Chapter 7 - Outline

Chapter 7 - Outline - Britain Political Economy Chapter...

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Britain Political Economy – Chapter Outline From the end of WWII through 1970s, Britain’s annual growth rates were lower than those of German and France Britain preserved an arm’s length state relationship with key economic actors. Compare to France and Italy, much more laissez faire, less state intervention. There are state owned industries in Britain. During collective consensus Britain owns a lot of industry but it is not statist like France because the ownership is not driven by a concerted effort to make the economy grow. Thatcher appealed to entrepreneurship, competition and industriousness in the private sector Tony Blair is considered neo-liberal, wants to promote free competition among firms, create a business-friendly environment and attract foreign investment and spur innovation. Periods of economic decline before WWII and during the postwar period. 1976 the government received a Third World-style bailout from the IMF. 1980s and 1990s growth rate rebounds and ranks in the middle of the pack of the 7 richest countries. Britain avoided the high unemployment rates that plagued other EU nations, in 2004 UK unemployment rate was down to 4.7% Downsides of UK economy today o Productivity gap between UK and key competitors o Low rates of domestic investment and spending on research and development o Seen in EU as producer of low-technology, low-value-added products New Labour’s Third Way is supposed to blend the dynamism of market forces with the traditional center-left concern for social justice and commitment to the reduction of inequalities.
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The State and the Economy UK’s industrial revolution was based on laissez-faire, free-market principles (in contrast to Germany and Japan) Following WWII, the sense of unity in the UK inspired by the shared suffering of war and the need to rebuild a war-ravaged country helped crystallize the Collective Consensus o The state broadens its responsibility for the overall performance of the economy. Nationalized key industries Keynesianism – economic model where state accepts responsibility to secure low levels of unemployment, expand social services, maintain a steady growth rate, keep prices stable, and achieve desirable balance of payments and exchange rates. Expands economic management and welfare provisions, sometimes
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Chapter 7 - Outline - Britain Political Economy Chapter...

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