The cotton textiles industry was Britain’s leading export for 125 years, allowing Britain to pioneer the mechanisation of the textiles industry. However, by the early 20th Century the components that forged its success were no longer exclusive and thus Britain lost its comparative advantage over its foreign competition. The UK went from controlling almost 80% of the worlds cotton to around 28% in period of just 50 years. There are several reasons put forward to explain the rapid decline in the industry which include: the failure of British Entrepreneurs to invest in re-equipment, the failure of the Government to intervene and the product cycle theory. To determine whether the decline of the industry was inevitable it is crucial to understand and discuss what could have prevented the collapse. Historians put forward various suggestions as to what could have prevented this decline however evidence suggests that this would only have slowed the decline, not prevented it. The only viable solution was for Britain to adopt American Protectionist policies and introduce tariffs and quotas. However, the adopting of this kind of government policy was extremely unlikely and there for I shall argue that the collapse of the cotton industry was inevitable.
The failure of British entrepreneurs to invest and re-equip the mills played a key role in the decline of the industry. British entrepreneurs are quite often criticised for failing to direct investment correctly in order to increase competitiveness. Tomlinson argues that ‘profit maximisation conflicted with the industry’s development rather than a case where Britain had lost its competitive advantage’. He argues that the main reason UK output demised so quickly was due to the hesitance to develop new machinery to replace the old. Tomlinson suggests that if the British had invested ‘a fraction of the amount that the Dutch and French did in the 1950’s’ then the decline wouldn’t have been so dramatic. The basis of his argument here stems from the fact that during this period whilst British exports fells those of other European Countries grew. An example of this is Holland whose cotton exports rose from 30 million square yards to 70 million. Likewise, Germany’s cotton exports also grew by 27 million in the period between 1950 and 1960. However, when we look at the French performance during this period this is where Tomlinson’s arguments begin to fall apart. The figures show a decline of 25 million square yards during this period. His argument is further weakened by the example of New England who adopted the more advanced ring spinning mules, yet witnessed a more drastic fall than Lancashire. Therefore, it is impossible for us to use the failure of British entrepreneurs to modernise and the lack of implementation of new machinery by British firms on its own as the cause of the industry’s decline. Instead here we can argue that British entrepreneurs were not guilty of underinvestment but pro-longing the use of existing machinery until the industry dried up, something which they believed was inevitable. Singleton highlights this clearly when he says ‘'British mill owners were not the dimwits of labour minister’s imaginations. They knew that cotton was finished and that it was no use throwing good money after bad.’
Another key element providing evidence for an inevitable decline was the fact that the cotton industry was particularly vulnerable to international competition. Cotton manufacturing is primarily a very labour intensive process as opposed to capital intensive which a lot of other industries such as Steel and Iron relied on very heavily. Due to its less capital intensive nature, developing countries used it as an opportunity to industrialise as it required low-skill intensity and involved low transport cost allowing production to take place anywhere irrespective of climate conditions. This provides us with a suitable explanation as to why Asian countries such as Japan could start up and develop a cotton industry. This aspect will be useful in understanding why the decline of the cotton industry in Britain was inevitable. It cannot be concluded that the decline of the cotton industry stemmed from the emergence of foreign competition because one factor that must be considered is the refusal of the Government to implement quotas and tariffs to protect Lancashire’s interests. The success of using tariffs as protection can be clearly seen looking at other European countries. In 1958 Germany imposed a 12-8% duty, France a 20-5% duty and Belgium a 12-8% duty whilst Britain imposed no duty whatsoever on the commonwealth countries under the imperial preference regime (Singleton, 1991). This could be an argument showing that the decline of the British cotton industry may not have been inevitable as other countries managed to survive despite having competition from other low wage countries. This was particularly problematic for Britain as a lot of their competitors were from their former colonies whereas countries such as France had not such competitors amongst theirs. Thus, the result was Lancashire being the only Western European country to be overrun by Asian imports. Additionally, since Britain primarily exported to the commonwealth, the introduction of tariffs may have promoted inefficiency and have little benefit to other areas of the economy, but it would have ensured the survival of the Lancashire cotton industry.
The product cycle theory is probably the most crucial reason allowing us to understand why the collapse of Britain’s cotton industry was inevitable. The argument first put forward by Levitt explains the time cycle of product from when its first launched to when it is taken off the market. The argument explains how products are introduced, experience growth and eventually enter decline as they mature. This theory has been an important tool used by a variety of historians such as Singleton, Broadberry and Leunig use to explain the decline of the Lancashire cotton industry. Britain was always going to be an unlikely producer of cotton as like Leunig points out Britain does not and cannot grow cotton and has no exclusive advantages as a cotton manufacturer. The primary reason as to why Britain could dominate the cotton industry to such a great extent during its early years was due to its early industrialisation compared to other countries. Thus, when other countries began to enter the cotton market, their lower wages were always going to cause trouble for Britain and force it to lose its market share. Post World War One, Japan began to gain a competitive advantage in the cotton industry and began to threaten Britain’s market share. For example, Japanese cotton exports to British West Africa rose 91 million square yards between 1950 and 1960. Another example can be seen from the comparisons with the American market which was dominates by the New England cotton manufacturers until 1871. Post 1871 competition from the South in the low-quality market meant that by the 1930s the South had an advantage in all areas of the American market. Thus, it was going to be inevitable that as wages continued to rise in Britain and fall in other countries that Britain was not going to be able to continue to defend its substantial domination of the worlds cotton industry.
From this we can therefore suggest that the decline of the British cotton industry was in fact inevitable. Looking back the product cycle theory, it clearly suggests that Britain having an early advantage in the industry was inevitable and would have to lose its competitiveness as the industry reached maturity and the competitive advantage shifter to low wage countries. It can be argued here that this result was inevitable because the nature of the cotton industry required low capital requirements, low skilled labour and cheap transportation costs. All of these conditions which ultimately did not favour Britain. Another important factor discussed was the failure of British Entrepreneurs to re-equip and modernise to increase efficiency and compete with foreign competition. However, the argument put forward by Singleton that British cotton producers foresaw the coming collapse of the industry and chose not to modernise further strengthens the argument that the collapse was inevitable. Perhaps the only way that the British cotton industry could’ve survived was if the Government acted through the introduction of tariffs to protect Lancashire’s interest. However, historians suggest that this outcome was very unlikely and thus the collapse inevitable. To conclude an outcome as inevitable whether it is at present or throughout history is extremely difficult however from the evidence and examples looked at earlier, I think we can conclude that the collapse of the Lancashire cotton industry was inevitable.