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The Iron Quadrilateral: Political Obstacles to Economic Reform under the Attlee Government

Published online by Cambridge University Press:  10 January 2014

J. D. Tomlinson
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Extract

The 1945 Labour government came to power with a clearly formulated economic program relating to nationalization and the continuation of wartime planning and controls to smooth the transition to a peacetime economy. The first of these components, at least, was largely carried out according to plan over the next six years. The transition to a peacetime economy was much less smooth, and Labour's policies here underwent a major shift. While controls remained an important part of the policy regime down to 1951, they increasingly gave way to the instruments of fiscal policy. In large part this reflected the buffeting of the economy by balance-of-payments problems. But while the compelling force of economic circumstance must be given its due, it is clear that the increasing dependence on demand management was a political and ideological defeat for Labour, in the sense that it had previously based its distinctive appeal so much on microeconomic policies usually summed up in that ambiguous term, “economic planning.” In that sense the reliance on demand management represented a retreat for Labour from its policy position of 1945: “Socialist planning was a notable, if unlikely casualty of Labour government after the Second World War.”

On one influential view, Labour's conversion to macroeconomic management may be considered a success; eventually, as Alec Cairncross records, that management delivered balance-of-payments equilibrium without sacrificing the goal of full employment. But it is increasingly recognized that Labour's agenda involved issues beyond these macroeconomic goals, important as they undoubtedly were.

Type
Research Article
Information
Journal of British Studies , Volume 34 , Issue 1 , January 1995 , pp. 90 - 111
Copyright
Copyright © North American Conference of British Studies 1995

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References

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31 Committee on industrial productivity, Daken to Nowell, April 16, 1948, May 6, 1948, PRO, BT 64/2360, on opposition to any role for the British Institute of Management on the major tripartite bodies.

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