Revisiting the Role of Profits in the Collapse of Britain's Post-War Consensus

15 Pages Posted: 18 Oct 2023

See all articles by Robert Calvert Jump

Robert Calvert Jump

University of Greenwich - Business School

Date Written: September 21, 2023

Abstract

It is widely assumed that British companies suffered a collapse in profits in the late 1960s. This proposition was first advanced by Andrew Glyn and Bob Sutcliffe in 1971, and influenced various interpretations of post-war British history from the 1970s onwards. Most importantly, it supported the widespread view that organised labour used its bargaining power to erode the long-term viability of British capitalism in the 1960s, which continued into the 1970s and contributed to the breakdown of the post-war consensus. In this paper I argue that, although profitability did decline over the broad sweep of the post-war consensus, this process had stopped by 1966. Interestingly, this falsification of Glyn and Sutcliffe’s hypothesis does not rely on any inadequacy in their empirical work. Instead, it relies on data revisions that were only incorporated into the British national accounts from 1976 onwards. As stagflation and industrial unrest only became serious problems after 1966, I argue that declining profitability played very little role in the collapse of Britain’s post-war consensus.

Keywords: Profit Squeeze, Britain, United Kingdom, Post-War Consensus, Measurement Error, National Statistics

JEL Classification: N00, N14, B20, B24, B50, B51

Suggested Citation

Calvert Jump, Robert, Revisiting the Role of Profits in the Collapse of Britain's Post-War Consensus (September 21, 2023). Available at SSRN: https://ssrn.com/abstract=4578981 or http://dx.doi.org/10.2139/ssrn.4578981

Robert Calvert Jump (Contact Author)

University of Greenwich - Business School ( email )

United Kingdom

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