Despite extensive writing on Social Democracy in Britain, largely in the form of histories of the Labour Party and marxist state theory, few studies have undertaken, in depth, an empirical analysis of a particular period of social democracy as government, and even fewer using the extensive documentation available in the Public Archives. Theories of the role of the state and those that manage it are often based on abstract, essentially deductive reasoning and over-influenced by a hostile attitude to their object of analysis. Such approaches have resulted in a neglect of the scope for discretionary behaviour in the management of the capitalist state by reducing it to that required for system maintenance. The aim of this thesis has been to examine the nature of any such revealed discretion by opening up and 'dissecting' the black box of policymaking through a detailed examination of a government programme considered vital to the continuing relationship between politicians and the labour movement. Analysis was made of attempts to insulate and protect the programme from forces and interests that could be expected, on a purely deductive reading, to interfere with its success. Crucial in this respect was the way in which policies or programmes were related in an environment, often conceived as one where imperatives, stemming from the constraints of the international market, reduce or remove the degree of discretion and compel adjustment in domestic policy. The closing chapters outlined the key features of the discretionary behaviour apprehended in the study. Much of the conjunctural possibility of social democratic management was seen to lie in a series of 'policy spaces' achieved through a mix of administrative control and negotiation. Some of the contradictions and resulting costs of such a strategy were also revealed: the short term horizon in investment planning, known euphemistically at the time as 'make do and mend", leading to a neglect of long run and progressive accumulation.

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