Does Margaret Thatcher “haunt” or “inspire” the modern Conservative Party? This week marked what would have been her 100th birthday, drawing out the usual debates as proxies for present-day disagreements. Was she a conviction politician or a pragmatist? Was Thatcherism a guide for policy today or a response to Britain’s 1970s afflictions? Where would Thatcher have stood on Brexit or Liz Truss’s mini-budget?

As someone who once worked at the Centre for Policy Studies think tank she founded, I’d say this: the most important Thatcher lesson for today’s Conservatives isn’t anything about her personality or policies. It’s that she took economics seriously as the foundation of governing. And the Conservatives haven’t for years.

“Economics is not the most important thing in life,” her former adviser Robin Harris once told me. “But it is the area where governments can do the most damage.” Thatcher understood this. She and Keith Joseph, her intellectual outrider, spent years in opposition building a theory of the British economy — what was broken, why, and the barriers to fixing it.

First came a clear macroeconomic diagnosis. Britain’s relative decline and inflation weren’t accidents or international inevitabilities. They were the product of policy: stop–go fiscal cycles, monetary indiscipline, and the corporatist delusion that ministers could agree wage bargains with trade unions to outsmart inflation. British industry had been “decapitalised” by high inflation, high real interest rates, and an investment-punishing tax system, they said. And Tory governments had been culpable.

Second, they knew better monetary policy alone wouldn’t reverse the decline. Yes, inflation had to be extinguished through monetary and fiscal tightening. But in his 1976 lecture, Monetarism Is Not Enough, Joseph made it clear that unless “union obstruction, lack of skills, overmanning, housing rigidity, lack of confidence” were tackled, Britain would remain unproductive.

Finally, they identified the opposition to necessary reform. The 1977 strategy document, Stepping Stones, laid it out plainly: the biggest blockages weren’t economic, but institutional. Especially trade union power. Fixing the economy with public buy-in thus required sequenced policies: stabilisation; reform of industrial relations; then, possibly, denationalisations.

Was all this followed exactly? No. Did it all work? No again. But it was Thatcherism before it had a name: a diagnosis, a recognition of the limits of policy, and a roadmap for countering opposition. Serious economics led both policy and strategy.

For two decades, the Tory party has largely let politics dictate economics. David Cameron wanted to focus on social policy until the financial crash forced an austerity pivot. Theresa May moralised without economic substance. Boris Johnson’s “levelling-up” was largely about political geography, not economics. True, Liz Truss tried Reaganism without the dollar, or any pitch-rolling, to disastrous effect. Since then, Rishi Sunak managed, while Kemi Badenoch opposes.

What’s been missing is analysis. Since 2005, economic growth has stagnated, public debt has soared, and, during the pandemic, inflation returned. Yet the Conservatives still have no shared account of why; leaving them no clear evaluation of what went right or wrong in office. Their emerging policies suggest they take political constraints as binding and unchangeable.

Yes, today’s problems are difficult, not least because they are a slow-burn rather than acute crises. Debt is rising because of fiscal shocks, but also unsustainable long-term health and pension promises, coupled with slow growth. Slow growth and low investment stem in part from fiscal pressures, plus supply-side constraints that were tolerable when demographic headwinds were favourable.

Overwhelming majorities desire that the state socialises “cost disease” industries like healthcare, social care and childcare. The diffuse benefits of higher growth through targeted deregulation aren’t tangible enough to draw aggressive supporters. As a result, today’s anti-growth coalition are less likely to wear hard hats than to be local residents, professional regulators, or voters demanding their triple-locked pension.

But that’s the point. Thatcher let economic thinking lead. The alternative for today’s Conservatives is to follow political winds, and drift with the consequences.