British export trade was critically affected by foreign tariffs, in certain industries. In the case of the tinplate trade in South Wales, the industry was knocked hard in the 1890’s by American import duties.
As Britain had absolutely no influence over transformations to the world economy, her loss of status as a manufacturing authority was unavoidable. In this situation it is fair to say that Britain was unquestionably going to face a slow-down in growth, but to what extent is considered to be normal? Many theories imply that although Britain had no power over external variations, there were also internal faults for which Britain was responsible. A lacking of innovation, meant that Britain lost her technological leadership, coupled with the fact that she had not improved her productivity adequately, her competitiveness had been drastically reduced.
Compared to the United States, Britain added £100 per worker, contrasted to £500 per worker in America. However, this particular information does seem predominantly biased and resiliently pessimistic. Even though Britain had lost its technological advances, it had not necessarily succumbed to the force of international competition and let her economy suffer. As T.C.Barker presents a more reasonable argument, which suggests that Britain was backwards in some respect, but he contends that Britain was by and large narrowing the gap between the United States, by using new techniques, and designing new products with good sales prospects in the long term. On the other hand if Britain had narrowed the gap fairly quickly, then the economy would not be in the sluggish phase it encountered. If Britain successfully adapted then surely during the first decade of the 1900’s it should have been in a more influential position in the economic community. For example there was an extreme slow down after 1900, and up until 1910 growth was negative at 0.4%.
The role of entrepreneurs in the demise of the economy is vital. Business’s that had been found in the late eighteenth century, and beginning of the nineteenth century were strictly family owned firms. By the end of the nineteenth century, third generation men ran businesses. The grandfather was long dead, it was he who produced the business, driven by a hard upbringing, and determined to succeed. The son, habitually respected his father deeply, and practised the same methods, had handed the rights to the third generation. These men of immense wealth had not been brought up the hard way like their father, and grandfather. They had been educated in a public school, where they were not taught adequately enough to prepare to manage an industrial taking. In a nutshell, they paid little attention to the amendments taking place in the world economy, or to the development made by their competitors. This lead to an ignorance among manufacturers that was destructive. Instead of endeavouring new machines and new systems, they distinctively made constant repairs, or at best substituted old machinery, for new similar equipment. This regard for tradition stunted potential growth of the economy, by ignoring technical and management matters where the new American methods rising at the end of the nineteenth century would have benefited Britain.
The surroundings for innovation were becoming more and more diverse, than to those imposed at the start of the nineteenth century. From the times where the main inventions came about with men of little education, who were either clever craftsmen or amateurs addicted to tinkering, inventions now incorporated scientific knowledge. In particular the occurrence in both chemical and electrical industries, that relied on solely on applied science. The relationship between industry and science seems to have been the secret weapon in Germanys economy. Britain on the other hand, failed to achieve this union between science and industry. Compared with Germany the level of students Britain retained was appallingly low, with a mere 9000 contrasting with Germany’s 60 000 students in 1913.
In general the economic activity in the United States and Canada, varies inversely with swings in British building and domestic investment. Domestic savings grew in the 1870’s, 1890’s, and the early 1900’s. Overseas investment on the contrary, moved in the opposing route, declining in the 1870’s, and 1890’s. Departures of population from Britain move comparatively to the outflow of capital. In the Northern American economy domestic investment, and economic activity were running at high levels in the 1880’s, and 1900’s. This was due to the upsurge of capital, and population from Britain, and other European Countries. In phases where domestic investment, and business activity were depressed in Britain, the American and Canadian economies rose rapidly, and this economic growth was sustained by the injections and capital from Britain to these countries. Conversely, in periods in which the British economy grew hastily, the outflow of capital and population decelerated, and the Northern American economy was respectively reduced.
Protection in Europe was brought about after 1880, due to a number of political and economic developments. The revival of nationalism in the late nineteenth century linked with the surfacing of new nation states, such as Germany and Italy, assisted the economic case for protectionism. However, the major two factors that accounted for the swing into protectionism were two particular economic developments of the 1870’s. The first was the enormous inflow of low-priced grain into Europe, from the United States and Russia, and the second the depression of 1873-9. The latter was the longest duration of dormant trade, the international economy had yet experienced. Over the 1880-1913, only Britain, Denmark, and Holland persistently remained to free trade. As France, Germany, and Italy imposed tariffs on wheat in a bid to protect grain producers, Denmark, and Britain did not. Denmark however, did adapt by converting from the growing of grain, to specialization in dairy production, and animal husbandry. Britain on the other hand, failed to adjust promptly, with the letdown of the British farmer to the opposed market situation, contrasts harshly with the success of the Danish.
International cartels, started to fill the international economy in the nineteenth century. They covered industries such as shipping, tobacco, glass, aluminium, enamelware, and bottles. The fact that Britain was not a member of most international cartels, greatly limited the international economic power, as the application of their monopoly powers, was always under the threat of competition from Britain.
The magnitude, and capability of Britain’s Labour force, did not generate any conspicuous obstruction to her economic growth. There was not a scarcity of labour, or at the other extreme, an oversupply of labour, to depress industrial investment. The primary resources were more than sufficient to enable a spirited expansion, which included coal, iron, and other minerals. It was how these resources were utilized, coupled with labour, and capital, that was decisive.
The notion of ‘decline’ would be absolutely accurate to describe the economic development, for the period of 1870-1913, if the term was used to compare it with its previous rate of growth. As the term denotes a smaller expansion in the economy, and not necessarily a recession, it is clear that Britain had lost its first class rank in the world economy. She did this by failing to mechanize to keep up with the technology bestowed on the rest of the world, who consequently carried on escalating and succeeded in driving Britain into a decline. However, the fact that the economy was on the rise, but at a less significant rate, could just be a cyclical pattern of fluctuations, which any economy would encounter. If this was the case though, then why did Germany who not only caught up with Britain but also overtook Britain in the world market.
The decline was however constrained to industrial production and productivity, united with a regressive disposition in technology. Great Britain had a superior position in the field of services. However a combination of factors including, lack of innovation, education, investment, ambition, meant that Britain was in decline in 1870-1913.
The Growth Of The International Economy 1820-1920 pg 9 A.G.Kenwood and A.L.Lougheed
The Victorian Economy pg 377 Crouzet
The Victorian Economy footnote 17 pg 377 Crouzet
The Victorian Economy pg 378 Crouzet
The Victorian Economy table 29 pg167 Crouzet
The Victorian Economy pg 378 Crouzet
The Victorian Economy pg 380 Crouzet
Economic Change In England pg23 Sayers
The Victorian Economy pg 381 Crouzet
The Victorian Economy pg 383 Crouzet
The Victorian Economy pg 384 Crouzet
The Victorian Economy pg 386 Crouzet
The Victorian Economy pg 408 Crouzet
The Victorian Economy pg 420 Crouzet
The Growth Of The International Economy 1820-1920 pg 150 A.G.Kenwood and A.L.Lougheed
The Growth Of The International Economy 1820-1920 pg 70 A.G.Kenwood and A.L.Lougheed
The Growth Of The International Economy 1820-1920 pg 75 A.G.Kenwood and A.L.Lougheed
English Culture and The Decline Of The Industrial Spirit 1850-1980 pg 167 Wiener
The Victorian Economy pg 421 Crouzet