Margaret Thatcher helped Great Britain regain self-confidence

In Great Britain Thatcher implemented a strong and internally harmonized program aimed at developing the market and promoting competition. Following are the basic principles of the policy:

1) hard-line monetary and fiscal policy curtailed inflation;

2) tax burden relaxation and refusal to follow the principle of support to businesses with budget resources helped to restore the health of the economy;

3) large-scale privatization – beginning with such giants as British Petroleum (an equivalent of Rosneft in Russia), British Telecom (an equivalent of Svyazinvest in Russia), British Airways (an equivalent of Aeroflot in Russia) and ending with small public utility enterprises – took place for the benefit of the middle class, rather than tycoons;

4) deburoucratization of the country and drastic reduction of the state employee headcount followed by their wage raise, enhanced the effectiveness of state employees and the prestige of this occupation;

5) reforms in education, healthcares, pension provision, social protection and labor legislation reached a sort of a balance between limited budget resources, quality of living and creating incentives for enhancing effectiveness of these social systems.

The foregoing measures created the so-called people’s capitalism: the number of self-employed persons increased from 1.9 million in 1979 up to 3 million by 1987, shareholders from 7% to 20% of adult persons, home owners increased from 55% to 66% of total population. Most importantly, Thatcher helped Great Britain regain self-confidence. Let me cite a left-wing British diplomat who belonged to the university community which dislikes Thatcher, to say the least of it: “Before Thatcher I used to feel ashamed to represent my country abroad”.

One may say that Margaret Thatcher was lucky. She took the office almost at the bottom of economic cycle, whereas her policy was realized mostly in a period of economic growth. In addition, Great Britain won the Falklands war. By the way, today some politicians on both sides of the ocean use ‘small wars’ and economic and political cycles.

Thatcher left her mark in history. But history is not only the past, but also the present and the future. Capitalism needs ‘saints’ right now: god-gifted, hardworking, and prudent persons. Neither intangible nor tangible wealth can grow with government expenditures, political demagoguery, and brute force right.

Nazarov V.S. – Ph.D. in Economics, Head of Budget Federalism Department