How would British economy looks like without ww1?

Thomas1195

Banned
But, and I understand how hard this is to project, would a Labour majority government come into power in this timeframe? Is Labour in government a certainty, or a product of the economic slowdown post-War and the economic crash? Personally, I think a Labour government would need to be part of a Coalition first and then form a majority government much later, say the mid forties or the fifties.
Not sure. Liberal Party was still a strong power in 1914.

The railways were a service industry, therefore they need an industry to service to make money. AFAIK (and I don't know this as well as I should do) the decline in Britain's staple industries after 1913, i.e. coal, steel, cotton and shipbuilding hit the railways particularly hard. If there had been no World War One those industries don't loose markets which would have created more traffic for the railway companies to carry. The result would have been bigger profits for the railway industry, some of which can be invested in electric traction.
Maybe even a improvement of the railway network that keeps industrial traffic to the rails as opposed to the roads?
Well, Stenz raised a good point. The rise of the motor vehicle industry would be a big challenge for railways. Note that the living standard would be higher than IOTL (due to the absence of mass unemployment), which means higher demand for cars. Rising demand for cars would lead to more road construction. But I am not sure the construction of roads would be more than just improving and enlarging existing roads like the prewar Road Board, due to lower level of state intervention. You should not expect private firms to construct trunk roads without government subsidies and/or orders.
 
Well, Stenz raised a good point. The rise of the motor vehicle industry would be a big challenge for railways. Note that the living standard would be higher than IOTL (due to the absence of mass unemployment), which means higher demand for cars. Rising demand for cars would lead to more road construction. But I am not sure the construction of roads would be more than just improving and enlarging existing roads like the prewar Road Board, due to lower level of state intervention. You should not expect private firms to construct trunk roads without government subsidies and/or orders.
There would have been some loss of traffic to the roads. That was inevitable.

However, lorries are not good as trains at carrying things like coal from the West Durham mines to the North Sea ports or the Welsh valleys to Cardiff and Swansea. If coal exports had not declined so badly (and without World War One they wouldn't) all that traffic would have been carried by the GWR and LNER which were the two railway companies most badly affected by the 1920s slump in British heavy industry.

Without World War One there won't be tens of thousands of Army surplus trucks to sell at low prices in 1919 and there won't be tens of thousands of recently demobbed Royal Army Service Corps drivers to buy them. Therefore no kick start for the road haulage industry. There would still be one, but it would take longer to develop.
 
Without the war London would remain the undisputed world financial capital, including investment banking, insurance, etc. Despite the wars, London can still be considered an equal of New York in terms of global finance. If we look at the largest banks in the world in 1913, British banks were 9 out of the 20 of the largest in the world as shown below. Even with the United States, Russia, Germany, and Japan emerging as the great powers in the century, London and Paris remained the hubs for world finance and as a result Britain and France were the world's leading creditor nations with Germany third and the U.S. fourth. Capital markets are always slower to respond to the economic realities it seems as Vienna was still fifth and not far behind New York, with several large banks being based there.

British overseas investments totaled $20 billion in 1914, and were more than double of France's at $9.7 billion and Germany's $5.8 billion. Of British capital invested abroad, only $1.05 billion was invested in Europe versus $5.4 billion for France ($2.5 billion in Russia alone). Foreign investments generated nearly $1 billion per year in income, or around 10% of the national income.

TOTAL LIQUID ASSETS 1913
1. Imperial Bank of Russia $612,829,000
2. Lloyds Bank $507,605,000
3. London City and Midland Bank $456,643,000

4. Credit Lyonnais $435,060,000
5. London County and Westminster Bank $429,780,000
6. Deutsche Bank $384,463,000
7. Societe Generale $352,885,000
8. Bank of England $347,259,000
9. National Provincial Bank of England $330,348,000

10. HSBC $299,533,000
11. Barclay & Co. $295,912,000

12. Comptoir National d'Escompte de Paris $275,317,000
13. Bank of Spain $274,062,000
14. Direction der Disconto-Gesselschaft $243,325,000
15. Dresdner Bank $233,203,0000
16. Banco de la Nacion Argentina $230,010,000
17. National City Bank (New York) $215,420,000
18. Parr's Bank $212,515,000
19. Russian Bank for Foreign Trade $209,337,000
20. Union of London and Smiths Bank $204,802,000

In terms of trade, Britain was still the world's largest trading nation, but in several markets it was being eclipsed by the United States and Germany. Russia for instance imported nearly 4 times as much from Germany as it did from Britain in 1913. British exports still dominated trade with India, the dominions (with the exception of Canada), the Southern Cone (Argentina, Brazil, Chile, Peru and Uruguay), the United Staes and much of the British Colonial Empire. In Europe France, Greece, Portugal, Sweden and the Ottoman Empire were the only countries where British Imports were number 1.

German imports dominated much of Europe, with German imports dominating every single one of its neighbours except Belgium. Even politically hostile France imported almost as much from Germany as it did from the UK in 1913. Additionally, in South America German exports had raced ahead of France and in Mexico and Central America ahead of Britain. Unlike Britain however, the bulk of German trade and investment was firmly oriented towards Europe. It was probably for that reason that Germany fought two world wars to achieve political dominance on the continent.

With regards to manufacturing, the Britain's manufactured goods were losing out to both German and American firms, especially in industrialised economies. The rise in coal exports to European countries increased and this was seen as a worrisome trend by economists. Textile exports were nearly one-fourth of British exports, with 14% of British exports being textiles to India and the Dominions. The exports of manufactured goods to foreign markets remained stagnant and was lower in 1913 than in 1870, while those to the Empire grew by 38%.

Nearly one-fourth of British imports were manufactured goods, with Germany being the leader and Britain having a deficit in manufactured goods to Europe. In the dominions, British goods were being eclipsed by American goods as evidenced by the importation of American marques (often built in Canada) to Australia, New Zealand and South Africa. In India, Japanese textiles were quickly becoming a threat and were already dominating trade to China.

Shipping, insurance, banking and commerce made up for the British trade deficit. Shipping rose steadily having reached 60% of world tonnage in 1890, but decreasing to 40% in 1914. Trading in commodities was also important as London had the leading exchanged for many of the world's goods. Many foreign companies raised capital in the London market, with American railways, etc all being backed by loans in London. In short, Britain would still evolve into a financial/service-based economy, but one of much greater preeminence in the world. This would be due to several factors including it being an English-speaking area with very prominent institutions of higher learning (Cambridge, Oxford), along with a commitment to rule of law, government transparency and democratic institutions.
 

hipper

Banned
Well, these industries had structural weaknesses in technology and organization that harmed their competitiveness, for example, they were heavily unionized. However, the demand for these goods might not decline as much as IOTL, especially shipbuilding since there could be no WNT if the American still stayed isolationist. Besides, without the long decline during the IOTL interwar period, British shipbuilders might actually modernize their shipyards.

Without World War One there would be no mass production of hog islanders Uk shipyards would continue to produce the worlds cheapest merchant ships, sometime in the twenties Diesel ships will become a thing, but without any substantial patient protection Uk shipyards will have no difficulty producing slightly inferior copies of the latest German diesels.
 
My broad brushed and very rough vision of this would be not dissimilar to modern Britain, a nation with some gems in manufacturing but overall rather deindustrialized as the heavy industrial goods are imported along with many consumer products and food. The UK would be a major player in service industries, banking, insurance, investment, etc., especially in the web of colonial relations, perhaps with a hint of Imperial preference to more successfully knit the Commonwealth together. This might improve the automobile and aviation industries by giving them bigger markets to export to and carry them against the competition from France, USA and Germany in aerospace with Japan a competitor in automobiles especially. I tend to think connections with Japan remain stronger so more synergies there for example. One thing I wonder about is how the UK plays out as a major oil player given the likely foundation of AIOC and Shell with a dominance in shipping. Depending upon who gets control of the oil in the Arabian peninsula, perhaps a better involvement of British interests with the USA and Germany following, the UK economy might then see a lot of the distortions created by the Pound also being a currency of preference in oil trading with huge outflows into the oil producers and capital inflows to London for investment. This begins to shape the UK economy akin to the USA come the 1970s some decades before?
 

Thomas1195

Banned
Japan a competitor in automobiles especially. I tend to think connections with Japan remain stronger so more synergies there for example
Postwar Japan was vastly different from Imperial Japan, due to crucial reforms carried out during Allied Occupation. Also, it was during that time American business practices were learned comprehensively.
 
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Thomas1195

Banned
Imperial preference to more successfully knit the Commonwealth together
Note that the Liberal Party would be very likely to remain one of the main party of the government (i.e. free trade). Besides, empirical evidence found that Imperial Preference actually had a negative impact on British industrial productivity over the long run.


Depending upon who gets control of the oil in the Arabian peninsula, perhaps a better involvement of British interests with the USA and Germany following
The US would be isolationist for much longer ITTL. During near term Germany would be the only competitor.
 

Thomas1195

Banned
British overseas investments totaled $20 billion in 1914, and were more than double of France's at $9.7 billion and Germany's $5.8 billion. Of British capital invested abroad, only $1.05 billion was invested in Europe versus $5.4 billion for France ($2.5 billion in Russia alone). Foreign investments generated nearly $1 billion per year in income, or around 10% of the national income.
Well, if a Great Depression occurs, then Keynesianism/New Deal is not so difficult. IOTL Keynes actually proposed to pull back these foreign investments for domestic investments.
If Keynesianism/state interventionism emerged earlier, then it's good.
 

Thomas1195

Banned
Without World War One there would be no mass production of hog islanders Uk shipyards would continue to produce the worlds cheapest merchant ships, sometime in the twenties Diesel ships will become a thing, but without any substantial patient protection Uk shipyards will have no difficulty producing slightly inferior copies of the latest German diesels.
Well, but the structural weaknesses of British industries including shipbuilding were still there: heavy union, outdated technology and practices, amateurism, small size of individual firms, lack of systemic R&D (large-scale laboratories were basically non-existant in Britain before ww1)... It would depend on how Britain solve these problems.
 
Well, British economy had been declining since 1880.

No, the British economy had grown since 1880, just slower than other economies. Germany, the U.S., and even Russia were passing Britain in industrial output, which should surprise no one as all three countries were much larger in area and population than Britain.

As to the question asked in the title: WW I cost Britain several hundred thousand young men killed, and a vast amount of capital. Material damage was limited to the effects of Germany's limited bombing campaign and merchant ships sunk by U-boats and raiders. A great deal of Britain's foreign investments were liquidated to pay for wartime imports from the United States. If there was no war, none of that would have happened.
 

Thomas1195

Banned
No, the British economy had grown since 1880, just slower than other economies. Germany, the U.S., and even Russia were passing Britain in industrial output, which should surprise no one as all three countries were much larger in area and population than Britain.
Well, British growth during 1880-1914 was very slow, and a very big reason was slow to modernize (this had become a consensus). And about population, high economic growth is usually positive related to population, which means British population could have been higher if its economic growth was better.

A great deal of Britain's foreign investments were liquidated to pay for wartime imports from the United States. If there was no war, none of that would have happened.
Well, a major reason why lots of wartime imports were industrial goods and machinery was Britain's lack of essential skills and technical expertise, as well as its increasing obsolete industrial base. There were many high-tech industrial products that they could not produce well, such as various kinds of machinery, or HE shells, or magnetos and ball bearings.
 

GarethC

Donor
If there's no WWI, won't Germany be rather busy with Russia? The British Empire is, well, all the way over there, while the numberless hordes of vodka-powered Cossacks enraged by endless re-runs of Aleksandr Nevsky are just across that river.

Indeed, with the post-1911 shift away from a naval arms race with Britain and Russia presumably going through societal and military reforms, Germany needs to be looking for a British ally against a Paris-Moscow axis.

If there is no WWI, it's reasonably likely that Austria-Hungary will schism, leaving a vacuum that sucks Britain, Russia, Germany, Italy, and the Ottoman Empire into a new Great Game in the Balkans and former Dual Monarchy.
 

BooNZ

Banned
"Again, it is interesting to compare actual developments to the extrapolated trends from the pre-World War I period: Had both German and British aggregate pro- ductivity continued to grow at their average pre-war trends, Germany would have caught up to Britain already by the mid-1930s, not just in the 1960s." http://personal.lse.ac.uk/ritschl/pdf_files/KETCHUP.pdf section II, para 4

So, this is referring to the total output as opposed to the relative rates of increase? Germany's economy in toto would catch Britain's by, say, 1935 absent WWI? Your reference to decline would be to the rates of expansion, rather than total output?
So mid 1930s without WWI then

Probably not.

The Figure 2 in the appendix of the reference provided projects British growth trend from 1901 to 1913. This is not representative of the actual long term growth of British productivity, which OTL is substantially similar to Germany. In the period up until the turn of the century Britain was in a low growth cycle, but if you look at British growth in productivity from 1907 to 1914 it is substantially similar to Germany. The premise Germany was scheduled to overtake Britain productivity in the mid 1930s assumes that WW1 did not negatively impact on British productivity in any material way, which is absurd.

This has been brought to the OP's attention previously, but it does not fit the theme/intent of his threads.
 

Thomas1195

Banned
Probably not.

The Figure 2 in the appendix of the reference provided projects British growth trend from 1901 to 1913. This is not representative of the actual long term growth of British productivity, which OTL is substantially similar to Germany. In the period up until the turn of the century Britain was in a low growth cycle, but if you look at British growth in productivity from 1907 to 1914 it is substantially similar to Germany. The premise Germany was scheduled to overtake Britain productivity in the mid 1930s assumes that WW1 did not negatively impact on British productivity in any material way, which is absurd.

This has been brought to the OP's attention previously, but it does not fit the theme/intent of his threads.
For Germany, it had been growing like that for decades. And as its growth was mainly driven by technological advances, it would not slow down soon. It would at least grow in accordant to its straight line for several more decades.
For Britain we cannot know that whether it was just a short/medium-term upswing or not, as its growth had been stagnated during the last decade of the 19th century.
 
If there's no WWI, won't Germany be rather busy with Russia? The British Empire is, well, all the way over there, while the numberless hordes of vodka-powered Cossacks enraged by endless re-runs of Aleksandr Nevsky are just across that river.

Indeed, with the post-1911 shift away from a naval arms race with Britain and Russia presumably going through societal and military reforms, Germany needs to be looking for a British ally against a Paris-Moscow axis.

If there is no WWI, it's reasonably likely that Austria-Hungary will schism, leaving a vacuum that sucks Britain, Russia, Germany, Italy, and the Ottoman Empire into a new Great Game in the Balkans and former Dual Monarchy.
It's also likely that Russia will explode or implode under the influence of it's own internal problems.
 

hipper

Banned
It's also likely that Russia will explode or implode under the influence of it's own internal problems.

It's perhaps possible that Russia will undergo a communist revolution without the stimulus of a world war but likely is a bit strong.
 

hipper

Banned
For Germany, it had been growing like that for decades. And as its growth was mainly driven by technological advances, it would not slow down soon. It would at least grow in accordant to its straight line for several more decades.
For Britain we cannot know that whether it was just a short/medium-term upswing or not, as its growth had been stagnated during the last decade of the 19th century.

Well as with all growth spurts German expansionism will continue untill its markets are saturated,and when cheaper labour countries start making widgets to compete with Germany, Russia is the unknown factor here.
 
It's perhaps possible that Russia will undergo a communist revolution without the stimulus of a world war but likely is a bit strong.
Not necessarily a communist revolution, but a major (and probably violent) 'readjustment' is IMO inevitable.
The Russian system with it's mix of Tasarist absolutism (for example Alexander's violation of the 1906 constitution to alter the Duma election laws), administrative incompetence and corruption, pan-Slavism (leaving it vulnerable to entanglements in the Balkans), historical problems with Britain (notwithstanding the Anglo-Russian Entente and the agreement around 'spheres of influence'), increasing industrialisation (creating a larger urban working class) and the consequent appalling working conditions, is simply not tenable in the medium-to-long term.

In fact historically the outbreak of the Great War acted to reduce the level of worker unrest; the wave of strikes that began in April 1912 (with the massacre of miner and workers in the Lena goldfields [1]) were damped down by an upsurge in patriotism and nationalism (and anti-semitism)[2]. It also heavily disrupted the organising of labour activity.

Alexander's incoherent and incompetent mix of liberalising and repressing was the worst option for the situation. Sooner or later there will be a repeat of the factors [2] that triggered the 1905 revolution (because the causes haven't been addressed), and the second revolution (heaving learned from the Tsar's renegading on his earlier promises) will not be as easily stopped.

[1] An event that led to the first public notice for Kerensky, who reported on the massacre in the Duma.

[3] In the first seven months of 1914 Russia saw 3,493 strikes involving 1,327,897 participants; in the final five months there were 49 strikes with 9,561 participants.

[3] Shooting unarmed marchers, the peasant communes and their petitions to the Tsar, an upsurge in liberal demands for political reform (e.g. the appointment of Sviatopolk-Mirskii) which led to the General Strike of October 1905 and the Moscow Uprising.

 

hipper

Banned
Not necessarily a communist revolution, but a major (and probably violent) 'readjustment' is IMO inevitable.
The Russian system with it's mix of Tasarist absolutism (for example Alexander's violation of the 1906 constitution to alter the Duma election laws), administrative incompetence and corruption, pan-Slavism (leaving it vulnerable to entanglements in the Balkans), historical problems with Britain (notwithstanding the Anglo-Russian Entente and the agreement around 'spheres of influence'), increasing industrialisation (creating a larger urban working class) and the consequent appalling working conditions, is simply not tenable in the medium-to-long term.

In fact historically the outbreak of the Great War acted to reduce the level of worker unrest; the wave of strikes that began in April 1912 (with the massacre of miner and workers in the Lena goldfields [1]) were damped down by an upsurge in patriotism and nationalism (and anti-semitism)[2]. It also heavily disrupted the organising of labour activity.

Alexander's incoherent and incompetent mix of liberalising and repressing was the worst option for the situation. Sooner or later there will be a repeat of the factors [2] that triggered the 1905 revolution (because the causes haven't been addressed), and the second revolution (heaving learned from the Tsar's renegading on his earlier promises) will not be as easily stopped.

[1] An event that led to the first public notice for Kerensky, who reported on the massacre in the Duma.

[3] In the first seven months of 1914 Russia saw 3,493 strikes involving 1,327,897 participants; in the final five months there were 49 strikes with 9,561 participants.

[3] Shooting unarmed marchers, the peasant communes and their petitions to the Tsar, an upsurge in liberal demands for political reform (e.g. the appointment of Sviatopolk-Mirskii) which led to the General Strike of October 1905 and the Moscow Uprising.


Everyone who says that early industrial working classes had appalling conditions has never tried subsistence agriculture :)

I think as long as the loyalty of the army remained intact the Tzar would survive. I agree that Alexander was incompetent however I think any unrest could have been supressed. It's hard to say it's impossible but I'm not sure you can say it wa probable.
 
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