AHC/WI: Delay/ slow down British economic decline post 1870
- Thread starter Thomas1195
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Sans computers, value-added growth has declined by .04% annually between the years 2000-2011. That's without factoring in the input price bias which goes into deriving the aforementioned number, which reduces real value-added by another .02%.
https://www.brookings.edu/wp-conten...-past-and-potential-future-baily-bosworth.pdf
Before you go and say something along the lines of "if you include computers manufacturing output increases", understand what you're saying, and what i'm saying. If the British during this time period, with a manufacturing economy which was rather diversified, saw a decline in all industries except the production of textiles, with the latter seeing an increase in value-added such that it pushes manufacturing output for the nation into growth in the aggregate, would you call that a success?
Imagine, for a moment, if the demand for the one good which is produced in the Portugal of Adam's Smith magnum opus, or this hypothetical England, is substantially decreased? Gone is the wealth of those nations, as is the wealth of Saudi Arabia when the oil market collapsed.
Now, imagine that, for whatever reason, the value of computer electronics collapses. Or, better yet, the more likely scenario of it finally being wage-pushed overseas along with the rest of US manufacturing. You can certainly claim that another industry would pop up, and I would be in no position to outright deny it as nobody can predict the future, but the USA's ability to weather any sort of transition in such an event is becoming increasingly unlikely as its manufacturing continue's to loose its diversity.
No, finance is a service, not an industry.
https://www.imf.org/external/pubs/ft/fandd/2011/03/basics.htm
Science, meanwhile, is...
https://en.wikipedia.org/wiki/Science
I was more talking about the worker productivity and wage stats.
According to you!
I don't mean to be facetious, but what criteria are you using to make these assertions about what is and isn't "high tech"?
For people in the period 1870-1930s which you seem to be talking about steam powered machinery, particularly railway locomotives, are still high tech. Engines like Mallard are specifically designed to be modern, sleek, and capable of sustained high-speed.
The two key issues with this thread, as I see it, are:
1. That you aren't being clear with people about the criteria you are using. Hence the current argument about GDP, science, and the financial sector. Are you using contemporary definitions from the period? (In which case financial services as we call them were considered an industry like steel or electricity production). Or are you using a modern criteria of what is and isn't high tech? Because you haven't shared that with us at all, hence my point about Newcastle and lighting. You are right that, overall, Britain lagged behind the US in adopting electricity for a number of purposes, but you were also claiming that there was little intellectual or industrial capacity for electricity in Britain which isn't true. It just wasn't utilized. You need to be clear about your criteria and maybe we can help you better!
2. All of these ideas are fine, but shouldn't we be concerned with implementation. If you question is "How could Britain have staved off relative industrial decline 1870-1930s?" then you need to explain not just what the changes to be made are but how you see these changes being achieved in Britain at the time. This, for me, is where the wheels come off your argument. Your tariff reform points don't add up, economically or politically, for example. How do you see this being put into practice on the ground and how are you going to overcome the historical conditions that OTL meant that these things didn't happen?
I don't mean to sound negative - it is an interesting question. But at the moment it's not entirely clear what you are asking us to answer because you seem to have your own criteria in play.
Thomas1195
Banned
Well, according to economic historians who studied this era, they considered industries emerged from the Second Industrial Revolution as high-tech industries. And most of them considered industry as just production of visible goods when they talked about decline.
Hi. I take it you've heard the term "Service Industry"?
If you want to tie this discussion to only Secondary Industry, then fine - but it is a widely accepted and known term in economics (which this debate is widely about), that there is Primary, Secondary, and Tertiary Industry - Finance is quite comfortably in Tertiary Industry.
Also, again title - this was about the Economy. Secondary Industry is simply part of the economy, which GDP is a fine measure of. If you're going to quote the IMF for terms, then at least have the decency to recognise common economic nomenclature.
Frankly, the only thing that is at all helpful to this conversation I've seen on this page seems to be "The UK could have diversified more", which was well countered by "They literally didn't have enough labour", which is again countered by me, on the first page by "It has the rest of the Empire".
In the context of the time. Not universally. Heck, STEEL was High Tech manufacturing in the context of Medieval Europe, but we certainly wouldn't say so now. Whereas you've ignored the context previously of the steam engine being high-tech at its time, because you wouldn't call it high-tech now.
Thomas1195
Banned
EDIT: according to economic historians who studied this era, they considered industries emerged from the Second Industrial Revolution as high-tech industries during 1870-1914. And most of them considered industry as just production of visible goods when they talked about decline. I mean sectors that emerged after 1870.
I will now listen to every other possible views from you guys
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It's unfortunate that discussion has turned to refutations of Britain being anything other than an abysmal loser, since the question is an actually interesting one.
Do the board's experts have any ideas for how British manufacturing could stay ahead in total output of, say, Germany? (I'm going to assume staying ahead of the USA is unlikely given the sheer disparity).
With the population discrepancy, it seems intuitive that any solution will require significantly stronger growth in productivity of UK secondary industries - how though, I haven't a clue.
There would be interesting consequences for European diplomacy. Does a stronger UK remain in Splendid Isolation for longer? Does Germany not challenge the Royal Navy? Does a stronger UK weaken or enhance arguments to consolidate the Empire?
Do the board's experts have any ideas for how British manufacturing could stay ahead in total output of, say, Germany? (I'm going to assume staying ahead of the USA is unlikely given the sheer disparity).
With the population discrepancy, it seems intuitive that any solution will require significantly stronger growth in productivity of UK secondary industries - how though, I haven't a clue.
There would be interesting consequences for European diplomacy. Does a stronger UK remain in Splendid Isolation for longer? Does Germany not challenge the Royal Navy? Does a stronger UK weaken or enhance arguments to consolidate the Empire?
Thomas1195
Banned
I think there must be measures to prevent dumping, and this may end free trade.
Next, protecting and subsidizing infant industries like synthetic dyes and electrical. For example, the electric lighting boom in early 1880s must be sustained by protection from gas industry until the cost of production fall due to experience gains.
Third, building a centralized, standardized electricity supply system consist of large-scale power plants (a system like in North East England OTL, but nationwide, like National Grid in 1930s). This would enable the mass production of electrical equipment because they would have been standardized. But this would require abandoning laissez faire.
Export subsidies if necessary.
Improve technical education, promote STEM in unis.
Impact?
A stronger UK might deter German adventurous expansions. But I think ww1 would happen anyway.
However, the UK war effort would be much more efficient, and their military production would be significantly higher than OTL. This would reduce the amount of debt owed to the US significantly. You could imagine a scenario in which the UK was able to produce millions of shells and over 1 million rifles per year from 1914-1915 without importing machine tool and steel from the US.
hipper
Banned
that is an interesting approach and it pits the economic interests of the UK against the economic interests of the Empire as a whole.
simply put the UK economic model was to take in raw materials from the empire (formal or informal) and export finished goods. with the earnings coming from the added value provided by making finished goods
the problem was the limited number of workers in the UK and to be fair to Thomas the paucity of technical education in the UK compared to Germany which is the source of German technical advantage.
the solution was of course to invest in industry in the empire and dominions generating a larger Industrial capacity there
now this did happen in the late 1930's the UK's the largest investment in steel plant by the UK was at the Tata steel plant in India
the trouble was that in the 1880's and 1890's technical education in India was even more limited than it was in the UK.
the other problem is that there is more money to be made by investing in steel plants in the US than by investing in the empire as there is a bigger market there protected by tariffs.
in short the only way for the UK to increase the size of industry is to deliberately make itself poorer by restricting cheap goods from abroad and directing flows of private capital to approved destinations
the only advantage of this over sized manufacturing sector would be the ability to ramp up production in a world war.
but who plans for that ? the answer is of course Germany in two world wars. The outbreak of WW1 after the completion of the Kiel canal expansion is a bit of a clue.
cheers Hipper
Thomas1195
Banned
A little bit poorer in the short term, but much better off in the long run if they invest in their own industrial base as well as industrializing Empire, especially Canada and Australia
Now, it would not be fun for Germany in a scenario in which the UK could produce millions of shells and rifles as early as 1914-1915. More modern industrial methods would also allow them to produce better shells, thus butterfly away the qualitative aspect of the shell crisis.
Saphroneth
Banned
But that requires Britain to be preparing for a major land war in the short term!
Weapons and ordnance are specialist work. The idea of Britain being able to fully fulfil the demands of an industrial war in 1914 - when the largest British army ever deployed to the field at one time before then was quite possibly at Waterloo a century earlier, when the British Army is deliberately smaller than that of almost any other power, and when the demands of the front line exceeded the ability of nations like Germany (who you laud as being "good" compared to the British "bad") to come to terms with - is silly. It would require prescience.
As it was everyone retained roughly the same shell reserve per gun pre-war (more would lead to the danger of obsolescence).
The French suffered a shell crisis within six weeks of the opening of the war. The British and Germans both lasted until November.
The French and Germans had their own shell quality problems too, it wasn't just the British - British shells failed to detonate, German and French shells had a tendency to go off in the barrel.
The scale of the artillery warfare on the Western Front was far beyond that which anyone had expected, so the shell crisis is probably impossible to prevent - it could be alleviated, somewhat, but to have industry capable of the specialized job of shell production with a maximum capacity anything like that needed in WW1 is to have industry which is far overengineered to what you need in peacetime.
Practice by batteries in 1913 used around 600 shells per battery per year for regulars and about 200 per year for territorials or reserve
http://hansard.millbanksystems.com/lords/1913/jul/02/the-army#S5LV0014P0_19130702_HOL_86
Meaning less than 100 shells per gun per year. (Battery = 6 guns)
OTL the retained reserves were something like fifteen years of peacetime training; to have sufficient capacity to straightaway produce shells at the rate required by the First World War would be fantastically over-engineered for peacetime and would require well over 95% of the capacity to go unused in a given year - and you'd have to replace it all in 1900, and again in 1906, or whenever new artillery pieces are adopted.
Given that British policy was to prepare for a naval war, and given that the Germans who prepared for a land war were caught out so by the demands of WW1, I think it is infeasible for the British to have such a large shell manufacturing industry. Nobody on Earth could buy enough in peacetime to make it remotely profitable.
ED: rifles are similar. The British in 1914 had actually just decided to switch service rifles, but the war intervened and they just made scads more Lee-Enfields instead. The reason they couldn't supply their needs was because of the first mass army mobilization in British history - everyone who was expected to fight had a rifle, with plenty of spares, it's just that "expected" was roughly a million and instead over ten times that number went to war.
Nobody can conjure up nine million rifles in a year unless they already have a reason to produce hundreds of thousands of rifles a year in peacetime. To give you some idea of how fast the US did it, say, they peaked at 100,000 a year of Krag rifles in 1899 - after a fairly hefty war by their standards. The British have a larger army, but not that much larger that they need to be able to produce a million rifles a month.
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Saphroneth
Banned
Thinking about the specific issue of the shell and rifle crisis, then there is a fairly simple PoD for that one - the post-Boer expansion of the British Army. I've seen at least one reference that suggests the army was planning on doubling again when cost caused a reduction instead - if you had some kind of invasion scare about that time (1906 from memory - perhaps the Germans get their Dreadnoughts going early?) then you could have the funding to the army increased enough for them to do the doubling again, and that means that industry contracts are awarded to basically completely re-equip the British Army all over again (complete with artillery and rifles) meaning that they've just built about half a million rifles and a full artillery park and then had to build twice as many shells as OTL.
It's not very much, of course, but it is more than OTL and it relies on expanding the demand the Army has.
It's not very much, of course, but it is more than OTL and it relies on expanding the demand the Army has.
Saphroneth
Banned
No it wouldn't, that is unless you assume that Germany had their mass-produced shells going wrong (and exploding in the barrel, sometimes) because it entertained the landsers. (Or unless you assume that Germany wasn't the modern industrial paragon you seem to present it as, of course.)
ED:
Did you just delete a post because I showed it was wrong?
Thomas1195
Banned
During Napoleon war, Britain was the biggest arm manufacturer in Europe and they armed the whole Coalition.
So, if they predict that there would be a war (Fisher actually correctly predicted the war), they should prepare (not 9 million a year, no, just 500k-1m in 1914 and more in 1915), also to arm other nations like Russia, Italy, Belgium or some Arab factions.
If the prewar shell producers were better equipped with more modern machinery, they would have ramp up more easily and produced more than their OTL level, thus would be able to actually meet demand during the early period. As a result, fewer new factories would be required (building new plants need money). A similar logic could be applied for ball bearings, magnetos (all motor vehicles and planes need magnetos), dye for uniforms, pharmaceuticals, optical instruments or electrical equipment, because if these industries were well-established prewar, they would not need to build so many new factories from scratch to produce them. Or a stronger machinery industries would mean less import from the US (especially to equip the new factories). The money saved could be used to build warships, especially escorts.
Well, tying into the idea of the expanded army, perhaps that can be what happens with the money I suggested earlier?
I'd suggest the PoD is that the investors who so charitably supported the government during the Napoleonic Wars start pressuring the government, threatening to call in their debts or other such recourse. This sentiment leads to the government maintaining income tax on the pretext of repaying the debts faster, whether the investors/debtholders maintain their threat or not. The money is then used to increase the debt repayments but primarily to begin an industrialisation program throughout the Empire.
Some investments are at home, and deals are given in exchange for forgiving the governments debts (in some cases, the asking for forgiving the debts is to maintain the pretence for the Income Tax, it is regularly not agreed to). This increases capacity throughout the Empire, without sacrificing the British Textiles industry. Some home industries such as Newcastles Electrical Lighting is subsidised, enabling them to provide electrical lighting throughout the Empire. No tariffs, just significant subsidy/"Buy In Britain" campaign.
Outside of Britain they support budding entrepreneurs in South Africa *cough*Rhodes*cough* and India/Burma.
However, this is creating a lot of overhead for the British Government, so despite some objectives for infrastructure (i.e. Build this railway so we can move troops), they generally support railway construction for "domestic" purposes (as in, for the colonial economy, not to extract).
The increased taxes from the colonies through economic growth, and income tax (either continuation or institution - I'm unaware if the colonies had to pay income tax), the entire program develops the economies. Does this butterfly the Boer war? Unlikely. Does it change it? Probably. Assuming the Empire still wins, it is able to use the income from increased industrialisation in the colonies and tax revenues to maintain the expanded army, and thus the demand for a larger military-industrial complex.
There, income tax to Boer War army in what I think is a reasonably plausible outline, and possibly the policy that keeps the Empire united. Hell, half the reason famines in India were so bad was the concept of "Money Famines", with stronger local economies that aren't as reliant on the monsoons, India and the Empire might stay united (even if it is forced to federalise). Eventually however, textiles likely moves to India, leading Britain to invest more at home.
With strong colonial economies wanting devolution, first comes local powers, and then because of the economies in question have different demands/needs, an alt-Keynes brings up the Stirling Standard.
I'd suggest the PoD is that the investors who so charitably supported the government during the Napoleonic Wars start pressuring the government, threatening to call in their debts or other such recourse. This sentiment leads to the government maintaining income tax on the pretext of repaying the debts faster, whether the investors/debtholders maintain their threat or not. The money is then used to increase the debt repayments but primarily to begin an industrialisation program throughout the Empire.
Some investments are at home, and deals are given in exchange for forgiving the governments debts (in some cases, the asking for forgiving the debts is to maintain the pretence for the Income Tax, it is regularly not agreed to). This increases capacity throughout the Empire, without sacrificing the British Textiles industry. Some home industries such as Newcastles Electrical Lighting is subsidised, enabling them to provide electrical lighting throughout the Empire. No tariffs, just significant subsidy/"Buy In Britain" campaign.
Outside of Britain they support budding entrepreneurs in South Africa *cough*Rhodes*cough* and India/Burma.
However, this is creating a lot of overhead for the British Government, so despite some objectives for infrastructure (i.e. Build this railway so we can move troops), they generally support railway construction for "domestic" purposes (as in, for the colonial economy, not to extract).
The increased taxes from the colonies through economic growth, and income tax (either continuation or institution - I'm unaware if the colonies had to pay income tax), the entire program develops the economies. Does this butterfly the Boer war? Unlikely. Does it change it? Probably. Assuming the Empire still wins, it is able to use the income from increased industrialisation in the colonies and tax revenues to maintain the expanded army, and thus the demand for a larger military-industrial complex.
There, income tax to Boer War army in what I think is a reasonably plausible outline, and possibly the policy that keeps the Empire united. Hell, half the reason famines in India were so bad was the concept of "Money Famines", with stronger local economies that aren't as reliant on the monsoons, India and the Empire might stay united (even if it is forced to federalise). Eventually however, textiles likely moves to India, leading Britain to invest more at home.
With strong colonial economies wanting devolution, first comes local powers, and then because of the economies in question have different demands/needs, an alt-Keynes brings up the Stirling Standard.
Saphroneth
Banned
And they did that not by having a massive peacetime arms industry, but by expansion during wartime.
Why? Everyone in the world expected the war to be a quick one, without enough time to train up new infantry.
They had a comparable production per gun to the Germans, and the Germans also had a shell crisis. Do you think the Germans were not equipped with modern machinery?
Those plants have to exist for the production rate - either they get built prewar or they get built during the war. If they're built prewar, then they cost money in subsidies without providing munitions to the scale they would if - during a war - they can be run out of contracts.
Establishing the industries involves cost. Establishing them when they're not economical due to competition requires a lot more cost.
And I assume you speak of money saved during the war - when the British were deficit spending OTL anyway and were buying everything the country could produce. If they wanted more ships and there was the slack to build more ships, they'd build more ships - the bottleneck was either production capacity or desire for ships, not money.
Thomas1195
Banned
My point is to have the existing arm factories modernized and reequipped with better machinery prewar so that they could produce more rifle (per day for instance) with the same amount of input (labour, machines...) when war break out, not building new ones prewar.
They had 40 years to build up new industries. That's enough to make them become well-established and profitable. Costs would reduce with experience gains, this is a rule for manufacturing.
Hang on, you're either assuming that there is demand enough to make up for the increased production. The problem with this is that at peacetime there isn't. You need an increased demand for weaponry. Considering that the two best customers (us and germany) are protecting their native manufacturers and are unlikely to buy the british guns, then it becomes an expensive investment to end up with the same sales figures, with no guarantee from their perspective that the potentially increased margins will pay off the cost of modernising.
This is why they need a larger market BEFORE they modernise.
Saphroneth
Banned
How do you tell when the war is going to happen, then? If you upgrade ten years too early, then you've not improved things; if you upgrade every three years, the capital outlay is going to be considerable.
But the British had arms industries at the time, for example - it's not like there was a hole in the market for those. As for the rest, trying to establish cutting edge industries is inherently incompatible with the idea that you'd have forty years to make them profitable - if you try to encourage new industries too zealously then you end up paying a whole hell of a lot of money to people who are never going to turn a profit at all.
In addition, you need people to sell to. OTL the British were selling guns to pretty much anyone who didn't buy Krupp (they sold entire ships to several countries in South America, as well as selling weapons to Japan, to Italy, to the Ottoman Empire, and even managed to sell to the US during the Spanish-American War.) Where's the extra market - France? Russia? Both had their own ordnance suppliers.