Margaret Thatcher was ebullient; the 54-year-old Prime Minister of Great Britain had won a crucial vote in Parliament on her austere economic and social policies the night before. She greeted visitors in her second-floor office at 10 Downing Street with a warm smile, an apology for the unattractive pale green flocking on the walls (she does not want to spend public money to replace it, at least not now) and an offer of tea, sherry or coffee—"instant, I'm afraid." Then for the next 70 minutes Mrs. Thatcher answered a broad range of questions about her policies, her career, her family and herself. She was refreshingly candid. "I think people have a natural interest in you if you are in the public eye," she said at one point, "and this is a fact of life." Mrs. Thatcher has been in office for 15 months, the highest-ranking woman among the Western democracies. As a Conservative, she has introduced stringent belt-tightening measures designed to increase the productivity of British industry. Inflation, however, is running at 21 percent and unemployment has reached 1.9 million in a country whose entire work force is 26.3 million. Yet Mrs. Thatcher's popularity, according to polls, has been going up. She is a keen student of the United States who reads Abraham Lincoln's speeches and recommends them even to American guests. The following interview, the first Mrs. Thatcher has given to an American magazine since she took office, was conducted by PEOPLE'S Managing Editor Richard B. Stolley and London Bureau Chief Fred Hauptfuhrer. At the end of it, the Prime Minister cleared all the coffee cups and tidied up her office for the afternoon's work.

As the daughter of a grocer in Grantham, you approximate the American Middle Western boy made good. What values, what priorities...

[Interrupting] Is there never any expression called girl made good? [Laughing] That just shows you!

I stand corrected. What priorities instilled in you at home can be recognized in the person you are today?

I think total integrity—that was very much my father—and, secondly, we were always taught to make up our own minds. You know, one would come home from school and say so and so is doing something, can I do it too? And straightaway: "You never do something because someone else is doing something." That was instilled at a very early age. You make up your own mind and then you persuade other people to follow you if need be. It was a very tough upbringing. Character always mattered more than money.

Hard work aside, how do you account for your having got where you are?

I have no idea. Absolutely no idea. Nor did I ever set out to be anything. I just arrived.

Are you surprised at being where you are now?

No. This is the curious thing. At each stage in life the next stage has come naturally. But people only see the beginning of the journey and the end—they don't know all the stages in between. You don't suddenly appear on the bottom rung of a ladder and then at the top. You have to climb up each rung as it goes. Life is very much a business in which, if you do absolutely the level best with the job you've got and watch out for the next opportunity, you never know how far you can get. I have always rather recoiled from the person with ruthless ambition who says, "I'm going to start here and in 30 years I'm going to be so-and-so"—because you cannot take life like that.

You have often identified yourself with housewives and their everyday concern for prices and inflation. With unemployment at 7.8 percent, would you still expect the vote of a woman whose husband had lost his job because of what she felt to be your government's economic policies?

A husband losing his job is a very traumatic experience. It wouldn't, if I might say so respectfully, necessarily be because of my policies. There is a world recession, and the reason for it is the increase in the price of oil. There is nothing any of us can do to avoid that. They might say that I am throwing people out of work because I won't print money to finance their jobs, but jobs that depend on printed money are temporary jobs anyway. Here we have pay running far ahead of productivity. This is the message I am trying to get across. In this country we have tried for too long to keep yesterday's jobs going—to keep too many people in steel, in the car industry. That has to end if we are to survive at all. So, though they might blame it on me, it isn't my fault.

What would be your advice, whatever the causes, to that woman and her unemployed husband?

I would say, "Look, you will only get a good job in the end provided we get each and every one of our industries in fit condition to compete. We are still short of skilled people. For heaven's sake don't just sit there: There will be jobs. If you haven't got a skill, acquire one, or change your skill."

Americans who come here say they are shocked by hotel and restaurant prices. They surely represent a threat to the tourism that is so important to the balance of payments.

Partly it's the exchange rate, partly I agree the prices are too high for the service. And you know what's happening? The rooms are only half full. People must take the consequences of their own actions. That's the only way they will learn. If they're not getting the business, they will learn to give better service for lower prices.

President Giscard of France and Chancellor Schmidt of Germany knew each other very well long before becoming the leaders of their countries. Do you feel in any way the odd-person-out among Europe's Big Three?

Not at all. We have had to stick up for Britain; everyone sticks up for their own country. It was difficult until they understood that I was not going to give in. Since then the atmosphere has been much better. No, I haven't felt the odd-person-out. I have too much in common with these people. I do wish they all spoke English, though. You know, Helmut Schmidt and Giscard speak English, and most of our Japanese friends do too. It's very kind of them because I couldn't possibly learn their languages. I just wish there were one language the world over and it were English.

What gives you reason to believe that your government will succeed in Northern Ireland where all others have failed?

I don't know how you would define success. You and I would have thought, after violence flaring from time to time for 10 years, that they would get together and say this can't go on. It hasn't happened that way. So you must simply try for steady improvement and not be too frustrated when all of a sudden you have a setback.

Would you recommend more stringent criminal laws in the U.S. about the funding and exporting of arms to Northern Ireland?

That's a matter for the United States. Democracy doesn't go on without self-discipline and self-responsibility. I don't know what your laws are about the export of arms—but whatever the law says or not, it ought not to be done. For a free people to espouse the cause of violence is to deny everything by which they live.

How would you describe your style of leadership within your party, as well as with regard to the public?

Well, I just try to keep in touch. Very much in touch. It's not a remote kind of leadership in any way. I am still regularly in my constituency and I make a point of being in Parliament, not just every Tuesday and Thursday for Questions but other days too. You must never become an ivory tower. The moment you lose your feel you will have lost your capacity to lead, because you will have lost the sense of suitability of what you are saying and doing, your sense of the needs of the moment.

It is reported that you have had the benefit of a voice coach. True?

I have learned to breathe properly—you must—for which I did have a few hints. You breathe from the diaphragm, but I know nothing more than that. My voice seems to be getting deeper. When I first became leader of the party, and I was very nervous, my voice went higher and tight. I have learned to master that, however nervous I am.

What do you regard as your weaknesses as a leader? And how do you try to handle them?

I think you better answer this one. Gosh, I must have an awful lot. It's difficult when you have the final responsibility ever to let go of it, even for a short time. Even when I'm away, I still like to take the final decisions myself. I don't know whether that's a weakness or a strength. I don't take much time off; people tell me that's a weakness. I don't really think of life like that. Even if you are only one or two days out, there's something you have lost that would have been in your mind if you'd been one or two days in. So there is not a single day when I don't do some work. I don't hold with this "have a clean break." I mean, your heart doesn't have a clean break, and it manages to get along all right without it.

Why do you think you operate this way?

It comes from being a mother and having a family. You find with your family it's you in the end who adapts to the needs of everyone else. You do it quite subconsciously. You know someone will blow up if you say this or do that, and so you sort of keep 10 balls in the air at once. Having done that with family, I find that in government as well I am the one who is adapting. Churchill took the view: "I am number one and everyone else is going to adjust to me." I say, having run a family, you tend automatically to adjust certain of your reactions. If you have ever said anything that no amount of apology could take back, you are far better to choke it back before it's said.

The press has had particular fun with you in some respects. You have been called such things as the Iron Maiden and Attilla the Hen. Do these tags fit?

Any leader has to have a certain amount of steel in them, so I am not that put out about being called the Iron Lady at all. As for Attilla the Hen, I thought it was really rather funny. One really musn't get too put off by these things.

You have said that you want people to treat you for what you are, not as a woman, yet you take meticulous care to turn yourself out beautifully...

Well, being a woman is part of my whole personality. What does one expect me to do? Subdue it? Certainly not. I make the best of what I have got, just as I make the best of the talents I have got.

You have made your way to the top very differently from the course espoused by American feminists, some of whom criticize you for not making more use of your position to advance their cause. How do you feel about radical feminists?

I think sometimes they are too strident and emphasize the wrong things. I just think that if you have got what it takes, you'll find a way of bringing it out in the ordinary course of life. Now, we have certainly had to break down some barriers. But I have always thought the main reason why the barriers went was twofold really. First, I can tell you the human one: because fathers had talented daughters and realized that they didn't have opportunities or weren't allowed to have their own property. Secondly, there was what women did in the Great War. They took over all sorts of jobs and proved in practice that they could do it and of course we had it again in the Second World War. So gradually the barriers began to break down. The interesting thing is that legislation itself has not brought colossal advantages.

I can never see the point of putting women's rights forward stridently. You just say there are certain human rights that are available to both men and women. But I don't think men and women can necessarily be the same. The fact is that women have children, and this mother-child bond is the greatest bond in the world. It's far better to make something of it than try to act as if you had never had it.

How soon will we see a woman in the White House?

When you have someone coming up who has had all the necessary experience and who captures the public's imagination by what she has done. Don't forget that I had 20 years' experience in Parliament.

The stabilizing influence of a happy marriage can be just as important for a woman politician as for a man. Are you a better person because Mr. Thatcher is behind you?

Of course I am. If you've got security and certainty behind you, if you come home to total loyalty and affection, then your basic worries in life are gone. They really are. My family is far-flung—my daughter Carol is in Australia—but we are very much a family. My great treat in life is once a fortnight I ring up Carol in Australia. It's always thought that daughters get on better with fathers, but my daughter and I get on marvelously well. I must not intrude too much on her life, but when she comes home, the whole world smiles and sings. Of course I'm better because there is nothing in my family to worry about. My husband, Denis, has made a niche for himself in the most remarkable way.

How has he adjusted to his unprecedented role?

I think that his great safety valve is that he gets out of here from time to time and goes down to our flat in Kent, where I know he feels at home. For me Chelsea is much more home, but the country is for him. Of course he has a safety valve too in his own work. He is a person in his own right.

We have been following your son Mark's car-racing career. How do you handle what must be some worry over that sport?

Well, you can't stop your children doing these things if they want to do them, and you mustn't. Something gets in the blood and they want to do it. I am always a bit nervous when I know he is racing, and quite honestly he often won't tell me about it for that reason. If I do know he is racing at 4:30 I listen to the news. If I haven't heard something by about 5:30 it's all right.

Would you rather be at the track?

I must tell you I have never been to see him race because I feel that he would be doubly anxious to win and might do something. I must equally tell you that none of my family has ever been to see me in the House of Commons. We sort of have a rule that we don't go and watch one another at the critical times. It's quite different from other families, who are always there. I say, "No, please, when I am on at the House of Commons I have got enough to worry about with the matter in front of me." If I've also got to worry that a member of my family is watching me and it's their reputation at stake as well as mine, then that would, I am sorry, be an additional nerve-racking thing that I can't take on.

Has your support of President Carter's often mysterious foreign policy weakened your position in Europe?

It hasn't weakened it in any way. Let me put it like this: Long ago I was on to what they call the fundamental battle of ideas, the East-West relationship and the fact that Russia never, never, never changes her objectives, only the speed at which she attains them. When Afghanistan came it was not quite as big a shock to me as to others because I had been making speeches saying that détente was turning out to be a one-way business. And of course when it comes to Iran, I used to sit here and think, what would I do if they had taken our embassy hostage? I know the agony President Carter went through, and if you ask me what conclusion I came to, I am just very relieved they never attempted it.

When you are dealing with foreign affairs you've got to try to think not what would I do in their shoes but what would I do if I were them in their shoes. That means quite a detailed study of the way they see things, the way their minds work, their history, their culture, their tradition. Take Helmut Schmidt, for example; he's a bus ride away from the Iron Curtain. Now, none of the rest of us is. He's got some of his people beyond the Iron Curtain. Therefore he is going to see things differently. A bus ride away from tyranny is very different from the United States or Britain.

How would you characterize President Carter as a person?

I find him very, very easy to get on with face to face. Very thoughtful. Very, very well briefed.

When you received John Anderson not long ago, were you concerned about lending prominence to his campaign?

I was very grateful that the world leaders received me when I was not Prime Minister, so when there is someone else running for office I naturally receive them. The alternative was to refuse, and I really don't think there were any grounds for that. We got on very well.

Would a Reagan Presidency concern you, as it apparently does other European leaders?

I shall give a very diplomatic answer: I will work with and have confidence in anyone the American people choose.

Could you give us an impression of your personal contact with Mr. Reagan?

I found no difficulty in getting on with him at all. He talks in a very down-to-earth, very clear-cut language. In the end, you know, if you really understand things you are able to make them simple. The simplest lectures I ever had at university were from the most brilliant professor whose mind was totally lucid, who had total comprehension and understanding, and therefore could put it simply. If people clothe their ideas only in jargon, it means they don't fully comprehend what they are saying. It is not an indication of knowledge, it is a cloak for their ignorance.

How do you feel about our elections?

I think any society from time to time needs a cohesive force with which it can easily identify. We are lucky in having the monarchy. You haven't got that in the States, so it has to be replaced not only by a person but I think the whole tradition of the White House. A presidential election is a time when you are all thinking in national terms. The very act of having an election every four years is itself something that gives you a cohesive force. Every nation needs it. With our monarchy, regardless of the performance of politicians, there is always something that is above politics and that unites people. We are lucky. We are very lucky. What a pity you left us!