... and employment in services as unproductive labour, others purporting the idea that services made a positive contribution to the British economy. We shall evaluate both views to discover the nature of the tertiary sector in the late Victoria and Edwardian periods. The service industry has been accorded little credit by some economists in their accounts and explanations of economic growth. The thesis developed by classical economists in the 19th century relied heavily on the notion of capital accumulation in terms of tangible goods. Kaldor (1965) developed an explanation of economic growth driven by manufacturing productivity: the rate of growth of national product is determined by the growth of output in manufacturing. Labour productivity in manufacturing is simply a function of the growth of output, attained through economies of scale. As manufacturing alone stimulates growth and productivity, its expansion will entice labour away from less productive sectors, like services. This change in ...

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