Recovery after the “British disease”: special experience of the UK economy transformation in the 1980s

Alexander MAL’TSEV
PhD in Economics, Associate Professor of the Global economy department, Ural State University of Economics, Yekaterinburg, Russia

Sergey NEVSKIY
PhD in Economics, Associate Professor of the Faculty of Economics, Lomonosov Moscow State University, Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 3),

p. 63-86
DOI: 10.18522/2073-6606-2016-14-3-63-86

The article deals with the analysis of the specificity of Britain’s economy transformation in the 1980s. It has been shown that thanks to the economic reforms of Margaret Thatcher the United Kingdom was able not only to recover from the “British disease”, but also to become one of the world’s first “post-industrial nation”. Authors believe that the main cause of British “institutional sclerosis” in 1960–1970s were difficulties with the adaptation of the institutional structure of the Fordist welfare state with its inherent tendency towards full employment, social collectivism, focus on industrial production and state interventionism to the new challenges of post-Fordist era of socio-economic development with its priority of service sector development, individualism and public sector decentralization. Thatcherism is interpreted by the authors as a way of clearing the institutional remnants of the industrial age, preventing the transition of the British economy to the new post-industrial stage of economic growth. Special attention is paid to the study of reasons by which Keynesianism was replaced by Monetarism as a mainstream in British political and economic discourse of the 1980s. The distinctive features of the economic philosophy of Thatcherism are systematized. The main of them was the replacement of the “dependency culture”, based on state paternalism by the “entrepreneurial culture”, promoting personal initiative and responsibility. Ultimately, thanks to the painful but necessary reforms of 1980s Britain became Great once again.

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Keywords: Monetarism; Keynesianism; Thatcherism; the economy of Great Britain; post-industrialism; socio-economic reforms; creative destruction

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ISSN: 2073-6606