5 - The Anglo-American labour productivity gap

Summary

As with many other industries in the late nineteenth century, the American paper industry in numerous ways set the standard to which producers elsewhere aspired. Much about Britain's performance can thus be learnt by comparing its experiences in the second half of the nineteenth century, particularly its productivity history, with that of the American industry. In chapter 3, it will be recalled, our analysis of British productivity growth found that from at least the 1870s onwards American paper manufacturers seemed to have consistently held in terms of labour productivity an approximate two to one lead over their British cousins. This finding appears to be no statistical aberration, as contemporary observers also seem to have been well aware of the gap's existence as well as its approximate magnitude. Analysis by later commentators and modern researchers too has not only identified this same gap, but has also indicated that it persisted and was probably extended well into the twentieth century. Broadberry and Crafts, for example, put the gap in the first half of this century as fluctuating around the two-and-a-half-to-one margin, whereas Rostas in 1935 estimated its magnitude to be of the order of approximately two-and-a-quarter-to-one. These analyses, however, do not venture back into the nineteenth century, so there is little room for direct comparison with our calculations. Broadberry and Crafts do give an estimate for 1907/9 (265.0) which is somewhat higher than ours.