Such active involvement as there was took the form of demand-management—manipulating interest rates and marginal tax bands to encourage saving or spending. These were short-term tactics. The main strategic objective of British governments of all colors in these years was to prevent a return to the traumatic levels of unemployment of the 1930s. Throughout Western Europe, then, governments, employers and workers conspired to forge a virtuous circle: high government spending, progressive taxation and limited wage increases. As we have seen, these goals were already inscribed in the widespread
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