Social Policy in the Age of Reagan and Thatcher

Abstract

Throughout many of the capitalist democracies in Western Europe and in North America, the recession that began with the sharp,rise in petroleum prices in 1973-74 signalled an epochal shift in the patchwork of growthbased economic and social policies that had oriented the welfare state for a quarter-century or more. Quite suddenly, the immediate problems of economic management became more obviously intractable. Sharpened distributional conflicts rendered tried and true strategies to secure popular acceptance and electoral success for traditional social-democratic/welfarist political appeals far less reliable. The demise of Keynesianism which followed, meant far more than the obsolescence of an economic doctrine that had been used to iustify a broad range of economic policies. It represented a significant retreat from a vision of society-the Keynesian welfare state-that had motivated state strategies to harmonise interests through social policy, to politically regulate the market economy and thereby reduce class and diverse social conflicts, and to promulgate for the state a tutelary role in securing business and trade union acquiescence (and less commonly approval) for a limited set of important economic policies.