ABSTRACT
The decline of British industry, along with monetarism, economic liberalization and the rise of the financial sector are popularly associated with the 1980s and Margaret Thatcher’s Conservative government. But British industry had already passed its peak nearly a century before. Unregulated financial markets were in full swing in London by the late 1950s, with the emergence and growth of the Eurodollar and wholesale money markets there. Monetarist policy was attempted by Heath’s Conservative government during the early 1970s and endorsed by the Labour party leader, James Callaghan, later in the decade; and the need for a loan from the IMF in 1976 laid the foundations for much of what would later become known as ‘Thatcherism’. Britain’s return to economic liberalism during the three decades leading up to the 2008 global financial crisis (GFC) must thus be traced to processes that have roots much earlier. We therefore begin with an examination of the forces that created the system that ultimately collapsed; and this requires a brief exploration of Britain’s ‘imperial hangover’.
