8 - The ‘golden age’ of British commerce, 1870–1914

Summary

Introduction

This chapter presents a systematic assessment of the performance of the major British market service sectors in international perspective between the mid-nineteenth century and World War I. In the mid-nineteenth century Britain had the highest level of per capita income in the world, and this was underpinned by a high level of labour productivity, particularly in services. Although productivity growth in services was more rapid in the United States and Germany before World War I, this can be seen, in many sectors, as part of a process of catching up. This is well illustrated by the case of finance in table 8.1, which presents benchmark estimates of the level of comparative US/UK labour productivity in market services before World War I, extracted from table 3.2 To some extent, the process of catching up was inevitable, as the release of labour from the agricultural sector in rapidly developing countries such as the United States and Germany led to a catching up in the extent of urbanisation, with concentrated urban demands allowing a high degree of specialisation in market services. Since services also made a substantial positive contribution to the British balance of payments, and the services of the City of London dominated world trade and payments, the period between 1850 and 1914 can be seen as the ‘golden age’ of British commerce (Imlah, 1958; Kynaston, 1995).