[FIRST PARAGRAPH] The institutional perspective sees the UK's economic decline in the twentieth century as rooted in the rigidities established at the end of the nineteenth. According to Elbau mand Lazonick, the competitive capitalism which had served Britain well in the earlier parts of the nineteenth century failed to transform itself into the corporate capitalism necessary for success by the century's end.1 From an institutional perspective the Lanca- shire cotton industry provides a classic example of this predicament. Its first basic weakness, argues Lazonick, lay in its industrial organization.2 The vertical specialization that characterized the industry - in particular, the split between cotton spinners and cotton weavers - meant that there did not exist the co-ordination of decision-making necessary to replace traditional methods of production with the new technologies of r ingspinning and automatic looms. This, it is argued, was a situation which persisted wel linto the twentieth century and which saw the industry unable in the end to withstand the pressures of foreign competition
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