The Economy and Industry

Through natural resources, convenient communications and the enterprise of her people, Britain was the world's first country to create an industrial economy based on mass production in factories. It began in the eighteenth century and, because of the international predominance she acquired in many products, Britain came to be called 'the workshop of the world.' The corollary was that as other countries of the European tradition built up their own industries, the British monopoly disappeared. Already in the nineteenth century there was talk about the 'decline' of British industry but this really only meant that there were more players in the game; any 'decline' was relative and not absolute.

The economy is as international as any in the world - British exports as a proportion of total production are more even than Japan's - and the 'invisible' exports of the City of London in insurance, commodity broking and finance play a key role in the international economy.

The original British industrialisation was based on free enterprise capitalism in a very raw form of which Karl Marx (living in London) was an eager student. The government and the state played no part in the control of industry. By the twentieth century however, the sphere of the state was widening, and from 1945 the British have settled for a mixture of private and public enterprise with sophisticated technical controls. It is where the boundaries would be drawn between private and public in the 'mixed economy' that has been the source of political conflict. That there should continue to be two economic sectors, private and public, is hardly in question.

The public sector of the British economy took shape in the nationalisation programme of the 1945 - 1951 Labour Government, which was the culmination of a generation of political campaigning. In outline it has not changed since. It was not a question of the State picking and choosing which private companies to take over but of it buying whole industries, both from private shareholders and from such bodies as local authorities who happened to own their own gasworks, power stations and hospitals. There was no question of confiscation - the previous owners were paid for their property at a reasonable market rate.

The principal industries involved in the 1945 - 1951 nationalisation programme were railways, coal, electricity, gas and iron and steel, plus air travel (which was only in its infancy), and all major medical services except drugs manufacture.

Brian Harrison: Britain observed. 1945 to the present day; Ernst Klett Verlag, Stuttgart, 1984, page 55