By John C. Carrington
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3) it is clear that while both France and West Germany were slightly below UK levels in 1960, by 1970 both had considerably surpassed the UK; 23 Britain in the Industrial World Japan-which had a per capita income of about one-third of the UK in 1960-was by 1970 approaching UK level:>. Japan passed UK levels in 1973. Meanwhile, the poor of the world in the developing nations lost ground between 1960 and 1970: they recorded increases in incomes per head of about 60 %, while in the developed world, incomes per capita nearly doubled in the same period.
The principal reason may be that most UK firms do not appear to react strongly to the loss of their export markets, as most of their production is for the home market. A domestic company, however, which increased productivity greatly, would not only threaten a competing firm's exports, but also the very survival of the company. The extent to which works managers in the same industry tend to keep a watchful eye on what the opposition is up to also helps to explain why productivity gains either seem to occur as ripple effects across many sectors of an industry, or not at all.
They do not, however, commit themselves to the kind of structural change required. They observe: 38 Financing Industrial Investment So these economists, and they are numerous, must choose. They can support the allocation of investment resources through the market, or they can support Left policies for higher public expenditure, but they cannot have both. And the British people must decide, either to strengthen the market sector so that it can function effectively, or to support the Left. Once the choice is made, it is crucial that the policies chosen be continued long enough to allow the balance of the economy to be restored.