Do Lower Levels of Productivity amongst British Firms Compared to Their US Counterparts in the 19th Century?

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During the nineteenth century, Great Britain was a very mature industrial economy, so their low productivity levels do not automatically imply failure because their potential for industrial growth was far more limited (Magee 2004, p. 97), whereas America was still very young and was experiencing a rather abrupt shift out of agriculture and into services (Broadberry 2009, p. 379). Therefore, it must be understood, that “ factors other than manufacturing’s dynamic economies of scale can clearly affect productivity and it may well be these that are of greater importance (Magee 2004, p. 96)”, which illustrates that more than just manufacturing productivity is necessary in evaluating an economic status. With that being said, by drawing on the …show more content…

81). Therefore, all of this illustrates that the British family firms had a completely different consumer demand than America, which did not allow them to adapt similar mass-production techniques, thus explaining their lower levels of productivity. In the nineteenth century, British firms were strong competitors in exporting compared to America. British firms were responsible for forty-three per cent of world trade in manufactured goods, which is a number that confidently supports their unwavering presence, regardless of their low productivity levels (Magee 2004, p. 82). With a strong exporting presence, Great Britain was known as a ‘workshop of the world’ because many foreign countries relied on them for certain products, in comparison to the Unites States, who were only responsible for about six per cent of world trade in manufactured goods (Magee 2004, p. 83). Therefore, Great Britain’s strong exporting presence was due to their efficiency of their craft-based production system, which also explains that their low productivity levels do not imply failure because, even though America had higher productivity levels, almost half of the world depended on British products. On a final note, it is important to conclude that any comparison of growth does not reveal anything about the direction of causation, especially in the case of Great Britain and America in the nineteenth century because both economies were very different

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