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One phrase perhaps best summarizes the origins, consequences, and legacies of the economic policy environment of the 1990s: tax cuts. The passion for tax cuts as a kind of “Holy Grail” of a “new classical” economics was so intense that even the major political parties, towards the end of Ronald Reagan's second presidential term, could find little about which to disagree on that score. All that was left was political pandering to targeted constituencies. For the Republicans, that meant emphasizing the usefulness of tax reduction for upper-income groups and the broadening of the argument to include proposals for reductions in the prevailing levy on capital gains; for the Democrats, the riposte was to focus on what was beguilingly labeled “middle-class tax relief.” Both parties flirted with radical suggestions to eliminate the entire structure of income taxation itself – usually toying with half-baked ideas concerning the implementation of a single- (or “flat-”) rate income tax or a national sales (or “value added”) tax. With genuine justification, an observer new to the scene might have concluded, during the 1988 presidential campaign especially, that John Maynard Keynes (not to mention his like-minded colleagues and students) had never published a word. Like most nostrums, tax reduction created more problems than it solved. Federal spending, whether engrossed by military initiatives such as those undertaken during the Reagan presidency, or propelled by transfer payment programs long on the books, rose in both absolute terms and on a per capita basis throughout the 1980s and early 1990s. [ABSTRACT FROM AUTHOR]

“The Great Depression of 1929 to 1940 in the United States was the greatest event in the history of business cycles. It devastated rich and poor alike. It destroyed wealth in the billions, tossed one-quarter of the 1929 labor force onto the shoals of unemployment, evaporated the hopes and aspirations of millions, left a majority of American families near destitution for a full decade in an event that was totally unnecessary, because properly applied monetary and fiscal policy could have cured the recession in 1930/31, not a decade later in 1941.” Introduction The similarities in American economic performance between the decades of the 1920s and 1990s are tantalizing. Particularly when 1919 is aligned with 1990 and 1929 is aligned with 2000, the evolution of many key macro-variables over the intervening decade match remarkably closely. Growth in real GDP, real GDP per capita, employment, and productivity were almost identical, the conventionally measured unemployment rate was identical in 1928 and 1999, inflation was negligible (1920s) or low (1990s), and the late 1920s stock market boom is the only such episode in the century that comes close to the stock market's ebullience in the late 1990s. Like the 1990s, the 1920s witnessed prosperity, a productivity revival, low unemployment, and low inflation. Both decades featured an explosion of applications of a fundamental general-purpose technology, electricity and the internal combustion engine in the 1920s and computer hardware, software, and networking communications technology in the 1990s. [ABSTRACT FROM AUTHOR]

Introduction Like most academic disciplines, economics has become highly specialized. The purpose of this chapter is to interpret the productivity record of the 1990s in historical context, by drawing together evidence from several lines of research that tend to proceed separately from each other: the economic history literatures on the diffusion of new technologies and institutional change in the labor market; work in labor economics on real wages and wage inequality; and the evidence from growth economics on alternating surges and pauses in the pace of productivity change. Together, these perspectives point towards a linkage between the productivity surge that began during the mid-1990s and the high-pressure labor market conditions that prevailed during the same period. The objective is not to develop a comprehensive historical interpretation of American technology and productivity, only to suggest that the labor market has been neglected in earlier accounts. I maintain that it deserves a central role in the story of the 1990s and, for that matter, the preceding century. Conceptual issues In virtually any reasonable model of the labor market, higher wages will lead to an increase in the marginal and average productivity of workers. The effect may operate through the choice of technique in production, through factor substitution within a given technique, or through compositional shifts towards more productive workers and higher-value activities; but the correlation should definitely be positive. [ABSTRACT FROM AUTHOR]

The society Labour inherited when it took power in 1997 looked dramatically different from the one it had left behind in 1979. During the Thatcher years economic growth had disproportionately benefited the better off, leading to a widening gulf between rich and poor. The dramatic nature of the change can be seen in historical context in Figure 14.1. Poverty more than doubled between 1979 and 1991, and families with children were most affected: between one in three and one in four children lived in relative poverty in 1997. Inequality measures such as the Gini coefficient show a similar pattern. Some of these changes can be put down to global forces beyond the reach of government policy. Falling demand for unskilled labour had placed an increasing premium on skills, affecting countries across the industrialised world. The impact on the UK was particularly great because of the high proportion of the population with low qualifications. Demographic factors also played a role, with increasing numbers of children growing up in one-parent households. But policy under Margaret Thatcher was also crucial. Curbs on trade union power and an end to the minimum wages councils had removed a floor on wages, while the move to linking benefits to price levels rather than incomes had left those without work, from pensioners to the unemployed, increasingly far behind. [ABSTRACT FROM AUTHOR]

On 15 June 2004 Gordon Brown passed an important milestone. A politician whose stock after-dinner joke is that there are two types of chancellor, ‘those who fail and those who get out in time’, became the longest-serving holder of the office in the modern era. In beating David Lloyd George's twentieth-century record (7 years and 43 days) in a job whose modern-day pressures far exceed those of the past, Brown's achievement was considerable. Under his economic management the Blair government had avoided economic crises, something that every previous Labour administration had succumbed to. It had maintained, indeed added to, its reputation for economic competence, by achieving the low-inflation stability that too often had eluded governments of all colours. The Treasury's pre-eminence in Whitehall, often in doubt during the Thatcher and Major years, was unquestioned. So was Brown's own political stature. If it was ever open to question during Blair's first term, nobody in the second term seriously challenged the notion that when it came to the Cabinet it was Blair, Brown and the rest some distance behind. As Brown surveyed the scene in summer 2004, he had much to be satisfied about. Blair was politically weakened and privately doubting his ability to carry on. The chancellor, untainted by Iraq, was getting much of the political credit for the improvement in public services beginning to come through. [ABSTRACT FROM AUTHOR]

When the Blair government came fresh to power in May 1997 it had primary education as it main aim and a close-knit team ready for both Number 10 and the newly merged Department for Education and Employment. David Blunkett, the secretary of state, had been the only member of the shadow cabinet besides Gordon Brown to have been publicly promised his post prior to the election. Estelle Morris, a member of the education team since 1995, became under-secretary for schools and then school standards minister from 1998 when Stephen Byers was promoted to the Cabinet. Professor Michael Barber, Tony Blair's chief speechwriter on schools in opposition, became Blunkett's main adviser and head of the newly created Standards and Effectiveness Unit (SEU) in the department, charged with changing the culture to accept responsibility for delivery as well as legislation. In Number 10, Tony Blair's chief of staff since 1994, David Miliband, an education expert, became head of the newly formed Policy Unit. Andrew Adonis, don and education journalist, who in an article in the run-up to the 1997 election had urged Blair to become his own education minister, was recruited to be Blair's education adviser. From the outset the new DfEE was a whirl of activity. It restructured and rewrote the mission statement and embarked on an ambitious programme of legislation and monitoring. Within days it was setting targets in literacy and numeracy for primary education. Tony Blair was personally involved, regularly meeting the education team at the DfEE. [ABSTRACT FROM AUTHOR]

It is a sign of the complete transformation of British politics that we can claim to be the party of the economy and the Conservatives are the threat to it. Business has a responsibility to make profits, using the money invested by shareholders and making it grow. Profitable businesses create sustainable employment and the pursuit of profitability stimulates innovation and productivity. The challenge of globalisation needs a strong and vibrant trade union movement standing up for its members in a coherent and intelligent way. The partnership between us is essential and I intend to ensure that it remains positive and firm. Labour believes in strong trade unions that are representative of the diverse workforce and which play a positive role in securing the success of their workplaces. Labour wants to work in partnership with the trade union movement to help such unions grow. The making of the British Business Model Tony Blair – in his third successive elected term as prime minister – has made it clear that he would like to carry through an irreversible transformation of the British economy so that it can become one of the world's leading centres for successful private enterprise, wealth creation and investment in research and development and technological innovation. [ABSTRACT FROM AUTHOR]

Scarcely anywhere has the semi-democratized political system of the new Russia appeared to stand in stiffer contrast to its predecessor, the prototypical communist dictatorship, than in the area of partisan activity. The Soviet regime banned overt opposition and insisted that all legitimate social interests find expression through one hierarchical pseudo-party. Having long since reduced elections, the hub of a traditional party's operations, to single-candidate charades, “the” party – the Communist Party of the Soviet Union (CPSU) – functioned essentially as ideological policeman, personnel department, and master coordinator and fixer for a disjointed state bureaucracy. Perestroika unleashed a quantum change in the late 1980s. Mikhail Gorbachev's sudden inauguration of electoral competition telescoped the universalization of the franchise, the work of generations in the West, into a few frenzied months. The same emancipating impulse led him to cripple the CPSU administrative apparatus and to ease curbs on public association, assembly, and communication. Politicized groups of all manner and description rapidly formed and took the stage. Elimination of the CPSU's legal monopoly in 1990 enabled almost any faction with an articulate spokesman and a photocopying machine to pose as a political party or movement. Two years after the Russian Federation emerged from the wreckage of the USSR in 1991, the Yeltsin constitution of 1993 enshrined the rights to organize parties and to vote freely for them. Aided by low barriers to entry, proportional-representation (PR) voting rules, and budget-subsidized campaigns, parties and party-like entities proliferated in Russia. [ABSTRACT FROM AUTHOR]

At the turn of the twenty-first century, consumers and politics stand in a paradoxical relationship. Never before have consumers in advanced economies had it so good. According to the proponents of more open and competitive global markets, consumers have been the principal beneficiaries of deregulation and trade liberalization in the 1980s and 1990s. At the same time, there has been a wave of consumer protests at international summits and in local politics against the democratic, economic and ethical costs of globalization. How should we explain this paradox? One school of thought views the recent consumer protests as a reaction to the global processes of capitalist branding and production – processes that created the very communicative and cultural openings for the development of a critical global consumer movement. This account is a good social movement story, popular with the critics of trade liberalization, but it is marred by a number of conceptual and empirical problems. First, by treating the recent wave of consumer activism in isolation from the network of national and international consumer movements and their ideological evolution in the twentieth century, the globalization narrative ignores the persistence of different traditions of consumer politics. Just as deregulatory processes have diverged across countries, so, too, have the ideological definitions and political uses of ‘the consumer’. Second, the narrative helps explain how consumer movements arise in response to changes in the political economy, yet fails to explore how the movements themselves have contributed to the structure and dynamics of political economies. [ABSTRACT FROM AUTHOR]

Following the failure of the Political Consultative Conference, China soon plunged into an all-out civil war. It was a hopeless situation for all those who pleaded for peace and democracy. To vent their anger and frustration, they could take to the streets, demonstrating against civil war, hunger, and the government, and in so doing risk arrests and their lives. Other than that, there was not much they could do. Yet in the intellectual marketplace of ideas, there remained a liberal forum at the center of which were the independent, nonparticipatory elite plus some MPG thinkers who had withdrawn from political engagement. Standing on the sideline, claiming impartiality, disclaiming selfinterests, pondering the future of China, and wondering where Chinese liberalism was headed, these liberal elements were a diffuse and unorganized coterie of university professors and intellectuals fighting a battle already lost. Theirs was the last voice, a swan song, or perhaps a requiem. Maintaining their faith in liberalism, they still spoke, desperately, of the continued necessity of a middle force representing the will of the people. Finding themselves at a crossroads, they could not help but wonder where they were going. The tragedy was that, as they faced the prospect of a final CCP victory and pondered what it meant for them, the road to democracy was closed long before they realized. Earlier works on the civil war period have shown that the Nationalist government drove the liberals to the communist camp rather than the CCP winning them over. [ABSTRACT FROM AUTHOR]

Japanese industrial policy in 1946–9 was still dominated by the paradigm of the managed economy. Although many elements of the wartime economic system were greatly challenged by the democratic reforms of the occupation authority, the practice of priority production (keisha seisan hōshiki), which referred to concentrating human, financial, and material resources in the coal, iron and steel, and fertilizer industries in order to provide basic materials for postwar economic reconstruction in all industries, contributed greatly to transforming the wartime legacies into the postwar economy. Japan's defeat in World War II opened a new chapter in its history. Like Germany, Japan experienced a storm of democratic reforms by the Occupation Authority. What was the impact of these reforms on postwar Japan? For a long time, 1945 was considered by many people the “birthday for a new Japan” (Noguchi 1995), a “Year Zero, when everything could be remade and redone” (Fallows 1994:120). In academic discussions, the discontinuity argument presented by Yamada Moritarō prevailed. It held that the postwar democratic reforms changed Japanese capitalism fundamentally because the production cycle of the Japanese economy was no longer sustained by militarism and colonies, the land reform eliminated the landlord class, and the majority of economic output shifted from textile industry to heavychemical industry (Ōishi 1974). This view was influential not only in Japan, but also in Germany. As Simon Reich (1990:4) points out, the astonishing achievement of Germany in postwar economic growth has been interpreted as being “like a phoenix [rising] from the ashes,” which had nothing to do with the German experience in the dark valley. [ABSTRACT FROM AUTHOR]