Governing the British Governing the British EconomyEconomy

What does this mean?What does this mean? The whole range of economic phenomena The whole range of economic phenomena

relating to production of goods and servicesrelating to production of goods and services Growth, stability (price, currency), Growth, stability (price, currency),

unemployment, distribution unemployment, distribution Policy and implementationPolicy and implementation

Power and ConstraintsPower and Constraints Identifying success, rather than luckIdentifying success, rather than luck

'Riding the economic cycle''Riding the economic cycle' 'Puzzling' and learning through making 'Puzzling' and learning through making

policy (Hall)policy (Hall)

Two casesTwo cases

HeathHeath In In 19741974, the Prime Minister called an , the Prime Minister called an

electionelection asking " asking "Who governsWho governs Britain?" Britain?" They answered "They answered "Not youNot you, Ted", albeit , Ted", albeit narrowly. The Conservatives polled more narrowly. The Conservatives polled more votes than Labour but held fewer seats. votes than Labour but held fewer seats. (BBC news)(BBC news)

Gordon Brown's confusing moveGordon Brown's confusing move Taking away his own power?Taking away his own power?

FrameworksFrameworks

Power and ConstraintsPower and Constraints Ideas, Institutions, interests (3i)Ideas, Institutions, interests (3i) Hall's model (see later)Hall's model (see later)

Power and ConstraintsPower and Constraints

PowerPower Hall claims the state has unrivalled Hall claims the state has unrivalled

power in making economic policypower in making economic policy cf. the mechanistic modelcf. the mechanistic model

Howell contradicts this suggesting Howell contradicts this suggesting power moved away from state: down to power moved away from state: down to firms and out to the international arenafirms and out to the international arena

Power and constraints IIPower and constraints II ConstraintsConstraints

IdeologicalIdeological UnionsUnions

Special position: private workers, public Special position: private workers, public workers, represent the most vulnerable to workers, represent the most vulnerable to economic failure. Political but not governingeconomic failure. Political but not governing

InstitutionsInstitutions Global Economy – EUGlobal Economy – EU 'The model of capitalism''The model of capitalism' Inherited traditionsInherited traditions

The three I modelThe three I model

Three different ways to explain policy Three different ways to explain policy changechange IdeasIdeas

Including, but not restricted to, ideologiesIncluding, but not restricted to, ideologies InstitutionsInstitutions

Graham suggests that the highly centralised Graham suggests that the highly centralised executive power in the UK was key in...executive power in the UK was key in...

King and Wood – models of capitalismKing and Wood – models of capitalism InterestsInterests

Hall's analysisHall's analysis Politicians have valuesPoliticians have values From these they set their targets or goalsFrom these they set their targets or goals Then they make choices to achieve themThen they make choices to achieve them There is a hierarchy of possible changes:There is a hierarchy of possible changes:

Change the levels of a chosen instrumentChange the levels of a chosen instrument Change the chosen instrumentChange the chosen instrument Paradigm shift affecting all values, goals, Paradigm shift affecting all values, goals,

instruments and levelsinstruments and levels

Interlude: the story of Interlude: the story of British Economic policyBritish Economic policy

The post-war consensus. 'Butskillism' and The post-war consensus. 'Butskillism' and Mr JM Keynes. NationalisationMr JM Keynes. Nationalisation

Wilson: Macmillan's 'You've never had it Wilson: Macmillan's 'You've never had it so good' is dead, Devaluation struggle, so good' is dead, Devaluation struggle, Beer and sandwiches at Number 10Beer and sandwiches at Number 10

Heath, Wilson and Callaghan: Failures on Heath, Wilson and Callaghan: Failures on all fronts and especially income policies all fronts and especially income policies and unions. 'Cap in hand' to the IMF. and unions. 'Cap in hand' to the IMF. Culminates in 'the winter of discontent': Culminates in 'the winter of discontent': several thousands of workers, causing several thousands of workers, causing bodies not to be buried, etcbodies not to be buried, etc

Interlude II: the story of Interlude II: the story of British Economic policyBritish Economic policy

Thatcherism I: a bright new dawn: no Thatcherism I: a bright new dawn: no more 'tax and spend'. The end of Keynes? more 'tax and spend'. The end of Keynes? PrivatisationPrivatisation

Thatcherism II: a terrible nightmare – Thatcherism II: a terrible nightmare – Boom and Bust. Finance Ministers Boom and Bust. Finance Ministers trodden underfoot. Armies of unemployed.trodden underfoot. Armies of unemployed.

Prudent Gordon: Labour as the 'new Prudent Gordon: Labour as the 'new tories': 'no more boom and bust', 'the tories': 'no more boom and bust', 'the golden rule', back to full employment?golden rule', back to full employment?

But where is Blair?But where is Blair?

Hall RevisitedHall Revisited

Hall’s is a limited analysis: government, Hall’s is a limited analysis: government, even if central, still has to get ideas from even if central, still has to get ideas from somewheresomewhere

He suggests that consistent ideology He suggests that consistent ideology allows government to govern rejecting allows government to govern rejecting others viewsothers views

Pemberton looks at policy networks: Pemberton looks at policy networks: relates involvement of actors to first and relates involvement of actors to first and second or third order changesecond or third order change

Howell contradicts the model altogetherHowell contradicts the model altogether

InternationalInternational Post war austerity and rationing: bankrupted by Post war austerity and rationing: bankrupted by

saving Europesaving Europe Oil crisisOil crisis Cold war defence spending (cf. Germany, Japan)Cold war defence spending (cf. Germany, Japan) Protecting sterling in EMUProtecting sterling in EMU Stability and growth pact – but stricterStability and growth pact – but stricter Aligning economic cycle to join EuroAligning economic cycle to join Euro High % of trade with EU forces Eurozone High % of trade with EU forces Eurozone

shadowing?shadowing? Staying out: £ becomes a hedging currency for Staying out: £ becomes a hedging currency for

$ + €$ + €

What is government for?What is government for?

How much should we govern? How much should we govern? Government and control (traditional)Government and control (traditional) Markets (Thatcherism)Markets (Thatcherism) Regulation (New Labour)Regulation (New Labour)

Sub-issuesSub-issues Clause 4Clause 4 DeregulationDeregulation Market failuresMarket failures Redistribution (in secret?)Redistribution (in secret?)

Success or FailureSuccess or Failure Late 60s, early 70s generally viewed as Late 60s, early 70s generally viewed as

failurefailure But how do citizens remember Britain? But how do citizens remember Britain?

Swinging 60s and smiling facesSwinging 60s and smiling faces Thatcher changed BritainThatcher changed Britain

Did she succeed in governing the economyDid she succeed in governing the economy Did she create a better BritainDid she create a better Britain

New Labour govern ‘rationally’New Labour govern ‘rationally’ They talk about evidence based policy: they They talk about evidence based policy: they

get judged on evidenceget judged on evidence Redistribution by stealth: good or bad?Redistribution by stealth: good or bad?