LOSS OF LEADERSHIP^461
Japan is excellent, overall productivity is substantially lower (55 percent
of the American), because agriculture is cosseted and the service sec
tor is overmanned, highly fragmented, and uncompetitive. The whole
system is designed to create and preserve vested interests, and so much
the worse for the consumer. Meanwhile the yen is overvalued, and in
ternational comparisons based on exchange rates tilt grotesquely in
Japan's favor. The reality is very different. Japanese housing is so frag
ile and space so scarce that it is often easier to tear down a house and
rebuild than to look for better accommodation. Unless, of course, one
is ready to go out into the endless suburbs and do a daily calvary to and
from work.
A mixed picture, then. From the economists, to say nothing of self-
appointed pundits, journalists, and politicians, we have cacophony.
This division of opinion in itself gives one pause; for it recalls the
century-long debate about Britain's performance. Does this kind of
ebb tide invite denial? Is the evidence so abundant that each tempera
ment can find what it wants? Or is the whole issue of leadership now
irrelevant? Have we now entered a new era of global enterprise, such
that nationality no longer matters?
Hardly.
The Rise and Fall of
the British Auto IndustryThe invention of the automobile should have boosted British
industry. No country had a longer tradition of machine manufacture
and engineering; none so large a pool of skilled metal workers. The
potential demand was good. British income levels topped all of
Europe, and imperial dominions and possessions offered sheltered
markets overseas. Yet Britain was slow on the pickup and saw first
France and then the United States take the lead. In 1913, only one
British car stood amongst the top ten of American and British
producers—the Maxwell, in sixth place with 17,000 units, against
202,667 by Ford.^49
Given the winding, narrow roads, British car makers might have
concentrated on small vehicles. Some of them did; but early on, the
industry moved to large, pricey models that appealed to richer
buyers (many with drivers) and brought larger unit profits. As a