Perhaps more important, in retrospect, was a willingness to extend the bounds of the politically possible. There was, for example, widespread acceptance that inflation was a major economic and social evil, that all attempts - by governments of both parties - to contain it by incomes policies had not only failed but brought significant political and economic disadvantages of other kinds and that the problem was getting worse, as inflationary expectations became embedded. But it was equally widely assumed that the alternative approach of a fierce monetary squeeze would bring levels of transitional unemployment that made it politically impossible. In the event, transitional unemployment rose rather more than we had expected, and lasted slightly longer. But it did not make the policy, which was pursued to a successful conclusion, politically impossible.

Again, there was general agreement that nationalisation of a large and important sector of the economy had failed, having brought neither business efficiency nor industrial peace (as its original architects had hoped, by ending conflict between workers and their capitalist bosses) and that this was a significant part of the explanation for Britain's poor economic performance. But the obvious remedy of recognising this and embarking on a policy of denationalisation - or privatisation, as it came to be known - was assumed to be politically impossible: a rupture of the post-war settlement which the people did not desire and the trade unions would not permit. And, of course, it had never been done - neither in the UK nor anywhere else.

The complete abolition, within months of the Thatcher government taking office, of all controls on overseas capital flows, a liberalisation of profound consequence, also deserves a mention here. Exchange controls had been imposed on the outbreak of war in 1939 as an emergency measure and had been rigorously maintained ever since. Abolition, castigated at the time by Denis Healey, Labour's last Chancellor, as "reckless, precipitate and doctrinaire" took the public and the markets completely by surprise. It is now taken totally for granted - as much as the existence of rigid controls was then.

To return to privatisation, it is, incidentally, a complete myth that this, the Thatcher government's great gift to the world, was something we stumbled upon by happy accident when looking for ways to raise money to fund the massive public deficit we had inherited. The facts and the chronology are clear. In a lecture I gave in 1980, before any privatisations had actually taken place, in which I sought to explain at some length what the new Conservative government was about, I observed: "We have also embarked on a major programme of privatisation of the state-owned industries...Throughout this exercise, we are anxious to see the widest possible spread of private shareholding."