The Economic Achievements and Legacy of Thatcherism - Case Study Example

Margaret Thatcher, dubbed as the “Iron Lady” (Blundell,p. 219) was one of the most influential Prime Ministers of England in the 20th century. She enjoyed this influence and noticeable attention on account of her aura, her personality, her political acumen, her policies, her clear understanding of political dynamics, her affluence with the economic policies, and her potential to think out of the box and deliver according to the circumstance in a very unique manner, enabling her to become one of the prominent figures of Great Britain in the 20th century (Moore). Political profile: Margaret Thatcher was from the Conservative Party of Great Britain and she remained as the Prime Minister of Great Britain for consecutive terms. She enabled the Conservative party to reach the seat of authority and power after it had suffered slight dip in the recent years against the Labor party. She remained in office for one of the longest periods of time in office in history of Great Britain. She was in the office between 1975 and 1990. The long period of her stay in office depicts of her popularity, her policies and her political presence as a result of which she remained in the limelight and political decision making influences. Prior to her political ambitions and practical steps, Margaret Thatcher enjoyed a brief stint in the field of chemistry and later on going on to follow the law practice before she formally stepped into the practical field of politics. She took the first step towards politics in 1950s. Margaret Thatcher gave an insight into her policies and overall political ideology through her later revealed and later written memoirs which enabled the followers of her political ideology to follow her guidelines accordingly. Economic outlook of Great Britain in 1970s: Margaret Thatcher came to ascendency in the days when England was faced with number of economic upheavals. These included the one of the highest rates of inflations in the recent times. The figures spiked up to the value of double digit and this led to resentment within the ranks. Owing to the overall desperate scenario and situation, Great Britain was termed as the sick man of Europe in those days. This came about in the form of its decades long isolation from the European Economic Council. In such a scenario England needed a responsible head that could think out of the box and enable England get back on track towards gaining economic momentum and overcoming challenges such as higher inflation rates, and overcoming the challenges. Margaret Thatcher saw two key steps as potential solution towards the troublesome outlook of Great Britain. The first came about in form of privatization and second as de-regularization. Overall the policies and the mindset of Margaret Thatcher can be reflected from the fact that she took on initiatives such as Sunday be allowed for trading. While this move did not get the approval of the house of Commons, yet it reflected upon the mindset and ideas that Margaret Thatcher possessed and the manner in which she wanted to bring about reforms through dedicated hard work and continuous improvement in the different spectrums of decision making during those days. Privatization under Margaret Thatcher: Margaret Thatcher took to privatization as a potential solution and this was unprecedented in the recent times of Great Britain. She brought about radical reforms that turned the industries from losses to directly profit producing services based industries. She undertook the overall process of privatization in a step wise yet comprehensive manner enabling overcoming the challenges and making sure that the potential negative impacts do not hurt the locals through lay off and other downsizing concepts of privatization that come along. Gerry Grimstone, who was one of the leads of the overall process of privatization and was in influential government post during the phase of privatization in the early 1980s to 1986. He explained the overall process of privatization as one based on dedicated intentions and efforts towards bringing about improvement in the economy and overall outlook of Great Britain’s economy. According to Gerry Grim stone, the overall process of privatization was a well thought out one with due consideration of equity and other stakeholders considerations were also taken duly into account allowing for an overall improvement in the economic corridors. Margaret Thatcher undertook a privatization plan of privatizing over 50 plus industries (Osborne). She gave a total new spirit and life to the corporate sector that was previously under the burden of debts, ill functioning and poor governance. Through the stick of privatization, Margaret Thatcher not only improved the efficiency but also brought about investors interest from abroad increasing the overall positive impact upon the economy of England through increased Foreign Direct Investments in the 1970s decade. Margaret Thatcher saw the concept of privatization as the best solution. This was later on revealed in her memoirs where she termed privatization as inevitable and mandatory towards regaining the strength in terms of England’s economy. Owing to the overall success, the manner in which her privatization policies were engaged, number of countries in the times ahead adopted her guidelines and concepts of privatization. It was on account of fact that her principles of privatization were based on actual and critical assessment of the dynamics related to the general process of privatization. Phase wise privatization process: The privatization process was initiated in a phase wise manner. The major industries that were brought under the privatization machinery were the British Steel, British Telecom. This was also accompanied by the water industry. All these resulted in the overall improved outlook of services industries on number of grounds. The first was improved output. The second was that of better services to the customers and the third was an overall positive impact of privatization on economy of Great Britain. Previously in place socialism based ideas were a total failure according to the ideals of Margaret Thatcher and thereby she went for the total opposite by introducing concepts such as that of privatization. Privatization and focus on the Services industry: Margaret Thatcher was of the view that the ever high rates of inflation could be reduced if the government brought about improvement and delivery rate increase in the various services industry. For this purpose Margaret Thatcher targeted the British Gas, the automobile industry such as the Rolls- Royce along with other services industry. Each of these underwent a comprehensive overall hauling process with focus on improvement with regard to the delivery, services, customer care and employees care at the same time. As a result of this, the government also introduced the New Labor Rules and New labor agendas which were aimed at more improvement in the services industry. http://www.bbc.com/news/business-22073527 Balancing the budget: Margaret Thatcher aimed at bringing about stability in the budget with regard to reduction in the deficit. For this purpose numbers of steps were introduced. While they in macroeconomic terms did not go too well with the common citizens initially, yet it benefited the Great Britain economy greatly towards the later part of her governance days. The budget deficit was aimed for reduction through the introduction of the valued added taxes. The ratios of this rate were increased from percentage of 8 percent to 15 percent. De-regularization: Another important hallmark of Margaret Thatcher’s policies included the de-regularization decision. Owing to the overall intensity and spirits of action behind this decision, the decision to undergo de-regularization was dubbed as a Big Bang decision (Plender). This was largely due to the fact that it undertook the objectives aimed at bringing about reforms and restricting the economy and different sectors from a grass root level. This was implemented largely towards the later end of her career in 1986. Under this process numbers of key steps were taken. These included the concept of reducing the focus on labor unions. The labor unions were in practice and existence previously in the overall service and government entities of Great Britain. Like any other country’s aims at privatization, the labor unions were reduced in their influence and a more generic and privatized outlook as given to the various industries within the country. One major decision that came forth in the overall concept of de-regularization included the idea of changing the manners of Stock Market. As a result in 1986 Stock Exchanges saw a process of de regularization which had a direct positive impact on the overall Stock Market index of Great Britain in those days. Its direct positive output and . The direct impact of this decision was increased output and improved productivity and working relation between the customers and government as a whole. As a result of this, there was slight resentment against the previously all influential and all strong labor unions, but the overall scenario if seen from the perspective of the common man and common British citizens improved in terms of customers’ services delivery. Under the de regularization process, the number of off days, and the ability of labor union to call on strikes were also reduced which also augured well for the government machinery. One similar strike that came forth in those days was the strike initiated by the Miners towards 1984 and 1985. This however was handled by the government quite effectively without any major hurdles or disturbances as such. Big Bang decisions: The loosely coined word Big bang was introduced on account of not just privatizing the given number of enterprises, rather changing the overall mindset that prevailed in the Central London towards that era (Coman). In those days prior to the developments and improvements brought about Margaret Thatcher, it was the stock markets and stock exchanges that were seen as the center of business activities and the rest of the counties and major metropolitans presented a dim outlook with regard to the business activities. Margaret Thatcher through her ideas changed the overall concept. The decisions taken by Margaret Thatcher allowed the foreign investors to head towards Great Britain and as a result an overall positive impact fell upon the economy of Great Britain. The overall positive impact of Big Bang policy and re-regularization can be translated from the Canary Wharf and other similar entities that rose to prominence and direct saw improvement in their performance as a result of the big bang based policies and privatization. The policies so initiated were promoted through the television and other forms of Public relation based advertisement of the government. It laid emphasis on how the betterment was possible in the different corridors of decision making. Local media and industry actors from those days were used for the purpose of promoting the policies and actions of the government of Margaret Thatcher. One similar poster that was commonly published and gained popularity in those days was that of “The Labor is not working” ( references). As a result of this, the concept and the need for revamping the labor unions and bringing about reforms and improvements as a whole was seen in the different labor unions and employees based entities. The overall actions taken reflect the comprehensive outlook and manner in which the government undertook the steps and how dedicated it was towards bringing about reforms and making the global functions of governance active with regard to improvements and efficiency. Critical angle analysis of the policies and its impact on the North: The northern part of the country and its economic output did not reflect directly from the improvements that were in action and practice in the other parts of the country. Margaret Thatcher was all mindful of it and she did address this point, however she directed it to the potential necessary evil and bitter pill which was to be a short lived one yet as a result of it, the overall rest of the country’s economy flourished. Overall, it can be stated, that while it was not absolutely all perfect, but realistic and Margaret Thatcher was equally mindful of the various tight situations in the country in the various parts. Right to Buy Scheme: Margaret Thatcher brought about number of incentives and policies aimed at developing the interest of the masses and providing them with the incentives with regard to safer future. The Right to buy scheme was one similar move that was initiated in those days. A special act was introduced towards 1980 to bring about legal legitimacy along with this scheme. This scheme came about in the form of Housing Act. The overall move and scheme was a success with regard to the people’s interest and improvement in the life styles. This scheme lasted from between 1982 to 1989. As a result of this scheme, by the end of the term of Margaret Thatcher, it was estimated that as many as two million Great Britain citizens earned the ownership to their houses. It was set of such moves and actions which allowed Margaret Thatcher gaining such popularity and such increase in promotion through the years( Miligan). While the legacy reflects through the revision of the actions, the same scheme has been introduced by the government of Great Britain in as recently as 2013 where it announced that it would carry forward the steps and actions that were initially introduced by Margaret Thatcher towards 1980s. through a politician’s eye it can be evaluated that if the policies are repeated in the times, ahead this means that the previously initiated policies were a success as the new generation also follows the same rules. Free market based economy: Apart from this, Margaret Thatcher undertook the basic principle of Free market based economy. This was the slight contrast to the mixed economic outlook that was largely in practice towards the days in the post Second World War. The free market based mechanism was largely influenced by the policies such as free to possession, ownership, reduced government interference and further reduced role of labor unions along with increased incentives for the investors and bringing about reforms through the government funding and monitoring in areas where it was needed. Previously, the mixed market concepts were the hallmark of the both parties that had been primarily in ruling after the Second World War. The free market concept came about as an opening and encouragement in such a scenario. The free market concept came about in response and ideas that were floated in the wake of tight economic situation in Great Britain in those days. Margaret Thatcher saw offers and ideas such as increased control and tight check on the various entities of service and delivery sector. In contrast to the common concept, she gave the idea of bringing about reforms and introducing the commercial and private sector partnership. It was only later in the due course of time that the policies proved a success and it was not the further tight control rather the free market concept which enabled bringing the Great Britain’s economy out of trouble and making it one of the glittering economy of 1990s in Europe. Political stability: While there are number of parameters through which the government’s aims, objectives and policies focus can be gauged, the days of Margaret Thatcher also saw one important development in the form of the North Ireland political dispute resolution. It is a no brainer to assess that the political stability directly reflects and translates upon the investors trust, interest and overall direction and orientation towards the various business sectors. Margaret Thatcher along with her economic policies ensured her due consideration and attention towards the political disputes which reflected upon a peaceful political spectrum and encouraging investors. The Irish issue was one of the broad line steps which also goes to the credit of Margaret Thatcher through which she managed resolving the political disputes and ending the overall uncertain and violent movement in those days (Thompson,p.86). Individually Margaret Thatcher looked upon the likes and ideals of Ludwig Von Mises for ideals with regard to the economic policies, their economic wisdom and overall tenacity towards coming out with the sparkling results despite being faced with the odds in various scenarios and dynamics such as the one where Margaret Thatcher found herself when Great Britain was faced with situation of crisis not just in the economic corridors but also the political upheavals and internal unrest. Reduction in taxes was another move that was seen as a positive step by the commoners. Towards the latter part of her days, the lower tax rates were reduced from between 33 percent to 30 percent with an overall positive response in the common corridors of the Great Britain middle class community. Various indirect taxes were reduced and removed from the government expenditure. Capitalizing on the North Sea Oil: Margaret Thatcher was equally mindful of strengthening the economic outlook of Great Britain. Owing to this concern, Margaret Thatcher increased her focus upon the potential increase in the North Sea oil and increasing the supply to the external markets. This benefited the local currency in number of ways. The first is that it increased the exports ratio against the imports; the second was Great Britain again was in a dominant position with regard to dictating its desired terms in the oil market sector in the European market. Hence, it can be safely said that it was the able guidance and effective decision making of Margaret Thatcher that enabled extracting the positives out of the North Sea oil and implementing it to the benefits of Great Britain’s economy in those days (Reitan,p.21). Conclusion: Overall, Margaret Thatcher brought about a new dimension of politics to the Great Britain internal politics. She after Winston Churchill was the most influential and dominant primers that the Great Britain saw and this was largely due to the bold decisions she dared taking. Owing to the overall successful policies, it was the same legacy that gave rise to the concept of Thatcherism which despite her demise finds millions of followers from across the world who strongly follow her ideals and principles with regard to governance and overall successful policies. References: Blundell, John. Remembering Margaret Thatcher: Commemorations, Tributes and Assessments. Algora Publishing, 2013 Coman, Julian. Margaret Thatcher: 20 ways that she changed Britain. 14 april 2013. 4 April 2015 http://www.theguardian.com/politics/2013/apr/14/margaret-thatcher-20-changes-britain Milligan, Brian. Margaret Thatcher: How her changes affected your finances. 8 April 2013. 4 April 2015 Moore, Charles. Margaret Thatcher: The Authorized Biography, Volume One: Not for Turning. Allen Lane, 2013 Plender, John. Markets Insight: Bank deregulation part of Thatcher legacy. 13 April 2013. 3 March 2015 http://www.ft.com/cms/s/0/7f8aaf08-a122-11e2-bae1-00144feabdc0.html#axzz3WFBI5UXT Reitan, Earl Aaron. The Thatcher Revolution: Margaret Thatcher, John Major, Tony Blair, and the Transformation of Modern Britain, 1979-2001. Rowman & Littlefield, 2003 Thompson, Joseph E. American Policy and Northern Ireland: A Saga of Peacebuilding. Greenwood Publishing Group, 2001 Osborne, Alistair. Margaret Thatcher: one policy that led to more than 50 companies being sold or privatised. 14 april 2013. 4 April 2015 Read More