So Thatcher wasn't a proponant? Because under her reign it remained steady.
Thatcher made it plainly clear that the Conservative party would follow Neoliberal doctrine, based on no empirical foundation. The deregulation that occurred especially within the City of London unleashed something that most people have no comprehension of. If you work in finance (I do, have worked for investment banks and currently at a hedge fund on structured transactions) you know that the City is the Wild West of the Financial Services industry. Regulation is easily circumvented regardless of the regulatory framework.
Every dodgy deal, all of those SPVs, all of those economic hedges and hedge accounting relationships were nearly all of them cooked up and booked in the London divisions of every one of the financial institutions involved.
Thatcher's policies followed Greenspan's fundamentally libertarian viewpoints. The result was the re-emergence of everything that FDR's administration had worked so hard to stop happening as a result of 1929 and the harsh lessons learned of the real perils of free market economics ideology left unfettered.
I don't think anyone is really arguing against free markets, what we want are proper regulation. Thatcher's doctrine was to deregulate almost without limit.
The crash of 2008 and the balance sheet recession that we are currently in and will not come out of for another decade at least (see Japan/Richard Koo/Nomura) was born out of the de-regulation of financial services in the 1980s and the immediate race to the bottom as a result of free movement of capital.
Unprincipled people on Wall Street/The City took advantage of deregulation to makes themselves wonderfully wealthy at the expense of others in transactions which were nothing but zero sum. These werent trades and deals that created wealth, nothing of physical tangible value created, paper was moved and synthetic entities conjured up. For someone to win, someone else had to lose.
Thats the trading side. No one talks about the Wealth Management side and the real damage caused by the tax haven network her policies created. Britain is at the center of the whole offshore scandal. The City of London lobbies to keep the status quo they profit from it, not just the financial intermediaries, its the accounting firms, consultants and lawyers. The entire apparatus focused on the harvesting of capital out of the world economy. The politicians are fully captured too.
We have a situation now where tens of trillions are hidden within secrecy jurisdictions and so called treasure islands. This evasion has increased exponentially since the 1980s and is a direct result of the Big Bang that Thatcher and Reagan are so venerated for. This evasion is a major contributor to those government deficits. The kicker is that where do governments go to finance these deficits? The very same offshore money made available through financial intermediation. So here it is, deficits caused in part by tax havens, with States then paying interest to the holders of the money in those very jurisdictions.
This money is essentially deadweight. It just accumulates; most of it can never be spent. Multinationals cannot repatriate it since they deem it would receive far too great a haircut (i.e. taxed at the correct rate that small business can not escape) - so shareholders will never see a benefit from this cash. For them to repatriate and therefore invest they demand a higher return than ever before. This is in part the reason for the lobbying activity based on championing cost reductive measures (deregulation, erosion of worker rights, removal of minimum wage).
It is a total scam.
What it all boils down to is this it is increasingly obvious that deregulation of financial services is the number one cause of the growing inequality prevalent across our economic landscape. This does not excuse successive governments from pursuing the very same utterly destructive policies. However once you start a race to the bottom its very difficult to reverse course without international consensus.
But fuck it, its easier to sell politics of division talking about those scroungers than discuss the real issues of secrecy jurisdictions, financial engineering, transfer pricing and shell companies.
