Why were Mrs Thatcher's economic policies controversial?

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Why were Mrs Thatcher's economic policies controversial?
Mrs Thatcher upon her election victory in 1979 brought new and radical economic policies, many of
which moulded around the anti-Keynesian views of the Austrian economist Hayek, who attacked in
`The Road to Surfdom' the role of government in the direction of the economy. He argued for a free
market, devoid of militant trade unionism and inefficiency which led to low growth. From these
principals, Mrs Thatcher underwent the biggest economic shift in Britain since the Industrial
Revolution, moving towards the principals Hayek, and of monetarism, privatisation, deregulation and
the rolling back of trade unionism. Her policies were fundamentally controversial, as they often
resulted in rising unemployment levels, and social inequality, while she argued such actions were `a
price worth paying' to streamline inefficiency out of the British economy.
The most controversial economic policy undergone by Thatcher in her eleven years in office was
undoubtedly the revolution in the way in which trade unions were reformed. Principal writers such as
P. Jenkins in Mrs Thatcher's Revolution ague it is her reduction of the power of the trade unions that
had the greatest and most controversial effects on the economy. Before her election, trade unions
had had a massively damaging effect on the British economy, the most prevalent example being the
`Winter of Discontent' under Heath, which resulted in over twenty nine and a half million working
days being lost, a massive cause of inefficiency in the economy. Trade unions largely held
accountability for the rising inflation rates in the 1970s, along with rising prices, making the economy
unmanageable. Under Thatcher by 1984, the unions ceased to play a significant role in public life. The
Employment Acts limited trade union power by ending legal immunities of the unions, along with the
enforcement of secret balloting and the controlling of picketing. The introduction of these
Employment Acts was very controversial, as they seemed to punish the workers, not allowing them a
say in declining industry or wages. Furthermore, they were controversial as they can be closely linked
with Mrs Thatcher's streamlining of the economy, which cost many their jobs. For example, the
impact of the Acts over The Times workers was to stop them from striking as the paper moved
towards new high-tech printing methods, costing many their jobs ­ massively controversial. Mrs
Thatcher made her final stand during the Miners' strikes of 1984, which took place as Arthur Scargill
confronted the Coal Board as they tried to place the coal industry on a realistic economic footing. The
state refused to subsidise out of taxation underperforming pits, and they were close to making
thousands unemployed, massively controversial. The building of coal stocks, and the police
responsiveness to picketing and her refusal to make a compromise led to the falling of the miners, a
massive victory for Thatcher over the unions. The policy of curbing the power of the unions was the
most controversial of her economic policies as the policy affected a massive proportion of the
workforce, who after the Employment Acts, had no choice but to follow the laws of the new
democratic Union system. The north of the country, which had a history of manufacturing, met an era
of decline, led mainly by the fall of Union power, as they could no longer demand and receive higher
wages at the first sign of strike. Unemployment rose massively over her terms in office, rising to
12.3% of the workforce in 1986, massively controversial. The effect of her victory was to reduce the
number of days lost to strike from 29.5 million in 1979 to 1.9 million in 1990, a massive shift to a new
streamlined economy.
Monetarism was a major economic shift in Thatcher's first term in office, representing a controversial
policy not only from outside her party but also internally, Thatcher regarding these as the `wets' who
challenged her principals. Monetarism was a financial theory out forward by Milton Friedman, a US
economist, which states in order to control inflation government spending had to be cut, reducing

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The new ideology imposed by Thatcher led her to cut government spending,
hoping to reverse the continual deficit of PSBR. Along with the cuts, high interest rates deterred the
irresponsible from borrowing, keeping the pound strong. Monetarism was successful in reducing
inflation form 19% to 5% in the space of four years, the factor Mrs Thatcher blamed as the root
cause of economic stagflation in post war governments. The policy caused massive unemployment,
rising steadily to a peak of 3.…read more

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England meant that many saw Thatcher's revolutionary policies as
controversial as they rewarded the south as they moved to a more streamlined service sector based
economy, but undermined the North due to mass industrial decline. Many say that the programme
failed to reduce public spending enough and the industries were sold off too cheaply.
Finally, Thatcher's policy on the areas of taxation, borrowing and public spending were all
controversial, she wanting to tax borrow and spend less.…read more



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