TSR Wiki > Study Help > Subjects and Revision > Revision Notes > History > Growth Rates, Data and Methods
Long run performances of Britain and France too similar to warrant derogatory adjectives – gap between per capita incomes least ambiguous and perhaps only viable basis for discussion
DATA AND METHODS
Deane and Cole in Britain – Toutain, Markovitch, Marczewski in France historians concede with all their shortcomings the estimates have been properly constructed and are the best available for the time being
Problems: compare national account D and C use labour data and census which will probably underestimate cf. OUTPUT figures of France
Major differences regarding output in French figures and income flows in British figures.
Services and Commodity Output
Output employed physical output cannot use services as is the norm. – service estimates unreliable and usually done on value of labour and wage bills – fails to account for income accruing from property – if claims made by those factors on national incomes regarded as equivalent to contribution of services – must be full employment, perfect competition in factor and commodity markets – absence of tariffs and external economies. Sceptical of any method that measures service contribution in terms of total remuneration received by those employed in the service sector.
Inclusion service output is double-counting as many services seen as inputs for physical output – would be bias toward urban and industrialised British economy – also problems of statistics in showing quality of output.
Service Sector Figures – earlier structural change in Britain and urbanisation higher service sector as % of output and labour – lower per capita incomes France cf. Britain – confine measurement to flows of commodities – dubious stat. Nature and measurement service output in terms labour income is v. dubious
Periodisation and Cycles
Analysis pertains to trends form 1780 to 1914 safely ignore biases introduced by scales of economic activity.
Rate of Exchange
Official foreign exchange is not the true purchasing power parity between francs and sterling there is equally no unambiguous measure of relative levels of output based upon a set of prices prevailing in one economy
The purchasing power parity of the pound sterling in terms of the France can be defined as the number of Frances required to buy, in France, as basket of goods “representative” of British expenditure patterns which cost £1 to purchase in Britain.
Two differing but valid rates of exchange:
- Based on structure of production in Britain valued first at British and then at French prices
- Composition of output in France valued at French and then British prices
Exchange can be either converting based upon patterns of production and expenditure in Britain or composition and production in France.
Comparisons of levels of welfare and productivity across countries which convert trading rates of exchange between two currencies assume some identity of consumption and production to patterns of trade – their method allows them to express per capita incomes in sterling in terms of consumption and production patterns that prevailed in both countries
ECONOMIC GROWTH IN BRITAIN AND FRANCE 1780 – 1914
The Productivity of Labour and Structural Change
Concepts and Data
Labour productivity is an index of productive capacity – potential of economy to supply goods and services
LP closely correlated to per capita income and per capita consumption – LP affected by quality and quantity of complementary inputs: capital, technology, natural resources, raw materials etc.
Difference in LP between states reflect different labour productivities within agric. and industry as well as vars. In share of labour force between agric. and industry.
Important to not different hours worked by different workers – need total number of hours worked year by year
Global Productivity and the Quality of Labour
Before revolution France ahead LP but early 19th century Britain jumped into a lead maintained through classic industrialisation period and Victorian boom.
Goes against the traditional view – very definite and widening British lead up to mid-century followed by a period when France slowly caught up as its economy diffused techniques and org. found to be efficient in Britain.
There is no doubt that had French productivity increased at the British rate and thus maintained the differential in output per worker that existed before the revolution – then per capita incomes in France 1913 would have been well above British levels – if underdeveloped or backward def. Failure to realise potential for eco. Growth equivalent to British rate of advance in labour productivity – performance French economy seen as unsatisfactory.
France offset British ad. In LP by allocating larger share potential labour force in production agric. and industrial commodities. Narrows gap between LP and output per head – 1895-04 LP gap is 38% and output per head is only 10%.
No significant variations in gender balance or demographic make up of the two workforces / nor education, literacy levels equally poor / health standards, life expectancy seem similar.
VARIATIONS IN THE QUALITY OF LABOUR AVAILABLE TO THE TWO ECONOMIES CONSTITUTE ANYTHING BUT A SMALL PART OF THE EXPLANATION FOR THE DIFFERENTIALS IN LABOUR PROD.
Labour Productivities in Agric. and Industry
Labour productivity in French industry above British levels until the 1890s
British farming labour productivity consistently and appreciably higher than in France
Comments
