To what extent was the period between 1951-1964 a ‘Golden Age’ for the economy

During this time, the Conservative government was said to have pursued mainly Keynesian economic policies, which centrally focused on reducing inflation.

Their aims were to maintain growth, stability and a Keynesian system. However, some techniques used caused a rise in unemployment and higher interest rates. Therefore in terms of whether it was a ‘Golden Age’ for the economy; it depends on whose view the opinion is coming from. After WW2, Britain’s domestic life was in upheaval and most people wanted peace and to return to normal, the war also brought on an urge to broaden Britain’s wealth.This meant the new Conservative government was expected to return the war-ridden country back to one where most people were leading stable lives – with stable incomes, and they managed to achieve this with only 1.

6% of the population unemployed between 1950 and 1969 and a record postwar low of just 215,000 (1% of workforce) unemployed in 1955. This made the period 1951-1964 feel like a prosperous time (‘Golden Age’) for the normal citizen, as jobs were plenty. Even Harold Macmillan claimed ‘most of our people have never had it so good’.Broadly speaking, living standards also continued to rise throughout this time, best demonstrated by the increase in people’s avg. weekly income (adult male) from ? 8.

30 in 1951 to ? 18. 35 in 1964, allowing for more disposable money which no doubt made people’s lives easier and more enjoyable. Another factor in an improved domestic life was the greater availability of credit, enabling people to borrow large sums and repay over a long period of time, this meant a consumer boom occurred.Between 1950 and 1965 private car sales soared from 1.

5million to 5. 5million. So people felt prosperous and were able to purchase more things than before, making its feel like a Golden Age for the economy. On the other hand, In order to maintain full employment, the government adopted ‘stop-go’ policies, whereby expansionist policies were applied (reduced interest rates to encourage businesses expansion) but when consumption and prices rose too rapidly - Britons imported more than they could pay for in exports, so a balance of payment problems occurred - inflation soared. In order to reverse this, the government changed policies - increasing interest rates, higher taxes and reduced government spending.Unfortunately, the series of adjustments didn’t really add up to an integrated plan and policies lagged behind events, reducing their effectiveness.

These deflationary policies eventually led to unemployment so the government reversed itself again and adopted expansionary policies, starting the cycle over again.All this made the 1950s feels less like the times of austerity and less like a ‘Golden Age’, therefore it could be said that in the eyes of the citizens 1951-1964 was not a ‘Golden Age’ in terms of economic stability. A proof however, of the British economy advancing still, was the domestic industrial advances. For example, the first inter-urban motorway to be opened in Britain was the M1 in 1959 and 1. 7million homes were built by 1964, Macmillan had also kept to his promise of building 300,000 houses per year in 1955.This proves that Britain’s economy was healthy enough to complete such large developments.

Also, the conservatives were willing to continue with Atlee’s consensus, including the welfare state which added to the country’s expenditure with a budget of ? 9billion at the time, in being able to keep the welfare state running also implies that the economy was holding up well. One of the only reasons why the economy might have been compromised was due to Britain’s huge defense spending, in the 1950s this cost covered 15.6% if the government’s total spending, yet the economy did not fail and normal civilians did not feel a strain on money. Due to increased disposable income in the 1950s, local industries thrived.

Previously only 1% owned TVs, but 1965 75% did, small local stores were replaced by large chain stores and department stores selling new mod-con products. Britain had become one the world’s most profitable countries with spending increased by 20% during this period– even though the economic growth remained at just 3%. In the views of the politicians, the economy was not one of a ‘Golden Age’.As the British Cabinet Paper wrote, ‘It is clear that ever since the end of the war we have tried to do too much…we have only rarely been free from danger of economic crisis’.

This illustrates the fact that although the economy was not falling apart, it was not stable and not prosperous. There was also a lack of a plan to deal with the economy; the government merely adjusted the system as it went along, which sometimes resulted in high rises of inflation or sudden consumer booms that did not correlate with its ability to pay for them – causing a deficit.Both parties (when in opposition) criticized the other of using the annual budgets as a mechanism to win votes in elections, and not improving the failing economy. For example, Heathcoat Amory’s 1959 budget included a range of tax cuts to boost support; this was in a time when high inflation suggested financial restraint would have been a better strategy. This resulted in higher consumer spending that led to a rise in inflation, and because of this the economy was unstable.

In comparison with other competitive countries, Britain’s economy was also lagging behind.One aspect was that Britain’s GDP growth rate was the lowest in Western Europe (Italy had 5. 6%, Germany 5. 1%, France 4.

3% with Britain just 2. 3% growth rate), showing that what once was a Great British Empire comprising of 458million people, now was falling off the world’s league tables. The Suez Crisis of 1956 further demonstrated this, where The United States humiliated Britain by forcing her out of war with Egypt, reinforcing Britain’s decline from the world stage and that she could not act without the support of the now biggest power, USA.During the conflict, USA was even able to use financial leverage to get Britain to do, as they wanted – threatening to sell US reserves of the British pound stimulating a collapse of the British currency.

This also showed British dependence on the USA to maintain its economy; therefore technically it was not a ‘Golden Age’ for the economy as it was only existent via American aid. After the loss of the empire, Britain began trading with the Commonwealth, however when this halved between 1945-1965 to roughly 25%, Britain attempted to join the EEC to increase trading, but was rejected till 1973.Ultimately, the period 1951 to 1964 was not a Golden Age for the economy, as the economy was unstable throughout and dependent on wealthier countries to survive. Although to the normal person life was improving and even prosperous, the government wasn’t able to prevent inflation causing a problem with the balance of payments that later led to receding economic growth. Therefore, unlike the period 1945 to 1951 when industrial development led to a time of austerity, in this period the facade of affluence was based on unsuccessful ‘stop-go’ policies and debt.