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Учебный материал
РОССИЙСКОЙ КОЛЛЕКЦИИ РЕФЕРАТОВ (с) 1996
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The Economy of Great Britain
Little more than a century ago, Britain was 'the
workshop of the world'. It had as many merchant ships as the
rest of the world put together and it led the world in most
manufacturing industries. This did not last long. By 1885
one analysis reported, "We have come to occupy a position
In which we are no longer progressing, but even falling
bock.... We find other nations able to compete with us to
such an extent as we have never before experienced." Early
in the twentieth century Britain was overtaken economically
by the United States and Germany. After two world. wars and
the rapid loss of its empire, Britain found it increasingly
difficult to maintain its position even in Europe.
Britain struggled to find a balance between government
intervention in the economy and an almost completely free-
market economy such as existed in the United States. Neither
system seemed to fit Britain's needs. The former seemed
compromised between two different objectives: planned
economic prosperity and the means of ensuring full
employment, while the latter promised greater economic
prosperity at the cost of poverty and unemployment for the
less able in society. Neither Labour nor the Conservatives
doubted the need to find a system that suited Britain's
needs, but neither seemed able to break from the consensus
based on Keynesian economics .
People seemed complacent about Britain's decline,
reluctant to make the painful adjustments that might be
necessary to reverse it. Prosperity Increased during the
late 1950s and in the 1960s, diverting attention from
Britain's decline relative to its main competitors. In 1973"
the Conservative Prime Minister Edward Heath warned, "The
alternative to expansion is not, as some occasionally seem
to suppose, an England of quiet market towns linked only by
steam trains puffing slowly and peacefully through green
meadows. The alternative is slums, dangerous roads, old
factories, cramped schools, stunted lives." But in the years
of world-wide recession, 1974-79, Britain seemed unable to
improve its performance.
By the mid 1970s both Labour and Conservative
economists were beginning to recognise the need to move away
from Keynesian economics, based upon stimulating demand by
Injecting money into the economy. But, as described in the
Introduction, it was the Conservatives who decided to break
with the old economic formula completely. Returning to power
in 1979, they were determined to lower taxes as an incentive
to individuals and businesses to Increase productivity; to
leave the labour force to regulate itself either by pricing
itself out of employment or by working within the amount of
money employers could afford; and, finally, to limit
government spending levels and use money supply (the amount
of money in circulation at any one time) as a way of
controlling inflation. As Prime Minister Margaret Thatcher
argued in the Commons, "If our objective is to have a
prosperous and expanding economy, we must recognise that
high public spending, as a proportion of GNP gross national
product;, very quickly kills growth.... We have to remember
that governments have no money at all. Every penny they take
is from the productive sector of the economy in order to
transfer it to the unproductive part of it." She had a
point: between 1961 and 1975 employment outside Industry
increased by over 40 per cent relative to employment in
industry.
During the 1980s the Conservatives put their
new ideas into practice, income tax was reduced from a basic
rate of 33 pet cent to 25 per cent. (For higher income groups
the reduction was greater, at the top rate from S3 per cent
to 40 per cent.) This did not lead to any loss in revenue,
since at the lower rates fewer people tried to avoid tax. At
the same time, however, the government doubled Value Added
Tax (VAT) on goods and services to 15 per cent.
The most notable success of 'Thatcherism' was the
privatisation of previously wholly or partly government-owned
enterprises. Indeed, other countries, for example Canada,
France, Italy, Japan, Malaysia and West Germany, followed the
British example. The government believed that privatisation
would increase efficiency, reduce government borrowing,
increase economic freedom, and encourage wide share
ownership. By 1990 20 per cent of the adult population were
share owners, a higher proportion than in any other Western
industrialised country. There was no question of taking these
enterprises back into public ownership, even by a Labour
government.
Despite such changes, however, by 1990 Britain's
economic problems seemed as difficult as ever. The government
found that reducing public expenditure was far harder than
expected and that by 1990 it still consumed about the same
proportion of the GNP as it had ten years earlier. Inflation,
temporarily controlled, rose to over 10 per cent and was only
checked from rising further by high interest rotes which also
had the side effect of discouraging economic growth. In spite
of reducing the power or the trade unions, wage demands (most
notably senior management salaries) rose faster than prices,
indicating that a free labour market did not necessarily
solve the wages problem. By 1990 the manufacturing Industry
had barely recovered from the major shrinkage in the early
1980s. It was more efficient. but in the meantime Britain's
share of world trade In manufactured goods had shrunk from 8
per cent in 1979 to 6.5 per cent ten years later. Britain's
balance of payments was unhealthy too. In 1985 it had enjoyed
a small surplus of ?3.5 billion, but in 1990 this had changed
to a deficit of ?20.4 billion.
Many small businesses fail to survive, mainly as a
result of poor management, but also because, compared with
almost every other European Community member, Britain offers
the least encouraging conditions. But such small businesses
are important not only because large businesses grow from
small ones, hut also because over half the new jobs in
Britain are created by firms employing fewer than 100 staff.