AHC/WI: British New Deal

Thomas1195

Banned
IOTL, in order to combat the Great Depression, several countries like the US, Sweden, New Zealand or to a lesser extent, Canada had introduced New Deal (US) or equivalents, which involved major social programs and Keynesian public investment spending on infrastructures and others, with varied degree of success. And Sweden was the first country in the world to fully recover.


Britain, however, still wedded with classical economic approach championed by both the Tories and MacDonald Labours, and had been implementing Treasury policies until 1935 (this was a factor contributed to Labour landslide victory in 1945), when a large-scale rearmament began, while Keynes did not have much influence until the Second World War.


The challenge now is to have a New Deal or equivalent implemented in Britain, and not necessarily after the Great Depression.
 

Thomas1195

Banned
The earliest POD for Britain is in 1921, when the post-war slump began to kick in.

The second one is in 1924, when Keynes published the pamphlet "Does unemployment need a drastic remedy?" which proposed public works on roads, housing and electricity supply.

The third one, of course, is 1929 election.

The fourth POD is after Britain abandoned Gold in 1931.

The final POD is in 1936, when several figures like DLG called for a British New Deal.
 
Lloyd George's lliberals did propose public work schemes and a National Investment Board during the 1929 election (We can conquer unemployment). Maybe a Lib-Lab "popular front" coalition.

Might not last past the next election in 1934 though, but 5 years of reform and modernisation would put Britain's economy on a better footing than OTL's 1930s.
 

Thomas1195

Banned
Lloyd George's lliberals did propose public work schemes and a National Investment Board during the 1929 election (We can conquer unemployment). Maybe a Lib-Lab "popular front" coalition.

Might not last past the next election in 1934 though, but 5 years of reform and modernisation would put Britain's economy on a better footing than OTL's 1930s.
Now, the question would be "who would be the Chancellor". If Snowden, then well, no chance.

Even if Lloyd George become Chancellor, he would have to abandon the Gold Standard first before any deficit spending, and even capital control, if he doesn't want to trigger capital flights. After that, feel free to go on with it.


A programme like that in 1918-1924 would be far more favourable and more effective. During a benign period, it woud be far easier to pull back foreign investments than during Great Depression. Also, you can nationalize railway during this period with ease. And a successful programme during this period would result in stronger belief in Keynesianism during the Great Depression (capital control might be no longer needed).
 

Thomas1195

Banned
Let see:

Have a Lib-Lab Coalition winning either the 1918 or the 1923 (Pipisme TL) general election. Now, Labour would have much stronger position in the new coalition government.

A first British New Deal would be called as Reconstruction Programme. It would include (quite similar to postwar reforms IOTL, BUT without Geddes Axe):

- Railway nationalization.

- Public works on infrastructures like roads and electricity supply.

- OTL Education Reform 1918.

- Subsidies for house building undertaken by private enterprises and local authorities.

- Encouraging local authorities to provide land for people to take up farming and to provide allotments in urban areas.

- Providing assistance for unemployed blind people and blind persons who were in low paid employment.

- Providing for farm labourers to receive a minimum wage, while continuing to guarantee the prices of farm products until 1921 (in case of winning 1918 election). Also, providing tenant farmers with greater protection by granting them better security of tenure.

- Placing a mandatory requirement to provide social welfare opportunities to mining communities.

- Increasing the obligation of local authorities to treat and prevent tuberculosis.

- Setting up a Ministry of Health and a Minister of Transport.

- Providing payments for the wives and dependent children of unemployed workers.

- Increase pensions and insurance benefits, and extending eligibility for pensions to more people.

- Industrial democracy - Cooperation between capital and labour.
 
You'd likely need different people at the top of Labour. Snowden was their economics guru at the time, and was very much committed to the existing orthodoxy. McDonald was sceptical of Keynesianism, and more open to austerity than much of his cabinet. Replacing him isn't absolutely necessary, but it would help a great deal. An interesting PoD would be to have JR Clynes keep the Labour leadership in 1922, and then become the first Labour PM instead of MacDonald. He was strongly opposed to austerity in OTL, so he would likely be more willing to explore alternatives when placed in similar circumstances.
 
Mosley somehow getting in the power either as a Labour, Conservative PM or some kind of less Fascist New Party probably would work for a New Deal. He was a fan of Keynesianism and probably would have been quite radical, even more so than FDR had he gotten into power.
 

Thomas1195

Banned
Mosley somehow getting in the power either as a Labour, Conservative PM or some kind of less Fascist New Party probably would work for a New Deal. He was a fan of Keynesianism and probably would have been quite radical, even more so than FDR had he gotten into power.
Mosley's proposal was too extreme (all-out nationalization of banking and import..., as well as high tariffs) and might be counter-productive. In fact, it somewhat looked like Nazi policies. Also, the time he proposed his plan was not suitable as I remember (before Britain abandoned Gold).

Besides, looking at Labour's records postwar, I doubt their efficiency.

OTOH, Lloyd George had proved to be excellent in controlling and organizing the economy during wartime (more than the whole Labour party combined), and he was backed by the economic titan Keynes. Besides, the Liberal Yellow Book in 1928 was more than just public works (like New Deal). For example, they planned to harmonize capital and labour rather than stand for the interest of one specific group in a conflict with the other.
 
One of the reasons Britain didn't go in for a New Deal solution was that although the Great Depression was pretty bad in Britain, thanks to abandoning the Gold Standard earlier than most Britain came out of the depression earlier so the damage wasn't as bad as it was for other nations. To improve matters Britain could abandon Gold earlier (before the Stirling crisis of 1931 forced their hand) or not gone back to it in 1925. The main problems with the British economy from the 1850's on wards were structural and educational made worse by chronic under investment.

Now if we are going to be really cunning, Britain could have tried some dodgy quantitative easing between the end of WW1 and the German hyper inflation scared them off in 1922/23. This would involve the Bank of England secretly printing extra money to pay of the war debts held by foreign investors. It has the beauty of allowing the debts to be reduced and the British could keep inflation at home under relative control with punitive taxes to "pay for the war". This would still increase inflation in Britain as the investors would look to reinvest their cash. But this is to the British governments advantage as artificially raising inflation in this way effectively devalues the Pound. As the debts were organised in a world where moderate to high inflation didn't really exist (thanks to the Gold Standard) there were little to no inflation conditions on the debt bonds. Therefore 4-5 years of inflation at around 10% would more than halve the national debt, bringing it back under control. Especially if the money printed to create the inflation went on repaying the debt as well. This could lead to a very different 1930's with Britain avoiding the default (albeit with its old creditors losing significant levels of trust in Perfidious Albion). Also freed to make less repayments and therefore in a better financial position, Britain would be more able to ease taxes or raise public spending during the Great Depression. It could also start pumping money into rearmament earlier perhaps enough to call Hitlers bluff pre1938.

Another option would be for a flash point to happen somewhere in the Empire either against a regional power like Japan or Italy or from bandits in the North West Frontier. This goes badly for the British and the 10 year rule on military expenditure is blamed. This causes public uproar as our boys were betrayed by the penny pinchers at the Treasury. The result is some limited public expenditure putting right the worst effects of 10+ years of under investment. This in turn creates (accidentally) the same effects as a Government fiscal intervention which has the desired new deal/Keynesian effect.

This has the added effect of the British military being able to do up the Hood, get semi automatic riffles and keep/expand the Experimental Armoured Force (or insert your favourite British WI here) in time for some serious WW2 Brit w***ing.



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Mosley's proposal was too extreme (all-out nationalization of banking and import..., as well as high tariffs) and might be counter-productive. In fact, it somewhat looked like Nazi policies. Also, the time he proposed his plan was not suitable as I remember (before Britain abandoned Gold).

Besides, looking at Labour's records postwar, I doubt their efficiency.

OTOH, Lloyd George had proved to be excellent in controlling and organizing the economy during wartime (more than the whole Labour party combined), and he was backed by the economic titan Keynes. Besides, the Liberal Yellow Book in 1928 was more than just public works (like New Deal). For example, they planned to harmonize capital and labour rather than stand for the interest of one specific group in a conflict with the other.
Perhaps Mosley and Lyold-George could team up instead? I imagine the two might be a dangerous threat to Labour and could make a good Mentor-Apprentice relationship. Also, the Attlee government was one of the few which managed to achieve a budget surplus. It might be interesting to see.
 
Perhaps Mosley and Lyold-George could team up instead? I imagine the two might be a dangerous threat to Labour and could make a good Mentor-Apprentice relationship. Also, the Attlee government was one of the few which managed to achieve a budget surplus. It might be interesting to see.
It would be very difficult to kick Labour back to third party status by the time Mosley was a reasonably important person. Besides, even before he turned outright fascist, he had quite a bit of an ego that would make it difficult for him to play a leading role in anything that didn't have him at the centre of it. There were similarities between Lloyd George and Mosley, but the former has to rely on the support of some reasonably centrist MPs who are anti nationalisation and anti authoritarian. It would be a tough sell, and I certainly cant see it being such an overwhelming success that they come from third place to lead a government during the depression.

Perhaps PR in 1918 might help if you want Lloyd George to take the leading role in the New Deal program, particularly because STV particularly benefits the more centrist third parties. If Labour and the Tories go through a difficult periods with a few significant splits, its not impossible to see Lloyd George leading a government where his Liberals are the largest party.
 
Let see:

Have a Lib-Lab Coalition winning either the 1918 or the 1923 (Pipisme TL) general election. Now, Labour would have much stronger position in the new coalition government.

A first British New Deal would be called as Reconstruction Programme. It would include (quite similar to postwar reforms IOTL, BUT without Geddes Axe):

Huh. Given postwar Britain's performance...
 

Thomas1195

Banned
It would be very difficult to kick Labour back to third party status by the time Mosley was a reasonably important person. Besides, even before he turned outright fascist, he had quite a bit of an ego that would make it difficult for him to play a leading role in anything that didn't have him at the centre of it. There were similarities between Lloyd George and Mosley, but the former has to rely on the support of some reasonably centrist MPs who are anti nationalisation and anti authoritarian. It would be a tough sell, and I certainly cant see it being such an overwhelming success that they come from third place to lead a government during the depression.

Perhaps PR in 1918 might help if you want Lloyd George to take the leading role in the New Deal program, particularly because STV particularly benefits the more centrist third parties. If Labour and the Tories go through a difficult periods with a few significant splits, its not impossible to see Lloyd George leading a government where his Liberals are the largest party.
By 1918, Liberals were committed to nationalization of railway and electricity system, and mine royalties. By 1928, they even wanted to nationalize BOE and create a National Investment Board. After all, it was them who nationalized telephone. But frankly, nationalization of industries other than public services, infrastructures and utilities and maybe, arm industry, is stupid. Labour had gone too far.

There are some PODs between 1913 and 1918 to keep the Liberal Party alive.

First, have Asquith arrest Carson and Bonar Law for sedition around 1913-1914 following Home Rule. IOTL, these guys eventually helped overthrow Asquith, but now they would be in the jail.

Second, successful Gallipoli or equivalents (a landing on Alexandretta would guarantee a victory).

Third, Asquith retires following his son's death.

Fourth, Liberals united before 1918 election.

Also, the Attlee government was one of the few which managed to achieve a budget surplus. It might be interesting to see.
Well, it's about the lousy performance of nationalized industries and their failed forced mergers in aircraft and motor industries (of course these happened more under Harold Wilson). Not to mention capital-labour conflict and the trade union militants, which could have been solved in Mond-Turner talk in 1928. The measures in Mond-Turner talk were proposed by Liberals as early as 1922.

Huh. Given postwar Britain's performance...
Well below its potential. The high unemployment rate suggested that surplus resources were not fully utilized.
 
Coalition with the Lliberals in 1929, Lloyd-George persuades the cabinet to adopt a watered down version of Moseley's proposals with some of his own thrown in.
 

Thomas1195

Banned
Coalition with the Lliberals in 1929, Lloyd-George persuades the cabinet to adopt a watered down version of Moseley's proposals with some of his own thrown in.
With a condition that Philip Snowden does not hold the Chancellor post, which is unlikely since Labour is the senior partner.
 
Either that put pressure on the Labour party to adopt some reforms. Or say "Look you, we're not working with Snowden, not even for confidence & supply.
 
With a condition that Philip Snowden does not hold the Chancellor post, which is unlikely since Labour is the senior partner.
That might not matter, so long as the rest of the party can be convinced of the merits of the idea. MacDonald could have been convinced, and certainly there are several other leaders who will opt for those ideas over austerity. Its worth noting that the party converted to Keynesianism not long after they left government in the 1930s. Alternatively, you could have the Liberals hold significantly more seats in parliament at this time. It would be difficult for them to beat out Labour, but winning 100 seats or so is not out of the realms of possibility, at which point they would have enough leverage to secure the Treasury in coalition negotiations.
 

Thomas1195

Banned
Either that put pressure on the Labour party to adopt some reforms. Or say "Look you, we're not working with Snowden, not even for confidence & supply.
That might not matter, so long as the rest of the party can be convinced of the merits of the idea. MacDonald could have been convinced, and certainly there are several other leaders who will opt for those ideas over austerity. Its worth noting that the party converted to Keynesianism not long after they left government in the 1930s. Alternatively, you could have the Liberals hold significantly more seats in parliament at this time. It would be difficult for them to beat out Labour, but winning 100 seats or so is not out of the realms of possibility, at which point they would have enough leverage to secure the Treasury in coalition negotiations.
With PR, Liberal would have won over 100 seats in 1929.
 
That would require an earlier PoD. There's no way that kind of radical electoral reform would happen at any point in the 20s if the Tories are still dominating the government as per OTL.
 
That would require an earlier PoD. There's no way that kind of radical electoral reform would happen at any point in the 20s if the Tories are still dominating the government as per OTL.
Only a few years earlier. STV came close to passing in 1918. If parliament was willing to consider it then I see no reason why they would not do so at other points in the following ten years or so. It doesn't necessarily need to be PR if you want the Liberals around 100 seats, AV might achieve that, and that was considered both by the Speakers Conference and by the Labour government of 1929-31. Give the first Labour administration a bit more time, and a different leader not so hell bent on destroying the Liberals, then you could quite plausibly get AV introduced in the 1920s.
 
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