Britain Economic Flashcards
Gold standard
monetary system based on mass of gold
keynesian economics
advocate of a mixed economy
Staple industries
iron steel coal shipbuilding
agriculture
cultivation of animals, plants fungi and life forms for food fibre and products
productivity
measure of efficiency of production
service industries
transport, retail, entertainment
British economic timeline
1914 - 1919 war 1919 growth 1921 economic decline 23- 28 recovery 29-32 depression 33-37 recovery 1938- 39 rearmament
Early 1920s Boom
war stimulated growth modernisation
little unemployment
production grew 20%
good wages
1921 bust
strucutal unemployment
over investment
decline in staple industry
decline in world trade
Unemployment 1921
over 2 million
Wall street crash
October 1929
collapse of wall street in USA started depression
Effects of Depression on UK
Value of exports halved
1932 3 million unemployed
world trade halted
Levels of unemployment
3 million 1932
steadily improved but still 1.5 million by 1939
regional unemployment rich poor divide
Depressed v Affluent areas
depressed - Jarrow, Newcastle, Merthyr Tydfil
Affluent - Bristol London Essex
Depressed Areas
Staple industries - impacted heavily by depression
national average unemployment 22%
jarrow 73%
These areas had worst health housing and infant mortality rates
Economic Revival - electricity
1932 - 37 industrial production rose by 46%
1939 2/3 houses wired for electricity
radios sold - 500,000 in 1930, 2M in 1937
Economic revival - Motor, Chemicals, Aircraft and service industries
no. of cars on road in 1939 3 million 400k employed in car industry 1939 ICI chemicals New industries usually in south and midlands 80% of factories built in London service industries grew
Housing
Boom in houses 1930s 2.7m built
new houses usually in suburbs
more affordable to build
Temporary Break
1937 downturn
unemployment 2 million
short lived due to rearmament
35-39 1 million jobs created by 1939
Causes of recovery
trade cycle
new industries
housing boom
affluent spending
New industries
electricity and cars!
sustained recovery
1934 7% employment accounted by new industry
Housing Boom
1935 peak time of housing
750k employed by building
low rates allowed
started spin off trades (plumbing etc)
affluent spending
1938 average family had double real income then 1914 deflation made good cheaper 1930s real wage increased 15% imports cheaper 1939 - 20m cinema tickets weekly 1939- 20m went seaside yearly jobs in entertainment and sport 1937 - 116k
Miners and Black Friday
Miners wanted full nationalisation
called for wage rise
govnt set up sankey commision called for high wages low hours but no nationalisation
Causes for strike
gold standard
Baldwin kept things the same while commission investigated
Samuel report
march 1926
better working hours but slight wage cuts
both sides didnt like
General strike
4th may - 12 may 1926 Trade disputes act made strike illegal govnt planned well, unions didnt members of public took over key roles govnt spent 433 million over 9 days, greater financial ability
effects of depression
union membership fell 8 million in 1921, 4 million 1934
unions became more political pushing Keynesian ideas
Keynes view v Orthodox view
Keynes - gold standard was disaster, savings not properly used
Orthodox - gold standard brought stability
Labour Policies in Depression
many believed no solution, just resolve itself
disagreement in party meant not alot done
treasury hard to balance with benefit spending
suspension of gold standard
Nat Govnt Aug 1931
£70 million cuts in Govnt spending
increased income tax 25%
Gold depleted so gold standard abandoned
pound devalued 30% from $4.86 to $3.40
positive as balanced exchange and export rates
Low interest rates
6% in 1931
2% 1932 - 39
encouraged business growth as people more willing to borrow with low rates
less saving for spending and borrowing while cheap
Britain pulling out of depression
slow recovery
cyclical unemployment disappeared and structural remained
NG made token effort to help depressed areas
Special Areas Act 1934
2 million available to depressed areas, nothing substantial achieved
44k encouraged to move
30k on retraining courses
1937 amendment tried to encourage firms to set up in depressed areas
rearmament only real solution to unemployment
NG influence
didn’t directly tackle depression
Chamberlain didn’t agree with Keynesian rather stimulating private enterprise
Factors outside Britain control
recovery in world
natural recovery
unemployment act 1934 - 26 weeks claim benefits
unemployment assistant board controlled benefits and people on dole
