Growth in the U.K. Economy :: Economics Britain Essays

Growth in the U.K. Economy After the Second World War, Britain enjoyed the longest boom in its history until the 1973-74 oil crisis. There are many, though, who do not view this as a successful period of Britain's history. Although Britain experienced unprecedented growth, its rate of growth was slower than that for many other countries. It is therefore debatable as to whether this was a successful period of Britain's history or not. This essay will examine the statistics of Britain's growth after the Second World War and compare this to statistics for other countries as well as statistics from Britain's past. This will provide evidence to accurately assess Britain's growth performance during this period. The essay will also examine possible reasons for Britain's relative decline such as demand management Government policies, balance of payments problems, an over reliance on traditional manufacturing industries, low investment in capital stock, Trade Union power, poor management, poor business structure and a poor education system. The 25 years from 1948 to 1973 produced growth faster than had been seen in any previous period of equivalent length. During this period, real gross domestic product doubled. The increase in the average growth rate from 2% to 2.8% shows that UK productivity increased considerably. During the 1950s, there were no concerns about the UK growth rate. The standard of living was still higher than that of any other EEC country except Belgium and higher than it had ever been in Britain's history. It was twice as high as Italy and 50% higher than West Germany. When compared to the performance of other countries, though, UK growth rates are less impressive. Other EEC countries had growth rates roughly double that of the UK, between 5% and 6%. This caused great concern amongst many politicians and economists at the time. Most economists look back on the period as a failure. Elbaum and Lazonick, two North American economists say: "If there is much to be learned from the Japanese success, it is our conviction that the United States may have even more to learn from the decline of Britain The significance of a difference of 3% in the growth rate is that, if two countries have a level start, the faster growing country will have twice the output of the slower country in 25 years. This showed that Britain was in relative decline and justified some of the fears of