question_answer

  Which two key lessons did economists and politicians draw from inter-war economic experiences?  

Answer:

                  First (i) An industrial society based on mass production cannot be sustained without mass consumption. (ii) But to ensure mass consumption, there was a need for high and stable incomes. (iii) Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment. (iv) But markets alone could not guarantee full employment. Therefore the government could have to step in, to minimize fluctuations of price, output and employment. Second (i) It is related to a country's economic links with the outside world. (ii)The goal of full employment could only be achieved if governments had power to control flow of goods, capital and labour. Thus the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.