Adjusting from war to peace in 1940s Britain

Abstract

Most assessments of British economic policy in the transition from war to peace after 1945 praise the strategy adopted. This paper draws on recent growth theory and analysis of eastern European liberalisation to argue that British policy was seriously flawed. In particular, a heavy price was paid for the social contract and delayed liberalisation in the 1945-55 period in terms of subsequent growth and productivity performance. Policy choices, notably with regard to taxation and industrial relations, were, however, heavily constrained by political circumstances.