Incentives in the United Kingdom
Few people would disagree that the United Kingdom presents in its post-war behaviour — and perhaps for a long period before that — a disappointing economic performance. There have been many diagnoses of the problem, ranging from lack of effective demand through to the class system. I believe the cause lies in the pattern of government and government-permitted intervention in U.K. markets; or in the words of this conference, in “incentives”, as influenced by government policy. That pattern of intervention has itself to be explained of course; and there is a large and rightly expanding literature on the public choice issues involved — the work of Tullock  and Olson  for example belongs in this category. However, my task is limited here to disentangling the channels of intervention and its effects; agreement on this, if it could be reached, would then help to focus public opinion in resisting the pressures of the interest groups which manipulate this intervention.
KeywordsReal Exchange Rate Real Wage Unemployment Benefit Replacement Ratio Supply Curve
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