From the Counting House to the Modern Office: Explaining Anglo-American Productivity Differences in Services, 1870–1990

Abstract

The United States overtook Britain in comparative aggregate productivity levels primarily as a result of trends in services rather than trends in industry. This occurred during the transition from customized, low-volume, high-margin business organized on the basis of networks to standardized, high-volume, low-margin business with hierarchical management from the 1870s. This transformation from the counting house to the modern office was dependent on technologies that improved communications and information processing. The technologies were slower to diffuse in Britain as a result of lower levels of education and stronger labor-force resistance to intensification.