British economy in the 1930's
How far can the fortunes of the British economy in the 1930s be explained in terms of British industrial decline?After the Wall Street Crash of 1929, the economy of those countries dependent on trade collapsed due to the crisis in America. Britain was one of these countries. The aim of this essay is to establish the extent of the effect that Britain's industry had on her economy after this depression.There is no doubt that the stock market crash had a profound and disastrous effect on the economy. Between 1929 and 1931 the value of British exports fell by 50%, and Britain had a trade deficit of L100 million. There were also 3 million people unemployed in 1931. All of this goes to show that at the beginning of the decade, the British economy was in crisis not because of industry, but because of the collapse of share values in America. Despite this, it was American investors that formed the majority of Britain's 'new' industries, such as the Ford car company and the Hoover Corporation. These industries, whilst booming in the South, totally bypassed the North of the country, and only provided 7% of employment in 1934. Therefore, these newer industries did not really have a significant effect on he economy as a whol
As I have already said, the old industries of Britain were in decline, as although output increased in many sectors, such as coal mining, where output increased by a third, Britain actually began to import more ships than she was exporting, and cotton production fell by a half. However, from 1934 onwards, industry was actually in absolute growth, as production was increasing year by year. This high figure was due to the decline of traditional industries such as coal mining, steel production and shipbuilding. According to Source A, 123 out of 1000 coal miners were unemployed in 1936, and this goes to show that the so called staple industries of Britain were in relative, if not absolute decline during the 1930s. The absolute industrial growth may have simply occurred at the same time as one of the boom periods. This is because after prospering almost accidentally in the first industrial revolution, the British government wanted to try and repeat this success by simply leaving the British economy to run itself. Also, the country was experiencing industrial decline relative to other nations and the economy collapsed due to the Wall Street Crash, to such an extent that the country had to be taken off the Gold Standard. This coincides with a boom period in British economy, especially after 1936, when the British army began an extensive rearmament programme, which created 1 million jobs. This divide is also apparent in Source N, as the map shows the areas that were growing industrially and those that were in absolute industrial decline. There can be no disputing the fact that in the years directly subsequent to the Wall Street Crash, the British economy was in crisis. However, although this may sound like a positive factor of the economy, the number of people unemployed never dropped below 1. This, together with the housing boom and the growth of the newer industries such as car manufacture, meant that the British economy was prospering at the same time as an absolute industrial growth. Because of this policy of laissez-faire, the other major countries had the chance to develop their own industries, with the result that Britain lagged behind in the second industrial revolution. The Hoover factory is an example of foreign investment, as Hoover was an American company, and the new Marks and Spencer shop in Source H shows how Britain was becoming Americanised, as this was a chain store, rarely seen before 1930. This absolute decline of the economy therefore came about entirely as a result of the failure of Britain's industries to keep up with their foreign counterparts.
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Acceptance Essays
