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Economics and the Economy in Britain:
Keynes, very influential economist in Politics and the British Economy after
After WW1 there was an economic depression. Due to move from
Neo-classical laissez- faire economic model, this meant loss of free trade
between countries. Due to increased competition as other countries
started to trade with each other, leaving Britain as not the most
dominant Economic country.
After WW1 Liberals were in power Lloyd George (1916-1922).
1922, Bonarlow (Conservative) formed coalition with Lloyd George.
Baldwin 1923-1924 (Conservative Government) Saw struggling economy and he
wanted to introduce tariffs on imports in order to protect industry e.g. Steel
Tariffs- Tax on imports and exports in/out of country.
Labour, however gained enough seats to become official opposition.
Baldwin knew that the introduction of tariffs was unpopular, so he called
a general election in order to get a mandate. Bonarlow had previously
ruled out the introduction of tariffs out.
1924 Ramsey, first Labour Prime Minister only in office for 9 months.
Brought in another Laissez faire economic model of Protectionism,
however was not fully implemented until 1946.
This included the introduction of Tariffs.
Protectionism: Protection of industry/ free markets by the use of trading.
1924 another General election was held and Baldwin regains power.
Still on Neo- classical economic model.
Baldwin forced minors to take a 17% pay cut, in order to try and stimulate
the economy. Through the demand of coal to rise, due to the price going
Minors planned a 7 day general strike.
Baldwin saw this coming, so managed to put measures in place to delay
General strike by 9 months.
During this period Union rights really restricted.
1929 Wall Street crash leads to another economic depression in the
Keynes then starts to question current Neo-classical model.
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Protectionism was brought in straight away to protect industries, brought
in by all countries world-wide.
Keynes- General Theory 1946- expectations of the economy. Keynes said
that "You cannot expect the economy to fix itself".
Politicians started to realise, a fall in the economy e.g. if the demand for
products goes down. So they started to plan ahead, the idea that people
with demand a product before they do.…read more
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Keynes Macro/ micro economics: Macro- Big spending/ saving and micro
Independent spending/ saving.…read more