To Grasp Fully The Nature And Significance Of The Economic policies at the heart of dominant political projects, those policies have to be studied in the round. They have to be grasped as complex totalities which touch all aspects of the political agenda; and they have to be seen as constructed and contested wholes, whose contradictions, internal inconsistencies and conceptual limits are as vital to their trajectory as are their axioms, theories and content. Academically and professionally, the study of policy in this rounded way is often a more difficult task to complete than might be expected, in part because of the powerful divisions within and between the intellectual disciplines which comprise the social sciences.
1 Blank, Stephen ‘Britain: The Politics of Foreign Economic Policy, the Domestic Economy and the Problem of Pluralistic Stagnation’, International Organization, 31:4 (1977), pp. 674–721.
2 Colin Hay, The Political Economy of New Labour, Manchester, Manchester University Press, 1999; Michael Moran and Elizabeth Alexander, ‘The Economic Policy of New Labour’, in David Coates and Peter Lawler (eds), New Labour Into Power, Manchester, Manchester University Press, 2000; Martin J. Smith, ‘The Complexity of New Labour’, in Steve Ludlam and Martin J. Smith (eds), New Labour in Power, Basingstoke, Macmillan, 2000.
3 In making this observation we are, of course, not suggesting that the Blair government is the first Labour administration to promote vigorously its political and economic model. Rather, we suggest that there is something qualitatively distinctive about the highly concerted public packaging and external promotion of the ‘third way’ which invites comparison with Thatcherism.
4 See Hutton, Will The State We’re In, London, Viking, revised edn, 1996; Gavin Kelly, Dominic Kelly and Andrew Gamble (eds), Stakeholder Capitalism, Basingstoke, Macmillan, 1997.
5 Blair, Tony New Britain: My Vision of a Young Country, London, Fourth Estate, 1996, p. 2.
6 Tony Blair, Mais Lecture, 22 May 1995, p. 15.
7 Howell, Chris, ‘From New Labour to No Labour? The Industrial Relations Project of the Blair Government’, New Political Science, 22:2 (2000), pp. 201–30.
8 Blair, Tony ‘Foreword’, Department of Trade and Industry White Paper, Fairness At Work, London, HMSO, 1998.
9 Gordon Brown, ‘A Modern Agenda to Tackle Poverty’, Labour’s Case, January 1998.
10 Gordon Brown, ‘Personal View’, Financial Times, 11 November 1997.
11 Tony Blair, Speech at the World Economic Forum, Davos, Switzerland, 28 January 2000.
12 Tony Blair, Mais Lecture, 1995, p. 2.
13 Balls, Edward, ‘Open Macroeconomics in an Open Economy’, Scottish Journal of Economics, 45:2 (1998), pp. 113–32.
14 Tony Blair, Mais Lecture, 1995, p. 12.
15 Gordon Brown, Speech to the Council for Foreign Relations, New York, 16 September 1999, p. 6.
16 Tony Blair, New Britain.
17 Brown, Gordon, Speech to the Conference on New Policies for the Global Economy, 26 September 1994, p. 3.
18 Tony Blair, Speech at the Annual Friends of Nieuwspoort Dinner, The Ridderrzaal, The Hague, 20 January 1998, p. 2.
19 Byers, Stephen Plenary Address to the Opening Meeting of the World Trade Organisation Ministerial Meeting, Seattle, 30 11 1999.
20 Tony Blair, Speech to the Congress of European Socialist Parties, Malmo, Sweden, 6 June 1997, p. 5.
21 Tony Blair, Speech at Nieuwspoort Dinner, p. 7.
22 Tony Blair, Speech at World Economic Forum, p. 4.
23 Conversation with John Humphreys, cited in Marxism Today(November/ December 1998), p. 26.
24 Tony Blair, Speech at the World Economic Forum, pp. 3, 6.
25 Tony Blair, Speech at the World Economic Forum, p. 6.
26 Gordon Brown, Mais Lecture, 19 October 1999, pp. 2–3.
27 Edward Balls, ‘Open Macroeconomics’, p. 129.
28 Tony Blair, Speech at the World Economic Forum, 28 January 2000, p. 1.
29 Space prevents a full consideration of the practical motivations underpinning this significant institutional overhaul. Nonetheless, the significance of the adoption by the EU in the Maastrict Treaty of an independent European Central Bank should not be underemphasized.
30 Kydland, F. E. and Prescotta, E. C., ‘Rules Rather than Discretion: The Inconsistency of Optimal Plans’, Journal of Political Economy, 85:3 (1977), pp. 473–92; Lucas, R. E., ‘Econometric Policy Evaluation: A Critique’, in Brunner, K. and Meltzner, A. (eds), The Phillips Curve and Labour Markets, supplement to the Journal of Monetary Economics, 1 (1976), pp. 19–46; and on the political business cycle, Alesina, A. ‘Macroeconomic Policy in a Two-Party System as a Repeated Game’, Quarterly Journal of Economics, 103:3 (1987), pp. 651–78; ‘ Inflation, Unemployment and Politics in Industrialized Democracies’, Economic Policy, 8:1 (1989), pp. 58–98.
31 Edward Balls, ‘Open Macroeconomics’, pp. 120–1; see also Brown, Mais Lecture, pp. 7–14.
32 Of course, the problem here is not strictly the ceding of operational independence to the Bank of England, but the absence of compensating fiscal and supply-side policies at a regional level which might militate against the bluntness of monetary policy as a means to deal with unevenly distributed inflationary pressures. It should also be noted that, regardless of the formal status of the Bank of England, interest rates in Britain have consistently been set with little consideration of their effects for manufacturing industry or regional inequalities. In this sense, operational independence has merely served to institutionalize a series of already well-established tendencies.
33 For reviews of the literature see Bond, Simon and Jenkinson, ‘The Assessment: Investment Performance and Policy’, Oxford Review of Economic Policy, 12:2 (1996), pp. 1–29; Kitson, Michael Tim and Michie, Jonathan, ‘Manufacturing Capacity, Investment and Employment’, in Michie, Jonathan and Smith, John Grieve (eds), Employment and Economic Performance: Jobs, Inflation and Growth, Oxford, Oxford University Press, 1997; Watson, Matthew and Hay, Colin, ‘In the Dedicated Pursuit of Dedicated Capital: Restoring an Investment Ethic to British Capitalism’, New Political Economy, 3:3 (1998), pp. 407–26.
34 Dixit, Avinash ‘Investment and Hysteresis’, Journal of Economic Perspectives, 6:1 (1992), pp. 107–32.
35 Stephen Byers, Speech at the Mansion House, 2 February 1999, pp. 1, 2.
36 Stephen Byers, Mansion House, p. 6.
37 Sassoon, ‘European Social Democracy and New Labour: Unity in Disunity?’, in Gamble, Andrew Donald and Wright, Tony (eds), The New Social Democracy, Oxford, Blackwell, 1999, p. 24.
38 Gray, Anne, ‘New Labour — New Labour Discipline’, Capital and Class, 65 (1999), pp. 1–8.
39 Barrell, R. (ed.), The UK Labour Market: Comparative Aspects and Institutional Developments, Cambridge, Cambridge University Press, 1994; Crouch, Finegold, C. and Sako, D. Are Skills the Answer? The Political Economy of Skill Creation in Advanced Industrial Countries, Oxford, Oxford University Press, 1999; Philpott, M. ‘The Performance of the UK Labour Market: Is Anglo-Saxon Economics the Answer to Structural Unemployment?’, in Buxton, J. Chapman, P. T. and Temple, P. (eds), Britain’s Economic Performance, London, Routledge, 1998.
40 E.Crooks, ‘Brown’s Jobless May Be No More’, Financial Times, 17 February 2000.
41 Erdem, E. and Glyn, A. ‘From Welfare to Work’, Financial Times, 17 February 2000.
42 Jamie Peck, ‘Getting Real with Welfare-to-Work: Hard Lessons from America’, Renewal, 7:4 (1999), pp. 39–49.
43 Alistair Darling, ‘We Make No Apologies for Our Tough Benefit Regime’, The Independent, 10 February 1999.
44 Keep, E. and Mayhew, ‘Vocational Education and Training and Economic Performance’, in Buxton, T. K. et al. (eds), Britain’s Economic Performance, Oxford, Oxford University Press, 1998, p. 53.
45 Kleinman, M. and West, A. ‘Employability and the New Deal’, New Economy, 3 (1998), pp. 174–9.
46 Brown, Gordon Speech to the Conference on New Policies for the Global Economy, Edward Balls, ‘Open Macroeconomics’.
47 DTI, Building the Knowledge-Driven Economy, Competitiveness White Paper, London, HMSO, 1998; Our Competitive Future: The Economics of the Knowledge-Driven Economy, London, HMSO, 1999; M. Sharp, ‘Technology Policy: The Last Two Decades’, in Buxton et al. (eds) Britain’s Economic Performance.
48 Leadbetter, Charlie Living on Thin Air: The New Economy, London, Viking, 1999.
49 Albo, ‘Competitive Austerity and the Impasses of Capitalist Employment Policy’, in Panitch, L. G. (ed.), The Socialist Register 1994, London, Merlin, pp. 144–70; and ‘A World Market of Opportunities: Capitalist Obstacles and Left Economic Policy’, in Panitch, L. (ed.), The Socialist Register 1997, London, Merlin, pp. 1–43.
50 Crafts, Nick ‘Post-Neoclassical Endogenous Growth Theory: What are its Policy Implications?’, Oxford Review of Economic Policy, 12:2 (1996), pp. 30–47.
51 On investment in human capital see Lucas, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 22 (1988), pp. 3–42; on investment in physical capital see Romer, Paul ‘Increasing Returns and Long-Run Growth’, Journal of Political Economy, 94 (1986), pp. 1002–37; on investment in research and development see Paul Romer, R. E., ‘Endogenous Technological Change’, Journal of Political Economy, 98 (1990), Supplement, pp. 72–102; for reviews see Crafts, ‘Post-Neoclassical Endogenous Growth Theory’; Sharp, ‘Technology Policy’.
52 Coates, David Models of Capitalism, Cambridge, Polity, 2000, pp. 251–64.
* Though all the usual caveats apply, the authors would like to thank the editors and anonymous referees of the journal for their helpful comments and suggestions. Colin Hay would also like to acknowledge the support of the ESRC for research on ‘Globalisation, European Integration and the European Social Model’ (L213252043).
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