22. Jahrgang (1996), Heft 3 Wirtschaft und Gesellschaft of the 1980s' , while they claim that it has rendered reformist strategies of the Left "obsolete" (14) . The Thatcher government found neo-classical economics generally and "monetarism" and "supply-side" economics specifically in tune with its ideological preoccupations. A myth was created that Mrs. Thatcher and her associates had, while still in opposition, "worked out a full programme for government" (15) which in office they pursued consistently and with full success. In reality, the Thatcher period was characterised by the "persistence of intractable problems" (16) such as slow growth and high unemployment, the ongoing contraction of manu­ facturing capacity, repeated bouts of high inflation and balance of pay­ ments problems. The thatcherites had mocked as "fine tuning" the attempts by the governments that preceded them to stabilise demand and output, leading to "stop-go" (or, more correctly, "go-stop" ) economic phases of the 1950s and 1960s. But the thatcherites turned them into the much more virulent "boom and bust" phases of the 1980s and 1990s. Nor did the Thatcher period see the unfolding of a master plan. The govern­ ment changed tack several times as earlier strategies came to grief, but never acknowledged it: substance changed, the rhetoric persisted. Take monetary policy, the central and "magic" ingredient of thatche­ rite mecro-steering: setting targets for the (generally to be reduced) growth of the money supply over a number of years ahead to eliminate inflationary expectations (the "Medium-Term Financial Strategy" ) would do away with booms and slumps, assuring stability of growth. Monetary targets would be set and adhered to by cash-limited (mostly reduced) public expenditure, controlling government demand for credit. Variations of interest rates would control demand for credit by the pri­ vate sector. (This system had, in fact, in essence been first introduced by the Labour government of the late 1970s, following a particularly severe sterling crisis, under pressure from the IMF. One analyst has even suggested that, with the arrival of the IMF loan monitors in London, "thatcherism took office . . . in 1976 " (17) . Mrs. Thatcher's government was not formed until 1979 . ) However, in the first two years, responding uncritically to (often mis­ leading) signals given out by the changes in the growth of monetary aggregates, Mrs. Thatcher's ministers, in order to tighten policy, set ever higher levels of interest rates, which contributed to an inappropriate ap­ preciation of the currency: the "petro-pound" . High interest and ex­ change rates combined to reduce British industrial competitiveness at a time when the world conjunctural conditions were deteriorating, and pushed Britain into an unnecessarily deep and prolonged recession. Bet­ ween 1978 and 1981 relative export prices rose by nearly 20% and relative unit costs by 50% (! ) (18) . Output fell sharply, one-fifth of the manufacturing sector disappeared never to return and in eighteen months unemployment doubled to over three million. The Thatcher government had inherited a (declining) rate of 4% in 1979 ; in 1981 it averaged 8 .3%. By 1985 it had reached 1 1% (19) . 359