Introduction

In a previous book, I argued that there was little change in the comparative productivity performance of UK manufacturing between the mid-nineteenth century and the late twentieth century (Broadberry, 1997a). In both 1870 and 1990 US labour productivity in manufacturing was about twice the British level, while German labour productivity in manufacturing was about the same as in Britain. I also noted that value added per employee varied between manufacturing and the rest of the economy, and that the size of the manufacturing sector differed across countries and over time. This meant that it was still possible for manufacturing to have contributed to Britain's relative economic decline, through, for example, greater de-industrialisation than in Germany (Broadberry and Crafts, 2003). Nevertheless, the central message of The Productivity Race was surely that, to understand the relative decline in British productivity and living standards since the mid-nineteenth century, it is necessary to understand what happened in services.

This book is an attempt to set out the story of Britain's productivity performance in services, focusing in particular on market services. Part I begins by establishing the comparative productivity trends in services, and fitting them into the patterns for the whole economy. I show that comparative productivity trends in services, unlike those in manufacturing, do mirror comparative productivity trends in the whole economy.