The Post-American World - Fareed Zakaria [83]
The Strange Rise of British Power
Britain has been a rich country for centuries (and a great power for most of that time), but it was an economic superpower for little longer than a generation. We often make the mistake of dating Britain’s apogee by the great imperial events, such as the Diamond Jubilee, that were seen at the time as the markers of power. In fact, by 1897, Britain’s best years were already behind it. Britain’s true apogee was a generation earlier, from 1845 to 1870. At the time, Britain was producing more than 30 percent of global GDP. Its energy consumption was five times that of the United States and Prussia and 155 times that of Russia. It accounted for one-fifth of the world’s trade and two-fifths of its manufacturing trade.6 And all this with just 2 percent of the world’s population!
In 1820, when population and agriculture were the main determinants of GDP, France’s economy was larger than Britain’s. By the late 1870s, the United States had equaled Britain on most industrial measures and actually surpassed it by the early 1880s, as Germany would about fifteen years later. By World War I, the American economy was twice the size of Britain’s, and together France’s and Russia’s were larger as well. In 1860, Britain produced 53 percent of the world’s iron (then a sign of supreme industrial strength); in 1914, it made less than 10 percent.
There are, of course, many ways of measuring power. Politically, London was still the capital of the world at the time of World War I. Across the globe beyond Europe, London’s writ was unequaled and largely unchallenged. Britain had acquired an empire in a period before the onset of nationalism, and so there were few obstacles to creating and maintaining control in far-flung places. Its sea power was unrivaled for over a century. It had also proved to be highly skilled at the art of empire. As a result of the empire, it remained dominant in banking, shipping, insurance, and investments. London was still the center of global finance and the pound still the reserve currency of the world. Even in 1914, Britain invested twice as much capital abroad as its closest competitor, France, and five times as much as the United States. The economic returns of these investments and other “invisible trades” in some ways masked Britain’s decline.
The reality, however, was that Britain’s economy was sliding. In those days, manufacturing still accounted for the bulk of a national economy, and the goods Britain was producing represented the past rather than the future. In 1907, it manufactured four times as many bicycles as the United States did, but the United States manufactured twelve times as many cars. The gap was visible in the chemical industry, the production of scientific instruments, and many other areas. The overall trend was clear: British growth rates had dropped from 2.6 percent in its heyday to 1.9 percent from 1885 onward, and falling. The United States and Germany, meanwhile, were growing at around 5 percent. Having spearheaded the first industrial revolution, Britain had been less adept at moving into the second.
Scholars have debated the causes of Britain’s decline since shortly after that decline began. Some have focused on geopolitics; others, on economic factors like low investment in new plants and equipment, bad labor relations,