>
> Well, was the problem simply that it was ineffective (and why was it
> ineffective?) or was it that the vaunted reforms were hollow, or both?
It was effective in reducing the real wage - it's just that the anticipated effects on unemployment and inflation did not eventuate. (Actually, there was an initial reduction in the rate of inflation, soon reversed, but no reduction in unemployment.) The problem is that the scheme relied on a revival in private investment, under the belief that a reduction of the 'real wage overhang' built up in the 1970s would restore profitability. But that revival did not occur.
> I don't understand. I'm all for wresting control of investment, but how
> would that (rather than incomes policy itself) have helped avert an
> anti-union backlash? The backlash was provoked by inflation. Averting the
> backlash required an anti-inflation policy.
Well, the inflation just wasn't as simple as a wage-price spiral (there was also a downward tendency in the Australian dollar), and at the turn of the 1980s it was stagflation, not simply inflation, that was the problem. There were structural problems, in that old industries were dying and new had yet to be born. Private investment depended not only on the real wage, but on perceived profitable opportunities and 'animal spirits'. A wages policy is also a profits policy - effectively workers are asked to restrain their claims to induce wealth-owners to invest domestically rather than overseas. My argument is that a truly socialistic program, or one that truly aims to 'democratise the economy', needs to begin to cut out the middleman, standing ready to replace the profit motive with public investment. Ultimately, of course, consumption needs to leave room for investment, but it ought to be on a rational, democratically-determined basis, not on the inegalitarian basis of rewarding rentiers for access to their capital.
> That is because my views on Billy Joel, incomes policy, and Lezsek
> Kolakowski are interdependent elements of a larger philosophical system
> which I am currently developing in a four-volume self-published treatise. I
> will be sending you a manuscript for comments.
Have you got a title? Can I suggest 'My Correct Views on Who Started the Fire'? :)
Mike Beggs