The politics of economic policy making in Britain : a re-assessment of the 1976 IMF crisis

Many existing accounts of the IMF crisis have argued that British policy was determined either by the exercise of structural power by markets through the creation of currency instability and the application of loan conditionality, or by demonstrating that only policies of a broadly monetarist persuasion would be sufficient to sustain confidence, a recognition which was reached through a process of policy learning. This paper offers a re-assessment of economic policy-making in Britain during the 1976 IMF crisis to show that policy change did not occur as a result of disciplinary market pressure or a process of social learning. It argues that state managers have to manage the contradictions between the imperatives of accumulation and legitimation, and can do so through the politics of depoliticisation. It then uses archival sources to show how significant elements of the core-executive had established preferences for deflationary policies, which were implemented in 1976 by using market rhetoric and Fund conditionality to shape perceptions about the range of issues within the government‟s scope for discretionary control

From social contract to 'social contrick' : the depoliticisation of economic policy-making under Harold Wilson, 1974–75

The 1974-79 Labour Governments were elected on the basis of an agreement with the TUC promising a redistribution of income and wealth known as the Social Contract. However, the Government immediately began to marginalise these commitments in favour of preferences for incomes policy and public expenditure cuts, which has led the Social Contract to be described as the 'Social Contrick'. These changes were legitimised through a process of depoliticisation, and using an Open Marxist framework and evidence from the National Archives, the paper will show that the Treasury's exchange rate strategy and the need to secure external finance placed issues of confidence at the centre of political debate, allowing the Government to argue there was no alternative to the introduction of incomes policy and the reduction of public expenditure