The following is a discussion about Europe’s mixed Economy. After the war Europe was on hard times. Most economies were feeling the burden of the war. Most economies needed serious change, to rebuild their countries. The move that most of Western Europe seemed to be heading towards was that of a mixed economy. These countries of Western Europe needed to act fast so that communism didn’t capture the entire continent Britain is the first country this book discuss. The Labourites saw Britain as a nation whose capitalist had failed it.
They claimed that few men hoarded all the profits, while the workers were deprived. Many of the intellectuals of this time sought to move Britain towards “Collective Welfare.” The Labour politicans took power near the end of World War II. They wanted to make government into “The protector and partner of the people and take on responsibility for the well-being of its citizens.” The Labour government implementing the recommendations of the Beveridge report, established Nation Health Service, created pensions, and promoted better education and housing. This added up to the “Welfare State,” as the labourites called it. The implemented nationalization approaches.
These failed due to the lack of resources from the war. This lead to the abandonment of a centrally planned British industry. France faced many of the same hardships that Britain did. To control this the French state took control over such things as banking, electricity, gas, coal, railroads, and various other industries. However as quickly as this nationalism was implemented, the process was halted.
The French sought a middle way between free markets and socialism. Jean Monnet fathered this plan that changed the French economy. The group of the Ordoliberals was the group that was to shape the German economy. Market forces and a competitive economy were the standard for the Ordoliberals. They claimed that government’s responsibility was to create and maintain a framework that promoted competition and prevented cartels.
Competition was the best way to prevent private or public concentrations of power. John Maynard Keynes, was the most influential economist of the twentieth century. He believed that the economy was chronically unstable and subject to fluctuations. His solution to this was to replace the missing private investment with public investments. This would be the only way to get closest to full employment.
Many Americans believed there was an excess of capitalism before the great depression. The New Deal was put into place. This was market orientated, but government still held considerable sway over the market. This idea was maintained until new economic disruptions arose. The US was becoming more and more and industrial nation.
The main economic regulation of this time focused on one particular problem. What to do about monopolies and business with large control of there market. The plan was to break up these bad “trusts.” The Federal Trade Commission was to police bigness. Everything went well until Black Thursday. Unemployment soared and the GNP fell by half.
Roosevelt was elected into office and called for a “partnership in planning between government and business.” The New Deal pursued another approach – regulation instead of ownership. During the Nixon reign central economic issues became how to manage the inflation and unemployment. Nixon came out with the New Economic Policy. This temporarily froze wages and prices to check inflation. This was to solve the employment-inflation dilemma.
These controls would allow the administration to pursue a more expansive fiscal policy. Wage-price controls were not the answer. In the end most of the programs implemented failed and the Market did prevail. Chapter 3 – Tryst With Destiny Third World was the topic of Chapter 3. India had broke from the British and became on its own. The people of India were now free, but had serious economic problems. Gandhi and Nehru were the two leader of India. With Nehru being the understudy to Gandhi.
These two did differ in the area of how the economy should be run. Gandhi wanted self-reliance while Nehru wanted to go towards industrialization. He adopoted ideas of the Labour Party, but was also impressed with the Soviet model. Gandhi was murdered and Nehru took over. India embarked on a socialist course.
India actually aimed for a mixed economy, borrowing from both the European and Soviet system. To achieve this India put in place a more complicated system of planning than any of the European nations had. However, the Indian economy did not perform as the model they predicted. The restrictions brought economic stagnation. They system fell to politics.
India wasn’t the only decolonization there were many to follow. They all seemed however, to face economic hardships. The World Bank was created to help these colonies out. The World Bank’s role was to help ensure that the conditions for market development were in place. It would fund the nonexistent or sorely lacking infrastructure that was required for the development of market economies.
In Africa Britain and France granted independence to almost all of its colonies. The colony had responsibility for currency, defense, and foreign affairs. The new leader of these face many challenges. The beacon country for Africa was Ghana. Its main figure was Kwame Nkrumah.
A socialist society was formed Ghana and most other African countries. The marketing board was responsible for buying crops and from farmers and reselling them as exports. They did this during good and bad times. If more money was earned during a certain time is was save for bad times. These marketing board were created for every industry. State-led development was falling far short of its promise.
Ordinary people suffered shortages, decaying infrastructure, petty corruption, and continuous postponement of promised improvements.