Margaret Thatcher: The Economics of Creative Destruction

Sunday, 10 November 2013 18:01

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To be Published, September 2014.

(Roughly) 140 pages 


This book is neither a history of her government nor the story of her life.


It does not attempt to explore the high politics of the Conservative Party or to chronicle the dramatic episodes that punctuated her period in office. As with President De Gaulle’s tenure in France, Mrs Thatcher’s governments experienced a series of crises of regime. Among them were the rows with the ‘wets’ in the Cabinet over economic policy in 1981, the Falklands War in 1982, and Westland and the Heseltine resignation in 1986. This monograph attempts to identify the key changes that Margaret Thatcher made and to locate them in their broader political, social and economic contexts.


In the process it seeks to illustrate why Margaret Thatcher was such an unusual figure among British politicians.



It is written by someone who admired Margaret Thatcher as a person and came to have an abiding respect for her as Prime Minister.


This respect reflected the vim, seriousness and sheer application that she put into the job. Margaret Thatcher brought what can only be called a destructive excitement to politics. Arguments and institutions that plainly needed to be challenged and dismembered are likely in normal circumstances to be left alone, on the ‘let sleeping dogs lie’ principle. Under Mrs Thatcher they did get challenged and taken apart. Whether it was the metropolitan county authorities or the rules preventing solicitors from arguing cases in the higher courts protecting the bar from competition, Margaret Thatcher had a tendency to make things happen. She also had a powerful style of argument that was at once forensic and lucid, made all the more direct by her unusual relationship with the English language, in terms of conventional grammar and syntax.


This monograph will try and capture the vivid character of Margaret Thatcher’s political personality, because it is necessary to appreciate it, in order to understand much of the controversy surrounding her and because it is part of the explanation of her extraordinary capacity to transform debates that had been previously settled for many years.


About Warwick Lightfoot

warwick 2nd pic

Warwick Lightfoot is a professional economist with specialist interests in monetary policy, public expenditure, taxation and labour markets.


Formerly the economics editor of The European, he was for many years a frequent contributor to the Wall Street Journal and has written for the Financial Times, The Times, Sunday Times, the Daily Telegraph, Sunday Telegraph, and the Guardian. His articles on economics and public policy have also been published in specialist journals that range from Financial World, International Economy, and Investors Chronicle to the Times Literary Supplement and the Journal of Insolvency Practitioners.


Warwick worked in government as Special Adviser to the Chancellor of the Exchequer from 1989-92, initially appointed by Nigel Lawson and later reappointed by John Major and Norman Lamont. He was also Special Adviser to the Secretary of State for Employment, the  Rt Hon Norman Fowler MP. He is a Councillor for the Royal Borough of Kensington and Chelsea.

Contents List


Introduction p1 Britain in 1979: Its Decline and Causes p5 The woman who was by turns patronised and underestimated p7 Breaking with the Post-War Political Consensus in Opposition p11 Changing Britain Profoundly p 12 Inflation, Monetarism and Monetary Conditions p11 European Exchange Rate Mechanism p17 The UK Industrial Relations Problem p21 Trade Union Law Reform p25 The Miners Strike p26 Ending the Dock Labour Scheme p29 The Sea Change in Strikes and Days Lost through Industrial Disputes p32 Profits and the Crisis of British Capitalism p36 Nationalised Industries, the Mixed Economy and Privatisation p42 A Capital Owning Democracy p36 1976 the end of the Keynesian Consensus p38 North Sea Oil p42 The Public Sector Borrowing Requirement becomes the Public Sector Debt Repayment p42 Margaret Thatcher and the City of London, what she did not do p47 National Health Service, Housing and the Welfare State p51 Local Government: Centralising to Liberate or Socialistic Planning? p56 Downfall p61 Margaret Thatcher’s Public Personality and her Symbiotic Relationship with her Opponents p63 A scientist in government p65 The Limits of the Thatcher Agenda  p67 Thatcherism as an Ideology p70 The Economic Legacy of Margaret Thatcher p73 Alternatives to Thatcher in early 1980s p78 France’s Programme Common: Neo-Keynesian Economics in One Country p81 Margaret Thatcher and Europe p83 The French Revolution, the European Social Charter and the Paris Summit 1989 p85 Role that Europe Played Mrs Thatcher’s Downfall, Sovereignty and the Future of Europe p89Conclusion p92