Why were so many industries nationalised in Britain in the years immediately following WWII?

(Clement Attlee, Prime Minister 1945-51)

Following the war and the Labour Party’s landslide victory in 1945 over ten powerful industries were nationalised in Britain. Clement Attlee’s Party was seen as the country’s best hope for a revival from the war, ending war austerity and an avoidance of the depression of the interwar years. This meant a change of leadership. In this essay I will argue that so many industries were nationalised in Britain in the years immediately following WWII for three main reasons; the financial legacy of the war in the form of an ominous British balance of payments deficit, the war illuminating industries which full free-market capitalism didn’t work for and which central planning did, and the ideology of the Labour Party which saw government intervention as the only way to save these industries. These three factors, whilst not exhaustive, explain the reasoning behind public ownership in the period between 1945 and 1951.

The inclusion of non‐economic institutions is ‘vital’ in analysing historical economies.

Historians often exclude non-economic institutions from their analysis of historical economies. A non-economic institution is defined here as internal or external organising and correcting factors that provide order to the market and other societal institutions so that they may function efficiently and effectively. In this essay, I argue that the inclusion of non-economic institutions is vital when analysing historical economies. Allocative and social organisations have a considerable affect on the workings of a society that are often missed by Marxian and neo-classical economics. I will use the examples of trust, reciprocity, household, gift-giving and ideology to illustrate the line of thinking that whilst current economic theory may suit many situations this is a simplification of the broader picture. It is thus important to take into account other factors, or it is possible that details and important explanations within an analysis will be missed.

Why did international trade rise rapidly between 1870 and 1914?

Here is a short article (that misses many points that could have been made, such as mass migration and transmission of knowledge) that I wrote before christmas on the series of events that lead to the rapid increase in international trade between 1870 and 1914.

Between 1870 and 1914 global trade was growing at a rate that was noticeably rapid in comparison to the time period before, and included vast amounts of international trade in capital, goods and ideas. The rapid rise in trade between countries grew for many reasons but is greatly connected to what the World Bank sets out as the first ‘wave’ of globalisation that began in 1870 and finished in 1914. This period of globalisation introduced a reduction in transport costs, which increased the value of involvement with international trade and it also introduced fixed exchange rates and other benefits via the gold standard.

Why has growth failed to touch Africa?

During the 19th Century Africa dramatically fell behind in income and life expectancy and moving on to the 20th Century, Africa fell further. Africa experienced a fleeting boom from 1950 to 1980 in terms of GDP per head, which was short lived when Africa slowly declined into the 1980s. Many factors must be analysed as to why growth has failed to sustain in Africa, the main points that I will be studying include fractionalisation which can be seen as the levels of difference between the many ethnic, cultural, linguistic and religious groups which are abundant throughout Africa. I will also study the foundation of African economics; Agriculture, and how it was affected by the implication of trade and economic policies such as import substitution industrialisation - a policy advocating replacement of foreign imports with domestic production. My final point will analyse how geography has affected growth and I will tie in the inefficient transport systems in place in Africa. Once analysing these factors it is clear that the reason growth has failed to touch Africa cannot be attributed to one factor but must be based on the accumulation of interlinking factors. 

The Invisible Hand

It's actually really difficult to continue to blog, I need to turn it into a habit, maybe. Today i'm going to write on a subject I found interesting from my macroeconomics course that I also read about an alternative view in the Economist magazine here. The invisible hand.

Firstly i'll quickly explain what the invisible hand is: The invisible hand is the sort of self-regulating nature of markets that helps when determining how resources are allocated - if a resource is scarce then it'll become expensive meaning demand will fall and the commodity will be sold to those who value it the most. The invisible hand is based on individuals acting in their own self-interest. Essentially, as Adam Smith laid out, if everyone looks after themselves, and the government doesn't intervene, then this will be best for society as a whole. I personally disagree with this as have many, the need for intervention rose dramatically and fell over the past century, with catastrophic world events such as WWI, WWII and the Great Depression all calling for change.

Being an LSE student it would be rude not to side with Beatrice Webb and her ideal of the welfare state. Despite capitalism obviously raising world living standards and spurring technological growth, a total free market would be almost barbaric. Government intervention is definitely necessary to raise human capital - sending kids from the workhouse into school, raising the minimum wage to increase productivity and consumption, et cetera. I'm not a communist sympathiser although Marx' manifesto does seem increasingly utopian the more I think about it, but can the western world begin to become dubious with the increasing boom in China? I mean, they've had a 10% level of growth for so many years now... and from what I have read this growth is sustainable even after they have their final sectoral shift into industry.

Can the visible hand of state capitalism work as a long term option?

"Geography has made us neighbours. History has made us friends. Economics has made us partners, and necessity has made us allies." - JFK


[unfinished - any comments welcome]