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Economics > The Interwar Years > Flashcards

The Interwar Years Flashcards

1
Q

What does D.H. Aldcroft argue about the interwar economy?

A

D. H. Aldcroft argued that between 1920-38 factors inputs contributed less to growth output than residual improvements

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2
Q

What does Aldcroft mean by residual factors?

A

‘residual’ input factors is taken to mean tech advancements, resource allocation, business organisation etc.

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3
Q

How does Aldcroft prove that residual change its what impacted output growth?

A

Between 1899-1913 output growth was lower than interwar, but there was a steady growth of factor input, so residual must be the difference

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4
Q

What is the most important part of residual change according to Denison?

A

advances in technique, resource allocation and economies of scale are the most important aspects of residual change

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5
Q

Summarise the difference between pre and post war economic focus:

A

Prewar, resources were focused on slow growing sectors, post war, export heavy staple industries declined and gave way to new industries

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6
Q

Outline the growth in new industries’ contribution to industrial output:

A

In 1907 new industries made up 6.5% of industrial output, in 1924 12.5%, and in 1935 19%

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7
Q

What was the role of the service sector in regards to employment?

A

Apart from 1921-2 employment in service trades grew every year. So although small, amidst constant fluctuations it acted as a stabilising force.

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8
Q

Who characterised the interwar economy as paradoxical?

A

J. Stevenson and S. Cook- because the economy was doing well and badly simultaneously

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9
Q

What often clouds historical analysis of the interwar economy?

A

Often the high unemployment levels which didn’t dip below 1mil obscures the advancements made

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10
Q

How can the interwar economic changes be described?

A

There wasn’t all out recession, nor was there all out recovery. There was rapid, sharp and much needed change

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11
Q

What are the three main themes of the interwar economy?

A

Industrial changes, the rise in standard of living through consumerism, and chronic unemployment

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12
Q

How did traditional historian A. J. P. Taylor refer to the 1930s?

A

A. J. P. Taylor thought the 1930s to be ‘the devils decade’

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13
Q

Between 1912-1930 electrical power in industrial production increased from what to what?

A

Electrical power in industrial production increased from 25% to 66% in the years 1913 to 1930.

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14
Q

What occurred in 1929-31?

A

An international slump which caused British exports to almost half in value, forcing the country to drop the gold standard

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15
Q

What did the international slump mean for resources in Britain?

A

Resource allocation was overhauled because of the decline of exports, so capital and labour went to dynamic areas of the economy

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16
Q

What is a source for the impact of the war on the British economy?

A

One Sheffield contemporary in 1920 claimed: ‘the war had done Sheffield industry good. IT has shaken it up in a way nothing else would have done’

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17
Q

What was the growth rate of GDP in the 1930s?

A

1.7%pa.

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18
Q

Break down the growth rate of GDP into factor inputs:

A

1% of GDP growth is accounted for by residual inputs, 0.7% by capital and labour

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19
Q

What were the fastest growing industries in the interwar years?

A

allied trades (construction + materials) and new industries (vehicles, electricity)

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20
Q

How did total industrial labour force in the dynamic industries grow in the interwar years?

A

Construction and new industries had 30.5% of the industrial labour force in 1920, 37.4% in 1929 and 42.2% in 1938

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21
Q

By 1938 how much of total domestic investment could be found in dynamic sectors of the economy?

A

By 1938, construction and new industries had >60% of total domestic investment

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22
Q

Outline T. Barna’s study of interwar industrial interaction:

A

T. Barna found that the vehicle industry interacted with 24/36 of the main industries with a transaction value of £213mil

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23
Q

What is often disputed regarding factor inputs in the interwar economy?

A

The reallocation of capital is disputed to have been important- it is difficult to disentangle capital from residual inputs

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24
Q

What was N. Kaldor’s view of the role of capital in the interwar economy?

A

N. Kaldor thought that capital, although contributing less to GDP growth, was important because it facilitated innovation

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25
Q

What was R. Matthews view of the role of capital in the interwar economy?

A

R. Matthews contended with Kaldor, asserting that 1924-1937 only saw a 0..19% correlation between capital and innovation

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26
Q

What can be said about Matthews and Kaldor’s at-odds interpretations?

A

Replacement investment was >70% in the interwar years, but only 33% prewar, suggesting that capital can’t be ignored because the economy was better in the former

27
Q

What was the nature of the housing problem in the interwar years?

A

There was a serious deficit- a need for 1.9mil houses, to meet this 300,000pa 1921-31 would need to be built

28
Q

What helped the interwar housing crisis? (3 things)

A

Liberalisation of building society borrowing, 4 parliamentary Acts being initiated, and a fall in costs

29
Q

By how much did house prices fall in the interwar years?

A

From £432 in 1928 to £361 in 1934

30
Q

What did the housing boom of the late 1930s contribute to?

A

The late housing boom contributed to the overall rise in the standard of living

31
Q

Were mortgage rates realistic in the interwar years?

A

Yes, mortgage rates were incredibly realistic. The average deposit was £25- about 2 years of saving without compromising living standards

32
Q

What changed for those that were in regular employment in the interwar years?

A

Those in regular employment saw a 15% improvement in wages on average

33
Q

By how much did living costs fall in the interwar years?

A

In the interwar years living costs fell by approximately 1/3

34
Q

How did Britain’s savings increase in the interwar years?

A

In 1920 there was £82mil in building societies, in 1938 there was £717mil

35
Q

How can we show that Britons had more disposable income in the interwar years?

A

Disposable income can be inferred from the increase in vehicle ownership

36
Q

Outline the increase in vehicle ownership

A

In 1920 500,000, in 1930 1.5mil, in 1939 3mil

37
Q

What changed in the interwar years with regards to the vehicles industry?

A

The price of creating vehicles fell 33% 1923-9 because of perfection of technique

38
Q

By how much did employment in service trades (i.e. distribution/wholesale) increase in the interwar years?

A

Employment in service trades went from 1.78mil in 1920 to 2.44mil in 1938

39
Q

What is the rise in service trades employment indicative of?

A

A rise in service trades employment shows not only that unemployment was general, but also sheds light on rising consumerist culture

40
Q

Did the working class also benefit from interwar changes?

A

Yes. Where in 1914 60% of income went on food, 16% on rent; in 1937 35% went on food and 9% on rent

41
Q

What can be said about the decline in birth rate?

A

Fewer children was reflective of changing familial economic needs, and the beginning of women’s work- but further research is needed

42
Q

What was the decline in birth rate?

A

The prewar birth rate was 94:1000, in 1938 it was 62:1000

43
Q

What is the difference between contemporary and historical interpretations of the fall in British interwar birth rates?

A

contemporaries thought the fall in birth rate to have been a response to depression, however historians have attributed it to an increase in effective contraception education

44
Q

How can the divide between middle and working classes be highlighted?

A

Through food consumption it is clear that the middle class was better off in the interwar: 2.5x more fruit, 3x more veg than working class

45
Q

What is a contemporary study which highlights depression in the interwar years?

A

S. Rowntree’s survey of York (1935)

46
Q

Outline the Rowntree survey:

A

31% of the population were found o be in poverty, 6.5% in “primary poverty”- i.e. can’t afford basic sustenance

47
Q

What is a contemporary study which highlights the geographical dispersion of depression?

A

The New Survey of London Life and Labour (1934)

48
Q

What did the New Survey of London Life and Labour find?

A

The New Survey found that poverty fell by 2/3 1900-1929, in the East End falling from 750,000 to 250,000

49
Q

What can be said about the causes of unemployment and poverty?

A

Poverty was not solveable with one policy because it was affected by many things, and unemployment was not for lack of jobs.

50
Q

What were the worst years for unemployment?

A

1921, 1930-2, 1938

51
Q

When did unemployment peak?

A

Unemployment peaked in 1930-1 at 3 million

52
Q

How did the govt try to manage unemployment?

A

Governments attempted to manage unemployment by adopting policies of financial orthodoxy and economic conservatism such as means tests and new taxes

53
Q

What was the rate of employment growth in the interwar era? Why?

A

Rate of employment growth was 0.5%pa, because of the ‘ailing giants’

54
Q

What was the biggest issue behind unemployment?

A

demography was the biggest issue in interwar unemployment- the labour force did not match the population

55
Q

By how much did the population grow in the interwar period?

A

The population of Britain grew from 44 mil to 47 mil

56
Q

Why was unemployment geographically uneven?

A

Unemployment was geographically uneven because work shortages were common in basic industries with well-established bases, newer industries were not as big.

57
Q

What industries had notable employment gains?

A

Construction and electricity are the only industries which saw a worthy increase in employment

58
Q

What was the employment increase in construction?

A

107,000

59
Q

What was the employment increase in electricity?

A

318,000

60
Q

What quote encapsulates how the interwar period should be interpreted?

A

D. H. Aldcroft: ‘economic growth and unemployment are not incompatible”

61
Q

Summarise the 1930s:

A

The 1930s saw the realisation of tech changes and modernisation which had been delayed by the onset of war and international slump in the 1920s

62
Q

How many cars in 1939 were privately owned?

A

2 million out of the 3 million total cars were privately owned

63
Q

What is a fact which shows the increase in leisure and consumerism?

A

3 cinemas were opening weekly in 1939- showing the increase in disposable income

Economics (9 decks)

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