The Gradual Encroachment of Ideas: Lessons from the paradigm shift to embedded liberalism

Abstract

Elements of the shift to embedded liberalism are of interest for those seeking to understand how political-economic paradigms shift or to precipitate such a shift today. Two policy programmes were particularly important: structural reform of the global financial system, manifest in the creation of the Bretton Woods system; and a shift in the balance of ownership across the economy, in favour of the public sector. As in other periods, those prosecuting the shift employed a wide-ranging ‘theory of change’ that included a diversity of groups, was ultimately successful upon the election of signal governments, and which benefited from the centralised power of the post-war state and the desire of electors for change. These favourable conditions stand in direct contrast to the outlook facing current change efforts.