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TheFalloftheBritishEmpireOutline•Decolonisation•DeclineinEconomy•EndofEmpireⅡDeclineinEconomyBythe1880stheBritisheconomywasdominantintheworld.Butevenby1900thiswasnolongerthecase,theUKhavebeenovertakenbyboththeUnitedStatesandGermany;andcertainlyfrom1945untilthepresent.Now,wewilldiscussitsdeclineineconomyinthefollowingaspects.ⅡDeclineinEconomyYaltaSystem——theconfrontationbetween,U.S.andUSSR.ⅡDeclineinEconomyThoughBritainandtheempireemergedvictoriousfromtheSecondWorldWar,theeffectsoftheconflictwereprofound,bothathomeandabroad.MuchofEurope,acontinentthathaddominatedtheworldforseveralcenturies,wasinruins,andhosttothearmiesoftheUnitedStatesandtheSovietUnion,whonowheldthebalanceofglobalpower.Britainwasleftessentiallybankrupt,withinsolvencyonlyavertedin1946afterthenegotiationofa$US4.33billionloan(US$56billionin2012)fromtheUnitedStates,thelastinstalmentofwhichwasrepaidin2006.ⅡDeclineinEconomyBrettonWoodsConferencein1944——American-orientedworldeconomicpatternⅡDeclineinEconomyFirstly,thecountryhadgotheavilyindebtinordertofinancethewar,sellingmanyofitsaccumulatedoverseasassets,andborrowinglargeamountsfromtheUnitedStatesandCanada.ⅡDeclineinEconomySecondly,theeraoftheempirewasover.SinceIndiahasgaineditsindependencefromtheBritishEmpirein1947,therestoftheempirequicklyfolloweditsexample.That’stosay,theBritishEmpirelostmostofitsrawmaterialfieldsandmarketsforBritishgoods.ⅡDeclineinEconomyBritishIndianEmpire1909ImperialGazetteerofIndiaⅡDeclineinEconomyThirdly,Britainwasstillforcedtomaintainedasubstantialandexpensivemilitarypresenceinmanyoverseaslocationsuntiltheprocesswascompleted(mostlybytheendofthe1960s).Alsoitspositionasoneoftheshapersofthepost-warworldrequiredsubstantialmilitarycontributions——bothasoneofNATO’smajorpartners,andasamemberoftheUNSecurityCouncil.AllthishadtheresultthatBritainspentahigherproportionofitsnationwealthonthemilitarythanmostofitscompetitors.Militaryexpendituretendsnottogenerateaneconomicreturninquitethesamewayasotherindustrialinvestment.Fourthly,althoughBritainwasquitebadlydamagedbyGermanbombingduringthewar,itsindustrysurvivedcomparativelyunaffected.However,whilethemainlosersintheconfict,GermanandJapan,whohadtoinvestinthemostmodernequipmentandnewproducts,Britishindustrycontinuedwithitsolderfactoriesandpre-warproducts,whichmeatthatoutputwasinitiallyverylow.Withoutsufficientinvestmentinindustries,thereisalsothelackofacloserelationshipbetweenindustryandbanksintheUK.ⅡDeclineinEconomyⅡDeclineinEconomyⅡDeclineinEconomyTheUKhasexperiencedeconomicdecline,butthisdeclineisrelativetosomeothereconomiesratherthanabsolute.So,whileBritainlookedsecurelywealthierthanothersin1945,acatching-upwiththeUKwasinevitableastheyrecovered.ⅡDeclineinEconomyBanksandindustryⅡDeclineinEconomy•Evenwithouttheparticularcircum-stancesofthepost-warworld,relativelylowratesofinvestmentwerecharacteristicoftheBritisheconimyinrelationtootherdevelopedeconomies.•Also,theUKeconomylackedofacloserelationshipbetweenin-dustryandbanks—againacon-trast,particularlywiththetwomostsuccessfulpost-warecono-mies,JapanandGermany,wherebanksandindustrialfirmshaveverycloselinks.ⅡDeclineinEconomyBanksarenotabletofindgoodinvestmentoppor-tunitiesintheUK,lookedoverseasforinvestmentopportunities.So,amongstEuropeannations,BritiainisthelargestinvestorinChina,butsellsfewerofitsownmanufacturedgoodsherethandoGermanyorFrance.ⅡDeclineinEconomyBritainisnotpoorerⅡDeclineinEconomy•Britainisnotpoorer,orproducinglessthanitwasin1945,infactitisalotwealthierandmoreproductivethanitwasthen.Theproblemisthatthoughithasimproved,othercountrieshaveimprovedmorerapidly,hencetheslidefrombeingthe2ndlargesteconomytobeingthesixth,asitisatpresent.AndmanysmallereconomieshaveovertakentheUKintermsofoutputperheadofpopulation.ⅡDeclineinEconomySothedeclinefromBritain'sapparentlygoodfortunesatthatpointuntilnowisthusnotasextraordinaryasitmightseem,beingtheresultofalreadyexistingbasicproblems.Nevertheless,thisrelativefailureisaseriouscauseofaseriouscauseofconcerntotheUKgovernments.