INTRODUCTION

The 1920s and 1930s were years of transition, most obviously between the First and Second World Wars. But they were also years of transition between the long nineteenth century, when Britain was the world’s leading creditor nation, its leading trading nation and the producer of a third of the world’s manufactured exports, and the years after 1945, when the country was overtaken in terms of per capita incomes, productivity and growth rates by many of its European competitors. The story of the interwar period is thus the story of how this transformation came about. It is the story of Britain’s loss of economic pre-eminence.

The interwar years were troubled not just for Britain, of course, but for the entire world. Growth slowed in virtually every industrial country. Growth was also slower everywhere than the post-Second World War norm. The 1920s were dominated by political disputes and inflations that disrupted economic growth throughout Europe, the 1930s by a business cycle downturn of exceptional depth and duration, a downturn that came to be known as the slump in Britain and the great depression in the United States. All market economies were affected. Thus, any critique of Britain’s economic performance in this period is more compelling if it can be shown that the country performed poorly not just in an absolute sense or in comparison with the golden age of growth after the Second World War, but also relative to other advanced industrial economies.