ABSTRACT
The First World War was the first total war. The changing pattern of world production and trade was the outcome of the changing process of industrialization that had been well in evidence before the First World War. In part, also, the lack of government initiative can be explained by the absence of any plausible alternative to that long provided by the classical economists. It was not until April 1925, however, that the Chancellor of the Exchequer, Winston Churchill, announced the return to gold. Keynes is cited as the major figure who argued that the return to gold damaged Britain's international economic position. To begin with, in relation to the issue of the direct effects on Britain of the return to gold there are four overriding conditions. Political inertia, combined with an antediluvian administrative system, whose vested interests deepened with each passing year, were formidable barriers to innovative political economy.
