Thatcherism: The Economic Revolution
Monetarism, privatization, deregulation, and tax reform — how Thatcher transformed the British economy and divided the nation.
Monetarism and the Early Recession
Thatcher came to power determined to defeat inflation, which had reached 27% in 1975. Influenced by monetarist economists like Milton Friedman and Keith Joseph, she believed inflation was caused by excessive government spending and money supply growth. Her Chancellor Geoffrey Howe raised interest rates sharply and cut public spending.
The result was the deepest recession since the 1930s. Unemployment doubled from 1.5 million to 3 million between 1979 and 1982. Manufacturing output fell by 30% in some regions. Riots erupted in Brixton, Toxteth, and Moss Side. 364 economists signed a letter to The Times warning that her policies would 'deepen the depression.' Thatcher was unmoved. 'The lady is not for turning,' she declared — the most famous line of her career.
