Introduction

We now turn in part 2 to explanation of the comparative labour productivity performance in manufacturing that has been established in part 1 of the book. In particular, the persistence of a large labour productivity lead in the United States needs to be explained. In this chapter a general framework is provided, in which productivity differences between countries can persist as a result of technical choice and factor accumulation around those technical choices, despite all countries having access to the same technology. Here I draw on a number of historical models of technology and growth which are surveyed below, before deriving a model of technical choice based on Broadberry (1994a).

Historical models of technology and growth

The survey offered here aims to highlight the key themes of the model developed below, rather than to provide a comprehensive literature survey. The starting point is the Rothbarth-Habakkuk thesis, which traces the origin of transatlantic technological differences to land and resource abundance in the New World. Given complementarity between natural resources and machinery, a more machine-intensive technology developed in America. This had implications for the labour process, a theme taken up in the work of Piore and Sabel (1984) and others. American manufacturing substituted resource-using machinery for skilled labour, which was in short supply in the New World. In Europe, however, skilled labour was abundant and resources scarce, so that European technology remained skilled labour-intensive.