Coordinated capitalism in the United Kingdom: wage bargaining and British social democracy

This archival-based paper offers an analysis of the attempt by the British Labour party to establish coordinated capitalism in the United Kingdom during the 1980s and 1990s. Long regarded as insouciant on the management of inflation, during the late 1980s, Labour endeavoured to develop a more persuasive strategy. In part, the party's approach relied on the establishment of close relations with Europe and in particular with British membership of the European exchange rate mechanism. But membership of the Euro simply aligned sterling with the deutschmark. Control of inflation required accompanying policy interventions. Labour's response was to explore the development of a coordinated, centralised and synchronised form of wage bargaining across the British economy. Such proposals drew heavily on European experience and, given the historic commitment to free collective bargaining and union sensitivities on the subject, had to be developed in secrecy. Ultimately the proposal failed not because it was rejected by the party but because the party lost the April 1992 general election. This paper places Labour's proposals in the context of European anti-inflationary strategies and examines their development including an assessment of the difficulties such measures involved.