Thatcher Fallacy (7)

   

“Thatcherism produced a greedy consumer society”

 

During the 1980’s much of the regulation that had impeded the free movement of capital was repealed. 

Through the liberalisation of the credit market there was more lending, and more spending financed by lending. Such measures included the abolition of exchange controls, the aboliton of bank lending limits, the abolition of Hire Purchase (Buy now pay later) restrictions, the dissolution of the Building Society cartel, and so on.

Meanwhile, Britain was getting richer. Gross Domestic Product rose faster in the 1980’s than it did during the previous two decades. This became a trend. In fact this year Britain’s GDP has overtaken the United States, Germany and France.

Access to credit and increased earnings have resulted in a consumer explosion. As a result we now own more ‘stuff’ than ever before. We are better housed, better furnished, better fed, better clothed, and better looking.

This does not mean we are greedy. Greed is a word people use to explain the purchases of others that they do not themselves understand. I for example, am sometimes prepared to pay for brand-named clothes. I might do so because I like the design or trust the quality of the product. This is only viewed as greed by others who fail to understand my interest. Actually, if they minded their own business the accusation wouldn’t arise in the first place.

Critics claim that the liberalisation of the credit market produced irresponsible lending, over-heat and a recession. They are of course correct. But then freedom was bound to result in mistakes. In the longer term however, borrowers learn to exploit credit to their best advantage.

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