In the 1980s, British Prime Minister Margaret Thatcher, known as the “Iron Lady,” revolutionized Britain’s economy by rejecting the post-war socialist consensus and replacing it with a market-driven individualistic model. Today, two strong female leaders in Japan’s Sanae Takaichi and Italy’s Giorgia Meloni are looking to generate similar overhauls of their respective economies to reverse decades of decline.
Like Ronald Reagan in the United States, Thatcher targeted inflation in Britain to restore confidence in the Pound and reduce runaway public spending. She championed the privatization of lethargic state-owned industries, cut taxes and regulations, confronted the stranglehold unions had over the economy, and emphasized self-reliance, entrepreneurship, and home ownership. As a result, Britain thrived, recovering some of its pre-war economic might. (That progress has now, unfortunately, been largely reversed by subsequent decades of socialist governance.)
When Takaichi officially became prime minister last month, she was already drawing comparisons to Thatcher, whom she greatly admires. The BBC reported that her personal goal was “to become Japan’s Iron Lady.” And Japan needs it.
Japan’s economy has struggled in recent years, a crisis that has accelerated over the past few months. Extremely low birth rates and an aging population have created a looming demographic crisis. Japanese companies have shifted their focus overseas, including to China, threatening to expose the Japanese economy to pressure from Beijing. In the most recent quarter, the Japanese yen fell more than 4.5 percent against the dollar, the worst mark among major G10 currencies. Last year, the yen sunk to levels not seen since the early 1990s.
Takaichi has taken office with promises to prioritize pension reform and bring down inflation in order to drive economic growth. Her social agenda also includes policies to encourage Japanese citizens to get married and start families, along with limiting mass immigration.
Like her political mentor, the late Prime Minister Shinzo Abe, Takaichi has said that she will not support a fight against inflation solely through raising interest rates – a slight departure from Thatcherism. Instead, Takaichi has advocated for more accessible credit that will boost economic output, thus easing inflation. To Takaichi, more domestic investment is the path out of Japan’s economic malaise.
The Japanese media has introduced the term “Sanaenomics” to describe her unique approach to recovery, which combines private capital with public finance and economic reforms. The primary obstacle she faces is longstanding Japanese fiscal dogma, which opposes economic stimulus as inflationary.
Tamura Hideo, a business editor at Japanese daily newspaper Sankei Shimbun, has noted that the media often questions, “Who will pay for tax cuts or fiscal subsidies?” while ignoring that economic growth can generate new government revenue. U.S. President Donald Trump’s 2017 Tax Cuts and Jobs Act proved this out, with government revenue actually increasing after passage of the law despite the fact that tax rates were lower across the board.
Takaichi is specifically proposing a $64.9 billion stimulus package alongside a supplementary budget to support it. While Abe focused on the three arrows of monetary easing, fiscal stimulus, and structural reform, Takaichi emphasizes livelihood security (including affordability), growth investment, and defense capabilities.
Among backers of this approach is former deputy governor of the Bank of Japan Professor Masazumi Wakatabe. An economist who lectures at Waseda University, he criticized previous governments for departing from Abe’s pro-growth policies. “Strategic fiscal spending would raise household incomes and corporate earnings, which could lead to an increase in tax revenues without needing to raise tax rates,” he told me in an interview.
To tackle rising prices, Takaichi’s government plans to abolish the gasoline tax and subsidize electricity and gas bills for all households. Additionally, public funds will be allocated to support wage increases and grants through local governments. These funds will also be used to subsidize medical institutions and personnel.
The stimulus is aimed at incentivizing capital investment in 17 strategic fields, including shipbuilding, semiconductors, advanced technologies such as AI, and nuclear fusion, where Japan currently holds a leading position. This stimulus package will be financed through the 3.6 trillion-yen budget surplus projected in Fiscal Year 2026, which will be reinvested into the country’s economy.
Takaichi also announced the launch of the Government Efficiency Bureau, dubbed “Japanese DOGE,” to review the effectiveness of tax policies and high-value subsidies. The Bureau will also review whether any government agency is an obstacle to increased investment.
Early polling data suggests that Takaichi’s aggressive platform is overwhelmingly popular with the Japanese people. Her government received a 74 percent approval rating in a Nikkei Research/TV Tokyo survey, which is more than 20 percent higher than the 51 percent initial support for the previous administration led by Shigeru Ishiba. Only 19 percent of respondents in the new poll expressed disapproval. Support for Takaichi was particularly strong among voters aged 18 to 65, with an approval rating of 82 percent. Among those aged 65 and older, support was lower at 66 percent.
Meanwhile, halfway around the world, Italian Prime Minister Giorgia Meloni is three years into a similar effort to revitalize her economy. Italy was once an economic powerhouse, with GDP peaking at $2.2 trillion in 2008. But creeping socialist influences led to years of negative growth.
Meloni has reversed that trend. In 2024, GDP climbed back to $2.37 trillion, and 2025 looks to be another strong year, with the most recent quarterly result coming in better than expectations.
Under Meloni’s leadership, Italy has issued targeted subsidies to certain key industries, cut taxes, and slashed regulations. Her government also eliminated “the citizen’s income,” a form of universal basic income implemented by her predecessor that incentivized Italians not to work.
As a result, the country has seen its lowest unemployment rate since 2007 at six percent. Italy’s public deficit has fallen from 7.2 percent of GDP to 3.4 percent. The government has also facilitated numerous investments in Africa, including key energy projects that cut Italy’s reliance on Russian natural gas.
Meloni’s success is proof of concept that Thatcherism can still work in the modern economy and provides reason for optimism that Takaichi will be successful in Japan. Challenges remain, but it may well be that these two “Iron Ladies” are spearheading a broader economic revival throughout the free world.
Ben Solis is the pen name of an international affairs journalist, historian, and researcher.
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