Abstract
The interwar years are now generally regarded as a turning point in the history of capitalist development, and for Britain, as the pivot of the liberal system, a period of drastic change. The First World War appeared to have hastened the transition from the competitive market capitalism of free trade under the discipline of the gold standard to a more controlled economic order eventually based on protection and state intervention in industry, which was now characterised by monopolies and joint stock companies. During the early part of the period, however, it was believed in Britain that the First World War had been an unforeseen and quite discrete intrusion which had led merely to the suspension of the liberal system. Consequently, Britain’s dominant class set about its reconstruction as soon as victory seemed possible.
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Notes and References
See Clarke, The City in the World Economy; Rubinstein, ‘Wealth, Elites’; Aaronovitch, The Ruling Class; John Scott, Corporations, Classes and Capitalism (London: Hutchinson, 1979).
The Bank had to employ various interventionist strategies to deal with the frequent liquidity crises at the same time that its reserves were shrinking in relation to the growth of international credits and the deposits of the domestic joint stock clearing banks: de Cecco, Money and Empire; Bloomfield, Monetary Policy. The following account of the events and proceedings surrounding the return to gold draws heavily on the carefully constructed history in D.E. Moggridge, British Monetary Policy 1924–1: The Norman Conquest of $4.86 (Cambridge University Press, 1972).
de Cecco, Money and Empire. Donald Winch, Economics and Policy (London: Allen Lane, 1969) refers to the Report as follows: ‘Even as an account of how the gold standard worked under nineteenth century conditions the Cunliffe Committee’s model had considerable weaknesses’ (p.76).
In Pollard’s words: ‘One of the most bizarre examples of this was Bradbury’s statement at the famous dinner disputation arranged by Churchill before the return to gold: by raising export prices artificially, he maintained, the gold standard would force Britain to stop “living in a fool’s paradise of false prosperity” and make her export industries more competitive’: Sidney Pollard (ed.) The Gold Standard and Employment Policies between the Wars, (London: Methuen, 1970) p.18.
See, for example, the work of Moggridge, British Monetary Policy; Winch, Economics and Policy; and S. Howson, Domestic Monetary Management in Britain, 1919–38 (Cambridge University Press, 1975).
Quoted in Winch, Economics and Policy, p.93. Ricardo’s exact sentiments, but ones which were based on the assumption of the inviolability of market capitalism — the system which the Labour Party had committed itself drastically to reform, if not overthrow. Weeks before the infamous 1930 deflationary budget Snowden wrote to his predecessor, Churchill, criticising him for his flexibility: The difference between us does not lie in a nice calculation of figures. It lies in differing conceptions of sound finance … A well-balanced budget is not a luxury which is to be avoided; it is a necessity which is to be provided for’: quoted in S. Howson and D. Winch, The Economic Advisory Council, 1930–1939 (Cambridge University Press, 1977) p.31.
See G. Ingham, Strikes and Industrial Conflict (London: Macmillan, 1974) pp.30–1.
For a brief statement, see C.P. Kindleberger, The World in Depression, 1929–1939 (London: Penguin, 1973) chs 2, 3. Both the French and Americans
S. Pollard, The Development of the British Economy, 1914–1967. 2nd. edn. (London: Arnold, 1967) p.226.
See Nicos Poulantzas, Fascism and Dictatorship (London: New Left Books, 1974) for a discussion of crises of representation.
Due to a large range of factors — most importantly, the City’s continued dominance, the exigencies posed by the need for wide electoral appeal, and the divisions within industry — the Conservative Party has retained these factions to the present day. On the ‘corporatism’ of the 1930s, see Middlemas, Politics in Industrial Society; on the Conservative Party’s different factions on this issue, see Nigel Harris, Competition and the Corporate society (London: Methuen, 1972) part 1. ch.4.
The suddenness of the partial reorientation apparently took the City’s close ally the Treasury by surprise. Treasury officials misjudged City opinion when they proposed to tax the high profits which sections of industry had made during the rearmament programme of the 1930s. The Treasury had assumed that the City would support the plan for a national defence contribution, as the tax was known, as it would lessen the possibility of a budget deficit and thus preserve financial orthodoxy. However, bankers and stockbrokers denounced what they referred to as a ‘tax on recovery’, and Robert Horn (the Conservative MP for the City) led the attack on it in Parliament: see Robert Paul Shay, Jr, British Rearmament in the Thirties: Politics and Profits, (Princeton University Press, 1977) p. 150.
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© 1984 Geoffrey Ingham
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Ingham, G. (1984). The Interwar Years: the Rise and Fall of Gold. In: Capitalism Divided?. Contemporary Social Theory. Palgrave, London. https://doi.org/10.1007/978-1-349-86082-1_9
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DOI: https://doi.org/10.1007/978-1-349-86082-1_9
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