Carol E. Heim

Interest Rates and Crowding-Out During Britain's Industrial Revolution

Available evidence on interest rates and government borrowing during Britains industrial revolution, while limited, does not support the idea that war spending crowded out private investment. This article demonstrates the importance of using data on net receipts from borrowing, rather than changes in government debt. Weaknesses of the crowding-out model concerning capital markets and investment, openness of the economy, and full employment are identified for the historical case. The case raises broader issues of whether conceptions of saving and investment based in neoclassical supply-constrained models are as appropriate as theories of capital accumulation.

Structural Transformation and the Demand for New Labor in Advanced Economies: Interwar Britain

In prosperous and depressed areas sectors of industry representing structural transformation in interwar Britain tended to draw upon new types of workers rather than upon workers displaced in declining export industries. Data on the age and sex composition of people in expanding and declining industries, on new entrants to the labor force, and on interindustry mobility are examined to support this claim. The process reflects a general tendency of capitalist economies to grow through incorporation of new elements.

Government Research Establishments, State Capacity and Distribution of Industry Policy in Britain

HEIM C. E. (1988) Government research establishments, state capacity and distribution of industrial policy in Britain, Reg. Studies 22, 375–386. Location decisions concerning government research establishments are examined to understand why defence and civil establishments were concentrated in the South in the late 1940s when regional policy to disperse economic activity was being actively promoted by the Labour Government. World War Two, while increasing state capacity generally, strengthened individual departments within central government with opposing views on regional policy, thus having both positive and negative implications for pursuit of particular policies such as distribution of industry. Defence departments and the Department of Scientific and Industrial Research, favouring southern locations, generally prevailed over the Board of Trade. The major exception—the National Mechanical Engineering Laboratory sent to Scotland—owed its location to political pressure more difficult to mobilize for oth...

Industrial Organization and Regional Development in Interwar Britain

Developments in industrial organization contributed to the lack of diversification in Britains older industrial areas during the interwar period. The large-scale firm had not yet developed in appropriate industries to the point where large numbers of branch plants could be sent to the depressed areas (as they were after World War II), even if interwar macroeconomic policy had been more expansionary. At the industry level, barriers to new entrants and restrictive practices were high in the 1930s, precisely the period when the need for structural change in the depressed areas was most apparent.

R & D, Defense, and Spatial Divisions of Labor in Twentieth-Century Britain

New spatial patterns, with areas specializing by function rather than industry, reflect twentieth-century developments in industrial organization, the role of the state, and Britains system of cities. In the short run, World War II and postwar regional policy increased factory-building and employment in formerly depressed areas. Longer-run effects of both helped concentrate research and development within the South near London and dispersed routinized production to other areas. Organizational links within firms and to government departments, intellectual and commercial contacts in London, and locational preferences of professional and technical workers influenced R & D location.

Dimensions of Decline: Industrial Regions in the United States and Europe, 1970-1990

This paper assesses the severity of the problem of declining industrial regions in the U.S. and Europe during 1970-1990. Conceptual issues in defining such regions are discussed, as are difficulties in comparing U.S. and European data. The proportion of the population living in declining industrial regions in selected years ranged from 11 to 25 percent for the U.S., and from 17 to 28 percent for Europe as a whole, with a wider range for individual European countries. In the U.S., declining industrial regions showed relatively low persistence over time; only 2 states and 15 metropolitan areas are identified as such regions in all four years for which U.S. data are presented.

Uneven Regional Development in Interwar Britain

This study examines Great Britains adaptation in the 1920s and 1930s to the decline in the market for its nineteenth-century exports: cotton textiles, ships, iron and steel products, and coal. Continued growth in a mature economy depends at certain points upon structural change, in this case a movement from declining to expanding industries. At such times, I contend, the developing sector tends to grow independently, rather than through transformation of existing productive structures. Growth does not occur primarily through a reallocation of capital and labor from declining to expanding industries and regions.

THE TREASURY AS DEVELOPER-CAPITALIST - BRITISH NEW TOWN BUILDING IN THE 1950S

In the 1950s the British Treasury made an unusual departure from its traditional effort to minimize government spending, arguing that publicly funded development corporations rather than private developers should build town centers in New Towns so as to reap returns from property development. Often associated with frontier growth, development gain is partly created by the state and can only emerge and be realized with the passage of time and the evolution of expectations. Divisions within the state kept Treasury officials from fully securing a greater public role in New Town center building.

Dodging Bullets: Changing U.S. Corporate Capital Structure in the 1980s and 1990s. By Robert N. McCauley, Judith S. Ruud, and Frank Iacono. Cambridge, MA: MIT Press, 1999. Pp. xii, 415.

During the late 1980s the United States experienced a major wave of corporate leveraging as firms substituted debt for equity. The boom peaked in 1989, after which the junk bond market collapsed, bank credit tightened, and leveraged buyouts (LBOs) dropped off sharply. Beginning in 1991, the favorable stock market helped firms that had been taken private with largely borrowed money to survive by issuing public equity. As the economy recovered from recession, mergers and acquisitions resumed the acceleration that had begun in the 1980s. Corporate restructuring often occurred without much leveraging, however, and in the more friendly deals of the 1990s CEOs were likely to be in control.