Winning the war, losing the peace?: a comparative study of labour productivity in British and West German manufacturing, 1936-1968

There has been disagreement on the popular notion of Britain’s relative economic decline vis-à-vis West Germany after 1950. While German scholars emphasised the role of the post-war output gap in German super-growth, the recent British literature crystallized around the manufacturing failure hypothesis of Broadberry and Crafts. This paper offers a comprehensive reassessment of the relative productivity performance of British and West German industry both before the outbreak of World War II and in the early post-war period. The war had an enormous impact on the Anglo-German productivity race. Relative to the UK, industrial value added per hour worked in West Germany had declined by a quarter between 1936 and 1951. In the 1950s, German super-growth can be explained entirely by this war-induced productivity gap. Britain’s relative decline in this period cannot be attributed to British manufacturing failure. If at any time during the post-war Golden Age, such failure can be observed in the 1960s.