Britain: the politics of foreign economic policy, the domestic economy, and the problem of pluralistic stagnation

Abstract

Economic policies in Britain after World War II, both domestic and international, were dominated by foreign policy goals. This provides the primary explanation for Britain's poor economic performance in the postwar years. Commitments made in the late 1940s and 1950s, particularly with regard to Britain's international position and responsibilities, and domestic economic policies devised to support these commitments, locked Britain into a low-growth situation. In the late 1950s and early 1960s, the widespread consensus supporting these commitments began to disintegrate and efforts were made to develop new policies directed toward stimulating domestic economic growth. These efforts were unsuccessful–largely because of the unwillingness of government leaders to shift national priorities away from traditional international commitments. This failure made it impossible for the British economy to meet the rising expectations of the British population and contributed, after 1967, to a widespread increase in social conflict. Compared to other advanced industrial nations, Britain's economic performance since 1945 has been poor. Britain's poor economic performance is due, however, not to the weakness of British governments or to their inability to resist demands made by interests groups, but rather to a series of policy choices, especially in the international area, that were inappropriate for Britain's resources but to which successive governments adhered with remarkable stubbornness and rigidity.