Question

explain the political economy of Britain and its evolution over time.

Answer 1

Answer:-

Britain became one of the most prosperous economic regions in Europe between 1600 and 1700,[3] Industrialisation in the mid-eighteenth century resulted in economic developments described by many historians as the British industrial revolution. These developments resulted in Britain becoming the premier economies in Europe during the first half of the 19th century, the most prominent industrial power in the world economy and a major political entity. Its industrialists were major innovators in machinery such as steam engines (for pumps, factories, railway locomotives and steamships), textile equipment, and tool-making. Britons pioneered the railway system and built many systems and sold most of the equipment other nations used. Its businessmen were leaders in international commerce and banking, trade and shipping. The markets included both areas that were independent and those that were part of the expanding British Empire. After 1840, an economic policy of mercantilism was abandoned and replaced by "free trade," with few tariffs, quotas or restrictions. The powerful Royal Navy protected British interests, shipping and international trade, while the British legal system provided a system for resolving disputes relatively inexpensively, and the City of London functioned as the economic capital and focus of the world economy.

During 16th & 17th century many fundamental economic changes occurred, resulting in rising incomes and paving the way for industrialisation.. There were growth in money supply, exports, wool industry , increase in diets of the people and poverty too.

During 18th Century was prosperous as entrepreneurs extended the range of their business around the globe. There was a major boom due to industrial revolution and many Napoleonic war created a long term benefit for Britain.

19th century Britain was the world's richest and most advanced economy. Real GDP per person almost doubled in the 90 years between 1780 and 1870, when it reached $3263 per capita. This was one third greater than GDP per person in the United States, and 70% more than both France and Germany.[61] The economy was the most industrialized in the world, with one-third of the population employed in manufacturing by 1870 (concurrently one-sixth of the workforce in the United States was employed in manufacturing). The level of quantifiable steam power (in both industry and railroad travel), was gauged at 7,600 hp in 1880, only excelled by the United States.[62] Urbanization was so intense that by 1901 80% of the British population lived in towns.[63] The number of towns with a population over 50,000 reached 32 between 1847–50, double that of Germany and almost five times that of the United States.[62] By 1901 there were 74 British towns which met the 50,000 minimum threshold.

During the period of 1900-1945 ,the United States and Germany had experienced industrialisation on a scale comparable to that achieved in the United Kingdom and were also developing large-scale manufacturing companies; Britain's comparative economic advantage had lessened. London did remain the financial and commercial capital of the world, until challenged by New York after 1918.

During First world war ,Britain was forced to use up its financial reserves and borrow large sums from the U.S which resulted in Britain in turn owing the U.S. billions in loan repayments. Because of its prime importance in international finance, the entry of the UK into the war in August 1914 threatened a possible worldwide liquidity crisis. The great depression and second world war also was in this period only .

1945-2001- Although Britain achieved ultimate victory in the war, the economic costs were enormous. Six years of prolonged warfare and heavy losses of merchant shipping meant that Britain had lost two-thirds of her pre-war export trade by 1945.Nationalization of industries happened during this period. Suez crisis too.

1960-1979- Deindustrialization happened leading to closure of many operations in mining, heavy industry and manufacturing, with the resulting loss of high paid working-class jobs.

21st century- The economy shifted from manufacturing, which had been declining since the 1960s and grew on the back of the services and finance sectors, while the public sector continued to expand. It entered a recession in the final quarter of 2008, accompanied by rising unemployment which increased from 5.2% in May 2008 to 7.6% in May 2009. The unemployment rate among 18- to 24-year-olds has risen from 11.9% to 17.3%. Few suggests that the UK suffered a slightly longer recession than other large European countries as a result of government policy dating back to the policies of the Thatcher government of 1979, in which UK governments have moved away from supporting manufacturing and focused on the financial sector.

From Q2 2013, the UK's economy continued to grow for five consecutive quarters, the longest since Q1 of 2008, showing growth beating most developed economies helped by the rebound in the housing market and strong growth in both manufacturing and services industries. The IMF increased UK growth forecasts for 2014 from 1.9% to 2.4% in January 2014.Subsequently, inflation dropped to a low of 1.6% in Q1 2014.,unemployment dropped to 6.8% (the lowest level since 2009)with impressive growth in employment leading to an all-time high of 30.4 million.The UK government posted a £107.6 billion national deficit for the fiscal year ending March 2014, meeting the target of £107.7 billion set a month previously.