By the mid-1970s, Labour had already discredited Keynesianism and set up the conditions for the legitimisation of neoliberalism — and for Thatcher's all-out attack on the working class
Well written. Yeah. The so called Neoliberal Era didn't begin in the 1980s under the Tories, it began in the 1970s under Labour when the Callaghan accepted the conditions of the IMF bailout (1976 but I think the real moment was 78 (I think, maybe off on year) when the conditions were finally fully accepted and all fake pretenses were dropped), which was also another marker of the shift into a new Era because that was the first non cooperatively done IMF bailout conditions that sought to be as lite as possible and instead demanded lots of austerity and did so in ways that obviously favored the financial sector at the expense of other sectors
Sorry, but no meaningful social contract 'reconciling the unions to wage restraint in exchange for job growth' ever existed in the seventies. All attempts by Labour to come to an agreement with the unions ('In Place of Strife', 'The Social Compact') failed, as the unions refused to temper their demands of a government which they were funding politically and continued to bite the hand that was trying to feed them. UK inflation of 27% in 1979, under which prices double every three years, was not 'world inflation' but was the national social and economic anarchy which arose inevitably from the unions' continual beggar my neighbour demands for wage increases, and a government pursuing an interventionist strategy which lacked the authority to resist them.
If real wages are falling it means nominal wages are not keeping up with inflation. That's called wage restraint, as it means unions are not demanding that wages rise as much as or more than inflation. So not sure what point you're making. Are you blaming the crisis of those years on workers for not accepting an even bigger hit to their living standards?
The unions did make agreements to enforce wage restraint at various points during the 1970's, although agreements made at a high level (with the TUC) were not always followed on the ground. And there were external factors other than wages driving inflation, particularly the oil price. The bigger picture is that, as Denis Healey found out, you cannot pursue an interventionist/managed economic policy *and* maintain an aspirational exchange rate for a (since 1972) floating pound, as real world realities will always intrude. The really serious social and political problems developed after the rejection by the left of Healey's 1976 public expenditure white paper and the resultant sterling crisis, when it became clear that Labour was not going to be able to deliver its social democratic vision due to the external realities, leading to the 'winter of discontent' and Thatcher.
Well written. Yeah. The so called Neoliberal Era didn't begin in the 1980s under the Tories, it began in the 1970s under Labour when the Callaghan accepted the conditions of the IMF bailout (1976 but I think the real moment was 78 (I think, maybe off on year) when the conditions were finally fully accepted and all fake pretenses were dropped), which was also another marker of the shift into a new Era because that was the first non cooperatively done IMF bailout conditions that sought to be as lite as possible and instead demanded lots of austerity and did so in ways that obviously favored the financial sector at the expense of other sectors
Sorry, but no meaningful social contract 'reconciling the unions to wage restraint in exchange for job growth' ever existed in the seventies. All attempts by Labour to come to an agreement with the unions ('In Place of Strife', 'The Social Compact') failed, as the unions refused to temper their demands of a government which they were funding politically and continued to bite the hand that was trying to feed them. UK inflation of 27% in 1979, under which prices double every three years, was not 'world inflation' but was the national social and economic anarchy which arose inevitably from the unions' continual beggar my neighbour demands for wage increases, and a government pursuing an interventionist strategy which lacked the authority to resist them.
Not true. There was very much wage restraint in the years leading up to 1979, as you can see clearly in the figure at the top of this article: https://www.theguardian.com/business/2014/jan/31/real-wages-falling-longest-period-ons-record
The Guardian graph shows 'real' wages, with inflation stripped out. The average UK annual salary tripled in nominal terms between 1970 and 1978, and manual workers' wages doubled between 1970 and 1975, and then doubled again between 1975 and 1980: https://insideconveyancing.co.uk/news/houses-prices-have-soared-100-fold-since-1966-rising-three-times-faster-than-wages-unless-youre-a-footballer/ ; https://www.gov.wales/sites/default/files/statistics-and-research/2018-12/980827-historical-1974-1996-chapter-8-en.pdf (p5)
If real wages are falling it means nominal wages are not keeping up with inflation. That's called wage restraint, as it means unions are not demanding that wages rise as much as or more than inflation. So not sure what point you're making. Are you blaming the crisis of those years on workers for not accepting an even bigger hit to their living standards?
The unions did make agreements to enforce wage restraint at various points during the 1970's, although agreements made at a high level (with the TUC) were not always followed on the ground. And there were external factors other than wages driving inflation, particularly the oil price. The bigger picture is that, as Denis Healey found out, you cannot pursue an interventionist/managed economic policy *and* maintain an aspirational exchange rate for a (since 1972) floating pound, as real world realities will always intrude. The really serious social and political problems developed after the rejection by the left of Healey's 1976 public expenditure white paper and the resultant sterling crisis, when it became clear that Labour was not going to be able to deliver its social democratic vision due to the external realities, leading to the 'winter of discontent' and Thatcher.