The Government's financial policy in Britain during most of the post-war period has been based on 'demand management': the attempt to maintain total spending on a smooth upward trend, thereby preserving a high and stable level of employment. This basis for policy, correctly called Keynesian, has recently been displaced by the adoption of targets for money and other financial variables on the basis of a doctrine, monetarism, of which the central contention is that employment cannot in the long run be influenced much by financial policy, and that attempts to change the level of employment from what is dictated by market forces will only cause inflation.

LRB 24 January 1980 | PDF Download