Margaret Thatcher & economy system

The main points of difference between the UK mixed economy system and the economic conditions that existed in the former eastern bloc communist states. There can be many points of difference between the UK mixed economy and what existed previously. 'In the nineteenth century the UK government played only a small part in control of the economy. Today, the proper role of the government is open to debate. But most people can accept that it should at least try to influence economic activity'. In a small number of towns in the 1920s, more than half the potential working class were unemployed.

A sustainable number of people thought that something should be done, and the only people to do this were the government. (The government had to sustain the level of employment). Furthermore, the'1970s was a period of rapid increase in prices'. The people thought that they had to raise their own incomes to cope with price rises. The general price increase is due to the working price system. 'Trading ideally needs to take place in settled conditions'. if people hesitate to trade , then fewer goods will be produced for sale.

Therefore, if fewer products are manufactured the less people are employed in production. 'Price disturbances can therefore, cause the whole economy to stagnate'. When Margaret Thatcher was elected in 197 9 not only did the economy change but also the economic policy within the country. A number of industries, which were previously, owned by the state, for example telecommunications, fuel and power, rail and air transport were privatised. Services such as health and education were placed in to a competitive environment in which they had to manage their own income and their own budgets wisely.

Within this 'mixed economy' framework, the degree of regulation, however, remained a subject of extensive debate. In Germany for instance the idea of planning in any form was widely rejected. France on the other hand adopted a system of 'indicative planning', intended to establish a state – controlled frame- work for the market economy. These remained also differences of opinion on the issues of nationalisation of key industries, the extension of social security systems and the size of the public sector in various west European countries.

But the extreme of, on the other hand, a centrally planned economy were almost completely abandoned, as realistic options. Arguably it is the United Kingdom that has made the mostly pronounced changes towards creating a more liberal economy. These changes were set in motion when the Thatcher administration came into power. Thatcherism abandoned the Keynesian demand management. The only goal, which eluded the government, was that of controlling the money supply. Moreover, John Major replaced Margaret Thatcher in 1990.