The years 1948 and 1956 are significant in terms of the Sri Lankan economy, as the former is the year in which the country gained independence from Great Britain, and latter is when the country attempted to move from a capitalist economy to a socialist economy. Two completely different economic principals and policies implemented in close succession, the period between 1948 to 1960 provides economists with a real live example in terms of how the two different economic policies perform in reality and related implications. Thus, this report will attempt to compare and contrast the two different economic policies established within this period and the relative performance of the two policies.
1948 – 1956: Post independence capitalism
Post-independence, the country opted for a democratic socialist system where the rulers of the country are elected through a voting system. The rulers who accepted the power post-independence were mostly the middle and high-class crowd, who were pioneering plantation industries as well as an emerging new social crowd that was establishing industries such as liquor etc. However, in tribute to the previous land owner centric social system that was prevalent before the British invasion, the land owners were still given considerable decision-making power