A Brief Economic History of Britain from circa 1600.When trying to discover from whence came Britain's wealth it is always worth looking at the sea and its influence on how these islands came to be so dominant in world trade. The start of the 1600's saw us fresh from success against the Armada and our ‘adventurers’ were beginning to explore far off lands. They were to ‘acquire’ some of the Spanish territories in the Caribbean and eventually develop India for the British, during which they expelled the French from what was then the largest single market in the world. In doing so they made English the most spoken language in the commercial world and transferred huge sums of money back to the United Kingdom Ironically, one of the most successful sailed on a Dutch boat and was not really looking for what he found. He was Henry Hudson, who like quite a number was looking for the route to China and untold riches. On his return to Britain he was told that never again must he sail with a foreign crew and so when he took to sea the next time he set sail in the opposite direction and discovered the Hudson Bay area of what is now Canada. Elsewhere these brave people travelled to Botany Bay and other parts of the globe. Though they continued to prosper the Dutch were missing one important element that the British had in abundance. This was coal. As a fuel it had been used for quite sometime but its smell led many to use wood. However, in what was to be a glimpse of future environmental problems the stock of wood began to diminish and so coal grew in popularity. With its increase in use came the need to transport the 'black stuff' in bulk and this was major force behind the building of canals. It also was to become the backbone of the new industries that would propel Britain the front of the industrial league. However, the Dutch were still out there and something had to be done about this. The East India Company (formed in 1601) began to compete for the riches of the East and as this intensified the British passed a series of Navigation Acts, which effectively banned Dutch vessels from British ports. They were to try the same tactics on the French. Coupled with the Seven Years War (which was financed by excise duties) the British developed their trading empire to most corners of the world. Such ventures remained privately financed until near the middle of the nineteenth century, when the State took over the responsibilities for maintaining the security of trade. Prior to the arrival of the State private armies, administrations and legal systems ruled the trading empires. The British and the Dutch continued to quarrel for most of the century and the Dutch got as far as Chatham, Kent (then a major naval dockyard) when the 'invaded' in 1667, however, peace was negotiated in the same year. The Dutch did return but in the shape of our new monarch (William) and Anglicanism was made good in Britain - another fact, which in the opinion of some historians made these islands ripe for a trade expansion. The British might have lost in some of their military encounters with the Dutch but they had noted their strengths. Amongst these was a national bank and in 1694 the Bank of England was created. Its formation was based on the premise that ordinary people would invest in it and its operations. Deposits were rewarded with an 8% interest rate, though the early monies were used for a war against the French. Speculation became a fashionable industry and despite the South Sea Bubble continued to attract new funds for what was emerging as ‘The City’. The National Debt was born and shares, bills of exchange and the early forms of bank notes began to form part of commercial operations. At a national level the ability to organise tax collection improved considerably. This allowed the National Debt to be increased and financed by ordinary people paying customs and excise duties.
The Dutch meanwhile engaged in wars with the French and ended the century a less formidable economic power. Britain had a growing population, which was to grow larger as the Agricultural Revolution gained pace and they had the resources, especially coal and iron to begin to move towards an age of machines and increased output. It was the power of its navy that boosted the ability of Britain to organise and deliver. Dockyards were the technical miracle of their age and when coupled with our fiscal skills the British made a formidable fighting force. To this technical ability we must add our scientific breakthroughs, some of which were related to our maritime status. We had navigational aids. dictated the time and adapted to the invention of Harrison, namely longitude. As such we enjoyed a degree of unparalleled supremacy at sea and this we to be an important ingredient in our expansion as the major colonial nation of the period just prior the take-off of the industrial age. We could explore and conquer, whilst others, such as the Islamic navigators relied on reciting ancient poems that helped with plotting a course in known waters. Alas, once such mariners entered unknown waters they we literally 'all at sea'! We based much on circular trade, another creation of the more organised mind that was apparent amongst the emerging moneyed class of Britain. This meant that we never sailed empty. Routes were calculated in advance and cargoes offloaded at the precise point where another could be taken. As we know such trade included the infamous triangular route from Liverpool and Bristol to West Africa and then across to the Caribbean and the fledgling US (plus part of modern Brazil) and the cargo on part of the journey was that of human beings. We cannot underestimate the wealth received from slavery and the lasting damage done to the nations of West Africa. Neither can we ignore the transfer of capital from India to Britain. Much of this gave rise to a new middle class, who were ‘comfortable’ with trade and wanted to acquire new riches. The next characteristic is one, which to this day is not always popular. In Britain local entrepreneurs reacting to local economic conditions drove much. Adam Smith was being put into practice. In areas of the country, such as Cromford in north Derbyshire, the creative determination of Richard Arkwright led to the introduction of both mass production and its close cousin the factory system. He invented a cotton-spinning machine, patented it and then set about selling it to others. Arkwright also illustrates another interesting fact of British economic life, namely the dissenters. These were followers not of the established Church of England but of their own brand of Anglicanism. In some areas they were not allowed to join in formal business groups and so started there own. They lent to one another and exchanged ideas. It is interesting to note the number of large companies founded by Quakers, Methodists (Arkwright - whose home at Cromford is to this day a Methodist Holiday Home) and Baptists. If you like chocolate then be thankful for Quakers. But not all shared in this new wealth. Unrest was also apparent and the pressure for representation and electoral reform was mounting - some of you might like to make a small detour here and look at the writings of those known as Chartists. Also Thomas Paine and his 'Rights of Man' might make an interesting read for some. At St Peter's Field in Manchester a peaceful demonstration ended with a military charge and death of several innocent protestors. It was not an isolated incident but in general Britain did not undergo the political instability seen elsewhere in Europe. So, with the nineteenth century moving towards its third quarter Britain was uniquely placed to advance both the pace and influence of the industrial age. It also accepted, not without some friction, the need to address the 'winners and losers’ debate that is central to all economics. As the century moved on so did the concern of some that the spoils of such wealth were being earned at the cost of much human misery and that distribution of the wealth was focused on a minority of the population. Despite what might have seemed to be a recipe for revolution the British were to navigate the next part of their economic history without resorting to outright internal strife.
The last part of the mixture that made Britain a major economic and political power
So, let's end this first part of our brief trip through the economic history of the British Isles by drawing together some of the threads we have developed earlier.
The age of steam is upon us and quick and effective movement of bulky cargoes is now straightforward. Agriculture and the rural way of life, which by some had been seen as a time of pastoral tranquillity, was giving way to industry and modern cities. Perhaps a final flurry of those living in the countryside came in 1830 with riots and the publishing of Cobbett's Rural Rides. Malthus also published in 1830, with an update of his famous essay on population and the ability of a country to feed itself. In essence we have a paradox before us. On one side a period of unbelievable economic wealth and on the other to cries of some who saw doom and desperation in this new age of industrialisation? It was to be the cornerstone of the debate that raged for much of the century and led to the founding of the Labour Party, it's close cousin the Trade Union Movement and social changes that increased the role of the State in the lives of ordinary people. But back to the early years of the nineteenth century. There can be little doubt that a two tiered system of society was emerging- this was not new. For the merchants it was large houses, gardens, estates and servants. Whilst for the workers it was terrible living conditions, cholera, other diseases and short lifespans. The rapid growth of cities, for example Liverpool had a population 5145 in 1700 and 118,972 in 1821 ( it rose by another 40% in the next decade) led to hideous living conditions. Engels published his The Condition of the Working Class in England in 1845 and described his visit to Manchester and other northern towns as showing him ' filth, ruin and the defiance of all considerations of cleanliness, ventilation and health which afford the majority little room in which to move, breathe and live'. He was appalled and his writings awoke in some the need for social change. John Ruskin, fortunate to have been raised in Keswick in the Lake District described Manchester as ' the devil's darkness'. We must always remember that much of the wealth we enjoy was built on the suffering of countless thousands of poor people. Some suggest that tea drinking, which relied on boiled water kept the working classes fitter than they should have been and reduced some of the social tensions that erupted elsewhere in Europe. True is this might be it is always advisable to read the works of Sellar and Yeatman (especially their chapter on mill owners and terrible working conditions) and Hobsbawn and his famous statement that ' for Industrial Revolution say cotton'. It is also interesting to note the writings of Queen Victoria, who despite the efforts of her advisers did see the horrors of the Midlands and other industrial areas. Others, such as Baines in 1835 wrote of the majesty of the mills and the privilege position the workers enjoyed within such powerhouses of industry. Perhaps you should briefly look at both another secret weapon employed by the British. Workers toiled for 12 or 14 hours a day and emerged covered in whatever they had been making. Women worked until their baby began to emerge and were back at work within a week of its birth or death. Cotton required a damp atmosphere and so buckets of water were thrown onto the floor and this made the air wet and cold. Injuries and deaths were common place. We have reached the time of huge change and the dawning of an age of exploration, commercial exploitation and enormous fortunes. These could be made on the strangest of 'commodities', such as that of the Gibbs family. They had lived in Madrid, Spain and had connections with South America. In what was a considerable gamble William Gibbs invested in bringing bird droppings from Peru all the way to Bristol? These contained nitrates and in the age of scientific breakthroughs fitted nicely into the initial use of fertilisers. He made enough money to afford a huge house and an estate of over 3000 acres. The 'landed gentry' resisted these 'new wealth' people but with changes in society gaining a pace similar to that of the Iron House (railway engine) the new rich were here to stay.
They brought with them a desire to seek riches overseas and some embodied the Victorian principles of giving some of their wealth to others. Philanthropy was a strong part of the philosophy of many who grew rich in early Victorian Britain. They built schools and hospitals and enjoyed a rather paternal hold over their employees. But time does not stand still and beneath this air of apparent tranquillity change was taking place. Japan had been re-discovered, the US was about to leap forward post its civil war (see January's Monthly Supplement) and Europe was emerging from yet more bouts of warfare and political turmoil. Competition was to intensify. Workers would strive for better conditions. Lands in far away places would fly the Union Jack and much of the industrial world would move inevitably to World War One and the slaughter of a generation. But that is all before us. In next Month's Supplement we shall examine the last half of Victoria's reign and move upto the eve of war and the changes that were to happen in Russia.