What lessons were learnt from inter war economic experience by the economists and politicians during the Second World War?
- ECONOMISTS and politicians learnt two key lessons from inter war economic experiences during the Second World War
- An industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Income could be stable if employment was stable. So stable income and employment were needed.
- Markets could not guarantee full employment. Therefore, government would need to check fluctuations of price and provision of employment. Economic stability can be ensured with the interference of the Government.
- The second lesson was a country’s economic links with the outside world. The goal of full employment could only be achieved if government had power to control flow of goods, capital and labour.