Industrial change is a two-sided process: it both creates new plants, production methods and jobs and displaces others at present in operation. But the two sides of this process rarely coincide in time or space, and in Britain over the past fifteen years or so the develop ment path of the economy has been increasingly dominated by displacement effects. Whether measured in terms of output, exports, investment or employment, there has been a cumulative weakening of the contribution of manufacturing to the national economy: an unprecedented 'de-industrialisation'. Although opinions differ over the precise causes of this persistent industrial decline, it is clear that the British economy has become caught in a process of declining external competitiveness, which is both a consequence and a cause of a deteriorating economic environment, characterised by low profits, the holding back of new investment and insufficient job opportunities (Blackaby, 1978; Hughes, 1981; Cambridge Economic Policy Group, 1982). It is the absolute decline in industrial employ ment, sustained now for some sixteen years and accelerated by the current recession, that is one of the worrying features of this deindustrialisation. From a peak level in 1966, total industrial employment has declined by over four million, of which three million is accounted for by jobs lost in manufacturing. During the 1970s there were some increases in service employment, especially in the public sector, which offset the decline in manufac turing jobs, but that offsetting trend came to a halt towards the end of the decade. Over the period 1966-81, service employment increased by just over one million, so that the loss of four million jobs in industry has been primarily reflected not by jobs created else where in the economy but by an increase in the army of unemployed of nearly three million. Industrial unemployment is now more than ten times what it was in 1966. This decline in the demand for labour has been characterised by a number of cyclical phases. Over the last decade or so, cycles in the rate of capital accumulation appear to have become more marked, and to have been accompanied by pronounced swings in the financial balance of a large number of firms and industries. Much of the labour displacement that has occurred during these crises has been concentrated in a single year within the four or five year cycle, as in 1967, 1971, 1975 and, in the current recession, in 1980. With out doubt this latest downturn is the most severe of the post-war period, an economic col lapse that has been sharply intensified by the Tory government's pursuance of restrictive monetarist policies to combat inflation and a laissez-faire approach to the supply side of