There is no denying the fundamental changes and diminishing influence of Britain’s role in the international economy in the twentieth century. Britain began the century as de facto manager of the systems of international finance and trade. At the end of the century the City of London continued to play a major role in the world economy and British multinational companies had carved an important niche for themselves in world production and commerce, but Britain’s international standing had waned. We know that the position in 1900 was based upon transient factors that were already beginning to disappear as bigger economies with more natural resources drove towards economic maturity. The question, as with the discussion of the growth rate, is whether Britain’s decline needed to be quite so steep and spectacular. Those with experience of the years between 1930 and 1980 will be acutely aware of what external frailty means. Even those whose memories extend only to ‘Black Wednesday’, 16 September 1992, will recall the sense of national failure that accompanied formal devaluation (also experienced in 1919, 1931, 1949, 1967 and 1972).Rather surprisingly, Britain made fewer efforts to shelter from the dull, continuous ache of external weakness and the public humiliation of devaluation than any of its major rivals.
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