When Thatcher was elected Britain’s first female prime minister on May 4, 1979, it was against a background of soaring inflation, bitter labor disputes, rising unemployment and declining trade figures—a result of the collectivist and consensus policies that both Labour and Conservative postwar governments had pursued. Influenced by her upbringing and, now, the ideas of Keith Joseph and American economist Milton Friedman, Thatcher was set on what became known as monetarism and, through her implementation, Thatcherism. This economic theory advocated individual enterprise and a reduction in state intervention. State-subsidized industry and jobs instilled no incentive to compete, put too much money into the economy and encouraged inflation. Thatcherism valued individual responsibility: Taxes and government spending on state-provided welfare should be lower to allow individuals to use their money to support themselves as they choose. The state should be servant, not master.

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Thatcher ushered in a decade of painful reform, privatization, deregulation and tax cutting. At first inflation and unemployment rocketed, some businesses crumbled. But—“the lady’s not for turning”—the prime minister brazened it out over three historic terms of office, wrenching the economy back off its knees. At least one widely popular measure was the sale of council houses, allowing by 1982 a half-million people to become homeowners (and possibly Tory voters) for the first time.

Paradigmatic of Thatcher’s ruthless resolve—and crucial to the success of monetarism—was her defeat of the National Union of Mine Workers, which, in March 1984, called a strike over plans to close unprofitable pits. The threat to the national fuel supply raised the specter of an ungovernable country. The strike lasted a year and saw police and miners in ugly pitched battles. But Thatcher had stockpiled coal reserves, ready to defend democracy against her bête noire of socialism, the militant trade unions. She won. Whole mining communities suffered badly, yet the greater community of democratic Britain survived. Tougher legislation was later introduced to curb future union power. The general mood of the country, fed up with disruptive strikes, was with Thatcher on the need for change.

The prime minister was equally tough in 1984 when an Irish Republican Army bomb meant for her exploded in the Brighton hotel where Tory Party members were staying overnight for their annual conference. Having hardly slept, she appeared on the conference platform the next day, neatly dressed and made up, defiant that democratic business should continue. The image went around the world.

If defeating the unions epitomized Thatcher on the domestic front, then victory against Argentina in the Falkland Islands was a key event abroad. Few people had even heard of the tiny British dependency (population 1,800) near Cape Horn, but invasion by Argentina in April 1982 offended every patriotic fiber in Thatcher’s body. Raised on the Churchillian belief that Britain was capable of epic things on the world stage, she sent ships to retake the islands. By mid-June the war was won—at a cost of 255 British lives. Principle had been upheld; a new sense of national confidence emerged. Thatcher’s flagging popularity ratings also benefited.

Less spectacular but truly far-reaching was Thatcher’s role in bringing about the end of the Cold War and contributing to the demise of communism in Central and Eastern Europe. As an individualist and free market advocate, she had an innate and frequently voiced distrust of communism. In Soviet leader Mikhail Gorbachev, however, she found a man she “could do business with,” and she helped to persuade President Ronald Reagan away from “evil Empire” rhetoric to do the same. The chemistry between Reagan and Thatcher made their alliance a high point of the special relationship between Britain and the United States in the 20th century. “She was warm, feminine, gracious and intelligent and it was evident from our first words that we were soul mates when it came to reducing government and expanding economic freedom,” Reagan remarked.

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