Price and Wage Regulation, Exchange Rate Deregulation

Burns (1969 [1967], 263) noted that ‘practice’ could often turn out to be ‘less orthodox’ than ‘rhetoric’.1 Indeed, alongside free market rhetoric there was also the rhetoric of ‘a social bargain or compact’ (De Marchi 1975, 348). On both sides of the Atlantic, support for price and wage controls was gaining ground. In Britain for example, there were rhetorical similarities between the rhetoric of the Conservative Party election manifestos of June 1970 and May 1979. After Friedman’s September 1970 Wincott Lecture, the Institute of Economic Affairs arranged for him to be ‘discreetly ushered in’ to see Edward Heath, the newly elected Prime Minister, for an hour’s talk.2 Friedman (19 September 1970) told Stigler that ‘Heath impressed me very favorably.… What he wanted to talk to me about was (1) floating exchange rate; (2) monetary policies for fighting inflation.’ Friedman reported that Heath indicated ‘a lack of interest in wage + price controls or guidelines or incomes policy’.3