Record Detail Back
The British Economy.
- Share to:
THE studies in this book are mainly devoted to different aspects
of the British economy in the six years following the end of the
war. In two respects, at least, these six years constitute a distinct
'period' in our modern economic history. Firstly in 1949, and
throughout 1950, the balance of payments on current account
showed an overall surplus. Marshall Aid to Britain came to an end
in December 1950. Since then a new crisis in our balance of payments
has come upon us and the terms of trade have worsened
sharply. The causes of this crisis are complex. It was only in 1951
that Germany and
t Japan returned to the world economy as exporters
on their pre-war scale. The effects of this return on British
exports are obviously long-lasting. The Korean War caused excessive
stockpiling in the U.S.A. and this was followed by rearmament
throughout the Western world, both developments unfavourable
to Britain's external position. In retrospect, therefore, one sees the
achievement of an overall surplus in 1949 and 1950 as, to some
extent, fortuitous. But it is not too much to say that it showed that,
so far as the overall payments position was concerned, the problem
was soluble, if not solved. There were fewer grounds for optimism
about the dollar shortage. True, the Sterling Area dollar deficit was
also wiped out in 1950: but equally the relatively small recession
in the U.S.A. in 1948 and 1949 had been sufficient to throw us
right back on the painful climb to dollar balance. Altogether we
may say that, by 195