Theory & Struggle

The Alternative Economic Strategy

Theory & Struggle (2019), 120, (1), 42–49.

Abstract

In the 1970s in Britain, a package of economic policies to promote full employment and a redistribution of income, wealth and power was promoted by the trade unions, the left of the Labour Party and the Communist Party. This Alternative Economic Strategy (AES) was designed to tackle the long-standing problems in the British economy of short-termism and underinvestment, caused by the dominance of the financial institutions of the City of London with their primary interest in global financial activities rather than supporting domestic industry. Public ownership of the financial institutions was therefore a key plank, along with public ownership within the industrial sector and planning agreements with private sector firms. When the Labour government faced a crisis in 1976, Tony Benn, the industry minister, sought to get the AES adopted. Instead it chose to take a loan from the IMF along with monetarist conditions, and the resulting squeeze of living standards led to the winter of discontent and the election of Thatcher in 1979. The AES continued to be the lefts alternative to Thatcherism, but was not accepted by the Kinnock or Blair leaderships. Today, an AES needs to be based around a global Green New Deal, with taxation of international financial speculation and a crackdown on tax evasion, along with investment in the productive infrastructure.

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Author details

Michie, Jonathan