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Was the period 1918-39 a period of economic failure for Britain?

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Introduction

WAS THE PERIOD 1918-39 A PERIOD OF ECONOMIC FAILURE FOR BRITAIN? Economic failure could be defined as a period in history in which industrial production and productivity fell, unemployment rose on the whole, exports decreased, imports increased and disposable income and consequently consumer spending fell. It is also indicated by the loss of competitiveness for the staple industries in the global market. Growth of new industries is negligible on the whole. However, there has been a great deal of argument about whether the inter-war period was one of economic failure for Britain and how far was its economy successful competing against its European neighbours and competitors overseas like the USA and Japan. Robert Pearce, in his 'Contemporary Britain' argues that the main problem in analysing Britain's economic performance in the inter-war period is due to the fact that some parts of the economy suffered very badly due to the 1929 Wall Street Crash in America like the traditional staple industries while on the other hand, in his 'Britain: Industrial Relations and the Economy 1900-39' he points out that certain segments of the economy excelled during this period even during the Depression years. ...read more.

Middle

Coal was another industry which suffered. Britain lost a number of its overseas markets to Japan. The alternatives to coal like gas and electricity and in case of ships, oil were more acceptable to the customers in the markets in which Britain used to sell its goods. British coal productivity went up slower compared to its rivals especially Germany. In 1938, 60% of British coal was cut by machinery whereas in 1934, 97% of coal in the Ruhr valley of Germany was being cut in the same manner. However, we can argue that there was an opposite current as well. In the years 1920-29 industrial production grew by 2.8% per annum. Output per worker per hour increased by 3.8% a year which was better than most rivals. The staple industries employed less people and exported less as well but there was significant increase in productivity which went up by 18% between 1924 and 1930. Iron and steel, on their own, went up by 25%. Between 1932-37, industrial production went up by 46%. Steel production went up from 5.2 million tons in 1932 to 7 million and to 13 million tons in 1937. ...read more.

Conclusion

However, Pearce argues that there were 75,000 more people who were unemployed but not on the registers. In 1934, 62% of the workers in Merthyr Tydfil in South Wales were unemployed. In Jarrow, there was 73% unemployment and the shipyard had to be closed down. Between 1935-39 the government did create 1 million jobs and by 1939 only 7.9% of the insured workforce was unemployed in 1939 which was lowest since 1920. But the level did not go below the 1 million mark before 1940. Thus we see that the inter war period was generally marked by high level of unemployment. Thus we see the economic situation in the period between the wars in Britain. Whether it was a period of economic failure remains a matter of debate. It is beyond doubt that British economy suffered tremendously and it can be argued that this failure overshadows the growth in the new industries. London was no longer the financial capital of the world. Less demands for British goods abroad led to fall in industrial output in many sectors especially shipping. To conclude we must say that the period between the two world wars was certainly a period of economic decline for Britain although there were certain exceptions nevertheless. Aruni Mukherjee U6MVW 1 ...read more.

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