Monetary statecraft and the making of modern macroeconomic governance in Britain, 1947-1997
This thesis explores the political origins of a regime of macroeconomic control in the UK. Using archival evidence and other primary sources, it argues that by the end of the twentieth century an idiosyncratic structure of macroeconomic governance had emerged centred around the Bank of England’s policy rate, which was transmitted through variable rate mortgages and the flexible exchange rate. This novel structure was grounded in fundamental socio-economic and institutional changes, including the spread of homeownership, the liberalisation of financial markets, and the dismantling of institutionalised labour power. The new governing regime and the transformations that brought it about were both a consequence of political agency and inextricably bound up with the legitimacy and authority of Britain’s political class. To trace the origins of this regime and the processes of institutional change from which it emerged, the thesis uses the historical institutionalist method. Accordingly, it focuses on mechanisms of institutional reproduction and critical junctures. Yet it argues that many accounts of these same historical processes are overly reliant on structural-functional determinants of institutional change and fail to recognise the importance of political agency. It develops the concept of ‘monetary statecraft’ as a heuristic device for understanding the impact of political agency on institutional change. It makes the claim that in modern capitalist societies, monetary institutions are a uniquely important site of strategic and pragmatic political action. The thesis shows how we can conceive of actors as simultaneously shaping, but also being structured by, the institutional context. It then demonstrates how modern modes of macroeconomic policy and the intensifying financialisation of British capitalist development in the second half of the twentieth century emerged from the monetary statecraft strategies of political and financial elites. In doing so, the thesis makes both theoretical contributions to the historical institutionalist literature and empirical contributions to British political economy scholarship. It highlights frequently neglected features of the British political economic landscape and the ways in which they are inextricably linked with party politics.
Bank of England, British history, British politics, Historical institutionalism, macroeconomic history, Monetary statecraft, political economy, the Conservative Party, the Labour party
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