The Effect of World War I on Britain Economically and Socially
The outbreak of the war in August 1914 produced immediate changes. It
is often said that war is the 'locomotive of history' - that is what
drives it along. Certainly the First World War helped to produce major
changes in British government, society, the economy and industrial
The war produced political turmoil. In 1915 Prime Minister Asquith
formed a coalition government, and the following year he was replaced
as premier by Lloyd George, who gave a new impetus to the direction of
the war. He believed in greater state intervention built upon the
abandonment of laissez faire. The powers of the state had grown
enormously. A form of 'war socialism' had been introduced. New
ministries were set up, and at the end of the war, several of these
(pensions, health and labour) became permanent institutions of the
state. There had been an important extension of social policy during
the war, the government was formulating extensive plans for the
provision of new housing, better education and an extension of
unemployment insurance. Nevertheless taxation and social spending did
not return to their pre war levels. These policies were introduced
thanks to the outbreak of the war although it can be argued that they
would have probably occurred anyway.
The war also produced major economic changes. British industry had
been to a large extent transformed by the mobilisation of millions of
soldiers and by an unprecedented switch to war production. Under a
positive perspective, the economy had shown a new production capacity.
Although total output had decreased, due to the smaller workforce,
productivity definitely increased. There had been much state-sponsored
modernisation. Electric power was used more than ever before. The
removal of so many skilled workers had initially threatened an
economic collapse but had in fact stimulated the much needed
mechanisation. The efficiency of agriculture had also increased, with
the widespread introduction of the tractor. Such changes however,
although at a slower pace, might have occurred even without the war.
The same cannot be said for the high numbers of casualities incurred.
A productive section of the workforce had been lost. In addition
Britain still had to pay the financial costs of the war. Massive
amounts of money had been borrowed and still had to be repaid.
Valuable overseas markets had been lost. During the war massive
investment in the staple industries had taken place. But once the war
was over the demand of these products fell.
The decline of the staple industries was also the main reason for the
bitter industrial relations which developed in post-war Britain.
During the war actually industrial relations had improved. Trade