« The talent myth | Main | More on wasting talent »

September 25, 2007


The SageKing

As I seem to remember it (being stuck in a hotel in Malta being laughed at by the Germans cause we could not change our money) when we effectively went bankrupt in 1976 and was bailed out by the IMF Labour's gooses was cooked, (a golden Wednesday scenario in reverse?) and old Callaghan had the decency to put through the first bitter pill of economic change before Mags had even wrote her manifesto...nice of him, but he paid in the Winter of Discontent.

Chris Williams

Sidney Pollard once pointed out to me that the global rate of profit sunk to an all-time low in 73/74. Not sure where or even if he wrote it down, but it's probably somewhere.


1979 was probably inevitable, 1983 was, on the other hand, entirely self inflicted.

If you ever want to rank the buffoons who screwed the Labour Party forever be sure to add the rote-liberal idiot Foot up there with Kinnock and Blair.

Bob B

For data sources to test the claims made about Britain's decline, I suggest this research paper (1998) by the HoC Library on: "GDP per capita in OECD countries: the UK’s relative position 1974 - 1997"

And for comparison this by the US Department of Labor on: Comparative Real Gross Domestic Product per Capita and per Employed Person (2007):

If anyone has better suggestions, I'd appreciate knowing of the links.


Thank goodness it wasn't avoided, eh? Something had to be done to stop the socialistic excesses, as you intimated here, Chris.


... for reasons I discuss in that book.

What book?

Bob B

From several perspectives, the 1970s was a miserable decade and the end of an era 1950-73 which many economic historians have dubbed the Golden Age of (Global) Capitalism. But there was nothing especially novel in the 1970s about Britain's relative decline compared with its peer group of other advanced economies.

Britain's GDP per capita had been overtaken by that of West Germany in the late 1950s and by that of France in the late 1960s or early 1970s. Britain had regularly lagged near the bottom of OECD league tables for economic growth in the industrialised market economies - usually ranked just above America. Britain's economy was notoriously beset by industrial relations issues and productivity per person employed was generally inferior to that in peer group countries. By the late 1970s, only half the adult population had any educational qualifications.

Reforms of some kind were widely recognised as both essential and overdue, which helps to explain the electoral swing that swept Mrs Thatcher to power in May 1979. The question was and is whether the reforms of the 1980s were just what was needed.

Significantly, New Labour has done little to change the industrial relations legislation it inherited and NL has maintained Mrs Thatcher's pioneering commitment to privatizing state-owned business assets. But retrospective assessments have not been kind to monetarism - the IMF provided an official epitaph in its World Economic Outlook of October 1996:

"...instability of monetary demand, especially in the context of supply shocks and declines in potential output growth, complicated the task of monetary authorities. As a result, during the 1980s most central banks – with some notable exceptions – either abandoned or downplayed the role of monetary targets".
IMF World Economic Outlook, October 1996, p.106.

However, Mrs Thatcher's instinctive reservations about Britain's entry into the European Exchange Rate Mechanism (ERM) in October 1990 proved well-founded. Dropping out of the ERM in September 1992, after Mrs T had left office, turned out to have benign consequences. By the final quarter of 1995, Britain's standarised unemployment rate was lower than that of France, Germany or Italy. And by the mid 1990s, only a quarter of Britain's adult population had no educational qualifications.

Bob B

"What book?"

As modesty inhibits the author, I suggest trying this:


The most important reason to doubt it, however, is the fact that the argument is being put forward by Neil Clark. Not only is he always, egregiously, wrong, but he is the purveyor of the vilest views and supporter of the most murderous thugs.

Chris Williams

Alas, the fact that Clark has vile views and supports murderous thugs isn't important right now. The fact he's often wrong, though, is. On the other hand, can we have some evidence? What were the opinion polls doing in late 78 as compared to early 79?

Chris D, what's your opinion of Howe's budget? I would imagine that you noticed its impact, what with living here in Leicester at the time. Any long-term gain from flexible labour markets has to be set against serious pain in the 1980s.

And who do we blame for the advent of Thatch? Me, I blame the RUC and the British Army for her arrival, and Roy Jenkins for 1983.

Bob B

By way of an aide memoire, this is the BBC's assessment of the 1979 election which brought Mrs T to power:

"The general election of 1979 was to prove a political watershed. Most historians and commentators agree that the election of Margaret Thatcher marked a break in post-war British history. The era from 1945 - 1979 had been characterised by a 'consensus' style of politics, in which the main parties mostly agreed on certain fundamental political issues and concepts such as the mixed economy, the role of the trades unions, the need for an incomes policy and the nature of the provision of public services such as health and education. This was now to change. Most of all, Mrs Thatcher's election heralded a change in the politics of unemployment. . . "

The comments to this entry are closed.

blogs I like

Blog powered by Typepad