ECONOMIC POLICY AFTER 1974*
A Review Article
These two books‡ might seem to have a great deal in common. Both deal with the five years of Labour government from 1974 to 1979 (although Britton covers the first eight years of Conservative government as well); the focus of both is on policy rather than events; and both aim to provide an assessment of policy in terms of its effectiveness and appropriateness. That is, they are more concerned to isolate the part played by government in the economic history of those years and draw morals from the record than to provide an account of events in which the actions of government are only part of the story. They accept that any assessment of policy has to be made in relation to feasible alternatives (‘counterfactuals’) and make use of mathematical models to demonstrate what success policies had.
There are, however, important differences in approach. Britton’s book is in the tradition of Dow’s Management of the British Economy. It is, in principle, a one-man job, backed by staff from the National Institute. Artis and Cobham are the leaders of a team of fourteen, whose views—for example, on incomes policy—do not altogether coincide. Britton narrows the scope of his book to macroeconomic policy, which he equates broadly with demand management. He accepts that this covers attempts to influence expectations as well as the use of monetary and fiscal instruments and that, with floating rates, exchange rate management also enters. Prices and incomes policy, although recognized as a means of acting directly on inflation, is given little attention, especially as it was abandoned in 1979. Artis and Cobham, on the other hand, cover nearly the whole range of government policies, with four chapters devoted to monetary and fiscal policy, another four to prices and incomes policy (including industrial relations), and six others to regional policy, industrial policy, the nationalized industries, redistribution of income, relations with the European Community, and the rate of exchange, plus a
* From Twentieth Century British History, vol. 3, no. 2, 1992, pp. 199-208.
‡ Labour’s Economic Policies 1974-79, edited by Michael Artis and David Cobham, Manchester: Manchester University Press, 1991, and Macroeconomic Policy in Britain 1974-87, by A.J.C. Britton, Cambridge: Cambridge University Press for National Institute of Economic and Social Research, 1991.