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Tuesday, February 16, 2010

The Rise of Toyota and the Fall of Britain

From Oldham?

The helping hand provided by British money and technology offers a further graphic insight into the change in the balance of power in manufacturing industry. Eighty years ago Britain had foreign companies knocking at its industrial door. Now the motor industry in Britain is dominated by three Japanese manufacturers, Toyota, Nissan and Honda. The textile machinery industry has all but disappeared along with other vast tranches of uncompetitive manufacturing.

But the writing was on the wall as Sakichi Toyoda shrewdly observed in 1929 when visiting Manchester, then the centre of the textile industry, to assess the competitive strength of Platt’s in world markets. Toyoda, designer of a loom that allowed one worker to control 30 of them, wrote: “On first seeing Manchester, I realised that making our industry the biggest would be a fairly easy task.”

Aside from bombing Pearl Harbor and seizing Hong Kong, the Japanese spent much of the next eight decades avoiding British mistakes. No Clement Attlee, no Harold Wilson and no Red Robbo. The Japanese may have practiced a form of dirigisme all their own, but they at least understood being productive requires that you to produce, and produce something others will buy. A truism which the geniuses at British Leyland, on both sides of the labour-management divide, failed to grasp. 

In many ways the British were victims of their own success. It's difficult today, with the United Kingdom largely in hock to foreigners, to recall that the country was not simply a world power, but THE world power. The nucleus of its vast empire was a small island, half the land area of France, whose natural resources consisted of tin and coal, the later of which, until the industrial revolution, was seen as a poor substitute for wood. Despite its small size in terms of land area and population, historically Britain's population has been about half that of France, the very high productive of British labour placed the country in a league all its own. 

As a more recent example, not more than a decade ago thirty million odd Canadians generated more wealth than nearly a billion Indians. Now imagine a world in which only one country holds such an astonishing edge. Until the emergence of German and American industrial rivals, in the very late 19th century, in a wide array of products and services the British had no serious rivals. Emergence of two formidable competitors should have sharpened British entrepreneurial skill. Instead the country began retreating behind a tariff wall, abandoning its traditional policy of free trade. Using its preferential access to colonial markets, it was able to prop up its increasingly obsolete industrial base. The economic shock of two world wars, a depression and imperial collapse weakened the country further. Three and a half decades of Labour Party style socialism finished the job. By the late 1970s Britain was the sick man of Europe. A sad example of decline our American friends should keep before them.

Posted by Richard Anderson on February 16, 2010 | Permalink


I would like to smug in regards to the decline of the British Empire but there are far too many parallels between Canada , the USA and England. The nanny state mentality is crushing all of us.

Posted by: peterj | 2010-02-20 7:48:48 PM

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