British exports in the 1950s: some institutional and geographic considerations
Peter Howlett, London School of Economics
This paper examines UK exports in the 1950s. It argues that a major problem facing UK exports in the
postwar period, as trade liberalisation took hold, was that they were spread across too many markets that
were too far away, especially compared to the main competitors of the UK. It will be argued that there is
evidence that one legacy of imperialism was that British exports were spread too thinly spread over too many
markets when compared to other leading industrial economies. Furthermore, some of the most important of
those markets were geographically very far from London. In contrast in the 1950s France, Germany, Italy,
the USA and Japan already seemed to be orientating themselves to relatively well defined regional trading
blocs to which they were geographically central, most obviously in the case of the European economies. For
Britain the Commonwealth countries, though perhaps not the British colonies, retained a strong hold on
British exporters.
The relative decline of the UK economy in the decades following the Second World War went hand in hand
with the decline in its share of world exports and politically went hand in hand with the decline of the Empire.
The story of the relative decline of British exports is well-known: in 1950 Britain accounted for 10% of world
merchandise exports, second only to the USA, but by 1973 its share had halved whilst that of all its major
industrial competitors had increased; in the case of manufactured exports the decline was even starker.
Politically, the ‘jewel in the crown’, the Indian sub-continent, had broken free form its imperial shackles in
1947 followed by Ceylon (now Sri Lanka) and Burma (Myanmar) in 1948. Almost a decade passed before
the floodgates to independence swung open: among the larger colonies gaining independence were the
Gold Coast (Ghana) and Malaya (Malaysia) in 1957; Nigeria in 1960; Jamaica, Trinidad and Tobago, and
Uganda in 1962; Singapore and Kenya in the following year; with what were Northern Rhodesia (Zambia)
and Southern Rhodesia (Zimbabwe) following suit in, respectively, 1964 and 1965. From an economic
perspective it has been argued that the British Empire was counter-productive to the competitiveness of
British exports because it offered ‘soft markets’ in which political protection from foreign competitors could be
offered to British exporters; at times this argument is extended to encompass the Sterling Area. Allied with
weak competitive pressure in the domestic market in the 1950s, where imports only accounted for 4.7 per
cent of home demand in 1955, it could be argued that this contributed significantly to poor productivity in the
British product market. Also many of these export markets were said to be under-developed, to be growing
slowly in the 1950s and 1960s, and were becoming increasingly protectionist. This was a further hindrance
to British economic growth in a period of increasing trade liberalisation. Thus, the 1950s began with the loss
of political control of the vital Indian sub-continent and the dramatic 30% devaluation of sterling and ended
with the start of second wave of decolonisation and the full awakening of the Bretton Woods system.
The first question that will be addressed is about the spread of export markets. The size and extent of the
British Empire at its height is well known and this represented a good opportunity for British exporters to
spread their wares and penetrate markets across the globe. However, it was not always the case that this
expansion of British trade was market driven, politics was often as important – sometimes a more important
consideration. Therefore it is possible that British exporters over-expanded, that the reach of the Empire
took them into markets, which economic forces alone may not have led them. The question that arises
therefore is was the UK unusual in terms of the number of export markets it was committed to? Given the
size of the British Empire it might be thought that this led it to extend its export effort across far more markets
than other leading economies. If such a situation existed it might have been fine when world markets were
overly protective or when the political muscle of the UK allowed it favourable conditions in such markets.
However, as the empire disintegrated and as the world economy slowly liberalised in the 1950s this may
have become a disadvantage.
At their core these issues concern geography and institutions. These are also primary concerns of the new
economic geography and of the family of gravity models. Therefore a simple gravity-type model is estimated
to try and capture certain aspects of these factors for British exports in the 1950s. British exports are
analysed with respect to the income level and population of the economies they exported to and the distance
of those markets from London; dummy variables are also utilised in an attempt to capture institutional factors
such as the British Empire, the Sterling Area, and being a colony.