ABSTRACT
The main outlines of postwar economic performance will already be clear from Chapter 2; since 1951, the British economy has grown on average more rapidly than at any time in its industrial history but other developed economies have done even better. Between 1950 and 1990, British living standards have fallen from among the highest in western Europe to among the lowest (Maddison 1991:6-7). Until the late 1950s, British opinion took it for granted that domestic living standards were well ahead of those on the Continent. Since the early 1960s, however, concern has mounted. Economists became highly perplexed about the trajectory of British economic development, and began to portray Britain as a case study of ‘de-industrialisation’ (Bacon and Eltis 1976; Singh 1977; Blackaby 1978a). The economy plunged into recession in 1974 and 1979, but the upswing of the 1980s was long and strong, and soon provoked Conservative ministers to claim that the long-awaited ‘economic miracle’ had at last arrived (Lawson 1992). Sympathetic economists trumpeted a British economic renaissance (Walters 1986; Maynard 1988). Unfortunately, this very rosy view of economic prospects soon collapsed. A third recession unfolded from mid-1990 and, though not as deep as the downturn of 1979-82, was more longlasting and tenacious than anything since ‘the slump’ of 1929-32. Opinions about British postwar economic performance have been more volatile than the economy itself. Despite the growing evidence of cyclical instability since the early 1970s, actual rates of growth of output and output per head have fluctuated within relatively narrow limits. There is a pervasive view that the British economy should have grown faster than it has, but economists have also become aware that the processes of economic development are much more complicated than was formerly believed (Crafts 1993: ch. 2; Ormerod 1992). The key to faster growth has been elusive both for economists and governments since the early 1960s.
