BRITISH LABOR IN BRITAIN'S DECLINE (COTTON INDUSTRY)

The relative decline of the British economy in the twentieth century derived in large part from the lower efficiency of British workers. The proximate cause of this inefficiency, at least in some cases such as the cotton textile industry, was the restrictive practices of British labor unions. But the reason these practices, which could be observed in many other countries, had such a great effect on British labor efficiency was the slow growth of wages in the general labor market in Britain. If wages had risen more rapidly in the late nineteenth and twentieth centuries then the same actions by British labor would not have limited labor efficiency. Particular industries in Britain, such as cotton textiles, had low productivity because the economy as a whole was unproductive. If the factories, workers and management had been transferred intact to New England then worker efficiency, with no other changes, would have increased greatly. Similarly the British economy as a whole was unproductive because each industry faced similar constraints as textiles.; The mechanism which generates such linkage, and hence the possibility of such a suboptimal equilibrium, is the moral economy of workers which limits the kinds of efficiency-improving bargains that could be struck with management. Instead of the capital stock and the available techniques alone determining the marginal product of labor, to which the market wage adjusts, in Britain the marginal product of labor adjusted to the wage rate through adjustments in the efficiency of workers. The same mechanism can be observed generating differences in labor efficiency in different British textile towns around 1900, and at least in some instances generating low worker efficiencies in the textile industries of other countries. Such mechanisms also appear attractive in explaining the marked variation in worker efficiency in British agriculture across different regions in the nineteenth century.