ABSTRACT
This chapter examines policy and the extent to which it really influenced economic performance. The changes in the government's macro-economic policy were almost as radical and were longer lasting. Initially, many economists expected the post-war recovery boom to exhaust itself and be followed by a state of semi-permanent demand deficiency which would call for Keynesian counter measures. The Ministry of Economic Affairs (MEA) was wound up, while the growing political unpopularity of controls led to the abolition of many of them in 1948, in Harold Wilson's 'bonfire of controls'. Inflation had been a serious problem after the First World War and had eventually led to restrictive monetary policies, which reduced prices but only by reducing economic activity. The Conservatives, in keeping with the post-war consensus on important areas of policy, had retained Labour's interest in centralisation and coordination in major industries, and so a sort of unofficial supply-side policy continued throughout the 1950s.
