Explaining The Decline Of The British Economy

Submitted By Jacobswm
Words: 6315
Pages: 26

London/Warsaw/Oxford University, July 2014
Please answer the following exam questions and submit your write-up through SafeAssign at Blackboard by July 20th.
Question One (1): “Explaining the Decline of the British Economy,” McGraw’s three contrasting views
Answer: Document 2 most closely aligns with the views of Yergin and Stanislaw in The Commanding Heights?
First step for me was to break down the key tenets of all four documents briefly described in Table 1, which support my analysis written after the table.
Table 1: Compares the key point made is each of the four documents cited:
“Explaining the Decline of the British Economy”

“Commanding Heights”, Yergin, Stanislaw
Doc 1: Neoclassical, Sandberg, key points:
Doc 2: Institutional Perspective, Elbaum, Lazonick, key points:
Doc 3: Why has Britain “Failed”?, Dahrendorf
Chapter 4, “The Mad Monk: Britain’s Market Revolution”
Decline in industrial competitiveness
Homogeneity of Japan, Singapore
Inflation from 7% to 24%
Poor leadership
Social ethics
Tax rates exceedingly high irredentism Decline per capita income
Political values
Decentralized management
Slow tech
“British disease”
“relegation zone”
No national industry strategy
Labor costs
Neg. entrepreneurship
GNP < 16 competitor nations
Labor unions: conflict, strikes, high wages
Labor unions
Complex global changes
Empire’s sun setting
“Maggie’s back in town”; confidence
End of colonialism
Too conservative
Industry revolution moved on to GE, US
Laggard initiative, enterprise, and entrepreneurship
Comparative advantage (-)
Atomistic – many reasons
Still has niche qualifications
Slowed demand, slow growth
Foreign competition
Nepotism, 3d gen aristocracy
No EU marriage
Torpid socialism, lethargy
Resource paucity
Poor accounting
Talent emigrates
Societal complacency
Globalization begins
No systems approach
Brain drain
Destructive downward spiral
Wealth distribution
Organization insufficient
Aristocracy v. serfs
Crises: war, fiscal, industrial
World is changing
Regional, vertical specialization
Controlled inflation with supply v. demand
Products narrowly distributed
Some mobility OK
Oil crisis
Mgt errors, mistakes
Small staff, untrained family management
Solidarity v. individualism
Coal miner strikes
Inevitable global change; momentary confidence post-Falklands
Not failure, but relative decline
Statism, too conservative
Scale, scope (-)
Entrenched institutions
No “rat race”
Wealth sought for the nation, not individuals
Emergent markets
Robust invest. Banks in London
Emulation v. origination
Falklands temporarily restored confidence; incentivized for a few years
Loss of entrepreneurship
Firms used family £ or SE

Balance of payments skewed; overspent, overtaxed
High corporate taxes
Hierarchical oligopoly

Keynesian full employment

All facets centrally controlled

“Nanny state” repudiation

Corporate capitalism

Free market v. monetarism

Unions, labor, strikes

Should have assaulted consensus thinking

Euro-colonial ends, aging

Insufficient long-term planning

Complacency v. transformation

Techs became second class

Poor quality end products

Irreversible historical forces

Question One (1) (cont.): Britain’s decline can be explained objectively. However, in the aggregate, “British disease” was inevitable, and an irreversible sign of changing times in international commerce. Many global and domestic factors beyond Britain’s control included decrease in demand at home, unsophisticated capitalization and foreign investments, and inept management. From 1870 forward there was a burgeoning transition of wealth and power facing Britain leading up to both World Wars, when the US emerged as the global power. The decline in Britain can be compared in many ways to the demise of the Phoenicians, Greeks, Tripoli, the Dutch, and Ottomans to cite a few other historically temporal entrepot-trade and seafaring nations and city states. Each in time were eclipsed by