Thatcher's Impact Flashcards
What was Thatcher’s first priority?
Tackling inflation - she was the first prime minister to do so in a long time
What was inflation at when she first started?
13%
How much did productivity improve?
Up 77%
What did unemployment rise from and to between 1980 and 1990?
3.4% to 9.1%
How much does public expenditure rise from and to by 1997?
39% to 44%
What economic model did Thatcher follow between 1979 and 1983?
Monetarism
What was monetarism?
Theory that the primary driver of inflation is how much money is in the economy - the more money circulating, the higher prices rise. Managing money supplies.
How did Thatcher control money supplies?
Raising interest rates, slash government spending and accept unemployment and inequality
What economic model did Thatcher follow in 1983-1990?
Supply side theory
What is supply side economics?
Policies that increase productivity and how much the economy provides. Idea of Thatcher and Reagan - economic growth comes from lots of supply in the economy.
How did Thatcher increase productivity?
Cut tax for businesses to invest, free market economic, deregulation, privatisation and spending cuts
What was the issue with supply side economics?
Reduces funding for social and welfare provision
What did Thatcher want to end?
Post War Consensus
How did Thatcher explain her economics?
Housewife economic - living within your means
What other aim did Thatcher have?
Reducing the power of the Unions
What did she want to do with nationalised industries?
Make them more efficient - privatise if possible
What kind of capitalism did she want?
Popular capitalism - owning property and shares
What was Thatcher against?
State intervention
What were these policies?
Highly controversial - based on short term pain for long term gain - accusation was that not everyone felt the pain equally
What was inflation in 1980?
22%
What caused many businesses to go bust?
Rising interest rates
What policies did Thatcher adopt?
Milton Friedman - New Right Thinker
Where was the only place where monetarism was implemented?
Chile - military dictatorship
What was the issue with Thatcher using monetarism?
She didn’t really understand it and there was no agreed definition of money supply