Published by EH.NET (September 2005)
Nicholas Woodward, The Management of the British Economy, 1945-2001. Manchester: Manchester University Press, 2004. xi + 305 pp. ?49.99 (hardback), ISBN: 0-7190-4979-2.
Reviewed for EH.NET by Catherine R. Schenk, Department of Economic and Social History, University of Glasgow.
To scholars and students of post-war British economic history, the title of this textbook will evoke the classic study by J.C.R. Dow, The Management of the British Economy, 1945-60 (Cambridge University Press), first published in 1964. Twenty years later this book was still a standard account of its period, blending analysis of policy with an assessment of economic performance in the 1950s. Woodward consciously chose his title to echo Dow’s emphasis on the importance of economic policy formation in the era of demand management. The supply of textbooks on the post-war British economy has swelled recently. Cairncross partly replaced Dow in 1985 with his insider’s account of Years of Recovery; British Economic Policy, 1945-51 (Methuen, 1985) and then The British Economy since 1945 (Blackwell, 1995). The latter does not appear in Woodward’s bibliography. Middleton’s shorter The British Economy since 1945 (Macmillan, 2000) blends policy and economic analysis for undergraduate students. In 1991, Woodward himself edited a textbook with Crafts on The British Economy since 1945 (Oxford University Press) which drew together a range of scholars and approaches. The present volume adds to this collection of textbooks by bringing the period of analysis up to the end of the twentieth century.
The book is arranged chronologically and the chapters loosely follow a similar structure. After a brief survey of the period there is a description of the ‘policy machine,’ which reviews the individuals and departments/offices that were important to policy-making. There then follows a description and evaluation of policy. The chapters on the 1950s and 1960s separate the description of policy into ‘financial policy,’ which is a mixture of fiscal policy and incomes policy, and then ‘supply-side policy,’ which includes the various development councils and other initiatives. There is very little reference to monetary policy until the 1980s, despite the active use of bank rate and controls on bank lending in the 1950s and 1960s. As in most textbooks there is a useful glossary and calendar of events to guide students.
This is an overwhelmingly domestic account of policy-making with brief side references to such key developments as European integration, Anglo-American or Commonwealth relations. There is no account of the changes in Britain’s international trade and investment patterns over the period despite substantial shifts that influenced the evolution of the economy and economic policy-making. On the other hand, the analysis does not unpack the domestic British economy into its constituent parts or regions. The analysis implicitly fits into the ‘decline-ist’ view of Britain’s post-war economic performance but does not delve into comparative indicators.
Woodward concludes that economic policy broadly failed to achieve its goals of relatively low unemployment and low inflation, at least until 1990s. This was due to weaknesses among individual policy-makers and mistakes by the Treasury, as well as political pressures and the constraints of public opinion on what was feasible. More substantially, he blames the targets of policy-making; wage restraint and Keynesian demand management in the 1960s and 1970s, and intermediate targets (money supply and then exchange rate) in the 1980s. He is more optimistic about Tony Blair’s Labour governments in the 1990s, going so far as to suggest this period of inflation targeting has been the most successful period of policy-making since 1945.
In sum, this is a useful but not essential addition to the existing list of textbooks on this topic. It will be easily understood by first and second year undergraduates but will need to be supplemented by more thorough accounts of the development of the economy itself and of international economic relations.
Catherine R. Schenk is Professor of International Economic History at the University of Glasgow. She has published widely on British post-war economic history, the development of the international monetary system and the economic history of Hong Kong. She is currently engaged on projects assessing British management of the decline of sterling in the 1960s and 1970s and analyzing the competitiveness of the Hong Kong banking system. She will be a visiting research fellow at the Hong Kong Institute for Monetary Research and Visiting Professor at the University of Hong Kong in 2005.