“Thatcherism made a small number of Yuppies filthy rich”
This is often used by the Left as an example of how Thatcherism favoured the rich over the poor. This implication however is a fallacy.
Yuppies can make a huge amount of money, but then they are hugely active economic agents who play the stock market on a daily basis. Some do it for themselves, some do it on behalf of others and take a percentage of the profit in exchange for their market knowledge. However, it should be remembered (though it often isn’t) that Yuppies can also lose a huge amount of money. Yuppies who got used to the high-life during the Big Bang of the 1980s crashed to Earth in the 1987 stock market crash.
This activity, however, is not a superfluous sector of the economy. On the contrary, it performs an important function. Stock purchases allow companies to raise large sums of capital quickly. Expanding companies often ‘float’ on the stock market to fund their growth, or companies encountering financial difficulties sell stock to raise funds. This can both create and stabilise employment far down the economy. Then, when the companies grow or recover the stocks can be sold for a higher price. The Yuppie makes a tidy profit for himself but also has extra money to invest in new companies that require capital.
The wealth created by this virtuous cycle percolates down the economy, creating employment and contributing heavily to government revenue which can be used to fund education, healthcare and other public services. The Thatcher government’s deregulation of the stock exchange boosted this multiplier effect and was in the interests of the whole economy, rich and poor alike.