Thirty Years of Thatcherism How Maggie Came to Power

The Soviets dubbed her the "Iron Lady," US President Ronald Reagan called her "England's best man" -- 30 years ago Margaret Thatcher was elected prime minister of Britain. It was the start of a radical free-market revolution which hasn't yet been turned back.

"You know, there are times, perhaps once every thirty years, when there is a sea-change in politics," said British Prime Minister James Callaghan to a young confidant during the last days of the 1979 parliamentary election. "It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of. I suspect there is now such a sea change and it is for Mrs. Thatcher."

Before the voters even went to the polls, Callaghan privately took leave of his own job. The message of "change," at least to him, seemed to be sweeping Conservative opposition leader Margaret Thatcher into power. But her rise wasn't nearly as unstoppable as Callaghan later made it out to be.

Only a few months earlier, in the summer of 1978, Thatcher's career seemed to be ending. The British economy showed signs of revival. Inflation, which had been at 26.9 percent a few years before, was back in the single-digit range. The political climate improved for the Labour Party. It started to lead in polls, and in lists of political favorites, the moderate Callaghan was leaving Thatcher, with her reputation for extremism, far behind.

The 'Winter of Discontent'

It looked so good for Labour, in fact, that the prime minister considered calling an early election for fall 1978. If he had, writes Thatcher biographer John Campbell in "The Grocer's Daughter," Thatcher might have lost, and her days as frontwoman of the British Conservatives would have been numbered.

But it turned out differently.

Feeling worried, the Tories hired the Saatchi ad agency to produce a poster. It showed a long line of unemployed workers, with the slogan, "Labour isn't working." It was a reminder that the unemployment level, still at 1.5 million, was abnormally high. Only a few posters went up, but the furious protests of the Labour Party ensured that more people would see it. Callaghan was on the defensive again and buried his plans for a new election.

In the following winter came Thatcher's breakthrough. It would become known as Britain's "winter of discontent." In its fight against inflation, the government set a limit of five percent on pay rises during the wage bargaining round. Companies that failed to stick to the limit would lose their public contracts.

The five-percent rule led to massive strikes. Truck drivers, garbage collectors and hospital workers took to the streets. Even gravediggers went on strike in Liverpool. Gas stations and shops went unstaffed, hospitals only took emergency patients, and public squares were piled with garbage. For several weeks in January 1979, anarchy ruled. On January 22, unions held a "National Action Day" and around 1.5 million people refused to work.

Thatcher's moment had arrived. Until then she hadn't felt confident enough to challenge the unions. She was a careful politician, worried about her electoral chances. But now she sensed that the public would accept a sharper tone. She presented herself as a leader who was ready, in the name of the nation, to fight militant unionists. "If someone is confronting our essential liberties, if someone is inflicting injury, harm and damage on the sick, my God, I will confront them," she said in a radio speech on January 31, 1979.

Thatcher hit a nerve. Her poll numbers rose, and soon the Tories led Labour by 20 percentage points. It would be another three months before the election, and in the last few weeks Labour picked up momentum. But in these days of January, Thatcher laid the decisive foundation for a victory.

The 'Thatcher Revolution'

It was a rare demonstration of combativeness that later earned her nicknames like "Attila the Hen," and it stood in marked contrast to her moderate, inscrutable approach until then. "Right up until May 1979," wrote John Campbell in his biography, "no colleague or commentator could be sure which was the real Margaret Thatcher. It is not even certain that she knew herself."

Even after the election, which the conservatives won on May 3 with 44 percent of the vote, "Thatcherism" took some time to bloom. The Falklands War of 1982 made her a national hero. Only afterwards did she feel strong enough to push her philosophy of deregulation. She became one of the most admired but also the most hated leaders of the nation.

Thatcher now counts as the founder of modern Britain. All prime ministers since have been her heirs, above all Tony Blair, who changed the Labour Party as radically as she changed the Tories. "The real triumph was to have transformed not just one party but two," said Geoffrey Howe, Thatcher's earlier finance minister, at the celebration of her 80th birthday.

Now the 83-year-old Baroness Thatcher, who suffers from dementia and rarely appears in public, still divides opinion. The residents of her hometown, Grantham, have no apparent interest in raising a statue to their most famous daughter.

But 30 years after the start of her revolution, Thatcher has lived to watch the pendulum swing back. The banking sector that she deregulated has been nationalized again, and public debt is exploding. Callaghan seems to have formulated things correctly. Another sea-change is underway.

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