After the 2 World War the British economy was marked by many crises of varying strength.
The international system which British capitalism was developed within the empire had collapsed. British industry had, instead of expanding trade with colonies, to switch-over to compete with highly industrialized countries, especially USA, later on West Germany and Japan.
British industry fell more and more behind, especially because of the country's older production equipment, a lower technological level and a working class which was less integrated in capitalist society.
During Winston Churchill's PM year, a rise to a new era of state intervention happened, also defined as a broad range of agreement on economic and social policies between the Conservatives and Labour. One of the main goals of the post-war consensus was to establish a welfare state, financed by taxation of market and interest rates.
But this created many alleged problems: a disputed between the Labour party itself, many believed that the concept of consensus "state intervention" is so flawed that it should be discarded while others believed it should intervene far more then it did .
The second consensus'
In 1979, after a long number of strikes and rising public dissatisfaction, the Conservatives won the parliamentary election, with Margaret Thatcher as the leader. The new government entered with one overriding intention: to reverse socialism. Mrs. Thatcher's monetarist program called for deregulation, tax cuts, better use of supply side policies and a tough control of the money supply in order to keep inflation low. But she also entered upon a miserable economic scene that would only get worse. Her policy of high interest rates hit business, extending a deep downturn.
Upon Mrs. Thatcher's entering, income tax was cut immediately and compensated for a successive rise in VAT (value-added tax), representing an important shift from direct to... [continues]
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