ABSTRACT
One of the most interesting periods in the history of modern capitalism is the inter-war Great Depression. Apart from plunging the capitalist world into a deflationary spiral of falling output, employment and trade, this period also saw the demise of Britain as the world capitalist leader and the passing of this mantle to a reluctant and unprepared United States of America. The impact of the Depression is widely recognized to have been more severe and prolonged in the USA than in Britain, so the fact of being caught up in the Depression could not be the main reason for Britain’s inability to maintain its long and undisputed position as the world capitalist leader. True, the difficulties of maintaining the smooth operation of the international gold standard had started even before the Depression as an outcome of the economic dislocation and imbalances caused by the First World War, well described by W.A. Lewis in his Economic Survey 1919–1939 . But by the mid-1920s, Britain appeared to have returned to its earlier position as undisputed leader of the capitalist world.
