The British economic experiment of the early 1980s, like the American experiment just discussed, placed major emphasis on reducing the growth rate of the money supply in order to reduce inflation and, ultimately, interest rates. And, as in the US, these goals were achieved: between 1980 and 1983 inflation had been lowered from 18 percent to 3 percent and short-term interest rates had dropped from 16 percent to 10 percent. However, also as in the US, these goals were achieved at a tremendous, unexpected cost to the economy in terms of unemployment and lost output. During 1980, the first year of Thatcher's administration, the growth rate of the British economy plunged to -2.0 percent and continued to fall through 1981. In 1982, the unemployment rate had increased to 12.3 percent, the highest among the major industrialized countries.

Both Thatcher and Reagan made overly optimistic promises of economic performance which were not achieved due to widespread ignorance of just how powerful restrictive monetary policy had become. In the early 1980s, the financial side of the new global economy began absorbing an unexpectedly large supply of national currencies away from GDP markets. Therefore, GDP markets would have been faced with an unexpected liquidity crisis even without governmental moves to tighten credit. So destructive were the short-run effects of the UK's monetary experiment, that 364 university economists and nearly all of the retired senior economic advisors to past British governments issued an unprecedented public statement condemning the experiment:

First, there is no basis in economic theory or supporting evidence for the Government's belief that by deflating demand [with restrictive monetary policy] they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment; Secondly, present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability; Third, the time has come to reject monetarist policies and consider urgently which alternative offers the best hope of sustained economic recovery. ("The 364 Economists" Attack on Government Policy', Barclays Review 56, May 1981, p. 27)

Fortunately for the British policy-makers, they did not highlight their ignorance of the new global economy, as did the Reagan economists, by setting specific targets for economic performance. The British promises were for the most part only generalized commitments for change, but even these were not attained. Large reductions in central government spending were not realized, and, as in the US, there was ultimately an increase in the central government's share of the economy -- just the opposite of what both Thatcher and Reagan had promised their constituents. Thatcher's conservative mandate from the voters soon lost some of its momentum, and in a key power struggle with the National Union of Mineworkers the government halted its attempt to close down operations at redundant coal pits. Industry was not freed from 'the shackles of labor and government', instead, large loans and subsidies were given to British Steel, British Leyland, Rolls-Royce, British Shipbuilders, and British Airways.