Margaret Thatcher's Policies Benefited Britain

The Need for Free Market EconomicsLet's face it, in the 1970s Britain sucked. The country was in a state of decline. Hubbard and Kane explained it well: "By falling into technological wake of the more innovative U.S. economy, the British shifted into a much less entreprenurial economic structure than it had during its heyday. To be fair, England has produced many great scientists and invetions, but there is no dying its relative stagnation in the late twentieth century. Its expansive national health system is a cautionary tale - expensive to the taxpayer, difficult to reform." [1]Weflare and nationalization programs, supported by most prime ministers in post-World War 2 Britain until Margaret Thatcher came along, were actually putting the nation in a state of inevitable decline. This was clear in 1978 and 1979, most notably the famous "Winter of Discontent" when unions decided to strike:"The transport of goods pactically dried up. Employees were laid off as businesses were crippled by the lack of deliveries, enforced by intimidatory and often violent picketing of docks and factories. Piles of rubbish lay uncollected in the streets. Roads were not gritted (in very cold weather), schools were closed and hospitals admitted only emergency cases, while shop stewards took it on themselves to determine what was an emergency. Most famously, in Liverpool, the dead went unburied. On 22 January 1.5 million workers joined in a national Day, the biggest stoppage since the General Strike in 1926." [2]The Labour government led by Prime Minister James Callaghan could do little. His party's greatest asset was being allied with the unions. His party saw as trade unions as the right thing for the people and that nationalized industries were needed to preserve jobs. This terrible thinking led Thatcher and the Conservatives to win the 1979 General Election. She decided to launch free market policies: supply-side economics, combat inflation, reduce size of government, and privatize national industries."What Thatcher hoped to do, by maintaining strict control over the money supply, was return the economy to the point of zero - or at least low and stable - inflation. She imagined this would necessitate a slight period of higher unemployment, after which unemployment rates would return to their starting point." [3]This is what happened. Inflation started to rapidly collapse under her. It came back a bit in 1990, but after that there has not been any major issues with inflation while before her it could get pretty outrageous. "Rates of both inflation and unemployment in Britain are now very low. In fact, since 1997, Britain has ranked top in both output and inflation in the Organisation of Economic Cooperation and Development." [3]Here is inflation: What about taxes and less banking regulations? Likewise this worked as well. The top income tax went from 83% to 40%, the standard tax rate from 33% to 25%, corporate taxes from 52% to 35%, and inheritance from 75% to 40%. The values added tax went up from 8% to 15%, for a more fair tax. The Big Bang in London is famous for opening up the international markets to Britain. There was huge economic growth. [2,4]"The effect of the 'Big Bang', combined with [Chancellor of the Exchequer Nigel] Lawson's tax cuts and the bonanza of privatisation, which offered huge rewards not only to the merchant banks which bore the risk but also to an army of consultants, advertising agencies and public-relations companies which rode the wave of lucrative new business, meant suddenly the City became glamorous.....Deregulation, the easy avaliability of credit and the rapid proliferation of personal computers created a climate in which small businesses flourished, helping to create more than 3 million new jobs (mainly in the service sector) between 1983 and 1990 to make up for those lost in manufcaturing at the beginning of the decade." [2]"Privatization generally saved the taxpayer a fortune and made privatized industries more competitive and innovative. The privatization of British Telecome resulted in a dramatic loweringof prices and improvement in service. The sales of council houses was and remains one of Thatcher's most popular policies." [3]As we can see here, the economy boomed and continued to boom after her: Government spending: Jobs: War with Argentina I don't know why anyone would say she was now succesful here in that she won a war against Argentina, caused the communist military junta to fall, and made Britain lift its spirits out of its recent decline. It was the war that gave her a second term in the 1983 general election by a landslide.In April 1982, Argentinean troops invaded the Falkland Islands and South Georgia, British territories in the South Atlantic. The dictator of Argentina, Leopoldo Galtieri, believed this was a great distraction to get the people on his side by reclaiming the Islas Malvinas. However, the people on the island were British and wanted to remain so."The Argentinean troops reportedly were taken aback to discover that the islanders spoke English and did not welcome them as liberators, but the invaders adjusted quickly to the paradigm shift. Using languae that appears to have been inspired by the novels of Graham Greene, they proceeded to issues a series of minuatory communiques to the islanders:"Some of these were closing all shops and schools. No one could leave their houses. Propaganda was sent over radio. Rightfully, Thatcher sent a large task force of 26,000 men to take back the islands, which they did. This causing the brutal regime in Argentina to collapse, saved the islanders, and brought new pride in Britain. How could this way be anyway wrong? Stick it to the Unions!Arthur Scargill was the internal Galtieri. He was an evil slimy thing who was head of the miner's union and had a lot of power with Labour and the British government in general. This was because of the nationalize industries, which included coal mines. Thatcher believed it was time to challenge the unions and get rid of the unproductive coal mines. As a result, Scargill launched a strike in October 1984. This would be the most important of all strikes. It is important to undestand just how uncompetitive the British mining industry was. "That year, the Monopolies and Mergers Commission reported that some 75 percent of British pits were making losses. It cost 44 pound to mine a metric ton of British coal. America, Australia, and South Africa were selling coal to the rest of Europe for 32 pounds a ton. British coal was piling up in mountains unsold." [3]"The economic case for the shrinking coal industry was incontestable. The rundown had been going on under governments of both parties since the 1960s." [2]The only reason the mining industry still existed was because anytime past governments tried to do something the miners held strikes and British fell apart. Thus, the unions were a huge interest group in the government and had their voice through Labour. Thather and Energy Minister Peter Walker decided to stock up coal and prepare for a struggle. When it came they were ready to crush the power of the unions and end unproductive coal mines for good. When it did come, the strike lasted until March 1985 and was a huge success. The power of the unions was curbed and the coal mines began to shut down. It is important to understand this was not just about productivity, but also who controlled the government. Before her a militant minority could push the entire country into submission. After he the trade union movement was dead. "So Margaret Thatcher not only reformed trade union law in a way that her predecessors had tried but failed to do, but in Arthur Scargill she faced a more ruthless and dangerous foe than her predecessors and succeeded in proving that a democratically elected government could prevail over a mindlessly militant minority who were trying to hold the country to ransom." [5]First Britain, Tomorrow the World!One of the great signs that you are working wonders for your country is when foreign leaders come to visit to ask how they can do it. This was exporting Thatcherism around the world. Leaders came to her doorstep to ask how they could try the reforms."Above all she was the most articulate and charismatic champion of a wave of economic liberalisation which was sweeping the world, turning back the dominant collectivism of the past half-century." [2]This was the rise of a globalisation and free markets around the world!"Over the next decade the same necessity imposed itself right across Europe. In the fifteen years from 1985 over $100 billion worth of state assests were sold off, including such flagship national companies as Renault, Volkswagen, Lufthansa, Elf and the Italian oil company ENI, adding up to the 'greatest sale in the history of the world.'"At the same time, she had a critical role in Cold War affairs. She met Soviet General Secretary Mikhail Gorbachev and sent to Washington that he was a new man the capitalist countries could do business with. She remained publicly supportive of Reagan even through times they disagreed in order to their to be a strong alliance against communism. Her role cannot be diminished here. [2,3]Sources 1. Hubbard, R. Glenn., and Tim Kane. Balance: The Economics of Great Powers from Ancient Rome to Modern America. New York: Simon & Schuster, 2013. Print.2. Campbell, John. The Iron Lady: Margaret Thatcher, from Grocer's Daughter to Prime Minister. New York: Penguin, 2011. Print.3. Berlinski, Claire. "There Is No Alternative": Why Margaret Thatcher Matters. New York: Basic, 2008. Print.4. Stewart, Graham. Bang!: A History of Britain in the 1980s. London: Atlantic, 2013. Print.5. Hanson, Charles. "Thatcherism, Trade Unionism and All That « Adam Smith Institute." Adamsmith.org. Adam Smith Institute, 16 Oct. 2013. Web. 21 July 2014.