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Alternative Economic Strategy

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The Alternative Economic Strategy (AES) is the name of the economic programme of the left-wing of the British Labour Party during the 1970s and early 1980s.

The Secretary of State for Industry in the Labour government, Tony Benn, wrote a paper for his Department in January 1975, which he described in his diary: "It described Strategy A which is the Government of national unity, the Tory strategy of a pay policy, higher taxes all round and deflation, with Britain staying in the Common Market. Then Strategy B which is the real Labour policy of saving jobs, a vigorous micro-investment programme, import control, control of the banks and insurance companies, control of export, of capital, higher taxation of the rich, and Britain leaving the Common Market".[1]

With Britain in economic crisis in October 1976, Benn again put forward the AES with the support of Peter Shore in Cabinet.[2] He claimed the two courses open to the government were the monetarist, deflationary course recommended by the Treasury and "the protectionist course which is the one I have consistently recommended for two and a half years...protectionism is a perfectly respectable course of action. It is compatible with our strategy. You withdraw behind walls and reconstruct and re-emerge".[3] Benn further said that both courses were a "siege economy" but the difference is that in the monetarist course "you will have the bankers with you and the British people, the trade unions, outside the citadel storming you; with mine it will be the other way round".[3] However the Cabinet rejected the AES on 1/2 December and accepted the terms for a loan from the International Monetary Fund.[4]

Notes

  1. ^ Tony Benn, Against the Tide. Diaries 1973-76 (London: Hutchinson, 1989), p. 302.
  2. ^ "IMF crisis forced Labour to consider scrapping Polaris". the Guardian.
  3. ^ a b Benn, p. 621.
  4. ^ Benn, pp. 661-679.

References

  • Tony Benn, Against the Tide. Diaries 1973-76 (London: Hutchinson, 1989).

Further reading

  • Sam Aaronovitch, The Road from Thatcherism: The Alternative Economic Strategy (London: Lawrence & Wishart, 1981).
  • Alan Budd, The Politics of Economic Planning (London: Fontana, 1978).
  • CSE London Working Group, The Alternative Economic Strategy: A Labour Movement Response to the Economic Crisis (CSE Books, 1980).
  • Kathleen Burk and Alec Cairncross, Goodbye, Great Britain: The 1976 IMF Crisis (Yale University Press, 1992).
  • Stuart Holland, The Socialist Challenge (London: Quartet Books, 1975).
  • Mark Wickham-Jones, Economic Strategy and the Labour Party: Politics and Policy-Making, 1970-83 (London: Palgrave Macmillan, 1996).
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