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Forging Ahead, Falling Behind and Fighting Back: British Economic Growth from the Industrial Revolution to the Financial Crisis
To what extent has the British economy declined compared to its competitors and what are the underlying reasons for this decline? Nicholas Crafts, one of the world's foremost economic historians, tackles these questions in a major new account of Britain's long-run economic performance. He argues that history matters in interpreting current economic performance, because the present is always conditioned by what went before. Bringing together ideas from economic growth theory and varieties of capitalism to endogenous growth and cliometrics, he reveals the microeconomic foundations of Britain's economic performance in terms of the impact of institutional arrangements and policy choices on productivity performance. The book traces Britain's path from the first Industrial Revolution and global economic primacy through to its subsequent long-term decline, the strengths and weaknesses of the Thatcherite response, and the improvement in relative economic performance that was sustained to the eve of the financial crisis.
160 pages, Paperback
First published January 1, 2018
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About the author
Nicholas Crafts
36 books1 followerProfessor of Economics and Economic History at the University of Warwick.
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Displaying 1 - 5 of 5 reviews
August 8, 2019
An important part of understanding the future course of an economy is to understand from where it has come. It was this that attracted me to the book to begin with. The book charts the economic progress of Britain from the start of the Industrial Revolution to the current day. In many ways, it is a companion to a number of similar volumes charting the rise of the American economy. All of these serve as a guide to the future.
This book takes an econometric approach to economic history. There is little description and much analysis. I didn't mind that too much, but it did make for heavy reading. I did have a problem with the econometric model used because I felt that it was too focussed on the things that are easily measured, as econometrics does, and that it didn't really come to grips with those things that were not too readily measured. That is a point in favour of a more descriptive approach.
An example of this might be the role of institutions in the development of the British economy. The author quite rightly points to their importance, especially in the development of London as a financial centre late in the Nineteenth Century, but its importance doesn't easily render itself for inclusion into an econometric model. Instead, it gets lumped into 'Total Factor Productivity', whatever that is. The result is that the importance of the supply side, a naturally soft side to the economy, becomes underplayed.
This works against the author. Later in the book he argues that it was the institutional legacy of the Nineteenth Century that impeded progress in Britain in the Twentieth Century. I can see this. The contemporary economy is more like an historical theme park than a modern dynamic economy, and this is largely due to the legacy effects of deep and entrenched vested interests. However, the core question of what it is that allowed Victorian Britain to forge ahead, but prevents Elizabethan Britain from doing likewise, is largely unexplored. It doesn't easily render itself to econometric analysis.
On the whole, I found the book interesting. There are snippets of really good analysis here and there, but they are buried in a large volume of dense academic economic analysis. The book is only a shrt one, but in reading it felt much, much, longer. It is a work that can only be recommended to the dedicated.
This book takes an econometric approach to economic history. There is little description and much analysis. I didn't mind that too much, but it did make for heavy reading. I did have a problem with the econometric model used because I felt that it was too focussed on the things that are easily measured, as econometrics does, and that it didn't really come to grips with those things that were not too readily measured. That is a point in favour of a more descriptive approach.
An example of this might be the role of institutions in the development of the British economy. The author quite rightly points to their importance, especially in the development of London as a financial centre late in the Nineteenth Century, but its importance doesn't easily render itself for inclusion into an econometric model. Instead, it gets lumped into 'Total Factor Productivity', whatever that is. The result is that the importance of the supply side, a naturally soft side to the economy, becomes underplayed.
This works against the author. Later in the book he argues that it was the institutional legacy of the Nineteenth Century that impeded progress in Britain in the Twentieth Century. I can see this. The contemporary economy is more like an historical theme park than a modern dynamic economy, and this is largely due to the legacy effects of deep and entrenched vested interests. However, the core question of what it is that allowed Victorian Britain to forge ahead, but prevents Elizabethan Britain from doing likewise, is largely unexplored. It doesn't easily render itself to econometric analysis.
On the whole, I found the book interesting. There are snippets of really good analysis here and there, but they are buried in a large volume of dense academic economic analysis. The book is only a shrt one, but in reading it felt much, much, longer. It is a work that can only be recommended to the dedicated.
August 27, 2025
This is a concise and tightly-argued book. In fact, it so concise that it runs to only 129 pages of text and is, therefore, more of an extended essay than a book.
Even so it is still worth reading as it distils a lifetime of think about the macro-economic history of modern Britain by one of its leading practitioners. In some ways it is a hard book to criticise because its design and execution have such a high degree of internal coherence and control. Crafts’ focus is on tracking the British economy’s national growth performance over 250 years using a small set of indicators and explaining it through the lens of modern growth theory. Comparison with a select group of other economies is used to benchmark Britain’s performance. Other economic and policy issues are outside the book’s self-imposed remit.
The main insights of the book are the author’s focus on the role of institutions, particularly the institutional legacy of the 19th century and its effect (or not) on growth in the 20th century. Crafts also has comments on the Varieties of Capitalism framework, suggesting that liberal markets economies, like Britain, performed best in periods of rapid economic change and in adapting general purpose technologies.
The book is clearly intended to address policy makers, as well as historians. In some periods, Crafts comments directly on the performance of government economic policy. Here he is not so consistent in his analysis. There is little on the 18th and 19th centuries. Crafts is sympathetic to policy makers in the 1930s, harsh on policy makers of the post-war period, but omits any reference to the obvious major failures post-1979: the disastrous monetarist experiment, the Lawson boom-bust and the ERM debacle. As these are clear examples of a government causing major recessions, and therefore damaging growth, this seems a major oversight. Some readers will perhaps find this a revealing one, as Crafts does criticise the failure to regulate finance pre-2008.
Crafts is also not consistent in his choice of comparator countries. India and China are included at the beginning, but then dropped never to return. Japan never appears post-1945. This suggests a weakness, common to Western liberal economists who came of age post-1979, to fully absorb the significance of the rise of the East Asian economies for both theory and practice. ‘Europe’ in this book often means just France and Germany.
For the casual reader the book’s tight focus—although intellectual admirable—may be a disappointment. Major issues that you might expect to find in a survey of the British economy are absent. There is no discussion of deindustrialisation, for example. The effect of Britain's empire on the economy is not considered at any point, which seem extraordinary, particularly for a book obsessed with the debate on relative economic decline. For an author who elsewhere has worked on economic geography, there is little focus on the impact of urbanisation, or of regional patterns of growth.
Finally, the ‘view from above’ can only ever tell part of the story. One could easily imagine an alternative book covering the same period, but focused instead on the economic performance of British households. That would surely paint a different picture, especially for the post-1945 period. Perhaps someone should write it.
Even so it is still worth reading as it distils a lifetime of think about the macro-economic history of modern Britain by one of its leading practitioners. In some ways it is a hard book to criticise because its design and execution have such a high degree of internal coherence and control. Crafts’ focus is on tracking the British economy’s national growth performance over 250 years using a small set of indicators and explaining it through the lens of modern growth theory. Comparison with a select group of other economies is used to benchmark Britain’s performance. Other economic and policy issues are outside the book’s self-imposed remit.
The main insights of the book are the author’s focus on the role of institutions, particularly the institutional legacy of the 19th century and its effect (or not) on growth in the 20th century. Crafts also has comments on the Varieties of Capitalism framework, suggesting that liberal markets economies, like Britain, performed best in periods of rapid economic change and in adapting general purpose technologies.
The book is clearly intended to address policy makers, as well as historians. In some periods, Crafts comments directly on the performance of government economic policy. Here he is not so consistent in his analysis. There is little on the 18th and 19th centuries. Crafts is sympathetic to policy makers in the 1930s, harsh on policy makers of the post-war period, but omits any reference to the obvious major failures post-1979: the disastrous monetarist experiment, the Lawson boom-bust and the ERM debacle. As these are clear examples of a government causing major recessions, and therefore damaging growth, this seems a major oversight. Some readers will perhaps find this a revealing one, as Crafts does criticise the failure to regulate finance pre-2008.
Crafts is also not consistent in his choice of comparator countries. India and China are included at the beginning, but then dropped never to return. Japan never appears post-1945. This suggests a weakness, common to Western liberal economists who came of age post-1979, to fully absorb the significance of the rise of the East Asian economies for both theory and practice. ‘Europe’ in this book often means just France and Germany.
For the casual reader the book’s tight focus—although intellectual admirable—may be a disappointment. Major issues that you might expect to find in a survey of the British economy are absent. There is no discussion of deindustrialisation, for example. The effect of Britain's empire on the economy is not considered at any point, which seem extraordinary, particularly for a book obsessed with the debate on relative economic decline. For an author who elsewhere has worked on economic geography, there is little focus on the impact of urbanisation, or of regional patterns of growth.
Finally, the ‘view from above’ can only ever tell part of the story. One could easily imagine an alternative book covering the same period, but focused instead on the economic performance of British households. That would surely paint a different picture, especially for the post-1945 period. Perhaps someone should write it.
October 24, 2021
A wonderfully concise overview of the last ~250 years of British economic performance. Crafts does a great job integrating "institutionalist" views on the relevance of path-dependent historical outcomes with broader macro growth theory. His perspective on the Industrial Revolution is tempered -- it was a transition to a new level of technological progress, but by no means a sharp and dramatic overhaul in productivity. He is relatively agnostic on the relevance of Mokyr's "embrace of science" versus Allen's "high wage theory" for explaining "why Britain." I would have liked more critical discussion of that and institutional/cultural comparison with other countries. I have no familiarity with the literature but all of his twentieth century explanations made a lot of sense. The only thing I would have liked to see more of is welfare comparisons of the greater unionization and lower relative growth (versus EU) of 1950-75 versus higher growth but weaker labor power since. This is somewhat dense reading -- every sentence introduces new empirical information or theoretical linkages -- but makes the book a remarkably efficient tour through its subject matter.
July 17, 2021
Very clean analysis, punctures many misconceptions. At under 130 pages, not much background on the economic theories Crafts is basing his analysis around, which could be an issue for readers not up on contemporary growth theory.
April 10, 2025
Very insightful and straight to the point.
Displaying 1 - 5 of 5 reviews