RETARDATION IN BRITAIN'S INDUSTRIAL GROWTH, 1870‐1913
| Author | H. W. Richardson1 |
| DOI | http://doi.org/10.1111/j.1467-9485.1965.tb00685.x |
| Date | 01 June 1965 |
| Published date | 01 June 1965 |
SCOTTISH
JOURNAL
OF
POLITICAL
ECONOMY
JUNE
1965
RETARDATION IN BRITAIN'S INDUSTRIAL GROWTH,
1870-1
91
3
H.
W. RICHARDSON
I
IT
is now generally accepted that there was a slowing down in the rate
of economic growth in the United Kingdom after
1870.
There is not
the same measure of agreement, however
as
to its extent or its causes.
The problem has received much attention
in
recent years but
i€
one
tries to' synthesise the results one is struck not
so
much by the mas! of
material
as
by the confusing and inconsistent picture which emerges
from a study of it. There are two main difficulties: the definition of the
problem and the interpretations to
be
put upon
it.
In regard to the
first, there are several questions which need to be answered.
Is
the
British experience to be studied as one support for the general hypo-
thesis of retardation in mature economies or merely as an instance
of a temporarily lower trend rate
of
growth resulting from
a
special
set of historical circumstances? What do we understand by the rate of
economic growth?
If
we
refer to the rate of growth
of
industrial pro-
duction the results are very different from examination of the rate of
growth of gross national product
or
of real income per head.
To
give
one instance, in
so
far as retardation is verifiable it seems to date from
1870
in
regard to industrial production but from the
1890s
in the case
of
GNP.
Is the retardation indisputable? The available statistics are
not beyond reproach, and are little more than rough, incomplete esti-
mates. Moreover, the slowing down indicated by
some
time series
is
relatively slight.
125
1
126
H.
W.
RICHARDSON
Once retardation is established, the difficulties involved in inter-
preting its causes are even more serious. The nature
of
the problem is
such that one
can
carry on adding cause upon cause until one has a
very long, impressive but meaningless list. There are
so
many argu-
ments possible that comprehensiveness
is
scarcely profitable. The first
aim
of
any inquiry must be to try to
assess
the relative weight to
be
given to the main elements in the situation but this is not made any
easier by the fact that causes fall into three groups: theoretical argu-
ments rooted
in
analysis
of
the nature of the
growth
process; economic
causes based on a study
of
the
prevailing historical situation, particu-
larly
of
Britain’s changing role
in
a
developing world; non-economic,
primarily sociological factors. These three categories have
no
common
denominator, and any attempt to
assess
their relative importance is
bound to be inconclusive.
The
most reasonable approach would seem
to be to put forward a number of
not
mutually exclusive hypotheses,
which must then stand
or
fall by their commonsense logic and by their
compatibility with accumulated historical knowledge. Finally, another
cause
of
confusion
is
that in the writings the problem of deceleration
has often become entangled with the separate (though not unconnected)
problem of the Great Depression (1873-96); obviously, the causes of a
declining rate of industrial growth are not the same as the causes
of
a
secular price fall.
I1
The aim
of
this paper is two-fold firstly, to point out some
of
the
questions raised by existing interpretations of Britain’s deceleration
in the period 1870-1913; secondly, to elaborate
a
new (or rather
hitherto little stressed) hypothesis which it is believed does not exclude
other explanations but helps to clarify them.
As
a
preliminary, how-
ever, some consideration must be given to what we understand by
retardation. Three main indicators may be chosen: the rate
of
growth
of industrial production, the rate of growth of
gross
or net national
product (national income) and the rate of growth of income per capita.
The choice between these will closely depend upon the purpose of the
inquiry. Industrial production will be
the
most valuable index if one
is
concerned with questions
of
industrial efficiency, entrepreneurial
activity, changes in the structure of exports, the effects of industrial-
isation overseas and the like.
If
one is seeking to understand develop-
ments in the whole economy (including the growth of the service trades
and expansion in the public services, etc.) the national income will
be more appropriate. Changes in real average incomes per capita
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