Removal of exchange control by the Thatcher Government (original) (raw)
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Triumph of the Market? Neo-liberalism and the Thatcher Government’s foreign policy
The values implicit in Thatcherism, particularly the rhetoric of the Prime Minister, were often closely linked to the principles of liberal economics and individual freedom. Neo-liberal ideals were repeatedly invoked in foreign policy but in reality rarely manifested themselves, commonly eschewed in favour of the realpolitik of the Cold War. This included several arms deals with autocrats, tied bilateral aid and resistance to sanctions against apartheid South Africa. As tensions thawed between the superpowers, however, liberal economics took on increasing prominence in foreign policy. Examples of this included the increase in proportion of aid to multilateral agencies like the World Bank, as well as the Know How Fund to Eastern Europe. This was both by design and the prevailing climate of ideas, which shifted internationally in the 1980s just as it had Britain in the previous decade, in part due to the policies of the Thatcher Government.
Mrs Thatcher's Macroeconomic Adventurism, 1979–1981, and its Political Consequences
British Politics, 2007
Drawing on the influential analysis of Thatcherism by the late Jim Bulpitt, this paper seeks to do two things. First, to use the enquiries of the Treasury and Civil Service Committee of 1980 to underpin an account of economic policy-making in the initial period after 1979 which stresses the inadequacy of accounts which see policy as based upon a coherent, monetarist doctrine. Instead, it is argued that policy in this period is best described as 'adventurist', based on strikingly little analysis of its possible consequences. Second, this analysis is linked to the question of Conservative 'statecraft', and especially what Bulpitt called the 'political argument hegemony', which enabled the Conservatives to win the 1983 election despite mass unemployment. Here, it is argued, notions of economic 'decline' were crucial.
The British Journal of Politics & International …, 2008
The concept of depoliticisation has become increasingly popular in recent years, but empirical studies into depoliticisation policies have been less prevalent. Absent from the literature, too, are any clearly delineated criteria by which the success or failure of such policies might be assessed. This article attempts to address these issues through an examination of Britain's membership of the Exchange Rate Mechanism from 1990Mechanism from to 1992. In contrast to the conventional view of this episode, in which it is seen as a policy disaster, it is argued that as a policy of depoliticisation ERM membership was a relative success.
Mrs Thatcher's Economic Policies 1979-1987
Economic Policy, 1987
Mrs Thatcher inherited a weak economy whose poor performance she attributed to policies of cosy consensus, lax discipline, high inflation, and pervasive inefficiency. These she sought to banish forever. The authors stress the astuteness with which this radical programme was pursued. Rather than launching an immediate and grand assault on all fronts, Mrs Thatcher picked off enemies one by one, each victory consolidating her position for the next attack. Only when inflation was clearly under control could more radical supplyside measures be introduced. Matthews and Minford argue that the recession of 1980-81 was caused not by tight domestic demand but by external and supply-side shocks. Subsequently, tight monetary and fiscal policy did have powerful effects, both in achieving rapid inflation reduction and in holding unemployment above its equilibrium level. Once serious supply-side policies were introduced, they had a significant effect on productivity growth and on the equilibrium rate of unemployment. Matthews and Minford conclude that the latter was halved between 1981 and 1986, by which date it stood at 1.6 million or roughly half of actual unemployment. Whilst unemployment may slowly fall towards its equilibrium level, the authors do not recommend fiscal or monetary expansion to accelerate this adjustment; rather they advocate further supply-side measures and deregulation to help markets achieve this transition.
2017
Sterling was an integral component of the way Great Britain formulated its foreign policy during the late 19 th and 20 th centuries. As the British Empire expanded considerably throughout the 19 th century, free trade was essential to conveying British ideals and to maintaining the strength of its own currency, pound sterling. A fundamental part of British political economy was the international monetary system of gold standard (that Britain adopted in 1790 in reaction to its trade deficit with China at the time). The system enabled the pound to maintain a key position with peripheral powers pegging their currencies to sterling. Britain's currency was thus a central element in the international monetary system and in consequence benefited from it. The British Empire was maintained and run through banking and the gold standard system until the 1930's. However, the Great Depression and the Second World War marked the downfall of Great Britain's political and economic power. The 1929 Crash shook the world's major economies and temporarily suspended the practice of free trade with nations adopting protectionist measures in response. This particular event disproportionately affected the British economic outlook that was mainly based on free, unbridled trade. World War II then diminished Britain's financial might with many funds being diverted to wartime needs. These successive events had indeed drastically affected the position of the pound in the international monetary system and severely reduced Britain's foreign policy maneuverability. Following decades of economic stagnation, Thatcher's arrival to power constituted a significant break with the policies that had been pursued by the previous governments until then, more specifically from 1945 to 1979. Her tenure as prime minister (1979-1990) had far reaching effects on British domestic as well as foreign policy. The essay will first attempt to analyze the multiple economic policies adopted by the British government with regards to sterling and its impact on foreign policy following the Second World War. Margaret Thatcher's policies, designed to manage Britain's progressive decline during the Cold War, will then be addressed.