Perspective in Political Economy

In what we are promised will be the last spring Budget week, all sorts of data of dubious relevance are dragged into the papers. Does it matter that George Osborne's tinkering with the tax system in the six years 2010-16 led to the implementation of 'about half' of the 1,453 changes that have been imposed on Britons in the last 45 years? This gem of data has been proffered by the Chartered Institute of Management Accountants, who I am old enough to remember as the Cost and Works Accountants when their forebears did useful work in ensuring that most of Britain's massive industrial sector was productive and profitable.

It is absolutely taboo nowadays, under the hegemony of authoritarian Economics, to note that much of the success of private industry came from state subsidies, export credits, and from massive orders from the armed forces and from the nationalised electricity, railways, coalmines, ports and other state industries. The state sector built the world's first viable nuclear power plant and funded Concorde, while the demands of the cold war gave us the V-bombers, brilliant fighter aircraft, superb high-speed destroyers, the most efficient nuclear-powered submarines in the world: and the UK funded all of that while constantly improving the health service, expanding and developing a rational [though socially divisive] pattern of schools and universities and technical colleges, expanding  broadcasting into television, building the first motorways, and fostering a general feeling of success among the population at large. That is all about the UK more than 45 years ago, 45 years being the timescale against which the Management Accountants have mapped the frenetic increase in work for their profession and their sister institutes that has been derived from Chancellors tinkering with the tax system as they have have sold off or shut down the state industries, overexpanded the universities as they have driven down standards for the majority of bubble institutions so described while they have been thrown up to accommodate the otherwise-unemployable army of non-mathematical school leavers who have been deprived of positive prospects for employment in an industry of which they can feel truly proud.

1972 was 45 years ago. It can be taken as a watershed year, as in the next year the economic world was turned upside down by the decision of the oil exporting countries [OPEC] to use political means to shift the balance of power in the capitalist world. They slapped massive charges on the export of their oil, which transformed the global pattern of payments as the capitalist system in the 'free world' had become hugely dependent on petroleum. The USA and a few other leading economies were themselves major oil producers; but for Britain the public announcement of oil discoveries [already made] in the North sea was several years in the future. So the immediate impact of the oil-price hike meant that the price of almost everything that was carried in oil-fired ships, on oil-fired lorries  was necessarily increased; the prices of plastics and other materials incorporating petroleum rose, private motoring became more costly. The cumulative effect of all these sudden and unavoidable changes was rapid general price inflation; to which workers responded with wage demands. Thus it is also important that in 1972 it became unequivocally clear that wages could not be controlled by government decree. Edward Heath's conservative government came into power in 1970 with a policy to have an Industrial Relations Act [really, a Trade Union Control Act] that would enforce the decisions of an Industrial relations Court. That system was simply ignored. Before the inflation occurred, the new legislation had successfully been challenged; so when the authorities tried to enforce pay restraint, they failed.

The economic history of Britain is totally different, pre and post 1972. Of course, the problems that drove the country into the inflationary tendency and into the arms of Mrs Thatcher had been incipient long before 1972; but that really was the year in which the disaster was in preparation.

It the ICMA had chosen a different timescale for their research, or had decided not to publish it, this historical disquisition would never have been written: but they did publish it, and I blame them for this piece.