Taking over: a new appraisal of the Anglo-American productivity gap and the nature of American economic leadership ca. 1910

This article re-examines how and when the USA closed the gap and ultimately overtook the UK in terms of both labour productivity and real income. On the basis of a set of sectoral productivity benchmarks for the year 1910 – which utilise a more rigorous methodology than previous pre-First World War productivity studies – I find a substantial USA lead in both agriculture as well as industry. I conclude that the relative strength of the American economy has been underestimated by Maddison and various other scholars. This study suggests that the USA had challenged British economic leadership in terms of relative labour productivity as well as relative income levels long before 1900, and not thereafter. This finding ties into an ongoing heated debate on the timing of the Anglo-American takeover.