Collective consensus in Britain PDF

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Political economy of britain-Collective consensus in Britain...

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under successive Conservative governments. Overall, they accepted the nationalisation programme and did little to change the balance of the mixed economy. 1. Keynesianism: Both Conservative and Labour governments during the 1940s and 1950s were committed to the maintenance of full employment and used Keynesian demand management to ensure this occurred. Frequently, the term ‘Butskellism’ (a combination of the names of Rab Butler, Conservative Chancellor 1951-55, and hid predecessor Hugh Gaitskell, Labour Chancellor 1950-51) has been used as a shorthand expression of this consensus. Keynesian demand management techniques consider that it is possible to control unemployment through government borrowings and spending. This interventionist approach was adopted by both parties and influenced economic policies and budgets for both parties from 1947 onwards.

CRISIS IN CONSENSUS PERIOD: During 1950-60s successive governments managed to avoid another depression. However, it proved difficult to fine tune the economy by adjusting interest rate and money supply to ensure economic growth, low inflation and full employment. Conservative governments tried to reduce inflation which in turn triggered recession and caused voters to turn to Labour Government. Labour tried inflating the economy via public spending which caused inflation. By the 1970s Britain was suffering economically without growth and growing political discontent. Investments declined, trade unions agitation increased. Relations between workers and employers were tensed. There was no attempt to introduce corporatist institutions to give labour a say in private management. The 1970s saw the beginning of economic stagnation and declining competitiveness of key British industries in international market. This fuelled industrial strife. Industrial unrest in the winter of 1978-1979 dramatized Labour’s inability to manage the trade unions. It seemed as if everyone was on strike. There were strikes by truck drivers that disrupted fuel supplies. Ambulance drivers refused to respond to emergency calls. Strikes by train drivers created problem for inter-city commerce and travelling. Grave diggers refused to bury the dead. This period was termed ad “ winter of discontent”. No government policy could manage the economy. Economic downturn and political stagnation unravelled the consensus and discredited Keynesian welfare state....