AHC/WI: Operation ROBOT implemented

For the uninitiated, Operation ROBOT was a 1952 proposal by the Treasury and Bank of England to restore convertibility for non-resident Sterling currency by allowing the exchange rate for the pound to float. The objective was to relieve pressure on the British balance of payments, but it was rejected in February 1952 and again in June.

This was perhaps forseeable given that the advocates of the scheme anticipated that it would increase interest rates and unemployment. On the other hand, it would have imposed economic discipline, and made British exports more competitive. On the gripping hand, it would have undermined the Bretton-Woods system and annoyed the Americans. Later in 1952, the British balance of payments improved, and the plan didn't get much more consideration.

What could make the British government implement ROBOT, and how might it have played out at home and abroad?
 
Well when you consider what actually happened...

Bump. Any thoughts?

The result would only have to be better than what actually happened to the British economy to make it a good idea. That would require somebody pointing out the consequences of not having the fiscal discipline you mention. Not having the money to modernise industry, rebuild after The War etc resulting in Britain slipping even further behind than it had to for example.

What programs or policies are they going to cut? I tend to think of things like fighting the Malayan Emergency or the Mau Mau or the Suez Crisis. Examples of spending that burned up enough money to modernise British industry/economy. But could they really have walked away from those wars, given the perception of themselves as a great power and a need to prove that was still true? Others might mention the welfare state, again cutting that would not be politically or socially feasible as far as I know.

Or did you have something totally different in mind? Some more detail of the proposal and the circumstances etc might trigger more responses.

Just a thought.
 
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