London Briefing: When Margaret Thatcher began restructuring the UK economy in the early 1980s she did so without having asked the electorate first. While her election victory in 1979 gave her a clear mandate to govern, she had forgotten to mention to the electorate that there was going to be a major switch from direct to indirect taxation and that the trade union movement was going to be routed.

Policies designed to accelerate the shrinking of the UK's industrial base didn't figure prominently in the election manifesto.

Economic restructuring is always painful - the losers find out first while the winners often have to wait for the good times to roll. The costs are always obvious and immediate while the benefits, in the early days at least, amount to vague promises. Gordon Brown was perhaps the biggest political beneficiary of Thatcher's reforms.

Similar stories can be told about the US. The modern renaissance of the American economy began under the presidency of Ronald Reagan: few people thought they were voting for serious reform when he was elected. In Japan, it has taken a decade and a half of economic stagnation for the electorate to finally realise that structural change is necessary.

Japan's lessons are instructive: the recent election result whereby Koizumi won a landslide on an explicitly reform-based programme (albeit a single issue platform) came only when it became obvious to pretty much everybody that it is a question of restructure or die.

The German economy has underperformed for years but is not yet in the situation reached in Japan. Last Sunday's election was unusual - perhaps unique - in that it was portrayed as a contest between reform and stasis.

Angela Merkel has been described (somewhat inaccurately) as Germany's Margaret Thatcher while Gerhard Schröder has presented himself as the anti-reform candidate.

What was odd about all of this was the way in which structural change was presented as a simple choice to the electorate. Thatcher never had the courage to make that case so explicitly. On the grounds that nobody ever votes for painful change when the status quo doesn't seem so bad, it should have come as no surprise that the result was so equivocal.

But the choice facing countries in 2005 is not the same as the one made by the UK in 1979. Simply voting for the no-change candidate is no longer a practical option: the world has now moved on to the point where change cannot be resisted. Globalisation means that change happens either in spite of or because of government policies.

All that governments can do, particularly for economies that are based on international trade like Germany, is choose the level of unemployment. Countries that permit flexible response to the external challenges generally have full employment. Countries that stick their heads in the sand have chronic unemployment.

The intriguing thing about Germany is that there is, in fact, plenty of evidence of structural reforms already taking place. Schröder, far from the anti-reform caricature that he adopted for the election, has pushed through difficult legislation in the form of his Agenda 2010 programme and Hartz-IV reforms.

Not for nothing was Germany showing signs of revival this year and there are plenty of good reasons why the German equities have being doing very well for the past three years.

But the main reason why Germany has been delivering positive surprises has got nothing to do with the politicians: companies have been doing it for themselves. This is the new world that we now live in. With many businesses now operating on a global stage, corporate Germany knows that it has to adapt - there is no choice - and that is what has been happening.

The ability of politicians anywhere to stop this process is severely limited. In fact, the best thing they can do is get out of the way. The fewer burdens they can place on business the better. Which is why here in the UK the cries about regulation get ever louder.

Many people now think that the Thatcher legacy is being squandered and that the UK's economic renaissance will be delivered the final coup de grace when Gordon Brown becomes prime minister. He is in danger of discovering that economic success is never guaranteed.

The lesson from Germany and Japan is that failure, also, is not automatic: things can change.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.