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This chapter describes the consolidation of new macroeconomic regimes in Denmark and the Netherlands in the early 1980s and the end of employment-oriented macroeconomic policies in Austria and Sweden in the late 1980s and early 1990s. The main argument of the chapter is that the policy changes in Austria and Sweden were associated with wider changes in the Austrian and Swedish political models in the late 1980s and early 1990s – a period when Austria and Sweden became, in a certain sense, ordinary European states. The chapter also considers the role of economic ideas and Europeanization.

This chapter traces the growing influence of economic culture in the late 20th century and the associated increase in the social legitimacy of self-interest. Key features of the economic mindset include the acceptance and assumption of self-interest, money as a measure of good, an emphasis on property and possession, agency and control, a prioritizing of the present, and a privileging of markets. Perfectly justifiable within particular areas of economics, these ideas have grown to dominate arenas in which they are less evidently appropriate, including public policy generally and the practice of business.

This chapter provides an assessment of EC merger policy from three perspectives. First, it places the evolution of merger policy alongside the evolution of economic ideas in relation to competition and industrial organization. Second, it highlights recent developments in the practical economic appraisal of competition in four areas: unilateral (non-coordinated) effects, particularly the appropriate use of simulation techniques and the efficiency defence; coordinated effects (collective dominance), particularly the role of the Community Courts; non-horizontal effects, particularly the need for the new guidelines; and remedies, particularly weaknesses in current practice. Third, it introduces a simple bargaining approach to merger policy evaluation to draw conclusions about the trend in overall effectiveness of EC merger policy since 1990.

This chapter provides additional intellectual background related to the freedom of contract in England in 1770. It examines the influence of medieval thoughts on the economic ideas of the time and the intellectual conditions in the country. These include the customary nature of relationships, close relations between economic and ethical ideas, and the exercises of freedom in a way which was consonant with a man's duty to his fellows and to God. It suggests that these traditions contributed to the emergence of firmly held convictions about contractual relationships.

The first section explores the investment flows that connected Britain and Ireland to the rest of Europe. The second sketches out the contours of British and Irish trade with the Continent, and then looks at the growth of Atlantic commerce. The third section demonstrates that European trade picked up significantly after the American Revolution. The final section considers how capital and commodity flows affected British and Irish attitudes towards the Continent. A narrowly national perspective is not difficult to find, but from the second half of the eighteenth century in particular, an alternative conception of trade, which stressed a community of economic interests between the different European nations, began to gain ground.

This chapter places the IMF’s recent and longer-term evolution within the context of evolving prevailing approaches in economics on macroeconomic and fiscal policy. It outlines briefly the intellectual underpinnings of these economic ideas, their significance, and their coexistence alongside each other within Fund thinking and practice. The view that ‘New Consensus Macroeconomics’ had solved economic stabilization problems was demolished by the GFC and the deep recession that followed. The chapter charts how parallel re-evaluations were helpful to those within the Fund seeking to shift positions and priorities, since they could draw on the views of leading economists evolving in a similar direction. A key finding of the chapter and the book is the breadth of the policy approaches reconcilable to mainstream economic thinking. Provided certain form conditions are met, the content of acceptable new economic thinking is surprisingly open.

The conclusion reflects on how the IMF’s post-crash rethink has sought to alter the contours of ‘sound’ economic policy. It reflects on the implications of the argument of the book as a whole about malleability of economic orthodoxy. It considers the scope and limits of the IMF authority in its dealings with advanced economies and how this authority can be constrained. Recalling the key role played in the social construction of economic orthodoxy by authoritative voices like the IMF, it considers the potential for advancing new research agendas in ideational political economy, the study of international organizations, and the politics of austerity.

This chapter focuses on some of the challenges in developing and implementing well-designed innovation policy initiatives. It points out the disjunction between arguments for particular policies—for example, a particular tax rate or regulatory change—and the broader evidence that the rate and impact of innovation reflect broader measures of the overall innovation environment. The chapter also emphasizes the disjunction between academic and policy approaches. The role of certain types of institutions—for example, long-term interagency working groups—in facilitating a more sophisticated innovation policy-making process is also highlighted. Interagency processes approaches have tended to be much more successful in things related to finance than to technology, and one might look to success stories of long-term interagency working groups. The chapter concludes with a discussion on an important and underemphasized element: the policy process.

This chapter discusses some economic questions during the time of the Greek city-states and the Athenian Empire and later in the age of Rome. The basic industry of both ancient Greece and Rome was agriculture, and the use or consumption of goods was infinitesimal for all but a small governing minority. Aside from the elementary character of economic life in this period, the most important reason that ethical questions were addressed to the exclusion of economic ones in the ancient world was the existence of slavery. The chapter considers the issue of capital, wages, and interest rates in the ancient world, taking into account the ideas of Aristotle on subjects such as money, coinage, and moneymaking, as well as Plato's inclination to communism. It also examines the contribution of the Romans to the history of economic ideas, especially Roman law and private property.

This chapter spells out the central questions. Who were the architects? From what sort of backgrounds did they come? What kinds of attitudes and beliefs inspired their engagement with Economic and Monetary Union (EMU)? Was there a shared factor of generational experience? What kind of project did they seek to construct, how, and with whom? How successful were they in embedding their ideas in the final design? Were the design failures attributable to their lack of warnings? The chapter spells out the criteria of selection. It examines the value and the pitfalls of intellectual biography, pointing to the possibilities and to the limits of individual creativity and inventiveness. The chapter points to the characteristic biases that arise in assessing the role of architects. Finally, it warns against the danger of seeing EMU as a linear, teleological process.

This chapter summarizes the main themes of this book, and the theory it proposes of why the governments of so many nations around the world decided to globalize their economies in the late 20th century. The book asks whether the foundations of globalization were democratic, in the sense that politicians’ decisions derived from public opinion and electoral incentives, and also whether globalization as based on mainstream economic ideas. As shown by the cases of Canada, Mexico, and the United States, and the ways they established free trade in North America, the book shows that globalization has been more of an elite than a democratic project, and one based on folk economics rather than expert ideas. Business has been the motor force in developed countries; in developing countries, states have acted more autonomously from domestic business, but they have been more subject to pressure from international financial institutions.

This chapter sets the stage for the rest of the book, describing key political economic events, conditions, and changes in Canada, Mexico, and the United States from the 1940s to the early 1980s. The US government was broadly keen on regional economic integration throughout this period, but Canada and Mexico were opposed. As a consequence, this was in some ways a period of deglobalization. Canadian economists advocated freer trade (like their counterparts in the United States), but Canadian businesspeople prevented the state from pursuing it. In Mexico, political elites maintained a closed economy because they subscribed to the developmentalist economic ideas of the day. Public opinion everywhere was little informed about international economic issues, and had no significant role to play in shaping public policies.

This chapter details the political economy of the 1966 devaluation when India was faced with a grave crisis of foreign exchange. At that time, Prime Minister Indira Gandhi was unsure about the benefits of globalization and the technocracy within the government and was a firm believer in import substitution. The business class too was largely a votary of import substitution. When the government and the business class both wished import substitution, pressure from the World Bank could not coerce India to promote either globalization or private sector driven industrialization.

This chapter charts changing character of the economic ideas informing fiscal policymaking in Britain, and Fund responses to them. Drawing on interviews with the Fund’s UK Missions and UK authorities, it shows how, despite the IMF’s prizing of its non-political, scientific image, its differing views of UK policy space and prioritization became the stuff of a contested politics. The central assumption of the coalition government’s construction of fiscal rectitude was that Britain faced a ‘crisis of debt’, yet the IMF did not share this view. Fund work on fiscal multipliers being higher during recessions, and the adverse effects of fiscal consolidation on growth, all had pointed relevance for UK policy. The coalition government saw little potential for activist fiscal policy in support of growth. In 2013 Blanchard accused the UK authorities of ‘playing with fire’ by pursuing excessively harsh austerity which threatened a prolonged and deep recession.