In this revised version of a Cambridge Ph.D. dissertation, Richard Toye traces the vicissitudes of economic planning in the Labour party between the collapse of the second minority Government in August 1931 and the end of the first majority Government in 1951. Throughout, the emphasis is on the relationship between ideas and the Labour party, but after the formation of the Coalition Government in 1940 there is inevitably a concern with the formulation and execution of government policies where the webs of influence become even more complex. As one might expect, the book is firmly grounded in the secondary literature as well as a wealth of archival research in the usual sources. However, in the post-1945 discussion, there is the introduction and extensive use of a new source, the diaries of R. W. B. (“Otto”) Clarke, a brilliant and opinionated Treasury Under-Secretary.

The main theme of the book is that, despite all the talk and writing about planning in the 1930s and early 1940s, Labour came to power in 1945 without having fully thought through, much less agreed on, the implications of what it meant to plan. As a result, despite its 1945 public commitments and its claims to have undertaken some planning during 1945–1951, the reality of practice fell rather short of its aspirations.

The main weakness of the book lies in its narrowness. Economic planning was only one of the departures of Labour from past practice. Other departures, both related to planning, included widespread nationalization and macroeconomic management. These were similar to economic planning in that although much had been written about them before 1945 relatively little concrete thought had been given to what they necessarily meant on the ground. In the case of macroeconomic management, given the state of the empirical side of the subject, the learning process was prolonged, but learning there was. The case of nationalization had more parallels with the planning of which nationalized industries were to be an important part. There the would-be nationalizers had not fully thought through what nationalization was supposed to achieve. As a result, as Sir Norman Chester's volume The Nationalisation of British Industry, 1945–51 (London: Her Majesty's Stationary Office, 1975) made clear, Labour did not provide the newly nationalized industries with a governing structure that might reflect its aspirations. (There are, of course similar, parallel problems in the regulatory environment that accompanied the Tories' program of denationalization after 1979.) In other words, Labour did not follow Maynard Keynes's 1944 injunction:

There is also a certain patchiness in the coverage of particular subjects. For example, the discussion of the “socialist calculation debate” is truncated with the impression created that it ended in 1938 rather than with Friedrich Hayek's “Socialist Economic Planning: The Competitive Solution,” Economica, May 1940, but this may have been the case among members of the Labour Party. Again in the discussion of post-1945 external economic policy there are small, irritating muddles in the details at almost every stage of the treatment of the evolution of the Article 7 discussions, the loan negotiations, and the development of the Bretton Woods institutions through to 1951.

Although these quibbles reflect this reader's disappointment that what was obviously a very very good dissertation was not more thoroughly revised as it became a book, readers of this review should recognize that this is an important contribution to the literature on the Labour Government of 1945–1951.