The 1970s was a decade of unrest, both in the USA and the UK. Strikes by steelworkers, railwaymen, lorry drivers and medical staff crippled the economy and toppled governments. First Ted Heath of the Conservatives fell in 1974 and subsequently James Callaghan in 1979. And then there was the inflation and slow growth causing a phenomenon which the dominant economic theory of the day, Keynesianism, couldn’t explain – stagflation. At the same society became ever more socially ‘permissive’ in the anonymity of big cities and crime increased.
Milton Friedman, an American economist, and Friedrich Hayek, an Austrian philospher/ economist, had warned about the danger of high state intervention for decades, especially subsidies designed to combat unemployment. Central planning they also criticised as communist or socialist, and as Marty Robbins said ‘there’s very little difference in the two.’ They proposed privatisation and deregulation to foster a free market. Ayn Rand’s Atlas Shrugged was also an interesting fictional justification of this. Also monetarism, the controlling of the supply of money to beat inflation was proposed.
Margaret Thatcher was the new Conservative Prime Minister in 1979 who took on board these ideas, and improved the British economy’s efficiency, and global competitiveness and forged a new path for Britain that we have largely stuck to ever since. Though high unemployment was controversial on balance her legacy is positive, especially since she got along personally with USSR General Secretary Gorbachev and so helped facilitate his difficult reforms which largely ended the Cold War.