British decline can also be attributed to its huge decline in the manufactures industry as 'manufacturing is the key to the modernisation of the economy' (Eatwell, 1982). Manufactures provide 'unlimited scope for technical change' (Eatwell, 1982) as change leads to development which should again lead to change but in all sectors such as agriculture and services. Manufacturing industry should be able to 'satisfy the demands of the consumers at home' as well as being able to 'sell enough of its products abroad to pay for the nations import requirement' (Coates, 1994).
During the industrial revolution British industry strode ahead as bottlenecks were overcome by British invention, however as the nineteenth century drew to a close British entrepreneurs 'waited for them to be solved by someone else' (Kindleberger, 1996) as 'institutions will adapt when it is cheap and easy, not when it is expensive and difficult' (Kindleberger, 1996). British heavy industries began to fall behind after 1870, between 1871 and 1885 British percentage growth in manufacture was 0. 6 compared to 1.7 in Germany and 2. 7 in the US.
Technology had diffused abroad following Britain's rise to economic primacy and the lesser industrialised countries started up quickly to produce goods of a higher quality: 'German industry and trade, being younger than British, naturally grew faster… '(Marshall, 1920) German furnaces for steel production were fifty per cent bigger than British and its world output grew from 15 per cent in 1880 to 23 per cent in 1913 whilst Britain's fell from 31 per cent to 10 per cent.
In 1913 Argentina and India bought more British steel than Europe as Britain became increasingly locked out of fast growing European and American markets which meant 'British manufacturers didn't stand a chance' (Eatwell, 1982) in competing with Germany and the U. S. Britain also had 'over-commitment to the older industries' (Saul, 1969) as before 1914 many of these older industries like cotton textiles were still profitable and so justified investment, where as German industry was growing rapidly due to an 'irresistible urge' (Richardson, 1965) to invest in new industries.
In Britain the old industries led to traditions which did not promote the development of new industry alongside old such as the prestige of education and social standing and the 'inability of engineers… to undertake the wholesale rethinking of productive processes' (Saul, 1969). The opposition of trade unions and workers may also have hindered development of industry, specifically in the 1897 workers lock out which arose from contention over new types of machinery.
There was also disharmony between workers and management. At the end of the nineteenth century there was a 'decline in the industrial spirit' (Wiener, quoted in Kindleberger 1996) as Britain lost its interest in catching up but wanted to maintain its dominance and traditional systems. There was also a lack of technical education in Britain despite the establishment of scientific institutions as the view was that 'technical education was for "them" not "us"' (Kindleberger, 1996).
The merchant market which developed in Britain also seemed to lack motivation to improve as it 'imposed a barrier between the consumer and producer' (Kindleberger, 1996) which slowed the development of products to suit consumer need. There was a lack of vertical integration within sectors which meant British producers fell behind. Before World War 1 Britain produced '60 – 80 per cent of the world tonnage' (Kindelberger, 1996) and could sell its old ships again on the world market.
Skilled shipwrights meant that Britain could still compete despite the highly organised building techniques used in Europe and the United States but as technologies developed shipwrights resisted encroachment and British shipbuilding became uncompetitive by the end of World War 2. Britain was also at a disadvantage as the first industrialised nation as its developments were no always standardised. For example the railroad industry in Britain had 'two hundred types of axle boxes, forty different types of handbrake for rolling stock…
'(Kindleberger, 1996) which meant standardisation would require investment throughout the industry, newly industrialised nations can build standardised equipment from the start. There is debate as to when British decline began but dates range from around 1870 (Kindleberger) although Saul's book 'The myth of the Great Depression 1873 -1896' is written to show that decline did not set in until post World war 1 and that the period 1873 – 96 was one more of change, or in cases lack of it within British industry.
The industrial revolution set Britain ahead as the first industrial nation but this also provides a disadvantage, as technology spread other countries began to industrialise and modernise more than Britain as it was cheaper to use the most modern technology from the start not to replace and renovate. This lead to better and cheaper products being produced abroad so that '"made in Germany" proved to be a mark of quality' (Kindelberger, 1996). France and Germany established financial systems to stimulate industry and so began to increase their share of world exports at British expense.
Britain also lost out as other countries imposed tariffs to block British goods which cut Britain out of the fast growing European and U. S markets. British industry soon started to lack the innovation that had driven the industrial revolution and change became slow as the US and Germany pushed forward in industrial innovation and new technology like chemical dyes. The Boer war saw Britain secure its Indian trade routes but at a cost as the empire took its toll on British finances.
The First World War saw Britain slipping out of economic primacy as its export industries crumbled following a return to the gold standard, further sterling devaluations would see Britain fall behind further after the Second World War. Bibliography World Economic Primacy 1500 – 1990, Charles Kindleberger, 1996 Oxford University Press The Myth of the Great Depression 1873 – 1896 2nd edition, S. B. Saul, 1969 Macmillan Whatever Happened To Britain? , John Eatwell, 1982 British Broadcasting Corporation Britain in decline 4th edition, Andrew Gamble, 1981 Macmillan The question of UK decline, David Coates, 1994 Harvester Wheatsheaf