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

Recruitment Genius: Installation and Service Engineer - Doors / Windows

£18000 - £30000 per annum: Recruitment Genius: This specialist designer and ma...

Recruitment Genius: Systems Developer

£26000 - £30000 per annum: Recruitment Genius: A market leading provider of tu...

Recruitment Genius: Sales Consultant - OTE £30,000+

£15000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Area Sales Manager - Designate South

£25000 - £30000 per annum: Recruitment Genius: One of the UK's leading electro...

Day In a Page

Read Next
 

Here’s why I’m so full of (coffee) beans

Jane Merrick
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn