In: Alcohol and alcoholism: the international journal of the Medical Council on Alcoholism (MCA) and the journal of the European Society for Biomedical Research on Alcoholism (ESBRA)
This paper historically and econometrically explores the hypothesis that the productivity slowdown is in part due to the secular increase in industrial conflict, and that this increase derives from the unraveling of the postwar structure of union-management relations (or truce) and historically low unemployment. The empirical investigation of conflict outside the truce and secular productivity growth provides statistical evidence for this hypothesis.
This response offers a critical appraisal of the claim of Albrecht Ritschl to have found a possible resolution to what he calls the Anglo-German industrial productivity puzzle, which arose as the result of a new industrial production index produced in an earlier paper by the same author. Projection back from a widely accepted 1935/36 benchmark using the Ritschl index showed German industrial labor productivity in 1907 substantially higher than in Britain. This presented a puzzle for at least two reasons. First, other comparative information from the pre—World War I period, such as wages, seems difficult to square with much higher German labor productivity at this time. Second, a direct benchmark estimate produced by Stephen Broadberry and Carsten Burhop, using production census information for Britain and industrial survey material of similar quality for Germany, suggested broadly equal labor productivity in 1907. Broadberry and Burhop also showed that if Walther Hoffmann's industrial output index was used instead of the Ritschl index for Germany, the puzzle largely disappeared.
International productivity comparisons are often plagued by discrepancies between benchmark estimates and time series extrapolations. Broadberry and Burhop present both types of evidence for the Anglo-German comparison. For their preferred data, they find only a minimal German productivity lead prior to World War I, while use of a revised industrial output series for Germany by Ritschl leads to implausible results. This article presents further time series revisions and substantial corrections to the Broadberry and Burhop benchmark estimate. Results strongly suggest a considerable German productivity lead over Britain prior to World War I, which eroded during and after the war.