What lessons were learnt from inter-war economic experiences by the economists and politicians during the Second World War? Describe.

Explanation

Economists and politicians learnt two key lessons from inter-war economic experiences during the Second World War:
(i) An industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Income could be stable if employment was stable. So stable incomes and employment were needed.
(ii) Markets could not guarantee full employment. Therefore, Government would need to check fluctuations of prices and provision of employment. Economic stability can be ensured with the interference of the Government
(iii) The second lesson was a country.s economic links with the outside world. The goal of full employment could only be achieved if Government had power to control flow of goods, capital and labour.