ABSTRACT
Indicators for the macroeconomic performance9 of the main industrial economies show a significant upward movement from 1950 to 1973. As Crafts points out, the growth performance of the major western European economies “provides prima facie evidence for attaching the label ‘golden age’ to the period 1950-73”, and “productivity growth rose to an all-time high”.10 As Table 8.1 shows, the average growth rates for 12 western European economies show significantly higher rates for the post-war upswing than either the preceding or following downswings. The period was one “of great success, especially when contrasted with the maladjustments and disequilibrium normally associated with the interwar years and the years after 1973”.11 In terms of the long-term historical perspective, Britain shared in this success. As Table 8.2 shows, GDP and GDP per manhour increased by 3.0 per cent and 3.2 per cent respectively, faster than either the pre-1950 or post-1973 figures. Indeed, Britain recorded the highest growth rates, over the long term, in her economic history. The British economy displayed a “relatively strong performance in the years of the post-war boom . . . when productivity growth was at an all-time high”.12 In the key sector associated with the growth-promoting forces of the long boom, industry, and particularly manufacturing industry, Britain performed more than
adequately by historical standards. In manufacturing, for example, output increased by 3.1 per cent per annum and output per person by 3.3 per cent over the period 1955-73, outdistancing previous long-term growth trends in this
13sector. There were other positive trends in Britain’s performance during the long
boom which reflected characteristics of the advanced capitalist economies during this period. Certainly, from the perspective of the interwar years, there was no return to mass unemployment, and the economy managed to utilize the full potential of its available labour resources. Indeed, as shown in Table 8.3, in all three of the industrial economies hardest hit by the depression of the interwar years, there was no return to mass unemployment, and the record also stands in marked contrast to the post-1973 experience. Between 1950 and 1973 there was a close match between the growth of the labour force and the expansion of employment opportunities, the former increasing in Britain by 0.48 per cent per annum while the latter expanded by 0.49 per cent. This was in marked contrast to the interwar years, when “employment rose less than the labour force . . . with the difference being particularly marked in the European countries”.14 Sustained and high rates of employment were also reconciled with relatively low levels of inflation. Prices did show a tendency to rise, “with some
acceleration in the rate of increase towards the end of the 1960s”, but “inflation fell within bounds felt to be tolerable . . . The gentle upward crawl in prices was considered a reasonable trade-off for low levels of unemployment.”15 Again, this stood out in marked contrast to the falling price trend of the interwar years and, as we shall see in the next chapter, to the stagflation of the post-1973 period.
