1. R.H.S. Crossman, letter to Tony Crosland, 23 October 1956, Crosland papers 13/10, British Library of Economics and Political Science.

2. Harold Wincott, “Socialism in One Country,” 20 March 1958, The Listener, 491-3.

3. Stephen Lewis, Investors Chronicle, 31 January 1992.

4. For overviews, see Charles Lindblom, “Democracy and the Economy,” in Democracy and the Market System (Oslo: Norwegian University Press, 1988), 124-126; and Duane Swank, “Politics and the Structural Dependence of the State in Democratic Capitalist Nations,”American Political Science Review 86, no. 1 (March 1992): 38-54.

5. Adam Przeworski and Michael Wallerstein, “Structural Dependence of the State on Capital,”American Political Science Review 82, no. 1 (March 1988): 11-30.

6. Adam Przeworski, The State and the Economy under Capitalism (New York: Harwood Academic, 1991), 95.

7. As suggested by Fred Block, “The Ruling Class Does Not Rule,” in Revising State Theory (Philadelphia: Temple University Press, 1987), 51-68.

8. Przeworski and Wallerstein, “Structural Dependence of the State on Capital,” 22-23.

9. Wincott, “Socialism in One Country,” 492.

10. T. N. Street, “The Pound and the Election,”New Reasoner 8 (spring 1959): 27-35.

11. Harold Laski, “Some Implications of the Crisis,”Political Quarterly 2, no. 4, (October-December 1931): 466-9.

12. Oskar Lange, “On the Economic Theory of Socialism,” in On the Economic Theory of Socialism, edited by Benjamin Lippincott (New York: McGraw-Hill, 1964), 55-141.

13. Przeworski, The State and the Economy under Capitalism, 95. See also Przeworski and Wallerstein, “Structural Dependence of the State on Capital,” 24.

14. Andrew Glyn, “Capital Flight and Exchange Controls,”New Left Review 155 (January-February 1986): 37-49; and Andrew Glyn, “The Case for Exchange Controls” (unpublished paper, March 1987). Similar arguments were put forward earlier by Hugh Gaitskell, “Financial Policy in the Transition Period,” in New Directions in Socialism, edited by George Catlin (London: Lovat Dickson & Thompson, 1935), 169-200. On class coalitions, see Gosta Esping Andersen and Roger Friedland, “Class Coalitions in the Making of West European Economies,”Political Power and Social Theory 3 (1982): 1-52; and Peter Gourevitch, Politics in Hard Times (New York: Cornell University Press, 1986), 222-4.

15. See Patrick Seyd, “Labor: The Great Transformation,” in Britain at the Polls, edited by A. King (London: Chatham House, 1992), 70-100.

16. Tony Benn, The End of an Era (London: Hutchinson, 1992 [25 May 1988]), 546.

17. Benn, The End of an Era, 563.

18. Martin Smith, “The Labor Party in Opposition,” in The Changing Labor Party, edited by Martin Smith and Joanna Spear (London: Routledge, 1992), 3-12.

19. “The Policy Review Groups,” PD: 1121/October 1987; and Labor Party, Conference Report (1987), 46. A full account of the policy review between 1987 and 1989 is given by Colin Hughes and Patrick Wintour, Labor Rebuilt (London: Fourth Estate, 1990).

20. Labor Party, Meet the Challenge, Make the Change (1989). The most dramatic changes, in defense, will not be discussed here.

21. Labor Party, Meet the Challenge, Make the Change, 12. These themes were discussed at length in Tribune, 12 May 1989, and 28 July-4 August 1989.

22. Se John Eatwell, “The Development of Labor Policy, 1979-92,” in The Economic Legacy, edited by Jonathan Michie (London: Academic Press, 1992), 333-9. A classic work on this theme, still very influential with Labor policymakers, is Andrew Shonfield, Modern Capitalism: The Changing Balance of Public and Private Power (Oxford: Oxford University Press, 1965).

23. On the theory of coordinated capitalism, see David Soskice, “Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries,”Oxford Review of Economic Policy 9, no. 4 (1990): 36-61; David Soskice, “Reinterpreting Corporatism and Explaining Unemployment: Coordinated and Non Coordinated Market Economies,” in Labor Relations and Economic Performance, edited by R. Brunetta and C. Dell' Aringa (London: Macmillan, 1990), 170-211; and David Soskice, “Advanced Economies in Open World Markets and Comparative Institutional Advantages: Patterns of Business Coordination, National Institutional Frameworks and Company Product Market Innovation Strategies” (unpublished paper, 1994). For analyses of uncoordinated capitalism in the United Kingdom, see Desmond King, Actively Seeking Work? (Chicago: University of Chicago Press, 1995), 128-33; and Desmond King and Stuart Wood, “Neoliberalism and the Conservative Offensive: Britain and the United States in the 1980s” (unpublished paper, 1994).

24. “Proposed New Institutions and Quangos,” PD: 2153/April 1989, 1.

25. Labor Party, Meet the Challenge, Make the Change, 8. Party researcher Henry Neuburger emphasized the need for spending plans to be carefully costed and limited; H. Neuburger, “Public Spending Implications of the Policy Review Proposals,” PD: 2046/February 1989.

26. Neuburger rejected the introduction of a target; PD: 2046/February 1989.

27. Labor Party, Meet the Challenge, Make the Change, 32.

28. See Industrial Strategy Group, Beyond the Review (Edinburgh: Industrial Strategy Group, 1989); and revised versions in K. Cowling and R. Sugden, eds., A New Industrial Policy for Britain (Manchester: Manchester University Press, 1990).

29. K. Cowling, “The Strategic Approach to Economic and Industrial Policy,” in A New Industrial Policy for Britain, edited by K. Cowling and R. Sugden (Manchester: Manchester University Press, 1990), 6-34; and K. Cowling and M. Sawyer, “Merger and Monopoly Policy,” in A New Industrial Policy for Britain, edited by K. Cowling and R. Sugden (Manchester: Manchester University Press, 1990), 72-86. See also Mike Craven, “Labor and Business: The Implications for Industry of a Labor Government's Legislative Program” (Market Access International, 1990), 20; and S. G. Warburg Securities, “The Market under Labor” (written by Stephen Carr, George Hodgson, and Kevin Gardner, 1990), 16-7.

30. Henry Neuburger, “Investment and the City,” in Industrial Strategy Group, Beyond the Review, 34-7.

31. Eric Shaw, “Towards Renewal? The British Labor Party's Policy Review,” in Rethinking Social Democracy in Western Europe, edited by Richard Gillespie and W. Paterson (London: Frank Cass, 1993), 112-32.

32. Seyd, “Labor: The Great Transformation,” 85.

33. See Eric Shaw, The Labor Party since 1979 Crisis and Transformation (London: Routledge, 1994).

34. See Labor Party, Labor and Britain in the 1990s (1988); “The Policy Review,” PD: 1104/ October 1987; “Some Polling Evidence on Employment Issues and Unions,” PD: 1241/January 1988; PD: 1249/January 1988; “Policy Review: Phase Two,” PD: 1800/December 1988.

35. “Programme of Work,” PD: 1158/December 1987.

36. PD: 1205/December 1987, 3.

37. Quoted by Hughes and Wintour, Labor Rebuilt, 42.

38. Tribune, 29 September 1989.

39. Tom Sawyer, for example, in Tribune, 29 September 1989.

40. See David Cox, ed., The Walden Interviews (London: Boxtree, 1990), 98.

41. NEC Report (1990), 24.

42. Roy Hattersley, “Exchange Rates and the EMS” (speech), 15 October 1986.

43. Brown advocated full membership to the PLP in November 1989; Financial Times, 9 November 1989.

44. See Gavyn Davies, Britain and the European Monetary Question (London: IPPR, 1989) and Gavyn Davies, David Currie, Neil MacKinnon, and Irene Brunskill, European Monetary Union (London: IPPR, 1990).

45. Andy McSmith, John Smith Playing the Long Game (London: Verso, 1993), 148, 164.

46. Craven, “Labor and Business,” 14.

47. Cox, ed., The Walden Interviews, 94.

48. See Jim Tomlinson, “Labor and Policy on Inflation,” PD: 1699/October 1988, 5-10.

49. The Guardian, 5 April 1990.

50. The Independent on Sunday, 6 May 1990. See also The Guardian, 28 May 1990.

51. Financial Times, 27 September 1991.

52. Quoted by Anthony Bevins, The Independent, 25 May 1990.

53. Quoted by Christopher Huhne, The Independent on Sunday, 6 May 1990.

54. Interview with Brian Walden, transcript, 23 September 1990, 6.

55. Tribune, 15 December 1989.

56. Mike Craven (with Sue Goss) in a paper for the Labor Coordinating Committee, quoted by Tribune, 8 June 1990.

57. Labor Party, Meet the Challenge, Make the Change, 14.

58. Labor Party, Looking to the Future, 6.

59. Smith gave a commitment that there would be no controls; interview with Brian Walden (transcript, 23 September 1990), 35; and McSmith, John Smith Playing the Long Game, 162.

60. Quoted by Investors Chronicle, 13 December 1991.

61. They had little contact with Gordon Brown. See Cowling and Sawyer, “Merger and Monopoly Policy,” 83.

62. Labor Party, Modern Manufacturing Strength, 6, 13; and Labor Party, Opportunity Britain, 14.

63. McSmith, John Smith Playing the Long Game, 161. See also Financial Times, 17 November 1989; and The Times, 23 September 1991.

64. The Guardian, 5 April 1990.

65. Labor Party, Fulfilling Our Future Technology and Training in the New Industrial Age, 1990.

66. Interview with Brian Walden (transcript, 23 September 1990), 8. See also Tribune, 16 February 1990.

67. Charlie Leadbetter, Financial Times, 23 May 1991.

68. Financial Times, 16 May 1990.

69. Observer, 5 May 1991.

70. Financial Times, 9 November 1989, 12 April 1991, and 3 July 1991.

71. Lewis Chester, The Independent on Sunday, 26 May 1991, and The Scotsman, 30 September 1991.

72. The Guardian, 28 May 1990. See also Financial Times, 27 September 1991.

73. The Sunday Times, 24 June 1990.

74. Interview with Brian Walden (transcript, 24 November 1991), 12.

75. Quoted by Michael Harrison, The Independent on Sunday, 29 September 1991.

76. Financial Times, 3 July 1991.

77. Quoted by Anthony Bevins, The Independent, 18 April 1990. See also Financial Times, 17 April 1990; Observer, 22 April 1990; and The Guardian, 19 July 1990.

78. Bryan Gould, A Future for Socialism (London: Jonathan Cape, 1989), 85.

79. Neil Kinnock, Making Our Way (Oxford: Blackwell, 1986), 111-2.

80. Labor Party, Meet the Challenge, Make the Change, 6.

81. Roy Hattersley, Economic Priorities for a Labor Government (London: Macmillan, 1987), 126.

82. Quoted by the Financial Times, 4 November 1989.

83. Gordon Brown, Where There is Greed... (Mainstream, Edinburgh, 1989), 17, 30.

84. The Sunday Times, 6 May 1990.

85. Financial Times, 26 February 1991.

86. The Sunday Times, 24 June 1990.

87. The Times, 23 September 1991; see also Ian Aitken, The Guardian, 31 December 1990.

88. Tribune, 8 June 1990.

89. After an examination of CSFB, “The British Economy under Labor,” October 1989; The Guardian, 7 November 1989.

90. Financial Times, 3 July 1991.

91. Quoted by Michael Harrison, The Independent on Sunday, 29 September 1991.

92. The Economist, 14 April 1990. A similar survey at the time of the 1992 election indicated a preference among economists for Smith over Norman Lamont, the Conservative Chancellor.

93. Financial Times, 23 April 1990. At the time of Mrs. Thatcher's downfall in November 1990 one commentator reported that, despite John Smith's attempt to win over the City, the consensus among financial institutions was that the central task of whoever became Prime Minister was to keep the Labor Party out; Observer, 25 November 1990.

94. S. G. Warburg Securities, “The Market under Labor,” 9. This judgment was passed before Labor's full commitment to the ERM became clear. See also COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 28; and Financial Times, 3 July 1991.

95. Nomura Research Institute, “The U.K. under Labor—Right Turn or Dead End?” May 1991, 14.

96. BZW, “Implications of a Labor Government,” 30 September 1991.

97. Goldman Sachs, “Labor's Program: The Stock Market Implications,” June 1991, 13.

98. Nomura Research Institute, “The U.K. under Labor—Right Turn or Dead End?,” 13.

99. Credit Lyonnais Securities, “Life under Labor,” October 1991, 1; and Goldman Sachs, “Labor's Program: The Stock Market Implications,” 20.

100. The Independent on Sunday, 29 September 1991.

101. BZW, “Implications of a Labor Government,” 30 September 1991; and Investors Chronicle, 18 October 1991.

102. Credit Lyonnais Securities, “Life under Labor,” 5.

103. Goldman Sachs, “Labor's Program: The Stock Market Implications,” 10-2.

104. S. G. Warburg Securities, “The Market under Labor,” 6.

105. See Tomlinson, “Labor and Policy on Inflation,” 8-10; Gerald Holtham's contribution to Controlling Inflation: Two Views (London, Fabian Tract 539, 1990), 12-6; and John Grieve Smith, Pay Strategy for the 1990s (London: IPPR, 1990).

106. See, for example, interview with Brian Walden (transcript, 23 September 1990), 25-6.

107. Credit Lyonnais Securities, “Life under Labor,” 6; and Nomura Research Institute, “The U.K. under Labor—Right Turn or Dead End?”

108. COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 17, 22, 25, 36.

109. Goldman Sachs, “Labor's Program: The Stock Market Implications,” 23-5.

110. Nomura Research Institute, “The U.K. under Labor—Right Turn or Dead End?” 26.

111. COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 13.

112. Financial Times, 12 April 1991.

113. Financial Times, 12 April 1991.

114. COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 14. CSFB, “The British Economy under Labor” saw the impact as “dramatic,” 8.

115. COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 5; S. G. Warburg Securities, “The Market Under Labor,” 14; and Goldman Sachs, “Labor's Program: The Stock Market Implications,” 3.

116. Despite the changes that Shadow Employment Secretary Tony Blair had made to Labor's proposals for industrial relations, namely the abandonment of support for closed shop union arrangements. See COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 4; and Financial Times, 12 April 1991.

117. The Guardian, 19 June 1991.

118. Credit Lyonnais Securities, “Life under Labor,” 2.

119. Investors Chronicle, 26 June 1991.

120. Goldman Sachs, “Labor's Program: The Stock Market Implications,” 13.

121. S. G. Warburg Securities, “The Market under Labor,” 9; and Goldman Sachs, “Labor's Program: The Stock Market Implications,” 20.

122. See Investors Chronicle, 7 June 1991; Credit Lyonnais Securities, “Life under Labor,” 9; S. G. Warburg Securities, “The Market under Labor,” 38; Goldman Sachs, “Labor's Program: The Stock Market Implications,” 3; and BZW, “Implications of a Labor Victory,” 30 September 1991.

123. COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 4; and Credit Lyonnais Securities, “Life under Labor,” 1.

124. Goldman Sachs, “Labor's Program: The Stock Market Implications,” 20.

125. S. G. Warburg Securities, “The Market Under Labor,” 11. See also COBA Group, “A Labor Government? Changing the Rules for U.K. Business,” 20.

126. Financial Weekly, 27 April-3 May 1990.

127. Goldman Sachs, “Labor's Program: The Stock Market Implications,” 6 and 13.

128. The Independent on Sunday, 6 May 1990.

129. Financial Weekly, 27 April-3 May 1990.

130. Financial Weekly, 27 April-3 May 1990.

131. Bob Serple, quoted by Investors Chronicle, 20 March 1992.

132. Credit Lyonnais Securities, “Life under Labor,” 8.

133. The Independent on Sunday, 6 May 1990; and S. G. Warburg, “The Market under Labor,” 13.

134. Goldman Sachs, “Labor's Program: The Stock Market Implications,” 18 and 28.

135. Quoted by Michael Harrison, The Independent on Sunday, 29 September 1991.

136. Quoted by Lewis Chester, The Independent on Sunday, 26 May 1991.

137. Quoted by McSmith, John Smith Playing the Long Game, 191.

138. Quoted by McSmith, John Smith Playing the Long Game, 191.

139. Investors Chronicle, 20 March 1992. Stephen Lewis wrote: “the financial markets, nevertheless, are still likely to react adversely to the prospect of a Labor election victory, and with good reason... the essence of its fiscal strategy is to redistribute income from high-earners to low-earners,”Investors Chronicle, 31 January 1992.

140. The Guardian, 20 March 1992; and The Independent, 26 March 1992.

141. Brian Pearce, The Sunday Times, 5 April 1992.

142. The Guardian, 19 March 1992.

143. Wall Street Journal Europe, 2 April 1992.

144. Such a situation was an important part of the opposition to the ERM taken by Alan Walters, Margaret Thatcher's sometime economic adviser. He felt that concerns over a potential Labor election victory were preventing the Conservative Government from cutting interest rates and therefore making it less likely that the Tories would win the election; Alan Walters, Sterling in Danger (London: Fontana, 1990), 92.

145. The Guardian, 19 March 1992.

146. Quoted by Hamish MacRae, The Independent, 13 March 1992.

147. Quoted by Angela Lambert, The Independent, 19 March 1992.

148. Financial Times, 16 March 1992.

149. The Daily Telegraph, 27 March 1992.

150. Eatwell, “The Development of Labor Policy, 1979-92,” 334-5.

151. See Ton Notermans, “The Abdication from National Policy Autonomy: Why the Macroeconomic Policy Regime Has Become So Unfavorable to Labor,”Politics and Society 21, no. 2 (June 1993): 133-68; and Ton Notermans, “Social Democracy in Open Economies: A Reply to Jonathon Moses,”Politics and Society 22, no. 2 (June 1994): 149-64.

152. See Jonathon Moses, “Abdication from National Policy Autonomy: What's Left to Leave?,”Politics and Society 22, no. 2 (June 1994): 125-48. In an examination of the German case, Notermans reaches conclusions close to those of Moses. See Ton Notermans, “Domestic Preferences and External Constraints: The Bundesbank between Internal and External Pressures,” (Center for European Studies, Harvard University, 1991).

153. Block, Revising State Theory, 59-60.

154. Adam Przeworski, Capitalism and Social Democracy (Cambridge: Cambridge University Press, 1985).

Anticipating Social Democracy,Preempting Anticipations: Economic Policy-Making in the British Labor Party,1987-1992

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