Britain's economy 1906-14 (2)

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  • Created by: MonsurAli
  • Created on: 15-06-17 00:32
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  • Britain's economy 1906-14
    • Lack of research and investment in new technology
      • Britain was less efficient than USA and Germany.
      • Britain's coal mines were not using enough machinery (only 8%) opposed to USA using 25% machinery.
      • Labour productivity fell by 20% between 1880-1914. Growth of industries could not be achieved (no economies of scale).
    • No progress in 'new' industries
      • Advanced sciences became more important. Germany's chemical industry was twice the size of Britain's.
      • Development of electrification started 10 years after USA.
    • Low wage economy
      • USA had a 'high wage economy' meaning workers could buy more goods which helped stimulate the economy.
        • Britain was a low wage economy so only the middle and upper classes could buy manufactured goods.
    • Free trade
      • Britain had free trade which meant that their domestic industries were not protected by tariffs - unlike USA and Germany.
        • This meant there was easy access to British goods, and they had little bargaining power.
    • Education and training
      • Britain was behind in the sciences: Germany had 1000 graduates a year while Britain only had 400 in engineering.
    • Agriculture
      • Railways meant USA could sell cheaply, which forced the production and exports of Britain to fall. Increases in the use of refrigerated ships bringing meat from Australia etc. affected our production.
    • Positives
      • Staple industries were still profitable; world trade was increasing in real terms; London remained the commercial centre of the world; huge amount of invisible earnings; availability of cheaper food meant real wages were rising.

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