by Jim Tomlinson (University of Glasgow)
‘It’s the economy stupid’, like most clichés, both reveals and conceals important truths. The slogan suggests a hugely important truth about the post-1945 politics of the advanced democracies such as Britain: that economic issues have been crucial to government strategies and political arguments. What the cliché conceals is the need to examine what is understood by ‘the economy’, a term which has no fixed meaning, and has been constantly re-worked over the years. Starting from those two points, this book provides a distinctive new account of British economic life since the 1940s, focussing upon how successive governments, in seeking to manage the economy, have sought simultaneously to ‘manage the people’: to try and manage popular understanding of economic issues.
The first half the book analyses the development of the major narratives from the 1940s onwards. This covers the notion of ‘austerity’ and its particular meaning in the 1940s; the rise of a narrative of ‘economic decline’ from the late 1950s, and the subsequent attempts to ‘modernize’ the economy; the attempts to ‘roll back the state’ from the 1970s; the impact of ideas of ‘globalization’ in the 1900s; and, finally, the way the crisis of 2008/9 onwards was constructed as a problem of ‘debts and deficits’. The second part focuses in on four key issues in attempts to ‘manage the people’: productivity, the balance of payments, inflation and unemployment. It shows how in each case governments sought to get the populace to understand these issues in a particular light, and shaped strategies to that end.
One conclusion of the book is the grounding of most representations of key economic problems of the post-war period in Britain as an industrial economy, and how de-industrialization undermines this representation. Unemployment, from its origins in the late-Victorian period, was largely about the malfunctioning of industrial (and male) labour markets. De-industrialization, accompanied by the proliferation of precarious work, including much classified as ‘self-employment’, radically challenges our understanding of this problem, however much it remains the case that for the great bulk of the population selling their labour is key to their economic prosperity.
The concern with productivity was likewise grounded in the industrial sector. But outside the marketed services, in non-marketed provision like education, health and care, the problems of conceptualising, let alone measuring, productivity are immense. In a world where personal services of various kinds are becoming ever more important, traditional notions of productivity need a radical re-think.
Less obviously, the notion of a national rate of inflation, such as the Cost of Living Index and later the RPI, was grounded in attempts to measure the real wages of the industrial working class. With the value of housing as key underpinning for consumption, and the ‘financialization’ of the economy, this traditional notion of inflation, measuring the cost of a basket of consumables against nominal wages, has been undermined. Asset, especially housing, prices matter much more to many wage earners, whilst the value of financial assets is also important to increasing numbers of people as the population ages.
Finally, the decline of concern with the balance of payments is linked to the rise in the relative importance of financial flows, making the manufacturing balance or the current account less pertinent. For many years now Britain’s external payments have relied on the rates of return on overseas assets, exceeding those on domestic assets held by foreigners. We are a very long way indeed from 1940s stories of ‘England’s bread hangs by Lancashire’s thread’.
De-industrialization has not only undercut the coherence and relevance of the four standard economic policy problems of the post-war years, but has also destroyed the primary audience that most post-war economic propaganda was aimed at: the industrial working class. While other audiences were not entirely neglected, it was the worker (usually the male worker), who was the prime target of the narratives and whose understandings and behaviour were seen as the key to the projected solutions.
A recurrent anxiety of this propaganda was the receptivity of those workers to its messages. This anxiety helps to explain much of the ‘simplified’ language of this propaganda, as well as its patterns of distribution. More fundamentally, this anxiety rested upon uncertainties about what kind of arguments would a working-class audience find congenial; there was perennial debate about the efficacy of appeals to individual as opposed to the ‘national’ interest. Above all, there was a moral message of distributive justice which infused much of the propaganda, ultimately grounded in the belief that working class culture had within it ingrained notions of ‘fairness’ that had to be appealed to.
While ethical appeals continued to inform economic propaganda into the twenty-first century, the fragmentation of the old audience accelerated. In addition, given the upward lurch in inequality in the 1980s, and the following period of continuing growth of incomes right at the top of the distribution, appeals to ‘fairness’ have become much more difficult to make credible. Strikingly, concerns about inequality emerged across the political spectrum after the 2007/8 financial crisis, at the same time as the narrative of debts, deficits and austerity had driven post-crisis policies that increased inequality. Widespread talk of ‘reducing inequality’, whilst having obvious political appeal, especially after Brexit, would seem to be largely rhetorical.
Managing the Economy, Managing the People: narratives of economic life in Britain from Beveridge to Brexit is edited by Oxford University Press, 2017, ISBN 978-019-878609-2
To contact the author: Jim.Tomlinson@Glasgow.ac.uk