Competition In British Industry

This book, first published in 1974, presents the findings of a research project and considers their implications for public policy. The project was designed to find out what effect the 1956 Restrictive Trade Practices Act (and the subsequent legislation of 1968) had on British industry. The Act was a decision in favour of competition against a background of well-entrenched and widespread restrictive agreements, and this book examines in depth its impact in eighteen selected industries.

"A Drewry report" -- cover.

A theoretical and empirical study of the effects of competition across a broad range of industries. Policies to promote competition are high on the political agenda worldwide. But in a constantly changing marketplace, the effects of more intense competition on firm conduct, market structure, and industry performance are often hard to distinguish. This study combines game-theoretic models with empirical evidence from a "natural experiment" of policy reform. The introduction in the United Kingdom of the 1956 Restrictive Trade Practices Act led to the registration and subsequent abolition of explicit restrictive agreements between firms and the intensification of price competition across a range of manufacturing industries. An equally large number of industries were not affected by the legislation. Using data from before and after the 1956 act, this book compares the two groups of industries to determine the effect of price competition on concentration, firm and plant numbers, profitability, advertising intensity, and innovation. The book avoids two problems common to empirical studies of competition: how to measure the intensity of competition and how to unravel the links between competition and other variables. Because the change in the intensity of competition had an external cause, there is no need to measure the intensity of competition directly, and it is possible to identify one-way causal effects when estimating the impact of competition. The book also examines issues such as the industries in which collusion is more likely to occur; the effect of cartels and cartel laws on market structure and profitability; the links between competition, advertising, and innovation; and the constraints on the exercise of merger and antitrust policies.

British society changed radically in the 21st century. Any political party dedicated to preserving the Britain of 1900 would have faced, over time, either major problems of adjustment or the possibility of its own destruction. The British Conservative party was just such a party, its character defined by its commitment to the defence of the British status quo. Yet it has also been one of the most successful political parties in the twentieth century. Not only was it able to adjust itself to the transformation of British society including two world wars and the most catastrophic slump – but it was able to win elections more consistently than any of its rivals. This book seeks to show how the Conservatives achieved such a metamorphosis, by identifying the main changes in the British economy and society, and the changing Conservative response. In practice, there was no single Conservative response to any particular change. The debate within the party revealed a surprisingly large number of responses; yet the range was limited. Indeed, with some simplification, one can see only two general political positions, from which flowed differing proposals on all detailed issues. In describing these two positions, the author suggests a new method of classifying dominant political beliefs in Britain and other Western countries. This study covers a wide field, bringing together contemporary Conservative politics, economic problems and economic history. The Conservatives were intimately related to the interests of what used to be called British capitalism, and their attitudes to the changes taking place in industry reveal most clearly the changing political priorities of the party. The book examines Conservative policy, proposals and attitudes to nationalization and the public sector, to the trade unions and labour, to private business and finally to the economic role of the State, between 1945 and 1964. For those wishing to gain an understanding of the British Conservatives, Nigel Harris’ detailed and stimulating material will make excellent reading and has been acclaimed since its first publication in 1972.