Problems of the British economy (original) (raw)

The Politics of Economic Performance, and the Trade Union Movement, 1970-1982

2008

Here we argue that the relationship between the main Irish political parties and the trade unions, in the 1970s, was largely based upon political imperatives, with an economic subtext. The absence of strong ideological difference between the two largest Irish political parties meant they were willing to deal with the trade union moment in a somewhat similar fashion. At the start of the 1970s, the Fianna Fail government prodded the ICTU into a “voluntary” national wage agreement. This agreement was regarded as a means of stabilising the economy, attracting foreign investment, and improving Fianna Fail’s image with the electorate. While the governments throughout this period did adopt certain trade union policies as public policy, this was only done when it suited the administration. The objective was never to create a Scandinavian style corporatist state. All agreements with the ICTU, whether conducted under the auspices of the Fianna Fail, or coalition, government, had the same ulti...

The Evolution of J.M. Keynes’ Wage and Employment Theory 1920–1946

History of Economics Review, 1992

This paper traces out a historically-based survey of the development of Keynes' wage and employment theory. While the title includes employment theory, the paper devotes particular attention to Keynes's wage theory. The development of Keynes's wage theory has been given only the most sparing attention in the literature. This glaring omission has usually been attributed to the dearth of material in Keynes's literary works to warrant a major study. Underpinning this, has been the popularly-held view that Keynes said relatively little about wages. This paper attempts to repudiate this interpretation and, in doing so redress this long standing neglect by providing an exegetical account and analysis of Keynes's wage theory. 48 Histo'Y of Economics Review considerable amount of material pertaining to wages to the extent that the whole area needs re-evaluation. As we know, Keynes broke rank with his neo<lassical colleagues over the decision to restore the Gold Standard given its implications for domestic economic policy. After that juncture Keynes unleashed a flood of correspondence and articles that rejected the concomitant classical medicine of deflation and wage-cutting. By developing a robust critique of classical wage theory Keynes had, by the late twenties, an early but incomplete command of the theoretical arguments that were to appear in Chapter 19 of CT. This article will argue that the substance of Keynes's wage theory had been formulated some time before the theoretical framework of CT took shape. For that reason alone the wage analysis, as it was, lacked coherence and was founded upon classical dynamic disequilibrium analysis. This asymmetric development in Keynes's theorising explains the detached role wage analysis played in the overall scheme of things in the CT. True to their role in the first opening chapter of the GT, Keynes's wage analysis, nonetheless, played a crucial part as his battering-ram against the citadel of neo-classical economics particularly its full employment and market-clearing nostrums. The 1\venties Keynes's first dealings with the issues of employment, output and income distribution had arisen with The Ecmwmic Consequences of the Peace (1919); it contained a remarkably panoramic, yet succinct account of the nature and dynamics of the 19th century mode of capital accumulation, growth and distribution. Keynes took particul~r note of the servile working classes that had, ' ... accepted from ignorance or powerlessness, or were compelled, persuaded or cajoled by custom, convention, authority, and the well established order of society into accepting, a situation in which they could call their own very little of the c~e that they and nature and the capitalists were cooperating to produce'. However, the postwar world was marked by upheaval in the underlying social and psychological climate. There had been a breakdown in the conditions that had underpinned capital accumulation before the war. The working classes were, for_ one, no longer prepared to meekly surrender the larger portion of the 'cake' to the capitalists without a fight. As KeYJT forewarned, 'The labouring classes may no longer be willing to forgo so largely'. This particular outlook contained the seeds of Keynes's later emphasis upon the relative incomes struggle that arose between the 'capitalist classes' and 'workers' and 'rentiers'. This antagonism would be expressed through the level of money wages; their determination. Keynes inferred, being a politico-economic matter. The Economic Consequences of the Peace was prescient for its depiction of a matlliJ economy facing the prospect of stagnation due to a savings-investment imbalance. This arose from the bourgeoisie's diligent practice of setting aside funds for saving whilst profitable investment opportunities shrunk. Keynes questioned not only the purpose of the saving, but by inference, the maldistribution of income that allowed

Wage Determination and Trade Unions: A Comment

Scottish Journal of Political Economy, 1974

W i b s o n and Burkitt (1973) in a recent article in this journal discussed the conflicting claims of the ' market forces ' and the ' power forces ' schools of the theory of wage determination. Their conolusion seems to be, as is often the case, that there is much to be said on both sides. They argue, rightly I believe, that ' . . . a more realistic approach to the theory of trade union behaviour ' is one ' in which market and power forces are not seen as alternatives ' but as each playing some part in influencing trade mion behaviour.

IN FOCUS I. WAGES: A DECADE OF TRANSFORMATION

A peculiar feature of the transformation crisis period was that while net earnings significantly dropped in value (by 13.5 percent in 1989-92), for employers the actual costs of labour increased. Godfrey (1994) estimates that in 1989-92 unit labour costs in industry increased by 26 percent in USD. The following factors contributed to this anomaly: