further the economy 1870-1914 Flashcards
(15 cards)
what should you look at when looking assessing economic decline - 7 things
- the problems within the economy
- the effect of global conditions of depression and slump on the british economy
-the competitiveness of the brtish economy relative to foreign comp
-the nature of the economy- the balance of payments
-the changing nature of industry and the manufacturing world - the move from staple industries to new industries
-the effects of free trade on the british economy and the call for tariffs in retaliation to those imposed by other economies
-the state of brtish farming and the effects of free trade
what does a depression imply and when was the great depression
-1873 in austria and and new york and it implies a cyclical problem that will end and return to normality
outline the strengths of gb manufacturing and evaluation- what shares of the global market were falling and stats
-manufacturing still accounted for 25% of british output (30% more people were employed in manufacturing then in 1870)
-innovative steam ships were dominated by britain in 1892 - 80% of the worlds steamships were british compared to 60% in 1900
eval- shares of the global market were falling
- gb’s avg industrial growth was 2.1% between 1900-1913 compared to 4.4% for germany and 5.4% for the usa
-share of global manufacturing output declines to 13.6% whilst germanys increased to 14.8% and the usa dominated with 32%
outline the problems with the steel industry and growth in america and germany
in 1910-1914 british ouput of steel was 7million tons whilst germany and the usa respectively
produced 15m and 27m. This concerned observers at the time. German and American steel industries were protected by tariffs and their protected domestic markets thus encouraged huge and integrated steel enterprises.
- in contrast british steel firms were smaller, atomised in distribution and family owned
-Nearly half of British steel was
specialist steel for ship-building, whilst Germany produced basic steel which began to be imported into GB by 1913.
outline the coal and shipbuilding industries
Coal and ship building remained as strong as before: coal exports more than doubled and coal output equalled 5% of GB’s national income. Only 8% of coal was mechanically cut in 1913 but then only 2% was so cut in Germany then. British ship-building provided 60% of the world’s tonnage and involved efficient family-firm single yard enterprises with skilled
labour.
outline cotton production and problems with it
Cotton production constituted 25% of exports but it was slow, unlike American competitors,
to use automatic looms or ring spinning which had been developed in 1860-90.
-However, this made economic sense at the time as the British cotton industry was based on skilled labour whilst its American counterpart relied on unskilled labour so mechanisation made
more sense.
-Cotton’s real problem was that over 50% of cotton exports went to one market, India, and this dependence became a real problem after 1918.
outline new industries that had developed in gb and their position- did gb lag behind
In new industries, the British record is more uneven: it dominated cable manufacture but the limited use of electricity inhibited the development of electrical engineering compared
to Germany which used it more.
- The undeveloped education system certainly inhibited the
growth of skills needed for new industries and GB was behind Germany in research and
development R&D). - The British car industry lagged behind continental producers only
slightly. Most British production was craft-based with only some assembly-based production but the real problem was that such a capital hungry industry needed a large
market and here the USA excelled: in 1913 Ford in the US produced 200,000 cars whilst Britain produced 3,000. The US produced four times as many cars as the whole of Europe.
outline the incipient weaknesses of GB manufacturing
-countries industrialised and their demand for british goods declined
-the family firm dominated brtish industry and discouraged economies of larger scale and modern management and long term investments needed for modernisation in newly competitive conditions
- Some British firms were huge like the textile firm J & P Coats which was twice as big as the largest German enterprise, Krupps. But mainly integrated multi-unit firms managed by professionals were more common in Germany and, especially, the USA (see Ford cars and Singer sewing machines) than in GB and such production was more efficient than family-firms.
- The American economy valued and promoted standardisation of products which improved efficiency and sales; the British economy valued skilled worker production for a range of different markets. Consequently, the USA promoted assembly line mass production of standardised goods for one large market whilst Britain relied on skilled labour
-Ship-building, however, was successful at the time and it was based on family-firms who benefited from geographical concentration in the NE, a culture of skills and the fact that GB controlled 35% of the world’s shipping.
why was productivity in the uk a problem, how was it measured and how did it compare to the us and germany
Productivity, especially when measured comprehensively as Total Factor Productivity (TFP), in GB was a problem and it fell below TFP rates for Germany and the USA. Productivity is important since it measures the output per worker and British industry was less productive than its competitors.
why:
-family firms lacked efficient mangerial methods and relied on skilled labour or unskilled labour rather than mechanisation
-lack of capital investements for the modernisation of production - usa 90% more capital intensive then GB, british industry tended to rely on short term loans
-higher amounts of unionisation in the uk- 1892- 13% of british labour was unionised compared to 4% in the usa and by 1911 the figure stood at 19%
-there was a lack of scientific innovation linked to industry in GB
why did the economy experience technical and scientific failure
-patents- the legal protect given to new industries were dominated by germany and the usa esp in new industries such as chemicals, cars and electrical engineering
-between 1883-1913 germany overtook gb in registered patents
-limited research and development in british firms most innovation was on an ad hoc basis - british higer education was behind that of germany and the us
-by 1900 there were only 677 new scientific graduates
-so they lagged behind in chemical industries- 60% were produced by germany and the usa compared to 11% of gb- however imperial chemical industries experienced prosperity
what was the problem with the growth of invisible earnings
it came from investment in competitors of british industry and those such as germany and usa were protected by tariffs and quotas
outline stats of british foreign investment
-increased from 1200m in 1870 to 4000m by 1914 and 60% of it went to foreign competition
- germany and the usa invested 12% of their gnp compared to britains 5-7% which compounded the problem
agriculture problems
-Agriculture’s share of national income fell from 20% in 1851 to 10% by 1881;
The numbers employed in agriculture fell from 1.7m to 1.2m between 1851 and 1911;
Agricultural output fell by 20% between 1851 and 1895.
The fall in prices hit agriculture badly; many tenant farmers who had previously bought land with mortgages during the boom of the previous ‘high farming’ period were bankrupted whilst many rural workers were made unemployed. Arable farmers (growers of wheat, barley and grain) were particularly hit hard. The flood of cheap imported grain once only threatened by free trade now became a reality in this period and by 1900 to 1914 only 25% of wheat consumed in GB came from domestic farmers – the rest came from exports (mainly from the USA but also from Russia).
This was a huge problem as grain (wheat was consumed by 95% of the population) was a cash crop (provided important cash for farmers), the price of grain dropped by third between 1874 - 1914 (even more for wheat which continued a price decline for 60 years from 1874). British grain farmers could not compete with the price of cheap imports but this process was a long-term process flowing from free trade policies of the 1840s and high farming techniques could not stop it (it failed to increase yields anyway). This is shown by the loss of land (aka acreage) dedicated to wheat which began before 1873. In 1840 it stood at 4m acres; by 1914 only 2m was used.
Global trade impacted on other food stuffs grown: the tin can and refrigeration could now enable the transportation of meat and fruit from around the world but, fortunately for British livestock and fruit farmers, the railways of Britain enabled a domestic supply chain of fresh products that could successfully compete with frozen or canned products. Livestock and fruit/vegetable farmers remained competitive and reasonably successful.
what strengths were there in agriculture
dairy and milk farmers were most successful as they fed demand from urban city centres and it was the only agricultural prices that remained stable
- farmers specialised with cattle or milk which accounted for 40% of farming by 1911. During the period farmers had to adapt or perish, specialise and survive. Between 1875 and 1914 the average farmer produced a profit that only covered a quarter of his rent to his landlord and a parliamentary enquiry found that many farmers make ‘little more than nothing and some make less than nothing’.
