Editing Thatcherism (section)

=== 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]].

Moreover, it has been argued that the Thatcherites were not strictly monetarist. A common theme centres on the Medium Term Financial Strategy, issued in the 1980 budget, which consisted of targets for reducing the growth of the money supply in the following years. After overshooting many of these targets, the Thatcher government revised the targets upwards in 1982. Analysts have interpreted this as an admission of defeat in the battle to control the money supply. The economist C. F. Pratten claimed that "since 1984, behind a veil of rhetoric, the government has lost any faith it had in technical monetarism. The money supply, as measured by [[M3 (economics)|M3]], has been allowed to grow erratically, while calculation of the [[public sector borrowing requirement]] is held down by the ruse of subtracting the proceeds of privatisation as well as taxes from government expenditure. The principles of monetarism have been abandoned".{{sfn|Minogue|Biddiss|1987|p=73}}

Thatcherism is also associated with [[supply-side economics]]. Whereas [[Keynesian economics]] holds that the government should stimulate economic growth by increasing demand through increased credit and public spending, supply-side economists argue that the government should instead intervene only to create a free market by lowering taxes, privatising state industries and increasing restraints on trade unionism.{{Citation needed|date=August 2015}}