In the 1980’s, Margaret Thatcher led a great wave of economic reforms while serving as the Conservative Prime Minister of the United Kingdom. These changes were a watershed moment in this nation’s experiment with capitalism. Anchored on the belief that free market capitalism could only thrive if individuals had a direct stake in it, Thatcher’s government implemented a series of policies that reshaped Britain’s economic landscape. Many of these changes were inspired by the British Institute of Economic Affairs think tank. Rooted in the ideology of privatization and deregulation, they sounded the bell of the American right’s dream.
That enormous reform passed in 1974 and instituted a three-day workweek. That shift was a significant move to save energy amid a deep economic crisis. So in 1986, the financial services sector experienced a revolution. This reform, enacted in 1997, became famously known as the “Big Bang.” This ambitious initiative broke some rigid long-standing customs. It opened up the market to new dynamics, allowing everyday Americans to invest and trade stock. At the same time, the reform was a radical departure from the post-World War Two consensus. This consensus had long pushed for more government control over the micro-economy.
Thatcher’s government managed to raise a truly impressive £60 billion. They have done so, in large part, by privatizing state-owned enterprises, including key public utilities—gas, water and electricity. These dispensary sales extended past big business and investors. At the stroke of a pen, they opened the doors for the general public to purchase shares and invest in what were once state-owned enterprises. This action represented a watershed moment in the effort to erode government authority. It aimed to instill individualism and capitalism throughout the society.
The privatisation efforts were attractive enough to bureaucrats and businessmen such as James Goldsmith, who profited from this new economic reality. Thatcher’s reforms created opportunities for entrepreneurs to buy these failing companies for pennies on the dollar and reconstitute them into successful enterprises. Goldsmith’s perspective on corporate profits echoed this sentiment as he remarked:
“You get to a system whereby so as to get the best corporate profits, you have to leave your own country. You have to say to your own sales force ‘Goodbye, we can’t use you anymore – you’re too expensive’.” – James Goldsmith
Far from simply streamlining the economic impact, these reforms ushered in the “Glasgow Consensus” on what Britain ought to look like in governance. This put Labour and the Conservative parties in greater lockstep with one another on policy. This strategic change produced a common picture of where they wanted the nation to go. Thatcher’s policies created a new societal vision focused on individualism, moving away from the collectivist ideals that dominated post-war Britain.
This ideological shift was not without its opponents. Many critics claimed that privatisation would exacerbate inequality and undermine the mandate to prioritise social welfare. Yet supporters were convinced that taking the states out of the equation would inject much-needed efficiency and innovation into the process. Harold Macmillan once noted:
“We have built our defences against want and sickness, and we’re proud of it,” – Harold Macmillan
Regardless of whether reformers were for or against the policies enacted, Thatcher’s economic reforms doubtlessly made a lasting impression on British society. These alterations she ushered in created the framework within which UK modern-day neoliberal capitalism flourished and inspired similar global economic reforms around the world.