ABSTRACT
This quotation from Kaldor illustrates one of the central disputes in addressing the process of UK economic decline in the post-war period. Kaldor was referring to the use of incomes policies to regulate wage increases within a framework of internal demand management designed to maintain full employment and secure the UK’s fixed exchange rate. Kaldor’s recognition that economic problems have a sociological and political dimension illustrates that beyond economics as a discipline economic explanations of decline are partial. Specifically, economics can demonstrate factors in decline but cannot necessarily demonstrate why they are of central importance. Rational actor models of economics emphasize the centrality of the market mechanism and are able to side-step the presence of political and sociological factors by applying the rational actor model to such factors. This has the effect of sealing complex and interdependent material as a contiguity-a proximity of ideas and impressions. The principle of association creates categories of explanation such as the failure of technological evolution, the absence of the market mechanism, the presence and effects of multi-unionism and, lastly, the UK’s flawed Fordism.2
