LETTER: Economic decline of post-war Britain: myths and realities

Share
From Dr Jim Tomlinson

Sir: Corelli Barnett ("How Blighty turned victory into defeat", 27 April) perpetuates some hoary old myths about the British economy in the late 1940s.

First, he talks about the "complacency" of Britain about her industrial position, completely ignoring the massive efforts by the Labour government to improve that position. Policies to that end included a major expansion of the research and development effort, the funding of the British Institute of Management, the provision of investment incentives, and the first ever anti-monopoly policy. In addition, nationalisation, whatever its results, was intended as a way of securing economies of scale and hence embraced efficiency in basic industries. These measures had varying degrees of success, but to ignore them is to give continued currency to an approach to the 1940s that recent historical research has shown to be seriously deficient.

Secondly, and more specifically, Barnett suggests that Britain suffered from not spending Marshall Aid as investment but squandering it on debt retirement. Marshall aid was about providing dollars to the economies of Western Europe. These dollars could be spent to purchase imported capital goods for investment and, in Britain's case, they largely were. They were not used, as he suggests, to finance the welfare state because the welfare state needed little imported materials - it was largely a matter of redistributing income internally. Barnett's confusion arises from the role of "counterpart funds", which were sums of money that recipients of dollar goods had to pay in sterling to the Government. But such money could not increase the amount of investment, as this was restrained by the capacity to import - the money could not be spent twice!

In fact, British investment rose faster than almost any other western European country in this period, and the striking factor of the period was the willingness of the Government to hold down consumption in order to put resources into exports and investment. The Attlee government eventually paid the price for this highly responsible economic policy in the election defeat of 1951.

Yours sincerely,

JIM TOMLINSON

Reader in Economic History

Brunel University

Uxbridge,

Middlesex

28 April

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Pharmaceutical Computer System Validation Specialist

£300 - £350 Per Day: Clearwater People Solutions Ltd: Pharmaceutical Computer ...

High Level Teaching Assistant (HTLA)

£70 - £90 per day: Randstad Education Birmingham: Higher Level Teaching Assist...

Teaching Assistant

£50 - £80 per day: Randstad Education Birmingham: Randstad Education is the UK...

Senior Java Developer - API's / Webservices - XML, XSLT

£400 - £450 Per Day: Clearwater People Solutions Ltd: Our client is currently ...

Day In a Page

Read Next
 

i Editor's Letter: Take a moment to imagine you're Ed Miliband...

Oliver Duff Oliver Duff
 

Letters: No vote poses difficult questions – so why rush?

Independent Voices
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments