Assess Reasons Why Thatcher S Economic Policies Were Controversial

Topics: Privatization, Unemployment, Macroeconomics Pages: 2 (1533 words) Published: February 4, 2015
Assess the reasons why Thatcher’s economic policies were controversial There is little which unites Thatcher’s passionate supporters, and equally passionate critics. However, both camps would agree that she was, without question, one of the most controversial prime ministers the UK has seen, and her economic policies were at the heart of that controversy. She instituted an economic revolution in the UK, bringing the post-war consensus to a crashing halt, and replacing it with a free-market ideology which remains in place today. So there is surprisingly little controversy over whether she was successful in implementing her policies, but rather the controversy is whether her economic policy successes were either necessary or desirable. There is no answer to this conundrum, as any answer must be dependent upon the values of the beholder. All of her individual policies, such as monetarism, privatisation, and trade union reform, generated their own controversies, but perhaps the greatest controversy was over the sort of nation which those reforms created. The first, and perhaps most controversial, economic policy Thatcher imposed was monetarism. This theory, described as “crazy” by previous Tory Chancellor, Reginald Maudling, envisaged controlling inflation through restricting the money supply, and Thatcher moved quickly in her first term to implement it, through a squeeze on public spending and an increase in interest rates to a high of 17% to restrict borrowing. The first controversy was whether monetarism even worked. Supporters argued that it was responsible for bringing inflation down from 19% in 1979, to 5% in 1983. Opponents, on the other hand, argued that this had more to do with the descent of the UK economy into recession during Thatcher’s first term, and a decrease in the price of oil following the Iranian revolution in 1979. Perhaps a clue as to the correct answer can be found in Thatcher’s quiet abandonment of any attempts to control the money supply...
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