ABSTRACT
The Government’s programme is as foolish as it is wrong. Its direct effect on employment must be disastrous…purchasing power is to be curtailed…the end will be that no one can be employed, except those happy few who grow their own potatoes, as a result of each of us refusing, for reasons of economy, to buy the services of any one else…If we carry ‘economy’ of every kind to its logical conclusion we shall find that we have balanced the budget at nought on both sides with all of us flat on our backs starving to death. (John Maynard Keynes, writing in 1931; 1972, pp 147 and 239)
From 1945 to 1970 or thereabouts, there was a Keynesian ‘interlude’ in economic policy in Britain. Full employment was a primary objective. State intervention in a ‘mixed’ economy was accepted. The limitations of the market mechanism were recognized, to some degree, by both Labour and Conservative administrations.
