ABSTRACT
The origins of the 'Ricardo phenomenon' in Britain could be traced to the mid-1960s, when productive employment started to decline, but productivity continued to increase. This chapter looks in more detail at this period, and considers how the Labour government's economic policies influenced this process. It is now generally accepted by economists that this period was a crucial turning-point in the post-war economic development of Britain. The Labour government was committed to a plan for improving the rate of growth of the economy, giving highest priority to industrial expansion. The notion of economic planning was part of the Labour Party's heritage from the 1945-1951 government. However, Harold Wilson sought to rid it of its overtones of rationing and restriction, and to present planning as a necessary means to injecting a new dynamism into the economy. Both before and after the election victory, Labour's leaders emphasised the modernisation of industry as the primary aim of its programme.
