1906-1914 Economy Flashcards
Why were staples significant
In 1913, British Industry remained focused on Staple Industries - the basis of the Industrial revolution which made it so successful.
How was Britain’s Global Position
Despite competition from Germany and America, output of iron and steel continued to increase
-USA and Germany were making faster progress however this was natural due to larger home markets, access to resources and raw materials
What was good about New Industries from 1906-1914
They were expanding by 3.8% a year, faster than the growth rate of the economy itself
New industry consisted of electrics, chemicals and motoring
How significant was agriculture
Farming accounted to 10% of employment, national income and investment between 1906-1914
Trade and Invisible earnings
- Why was it important
- What is it
Britain was the world leader in banking, investment and insurance. The reliability of the Bank of England encouraged investment.
British exports of services helped secure a healthy balance of payments even though the value of exports was rising but the value of imports was increasing
Percentage of exports which came from Staples
60% of exports came from Staples such as textiles, steel, coal and shipbuilding
Key areas of concern
- LAck of research
- Lack of progress in new industry
- Low wage economy
- Issue of free trade
- Shortcomings in education
- Issues in agriculture
Key areas of growth
- ‘Real wages’ were rising in real times
- Trade and Invisible earnings
- World trade and position
- Aspects of staple industries
Problems in agriculture
- Farmers were suffering to cheaper competition of North America and were forced to reduce production
- Only 25% of wheat sold in Britian came from British farms before the First World War
- In the 1880’s refrigerated ships bought cheaper meat from New Zealand and Southern America
Shortcomings in education and teaching
- Economic decline created fears that British workers were not learning sufficient skills
- Both Prussia and USA had introduced primary education for all children in early nineteenth century, Britain implemented this later towards the end of the century creating a gap between countries in terms of education.
- Germany averaged 1000 graduate engineers a year as opposed to 400 in Britain.
Issue of Free Trade
-Competition that Britain faced in world trade and the growth of imports raised questions about British policy of free trade. Germany and USA both used tariffs to protect domestic markets
Low wage economy
- ‘High wage’ economy means that workers can usually purchase the goods they are producing ensuring high demand and high production.
- The British domestic market was small because only the upper and middle classes could afford
Lack of progress in ‘new’ industries
- By 1906 new industry was based on advanced science
- 90% of British army uniforms used German dyes
- Many electrical companies were subsidiaries of German or American companies
Lack of research and investment
- Britain had few resources invested in researching methods to modernise industry
- Only 8% of coal was mechanically cut compared to 25% in America
