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Running head: BUINESS ECONOMICS

Running head: BUINESS ECONOMICS

 

 

 

Business Economics

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SCHOOL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

Introduction. 3

Socio-economic and political history of Britain. 3

De-industrialization vs. modern market evaluation. 6

Burgers for Britain. 7

Conclusion. 9

References. 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Economics

Introduction

It was recently revealed that more workers are involved in making sandwiches than making steel in Britain today. Does this mean that Britain is now so de-industrialized that service industries have taken over from important manufacturing sectors? Or does it suggest that the country is developing its businesses according to the dictates of modern market evolution? Discuss these two contentions and come to a considered conclusion.

Socio-economic and political history of Britain

Mokyr & Nye (2007) narrated that Britain became the first industrial nation when it assumed the leadership of the Industrial Revolution in the 18th century (p. 1). The Glorious Revolution of 1688 and other events until 1689 and the Civil Wars, “created a stable and strong nationwide government that made Britain into an integrated and large jurisdictional unit, thus weakening most distributional coalitions (Olson, cited in Mokyr & Nye, 2007, p. 1). Britain became a powerful and stable nation where the power, wealth, and stability of the central government also expanded. By paving the way for economic transformation, Britain’s industrial technology and liberal commerce both flourished and stopped supporting mercantilist, which protected some merchants, manufacturers, financiers, ship owners, and planters. Subsequently, Britain consented in creating and encouraging a system in which a new merchant class shifted the distribution of political power toward capital, commerce, and then labor, instead of concentrating this power on land and in the hands of the nation’s nobility.

Thus, from agriculture, production shifted to industry and services, to supply the demands not only of the local, but also the national markets and international commerce. This trend eventually weakened the traditional power of the nobility and destroyed the social system that supported them. But, the elites were invited into an economic transformation that promised greater immediate rewards than the long-term change that was either unnoticed or apparently insignificant, which was meant to end their political dominance (Mokyr & Nye, 2007, p. 1). The landed elite created a democracy, since they realized the high costs of repression as well as the possibility of surrendering their power to the landless majority. So, this landed minority continued to benefit from increasing land values in urban and other strategic areas, until the mid-19th century. In this regard, the structure and size of British tax receipts showed how the “British landowning class was co-opted to join those that it could not beat” (p. 1). Consequently, total government income increased at nearly five times more than the growth of gross domestic product.

Mokyr & Nye (2007) stressed that, “there were losers from this transformation, both in a relative and in an absolute sense” (p. 1). At the disadvantaged position were small-scale farmers and the workers in the large domestic industry, and increasing numbers of independent artisans. Local merchants and niche producers, who used to make a humble and secure living in an economy of disjointed production, encountered increasing competition at a national level and were unable to maintain or rely on either visible government protection or the natural shield of high transportation costs. Hence, developments, such as “improved productivity, increasing quality standardization, and, the realization of certain economies of scale, by lessening uncertainty,” happened at the expense of many small merchants who had to follow the discipline of a competitive national market, as outsiders started to invade their once-safe positions (Szostak, cited in Mokyr & Nye, 2007, p. 1).

The British elite failed to effectively stop the growing commerce in the 18th century, and did not impose challenging obstacles to the industrial expansion around Britain. They have not prepared for changes in technology and production, which revolutionized British production in only a few industries and gradually reversed the whole relationship between town and country. Though, it was noted that the British political establishment increasingly supported the” bearers of technological progress and innovation” (Mokyr & Nye, 2007, p. 1). It is also clear, however, that many of the elite had the awareness to plunge into a fast changing economy.     

 With the abolition of the Corn Laws starting from 1846, “Britain made a decided shift to a unilateral free-trade regime (which was accomplished by the 1860s), although this move was based on its then unchallenged economic superiority and was intricately linked with its imperial policy (Chang, 2002, p. 1). Many European countries considerably reduced tariff protection, between 1860 and 1880, simultaneously with the practice of free trade through colonialism that compelled most of the countries of the world.

The free trade regime, however, was short-lived. British politics concentrated on the “reintroduction of protectionism” (Chang, 2002, p. 1) as one of its hottest issues, while the United States and Germany were competing with Britain’s manufacturing advantage to the United States and Germany. “The influence of the Tariff Reform League formed in 1903 under the leadership of the charismatic politician Joseph Chamberlain is a good testimony to this” (Clarke, cited in Chang, 2002, p. 1 ). Free trade died down in 1932 when Britain reintroduced tariffs on a large scale. In relation to this, the free-trade theory that the British classical economists had advocated were considered by many U.S. intellectuals and politicians to be unsuitable to the United States. Consequently, the early mentor of Abraham Lincoln and the most famous protectionist politician of the early 19th century,  Henry Clay, clearly opposed what he called the "British System" of free trade by naming his economic policy platform the "American System". Henry Carey, then, “even argued that free trade was a part of the British imperialist system that consigned the United States to a role of primary product exporter” (Conkin, cited in Chang, 2002, p. 1). In addition, Abraham Lincoln fully shared the view of Clay in the “American System,” which consisted of infant-industry protection ("Protection for Home Industries") and infrastructural development ("Internal Improvements"). 

De-industrialization vs. modern market evaluation

Based on the foregoing discussion about the socio-economic and political history of Britain, it can be said that the British political establishment’s refusal to give in to the local special interests that attempted to oppose innovation, was meant to preserve the technological status quo (p. 1).  Innovation and technological progress were apparently responsible for Britain’s success and the desire to be on the lead in a competitive world. Accordingly, Britain, which once led the Industrial Revolution and became the first industrial nation, is seemingly developing its businesses according to the dictates of modern market evolution, which had been influenced by the country’s socio-economic and political history, rather than being de-industrialized, when the service industries have taken over from important manufacturing sectors. This development is also consistent with the British Parliament’s task of implementing reforms gradually, by often preserving many older forms while "reforming" and adapting them to changing needs. “These reforms were certainly uneven and lagged behind the demand for them” (Mokyr & Nye, 2007, p. 1).

The Columbia Encyclopedia (2009) cited that “services are marketed in much the same manner as goods and commodities” (p. 30954). A service, like that of a repair person or physician, is sometimes marketed in the same way as the act that produces it. Personal services may also be facilitated through employment agencies, booking agents for concert or theatrical performers, travel agents, and others. Methods of marketing vary from market research, to motivational research, and other means of knowing a product’s consumer acceptability before the producer decides to manufacture and do large scale marketing on it. Market research is a major industry in itself, which is often done through telephone interviews with consumers.

Burgers for Britain

In Burgers for Britain, Debres (2005) “summarizes the growth and development of the company from the 1970s to the early twenty-first century, and then focuses on the exteriors, interiors and restaurant menus of McDonald's UK”. She also discusses the creation of a two-tiered system of restaurant exteriors and interiors. McDonald’s UK is still identified strongly with the Americanization of Britain, although it has more than a thousand outlets in Britain and has been integrated into the British downtown streetscape.

Britain was the last major market that McDonald's tapped in western Europe possibly because of the high prices of British property and beef., aside from the tradition of McDonald's as a drive-in restaurant, an unknown form in 1970s Britain. In 1970s Britain, drive-in restaurants may have been unknown, but the British had already learned about American food through Kentucky Fried Chicken. Unlike dining out in Britain, which was primarily a middle class adult experience in a quiet surroundings, a leisurely meal, and attentive service, McDonald's tried to expand the market and invite families from all walks of life to dine out three times a day. Imported American food became part of the “American culturaI invasion” by the British.

McDonald's opened its first UK restaurant in a London suburb, in Woolwich on October 1974, and imported many items from the U.S., for the first overseas restaurants, which were located on prime sites with a steady flow of customers, to increase McDonald's visibility in the community. McDonald's food was imported outside the UK, to comply with its strict product control guidelines. McDonald's UK became a classic example of vertical integration, as it established its own food suppliers as well as its own distribution infrastructure in Britain. For instance, “french fries for McDonald's in Europe come from a plant in Germany built with company funds” (Debres, 2005, p. 1). Other plants located there, produce buns and syrup for the United Kingdom, established as a joint venture between McDonald's and English and American operating partners (Love, cited in Debres, 2005, p. 1).

Debres (2005) concluded that McDonald's “has helped change the British dining experience” (p. 1). It made available inexpensive meals and snacks, of a consistent quality, at more than a thousand outlets in Britain, with very long restaurant hours, which support the expanded Sunday shopping hours in many British cities. McDonald’s especially welcomes children and teenagers, who can often make their own social spaces in individual restaurants. McDonald’s has expanded "take-away" dining, which was popular in Britain at fish and chip and ethnic restaurants, and has “changed the meaning of a family meal, especially in urban locations’ (Bell and Valentine, cited in Debres, 2005, p. 1).

For the last quarter century, McDonald's has played an important role in the so-called Americanization of Britain, which refers to a particular form of Americanization, in which large scale capitalism influences the type of restaurant design located on the high streets, and others. McDonald's food is often regarded as unhealthy, and its company business practices--especially the employment of young, part-time nonunion workers--are criticized, and it is often accused of trying to get rid of local foods (McLibel, cited in Debres, 2005, p. 1). McDonald's menu offers a few versions of local food, such as the ones in Britain. It offers a version of the American culture in its numerous UK outlets, to encourage the appeal of the popular American culture.

As a symbol of the world's remaining superpower, which has a culture that considers itself as particularly superior to any other in the world, and which also tends to proselytize (Zelinsky, cited in Debres, 2005, p. 1), McDonald's presence in Britain is somewhat an "imperial" one, and its restaurants may be viewed as "growth poles" of American culture.  Its presence in Britain is especially problematic, at least to those concerned with the effects of globalization. McDonald's common presence in Britain, especially in larger urban areas, for more than 23 years, as an export of Americana, is also integral to the contemporary British national popular culture, and as the leading burger chain in Britain, is at or near the core of that culture. If food expresses notions of inclusion and exclusion, then the acceptance of majority of the British public of McDonald's in their localities indicates an acceptance, or an agreement with many of McDonald's policies that may also affect other cultural and social changes in Britain.

Conclusion

More workers are involved in making sandwiches than making steel in Britain today because the country is apparently developing its businesses according to the influence of modern market evolution, which stemmed from its socio-economic and political history.  Britain’s history as the first industrial nation who used to lead the Industrial Revolution, and whose landed elite reaped more benefits during the economic transformation, than the disenfranchised masses, has significantly influenced the decisions and policies of the British parliament, particularly in terms of expanding trade and commerce in both the national and the international markets where different types of services such as professional, personal, and food services are marketed in various ways.  The entry of foreign companies, like McDonald’s, and their respective products and services, like food, into the local and the national markets, does not only require the local populace of a nation to be open to new ways in dining and eating, and to accept and agree with the policies of these companies. But, it also alerts the people of a nation, like Britain, to be aware of the important cultural and social changes that could influence the identity of a nation and its people.    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Chang, Ha-Joon. (2002). Kicking away the ladder: an unofficial history of capitalism, especially in Britain and the United States. Challenge, 45 (5), 63+.

Debres, K. (2005). Burgers for Britain: A cultural geography of McDonald's UK. Journal of Cultural Geography, 22 (2), 115+.

Mokyr, J. & Nye, J.V.C. (2007). Distributional coalitions, the industrial revolution and the origins of economic growth in Britain. Southern Economic Journal, 74 (1), 50+.

Marketing. (2009). The Columbia Encyclopedia, 6th ed. Sixth Edition. (no volume, p. 30954). New York: Columbia University Press.