The British Economy Since the Second World War - Assignment Example

 Politics: How was the British economy and class structure transformed in the period from 1945 to the present? The development of Britain since the Second World War has been thoroughly examined in the literature; many assumptions have been made regarding the reasons for the delays that have been observed ever since in the increase of profitability of internal market. Regarding this issue, Porter, 1999, 28) stated that ‘the 30 years or so after the end of the Second World War witnessed the loss of empire and confirmed Britain's fall from Great Power status; at the same time Britain's economy entered a period of relative decline when it's rate of growth lagged persistently behind that of most other developed nations’. In accordance with the above view, the financial development of Britain in the past (in the pre-1940 period) should be considered as the direct result of the country’s expansion around the world (through the creation of protectorates or other forms of political and military control over states worldwide). However, the intervention of the two World Wars to the country’s economy has been radical. In fact, it has been proved (especially through the statistical data published in the period involved) that the consequences of the Second World War to Britain’s economy and population have been severe. A relevant study made by Obelkevich et al. (1994, 119) proved that ‘for most of the 1950s, unemployment was low and the wage stop affected fewer than 3,000 people—including the sick—at any one time; but as unemployment rose, so did the numbers being wage-stopped; by 1965, there were 16,000 wage-stopped unemployed families with 56,000 children’. In other words, the results of the Second World War on British economy have been direct and severe: the country was forced to face a continuous growing unemployment rate while the performance of the commercial sector was disappointed. All these conditions, led to the restructuring of the British social class giving to Labour a significant strength compared with the past when the Conservatives had a clear superiority in the country’s political framework. The ‘social settlement’ of 1945 and the Welfare State As already stated above, the post – 1945 period is characterized by significant changes in most sectors of British society and economy. Towards this direction, it is supported by Pugh (1999, 50) that ‘from the perspective of the post - 1945 welfare state it is only too easy to take for granted the idea of government responsibility for the level of unemployment and standards of living’. In other words, governmental policies applied in the particular period should not been considered as the main reason for the delays in the development of the country from 1945 until today. In fact, other parameters should be also regarded as crucial for the above situation. Of course, political parties did have an important role in the decisions taken in relation with the country’s economy in all its aspects. The above view is also supported by Pough et al. (1999, 269) who stated that ‘in 1945 all parties accepted that it would be a mistake to abandon wartime controls rapidly as had been done in 1919-20; for Labour, the success of wartime policies in mobilizing the nation's resources underlined the efficiency of state control’. Other political parties have presented different reasoning regarding the decline of British economy after the Second World War. It should also be noticed that the development of British economy after 1945 could not be rapid. In fact, severe shortages in many products during the above war have created a strong instability in the country’s currency causing also inflation difficult to be controlled. Other options related with the development of the national economy were also examined in the above period. Indeed, the study of Pough et al. (1999) revealed that investment was another aspect of state interventionism; the Labour government used its powers to promote a regional economic policy to counter the high unemployment in the 'Development Areas'; as a result, 51 per cent of all new factories during 1945-51 were sited in these regions’ (Pough et al., 1999, 269). Under these terms, British society was difficult to be adapted to the financial and political conditions that followed the Second World War. The provision of a welfare state – as a common target for most politicians internationally – was very difficult to be guaranteed. However, it should be mentioned that the delays in the British economy did not lead to severe turbulences in the British society. In fact, the creation of a powerful labour class has been the result of the Industrialization era and not the result of the two World Wars. In other words, the ‘redistribution’ of power among social classes in Britain is not a characteristic of the post -1945 era. It is the result of a long transition from the traditional aristocracy related with the British Empire that controlled a significant part of the world in the past. Since the ‘superiority’ and the land of British Empire was reduced, the restructuring of social classes in Britain was inevitable. The New Times Thesis The continuous changes that characterized the British economy and society in the post -1945 period led to the ‘New Times’ initiative. The specific initiative appeared for first time in the magazine ‘Marxism today’ (October 1988). The main goals of this initiative have been analytically explained in the above article: ‘[T]he ambition of the 'New Times'project is not only to make sense of the new world -- to appreciate the tendencies and limits of post-Fordism, to unravel the emergent postmodern culture, to understand the new identities and political subjects in society -- but also to provide the parameters for a new politics of the Left, a politics beyond Thatcherism, which can give a progressive shape and inflexion to New Times’(Dworkin, 1997, 259). In other words, New Times Thesis focused on the explanation of the changes taking place in British political and social framework trying to identify the main reasons for the distribution of power among parties in Britain highlighting the importance of Labour (named as Left) for the achievement of a high level of growth of the country’s economy. Post war Britain and economy The political choices made in Britain in the post -1945 period had significantly influenced the country’s financial and social development the years that followed the Second World War. In accordance with the study of Schenk (1994, 1) ‘the 1950s was a testing period for British economic policy; the decade was marked at its beginning by the dramatic 30 per cent devaluation of sterling in September 1949 and at its end by the adoption of official external convertibility of sterling in 1958; the decade has become characterised by 'Butskellism' and the infamous 'stop-go' policy cycle which, it was later believed, rocked business confidence and inhibited economic growth’. Other policies were also adopted in order to help British economy to recover. However, there were still many issues to be resolved in order for the country’s economy to be stabilized. Towards this direction, Glynn et al. (1996, 216) supported that ‘the drastic balance of payments position left the postwar government with few real choices; Britain would have to borrow to cover the deficit on current account during the transitional period; the only country with funds available was the USA, and the Attlee government sent a team led by Keynes and Lord Halifax to Washington in autumn 1945 to seek financial assistance’. Indeed, a significant financial support was offered to Britain by USA; however this support had the form of an interest-bearing loan that had to be covered in accordance with specific terms and condition. The above loan helped Britain to recover financially in the particular period; in the long term British economy managed to be developed although this has been a very slow development; particular projects are necessary in order for the British economy to reach a significant level of growth. Post War Britain and structure of social classes Another area that has been significantly alternated in the post -1945 period (as already stated above) has been the British society; the particular society has been transformed in order to meet the social demands appearing in Britain the above period until today. Regarding this issue, it is supported by Blackwell et al. (1985, 79) that ‘the beginnings of the Cold War in the late 1940s, with the sudden transformation of our war-time Soviet allies into their more familiar guise of the Red Menace, made it even more difficult to develop and sustain socialist rhetoric in Britain’. In fact, the development of labour class has faced significant difficulties in Britain (the structure of the country’s social classes in the past should be considered as a major obstacle towards this direction). On the other hand, the differentiations in the structure of British social classes have not been equal among the decades. More specifically, it has been found by Blackwell et al. (1985, 11) that ‘there was no real discontinuity between the 1950s and the 1960s despite, perhaps almost because of, the change of government of 1964; the much-commented 'moral revolution' of the 1960s, heralded by all the satirists and entertainers who, in their non-standard accents, set about debunking and deflating authority (for example 'That Was The Week That Was', Peter Cook , Alan Bennett, Beyond the Fringe, etc.)’. The above events could be characterized as just an indicative example of the transition of British society and culture to a different format (both political and social) presenting many similarities with modern British political and social framework. Post War Britain and immigration One of the most important problems for Britain in the years that followed 1945 has been the regulation of immigration that has been extensive especially the last decade. Regarding this issue, it is noticed by Messina (1995, 686) that ‘two of the most intriguing puzzles of the postwar period (1945-1990), and questions that have aroused the intellectual curiosity of a number of scholars in recent years, are how and why political elites in Western Europe lost control of immigration and immigrant policy’. The above study is not limited into Britain but refers generally in Europe for the period under examination. The problem of immigration in Britain has been usually related with the decline in the country’s population and the need for additional workforce across the country’s industrial areas. For this reason, Obelkevich (1994, 20) stated that ‘the emphasis in the discussion on the reasons for the divergence of demographic trends between the two halves of the post-war era should be on fertility and family formation, not because it is supposed that mortality has remained unchanged but because movements in fertility rates have been more influential than mortality shifts in driving the national demographic motor’. In accordance with the above, immigration should be regarded as the direct consequence of Britain’s demographic problem. This problem led to the need for additional workforce in specific sectors of the British industry and immigration was considered to be the only appropriate solution. Referring especially to the immigration of the post 1945 period, Glynn et al. (1996, 175) suggested that during this period ‘UK has absorbed approximately 200,000 immigrants, and up to half have been returning British citizens; as the British economy began to run into labour shortages in the late 1940s migrant workers were attracted from the Caribbean and the Indian subcontinent in increasing numbers. There were also substantial inflows of Irish throughout the period, Poles in the late 1940s and Italians in the 1950s and 1960s’. In order to avoid the risk of a possible social instability because of the flows of immigrants in UK, the British government introduced the Commonwealth Immigrants Act of 1962. The above Act was the first attempt to regulate a series of issues related with immigrants in British territory. In the years that followed, many similar legislative texts have been applied trying to cover all potential issues regarding the entrance and establishment of immigrants in Britain. Generally, it is noticed by Messina (1995, 693) that ‘like many other states, Britain experienced severe labour shortages during the early postwar period, as its domestic economy rebounded from the ravages of World War II; to satisfy the increasing demand for labour, the British government's Ministry of Labour actively recruited Irish, Polish, German, Italian, and Ukrainian workers for service in the sectors of agriculture, mining, textiles, and heavy industry’. In other words, immigration in Britain in the post 1945 period has been necessary in order for the national economy to recover gradually from the damages that the wars (especially the Second World War) have caused to the country’s economy. However, through the years, immigration expanded and its control is necessary in order to ensure the safety of the existed social framework in Britain. Today, British economy presents many failures, mostly because of its weakness to achieve a high rate of growth in the commercial sector. Indeed, the study of Chisholm (1995, 7) showed that ‘Britain’s economy is rather weak, and the rate of growth rather low, because too many firms are insufficiently competitive in the domestic and international markets; under these circumstances, further integration with the EU (whether EUR12 as at the time of writing, or as it may be after enlargement) will expose British firms to competitive pressures they will find hard to withstand’. The above study refers especially to the prospects for UK in case of its entrance in the European monetary Union (which has been applied several years before). It seems that currently Britain is not prepared for such a cooperation; it is necessary to take additional measures and proceed to further restructuring in order for British economy to reach the required level of growth; at this level, the further integration of Britain with European Union would be profitable for the country. Britain managed to face successfully the challenges set to its society and its economy because of the wars that took place during the last century. The development of the country after the 1945 proves that the country has many prospects for future growth; but in this case the restructuring of current commercial and financial (monetary) practices would be necessary. References Barrett, G., Jones, T., Mcevoy, D. (2001) Socio-Economic and Policy Dimensions of the Mixed Embeddedness of Ethnic Minority Business in Britain. Journal of Ethnic and Migration Studies, 27(2): 241-257 Blackwell, T., Seabrook, J. (1985) A World Still to Win: The Reconstruction of the Post-War Working Class. London: Faber & Faber Chisholm, M. (1995) Britain on the Edge of Europe. New York: Routledge Dworkin, D. (1997) Cultural Marxism in Postwar Britain: History, the New Left, and the Origins of Cultural Studies. Durham, NC: Duke University Press Glynn, S., Booth, A. (1996) Modern Britain: An Economic and Social History. New York: Routledge Messina, A. (1995) Immigration as a Political Dilemma in Britain: Implications for Western Europe. Policy Studies Journal, 23(4): 686-698 Obelkevich, J., Catterall, P. (1994) Understanding Post-War British Society. New York: Routledge Porter, D. (1999) Juggling with Welfare and Greatness: Britain under the Tories, 1951-64. History Review, 28-36 Pugh, M. (1999) State and Society: A Social and Political History of Britain, 1870-1997. London: Arnold Schenk, C. (1994) Britain and the Sterling Area: From Devaluation to Convertibility in the 1950s. New York: Routledge Stuart Hall and Martin Jacques, introduction to New Times: The Changing Face of Politics in the 1990s, ed. Hall and Jacques (London: Verso, 1990), p. 15 Read More