The Keynesian Era



The 1944 Employment Policy White Paper, which marks the move away from pre-war enthusiasm for the market towards post-war Keynesian intervention, shrugs off the tenets of classical economic theory with condescending disparagement:

It was at one time believed that every trade depression would automatically bring its own corrective, since prices and wages would fall, the fall in prices would bring about an increase in demand, and employment would thus be restored. Experience has shown, however, that... this process of self-recovery, if effective at all, is likely to be extremely prolonged and to be accompanied by widespread distress, particularly in a complex industrial society like our own.


World Trade White Paper Full Employment Money Income Reconstruction Programme 
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  1. 4.
    It is fair to say that they were not so perceived at the time. Some, including Churchill, were unsure whether it was wise or practical to make such commitments. He had warned his Cabinet colleagues on 12 January 1943 against raising false hopes, but a month later (14 February 1943) he was welcoming the Beveridge Report as ‘an essential part of my post-war scheme for national betterment’ in a further minute to the Cabinet. (The Second World War, W. S. Churchill, vol. IV, Cassell, 1951, p. 861.)Google Scholar

Copyright information

© Robbie Gilbert 1989

Authors and Affiliations

  1. 1.Institute of Economics and StatisticsUniversity of OxfordUK

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