Full Employment: A Pledge Betrayed

274 Pages·1997·14.15 MB·English

by  John Grieve Smith (auth.)

FULL EMPLOYMENT: A PLEDGE BETRAYED
By the same author
BUSINESS STRATEGY
Edited by the same author
STRATEGIC PLANNING IN NATIONALISED INDUSTRIES
and with Jonathan Michie
UNEMPLOYMENT IN EUROPE
MANAGING THE GLOBAL ECONOMY
CREATING INDUSTRIAL CAPACITY: Towards Full Employment
EMPLOYMENT AND ECONOMIC PERFORMANCE: Jobs, Inflation and
Growth
Full Entployment:
A Pledge Betrayed
John Grieve Smith
© John Grieve Smith 1997
Softcover reprint of the hardcover 1st edition 1997978-0-333-68736-9
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First published 1997 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
ISBN 978-0-333-68737-6 ISBN 978-0-230-37238-2 (eBook)
DOI 10.1057/9780230372382
A catalogue record for this book is available
from the British Library.
This book is printed on paper suitable for recycling and
made from fully managed and sustained forest sources.
10 9 8 7 6 5 4 3 2 1
06 05 04 03 02 01 00 99 98 97
For Jean

Contents
lDr~ace ix
Acknowledgements Xl
1 A Pledge Betrayed 1
2 Unemployment and Economic Policy before 1939 15
3 The Birth of Full Employment 35
4 The Years of Full Employment: 1946-70 56
5 Transition and Revolution: 1970-95 78
6 Demand Management 105
7 Pay and Inflation 124
8 Jobs and People 149
9 The Capacity Problem 168
10 Our European Future 180
11 A Global Payments Strategy 203
12 The Way Ahead 224
Appendix 1: Measuring Unemployment 242
Appendix 2: Tax-Based Incomes lDolicies 244
Notes 247
Select Bibliography 254
Index 259
Tables
2.1 UK unemployment, 1881-1918 16
2.2 UK unemployment, 1919-39 18
4.1 UK unemployment, 1945-70 57
5.1 UK unemployment, 1970.-95 80
vii

Preface
This book is addressed to all those interested in the problems
of economic policy and unemployment, whether they be poli
ticians, journalists, civil servants, readers of the economic col
umns of the press or members of the economic profession. In
trying to make it as widely accessible as possible, I am particu
larly grateful to Kit Jones, Brian Reddaway, Michael Stewart,
Geoff Harcourt, Andrew Glyn, Robert Neild and Mica Panic
for commenting on all or part of the manuscript. I should also
like to thank John Wells for help with data on unemployment
and poverty. Once again I am totally indebted to Lesley Haird
for typing and retyping successive drafts with such patience
and good humour.
As the reader may detect, Chapters 4 and 5 on the postwar
period rely heavily on the various works of Alec Cairncross,
Christopher Dow and Frank Blackaby and the National Institute.
I should like to take this opportunity to thank some of the
many people to whom I have been indebted over the years for
help and encouragement in getting to grips with the problems
of economic and industrial policy, of which I believe that the
problem of restoring full employment is now the most press
ing. My longest standing debt is to Brian Reddaway, my Super
visor throughout the time I was a student at Cambridge, who
taught me with tolerance and good humour, and confirmed
my belief that economics should be a practical and useful sub
ject. Next came my first boss, Robert Hall, head of the Eco
nomic Section of the Cabinet Office (and then the Treasury),
who was unsurpassed as a government economic adviser in
the postwar period: if Keynes was the architect of postwar full
employment policies, Robert was the journeyman builder, who
played the major role in turning them into reality. Returning
to Whitehall in the 1960s I had the good fortune to work for
Donald MacDougall in the Department of Economic Mfairs on
tackling what would now be called 'supply-side' problems. I am
also deeply grateful for the good comradeship and support of
John Jukes and Peter Evans with whom I worked so closely on
and off for 20 years.
I have been much encouraged by a number of Cambridge
ix