The Productivity Race: British Manufacturing in International Perspective, 1850–1990

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Still, because the narrative is principally couched in terms of the explanation of relative decline, Broadberry finds himself repeatedly compelled to emphasize that even in periods in which the country may have performed poorly in comparison with other countries, the absolute growth rate of labor productivity in Britain was high by world historical standards.

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The point I am making is separate from but in a sense related to the important methodological issues which have motivated the exchanges between Broadberry on the one hand and Ward and Devereux on the other. To calculate comparative productivity ratios one chooses a benchmark year, calculates value added per worker or per hour in the domestic currencies of each country, and then converts the value added in the two countries to a common metric using a PPP adjusted exchange rate.

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Using domestic rates of economic growth, one then projects forward and backwards. Because of index number and other problems, however, growth rates from one PPP based comparative productivity benchmark will not always or necessarily produce a later or earlier comparative productivity measure consistent with a later or earlier PPP based benchmark.

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Broadberry has tried to address this problem by choosing as a benchmark unlike Maddison, who used , and by using other benchmarks as a check on the projections forward and backwards using domestic growth rates. He is persuaded the methodology is defensible, and the remaining discrepancies tolerable, but he will probably not satisfy all of his critics. Those seeking more detailed discussion of these problems, which also bedevil work on contemporary economies, should consult, for example, Ward and Devereux For example, he endorses Abramovitz and David on the importance of capital accumulation rather than TFP in explaining trends in U.

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But TFP growth in the U. Secondly, Broadberry correctly identifies very strong labor productivity and TFP growth in transportation and communication in the s as part of what underlay the continuing advance of U. The introduction of modern business enterprise in railroads occurred in the last third of the nineteenth century. The growth sector within transportation in the s was trucking, a sector comprised of small, non-hierarchically organized companies.

The Productivity Race

What is striking about the s in the U. Since railroads were still such a large part of the economy, this mattered see Field, Greater emphasis on the importance for the United States of the Depression build out of the surface road network, and the role of street and highway spending in the U. There is also some tendency to be too dismissive of trends in industry in explaining the huge gap opened up between the U.

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The driver of aggregate trends in comparative productivity, Broadberry asserts, are trends within the respective service sectors. My point is that whereas the surge in U. By combining a multitude of detailed productivity measurements with qualitative industrial and business history, he provides a major contribution to our understanding of British economic performance over the last years. Changing markets and technology Manufacturing and the whole economy.

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The Productivity Race by Steve N. Broadberry

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