Kongfucius said:
The reason why they did not invest was because those industries were in terminal decline and so their investment would ultimately have been fruitless - why pin you're hopes to a sinking ship? Therefore they were quite happy to sit on their mines and shipyards which although struggling, were still profitable without ploughing any money into them. At this point, if the government had spent wisely on researching new methods of production and attracting other businesses then Britain could have been weened off of these heavy industries, alternatives in light industries making consumer goods could have been found and Britain would have a much more resiliant, more diverse economy more like Germany's. The reason why businesses in Germany in particular did better than in the UK was because when they were rebulding their economy after WW2, they had something of a clean slate and could focus on the most promising area of growth at that time, which was those light industries making consumer goods. This is compared to Britain, where we ended up attempting to salvage our heavy industry through nationalisation, which, though I consider myself reasonably left-wing in my views, I have to concede is seldom appropriate for most sectors and which is usually at best a way of buying time for the economy to change and develop new industries without creating a spike in unemployment. It also requires an enormous amount of money to do correctly which Britain was not able to provide even with such large loans and other sources of income (e.g. from the Marshall Plan) |
Your premise seems to be buisness owners knew they were obsolete and just didn't care that they would eventually lose their only livelyhoods and their familiys only livelyhoods. This being the era where there was very little invsetment diversification and factories were handed down father to son.
Nobody needed to "research" new ways of production, it was already out there. Hell it was already in the UK. A few US companies like ford opened more advanced comanies in the UK. I'm guessing you read a thorwaway line or two about Great Brtiain being behind in production technology, and what they meant by that was applied technology, not the level of technology that actually existed.
They had the same level of technology, the US, Germany and plenty of other countries had... and Germany's Industry grew faster both pre and post WW2. So no. It's not just having a "Clean slate".
Here's the think about pre-WW2 international trade. It barely existed... even shortly after WW2. Tariffs ruled the day... and nobody had a stronger position then the British Empire due to it's many colonies and deals with commonwealth countries. An example of this lies in Kenysian economics. His strongest reason during the day for targetting the poor?
They didn't buy foreign products. Stimulus money was wasted if the rich used it to buy expensive luxuary items from overseas. The rich were the only ones able to get over the tariffs.
That's why American companies like ford were forced to build car factories in the UK and steel factories in Canada. To avoid the tarrifs.
British industires didn't improve not because they were short sighted, but because the UK government created a situation in which no improvements were needed. Nor was their any reason to expect this wouldn't continue on forever. Neither the UK government nor the factories have forseen the change that happened.
All the best factories became rich foreign factories.... and rich foreign ones were the first ones moved when free trade got big post WW2.
By the time the tariffs were gone, UK factories were way behing. Germany, and by that i mostly mean West Germany was the new focus of the cold war for the US, so their better factories that survived got amped up by the US more.
The UK government didn't need to invest in factories. All they needed to do was not activly discourage investing in factories by promoting unfair trade advantages.
The buisnesses were foward thinking, with the same foward thinking the UK government provided. It was jsut the wrong kind of thinking... created specifically by government policy.
The real fault lies with... the government.
