ABSTRACT
In what turned out to be an epoch-making speech in September 1974, Sir Keith Joseph attacked the recently defeated Heath government for over-reacting to short-term unemployment figures, and allowing the money supply to expand too rapidly. Harking back to the Conservative manifesto of 1970, he reminded his party that they had been pledged to less intervention by the state, to greater scope for market forces, and to controlling public expenditure. But in restating the tenets of the Selsdon Conference of 1970, he placed a far harsher stress on monetary control, and the acceptance of its social consequences, than had been heard from a leading Conservative spokesman since the war. Theorists of the monetarist school make it clear that they consider that Keynesian policies have, over the past forty years, so distorted the economy that only a drastic reallocation of resources can allow growth. In June 1980, the Independent Treasury Economic Model (ITEM) Club published its forecasts for the economy.
