Economy Flashcards
What was the state of the British economy in 1918?
Quite weak, the national debt was high due to the war and loans from America. Th heavy industry also experienced a large drop when WW1 ended- it was experiencing relative decline in comparison to other countries.
How many houses were built during the 20s and 30s?
4 million- 3 million were built by the private sector and 1 million was built by the government.
What is the main principle behind Keynesianism?
That governments should interfere when the economy is struggling.
What happened to the economy during the phoney war?
Seemed that the war would only have minor economic consequences. Luxury goods were still produced for those who wanted them. People claimed that they were aiding the French by buying their products. British industry was not being put on war footing. Conscription was introduced, prices of some food subsidised, minor changes to budget and small scale rationing began.
What were the three main policies during total war?
Emergency powers act- gave govt power to direct anyone over the age of 16 to perform any work or service required.
Trade unions- Strikes were illegal during the war but days lost to strikes got higher every year.
Rationing- Started on the 8th January 1940- people could only have basic foods like bacon, butter, cheese, milk and tea.
How did Beaverbrook operate within the economy?
He took over aircraft production. He improvised and broke the rules. He set impossible production targets. In the short-term his methods payed off and production of planes increased dramatically (94%).
How did Bevin operate within the war economy?
He knew people on the home front had to be treated well and he was concerned for the long-term. HE tried to win people over by voluntaryism. He encouraged better working conditions, minimum wages for dockers, abolished the household means test. Conscripted 22,000 young men to work in coal mines (Bevin boys).
What were the successes of the British economy during the war?
Total working population grew from 19.8 million to 22.3 million and unemployment fell from 1.3 to 0.1 million. More women were entering the workforce. 46% of population directly engaged in war effort.
What problems were facing the British economy during WW2?
British industry was prone to many strikes. Was incompetent management and shortages of skilled workers due to lack of technical education. Machinery was out of date, took three hours longer to build a British plane than a German plane. Relied on help of America.
What were the long-term impacts on the economy due to the WW2?
A huge loan was needed to be paid back to America. Oversees assets were sold. More people in workforce led to prioritising full employment. Women were more viable in the workforce- welfare state was set up and more nationalisation took place. Growth of housing industry.
How much money did Britain receive in Marshall aid?
$2.7 billion
What did Britain use Marshall aid for?
General expenses at home and overseas.
What industries were nationalised after the war?
Coal, railways, shipbuilding and banking.
What were the levels of unemployment between 1947 and 1951?
Under 300,000 (full employment)
What percentage of world trade was dominated by Britain in the late 40s and how much did the economy grow after 1948?
20% and 4% each year.
How can the period of 1950-1979 be seen as an era of absolute progress and an era of relative decline?
Production was 105% higher in 1950. Living standards had greatly increased. Wages had increased rapidly. Share of world exports fell from 25% in 1950 to 10% in 1970. Britain was 18th in the world league table of production in 1978.
When and why was the pound devalued?
November 1967- devalued by 14%. This was to make exports cheaper and encourage people to buy British goods. Britain had a balance of payments deficit.
What are the potential reasons for Britain’s economic difficulties from 1951-79?
Costly military and defence commitments. The legacy of two world wars. High cost of welfare state. Lack of technically skilled management. Troubled industrial relations. Oil price rises from 1973. Transition from industrial to service economy. Strength of other countries. Reluctance to devalue the pound.
What happened to the British economy between 1918-20?
There was a postwar boom. Investment and demand for goods rose and industrial production rose 20% within two years of the war. Unemployment was low.
What happened to the British economy between 1920-22?
A brief but acute depression took place. Price of goods fell, industrial production slumped and unemployment reached 2 million.
What happened to the British economy between 1923-29?
Years of gradual recovery. No boom and there was always 1 million people out of work. The share of the countries world exports fell. Industrial production grew by an average of almost 3% per year. New industries did well.
What happened to the British economy between 1929-32?
The great depression. Britain did not perform as badly as its rivals but the prices of goods fell, the value of exports was almost halved, a balance of payments deficit happened and unemployment mounted. Almost 3 million were out of work.
What happened to the British economy between 1932-39?
Economic recovery. Unemployment dipped in the final months of 1932 and thereafter recovery was slow but unmistakable. There was a short lived recession between 1937-38 and by 1939 there were still 1.5 million unemployed. Expansion of domestic market - new consumer industries flourished and there was a housing boom. 2.7 million houses were built in the decade.
Why were so many unemployed in the interwar years?
The trade cycle had peaks and troughs as boom tends to give way to busts. Cyclical unemployment happened a lot during the war. There was also long term structural unemployment due to the decline of the staple industries. Other countries were importing from elsewhere or satisfying their own needs.
How much did real wages rise in the 1930s?
Over 15%
