Seesaw or domino: The British dilemma

• Published in: Business horizons 1981-11, Vol.24 (6), p.35-39
• Main Author: Bonavia, Michael R.
• Format: Article
• Language: English
• Subjects: Borrowing; Economic conditions; Economic policy; Monetary policy; Prime ministers; Public sector; Requirements; United Kingdom
• ISSN: 0007-6813; 1873-6068
• DOI: 10.1016/0007-6813(81)90023-9

While Margaret Thatcher insists that she is dealing with a problem that can be solved, most people in Britain see her in a dilemma. There are some features that are peculiar to the British situation. Monetarism has been re-imported into Britain and it appeals to the present government in 2 ways: 1. it attracts people who believe that the economy has a built-in tendency towards equilibrium; and 2. it attracts Conservatives who consider the public sector to be diminished. The Thatcher government is making an assault on the public sector. One example of this is cutbacks in the Public Sector Borrowing Requirement. There appears to be an implied belief underlying the attack, in that, if resources flowing through the public sector are restricted, there will be a corresponding transfer into the private sector. It is the seesaw effect-if one goes down, the other will go up. The alternative to the monetarist approach is viewed by Thatcher as disastrous. The government seems to believe that a shake-out is needed to improve the performance of labor and managements. It is suggested that Margaret Thatcher needs some sensitivity to what is really happening, rather than her obstinate reiteration of what should happen. It is suggested the old ideas are no longer appropriate for this day and time.