Economic Growth in Britain and France 1780-1914 (Routledge Revivals)

Two Paths to the Twentieth Century

Patrick O'Brien, Caglar Keyder

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136629402
• Edition: 1
• Topic: Economics
• Subtopic: Macroeconomics
• Index: Economics

First published in 1978, Professor O'Brien's Economic Growth in Britain and France 1780-1914 is an original and pioneering exercise in comparative and quantitative economic history. It finds a controversial place in the debate on the question of French retardation in the 19th century and as a brave and important contribution towards the understanding of economic growth in Western Europe. The author attempts to comprehend and evaluate the economic performance of France through explicit comparisons with Britain, while considering British economic history from a French perspective. Challenging the orthodox view that France lagged behind Britain in economic terms, the book argues that there were two paths of economic growth to the 20th century, with France's path seen as a more humane and no less efficient transition to industrial society.

Part One
Historiography, Data and Methods

Chapter 1
Definitions and Historiography of Retardation

According to the Oxford English Dictionary, retardation means lateness, slowness or delay compared to some expectation based upon previous progress or to some other independent norm. In assessments related to the performance of economies over the long run, retardation implies either deceleration in rates of economic progress or slow growth compared to other economies deemed appropriate for comparison. The first meaning of the word is predicated upon assumptions about a supposed potential for development at constant or accelerating rates of growth, and when the actual record of a given country is considered in terms of potential for growth that potential is usually defined in terms of a comparison with other countries. Failure or poor economic performance means opportunities missed, leads lost and output foregone because of a neglect of best economic practice. But a slower rate of growth provides a rather inadequate index of the failure of a country to exploit new technology or other inputs that might raise productivity. In comparative terms, condemnation of performance based upon relative rates of growth assumes that producers in two countries faced equal, or roughly equal, opportunities to expand production – in this particular comparison, that the growth of domestic and international demand for the products of French industry and agriculture expanded at the same rate as the demand for British output. Clearly this was not true, but terms like retarded or relatively backward may still be warranted if it can be shown that French producers made less of their opportunities than their rivals in Britain. On the other hand, it could be the case that opportunities offered to British businessmen between 1780 and 1914 were greater but that French businessmen exploited their more limited markets more effectively.

But like other historians we propose to concentrate upon the comparative sense of the term ‘retardation’, while recognising that countries should (if possible) be studied in terms of some unique capacity for development at different stages of their history.

When he first surveyed the problem, nearly two decades ago, Rondo Cameron found the French ‘rate of growth for all relevant variables substantially below that of other Western industrial nations’ and considered the disparity in performance puzzling because of the obvious advantages possessed by France.¹ He admitted, however, that on a per capita basis the French record looked better and in a later study of European banking tabulated some crude estimates of French and British per capita incomes which show how the differential between the two countries narrowed from 52 per cent in 1801 to 27 per cent by 1872.² More recently, after citing data which indicated that for the half-century before 1914 the rate of growth of real per capita output in France was above the rate for the United Kingdom and only slightly below the German rate, Cameron seemed inclined to abandon terms like ‘retardation’ in favour of something called ‘slow growth’.³ His own research has, moreover, always been concerned to emphasise the positive achievements of the French economy and the substantial contributions made by France to economic development in the rest of Europe.⁴

Kindleberger set out to compare economic development in Britain and France for a century after 1850 and since he had ‘no doubt that income per capita in France was well below that of Britain in 1851’ his analysis is directed to explaining the persistence of French backwardness.⁵ But his first chapter, which purports to be an outline of economic growth in Britain and France (and which should presumably specify the problem and delimit it chronologically), merely separates periods of expansion from periods of contraction in the two economies. Relative backwardness is nowhere defined or measured in terms that indicate changes over time in differential per capita incomes in the two countries. Kindleberger’s failure to specify the explicandum means that his analysis of various factors (such as coal, capital formation, population, entrepreneurship, technology, scale and agriculture) behind the British and French rates of growth from 1850 to 1950 is an interesting exercise in the mechanisms of economic development but less satisfactory as quantitative economic history.

‘Retarded’ is not only applied to a country’s inferior record in the rate of growth of real per capita income, but is also taken to connote some incapacity for structural change. The argument runs like this: since over the long run structural change and the growth of output are correlated, the indicators of structural change can be used to rank countries along a scale of economic development. Thus one country has been described as backward or retarded because the share of industrial output in its national product is below that of (or increasing more slowly than that of) another country.

A less acceptable form of this equation of development with industrialisation is one that focuses upon the structure of industry itself. Thus countries have been described as backward because their coal and iron and cotton production are relatively low. Of course, the examples selected for emphasis are not chosen arbitrarily since the development of industries like iron, steel, coal and textiles has been at the centre of earlier examples of industrialisation, particularly the English pattern. But there is more than one strategy for growth, and idealisation of the English model does not provide unambiguous indicators for all national development.

Kemp’s extensive writings on French economic history exemplify the notion that backwardness can be defined and analysed in structural terms. According to Kemp, ‘the origins of the problem of French industrial lag may be said to be found [under the ancien régime]’ when ‘agriculture stagnated and industrial development proceeded along traditional lines’.⁶ He asserted that in per capita terms no improvement took place over the eighteenth century and the kind of growth that occurred ‘was not accompanied by the preparation of conditions for structural change’.⁷

Although Kemp is not engaged in comparative history, there is no doubt that his judgements on the performance of the French economy over the nineteenth century are permeated by implied references to British standards. Thus he recognised that although ‘growth was taking place it fell short of what was required to bring the economy into line with the best results elsewhere’.⁸ Kemp perceived that economic development in France adapted to the availability of local resources, to the characteristics of local and European markets and to the international division of labour that emerged after Waterloo. But he had no doubt that better results could have been achieved if resources had been allocated from agriculture to industry so that the contribution of agriculture to national output declined more rapidly.⁹

Kemp also saw the principal defect of French industrial development in structural terms as a failure ‘to turn over earlier and more completely to large scale production or to mass production methods’¹⁰. ‘Large sections of French industry underwent little change in technique or structure during this whole period’ and ‘the continued vitality of the old forms of artisanal production and small scale organisation in consumer goods industry’ is seen throughout his books and articles as a source of backwardness derived from a failure to assimilate British technology and the factory system.¹¹ Thus even the silk industry ‘despite some technical improvements continued to represent old style capitalism’ and the survival of domestic textile industry in Normandy over the first half of the nineteenth century ‘may be taken as an adaptation to French peculiarities which inhibited growth’.¹²

Established correlations between levels of per capita income and the share of the economy’s labour force employed in agriculture and the share of agriculture in total output are derived from international comparísons taken from samples of countries and are related to the modern period. It is also the case that the long-run improvement in the level of per capita income observed from the historical records of 20–30 countries, now affluent, is associated with the relative decline of the agricultural sector.¹³ Nevertheless, no presumption can be derived from the literature on structural change that transformation should proceed with equal speed in all countries over any finite historical period. The reallocation of labour and other resources from agriculture to industry and services is efficient only if its marginal productivity is higher outside primary production. There can be no easy assumption that a relatively large agricultural sector is ‘abnormal’ or demonstrably suboptimal.¹⁴

Finally there is far less theoretical validity and very little statistical support for his proposition that small-scale artisanal forms of industry should have been superseded as early as possible in the nineteenth century by larger-scale factories in all forms of industrial enterprise. An efficient allocation of resources cannot be equated with one form of industrial organisation or indeed with any one technique of production. Economic theory lends no support to assumptions, present all too often in writings on French backwardness, that there is one definable and optimal path to higher per capita incomes and still less to the implicit notion that this path can be identified with British industrialisation as it proceeded from 1780 to 1914.

Such assumptions are even more obvious in the technological approach to French retardation. In its cruder forms, that approach assumes that only certain forms of technology produce structural change and economic growth and tends to confine the history of economic development to a history of inventions and their diffusion. Retardation in this framework means a failure or slowness to adopt techniques and forms of organisation of the country or countries already industrialised.

There is no doubt that The Unbound Prometheus is the best study of retardation conceived in technological terms, and the book has had a deep influence on European economic history ever since its early publication as an essay in the Cambridge Economic History of Europe.¹⁵ Of course the author is too sophisticated to accept any simple equatio of material progress with mechanisation. Nevertheless, paragraph after paragraph in Landes’s famous study suggests that the economic history of Western Europe for the century can be understood as the diffusion of techniques of production (machines and chemical processes) and forms of industrial organisation (factories) from the first industrial nation, Britain, to more backward economies on the European mainland. For Landes the central problem in European economic history is to explain Britain’s early start and the relatively slow diffusion of Brit...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Original Half Title page
• Dedication
• Original Title Page
• Original Copyright Page
• Contents
• Tables
• Introduction and Acknowledgements
• Part One Historiography, Data and Methods
• Part Two Welfare
• Part Three Productivity
• Conclusions
• Bibliography of Official Publications
• Index