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The Years of Full Employment: 1946–70

In: Full Employment: A Pledge Betrayed

Author

Listed:
  • John Grieve Smith

Abstract

The Second World War left a legacy of pent-up demand and a battery of controls over the home economy and foreign trade and payments which had been used to give priority to the war effort. The immediate postwar task was to ensure a smooth demobilisation of the armed forces and rebuild peacetime production. It was particularly vital to rebuild exports, not merely to prewar levels, but to the new higher levels needed to make good the decline in income from invisibles due to shipping losses together with the liquidation of assets and borrowing incurred to pay for the war. In the immediate aftermath of war, continued controls on imports, materials and investment played an important part in the process of reconversion. Prices were held down by price controls, rationing and food subsidies, despite a substantial ‘inflationary gap’ between potential demand and the available supplies. This would be reduced as output expanded, but there remained a need to restrain demand. The process of ‘disinflation’ (i.e. reducing demand by fiscal means) was started in the autumn 1947 Budget of the Labour Chancellor, Hugh Dalton, and continued by his successor Stafford Cripps in the three years up to the end of 1950.

Suggested Citation

  • John Grieve Smith, 1997. "The Years of Full Employment: 1946–70," Palgrave Macmillan Books, in: Full Employment: A Pledge Betrayed, chapter 4, pages 56-77, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-37238-2_4
    DOI: 10.1057/9780230372382_4
    as

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