The manufacturing comparative advantages of late-Victorian Britain

Abstract

This article constructs indicators of revealed comparative advantage for 18 British manufacturing industries for the years 1880, 1890, and 1900. These indicators constitute the earliest systematic measurements of the relative performance of British industries. The indicators are then employed in a four-factor Heckscher–Ohlin model of trade, with the factors being capital, labour, material inputs, and human capital. Contrary to the previous literature, the manufacturing comparative advantages of late-Victorian Britain were not in the relatively labour-intensive industries. By 1890, there was a distinctly labour-economizing regime within British manufacturing. Contributing to this pattern of within-sector specialization were emigration from Britain and the full absorption of displaced agricultural labour into the manufacturing sector. This article concludes with the suggestion that, in the late-Victorian era, British and American manufacturing were not so dissimilar, at least relative to Continental manufacturing.