Week One:

Creation of Welfare State and Socialized medicine (NHS) 1945-1951:

NHS:
Britain has always had welfare since 16th century but was selective
o Now universal in 1945
1948 NHS implemented
o Every citizen has free healthcare from point of receipt
Prime Minister Bevan
o Nationalizes hospitals
Doctors hate that, Guy Dain leads goes against Hippocratic oath
Bevan makes compromise w/ Doctors
1.) Pay more richest profession
2.) No malpractice insurance
3.) Doctors police own profession
4.) Private medicine on the side
How IS it paid for?
1.) High taxes
a. Paid for by 22% of Britains taxes
b. 28% of Britains taxes goes to Welfare
c. Value-added tax, inheritance tax, gas tax
2.) US Loan (1945)
a. 3.75 billion
3.) Policy of decolonization windfalls (1947-1970)
a. Independence movement pressures
PROS:
1.) Peace of mind- no worrying about cost of medical care
2.) Good for society redistribution of wealth, binds everyone together, helping
fellow citizens
3.) Lower Insurance costs/ legal costs- doctors dont need malpractice insurance
4.) Preventative medicine small pox, aids/hiv, swine flue : all succeeded
5.) Good for NHS staff morale high levels of dedication
CONS:
1.) Wait in line demand exceeds supply
2.) Bureaucratic biggest employer in Europe
3.) Nanny State priority treatment (i.e. smoker)
4.) Govt too close to BMA not enough scrutiny on doctors and mistakes
5.) Cant cut when budget deficit reduction needed

CONCLUSION: NHS here to stay as it is popular

UK Macro Economic Policy 1945-1970: Quest for Full Employment:

1.) Nationalization of the Economy

a. Govt owns 20%
i. These industries run by the Central Plan
1. Utilities: water, gas, railroads, airports, bank, hospitals, etc.
ii. Easy to fix unemployment
2.) Demand Management Keynesian Economics
a. Govt should intervene in economy to stimulate aggregate demand
i. Lower interest rates, more govt spending
ii. Central bank controlled by govt
3.) Public Work Schemes
a. Labor intensive, lots of employment
i. Post-war rebuilding
ii. Council houses aka Public Housing (42% of homes owned by govt by
1979)
iii. Motorways not railways
iv. Govt gives money to companies to invest in high unemployment areas
4.) Science & Technology
a. University expansion 1960s
b. High tech colleges established
c. Harold Wilson- Jesus college grad pushed this
5.) More trade unions
a. Better working conditions
b. Minimized exploiting workers
6.) Affluent society & economy
a. End wartime rationing
b. People start vacationing and buying nicer things
7.) PROBLEMS:
a. Nationalized Industries have deficits
b. More strikes and industrial disruption
c. Inflation at 8% (1970)
d. Unemployment rises from 1958 onward

Economic Meltdown 1970-1974: The Great Inflation:

1.) Economic consequences of rising inflation:
a. Price level disruption & uncertainty (How to price products?)
b. Savings erode in values
c. Reduced savings means reduced investment
d. More unnecessary strikes to catch up wages with prices
e. External value of currency may fall/collapse
2.) Prime Minister Edward Heath promises to reduce 8% inflation & curb strikes
3.) 1972 winter
a. unemployment at 1 million, highest level yet
 i. trade unions make demonstrations
ii. heath changes focus from reducing inflation to unemployment
b. Miners strike
i. Good cop- Gormley
ii. Bad cop- Scargill
iii. Heath turned down their pay increase
c. Lights out
i. Lights rationing
ii. Flying pickets
iii. Didnt import coal
d. Heath gives in and pays miners- looks weak
4.) Economic U-turns
a. Keynesian economics
i. Inflation to 27%
b. Nationalization
i. Bailouts
1. UCS, RR, Motorbikes
ii. Wage strikes
c. Unemployment up
i. Rate of econ. Growth drops from 2% to 0% (no growth)
5.) 1973-1974 Miners strike again & end game for Heath
a. Heath again initially refuses demands
b. Imposed a state of emergency cant work more than 3 days LOL
i. Created outrage DUH
c. Heath loses 1974 election badly