Saturday, December 20, 2008

Lessons From the U.K. in the 1980s: And the Triumph of Thatcherism Over Keynesianism

When she came to power in May 1979, the British economy, by every measure, was in worse shape than the U.S. economy is today. Inflation was out of control. Unemployment was high and rising rapidly. Job creation had been at a total standstill for almost a decade and a half.

By sticking to her policies of lightened regulation, reduced trade barriers, privatization of a raft of publicly owned companies, reduced taxation, and the adoption of laws to prevent abuses of union power, Mrs. Thatcher achieved something few if any of today's economists have begun to consider. She achieved a genuine, productivity-led recovery that transformed Britain from perennial basket case into the Europe's most improved and vibrant economy.

U.S. policy makers and professional economists should study her example in order to turn this time of crisis into useful and enduring change. As she herself said, "Economics is too important just to be left to the economists." Thatcherite principles remain as valid as ever. The freedom of the marketplace is still the only effective mechanism for eliminating poor business practices, identifying productive investment, and providing long-term growth.

~Andrew B. Wilson in today's Wall Street Journal

8 Comments:

At 12/20/2008 3:35 PM, Blogger Michael Smith said...

In 1984, I had a chance to visit the House of Commons on a Wednesday when it was in session. By custom, the Prime Minister appears in the House every Wednesday to take questions, with most questions, certainly the hostile ones, coming from the other Party.

So I had a chance to watch for a while as Mrs. Thatcher sliced, diced, crushed and generally destroyed the Labour members of the House that dared to question her. It was a political and intellectual tour de force. Her command of the facts, her command of details, her ability to spot a false premise in an argument -- were all simply stunning.

It was over in under an hour. I'd never seen anything like it and still haven't to this day. Margaret Thatcher could take any of our current crop of politicians and turn them inside-out in about 5 minutes of debate.

 
At 12/20/2008 8:35 PM, Blogger @sethstorm said...

Ah, the folks who defended her in the UK. They must be nervous seeing the last vestiges of Reaganism leave.

Thank goodness we've had the foresight to watch Reaganism fall. Now it's time for the Butcher to fall as well.

Now let's see how long it takes for the UK to give her ideology the boot.

May her ideology and Reagan's be forever be remembered as a mistake.

 
At 12/20/2008 11:17 PM, Anonymous poor boomer said...

Keynesianism's Ultimate Result:

In the long run, the economy is dead.

 
At 12/22/2008 4:23 PM, Blogger RebelRenegade said...

poor boomer> Interesting!

Given your previous comments, I'd think you'd embrace Keynesianism with open arms.

 
At 12/22/2008 7:32 PM, Blogger 1 said...

"Ah, the folks who defended her in the UK. They must be nervous seeing the last vestiges of Reaganism leave"...

That's right sethstorm, now they wait for the economic downturn that comes with a socialist like Brown...

"Thank goodness we've had the foresight to watch Reaganism fall. Now it's time for the Butcher to fall as well"...

Yeah, this country fought communism for fifty plus years and now the stupids have gone and elected a pinko-socialist to defile the Oval Office...

 
At 12/22/2008 10:11 PM, Anonymous Mika said...

It's fun to extol the virtues of a true Libertarian state and fantasize about how wonderful it would be. It would be really interesting if any society would actually allow such an experiment to occur and allow it play out. Then we'd all know with certainty.

But we live in the real world. Dreaming of a libertarian society is strictly an academic exercise or fantasy. The reality of our situation is that the critical mass of our population wants those well-established social service "safety nets" along with a free enterprise system. The pendulum keeps swinging through good times and bad, but modern civilization always demands both and always will.

* * *

Isn't calling anyone a communist in the 21st century a little silly and archaic? Everyone knows that communism doesn't work and that no one in the Western world seriously advocates it.

 
At 12/24/2008 1:35 AM, Blogger OBloodyHell said...

> May her ideology and Reagan's be forever be remembered as a mistake.

Ah, sethstorm. May you never let anyone forget that you were your parents mistake. It provides us all with such endless amusement.

It is, indeed, your lot in life to serve as nothing more than a bad example.

Cheers!!

 
At 12/24/2008 1:38 AM, Blogger OBloodyHell said...

> Isn't calling anyone a communist in the 21st century a little silly and archaic? Everyone knows that communism doesn't work and that no one in the Western world seriously advocates it.

There's this guy named Ayers who would almost certainly disagree with you.

And Obama is certainly a practitioner of "communism lite", aka socialism.

Finally, I strongly recommend you need to spend a lot more time around idiots who wear "Che" t-shirts. I think you'd encounter no end to the sort of damnfool who seriously thinks communism is the cat's meow.

 

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