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War Economy

Economic Recovery

page 532

Economic Recovery

THE full effects of a major war do not exhaust themselves in a decade or two. Nevertheless, some of the more significant economic distortions of World War II worked themselves out in a reasonably short period, and peacetime influences then started to dominate where wartime influences had dominated before. It is in this sense that the present chapter sets out to discuss the recovery of the economy from the war, and to point to the beginnings of a period of economic development, comparatively unaffected by wartime diversions and restrictions.

A good deal of change in emphasis occurred around about 1955, and in some respects this can be taken to mark the end of a period of recovery. Certainly many of the building and construction backlogs which had built up during the war were overcome then, though some, notably the shortage of electric power generating plant, would continue for a few years. At about this time also, shortages of some of the consumer durables such as washing machines and refrigerators disappeared.

The more rigid wartime system of price control came to an end in 1955, too. Since 1939 all goods and services had been price-controlled unless they were specifically exempted. From 1955 a list of price-controlled items was prepared, and all items not on the list were free.

However, some quite significant effects of war can be found in the following decade; and, for this reason, at least the major economic events up to 1964 must find a place in this final chapter.

In the recovery period, if we may so designate the years 1946 to 1955, the most frequently discussed economic topic was inflation. The 1951 Economic White Paper, for example, devoted a considerable portion of its text to discussions of stabilisation, the problem of inflation, and remedies for inflation. Later, the rate of develop- page 533 ment of the economy was to claim much more attention. Through all the post-war years, the tendency to over-import has persisted, and has been restrained from time to time by varying types of control.