Blackwell Reference Online

Extract

During the second half of the twentieth century the international economy expanded in size and complexity. The integration of goods and capital markets culminated in the 1980s and 1990s, described as an era of ‘globalization’ comparable to the late nineteenth century. As this process unfolded, there was a steady reduction in Britain's prominence as a world economic power both in quantitative terms and in terms of influence in global policy-making. This had as much to do with the evolution of the international economy as with Britain's own economic strength. The rapid expansion in global trade and investment and the increase in the number of countries involved compared to the nineteenth century inevitably left the British economy in a less prominent position. This trend also reflected a more fundamental shift of economic strength and influence toward the US economy that had begun before the First World War and was enhanced by America's war experience. The era began with Britain exercising its still considerable influence in global policy-making. Indeed, the entire framework of the post-war international economic system was born out of wartime relations between the United States and the UK. Through the post-war years, despite heavy domestic economic burdens, Britain managed an international currency that ranked second only to the US dollar and was the unit of account for half of the ... log in or subscribe to read full text