Looking, as is her habit, at a far horizon, Margaret Thatcher sees a Britain made virtuous by ordeal, and then made prosperous by its virtues-- thrift, industriousness, entrepreneurial daring. But as yet, after considerable ordeal, the evidence of renewal is less statistical than anecdotal.

There are many stories of management and labor driven by hard times to buckle down to new efficiencies. But growth, employment and investment are disappointing. Thatcher's recovery (such as it is), like Reagan's, is driven by consumers, not investors, and that was not the plan. Productivity in manufacturing is rising (up 17 percent since 1980, better than in Japan), but that happens when recession washes away the least efficient. Britain's productivity remains 30 percent behind Europe's average.

During the 1970s, wages rose 346 percent, productivity just 26 percent. The union and management attitudes responsible for that have been changed, which is a significant Thatcher achievement. But during the recession, Britain's industrial production dropped three times more than the average for industrial nations, and real gross national product is still slightly below what it was when Thatcher took office in 1979. Many forecasters expect GNP growth to be just 2 percent in 1983 and less in 1984, when unemployment, now 12.5 percent, may rise.

Thatcher came to power talking about "rolling back the frontiers of the corporate state." But although she has sold or reduced many public enterprises (500,000 municipal housing units, 12 percent of all civil servants, 100,000 workers from the nationalized steel corporation), the frontiers remain basically unrolled.

Critics say she is like Mr. Grandgrind (in Dickens' "Hard Times"),who believed that "the Good Samaritan was a Bad Economist." But in rhetoric and policies she accepts the "social-market economy." That phrase is favored by her critics as they try to seem different without disputing her indisputable premise. That premise is that Britain's welfare state cannot be paid for by the British economy without making the economy sluggish.

A "social-market economy" is just what exists in every developed nation. It is a system where market forces are tempered by what Ronald Reagan calls --approvingly--a "safety net" of welfare-state policies.

Thatcher, like Reagan, inherited, and will bequeath to successors, a "social-market economy." She, like Reagan, never sought, never got and will never seek a mandate for radical surgery on the welfare state. She has tried to prune it a bit, but it has broken her shears--with help from traditional Tory paternalists.

Spending on the National Health Service is up 7.7 percent in real terms, education spending per child is up 5 percent. Unemployment benefits will soon be higher than they were under Labor. That may help explain why unemployment cost Thatcher so little in the election, and why you can eat in London restaurants for months without meeting an English waiter.

Reagan could take a correspondence course from Thatcher in the art of praising free markets, entrepreneurship, minimal government and the rest of Republican values, including--drum roll, please--balanced budgets.

When I first met her, in 1976, I decided she had made a mistake being born 4,500 miles too far east. She would have made a magnificent Republican senator from Oklahoma, but she was, I thought, improbable as leader of Britain's Conservatives. She defines conservatism as most Republicans do, but as few Tories ever have. She defines it in terms of individualism and a light state--low taxes for a slim public sector.

Collectivism in Britain is at least as much the legacy of Conservatives as of socialists. Clement Attlee's postwar Labor government built on institutional and even ideological foundations laid by Conservatives. The Americanization of British Conservatism is a Thatcher achievement.

In fact, although she is a radical Tory, she is a traditional Republican-- perhaps more so than Reagan. Unable to cut spending as much as she desires (it now is 43.5 percent of GNP, up from 40.5 percent when she took office), she has raised taxes as a percentage of GNP (from 35.3 to 39.1) in order to hold down the deficit. Britain now has the smallest deficit of any Western nation: 2.75 percent of GNP. (The U.S. deficit is 6 percent.)

She believes what Republicans said for 30 years--what they said until (recently) it became impolitic. That is, she believes that large deficits are a cause of high interest rates, and are so disruptive of capital markets that higher taxes are justified, as a nasty last resort, to reduce deficits. If Thatcher's program does not produce growth soon, or if Reagan's recovery aborts soon, there will be new heat to the intramural argument among conservatives concerning which is worse, tax increases or huge deficits.