Globalization and Its Discontents

In May 1979, Conservative party leader Margaret Thatcher was sworn into office as the first female Prime Minister of the United Kingdom. A little over a year later, in January 1981, Ronald Reagan, leader of the American Republican Party, took office in the White House in the United States. Both leaders are known for being anti-Keynesian, anti-big government, and pro-private business.

This stance is a radical break from the economic and political trends that had been building since the Great Depression of 1929, which encouraged greater social programs, higher taxes, and a larger government. Both the US president and the UK prime minister advocated for a political shift to the right: Reaganomics and Thatcherism, as they came to be called, focused on expanding the private sector and controlling inflation through tight budget balancing, at the cost of rising unemployment. Both strongly pushed the idea of “trickle-down economics”—a principle of economic distribution founded on the belief that any growth in the upper class will eventually flow down to positively affect the lower classes. Trickle-down economics is primarily used to justify tax cuts.

In Globalization and Its Discontents, Stiglitz highlights the Reagan-Thatcher revolution as one of the factors that pushed the IMF and other international economic institutions to adopt

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