AHC: Make British industry as strong as possible during 1920s-1930s

Thomas1195

Banned
After the world war 1, Britain had suffered a postwar slump due to overcapacity and market oversupply. During the OTL interwar, although new industries in the South grew at fast pace, with the gap between Britain and Germany and the US being narrowed, overall growth was offset by the decaying of British staple and heavy industries, with the North suffered mass unemployment.

What could have been done to make British industries, both new and old, perform much better than OTL? The starting POD would be either in June 1915 or in January 1920.


One obvious medium term solution would be preventing the return to prewar Gold in 1925. But this would not tackle the underlying structural weaknesses in British industry.
 
One obvious medium term solution would be preventing the return to prewar Gold in 1925. But this would not tackle the underlying structural weaknesses in British industry.

Churchill might be persuaded to go for a qualified return to the Gold Standard where the value reflects the value of the Pound at the time.
This could also butterfly away the general strike. One the other hand, stronger economy means that Britain will probably have further
to fall during the Great Depression.

Maybe a coalition government between MacDonald's Labour party and Lloyd-George's Liberals with Lloyd George as Chancellor (either
of the Exchequer or the Duchy of Lancaster) and his recommendations are implemented. Couple this with a carrot and stick approach
to industrial reform.

Nationalise some ailing firms and sites e.g. Jarrow. Comprehensively reform labour practices and facilities in the state run industrial sites
and "enourage" other firms and labours to follow suit e.g. Offer better working conditions safeguared wages in exchange for more efficient
labour practices.

Buy small quantities of American/other modern machine tools, reverse engineer these, and use the knock offs in the regeneration/expansion
of industry.

Maybe establish a permanent body discussing Imperial economic policy from the 1923 Imperial Economic Conference
(this may be a factor in a more moderate return to the Gold Standard two years later).

More work on the practicalities of Imperial Free Trade at the 1932 conference.
 
Dark horse, here, what about Oswald? He hadn't gone fascist yet. Bring him into a national government 10 years earlier
 

Thomas1195

Banned
Buy small quantities of American/other modern machine tools, reverse engineer these, and use the knock offs in the regeneration/expansion
of industry.
Agree.

Nationalise some ailing firms and sites e.g. Jarrow. Comprehensively reform labour practices and facilities in the state run industrial sites
and "enourage" other firms and labours to follow suit e.g. Offer better working conditions safeguared wages in exchange for more efficient
labour practices.
I prefer forming a National Investment Board to lend or subsidize money to manufacturers with a condition that the borrowing firms must adopt new production methods. Rationalization and stratetic M&As would be carried out simultaneously to form larger firms. Only nationalize public utilities like power stations, roads and railways, as well as firms that are stubborn (but only temporary nationalization).

Maybe a coalition government between MacDonald's Labour party and Lloyd-George's Liberals with Lloyd George as Chancellor (either
of the Exchequer or the Duchy of Lancaster) and his recommendations are implemented. Couple this with a carrot and stick approach
to industrial reform
The best scenario would be the prewar Liberal government. This would be very likely to butterfly away Russian Civil War and Greco-Turkish War interventions, thus would allow for military spending cuts. A postwar Liberal government might also means no Geddes Axe at least on public services and education, while the Land Value Tax still in effect would be a big source of tax revenues for public works (by 1920s even Asquith advocated Keynesian approach).

Maybe establish a permanent body discussing Imperial economic policy from the 1923 Imperial Economic Conference
(this may be a factor in a more moderate return to the Gold Standard two years later).

More work on the practicalities of Imperial Free Trade at the 1932 conference.
The only problem was that both Lib-Lab were free traders.
 

BooNZ

Banned
After the world war 1, Britain had suffered a postwar slump due to overcapacity and market oversupply. During the OTL interwar, although new industries in the South grew at fast pace, with the gap between Britain and Germany and the US being narrowed, overall growth was offset by the decaying of British staple and heavy industries, with the North suffered mass unemployment. .
The reason for the productivity gap closing between British and German industries post war was the wartime boom for British industry and the wartime collapse of German industry significantly extended the British productivity lead over Germany. In the real world, the British post war slump ended in 1920 "After that year, British productivity actually grows faster on average than it did since the turn of the century"...

"...In the inter-war period, Germany fails to catch-up to her pre-war productivity position with respect to Britain. The German recovery of 1933-1938 may have done much to increase employment, aggregate demand, and the number of tanks in the German economy, but our data suggest that it was definitely not a productivity race."

http://personal.lse.ac.uk/ritschl/pdf_files/KETCHUP.pdf


The OP has cited [out of context] from the same reference in recent days, so ignorance is no excuse.
 

Thomas1195

Banned
The reason for the productivity gap closing between British and German industries post war was the wartime boom for British industry and the wartime collapse of German industry significantly extended the British productivity lead over Germany. In the real world, the British post war slump ended in 1920 "After that year, British productivity actually grows faster on average than it did since the turn of the century"...

"...In the inter-war period, Germany fails to catch-up to her pre-war productivity position with respect to Britain. The German recovery of 1933-1938 may have done much to increase employment, aggregate demand, and the number of tanks in the German economy, but our data suggest that it was definitely not a productivity race."

http://personal.lse.ac.uk/ritschl/pdf_files/KETCHUP.pdf


The OP has cited [out of context] from the same reference in recent days, so ignorance is no excuse.
The gap in new industries, ok? Like electric goods, like chemical (the formation of ICI). I mean the new industries grew very fast during interbellum, especially motor vehicle.

However, in this thread, I focus on Britain itself. The high growth of new industries in Britain was offset by the decaying of the staple heavy industries in the North. IOTL, the solution of the Tory government for them was still mainly pumping up these sectors, with some M&A, but without any radical measures to tackle the structural weaknesses in techniques, organization and industrial relations.
 

Thomas1195

Banned
However, most school history lessons teach students that British industries were outdated by 1900
 
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BooNZ

Banned
The gap in new industries, ok? Like electric goods, like chemical (the formation of ICI). I mean the new industries grew very fast during interbellum, especially motor vehicle.

No - your stated "overall growth was offset by the decaying of British staple and heavy industries", when in reality, "overall growth" for Britain was relatively healthy.

However, in this thread, I focus on Britain itself. The high growth of new industries in Britain was offset by the decaying of the staple heavy industries in the North. IOTL, the solution of the Tory government for them was still mainly pumping up these sectors, with some M&A, but without any radical measures to tackle the structural weaknesses in techniques, organization and industrial relations.

No - from an objective perspective, the growth of "new industries" like electrical and motor vehicle were simply "not material". The global glut in coal and shipping had far more impact on the British economy, but this was beyond the capacity of Britain's domestic policy to "fix". As the reference outlined, the British economy did reasonably well in the 1920s, all things considered.
 

BooNZ

Banned
However, most school history lessons teach students that British industries were outdated by 1900

Oh, I get it now. Your favourite history teacher is dating a Britisher [perhaps she has a thing for bad teeth]. Don't worry, once you hit puberty you can fantasize about girls instead of Germany's historial industrial development...
 

Thomas1195

Banned
Oh, I get it now. Your favourite history teacher is dating a Britisher [perhaps she has a thing for bad teeth]. Don't worry, once you hit puberty you can fantasize about girls instead of Germany's historial industrial development...
Try to pick up meanstream school history books. You would find similar conclusion, with countries' share of world manufacturing and the output of steel, pig iron and coal as backup figures. They do not compare overall productivity, sectoral productivity or GDP per capita...like professional historians.
 

Thomas1195

Banned
No - from an objective perspective, the growth of "new industries" like electrical and motor vehicle were simply "not material". The global glut in coal and shipping had far more impact on the British economy, but this was beyond the capacity of Britain's domestic policy to "fix". As the reference outlined, the British economy did reasonably well in the 1920s, all things considered.
For shipping, faster move to motorship would help. Also, radical measures to rationalize shipbuilding such as replacing a series of small yards with a big yards (similar to what happened in chemical industry), combined with M&A. This would reduce total operating costs and increase efficiency due to economies of scale, while the construction costs were partially subsidized by state. The industrial relation and union problems, which were more serious in staple industries, must be solved. Unions, dominated by skilled workers, often impose restrictive practices such as craft rule and resisted new technology. Nationalization would be the last resort for stubborn firms that resist new technology, like the Short Bros case IOTL.

You can create demand for coal directly by developing coal-based chemical industries like dyestuff, or indirectly via public works (which would require lots of steel, glass...) and boosting steel manufacturing. Also, rationalization of coal mines and the adoption of coal-cutting machines with state support would help. You should know that too many small producers would increase the total operating costs, as they could not benefit from economies of scale, and in many cases small producers could not afford to adopt modern technology as they are too capital intensive.

This topic is not going to compare Britain and Germany, but to find a way to make Britain industry perform as good as possible (or better than IOTL). For example, if Britain did not return to prewar Gold Standard (for instance, instead fix it at a lower level than $4 per pound), it could make the staple products more competitive in medium term.
 
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For shipping, faster move to motorship would help. Also, radical measures to rationalize shipbuilding such as replacing a series of small yards with a big yards (similar to what happened in chemical industry), combined with M&A. This would reduce total operating costs and increase efficiency due to economies of scale, while the construction costs were partially subsidized by state. The industrial relation and union problems, which were more serious in staple industries, must be solved. Unions, dominated by skilled workers, often impose restrictive practices such as craft rule and resisted new technology. Nationalization would be the last resort for stubborn firms that resist new technology (1), like the Short Bros case IOTL.

You can create demand for coal directly by developing coal-based chemical industries like dyestuff, or indirectly via public works (which would require lots of steel, glass...) and boosting steel manufacturing. Also, rationalization of coal mines and the adoption of coal-cutting machines with state support would help. You should know that too many small producers would increase the total operating costs, as they could not benefit from economies of scale, and in many cases small producers could not afford to adopt modern technology as they are too capital intensive (2).

This topic is not going to compare Britain and Germany, but to find a way to make Britain industry perform as good as possible (or better than IOTL). For example, if Britain did not return to prewar Gold Standard (for instance, instead fix it at a lower level than $4 per pound), it could make the staple products more competitive in medium term (3).

(1) A bit like what I had in mind with the carrot and stick approach. The carrot being assistance in modernising from the National Investment Board.
(2) The NIB provides an incentive for modernising, but what would incentivise mergers?
(3) Perhaps this would make a good starting point with other changes building on it for long term progress.
 

Thomas1195

Banned
(2) The NIB provides an incentive for modernising, but what would incentivise mergers?
In some cases, maybe supporting large firms takeover small ones.
Buy small quantities of American/other modern machine tools, reverse engineer these, and use the knock offs in the regeneration/expansion
of industry.
Plus send men (plus spies) to the US and Germany to study, like what Japan had done.
 
What with the qualified return to the Gold Standard and the Welsh Wizard back in the cabinet,
I think we might have established the basic premise of a TL.
 

Thomas1195

Banned
What with the qualified return to the Gold Standard and the Welsh Wizard back in the cabinet,
I think we might have established the basic premise of a TL.
Actually, we already had two: Rule Britannia and Keeping the British Liberal Party flag high.
 

Thomas1195

Banned
Did either of those use either of these as a PoD?
Well, I've just checked. Pipisme took a POD in 1923, while the Rule Britannia had a POD in 1915 like I've posted above.

The POD in 1920 was difficult as at that time the Tory-dominated Coalition, who IOTL opposed big capital spending on public works, was holding power.
 
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