Why was the 'Managed Economy' Introduced, 1945-51?

Question 1

What Was the Managed Economy?

Answer 1

1945- Attlee’s Labour gov introduced centralised economic management
Continued WW2 management into peacetime
Included nationalisation, austerity measures, and use of measures to control inflation
Unprecedented gov. involvement

Question 2

Origins- Second World War (Public Attitudes)

Answer 2

National Government increased power of the state to meet demands of ‘total war’
Public accepted government involvement in economy + society

Question 3

Origins- Second World War (Rationing + Conscription)

Answer 3

Rationing + Conscription introduced early in war, compulsory registration of unemployed men in 1941
Issued over 8.5 million Essential Work Orders
1945- 3.2 million worked in munitions, 4 million in some kind of war work, 5.5 million conscripted in armed forces

Question 4

Origins- Second World War (Collective Struggle)

Answer 4

Long term impact of collective struggle- people accepted need for gov to have active role in managing the economy
Public expectation of gov. had changed- much more interventionist
Methods used to ‘win the war’ should be used to ‘win the peace’

Question 5

Origins- John Maynard Keynes

Answer 5

War lent credibility to theories of Keynes
Argued that rather than ‘balance the budget’ gov. should borrow + spend more to stimulate recovery
Had been rejected by traditional view of economics in 1930s, but now supported
Labour adopted ‘Keynesianism’- all parties followed suit until 1970s