Punch Newspapers Sections From the period after World War II, in 1945, the “Washington Consensus” had revolved around the need to commit public money to build some aspects of the economy. This was underlined by America’s “Marshall Plan” (European Recovery Programme), aimed at reviving Western European economies from the ruins of the war. It was underwritten with US15bn, and enacted into law by the US Congress in 1948. Western economies would be run on the basis of free market, with minimal government intervention targeted at infrastructure and social services. Government annual deficit could be offset by ‘limited’ borrowing. Inflation could rise a little, but that was preferable to rising unemployment. A cosy, middle-of-the road, mixed economy type philosophy you might say, but it worked. The “consensus” remained the orthodoxy until it came under sustained assault by the apostles of (ultra) free market, the ‘supply-side’ (lower taxes, minimal regulation, and free trade) economists, from the late 1960s through to the 1980s. Accumulation of public debt, bureaucracy, inflation, even stagflation in some cases, and a steady decline in manufacturing capacities, made the point for them succinctly. The supply-side economists had won the intellectual argument by the end of the 1970s, but needed political power to put their ideas into practice. Then, came Britain’s first woman Prime Minister, (“Iron Lady”), Mrs Margaret Thatcher (1979-1990), followed by the US President Ronald Reagan (1981-1989). Together, they pushed for low taxes, low inflation, deregulation, and smaller government with an evangelical zeal. It caught fire, and a new orthodoxy was established, until the G7 “historic” agreement at a meeting of its finance ministers in London on June 5, 2021.