The Downturn of the British Economy

By the mid-1960s, Britain's economic recovery from World War n seemed uncertain. As the 1970s opened, the country faced severe economic problems. Part of the country's problems stemmed from its relatively recent loss of its numerous overseas colonies, which had provided inexpensive raw materials to produce manufactured items, as well as ready markets for these goods. Britain also had failed to keep pace in plant, labor, and managerial practices with more recently industrialized nations. Of the world's industrialized countries, Britain alone experienced declining exports in the 1970s.

Outdated factories, low productivity, and lack of worker interest made it difficult for Britain to compete. The strength of labor unions led to more severe problems. Strikes took place in widespread industries, including utilities, civil services, and mining. Between 1970 and 1972, for example, around 47 million working days were lost to strikes. In 1973, the government banned...