From Empire to Europe: Britain in the World Economy

This chapter provides a brief introduction to the history of Britain’s engagement with the international economy between 1870 and 2010. It begins by discussing long run trends in the integration of the British economy with the rest of the world over time. Economic historians are typically interested in four types of flows between economies: trade in goods and services; flows of capital; migration flows; and flows of ideas and technology. The last flow is probably the most important one for countries hoping to catch up to the international technological frontier. While this was not the right way to characterise the British economy in 1870, it probably was at various points after World War II. Unfortunately, such flows are also the most difficult to quantify, and so I follow the bulk of the literature in concentrating on trade, capital flows and migration.