Studies in the political economy and economic impact of British defence expenditure and American military aid to Britain, 1945-1955
This dissertation examines political aspects and the economic impact of the British defence effort during the period of the first cold war (1945-1955). The study consists of nine case studies which are grouped under three headings - Studies in the Political Economy of British Defence Expenditure, Studies in the Economic Impact of British Defence Expenditure, and Studies in the Political Economy of American Military Aid to Britain. These case studies stress the historical contingent nature of the British defence effort reflecting the experience of the second world war. Aware of the country's military and economic vulnerability, policy-makers remained determined to maintain a global presence and a high level of military preparedness. However, policy-makers failed to assess critically whether this policy was appropriate for the nuclear age and the cold war. As a consequence, the governments' foreign and defence policy imposed considerable costs on the economy and society. For example, its defence procurement policy led to subsidising under-employed defence production capacity in order to preserve the military production base for another global war. During the Korean war the commitment to this defence procurement strategy induced an over-commitment to defence production which reduced British economic growth in this period. This over-commitment of resources to defence contributed to the relatively slower growth of the British economy from the early 1950s onwards. During the Korean war, the British government embarked on an arguably excessive defence programme, because ministers sought to insure a lasting American commitment to the defence of western Europe. As a consequence, Britain paid the price for its military and economic vulnerability in terms of slower economic growth.