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British Economy After Ww2

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Submitted By debyla88
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The world’s first industrial power and better developed country was Great Britain. Having the upper hand in the world economy, Britain was the target of other countries to compare themselves with and to hold a grudge against. The US and Germany were the first to surpass Britain when they seemed to start a long period of decline. During the two world wars time Britain workers fought to keep industry unsocialized, but would eventually fail to stop it. Labour government was the term used to describe the new economic shift after WWII due to the Labour Party gaining control. The nationalization of steel, coal, road, rail, air transportation, electricity, and gas were the first big industry changes. Freedom in the industries was thought to be sacrificed for fairness as these industries became under government ownership and control. Next the government enacted new welfare laws to provide education, unemployment compensation, universal healthcare, and support for the elderly. The costs to provide these new programs would be financed through mainly taxes. Finance and banking was left private but highly regulated by the government after WWII as well. These policies were expected to allow for Britain to regain their thrown as the best economy but would ultimately prove to be much less than what was to be expected. The policies of the British government after WWII created problems that were not perceived in the new system. One problem was the inefficiency of work. High taxes and poverty relief programs caused workers to be less productive by providing an incentive to not work since they would make more income at a lower salary or would be taken care of by the government if they did not work. Labor unions caused many strikes and problems in efficiency as well. The unions were organized by what job or profession a worker was a part of and not by where they worked. This union institution made it difficult to pass new practices to improve productivity due to unions not agreeing. Old and outdated plants and industries also created inefficiencies due to the low productivity of the organizations. Another problem that occurred was the growth in the economy. The British economy was growing after WWII but other countries were doing far better showing almost double the growth of Britain. Inflation became another problem as well. The high level of inflation in the 70’s caused investment and saving in Britain to decline, thus making the economy unstable. The high taxes also caused more investment abroad so as not to be taxed as much to make more money than if investing in Britain markets. The successes of the economic policies after WWII are corresponding to the problems that were created as well. One good aspect to come out of the policies was the low levels of unemployment. Unemployment was low partially due to the benefits provided were better than most and were improving as time went on. Another reason for low unemployment was that some of the wartime production policies continued in some industries such as in agriculture. The social welfare programs mentioned early that were enacted also were some of the best benefits of the Labour Government. Growth was also a success in the strict sense since it consistently grew even if it did not contest with other countries growth rates which had better economic policies.

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