Economics, Free Enterprise, Pethokoukis

How Margaret Thatcher turned around Great Britain, in one chart

Credit: Time

Credit: Time

“My job is to stop Britain going red.” – Margaret Thatcher, Nov. 3, 1977.

But the former UK prime minister, who died today, did far more than that. The Iron Lady reversed decades of statist policies that had turned Britain into the sick man of Europe. And in the process, Thatcherism provided inspiration for the burgeoning free-market revolution in America, as well. She privatized. She cut taxes. She busted unions. As economist Scott Sumner has noted, “Britain had lagged other European economies for decades, growing far more slowly than most economies on the continent. Thatcher’s reforms were among the most comprehensive in the world.”

Just compare the real per-person GDP performance of the UK economy versus the French economy. One nation in 1979 started to again embrace markets, the other did not. Brits went from being 10% poorer than Frenchmen to being 10% richer. The lady was not for turning, but thanks in great part to her policies and determination, the economic fate of the UK and the West was.

Thank you, Margaret Thatcher!

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27 thoughts on “How Margaret Thatcher turned around Great Britain, in one chart

  1. With all due respect, there could not be a looser correlation than the one you are presenting- so many things have affected RGDP since that time including the Euro crisis which has affected France more than the UK. This is not to comment on the importance or good/bad that Thatcher did one way or the other, but the chart does not adequately back up your conclusion.

    • nothing proves the point than your immediate non comment. ‘there are so many things” is not A thing. its not even a statement. its more mush, mush like what the socialists would have you living under if actual women like Maggie hadnt been around. The wall still up? gas ten bucks a gallon? imagine if reagan and thatcher had lost and your geniuses had control then..

      • Margaret Thatcher was a class act. She was also an astute woman ready to engage her wits with any man. Happily, Thatcher understood the need for expanding capitalism in an effort to uplift all of society. In short, she stood up to troubling, labor strategies intent on silencing conservative ideas.

        • I am no socialist Gary the Berlin wall i wish it was still up.
          The UK is where most poor from other EU Counties want to live the Tories are Running scared now because UKIP & The extreme far right BNP is also being favored by the young Brits who cannot find work and picking up Votes once we had Industry that gave youngsters a chance via apprenticeships have gone aboard to subsidized Countries like Slovakia via the EU. All our government cares about is pleasing the Stock-market &Banks.We have gone from being a Nation that Produces goods to a Nation of warehouses .We cannot even deport Criminals like Abu Hanza Preaches Hatred of America& Britain.We cannot be a Nation who harbors Foreign Criminals.Our government talks of introducing a Levy of £1000 returned when they leave and go to their native country they pay £5;000 to £6000 to get here so all that does is put the price up to those Criminals helping illegals get here.We cannot have masses of people flooding into a country for work.I like America very much its my favorite country after England but only for a Vacation.

    • I agree with you on some parts. But do not forget Thatcher was the main reason that UK did not join Euro. It was her ideas that set United Kingdom apart from the rest fo Europe, because she could see European Union based on socialist agenda is doomed to failure.

  2. If you want a rather different one-chart view of Thatcher’s achievements, have a look at the UK’s Gini coefficient (measuring wealth distribution) during the Thatcher years. The UK’s GDP may have increased, but only a small portion of the population shared in that wealth.

    • The UK’s GDP may have increased, but only a small portion of the population shared in that wealth“…

      How is that Ms. Thatcher’s fault?

    • The fact that “only a small portion of the population shared in that wealth” could be because most of the money will have been tied up in capital investment – you know, the stuff that’s used to create new businesses. If it had been shared equally among the general public it would have been p!ssed up the wall. Liberals do not, on the whole, understand that most of “the wealth” at any one time is tied up in capital and cannot be “spent.”

      • The fact that “only a small portion of the population shared in that wealth” could be because most of the money will have been tied up in investment…..

        {Yes, that’s right, the liberalisation of the financial sector created wealth …}

        “…you know, the stuff that’s used to create new businesses….”

        {except it wasnt. It was used to create asset prices bubbles.}

        “… If it had been shared equally among the general public it would have been p!ssed up the wall. Liberals do not, on the whole, understand that most of “the wealth” at any one time is tied up in capital and cannot be “spent….”

        Thank goodness I’m not a Liberal then! It gives me the freedom to understand that there is a difference between wealth creation and balance sheet inflation. it means that I understand why the wealth created by the privatisation of utilities and the need to pay dividends means that there is now a massive underinvestment in physical capital – clean renewables sources of power and a smart grid.

  3. Once again, it takes a strong personality to implement economic strategies that work, but a 20% improvement in real GDP is something no Keynesian or Socialist can ever lay claim to achieving. Her success made it much easier to rebuff statist policies here in the USA. Hopefully, her memory will serve to remind out current administration that statist policies do not work.

    The world is a better place because of Margaret Thatcher.

  4. Her biggest accomplishment was the defeat of European communism, as part of the heroic triumvirate of Reagan, John Paul The Great, and herself.

    • Of course unemployment grew. Thatcher never said that it wouldn’t. You cannot cut cancers of the size of the UK’s nationalized industries out of an economy without losing jobs.

  5. The Chart says the opposite. When Thatcher was deposed in 1990 the gap had grown marginally – but certainly not closed. GB only overtook France after Blair’s first term and only significantly during the “Brown” boom which is now derided on the right as based on “unsustainable” public spending financed by borrowing. The current gap is closing once again and is well within the range of exchange rate fluctuations.

  6. The first commet is absolutely utterly untrue. IMF WEO database gives: real GDP change y/y:
    2008: France = -0.083% UK = -0.968%
    2009: France = -3.146% UK = -3.974%
    2010: France = +1.664% UK = +1.799%
    2011: France = +1.693% UK = +0.758
    and so on. Thus, in addition to being senile in its nature, the first comment is also factually wrong.

  7. Margaret Thatcher Split our Island in to a North/South Divide still exists today destroyed our manufacturing industry .Today our Tory Government continue policy’s divide RE:MP George Osbourne&MP Ian Duncan Smith is Crazy.The Tories Promised a Referendum on belonging to the European Union they did not keep it! Resulting Foreign Criminals use EU Human Rights to over rule our Justice.I am sure most American Citizens would like to see ABU Hanza islamic Preacher of Hate Deported.

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