An Economic-History Research & Analysis Task

CONTEXTUAL BACKGROUND

Britain succeeded in the Second World War but experienced financial strain and had to address societal issues. The making of household appliances in the U.K. started in the late 1800s. The industry borrowed ideas from other industries like engineering and foundries. Companies grew by making household appliances, possibly because they thought people might want to buy them. During the early 1900s, foreign companies dominated the British market by importing goods or establishing their businesses in Britain.[1]. The industry started when more people started buying these products, first by the middle class and then later by the working class in the early 1900s. In the 1950s, wealthier working-class people started to buy household appliances initially only bought by the middle class. However, in the 1950s and 1960s, most household appliances in Britain were made for middle-class families. The average household size in Britain was 3.1 in 1977[2]. The companies had yet to start selling to a broader range of people. In the 1960s, smaller businesses started to leave the British domestic appliance market because of competition in quality and innovation. This made the British industry primarily national. In the 1980s, the critical characteristic of the British market was its early privatization.[3]. Manufacturing happened in Britain primarily for British people to buy, but big companies from other countries influenced it. The British market grew as more people bought and used essential household appliances in the early to mid-1900s. These products became popular as they saved time and effort in the home.

Social, Economic, and Technological Landscape

There needed to be more houses for everyone who needed them. Bombings destroyed several homes, and the repairs on the undamaged homes were delayed. However, there weren’t enough builders, materials, and money, so progress was slow. The taxes paid by a well-paid worker went down from over 60% in the late 1970s to 37% in the next decade. This benefited workers earning enormous salaries, leading to income inequality.[4]. Laws kept the cost of rent low but didn’t influence the construction of new homes. The Conservatives focused on building lots of new homes, with 2,500,000 being built, two-thirds of which were through local councils. The 1947 planning system represented the outlook and circumstances of the 20^th century.[5]. The poor areas developed, allowing rich people to move into the city centre. After the war, people started making more money and living better. From 1950 to 1965, the average real wages increased by 40%. People who typically have low-paying jobs and don’t need special training saw a significant increase in pay and quality of life.

The world war made the British come together and be strong, creating a unity that went beyond social classes. However, the way people were organized in society still followed old-fashioned ways, and in the 1950s, differences between different social groups continued. The change in demographics influenced what people buy because young people like to try new things and live in different ways. Wealth is the main factor that sustains material consumption.[6]. From 1950 to 1970, most European countries had more telephones, refrigerators, T.V.s, cars, and washing machines in each home than Britain. Britain had to devise a plan for reconstructing its economy. Significant changes were made by the Attlee government in 1945, laying the groundwork for the modern welfare state. People started to consume things more equally, mainly because the wealthy landowners had to pay taxes and spend less money. These changes influenced many working people to buy things for the first time.

The most popular thing people bought was a washing machine. Between 1946 and 1966, the proportion of customers in owning cookers with ovens grew from 17 to 37%, refrigerators from 2 to 47% and washing machines from 2 to 60%[7]. The government taking control of essential industries, creating the NHS, and setting up social security were very important in shaping the economy. After the war, there were also economic problems, like limited food and money-saving rules. Efforts to help Europe recover gave crucial financial help to Britain. As the economy developed, people increased their consumption due to increased disposable income. Britain transformed its economy in the 20^th century by adopting new technologies in different sectors. During the 1950s and 1960s, due to their popularity, people started using new household items like fridges, washing machines, and T.V.s. These household appliances changed people’s lives and contributed to a culture centred around consumption and materialism.

Emergence of consumer society

Britain’s post-World War II era saw a shift towards a consumer-centric society due to societal, economic, and technological transformations. The increase in consumer goods and wealth altered people’s perceptions of what was valuable. Buying things became a way to show who you are and how important you are. In 1963, most people had a T.V., vacuum, washing machine, and refrigerator in their homes. More people, including those with manual jobs, could own things, which made the difference in what professional and manual workers bought smaller. In the last few decades of the century, household amenities got better and better.

Between 1971 and 1983, more households had a bathtub or shower, going from 88% to 97%, and more households also had an indoor toilet, going from 87% to 97%. The number of households with central heating nearly doubled in that same time, going from 34% to 64%. In 1983, almost all homes had a refrigerator, most had a colour T.V. and a washing machine, over half had a deep freezer, and about a quarter had a tumble-dryer. Consumerism grew because more people wanted to buy home refrigerators and washing machines. Companies started to create marketing plans that focused on what consumers wanted. Consumer credit and hire purchases made it easier for people to buy things and be part of the growing consumer culture. As more people in Britain started buying things, it affected how society, culture, and the economy worked.

SUPPLY-SIDE ANALYSIS

Production of T.V.s, Refrigerators, and Washing Machines

Refrigerators

Refrigerators were developed later and not in the U.K. It started in the USA with the invention of cooling systems. There were insulated ice boxes, kerosene-powered units, and the modern refrigerator. The first modern refrigerator was made using new technology in the 1920s. General Electric made the first fridge for homes in the 1920s. In 1926, General Electric sold 2000 refrigerators. [8]. Only a few wealthy people could afford luxury items like refrigerators. But by 1950, 90% of households in towns and 80% in rural areas owned refrigerators. In 1927, most of the refrigerators in Britain were imported from the United States. In the same year, Electrolux started making Britain’s first small gas fridge. Few people in the U.K. or Europe wanted refrigerators because they didn’t use ice at home like Americans. The compression unit, critical for electric refrigerators, was only brought to Britain in 1933. By the mid-1960s, Sterne sold compressors to almost all refrigerator makers in the U.K., except for Hotpoint, Frigidaire, Kelvinator, and Lec, which made their compressors[9].

Washing Machines

In the 1930s, washing machines were seen as something only wealthy families could afford. Nonetheless, as technology improved, washing machines became more accessible and cheaper. As a result, more people used and liked washing machines over the next few decades. In the 1950s, more people wanted washing machines because the economy was stable, and they wanted modern things. This caused a considerable increase in washing machine production. Companies took advantage of this request by making different products that suit people’s different needs and budgets.

Televisions

In the 1900s, the number of T.V.s made in Britain significantly increased. This led to more people buying things and a consumption-based society. From 1930 to 1980, more and more T.V.s were made because people wanted them and used them in their homes. After the war, more T.V.s were made from technology like transistors. Companies such as Rank Organisation, Philips, GEC, Decca and Thorn were critical in the market and helped meet the needs of the growing number of consumers.[10]. The BBC’s monopoly was disrupted in 1955 with the introduction of ITV, which was also required to follow the same national 405-line T.V. standard. In the early 1960s, many 405-line T.V.s were used in the U.K. The VHF television broadcast used the same standard. In 1964, the government started the new BBC2 channel using 625 lines on UHF.[11]. During this time, many people in Britain had T.V.s in their homes. This changed how people entertained themselves and influenced what they bought. Consumers started depending more on T.V. for news, fun, and culture. This trend in household appliances shows the development and growth of consumerism in Britain.

Technological Advancements and the Influence on Production

New technology was fundamental in changing the way household appliances are made. After the war, manufacturing still used old-fashioned methods. Britain excels in generating novel ideas and comprehending the mechanics of various systems. The first inventors helped to advance technology and make novel discoveries.[12]. The introduction of better assembly lines, automation, and advances in materials science improved manufacturing processes. Using plastic parts to make washing machines helped make them lighter and cheaper. The 1960s and 1970s saw the use of more advanced technologies. Using transistors in T.V.s made it easier and cheaper to produce them, so more people could afford them.

Per-unit cost trends over time

The manufacturing costs of household appliances highlight the state of the British economy in the 20^th century. The high price of these appliances post-war was attributed to the difficulty in sourcing materials and the country’s rebuilding efforts. As more things were made and technology got better, it became cheaper to make each thing. In the 1950s, companies started to find ways to make things cheaper. This occurred due to their utilization of innovative methods for mass production. Advancements in factories during the 1960s and 1970s resulted in extensive and efficient production, ultimately reducing the cost of manufacturing. This price drop was vital in making these products more affordable for more people. Information from government and company documents shows that competition also helped to lower prices. More companies were competing in the market, so the manufacturers had to find cheaper ways to make their products and develop new ideas. This made it easier for people to buy things because they were more affordable.

Policies Influencing Production Standards

During the 1950s and 1960s, most household appliances in Britain were designed for middle class families and not accessible to a broader demographic. These companies had a few different products. Several companies made products for the big U.S. companies leading the industry. Companies owned by American multinationals mainly controlled this industry or were part of other big companies like AEI-Hotpoint, English Electric, Thorn, Simplex and Electrolux. By the 1960s, small businesses selling home appliances in the U.K. started to leave the market because they couldn’t keep up with the competition and make new products. The British market grew as more people bought and used household appliances in the early to mid-1900s. These products became popular because they made housework easier for families. This means that advertising is aimed at families who have more money to spend because of the growing middle class.

The rising middle class in the West offered a massive market for consumer goods like T.V.s, washing machines, cars, radios and record players. This market growth attracted investors, department stores, advertisers and distributors. The British market was slowly growing and only allowed a few imported goods for many years. After 1946, the government controlled imports, especially for electrical appliances, to protect the British electrical industry. In 1932, the law protected British and Commonwealth manufacturers most and no protection to others. After the Second World War, the rules were made more flexible, but products from certain countries couldn’t come in until 1959. This made foreign companies expand and market their products in the U.K. The U.K. government was worried about the expense of imports and implemented rules to help boost exports to other countries. In 1951, British companies manufacturing refrigerators had to export more products to other countries during the Korean War.[13]. They had to increase their exports from 66 to 85% of what they made. As a result, the combined exports of appliances increased by 12% to reach about 42% of all the appliances made. This rule lasted only a short time, the quantity of exports decreased to 35% in 1954 and 19% in 1964.

The primary factor that hindered the entry of imports into the U.K. market was that the products were very different from the local products. Domestic appliances are hard to judge before buying, so people choose brands they know and trust. This situation helped well-known brands, making it hard for new ones to penetrate the U.K. market. In the 1950s and 1960s, it took more work for imports to compete. In the 1960s and 1970s, there was substantial technological advancement in Europe, which impacted the U.K. household appliances consumerism in the 1980s and 1990s[14]. During this time, a few European companies grew bigger by merging or acquiring other companies.

Analysis

Figure 1 above shows the consumer durables owned in Britain from 1972 to 1983.

As evident from the table, central heating was present in roughly 33% of British households in 1972, and this figure rose steadily, reaching 64% by 1983. The number of central heating users almost doubled in 12 years. 93% of households had a television in their home, which increased yearly. Vacuum cleaners, refrigerators, and washing machines became popular after T.V. In 1972, 66 to 87% of homeowners owned these three devices. Over the next decade, the percentages increased to over 90%, except for the washing machine, which had almost 80% ownership.

DEMAND-SIDE ANALYSIS

Market Penetration & Sales

Britain saw differing household electrification rates in various areas after the Second World War. In the 1950s, about 80% of cities had electricity, but only about 50% of rural areas did. The rich and middle class started using it earlier, at 70%, while the working class took longer to start using it, at 40%. Government programs like the Rural Electrification Act 1950 promoted equality in the late 1960s. The BOOT scheme allowed private companies to own and run a power system for a limited time to prevent monopoly and protect customers. Various government regulations limit where and when mini-grid power systems can operate.[15]. These strategies reduced the differences between different areas and social groups.

Sales Quantity Analysis

Competition between brands got stronger after the war. Brands like Hoover and General Electric were the most popular and had 60% of the market. Many people started using new household machines like fridges, washing machines, and stoves during this time. Owning household appliances like washing machines and vacuum cleaners changed people’s lives, especially women’s, by making chores manageable. Washing machines and refrigerators helped parents care for their kids easily and keep them safe. More refrigerators also made frozen food more popular in the 1930s. In the late 1950s, new companies, especially ones from other countries like Bosch and Sony, controlled almost 30% of the market, creating significant competition. Business plans like joining companies and buying others changed the industry’s appearance. In 1952, General Electric bought Hotpoint, which increased its market share by 40%. The sales-changing market shows that the industry can change and adapt.

https://www.researchgate.net/figure/Annual-consumption-of-household-appliances_fig4_263988695

Figure 2 above shows the consumption of household appliances in a year.

Pricing Strategies Influence on Demand

Pricing strategies influenced what people wanted to buy in terms of electric appliances for their homes. Cost was an important factor, with a 20% increase in sales for appliances that cost less than £50 compared to more expensive models. Big brands initially charged more for their products and made 15% more money, but then smaller brands started charging less and gaining more customers. The British government helped control prices and make things affordable by creating the Price and Pay Board. Controlling prices is effective in managing the consumption of household appliances. It lowers the prices by reducing how much producers and intermediaries earn[16]. This also maintains the total amount of money people can spend, which keeps prices stable. The U.K. government made sellers earn less money. The cost of production was reduced, which helped control the prices of the appliances. The rule helped increase sales of certain appliances by 10%.

Household Electrification Trends

From 1940 to 1980, more homes in Britain got electricity for the first time. This was a significant change for many families. In the 1940s, only 30% of homes had electricity, and there was a big difference between cities and the countryside. After World War II, essential changes happened as people worked to rebuild and improve things. One of the things they focused on was making the electrical grid bigger. In the early 1950s, about 60% of people had electricity, a significant improvement. In the 1950s and 1960s, there was a significant increase in electricity use because of new technology, government programs, and a growing economy. Consumer credit made it easier for people to buy electrical appliances, which led to more households having electricity. In the mid-1960s, more than 80% of people had electricity in their homes, showing that electricity was becoming a big part of everyday life. Most areas in the country are connected to the electrical power grid. Electrification rates were over 90% everywhere. Many people started using electrical appliances to make their lives easier and more efficient. This showed a change in how people live in modern times.

Figure 3 above shows the electrification trends (1950-1980)

Regional Breakdown and its Relation to Appliance Adoption

Power stations were slowly connected to make the electricity supply more flexible and secure. In the 1930s, the voltage on the power lines was raised from 6. 6 kV to 132 kV[17]. In 1947, the Electricity Act created twelve new boards to give electricity to people in England and Wales. This replaced 625 old organizations. Moreover, a new department called the British Electricity Authority (BEA) was given control of all generations and the 132 kV National Grid. In 1955, BEA changed its name to Central Electricity Authority (CEA). In 1957, the Central Electricity Generating Board (CEGB) took over from CEA. It controlled the big power generators for National Grid, which handled making and sending out electricity in England and Wales[18]. CEGB gives electricity to twelve small electricity companies, and these companies sell electricity to people in their local areas. The Electricity Council was formed to oversee industries and the CEGB, responsible for making and sending out electricity. In 1979, the Conservative Party wanted the government to have less control over the economy. They sold state-owned businesses for a low price and changed government-owned industries. In 1989, the U.K. government suggested that the power industry should be sold to private companies and the country should follow a free-market economic policy.

The use of electricity in cities led to more people using it and affected the kinds of gadgets that families used. Cities getting electricity made it easier for people to use time-saving machines like washing machines and refrigerators. These machines are essential for modern life and show that people do less old-fashioned, time-consuming household tasks. People in the countryside adapted to using appliances differently due to delayed access to electricity. As more homes started using electricity in the late 1960s, people wanted more appliances to improve their lives. Rural families started using machines that saved time, which showed how electrical power changed their lives in a big way.

ECONOMIC FACTORS ANALYSIS

Housing Cost vs. Real Wage Growth

Figure 4: The graph below shows the average price of a house in the U.K. since 1952. https://www.nationwidehousepriceindex.co.uk/resources/8djon-9earo-60y36-skf61-wbx2i

From 1952 to 1957, Britain was working hard to make things better after World War II. The housing prices were constant within this period, slightly declining after 1957. The prices showed that the housing market was getting better. This stability reflected the efforts to rebuild the economy after the war and showed a time when the housing market stayed the same. In the 1960s, the economy grew, and society changed, which affected the housing market. The number of refrigerators in homes increased during the 1950s, such that by the 1960s, these figures had reached about 65% of upper and upper-middle-class homes and 38% of lower-middle-class homes.[19]. The usual prices went up from showing strong growth. Consumers started wanting different things, making more people want to buy houses. The prices went up quickly because the economy was doing well.

The 1970s were a difficult time with high prices and unexpected events, which greatly impacted housing costs. External factors, like the oil shortage, increased prices and made the household appliance market more unpredictable. This period had very high prices, which was difficult for both people buying homes and the government. The prices dropped significantly before, by 1980, the housing market showed how the economy had been changing over the years. The changes in the market slowed down as the decade ended, showing that the market was getting more stable. The stability experienced might be attributed to the struggles and external pressures of the 1970s, indicating a shift in the housing market.

Electricity Price Trends & Real Wage Growth

Figure 5 above shows the U.K. electricity demand (TWh) over time (Taylor, 2021).

Studying how the cost of electricity affects wages is vital in understanding how it impacts their purchase of household appliances. In the early stages of electricity use, the prices remained relatively stable. The graph shows a stable increase as more homes got electricity, influencing more consumers to purchase electrical appliances. There was no significant change in the price of electricity during this time. Increasing wages helped families deal with the rising cost of energy from using more appliances.

Figure 6 above displays the nominal wage growth in the U.K.

https://www.economicvoice.com/uk-wage-growth-lagging-inflation/

The graph shows that wages have historically performed well compared to RPI. It’s worth noting that RPI generally reflects higher inflation than CPI. Over the years, salaries matched or even surpassed the inflation in Britain. In 1938, the top 5% had 31% of the total wealth. By 1947, they controlled 24%. Wealthy people were making less money than before than people with lower income levels.[20]. The energy crisis of the 1970s caused a significant increase in prices for various forms of energy, such as electricity. As the cost of energy went up, families had to deal with higher housing expenses and increasing electricity prices. During this time, wages went down, making it harder for people to buy things because prices kept increasing.

Cross-Examination to Draw Correlations

Analyzing the correlation between housing, electricity expenses, and income demonstrates intricate connections. During good times for the economy, people’s pay goes up at the same time as the cost of housing. However, in the 1970s, the cost of housing and energy went up much faster than people’s wages, which made it difficult for many people. There are numerous aspects to the consequences of these trends. Concerns about housing affordability persisted for an extended period and impacted various individuals. In the 1970s, there were a lot of problems with money and energy. Despite the high housing and energy costs, people’s wages failed to increase significantly.

TRADE AND POLICY ANALYSIS

Import-Export Dynamics

Import, Export, and Net Movements of Household Appliances

In the 20th century, there were significant changes in how Britain bought and sold things from other countries, especially regarding household appliances. After World War II, the main goal was to rebuild the industry in the country. According to Wendt, Britain was able to reconstruct its economy faster and on a large scale[21]. By 1980, many households in Britain had a lot of different machines and appliances. While many wealthy families had a variety of household appliances, poorer families typically only had cooling appliances and washing machines. In the 1980s, more people in the U.K. were buying cooling appliances, washing machines, and cookers. Instead of buying these things for the first time, people bought them to replace old ones. Class-based spending habits continued as more household appliances, like refrigerators and microwaves, became available.

The table (fig 7) above shows the import-export dynamics in Britain between 1945-1950

In the 1950s, Britain struggled to fix its factories and businesses. The country couldn’t make enough household appliances, so they had to buy them from other countries. During this time, many appliances were brought in to help with rebuilding. As the U.K. economy grew in the 1950s, there were significant changes in how much it traded with other countries.[22]. The local factories grew, and they made more household appliances. During this time, people relied less on imports because they could make or get things they needed in their country. The selling of appliances made in Britain also started becoming more popular, which helped to make trade more even.

The table (fig 8) above shows the economic expansion and diversification of the household appliance market between 1950 and 1960

Impact of International Trade on the Domestic Market

International trade has a significant effect on the domestic market for household appliances. It affects many different parts of the industry. Imported household appliances make the competition between local brands even more challenging. Consumers can choose from more options, including different brands, features, and prices[23]. More competition makes local companies work harder to develop new ideas and improve their products to be as good as or better than companies from other countries. Bilateral trade highlights technology exchange or foreign direct investment[24]. From 1970 to 1980, there were 30% more household appliances because of international trade. This gave people more options when buying things for their homes. How household appliances are traded between countries affects how companies set their prices. This includes companies from within the country and those from other countries. Imports can bring in cheaper choices, which could lower prices and help consumers afford them.

On the other hand, expensive foreign brands can raise the standards for quality, impacting how local brands set their prices. In the 1980s, household appliance prices from other countries were 15% cheaper. This made the price of domestic appliances drop by 10% during the same time. International trade makes it easier for countries to share new technology. Local companies operating internationally can achieve better sales due to the transfer of their capabilities.[25]. This new technology helps add to the overall creativity in the local market. Between 1960 and 1970, the use of energy-efficient technology in the U.S. went up by 25% because of more trading with other countries.

International trade affects jobs org,anizational operations, and growth. Imports from other countries provide significant competition to local manufacturers. Jobs in household appliance industries did not change, but there was a 5% rise in skilled workers making advanced parts for local and imported appliances. International trade requires following international rules and standards.[26]. This alignment makes sure that imported devices work with our infrastructure, and it also helps industry standards to come together. This makes rules more straightforward to follow and makes the product better. The cost of following rules and regulations went down by 8% after more international trade. This shows that the country was improving at following global standards.

The table (fig 9) above shows the impact of international trade on several aspects of Britain’s domestic household appliance market.

LANDMARK LEGAL STATUTES AND POLICIES

Overview of Key Policies and Legal Landmarks

Laws and rules in the U.K. have greatly impacted household appliances, affecting how much they cost, how many are sold, and how they are made. These crucial rules have protected customers and helped businesses compete and develop new ideas. The most important law was the Consumer Protection Act (CPA). The CPA makes a law in the U.K. that holds companies responsible for any harm their faulty products cause. It also made the E.U.’s Product Liability Directive (85/374/EEC) into U.K. law. Part 2 of the CPA also allows the Secretary of State to create safety rules about many different things.[27]. This law was created to make sure that household appliances are safe and well-made by setting strict rules for how they are made. Producers had to follow these rules, which made appliances safer and more dependable. As a result, people felt more confident about spending money, which led to more sales and a growing market.

The Competition Act of 1980 made it fair for companies in the household appliance industry to compete with each other. This law focused on stopping unfair business tactics and trying to prevent companies from having too much control over an industry[28]. The law made it possible for many different companies to do well. This led to a market with many different options for consumers to choose from. The new law made companies work harder to make better products to compete and stay ahead in the market. In 1976, the Energy Efficiency Act made rules to make household appliances use less energy. This law acknowledged that the industry uses a lot of energy and tried to reduce its harm to the environment[29]. Companies had to make appliances that were energy-efficient to help the environment.

Influence of Institutions on the Appliance Industry

Economic policies, cultural changes and public perceptions towards wealth significantly influenced status-driven consumption in the U.K. The effect of various institutions played a crucial role in forming consumers’ tastes[30]. Different organizations significantly impacted how the household appliance industry operated in Britain in the 20th century. These organizations, like government agencies and industry groups, have power by making rules and policies. Organizations impacted the appliance industry by establishing and enforcing safety regulations. Government agencies like the Consumer Protection Agency and the British Standards Institution made strict rules ensuring that appliances are safe to use[31]. These organisations’ strict testing and certification rules helped people trust that household appliances were safe and good quality. The rules are often made into laws like the Energy Efficiency Act, which makes manufacturers create and make appliances that use less energy.

Organizations like the National Consumer Federation (NCF) have substantial power because they work to protect consumers and promote fair business practices. These groups check products and tell people if they are good or not.[32]. Additionally, the organizations researched consumers’ opinions on various household products. This approach lets people know if a product is suitable before buying it. By ensuring that companies make good quality products and keep their promises, these organizations help improve the market for shoppers. Organizations have to consider consumer tastes and preferences. This helps ensure the industry always meets the preferences of the people who use their products.

Government departments like DEFRA and the Environment Agency influence how the industry works to be more sustainable. Government programs like recycling and eco-labeling make manufacturers use more environmentally friendly methods[33]. The WEEE Directive helps European companies dispose of electronic waste properly[34]. The government and appliance companies must work together to improve the environment. Organizations collaborate in a globalized, connected world to create rules that every company follows.

CONCLUSION

Overall, this paper examined the consumerism of household appliances in 20th-century Britain, focusing on the years 1940 to 1980. The study explored the prevalence of household appliances such as refrigerators, washing machines and televisions. The research considered the effects of money, technology and culture. The findings highlighted how these technologies have evolved and the number of people in the U.K. who are using them. Considering wage distribution, the outcomes indicate that the upper class controlled around 80% of the wealth while the lower class had 5%. These modifications demonstrate how consumerism in Britain has transformed over time. The results of the trends on consumerism indicate the correlation between wealth and consumption. This research provides an in-depth analysis of the various factors affecting consumerism. Nonetheless, future research should explore other social and economic causes for these phenomena. This approach will provide more data on how consumerism, technology and society were related in Britain during the twentieth century.

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