The essence of Thatcherism was to oppose the status quo and bet on freedom—odd, since as a prim, upwardly mobile striver, she was in some ways the embodiment of conservatism. She thought nations could become great only if individuals were set free. Unlike Churchill's famous pudding, her struggles had a theme: the right of individuals to run their own lives, as free as possible from micromanagement by the state.

In her early years in politics, economic liberalism was in retreat, the Soviet Union was extending its empire, and Milton Friedman and Friedrich Hayek were dismissed as academic eccentrics. In Britain the government hobnobbed with trade unions (“beer and sandwiches in Number 10”), handed out subsidies to failing nationalised industries and primed the pump through Keynesian demand management. To begin with the ambitious young politician went along with this consensus (see article). But the widespread notion that politics should be “the management of decline” made her blood boil. The ideas of Friedman and Hayek persuaded her that things could be different.

Most of this radicalism was hidden from the British electorate that voted her into office in 1979, largely in frustration with Labour's ineptitude. What followed was an economic revolution. She privatised state industries, refused to negotiate with the unions, abolished state controls, broke the striking miners and replaced Keynesianism with Friedman's monetarism. The inflation rate fell from a high of 27% in 1975 to 2.4% in 1986. The number of working days lost to strikes fell from 29m in 1979 to 2m in 1986. The top rate of tax fell from 83% to 40%.

Not for turning

Her battles with the left—especially the miners—gave her a reputation as a blue-rinse Boadicea. But she was just as willing to clobber the right, sidelining old-fashioned Tory “wets” and unleashing her creed on conservative strongholds, notably by setting off the “big bang” in the City of London. Many of her pithiest put-downs were directed at her own side: “U-turn if you want to,” she told the Conservatives as unemployment passed 2m. “The lady's not for turning.” She told George Bush senior: “This is no time to go wobbly!” Ronald Reagan was her soulmate but lacked her sharp elbows and hostility to deficits.

She might not be for turning, but she knew how to compromise. She seized on Mikhail Gorbachev as a man she “could do business with” despite warnings from American hawks. She backed down from a battle with the miners in 1981, waiting until she had built up sufficient reserves of coal three years later. For all her talk about reforming the welfare state, the public sector consumed almost the same proportion of GDP when she left office as when she came to it.

She was also often outrageously lucky: lucky that the striking miners were led by Arthur Scargill, a hardline Marxist; lucky that the British left fractured and insisted on choosing unelectable leaders; lucky that General Galtieri decided to invade the Falkland Islands when he did; lucky that she was a tough woman in a system dominated by patrician men (the wets never knew how to cope with her); lucky in the flow of North Sea oil; and above all lucky in her timing. The post-war consensus was ripe for destruction, and a host of new forces, from personal computers to private equity, aided her more rumbustious form of capitalism.

The verdict of history

Criticism of her comes in two forms. First, that she could have done more had she wielded her handbag more deftly. Hatred, it is true, sometimes blinded her. Infuriated by the antics of left-wing local councils, she ended up centralising power in Whitehall. Her hostility to Eurocrats undermined her campaign to stop the drift of power to Brussels. Her stridency, from her early days as “Thatcher the milk snatcher” to her defenestration by her own party, was divisive. Under her the Conservatives shrank from a national force to a party of the rich south (see Bagehot). Tony Blair won several elections by offering Thatcherism without the rough edges.

The second criticism addresses the substance of Thatcherism. Her reforms, it is said, sowed the seeds of the recent economic crisis. Without Thatcherism, the big bang would not have happened. Financial services would not make up such a large slice of the British economy and the country would not now be struggling under the burden of individual debt caused by excessive borrowing and government debt caused by the need to bail out the banks. Some of this is true; but then without Thatcherism Britain's economy would still be mired in state control, the commanding heights of its economy would be owned by the government and militant unions would be a power in the land.

Because of the crisis, the pendulum is swinging dangerously away from the principles Mrs Thatcher espoused. In most of the rich world, the state's share of the economy has stubbornly risen. Regulations—excessive as well as necessary—are tying up the private sector. Businesspeople are under scrutiny as they have not been for 30 years and bankers are everyone's favourite bogeyman. And with the rise of China state control, not economic liberalism, is being hailed as a model for emerging markets.

For a world in desperate need of growth, this is the wrong direction. Europe will never thrive until it frees up its markets. America will throttle its recovery unless it avoids overregulation. China will not sustain its success unless it starts to liberalise. This is a crucial time to hang on to Margaret Thatcher's central perception: that for countries to flourish, people need to push back against the advance of the state. What the world needs now is more Thatcherism, not less.