Q&A ยท 1:25:11-1:25:49

Britain's postwar shortage was cash as well as capacity

Easing Britain's postwar economic crisis required an exceptional new source of foreign earnings to finance reconstruction and essential imports.

Question

What would have had to happen to solve or substantially lessen Britain's economic problems after the Second World War?

Short answer

Britain needed a major new source of cash or export earnings, such as gold or oil, to pay for reconstruction and imports.

Notes

The problem was a shortage of cash on the scale of discovering a major gold field or oil reserve. Britain needed money to rebuild damaged and worn infrastructure while also paying for food and other imports during recovery. Productive capacity alone could not remove the immediate external financing constraint. Postwar naval and strategic commitments therefore competed with reconstruction for scarce purchasing power.