A Golden Age: 1960s
The 1960s era, commonly referred to as the “Golden Age”, represents a fascinating turning point for economic and post war policies world over.It was a decade stretch that lasted soon after the Second World War to initial oil crisis that began in 1973.
Recognized economists, politicians and senior government officials have deliberated upon the socio-economic policies and their consequences during that period.
There has been much speculation concerning whether there were errors in the 1960s economic policies that could have contributed to the great inflation of the 1970s.Key players’ roles in that era’s major economic decisions are scrutinized to establish their positive and negative contributions to the great economic boom and the negatively perceived inflation.
Some of these figures included Lord O’Brien who was the Bank of England’s Governor between 1966 and 1973.
The considerations were both from an official or a political position held by the individuals.
However, even with the inflation, the 1960s decade seem to be an economic golden age as viewed from the 1990s perspective due to the major economic reformations and inventions that took place during the period. It is in this respect regarded as an economic apogee whose high/crest preceded the tribulations decent that followed. National income’s growth rate was faster than ever in history (Jason, 2001, p.45).
The unemployment level in Britain for example remained below 2.5% of the total labour. In many instances, it remained below 2%, far much below the proceeding two decades. For most of this golden decade, the inflation averaged below 4% even though it was a reason for major concern especially as it rose to between 5-6% in and within the last 2 years of the decade.
The 1967 balance of payments devaluation particularly led to surplus that was very healthy after it was affected to abide to post war years problems.
Generally, 1960s is regarded as a social and economic policy experimental period where major innovations took place and resulted to admirably noteworthy economic revolutions. In Britain for example the endless departures successions in the countries fiscal policies including gains in capital tax, regulatory tax, selective employment and corporation tax were major economic factors on the one side of the ledger whereas grants on investments and regional employment premiums comprised the other (Diller, 1995, p.23).
The National Plan and the National Economic Development Council were the major economic organs of the government that attempted to accelerate the economic growth rate especially through the use of long successive experimentation of income policies to control inflation.
Industrial restructuring was done through the industrial reconstruction corporation as a concerted effort to have an overhaul of the industrial. The 25% premium surrender on investment currency on temporary surcharged imports played a vital role in the balance of payments operations as efforts were made to join the European Community.
Other methods included opening of new universities as well as relaxation of procedures of Open University Learning system. This was facilitated by relaxations in the “permissiveness” law.
However, the golden age survivors usually do not see back to it with any particular individual resounding success. Most of them don’t have the feeling that they had singularly been carried or blessed for the successes but are sometimes retrospective on the fact that this period was also characterized by crises especially the balance of payments crisis.
Notably, the long uncertainties of currency, the 1968 catastrophic prediction of the following years and the long deferred 1967 devaluation to reduce difficulties in the balance of payments were some of these crises. And several years later, a number of the 1960s experiments were abandoned (Caircross, 1992, p.13).
Furthermore, the 1990s reappearances of difficulties in the balance of payments may perhaps revive the experiments and crises of the 1960s.
Considering for example the narrowly fixed exchange rate limits within the European monetary system, and the external deficit that is enormously increasing, the temptation to revert to the golden age policies and innovations is quite strong. Britain’s dilemma comes from an inclination of great magnitude of restoring her competitive power.
Other countries of the world have also experienced these difficulties as well although different world industrial economies experience substantiated differential effects.
This is especially considering the fact that continental countries had a faster growth rate as compared to the UK but in the 1950s they grew less fast than the UK did. All countries therefore had their unique problems.
Paris experienced riots and a strike that almost brought the government down early in 1968, between 1969-70 Germany suffered a great inflation than at any other time after the war whereas French franc devalued within one year after the sterling pound and again towards the end of the golden decade (Stuart, 1999, p.32).