The historiography of the 1945–51 Labour governments' economic policies is dominated by three interconnected themes. First, the preeminence of macroeconomic issues: Cairncross' magisterial work, for example, omits ‘any extended discussion of regional, commercial and industrial policy’, and he ‘recoiled from giving to microeconomic policy … the extended treatment that I have given to macroeconomic policy’. Second, this focus on macro policy, whilst coupled to a recognition of the importance of planning and controls in early post-war policy, emphasises the movement away from such methods towards the dominance of the fiscal policies of the 1950s and 1960s. Third, the effect of all this is to concentrate attention on economic policies concerned with stabilisation rather than modernisation.

Against the picture sketched above, this chapter emphasises the centrality of microeconomic or supply-side policy to the government's programme. Second, and linked to this first point, is the place of planning and tripartism as integral to those policies. Third, it is argued that these policies, whilst certainly affected by the compelling needs of economic stabilisation, embodied a significant project of modernisation. The argument is not that this project wholly succeeded, but it is important to know that it was tried and what limited its achievements.

Overall, the chapter argues that there was a much more distinctive and significant notion of democratic socialist economic policy than the existing literature implies.