In the mid-1970s Keynesian social democracy fell prey to the combined pressures of a sterling crisis, the imf and the us Federal Reserve and was jettisoned by many of its erstwhile supporters within the Labour Party. What remained of an intellectual and political commitment to government-initiated expansionary policies was swept aside and a “punk monetarism”, to use Peter Kellner's term, was embraced by the prime minister and others within the Labour leadership, with varying degrees of sincerity. Meanwhile, as we have seen in the previous chapters of this book, the 1970s also witnessed an impressive theoretical assault from the Left that damaged the hegemony that Keynesian social democracy had exercised within the Labour Party in the previous two decades. Yet, as regards some of its key components, its obituaries, and there was no shortage of these, were premature. Many of the rats of the social democratic Right might have deserted what they had convinced themselves was a sinking ship; many on the Left had never been convinced of its capacity to float in the first place, but, for some, the essential elements of Keynesian social democracy, with a little reconfiguration, could still be combined to construct a craft which was economically and politically seaworthy.

It had, of course, been the case, even in those years when the aes Left was setting the terms of economic debate within the Labour Party and “punk monetarism” had infected its upper echelons, that the core of the economic strategy offered to the electorate was essentially Keynesian.