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The Labour governments 1974–1979: social democracy abandoned?

We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step

(Prime Minister James Callaghan, 1976, quoted by the BBC News 2005).

Abstract

The driving forces behind the decline of the social democratic postwar consensus in Great Britain is much debated. One prominent school of thought, particularly common in Marxist studies, focuses on the structural changes in the global economy that occurred in the 1970s, specifically the collapse of the Bretton Woods system of fixed exchange rates, the end of the long boom, and the emergence of a second age of globalization. Those following a structural approach have found support for their position in the claim that it was the 1974–1979 Labour governments rather than the more ideologically committed 1979–1997 Conservative governments that first responded to the changing global economy by abandoning the social democratic postwar consensus. In this article, I set out to challenge this approach by arguing that the Labour government did not fundamentally abandon the social democratic postwar consensus, and that such an abandonment was highly undesirable given the political make-up of the Labour Party and its reliance on trade union support.

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Crook, M. The Labour governments 1974–1979: social democracy abandoned?. Br Polit 14, 86–105 (2019). https://doi.org/10.1057/s41293-018-0073-0

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Keywords

  • Wilson
  • Callaghan
  • The Labour Party
  • The winter of discontent
  • Social democracy