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Why Did the Post-war Consensus Breakdown?

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Introduction

Why Did the Post-war Consensus Breakdown? The term 'post-war consensus' is used because there was substantial agreement between the Labour and Conservative parties over the direction which foreign and domestic policy should follow after WWII. The post-war Labour government stayed in power until 1951. The foundations of the welfare state had been laid out and the Conservative government that took power in 1951 did not choose to dismantle them, which suggests the acceptance of the principles of the post-war consensus by both the public and the political elite. However, that does not mean there was no conflict. The main parties had agreed on the aims and principles, but differed in emphasis and style. There is some disagreement as to why it was that the post-war consensus came about. Middlemass (1979) and others have argued that it had its origins in the 1920's and 1930's. Writers on the left such as Milband (1961) have maintained that members of the Labour Party were committed to the existing system and sought to contain working-class ambitions within it. Although the post-war Labour government was responsible for setting up the welfare state, the principles which underlay it were laid down by a liberal, William Beveridge. In 1941, he was commissioned by the Prime Minister, Winston Churchill, to write a report examining existing welfare schemes and suggesting ways of improving them. The Beveridge Report was published in 1942 and became a bestseller. ...read more.

Middle

It could be argued that the breakdown of the post-war consensus was inevitable, as there were a number of inherent problems with the idea. Firstly, and probably most importantly were the huge expenses needed to begin and maintain the welfare state. These were paid for by the US initially. However, the costs of maintaining the functions of the Welfare State, such as the National Health Service, are ever increasing. Also, there has been demographic change due to the welfare state. People now live longer. This means further expense because there are more illnesses and a huge increase in care for the elderly. The elderly expect a pension until they die, and because they are living much longer nowadays, this has become a huge expense. Also, people now work for less of their lives, so there is less money coming into the welfare state. A second inherent problem can be attributed to the high expectations of people due to the initial success of the post-war consensus and the welfare state. Perhaps people took it for granted and never believed that there was the possibility of it being destroyed. Therefore there is a substantial amount of discontent amongst the population, who feel that the government is failing to maintain the welfare state and therefore reducing their living standards. However, these people are failing to recognise the problems that the post-war consensus and the welfare state has had to deal with throughout the years. ...read more.

Conclusion

The Thatcherite's blamed the inefficient if the nationalised industries for the balance of payments problems and this paved the way for their programme of privatisation and tighter controls on public spending. Thatcher's economic theory, 'monetarism', completely rejected the aims and techniques of economic management proposed by Keynes. Whilst the primary goal of Keynesianism is to maintain full employment, the primary goal of monetarism is to keep inflation under control even if it means high unemployment. Whereas Keynesian economists argue that the government's only role should be to control the money supply (the money supply is the total amount of money circulating in the economy). By adopting monetarism, the first Thatcher government took an important step in breaking with the post-war consensus. A further reason for the breakdown of the post-war consensus is the fact that Britain was losing her empire and the French empire was also collapsing. The new independent countries wanted prosperity and so they sold assets at prices which suited them e.g. oil. In 1973 Britain could hardly cope with these high oil prices. We were also beginning to import more than export. So there were a series of economic problems facing Britain, which meant that keeping up the welfare state and the post war consensus was becoming harder and harder. With a mixture of bad treatment form the likes of the Thatcherites, and the inevitable increase in expenses mixed with a suffering economy, Britain saw the gradual breakdown of the post-war consensus. ?? ?? ?? ?? Darius Kabbani U6 Crawfurd ...read more.

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