The rise and decline of Britain.
Britain
ƒ Aspects of British industrial success.
success
ƒ Industrial organization.
ƒ Industrial districts.
ƒ International trade.
ƒ The British Empire.
ƒ Free trade.
ƒ The debate over British industrial
decline.
ƒ Did B
Britain
it i decline?
d li ?
ƒ Theories of decline.
ƒ Culture.
ƒ Technological trajectories and timing.
1
I d t i l organization
Industrial
i ti
in
i Britain.
B it i
When an industry has thus chosen a locality for itself,
itself
it is likely to stay there long: so great are the
advantages which people following the same skilled
trade get from near neighbourhood to one another.
The mysteries of the trade become no mysteries; but
are as it were in the air, and children learn many of
them unconsciously. Good work is rightly appreciated,
inventions and improvements in machinery, in
processes and the general organization of the
business have their merits promptly discussed: if one
man starts a new idea, it is taken up by others and
combined with suggestions of their own; and thus it
becomes the source of further new ideas
ideas. And
presently subsidiary trades grow up in the
neighbourhood, supplying it with implements and
materials, organizing its traffic, and in many ways
conducing to the economy of its material.
— Marshall, Principles of Economics, IV.x.3.
Alfred
Alf
d Marshall,
M h ll
1842-1924
Industrial
districts.
External
economies.
2
Lancashire.
Lancashire
Original advantages.
advantages
ƒ Poverty.
y
ƒ Pastoral farming lends itself to small-scale
enterprise.
ƒ Indigenous textile tradition.
ƒ Woolens under Yorkshire influence and
linens under Irish influence.
ƒ Climate.
ƒ Cotton “hydroscopic
hydroscopic.”
ƒ An east wind reduces output and quality
by 10 per cent.
An Industrial Landscape in 1833:
S i
Swainson,
Birley
Bi l and
d Co.,
C near
Preston, Lancashire, England.
ƒ Water and coal.
ƒ Lack of institutional constraint.
ƒ Manchester a new town.
ƒ Grows from 7th largest
g
in 1775 to 3rd
largest in 1801.
3
Lancashire.
Lancashire
External economies.
economies
ƒ Transportation.
ƒ Port of Liverpool develops with
Manchester.
ƒ Canals,, turnpikes,
p
, and railways.
y
ƒ World’s first passenger railway.
ƒ Later, telegraph and telephone turn
Manchester into communications center.
ƒ Markets.
ƒ Cotton exchanges create thick market for
worldwide imports.
ƒ Power loom and mule adapted to wide
variety of cotton types and quality.
ƒ Worldwide network of commissioning
agents
agents.
The Manchester Cotton Exchange.
4
Lancashire.
Lancashire
External economies.
economies
ƒ Vertical specialization.
specialization
Low barriers to entry.
Tens of thousands of establishments.
Specialization by type of yarn or cloth.
cloth
One firm may lease space in several mills
and one mill may contain several firms.
ƒ “Flexible
Flexible specialization
specialization.”
ƒ
ƒ
ƒ
ƒ
ƒ Subsidiary industries.
An Industrial Landscape in 1833:
S i
Swainson,
Birley
Bi l and
d Co.,
C near
Preston, Lancashire, England.
ƒ Textile machinery industry.
ƒ Banking and finance.
finance
ƒ Transportation and communication.
5
Lancashire.
Lancashire
International trade
trade.
Sales worldwide,, but
especially to subtropical
areas of India, China,
Latin America.
Percent value of cotton exports
1820
1850
1896
Europe
65.5
34.3
18.9
America
26.1
29.1
18.5
USA
7.2
8.9
3.6
Latin
17 8
17.8
18 0
18.0
15 0
15.0
Levant
2.5
9.2
7.9
Asia
5.2
24.3
43.4
India
18.5
26.6
China
3.6
8.5
17
1.7
53
5.3
Af ica
Africa
06
0.6
6
The British Empire.
Empire
ƒ Beginnings in Mercantilist trading
monopolies.
ƒ East India Company (1600).
ƒ Trading companies take on political
and military functions.
ƒ Creating trading institutions and
preserving openness of markets.
ƒ British government takes over
f
functions
i
off trading
di companies.
i
ƒ East India Company nationalized 1773.
ƒ Monopoly
p y abolished 1813.
7
Britain and Free Trade.
Trade
ƒ Smith’s
Smith s Wealth of Nations attacks
mercantilism.
ƒ The Corn Laws.
ƒ Import controls after Napoleonic wars
wars.
ƒ Ricardo discovers comparative
advantage.
ƒ Anti-Corn-Law
Anti Corn Law League founded in
Manchester, 1836.
ƒ Corn Laws repealed, 1846.
ƒ Reflects shift of economic power from
agriculture to manufacture.
David Ricardo (1772-1823).
Image
g courtesyy of the Warren J. Samuels
Portrait Collection at Duke University.
ƒ Anglo-French commercial treaty
(1860) virtually eliminates tariffs.
tariffs
8
Britain and Free Trade.
Trade
9
The decline of Britain.
Britain
The Crystal
Palace site of
Palace,
the Great
Exhibition of
1851, which
showcased
British
technology to
the world.
ƒ Relative or absolute decline?
ƒ Timing of decline.
10
The decline of Britain.
Britain
GDP per capita in 1990 dollars.
dollars
25000
20000
Germany
15000
UK
USA
10000
5000
0
1820
1870
1900
1913
1950
1973
1992
Source: Angus Maddison, Monitoring the World Economy, 1820-1992. OECD, 1995, p. 23-24.
11
The decline of Britain.
Britain
ƒ B
Britain
it i retains
t i lead
l d in
i
traditional industries.
ƒ Textiles
Textiles, textile
equipment, shipbuilding,
cable.
A Bessemer steel converter
converter. Kelham Island
Museum, Sheffield, England.
ƒ Britain cedes lead to US
and Germany in new
areas.
ƒ Organic chemicals,
electrical products,
steel
steel.
12
Th decline
The
d li
off Britain:
B it i h
hypotheses.
th
ƒ Culture.
C lt
ƒ Sons of nouveau riche capitalists
studyy classics at Oxford and
Cambridge.
ƒ Culture of the gentleman: antitechnology and anti
anti-business
business.
ƒ Educational system.
ƒ Britain relies on on-the-job
j training.
g
ƒ No system of technical education.
ƒ Costs of empire.
ƒ Civil service drains off talent.
13
Th decline
The
d li
off Britain:
B it i h
hypotheses.
th
ƒ Institutional inertia.
ƒ The “disadvantages”
of an economic head
start.
The ring spinning frame.
ƒ Technological
trajectories.
ƒ The case of the ring
spindle.
14