A set of policies associated with the British Prime Minister Margaret Thatcher (1979-1990) derived from the works of Milton Friedman (the "Chicago School"), Friedrich Hayek and others. They emphasize the reduction of government control of the economy by privatizing socially owned businesses, reducing welfare and reducing tax levels for the rich (but not in practice for the poor). The proponents claim to be combating socialism but they are returning to early 19th century policies, which reformers at that time tried to mitigate; based on individualism . The 19th century saw a number of market bubbles and bank crashes (see Overend Gurney).

Mrs. Thatcher herself was once quoted as saying "there is no such thing as society, only individuals and families" . This was the view of Thomas Hobbes (1588-1679): that people do not cooperate unless compelled by superior force.

The main result of such polices, copied from the United States, seems to be an increase in the difference between rich and poor, greater crime levels and social unrest, and a concentration of economic activity on financial activities rather than investment in manufacturing. Unemployment rises. Crime rises and the Police and prisons become more expensive.

The policies were tried in Britain but also in Chile, Peru and New Zealand. Can a harmonious society be maintained with these policies? Not in the US or any of the above.

Were these policies the real cause of the 2007 crash in the banks, because of the repeal of controls over bank lending?

In Britain the same policies continued under the Blair government - 1997-2007 - in name a Labour Party government. That government seems to have lost the support of its traditional supporters (2008).

Has the 2008-9 world financial crisis discredited the policies of market deregulation?

The Gods That Failed: How Blind Faith in Markets Has Cost Us Our Future

Guardian extracts from the book - proposals to change policy to curb the super-rich.

Extract 1

Extract 2

Extract 3

See Economic Imbalance

Last revised 6/06/08


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