In May 1956...a working party of officials submitted a report on "German Competition with particular reference to the Engineering Industries". It mad… - Correlli Barnett

[I]t was the shortage of resources – economic and financial – which posed by far the gravest question of all for the British Government after the fall of France in 1940. For whether or not England escaped defeat at the hands of the enemy, the mere continuance of the war would itself inevitably, inexorably, bring independent British power to an end through national bankruptcy and economic ruin. It was a situation which no British Government had had to face since England first emerged as a great power in the wars against Louis XIV.

In terms of British society at home, this transformation of national character was wholly beneficent. It was a great achievement of Victorian moralism to have softened British life and manners; to have created British civic virtue and self-discipline, and brought about standards of personal and public honesty unequalled in the world; to have rendered the law virtually self-enforcing; to have given the British their special sense of the dignity and liberty of the individual, and, as a corollary, their sense of the individual's personal responsibility. Yet it was exactly because British life itself was now so orderly, gentle, docile, safe and law-abiding, so decent, so founded on mutual trust that the British were less fitted to survive as a nation than their ancestors, whose characters had been formed in a coarse, tough and brutal society. For the British made the fundamental mistake, catastrophic in all its consequences, of exporting their romantic idealism and their evangelical morality into international relations... And so, in applying the qualities of gentleness, trustfulness, altruism and a strict regard for moral conduct to a sphere of human activity where cunning, cynicism, opportunism, trickery and force, all in the service of national self-interest, still held sway, the twentieth-century British stood disarmed and blinded by their own virtues.

Between 1948 and the first half of 1953 manufacturing output per head in Britain only rose by some 14 per cent, as against rises of 20 per cent in America and Sweden, 27 per cent in France and the Netherlands, and a staggering 101 per cent rise in Germany (reflecting, naturally, her acceleration from stand-still). Even as early as 1950 Germany had virtually caught Britain up in manufacturing productivity. In fact, such productivity actually fell in Britain by some 3–4 per cent in 1951–2, just at the time when it was rising fastest in Germany. It only regained the 1951 level in 1953.