Prelude: A small cloud on the horizon (1968)

In 1968 real GDP in the OECD region was increasing at 6.3 per cent per annum, unemployment was 3 per cent and inflation was 3.9 per cent (OECD 1985): after two decades of boom conditions, economic growth was more or less taken for granted, and there was little sign of the problems to come. The late Keynesian consensus continued, on both sides of politics. Yet it was a troubling time for conservatives, the year of near revolution in Paris; the peak of the peace demonstrations and the radical student movement in the United States; President Lyndon Johnson's sudden decision not to seek re-election and to negotiate a ceasefire in Vietnam; the assassination of Martin Luther King, and. the riots in Watts and other American cities. The ‘sexual revolution’ proceeded apace. The counter-culture was at its height.