Memories of the golden days of the last century also encouraged a conservative attitude toward change in business methods or the routine of production. Some of the larger industries, however, emerged from the war intent on drastic changes, and others, less progressive, were forced to change by the increased competition for export markets and by the new necessity of using the restricted quantities of raw materials to greatest advantage.
Industrial engineering, including work study, work simplification, plant layout, and planned maintenance, has become a primary concern of industrial management. Many of the managers—the managerial class is about half a million strong—are much more interested in new methods of industry than are the workers. Any innovation that seems to disturb the happy condition of full employment and high wages can provoke discontent among the workers. The more progressive unions are doing their best to explain and advocate change. It is in the middle ranks of labor's officer class, the ranks most interested in the emotional support of "the lads," that the strongest resistance to change is located.
Management in industry, therefore, is beginning to assume some of the importance and standing that it attained long ago in the United States. Facilities for training in management are increasing, although the majority of today's managers never received any special training. Trade unions, employers' associations, and individual concerns are pressing forward with training schemes.
There is a relationship between this development and the arrival in British society of the new middle class. Many of the leaders of this class are in management work in industry and commerce. As their position is solidified by Britain's increasing reliance on the export industries they serve, their social and economic importance is bound to increase. In the past their social position has been well below that of the lawyers, doctors, soldiers, and civil servants who were the elite of the old middle class. That, too, is changing.
Gross fixed capital formation recently has been at about 14 per cent of gross national expenditure. By 1954 its volume was 17 per cent above that of 1938 and about 30 per cent greater than in 1948.
In 1951 and 1952 the government responded to the pressing needs of defense and exports by taking measures to curtail certain kinds of investment. In 1953 and 1954 the policy was reversed, and incentives for investment were written into the Budget. But the wave of home buying in 1955 made it necessary for the government again to impose restraints on investment. In particular it sought moderation in capital outlay for municipal and local building and improvements and a deceleration of investment programs in private industry.
These and other actions taken at that time were the result of the Conservative government's preoccupation with the balance of payments, the nation's gold and dollar reserves, the inflationary trend in the national economy, and the need for investment and expansion in the export industries. These objectives will dominate the economic approach of any government, Socialist or Tory, that achieves power in Britain in the foreseeable future.
British industry has many problems of finance, of production and productivity, of management. But to an outsider it appears that the gravest problem of all is the indulgence by the two main partners in industry, labor and management, in restrictive practices. By preventing the most effective use of labor, technical ability, or materials, or by reducing the incentive for such use, these practices gravely damage the industrial efficiency of the country. Restrictive practices seem to many competent observers a far greater danger to the British economy than strikes.
It is important to understand that such practices are almost as prevalent among management as among labor. Each group has the same basic motivation. They seek a reasonably stable economic life free from the strains and stresses of competition. The psychological explanation may be unspoken desire to return to the old easy days of Britain's unquestioned economic supremacy.
The employers' restrictive practices are less widely advertised than those of the workers. Their classic form is the price-fixing agreement which insures that even the least efficient manufacturing firms will have a profit margin. To maintain the price-fixing system, employers maintain private investigators and courts of inquiry; they can and do discipline the maverick who breaks out of the herd.