I would say it's not a coincidence at all, and there would have to be a global cause which would likely be the OPEC oil embargo and subsequent economic shock on the Western countries it was leveled against. Prior to this, there was a relative consensus around Keynesian economic policies that had been formed in the aftermath of the Great Depression. Socially liberal governments dominated and built mixed economies based on strong unions, direct government intervention in major industries like healthcare, and high government spending to support growth. Adherents of Keynesian theory also relied on an underlying principal: that inflation and unemployment are inversely related. In other words, as long as there is high inflation, there will not be high unemployment.

In America, the existence of stagflation unraveled that consensus and the public began to look for a new theory to guide policy. I can only imagine the psychological effects of the world's most powerful nation suddenly finding itself having to ration gasoline based on license plate number and the President suggesting solutions like putting on a sweater to lower home heating. The US was almost entirely dependent on these imports, and the foundation of the entire economy was oil. When those imports stopped, the economy came to a grinding halt.

Both Reagan and Thatcher (and conservative figures in other nations I'm sure, but know less about) presented an alternative. Whether called trickle-down economics, Reaganism ("voodoo economics" by skeptics), or Thatcherism, it was bound by a rejection of Keynesian thought and the theory that lowering taxes (especially for the wealthy), deregulating markets, lowering government spending, and privatizing public markets would grow the economy. Both used public dissatisfaction with unions for their corruption and disruptive strikes (US airlines, UK coal) to initiate major union-busting campaigns that would lead to their demise.

As I mentioned, the oil embargo had profound psychological damage on the superiority complex of both the US and UK. Reagan and Thatcher each believed in massive military spending and used their tenures to restore American confidence. Reagan directly confronted a Soviet Union already in decline, and Thatcher used the Falklands controversy in what was largely considered to be an unnecessary conflict to reassert British dominance after decades of decolonization and losing its status as a global empire.

I have to say that the 1960s Civil Rights Movement can't be overlooked in Reagan's election, but I can only speak on the US side of things. One of the most controversial aspects of Reagan has been his use of racial "dogwhistling" - using white working class fears concerning a recently liberated black population in order to win over a crucial electorate that had been loyal to the Democratic Party for its pro-immigrant, pro-labor policies dating back to FDR's New Deal Coalition. There's a lot that could be said here, but to keep this on topic, I think it still ties in with the overall ideology both he and Thatcher pushed: rebuilding a strong America/Britain that works for heavily-coded "traditional" public.

Did it happen anywhere else?

At least I can answer this. In Sweden the Moderate Party was moving towards an "an increasingly Friedman-inspired and market liberal direction" but their "Thatcherite era" was more in the 1990's. (Thatcher personally liked Bildt a lot.)

The immediate reason is listening to the economists like Martin Friedman, broadly the Chicago School.

Why exactly to them in why exactly in this era is more a complex econ question, although surely one big part of the reason is that the Keynesian school, that was largely the econ behind Social Democracy, had difficulties with stagflation.

This is only a part of the story. But very broadly, Social Democracy seemed to work really well 1945 -1975, France called this era the Thirty Glorious Years, and then there was all kinds of economic trouble and people were willing to listen to different ideas.

As a professional historian of the 20th-century USA, I must say this has been a really strong thread. Thank you all!

I would add a couple points from a transnational perspective. When neoliberal policies became dominant throughout the Western world, both in liberal and social democratic countries, was in the aftermath of decolonization. Keynesian thinking was popular with imperialists who needed not to worry about stagflation because the unequal trade relations they could count on with their colonies or their neighbors' colonies kept core economies growing. Once colonies began breaking away and nominally independent states like Chile began to behave like sovereign entities, Keynesian thinking grew incredibly dangerous. From OPEC to Allende, Third World polities began to turn statism against those who had benefited from this thinking for a century. Nationalizing copper, oil, or other natural resources and public amenities was in accord with Western behavior. The West forced what we now know as neoliberal policies on Chile with the Pinochet coup. That country became the laboratory for figuring out whether social collapse would follow. As much as I hate what happened there, Pinochet's Chile worked, and Carter/Reagan and Thatcher promptly followed suit. Why did neoliberalism take off c. 1980? Because it was already in place in Latin America's cone and had proved workable.

Previous answers touch on most of the obvious economical factors that led to a rise of neoliberalism in most industrialized countries in the 80's.

Another factor to consider is demography. That particular period of time (80-85) is also when the majority of Baby-Boomers (born between ~45-64) reached ~25-35 years old and had started families. That particular age group had virtual total control over any election because of their sheer number (in most industrialized countries, Baby-Boomers represented ~45% of the population by the early 60's).

Although historically Baby Boomers had been more socially and economically Left-leaning compared to preceding generations, and had been highly favored with the post-War economic boom by their (relatively) easy entry and mobility in the growing job market; when the going got rough twice in the 70's (73-75 recessions, Energy Crisis, late 70's/early 80's recessions) the collective minding of Baby-Boomers began to shift. With young children and more on the way, many Baby Boomers became more conservative and Right-leaning fiscally, lending a good voting base for political parties that presented Neoliberalism as a solution to almost a decade (70's) of economical hardships.

Another factor to consider as well: the Cold War was still going strong in the 80's. So Neoliberalism was easily absorbed within already existing anti-Communist political platforms, the latter of which had a permanent voting base in the older demographics (those who were already adults in the 50's and 60's). So when some Baby Boomers voters migrated to more Right-leaning fiscal ideologies, Conservative/Neoliberal candidates had an easy -- if not overwhelming -- upper-hand.

People focus on the effect of Reagan and Thatcher in the 1980s on the revival of free market capitalism. But most everybody – including in this thread – miss the leader of greatest importance for the free market's resurgence: Deng Xiaoping. Beginning slowly in 1978, Deng made changes that opened China to market systems and foreign investment, and not just in a de facto manner, but explicitly justified as adopting market techniques from capitalists, saying on one occasion: "We mustn't fear to adopt the advanced management methods applied in capitalist countries…" In the long run, the reform path begun by Deng Xiaoping and continued by his successors may be viewed as more consequential for global capitalism than anything done by Reagan or Thatcher.

Douglas Rushkoff has argued that neoliberalism was a reaction to the basic income becoming a viable mainstream political idea in the '70s. (Proposals of this kind have taken various forms, but essentially basic income means a living allowance paid to every citizen.) Supporters said it solved the core dilemma of automation: new technology increases our supply of useful goods and services in the long run, but in the short run decreases demand for the same by putting people out of work. Theoretically, a properly-calibrated basic income would establish a floor under demand while the economy adapts. Once the likes of Richard Nixon and Milton Friedman had come out in favor, the Anglo-American right wing experienced an identity crisis and Reagan/Thatcher was the result.

This is based on Capital in the 21st Century by Thomas Piketty:

At the end of the second world war, the USA and the UK were in an excellent economic position compared to the rest of the world, because they suffered less destruction. This was especially true for the USA, who now had by far the biggest economy of the world(more than 50% of the world GDP, if I remember right).

In the next 30 years other countries(Germany, Italy, Japan, France etc.) all had their economic miracles, they were lagging behind but catching up fast. By around 1975 they had mostly caught up with the USA and the UK. These countries now felt threatened, because they had been "on top" for the last 30 years and they thought that they had done something wrong and now things have to change.

This led to the election of Thatcher and Reagan, because they hoped they could overtake the rest of the world again, if they just became more economically liberal.

Thomas Piketty also correlates the rise of Reagan/Thatcher to the surge of Japan and core European countries (mainly Germany) during this time. He thinks the countries that were catching up were bound to catch up since their economies were destroyed a lot more than the UK or the US during WW2. However, he says, the voters were scared and voted for the ideology championed by Reagan and Thatcher to get their countries' economies pulling ahead again.

In shorter words, other countries (esp. Japan) were catching up to the UK/US block mainly on their dynamic economies. The voters got scared. The right wing promised an alternative that voters thought could make US/UK pull ahead again.

Im new but actually wrote about Reagans popularity in my bachelor's paper in history. As a background Reagan thought of himself as one of the people, "we against them" mentality. A mentality which he kept going on to the oval office.

But what made him a neoliberalist was according to David Stockman in his book "the triumph of politics" was that Stockman backed Jack Kemp as the republican presidential candidate. Jack Kemp together with his group was influenced by Milton Friedman and Fredrick Hayek saw a free market , lassiez faire market. Jack Kemp agreed to drop his candidacy if Reagan back his economical plan. Stockman jumped camp and became extremely important in creating what would become Reaganomics.

The problem they saw under the Carter precidency with a stagnation inflation market, later dubbed stagflated market, made it easier for Jack Kemp and his group to promote a neolibralist economy. Reagan believed in Neolibralism because according to himself he would in his actor days make a certain number of films to escape paying taxes. A system which cut down on taxes and governmental interference would create a market that would regulate and would be self reliant. With a higher income in the richest percentages in the population together spending cuts in government would cut down on governmental debt. The money would simply trickle down from the top and benefit everyone. Another seperate argument is that the democrats had a philosophy with governmental interference from FDR via JFK. It is argued that the republicans did not have a similar inheritance which made the small government -trickledown- solution easier to like, even though it was doubbed voodoo economics by Bush Sr. In the republican candidate debates.

Finally it was much easier to accept because of the failiures of Jimmy Carter to stop the stagflation and his controversy with the Shah of Iran. So sorry for the lack of structure guys and the nd language. Have a nice evening

Canadian follow-up: Brian Mulroney came to power around the same time. Was it for the same reasons discussed above?

Also does there similar looks have anything to do with it

http://snew.github.io/#/r/AskHistorians/comments/3mb9ep/is_it_a_coincidence_that_reagan_and_thatcher_both/

Thomas Piketty (French Economist) says that the conservative wave of the 80s in Britain and the US was due to the feeling that these countries were "falling behind" the rest of the world. Europe was finally recovering from the shocks of ww2 and Japan was soaring to new heights. The US and UK were not as damaged as the rest of the advanced world and so didn't have as much to gain. It's natural that economies have super fast catch up growth but when Americans see 5%wage growth year over year for workers in Frence (then) and 10%gdp growth in China (now) people get scared.