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H 2 >Was the British entrepreneur the most important single reason for the relative decline of the British economy in the late nineteenth century? Despite a continued growth of production and wealth in absolute terms, the economy of "the first industrial nation" began to decelerate after 1870, in comparison with that of her closest competitors. This so called "decline" was caused by a number of factors not merely one as the question suggests, indeed Supple's foreword (1) asks, "Are we to be concerned with the rate of growth of total income or of manufacturing output? Above all, by what standards do we assess 'failure' or 'success'?" Derek Aldcroft's article, 'The Entrepreneur and the British economy, 1870 - 1914 published in 1964 spearheaded the broad indictment of the British entrepreneur (2). A/ They failed to adopt the best available techniques of production in many industries, ranging from ring-spinning and automatic weaving in cotton to the mechanical cutter and electrification of mines in coal. B/ They underestimated the growing importance of science, investing little in laboratories and technical personnel for research or for the effective exploitation of foreign research. C/ They over-invested in the old staple export industries such as cotton and iron, and were slow to move to the industries of the future such as chemicals, automobiles, and electrical engineering.
D/ They were bad salesmen, especially abroad. E/ They were insufficiently aggressive in organising cartels to extract monopoly profits from the world a t large. I intend to investigate these areas, in addition to labour relations, education and the class system, as I feel that they have a distinct bearing on the late Victorian economic climate. The "technological retarding" theories are strongest in considering the erosion of King Cotton's pre eminence, due in part to America's competition and, the critics suggest, the British cotton manager's lack of judgement. It is said that the slow adoption of the ring spindle in spinning, and the low uptake of the automatic loom in weaving seriously hampered those industries' competitive edge. The principle advantage of the ring spindle was it's operation by unskilled female staff, whereas the traditional mule required skilled (mostly male) operatives, thus saving on labour costs.
The disadvantage was that the ring needed more expensive cotton to make a given 'fineness' or 'count'. Given this information, replacement of old existing technology should only be undertaken if the total cost of the new technology is less than the variable cost of the old technique. In this instance, considering the costs involved in replacing mules with rings in existing plants, it appears that the decisions of British cotton masters were vindicated. Similarly, regarding the weaving industry, the advent of the automatic loom reduced labour costs, but were more expensive to install than the plain looms, consequently raising the capital costs per unit of output. In comparison, the saving in labour costs would benefit the United States, but not Britain. The installation of automatic looms would have exacerbated the losses suffered by the dwindling British textile industry, again vindicating the British entrepreneur's judgement.
Britain 's pre-eminence in production and consumption of iron and steel ended by 1880, when production was surpassed most notably Germany & USA. The slow uptake of technical innovation was key in the British decline, for instance the Gilchrist-Thomas process of removing brittle phosphorous from pig iron opened the way to the use of phosphorous -rich ores, in plentiful supply in North East England, thus providing the cheapest iron ore in the world for the production of steel. European steel-makers embraced this method in the 1880 s but Britain continued with the old acid steel making until the 1930 s. Blast furnace operation enhanced the efficiency of pig iron production. Newer steel works modernised their blast furnaces, whilst Britain continued with acid steel making.
| Years | United Kingdom | Germany | France | U. S. A |
| 1890 | 3, 579 | 2, 195 | 6 70 | 4, 275 |
| 1896 | 4, 133 | 4, 745 | 1, 160 | 5, 282 |
| 1900 | 4, 901 | 6, 260 | 1, 540 | 10, 188 |
| Steel Production (In thousands of tons) |
Here is the history of an industry that supplied one of the essential ingredients of modern economic life, is clear-cut evidence of a British resistance to technological change British entrepreneurs were not immune to criticism in the newer chemical industry, although in terms of employment the industry grew faster between 1881 and 1911 than any other industrial group in Britain. Any failure could only be attributed in comparison to the United States and Germany, where their output was in the ascendancy. The Germans specialised in dyes, drugs and photochemical products, the Americans in electro-chemicals. Britain in soap, paints, coal tar and explosives.
Consequently, British investors were unlikely to invest in British companies in direct competition with German or American firms, exacerbating the gap in these areas. The principal charges levelled against British entrepreneurs are that they retained the Le Blanc process in the production of alkali despite the superiority of the Solvay process, the retention of the lead- chamber process rather than the contact process in sulphuric acid production, and that research did not keep pace with Germany in respect of dyes and drugs, in particular, as indeed generally. It is this lagging behind in educational matters that Britain's 'decline' is often attributed, in comparison with Germany, where compulsory primary education was introduced much earlier. There was much closer articulation between the primary, secondary and higher education.
The British government contributed little finance, in contrast to the German state which financed teaching and research to a high degree. Nevertheless, note must be taken that it was perhaps the informality of the education system which allowed for greater flexibility and thus a capacity for adaptability and expansion. Vocational training was always passed over in favour of more academic pursuits, it was supposed, and thus the population of universities contained smaller numbers of science, technology, economics and business students than her competitors. There was only state intervention in British education as late as 1902, and the century's children and industries were generally regarded as ill -served.
The enduring failure of the British educational system to supply an adequate number of trained people to each occupational level produced and the sustained a vicious cycle of uncompetitive products, processes and personnel. Lacking higher education, top officials have been less attuned to innovations in products and production methods than executives abroad and less appreciative of their potential. More content with inherited product lines and manufacturing routines, British managers have satisfied themselves with work forces trained mainly on the job. (5) Eric Hobsbawm's comments hint at the explanation of this disparity between British and German higher education, that of availability (6). "The assimilation of the British business classes to the social pattern of the gentry and aristocracy had proceeded very rapidly from the mid nineteenth century, the period when so many of the so called ' public schools ' were founded, or reformed by finally excluding the poor for whom they had originally been intended. In 1869, they were more or less set free from all government control and set about elaborating that anti-intellectual, anti-scientific, games-dominated Tory imperialism which was to remain characteristic of them.
Unfortunately the public school formed the model for the new system of secondary education, which the less privileged sectors of the new middle class were allowed to construct for themselves after the Education Act of 1902, and whose main object was to exclude from higher education the children of the working class. Knowledge, especially scientific knowledge, therefore took second place in the new British educational system, to the maintenance of a rigid division between the classes. In 1897 less than 7 % of grammar-school pupils came from the working class. The British therefore entered the twentieth century and the age of modern science and technology as a spectacularly ill-educated people. The reformation of the British public school supplies the reason for what Wiener calls The Decline of the Industrial Spirit.
He maintains that the late Victorian aristocracy yielded some of their power to a middle class elite in return for their acceptance of proper aristocratic values, styles and the pursuit of gentlemanly leisure and political service. This outlook was compounded, Wiener maintains, by public schools and universities which were 'anti-science and anti-business'. Consequently, the next generation were divorced from ideas of technology and business in favour of a classically academic background. Sons from industrial business backgrounds quickly disavowed them, and the public school became a breeding ground for army officers and civil servants, not engineers and entrepreneurs. 'Oxbridge' fostered an image to represent a 'national way of life' of 'English-ness' a pre-industrial rural utopia which bore little resemblance to reality and seeped into a middle class 'culture', thus hampering industry, fostering a suspicion of industrial / economic growth and leading to a 'decline in the industrial spirit' Hobsbawm disagrees however. (7) "The absorption of the sons of grocers and cotton-spinners into the aristocracy was a consequence of the loss of impetus in British business not its cause. " He further maintains that in at least one public school in the 1880 s, 75 % of the students were studying engineering. Lund green however, goes as far as (8) refuting on several grounds, the proposition that Germany's apparent lead in science and technology 'brought about her economic predominance' If the case is proven that lack of education does not have any bearing in Britain's economic stature, what, if anything, is the cause of a generation of poor entrepreneurs, and what would be it's effect, if any, on the economy as a whole?
Sandberg ponders the principal economic consequences and concludes (9) "A managerial error, such as investing in the wrong technology or failing to junk obsolete equipment or failing to take advantage of a profitable...
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Research essay sample on British Entrepreneurs And The Decline Of Economy
