Britain 1979-90

Question 1

What were Thatcher’s social and foreign policy approaches?

Answer 1

‘New Conservative’/Neoconservatism

Question 2

What was Thatcher’s economic policy approach?

Answer 2

Neoliberal

Question 3

What does ‘Populist’ mean?

Answer 3

appealed to the ordinary people, bypassing normal party politics

Question 4

Who were the 2 economists that Thatcher followed?

Answer 4

Friedrich Hayek + Milton Friedman

Question 5

What did Hayek say about how the economy should be run?

Answer 5

Warned of the dangers of tyranny from central government economic control + abandonment individualism leads to the loss of freedom

Question 6

What did Hayek and Friedman argue about how the economy should be run?

Answer 6

Believed in the ‘Free Market’ (Adam Smith, 1770’s Father of Economics).
Government should not interfere in the economy (no Keynesianism, increasing govt spending or taxes, no nationalisation or planning)

Question 7

What does Free Market mean?

Answer 7

market uncontrolled by the state, free for enterprise and business to control prices and competition

Question 8

What does Classical Economic Liberalism mean?

Answer 8

Emphasis on individual liberty and control of economics, advocating for the free market

Question 9

What does Individualism mean?

Answer 9

favours freedom for individuals rather than state controlled action

Question 10

What does Planning mean?

Answer 10

government making strategic decisions to achieve specific economic goals

Question 11

Why would Hayek and Friedman be considered as ‘Neoliberal’?

Answer 11

More autonomy in economic choices that a person can make, allows for personal not state controlled enterprise to prosper as it is left to entrepreneurs, individualist

Question 12

What did Thatcher replace Post War Consensus with?

Answer 12

Thatcherism

Question 13

How did Thatcher smash post war consensus on a Mixed Economy (state intervention + nationalisation) ?

Answer 13

Free Market ideas with emphasis on individualism through home owning, privatisation of most industry and minimal state intervention to allow enterprise to thrive

Question 14

What is the essence of Keynesianism?

Answer 14

about demand: Government invests and borrows to stimulate demand to manage the economy + achieve full employment

Question 15

How did Thatcher smash post war consensus on Keynesianism?

Answer 15

Replaced with monetarism (only care about supply + inflation, controlling the money supply and supplying the economy)

Question 16

How did Thatcher smash post was consensus on high taxes?

Answer 16

Low taxes are desirable, people spend their own money efficiently for what they actually want + people feel they get what they need and their money is wasted.
Wealth effect: people feel they have more money, so they spend more

Question 17

How did Thatcher smash post war consensus on being socially liberal and permissive (excessive freedom)?

Answer 17

Disliked Liberal ideas, Traditional in terms of family, religion, anti drugs

Question 18

How did Thatcher smash post war consensus on a large welfare state?

Answer 18

Has a shrinking welfare state

Question 19

How did Thatcher smash post war consensus on Collectivism (group priority over individual)?

Answer 19

Individualism- encourage people to work and gain economic incentives through easier social mobility IF they ‘put in the effort’
Rugged Individualism- cowboys, fend for themselves in a rugged way

Question 20

How did Thatcher smash post war consensus on Trade Unions and their power?

Answer 20

Harsher decision making and discussion with trade unions to reduce their power, in turn reduce their ability to impact the economy and lead to events like the Winter of Discontent

Question 21

How did Thatcher smash post war consensus on Britain’s drift towards Europe?

Answer 21

Increasingly Eurosceptic, didn’t want to give over power to the EEC, eventually quit over Europe

Question 22

How did Thatcher smash post war consensus on Multilateralism (International cooperation, good members of the Commonwealth, Nato, UN)?

Answer 22

One sided direction- goes in a more unilateral direction

Question 23

What was Thatcher’s priority when she got into office in 1979?

Answer 23

To rebuild the economy

Question 24

Why did she want to change post war economics?

Answer 24

End post war consensus, REVERSE harmful social and economic habits that she believed had been allowed to develop in 1945 govts onwards

Question 25

What were the harmful social and economic habits that had resulted from 1945 govts onwards?

Answer 25

- High levels of govt spending, led to borrowing, excessive taxation, inflation - Unnecessary growth interference in running of the economy - Growth of Bureaucracy meaning increasing civil servant and officials influence into people's lives - Combination of weak management and powerful unions resulted in continual increase in wages and salaries, but decline in productivity. Led to inflation and lack of competitiveness

Question 26

What did Thatcher implement to reverse the harmful social and economic habits within British government?

Answer 26

- Free market to replace Keynesian system (followed since 1945 govt) - Tackle inflation through Monetarism

Question 27

What is the origin of Monetarism?

Answer 27

financial theory associated with Milton Friedman, US economist.

Question 28

What is the PBSR?

Answer 28

Public sector borrowing requirement. The gap between government revenue and government needs - Includes all national and local govts, and nationalised industries who's cost of running is funded from govt revenue. If there is insufficient revenue, borrowing occurs

Question 29

What does Monetarism mean?

Answer 29

- root cause of inflation was govt spending - Therefore to control inflation, govt must reduce public expenditure and the amount in circulation (cut govt spending) - Wanted to get to a point where the PSBR was always in deficit

Question 30

What did Monetarism look like in practice?

Answer 30

- Kept interest rates high to deter irresponsible borrowing + keep the pound strong on international financial market

Question 31

What were the successes of Monetarism?

Answer 31

- Success: fall of inflation rate from 19% in 1979 to 5% in 1983

Question 32

What were the failures of Monetarism?

Answer 32

Failure: unemployment rapidly rose 1980 onwards, unacceptable as drop in inflation was unaccompanied by economic growth, increased 1981 saw fall in order for manufactured goods- start of economic recession

Question 33

What were some unemployment figures between 1980-86?

Answer 33

1980= 2,244,000 1982=3,097,000 1983=3,225,000 1986=3,408,000

Question 34

What social unrest occurred?

Answer 34

- Disturbances in many cities: April 1981, Black youths rioting, burning shops and looting in Brixton, South London. July riots in Bristol, Liverpool, Moss Side in Manchester

Question 35

What was the social unrest caused by?

Answer 35

Reaction to economic recession

Question 36

What is the 'Sus' law?

Answer 36

regulation that allowed the police to 'stop and search' people suspected of criminal behavior

Question 37

What did the people say were the reasons behind the social unrest?

Answer 37

- Thatcher's monetarist policies, leading to increased unemployment - Poor job prospects in deprived inner city areas - Alienation of young black people, feeling discriminated against by the police Brixton: 6 day period in April, used 'Sus' law against 1000+ people, majority black - High incidence of unemployment with school leavers Brixton unemployment= 13% Brixton ethnic minority unemployment= 25% Brixton black youths unemployment= 55%

Question 38

What did the Government say was the reason behind the social unrest?

Answer 38

those on the right felt the disturbances were deliberately started and exploited by political trouble makers, including minister of Employment, Norman Tebbit

Question 39

What were the Conservative MPs views on Thatcher's strong policies?

Answer 39

- Tebbit encourages Thatcher not to deflect from her policies (strong support strengthened the idea that 'the lady's not for turning' - Act against the 'wets' ie Francis Pym (Defence), James Prior (employment), Peter Walker (agriculture)-> worried about effects of monetarism, urging abandoning or modifying it

Question 40

What was the general feeling on Thatcher's policies 1982 onwards?

Answer 40

Economic and social problems had built up, began to threaten Thatcher's continuance in office, significant decline in PM and government popularity.

Question 41

What are 'wets'?

Answer 41

Applied in Thatcher years to those in government and Conservative Party who were opposed or uncertain about Thatcher's tough measures