Thatcherite

Thatcherite economics

Thatcherism is associated with the economic theory of monetarism, notably put forward by Friedrich Hayek's The Constitution of Liberty which Thatcher had banged on a table while saying "this is what we believe". In contrast to previous government policy, monetarism placed a priority on controlling inflation over controlling unemployment. According to monetarist theory, inflation is the result of there being too much money in the economy. It was claimed that the government should seek to control the money supply to control inflation. By 1979, it was not only the Thatcherites arguing for stricter inflation control. The Labour Chancellor Denis Healey had already adopted some monetarist policies, such as reducing public spending and selling off the government's shares in BP.