(^454) THE WEALTH AND POVERTY OF NATIONS
dian terms, a pound's worth of port wine equaled a pound's worth of
machine-spun cotton. The dissenters, strangely cowed, caught between
logic and intuition, object sotto voce.
- "Did Victorian Britain Fail?"—a loaded question. It was the title
of an article that defined failure as doing less well than rational behav
ior would have permitted.^29 Did British entrepreneurs miss opportu
nities to make more money because of want of character, knowledge,
or rationality? The answer of the historical economist (the "new eco
nomic historian") was no: if Britain did less well than some other coun
tries in, say, coal or steel or cotton manufacture, it was because it could
not have done better. Coal deposits were not thick enough; better iron
ores could wait while older, poorer ores were used up; faster spinning
machines did not suit fine British yarn. Given competition, all had to
be for the best in the best of all possible worlds.
True, foreign rivals now ran faster and better machines and more of
them. But new is not always cheaper, at least not for the early comer.
Never underestimate the tenacity and ingenuity of older devices where
touch and hand skills play a role lost with automation. Even where
British equipment aged, it did not always pay to replace it. These older
machines had already been paid for, and their net return might be
higher than a new device's. New might be more productive, but it still
had to be amortized.
And then some things were beyond the entrepreneur's control. Ex
ternal costs (related costs), for example, were greater in Britain, which
was stuck with relatively narrow-gauge track, small freight cars, low
bridges, narrow, winding roads. These installations had been built eco
nomically when volume was smaller. Now they reduced economies of
scale and hurt mass production. Similarly, Britain had developed a sys
tem of commission brokers and multimark distributors between man
ufacturer and potential customers.^30 These arrangements had once
promoted division of labor. Now they got in the way of big deals. Some
British enterprises did find ways to bypass the bottlenecks; but too few.
Ironically, many of the production changes deemed unnecessary and
unprofitable before 1914 were made after the war—everything in its
time. They came then too late.* And when one sees evidence of de-
- Thus Clapham, speaking of improvements in iron and steel technology: "Yet it
is hard to believe that a process employed so extensively in 1925 and 1913 might
not have been employed to advantage rather more than it was in 1901 and earlier"—
Economic History, III, 148.