Wednesday, April 10, 2013

Thatcher's legacy

April 10, 2013

During her stint as British prime minister between 1979 and 1990, Margaret Thatcher strove mightily to curb public spending, yet it remained high compared with countries like America. Her most profound economic achievement was a comprehensive overhaul of product and labour markets. Cosy corporatism gave way to bracing competition, and trade-union barons were slung out of court. That paid dividends. British living standards had fallen behind those in other advanced countries like Germany and France in the three decades after the second world war. But, as can be seen in the chart below, Britain started to regain ground in the 1980s, and for the next two decades it substantially out-performed America, Japan, France, Germany and Italy.