04/09/2013 09:26 am ET | Updated Apr 10, 2013

Paul Krugman: Margaret Thatcher Shouldn't Get Too Much Credit

It was only a matter of time before Paul Krugman jumped into the Thatcher-legacy ring.

The Nobel Prize-winning economist wrote in a Monday night blog post that even though Britain's economy experienced a major turnaround after Thatcher’s time in power, the rebound wasn't necessarily the result of the Iron Lady’s controversial economic policies.

“For now, consider this a caution: if anyone tells you that Thatcher saved the British economy, you should ask why the results of that salvation took so very long to materialize,” Krugman writes.

Thatcher, who died Monday, pursued an aggressive economic policy during her tenure that was driven by free-market ideals and included cuts to the nation’s welfare state, the sale of government-owned industries and famed battles with unions. She also slashed the nation’s income tax and made moves to curb inflation.

Supporters credit such policies with reinvigorating the British economy, an idea Krugman takes issue with. If Thatcher’s policies were responsible for the British turnaround, Krugman asks, then why did they take so long to produce results?

It's true that the British economy didn't take off until much later. During Thatcher's tenure, unemployment climbed to a record high, GDP never grew by more than a few percentage points and poverty soared, according to the Guardian. And, as Krugman notes, it was actually after Thatcher was no longer prime minister, in the mid-1990s, when the British economy experienced its real rebound.

Krugman’s argument may go unnoticed in the post-Thatcher, nostalgia-fueled environment, as even many of those who once opposed her policies now claim that they were transformative. John Rentoul, the chief political commentator for the left-leaning Independent, wrote Monday: “She was, in my view, a necessary prime minister who saved the British economy, but at too high a social cost.”


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