The Visible HandIssue: Winter 1993-1994
A hundred years ago, Great Britain, then the world's premier power, went into a long-term decline. Annual economic growth 1871-1913 averaged only 1.6 percent and historians have labeled this era "the Great Depression." During this period, the U.S. and Germany both passed England as an industrial power. After the adoption of free trade in the 1840s, a quarter century of economic dominance continued, but by 1873 observers such as Lord Penzance were warning: "The advance of other nations into those regions of manufacture in which we used to stand either alone or supreme, should make us alive to the possible future. Where we used to find customers, we now find rivals....Prudence is not alarm, and prudence demands a dispassionate inquiry into the course we are pursuing, in place of a blind adhesion to a discredited theory."