Economic Growth and Structural Change in the United Kingdom, 1870–1914

The paper presents an estimate of the limits to British economic growth in the period 1870–1914. It is argued that in contrast to the historical experience, vigorous and effective exploitation of the technological possibiites of the period would have required the relative expansion of some sectors—most of which, like engineering, were growing in relative size in any case—and the relative contraction of others. The conservatively estimated gains from such counterfactual sectoral shifts of economic activity were found to be of the order of 25 percent to 50 percent of British GNP in 1913. The paper concludes with a brief consideration of why opportunities of this magnitude were not seized.