The Industrial Revolution and the Atlantic Economy: Selected Essays

THE INDUSTRIAL REVOLUTION AND THE ATLANTIC ECONOMY In recent years the notion that Britain experienced an industrial re...

Author: Brinley Thomas

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THE INDUSTRIAL REVOLUTION AND THE ATLANTIC ECONOMY In recent years the notion that Britain experienced an industrial revolution has been questioned. The new economic history, with its emphasis on quantitative techniques and macro-economic indices, has tended to regard Britain’s transformation as a gradual and modest affair which does not deserve the term ‘revolution’. The Industrial Revolution and the Atlantic Economy takes issue with this revisionism. It views the industrial revolution as a climacteric, an epoch-making change in the energy base through the substitution of fossil fuels for organic materials, thereby ushering in the modern age of coal, iron and petroleum. Brinley Thomas argues that an energy crisis in the seventeenth century put Britain on a technological path that enabled her to solve a more severe energy crisis in the second half of the eighteenth century. The intensity of this second crisis was due to a population explosion and heavy pressure on supplies of timber and charcoal iron caused by Britain’s commitments as head of the Atlantic empire; that these commitments were excessive was demonstrated by the loss of the American war. Increasing dependence on foreign sources of organic energy was not a solution: there had to be an industrial revolution. The innovations of Newcomen, Darby and Watt were necessary but not sufficient; Henry Con’s puddling and rolling process was both necessary and sufficient. The fulfilment of Britain’s revolution came in the second half of the nineteenth century—the era of international migration and capital movements—when Britain was able to overcome the constraints of her limited agricultural area by exchanging the products of the industrial revolution for food and raw materials. In the half-century ending in 1911 the population of the United Kingdom increased by 55 per cent and the average real wage almost doubled. Brinley Thomas is Honorary Research Associate in Economics at the University of California, Berkeley. After being Lecturer at the London School of Economics, he was Director of the Northern Section of the Political Intelligence Department of the Foreign Office, 1942–5. He was Professor of Economics at the University of Wales at Cardiff, 1946–73, and is now Emeritus Professor. A Fellow of the British Academy, he has been visiting professor at several North American universities. His major work is Migration and Economic Growth: A Study of Great Britain and the Atlantic Economy (Cambridge University Press, 1954; second edition, 1973).

THE INDUSTRIAL REVOLUTION AND THE ATLANTIC ECONOMY Selected essays

Brinley Thomas

London and New York

First published 1993 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2003. Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1993 Brinley Thomas All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 0-203-16121-1 Master e-book ISBN

ISBN 0-203-16124-6 (Adobe eReader Format) ISBN 0-415-07978-0 (Print Edition) Library of Congress Cataloging-in-Publication Data Thomas Brinley, 1906– The Industrial Revolution and the Atlantic economy: selected essays/ Brinley Thomas. p. cm. Essays, with some revisions and updating, most of which were previously published in various journals. Includes bibliographical references and index. Contents: Introduction—Britain’s energy crisis in the seventeenth century—The first Atlantic economy, 1700–1776—The end of the Charcoal Iron Age—Feeding England, 1760–1846: a view from the Celtic fringe—Henry Cort and the primacy of Britain—Robert Owen (1771–1858)—Demographic determinants of British and American building cycles, 1870–1913—Long swings and the Atlantic economy—A cauldron of rebirth: the Industrial Revolution and the Welsh language—A plea for an organic approach to economic growth. ISBN 0-415-07978-0 1. Great Britain—Economic conditions—1760–1860. 2. Great Britain—Industries—History—18th century. 3. Energy development—Great Britain—History—18th century. I. Title. HC254.5.T484 1992 330.941´07–dc20 92–5397 CIP

To my daughter, Patricia

CONTENTS

ix xiii xv

List of figures and tables Acknowledgements Introduction 1 Britain’s energy crisis in the seventeenth century

1

2 The first Atlantic economy, 1700–76

34

3 The end of the charcoal iron age

60

4 Britain’s food supply, 1760–1846: the Irish contribution

81

5 Henry Cort and the primacy of Britain

100

6 Robert Owen (1771–1858): a hero of the Industrial Revolution

121

7 Demographic determinants of British and American building cycles, 1870–1913

144

8 Long swings and the Atlantic economy: a reappraisal

182

9 A cauldron of rebirth: the Industrial Revolution and the Welsh language

208

10 A plea for an organic approach to economic growth

232 250

Index

vii

FIGURES AND TABLES

FIGURES 1.1 1.2 5.1 5.2 7.1 7.2 7.3 7.4 7.5 7.6 8.1

Dynamic shortage 7 The British charcoal age, 1550–1750 8 Inventive activity and charcoal-coal price ratio, 1710–79 110 Great Britain: coal and iron production, 1750–1830 111 Population and regional building cycles, 1871–1910 150–2 Migration, natural increase and housebuilding, north-west region, 1871–1913 155 Housebuilding in agricultural and other non-industrial regions 157 Population change and the building cycle, urban regions of England and Wales, 1871–1910 160 Population change and building cycles, England and Wales and the United States, 1871–1910 162 Housebuilding in Great Britain, 1875–1910 168 Long swings in real national product and related variables in Great Britain, 1855–1914, and the United States, 1870–1914 196 TABLES

1.1 1.2 1.3 1.4 1.5

England and Wales: price indices for all agricultural products, timber and industrial products Indices of the general price level and the price of charcoal in England, 1630–70 British charcoal iron industry, 1580s–1730s Interdecennial rates of change, 1620s–90s British imports of bar iron

ix

5 6 9 10 24

FIGURES AND TABLES

1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 2.1 2.2 2.3 2.4 2.5 2.6 3.1 3.2 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8

Exports of bar iron from Stockholm and Gothenburg to all destinations, 1615–50 Exports of bar iron from Stockholm to England Exports of bar iron from Gothenburg to all destinations Estimated British annual imports of bar iron, 1670–9 Estimated British annual imports of bar iron, 1691–5 Great Britain: charcoal price, pig iron output and bar iron imports, by decade 1620–90 Prices of timber, board and bar iron, 1583–1702 Summary of data underlying Figure 1.2 and Table 1.3 Direction of England’s exports of manufactured goods, 1700–73 Imports of slaves into British America, 1701–80 England and Wales: construction index, 1703–76 England and Wales: rates of change in imports and exports during long swings in construction, 1703–76 British imports from and exports to the American colonies, 1745–73 Britain and the thirteen American colonies: estimated net barter terms of trade in long swing phases, 1723–73 Coal consumption, by category, 1700–50 Population, prices, and real wages in England, 1740–99 Wheat and coarse grain consumption in England, Wales and Scotland, 1801 Value of exports from Ireland, 1700 and 1750–1800 Exports of beef, butter and pork from Ireland to Great Britain, 1760–1800 Imports of grains, meal and flour into Great Britain, 1800–14 Comparative grain prices in Great Britain, 1810–40 Great Britain: imports of grains, meat and butter from overseas and from Ireland, 1804–6 to 1844–6 Grains and meal imported into Great Britain from Ireland, 1815–49 England and Wales: wheat imports and home output, 1829–68 x

25 26 26 28 28 29 29 30 37 38 39 40 49 51 62 66 85 88 88 89 90 92 93 94

FIGURES AND TABLES

4.9

Great Britain: imports of food and drink in relation to the value of agricultural output, 1814–16 to 1854–6 4.10 Irish exports of grains to Britain, 1843–9 5.1 English patents of invention, 1660–1779 7.1 Inhabited House Duty statistics: total number of houses assessed and not assessed to duty 7.2 Natural increase and migration, population aged 20–44: seven urban areas of England and Wales, 1870–1910 8.1 Data for Figure 8.1: Rates of change between overlapping decades

xi

95 96 106 176 178 197

ACKNOWLEDGEMENTS

The author and publishers would like to express their thanks to the following for permission to reproduce material by the author published by them: Academic Press Inc., Orlando, Florida, USA, for ‘Was there an Energy Crisis in Great Britain in the 17th Century?’, in Explorations in Economic History, vol. 23, 1986, and ‘Long Swings and the Atlantic Economy: a Reappraisal’, in Nations and Households in Economic Growth: Essays in Honor of Moses Abramowitz, edited by Paul A.David and Melvin W.Reder, Academic Press Inc., 1974; JAI Press Inc., Greenwich, Connecticut, USA for The Rhythm of Growth in the Atlantic Economy of the 18th Century’, in Paul Uselding, ed., Research in Economic History, vol. 3, 1978; Atlantic Economic Journal, Southern Illinois University at Edwardsville, Illinois, USA, for ‘Towards an Energy Interpretation of the Industrial Revolution’, Atlantic Economic Journal, vol. 8, March 1980; The Agricultural History Society, University of California, Davis, for ‘Feeding England, 1760–1846: a View from the Celtic Fringe’, in Agricultural History, vol. 56, 1982; Rowan and Littlefield, Lanham, MD, USA, for ‘Food Supply in the United Kingdom during the Industrial Revolution’ in J. Mokyr, ed., The Economics of the Industrial Revolution, 1985; The Honourable Society of Cymmrodorion, 30 Eastcastle Street, London, W1E 3UZ, for ‘Robert Owen of Newtown (1771–1858)’ in the Transactions of the Society, 1960; For ‘Demographic Determinants of British and American building cycles, 1870–1913’ in D.N.McCloskey, ed., Essays on a Mature Economy: Britain after 1840, Methuen and Co. Ltd (1971); also in Brinley Thomas, Migration and Urban Development, Methuen, 1972. Also in Brinley Thomas, Migration and Economic Growth: a Study of Great Britain and the Atlantic Economy, second edition 1973, Cambridge University Press; xiii

ACKNOWLEDGEMENTS

The editors of The Welsh History Review and the University of Wales Press for ‘A Cauldron of Rebirth: Population and the Welsh Language in the Nineteenth Century’, in The Welsh History Review, vol. 13, December 1987; The Association of University Teachers of Economics and Manchester University Press for ‘A Plea for an Ecological Approach to Economic Growth’ in M.Parkin and A.R.Nobay, eds., Contemporary Issues in Economics, Manchester University Press, 1975; Edward Arnold, Sevenoaks, Kent, for ‘Alfred Marshall on Economic Biology’ in Review of Political Economy, vol. 3, 1991; Cambridge University Press for paragraphs from Chapter XV of Migration and Economic Growth: a Study of Great Britain and the Atlantic Economy, second edition, 1973. I am grateful to my publisher and printer for the admirable way in which this book has been handled. It has been a real pleasure to cooperate with Alan Jarvis, Economics Editor, and Helen Gray, Desk Editor, and I wish to record my warm thanks to them. Brinley Thomas, FBA Honorary Research Associate, Department of Economics, University of California, Berkeley, California, USA

xiv

INTRODUCTION

It is now fashionable for economic historians to play down the Industrial Revolution as an uneventful process of gradual change with nothing ‘revolutionary’ about it. Typical of this view is Nicholas Crafts’ statement that ‘a “cataclysmic” interpretation of economic change in the late eighteenth century is inappropriate. On the whole, recent research has been tending to stress the gradualness of change when seen from a macroeconomic standpoint’ (Crafts 1985:6). This line is made to appear plausible by revised aggregate estimates of Britain’s economic growth in the eighteenth and early nineteenth centuries (Crafts 1983). Some of the revisionists do not lack enthusiasm. Here is an example from a textbook intended to summarize the results of the new economic history. Compared to its successors…the British industrial revolution was a very modest affair which emerged slowly from the past as part of a long evolutionary process, not as a sharp, instantly recognisable break from traditional experience; its technology was small-scale and comparatively primitive; it needed relatively little additional investment capital. (Tranter 1981:226) In the ten years 1790–1800 Britain’s annual output of pig iron went up 100 per cent (from 90,000 to 180,000 tons) and that of coal by 47 per cent (from 7.5 million to 11 million tons). If the 1750–85 trend had continued, the output of pig iron in 1830 would have been 200,000 tons whereas in fact it was 678,000 tons, and the output of coal would have been 12.5 million tons whereas in fact it was 22.5 million tons (see Figure 5.2). In the face of this sharp break with the xv

INTRODUCTION

past, one has to be hopelessly addicted to understatement to regard Britain’s Industrial Revolution as ‘a very modest affair’. Can one seriously describe as ‘small-scale and comparatively primitive’ the transport revolution made possible by the new coal-iron technology? As to capital requirement, Crafts’ estimates show that gross domestic investment as a proportion of gross domestic product in Britain doubled from 5.7 per cent in 1760 to 11.7 per cent in 1831 (Crafts 1983:195) and this is certainly significant. I cannot believe that the new fashion will last long. The exponents of gradualism who look at the past from a macroeconomic standpoint have forgotten Schumpeter’s golden rule that, in analysing technological change, ‘it is disharmonious or one-sided increase and shifts within the aggregate quantity which matter. Aggregative analysis…not only does not tell the whole tale but necessarily obliterates the main (and only interesting) point of the tale’ (Schumpeter 1939:134). The ‘evolutionary’ and ‘cataclysmic’ approaches are not mutually exclusive: on the contrary, a true interpretation must combine them. The economic historian has to explain why an economic equilibrium which may persist over a long period is punctuated by a fundamental structural change. With the exception of Chapter 5, the essays in this book have already been published in various journals, and I am grateful to their publishers for their kind permission to reproduce them. Where necessary they have been revised or updated, especially Chapters 2 and 3. I have brought them together in order to restate and emphasize the climacteric view of the Industrial Revolution. New insights can be obtained by looking at the transformation against the background of the crisis in the Atlantic economy of the eighteenth century. My argument differs substantially from the traditional one presented by John U.Nef (Nef 1932). I have drawn on recent theories of localized technological progress and path-dependency to help explain why Great Britain was the first country to change its energy base from the flow of solar energy to the stock of fossil fuels. The transformation was a drama in three acts. In Act I, 1784–1800, the organic energy crisis is solved and the fossil fuel revolution accelerates. In Act II, 1800–46, the foundations of a modern economy are laid through investment in machine tools, railroads and steamships. Act III, 1846– 1900, is the era of fulfilment with Britain as the workshop of the world and the centre of the Atlantic economy. The analysis suggests reasons why the Industrial Revolution did not occur in France in xvi

INTRODUCTION

the eighteenth century and why it did not reach the United States until the second half of the nineteenth century. I became interested in this subject through studying long swings in economic activity in the Atlantic economy of the eighteenth century. My aim was to find out whether the model which I had used to interpret the Atlantic economy of the nineteenth century (Thomas 1973) applied also to the eighteenth (Thomas 1978). The results given in Chapter 2 shows that there is a striking similarity. Between 1703 and 1776 there were three long swings with an average duration of twenty-three years. Upswings in investment in Britain were accompanied by upswings in imports from the overseas periphery; and downswings in investment in Britain were accompanied by a fall in British imports from the periphery. In both centuries long swings in the centre produced a corresponding rhythm in the rest of the Atlantic economy. It was clear that Britain’s upswing after 1760 had special characteristics: the economy was increasingly affected by a shortage of timber, charcoal and iron, and the marginal cost of supplying iron-intensive goods to the colonies was rising. Was this energy crisis different in kind from previous shortages? This led to an examination of the evidence for the seventeenth century, and Chapter 1 contains an analysis of Britain’s timber and fuel crisis in the period 1640–80. This seventeenth-century crisis suggested some interesting ideas relating to the Industrial Revolution. It implies a rejection of Nef’s argument that there was a first industrial revolution in the period 1540–1640 (Nef 1932, I: 161). The uses to which coal was put during that century did not alter the fundamentally agrarian character of society. The crucial difference between the century prior to 1640 and the years 1640–80 is that in the latter period there was a severe crisis within the timber economy. This is indicated by a major source of pressure on resources, namely shipbuilding. The average annual tonnage of naval shipping built under the Commonwealth (1649–59) was eleven times greater than it was in the reign of Elizabeth (1558–1603), and England’s merchant shipping expanded threefold between 1629 and 1686. Between the 1630s and the 1680s iron consumption per head almost doubled, the price of charcoal more than doubled, pig iron output increased by only 5 per cent, and imports of bar iron went up by over 500 per cent. The seventeenth-century crisis is an important part of the answer to the question: why was Britain first? The incentives to adopt coalxvii

INTRODUCTION

centred techniques induced British inventors to specialize on problems the solution of which would ultimately bring about an industrial revolution. The improvements from ‘learning by doing’, handed down from one generation of skilled craftsmen to the next, gave Britain an increasing comparative advantage. As early as the 1680s and 1690s the coke-using reverberatory technique was successfully applied to the smelting of non-ferrous metals; in 1709 Abraham Darby I solved the problem of smelting iron ore with coal or coke; in 1712 Thomas Newcomen’s steam engine was pumping water out of deep mines. The first half of the eighteenth century was an interlude of low population growth and energy abundance; it was followed by a population explosion and an acute energy shortage intensified by Britain’s excessive defence commitments after the Seven Years War. The loss of the American War was the last nail in the coffin of the charcoal iron age. Thanks to the Cromwellian energy crisis British inventors had evolved the expertise which enabled them to solve the post-1760 crisis. This argument is fully spelt out in Chapters 2, 3 and 5. The least honoured among the pioneers of the Industrial Revolution was Henry Cort, whose puddling and rolling process (1783–4) was the gateway to the new age of coal and iron. He made fortunes for others but he died in poverty, a broken-hearted man. His triumph and tragedy are described in Chapter 5. I have included a chapter on the most atypical entrepreneur who played a leading part in the Industrial Revolution—Robert Owen (1771–1858), the successful capitalist who was one of the founding fathers of British socialism (Chapter 6). Chapters 7 and 8 analyse the dynamics of the Atlantic economy created by the Industrial Revolution and the interaction between long swings in Great Britain and the United States. The energy transformation had effects far beyond the economic sphere. Chapter 9 deals with an unexpected cultural result which appeals to me as a Welshman— the rebirth of the Welsh language in the nineteenth century. The concluding chapter based on Alfred Marshall’s ideas on economic biology, argues against the mechanistic study of economic growth and in favour of an organic approach which does justice to ecological and qualitative factors. The entropy law states that energy moves from a free state, where it is usable, to a latent state, where it is not. As it was originally defined in the negative way, low entropy means high potential, and vice versa. ‘The economic process consists of a continuous xviii

INTRODUCTION

transformation of low entropy into high entropy, that is, into irrevocable waste’ (Georgescu-Roegen 1966:96–7; italics in the original). My book Migration and Economic Growth (1954) is a study of the Atlantic economy as an evolving unit. Sir Henry Phelps Brown, in his review of the first edition, used a striking phrase which puts in a nutshell what it is all about. ‘A pattern is there: the pulse of the Atlantic economy, dividing a common fund of incremental energies between its regions in varying proportions from time to time’ (Phelps Brown 1954:820). The ecological overtones are clear. When I was working on the second edition, I became increasingly aware that the evolving Atlantic economy should be treated as an ecological system. Chapter 10 of this book recalls Marshall’s reasoning about economic evolution and irreversibility and his insistence on economic biology as the Mecca of the economist. The great challenge to the new generation of economists and economic historians is to build where Marshall laid the foundations. Two recent works have direct bearing on the subject-matter of these essays—S.Solomou’s on long swings (Solomou 1988) and E.A.Wrigley’s on the Industrial Revolution (Wrigley 1988). Solomou conducts a series of rigorous case studies of Britain, France, Germany and the United States, and concludes that the Kuznets long swing, observed at the macroeconomic level, has existed in more countries and over a longer period than has hitherto been recognized. It is found in Germany up to 1913, in France into the interwar period, and in the United States from 1870 to 1973. Moreover, the inverse relation between home and foreign investment is true not only for Britain until 1913 but also for other capital exporters, France and Germany. Solomou finds no empirical foundation for the existence of long waves of fifty to sixty years (the so-called Kondratieff) in the period 1856 to 1973. These important results confirm the significance of the long swing as one of the two components in the long-term movement, the other being the long-run trend. Solomou stresses that long swings are‘…a series of episodic events and national growth conditions are essential to understanding these traverses’ (Solomou 1988:101). Given this view, it is hard to see the point of his criticism of the Atlantic economy model on the ground that it cannot explain European long swings in the pre-1913 period (ibid.: 129). The ‘national growth conditions’ in the two cases are different. The flows of factors from Britain to its Atlantic periphery xix

INTRODUCTION

were free of government interference, whereas the foreign lending by France and Germany to their European borrowers was heavily influenced by government policies. Any model of the European long swings must take these differences into account. Wrigley’s pioneering article, ‘The supply of raw materials in the Industrial Revolution’ (Wrigley 1962) helped me to relate my study of the Atlantic economy to the energy crises in the seventeenth and eighteenth centuries. In his new book the early ideas concerning the organic and mineral-based economies have come to full bloom. The literature on the Industrial Revolution has been enriched by Wrigley’s concept of an overlap between the receding organic economy subject to negative feedback and an advancing mineralbased economy subject to positive feedback (Wrigley 1988). He has worked out the implications of this approach in all its subtlety and tested it empirically, thereby providing an indispensable analytical framework for future work in this field. There is a broad analogy between Britain at the end of the eighteenth century and America at the end of the twentieth. One is tempted to reflect that, in terms of energy and defence, what the Baltic was to Britain the Middle East is to the United States. In the 1790s Britain had to switch from the flow of solar energy to the stock: in the 1990s America, together with the industrialized world, has to switch from the stock of solar energy to the flow. The nemesis of the age of fossil fuels lies in an awesome question—what effect is the emission of heat-trapping gases (the chlorofluorocarbons) having on the planet’s ozone layer? There is growing pressure on governments to hasten the transition to environmentally safe solar power. It is to be hoped that the United Nations Conference on Environment and Development (Rio de Janeiro, June 1992) will prove to be the beginning of effective international action to reduce pollution. In 1976 a distinguished Nobel Laureate at Berkeley made the following statement. I believe it will take less than twenty-five years to attain commercially adequate efficiency of the photochemical cell with its artificial membrane, which will be able to use, annually, the sun’s energy which falls to the surface of the earth, to store usable renewable energy for the use of people everywhere. (Calvin 1976)

xx

INTRODUCTION

Perhaps a fundamental breakthrough leading to another energy transformation will occur in the 1990s. What a splendid way that would be to celebrate the bicentenary of the first Industrial Revolution. REFERENCES Calvin, M. (1976) ‘Sunshine in your future’, lecture delivered at the University of California, Berkeley (mimeograph). Crafts, N.F.R. (1983) ‘British economic growth, 1700–1831: a review of the evidence’, Economic History Review, 2nd series, XXXVI. ——(1985) British Economic Growth during the Industrial Revolution, Oxford: Oxford University Press. Georgescu-Roegen, N. (1966) Analytical Economics: Issues and Problems, Cambridge, MA: Harvard University Press. Nef, J.U. (1932) The Rise of the British Coal Industry, London: Routledge and Kegan Paul. Phelps Brown, H. (1954) Economic Journal, December: 820. Schumpeter, J. (1939) Business Cycles: a Theoretical and Historical Analysis of the Capitalist Process, vol. I, New York: McGraw Hill. Solomou, S. (1988) Phases of Economic Growth, 1850–1973: Kondratieff Waves and Kuznets Swings, New York: Cambridge University Press. Thomas, B. (1954) Migration and Economic Growth: a Study of Great Britain and the Atlantic Economy, 2nd ed. 1973, Cambridge: Cambridge University Press. ——(1978) ‘The rhythm of growth in the Atlantic economy of the eighteenth century’, Research in Economic History, Vol. 3:1–46. Tranter, N.L. (1981) The labour supply, 1780–1860’ in R.Floud and D.McCloskey (eds) The Economic History of Britain since 1700, Vol. I: 204–66. Wrigley, E.A. (1962) ‘The supply of raw materials in the Industrial Revolution’, Economic History Review, 2nd series, XV: 1–16. ——(1988) Continuity, Chance and Change: The Character of the Industrial Revolution in England, Cambridge: Cambridge University Press.

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1

BRITAIN’S ENERGY CRISIS IN THE SEVENTEENTH CENTURY1

John U.Nef’s classic work, The Rise of the British Coal Industry, concluded that between the accession of Elizabeth and the Civil War, England, Wales, and Scotland faced an acute shortage of wood, which was common to most parts of the island rather than limited to special areas, and which we may describe as a national crisis without laying ourselves open to a charge of exaggeration.1 (Nef 1932, I: 161) In his view this crisis was the fundamental cause of the fourteenfold increase in coal production between the 1550s and the 1680s, and ‘by the mid-seventeenth century a new industrial structure was being built in England on coal and this structure provided the basis for the industrialized Great Britain of the nineteenth century’ (Nef 1964:170). Nef’s work left a profound mark and inspired a considerable literature, some of which rejected his main thesis. For example, George Hammersley’s detailed examination of the Crown woods in the sixteenth and seventeenth centuries led to the conclusion that ‘the much-vaunted fuel shortage…was always a strictly local and limited phenomenon. The story gained ground by an extension of hard cases—those of London, Bristol and Northumberland for instance—to make bad generalizations’ (Hammersley 1957:159). Other criticisms were made by Flinn (1959b, 1978) and by Coleman (1977). Space does not allow an adequate summary of the many issues raised in this debate. In this chapter I shall concentrate on one important aspect—the performance of the British iron industry 1

THE INDUSTRIAL REVOLUTION AND THE ATLANTIC ECONOMY

in the seventeenth century. Between the 1630s and the 1680s, when there was a massive increase in the demand for iron, why did Britain’s iron output fail to respond? Within the limits set by the available statistical data (which are far from perfect), an attempt will be made to analyse the supply and demand shifts and the course of prices in the markets for timber, charcoal and iron. THE REVISIONISTS’ ARGUMENTS As an introduction a few technical facts about the charcoal iron industry may be noted. The kind of timber needed to make charcoal was cordwood, i.e. trees aged about twenty years or less which were usually planted systemically in coppices. It is estimated that in 1660 coppice woods in Kent, Surrey and Sussex occupied no less than 200,000 acres (Schubert 1957:222). Because of the fragility of charcoal and the high costs of transport, it did not usually pay to move it more than about 5 miles; beyond this radius the marginal cost became prohibitive. At any one location output was limited by the rate of regrowth (the natural renewal of woods) and within that limit a well-run coppice could go on indefinitely. A 5-mile radius comprises about 50,000 acres and in the seventeenth century it would take about 13,000 acres of timber to feed a sizeable blast furnace and forge forever (Hammersley 1973:606). To accommodate two furnaces and forges, about two-thirds of the accessible area would have to be woodland, and this was rarely found in any part of the country; even the Forest of Dean, one of the most thickly wooded areas, was only 55 per cent woodland according to a survey made in 1641 (ibid.: 606). Under these constraints, if ironmasters wished to achieve a major increase in output they had to open up new furnaces and forges in other areas which possessed the required supplies of charcoal, water power, limestone and, if possible, iron ore. Thus, the response of the industry to an increase in the nation’s demand for iron took the form of an extension of operations to new sites while production continued at many of the old works. Nef’s critics argue that ironmasters were not being forced to move to remote areas because of ‘the hunger for fuel’ (Ashton 1951:15). The revisionists admit that there was a secular rise in the price of charcoal, probably about threefold between the 1590s and the 1690s, but it is held that the effect of this was partly offset by greater efficiency in the use of the fuel, e.g. a halving ofcharcoal consumption per ton in smelting during the seventeenth century (Hammersley 1973: Tables 2

BRITAIN’S ENERGY CRISIS

2 and 3). But what about the fourteenfold increase in the annual output of coal from 210,000 tons in the 1550s to 2,982,000 tons in the 1680s (Nef 1932, I: 19)? The new orthodoxy denies that this was induced by a growing shortage of charcoal. The substitution of coal for charcoal in many uses is attributed to the fact that at any time in the sixteenth and seventeenth centuries coal was less expensive than charcoal per unit of heat or of output. The reason given for this is that the labour involved in making coal available at an industrial site cost less than that involved in preparing and delivering charcoal, again, in terms of units of heat or of output. That this was as true of the sixteenth century as of the eighteenth is shown by the immediate substitution of coal for charcoal wherever current technology permitted. Coal was used in salt-making, soapboiling, and brewing long before any historian has suggested that the iron industry or any other industry had made serious inroads on the nation’s timber supplies. (Flinn 1959b: 119) The conclusion reached by Michael Flinn was that ‘so far from there being a timber famine, it is abundantly clear that the supply of both timber and cordwood during the two centuries after 1550 was enormously increased with surprisingly little real increase in prices’ (ibid.: 116). Much has been learned from the valuable researches of the revisionists. One can agree with their rejection of the claim that there was an industrial revolution in the period 1550–1700, but the question remains whether the evidence about timber demand and supply in the seventeenth century has been satisfactorily interpreted. They were right to point out that a necessary test of a shortage of a commodity is a rise in its price in a free market relative to the general price level. Unfortunately, in an attempt to play down the existence of stringency in the timber market, the revisionist argument relies on a concept which is theoretically questionable. Emphasis is placed on a spurious distinction between the price of standing timber and the price of charcoal at the place of delivery. For example, Hammersley states that it is too easily taken for granted that changes in the priceof fuel directly reflect changes in the price of wood, whereas 3


this incorporated also the cost of labour to cut and stack wood, to convert it into charcoal and to carry it to the ironworks…. If wood had to be bought, its price contributed only 40–60 per cent to the cost of fuel at the works; cutting and coaling accounted for 30–40 per cent, transport to the works for another 11–21 per cent. (Hammersley 1973:608) It is a mistake to isolate the price of standing timber from other elements of cost and to suggest that a rise in the price of charcoal at the place of delivery could be due not to a scarcity of timber but to the intermediate costs of cutting, cording, charking and transport. The various stages in the production of a commodity are an indissoluble whole. What matters is the price of the final product at the place of delivery. There can be no doubt that conditions varied considerably in different localities. However, if there was excess demand for a particular product in certain regions, one would expect this to be reflected in relative prices. An attempt has been made to strengthen the revisionist case by using the available price indices for the sixteenth and seventeenth centuries. For example, Donald Coleman argues as follows. Had there been a national timber crisis one would have expected timber prices to rise accordingly; in fact the best available price index shows timber prices between 1450–9 and 1640–9 rising by only 395 per cent whilst those of all agricultural products rose by 571 per cent. (Coleman 1977:86) These percentages covering two centuries conceal what was happening during shorter periods. The source on which the indices are based provides information for each decade, and Table 1.1 summarizes the evidence for subperiods. It is clear that the pattern of relative prices went through various phases. During the century ending in 1540–9 standing timber prices hardly rose at all and they fell in relation to industrial prices by 15 per cent, whereas agricultural prices went up by 76 per cent and by 37 per cent relative to industrial prices. During the second half of the sixteenth century food prices continued their steep upward course in relation to both industrial and timber 4

Table 1.1 England and Wales: price indices for all agricultural products, timber and industrial products (decade averages) (1450– 99=100)


Table 1.2 Indices of the general price level and the price of charcoal in England, 1630–70

Source: Cipolla 1965:4. Note: The source of the figures are: general price level, Brown and Hopkins 1956: Appendix B; price of charcoal, Beveridge 1939:144–5. The series are fiveyear averages around the corresponding years.

prices. Whereas these figures support the inference that there was no timber crisis in the period 1450–1600, they tell a different story for the first half of the seventeenth century when timber prices rose by 81 per cent as against 43 per cent for agricultural prices. In relation to the price of industrial products, the cost of timber rose by 41 per cent while that of food went up by 11 per cent. So far as these statistics are concerned, they point to the emergence of timber scarcity in the seventeenth century. This is in line with Cipolla’s conclusion based on the figures set out in Table 1.2 which show that between 1630 and 1670 the price of charcoal rose by 150 per cent as compared with an increase of only 2 per cent in the general price level. In Cipolla’s view, ‘the crisis exploded before 1660 but after 1600’ (Cipolla 1965:63; 1976:265–9). He agrees with Nef that there was an early fuel crisis but he locates it in the seventeenth century not the sixteenth. The only annual series for charcoal prices covering the seventeenth century are Eton College and Westminster School and Abbey (Beveridge 1939:143–5, 193–5) and colleges at Oxford and Cambridge (Thorold Rogers 1887:398–405). There is no long-term series showing what ironmasters paid. The significant fact is that the above sources independently register a sharp upswing in the price of charcoal at four widely separate locations between the 1620s and the 1660s. What are we to make of the revisionists’ case? I have the impression that, in their zeal to refute Nef, they overreacted. Even when we make due allowance for the imperfections of the statistics, the very sharp rise in the relative price of charcoal in the 6


gure 1.1 Dynamic shortage

seventeenth century must be a symptom of a timber shortage affecting an important part of the economy. The word ‘shortage’ is apt to be used rather loosely and it is necessary to give it a precise meaning. This can be done by employing the concept of dynamic shortage. In Figure 1.1 an increase in the demand for a product is shown by an upward shift in the demand curve from D1 to D2, and the response on the supply side is represented by a shift in the supply curve from S1 to S2. If the demand increase were a once-and-for-all affair the intersection point of these curves after the shifts a would indicate the new higher equilibrium price. Now suppose that the increase in demand is not a once-and-for-all affair and that before the new equilibrium price is reached, the demand curve shifts upward to D3; assume again that, before the supply response gives an equilibrium at intersection point b, the demand curve moves up to D4. If the market behaves in this way, disequilibrium will persist and the price will continue to rise along the locus of the dotted line. The magnitude of this dynamic shortage depends on the extent of the demand shifts, the reaction speed in the market (the ratio of the rate of price rise to the excess demand) and the elasticities of demand and supply (see Arrow 1958 and Arrow and Capron 1959). In the light of this model we can now look at the evidence concerning the timber/charcoal/iron markets in Britain in the period under review. 7


Figure 1.2 The British charcoal age, 1550–1750 Sources: Tables 1.12 and 1.13

EVIDENCE OF AN ENERGY SHORTAGE In order to focus attention on the shape of things in the long run, Figure 1.2 sets out the course of the main variables from 1550 to 1750. The period from the 1630s to the 1680s may be seen in its true perspective by setting it in relation to the previous half-century (see Table 1.3). Some striking contrasts may be noted. In the halfcentury 1580s to 1630s, dominated by the price revolution, population rose by a third, the general price level of consumables went up by 72 per cent and the price of charcoal by only 34 per cent, and pig iron output expanded rapidly from a low level, keeping pace with population growth. Consumption of iron per head of the population was more or less constant. Between the 1630s and the 1680s the story is quite different. 8

Sources: see Table 1.13

Table 1.3 British charcoal iron industry, 1580s–1730s (annual averages)

Sources: see Tables 1.11, 1.12 and 1.13. a For timber, board and bar iron, the decades are 1623–32, 1633–42, 1643–52, etc. b Bar iron imports (Table 1.11) in pig iron equivalent (1.35 pig iron=1.0 bar iron). c In relation to 1673–82.

Table 1.4 Interdecennial rates or change, 1620s–90s (decade averages)


Population actually fell by 2 per cent; it has been estimated that the gross reproduction rate (quinquennial average) decreased from 2.11 in 1631 to 1.94 in 1681 and that the rate of net emigration was at a record peak of 2.3 per thousand in the period 1646–61 (Wrigley and Schofield 1981:219, 230). The price of charcoal more than doubled, while the price of consumables fell by 6 per cent; pig iron output rose by only 5 per cent, and imports (pig iron equivalent) by over 500 per cent. Iron consumption per head of the population almost doubled. The Cromwellian and postRestoration period witnessed an unprecedented upsurge in investment triggered by a huge expansion in the navy and the merchant marine. The course of the long-period investment boom can be analysed in the light of interdecennial movements in prices, output and imports set out in Table 1.4. For this analysis it is fortunate that Thorold Rogers’ extensive researches on the period 1583–1702 produced annual price series for bar iron, timber and board (sawn timber)— crucial indices of activity in the iron industry, shipbuilding and housebuilding, respectively (see Table 1.12). In the model of dynamic shortage the reaction speed in the market is defined as the ratio of the rate of price rise to the excess of demand over supply. Demand and supply at any given price are the quantities sought or offered after the transactors have had time to work out fully the implications of rational conduct. In the seventeenth century communications were primitive and the circulation of information extremely slow, especially between one country and another. The supply response to continuing shifts in demand would take place with long lags and there would be wide possibilities of miscalculation. In applying the model to a period of several decades, we are concerned much more with shifts in the curves than with their elasticities. The first point to note about the period 1630s–80s is that the general price level of consumables was fairly stable, the interdecennial movements ranging between zero and 7 per cent. The sharp advances and fluctuations in prices took place in what can be called the energy sector—timber, charcoal and bar iron. In the decade 1633–42 there was a dramatic rise of 33 per cent in the price of bar iron and 49 per cent in the price of timber (in relation to 1623–32), far more than the 19 per cent increase in the consumables price level, the tail-end of the price revolution. The increase in pig iron output plus imports was a tenth, while the 11


market price of bar iron rose by a third. Swedish ironmasters had not yet realized the long-run significance of what was happening in the British economy; they were concentrating on their major market in The Netherlands (see Statistical Appendix). The course of the annual data indicates that dynamic shortage emerged as a potent factor in the early 1640s; between 1631–6 and 1641–6 the average price of bar iron in Britain went up by 50 per cent (from 37 to 56 shillings/ton), whereas the corresponding shift in total supply was not much greater than 10 per cent. The predicament of the British iron industry in the Cromwellian period, 1640–59, is clearly brought out in Table 1.4. In the 1640s output rose by only 5 per cent over the previous decade while the price of charcoal went up by 28 per cent; in the 1650s the industry managed to expand output by 10 per cent but only at the expense of a further 44 per cent jump in the price of charcoal. Meanwhile, the price of bar iron reacted from its peak by 6 per cent in 1643– 52 and 4 per cent in 1653–62 (compared with the previous decade) as a result of a substantial increase in the supply of foreign iron. Swedish ironmasters had had time to read the signals, particularly Cromwell’s vast rearmament programme, and had decided that their future was in the British market, not in The Netherlands. In the 1650s imports (pig iron equivalent) were 11,300 tons or a third of the total supply, as against 3700 tons or 16 per cent in the 1630s. About 7,600 tons (pig iron equivalent) came from Sweden. The supply shifts were now larger than the demand shifts, and the market price was falling. The bell was tolling for the stricken British iron industry, caught between an explosive rise in fuel costs and a decline in the price of the final product. It was this crisis which drove ironmasters to do all in their power to economize on fuel, and it is significant that some firms introduced changes in the production process which succeeded in reducing the charcoal used per ton in smelting from an average of 2.5 to 3 loads early in the seventeenth century to between 1.6 and 2.2 loads in the late 1660s (see Hammersley 1973:604, 609). After the restoration of the monarchy in 1660 and the enactment of stricter Navigation Laws (1660–3), there was a further expansion in shipbuilding, and the price of timber rose by no less than 43 per cent in the 1660s. However, the constraints were too much for the British iron industry: pig iron output fell by 4 per cent in the 1660s and 14 per cent in the 1670s, while the price of bar iron 12


continued its decline. Meanwhile, the interdecennial increase in foreign supply had peaked in the 1650s at 91 per cent; in the 1670s the corresponding shift was 26 per cent, and by then the foreign component in total British iron supply was over a half. The reaction speed in the British market was high, and the dynamic shortage in the 1640s disappeared fairly rapidly as the more efficient Swedish firms took over a large part of the growing iron market at the expense of marginal British producers, and the price of bar iron, after reaching a high peak, declined for four decades. A new equilibrium was reached in the 1680s and 1690s, with the price of charcoal stable, the price of bar iron rising, and a smaller and more efficient British industry expanding output again. During the last twenty years of the century 70 per cent of the increase in British demand for pig iron was met from domestic output and 30 per cent from imports. A more efficient allocation of resources in the AngloBaltic region had been achieved, and the proportion of British iron consumption supplied from the Baltic had stabilized at about 50 per cent. The statistical evidence leaves no doubt as to whether there was a fuel and power crisis in Britain in the seventeenth century. The long-term rearmament and shipbuilding programmes of the Cromwellian and post-Restoration periods rested largely on energy imported from abroad. There was a much more moderate trend in the half-century 1680s–1730s (see Table 1.3). The price of charcoal increased by only 11 per cent and the price of consumables fell by 4 per cent; the growth rate of pig iron output was 30 per cent (as against 5 per cent in the previous half-century), and iron imports expanded at only a tenth of the previous rate. The course of prices during this period was disturbed by war in the Baltic and the prohibition of all trade between Britain and Sweden between 1717 and 1719. In the absence of Swedish imports, British producers made frantic efforts to fill the gap, and the prices of pig iron, bar iron and charcoal rose sharply between 1717 and the early 1720s. Evidence for ironworks in Yorkshire shows a marked secular fall of 31 per cent in the price of charcoal and 16 per cent in the price of bar iron between 1720–4 and 1750–4 (Hyde 1977:44) (see series Y in Figure 1.2).

13


DETERMINANTS OF THE DEMAND SHIFTS Between the 1640s and the last quarter of the seventeenth century the unprecedented increase in the demand for iron and timber can be attributed to three major transformations—the Cromwellian revolution, the commercial revolution, and agricultural and industrial innovations. It was the Cromwellian revolution which, ironically enough, gave birth to what became a formidable Royal Navy, and Charles II’s Navigation Code (1660–3) was a tougher version of the Act which the interregnum Parliament had passed in 1651. Cromwell’s revolutionary defence and commercial policies ushered in an era of aggressive mercantilism and unprecedented naval expenditure. Between 1649 and 1660 no less than 103 new ships, excluding prizes, were built or bought for the navy, and 69 of them carried 26–100 guns (Oppenheim 1896:338). Then, under the Stuarts between 1660 and 1688 the yards turned out 106 new warships (24 of which were first and second rates) with a total tonnage of 73,700 (Coleman 1953:143). Already by 1688 the navy was ‘the most comprehensive and in some respects the largest industry in the country’ (Ehrman 1953:174), and in the next fifteen years the number of workers employed in naval dockyards increased fivefold to over 5,000 (Coleman 1953:140). Prominent among the inputs required by the dockyards were timber and miscellaneous wood products, naval stores (hemp, cordage, cables, pitch, tar, rosin and brimstone), ironwork (anchors, nails), armaments (cannon, shot), leather and other animal products, and wood fuel (charcoal, broom, faggots). The Navy Board insisted on English oak and was adamantly opposed to having even the smallest of its ships built abroad, even in the colonies (Albion 1926:244–5). There was nothing it could do about the fact that its indispensable naval stores, masts, and most of the plank and spars had to be imported, mainly from the Baltic countries. The strong prejudices of the Navy Board together with the protectionist rules of the Navigation Laws added significantly to the pressure imposed on British timber and iron supplies by the big navy policy. ‘When in 1677 the construction of thirty ships of the line was undertaken, the royal forests could not supply enough compass timber, knees and standards to build even two first rates and six seconds in four years; and the programme…left the King’s woods almost bare’ (Ehrman 1953:46). 14


In the century up to the Civil War the growth of English merchant shipping depended largely on the coal trade and the fisheries. Coal shipments from Newcastle-upon-Tyne increased from 35,000 tons in 1549–50 to 409,000 tons in 1633–4. In 1640 woollen cloth comprised 80–90 per cent of London’s exports. Nothing illustrates the impact of the commercial revolution more vividly than the fact that by the end of the seventeenth century three products—tobacco, sugar and calicos—comprised two-thirds of the value of England’s imports from outside Europe and nearly two-thirds of her re-exports to Europe (Davis 1954:153). This was the first stage in the structural shift of England’s trade toward the overseas colonies which became so important in the eighteenth century. The mass consumption of tobacco, sugar and calicos grew enormously in response to rapidly falling prices; there was a significant rise in real wages in the second half of the seventeenth century (see Table 1.13). One of the purposes of the Navigation Laws was to make certain that the handsome profits of those fabulous trades at home and in Europe would be enjoyed by the English not the Dutch. To assess the effect of the demand for timber on scarce resources we must concentrate on the bulk or volume of traffic not its value. Between 1663 and 1686 about four-fifths of the growth in English foreign-going shipping was accounted for by the import of timber and iron from Norway and the Baltic and the long haul of tobacco and sugar across the Atlantic. England had to depend more and more on foreign supplies of timber as well as iron. When London was being rebuilt after the Great Fire of 1666, the Navigation Laws had to be relaxed to allow a vast increase in timber imports into the capital (Reddaway 1940: Ch. 3). The best indicator of the shortfall in domestic supply is that by 1699–1701 timber cargoes comprised no less than 53 per cent of the total tons burden (359,000) of the ships entering English ports from abroad (Davis 1962:184). In the words of Ralph Davis, to a significant extent…the English shipping industry was pulling itself up by its own bootstraps. A ship built entirely of foreign materials—foreign timber, iron, pitch and tar, hemp—would call for the transport services of as many as two or three ships of its own size to carry the materials, and the annual extent of repairs and replacements was substantial. (ibid.: 19–20)

15


By the late 1680s the tonnage of English shipping was about 340,000. Since a large proportion of the population was engaged in agriculture or in occupations dependent on agriculture, the innovations which transformed farming techniques in the seventeenth century must have contributed significantly to the rise in the demand for iron. An interesting attempt at quantification was made by Paul Bairoch on the basis of data for the eighteenth century. Taking England for the period 1730–60, he estimated that agriculture’s demand accounted for between 30 and 45 per cent of domestic output of iron and between 17 and 25 per cent of the national consumption of iron (Bairoch 1966:19). In this calculation, the derived demand for iron rests on such factors as the extension of cultivable area through the elimination of fallow, the clearance and improvement of wasteland, the introduction of improved techniques, equipment and implements, and the increased need for horseshoes, etc. It would be very difficult to make an estimate for seventeenthcentury agriculture; but one can be fairly certain that the part played by the agricultural revolution in increasing iron consumption was far from negligible. Another important source of new demand for iron was the switch to coal for warming houses and the network of new industries which were expanding by using coal as fuel. The annual output of coal in Great Britain is estimated to have risen from 210,000 tons in 1551–60 to 2,982,000 tons in 1681–90. There was no serious technical problem in using coal in such processes as soap or sugar boiling, salt and alum refining, malting, brewing and the making of glass. Success was also achieved in the seventeenth century in smelting nonferrous metals, lead, copper, and tin, in a reverberatory furnace using coal (Jenkins 1933–5). However, there was one outstanding exception: no solution was found to the problem of satisfactorily smelting iron ore with coke instead of charcoal. This was not achieved until Abraham Darby’s innovation in 1709, when the charcoal shortage had ceased to be a problem. The above-mentioned expanding industries (including, of course, the ships required to carry coal in the coasting trade) exercised a strong demand for gears, axles, chains, hammers, nails, pans, bolts, clamps, anchors and a whole range of intermediate goods. Consumption goods such as cutlery, kettles, pins, nails, bottles, window panes, firebacks, pokers and grates were in increasing demand. There was also the beginning of a 16


flourishing export trade in miscellaneous manufactured goods (particularly to the American colonies) which was to become very important in the eighteenth century. To summarize, the Cromwellian revolution, one of the most traumatic events in British history, had consequences which went far beyond the constitutional sphere. It turned England into an aggressive mercantilist power with naval supremacy, at a time when her economy was being transformed by a commercial and agricultural revolution and the expansion of many coal-based industries. This conjuncture of events entailed massive shifts in the nation’s demand for timber, iron and charcoal, and a powerful investment accelerator effect. The available statistical sources suggest that the annual consumption of iron in Great Britain per head of the population almost doubled between the 1630s and the 1680s2 (see Table 1.3). THE SUPPLY SIDE The response to dynamic shortage could have taken several forms. Shifts in physical supply would be strengthened by a general increase in planting, investment in new coppices, and increased imports, whereas effective supply could be enlarged through major improvements in internal transport. Meanwhile, the shifts in demand could be lessened by technical innovations, substitutions and conservation in industries such as iron, shipbuilding and housebuilding. As we have seen, between the 1630s and the 1680s the British iron industry could manage to increase its output by only 5 per cent. Supply was disrupted in many areas by the destruction and chaos of the Civil Wars. In the New Forest ‘the small number of trees of a size fit for the Navy in 1707, or could be cut in 40 years, containing not more than 1/15 part of what was growing in 1608, proves the account given of the devastation during the Civil Wars’ (House of Commons Journal 1788–9, 44:65). The Forest of Dean suffered intense exploitation during the period 1610–48. ‘The incessant assaults on the cover had much reduced the number and quality of its trees and the acreage of its coppices. Few forests had been attacked with equal intensity’ (Hart 1966:135). It was the alarm felt by the Commissioners of the Navy that led them to request the Royal Society to study the problem. After the Restoration in 1660 there was a great awakening of interest in timber supply. In 1664 John Evelyn’s Sylva was published by the official printer 17


of the Royal Society, and it went into several editions. Skilfully aimed at landowners, the book had widespread influence in persuading them of the advantages of planting. It was fortunate that King Charles II, among his varied and exciting pursuits, had a passion for silviculture. By the end of the seventeenth century there had been substantial plantings on private estates as well as on crown lands. In 1668 Parliament passed ‘An Act for the Increase and Preservation of Timber within the Forest of Dean’, under which 11,000 acres of wasteland were to be enclosed and planted with oak. An Act in 1698 provided for new planting in the New Forest. All this had a substantial effect on long-run supply and was one of the reasons why the seventeenth-century shortage was overcome and timber ceased to be a problem during the first half of the eighteenth century. What has to be explained is the inability of the iron industry to expand during the crucial half-century of massive increase in consumption. Revisionist historians have tended to avoid this question; they seem to take the industry’s performance for granted and go on to argue that, in Hammersley’s words, ‘it was not the national development of the iron industry which was circumscribed by the amount of fuel available, but merely the sustained production from any one site’ (Hammersley 1973:606). This statement does not carry conviction. It appears to rest on the idea that the aggregate physical supply of charcoal in Britain was abundant, and all that the ironmaster had to do was to open up at a new location when he was faced with a fuel shortage at a given site. The charcoal iron industry’s adjustment to increased demand for its products had to take place within severe constraints. In the seventeenth century there was no transport revolution which could have greatly increased effective supply reaching the market. In an era before canals, carriage of heavy goods depended mainly on coastal shipping and navigable rivers; the river Severn played a dominating role in the economy of the iron industry because it brought waterborne cargoes to within a few miles of Birmingham and inland to Shrewsbury. At the turn of the century the cost of shipping pig iron on the Severn was 1 penny per ton-mile, whereas overland transport by cart cost 8 1/2 pence per ton-mile; charcoal was not mobile outside very short distances and the transit cost 12 pence per ton-mile (Johnson 1960:73). The industry used two sorts of pig iron, the ‘tough’ variety made out of top-grade, nonphosphoric ores located in Cumberland and the Forest of Dean, and the 18


‘coldshort’ iron made out of low-grade ores found in the coalfields. The need for high-quality metal for the fabricating trades in the Birmingham area (the local ores being low-grade) gave a special importance to the Severn traffic. There were large regional imbalances. For example, in the Forest of Dean in 1717 the output of furnaces (4,950 tons) was more than double the refining capacity of forges (2,303 tons), whereas in the Birmingham, South Staffordshire and Central Shropshire areas it was the other way round—refining capacity (7,140 tons) exceeding furnace output (3,150 tons) by 3,990 tons (ibid.: 69). The essence of the industry’s predicament was that, as demand moved up sharply with a bias toward quality iron, the supply constraints were aggravated largely owing to fuel and water shortages. An uneconomic geographical dispersion of blast furnaces, forges and slitting mills was forced on the industry by its need to reduce competition for fuel and power in key areas. Michael Flinn referred to ‘incontrovertible evidence of a rise in fuel costs in some districts. The siting of furnaces remote from ore supplies proves that a fuel shortage did exercise a significant influence on the trends of development of the industry’ (Flinn 1958:150). Some ironmasters made distant forays to Scotland and Wales in the search for cheaper cordwood despite the higher transport costs entailed. Producers sought methods of using charcoal more efficiently and they succeeded in halving fuel consumption per ton of iron output during the course of the seventeenth century. Another way in which ironmasters adjusted was by increasing the scale of their operations by building furnaces with an average annual output of 350 to 400 tons in the Midlands compared with the average of 200 tons in the Weald. They were driven to do this partly by the high price of labour (as compared with the subsistence rates in Sweden) and partly because most domestic ores were low grade. However, as Hammersley pointed out, ‘this incidentally helped to raise the price of British fuel by encouraging the concentration of efficient large ironworks on the better British fields’ (Hammersley 1973:610). Keen competition for scarce fuel and water power was one of the strongest incentives for Quaker ironmasters to organize their family partnerships; they preferred the stability which these semi-monopolistic organizations afforded them to the risky and frequently unprofitable attempts to expand

19


in a beggar-my-neighbour type of market (Schafer 1971; Edwards 1960; Flinn 1959a). A conscious attempt to adjust demand to supply is seen in the purchase, by a partnership which operated the Lawton and Vale Royal furnaces and the Cranage and Warmingham forges in Cheshire, of a furnace at Street in order to dismantle it and so safeguard the supplies of charcoal to other works. (Johnson 1951:174) At a time when there was an increasing demand for high-quality metal products, the industry was seriously handicapped as compared with its Swedish competitors. For example, the forges of the north Midlands and south Yorkshire were poorly situated to obtain tough pig iron and could only do so at the considerable expense of carting it overland from the Severn river ports, such as Bewdley, from Vale Royal furnace near the mouth of the Weaver in Cheshire, or over the Pennines from north Lancashire. (ibid.: 170) One of the casualties of the fuel crisis in the seventeenth century was a young industry in which English entrepreneurs displayed outstanding enterprise—the export of cast iron guns. This type of gun, selling at about a quarter of the price of bronze guns, was in growing demand throughout Europe and by the end of the century was the preferred artillery on European vessels. According to Cipolla, English iron guns were still exported in the second and third decades of the seventeenth century but, notwithstanding the vociferous allegations of patriots, it does not seem that the trade was very prosperous. In the 1630s when the fuel crisis became acute England began to import iron cannon. The first mention one encounters of Swedish iron guns shipped directly from Sweden to England is in 1632 and from 1638 we know of many shipments of Swedish guns from Amsterdam to England. (Cipolla 1965:63–4) 20


Since the fuel and power constraints were strong enough to prevent any significant expansion in British iron output, the gap had to be filled from abroad. The timber resources of Ireland were easy to exploit. As H.G.Richardson put it, ‘Ireland…did not have the good fortune to be removed from England by the breadth of the Atlantic’ (Richardson 1921:192). English entrepreneurs established ironworks in Ireland manned by English immigrants. The Irish hated these ironworks and destroyed many of them during the Cromwellian rebellion. While much Irish timber was consumed for English industries, it appears that the most important drain was caused by the remarkable growth of exports of pipestaves to England and the continent. It is estimated that in four and a half years from 1635 to 1640 3,759,450 hogshead staves and 2,153,650 pipestaves were exported from Ireland (ibid.). The main source of England’s iron and timber imports was the Baltic. In 1700–9, 88 per cent of her imports of bar iron came from Sweden, and (in pig iron equivalent) total imports were not far short of domestic output of pig iron. Sweden’s strong competitive position rested on abundant iron ore of excellent quality, cheap labour and land, a large number of smallscale production units with dependable supplies of charcoal at stable prices, and low cost of overseas transport. THE CONSERVATION LOBBY In the seventeenth century some of the best minds in England were devoted to the study and advocacy of silviculture and timber conservation. Convincing evidence of the concern about timber shortage may be seen in the works of Arthur Standish, Gabriel Plattes, Samuel Hartlib, Walter Blithe, Sylvanus Taylor, Captain John Smith, Andrew Yarranton, Roger Coke, John Evelyn, Sir William Petty, Robert Hooke, Nehemiah Grew, John Worlidge and John Houghton. The radical ideas of Samuel Hartlib and his circle, well in advance of their time, came to full flower during Cromwell’s protectorate. In a book published in 1652 Hartlib analysed a crucial dilemma facing the economy—the increasingly heavy pressures on land use and the necessity to apply new technology to raise food output per acre and thereby make more land available for forestry (Hartlib 1652). He also stressed the need for a technological revolution which would make possible the substitution of coal for charcoal in the making of iron. The importance of achieving a transport revolution was powerfully argued in the works of Sylvanus Taylor (1652), Captain John Smith 21


(1670) and Andrew Yarranton (1677, 1681). Plans for a national network of linked navigable rivers were put forward by Yarranton and, if they had been carried out, the effective supply of timber would have been enormously increased; but, alas, ‘some foolish discourse at coffee-houses laid asleep that design as being impossible and impracticable’ (Yarranton 1677:64–5). A century was to elapse before Britain got its transport revolution in the shape of the canal network at the end of the eighteenth century. Shipbuilding and housebuilding accounted for a large part of the total demand for timber, and there was much scope for economy in the use of the raw material. For over twenty years Sir William Petty carried out intensive research on the technologies of these two industries. He planned to change the design of ships in order to economize on English oak. In the words of Lindsay Sharp, In a period when massive demands occasioned by the necessary construction of large fleets were suddenly placed on a naturally restricted supply, both price and availability became almost insuperable problems. However, Petty realized that these difficulties could be avoided if a new design were scientifically developed that used a twin hull layout in which the two hulls were relatively flat bottomed, and in which the design structure provided the integral strength required, rather than demanding that this strength be provided through massive, oddly shaped and expensive pieces of oak…. Petty produced experimental work of high innovational and scientific quality that had a direct relevance to one of the crucial areas of timber shortage. (Sharp 1975:69; see also Lansdowne 1931) There was also much room for improvement in the methods used in housebuilding. Sir William Petty and Robert Hooke performed numerous experiments to establish the breaking strain of different kinds of timber, and the results were described in a popular form in Petty (1674). The changes recommended in the technique of housebuilding, entailing substantial savings in timber, were published at the request of the Royal Society, but these too were destined to be neglected. One of Petty’s most ambitious ideas was his essay on national planning, involving the enclosure of the Royal Forests and the use of much of the land near to navigable waters to meet the 22


navy’s demand for timber, flax and hemp. His imaginative proposals had quite a modern ring in stressing the need for objective statistical information. What was the effect of all this expert analysis and advice? Did it help to alleviate the timber shortage? Let us distinguish between two ways of responding to the crisis—conservation and increasing supply. The short answer is that the conservation lobby did not have much influence. Petty was too much in advance of his time, and most of his ideas were rejected as fantasies. Hartlib and his colleagues failed to get their radical plans across to the interregnum parliaments (Webster 1970:64–72) and, after the Restoration of 1660, the political atmosphere was so changed that those who had been associated with the Puritan revolution had to exercise great care. Most of those who had worked with Hartlib shunned him after 1660, and hardly any notice was taken of his death in 1662. However, while governments failed to respond, ironmasters reacted to a threefold rise in the price of charcoal by introducing a series of minor technical changes which over the seventeenth century reduced charcoal consumption per ton of iron output by about 50 per cent. The proposals of reformers who advocated increasing supply through planting were received with enthusiasm. The powerful propaganda impact of Evelyn’s Sylva (1664, and several subsequent editions) resulted in a substantial increase in the supply of timber. This famous book, reproducing many of the ideas of previous writers, was an important bridge between the Cromwellian and the postRestoration periods. To quote Lindsay Sharp, Whether it was a result of [Evelyn’s] own personal taste, or of shrewd packaging, or a combination of both, the commercial success and the depth of penetration that Sylva achieved among the English upper classes was remarkable. However, despite these factors, and advantages of size and detail, the book described few techniques that were not available in the works of earlier authors in a more contracted form. As far as this aspect is concerned, Sylva should therefore be seen more as a continuation and summary of earlier contributions and less as a radical and self-contained improvement of English silvicultural practice. (Sharp 1975:65)

23


Table 1.5 British imports of bar iron (annual averages)

CONCLUSION There is clear evidence of a timber and fuel crisis in Great Britain in the seventeenth century. The revisionists’ counter-arguments are not convincing. The sailing ship in peace and war had a tremendous potential as a high-energy converter, and Britain, unlike her continental competitors, was well placed to exploit it to the full (see Cottrell 1955: Chs 3, 4). However, domestic sources of energy were too meagre to sustain the great shipbuilding investment boom initiated by Cromwell’s mercantilist power politics: the increase in Britain’s naval power in the seventeenth century was made possible by importing surplus energy from abroad. With regard to Nef’s analysis, it is arguable that he exaggerated the timber shortage in the sixteenth century and underestimated the peculiar nature of the energy challenge in the seventeenth century. The crisis in Britain’s charcoal economy was cured not by conservation but by a substantial increase in external supply. There was one sure solution which was not available in the state of technical knowledge in the seventeenth century—the substitution of coal for charcoal in both the refining and smelting processes in the iron industry. This would not only have stopped dynamic shortage in its tracks but would also have reduced the economy’s dependence on foreign supplies of energy. This is what happened a century later. The much more severe crisis between 1750 and 1790 could not be resolved until the epoch-making innovations of James Watt and Henry Cort brought the charcoal age to an end and ushered in the era of coal-iron technology.

24


Table 1.6 Exports of bar iron from Stockholm and Gothenburg to all destinations, 1615–50

Source: Hildebrand 1957:36.

STATISTICAL APPENDIX British imports of bar iron in the seventeenth century A major contribution was made by Hammersley (1973:602–3) when he produced the estimates of bar iron imports based on material in the Public Record Office as shown in Table 1.5. In this chapter I have taken the mean of these figures. The object of this Appendix is to supplement the British data by using Swedish sources as a proxy to bridge the gap between 1630–9 and 1680–9. Bar iron exports from Sweden in the seventeenth century, based on K.-G.Hildebrand (1957), are set out in Tables 1.6, 1.7 and 1.8. Estimates will be attempted for the four decades 1640–79 and for 1691–5. For Gothenburg’s exports to Britain, use is made of back projection from firm figures in the 1690s. All that is claimed for these rough calculations is that they are better than linear extrapolation. 1640–9 Table 1.6 shows a spectacular rise in Stockholm’s bar iron exports to all destinations from about 2,000 tons in 1615 to 14,000 in 1650. British demand was not a major factor in this upsurge: the outstanding cause was the massive increase in the requirements of the Dutch economy. It is estimated that in the 1640s between a third and over a half of Stockholm’s bar iron exports and between 37.5 and 43 per cent of Gothenburg’s went to The Netherlands, 25


Table 1.7 Exports of bar iron from Stockholm to England

Source: Hildebrand 1957:49. Shippounds are converted at 7 1/3=1 ton.

Table 1.8 Exports of bar iron from Gothenburg to all destinations (annual averages)

Source: Hildebrand 1957:37.

and re-exports to Britain were negligible (Hildebrand 1957:40–3). The growth of towns, the building of merchant ships, and demands arising out of the Thirty Years War were important factors in this boom. It was after the 1640s that the huge growth in British demand for Swedish iron became dominant. It is reasonable to reduce the British share of Stockholm’s exports from 31 per cent in 1661 (Table 1.7) to about 20 to 25 per cent in the 1640s and the share of Gothenburg’s exports to 30 per cent. This makes British imports from Sweden about 3,300 tons. If a quarter of British imports came from non-Swedish sources, the estimated total is 4,400 tons per annum. 1650–9 In the 1650s Stockholm exported 14,700 tons a year to all parts (Heckscher 1936:474), and Britain’s share was probably about 31 per cent, i.e. 4,600 tons; back projection suggests that Gothenburg sent 42 per cent of 2,400 tons (Table 1.8) to Britain, i.e. 1,000 tons a year. This gives a Swedish total of 5,600 tons. If a third of British 26


imports came from non-Swedish sources, the estimate for total British imports per annum in the 1650s is 8,400 tons. 1660–9 Stockholm’s bar iron exports to England in the 1660s were an annual average of 7,100 tons (Table 1.7). We know that in 1695 just over 58 per cent of Gothenburg’s exports of iron went to England and Scotland (Heckscher 1936:475). Applying this ratio to the total exports of 3,300 tons for 1660–9, we get 1,900 tons. Thus, our estimate of Britain’s imports of bar iron from Stockholm and Gothenburg in the decade 1660–9 is 9,000 tons per annum. The next step is to calculate British imports from other countries, particularly The Netherlands and Spain. In the second half of the seventeenth century the Dutch were engaged in a substantial amount of transit trade in Swedish iron. Böethius and Heckscher pointed out that Taking the 1640s as base, the Dutch ports normally received something like three-fifths of the three leading Swedish export groups—iron, copper and brass, and pitch and tar…. The Dutch, like the Germans, were middlemen and retained very little of Swedish commodities. England probably received already at that time a great deal more from Sweden than appears in the Swedish accounts. She came more and more to the forefront as the country of direct destination. (Böethius and Heckscher 1938: LIV) There is evidence that in 1661 bar iron exports from Stockholm to The Netherlands amounted to 57,600 shippounds and from Gothenburg 4,600 shippounds, or a total of 8,500 tons (Hildebrand 1957:50). As a lower bound we may assume that the Dutch reexported at least a third to Britain, or about 2,800 tons. Similarly, we assume that a third of the 660 tons exported from Gothenburg to the German North Sea ports (Heckscher 1936:475) was re-exported to England, i.e. just over 200 tons. Finally, there is evidence that Spain’s exports of bar iron to Britain was on average about a tenth of the Swedish contribution (ibid.: 471). On this basis, annual imports from Spain in 1660–9 were about 900 tons. To sum up, our estimates suggest that Britain’s annual imports of 27


bar iron in the 1660s were roughly 9,000 plus 2,800 plus 200 plus 900, i.e. an average of 12,900 tons. The corresponding figure for the 1670s is 16,200 tons (Table 1.9). We have Hammersley’s estimate of 17,000 tons for the 1680s. In Table 1.10 the method of this Appendix is applied to the years 1691–5. Table 1.9 Estimated British annual imports of bar iron, 1670–9

Sources:

1

Heckscher 1936:274 Heckscher 1936:475 3 Heckscher 1936:275 2

Table 1.10 Estimated British annual imports of bar iron, 1691–5

Sources: 1Heckscher 1936:475 2 Hildebrand 1957:51

28


Our estimate of 18,200 tons for 1691–5 is consistent with the limits of 16,000–19,000 tons per annum given by Hammersley for the decade 1690–9. Table 1.11 sets out the decade estimates of British bar iron imports together with the price of charcoal and the output of pig iron. Source materials used for Figure 1.2 and Table 1.3 are summarized in Table 1.13. Table 1.11 Great Britain: charcoal price, pig iron output and bar iron imports, by decade (annual averages), 1620–90

1

For sources see Table 1.13.

Table 1.12 Prices of timber, board and bar iron 1583–1702 (decade averages)

Source: Rogers 1887:504, 544.

1Rogers used the term ‘wrought iron’. In view of the importance of this bar iron price series, it is worth noting what he said about their quality. I make no doubt that in this form the entries which I have collected indicate pretty closely what a purchaser in the seventeeth century would have to pay for wrought iron articles, and that the general average for the whole time would not be disturbed if five times as much evidence were discovered.

(Rogers 1887:482). 29

Sources: Population of England: Wrigley and Schofield 1981: Table A3.1. Charcoal prices: Beveridge 1939:193–5, 143–7. The series in Table 1.11 and Figure 1.2 is the average for the Westminster (School and Abbey) and the Eton College series. The price series for 1710–50 for the Duke of Norfolk’s ironworks at South Yorkshire was kindly supplied by Charles K.Hyde. This is series Y in Figure 1.2 (source: SpencerStanhope MSS, Sheffield City Library). Price of consumables: Brown and Hopkins 1956:312–13. Pig iron output: Riden 1977:443, 448. Bar iron imports: Hammersley 1973:602–3; Hildebrand 1958, and Table 1.11. Real wages: Wrigley and Schofield 1981:638–41, where the construction of the index is explained.

Table 1.13 Summary of data underlying Figure 1.2 and Table 1.3 (annual averages)


NOTES 1

2

I am grateful to Carlo Cipolla, Charles K.Hyde, Peter Lindert, and two anonymous referees for helpful comments on an earlier draft. I also benefited from discussion of the paper at the All-University of California Conference in Economic History at the University of California at Los Angeles in May 1985. Consumption of pig iron equals domestic production plus imports of bar iron in pig iron equivalent (1.35 pig iron=1 bar iron). The population estimates, based on Wrigley and Schofield 1981: Table A3.1, are for England only, but the iron output and imports are for Great Britain, i.e. including Scotland and Wales. This discrepancy does not make much difference.

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Edwards, I. (1960) ‘The charcoal industry of east Denbighshire, 1630–1690’, Denbighshire Historical Society Transactions 9. Ehrman, J. (1953) The Navy in the War of William III, 1689–97 London: Cambridge University Press Evelyn. J. (1664) Sylva, London. Flinn.M.W. (1958) ‘The growth of the English iron industry 1660–1760’, Economic History Review 11:144–53. ——(1959a) ‘The Lloyds in the early English Industrial Revolution’, Business History 2:21–31. ——(1959b) ‘Timber and the advance of technology: a reconsideration’, Annals of Science 20:109–20. ——(1978) ‘Technical change as an escape from resource scarcity: England in the seventeenth and eighteenth centuries’ in A.Maczak and W.N.Parker (eds) Natural Resources in European History, Washington DC: Resources for the Future, Inc.: 139–59. Fussell, G.E. (1952) The Farmer and His Tools: A.D. 1500–1900, London: Andrew Melrose. Hammersley, G. (1957) ‘The crown woods and their exploitation in the sixteenth and seventeenth centuries’, London University Bulletin of the Institute of Historical Research 20:136–61. ——(1973) ‘The charcoal industry and its fuel, 1540–1750’, Economic History Review 26:593–613. Hart, C.E. (1966) Royal Forest. A History of Dean’s Woods as Producers of Timber, Oxford: Clarendon Press. Hartlib, S. (1652) Samuel Hartlib his legacie: or an Enlargement of the Discourse of Husbandry used in Brabant and Flanders: wherein are bequeathed to the Commonwealth of England, more outlandish and Domestic Experiments and Secrets, in reference to Universall Husbandary, 2nd ed., London. Heckscher, E.F. (1936) Sveriges Ekonomiska Historia från Gustav Vasa, Stockholm, Vol. 2. Hildebrand, K.G. (1957) Fagerstabrukens Historia: Sexton-och sjuttonhundratalen, Uppsala. ——(1958) ‘Foreign markets for Swedish iron in the eighteenth century’, Scandinavian Economic History Review 6:3–52. Hull, C.H. (ed.) (1964), The Economic Writings of Sir William Petty, New York: Kelley, Vol. 2. Hyde, C.K. (1977) Technological Change and the British Iron Industry 1700– 1870, Princeton, NJ: Princeton University Press. Jenkins, R. (1933–5) ‘The reverberatory furnace with coal fuel, 1612–1712’, Transactions of the Newcomen Society: 14–15. Johnson, B.L.C. (1951) ‘The charcoal industry in the early eighteenth century’, Geographical Journal 117:167–77. ——(1960) ‘The Midland iron industry in the early 18th century’, Business History 2:67–74. Kerridge, E. (1967) The Agricultural Revolution, London: Allen and Unwin. Lansdowne, Marquis of (1931) The Double Bottom or Twin-Hulled Ship of Sir William Petty, Oxford: Oxford University Press.

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Maczak, A. and Parker, W.N. (eds) (1978) Natural Resources in European History, Washington DC: Resources for the Future, Inc. Nef, J.U. (1932) The Rise of the British Coal Industry, London: Routledge, 2 vols. ——(1964) The Conquest of the Material World, Chicago: University of Chicago Press. Oppenheim, M. (1896) A History of the Administration of the Royal Navy and of Merchant Shipping in Relation to the Navy, London: J. Lane. Petty, Sir William (1674) Discourse Concerning the Use of Duplicate Proportion, London. Reddaway, T.F. (1940) The Rebuilding of London after the Great Fire, London: Jonathan Cape. Reports of the Commissioners appointed to inquire into the State and Condition of the Woods, Forests and Land Revenues of the Crown, Fifth Report, New Forest (1788–9), London: House of Commons Journal 44. Richardson, H.G. (1921) ‘Some remarks on British forest history, II, The sixteenth and seventeenth centuries’, Transactions of the Royal Scottish Arboricultural Society 35, 174–97. Riden, P. (1977) ‘The output of the British iron industry before 1870’, Economic History Review 30:442–9. Rogers, J.E.Thorold (1887) A History of Agriculture and Prices in England, Oxford: Clarendon Press, Vol. 5. Schafer, R.G. (1971) ‘Genesis and structure of the Foley ‘ironworks in partnership’ of 1692’, Business History 13:19–38. Schubert, H.R. (1957) History of the British Iron and Steel Industry from c. 450 B.C. to A.D. 1775, London: Routledge and Kegan Paul. Sharp, L. (1975) ‘Timber, science and economic reform in the seventeenth century’, Forestry 48:51–86. Smith, J. (1670) England, Improvement Reviv’d Digested into Six Books, London. Taylor, S. (1652) Common Good: Or, the Improvement of Commons, Forrests, and Chases, by Inclosure. Wherein the Advantage of the Poor, the Common Plenty of All, and the Increase and Preservation of Timber…are Considered, London. Thirsk, J. (ed.) (1967) The Agrarian History of England and Wales, Vol. IV, 1500–1640, London: Cambridge University Press. Thomas, B. (1980) ‘Towards an energy interpretation of the Industrial Revolution’, Atlantic Economic Journal 8:1–15. Webster, C. (ed.) (1970) Samuel Hartlib and the Advancement of Learning, Cambridge: Cambridge University Press. Wrigley, E.A. and Schofield, R. (1981) The Population History of England 1541–1871, Cambridge, MA: Harvard University Press. Yarranton A. (1677) England’s Improvement by Sea and Land, London, 2nd ed. 1681.

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2

THE FIRST ATLANTIC ECONOMY, 1700–76

In the first edition of Migration and Economic Growth I described the concept of the Atlantic economy of the nineteenth century in these terms: To investigate the process of growth…it is instructive to regard the Atlantic community of nations as one economy. The long-period rise in the total real income generated in this economy necessitated various changes in the countries of which it was composed. By looking at the international movements of labour, capital and commodities as if they were interregional, we shall gain a better insight into the nature and implications of economic growth; it will also have the advantage of making us see the course of Empire settlement in its proper perspective. In the long run changes may be expected in the balance of power between the old and the new countries. (Thomas 1954:30) This statement is also particularly relevant to the Atlantic economy of the eighteenth century. The interaction between the centre and the periphery is even more striking in the mercantilist era when Britain had much more power relative to the colonies. There is also the interesting question of whether, as in the nineteenth century, the rhythm of growth took the form of long swings in British investment and exports which were inverse to those in the periphery. Sceptics might object that the difference between the two centuries—monopolistic mercantilism as against competitive capitalism—rule out any basis for comparison, but there is little substance in this view. Within the weakening structure of regulations in the eighteenth century, particularly in the second half, there was 34


ample scope for entrepreneurial ‘animal spirits’. The Industrial Revolution was not brought about by boards of bureaucrats: the great breakthrough in the 1780s was the culmination of decades of individual enterprise by inventors and businessmen, many of them religious dissenters. Moreover, the monolithic corporations, such as the East India Company, allowed free rein for their directors and ship captains to indulge in orgies of profit maximization which the ‘robber barons’ of the nineteenth century must have envied. As for free trade as the hallmark of the second Atlantic economy, it is easy to exaggerate the extent to which England in the nineteenth century relinquished control over her overseas possessions. Earl Grey made it clear that, in accepting the principles of free trade, the British government ‘did not abdicate the duty and power of regulating the commercial policy not only of the United Kingdom but of the British Empire’ (quoted in Habakkuk 1940:753). The old spirit died hard. Most of the business of foreign investment was directed from British headquarters and a large proportion of loans was spent on British goods. The old eighteenth-century habit of consigning export goods to agents abroad continued; even in the United States as late as 1869 nearly 60 per cent of the imported British cotton goods were consigned. Of course, if practices reminiscent of the old regime still persisted, it was by the free choice of profit-maximizing entrepreneurs in a laissez-faire system, whereas under mercantilism the government sought to direct economic activity into certain channels. However, by the second half of the eighteenth century, many of these government regulations had lost their force. The verdict on the nature and strength of mercantilism in that period has been clearly given by a leading authority on the period: Trade and war potential were regarded as one. For this reason there had to be an imperial pattern of trade imposed from Westminster by means of laws, embargoes and duties. But within such a framework there was great scope for private enterprise. Government was able to exercise less supervision over the conduct of either trade or industry at this time than in the later period of theoretical laissez-faire. Many old systems of control were moribund. (Watson 1960:25) The reference to war potential poses the question of whether the 35


time-shape of economic growth in the eighteenth century was determined by the occurrence of wars. This important matter will be dealt with later in this chapter. The end of the Seven Years War coincided with the onset of an energy shortage in Britain. An analysis of the Atlantic economy before and after the Seven Years War will throw light on some of the causes of the energy crisis. One of the striking facts about the first Atlantic economy is what Schlote called the ‘Americanization’ of English foreign trade (Schlote 1952:79). In 1700 England was very much a member of the then European economic community, with 63 per cent of her exports of manufactured goods going to Europe and only 33 per cent to the Atlantic economy (including re-exports of English goods by Spain and Portugal to their colonies). By the eve of American independence there had been a dramatic change, with the share of English exports taken by Europe down to 27 per cent and the Atlantic proportion up to 65 per cent (Table 2.1). We shall call this the ‘Westernization effect’, to take into account the striking expansion of the proportion of English exports going to Ireland. Many factors contributed to bring about this transformation, and among them was the part played by population trends in Britain, Ireland and the American colonies. Perhaps more than anything else it was the ‘Westernization effect’ which gave the first Atlantic economy its unique character. SLAVERY AND THE WESTERNIZATION OF ENGLAND’S TRADE It was in the American colonies that Malthus found his famous ‘rapidity of increase probably without parallel in history’ (Malthus 1798:105). Between 1700 and 1774 the white population of the colonies rose from 228,000 to 2,176,000, doubling every twentyfive years. By 1774 the black population was 331,000 (Davis 1973:265). The colonies had grown from 4 per cent to over a third of the population of England and Wales. The Atlantic became the busiest ocean highway in the world in the mid-eighteenth century, with a regular packet service from 1755, and the Atlantic trades became the greatest employers of English shipping, employing by the 1770s at least half of English foreign-going shipping. (Farnie 1962:213) 36


Table 2.1 Direction of England’s exports of manufactured goods, 1700–73 (3year average, annual)

Source: Davis 1969:117–18. It is assumed that half the goods imported from Britain by Spain and Portugal were re-exported to their colonies. See Prados de la Escosura 1984:127 on Spanish trade.

On both sides of the Atlantic there were booms in investment in housing, public utilities, transport, docks and shipbuilding. Ample evidence could be seen in and around Glasgow, Whitehaven, Liverpool, Manchester and Bristol and well as in New England, the Southern colonies and the West Indies. The Atlantic economy was transformed not only by the differential rate of growth of the white population but also by the massive spread of plantation slavery. The estimated British-controlled exports of slaves increased from 119,600 in 1701–10 to 360,000 in 1781–90 (Rawley 1981:165). For most of the eighteenth century Britain dominated the slave markets of the Atlantic world. Table 2.2 shows the progress of the slave economy in different parts of the British empire from 1701 to 1780. Over a million slaves were imported into the colonies, and expansion was particularly rapid between 1741 and 1780 in Jamaica and other Caribbean islands. Slavery was the life-blood of the imperial economy. Britain supplied manufactured goods and capital, West Africa slave labour, the northern colonies and Newfoundland farm and forestry products and fish, and the 37


Table 2.2 Imports of slaves into British America, 1701–80

Source: Rawley 1981:167.

southern colonies and the West Indies sugar, tobacco and other plantation products (Solow 1987:51–77). British traders did not confine themselves to the British empire: they also prospered by meeting the needs of the Spanish and Portuguese empires. In the Treaty of Utrecht in 1713 Britain secured the right to supply 4,800 African slaves annually to Spanish America for thirty years. Since Portugal’s own production was insufficient to supply the demands of her South Atlantic empire, a large proportion of the outward-bound cargoes consisted of goods purchased from other European countries, of which England provided the lion’s share. More than eighty ships, ‘great and small’, were engaged in the annual export of woollen manufactures from London, Bristol and West Country ports to Portugal. (Boxer 1962:25) The light woollen and worsted textiles which Britain virtually monopolized were in high demand to clothe slaves. Britain’s huge favourable trade balance with Portugal was settled in bullion from Brazil whose gold shipments to Portugal increased from £350,000 in 1700 to £2,200,000 in 1760. (Fisher 1969:153) Large gold imports into England, based on the rapid growth of Brazil’s slave economy, 1695–1750, helped to make London the financial centre of Europe and contributed to the financing of the crucial imports of iron, timber and naval stores from the Baltic. Between 1700 and 1773 the value of England’s exports of manufactured products to the Atlantic economy increased from £1,198,000 to £5,483,000 (Table 2.1). The most dynamic part of this expansion was generated by the colonies’ demands for iron products ranging from chains and nails to cooking utensils and 38


Table 2.3 England and Wales: construction index, 1703–76 (3-year moving average)

Source: Schumpeter 1960: Tables XV and XVII.

anchors. There was a substantial increase in intercolonial trade; Ireland participated alongside the northern colonies in supplying provisions to feed slaves in the West Indies. By the early 1770s England’s re-export trade (a large part of which was plantation products) was no less than £5,818,000 compared with £9,853,000 of domestic exports. The Westernization of England’s trade reflected the central role of slavery in the functioning of the Atlantic economy, and the process accelerated after mid-century. In the next chapter we shall see how this factor intensified the pressure on energy resources in Britain. LONG SWINGS IN ECONOMIC GROWTH The volume of construction is one of the leading indicators of variations in the rate of economic growth. In the absence of annual records of building activity in the eighteenth century, researchers have relied on a series showing annual amounts of timber imported for use in building, i.e. deals and fir (Ashton 1959; Lewis 1965; Chalklin 1974; Gottlieb 1976). These data were compiled by Elizabeth B.Schumpeter from the original sources (Schumpeter 1960). Various tests have shown that they are a reliable proxy for the volume of construction. There are high correlations between building timber imports and the output of bricks (Shannon 1934:300), the price of Consols (Lewis 1965:13), an index of domestic traffic (Ward 1974:165), and the wages of building workers (Gilboy 1934: App. 2). The details of the tests are given in Thomas 1978:11–15. Table 2.3 shows the peaks and troughs in this construction index. Since the trade returns are in official sterling values (at the 39


Table 2.4 England and Wales: rates of change in imports and exports during long swings in construction, 1703–76

Note: Retained imports are total imports minus re-exports. For the basis of calculation see Deane and Cole (1962:47 and Appendix 1). Source: Deane and Cole (1962:41–50 and 318–22).

prices ruling at the beginning of the eighteenth century), the series is the equivalent of a quantity index. Manuel Gottlieb, in his book on long swings, applies the kind of techniques used by A.F. Burns and Wesley Mitchell in measuring business cycles. He establishes three cycles with an average length of 23.3 years, the peaks being 1724, 1753 and 1776, and the troughs 1711, 1744 and 1762 (Gottlieb 1976:193–6). These dates are almost identical with those in Table 2.3. Details of the character and geographic distribution of building in this period may be found in Summerson 1945, Lewis 1965 and Chalklin 1974. We shall now plot changes in foreign trade during the course of the long swings in construction. Table 2.4 indicates a consistent tendency for imports to rise relatively to exports in the upward phases of the long swing and for exports to rise relatively to imports in the downward phases. In this respect these fluctuations are similar to those of the nineteenth century (Thomas 1973); movements in investment and aggregate demand in Britain set the pace for the rest of the Atlantic economy. Changes in the export-import ratio are inverse to changes in construction throughout the period 1703–76. Fluctuations in the gross barter terms of trade were a consequence of the time-shape of long-term investment in Britain and the process of interaction with the colonies.

40


WARS, ECONOMIC FLUCTUATIONS AND ENERGY SHORTAGE During the nine decades ending in 1790, Britain was at war for forty years—1702–13, 1718–21, 1739–48, 1756–63 and 1776–82. Obviously these wars influenced the course of economic activity: the question is whether they determined the timing of the peaks and troughs of the long swings in investment or whether they merely had a modifying influence. We shall exclude the Napoleonic Wars and concentrate on the first three quarters of the century. The troughs of the long swings in construction occurred in times of war—1710, 1745, 1760 and 1781. Are we therefore to conclude that the rhythm of economic growth was a reflection of a dominant exogenous factor, the occurrence of military operations? If the answer is to be in the affirmative, it has to be demonstrated that each war effort was large enough to have a major distorting effect on the economy. In an important article Larry Neal threw new light on the economic cost of the Seven Years War (1756–63) (Neal 1977). He finds that, though the burden was far from negligible, the impact on the British economy appears to have been slight, and he suggests that England may have drawn extensively on outside sources of labour, capital and materials. His analysis reveals that ‘nearly one half of the Navy’s intake of men most likely came from the two categories of felons and foreigners, with perhaps a few Marines thrown in to keep order’ (ibid.: 27). This is similar to the conclusion reached by Basil Williams that ‘the fleet was manned partly by the press-gang, which secured few but landlubbers and often criminals at that, partly by the inducement to able-bodied seamen of bonuses ranging from 30 shillings to 100 shillings.’ (Williams 1945:213) A rough calculation indicates that the average annual number of British nationals mobilized during the war was about 3 to 4 per cent of the estimated male population. Moreover, the Navy Board found it comparatively easy to obtain resources other than manpower. The building and major repair activities carried out by the Navy stayed fairly constant each year of the war at about £200,000, while the Navy and merchant yards combined turned out nearly ten ships of the line each year’ (Neal 1977:29). Britain had the enormous advantage of being able to borrow easily whatever sums were needed, and the navy debt increased from £1,688,800 in 1755 to a peak of £5,929,100 in 1762. Rates on navy 41


bills averaged between 8 and 10 per cent from 1760 to the middle of 1762. However, this stringency did not have any appreciable impact on the rest of the economy. This is documented by Neal as follows. In spite of this evidence of pressure upon the financial markets, it appears that its effects were virtually isolated from the markets for mercantile credit. No commercial crisis occurred during the war in England; the price of gold coin never rose above £4.03 compared to its prewar low of £3–17–11. The gold reserves of the Bank of England fell dangerously low only in August 1763, six months after the peace had been signed. The exchange on Amsterdam never showed any weakness of any duration. The record is the more astonishing since the expenditures for the Army became substantial with Pitt’s administration as well. (ibid.: 34) For an eighteenth-century assessment of the effect of the Seven Years War on the British economy we can turn to George Chalmers’ An Estimate of the Comparative Strength of Britain. If, however, the resources of Britain arise chiefly from the labour of Britain, it may be easily shown, that there never existed in this island so many industrious people as after the return of peace in 1763. It is not easy, indeed, to calculate the numbers who die in the camp, or in battle, more than would otherwise perish from want, or from vice, in the city, or hamlet. It is some consolation, that the laborious classes are too wealthy to covet the pittance of the soldier, or too independent to court the dangers of the sailor. And though the forsaken lover, or the restless vagrant, may look for refuge in the army or the fleet, it may admit of some doubt, how far the giving of employment to both, may not have freed their parishes from disquietude and from crimes. There is, therefore, no room to suppose that anyone left the anvil or the loom to follow the idle trade of war, during the hostilities of 1756, or that there were less private income and public circulation after the re-establishment of peace, than at any prior epoch. (Chalmers 1794:136–7) 42


Chalmers also points out that, although Scotland provided relalively more recruits than England for the armed forces during the Seven Years War, ‘yet, by this drain, the industrious classes (of Scotland) seem not to have been in the least diminished’ (ibid.: 138). The value of Scottish exports rose from £663,401 in 1756 to £1,086,205 in 1760. The average annual exports of British-manufactured linens during the war years 1756–62 (1,355,226 yards) was 135 per cent greater than in the pre-war years 1749–55 (576,373 yards) (ibid.). What was true of the Seven Years War applied also to the War of the Spanish Succession (1702–13) and the War of the Austrian Succession (1739–48). There was a switch of resources from construction (other than for the war effort) to the export sector. The official values of exports (including reexports) increased as follows: 1702–13, £4,797,000 to £6,892,000; 1739–48, £8,844,000 to £11,141,000; 1756– 63, £11,721,000 to £14,667,000. A.H.John, in his valuable analysis of war and the English economy, 1700–63, presents detailed evidence of the buoyancy of exports and the rising output of consumer goods industries during the conflicts under review (John 1965:335–8). Using the price and cost of living indices compiled by E.W. Gilboy (Gilboy: 1934 and 1936) and E.B.Schumpeter (Schumpeter: 1938), John reaches the following conclusion. In the War of the Spanish Succession and in the Seven Years War…prices in the last two years of conflict, when inflation would normally have been at its height, were, in fact, at or almost at the levels existing at the beginning of the wars. The prices are also compiled from London data, perhaps the most sensitive market in the country; provincial prices might be expected to rise even less. As far as basic foodstuffs are concerned, the prevalence of generally low prices in the first half of the eighteenth century is a well-known fact. There was neither the run of bad harvests nor the pressure on food supplies such as characterized the years 1792–1815. The exports of wheat, barley, malt, rye and oatmeal were, except in 1710–11, 1740–1 and 1757–8, uniformly high. (John 1965:336–7) The picture that emerges is largely one of business as usual in wide areas of the economy. In these eighteenth-century conflicts Britain was never on a war footing in the modern sense: military and naval 43


operations had only a minor impact on the economic life of the country. This has an important bearing on the question of whether the long swings in economic growth were dominated by Britain’s involvement in wars. We shall now re-examine the fluctuations in the volume of construction. Britain was at peace from 1722 to 1739, thanks largely to Sir Robert Walpole’s policy. The long swing in construction which brought the index from 50 in 1713 to a peak of 81 in 1723 was not affected by the war of 1718–21. The downturn started in peacetime in 1724–5 and, if we disregard the doubtful peak in 1736, it had lasted fourteen years when the War of the Austrian Succession broke out in October 1739. The total decline from the peak to the trough of 1745 was from 81 to 52; most of this, 81–61, had taken place during the long period of peace, and the tail-end of the downswing coincided with the first part of the war, 1739–45. There was a recovery from 52 in 1745 to 57 in the following year, and activity remained at this level until the war ended. It can be argued that the war made the depression more protracted than it would otherwise have been or that it delayed the recovery by two or three years; but it is impossible to maintain that the downswing was caused by the war. Indeed it is extremely doubtful whether the war had anything to do with the severity of the 1745 trough. That year was dominated by the Jacobite Rebellion. As John has pointed out, ‘the dislocation caused by the anticipatory rumours and by the actual Rebellion of 1745 was far greater than any resulting from the international wars of the period’ (John 1965:334). Malachi Postlethwayt, writing in 1757, had no illusions about the war of 1739–48. He condemned ‘the interest of the stock-holders’ and declared that ‘it was their superior influence that involved the nation in the late frivolous war with Spain’ (Postlethwayt 1757:286). In 1739 the strategic aims of the war’s proponents did not extend much beyond profit and plunder. The warmongers were only marginally interested in the conquest of Spanish territories either in Europe or America, while those who opposed the war were anxious to limit its dimensions and costs. (Baugh 1965:22) After Spain, the great enemy of England was to be France, and no one expressed the nation’s determination with more authority and eloquence than William Pitt, the Elder. A thorough scrutiny of France’s 44


commercial statistics was one of his preoccupations when he was in opposition. Pitt made a close study of France’s economy, its trade and manufactures and also of its maritime strength. He was appalled by what he learnt. In the long years of friendship which had been established by Walpole, France had been steadily building up her navy until it had reached formidable proportions. To waste our small reserves in useless continental campaigns seemed useless to Pitt…. As Paymaster-General of the Forces he had greater facilities, better material from confidential reports of our agents and from discussions with our representatives abroad. He was able to work out in detail his ideas on empire, trade and strategy. (Plumb 1953:26, 36) The budgetary cost of defeating France in the Seven Years War was £82,623,700, almost double the expenditure incurred in the previous war. It was an expensive victory, and yet, as we have seen, the struggle caused comparatively little disturbance to the working of the British economy. In 1756, when the Seven Years War began, the volume of construction had been falling for three years, and the bottom of the slump was reached in 1760 (index of 60 compared with the peak of 71 in 1753). A sharp upturn of 17 per cent took place in 1761 while the war was still on. Then in 1763 the recovery in construction gathered force and developed into a long boom of unprecedented strength lasting fourteen years. This was a period of population explosion, internal migration, canal building and massive investment in infrastructure. The boom was cut short in 1777 by the American War of Independence, a conflict which brought an epoch to a close. This time certainly it was war that sent the building index tumbling down from the peak of 130 in 1776 to 83 in 1781, but it was no ordinary business slump. It was the end of the first British empire or, to put it in more mundane terms, an outstanding example of a sharp structural break in the time-series. In the early 1780s the Industrial Revolution was ushered in by the innovations of James Watt and Henry Cort. A new era had opened, the stage was set for the second British empire, and the first spectacular building cycle in modern times took place, with the construction index rising from 118 in 1783 to a peak of 246 in 1793. 45


This brief review of the evidence indicates that the long swings in construction in Britain in the eighteenth century up to 1770 were not determined by the occurrence of wars. What the wars did was to influence the late phases of the downswings and increase the switch to exports. It was on the long-run trend, rather than on fluctuations, that the major wars had profound effects. In the eighteenth century Britain developed into a fiscal-military state relying on a ‘blue water’ strategy (Brewer 1989). This strategy entailed a form of technically advanced warfare emphasizing economic pressure. The military weight of the Continental powers was to be opposed by naval skills, superiority of equipment, and abundance of money and resources, as well as access to resources. All of these were chiefly derived from domestic industry and seaborne commerce. (Baugh 1987:87–8) Britain would give large subsidies to its European allies and it was assumed that the fighting on the continent would be done mostly by them not by the British army. In the years 1688–1714 waging war accounted for three-quarters of Britain’s state expenditure and most of it was financed by the land tax (Brewer 1989:148). The War of Austrian Succession (1739–48) increased public borrowing from £42 million to £76 million; by the end of the Seven Years War in 1763 the national debt was £133 million and by the end of the American War in 1783 it was £245 million. The proportion of total tax revenue required to service the national debt rose from 32 per cent in 1740 to 66 per cent in 1782 (ibid.: 117). ‘After 1763 it was feared that the cost of servicing the debt had outstripped the nation’s capacity to raise taxes and that a national bankruptcy might ensue’ (ibid.: 124). It was this fiscal problem which forced the government to add to the revenue by taxing the American colonists, with dire results. In the early 1770s Britain depended on the European continent for imports of charcoal iron, timber and naval stores equal to twothirds of total consumption. The strain on organic energy resources due to the blue water strategy and the Westernization of foreign trade was a major reason why Britain lost the American War. It was a fortunate coincidence that the fossil fuel revolution began to transform the economy in the 1790s. If this had not occurred, would Britain have won the war against Napoleon? 46


THE INTERACTION BETWEEN BRITAIN AND THE COLONIES The preceding analysis suggests that the economic growth of Britain in the eighteenth century was marked by long swings in construction alternating with long swings in the export sector. In this respect the record is broadly similar to that of the nineteenth century. This raises the question of whether these swings were fluctuations in population-sensitive capital formation, i.e. long-period investment varying with the rate of population growth and internal migration. Up to the 1740s population was virtually stationary, and then came the rapid increase (for England and Wales) from 6,140,000 in 1751 to 8,247,000 in 1790. The contrast between the long downswing in construction, 1723–45, and the two upsurges, 1745–53 and 1761– 76, suggests that demographic determinants played an important part (Deane and Cole 1962:106–122; Lewis 1965:186–192). In the first half of the eighteenth century internal migration did little to counteract the depressing influence of a stationary population. As Deane and Cole pointed out, a good deal of the migration which took place in the early part of the eighteenth century had little to do with the expansion of the newer industrial areas. In the first half of the century, for example, about 40 per cent of the migrants attracted to areas outside London apparently went, not to the Midlands and the North, but to Gloucestershire and Hampshire, Bedfordshire, Buckinghamshire and Hertfordshire, and even, it would seem, to the fenland county Huntingdon. (ibid.: 112) Overshadowing everything else in the first half of the century was the movement of population from rural areas into London where the crude death rate was ten per 1,000 higher than the crude birth rate. E.A.Wrigley calculated that, to enable the population of London to grow as it did, about 12,000 births from the rest of England were required every year; London was absorbing the natural increase of half the 5 million people in England and Wales outside the capital (Wrigley 1967:46–7). From the 1740s on, the demographic picture changed dramatically. The proportion of the population of England and Wales in the north-west grew from 21.5 per cent in 1751 to 24.2 47


per cent in 1781; the combination of sustained population increase and internal migration induced by economic growth gave a strong impetus to the upswing in building, particularly that of 1762–76. We shall now examine more closely the behaviour of the trade of the American colonies with Britain with respect to the long swings in the British economy. I shall use Jacob M.Price’s new time-series for Britain’s trade (including Scotland) with the thirteen American colonies and states as from 1740 (Price 1975:322–5). The figures are set out in Table 2.5. The long swing pattern of British imports from the continental American colonies is well marked. There were big increases during the two upswings in construction, 1745–53 and 1761–73, and an absolute fall during the downswing of 1753–61. An interesting point brought out in Table 2.5 is that the amplitude of the swing in the northern colonies (New England, New York and Pennsylvania) was much greater than it was in the southern colonies (Virginia, Maryland, Carolina and Georgia). The pattern of British exports to the colonies is much less clear and diverges from the behaviour of total British exports to all countries over the long swing (see Table 2.4). The firm inference that can be drawn is that the course of the American colonies’ exports to Britain was determined by the long swing in home investment in Britain. In this respect there is a parallel with what happened in the nineteenth century between the United States and Britain. It is not easy to measure the net barter terms of trade between Britain and the thirteen American colonies in the eighteenth century. An approximation can be obtained by using Schumpeter’s index of English prices of consumer goods (other than cereals) (Schumpeter 1938) and the United States wholesale price index for three major markets, Philadelphia, New York and Charleston (US Bureau of the Census 1960:772). Table 2.6 presents the long swing peaks and troughs in these series in the period 1720–73. The data are rather rough but, for what they are worth, they suggest that Britain’s net barter terms of trade, like the gross barter terms, moved adversely during upswings and favourably during downswings of the long swing in home investment. For the colonies this meant favourable net barter terms of trade when their exports to Britain increased strongly in the upward phases of the British long swing, and unfavourable net barter terms during the downward phases.

48

*Because of the drastic effect of the outbreak of the American Revolution on trade in 1775 and 1776, the peaks in the last row are averages of 1772-4. Source: Price 1975:307–25.

Table 2.5 British imports from and exports to the American colonies, 1745–73


Tobacco and rice formed a large proportion of colonial exports to Britain. With appropriate weights, a combined price index for these two commodities would be a good approximation to prices of the colonial exports (British imports). Table 2.6 shows that the price of rice moved in harmony with the swings in British home investment, and the same was true of tobacco, except for the downswing of 1753–61 when there was a moderate price rise. A comparison of columns (3) and (4) with column (1) of Table 2.6 amply confirms the positive relationship between the terms of trade of the colonies and the long swing in investment in Britain. Detailed information is available for the balance of payments of the North American colonies for 1768–72 (Shepherd and Walton 1978:101). They had an unfavourable trade balance (annual average) of just over £1,400,000. About two-thirds of this was offset by invisible earnings and the sale of ships and about a third by British payments in the colonies (salaries and army and navy pay), leaving a small capital inflow of £40,000. These figures tell us nothing about the situation in earlier decades. From the pattern shown in Table 2.6 we can infer that there were years in which Britain was lending heavily to the colonies and years in which loans were being recalled. The impact on the colonies of the vigorous investment boom in Britain from 1762 to the early 1770s was considerable. The economies of the plantation colonies had become dangerously sensitive to fluctuations in British capital and credit markets, witness the financial crises of 1763 and 1772. A contemporary wrote how reputable freeholders found it impossible to pay debts which are trifling in comparison to their estates. If creditors sue, and take out executions, the lands and personal estate, as the sale must be for ready money, are sold for a small part of what they were worth when the debts were contracted. The debtors are ruined. The creditors get but part of their debts, and that ruins them. Thus the consumer breaks the shop-keepers; they break the merchants, and the shock must be felt as far as London. (Ford 1895:227–8) J.A.Ernst, in his incisive analysis of the period 1755–75, stresses the part played by credit and capital flow, and concludes that ‘the Currency Act of 1764 appears as a move to safeguard British 50

Sources: (1) Schumpeter 1938; (2), (3) and (4) US Bureau of the Census 1960:772.

Table 2.6 Britain and the thirteen American colonies: estimated net barter terms of trade in long swing phases, 1723–73


investments in America, a move dictated by metropolitan, not colonial, needs’ (Ernst 1973:359). According to the ‘Committee of Merchants of London Trading to North America’, borrowers in North America owed British merchants nearly 5 million pounds sterling in 1766. In 1790 the pre-1776 debt still outstanding (with interest) was just under £5 million, of which 46 per cent was owed by residents of Virginia (Price 1980:6–10). An important factor facilitating international transfers of funds was the evolution of the international payments mechanism, induced partly by the spectacular growth of the re-export trade in American and East Indian products. ‘This occasioned increased exports of investment capital to overseas markets and areas of supply, and the advanced financial techniques which Europe had developed for effecting payments and capital transfers were now applied throughout most of the European-centred world trading system’ (Sperling 1962:447). It has been demonstrated by Sperling that by 1730 a considerable degree of multilateralism had been achieved (ibid.: 456), and the market facts were increasingly at variance with mercantilist doctrine. Evidence of British capital invested in the West Indies was given by Adam Smith in The Wealth of Nations when he was comparing the English colonies with the French. He pointed out that the capital which has improved the sugar colonies of France, particularly the great colony of St. Domingo, has been raised almost entirely from the gradual improvement and cultivation of those colonies. It has been almost altogether the produce of the soil and of the industry of the colonists, or, what comes to the same thing, the price of that produce gradually accumulated by good management, and employed in raising a still greater produce. But the stock which has improved and cultivated the sugar colonies of England had, a great part of it, been sent out from England, and has by no means been altogether the produce of the soil and industry of the colonists. The prosperity of the English sugar colonies has been, in a great measure, owing to the great riches of England, of which a part has overflowed, if one may say so, upon those colonies. (Smith 1776, II: 85) An estimate for 1775 put the stock of capital invested in the sugar colonies at £60 million, of which a half had been supplied by 52


residents of Great Britain (Pitman 1917:128). According to Pitman, more European capital was invested in the British West Indies than in any other colonies in the New World (ibid.: 127). The exports of the West Indies were as sensitive to British long swings as the exports of southern American colonies. There are indirect indications of an alternation between phases of British home and foreign investment. For example, at the close of the Seven Years War Grenada, Tobago, St Vincent and Dominica were annexed by England, and a new field for speculative investment was opened. At the same time, however, the war debt and the increasing industrial development of Great Britain itself tended to diminish the amount of capital available for improving the colonies. (ibid.: 136) As with capital movements, the volume and fluctuations of transAtlantic migration in the eighteenth century cannot be firmly established. The estimates vary considerably. After an authoritative scrutiny of the available data, Potter concluded that immigration into the thirteen North American colonies between 1700 and 1790 was about 350,000 (Potter 1965:645); of these about a third were Ulster Scots from Ireland (Dickson 1966) and about a quarter were Germans. British migration was not significant until after the Seven Years War. Total immigration may have accounted for about 20 per cent of the increase in the white population of the colonies up to 1775. What is known about the timing suggests that the inflow of Germans was greatest in the first half of the century, whereas the highest level of Irish and British migration came in the late 1760s and early 1770s. According to Potter’s estimates, the number of slaves imported from 1700 to 1790 was between 300,000 and 350,000. This would comprise between a third and two-fifths of the increase in the black population in that period. THE PEAK AND THE END OF THE FIRST ATLANTIC ECONOMY As an island separated from the continent by a narrow channel and possessing a rich colonial empire across the Atlantic, Britain was in a position to exploit to the utmost the unique possibilities of the 53


sailing ship as a high-energy converter. Her great enemy, France, persisted in an endeavour to build an empire without sea power to sustain it. There were several factors which gave England substantial advantages. The British conception of the liberty of the subject ruled out the existence of a large standing army. Thus, while her rivals on the continent of Europe had to spend immense resources on huge armies which were a heavy energy drain, Britain invested physical and human capital in ships for war and peace which cumulatively added to her supply of energy. King George III, in a memorandum in 1772, gave cogent expression to the British view: ‘Commerce the foundation of a marine can never flourish in an absolute monarchy therefore that branch of grandeur ought to be left to England whilst the great army kept by France gives her a natural preeminence on the continent’ (quoted in Namier 1963:35). Moreover, the spirit of English individualism facilitated the redistribution of resources essential to the flexibility of a great trading economy (Cottrell 1955:72– 6). Britain also excelled in her skilful pursuit of mercantilist protectionism embodied in the Navigation Laws. Finally, the extension of her shipping capacity at the expense of Holland in the period culminating in the Seven Years War was greatly assisted by a food surplus (the result of her agricultural revolution in the seventeenth century) which enabled her to export large quantities of grain to Europe. In the mercantilist era war was looked upon as a form of trade drive; it was believed that there was a fixed amount of international trade and that a major object of national policy was to increase Britain’s share, if necessary by force of arms. War was the policy of the Navigation Laws carried on by other means. In the first sixtyfour years of the eighteenth century Britain was at war for 34 years— 1702–13, 1718–21, 1739–48 and 1756–63. Immeasurable sources of human muscular energy were tapped through the nefarious institution of plantation slavery. The end of the Seven Years War was the peak of the first British empire. The Peace of Paris in 1763 established British rule in Canada, and Guadaloupe was returned to France. There had been a remarkable debate on this question (Grant 1911–12:735–43; Pares 1936:216–26). Those who wanted to keep Guadaloupe stressed the need to maintain a healthy economic balance between the northern and the tropical colonies. Many West Indies planters were convinced that it would be better to have Guadaloupe and Martinique within the empire than to have to go on battling with privateers from Martinique. By far the 54


most trenchant argument was put forward in 1761 in Five Letters from a Gentleman in Guadaloupe to his Friend in London. The core of this gentleman’s case is worth quoting at length. The having all North-America to ourselves by acquiring Canada dazzles the eyes, and blinds the understandings of the giddy and unthinking people, as it is natural for the human mind to grasp at every appearance of wealth and grandeur, yet it is easy to discover that such a peace might soon ruin Britain. I say the acquisition of Canada would be destructive because such a country as North-America, ten times larger in extent than Britain, richer soil in most places, all the different climates you can fancy, all the lakes and rivers for navigation one could wish, plenty of wood for shipping, and as much iron, hemp, and naval stores as any part of the world; such a country at such a distance could never remain long subject to Britain; you have taught them the art of war, and put arms in their hands, and they can furnish themselves with everything in a few years, without the assistance of Britain, they are always grumbling and complaining against Britain, even while they have the French to dread, what may they not be supposed to do if the French is no longer a check upon them; you must keep a numerous standing army to over-awe them; these troops will soon get wives and possessions, and become Americans; thus from these measures you lay the surest foundation of unpeopling Britain, and strengthening America to revolt; a people who must become more licentious from their liberty, and more factious and turbulent from the distance of the power that rules them: one must be very little conversant in history, and totally unacquainted with the passions and operations of the human mind, who cannot foresee those events as clearly as anything that can be discovered, that lies concealed in the womb of time; it is no gift of prophecy, it is only the natural and unavoidable consequences of such and such measures. (quoted in Grant 1911–12:740–1) Benjamin Franklin’s answer to this was that a people spread thro’ the whole tract of country on this 55


side of the Mississippi, and secured by Canada in our hands, would probably for some centuries find employment in agriculture, and thereby free us at home effectually from our fears of American manufactures. (ibid.: 741) The notion that honest Ben Franklin really believed this is hard to swallow. The debate, pertinent and lively as it was, had little influence on what the statesmen did. Britain retained Canada, and the economic argument that seems to have weighed most was that the North American colonies, whose populations were increasing so fast, held out enormous scope for British exports of manufactured goods. Thus, the French enemy was removed from the colonies’ back door, and the defence tie which had bound them to the mother country was snapped. The conquest of Canada, in the words of G.L.Beer, ‘was a most fundamental fact in the history of the Empire; it destroyed the equilibrium of the unstable structure and allowed full scope to the centrifugal forces within it’ (Beer 1907:173). The imperialist policy which became dominant after the Seven Years War laid stress on the colonies as markets for British goods rather than as sources of raw materials. However, in the postwar period energy scarcity made Britain increasingly dependent on foreign supplies of raw materials. The energy crisis was solved and the Industrial Revolution was ushered in at the very time when the centrifugal forces in the American colonies and Britain’s loss of control of the seas brought the first Atlantic economy to an end. REFERENCES Ashton, T.S. (1959) Economic Fluctuations in England, 1700–1800, London: Oxford University Press. Baugh, D.A. (1965) British Naval Administration in the Age of Walpole, Princeton, NJ: Princeton University Press. ——(1987) ‘British strategy during the First World War in the context of four centuries: blue water versus continental commitment’ in D.M. Masterson (ed.) Naval History: The Sixth Symposium of the US Naval Academy, Wilmington, Delaware: 87–8. Beer, G.L. (1907) British Colonial Policy, 1754–1765, New York: Macmillan. Boxer, C.R. (1962) The Golden Age of Brazil, Berkeley CA: University of California Press. Brewer, J. (1989) The Sinews of Power, War, Money and the English State, 56


1688–1783, London: Unwin Hyman. Burns, A.F. and Mitchell, W. (1947) Measuring Business Cycles, New York: National Bureau of Economic Research. Chalklin, C.W. (1974) Provincial Towns of Georgian England: a Study of the Building Process, 1740–1820, London: Edward Arnold. Chalmers, G. (1794) An Estimate of the Comparative Strength of Great Britain, during the Present and Four Preceding Reigns, 3rd ed., London: John Stockdale. Cottrell, W.F. (1955) Energy and Society: The Relation between Energy, Social Change, and Economic Development, New York: McGraw Hill. Davis, R. (1969) ‘English foreign trade, 1700–1774’ in W.E.Minchinton (ed.) The Growth of English Overseas Trade in the 17th and 18th Centuries, London: Methuen: 99–118. ——(1973) The Rise of the Atlantic Economies, London: Weidenfeld and Nicolson. Deane, P. and Cole, W.A. (1962) British Economic Growth, 1688–1959: Trends and Structure, London: Cambridge University Press. Dickson, R.J. (1966) Ulster Emigration to Colonial America, 1718–1775, London: Routledge and Kegan Paul. Ernst, J.A. (1973) Money and Politics, 1755–1775, Chapel Hill: University of North Carolina Press. Farnie, D.A. (1972) ‘The commercial empire of the Atlantic, 1607–1703’, Economic History Review 15. Fisher, H.E.S. (1969) ‘Anglo-Portuguese Trade, 1700–1770’ in W.E. Michinton (ed.) The Growth of English Overseas Trade in the 17th and 18th Centuries, London: Methuen: 144–64. Ford, Paul L. (ed.) (1895) The Writings of John Dickinson, Philadelphia: Historical Society of Pennsylvania. Gilboy, E.W. (1934) Wages in Eighteenth Century England, Cambridge, MA: Harvard University Press. ——(1936) ‘The cost of living and real wages in eighteenth-century England’, Review of Economic Statistics 18. Gottlieb, M. (1976) Long Swings in Urban Development, New York: Columbia University Press for the National Bureau of Economic Research. Grant, W.L. (1911–12) ‘Canada versus Guadeloupe, an episode of the Seven Years War’, American Historical Review 17. Habakkuk, H.J. (1940) ‘Free trade and commercial expansion, 1853–1870’, Cambridge History of the British Empire 2. John, A.H. (1965) ‘War and the English economy, 1700–1763’, Economic History Review 7. Lewis, J.Parry (1965), Building Cycles and Britain’s Growth, London: Macmillan. Malthus, T.R. (1798) An Essay on the Principle of Population, 1st edn 1926, London: Macmillan, reprinted. Namier, Sir Lewis (1963) England in the Age of the American Revolution, London: Macmillan. Neal, L. (1977) ‘Interpreting power and profit in economic history: a case study of the Seven Years War’, Journal of Economic History 37.

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Pares, R. (1936) War and Trade in the West Indies, reissued 1963, London: Frank Cass. Pitman, F.W. (1917) The Development of the British West Indies, 1700– 1763, New Haven: Yale University Press. Plumb, J.H. (1953) Chatham, New York: Macmillan. Postlethwayt, M. (1755) The Universal Dictionary of Trade and Commerce, 2nd edn 1757, London: J.Knapton. Potter, J. (1965) The growth of population in America, 1700–1860’ in D.V.Glass and D.E.C.Eversley (eds) Population in History, London: Edward Arnold. Prados de la Escosura, L. (1984) ‘El comercio hispano-británico en los siglos XVIII y XIX I Reconstrucción’, Revista de Historia Economica 2. Price J.M. (1975) ‘New time series for Scotland’s and Britain’s trade with the thirteen colonies and states, 1741–1791’, William and Mary Quarterly, Third Series, 32. ——(1980) Capital and Credit in British Overseas Trade: the View from the Chesapeake, 1770–1776, Cambridge, MA: Harvard University Press. Rawley, James A. (1981) The TransAtlantic Slave Trade, New York: Norton. Schlote, W. (1952) British Overseas Trade from 1700 to the 1930s, translated by W.O.Henderson and W.H.Chaloner, Oxford: Basil Blackwell. Schumpeter, E.B. (1938) ‘English prices and public finance, 1660–1822’, Review of Economic Statistics 20. ——(1960) English Overseas Trade Statistics, 1697–1808 Oxford: Oxford University Press. Shannon, H.A. (1934) ‘Bricks—a Trade Index, 1785–1849’, Economica, 3. Shepherd, J.F. and Walton, G.M. (1978) The Economic Rise of Early America New York: Cambridge University Press. Smith, A. (1776) The Wealth of Nations, London: J.M.Dent; Everyman’s Library Edition, 1910. Solow, B.L. (1987) ‘Capitalism and slavery in the exceedingly long run’ in B.Solow and S.L.Engerman (eds) British Capitalism and Caribbean Slavery: the Legacy of Eric Williams, Cambridge: Cambridge University Press: 51–77. Sperling, J. (1962) ‘The international payments mechanism in the 17th and 18th centuries’, Economic History Review 14. Summerson, Sir John (1945) Georgian London, revised ed. 1962, London: Pelican. Thomas, Brinley (1954) Migration and Economic Growth: A Study of Great Britain and the Atlantic Economy, 2nd edn 1973, Cambridge: Cambridge University Press. ——(1978) ‘The rhythm of growth in the Atlantic economy of the eighteenth century’, Research in Economic History 3:1–46. US Bureau of the Census (1960) Historical Statistics of the United States: Colonial Times to 1957, Washington, DC: Government Printing Office. Ward, J.R. (1974) The Finance of Canal Building in Eighteenth-Century England, London: Oxford University Press.

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Watson, J.S. (1960) The Reign of George III, 1760–1815, London: Oxford University Press. Williams, B. (1945) The Whig Supremacy, 1714–1760, London: Oxford University Press. Wrigley, E.A. (1967) ‘A simple model of London’s importance in changing English society and economy, 1650–1750’, Past and Present 37.

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3

THE END OF THE CHARCOAL IRON AGE

In the second half of the eighteenth century Britain was faced with a challenge much deeper than the energy crisis of the seventeenth century. An unprecedented population explosion intensified competing pressures on land use for timber, charcoal, pasture, crops, transport, manufacturing and urbanization. Could a small island depending mainly on the flow of solar energy avoid a Malthusian disaster? It was a matter of life and death for the organic-based economy. We shall first examine the long interlude of energy abundance which ended in the 1750s. ENERGY ABUNDANCE 1680–1750 In contrast to the seventeenth century, when there was a babel of eloquent tongues on the timber problem, hardly any books or pamphlets on this subject were published in the first half of the eighteenth century. Substantial plantings on crown lands and private estates had renewed the stocks of all kinds of trees from cordwood to oak, and from 1722 to 1762 the volume of timber imports declined. In the iron trade the Baltic connection had become normal and indispensable; England took half of Sweden’s bar iron exports which comprised three-quarters of that country’s total exports. The first half of the eighteenth century was a period of very low population growth. ‘It was an age of stability in politics, in religion, in literature, and in social observances’ (Williams 1945:1). There were ample supplies of grain for export; coal output per head of the population rose by two-thirds (Flinn 1984:252); there was continued growth in shipbuilding, an increase in shipping productivity and a spectacular expansion of Britain’s Atlantic

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economy which entailed increasing exploitation of the abundant energy of slave labour. The British iron industry, lean and healthy after drastic slimming in the seventeenth century, settled into a state of comfortable semiretirement buttressed by protective tariffs. As early as 1709 the problem of using coke instead of charcoal to smelt iron ore was solved by Abraham Darby in Coalbrookdale. One would have thought that this eventful innovation would induce a switch in investment from charcoal to coke furnaces, thereby enabling the British iron industry to recapture some of the market lost to Swedish producers in the seventeenth century. This did not happen. Between 1720 and 1755 British ironmasters built twenty-two new charcoal furnaces and no coke furnaces (Hyde 1977:24–9); and, in pig iron equivalent, imports of charcoal iron increased their share of the British market from 49 per cent to 60 per cent. Why did ironmasters reject Darby’s new process? Charles K. Hyde (1977: Chs 2, 3) has demonstrated that it was perfectly rational for them to do so, since both the variable and capital costs of charcoal smelting were substantially lower than those of coke smelting. There was a decline of 31 per cent in the price of charcoal and 16 per cent in the price of bar iron between 1720–4 and 1750–4 (ibid.: 44). Fortunately for Darby a by-product of his discovery turned out to be a gold mine; the thin-walled castings which he produced with his coke pig iron were much more profitable than those made with charcoal pig iron. He was able to supply cast iron pots only half as heavy as those based on the charcoal technique and at a lower price. He kept this process a secret as long as he could and made a fortune out of it. Meanwhile, other ironmasters, faced with Darby’s monopoly of the new casting technique and the relatively high cost of coke smelting, continued to use the charcoal smelting process right through the first half of the eighteenth century, and the annual output in 1745–9 was 27,000 tons which was the same as in 1720– 4. All the signs seemed to indicate that the British charcoal iron industry had reached a state of profitable stability and that energy shortage was a thing of the distant past. Iron was the basis of the remarkable expansion of exports of manufactured goods (such as nails, buckets, firearms, axes, etc.) to the American colonies and the West Indies. The output of coal in the first half of the eighteenth century increased from 2,985,000 to 5,230,000 tons and the proportion 61


produced in coalfields other than the north-east of England rose from 57 per cent to 63 per cent. An important factor on the supply side was the installation in the 1730s and 1740s of seventy-two Newcomen pumping engines which made it possible to sink deeper mines (Flinn 1984:122). Per head of the population total output rose by about two-thirds and coal for domestic heating by over 40 per cent. Trends in the pattern of consumption are shown in Table 3.1. Table 3.1 Coal consumption, by category, 1700–50

Source: Flinn 1984:252.

Nearly half the total output was used for domestic heating and most of the remainder was absorbed in a variety of traditional coal-using industries such as salt, glass, brewing, distilling, bricks, chemicals, baking and non-ferrous metals. It is significant that even by 1750 hardly any coal was used in the iron industry. The relative abundance of coal is shown by the course of its price in relation to that of commodities in general. The nearest one can get to a measure of the general price level in the first half of the eighteenth century is the mean of three available indices (Gilboy 1936, Schumpeter 1938 and Phelps Brown and Hopkins 1956). 62


Between 1700–4 and 1750–4 this composite index fell by 4.8 per cent, and average coal prices declined by 8.7 per cent (Flinn 1984:311). In real terms the trend of the price of coal was downward, indicating that the substantial per capita growth in various uses of this source of energy was easily accommodated by an expansion in supply at an annual rate of 1.13 per cent. There was plenty to spare for the fastest-growing coal market and exports to Ireland and foreign countries rose to 7.4 per cent of total output in 1750 from 4.7 per cent in 1700. We have already referred to the fall in the price of charcoal between 1720–4 and 1750–4 and its significance for the iron industry. Similar conditions could be observed in other markets for timber— shipbuilding for the navy and the merchant marine, and housebuilding. The demand for timber for construction was severely affected by the long downswing from 1723 to 1745; in the years after 1730 there was hardly any new building in London. Imports of deals and fir timber fell by over a third in this period (Schumpeter 1960: Table 15). Meanwhile supplies of British timber were increasing as a result of the plantings in the last third of the seventeenth century. R.G.Albion, in his classic study of the timber problem of the Royal Navy, concluded that during the first half of the eighteenth century, the timber problem was dormant in the English forests. The oaks that had been young enough to escape destruction prior to 1660 were gradually coming to maturity, and the Restoration plantings provided for a regular succession for some time to come. (Albion 1926:133)

THE NAVY BOARD VERSUS THE BOARD OF TRADE There was an inner contradiction in Britain’s mercantilist policy in the eighteenth century. On the one hand, it was an article of faith that a favourable balance of trade must be achieved; on the other, stubborn facts of security dictated that a large unfavourable trade had to be carried on with the Baltic countries where large quantities of timber, bar iron and naval stores had to be purchased. The Navy Board would not allow mercantilist policy towards the colonies to interfere with what it considered to be the overriding technical 63


requirements of the Royal Navy, and this brought it into conflict with the Board of Trade. All ships had to pass through the Sound and pay dues levied by the King of Denmark. There was no question of a political preference for a Charles of Sweden or a Peter of Russia—whichever threatened to upset the balance of power in the Baltic, or to interrupt by any other means, the supplies on which the security of Great Britain depended, became automatically her enemy. (Richmond 1946:105) On twenty occasions between 1658 and 1814 the British fleet was ordered to the Sound. At the beginning of the eighteenth century the monopolistic Stockholm Tar Company refused to send supplies to England except in Swedish ships and at exorbitant prices. A British envoy in Stockholm reminded his government ‘how much it was in the power of the King of Sweden either to forward the fitting out of the Royal Navy or to keep it in harbour’ (ibid.: 102). As a result, in 1705 an Act was passed establishing premiums to encourage the production of naval stores— pitch, tar and turpentine—in the American colonies, the subsidy to be paid out of the estimates of the Navy Board. The Board of Trade hoped that this measure would lure colonists away from producing manufactured goods which competed with British exports. The Admiralty consistently opposed the policy on the ground that the quality of colonial naval stores was not up to standard and that the superior Baltic products were more accessible. Ropemakers for the navy did not approve of the tar from the Carolinas because, to attain the consistency needed to coat yarn lightly, it had to be brought up to a temperature at which the yarn was in danger of burning. In 1722 the Board of Trade tried to meet this objection by issuing a statutory recipe (the Swedish method) and decreeing that only tar made according to this method would be eligible for premium. This brought little response from the colonists and in 1729 Parliament reduced the general premium to £2.3s per ton, while retaining £4 per ton for tar made according to the new recipe. However, the colonists resisted change and went on producing the same old product which was good enough for the commercial market (Baugh 1977:241). The statistical record of the operation of the 1705 Act is a striking example of the triumph of strategic necessity over mercantilist dogma. 64


In the period 1705–75 the Navy Board bought 60 per cent more pitch, tar and turpentine from Sweden and Russia than from the American colonies (£268,000 as against £167,074). The Act stipulated that importers had to give the Navy Board the option of purchasing each consignment arriving from the colonies; but nearly always, as the minutes of the Board testify, the offers were turned down and were ‘noted in connection with the premium’ (Pool 1966:98–9). The outlay on premium payments for colonial naval stores was no less than £1,471,719 for the period 1705–75, so that the amounts of pitch, tar and turpentine received by the navy were only equal to about one-tenth of the total subsidy paid out (Malone 1964:45–6). This was hardly one of the success stories of British colonial policy. Colonial tar, most of it produced by slave labour, was widely used in the private market in England; in the 1760s imports from the colonies were about 80 per cent of total imports (Hautala, 1963:165). The subsidies were strongly supported by ropemakers, the owners of the slave plantations, and the agents of the colonies in London. However, in terms of the energy inputs needed to maximize defence in the eighteenth century, the Admiralty’s preference for naval stores from the Baltic was fully justified. But there was one outstanding exception—the magnificent mast pines of over 36 inches diameter available only from New England. The Navy Board made certain that this branch of colonial trade was strongly safeguarded (Malone 1964: Ch. 4). If the Navy Board seemed to disregard some of the central principles of mercantilism, it was not because it wanted freer trade. The freedom which it cared about was its own freedom to act as a monopsonist in the markets for timber, Swedish bar iron, and naval stores. Although every kingdom in Europe bought Baltic naval stores, the best quality generally found its way to the British dockyards, for the British Navy was a good customer and paid its bills regularly. In some cases British merchants controlled the Baltic markets. (Baugh 1965:276) We shall see in a later section that the Navy Board’s monopsonistic price policy in the market for English oak was one of the causes of the scarcity of that vital resource which developed in the second half of the eighteenth century. 65


Table 3.2 Population, prices, and real wages in England, 1740–99 (Decade averages: 1740–49=100)

Sources:

1

Wrigley and Schofield 1981: Table A3.1; 2 O’Brien 1985:787–89; Hyde 1977:44 and 79; 4 Flinn, vol. 2, 1984:303–4; 5 Hyde 1977:81; 6 Wrigley and Schofield 1981: Table A9.2; 7 Schwartz 1985:39–40. 3

POPULATION EXPLOSION AND ENERGY CRISIS Between 1751 and 1801 the population of England increased by 50 per cent in contrast to a rise of only 14 per cent in the first half of the century. The implications of this pressure of numbers were evident in the energy sector, and there was practically no increase in real product per head between 1760 and 1780 (Crafts 1985:45–6). Indices of prices and real wages are set out in Table 3.2. The extent of the energy crisis can be gauged by an examination of the markets in food, timber, iron and charcoal. Food Thanks to early technical progress Britain was an important granary for parts of Europe in the first half of the eighteenth century, but the population explosion put an end to this. Net grain exports of 485,000 quarters in 1760 were replaced by net imports of 672,000 quarters by 1790. There was a change of diet in favour of animal products. As a result of relative agricultural plenty in early decades, the mass of the population both in town and country had by mid-century acquired a taste for meat and poultry (Drummond and Wilbraham 66


1939: Chs 9–11). Writing in 1751, Josiah Tucker denounced the meat-eating poor for over-indulgence in hard liquor at the expense of the cheap cuts which they used to buy. The common people by their bodily Exercise are supposed to be capable of digesting, and by their Station in Life are under a kind of Necessity of purchasing, the coarsest provisions—consequently the cheapest. But ever since the frequent Use of Spiritous Liquors, the Palates of the Poor are become Nice and Sickly, to a degree deserving one’s Pity and Compassion. They are not able to purchase Dainties, and they cannot touch what is coarse and ordinary. The Dram therefore is the only Refuge: and hence it is, that the great dealers in FleshMeat in Southwark and Whitechapel have justly complained of late Years that they can have no Purchasers for the coarser Parts of Meat, which used formerly to be Sold to the Poor at a low price, but must now be buried, or thrown upon a Dunghill. (Tucker 1751:28–9) Most of the land enclosures in the second half of the eighteenth century entailed a shift from arable farming to the breeding of animals. The counties which increased their livestock interests most were in the Midlands and Wales (Yelling 1977:205). By 1801 the acreage of pasture in England was 14,287,058 and arable 10,505,501; in Wales pasture land was three times larger than arable (2,509,400 acres as against 849,000) (Capper 1801:70). Since the time of Gregory King at the end of the seventeenth century the acreage under pasture in England and Wales had increased by about 68 per cent. The trend to livestock farming intensified the growing pressure on land use in a small island. Each acre used for animal products had only about 10 per cent efficiency in terms of calories for consumers compared with grain production. The object was, in the words of Mr Bakewell, ‘to make the beast into a machine, the best contrived for converting herbage into money’. (John 1960:154). It was not just a run of bad harvests which made the decade of the 1760s notorious for mass discontent and violent food riots: the pressure of population on food resources caused widespread poverty and privation. Between 1760 and 1774 the price of grains rose by 62 per cent, vegetables 54 per cent and animal products 16 per cent 67


(O’Brien 1985:789). The export of grain was prohibited between 1766 and 1774. Seven Years War veterans and militia men were prominent among the leaders of hunger riots in 1766. For example, in Warwickshire ‘the calculated actions of the rioters were reminiscent of a military campaign. Mob captains often chose targets ahead of time, although they also attacked spontaneously “targets of opportunity”’ (Shelton 1973:125). Several Parliamentary Committees were set up to examine the causes of high food prices. Trials of ‘provision rioters’ took place before Special Commissioners in the autumn of 1766, and twenty-eight were condemned to death, five to transportation and fifteen to imprisonment (John 1960:153). From the 1750s to the 1790s the standard of living of the working class fell, except perhaps in north-west England. The real wage index went down from 660 to 601, and the index of real wages of London bricklayers decreased from 140 to 99 (see Table 3.2). Real private consumption per head fell from 100.0 in 1760 to 97.4 in 1780 and recovered only to 101.2 in 1801 (Crafts 1983:198). The evidence is against the notion that there was an agricultural revolution in Britain in the second half of the eighteenth century (see Chapter 4). The general effect of the enclosures of open-field arable was ‘to redistribute the existing agricultural income not to create additional income by increasing efficiency’ (Allen 1982:950). On the most optimistic assumptions, in the period 1740–90 agricultural output increased by an average rate of only 2.7 per cent per decade whereas agricultural prices went up by an average rate of 7.7 per cent per decade. This is in sharp contrast to 1660–1740 when output rose by 4.3 per cent per decade and prices fell by 2.8 per cent per decade (Jackson 1985:342 and 351). Research on grain yields shows that productivity ‘stood still from c. 1770 or before until after 1830, and this at the time of the demographic revolution’ (Turner 1982:506). British agriculture was unable to cope. As early as 1758 the government was compelled to repeal the Cattle Acts which barred food imports from Ireland; between 1760 and 1790 imports of Irish beef went up threefold, butter sixfold, and pork sevenfold (Cullen 1968:45 and 70). There is no substance in the traditional view that an agricultural revolution was crucial to the Industrial Revolution. In an economy largely dependent on organic materials a rapid increase in population intensified the demands on land use. The inadequate performance of British agriculture after 1750 was part of a Malthusian crisis, the solution of which required

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a change in the energy base which would enable Britain to endow itself with the equivalent of a vast extension of its own land area. Timber As soon as the Seven Years War ended, contemporaries were well aware that the long interlude of energy abundance was over. In 1763 Roger Fisher, a Liverpool shipwright, published a book, Heart of Oak, which gave a depressing account of a severe timber shortage (Fisher 1763). The price of English timber had risen 30–40 per cent in the previous ten years. Prompted by public concern, the Royal Society of Arts in 1759 had offered gold and silver medals for the largest plantings of each type of tree each year, and the response by landlords had been favourable. However, this could not solve the problem in the immediate future. A Navy Board report to the Admiralty in 1768 declared that stocks of timber at dockyards were down to six months’ consumption and that large amounts of foreign oak were being imported (Albion 1926:134). Since oak for the Royal Navy had to be 80–100 years old, the young trees which had survived up to 1660 and the plantings of the 1660s under the influence of Evelyn’s SYLVA yielded a new supply of mature oak by the time of the Seven Years War, 1756–63, and much of it was used up during that conflict (House of Commons Journal (H.C.J.) 1792:268). In 1771 a House of Commons Committee issued a report on ‘How His Majesty’s Navy may be better supplied with timber’ (House of Commons Report 1771). The Navy Board had tried to get this committee to make a comprehensive survey of all the timber growing on private estates in every county in the country, but the landlords were not going to tolerate this interference with their property rights. They stopped the survey before it had reached the second county (H.C.J. 1792:267). Evidence given to the 1771 committee emphasized that during the Seven Years War over fifty warships of sixty guns and over had been built. One of the ominous symptoms of timber scarcity was that the Admiralty condoned the use of unseasoned timber in the building of warships; a shipbuilder testified that he had built and launched a seventy gun ship in a year, whereas if the timber had been properly seasoned it would have taken 3.5 years (House of Commons Report 1771:23). The prevalence of dry rot was to have dire consequences during the American War of Independence. Another matter for concern was the competition between the East India Company and the Royal Navy. Between 69


1750 and 1770 the size of East India ships had increased from 600 to between 800 and 1,000 tons and they were competing for the large timber required for fifty—to seventy-gun warships. This had considerable significance since the whole East India Company fleet of ninety ships (with each capable of doing only four round voyages) was rebuilt in twelve years (Pool 1966:88). The Admiralty responded to the 1771 Report by organizing imports of oak from the Baltic in order to curb the timber monopoly, restricting the tonnage of East India ships, and ordering that three years’ supply of timber should always be maintained in the royal shipyards. This eased the problem for a few years. The fateful year 1776 brought renewed crisis. The American war inflicted an unprecedented strain. By the early 1770s, owing to timber shortage, one in three ships in British registry had been built in the colonies. When the break came, Britain lost nearly one third of her merchant shipping and about 18,000 seamen (Graham 1949:25). The transport problems entailed by the war were enormous and proved insurmountable: Every biscuit, man, and bullet required by the British forces in America had to be transported across 3,000 miles of ocean…. The demands of a world war and the failure, after 1780, of the Navy Board to procure the tonnage necessary to meet the demands of Britain’s deteriorating military position in America imposed a crushing burden on the transport service. By 1782 the shortage of ships had reduced the transport service to a point where it could not supply tonnage for amphibious operations or meet the logistical requirements of the British forces. (Syrett 1970:241–3) In order to speed up shipbuilding, the use of unseasoned timber had been resumed in the merchant yards in 1776 at the behest of the Admiralty. In the American war nearly half the navy’s total losses of 199 ships were due not to enemy action but to perils of the sea— hurricanes, wreck, foundering and various accidents; sixty-six ships were lost partly because of rotting hulls (Graham 1949:29). After the surrender at Yorktown in 1781 there was a bitter outcry in Britain and votes of censure were put down in both Houses of Parliament. The opposition, led by Charles James Fox, vigorously attacked the 70


government for its failure to maintain adequate supplies of timber for the navy. On 24 January 1782, Fox, moving a motion in the House of Commons for ‘an Inquiry into the Ill-success of the British Navy, declared: ‘The Earl of Sandwich had procured lavish grants; he had the command of the national purse, but he had failed to provide for his country a fleet equal to the necessities of the state, or equal to the strength of the enemy’ (Wright 1815, II: 6–7). The shock of losing the war concentrated attention on the causes of the timber crisis. In 1787 Commissioners of the Land Revenue, under the Chairmanship of Sir Charles Middleton, were appointed to investigate the condition of the royal forests and crown lands. They sat for several years and published seventeen reports which are a mine of information on the timber problem (H.C.J. 1787–8 to 1792– 3). There was ample evidence of corruption and inefficiency in the administration of the royal forests. The Surveyor-General and his staff had uncontrolled power and they regarded their official papers as private property which they took away with them when they retired (H.C.J. 1788:570). There was a considerable secular decline in the amount of timber fit for the navy in the royal forests from 234,229 loads in 1608 to 50,455 loads in 1783 (H.C.J. 1792:271). However, the record was not entirely bleak. In one royal forest the Navy Board demonstrated that it could carry out a long-term programme of conservation. In 1707 it decided, in conjunction with the Surveyor-General of the Woods, that the New Forest would be a nursery for the largest timbers required by the navy. In order to preserve younger trees a warrant directed that only 300 oak timber trees, fifty old oaks and 100 beech trees should be felled annually for the next forty years. As a result, between 1707 and 1764 the number of oak trees fit for the navy in the New Forest increased from 12,476 to 19,836 or, in terms of loads, from 19,873 to 36,662 (H.C.J. 1788–9, vol. 44:563). In purchasing English oak in the private market the navy had a monopsonist’s power to keep the price low, but it had to pay increased transport costs as supplies from remote areas had to be tapped. There can be no doubt that one reason for the scarcity of timber for the navy was that many private landlords from the end of the seventeenth century on had little incentive to plant oaks at the low price level maintained by the navy’s monopsonistic power. It has been estimated that 70 per cent of the population explosion in the second half of the eighteenth century was attributable to a 71


rise in the birth rate (Lee and Schofield 1981, I: 31). The consequent expansion in the household-forming age group caused the building industry to have two major booms. Between 1750 and 1800 there were 108 Acts of Parliament for river navigations and canals, 20 Acts for harbour improvements and 550 Acts establishing turnpike trusts (Ward 1974:164). The building of houses and public utilities was brisk in cities such as London, Edinburgh, Glasgow, Manchester, Birmingham, Liverpool, Nottingham, Bath and Bristol as well as in agricultural areas (Lewis 1965: Ch. 1). This was the glorious era of Georgian architecture. Internal migration was having an important influence together with demographic echo effects. The upsurge in construction entailed a considerable expansion in the demand for timber beyond the increase in domestic supply made possible by the canals and turnpikes. Reports from all over the country indicated a huge excess demand for domestic timber which could be satisfied only by bringing in foreign supplies (H.C.J. 1792:314–27). Between 1752 and 1792 (years of peak activity) imports of fir timber mainly from Russia went up nearly sevenfold, from 40,000 to 261,000 loads (Schumpeter 1960: Tables 15 and 17). Another immense addition to the pressure on timber resources came from the expansion in the merchant marine caused by the rapid growth and Westernization of Britain’s trade. The shift to more distant routes, including the prosperous East India trade, and the constraints of the Navigation Laws called for a substantial growth in British shipbuilding capacity. The British-owned merchant fleet increased from 421,000 tons in 1751 to 1,055,000 tons in 1788; and, as was pointed out earlier, one in three of these ships had been built in the American colonies. The Navigation Laws reserved the coasting trade exclusively for British-owned ships and a large part of foreign trade for British or colonial ships; prohibitive differential export taxes eliminated foreign-owned ships from the coal export trade. Thus, the rules of mercantilism added considerably to the aggregate demand for timber. Moreover, the Admiralty had a strong prejudice against having warships built abroad; they insisted on building them at home with English oak and Swedish iron. The import requirement can be measured by estimating the tonnage of ships entering British ports which had timber as cargo. To do this it is necessary to express timber imports in tons burden, i.e. deadweight tonnage. The unit of measurement of each type 72


of timber—deals, fir, masts—is translated into tons burden in accordance with contemporary practice. For example, 100 deals equals 5 tons burden, one load of fir 1.2 tons burden, and a large mast 16 tons burden (Davis 1962:182). According to estimates by Ralph Davis all ships entering English ports in 1752–4, as an annual average, constituted 562,000 tons burden and timber cargoes accounted for 303,000 tons burden, or 54 per cent (ibid.: 184–5). A similar calculation for 1771–3 gives 770,000 and 472,000 tons burden respectively. Thus, at the beginning of the 1750s over a half of the shipping tonnage entering English ports was carrying timber, and by 1771–3 the proportion was about 60 per cent. Even allowing for a large margin of error, these proportions are clear evidence of a critical timber shortage. The total demand for naval timber in this period can be broken down into different categories. The Report on Naval Timber (H.C.J. 1792:274) contains estimates of the amounts used in building merchant ships and ships for the Royal Navy and the East India Company. The figures exclude timber for constructing small vessels such as lighters and barges. The annual averages for the period 1760–88 are as follows: Loads per Annum 50,542 9,150 158,679 218,371

Royal Navy East India Company ships Merchant ships

The building of merchant ships absorbed nearly three-quarters of naval timber and the Royal Navy just under one-quarter. The argument of this chapter rejects the traditional view that the textile industry was the leading sector and prime mover of the Industrial Revolution. The textile industry was certainly part of the energy problem but it was no part of the solution. It contributed to the pressure on resources through the massive increase in the demand for alkalies for the bleaching process. The development of a substitute in the form of kelp (the product of burning dried seaweed) in Scotland was only a temporary alleviation. Textile growth impinged directly on the timber supply through its demand for potash derived from wood ash, an extremely wasteful process since the proportion of potash obtained to wood consumed was about 1 to 500 (Barker, Dickenson and Hardie 1956:161–3). The price of potash rose rapidly,

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and by 1770 imports from Russia and the American colonies had gone up substantially. This aspect of the timber shortage inspired British innovators to look for a solution to the problem of making soda out of sea salt. Thanks to the discoveries of James Keir and the Earl of Dundonald, synthetic alkali works were operating successfully in Glasgow and Tyneside before the end of the eighteenth century. This was a quarter of a century before the Leblanc process was adopted in England. Iron and charcoal The seventeenth-century crisis was solved by a huge permanent increase in the level of imports of iron. During the years of energy abundance (1680–1750) Britain was in a long-period equilibrium with iron from abroad supplying over half of consumption, and the price of domestic charcoal and pig iron was falling for several decades. Earlier in this chapter we saw why Abraham Darby’s technique for smelting iron ore with coal or coke (1709) was not widely adopted in the first half of the eighteenth century. This comfortable stability for the charcoal iron industry was interrupted by a sudden change around mid-century—a steep rise in the price of charcoal which made it one-third more expensive in the 1760s than it was in the 1740s (see Table 3.2). Many ironmasters were at last switching from charcoal to coke smelting. This was not because the quality of coke pig iron had improved: it was a matter of relative costs. By the 1760s the variable costs of the most efficient charcoal furnaces in South Wales were £2 per ton higher than the total costs of coke furnaces (Hyde 1977:61). In the thirty years after 1750 technical progress in the use of coke to make pig iron was rapid, and the output of coke pig iron rose from 1,500 to 36,500 tons. After 1775 the use of the steam engine invented by James Watt had a profound effect by enabling furnaces to have a much stronger blast and by making it possible to have several large furnaces on the same site. The boom in coke smelting had a devastating effect on a onetime prosperous iron-making area—the Weald in the south of England. For a century and a half the Wealden ironmasters had had a virtual monopoly in supplying guns for the government, and they kept their hold on this market until the Seven Years War. By the 1760s the coke smelting innovation had reduced the cost of manufacturing cannon by more than £5 a ton (Tomlinson 74


1976:396), and this meant death for the charcoal-based gunfounding industry. During the American War of Independence almost all the producers of cannon were in the coalfields of Wales, the Midlands and Scotland. The form of the naval cannon was revolutionized by the invention of the carronade. It was lighter than the conventional cannon and this enabled a ship to carry more powerful pieces; it also needed fewer men to work it and could be fired more quickly…. In the hands of John Wilkinson, John Roebuck and William Gascoyne, the whole process of the manufacture and design of ordnance had undergone a profound change in little more than two decades. (Ibid.: 397) This innovation was to prove crucial in the Napoleonic wars. Meanwhile the other major technological problem—the use of coke to refine pig iron into bar iron—was far from being satisfactorily solved. Britain had to rely more and more on foreign supplies; annual imports of bar iron doubled between the 1740s and the 1780s, from 22,500 to 44,200 tons, mainly from Sweden and Russia (Hildebrand 1958:10). The excellence of Swedish bar iron made it indispensable for the finest quality steel and for many other uses. For example, the edge of scythes was of steel and the rest of the blade iron; steel-reinforced mattocks were provided for the sugar and tobacco plantations and harpoons for the whaling industry. Good-quality iron was needed for most agricultural implements (ibid.: 22). So great was the dependence of the British economy on imports that the Swedish ironmasters were able to pursue an effective monopolistic policy of restriction of output to maximize profits. It was this policy which gave an opening to the Russian iron industry in the 1750s. In the 1730s Britain imported 19,000 tons of bar iron annually from Sweden and only 3,300 from Russia; by 1770–9 Swedish imports were down to 16,700 tons whereas the Russian share had reached 25,300 tons per annum. Between the 1740s and the late 1780s the population of England went up by 33 per cent and the consumption of iron per capita increased by 83 per cent. Among the demand determinants were the building of warships and merchant vessels, the construction of houses, roads, canals and docks, and the export trade. It is estimated 75


that in the period 1730–60 the demand for iron in agriculture amounted to between 30 and 45 per cent of domestic output and between 17 and 25 per cent of the national consumption of iron (Bairoch 1966:19). Even with the rapid development of coke smelting the dependence of Britain on charcoal remained substantial. In the years 1770–4, on the eve of the American war, total consumption of iron was about 111,000 tons (pig iron equivalent), and no less than 64 per cent of this (71,000 tons) was imported charcoal iron. If we add domestic output of charcoal pig iron (17,000 tons) Britain was 79 per cent dependent on charcoal iron, of which 81 per cent was imported (Schumpeter 1960: Tables 16 and 17; Riden 1977:448). This is very much a lower bound estimate because it ignores the fact that, owing to smuggling, the actual amount of iron coming from Sweden (as shown by Swedish statistics) was between 25 and 40 per cent more than British statistics recorded (Heckscher 1932:234). The price of imported Scandinavian bar iron increased from £12 per ton in 1763 to £24 in 1795 (Table 3.2). There was a close connection between Britain’s dependence on Baltic supplies of energy and the Westernization of the export trade. Britain paid for vital raw materials and naval stores out of net income from her vast re-exports of plantation products. Between 1763–75 and 1783–91 the profitability of plantation slavery was increasing; in Jamaica, Barbados and the Leeward Isles the price obtained for sugar went up by 32 per cent while the price of slaves rose by only 8 per cent (Ward 1988:210). This gave further impetus to the Westernization trend. The proportion of England’s exports of manufactured goods going to the Atlantic economy increased from 47 per cent in 1752–4 to 65 per cent in 1772–4 (Table 2.1). Britain monopolized this trade; ‘dry goods’ such as wagon tyres, nails, gates, fencing, horse-shoes, axes, chains and farm implements were all based on bar iron, and the iron content of textiles was by no means negligible. The expansion of imports of organic materials from the Baltic was a necessary condition of satisfying the colonies’ demand for manufactured goods, and between 1761 and 1773 the net barter (and probably the single factor) terms of trade were moving against Britain (see Table 2.6). The priority which had to be given to iron-based exports to the Atlantic economy added considerably to the strains on Britain’s energy base. The benefits to Britain from the exploitation of the muscular energy of slave labour were being

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eroded by the rising real cost of providing manufactured goods for the colonies. The signals from Britain’s energy sector in the period 1760–90 were unmistakable—increasing scarcity and rising prices of organic materials. This was not a cyclical phenomenon: it was dynamic shortage which could not be overcome, as in the seventeenth century, within the ambit of the charcoal age. It is true that there were significant adjustments which alleviated the scarcity; for example, the transport revolution (canals and roads) greatly increased the effective supply of timber and coal by opening up new areas; fir timber from abroad was substituted for domestic woods on a large scale, and coke was increasingly substituted for charcoal in smelting iron ore into pig iron. However, the counter-forces of mercantilism, conservatism and special interests were much stronger. Instead of applying the techniques of wood-preservation, the Admiralty allowed warships to be built of unseasoned timber. Shipwrights and hand sawyers, by vigorously opposing the use of saw mills, kept the cost of hand-sawying so high that deals and plank had to be imported from the Baltic where oaks were sawn by windmills (Albion 1926:103). The landowners, the most powerful of special interests, sabotaged the Navy Board’s plan in 1771 to estimate the national supply of timber on private estates, and the record of most of them in increasing the productivity of their farms was insignificant. The Navigation Laws artificially increased the aggregate demand for timber. Defeat in the American war demonstrated that the defence commitments of the first British empire had outrun the capacity of the economy to sustain them, and the Westernization of Britain’s trade had contributed to this weakness. Adam Smith in 1776 had directed attention to this insecurity factor. The monopoly of the colony trade…by suiting, besides, to one particular market only so great a part of the industry and commerce of Great Britain…has rendered the whole state of that industry and commerce more precarious and less secure than if their produce had been accommodated to a greater variety of markets. (Smith 1910, II: 104) The energy crisis in the second half of the eighteenth century could not be solved by a massive increase in imports of timber and charcoal iron. Between 1760 and 1801 population grew by an average of 77


0.83 per cent per year and domestic agricultural output by only 0.44 per cent per year, and real private consumption per head was practically stationary. The organic economy was caught in a Malthusian trap. How could an unprecedented swarming of people on a small island be made consistent with a rising standard of living? This was impossible if the economy remained basically organic: it was necessary to change the energy base from the flow of solar energy to the stock of fossil fuels. To reach this goal the innovations of Abraham Darby, Thomas Newcomen and James Watt were necessary but not sufficient: the entry into the age of coal and iron required also the substitution of coke for charcoal in the refining of pig iron into a new kind of bar iron. This was achieved by Henry Cort’s innovation in 1784. The long evolution which culminated in this breakthrough will be examined in Chapter 5. The creation of a new iron industry based on coal removed the underlying cause of structural imbalance, but the full implications took time to unfold. Investment incentives in the 1790s were transformed. Between 1781–5 and 1796–1800 coal output expanded by 45 per cent (from 7,750,000 to 10,960,000 tons) and it reached 64,514,000 tons by 1854 (Pollard 1980:229). Pig iron production rose from 62,000 tons in 1781–5 to 154,000 tons in 1796–1800 and to 3,070,000 tons in 1854 (Riden 1977:448 and 455). The structural change in the first half of the nineteenth century was profound. The population of Great Britain (decade averages) increased by 75 per cent between 1801–11 and 1841– 51 (from 11,220,000 to 19,600,000). In the same period, according to C.H.Feinstein’s revised estimates, gross fixed capital formation in real terms in mining, manufacturing, gas, water and electricity rose fivefold and in transport (mainly railways) sixfold (Pollard and Feinstein 1988:444). As a proportion of total capital formation these two sectors increased from 33 per cent to 62 per cent, and agriculture declined from 26 per cent to 14 per cent. The age of fossil fuels had arrived with a vengeance; the Industrial Revolution had been achieved. REFERENCES Albion, R.G. (1926) Forests and Sea Power. The Timber Problem of the Royal Navy 1652–1862, Cambridge MA: Harvard University Press. Allen, R.C. (1982) ‘The efficiency and distributional consequences of eighteenth century enclosures’, Economic Journal 92.

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Bairoch, P. (1966) ‘Le rôle de 1’agriculture dans la création de la sidérugie moderne’, Revue d’Histoire Economique et Sociale 44:5–23. Barker, T.C., Dickenson, R. and Hardie, D.W.F. (1956) ‘The origins of the synthetic alkali industry in Britain’, Economica 30, May. Baugh, D.A. (1965) British Naval Administration in the Age of Walpole, Princeton NJ: Princeton University Press. ——(ed.) (1977) Naval Administration 1715–1750, Navy Records Society. Capper, B.P. (1801) A Statistical Account of the Population and Cultivation, Produce and Consumption of England and Wales, London: T. Geoghegan. Crafts, N.F.R. (1983) ‘British economic growth, 1700–1831: a review of the evidence’, Economic History Review 36, May. ——(1985) British Economic Growth during the Industrial Revolution, London: Oxford University Press. Cullen, L.M. (1968) Anglo-Irish Trade 1660–1800, Manchester: Manchester University Press. Davis, R. (1962) The Rise of the English Shipping Industry in the 17th and 18th Centuries, New York: St.Martin’s Press. Drummond, J. and Wilbraham, A. (1939) The Englishman’s Food: A History of Five Centuries of English Diet, London: Cape. Fisher, R. (1763) Heart of Oak, London: J.Johnson. Flinn, M.W. (1984) The History of the British Coal Industry, vol 2., Oxford: Clarendon. Gilboy, E.W. (1936) ‘The cost of living and real wages in eighteenthcentury England’, Review of Economic Statistics 18. Graham, G.S. (1949) ‘Considerations on the War of American Independence’, Bulletin of the Institute of Historical Research 22. Hautala, K. (1963) European and American Tar in the English Market in the 18th and 19th Centuries, Helsinki: Suomalainen tiedeakatemia. Heckscher, E.F. (1932) ‘Un grand chapitre de 1’histoire du fer: le monopol Suédois’, Annales d’histoire économique et sociale 4, March and May. Hildebrand, K.G. (1958) ‘Foreign markets for Swedish iron in the eighteenth century’, Scandinavian Economic History Review 6:3–52. House of Commons Journal (1787–8 to 1792–3) Reports of the Commissioners of the Land Revenue. House of Commons Report (1771), Vol. III, ‘How His Majesty’s Navy may be better supplied with Timber’. Hyde, C.K. (1977) Technological Change and the British Iron Industry, 1700– 1870, Princeton, NJ: Princeton University Press. Jackson, R.V. (1985) ‘Growth and Deceleration in English Agriculture, 1640– 1780’, Economic History Review 38. John, A.H. (1960) ‘The course of agricultural change, 1660–1760’, in L. S.Presnell (ed.) Studies in the Industrial Revolution, London: Athlone. Lee, R.D. and Schofield, R.S. (1981) ‘British population in the eighteenth century’ in R.Floud and D.McCloskey (eds) The Economic History of Britain since 1700, vol. I, Cambridge: Cambridge University Press: 17– 35. Lewis, J.P. (1965) Building Cycles and Britain’s Growth, London: Macmillan. Malone, J.J. (1964) Pine Trees and Politics: the Naval Stores and Forest Policy in Colonial New England, 1691–1775, London: Longman. 79


O’Brien, P. (1985) ‘Agriculture and the home market for English industry, 1660–1820’, English Historical Review 100. Phelps Brown, E.H. and Hopkins, S.V. (1956) ‘Seven centuries of the prices of consumables, compared with builders’ wage rates’, Economica 30. Pool, B. (1966) Navy Board Contracts, 1660–1832, London: Longmans Green. Pollard, S. (1980) ‘A new estimate of British coal production, 1750–1850’, Economic History Review 33. Pollard, S. and Feinstein, C.H. (eds) (1988) Studies in Capital Formation in the United Kingdom 1750–1920, Oxford: Clarendon. Richmond, Sir H. (1946) Statesmen and Sea Power, Oxford: Clarendon. Riden, P. (1977) ‘The output of the British iron industry before 1870’, Economic History Review 30:442–9. Schumpeter, E.B. (1938) ‘English prices and public finance, 1660–1822’, Review of Economic Statistics 20. ——(1960) English Overseas Trade Statistics, 1697–1808, Oxford: Clarendon. Schwartz, L.D. (1985) ‘The standard of living in the long run: London 1700– 1860’, Economic History Review 38. Shelton, W.J. (1973) English Hunger and Industrial Disorder, London: Macmillan. Syrett, D. (1970) Shipping and the American War, 1775–1783, London: Athlone. Smith, A. (1910) The Wealth of Nations, Everyman Library edition. Tomlinson, H.C. (1976) ‘Wealden gun-founding: an analysis of its demise in the eighteenth century’, Economic History Review 29. Tucker, J.T. (1751) An Impartial Inquiry into the Benefits and Damages arising to the Nation from the present very great Use of Low-priced Spirituous Liquors, London: T.Trie. Turner, M. (1982) ‘Agricultural productivity in England in the eighteenth century: evidence from crop yields’, Economic History Review 35. Ward, J.R. (1974) The Finance of Canal Building in Eighteenth Century England, London: Oxford University Press. ——(1988) British West Indian Slavery, 1750–1834, London: Oxford University Press Williams, B. (1945) The Whig Supremacy, 1714–1760, London: Oxford University Press. Wright, J. (ed.) (1815) The speeches of the Rt.Hon.Charles James Fox in the House of Commons, 6 vols. London: Longman. Yelling, J.A. (1977) Common Field and Enclosure in England, 1450–1850, London: Macmillan.

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4

BRITAIN’S FOOD SUPPLY, 1760–1846: THE IRISH CONTRIBUTION

On the occasion of the Silver Jubilee of the British Agricultural History Society in 1977, William N.Parker published an article in which he pointed out that there are still important unanswered questions about the English agricultural revolution, 1750–1850. For example: By what means was Britain’s growing population fed in these critical decades before the massive imports of overseas meat and grain? Could not some balance sheet be constructed to show the relative importance of dietary changes—whether restrictions or improvements (pace Hartwell, Hobsbawm)—increased grain yields and meat supplies at home, Irish and other imports, and finally the new crops and abandonment of fallow?… Did turnips or clover or both together feed by way of meat-animals or richer and better tilled soil for the grain crop—30 percent of the population increase or 80 percent of it in the Industrial Revolution? (Parker 1977:7) The standard generalization is that in the first half of the nineteenth century, when the population of England and Wales doubled, this substantial addition to numbers, thanks to the agricultural revolution, was fed out of domestic sources. E.L.Jones concluded as follows: The total population of England and Wales, which had been 11,004,000 in 1815, reached 14,928,000 in 1836 and this enormous increase was fed. It was fed from home supplies, with no sustained help from imports and

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clearly without the per capita consumption of foodstuffs falling much, if indeed it fell at all. (Jones 1968:13) In their well-known textbook, The Agricultural Revolution 1750– 1880, J.D.Chambers and G.EMingay reach a similar conclusion. The Agricultural Revolution…had performed its role in the process of industrialization. Output had risen almost as fast as population, and as late as 1868 it was estimated that no less than 80 percent of the food consumed in the United Kingdom by a highly urbanized and industrialized population had been grown at home. (Chambers and Mingay 1966:207–8) The questions raised by Parker seem to suggest that the received doctrine on this subject may be over optimistic (see also Kerridge 1969). In this chapter I propose to examine this issue from a new angle, taking into account recent additions to statistical information on Britain’s overseas trade, dietary changes and cereal consumption in the first half of the nineteenth century (with the help of suggestions concerning Ireland by Joel Mokyr). I have also found it instructive to revisit a classic published thirty years ago and somewhat underrated by historians of the agricultural revolution—R.N.Salaman’s The History and Social Influence of the Potato (1949). When it is said that the increase in population during the Industrial Revolution was fed out of domestic supplies, it is necessary to know at what level the people were fed. What kind of subsistence was it? What were the dietary variations in different regions and occupations? The discussion will also be clearer if we specify which area we have in mind. Are we talking about England, Great Britain (England, Wales and Scotland) or the United Kingdom (Great Britain and Ireland)? ENGLAND AND THE CELTIC PERIPHERY Some English authors slip into the habit of using ‘England’ as short-hand for ‘Great Britain’ and the result is a haze of ambiguity. Just as Trevelyan’s English Social History (1944) was well described as English history with the politics left out, it would be equally pertinent to say that some books on British economic history are 82

BRITAIN’S FOOD SUPPLY, 1760–1846

British history with the Celtic fringe left out. The Celtic countries— Scotland, Wales and Ireland—can be left out simply by burying them in aggregate figures for Great Britain or the United Kingdom. And sometimes these aggregates are used as the statistical basis of a historical work purporting to be about England. A case in point is John Burnett’s Plenty and Want: A Social History of Diet in England from 1815 to the Present Day (1968), in many ways an admirable study. At the beginning of his first chapter, ‘England in Transition’, it looks as if the author is writing a book about England: we are given population figures not for Britain but for England and Wales (Wales is always lumped in with England). However, later in the chapter when it comes to the consumption of sugar, tea, coffee and beer in the first half of the nineteenth century, the statistical time-series are all averages for Great Britain or the United Kingdom. An examination of the statistical groundwork of the whole book reveals that over a third of the forty-five tables give aggregate figures for Great Britain or the United Kingdom. This seems to suggest that Burnett should have had ‘Britain’ not ‘England’ in the title of his book, and yet the book lacks a systematic account of the history of diet in Scotland and Wales. Surely the proper course would be to base the history of diet in England on strictly English sources. No doubt for the twentieth century it does not make much difference whether aggregated British or English data are used. However, for the period of the Industrial Revolution it is essential to draw a clear distinction between England on the one hand and the Celtic crescent (Scotland, Wales and Ireland) on the other. Apart from the cultural differences between the Celtic and English peoples, there are solid economic considerations. First, there was a marked division of labour in the agricultural production network between the two segments of the British Isles economy. The Celtic sector concentrated on the production of foodstuffs, such as the rearing of livestock for export to the fattening areas of England. The significance of the changing balance between grain and pastoral farming under the influence of urbanization and the widening of markets was noted by Adam Smith. It is not more than a century ago, that in many parts of the Highlands of Scotland, butcher’s meat was as cheap or cheaper than even bread made of oat meal. The Union opened the market of England to the Highland cattle. 83


Their ordinary price at present is about three times greater than at the beginning of the century, and the rents of many Highland estates have been tripled and quadrupled in the same time. (Smith 1776. I: 135) Second, there were striking and long-lasting differences between the bread-eating tastes of the English and the Celts. To be accurate one should say the southern English, for the northern English shared with their neighbours, the Scots, a liking for oats. Until recently the general view was that by 1800 wheat had become the staff of life for virtually the whole population of England and Wales. (According to Ashley [1932:8] as many as 95 per cent of the population were wheat-eaters at the end of the eighteenth century.) This is no longer tenable. Recent research has produced strong evidence that in 1801 no less than a third of the population of England and Wales was still dependent on barley, oats or rye. In Great Britain as a whole the population consuming wheat in 1801 was only 58 per cent (see Collins 1975). The data for England, Wales and Scotland are set out in Table 4.1. By the end of the eighteenth century the wheaten loaf had triumphed only in southern and eastern England; 94 per cent of the 4,284,000 living in those areas were wheat-eaters. In northern England, with a population of 2,092,000, the corresponding portion was 25 per cent; in that area, 50 per cent consumed oats, 18 per cent barley, and 6 per cent rye. In the Celtic sector the wheaten loaf was eaten by only a very small minority, 10 per cent in Scotland and 15 per cent in Wales. The Scots went for oats (72 per cent), barley (10 per cent) and pulse (8 per cent), whereas the Welsh went for barley (60 per cent), oats (20 per cent) and rye (5 per cent). It is interesting to note that the Celtic fringe in Cornwall in south-western England conformed to the same pattern as Wales: no less than 55 per cent of the population of the south-west were barley-eaters (ibid.: 105). The dietary situation in Ireland was entirely different. By the beginning of the nineteenth century the Irish had become heavily dependent on the potato, and in the fifty years between the Union of 1800 and the Great Famine, this dependency grew more intense. Little wheat was produced and less eaten in Ireland. In the early 1850s, when more reliable statistics became available, wheat production averaged 4,532,000 cwt per annum (1851–5), as compared

84

b

1, 045, 000 of these, 50 per cent of the population of northern England, consumed oats. Mainly barley. c Mainly oats. Source: Consumption data from Collins 1975:105; population data from Mitchell and Deane 1962:8; Deane and Cole 1962:103.

a

Table 4.1 Wheat and coarse grain consumption in England, Wales and Scotland, 1801


to an output of 35,037,000 cwt of oats.1 Even oat consumption was comparatively modest, and only in the north and the east did it play a significant role. Elsewhere oats were consumed only in the late summer and early autumn, in the weeks before the new potato crop came in. A conservative estimate of the potato consumption in prefamine Ireland puts the average at about 4.5 lb per day, which is the equivalent of 1,400 calories per capita per day (Mokyr 1983:7). For the United Kingdom as a whole, J.R. McCulloch’s figures for 1821 may not be far off the mark. McCulloch estimated that of the combined populations, 10.3 million depended chiefly on wheat, 7 million on barley and oats and 5 million (mostly in Ireland) on potatoes (see Collins 1975:110). The third reason why it is important to disaggregate the United Kingdom into the English and Celtic sectors is demographic. In 1801 the distribution of the population was as follows: England 8,502,000, Scotland 1,625,000, Wales 559,000 and Ireland 5,216,000. The three Celtic countries comprise 46 per cent and England 54 per cent of the population of the British Isles; the proportions were the same in 1831. Thus, demographically, the Celtic sector was not so much a fringe as a hemisphere. Be that as it may, the role of Ireland must not be underestimated. We shall examine how well Britain was fed during the Industrial Revolution and the extent to which she drew on the agricultural resources of Ireland. In the first half of the eighteenth century Britain was the granary of a large part of Europe. Thanks to the agricultural revolution of the seventeenth century, she had the capacity to export an amount of grain which was the equivalent of what would feed a quarter of the British population. All this changed after 1750 when the population explosion was under way. The 1760s and 1770s were hard times, made all the worse by a succession of bad harvests. The price of wheat went up 40 per cent in relation to other prices; the average price of lambs rose from 4s.4d. in 1732–5 to 7s.1d. in 1761–7 (John 1960:153–4). There were frequent violent food riots. English agriculture, despite the enclosures, was unable to cope. Things must have been serious to force the English government to repeal the restrictive measures against imports from Ireland which were known as the Cattle Acts (Cullen 1968:33). Inspired by the aim of protecting English breeders, these laws, passed in 1666 and after, totally prohibited the import into Britain of Irish cattle, sheep, beef, butter and pork; they had 86


caused considerable dislocation and suffering in Ireland. At the end of the 1750s when the prices of livestock and livestock products were rising sharply in England, petitions were showered on Parliament from all over the country demanding the repeal of the Cattle Acts. In 1758 an Act was passed permitting the import of all sorts of live cattle from Ireland free of duty for five years, and the same applied to beef, pork and butter. These Acts were subsequently renewed; for example, in 1765 in the case of cattle for another seven years, and later they were made permanent (Macpherson 1805:308, 413). In 1784 the Irish Parliament passed Foster’s Corn Law, which consolidated the system of export bounties on agricultural products, and provided an export subsidy of perhaps 10 per cent of the value of the product (Crotty 1966:22). The effect was a big increase of food shipments from Ireland. The details are given in Tables 4.2 and 4.3. Between 1760 and 1790 the value of British imports from Ireland rose two and a half times, from £1,451,000 to £3,696,000. Purchases of beef went up threefold, butter sixfold and pork sevenfold. The very high figures for 1795 and 1800 reflect the influence of the Napoleonic War. In 1794–6 Ireland was supplying 44 per cent of Britain’s imports of grain, meat and butter (see revised statistics of British overseas trade in Davis 1979:87–125). Between 1760 and 1801 the population of Britain increased by 0.83 per cent per annum, while domestic agricultural output grew by only 0.44 per cent per annum (Crafts 1983:190). It has been estimated that over the eighteenth century as a whole output per head in English agriculture went up by 25 per cent, but none of this increase can be attributed to the second half of the century (Deane and Cole 1962:75). Indeed, the probability is that agricultural productivity fell in the third quarter of the century. BRITAIN’S FOOD SUPPLY 1795–1846 We now come to the major issue, namely, the feeding of Britain during the transition—the half century 1795–1846 which it took to bring into being the industrialized economy that could reap the payoff of the Industrial Revolution. The first part of the period, the years 1795–1815, was dominated by the Napoleonic Wars. Wartime stringencies, the blockade and a series of bad harvests sent the price of wheat up from an average of 43 shillings a quarter in 1792 to 119 shillings in 1801 and 126 shillings in 87


Table 4.2 Value of exports from Ireland, 1700 and 1750–1800

a

Year Ending 25 December Source: Cullen 1968:45.

Table 4.3 Exports of beef, butter and pork from Ireland to Great Britain, 1760–1800

Source: Cullen, 1968:70.

1812. The price of a 4 lb loaf of bread rose from 6 pence in 1792 to 17 pence in 1812 (Mitchell and Deane 1962:498). The threat of starvation was avoided by drastic measures to curtail wasteful consumption of grain, a large extension of the area under cultivation, and the subsidizing of imports of food. A crucial factor was the remarkable elasticity of supply from Ireland. In the period 1800–14 no less than 35 per cent of the total amount of grains, meal and flour imported into Great Britain came from Ireland. The various sources of supply are given in Table 4.4. Of the 7,338,000 quarters contributed by Ireland, 5,581,000 consisted of oats and 1,457,000 of wheat (Galpin 1925:252). Irish exports of foodstuffs to Britain in current values went up almost fivefold 88


Table 4.4 Imports of grains, meal and flour into Great Britain, 1800–14

Source: Galpin 1925: App. 8.

from £950,000 in 1784–6 to £4,416,000 in 1814–16 (Davis 1979:92). In the crisis years of 1809 and 1810 Napoleon allowed 1.5 million quarters of wheat to be sent to Britain from the French Empire, partly because he had to appease a strong farm lobby in his Empire at a time of bumper crops and partly because he was a good mercantilist—he demanded payment in gold and hoped in this way to undermine British credit (Galpin 1925:193). It is not possible to estimate accurately the increase in domestic output in Britain during the wars: that it was substantial is indicated by the fact that between 1801 and 1815 on an average nearly 53,000 acres were enclosed each year (Olson 1963:69). However, a heavy price had to be paid. According to Deane and Cole in the second half of the eighteenth century, and still more at the beginning of the nineteenth, the supply of beef failed to keep pace with the growth of population…. During the French Wars…a big increase in the output of grain was achieved only by bringing more land under the plough at the expense of the nation’s meat supply. (Deane and Cole 1962:74–5) When the Napoleonic Wars were over, the landed interest secured the passing of the Corn Law of 1815 which decreed that imports of wheat would be prohibited as long as the domestic price was below 80 shillings a quarter. Barley and oats were much cheaper than wheat, as can be seen from Table 4.5 (Mitchell and Deane 1962:488). There can be no doubt that the Scots and Welsh, depending on oats and barley respectively, were getting more nutritional value per unit of outlay than the English, who consumed white bread. This is underlined by the fact that various adulterants such as alum were added in order to whiten inferior 89


Table 4.5 Comparative grain prices in Great Britain, 1810–40

grades of flour used for the bread sold to the mass of the people. In southern England the white loaf had become a necessity which poor people were very reluctant to give up. The flour was very often made of the worst kinds of damaged foreign wheat (revealed in Accum 1820). The artificially whitened loaves were sold at the high price of loaves made of the finest white flour. There is ample evidence that in the first half of the nineteenth century agricultural labourers in the south of England became much worse off than their opposite numbers in the north. The differential had been reversed since 1770 when Arthur Young found that the average weekly agricultural wage in southern counties (7s.6d.) was about 10 per cent higher than in northern counties (6s.9d.). By 1850–1 average wage rates in the north (11s.6d.) were 37 per cent higher than in the south (8s.5d.) and the incidence of pauperism was 12.1 per cent of the population in the south as against 6.2 per cent in the north (Caird 1852:510–15). There were pronounced regional differences in the standard of nutrition. In the North oatmeal was made palatable by the addition of milk which was rarely available to the southern labourer who had no cow-pasture of his own. Also the conditions of service were quite different. The annual hiring of labour persisted in the North and Scotland— the worker got a part of his wages in meal or grain, irrespective of market prices, and he had cow-pasture or accommodation for pig or poultry. (Burnett 1968:40) The southern labourers endured the full force of overpopulation, the enclosures and the Corn Laws. What was the contribution of Ireland to Britain’s food supply in the thirty years before the repeal of the Corn Laws in 1846? In seeking 90


to answer this question one is handicapped by the lack of adequate statistics. As of 1826 the British government ceased to keep records of trade with Ireland, except for shipments of grains. Moreover, in this period there are no reliable statistics on British output of wheat and other cereals. Up to 1826 the revised figures of trade in real values compiled by Ralph Davis give a fairly accurate picture which is set out in Table 4.6. Between 1804–6 and 1824–6 the Irish contribution to total British imports of grains, meat and butter rose from 47 per cent to 75 per cent; as a proportion of estimated British output in agriculture, forestry and fishing, these imports from Ireland were 7.2 per cent in 1824–6. British imports of these foodstuffs from all countries, including Ireland, in 1824–6 were 9.6 per cent of the estimated output in agriculture, forestry and fishing. For the years 1826–49 there is a series showing the annual quantity of grains and meal imported from Ireland to Great Britain. G.R.Porter, in The Progress of the Nation explained that: when, in order to save the yearly salaries of one or two junior clerks, it was determined to cease keeping any official record of the commercial intercourse between Great Britain and Ireland, an exception was made as regards grain and flour, that trade being of great personal interest to our legislators. (Porter 1851:344) Table 4.7 shows that the quantity of grains and meal supplied to Britain from Ireland almost doubled between 1820–4 and 1835–9 (from an average of 1,493,000 quarters to 2,867,000 annually). Although Porter’s series are known to be inaccurate, it is safe to assume that they reflect broad trends. If we assume, furthermore, that meat and butter imports increased in the same proportion, Ireland in the late 1830s was supplying grains, meal, and butter at a rate at least equal to 10 per cent of the output of British agriculture. A full assessment of the contribution of the Celtic periphery to England’s food supply should take into account the movement of livestock from Scotland, Wales and Ireland. Space does not permit an analysis of this aspect of the subject but its importance is indicated by the following statement: A modern estimate of the output of Scottish farms… confirms the feasibility of Sir John Sinclair’s figure of some 91

b

Estimated on the assumption that imports of meat and butter from Ireland were proportionate to the recorded imports of grains and meal (see Table 4.7). Allowing for re-exports of grains, the percentages in col. 7 would be 1814–16, 6.2%; 1824–6, 9.5%; 1834–6, 10.5%; 1844–6, 14–6%. Source: Davis 1979:112–19; col. 5: Mid-decade estimate based on Deane and Cole 1962:166.

a

Table 4.6 Great Britain: imports of grains, meat and butter from overseas and from Ireland, 1804–6 to 1844–6 (annual averages at current prices)


Table 4.7 Grains and meal imported into Great Britain from Ireland, 1815–49 (annual averages: nearest 1,000 quarters)

Source: Porter 1851:345.

100,000 store cattle exported to England in 1800, 60,000 of which were probably sold at the Falkirk Trusts. This trade via Falkirk probably reached its peak in the 1830s or some-time before mid-century, by which time transport changes were beginning to make an impact on the structure of the cattle trade between Scotland and England. (Blackman 1975:60; Symon 1953–4:119–21) Porter estimated the number of live animals brought from Ireland to Liverpool in 1837 as follows: 84,710 black cattle, 316 calves, 225,050 sheep, 24,669 lambs, 595,422 pigs, 3,414 horses and 319 mules. Their total value was £3,397,760 (Porter 1851:344). If we add this to the figures in Table 4.7, the Irish contribution in the late 1830s must have been at least 13 per cent of the entire output of English agriculture and over 85 per cent of England’s imports of grains, meat, butter and livestock. The figures for 1844–6 are affected by the Irish potato famine and the repeal of the Corn Laws; they register an enormous increase in imports from overseas—five times the amount in 1834–6—due to the onset of free trade, whereas shipments from Ireland as a proportion of total imports fell to 52 per cent. Total imports of grains, meat and butter in 1844–6 were about 15 per cent of the estimated income in agriculture, forestry and fishing. By 1854–6 imports of grains, meat and butter from overseas had trebled compared with 1844–6 (£22.3 million as against £7.4 million). An analysis of wheat imports in relation to English output is given in Table 4.8. The striking change after the repeal of the Corn Laws in 1846 is evident. A quarter of English wheat con 93


Table 4.8 England and Wales: wheat imports and home output, 1829–68 (annual averages, nearest 1,000 quarters)

a

These years were chosen in order to minimize possible errors from changes in the composition of the ‘inspected market’ figures, on which the author based her output estimates. b The year 1842 was omitted for statistical reasons. c The author noted that ‘the imports were admitted officially to the United Kingdom as a whole, but in fact came mostly to England’. d Not including imports from Ireland. Adding the recorded imports from Ireland (and ignoring any foreign wheat that went into Ireland before 1845, which was negligible) makes total wheat imports as a proportion of consumption in England 8 per cent in 1829–36 and 12 per cent in 1837–46. Source: Fairlie 1969:102.

sumption was supplied by imports in 1847–56 as against about a tenth in 1837–46 (excluding Irish imports which raise it to 12 per cent), and this was long before the New World became the major supplier. In 1854–6 about two-thirds of the grain cargoes entering Britain came from Europe and the Near East and only a third from the United States. By 1867–76 half the wheat consumed in Britain came from abroad. IMPORTS OF FOOD AND DRINK The statistics used so far have given an unduly ascetic impression of the British diet—as if the British consumed only bread, butter, and meat. We must be realistic and add tea, coffee, sugar, rice, cheese, fruit, spices, wine, spirits, and other food and drink. All the above items are lumped together under ‘Food and Drink’ in Table 4.9. We find that during the Corn Law regime, 1815–46, Britain’s gross imports of food and drink were about a third of the value of domestic agricultural output; allowing for exports and reexports the proportion was about a quarter. In 1814–16, the end of the Napoleonic Wars, re-exports of coffee and sugar to Europe were abnormally large. When the restraints of the Corn Laws were removed in 1846, imports of food and drink, excluding imports from Ireland, doubled in ten years, from £26,691,000 in 94


Table 4.9 Great Britain: imports of food and drink (including imports from Ireland) in relation to the value of agricultural output, 1814–16 to 1854–6 (annual averages in current prices)

a

Comprising grains, meats, butter, sugar, rice, cheese, fruit, spices, coffee, tea, wine, spirits, other food and drink. b Including imports from Ireland calculated as in Table 4.2. c Not including imports from Ireland. Source: See Table 4.6.

1844–6 to £52,769,000 in 1854–6, which was 47 per cent of the approximate value of output in British agriculture or 37 per cent if we allow for exports and re-exports. The analysis suggests the following conclusions about the period 1815–46. Notwithstanding the achievements of the agricultural revolution, the supply of grains, butter, meat and livestock available to the British population would have been smaller by at least a sixth in the 1830s and early 1840s had it not been for imports, mainly from Ireland. And this indispensable assistance was being drawn from a colony where little was done by English landlords (many of them absentee) to bring about agrarian reform. Although Irish agriculture was far from stagnant in the first half of the nineteenth century, it is clear that there was no agricultural revolution in Ireland. Sluggish capital formation and technological backwardness, coupled to social unrest and the constraints imposed by the heavy dependence on the potato, kept the Irish economy far behind the rest of western Europe (Mokyr 1983). The considerable contribution which Irish agriculture made to the industrial revolution was expensive: Irish standards of living declined after 1815. As Table 4.10 shows, grain shipments continued throughout the famine years (albeit at a much reduced level) while between 1.1 million and 1.5 95


Table 4.10 Irish exports of grains to Britain, 1843–9 (in 000s of long tons)

Source: Donnelly 1975:82.

million Irish died of famine-related causes and another million fled in panic. The achievements of the English agricultural revolution in the first half of the nineteenth century tend to be exaggerated. In that period Britain, as an interim measure, drew heavily on the land resources of her Celtic colony; but, substantial though this input was, it was not enough to alleviate the severe strains, particularly in southern England. Despite the protection given by the Corn Laws, the level of real investment in buildings, improvements and equipment in agriculture was stationary between 1800 and 1830 when the rate of population growth was at its height (Feinstein 1978:40). The plight of the agricultural population of southern England, where the vast majority depended on wheat, was very serious. Contemporary witnesses in the 1830s gave plentiful evidence of a shift by consumers away from wheat to the potato, particularly in the south of England (Salaman 1949:523–31). In this way many workers were able to survive on the lowest possible wage.2 At the beginning of the century 94 per cent of the people of southern and eastern England consumed wheat, but in Scotland 72 per cent consumed oats; in Wales 80 per cent ate barley or oats, and in the north of England 68 per cent ate oats or barley. To interpret wheat consumption trends in the first half of the nineteenth century we must realize that an increasing number of ‘converts’ were switching from coarse grains to wheat. Between 1800 and 1850 it is estimated that the proportion of the population of Great Britain that consumed wheat increased from 58 per cent to 81 per cent (Collins 1975:105, 114). In interpreting this fact one must recognize that by the same measure, and with possible implications for 96


the ‘cost of living’ debate, a disproportionate share of the increase in wheat production during the first half of the nineteenth century was probably absorbed by ‘converts’, so that, while overall consumption per head may have been rising, per capita consumption among existing wheat-eaters, who formed the majority of the population, may have been falling. (ibid.: 115) The ‘converts’ were in Scotland, the north of England and Wales, and the traditional wheat-eaters were in southern and eastern England where the white loaf had become a necessity which poor people were very reluctant to give up. Much against the expectations of English landowners and farmers, the quarter of a century after the introduction of free trade in 1846 turned out to be a ‘golden age’ for British farming, based mainly on a shift to livestock production. There was a long interval before the land resources of continents of new settlement could be fully mobilized. The American Civil War delayed the process; the completion of the first American transcontinental railroad did not occur until 1869. Moreover, during this period up to about 1870 there was increasing scarcity of foods on the continent of Europe caused fundamentally by the population explosion. Sometime after 1836 north-western Europe became collectively deficient in the bread grains. Britain’s traditional suppliers not only ceased to be able to meet her needs, but were to some extent competing for available supplies from elsewhere (that is, principally the Russian Black Sea and Volga Steppes and the United States of America). The Repeal of the British Corn laws was intimately associated with the coincidence of famine conditions in north-western and central Europe, but also with the need technically to facilitate supplies from new areas. (Fairlie 1965:568) The supplies of foodstuffs from these new areas overseas began to hit Europe like an avalanche in the 1880s.

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NOTES 1

2

Data from Mitchell and Deane 1971:88. O’Grada (1984) has estimated that in the pre-famine period the value of wheat production was about 4.9 million pounds sterling per annum, barley 1.8 million pounds and oats 8.1 million pounds. Referring to the low price of potatoes, James Caird in 1852 wrote: ‘There could be no greater evil befall the English agricultural labourer, than that any circumstance could compel him to depress his standard of comfort so far as to be content for his principal subsistence with the lowest species of food in this country, the potato’ (Salaman 1949:518– 19).

REFERENCES Accum, F.C. (1820) A Treatise on Adulterations of Food and Culinary Poisons, London: Longman, Hurst, Rees, Orme and Brown. Ashley, Sir W. (1932) The Bread of Our Forefathers, Oxford: Clarendon. Blackman, J. (1975) ‘The cattle trade and agrarian change on the eve of the railway age’, Agricultural History Review 23, Pt I: 48–62. Burnett, J. (1968) Plenty and Want: a Social History of Diet in England from 1815 to the Present Day, Harmondsworth: Penguin. Caird, Sir J. (1852) English Agriculture in 1850–51, London: Longman (Reprinted New York 1967). Chambers, J.D. and Mingay, G.E. (1966) The Agricultural Revolution 1750– 1850, London: B.T.Batsford. Collins, E.J.T. (1975) ‘Dietary change and cereal consumption in Britain in the nineteenth century’, Agricultural History Review 23 Pt 2:97–115. Crafts, N.F.R. (1983) ‘British economic growth, 1700–1831: a review of the evidence’, Economic History Review 36. Crotty, R.D. (1966) Irish Agricultural Production, Cork: Cork University Press. Cullen, L.M. (1968) Anglo-Irish Trade 1660–1800, New York: Manchester University Press. Davis, R. (1979) The Industrial Revolution and British Overseas Trade, Leicester: Leicester University Press. Deane, P. and Cole, W.A. (1962) British Economic Growth 1688–1959, 2nd edn 1969, Cambridge: Cambridge University Press. Donnelly, J.S. (1975) The Land and the People of Nineteenth Century Cork, London: Routledge and Kegan Paul. Fairlie, S. (1965) ‘The nineteenth century corn law reconsidered’, Economic History Review 18, 3:562–75. Feinstein, C.H. (1978) ‘Capital formation in Great Britain’ in P.Mathias and M.M.Postan, (eds) Cambridge Economic History of Europe, Cambridge: Cambridge University Press, vol. 7, Pt I: 28–96. Galpin, W.F. (1925) The Grain Supply of England during the Napoleonic Period, vol 6, New York: University of Michigan Publications, History and Political Science.

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John, A.H. (1960) ‘The cause of agricultural change 1660–1760’ in L.S. Pressnell (ed.) Studies in the Industrial Revolution, London: Athlone: 125–55. Jones, E.L. (1968) The Development of English Agriculture 1815–1873, London: Macmillan. Kerridge, E. (1967) The Agricultural Revolution, London: Allen and Unwin. ——(1969) ‘The agricultural revolution reconsidered’, Agricultural History 43, 4:463–75. Macpherson, D. (1805) Annals of Commerce, Manufactures, Fisheries and Navigations, vol. 3, London: Nichols and Son. Mitchell, B.R. and Deane, P. (1962) Abstract of British Historical Statistics, London: Cambridge University Press. ——and Jones, H.G. (1971) Second Abstract of British Historical Statistics, London: Cambridge University Press. Mokyr, J. (1983) Why Ireland Starved, London: Allen and Unwin. O’Grada, C. (1984) ‘Irish agricultural output before and after the famine’, Journal of European Economic History 13:149–65. Olson, M.Jr (1963) The Economics of Wartime Shortage, Durham NC: Duke University Press. Parker, W.N. (1977) ‘From the colonies: a tempered tribute’, Agricultural History Review 25, Pt I, Silver Jubilee Issue: 6–13. Porter, G.R. (1851) The Progress of the Nation, London: Methuen. Salaman, R.N. (1949) The History and Social Influence of the Potato, Cambridge: Cambridge University Press. Smith, A. (1776) The Wealth of Nations, London: J.M.Dent; Everyman’s Library Edition, 1910. Symon, J.A. (1953–4) ‘The Falkirk trysts: a gauge to Highland stock output’, Scottish Agriculture, Winter. Trevelyan, G.M. (1944) English Social History: a Survey of Six Centuries, London: Longmans Green.

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5

HENRY CORT AND THE PRIMACY OF BRITAIN

Chapter 1 has shown that there was an energy crisis in the seventeenth century, between the 1630s and the 1680s, caused primarily by Oliver Cromwell’s unprecedented naval rearmament and aggressive imperial policy which placed a strain on the island’s timber and fuel resources. That crisis was easily solved within the ambit of the timber economy through a substantial permanent dependence on Baltic sources of energy; then, for about seventy years after the 1680s, Britain enjoyed an abundance of timber and charcoal iron, except when trade with Sweden was suspended in 1717–19. The decisive challenge came in the period 1750–90 when there was a resumption of dynamic shortage of timber and fuel, driven this time by a population explosion (Chapter 3). This crisis could not be solved, as the previous one had been, by drawing more energy from the Baltic. This would have meant almost total dependence on foreign sources of timber-based energy at increasing real cost; the price of imported Scandinavian bar iron nearly doubled between the 1740s and the 1790s (Table 3.2). Both economic and national defence considerations ruled this out. I shall argue that the type of technology which the seventeenth-century crisis evoked— the reverberatory furnace and the steam engine—proved to be a major part of the answer to the eighteenth-century crisis. The Cromwellian Revolution put Britain on the economic path which led to the Industrial Revolution. In this respect Britain’s experience was unique. This chapter pays particular attention to the contribution of Henry Cort.

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THE CROMWELLIAN REVOLUTION AND THE INDUSTRIAL REVOLUTION Economic historians have tended to underestimate the magnitude and consequences of the overstretch of Britain’s resources during the Great Rebellion and the Commonwealth. The break with the past is seen most clearly in the expenditure on warships. In the years 1650–9 Cromwell’s average naval shipbuilding per annum was 3,600 tons; this was over five times greater than the average of 682 tons in the reigns of James I and Charles I (1603–49) and eleven times greater than the average of 333 tons in Queen Elizabeth’s time (1558–1603) (Oppenheim 1896:160–1, 202, 254–5, 330–7). Through financial measures such as the sale of lands, the land tax and excise, Cromwell raised no less than £95 million in the period 1642–60, an annual average of £5.25 million compared with less than £1 million under Charles I (ibid.: 303–4). Even so, by 1660 the administration was loaded with debt and this was one of the factors leading to the Restoration. Heavy outlays on the navy continued under the Stuarts in the years 1663–79 when average naval shipbuilding was 3,522 tons per annum (Coleman 1953:143). Cromwell laid the foundations of the first British empire (Hill 1970:262–5): his Navigation Act put teeth into mercantilism, and his conquest of Jamaica ensured that plantation slavery and a shift of British trade from Europe to the Atlantic economy would be a fateful feature of the empire (Chapter 2). Timber, iron and naval stores in amounts equal to over half the national consumption were imported from the Baltic from the 1680s on. An energy interpretation of the Industrial Revolution has been criticized on the ground that it has a timing problem, since the scarcity of wood began in Elizabethan times and the substitution of coal and iron for wood was drawn out over centuries (Mokyr 1985:26). There is no substance in this line of argument. There was no national timber crisis in the pre-Cromwellian period; on this matter the critics of Nef have made their case beyond dispute. The counties which sold most wood in 1546 were still very well stocked in 1612, and there was hardly any contemporary evidence in that period of shortages of timber for charcoal, bridges, houses and other structural uses (Hammersley 1957:154–5). For a century or more before the Cromwellian crisis coal had been increasingly substituted for timber. This occurred in processes

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where technical problems were negligible—house-heating, saltmaking, soap-boiling, sugar-refining, brewing, lime, alum, saltpetre, starch and candles (Nef 1932, volume I: 206–15). These substitutions were not a symptom of timber shortage but simply the result of the fact that in many uses coal was less expensive than charcoal per unit of heat or output. The statistics available on relative prices are conclusive: in the half-century 1580s–1630s, when there was hardly any increase in iron consumption per head, the price level of consumables rose by 72 per cent and the price of charcoal by only 34 per cent, and imports of iron were negligible (Table 1.3). This is in glaring contrast to what happened during the energy crisis, 1630s– 80s, when iron consumption per head nearly doubled, the price of charcoal rose by 106 per cent while the price level of consumables fell by 6 per cent, and imports of iron grew by 522 per cent (Table 1.3). In this situation there were strong incentives to substitute coal for charcoal in industries where chemical reactions presented formidable technical problems—glass, tiles, the smelting of copper, tin, lead, brass and iron ore. In these processes new techniques were necessary to ensure that the impurities in the coal would not harm the product. Hence the concentration of inventive effort on the reverberatory furnace and the use of coke in the second half of the seventeenth century. One of the unintended consequences of the Cromwellian Revolution was a slanting of industry’s ‘learning by doing’ into channels which gave the nation a decisive advantage in the eighteenth century. A foreseeable consequence was the backlash which faced Cromwellites and their descendants when monarchy was restored. Under the Clarendon Code in the early 1660s nonconformists were deprived of civil rights and became secondclass citizens. Ironically, it was this deprived dissenting minority which provided most of the pioneers of the Industrial Revolution— Thomas Savery, Abraham Darby I, John Dolland, Josiah Wedgewood, John Smeaton, to name but a few. Nonconformists in England and Wales comprised 7 per cent of the population, but they contributed 41 per cent of the English and Welsh entrepreneurs (Hagen 1962:297). THE TECHNOLOGY OF IRON-MAKING Bar iron could be produced in either a direct or an indirect process. In the older and direct method bar iron was made directly from the 102


ore in small furnaces or hearths called a bloomery. The ore was smelted in a charcoal fire kept intense by blasts of air from a water-powered bellows until it got into a semi-molten condition, the bloom. This would be taken from the fire and pounded by large hammers so as to get rid of impurities such as carbon and thus obtain malleable bar iron. All these operations took place under one roof. The indirect method was in two stages. The first was the smelting of the ore in a blast furnace to produce an intermediate product, pig iron, which was hard and brittle because it had a high carbon content, 3 to 5 per cent. Then at the forge the pig iron was refined in the ‘finery’ fire and afterwards reheated in the ‘chafery’ fire and converted into bar iron under the forge hammer. The removal of most of the carbon and other impurities yielded a relatively soft and malleable bar iron. Alternatively, the pig iron could be remelted in the foundry to produce cast iron. Steel would be about half way between bar and pig iron in carbon content. Bar iron was needed for such products as nails, fencing, wire, gates, horseshoes, axes, chains and farm implements; cast iron products included pots, pans, stoves, fire-grates, anchors and cannon (Hyde 1977:7–10). The use of charcoal was subject to various constraints. Since charcoal is fragile and does not travel well, the furnace had to be very near to the fuel supply; at any one location output was limited by the rate of regrowth of timber. To satisfy a large increase in demand ironmasters had to open up new sites. There were strict limits on the size of the furnace. Its height depended on the blastpressure obtainable by using water-driven bellows. In the absence of such pressure a tall furnace would become clogged up because the temperature in the upper part of the shaft would not be high enough. The fragility of charcoal was also a constraint on the height of the furnace: if too large a load were inserted the charcoal would get crushed into powder. The average height of blast furnaces in the early eighteenth century was 25 feet and the average annual output about 300 tons (Aitchison 1960:451). Because of shortage of water in summer, furnaces and forges could operate for an average of only about 30 weeks a year, October to May. The problem of using coal instead of charcoal to smelt iron ore was solved by Abraham Darby I in 1709. By the 1680s the reverberatory furnace using coke was commercially successful in the non-ferrous sector, but it took another 100 years before it could 103


be used to refine pig into bar iron. This technique had considerable advantages. The most important was that, in a reverberatory furnace, the coal or coke was kept separate from the metal being treated; the heat was reflected or ‘reverberated’ off the roof of the furnace on to the material, so that the metal was not contaminated by the sulphur and other impurities in the fuel. (In the glass-making industry the same object was achieved by the use of closed crucibles capable of withstanding very high temperatures. This method enabled English crystal glass to be developed in the late seventeenth century.) Coke has a lower proportion of sulphur than coal and, in terms of hardness, it is better than coal and much superior to charcoal. The choking effect which plagued the charcoal furnace disappeared and this constraint on the size of the furnace was removed (Aitchison 1960:445). The problem of ensuring a powerful enough blast to sustain combustion in large furnaces was solved by using steam power, and, with coal or coke, operations could go on all the year round. ‘REVERBERATING’ DOWN THE AGES The seventeenth-century energy shortage did not disappear as a result of conservation: it was easier and more comfortable to increase dependence on for eign supplies (Chapter 1). Nevertheless, the crisis did have a strong influence on the goals of inventors and the techniques chosen by industrialists. These effects cannot be explained by neoclassical theory which states that, when there is technical progress, output per head goes up for all existing techniques; in other words, the whole production function shifts upwards. This concept is invalid. The correct approach is to regard technological change as localized to a particular point on the production function, and this means that benefits from ‘learning by doing’ are also localized (Atkinson and Stiglitz 1969). Given increasing returns, the technique which gets in first, for whatever reason, will reap improvements from learning and is likely to become the irreversible norm (Arthur 1989). The evolution of the reverberatory furnace is a fascinating example of path dependency. The reverberatory technique, one of many innovations imported from Europe, was used by gun-founders in Germany as early as the fifteenth century. The first description of it in English was given in 1613 in the specification of a patent by John Rovenson, A 104


Treatise of Metallica (Jenkins 1933–4:69). He divided furnaces into two categories: furnaces ‘not of division, wherein the mettall or materiall lyeth together with the fewell in one place undivided’, and ‘furnaces of division, wherein the metall or materiall to be melted or wrought is kept divided from the fewell…so as no substance of the fewell but only the heat and flame thereof can touch the metall or materiall’ (ibid.: 70). There is no evidence that Rovenson himself ever built a reverberatory furnace, but his patent foreshadowed an innovation which would have profound implications. The energy shortage of 1640–80 increased incentives to switch from charcoal-intensive to coal-intensive techniques, and by the end of the seventeenth century the coal-fired reverberatory furnace had been successfully adopted for the smelting of non-ferrous metals. The learning curve in this new area was much steeper than in the charcoal-based processes. In the Restoration years, 1660–88, no less than 42 per cent of the patents granted were for methods of using coal instead of charcoal to smelt metals and for steam engines to pump water out of mines (Table 5.1). Several factors combined to create a favourable environment for technological progress. The Revolution of 1688 signalled the triumph of the legislature over the monarchy and the strengthening of the legal basis of the liberty of the subject. In 1689 an Act was passed decreeing that mines of copper, lead, tin and iron would no longer be regarded as royal, thereby terminating the monopoly power of the Mines Royal Company. In 1694 the Bank of England was established. After the revocation of the Edict of Nantes in France in 1685, thousands of highly skilled Huguenot refugees settled in Britain and Ireland (Scoville 1951). New investment was fostered by the fact that numerous joint-stock companies were being formed on the basis of articles of association or a patent without the necessity of having a charter from the crown or Parliament. The persecution of the Quakers was much reduced by the Toleration Act of 1689, and an Act of 1696 allowed them to have licences for the mining, smelting and refining of ores; by the beginning of the eighteenth century between a half and threequarters of British iron works were owned or managed by Quakers (Hyde 1977:16).

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Sources: Woodcroft 1857a, 1857b

Note: This series does not include Scottish and Irish patents

Table 5.1 English patents of invention, 1660–1779


The Cromwellian energy crisis changed the direction of inventive activity and set in motion profound interactions between the demand for and the supply of coal. Decades of trial and error resulted in Sir Clement Clerke’s success in using a coal-fired reverberatory furnace to smelt lead at the Cupilo, Bristol, in 1680 and copper at Upper Redbrook, Forest of Dean, in 1688 (Jenkins 1943–5:73–5). The consequent increase in the demand for coal could not be satisfied until problems of mine drainage were solved to enable deeper pits to be worked. The answer came in two technological triumphs: Thomas Savery’s atmospheric steam pump in 1698, which was not commercially successful, and Thomas Newcomen’s engine c. 1705, a landmark in the history of technology. Between 1712 and 1775, 399 Newcomen engines were installed in coal mines (Flinn 1984:121– 2). In the first half of the eighteenth century the industrial sector, ranging from the smelting of nonferrous metals to such trades as glass, brewing, bricks, lime, distilling, baking and chemicals, increased its consumption of coal by 77 per cent, and the average price of coal fell by 8.7 per cent compared with a decline of 4.8 per cent in the general price level (Flinn 1984:252). As the reverberatory furnace came to be applied to different industries more and more was being learnt about the versatility of this technique. Particular attention was given to raising the intensity of draught for the furnace by providing it with a chimney. That the learning curve was relatively steep is proved by the rapid spread of the technique to so many industries and the extent of the increase in industrial use of coal. It is remarkable that hardly anything was published about the nature of these technical advances; the trade secrets were in the hands of skilled craftsmen who had the knack for the work, and it was impossible for foreigners to find out what was really going on. As J.R.Harris pointed out, ‘the diffusion of the coal-using reverberatory furnace through Britain was simply done by the open and honest, or the underhand and dishonest, enticement of skilled workmen from one area to another’ (Harris 1976:173), in other words, learning by luring. In contrast to the exciting atmosphere of this innovative sector, the charcoal iron industry showed little sign of technological dynamism and did not increase its annual output; it owed its existence to artificial respiration through tariff protection and high transport costs (Hyde 1977:48). For an industry living on borrowed time the learning curve was pretty flat. 107


Another notable event was Abraham Darby I’s success in smelting iron ore with coke in 1709. After being apprenticed to a brassfounder, Darby began in 1699 by setting up, with partners, a brass and iron foundry at Baptist Mills in Bristol. In 1707 he was granted a patent for a charcoal-using method of casting thin-walled iron pots. Unfortunately for him, the cost of fuel in the Bristol area was relatively high, and in 1709 he sold his interest in the Bristol foundry and moved to Coalbrookdale in Shropshire where charcoal was abundant (Aitchison 1960:446). There he established a new partnership. He found that the coal mined in the Coalbrookdale area had a very low sulphur content and he attempted to use it instead of charcoal in smelting iron ore. However, the experiment failed. It was fortunate that in Bristol he had seen the successful smelting of copper and lead in coke-fired reverberatory furnaces, and he was acquainted with the use of coke for the drying of malt at Derby. Having failed with raw coal, he used the local coke which was very low in sulphur and gave a much higher temperature in the old charcoal furnace. This was an immediate success and he obtained a fluid type of iron suitable for casting. This new method of producing thin-walled iron pots proved very profitable. Among Darby I’s other pioneering achievements was his use of a coal-fired reverberatory furnace to remelt pig iron (Mott 1958– 9:84). In the early 1720s it looked as if the curtain was about to rise on the drama of the Industrial Revolution. If only the coal-fired reverberatory technique could be successfully applied to the making of bar iron, the age of coal and iron would have begun; but this did not happen until seventy years later. Why was there this long delay? The clue is suggested by Figure 5.1 which shows a significant positive correlation for the period 1710–79 between the charcoalto-coal price ratio and the number of patents for coal-fired techniques of iron making and mine drainage. The steep rise in the relative price of charcoal in the early 1720s was caused by an external political shock which came out of the blue and which temporarily ended the abundance of charcoal-based energy. In 1716 King Charles XII of Sweden was secretly plotting with English Jacobites to overthrow King George I of England. The plan was leaked to British ministers, the Swedish envoy to Britain was arrested, and an Act was passed in 1717 prohibiting all trade between Britain and Sweden (Ashton 1924:111). These economic sanctions lasted for nearly two years and had a severe effect on 108


the iron market. It was a painful reminder of the risks of relying heavily on foreign sources of energy. Substitute imports coming via Holland were charged a premium of £4 a ton by the Dutch. The price of charcoal reached a peak in 1720–4 about 48 per cent above the 1710–14 level and the price of iron rose by 50 per cent (ibid.: 112). In response to the shortage, inventors intensified their experiments with the coke-fired reverberatory technique. Patentees such as Woodhouse, Fallowfield, F.Wood and W.Wood concentrated on attempts to produce malleable bar iron direct from the ore rather than from pig iron (Morton and Mutton 1967:723). The technical problems involved in using ore as raw material were insurmountable, and all efforts failed. When the political crisis was over in 1720 and imports of bar iron became normal (amounting to over half the national consumption), the abundance of charcoal-based energy reasserted itself and the price of charcoal relative to that of coal fell by a third between the 1720s and the 1740s (Figure 5.1). In this period, as was shown in Chapter 3, there was every incentive for ironmasters to choose charcoal-based techniques, and between 1720 and 1755 they built twenty-two new charcoal furnaces and no coke furnaces (Hyde 1977:24–9). There was also a marked reduction in the number of patents for coal-based methods of bar iron production (Figure 5.1). The charcoal iron industry was being given a new lease of life. The decisive turning point came in 1760–4 when the population explosion was gathering force; the relative price of charcoal rose by 10 per cent over the level in the previous five years and it went on increasing (ibid.). As shown in Chapter 3, the economy was in a state of disequilibrium characterized by dynamic shortage. There was a marked upsurge of inventive activity—for example, the patents of Roebuck and Wood, the Cranage brothers, Purnell, Cockshutt, Jesson and Wright between 1760 and 1783—which culminated in Henry Cort’s successful use of the coal-fired reverberatory technique for the conversion of pig into bar iron in 1784. It was no coincidence that the twelve immediate predecessors of Cort who worked on the reverberatory technique between 1760 and 1783 all took out patents in which pig iron not ore was the raw material used (Morton and Mutton 1967:723). They had undoubtedly learnt from the failure of their forerunners in the 1720s and 1730s. The most spectacular feature of Britain’s economic growth in the

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Figure 5.1 Inventive activity and charcoal-coal price ratio, 1710–79 Sources: Patents: Table 5.1; price of charcoal: Table 10.1; price of coal: Flinn 1984:303–4

eighteenth century is the upward leap of indices of the mineralbased economy at the beginning of the 1790s (Figure 5.2). THE TRIUMPH AND TRAGEDY OF HENRY CORT Henry Cort’s patent (no. 1420, 13 February 1784) contains the following description of the process which was subsequently called ‘puddling and rolling’: I make use of a reverberatory or air furnace…. My furnace…being got up to a proper degree of heat by raw pit coals, or other fuel, the fluid metal is conveyed into the air furnace by means of ladles or otherwise…. After the metal has been for some time in a dissolved state, an… effervescence or such-like intestine motion takes place during the continuance of which a bluish flame or vapour is emitted; and…the operation is continued (as occasion may require) of raking, separating, stirring and spreading the whole about 110

Sources: pig iron output and bar iron imports, Hyde 1977; coal output, Pollard 1980. Figure 5.2 Great Britain: coal and iron production, 1750–1830


in the furnace till it loses its fusibility and is flourished or brought into nature…. As soon as the iron is sufficiently in nature, it is to be collected together in lumps called loops, of sizes suited to the intended uses and so drawn out of the door or doors of the furnace…. The method invented by me is to continue the loops in the same furnace or to put them in another furnace, and to heat them to a white or welding heat, and then shingle them under a forge hammer…into half blooms, slabs or other forms…. My new Invention is to put them again into the same or another air furnace…from which I take the half blooms and draw them under the forge hammer…into barrs,…small rods for wire or such uses as may be required; and the slabs having been shingled…to the sizes of the grooves in my rollers…are worked by me through the grooved rollers in the manner which I use bar or wrought iron fagotted and heated to a welding heat for that purpose. (Morton and Mutton 1967:727–8) Henry Cort knew a great deal about the activities of his predecessors, one or two of whom had already taken out patents for a form of puddling. For example, in 1766 the brothers Thomas and George Cranage described their process as follows: The pig iron is put into a reverberatory or air furnace, built of proper construction, and, without the addition of anything more than common raw pit coal, is converted into good malleable iron, and being taken red hot from the reverberatory furnace to the forge hammer is drawn into bars of various shapes and sizes according to the will of the workman. (Dickinson 1940–1:35) Similarly, Peter Onions’s patent in 1783 described a puddling process almost identical with Cort’s. However, these inventors did not succeed in demonstrating that their processes worked successfully. Dr John Percy, in his review of the Cranage brothers’ patent, commented: It may reasonably be asked why was not this invention actively carried out at Coalbrookdale—as it does not 112


appear to have been? Either there must have been some difficulty or its importance was not appreciated properly… Now, Cort unquestionably did succeed and rightly apprehended the great value of puddling: and on these grounds he is, I submit, entitled to merit as great, if not greater than that of his predecessor. (ibid.: 36) Henry Cort’s achievement was well summed up in the following tribute by Dr H.W.Dickinson, past president of the Newcomen Society: What we can say of Cort was that he gathered existing knowledge and technique, absorbed what was useful and necessary for his purpose, rejected what was not needed, and combined it into a system which, as a whole, constituted such an advance that it marked an entirely new era in the manufacture of wrought iron. The effect of his labours was immediate: whereas a tilt hammer had been able to produce a ton of bars in 12 hours, no less than 15 tons could be passed through the rolls in the same time; the iron, produced as it was entirely by pit coal, was of a quality that enabled it to compete for all but the most exacting requirements with the charcoal iron of Sweden, Russia and New England. The process enabled Great Britain, relying on mineral fuel, to advance within a decade to the premier iron-producing country of the world. (Dickinson 1940–1:36) The great inventor who did so much to make Britain the first industrial nation deserved well of his country; but he died impoverished and broken-hearted. This was one of the most bitter of tragedies. Henry Cort began his career as a Naval Agent in London at the age of 25, and by 1775 he had built a forge and slitting-mills at Fontley, near Fareham in Hampshire. He entered into contracts to supply the navy with mast hoops and invested the whole of his private fortune of £20,000 in the development of his puddling and rolling process. In order to obtain extra capital he made an agreement in 1781 with Adam Jellicoe, DeputyPaymaster of the navy, whereby the latter advanced £27,000 in exchange for Cort’s patent rights as collateral security and half the profits of the undertaking, and Jellicoe’s son became a partner. Between 1784 and 113


1789 Cort was extremely active in visiting ironmasters to demonstrate his new process. Success was immediate, particularly in South Wales where Richard Crawshay in 1787 agreed to pay a royalty of 10 shillings a ton (reduced to 5 shillings in 1788) on the puddled iron made at his works at Cyfarthfa. In the twenty years following Cort’s patents of 1783 and 1784 British ironmasters took over the bulk of the home market in bar iron; one can just imagine the colossal fortune which Cort would have made by the time his patents expired in 1797–8. However, this was not to be. On 30 August, 1789, Adam Jellicoe died suddenly and it was discovered that the money which he had advanced to Cort was not his own but funds belonging to the navy. In an iron chest an open letter was found dated 11 November 1782, in which Jellicoe wrote: I…have always had more than my Balance by me till my engagements, about two years ago [i.e. 1780] with Mr Cort, which by degrees has so drained me, and employed so much more of my Money than I expected, that I have been obliged to turn most of my Navy Bills etc. into Cash and, at this time, to my great concern, I am very deficient in my Balance. (ibid.: 40–1) The letter contained a request to the authorities, in case of his sudden death, ‘not to be severe in requiring the Balance to be immediately restored’ (ibid.). The legal proceedings resulted in ruin for Cort who lost everything including his patent rights which were locked up by the solicitor to the crown. In 1790 he offered to work for the Navy Board but they were not interested. His application to the Commissioners of the Navy in the following year was also turned down. After an appeal addressed by the Lord Mayor of London to William Pitt, the Prime Minister, in 1791, Cort was given a pension of £200 a year which, after deductions, came to £160. He died a poor man on 23 May 1800, and was buried in Hampstead churchyard. His widow was left with no resources to support ten children; in response to her appeal for assistance the Treasurer of the Navy, Henry Dundas, first Viscount Melville (1802), a dab hand at the art of speculation, was authorized in 1801 to grant her the munificent net sum of £100 a year. When Mrs Cort died in 1816 an annual pension of £20 was given to each of two unmarried daughters. In 1856 Richard Cort, 114


the only surviving son, was granted a pension of £50 from the Civil List, and the two surviving daughters near the end of their lives had their pensions increased to £50 a year. The shameful injury done to Henry Cort and his family was bad enough, but there was insult as well. In 1812 the eldest son, Coningsby Cort, petitioned the House of Commons for a reward in recognition of the importance of his father’s invention, and a Select Committee was appointed. One of the witnesses, Samuel Homfray, an ironmaster who had been glad to pay 10 shillings a ton royalty for adopting Cort’s process in 1787, sought to deprive Cort of any credit for the invention. Another witness, William Crawshay, son of Richard Crawshay, the South Wales ironmaster, actually declared that his family would have been ruined if they had followed Cort’s plans for puddling and rolling (House of Commons 1812; Dickinson 1940–1:44). This was the exact opposite of the truth. Richard Crawshay had expressed his enthusiasm about the new process in several letters to Henry Cort. For example, on 9 November 1787 he wrote, ‘I am much pleased at your arrival and the three men to teach the Welch [sic] your mode of making Iron which I shall not repent paying 10/- for if others reject it.’ On 5 July 1788 he wrote, ‘We now make 20 tons weekly from 6 furnaces better iron than ever’ (ibid.: 40). In July 1788 Crawshay convinced Cort that the royalty should be reduced to 5 shillings a ton, on the pretext that this would cause the patent to be more widely used. The Crawshay family’s prosperity was based on the new type of bar iron made possible by Cort’s invention. The House of Commons Select Committee, after listening to a chorus of anti-Cort prejudice, concluded that neither the puddling nor the rolling technique introduced by Cort was so novel as to justify a parliamentary reward for the petitioner. The Committee recommended that a grant of £250 be made to cover the cost of the committee but the Chairman never moved a motion to this effect. Consequently, as an unbelievable final touch, this sum was left for the Cort family to pay (Ibid.: 40). It is a relief to turn from this lamentable history and to refer to some redeeming features. Henry Cort was held in high esteem by his famous contemporary, James Watt, who regarded him as a ‘brother projector’. In a letter to Dr Joseph Black in 1784 Watt showed his sympathy for his fellow inventor: Mr Cort has, as you observe, been most illiberally treated 115


by the trade; they are ignorant brutes; but he exposed himself to it by exposing his process to them before it was perfect; and they saw his ignorance of the common operations of making iron, laughed at and despised him; yet they will contrive by some dirty evasion to use his process or such parts as they like, without acknowledging him in it. I shall be glad to be able to be of use to him. (ibid.: 39) When the United States experienced its industrial revolution in the second half of the nineteenth century, the contribution which had been made by Cort to the technique of iron-making was generally recognized by industrialists. It was through American initiative that action was taken to create a memorial for Cort in the land of his birth. In 1904 Charles H.Morgan, Past President of the American Institute of Mining Engineers, arranged for the neglected tombstone in Hampstead churchyard to be cleaned and relettered, and he presented a bronze tablet to be installed in the porch of the church. The following statement by the donor was read at the unveiling ceremony on 9 March 1905. As a quiet expression of my admiration of the man, and my personal indebtedness to his worth and work,—as a little effort toward lifting the neglect so long laid upon his name, it has been my pleasure to seek the opportunity of placing a tablet in Hampstead Church, where he is interred, and also one at his birthplace in the Church at Lancaster. (Dickinson 1940–1:46) The inscription is as follows: In memory of HENRY CORT born at Lancaster 1740 interred at Hampstead 1800 to whom the world is indebted for the arts of refining iron by puddling with mineral coal and of rolling metals in grooved rolls In 1940, on the occasion of the bicentenary of Cort’s birth, Dr H.W.Dickinson, Past President of the Newcomen Society, published 116


an authoritative lecture, ‘Henry Cort’s Bicentenary’, which is an indispensable source (Dickinson 1940–1). It must be added that 1983–4 passed without anything being done to celebrate the bicentenary of Cort’s invention. SUMMARY The last twenty years of the eighteenth century saw the culmination of a long series of technological advances which had been called forth by the seventeenth-century energy crisis. There was a time-lag of a century between Clerke’s application of the reverberatory technique to lead and copper (1680 and 1688) and Cort’s application of it to iron (1784). Newcomen invented his atmospheric engine in 1705, and Watt, after many experiments designed to reduce the wastefulness of the Newcomen engine, came upon the idea of a separate condensing chamber in 1765. When John Smeaton first saw this new steam engine, he declared it to be ‘a very remarkable invention, but notwithstanding its excellence it can never be brought into general use because of the difficulty of getting its parts manufactured with sufficient precision’ (Smiles 1879:180). It was this problem which led James Watt to form a partnership with Matthew Boulton. The ultimate solution came with the advent of H.Maudsley’s slide rest (1797) which opened a new era in machine tools. The decisive step was the transfer of the tool (and the workpiece) from the hand of the workman to a mechanism which permitted the exact guidance of the tool (and the workpiece) and this carried out the relative movement between the workpiece and the tool without direct human intervention. (Paulinyi 1986:277) Despite the long time-lags between new ideas and the successful mechanical application of them, Britain remained well ahead of other countries. The essential part played in these processes by the craftsman’s skill meant that foreigners could not copy them, not even by importing the skilled workers who knew the secrets. As J.R.Harris pointed out, the craft element helps to explain why investigation by intelligent and learned foreign observers so rarely produced enough 117


know-how to transfer British coal-using methods abroad. The multiplication of specialized crafts associated with coal explains why the emigration of the worker possessed of the ‘central’ craft in an industry was not enough. (Harris 1976:181) The traditional view regards the Industrial Revolution as a prize won by the well-endowed country with the highest score in the ‘prerequisites’ race. Those who take the stochastic line insist that the race was wide open and that in some ways France was better endowed than Britain in the eighteenth century (Crafts 1977:429– 41). According to the diagnosis in this book, the Industrial Revolution occurred in Britain, not elsewhere, at the end of the eighteenth century because she was running out of energy and was able to do something about it. France had no such problem. A detailed survey of French evidence for the second half of the eighteenth century bears this out. A specialist summed it up as follows: On the whole, then, France did not have a fuel crisis similar to the one Britain had faced. An ample supply of wood, especially for manufacturers, in itself acted as a powerful deterrent to adopting coal. The French were under little pressure to change fuel…. Ironically, the very lack of a shortage of vegetable fuel, particularly an industrial wood famine, may be considered as one circumstance which caused the economic development of France to lag behind that of Britain during the old regime. (Young 1976:55) The United States, lavishly endowed with timber, lagged even further behind Britain and did not have its industrial revolution until the second half of the nineteenth century. Up to the Civil War it was a predominantly agrarian society based 90 per cent on wood fuel (Resources for the Future, Inc. 1960:36). Between 1860 and 1910 the proportion of total energy obtained from mineral fuels rose from 16.5 per cent to 86.1 per cent (ibid.). The order in which technical changes occurred was different from the British experience. In the United States puddling came first, and the substitution of coke for charcoal in smelting iron ore came at the end not at the beginning. After the Civil War the new railroad network enabled 118


the Connellsville coke, famous for being practically free of sulphur, to come into widespread use. The marked improvement in the quality of the pig iron made with this coke was a major factor in the transformation of the American economy by the end of the century (Temin 1971:119–20). To sum up, Britain’s economic crisis in the second half of the eighteenth century was due in large measure to a population explosion combined with the fact that her energy-intensive commitments as centre of the first British empire had outrun the capacity of her organic-based economy to sustain them (Chapters 2 and 3). The required technical knowledge was rounded off by Cort’s contribution. Without the energy transformation, would Britain have won the war against Napoleon? In 1778 a powerful new naval gun, the carronade (or the ‘smasher’ as it was called), was introduced by the Carron Company. According to the author of The Evolution of Naval Armament, ‘the carronade played a considerable part in the succession of duels and actions which had their climax off Trafalgar’ (Robertson 1921:135). It was in 1776 that Dr Johnson made his priceless remark to Boswell when they visited his home town, Lichfield: ‘Sir, we are a city of philosophers, we work with our heads, and make the boobies of Birmingham work for us with their hands’ (Boswell 1799:708). Some boobies! Some hands! REFERENCES Aitchison, L. (1960) A History of Metals, vol. 2, London: Macdonald and Evans. Arthur, W.Brian (1989) ‘Competing technologies, increasing returns, and lock-in by historical events’, Economic Journal 99, March: 116–31. Ashton, T.S. (1924) Iron and Steel in the Industrial Revolution, Manchester: Manchester University Press. Atkinson, A.B. and Stiglitz, J.B. (1969) ‘A new view of technical change’, Economic Journal, 79. Boswell, J. (1799) Life of Johnson, 3rd edn 1923, London: Oxford University Press. Coleman, D.C. (1953) ‘Naval dockyards under the later Stuarts’, Economic History Review, 6. Crafts, N.F.R. (1977) ‘Industrial Revolution in England and France: some thoughts on the question, “Why was England first?”’, Economic History Review 30, 429–41. Dickinson, M.W. (1940–1) ‘Henry Cort’s bicentenary’, Transactions of the Newcomen Society 21, 31–46. Flinn, M.W. (1984) The History of the British Coal Industry, vol. 2, 1700– 1830: The Industrial Revolution, Oxford: Clarendon Press. 119


Hagen, E.E. (1962) On the Theory of Social Change: How Economic Growth Begins, Homewood, Ill: Dorsey Press. Hammersley, G. (1957) ‘The crown woods and their exploitation in the sixteenth and seventeenth centuries’, London University Bulletin of the Institute of Historical Research 20:136–61. Harris, J.R. (1976) ‘Skills, coal and British industry in the eighteenth century’, History 61:167–82. House of Commons (1812) Report on Mr Cort’s Petition. Hill, C. (1970) God’s Englishman, London: Weidenfeld and Nicolson. Hyde, C.K. (1977) Technological Change and the British Iron Industry, 1700– 1870, Princeton, NJ: Princeton University Press. Jenkins, R. (1933–4) ‘The reverberatory furnace with coal fuel, 1612–1712’, Transactions of the Newcomen Society 14:67–81. Morton, C.R. and Mutton, N. (1967) ‘The transition to Cort’s puddling process’, Journal of the Iron and Steel Institute: 722–8. Mokyr, J. (ed.) (1985) The Economics of the Industrial Revolution, London: Allen and Unwin. Mott, R.A. (1958–9) ‘Abraham Darby (I and II) and the coal-iron industry’, Transactions of the Newcomen Society 31:49–93. Nef, J.U. (1932) The Rise of the British Coal Industry, London: Routledge, 2 vols. Oppenheim, M. (1896) A History of the Administration of the Royal Navy and of Merchant Shipping in relation to the Navy, London: John Lane, the Bodley Head. Paulinyi, A. (1986) ‘Revolution and technology’ in R.Porter and M. Teich (eds) Revolution in History, London: Cambridge University Press. Pollard, S. (1980) ‘A new estimate of British coal production, 1750–1850’, Economic History Review 33, 2nd series: 212–35. Resources for the Future, Inc. (1960) Energy in the American Economy 1850– 1975, New York. Riden, P. (1977) ‘The output of the British iron industry before 1870’, Economic History Review 30, 2nd series: 442–59. Robertson, F.L. (1921) The Evolution of Naval Armament, reprinted 1968, London: Harold T.Storey. Scoville, W.C. (1951) ‘Minority migrations and the diffusion of technology’, Journal of Economic History 11:347–60. Smiles, S. (1879) Industrial Biography, London: John Murray. Temin, P. (1971) ‘A new look at Hunter’s hypothesis about the antebellum iron industry’ in R.W.Fogel and S.L.Engerman (eds) The Reinterpretation of American Economic History, New York: Harper and Row. Woodcroft, B. (1857a) Alphabetical Index of Patentees of Inventions, 1617– 1852, London: Patent Office; reprinted and republished by Augustus M.Kelly, New York, 1969. ——(1857b) Subject-matter Index of Patents of Invention, London: Patent Office. Young, D.B. (1976) ‘A wood famine? The question of deforestation in old regime France’, Forestry 49:45–56.

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6

ROBERT OWEN (1771–1858): A HERO OF THE INDUSTRIAL REVOLUTION

Robert Owen died on 17 November 1858, at the age of 87, and was buried next to his parents in the old churchyard at Newtown. Apart from one visit, he had spent three-quarters of a century away from the land of his birth. We have it on the authority of G.J.Holyoake, one of his most devoted disciples, that when he came to the border line which separates England and Wales, he knew it again. It was more than seventy years since he passed over it. He raised himself up in his carriage, and gave a cheer. He was in his own native land once more. It was the last cheer the old man ever gave. (Holyoake 1859:7) A nineteenth-century biographer, W.L.Sargant, described the end in the following words: Thus was Robert Owen buried by his own wish, which was held sacred by his friends, in ground consecrated by the Church; with the formalities of a religion which he condemned; attended by mourners who had no sympathy with his opinions; in an ancient graveyard hallowed by historical associations which to him, when living, had little meaning. The bones of the prophet of innovation lie among the picturesque ruins of medieval orthodoxy. (Sargant 1860:379) There is no evidence that Robert Owen ever gave any thought to Wales during his long and active life; his influence on Wales has been part of the general impact of his work on the social history of 121


Britain as a whole. As we think of him at this distance of time, we are struck by the paradoxes in his enigmatic personality—the millowner with his eye on the millennium; the enemy of religion who preached the Christian ethic; the brilliant organizer of New Lanark who bankrupted New Harmony; the believer in the omnipotence of reason who embraced spiritualism; the successful capitalist who was one of the founding fathers of British socialism. Robert Owen was born five years before the appearance of Adam Smith’s The Wealth of Nations; he began his career as a business man at the age of 18, in the year in which the French Revolution broke out, and he died nine years before the publication of Karl Marx’s Das Kapital. His life thus spanned the epoch which transformed Britain from a rural society into the world’s leading industrial power. We have been reminded by Raymond Williams, in his stimulating study Culture and Society 1780–1950, that the five words industry, democracy, class, art and culture acquired their modern meanings during the period of the Industrial Revolution (Williams 1958:xiii–xix). Adam Smith, in 1776, was one of the first to use the word industry to denote an institution rather than a human attribute, and the use of the word class to refer to a segment of society dates from about 1772. Nothing could illustrate more clearly the fundamental character of the transformation which had just begun when Robert Owen was born. He was the youngest but one in a family of seven. He was reared in a Welsh home with a religious atmosphere, and was a voracious reader. If we were to accept Owen’s theories about the dominant influence of environment during infancy on a man’s character, then we would have to say that Newtown made him what he became. As we shall see later, there is a sense in which this was true. That he started working in England was not at all surprising. There were no comparable opportunities in Wales, and in any case, communications at that time between Newtown and, say, Merthyr Tydfil were hardly inviting. He went where his father had contacts and where there was a wide range of openings. By the time he was 18 years of age Owen had acquired a thorough knowledge of all sides of the cotton trade. His first job was as apprentice to Mr McGuffog, a draper, in Stamford, Lincolnshire, who had a wealthy clientele. His master had a good library, and Owen tells us that while there he read on an average five hours a day. Then he went as draper’s assistant to Messrs Flint and Palmer in London where he was lodged and boarded 122

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in the house and received a salary of £25 a year. This work was arduous, and Owen relates that ‘frequently at 2 o’clock in the morning, after being actively engaged on foot all day from 8 o’clock in the morning, I have scarcely been able with the aid of the banisters to go upstairs to bed. And then I had about five hours for sleep’ (Owen 1920:41–54). The next move took Owen to Manchester where he was soon to set up on his own with a loan of £100 from his brother in London. The account which Owen himself gives of his life as a young man tells us vividly what it was like to be living in the harsh, but envigorating, atmosphere of a pioneering cotton town (ibid.: 27). A Mr Drinkwater, a rich manufacturer and merchant, had built a new mill for fine spinning, and he advertised for a manager. As soon as Owen heard of this he presented himself for interview and, to Mr Drinkwater’s surprise, declared that he wanted a salary of £300 a year, as he was already making that amount of profit in his own business. This he proved by showing Mr Drinkwater his books. He was chosen for the post and did so well that he was given a partnership. He was not yet 20 and he was in charge of what was then the most modern mill in Manchester, employing 500 workers. This is how Owen described himself: I was yet but an ill-educated awkward youth, strongly sensitive to my defects of education, speaking ungrammatically a kind of Welsh-English, in consequence of the imperfect language spoken in Newtown, which was an imperfect mixture of both languages; and I had yet only had the society attainable by a retail assistant. I was also so sensitive as among strangers to feel and to act awkwardly, and I was never satisfied with my own speaking and acting, and was subject painfully to blushing which, with all my strongest efforts, I could not prevent. In fact, I felt the possession of ideas superior to my power of expressing them, and this always embarrassed me with strangers and especially when in the company of those who had been systematically well educated, according to the existing notions of education. (ibid.: 43) The attainment of this responsibility at so early an age was a tribute not only to Robert Owen’s outstanding gifts but also to the 123


opportunities which were then open to ambitious men of humble birth. Owen was the first to spin sea-island cotton from America; and it was an extremely profitable business. He had attained a complete mastery of the technique of a rapidly expanding industry. In 1797 Owen was appointed manager of the Chorlton Twist Company which had a large market for its product in Scotland, and during his visits to Glasgow he came to know David Dale, owner of the New Lanark mills. Two years later these mills were bought by Owen and his partners for £60,000, and Owen was put in charge. In the same year—1799—he married Dale’s daughter, Anne Caroline. Thus, in January 1800, began the phase of his life which was to have momentous consequences. In the years 1800–1813 the changes wrought by Owen in the New Lanark mills made him internationally famous. Between 1812 and 1821 he published his most important works (see References). The years 1813 to 1819 saw him wage a vigorous campaign for his plan to relieve distress among the workers and for factory legislation. In 1825 he bought the village of New Harmony in Indiana, USA for £30,000 and spent four years on this ill-fated experiment in communal living. The peak of his activity came in the early 1830s when he emerged as the leader of the Grand National Consolidated Trades Union which, in the spring of 1834, had attracted nearly 1 million members. He also set up the National Equitable Labour Exchange in 1832 in Gray’s Inn Road, London. After the middle of the thirties his influence on policy waned and he was engaged in a tedious reiteration of his ideas. The last years of his life were an anti-climax. He was as busy as ever but the weaknesses in his character became magnified. There was an element of pathos about his reduced circumstances, for his personal fortune had vanished. He had lost £40,000 in New Harmony, and from 1844 he was receiving from his three sons the sum of £360 a year.1 At the age of 82 he fell under the influence of a medium, and firmly believed, despite the exposure by G.H.Lewes, that he was receiving communications from the Duke of Kent, Jefferson, Benjamin Franklin and other notables. He tells us in his autobiography that the Duke of Kent informed him that there were no titles in the spiritual spheres into which he had entered (Owen 1920:275). One is tempted to suggest that his mental powers were failing, and yet one must remember that it was in 1857, the year before he died, that he published the remarkable first volume of the autobiography which he never finished. 124


The central principle in Owen’s philosophy is the dominant influence of environment on character. The following quotations from A New View of Society are typical: Man never did, nor is it possible he ever can, form his own character. (Owen 1813–14:83) Any general character, from the best to the worst, from the most ignorant to the most enlightened, may be given to any community, even to the world at large, by the application of proper means; which means are to a great extent at the command and under the control of those who have influence in the affairs of men. (ibid.: 11) The will of man has no power whatever over his opinions; he must, and ever did, and ever will, believe what has been or may be impressed on his mind by his predecessors and the circumstances which surround him. It becomes therefore the essence of irrationality to suppose that any human being, from the creation to this day, could deserve praise or blame, reward or punishment, for the prepossession of early education. (ibid.: 99–100) Children are without exception passive and wonderfully contrived compounds; which, by an accurate previous and subsequent attention, founded on a correct knowledge of the subject, may be formed collectively to have any human character. And although these compounds, like all the other works of nature, possess endless varieties, yet they partake of that plastic quality, which, by perseverance under judicious management, may be ultimately moulded into the very image of rational wishes and desires. (ibid.: 26) Man’s individual happiness can be increased and extended only in proportion as he actively endeavours to increase and extend the happiness of all around him. (ibid.: 15) 125


It would not be profitable to discuss how Owen came to embrace this philosophy. There is no doubt that he had read William Godwin’s Political Justice (1793), and he had been a member of the Literary and Philosophical Society in Manchester, which included among its members Dr Thomas Purcival, Sir Joseph Banks, Erasmus Darwin and Joseph Priestley. When Hazlitt called him ‘a man of one idea’, Owen replied: Had he said that I was a man of one fundamental principle and its practical consequences—he would have been nearer the truth. For, instead of the knowledge that ‘the character of man is formed for him and not by him’ being ‘one idea’—it will be found to be, like the little grain of mustard seed, competent to fill the mind with new and true ideas, and to overwhelm in its consequences all other ideas opposed to it’. (Owen 1920:105) What Owen had got hold of was, of course, a half-truth, but it was one which certainly needed to be pitted against the dominant idea at that time, namely, that if each individual pursued his own interest he would be led by an invisible hand to benefit the community as a whole. The laissez-faire school held that that government was best which governed least. Owen, however, saw clearly that, to quote his words: ‘the general diffusion of manufacture throughout a country generates a new character in its inhabitants and…it will produce the most lamentable and permanent evils unless its tendency be counteracted by legislative interference and direction’ (Owen 1815:5). He never faced the philosophical dilemma involved in his fundamental principle. He was content to assert that men could not be held morally responsible for their actions, since their characters were formed for them not by them; he never asked why one should take it for granted that every event must have a cause. He was not worried by the inconsistencies inherent in his uncompromising determinism. To escape from them it is necessary to ask whether ‘causal relationship’ necessarily involves constraint or compulsion.2 His theory of the formation of human character is a gross oversimplification. In the words of Max Beer: contrary to rationalist views, new social surroundings and circumstances do not operate directly on our intellect and volition, nor do they accomplish their work within 126


the period of a few years. Their noiseless transforming operations on our nervous system and mentality are a slow biological process which may take generations before the old impulses, strivings and passions are sufficiently weakened as to allow the new emotions to take effect. These psychological processes are the cause of those painful disappointments to which revolutionary enthusiasts are exposed whenever they try to force the sudden emergence of socialism from capitalist society. (Owen 1920:vii) What manner of man was Owen? What impression did he leave on his contemporaries? What was his great strength and what were his weaknesses? We shall begin with Jeremy Bentham, who bought one of the big shares in New Lanark which enabled Owen to have a free hand there. According to his executor, John Bowring, Bentham was attracted by Owen’s proposals—who had desired to get rid of his partners in as much as they thwarted his plans of improvement. His theory was that, while he made a manufacturing population more virtuous and happy, he could also render them more productive to their employers: and in this respect he certainly fulfilled his engagements; and Bentham had every reason to be satisfied with the pecuniary results of his investments of money in the New Lanark mills. (Bowring 1843:477) This was incidentally the only successful investment which the father of utilitarianism ever made. However, it did not prevent the old sage from being pretty caustic about Owen in private. Bowring quotes him as saying: Robert Owen begins in vapour and ends in smoke. He is a great braggadoccio. His mind is a maze of confusions and he avoids coming to particulars. He is always the same—says the same things over and over again. He built some small houses and people who had no houses of their own went to live in those houses—and he calls this success.3 (ibid.: 570–1) 127


For a very different—and more penetrating—assessment we turn to Robert Southey, who describes Owen as one of the three men who have in this generation given an impulse to the moral world. Clarkson and Bell are the other two. They have seen the first fruits of their harvest. So I think would Owen ere this, if he had not alarmed the better part of the nation by proclaiming, upon the most momentous of subjects, opinions which are alike fatal to individual happiness and the general good…. A craniologist, I dare say, would pronounce that the organ of theopathy is wanting in Owen’s head, that of benevolence being so large as to have left no room for it. Because he promises too much, no trial is made of the good which his schemes might probably perform. (Southey 1829:132–4) Harriet Martineau was struck by ‘the candour and cheerfulness, the benevolence and charming manners which would make him the most popular man in England if he could but distinguish between assertion and argument and abstain from wearying his friends with his monotonous doctrine’ (Martineau 1877:231). Perhaps she got near the heart of the matter when she said that one could not explain how the Old Immoral World produced Robert Owen. Owen’s personality made a favourable impression on Francis Place who, after meeting him in 1813, said: ‘He introduced himself to me, and I found him a man of kind manners and good intentions, of an imperturbable temper, and an enthusiastic desire to promote the happiness of mankind. A few interviews made us friends’ (Wallas 1898:63). Lord Brougham regarded him as ‘one of the most humane, simple-minded, amiable men on earth,…one of the most calm and candid men I have ever conversed with…he had none of the feverish irritable feelings which too generally belong to projectors’ (Podmore 1906:637–8). There can be no doubt that Owen was able to establish easy relations with people from every walk of life. He was disinterested, generous and absolutely truthful. Whether he had a lively sense of humour is more than doubtful. He combined the earnestness of the do-gooder with the supreme confidence of the man of vision. To him every occasion was an opportunity for preaching his gospel. 128


Here is an account by Lord Macaulay of a fancy-dress ball at which ‘Owen the philanthropist’ was present. Owen laid hold on Sheil, and gave him a lecture on cooperation which lasted half an hour. At last Sheil made his escape. Then Owen seized on Mrs. Sheil, a good Catholic and a very agreeable woman, and began to prove to her that there could be no such thing as moral responsibility. I had fled at the first sound of his discourse. (Trevelyan 1876:220) It was this side of Owen which led Leslie Stephen, in The Dictionary of National Biography, to call him ‘one of those intolerable bores who are the salt of the earth’ (Stephen 1895, xlii:451). Robert Own was not humble-minded; he never for one moment entertained the thought that he might conceivably be wrong. This was part of his great strength; he had no time for small talk, hobbies or social relaxation. He never took a holiday. Here is a characteristic remark of Owen’s on whether he should make an after-dinner speech: As to myself I never could make an after-dinner speech in which it was necessary to speak of personal good qualities, for I had so often published my conviction that our characters were before and from birth formed for us and that there could not be any personal merit or demerit, so that I could not, consistently with well-known views on this subject, say anything in after-dinner speeches satisfactorily to myself nor consequently to others. I therefore avoided them whenever it was practicable. (Owen 1920:305) If he had been less earnest and preoccupied and dedicated, he might have reached a higher pinnacle of greatness as a thinker. W.L.Sargant put it well in the following comment: He whose waking hours are fully employed, and whose wearied body enjoys at night unbroken rest, is at a great disadvantage in all pursuits which require meditation. For you cannot say, such an hour I will devote to reflection, and then I will think out the intellectual and moral problems which perplex me. The really valuable thoughts are those 129


which come unbidden, and are welcomed and cherished whenever they appear. Tell them to call again when you are at leisure and you lose them for ever. When Owen was waiting hour after hour, for the decision of Sturges Bourne’s Committee, he was little disturbed, because he applied himself to his usual occupation: he wrote in a strange room instead of by his own fireside. If he had been less industrious, the unbroken solitude and the anxious expectation would have annoyed and distressed him. But would not many wholesome thoughts have presented themselves? Would it not have occurred to him that though he was a great manufacturer he was profoundly ignorant of statesmanship; that the management of a village with 2,000 persons was a very different matter from the administration of an empire; that clear as his peculiar notions were to himself they might, after all, be unfounded; that if bold men had lived before Agamemnon, great thinkers had lived before Robert Owen? Such thoughts must, I suppose, have knocked at the door; but with his busy fingers he closed the portals of his mind against them. If he had been less active and industrious, if he had allowed himself more time for reflection, he might have escaped much unnecessary toil and many bootless sacrifices. (Sargant 1860:401–2) Even when we have taken fully into account all that has been said of Owen by his friends, acquaintances and biographers, we are left with an inadequate picture. The best clues to his character are no doubt to be found in his autobiography. Although he emerged in the early 1830s as the leader of a militant working class upsurge, he was always on extremely good terms with the highest in the land. The stock of the champion of socialism stood high with the conservative Establishment. There are passages in the autobiography which suggest that Owen felt inwardly proud of the favours shown to him by members of the nobility; he had risen from humble origins and moved among princes and peers. (For reasons not altogether clear, he failed to become a Freemason [see Owen 1920:309–10].) One has a feeling that at times he was slightly overawed by the experience and that if he had been born in an iron-worker’s cottage in Merthyr his attitude would have been rather different. It is interesting to speculate on the changes Owen would have wrought 130


in South Wales if his revolutionary ideas had been applied there instead of in New Lanark; how different would have been the history of the Welsh mining valleys if they had been developed by capitalists with a social conscience. Dowlais Top might have become a garden city, and the New Lanark seed planted in Welsh soil might have yielded a bountiful harvest. Let us dismiss these idle imaginings and return to one of the basic contradictions in Owen’s life. His fierce opposition to religion dominated his outlook and diminished his influence; he would declare with Dean Swift that ‘we have just enough religion to make us hate, but not enough to make us love one another’. And yet towards the end of his life he said: I have been compelled, contrary to my previous strong convictions, to believe in a future conscious state of life, existing in a refined material, or what is called a spiritual state, and that, from the natural progress of creation, these departed spirits have attained the power to communicate, by various means, their feelings and knowledge to us living upon the earth. (Podmore 1906:604) He tried to bridge the contradiction by adding that ‘these manifestations appear to be made at this period to prepare the world for universal peace, and to infuse into all the spirit of charity, forbearance and love’ (ibid.: 605). Perhaps, here, we have a key to an inner conflict which Owen could never resolve. Could it be that, by a strange irony, Owen was right in believing that his character had been formed for him by the environment in which he lived up to the age of 10, in the sense that the religious home in Newtown left upon him an imprint which he could never erase? He married a woman who was a devout Calvinist like her father, David Dale; he did not interfere with the religious instruction which she gave to the children. Mrs Owen asked young Robert Dale to pray that his father might embrace the faith of his grand-father. ‘With tears in her eyes, she added, “Oh, if he could only be converted, he would be everything my heart could desire; and when we die he would be in heaven with us all”’ (Dale Owen 1874:56). In reply to his son’s questions, Owen could not refrain from undermining the boy’s Protestant beliefs (ibid.: 35). It must have been a hard blow to Mrs Owen that her sons and one of her daughters followed their father’s example in what was, to her, the 131


most important thing in life. In the words of G.D.H.Cole, ‘Owen and his wife were very fond of each other, and the children very fond of both. But it was hard even for married love to sustain the burden of a firm conviction in the wife’s mind that her husband was damned’ (Cole 1925:93). The change in Owen’s beliefs at the end of his life was a sign that there was in his nature an inner craving which had not been assuaged by his ‘rational religion’. Robert Owen’s place in history rests not on his powers as a thinker but on his achievements as a social innovator (see National Library of Wales 1914). Several of his most daring ideas have now become commonplaces of the welfare state, and if his example had been heeded early in the nineteenth century the capitalist system would not have brought such bitterness in its train (see Professor Foxwell’s conclusion in Menger 1899:xxvii–xxviii). In certain respects Owen resembled Karl Marx: both based their theories on economic determinism and on the labour theory of value, and they were both enemies of religion. But on one crucial matter they differed radically: Owen had a profound faith that his fellow capitalists could be persuaded to see reason, and spent the best years of his life addressing appeals to those who held power; Marx, on the other hand, expounded the inevitability of the class war. The tragic failure of the Grand Consolidated Trades Union in 1834 was due partly to Owen’s refusal to countenance appeals to class-hatred. He was prepared to launch a general strike but it had to be done in the spirit of social brotherhood. All the individuals now living…are the suffering victims of this accursed system, and all are objects of pity; you will, therefore, effect this great and glorious revolution without, if possible, inflicting individual evil…without bloodshed, violence or evil of any kind, merely by an overwhelming moral influence, which influence individuals and nations will speedily perceive the uselessness and folly of attempting to resist (The Legacy of Robert Owen’ 1834). He contributed powerfully to the tradition of peaceful change and encouraged the empirical approach which was later seen in certain aspects in the work of Sidney and Beatrice Webb. Owen may truly be regarded as one of the founders of democratic socialism. Nowhere was his genius as an innovator more clearly displayed than at the New Lanark mills. At first the workers were opposed to 132


every change he proposed, but he won their confidence completely by what he did in 1806 at the time of the American embargo on the export of raw cotton. Instead of closing down the mills he continued to pay the workers their full wages for only keeping the machinery clean and in good order, and this went on for four months. This unemployment pay at the full wage rate cost the firm £7,000. When Owen gave evidence before a Government Committee in 1816 he was asked about this episode and he declared: ‘I have always considered that £7,000 to have been more advantageously expended than any other part of our capital’ (House of Commons 1816). That sentence shows how far in advance of his time he was. The famous schools at New Lanark were one of the wonders of the age; they attracted no less than 20,000 visitors between 1815 and 1825, including the Grand Duke Nicholas, who later became Czar of Russia. Here, Owen showed how practical his theory was. There were three schools, one for children from 1 to 6 years of age, another for children aged 6 to 10, and a third school for older children. In 1806 there were 274 children under 10 in the day schools; and there were 344 children between 10 and 15, and 141 young people between 15 and 25 in the night schools. The following is a description by an eye-witness, Professor Garscombe of New York, who visited New Lanark in 1818. One apartment of the school afforded a novel and pleasing spectacle. It consisted of a great number of children, from 1 to 3 or 4 years of age. They are assembled in a large room, under the care of a judicious female, who allows them to amuse themselves with various selected toys, and occasionally collects the oldest into a class and teaches them their letters. They appeared perfectly happy, and as we entered the little creatures ran in groups to seize their benefactor by the hand, or to pull him by the coat, with the most artless simplicity. This baby school is of great consequence to the establishment, for it enables the mothers to shut up their houses in security and to attend their duties in the factory, without concern for their families. (Garscombe 1823:385) There is no space to quote the fascinating description given by Owen himself in his autobiography. The children were taught in pleasant surroundings and in an atmosphere of friendliness; 133


imaginative use was made of visual aids; in summer nature study took place in the open air; singing and dancing and physical exercises were a prominent part of the instruction. The boys and girls were taught to read well and to understand what they read; and the religious convictions of the parents were respected. After a vivid account of the way geography was taught, Owen says: This was at once a good lesson for 150—keeping the attention of all alive during the lesson. The lookers-on were as much amused, and many as much instructed as the children, who thus at an early age became so efficient that one of our Admirals who had sailed round the world said he could not answer many of the questions which some of these children not 6 years old readily replied to, giving the places most correctly. (Owen 1920:199) Much of what has been most fruitful in primary education in our day was already practised at New Lanark a century and a half ago; and it was for the benefit of factory workers’ children. Let me now turn to the great battle which he fought for a genuine Factory Act and the programme of economic planning which he advocated. Just after the end of the Napoleonic War Owen and his 14-year-old son, Robert Dale, toured the manufacturing districts to examine conditions in the factories. Describing these visits, Robert Dale Owen said: In some large factories some one fourth to one fifth of the children were either cripples or otherwise deformed, or permanently injured by excessive toil sometimes by brutal abuse. The younger children seldom held out more than three or four years without serious illness, often ending in death. (Dale Owen 1874:101) The working day was fifteen and sometimes sixteen hours and the children were sometimes as young as 5 or 6. Robert Owen declared that whatever may be said to the contrary, bad and unwise as American slavery is and must continue to be, the white slavery in the manufactories of England was at this 134


unrestricted period far worse than the house slaves whom I afterwards saw in the West Indies and in the United States, and in many respects, especially as regards health, food and clothing, the latter were much better provided for than were those oppressed and degraded children and workpeople in the home manufactories of Great Britain. (Owen 1920:156) Pauper children were drafted in large numbers to the textile mills; in 1815 Francis Horner told a Government Committee of an agreement between a London parish and a Lancashire mill-owner that the owner should take one idiot with every twenty sound children (Hansard 1815:xxxi:582). There were, fortunately, exceptions to the general rule of cruel exploitation. One of the largest of the early mills, Smalleys at Holywell in Flintshire, with its sash windows ‘which nightly exhibit a most glorious illumination’, had no less than 300 apprentices in 1795. Boys and girls had their separate houses, ‘which were whitewashed twice a year and fumigated three times a week with tobacco smoke’. There was a surgeon and a Sunday school. Three children to a bed was the maximum; ‘the larger sizes’ slept only two; ‘and those who work in the night are so far from succeeding each other in the same beds that they do not even sleep in the same rooms’ (Clapham 1926:372; Pennant 1796:215). Owen fought a vigorous campaign for legislation to curb the evils of the factory system. He lobbied members of both Houses of Parliament and drew up a draft Bill. It was to cover woollen, flax and other textile mills as well as cotton wherever twenty or more people over 18 years of age were employed. The minimum age of employment was to be 10, and proof of age was to be furnished. The working day was not to exceed ten and a half hours, excluding one and a half hours for meals and half an hour for schooling. All workers under 18 were to be covered by these regulations. Night work for juveniles was prohibited. A place was to be provided for the schooling of children for four years after they came to the mill. Annual returns were to be sent to the Justices of the Peace, and inspectors were to be empowered to go into the factories at any time. For failure to observe the regulations there were to be fines from £5 to £10, half of the proceeds to be paid to the informer and half to a fund for the poor. The manufacturers used every means at their disposal to hinder and discredit Owen; they even sent people to New Lanark to pick 135


up any scandal that would be useful. The Bill was mutilated in Committee and when Sir Robert Peel finally got the Act passed in 1819 it was a mere shadow of what Owen had wanted.4 It applied only to cotton factories and, worst of all, the proposal that there should be salaried inspectors was not accepted. In six years there were only two convictions. Nevertheless, a great moral victory had been won; if it had not been for Robert Owen, Peel would never have proceeded with the Bill. It was the beginning of a series of Acts which, by now, constitute an elaborate code of industrial welfare, and through the International Labour Organization, it was to become an international code. How appropriate it was in 1929 that, on behalf of the people of Wales, a bust of Robert Owen was presented to the International Labour Office by Mr David Davies, Llandinam, representing the Welsh League of Nations Union. Most of the accounts of Robert Owen’s ‘Plan’ to cope with the unemployment and distress in the years following 1815 have concentrated on his Villages of Cooperation or the ‘parallelograms of paupers’, as Cobbett facetiously called them. A characteristic example of what the economists of the day thought of him may be seen in an article in the Edinburgh Review, October 1819, probably written by Col. Torrens. Owen’s proposals were attacked on the ground that they ignored the law of diminishing returns and had not the slightest bearing on the real causes of distress which, according to the author, were ‘fettered trade and oppressive taxes’. The crux of the economists’ argument was Say’s Law—that ‘demand will increase in the same ratio with supply, and the power of consumption will keep pace with the power of production’. The article went on: It has been objected to those who oppose Mr. Owen’s plans, that they do not themselves suggest any effectual means for the relief of the country. This appears to us most objectionable and unreasonable…. Is no one to detect and denounce the nostrums of an empiric, unless he pretend himself to be in possession of a panacea?… Give Freedom to Commerce and lighten the pressure of Taxation, and we shall have no complaining in our streets’. (Edinburgh Review 1819:475) Whereas Owen was appalled by the distress he saw around him, the economists saw nothing wrong except the Government’s action 136


in levying tariffs and taxes. Owen was not an acute theorist, but he was intelligent enough to be suspicious of Say’s Law.5 It is now well known, since Keynes’s famous denunciations in The General Theory of Employment, Interest and Money (1936), that Say’s Law was the basic fallacy of classical economics. To show how Owen anticipated later ideas of economic planning let me quote from A New View of Society, the Fourth Essay: To prevent the crime and misery which ever follow these unfavourable fluctuations in the demand for and value of labour, it ought to be a primary duty of every Government that sincerely interests itself in the well being of its subjects to provide perpetual employment of real national utility, in which all who apply may be immediately occupied. In order that those only who could not obtain employment from private individuals should be induced to avail themselves of these national works, the rate of the public labour might be in general fixed at some proportion less than the average rate of private labour in the district in which such public labour should be performed. These rates might be readily ascertained and fixed, by reference to the country or district quarterly returns of the average rate of labour. This measure, judiciously managed, would have a similar effect on the price of labour, that the sinking fund produces on the Stock Exchange; and, as the price of public labour should never fall below the means of temperate existence, the plan proposed would perpetually tend to prevent an excess of nationally injurious pressure on the most unprotected part of society. The most obvious, and in the first place the best, source perhaps of employment would be the making and repairing of roads. Such employment would be perpetual over the whole kingdom; and it will be found truly national economy to keep the public roads at all times in a much higher state of repair than perhaps any of them are at present. If requisite, canals, harbours, docks, ship-building, and materials for the navy, may be afterwards resorted to: it is not, however, supposed that many of the latter resources would be necessary. (Owen 1813–14:169–70) 137


In this remarkable passage, written in 1814, Owen is proposing what would today be called a policy of contra-cyclical public investment for the maintenance of full employment. As a preface to this plan he made another striking recommendation which amounted to setting up a modern Ministry of Labour. This is what he said: The last national improvement which remains to be proposed…is that another legislative act should be passed, for the purpose of obtaining regular and active information relative to the value of and demand for labour over the United Kingdom. This information is necessary, preparatory to the adoption of measures which will be proposed, to provide labour for those who may be occasionally unable to procure other employment. In this act, provision should be made. First, to obtain accurate quarterly returns of the state of labour in each county; the returns to be made either by the clergy, justices of the peace or other more competent persons. These returns should contain First:

Second:

Third:

The average price of manual labour within the district for the period included in the return. The number of those in each district who depend on their daily labour, or the parish, for their support; and who may be at the period of these returns unem ployed, and yet able to labour. The number of those who at the period of each return, are but partially employed; and the extent of that partial employment.

Provision should also be made to obtain a statement of the general occupations in which the individuals had been formerly employed, with the best conjectures as to the kind and quantity of work which each may be supposed still capable of performing. The want of due attention to this highly necessary branch of government occasions thousands of our fellow subjects to be made wretched; while, from the same 138


cause, the revenues of the empire are annually deteriorated to an enormous amount…. This waste of human labour, as it is highly unjust to all, is not only impolitic in a national view, but it is most cruel to the individuals who, in consequence of this waste, are the immediate sufferers. (ibid.: 161–3) Here we have Owen putting forward a system of unemployment statistics, national and local, with separate returns for wholly unemployed and temporarily stopped, the duration of the unemployment, wage rates in each district, and the occupational classification of the men out of work. Britain had to wait a century before it got even a part of this—in the Beveridge system of employment exchanges. I have drawn attention to these two extraordinary plans of Robert Owen’s, since, for some reason, they have been overlooked by most commentators on his life work. As to the Cooperative movement, Owen looked askance at the consumers’ retail societies: what he wanted were producers’ societies (Cole 1925:229). But it would be right to say that much of the inspiration came from the followers of Owen, e.g. the Rochdale pioneers. Robert Owen seems to have thought of himself and more than once referred to himself as an Englishman. He made it clear that the new system of education which he envisaged was to be uniform throughout the British Isles; it was against his principles to recognize the claims of nationhood. Between 1814 and 1834, when he was at the height of his power, South Wales was going through a phase of intense industrial development; Owen was an inveterate traveller, and if he had felt himself to be a Welshman he would surely have paid at least one visit to the scene of these dramatic changes. He crossed the Atlantic eight times, and was far more familiar with conditions in America than he was with those of his native land. Few Welshmen are known to have taken part in Owenite movements. Some, however, were members of the National Community Society of Rational Religionists in Manchester, and they translated and published in Welsh the Outlines of the Rational System of Society in 1840. The copy of this book in the Salisbury Library in University College, Cardiff,6 contains the following words written all over the title page in the blackest of ink (in Welsh): 139


‘One of the most devilish books ever written. May the author see the error of his ways before he leaves this world. It says a great deal about morality but nothing about the Christian religion.’ This is a fair sample of the reaction which Owen evoked among the vast majority of Welshmen in his day. It is true that the upsurge of Owenite trade unions was sharply felt in the industrial districts of South Wales in the early 1830s, but historians tell us that the powerful influence of Calvinistic Methodist ministers was thrown against the unions (John 1951:93). In 1839 an abortive attempt was made to establish an Owenite community on a 1,000-acre estate at Pant Glas, Abergeirw, Merionethshire. According to the Rev. Richard Roberts, Owen himself was against this effort to put his ideas into practice, on the ground that every small enterprise tended to weaken the resources of the main movement (Roberts 1902). There can be no doubt that Owen’s sudden and forceful denunication of religion in 1817 and his consistent campaign against the Christian Church thereafter alienated many radically-minded people, and set stern limits to his influence in Wales.7 What did the inhabitants of his birthplace think of Owen? Edward Edwards, brother of Sir Owen M.Edwards, writing in Cymru in 1893, reported an attitude of indifference and even hostility. They refused the offer of the Cooperative Union to put a marble tombstone on his grave. Edward Edwards, on his visit to Newtown in 1893, was dismayed to find the grave half covered with grass and dock leaves (Edwards 1893). Even forty years after his death Owen was still a prophet without honour in his own country. As we look back today on the epoch-making part of Robert Owen’s life, we see him stand out as one of the great dynamic impulses of the nineteenth century. He had an instinct for divining the shape of things to come; and of him it can indeed be said with truth: if you want to see his monument, look around you. NOTES 1

Frank Podmore, in his Robert Owen A Biography (1906:395), gives the following account of Owen’s finances: ‘Owen certainly had money, though probably not very much, all through the period of The New Moral World. We find him, for instance, contributing over £700 to the Queenwood scheme. At a later date, apparently 1844, he appears again to have exhausted his resources. Robert Dale Owen accordingly presents

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2

3

4 5

6 7

his father with an audaciously cooked account—not unworthy to be compared with the Queenwood balance sheets—by which a balance of £640 standing to Robert Owen’s credit in the account with his sons is so manipulated that it ultimately grows to the respectable figure of £6,000. On this sum Robert Owen’s three surviving sons propose to pay their father for the remainder of his life interest at the rate of 6 per cent—£360 a year. This arrangement appears to have been continued until his death.’ Professor A.J.Ayer has shown that the use of the word ‘determinism’ is misleading. ‘For it tends to suggest that one event is somehow in the power of another, whereas the truth is merely that they are factually correlated…the fact is simply that when an event of one type occurs, an event of another type occurs also, in a certain temporal or spatiotemporal relation to the first. The rest is only metaphor. And it is because of the metaphor, and not because of the fact, that we come to think that there is an antithesis between causality and freedom’. (Ayer 1954:282–3). Bentham’s verdict on Owen should perhaps be read in the light of what he thought of others. For example, Cobbett—‘His malevolence and lying are beyond anything’; Teel is weak and feeble…. Like the greyhounds of a lady I know, which were fed upon brandy to prevent their growth, so he feeds upon old prejudices to prevent his mind from growing. He has done all the good he is capable of doing, and that is but little’ (Bowring 1843:570). In the 1818 debate in the House of Lords, Lord Lauderdale, in the name of ‘the great Principle of Political Economy that labour ought to be left free’, managed to hold up Peel’s Bill for a year. Professor Lionel Robbins, in his account of ‘The Ricardians and Robert Owen’ in his work 1952 (pp. 126–134), does not indicate the extent to which the argument of the Edinburgh Review article rested on Say’s Law. I am grateful to Dr G.M.Ashton, Keeper of the Salisbury Library, University College, Cardiff, for placing the resources of that excellent library at my disposal. Mr R.O.Roberts’ scholarly study, Robert Owen o’r Dre Newydd (1948), has an interesting chapter on Owen and Wales, in which he quotes some of the views expressed in Welsh periodicals of the time (pp. 88– 9).

REFERENCES Ayer, A.J. (1954) Philosophical Essays, London: Macmillan Bowring, J. (ed.) (1843) The Works of Jeremy Bentham, vol. X, Edinburgh: W.Tait. Clapham, J.H. (1926) An Economic History of Modern Britain, The Early Railway Age 1820–1850, London: Cambridge University Press. Cole, G.D.H. (1925) Robert Owen, London: Benn.

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Dale Owen, R. (1874) Threading My Way, New York: G.W.Carleton and Co. Edinburgh Review (1819) Vol. XXXII, art. xi, October. Edwards, E. (1893) ‘Robert Owen’, Cymru, Mehefin. Garscombe, J. (1823) A Year in Europe, vol. II, New York. Hansard (1815) XXXI:582. Holyoake, G.J. (1859) Life and Last Days of Robert Owen, London: J. Watts. House of Commons (1816) Minutes of Evidence of the Committee on the State of the Police of the Metropolis, 20 June. John, A.H. (1951) The Industrial Development of South Wales 1750–1850, Cardiff: University of Wales Press. Keynes, J.M. (1936) The General Theory of Employment, Interest and Money, London: Macmillan. Martineau, H. (1877) Autobiography, Vol. I, London: Smith Elder. Menger, A. (1899) The Right to the Whole Produce of Labour, London: Macmillan. National Library of Wales (1914) A Bibliography of Robert Owen The Socialist, 1771–1858, 2nd edn 1925, Aberystwyth: in association with the University of Wales Press Board. Owen, R. (1812) A Statement regarding the New Lanark Establishment, Edinburgh: John Moir. ——(1813–14) A New View of Society, or Essays on the Formation of the Human Character, 4th ed. 1818, London: R. and A.Taylor. ——(1815) Observations on the Effect of the Manufacturing System, London: Hatchard. ——(1816) An Address delivered to the Inhabitants of New Lanark, London: Hatchard. ——(1818) Two Memorials on behalf of the Working Classes, Lanark: Cadell and Davies. ——(1821) Report to the County of Lanark, Glasgow: University of Glasgow Press. ——(1857) The Life of Robert Owen by Himself, London: E.Wilson; reprinted 1920 with an introduction by M.Beer, London: G.Bell. Pennant, T. (1796) The History of Holy well, London: B. and J.White. Podmore, F. (1906) Robert Owen A Biography, London: Hutchinson. Robbins, L. (1952) The Theory of Economic Policy in English Classical Political Economy, London: Macmillan. Roberts, R. (1902) ‘Robert Owen a Chymru’, Cymru, Gorffenaf, p. 40. Roberts, R.O. (1948) Robert Owen o’r Dre Newydd, Llandysul: Y Clwb Llyfrau Cymraeg. Sargant, W.L. (1860) Robert Owen, and his Social Philosophy, London: Smith Elder. Southey, R. (1829) Sir Thomas More: or Colloquies on the Progress and Prospects of Society, Vol. I, London: John Murray. Stephen, L. (1895) in The Dictionary of National Biography, London: Smith Elder. ‘The Legacy of Robert Owen’, The Pioneer, 29 March 1834.

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Trevelyan, G.O. (1876) The Life and Letters of Lord Macaulay, Vol. I, London: Longmans Green. Wallas, G. (1898) Life of Francis Place, London: Longmans Green. Williams, R. (1958) Culture and Society, 1780–1950, London: Chatto and Windus.

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7

DEMOGRAPHIC DETERMINANTS OF BRITISH AND AMERICAN BUILDING CYCLES, 1870–1913

In the course of the debate on the working of the Atlantic economy no critic has been able to refute the existence of an inverse relation between long swings in construction in Britain and the United States and in British home and foreign investment, at least in the period 1870–1913. There has indeed been ample confirmation.1 Where disagreement enters is in the interpretation of the nature of the mechanism by which the economies of the two countries reacted on each other. Contributors to the discussion can be divided into two broad schools—those who accept the reciprocal character of British and American long swings as systematic rather than fortuitous, and those who argue that the operative forces were in the domestic sphere and not in any interacting process. The line taken by this second group is seen in the work of H.J.Habakkuk (1968:103–42) and S.B.Saul (1962). Habakkuk is a sceptic not only about systematic influences in the alternation of British and American long swings, but even about the existence of a British building cycle, as the following quotation indicates. There has recently been some suggestion that in England after the 1860s the trade cycle was not an independent phenomenon but simply the result of lack of synchronization between the long swings in foreign and domestic investment. The view taken here is the reverse of this: it was the long swings which were the epiphenomena and the trade cycles the reality, in the 144

BRITISH AND AMERICAN BUILDING CYCLES

sense that when the character of the individual cycles has been explained there is no residue which needs to be attributed to the behaviour of a long cycle. The appearance of alternation in British and American long swings is the result of the fact that British trade cycles no longer came to a violent end but the American ones often did. (Habakkuk 1968:120) It is not easy to summarize Habakkuk’s paper, but the essence of his thesis can be put as follows. Housebuilding in Britain before the 1860s did not exhibit long swings but fluctuated with the trade cycle. There were special reasons of domestic origin why the relation between building fluctuations and the trade cycle changed after the 1860s. For example, internal migration became more an affair of the middle classes and less connected with changing business conditions, and financial institutions became more stable so that building could be sustained after cyclical downturns. The increasing tendency for building booms to continue after cyclical downturns gave rise to regional long cycles which were not necessarily synchronized. The 1880s were an exception; even in that decade the volume of emigration was largely the result of domestic influences. ‘The alternation of British and American housing activity in the eighties and nineties partly reflects the different rate at which electricity was applied to traction in the two countries. This was, in the present context, almost certainly fortuitous’ (ibid.: 137). With the exception of the later 1880s, the effect of emigration and foreign investment on British building fluctuations was ‘of minor importance compared with domestic factors’ (ibid.: 141). This is a challenging argument deserving attention, although it rests mainly on speculations which are not subjected to rigorous testing. The issue can be decided only by an appeal to the empirical evidence. S.B.Saul, in his 1962 study of local authority records for a large number of English towns in the period 1890–1914, has thrown light on matters such as the relation of building activity to the proportion of empty properties and the effect of changes in the availability of short-term funds. His general conclusion is as follows: Migration, external and internal, was certainly an important matter and money-market conditions often helped to determine the timing of the upswing of the 145


cycle. But the evidence for a complex interaction of the British and American economies, at least as far as investment in housing in Britain is concerned, is slender. The facts certainly seem to point to an industry whose fate was largely determined internally by the state of demand and by the nature of the operation of the trade itself. (Saul: 136)2 The two contributions referred to lay stress on so-called fortuitous domestic influences on the course of housebuilding in Britain: neither has paid enough attention to demographic factors. An adequate interpretation of building fluctuations must give a prominent place to the role of population change. In reappraising the conclusions of Migration and Economic Growth (Thomas 1954), I have re-examined the course of housebuilding in England and Wales in the period 1870–1913 on the basis of new data yielding a more comprehensive record of regional cycles. The analysis seeks to attain a more accurate measurement of the demographic determinants of building cycles, regionally as well as in the aggregate. These results are then related to corresponding data on the demographic determinants of the building cycle in the United States in the same period. STATISTICAL SOURCES AND METHODS The sources used are the Inland Revenue ledgers deposited in the Public Record Office. Inhabited House Duty statistics, available for each county, provide a basis for regional building estimates for the years 1875–1913 (see Mitchell and Deane 1962:236–7). The ledgers also contain figures of profit income assessed under Schedule D. The characteristics of these sources and the method used are described in the Appendix (p. 167). We have information about the number of dwelling houses assessed and not assessed to house duty as well as ‘messuages and tenements’ not used as dwelling houses. Sir Josiah Stamp pointed out that the income tax Schedule A figures ‘undoubtedly represent most closely the real facts but in revaluation years far more closely than at other times’ (Stamp 1916:31). To test the reliability of these data we expressed the annual change in the number of premises in Britain shown by the House Duty statistics as an index (1900–9=100) 146


and compared it with Weber’s estimates of housebuilding (Weber 1955). Figure 7.6 in the Appendix indicates clearly that the two series yield virtually the same long swing, and this justifies the use of the Record Office data for our purpose. It also reveals that the House Duty figures were affected by periodic revaluations and cannot be used for year-to-year changes. Both values and numbers were affected by revaluations. To overcome this difficulty we have averaged inter-revaluation years plus the revaluation year following them; this prevents any misleading impression that the series can be used for annual changes and at the same time provides an adequate indication of the time shape. The counties of England and Wales have been divided into two broad sectors, urban and rural. The urban counties form seven regions—the Midlands, counties surrounding London, north-west England, Yorkshire, northern England, South Wales and Monmouthshire, and London. The rural regions comprise the southern agricultural counties, those near the Midlands, and the south-west plus rural Wales. We shall deal mainly with the urban regions, defined as predominantly urban in that they contained the greater part of the population of England and Wales at the end of the nineteenth century. The purpose of this analysis is to test the proposition that British building fluctuations in the period 1870–1913 are to be explained mainly by demographic variables and, in particular, by migration. Also, by relating this analysis to recent studies of population change and the building cycle in the United States since the middle of the nineteenth century, we can carry out a new test of the inverse relation between British and American building cycles and the process of interaction between the two economies. To illuminate the connection between changes in building and changes in the house-seeking age group we have made estimates of the quinquennial change in the population aged 20–44 in each region, separating the effects of natural increase and migration. Figures on recorded deaths were obtained from the RegistrarGeneral’s annual reports and decennial supplements, and these were combined with census population figures in quinary age groups to estimate the quinquennial changes which would have occurred in the absence of migration. The following demographic factors are relevant in explaining the volume of housebuilding in any region in a given period: (a) natural increase in the 20–44 age group, (b) internal migration, (c) external 147


migration, (d) the headship rate (the ratio of heads of households to the total population in an age group). In this analysis we shall ignore changes in the headship rate: instead we shall refer to changes in the marriage rate. The age group 20–44 is taken as comprising the vast majority of the house-seeking section of the community. We shall concentrate on (a), (b) and (c) and examine the course of the demographic and building series quinquennially in each region and in the seven regions as a whole. Our method of obtaining regional estimates for both natural increase and migration is explained in the Appendix. ‘Natural increase’ in the 20–44 age group is an estimate of the population change which would have occurred in this age group in the two quinquennia following each census, if there had been no migration in either of these periods. Changes in natural increase reflect movements in the excess of births over deaths in previous periods. A five-year boom in the birth rate is followed twenty years later by a bulge in the 20–5 age group and after thirty years by a bulge in the 30–5 group and after thirty-five years by a bulge in the 35–40 group. In any given quinquennium the 20–44 age group is thus a composite of past influences. There is much to be explored under this heading, both nationally and regionally, but we cannot deal adequately here with echo effects. (Comprehensive studies are found in Easterlin 1968 and Campbell 1966.) The other element to be taken into account is migration, internal and external, affecting the age group 20–44. The estimate is of course a balance of inward and outward movements. There is no means of distinguishing between ‘immigrants’ who come into a region from one of the other six regions and those who come from outside, i.e. from the rest of the United Kingdom or from abroad; and similarly with ‘emigrants’ from a region. Despite the limitations of the data, it is possible to make a reasonably firm estimate of the extent to which natural increase in the age group 20–44 in each region was augmented or reduced by migration. Parallel with our aggregate migration series for the seven regions we have plotted from an independent source the quinquennial emigration of occupied persons from England and Wales to the United States. Having estimated natural increase and the balance of migration in the age group 20–44 in each quinquennium for each region, we derive an estimate of the change in the population in the houseseeking age group.3 This series is then compared with the course of building in each region and in the seven regions as a whole. 148


REGIONAL BUILDING CYCLES, 1870–1910 Figures 7.1A–C (pages 150–2) show the course of the building cycle in each of the urban regions of England and Wales from 1875 to 1910. This series gives the average annual number of houses built in each quinquennium (years between revaluations plus the revaluation year following them being averaged). For brevity I shall refer to the Inhabited House Duty figures as the IHD index. With it we plot for each quinquennium from 1870 to 1910 the average annual increase in the population aged 20–44; this registers the net effect of natural increase and migration, which are also shown in the charts. The picture emerging from these charts dispels the uncertainty of whether regional fluctuations were synchronized or were the result of diverse local circumstances. With the exception of London and South Wales there was a high degree of conformity between regional building swings, although the amplitude varied. London was particularly affected by outward shifts of population to the Home Counties; in the early part of the period, however, there was considerable net immigration. The reason why South Wales is an exception is that its economy was entirely in the export sector (see Thomas 1959). It would be unreasonable to expect the peak of the building cycle to occur in the same year in every region: there is usually a cluster of individual peaks within a neighbourhood of three or four years. Our building series, beginning in 1875, reveals a high level of activity, though often declining, in the late 1870s in every region except the counties surrounding London where the peak came in the early years of the 1880s. The downswing lasted until the early 1890s in all regions except London and South Wales. Building activity was rising during the 1890s in all regions, with a peak at the turn of the century everywhere except in South Wales and London. It might be argued that the averaging technique which has been used to overcome the difficulty of the reassessment years tends to blur the peaks and troughs of the cycle. In order to test the reliability of the new regional indices, I shall look at the north-west (Lancashire and Cheshire) in more detail and partially disaggregate the IHD index by plotting alongside it annual estimates of building in the Manchester conurbation and Liverpool, based

149

Figure 7.1A Population and regional building cycles, 1871–1910. Midlands and north-west Source: Appendix

Figure 7.1B Population and regional building cycles, 1871–1910. Yorkshire, North and South Wales and Monmouthshire Note: Northern England house-building 1879 and 1880 not charted— series distorted by boundary revisions Source: Appendix

Figure 7.1C Population and regional building cycles, 1871–1910. London and counties surrounding London Notes: Counties surrounding London house building 1875:5.1 thousand houses. 1876 and 1877 not charted-series distorted by boundary revisions * London population age group 15–44 Source: Appendix


on local authority data.4 These are shown in Figure 7.2 together with the demographic series. The peak of 1877–9 in our index coincides exactly with the peak in the number of houses erected by private enterprise in Liverpool. The peak in the Manchester conurbation index comes a year earlier, as one would expect, since these figures relate to houses for which planning permission had been obtained. The steep descent from the top to a very low trough in 1883–5 shown by the IHD index corresponds exactly to what happened in the Manchester conurbation; in both series building then continues at a very low level until the upturn in 1892–4. The downswing in Liverpool is less steep and there is no early trough in 1883–5; the revival takes place at the same time as is indicated in the other two indices.5 There is a close resemblance between the final peak and the subsequent decline in the IHD series from 1899 to 1910 and the dominant Manchester component, again allowing for the fact that the latter registers building plans and not houses built. The high average level of activity in the region between 1899 and 1903 recorded by our index reflects a balance between the weakening boom in the Manchester conurbation and a continuation of buoyant conditions in Liverpool. A vigorous boom continued in Liverpool, with another high peak in 1906, whereas the level of activity in the conurbation was midway between the peak of the late 1870s and the trough of the 1880s. The sharp decline in 1909–13 is the same in both. The IHD index is the nearest one can get to full coverage of regional building in the period 1875–1910. The comparison with local authority data in two large component parts of the northwest region has been reassuring; the close fit with Weber’s national index is reproduced regionally. Even before we bring in the population variable, the evidence points strongly against the argument that regional building was shaped largely by diverse local influences. S.B.Saul came near to the main explanation in the following sentence. ‘Liverpool followed the national index to the recovery after the Boer War, but then building continued at a high level until as late as 1909, just as it did in South Wales and in the cotton towns’ (Saul 1962:122). It is essential to distinguish between the Home Construction Sector and the Export Sector. Coal-exporting and cotton-exporting towns belong entirely to the export sector; building in such areas has a different time-shape from that of the home construction sector (areas other than purely export areas). There is always some building going on in the export 153


sector; the regional as well as the national indices are composites of building activity in the two sectors. It is clear from the national index that the high phase of the long swing were the years when the ratio of building in the home construction sector to building in the export sector was high and vice versa in the low phase. The purest case of export sector building is South Wales; the index for that region was rising in the 1880s and in the late 1900s, contrary to the national swing. The same phenomenon was at work in parts of other regions but it was seldom strong enough to dominate the regional composite. Saul presents a number of charts showing building in various towns in Cheshire between 1890 and 1913, and finds an upswing in a number of dormitory towns and in Stockport and a downswing in Crewe (ibid.: 124). The more it becomes local history, the more variety we are going to see; but this is perfectly consistent with the presence of major ebbs and flows.6 In the particular case of Cheshire, the boom in building in the dormitory towns was part of a universal tendency in the economic growth of large cities—the overspill (internal migration from the point of view of the region). This is part of the migration variable which, as we shall see, is the major determinant of the ebb and flow of building. A glance at Figure 7.2 shows for the north-west region the quinquennial course of natural increase and population change in the age group 20–44 from 1871–5 to 1906–10. The excess of population change over natural increase (the shaded area) indicates the volume of net in-migration, and the excess of natural increase over population change (the area with broken lines) indicates the volume of net out-migration. There is a close correspondence between the long swing in housebuilding and the curve of population change in the 20–44 age group, with the former lagging after the latter. The shape of the curve of population change is determined by the swing in the balance of migration. The period begins with a very heavy net movement of migrants into the region in the years 1871–5, and this leads to a sharp rise in building activity which reaches a high peak in the years 1877– 9. There was a marked contraction in in-migration in 1876–80, and it remained negligible through the 1880s and the beginning of the 1890s. This was accompanied by a sharp downswing and long trough in building activity. Meanwhile, beginning in 1886–90 the curve of natural increase rose sharply until it reached a record

154

Figure 7.2 Migration, natural increase and housebuilding, north-west region, 1871–1913 Sources: (1) Parry Lewis 1965:335–6; (2) ibid.: 317; (3) Figure 7.1


level in the 1890s. The quinquennium 1896–1900 saw the powerful echo effect of the sharp increase in the birth rate twenty-five to thirty years before and superimposed on this very high level of natural increase was a renewed rise in net migration into the region. There was also a considerable increase in the marriage rate in the 1890s. This time the lag relationship is between the natural increase build-up which attained its maximum in 1891–1900 plus the migration increase with peak marriage rate in 1896–1900 and the upswing in building which began about 1894–5 and went to a peak at the turn of the century and a few years afterwards. After 1900 net migration was negative until the end of the period and the level of natural increase was falling; this induced with a lag a downswing in the volume of building. Now that we have taken a preliminary look at the pattern in the north-west region, with our IHD index partially disaggregated, we shall examine the evidence for the other regions. DEMOGRAPHIC DETERMINANTS: REGIONAL AND NATIONAL The time-shape for the north-west is repeated in the north, Yorkshire, the Midlands and the counties surrounding London. The dominant influence of the course of migration is clearly brought out in all regions. It is interesting to compare the picture for London with that of the counties surrounding the capital. In the Home Counties building has a long swing corresponding to that of the rest of industrial England, with a very high peak in the early 1900s; in London, however, there is only a mild swing. The annual volume of building in the capital in 1902–6 was only slightly above the level of 1877–81, and the troughs in 1892–6 and 1907–10 were relatively shallow. Net migration into London, which was fairly high in the 1870s, fell to low levels in the 1880s and 1890s, and became a large net outflow in the 1900s. The gross outflows to the Home counties were an important factor. Some of these outflows went beyond the periphery of the capital, as can be seen from Figure 7.3, which gives the course of building in the predominantly rural areas of England and Wales. In the agricultural Midlands there was a steady low level of activity with hardly any fluctuation; in the southern counties movements were more erratic, and the south-west plus rural Wales showed mild peaks in the late 1870s and early 1900s. Putting the three 156

Figure 7.3 Housebuilding in agricultural and other non-industrial regions Source: Inland Revenue Inhabited House Duty records (see Appendix)


together as a residual rural sector, we find a definite peak in the early 1900s, as in the Home Counties, the Midlands, the north-west and Yorkshire. This was chiefly the reflection of the demographic echo effect and the growth of residential and military towns in southern counties during the 1890s. London displayed a unique pattern because it was a congested capital bursting at the seams. Behind the bare summary record of building and demographic change in Figure 7.1C is a fascinating story of population mobility, transport innovations and the expansion of suburbs. To do justice to it would need several volumes of the calibre of the admirable study of Camberwell by H.J. Dyos (Dyos 1961; see also Welton 1911:188–206; Bowley 1930:58–83; Ponsonby and Ruck 1930:171–99; Cairncross 1953:65–83). The following summary of Camberwell’s demographic history is in miniature a faithful reflection of the course of population change in London shown in the chart. Of the 75,000 persons by which the suburb had grown during its years of maximum development in the 1870s, about 52,000 represented the balance of migration into and out of the district, and 23,000 were the result of natural increase. But the stream of migrants which had been chiefly responsible for the growth of the suburb since the beginning of the century, and which was now in full flood, soon declined, and it had dried up all together by the end of the century. Of the increase of about 49,000 persons recorded between 1881 and 1891, only about 17,000 could be accounted for by net immigration, but in the last ten years of the century the increase of about 24,000 persons was wholly accounted for by natural increase, and would have been higher had not more people—over a thousand—left the suburb than came into it. By 1911, the balance of migration had detached a further 25,000 from Camberwell, and this attrition continued, despite the comparatively low average population density, in the post-war years. (Dyos 1961:56) The natural increase component of the population curve rose everywhere to a peak in the late 1890s; this was the result of the high level of fertility a quarter of a century earlier (the number of births per 1,000 women aged 15–44 in England and Wales rising 158


from 150.7 in 1863 to 156.7 in 1876). In addition, the marriage rate was at a peak in 1896–1900, 16.1 per 1,000 as against 14.7 per 1,000 in 1886–90. In all regions, except London and South Wales, population change in the age group 20–44 was at a maximum in the five-year period 1896–1900; there was a combination of a powerful echo effect on natural increase, a deep trough in emigration overseas, and heavy internal migration, particularly into the Home Counties and the northwest. In each of these five regions the peak in housebuilding came at the turn of the century and there can be no doubt that there was a common demographic determinant. South Wales, which was out of step, had relatively low building activity in 1899–1904 and then came a vigorous boom (in the wake of high in-migration) in the years 1905–10 when every other region was experiencing a decline in housebuilding. The building cycle and the demographic variables for the seven regions as a whole (largely England and Wales) are shown in Figure 7.4. There is a very close similarity between the movements in our IHD building index and those of the Parry Lewis weighted index. Population change in the age group 20–44 is the result of ‘natural increase’ and current migration. The charts show the quantitative significance of these two components. Figure 7.4 indicates the part played by migration in determining the shape of the curve of population change in the urban regions of England and Wales taken together. The verdict of the analysis is that nationally and regionally the swing in housebuilding follows with a lag the swing in the population aged 20–44 as determined by migration. With regard to timing, the divergent fluctuations in London and South Wales did little to modify the major uniform swings in the other five regions that governed the aggregate. The inverse relation between internal and external migration is clearly shown. When internal migration was high, emigration was low; and it was in those years that building, with a lag, expanded; the opposite occurred when internal migration was low and emigration was high. The swings in housebuilding conform to the swings in the migration-dominated curve of population change. As Cairncross observed in his well-known analysis of fluctuations in the Glasgow building industry, 1860– 1914, ‘the building cycle was little more than a migration cycle in disguise’ (Cairncross 1953:25).

159

Figure 7.4 Population change and the building cycle, urban regions of England and Wales, 1871–1910 Notes: (a) London’s population includes 15–20 age group. (b) Method of averaging housebuilding is based on reassessment years for areas outside London. Different reassessment years for metropolitan areas are ignored. Sources: (1) to (4) Figure 7.1 (A-C); (5) Thomas 1954; Tables 81 and 84


THE ALTERNATION OF BRITISH AND AMERICAN CYCLES Since Migration and Economic Growth was written, much new work has been done on building fluctuations in the United States. To round off this reappraisal, I shall compare the British pattern with that of the United States in the period 1870–1910, drawing on the valuable researches of Burnham O.Campbell (Campbell 1969). To take advantage of improvements in earlier building series, I shall use John R.Riggleman’s index of the value of building permits as adjusted by Walter Isard, and Clarence D. Long’s index of the value of permits as adjusted by Miles L. Colean and Robinson Newcomb (see Abramovitz 1964:206–20). Burnham Campbell has conducted a detailed examination of the influence of demographic variables, particularly immigration, on the residential building cycle in the United States. By isolating movements in the headship rate, i.e. the ratio of households to total population in the age group, he has reached illuminating conclusions about the causation of the post-1945 building cycle. In the present context we shall be concerned only with his results for the period ending in 1913. He defines ‘required additions’ as the population change in each age group during a given period multiplied by the headship rate for the age group at the beginning of the period. He has calculated for the United States the change in population by age group in each quinquennium for 1850–5 on, and he then estimates the change in required additions by age group due to immigration in each quinquennium (see Campbell 1969:189–94). It is this latter series for the period 1870–5 to 1905–10 which I have reproduced in Figure 7.5. Campbell concludes that from the Civil War to the 1890s the rate of change in required additions—and from the 1890s to the 1930s, the direction of change—was controlled by the long swing in immigration…. Not only was the long swing in required additions greatly influenced by immigration, but from the 1870s to the 1910s and again in the 1930s there was a close connection between the long swing in immigration and the long swing in household formations and housing starts of residential capital formation…. The argument that fluctuations in immigration were the sources of those in residential building can be stated most strongly in terms of quinquennial 161

Figure 7.5 Population change and building cycles, England and Wales and the United States, 1871–1910 Sources: (1) Parry Lewis 1965:317, col. 7; (2) to (5) Figure 7.4; (6) Campbell 1969:194; (7) Abramovitz 1964:147–9; (8) and (9) ibid.


data. From the 1870s to the 1930s, residential building and required additions due to immigration varied together in all but three half-decades, and the lagged adjustment of residential construction to changes in housing demand could explain all three exceptions. In summary, from the Civil War to World War II the long swing in immigration was the dominant source of the long swing in required additions and so of the residential building cycle in the United States. (ibid.: 110) In Figure 7.5 we plot the British data for the period 1870–1910 with the corresponding American quinquennial data on required additions in the age group 20–44 due to immigration, and three indices of building activity. There is an impressive inverse relation between the quinquennial increase in population in the age group 20–44 in Britain and the quinquennial change in required additions due to immigration in the age group 20–44 in the United States. The building cycles are inverse and the time-shape of each is governed by the course of migration. If it were possible to produce quinquennial estimates of internal migration for the United States, this would complete the picture. Kuznets has shown, on the basis of decadal estimates, that changes in internal migration of natives born in the United States were synchronous with changes in additions to total population and that the volume of internal migration in any decade was probably at least equal to the total additions to population (Kuznets 1961:325–7). Figure 7.5 amply confirms the conclusions of Migration and Economic Growth. The crux of the problem is the mechanism of the migration cycle. Housebuilding is an important part of populationsensitive capital formation, and the fluctuations in the latter are crucial in the process of interaction between the British and American economies in the period under review. The demographic factor is, of course, not the sole determinant of the building cycle: there are other factors on the demand and the supply side, e.g. income levels, the stability of rents, the rate of interest, the quality of houses, the rate of demolitions, and the organization of the building trades. Various elements can be combined to form a satisfactory explanation based on the cobweb theorem. What the empirical evidence demonstrates unequivocally is that migration is a major determinant. 163


Our analysis refutes the assertions of the writers quoted earlier, e.g. Saul’s statement about British experience in the period 1890– 1914, that it is ‘hard to believe that migration of itself could account for more than a small part of the wide fluctuations in house construction’ (Saul 1962:131). Habakkuk’s speculations about possible lack of synchronization between regional fluctuations in Britain in the period 1870–1914 are also wide of the mark. Starting from the notion that the only real cycle is the trade cycle, he suggested that regional trade cycles were behaving in such a way as to produce a bogus long swing in aggregate building, which became more moderate in its amplitude. The evidence contradicts any such notion. Statistical analysis confirms that there was a real building cycle determined mainly by migration. The degree of synchronization or lack of it between regional building cycles has very little to do with the trade cycle.7 Moreover, instead of moderating, the amplitude of the aggregate long swing increased, the high peak of the early 1900s reflecting the force of the demographic determinants in the late 1890s. So far as the United States is concerned, Habakkuk says that ‘an increase in immigration did not initiate a revival of building; the revival was started by changes in migration within the United States which preceded changes in immigration’ (Habakkuk 1968:121). There is no statistical support for this assertion; the figures for internal migration cannot be used for this purpose. What we do know about annual time-series for immigration and building in the United States refutes the assertion. Lag analysis has demonstrated that throughout the period 1845–1913, except for the years 1869–70, immigration consistently preceded American building activity (see Thomas 1954:159–63). According to Habakkuk, ‘the problem posed by the hypothesis of the Atlantic economy is the balance between domestic—and in this context fortuitous—influences on the one hand, and foreign and systematic influences on the other’ (Habakkuk 1968:133), and he comes down heavily on the side of the former. The empirical evidence presented in this chapter strongly confirms the proposition that migration, internal and external, played a major role in the housebuilding cycles in Britain and the United States in the period 1870–1913. To those who contemplate the tides of building activity and are impressed only by what seem to be accidental, wayward or local influences, I commend the well-known lines of Arthur Hugh Clough: 164


For while the tired waves, vainly breaking, Seem here no painful inch to gain, Far back, through creeks and inlets making, Comes silent, flooding in, the main.

OUTLINES OF AN INTERACTION MODEL Any interpretation of the interaction between the British and American economies in the pre-1913 period must also account for the fact that all the overseas developing countries, e.g. USA, Canada, Argentina and Australia, had their investment upswings and downswings at the same time. Those who have attempted a onesided explanation of the long swing in terms of variations in American aggregate demand (e.g. Kuznets, Abramovitz and Easterlin), see supporting evidence in the fact that there were simultaneous swings in migration from a number of European countries to the United States: they never pose the question of why there were simultaneous investment and immigration swings in a number of countries of new settlement. This latter phenomenon, which can hardly be due to variations in American demand, is an important part of the problem of inverse long swings. The answer is to be sought in two basic features of the period. First, the opening up of new sources of food and raw materials required flows of population and loanable funds to be invested in infrastructure overseas, and there was necessarily a long lag between the input phase and the output phase. Second, the countries were linked together by the gold standard dominated by London, the financial centre of the world. When an infrastructure upswing became intense, there was a serious problem of undereffected transfer; and drastic action by the Bank of England to protect its reserve had powerful repercussions on the supply of money in all overseas borrowing countries. This is not the place to spell out the mechanism of interaction, but the basis of it can be very briefly indicated. On the one hand, we have Great Britain, the creditor country (C) and, on the other, the factor-importing ‘country’ (D) representing the whole periphery of overseas developing countries. 1

Each is divided into two sectors, home construction and export. 165


2 3 4

5

6

7

8

C exports capital goods and D food and raw materials. Migration depends on the difference in real wages which can be approximated by the difference in real incomes. Export capacity is generated through population-sensitive capital formation, i.e. the building of infrastructure—railways, roads, land-clearing, ports, houses, public utilities, etc.—and this investment has a relatively long gestation period. There is an intertemporal relation between a country’s infrastructure investment in one period and its export capacity in the next period. The level of activity of a country’s export sector depends on the marginal efficiency of investment in the construction sector of the other country in the same period. A major fraction of total capital formation is populationsensitive, i.e. varying with the rate of change in population growth and internal migration. The population growth rate is a function of the external migration balance and the population structure (i.e. a vector showing proportions of population in various age groups). The countries are linked by a gold standard with specie currency.

These assumptions imply a complicated see-saw movement in which both ‘real’ and monetary factors are at work. The task is to take the basic relationships and build up an econometric model. An important constraint on the form of the functions is the long infrastructure gestation period. Another crucial factor is that population structure in each country has a cyclical element in it and that at any moment population structure is a function of an earlier population structure and of intervening migration. The ability of the model to generate long swings would seem to depend very much on population structure and the infrastructure lag. What is required is an experimental simulation of a complete model, to try out various types of functions with different numerical values of the parameters and different lags in order to discover what effects these different functions have upon the simulated values of the endogenous variables. The see-saw movement seems to arise fundamentally out of the alternation of infrastructure and export upsurges, and the whole thing is played according to the rules of the gold standard game, with the creditor country as referee. This mechanism of interaction 166


may offer an explanation of the fact that the overseas countries of new settlement experienced simultaneous long swings in capital formation which were inverse to those of the United Kingdom. APPENDIX: POPULATION CHANGE AND REGIONAL BUILDING CYCLES IN ENGLAND AND WALES 1870–1910: SOURCES AND METHODS The sources used are Inland Revenue ledgers deposited at the Public Record Office, Ashbridge, Hertfordshire.8 They comprise revenue raised from the Inhabited House Duty and profits assessed under Schedule D. The data are available for each county. Inhabited house duty statistics The Inhabited House Duty (IHD) was introduced in 1851 and was levied on dwelling houses of £20 annual value and over. There is information about dwelling houses assessed and not assessed to duty as well as ‘messuages and tenements’ not used as dwelling houses. We took the series showing the total number of houses assessed and not assessed to duty from 1875 to 1910, and obtained a measure of housebuilding activity from the change in the numbers recorded. It is important to be clear about the limitations of these data and how we have sought to overcome them. The first difficulty is the effect of the periodic reassessments of properties. In England and Wales, with the exception of London, reassessment took place in 1876, 1879, 1882, 1885, 1888, 1893, 1898, 1903 and 1910; the revaluation years for London were 1876, 1881, 1886, 1891, 1896, 1901, 1906 and 1911. Josiah Stamp, in his authoritative work, stated that ‘the income tax, Schedule A, figures undoubtedly represent most closely the real facts, but in revaluation years far more closely than at other times’ (Stamp 1916:31). In years between revaluations the series tend to be below the true figures. The reason is that while effect is given in practice to all bona fide reductions in rent wherever they occur, no effect is, or can be, given to increases in rents, and the totals are only maintained by new properties and structural alterations. There is a continuous drag downwards, and the ‘slack’ is not taken up until the next revaluation year, (ibid.) 167


Figure 7.6 Housebuilding in Great Britain, 1875–1910 Source: Mitchell and Deane 1962:236–9

In some areas the figures for revaluation years showed a decline rather than an upward revision; this was likely to happen where a large number of houses were becoming empty or where there was a general fall in rents and the revaluation provided an opportunity for a general revision of assessments. The numbers of houses as well as the values were affected by the reassessments. Another awkward fact about these data is pointed out by Mitchell and Deane, namely that ‘the figures are of net quantities, offsetting much demolition against new building, and it seems probable that demolition was nothing like constant from year to year’ (Mitchell and Deane 1962:233). For the above reasons the IHD figures are not an accurate guide to year-to-year changes in housebuilding, but this does not necessarily rule them out as an indication of the time-shape of housebuilding. Their reliability for this purpose can be tested by comparing them with Weber’s building index. From the IHD records we have taken the annual change in the number of premises in Great Britain (see ibid: 236–7) and produced an index for the years 1875–1910 (1900–9=100). This is shown together with Weber’s index of residential construction in Figure 7.6. The chart brings out clearly the effect of the periodic revaluations and the impossibility of using the series for annual changes. On the other hand, it also demonstrates that the long swing in building 168


revealed by the IHD statistics follows closely that of the Weber index. It was therefore decided to overcome the reassessment difficulty by averaging the years between revaluations plus the revaluation year following them. The year is the financial year ending on 4 April; thus, for example, the difference between the number of houses in existence at 4 April 1876 and 4 April 1875 is taken as an estimate of housebuilding in 1875. The counties of England and Wales are divided into two sectors, roughly urban and rural. The urban sector has seven regions— Midlands, counties surrounding London, north-west England, Yorkshire, northern England, South Wales and Monmouthshire, and London. The three rural regions are the southern agricultural counties, Midlands agricultural counties, and the south-west plus rural Wales. In compiling these regional estimates we had to consider the effects of the frequent changes in income tax districts. Since our classification splits the country into large sections, most of the district revisions fell within (and not between) regions and can therefore be ignored. Where major revisions distort our series we have noted these on the tables as boundary revisions and left breaks in our charts for the years affected. For the years 1893 and 1894 two volumes were missing from the Ashbridge ledgers. Counties are entered alphabetically, and the missing ledgers contained those beginning S–W (including Wales) for 1893 and B–R for 1894. Our table notes the method used to produce estimates. In most regions we had records for one or more counties and we applied the percentage change for available counties in the region to the missing counties. Where figures for all the counties in a region were missing, we used the percentage change in ledger section totals as a guide. The sections were alphabetical and we took the most appropriate ledger section in two cases: Section 4 containing Lancashire, Leicester and Lincoln was used for the north-west; Section 9 containing Wiltshire, Worcester and Yorkshire was used for Yorkshire. A third method seemed preferable for Wales. In view of the slow rate of increase in numbers of houses for rural Wales, we assumed that there was no change here between 1892 and 1893, and allocated the whole increase for Wales to the urban section—South Wales and Monmouthshire. The counties composing the regions are as follows.

169


170


A grouping of this kind is bound to be arbitrary and parts of regions classified as urban are rural; but the seven regions are urban in the sense that they contained the greater part of the population of England and Wales in the last quarter of the nineteenth century. A great advantage of the IHD data is that they give even coverage of all parts of the country, so that a comprehensive picture of regional cycles can be obtained. Profits assessed to Schedule D The Inland Revenue ledgers contain a great deal of information on profit income assessed to Schedule D. They show gross and net profits, with allowances for wear and tear and life assurances, and a table is given of profits arising from foreign and colonial securities and possessions. Stamp approved the use of Schedule D profits as a guide to trade prosperity. This test is generally regarded as one of the most reliable and it has been made by many writers. There is no doubt a close correspondence between the assessment and trade’ (Stamp 1916:257). Breaks affect the gross assessment series in 1876 and 1894, i.e. the financial years ending 5 April 1867 and 5 April 1895, and Stamp presents six alternative methods of allowing for these. We have applied a form of the second method (using abatements) described in his Appendix I (ibid.: 473–90), and the series are linked accordingly. There is one more break in 1874. From 1866 to 1874 the profit figures described as gross were actually net of life assurance allowances (ibid.: 207), and to make them comparable with later series some adjustment for this should be made. Also from 1866 to 1873 we have not deducted profits arising from foreign securities and possessions. If we take the north-western counties, for example, we find that in 1874 the allowances for life assurance amounted to £57,900 and the profits from foreign securities were very small, certainly never more than £100,000 and were probably in the region of £50,000 annually. Therefore the two adjustments required would seem to be almost entirely offsetting. The records contain two sets of figures separating ‘Trades, Manufactures, Professions and Employments’ from ‘Public Companies, Societies, etc.’ Since there would have been transfers over time from one group to the other with the extension of limited liability, we have taken the two groups together, and have used gross profit figures to avoid breaks caused by statutory 171


changes in allowances and abatements. From this total profit income we have deducted (except in 1866–73) profits earned from foreign securities and possessions. We should also have deducted profits on railways outside the United Kingdom, which are listed separately, in order to get a more accurate figure for domestic profits. However, they were negligible in relation to total profit income, so that they were ignored, except for London for which they were deducted. Before 1874 abatements were not included in profit income but given separately, so that they had to be added to the figures for profits to make them comparable with subsequent years. With regard to London, before 1875, separate figures are not given for the metropolitan and extra-metropolitan parts of the counties of Kent, Middlesex and Surrey. Therefore an assumption is made that the proportionate distribution of profits between the two areas was the same before 1875 as in the years immediately following. For each of the years 1875–8, 94 per cent of the profits were assessed in the metropolis and so this figure forms the basis for our metropolitan estimates of profit income in 1867–74. Some of the ledgers are missing in the years 1892 (i.e. the year ended 4 April 1893) and 1893. An estimate has had to be made for profit income (as well as building) for those years. Summary totals in ten sections are available and the percentage change in profits recorded in the relevant years in these section totals is applied to the particular county which forms part of the section. Space does not allow an analysis of these data on profits, but the figures have been used as part of the method of handling the demographic data, as explained below. Demographic data We have concentrated on population change as reflected in the 20– 44 age group and have made quinquennial estimates for each region, separating the effect of natural increase and migration. Data on recorded deaths for each region were collected from the RegistrarGeneral’s Annual Reports and Decennial Supplements, and these were used with census population figures in quinary age groups to estimate the quinquennial changes which would have occurred in the absence of migration. The method was as follows. We took the population in quinary age groups at each census date, and allocated recorded deaths for 172


the next five years to these groups, thus obtaining an estimate of the survivors from each group (now five years older) at a midcensus point. In the allocation we assumed that the deaths, say, of persons aged 15–19 during the five years could be allocated on a 50:50 basis between the persons aged 10–14 at the census date (moving up into the 15–19 group) and those aged 15–19 at the census date (moving up into the 20–24 group). From these estimated mid-census survivors we then deducted deaths for the following five years in a similar way to produce an estimate of survivors from the previous census population at the subsequent census date. The difference between actual census population and estimated survivors from the previous census indicates the decade’s migratory flows. Where population is flowing into an area, some of the persons dying would be migrants, and to adjust for this we assume that migrant deaths bear the same proportion to total deaths in their age groups as these migrants’ life years in the decade bear to total life years of all persons in the area within the relevant ages for the same decade. That is, we applied the following equation:

Where x is migrants’ deaths d is total deaths in relevant age groups c is life-year coefficient for migrants m is migratory flow before adjusting for migrant deaths i is our estimate of survivors from the previous census popu lation at the subsequent census date (i.e. natural increase component of population) before adjusting for migrant deaths (the life year coefficient for i is, of course, 10). The figure for x thus obtained was deducted from m and added to i, producing final estimates of migration and natural increase which take account of migrant deaths. Our ‘natural increase’ in population aged 20–44 is the change in the number of persons within these age groups shown by the survivor estimates five and ten years later. It should be noted that the increase is based in both quinquennia on the population of the preceding census. For the second quinquennium it would have been preferable to calculate from a mid-census population. In order to obtain a midcensus population in quinary age groups, however, we must be able to allocate migration quinquennially for each group of persons 173


as they move up through two succeeding age groups. As we cannot do this with the information available, the base for the second quinquennium has been left as the population of the census taken five years earlier. The definition of natural increase in this context must therefore be carefully noted. The natural increase figures are estimates of the population changes which would have occurred in the two quinquennia following each census if there had been no migration in either of these periods. At each census date the population base is changed, but between census reports it remains the same. Although it was not possible to split the migration figures quinquennially within each age group, we have used the domestic profit income series as the criterion for allocating the total migration. We have already noted that there is a close correspondence between assessments and trade, and it seems reasonable to assume that migration into an area is likely to occur mainly during times of rising local business activity and that this local activity will also influence the amount of any outflow, with perhaps, in each case, a short lag before the effects are transmitted. We have taken the years of rising profit income assessed as the probable years of migratory inflow, and the Inland Revenue’s use of a preceding year basis of assessment has the effect of introducing a short lag. The next step was to compare the number of probable years of inflow in each interdecadal quinquennium, and split the decade’s migration in the proportions indicated by this comparison. For example, if migration probably occurred in five years of the first quinquennium of a decade and in one year of the second, the decade’s migration would be split between the quinquennia in the proportions of 5:1. Since we wish to compare the demographic features with the other long swing series, it would have been more satisfactory to use some independent indication of migration. Where population is flowing out of an area we have brought in external factors by looking at the Board of Trade figures for external migration, taking an average of the proportions indicated by internal and overseas criteria. Where net decennial flows were very small, we have not attempted any division of numbers, but merely divided the migrants equally between the two periods. A low decennial total could be misleading where a flow in one direction during one quinquennium is offset by a flow in the opposite direction during the next. 174


We compare our decadal migration figures with those obtained from the census reports, having first adjusted our totals to take account of any boundary changes which occurred. The best way of doing this was to compare, say, the total population in 1901, of a region, with area of 1891, with population in 1901, with area of 1901—the difference being actually due to a change in boundary. Assuming that 35 per cent of the total population is contained in the age group 20–44, we reduce or increase migration figures by an amount corresponding to 35 per cent of the numbers spuriously gained or lost by a change in boundary. In some areas it was found that migration in our age group was of opposite sign to total migration, implying that the flow of migrants under 20 and over 44 was greater and in the opposite direction. A special note needs to be added about London. As already mentioned, out method produced estimates of natural increase based, in each interdecadal quinquennium, on the population at the preceding census date. This did not allow for the effects of migration during the first quinquennium on the natural increase in the second quinquennium. In certain circumstances, this could give misleading results, as in London where the heavy inward movement of young women (under 20) made the method inappropriate. Since we could find no way of arriving at a reasonably accurate mid-census population, we took the age group 15–44 for the analysis of London. This avoids the distorting effect which a swollen age group can have on the results shown by our usual method. NOTES 1

An outstanding work is Parry Lewis. This thorough study confirms the inverse relation between home construction cycles from the 1850s to 1913 in Chapter 7, pp. 164–85. See also Bloomfield (1968). Bloomfield points out that not only did British home and foreign investment move inversely over the long swing between 1870 and 1913, but they also tended to move inversely in the short run: ‘The correlation coefficient of the first differences of net capital exports and gross domestic fixedcapital formation from 1860 to 1913 was -0.32, significant at the 5 per cent level. Compare this result with Cairncross’s assertion (Home and Foreign Investment 1870–1913, pp. 187–8) that in the short run home and foreign investment generally moved together.’ (Bloomfield, op. cit., p. 22).

175

Table 7.1 Inhabited House Duty statistics: total number of houses assessed and not assessed to duty (000)

Table 7.2 Natural increase and migration, population aged 20–44: seven urban areas of England and Wales, 1870–1910 (000)


2 3

4

5

6

7

8

For a critique of Saul’s analysis, see J.Parry Lewis, op. cit., pp. 203–5. A similar analysis of the potential demand for houses from population aged 20–44 in Great Britain as a whole quinquennially from 1871–5 to 1906–10 was carried out by C.H.Feinstein in his Ph.D. thesis, Cambridge University, 1959:291–6. The methods used here, as explained in the Appendix, are different from those of Feinstein. The figures for the towns in the Manchester conurbation are the number of houses on approved building plans. For Manchester itself there is a gap from 1871 to 1890 and values for these years were estimated from other sources. See J.Parry Lewis, op. cit., pp. 307–17. The Liverpool series are the number of houses erected by private enterprise. They were supplied to B.Weber by the Town Clerk of Liverpool. See J.Parry Lewis, op. cit., pp. 335–6. The kink and sharp rise in the Liverpool index in 1895 is explained by the extension of the boundaries of the city in November of that year, adding 23,263 dwelling houses to the original stock of 106,962. See J.Parry Lewis, op. cit., p. 335. Analysis is concerned with phenomena which exhibit statistical uniformities. In the words of Sir John Hicks, ‘Every historical event has some aspect in which it is unique; but nearly always there are other aspects in which it is a member of a group, often of quite a large group. If it is one of the latter aspects in which we are interested, it will be the group, not the individual, on which we shall fix our attention; it will be the average, or norm, of the group which is what we shall be trying to explain. We shall be able to allow that the individual may diverge from the norm without being deterred from the recognition of a statistical uniformity.’ (Sir John Hicks, A Theory of Economic History (Oxford University Press, 1969), p. 3). The whole question of housebuilding and the trade cycle was thoroughly examined by B.Weber. He concluded that ‘taking the period from 1842 to 1913 as a whole, neither an emphatic anti-cyclical movement in building nor the reverse can be established unequivocally.’ See J.Parry Lewis, op. cit., p. 359. Thanks are due to the authorities at the Public Record Office at Ashbridge for their courtesy and cooperation in granting facilities for this research. The work was carried out by Mrs Margaret Evans and Mr Kenneth Richards when they were Research Assistants in the Department of Economics at University College, Cardiff. I wish to pay tribute to the substantial contribution which they made in collecting and analysing these data. I am particularly indebted to Mrs Evans for preparing the material for this Appendix and for drawing the charts.

REFERENCES Abramovitz, M. (1964) Evidences of Long Swings in Aggregate Construction Since the Civil War, New York: National Bureau of Economic Research, Columbia University Press. Bloomfield, A.I. (1968) Patterns of Fluctuations in International Investment

180


Before 1914, Princeton, NJ: Princeton University, Studies in International Finance No. 21. Bowley, A.L. (1930) ‘Area and Population’ in The New Survey of London Life and Labour, Vol. I, Forty Years of Change, London: King. Cairncross, A.K. (1953) ‘Internal migration in Victorian England’, Home and Foreign Investment 1870–1913, Cambridge: Cambridge University Press. Campbell, B.O. (1966) Population Change and Building Cycles, Urbana, Ill.: Bureau of Economic and Business Research, University of Illinois. Dyos, H.J. (1961) Victorian Suburb: A Study of the Growth of Camberwell, Leicester: Leicester University Press. Easterlin, R.A. (1968) Population, Labor Force and Long Swings in Economic Growth: The American Experience, New York: National Bureau of Economic Research, Columbia University Press. Feinstein, C.H. (1959) Home and Foreign Investment 1870–1913, unpub. Ph.D. thesis, University of Cambridge. Habbakkuk, J.H. (1968) ‘Fluctuations in house-building in Britain and the United States in the nineteenth century’ in A.R.Hall (ed.) The Export of Capital from Britain 1870–1914, London: Methuen. Kuznets, S. (1961) Capital in the American Economy, Princeton, NJ: National Bureau of Economic Research, Princeton University Press. Mitchell, B.R. and Deane, P. (1962) Abstract of British Historical Statistics, Cambridge: Cambridge University Press. Parry Lewis, J. (1965) Building Cycles and Britain’s Growth, London: Macmillan. Ponsonby, G. and Ruck, S.K. (1930) ‘Travel and Mobility’ in The New Survey of London Life and Labour, Vol. I, Forty Years of Change, London: King. Saul, S.B. (1962) ‘House building in England 1890–1914’ Economic History Review 15, 2nd series, XV 1, August: 119–37. Stamp, J. (1916) British Incomes and Property, London: King. Thomas, B. (1954) Migration and Economic Growth: A Study of Great Britain and the Atlantic Economy, Cambridge: Cambridge University Press. ——(1959) ‘Wales and the Atlantic economy’, Scottish Journal of Political Economy, November: 169–92. Weber, B. (1955) ‘A new index of residential construction, 1818–1950’, Scottish Journal of Political Economy, II, June: 104–32. Welton, T.A. (1911) England’s Recent Progress, London: Chapman and Hall.

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8

LONG SWINGS AND THE ATLANTIC ECONOMY: A REAPPRAISAL

Our understanding of long swings in the rate of growth of the American economy has been immensely enriched by the work of Abramovitz (1959, 1961, 1964). He regards them as ‘the outcome of interactions between the pace at which resources are developed, the generation of effective demand, and the intensity of resource use’ (Abramovitz 1961:246). His model leads to the conclusion that a long swing in the volume of additions, perhaps even in the rate of growth of additions, to the stock of capital, that is, in capital formation, is likely to involve a fluctuation in effective demand and thus to generate an alternation between states of relatively full and relatively slack employment. A long swing in unemployment rates in turn appears to have been among the chief causes of Kuznets cycles in the volume of additions to the labor force and perhaps in capital formation. (ibid.: 230) According to this interpretation, swings in immigration from other countries were determined unilaterally by a ‘common cause’ in the United States; they were ‘responses to the occurrences of protracted periods of abnormally high unemployment and to the recovery from such periods (ibid.: 243). It is not possible here to do justice to the subtle theoretical reasoning and the sophisticated empirical testing which Abramovitz brings to bear on the problem. No one can work in this field without being profoundly influenced by his achievement. What I propose to do is to look at the American long swing in the pre-1913 period from the British viewpoint and to suggest that a more convincing 182

LONG SWINGS AND THE ATLANTIC ECONOMY

explanation is to be found in the process of interaction within the Atlantic economy (for a further analysis see Thomas 1972, 1973). Then there is the solemn question of whether we should say farewell to the Kuznets cycle. Abramovitz, as chief mourner, has written a moving epitaph: The Kuznets cycle in America lived, it flourished, it had its day, but its day is past. Departed, it leaves to us who survive to study its works many insights into the kinds of connections and responses which go together to make for spurts and retardations in development. We are the wiser for its life, but it is gone, Requiescat in pace. Gone but not forgotten. (Abramovitz 1968:367) My first reaction to this was to borrow Mark Twain’s famous remark when he read an obituary of himself in the papers: ‘The news is somewhat exaggerated.’ However, as we shall see later, it is really a question of the identification of the deceased. AMERICA’S WEIGHT IN THE PRE-1913 INTERNATIONAL ECONOMY In the course of the debate on the working of the Atlantic economy no critic has been able to refute the existence of an inverse relation between long swings in construction in Britain and the United States and in British home and foreign investment from the 1850s to 1913. There has indeed been ample confirmation (e.g. Lewis 1965, Bloomfield 1968 and Thomas 1971). Where disagreement enters is in interpreting the nature of the mechanism by which the economies of the two countries reacted on each other. In approaching the question one has to bear in mind that the United States for most of that period carried only a moderate weight in the international economy. In 1870 she accounted for 23 per cent of the world’s output of manufactured goods as against Britain’s 32 per cent and over half her exports in the period 1861–78 went to Britain. In 1880 Britain was responsible for 63 per cent of world exports of capital goods and 41 per cent of world exports of manufactured goods as compared with America’s 6 per cent and 3 per cent, respectively; and even by the end of the century America’s share of world exports of manufactured goods was still only a third of that of Britain (see 183


Saul 1965). In the years 1870–1914 Britain supplied nearly 60 per cent of the foreign investment in the United States, and from 1869 to 1893 the net inflow of capital was on average between 10 and 16 per cent of America’s total net capital formation. London was the unchallenged financial centre of the world and presided over what was virtually a sterling standard. It has been estimated that when the United States returned to the gold standard in 1879, she held only 5 per cent of the world’s monetary gold stock or about 8 per cent of the part serving as monetary reserves, and these percentages for the rest of the century were probably less than 20. This is one rough measure of the relative importance of the U.S. economy in the gold standard world and one that almost surely overstates its importance since both the unit banking system in the U.S. and the absence of a central bank probably worked to make the ratio of the gold stock to the money stock higher than in most other important gold standard countries. (Friedman and Schwartz 1963:89) Given the above facts, it is hardly surprising, as Cagan recognized in his review of the pre-1913 period, that U.S. cycles frequently stemmed from foreign influences and were not usually transmitted abroad. This country’s economy during the nineteenth century could not have counted heavily with most foreign economies, while world trade clearly affected U.S. exports. Their irregular cyclical pattern…reflected the ups and downs of foreign business activity, which often moved counter to domestic business. (Cagan 1965:110) Any interpretation of the interaction between the British and American economies in the pre-1913 period must account for the fact that there were uniform long swings in investment throughout the overseas developing world, e.g. United States, Canada, Argentina and Australia. Writers who have attempted a one-sided explanation of the long swing in terms of variations in American aggregate demand see supporting evidence in the fact that there were simultaneous swings in migration from a number of European 184


countries to the United States: they have not asked why there were simultaneous immigration and investment swings in a number of countries of new settlement. This latter phenomenon, which can hardly be explained by swings in United States demand, is an important part of the problem of the causation of the inverse cycles. The answer is to be sought in two basic features of the period. First, the opening up of new sources of food and raw materials required flows of population and capital funds to be invested in infrastructure overseas, and there was necessarily a long lag between the input phase and the output phase. As Schumpeter said, this was essentially one vast process transcending national boundaries, with the whole earth as its stage. Second, the countries were linked together by the gold standard dominated by London; and when an infrastructure boom overseas became intense, strong action by the Bank of England to protect its reserve had powerful repercussions on the supply of money in all factor-importing countries. Space will not allow an analysis of British fluctuations in investment and trade in relation to those of countries of Europe. That the primary causal forces were within the Atlantic economy is attested by the following comparison between Germany and Britain based on the matrix of world trade in 1887 (see O’Leary and Lewis 1955). Germany was responsible for 11.7 per cent of world exports, about ninetenths going to Europe, including the United Kingdom, and under a tenth to the United States; she took 11.5 per cent of world exports, only 8 per cent of which came from the United States and 88 per cent from Europe, including the United Kingdom. The United Kingdom was responsible for 16.5 per cent of world exports, twothirds going overseas and a third to Europe; she took in 25 per cent of world exports, of which 54 per cent came from overseas (22 per cent from the United States) and 46 per cent from Europe. Since a fifth of German exports went to the United Kingdom, the German export sector was geared to home construction swings in Britain and not those in the United States, and this would make the German construction cycle coincide with that of America. A MODEL OF THE ATLANTIC ECONOMY We shall now explore the nature of the interaction between the creditor country (C) and the factor-importing country (D) representing the whole periphery, paying particular attention to the interplay of real and monetary factors. 185


The upswing in emigration and lending We can start with a movement of either labour or capital. Let us assume a large flow of young migrants from C to D, with consequent opposite impacts on the countries’ population structure and internal migration. This increases population-sensitive capital formation in the receiving country and reduces it to the sending country. There will be an accompanying flow of lending from C to D attracted by the higher marginal efficiency of investment in D’s construction sector. We distinguish between ex ante lending, i.e. the purchase of D securities by C residents, and ex post capital exports, i.e. the balance on current account minus gold imports. This ex ante lending can be considered in terms of periodic stock adjustments by C investors. The optimal portfolio of diversified home securities held by the ‘representative’ investor in country C is necessarily subject to the risk of a change in the general level of activity. When he sees the prospect of a construction slump at home coinciding with a boom abroad, he can reduce this risk by substituting foreign securities for some of his domestic securities. In the words of Lee, given the expected rate of return, variances and covariances of return of individual securities, there is a unique optimal composition of the securities in a portfolio, and this portfolio can be considered a composite good. Likewise, an optimal portfolio is derived for foreign securities only and this portfolio forms a second composite good. In the second stage, then, the investor makes a choice concerning the allocation of his total wealth between the two composite goods. (Lee 1969) When the actual amount of D securities held by C residents is less than the optimum portfolio of D securities, an outflow of capital takes place, and this can occur even if the rate differential is unchanged. The increased purchase of D securities (ex ante foreign lending) is followed by a rise in the demand for C exports, and the export sector in country C gets a boom at the expense of infrastructure investment. During this upswing the induced investment in C will be in exportsensitive producer durables, e.g. shipbuilding; but this is more than counter-balanced by the decline in population-sensitive construction. 186


Thus, in this first phase there is an infrastructure boom in D and an export sector boom in C. In country D there is an internal shift of labour and resources from the export sector to construction, and vice versa in C. The effect of the upswing on D’s price structure is seen mainly in a rise in the price level of domestic goods; next come export prices, and the price level of imports rises least. An important determinant of the latter is the fact that country C in the early stage of the upswing can draw factors easily into its export sector owing to declining activity in the construction sector. A rise in productivity enables its expansion to proceed for some time without a rise in costs. During this phase the net barter terms of trade (the ratio of export prices to import prices) move against C and in favour of D. With regard to the course of the upswing in D, it is relevant to note that in an infrastructure boom we have not only incomeinduced accelerator investment but also investment-induced investment. The latter is of a complementary nature and is in a fixed relation to the primary investment.1 This introduces an additional lag into the process and helps to account for the length of the construction upswing. There are three main determinants of the duration of the upswing in D. First, the course of the demand for additional infrastructure induced by the change in the population structure and the lifecycle spending decisions taken by the household-forming age groups; second, the interaction between the multiplier and the accelerator (with lags); and, third, the transfer problem. The financing of the lending by country C has multiplier effects on the balance of trade. When these are allowed for, the question is whether the financing and use of the transferred funds changes the demands for goods so that the improvement in C’s balance of trade equals the amount lent (see Johnson 1958). We must note that the flow of interest payments involves wealth effects which should not be left out, since they usually are in the literature on the transfer problem. Payments of interest and dividends on foreign investment from the periphery to Britain were a very large item. In the early part of the upswing in D there is not likely to be trouble. To simplify, let us ignore saving and postulate that the lending is entirely at the expense of home investment in C and that the borrowings are entirely spent by D; then the transfer will be effected without price or income adjustments if the marginal propensities to import add up to unity. A moderate degree of 187


undereffected transfer will entail adjustments which will slow down the boom in D, but the infrastructure investment projects already launched are unlikely to be much curtailed. In the later stage of the boom the situation changes. As the export upswing gathers momentum in C, a turning point is reached. Investment induced by the growth of exports increases rapidly, and at the higher level of employment marginal costs rise, while demand is running high in construction activity in D. Productivity in C’s export sector has ceased to go up and may be falling, and export prices rise relatively to import prices. Meanwhile, C investors are receiving an increasing flow of interest and dividends on their foreign securities. This wealth effect is likely to promote further ex ante lending which now reaches a very high level. The population variable, emigration, is also at a high level but its rate of growth is already declining for demographic reasons, and after a short lag this entails an upturn in construction from the low point reached in C. At this stage transfer becomes seriously undereffected; the growth of the current trade balance cannot keep up with the ex ante lending. The monetary authority in C is faced with an external drain of gold to D and an internal drain due to a combination of export-induced investment and a revival in construction. This means severe monetary instability. The central bank must take drastic action to replenish its reserves and raises the interest rate to a punitive level. This attracts a large flow of short-term balances and gold from D, and there is a fall in purchases of D securities. The representative investor in C, impressed by the increasing risk attached to D securities and attracted by the marginal efficiency of investment in home construction, will now optimize by increasing his stock of domestic securities at the expense of his foreign portfolio. The monetary cobweb thus set in motion breaks the infrastructure boom in D. The large loss of gold reduces D’s money supply or sharply reduces its rate of growth and this precipitates a downturn.

The downswing in emigration and lending We now have the reverse process—a decline in emigration and lending, an expansion in C’s construction sector and D’s export sector. Given absolute confidence in the ability of the creditor country to maintain convertibility, the action taken by C, with its curb on 188


foreign lending, quickly restores C’s balance of payments equilibrium through a deflation of effective demand. The incidence of the adjustment, however, is felt mainly in the periphery, which gets the full force of the monetary contraction and the reversed acceleratormultiplier process. Prices fall in D much more sharply than in C. The vigorous upswing in construction accompanied by a downswing in the export sector in the borrowing country had made its economy much more vulnerable to monetary contraction than the economy of the creditor country, which had been through a phase of declining construction combined with expanding exports. The degree of credit restriction applied to restore monetary equilibrium in C necessarily overshoots the mark and inflicts on D a steep fall in investment and income. Under the gold standard D’s money supply is a variable dependent on outside forces. The causal sequence runs from the balance of payments and the gold flow to the money stock and then to the level of prices which is consistent with the fixed exchange rate. If the debtor country is to remain on the gold standard, the correction of undereffected transfer by the creditor necessarily entails a reduction in the debtor’s money supply and a fall in its price level relative to the creditor’s. Infrastructure investment in D responding to the population variable declines rapidly, and there is a rise in the output of the export sector geared to the expanding activity in C’s construction sector. The productivity of D’s export sector is directly related to the expansion which took place in infrastructure in the previous period; a substantial supply of primary produce is exported at falling prices. D’s net barter terms of trade are declining; but the significant fact is that its ‘single factoral terms of trade’ (the net barter terms corrected for the rise in physical productivity in the production of exports) are rising. This is similar to what occurred in C during the early stages of the boom in its export sector in the previous period. Each country, debtor as well as creditor, in its infrastructure boom period, lays the foundations for the performance of its export sector in the following period; and during export upswings there is a shift away from home construction to investment in producer durables the demand for which is a function of the level of activity in the export sector. In C substantial internal migration takes the place of emigration; and population-sensitive capital formation sets the pace for the 189


economy. Ex ante foreign lending falls, and the price of domestic stocks rises. With the supply schedules of labour and loanable funds facing the construction sector moving to the right, the multiplieraccelerator process draws in a growing volume of imports of primary produce. Since the export sector is in decline, the balance on current account shrinks. It is possible for a monetary crisis to occur before the lags in the real process in C dictate a downturn. The rapidly rising current account balance of country D causes a continuing gold outflow from C and an acceleration of the rate of growth of the money supply in D. This means that sooner or later the price of D’s exports will begin to rise. This will increase the strain in C where infrastructure investment has reached a high level and unemployment is at a minimum. The monetary authority in C is now facing a double strain—a continued outflow of gold together with a rapidly increasing interior demand. The representative investor in C, worried by the increasing risk attached to his domestic portfolio and attracted by the expected profitability of investment in construction abroad, will optimize by switching into D securities. This rise in ex ante lending adds to the instability. The reserves of the system reach the danger level, and the central bank raises its interest rate enough to replenish its reserves. Gold will then flow in from D with a consequent deceleration of the growth of the money supply in that country, and the stringent credit restriction will precipitate a downturn in C’s construction sector. This downturn brings D’s export boom to an end. The stage is now set for a new upswing in infrastructure investment and a downswing in exports in D and an emigration-lending upsurge with falling infrastructure investment in C. In this model country D stands for the periphery of countries of new settlement in the second half of the nineteenth century. The critical turning points in the long swings are attributable to monetary instability occurring in the lending country, the financial centre of the system. The seesaw movement arises fundamentally out of the inverse demographic cycles and the alternation of infrastructure and export upsurges, but the whole thing is played according to the rules of the gold standard game, with the monetary authority in the creditor country as referee. This mechanism of interaction offers an explanation of the fact that the overseas countries of new settlement in the pre-1913 period experienced simultaneous

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long swings in capital formation which were inverse to those of the United Kingdom. HISTORICAL EVIDENCE, 1879–1901 The upswing in overseas investment 1879–89 The vigorous upswing in foreign investment which began in 1879 was interrupted at an early stage in 1881 when there was already undereffected transfer, with a gold outflow from London accompanied by an internal drain. By February 1882 the reserve was down to £9,175,000, a loss of £7,856,000 from a year before, intensified by the failure of the Union Générale in Paris in January 1882. The Bank of England raised its rates to 5 per cent in October 1881 and 6 per cent in January 1882. This had the required effect in a sharp reaction in foreign lending and a reflux of gold; by 1884 the transfer difficulty had disappeared. The impact on the periphery can be illustrated by what happened in the United States, where the stock of gold had risen from $210 million in June 1879 to $439 million in June 1881. This increase in the money supply raised the American price level in relation to the British from 89.1 in 1879 to 96.1 in 1882. The Bank of England’s intervention, through its impact on foreign lending and prices, reversed the gold flow. This was the classic gold standard mechanism in action. If the United States was to retain its fixed exchange rate, a fall in her income and price level was unavoidable. British investors, fearing that the United States would not be able to stay on the gold standard, began to sell American securities, leading to a further outflow of gold which helped to cause a panic in May 1884. Because British prices fell 12 per cent between 1882 and 1885, the achievement of a 1 per cent decline in American prices relative to British necessitated an absolute fall of 13 per cent in the American price level over these three years (see Friedman and Schwartz 1963:100– 1). The rate of growth in the United States money stock fell sharply from 1881 to 1885 from 16 per cent a year to 3 per cent and that of real output declined from 7 per cent a year to 1 per cent. Severe though the recession was, it was only an interruption in the infrastructure investment upswing which was resumed in 1885, with a further strong inflow of capital from Britain. By 1888 there was serious undereffected transfer; the flow of ex ante foreign lending 191


exceeded the current balance by a large margin. The situation in Britain at the peak of portfolio investment in 1889 was as follows: there was an external and internal drain of gold; the shipbuilding cycle was at a peak; overseas emigration had begun to turn down; the upturn in home construction had already begun, and a shift in British investment away from the United States to Argentina had started. The Bank of England alarm bells were ringing loudly; the rate went up to 5 per cent in October 1888 and to 6 per cent at the end of December 1889, in response to which gold began to flow back. At the end of 1890 there was a further spell of dear money. The result was a huge influx of gold. The repercussions were felt throughout the periphery. With the shock of the Baring crisis in November 1890, Argentina experienced a severe reaction (see Ford 1962; also Ford 1971). In the United States there was a parallel movement of net capital imports and the purchasing power parity index; the ratio of American to British prices began falling in 1887. Looking at this from the British side, one can interpret the course of events as follows. Between 1880 and 1887, the first phase of the lending-export boom, British prices fell by 30 per cent while money wages remained constant; this is a strong suggestion of rising productivity in the export sector which did not lead to higher money wages. There was a high elasticity of supply of factors for the export sector due to the downswing in home construction. As the boom gathered momentum, a turning point was reached; marginal costs began to rise because of bottlenecks at the higher level of employment in the export trades and exportsensitive investment, while demand was running high in overseas construction activity. The turning point came in 1887; from that year to 1890 British export prices rose by 18 per cent and money wages by 8 per cent; we may infer that in those years physical productivity fell. After 1887 there was a shift in the supply schedule of capital against the United States. Because of the rise in British prices, the absolute fall required in American prices was moderate. Nevertheless, this ushered in a phase of great difficulty for the United States, with substantial gold outflows, a fall in the rate of growth of money stock, and a banking panic in 1893. The maintenance of the gold standard once again necessitated a drastic deflation of prices and income. Meanwhile, the gold stock of the Bank of England rose to a record of £49 million in February 1896. The bank rate fell to 2 per cent and was ineffective; for much of the

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time the market rate of discount was under 1 per cent (see Beach 1935). The upswing in United Kingdom home investment, 1890– 1901 The upswing in home construction in Great Britain which began in 1889 was halted in 1891–3 and then developed into an intense boom which reached its peak in 1901. In the periphery, conditions in the early part of the decade were bordering on collapse: British portfolio investment dropped sharply from £120 million in 1889 to just over £30 million in 1893, and the current balance receded to a low trough of £22.9 million in 1898. In the United States the reaction from the investment boom of the eighties was intensified by lack of confidence in the stability of the dollar. The Sherman Silver Purchase Act and the McKinley Tariff Act of 1890 helped to increase the uncertainty; the years 1890–4 saw large outflows of gold, and net capital inflows declined to a trickle, foreign investors selling $300 million of American securities. The effect of the gold outflow on the money stock was strengthened by the public’s tending to hold a higher ratio of currency to deposits. In the first half of the decade there was a steep decline in the rate of growth of the money supply; and, in view of falling prices abroad, America had to experience a severe price and income deflation if convertibility was to be maintained. The long crisis of confidence did not end until the triumph of the Republicans in the election of 1896: from then on there was a dramatic change in the fortunes of the American economy, aided by the powerful effect of the gold discoveries in South Africa, Colorado and Alaska. Similar depressive influences dominated the rest of the periphery, e.g. Argentina, Canada and Australia, in the first half of the nineties. Whereas the export capacity of all these countries had been greatly increased by the infrastructure boom of the eighties, their export sectors did not have a real income expansion until the second half of the decade when the fall in world prices was reversed and the home construction boom in Britain really got going. Argentina is a good example of the cobweb-type instability to which the periphery was exposed because of the lag between infrastructure investment and the subsequent phase when it matured in increased exports. In the years 1885–9 Argentina absorbed £60 million of British 193


portfolio investment and a net total of 640,000 foreign immigrants, and by 1890 the annual servicing of the foreign debt, which had to be made in gold or sterling at a fixed rate, took 60 million gold pesos, or 60 per cent of the export proceeds in 1890 (Ford 1962:140– 1). According to Ford, ‘the slow maturing of investment projects for which the service charges were immediate was a main cause of the Baring crisis’ (ibid.: 142). The volume of exports of wheat and wool increased substantially after 1890, but export values did not show a marked rise until 1898. As in the United States, there was a strong export upswing in real terms in the late nineties, pivoted to a large extent on the home investment upsurge in the United Kingdom. Similarly in Canada the index of the value of exports between 1895 and 1900 rose from 114 to 192 and in Australia total exports rose from £36.5 million to £49.2 million. Even when full allowance is made for special political and other circumstances in the overseas countries, there was undeniably a basic common factor: their economies were seriously destabilized in the wake of the corrective measures taken by the Bank of England in 1890. When Britain caught a cold, the periphery caught pneumonia. There is no clearer demonstration of the process of interaction than the monetary series for the nineties. Gold flowing out of the United States and other countries went into the coffers of the Bank of England. Between June 1892 and June 1896 there was actually an absolute fall of 5 per cent in the United States’ money stock, the first such decline since the seventies, whereas the Bank of England reserve increased spectacularly from £15 million to no less than £49 million (February 1896). When America was struggling desperately to stay on the gold standard, Britain was enjoying such a surfeit of liquidity that the market rate of discount was below 1 per cent. In the second half of the nineties the reverse happened: the Bank of England reserve as a proportion of liabilities fell almost as rapidly as it had risen, while the money stock of the United States increased by 50 per cent. The demographic determinants of the inverse construction cycle were fully demonstrated in the previous chapter. The upturn of the cycle in Britain preceded the downturn in the export sector. Detailed research has established the primacy of residential construction in the home boom of the nineties (see Sigsworth and Blackman 1965). ‘This is the major single item of home investment which begins a decade’s rise gradually but steadily as early as 1891–2, preceding all other types of home investment by several years’ (ibid.: 78). Its progress 194


was accelerated by three powerful forces—abnormally cheap money, the high peak in internal migration and the natural increase component of the 20–44 population curve in the second half of the decade. The ability to borrow money at abnormally low rates had been, according to The Economist, the most important cause behind the rising prices of Stock Exchange securities, having ‘enabled enterprising investors to carry large blocks of securities with loans obtained from the banks. While money could be obtained upon Consols at 1 per cent and under, and while the banks were willing to lend at but little over that figure upon home railway stocks…it was obviously good business to enter into such transactions.’… The favourable cost structure of the building industry in a period of cheap money and of increasing demand for new and better quality houses made housing a particularly attractive field for speculative investment; and it was this sector which dominated the expansion of the 1890s. (ibid.: 96) This strong investment upswing in Britain was the foundation of the export sector boom in the periphery. American exports as a proportion of imports rose from 105 per cent early in the decade to 165 per cent at the end, and net gold imports to the United States from mid-1896 to mid-1899 amounted to $201 million or 40 per cent of the initial stock. With domestic mines producing at the rate of $60 million a year, the monetary gold stock had reached $859 million by the middle of 1899, a rise of 90 per cent in three years (Friedman and Schwartz 1963:141). In 1898 and 1899 there were signs of strain in the British economy. Construction was at a very high level, and shipbuilding was nearing a peak. The Bank of England up to 1890 had regarded a reserve of about £10 million as a sign that the rate should go up: after 1896 the critical level was held to be about £20 million. In April 1898, when the reserve had fallen to £18.3 million, the rate was raised to 4 per cent; there was a sizeable reflux and then a further loss, so that the rate was again raised to 4 per cent in October 1898, and gold again flowed in. The internal drain was rising rapidly at the height of the boom; gold imports had to accommodate this demand and so did not strengthen the Bank’s stock. The outbreak of the South African War led to the rate 195

Figure 8.1 Long swings in real national product and related variables in Great Britain, 1855–1914, and the United States, 1870–1914 Source: Table 8.1

Table 8.1 Data for Figure 8.1: Rates of change between overlapping decades


being raised to 6 per cent in November 1899. For the second half of 1900 it was at 4 per cent, and it was put up to 5 per cent in January 1901. The peak of the British investment boom had been reached in 1899 when unemployment was as low as 2 per cent, interior demand for gold was running at over £10 million, and the index of share prices touched its highest point. Meanwhile, in the United States the demographic cycle had already turned upward; net immigration had begun to recover in 1898 and rose from 121,000 in that year to 201,000 in 1899, accompanied by a 20 per cent jump in real construction. This was happening at the very time when the steam had gone out of the demographic cycle in Britain. The London stock market was signalling a downturn in 1900 and unemployment rose to 2.5 per cent; total construction reacted in 1901, unemployment rose to 3.3 per cent, and in 1902 a vigorous upswing in portfolio foreign investment was in progress, with the index of share prices 9 per cent down from the top. The British investment boom of the nineties was over, and the final infrastructure upswing in the periphery was under way. LONG SWINGS IN PRODUCTIVITY AND REAL INCOME With the aid of Figure 8.1 (see Table 8.1 for summary of data) we can indicate briefly what the analysis suggests about the growth and fluctuations of productivity and real income per capita. In both the United Kingdom and the United States the rates of change in fixed capital formation are inverse to those in exports as a percentage of imports; in other words, export performance in any one period correlates with the movement of fixed investment in the previous period. In the United States there is a strong positive correlation between rates of change in ‘other’ capital formation (which includes producer durables), exports as a percentage of imports, and changes in additions to the real flow of goods to consumers per capita. The course of these three variables is reflected (after a short lag) in the rate of change of real GNP per capita. In other words, in the upward phase of the long swing in populationsensitive capital formation, the economy is investing in capacity to produce more output per unit of input in the future. Ex post, the high rate of growth in real national income per capita is the payoff on the population-sensitive capital formation of the previous phase; ex ante, it is the inducement to a further round of fixed investment 198


in the next phase. It is in the payoff phase that the balance of payments is strong, the rate of growth of the money supply is high, and the standard of living grows relatively fast; the economy is reaping the increasing returns to scale arising out of the rapid rise in immigration and investment in the previous phase. The above process is a plausible explanation of the long swings observed in productivity in the United States,2 and it applies to the United Kingdom as well. The inverse relation between the swings in real income per capita in the United Kingdom and the United States3 is bound up with the seesaw movement in the population growth rate, changes in population structure (mainly through migration), and in populationsensitive capital formation. For the United Kingdom we have figures going back to 1856. The positive association between real income per capita and the export sector’s performance holds good until the turn of the century; these variables go up together between 1860–9 and 1865–74 and between 1875–84 and 1880–9. One would have expected the same to happen between 1890–9 and 1900–9, but it did not. The sharp upturn in foreign investment and the exportimport ratio in those years was accompanied by a relative fall in real income per capita. Here perhaps is further evidence of the validity of the argument that important parameters had changed, to Britain’s detriment, and the high propensity to invest overseas which had suited her so well in the nineteenth century had become inconsistent with a high rate of growth in the standard of living. Meanwhile, parameters affecting the United States had also changed: she had built up a large and highly productive manufacturing sector (accounting for 35 per cent of world output in 1906–8) and had become a net creditor country; the share of manufacturing producer durables in gross domestic capital formation increased from 31 per cent in 1869–78 to 57 per cent in 1899–1908.4 From 1834 to 1843 American income per capita was probably lower than the British. ‘Between 1834–43 and 1944–55 American G.N.P. increased at an exceptionally high rate of 42 per cent per decade, a rate perhaps never equalled elsewhere, for such an extended period. G.N.P. per capita also increased at a high rate, compared with British and French growth’ (Gallman 1966:23).

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CONCLUSIONS (a) The United States’ experience in the period 1870–1913 can best be interpreted within the ambit of the inverse long-swing relationship between the periphery and Great Britain, with an alternation of infrastructure and export upsurges. An interaction model fits the facts better than the notion of ‘a relatively stable rate of growth interrupted by two monetary episodes from which the system rebounded to approximately its initial path’ (Friedman and Schwartz 1963:187). It also has much more explanatory power than the one-sided models based on fluctuations in the ‘pull’ of the United States’ economy.5 There is no evidence to support those scholars who have assumed that the United States’ economy was the unmoved mover in the fluctuations of the international economy between 1860 and 1913. Abramovitz did refer, in a brief section, to the inverse relation between American and British long swings. He pointed out that ‘the competing pressures for finance of British home investment and of demands in other areas of the world played their parts in determining whether the United States could continue to finance a large deficit’, and that changes in the American stock of money ‘depended on the relation between the level of our current balance of international payments and that of capital imports’ (Abramovitz 1961:246). However, these were asides. No attempt was made to quantify the competing pressures or to work out their implications. I suggest that a close study of the international interaction would have revealed that the American Kuznets cycle pursued its course within international constraints which had an important influence in determining whether American growth was slow or rapid. (b) Home investment was dominated by population-sensitive capital formation, and inverse long swings in the latter were associated with (and probably attributable to) inverse swings in the demographic variables—population structure and migration—in Great Britain and the periphery. (c) The fact that the United States, Canada, Argentina and Australia had simultaneous swings cannot be fully explained without recognizing the constraints of the gold standard and the effect of the Bank of England’s reserve policy. This is not meant to imply that the Old Lady ‘managed’ the pre-1914 international gold standard system: on the contrary, according to her lights, she minded her 200


own business and on critical occasions this was very much at the expense of all the borrowers. (d) It is very difficult in the present state of knowledge to sort out the parts played by real and monetary elements in the long-swing interaction. Analysis of the available monetary data (see Thomas 1973: Ch. XV; 1972: Ch. 4) has shown that the course of the rate of change in the growth of the American money stock (five-year moving average) traces out a long swing corresponding to that of net external gold flows (five-year moving average), with the former showing a short lag. The gold stock accounted for most of the large changes in high-powered money in the United States up to 1913. The swings in net gold flows correspond to and lag behind the swings in United States’ exports as a percentage of imports. There was an inverse relation between the swings in the rate of change in the growth of the American money stock and the swings in the Bank of England reserve as a percentage of liabilities. Fluctuations in net capital flows were related to those in the ratio of American to British prices (purchasing power parity, 1929=100). The evidence indicates that the trade balance of the United States determined the gold flow, and the latter determined the rate of growth of the money supply. There is no basis for the suggestion that investment upswings, by generating excess demands, attracted net capital inflows which more than offset the unfavourable trade balance, thereby inducing gold inflows.6 Gold inflow, and as a consequence the money stock, rose most rapidly in the phases of the long swing when exports were surging upward and infrastructure investment and imports were declining. Moreover, it was in these periods that upswings in additions to the labour force and to GNP took place (Kuznets 1961). In these phases Britain was having a home-investment boom, her exports as a proportion of imports were falling, and gold flowed from the Bank of England to the periphery. When the United States had its investment upswing, the trade balance deteriorated and gold tended to flow out, with the result that the rate of growth of the money stock tended to fall. There can be no such thing as a purely monetary theory of the inverse long swing; but it seems to be equally true that no explanation will be satisfactory if it leaves out important monetary forces. First, in the words of Milton Friedman, ‘the major source of long-period changes in the quantity of money in the United States has been 201


changes in high-powered money, which, until 1914, reflected mostly changes in the amount of gold’ (Cagan 1965:xxv). Second, Cagan, after a careful analysis, reached the following conclusion: Severe contractions are an important exception…to the… statement that fluctuations in business activity seem to produce the cycles in the money series. For severe contractions, this effect may explain the timing, but apparently a deep depression cannot account for the sharp decline in the rate of change in the money stock associated with it…. Panics made ordinary business contractions severe when they led to substantial decline in the rate of monetary growth, and not otherwise…. The variety of reasons for decline in monetary growth during severe depressions rules out any single cause and rules out, in particular, a sharp fall in business activity as the main reason for the associated decline in monetary growth. The evidence is therefore consistent with, and taken as a whole, impressively favors emphasis on the decline in the rate of monetary growth as the main reason some business contractions, regardless of what may have initiated them, became severe. (ibid.: 267) This conclusion is in line with our analysis of the impact of changes in the money stock when long-swing expansions came to their usually severe end. In short, our view of the pre-1913 Atlantic economy is that the inverse cycle was propelled by real determinants but that, in the crucial phases when expansion gave way to contraction, changes in the stock of money played a significant independent part in influencing the course of events. The Kuznets cycle: requiescat in pace? Never did Abramovitz use such moving language as when he came to bury the Kuznets cycle. ‘We are the wiser for its life, but it is gone. Requiescat in pace. Gone but not forgotten.’ Dare one venture to murmur the famous line, ‘Yet each man kills the thing he loves’? There is an air of mystery about the whole thing and, maybe, even mistaken identity. In his funeral oration Abramovitz declared that the late cycle was ‘a form of growth which belonged to a particular period in history 202


and that the economic structure and institutions which imposed that form on the growth process have evolved, or been changed, into something different’ (Abramovitz 1968:349). He was anxious to guard the integrity and usefulness of the Kuznets-cycle hypothesis for interpreting development in the United States, Canada, and Western Europe from about the 1840s to 1914 by shielding it from an inappropriate confrontation with the different form which the growth process is taking, and is likely to take, in the contemporary world. (ibid.) He was not saying that long swings have had their day. This he made clear in the following sentence: What I do wish to argue is that the specific set of relations and response mechanisms which were characteristic of pre-1914 ‘long swings’ in growth are unlikely to be characteristic of future long swings. These will be of a different sort and may, indeed, not have much in common with one another in, say, their durations, amplitudes or internal structure. (ibid.: 349–50) It would appear, then, that the deceased mourned by Abramovitz was that well-known member of the family, the American Kuznets cycle, Born 1840: Departed this Life 1914. One feature of the modern world weighing heavily in the elegy is the ending of mass immigration; it is held to be a matter of chance whether long swings produced merely by the echo effects of past fluctuations in births will generate the pre-1914 type of Kuznets cycle. Then there is the point that governments now know how to prevent serious depressions. Another factor is the greatly increased volume of federal, state and local government expenditures in the United States and the prominence of government grants and loans in outflow of capital. However, Abramovitz admits that the adaptive variation in the flows of capital funds which, before 1914, made possible regular divergent fluctuations in the growth rates of Europe and the United States, may well continue to operate in the future. But it will probably be called on to operate only sporadically; not regularly. 203


For with the disappearance of the migration link, the chief cause of regular divergent fluctuations between the two halves of the Atlantic Community, have been removed. (ibid.: 366) This emphasis on the migration link as the basic cause of the inverse rate of growth in the pre-1914 period is in line with the main thesis of this chapter; but as to the future, one should keep an open mind despite the disappearance of trans-Atlantic mass migration. Much more research needs to be done on long swings in the post-1945 period (see Bernstein 1963 and Hickman 1963). It may be that a new era has started in which there could be systematic long-swing divergencies between growth rates in the United States and an enlarged European Economic Community of comparable magnitude. Kuznets has stressed that long swings are a fundamental component of the long-term movement. Changes in population structure and their echo effects on both sides of the Atlantic must continue to be reckoned with; waves of internal or intracontinental migration can be a potent generator of long swings, and in the United States even the demographic force of immigration is by no means negligible. Between 1950 and 1970 America (other than the south-east) received a massive influx of 3 million young blacks, the echo effects of which are bound to entail demographic cycles with a powerful social and economic impact. If we add the 5 million immigrants from abroad, we get a decennial rate of over 4 million for 1950–70, which is half the peak inflow in 1901–10. Since the economic and demographic consequences are likely to conform to well-established patterns, the old American Kuznets cycle may yet show that it is not half as dead as it looks. Perhaps we should end not with a wreath but a bouquet. NOTES 1

For example, for a given increase in residential building, additional investment is required in public utility services, schools, hospitals, etc. For orders of magnitude see Manila and Thompson 1956. Writing of the United States in the period 1946–54, these authors (1956:467) point out that ‘housing, which unassisted accounts for only 37 per cent of all new construction activity, when bundled up with what we intend to show to be complementary construction, has constituted almost 64 per cent of all new construction activity in the postwar period’. 204


2

3

4

5

See S.Fabricant (1959) Basic facts on productivity change, Occasional Paper 63, New York: National Bureau of Economic Research. The productivity estimates are based on the work of Kendrick (1961). Fabricant points out that ‘Kendrick’s estimates, and similar data compiled earlier by Kuznets and Abramovitz for the full period following the Civil War, suggest the existence of a long cycle in productivity. High rates of increase in net national product per unit of total input came, it seems, during periods of a decade or more centred in the late 1870s, the late 1890s, the early 1920s, the late 1930s, and the late 1940s or early 1950s. Low rates of increase came during periods centred in the late 1880s, the late 1910s, the early 1930s and the 1940s’. This confirms our analysis. This result clearly refutes the assertion by Matthews (1959) (repeated with approval by Richard A.Easterlin) that ‘fluctuations in national income in Great Britain have not generally stood in an inverse relation to those in the United States’ (Matthews 1959:194). See Gallman (1966). In this important paper, Gallman has shown that the movements of the real GNP series and the main components conform well to the chronology of long swings as established by Abramovitz (Gallman 1966:21–3). Regression analysis bears this out. Williamson did a univariate test, with net expenditure on railroads in the United States as a variable to explain net capital imports in the period 1871–1914. ‘The best fit occurs when net capital imports (K?) lag Ulmer’s net expenditure in the railroads IUS) by one year (R¯2=0.624) where the coefficient is positive and significant:

When, however, we add the Cairncross series of British home investment (IGB), an extraordinary thing happens. Not only does the fit improve only slightly, but also the coefficient of IUS becomes insignificant.

6

It would seem that Ulmer’s series does not add much to the explanatory power of the Cairncross series. Over the long swing, and statistically, it seems that the rate of British home investment is inversely related to the rate of net capital inflow and that conditions in the American railroad industry are somewhat unimportant. This holds true, incidentally, under all reasonable lead-lag conditions’ (J.Williamson 1964:147–8). Reference should also be made to an econometric analysis by M.Wilkinson. His conclusion refutes one-sided interpretations of American long swings. He found that ‘European migration to the US prior to World War I was significantly influenced by both employment opportunities in the particular European country (as represented by changes in domestic output) and the gain in real income to be achieved by migration to the US’ (Wilkinson 1989:19). This is the thesis argued by Williamson (1964:183): ‘The rate of net gold 205


flow over United States borders…is predominantly caused by income movements and excess demand for real-money balances.’

REFERENCES Abramovitz, M. (1959) ‘Historical and comparative rates of production, productivity and prices’, Hearings before Joint Economic Committee, 86th Congress, 1st Session, Pt. 2, Washington, D.C., 1959:411–66. ——(1961) ‘The nature and significance of Kuznets cycles’, Economic Development and Cultural Change 9(3): 225–48, University of Chicago. ——(1964) ‘Evidences of long swings in aggregate construction since the Civil War’, Occasional Paper 90, New York: National Bureau of Economic Research: Columbia University Press. ——(1968) ‘The passing of the Kuznets cycle’, Economica 35:349–67. Beach, W.E. (1935) British International Gold Movements and Banking Policy, 1881–1913, Cambridge, MA: Harvard University Press: 122–36. Bernstein, E.M. (1963) ‘The post war trend cycle in the United States’, Quarterly Review (1st quarter), New York: Model Roland and Co.: 1–10. Bloomfield, A.I. (1968) Patterns of Fluctuation in International Investment before 1914, Studies in International Finance No. 21, Princeton, NJ: International Finance Section, Princeton University Press: 18–24. Cagan, P. (1965) Determinants and Effects of Changes in the Stock of Money 1875–1960, New York: National Bureau of Economic Research, Columbia University Press. Fabricant, S. (1959) Basic Facts on Productivity Change, Occasional Paper 63, New York: National Bureau of Economic Research: 16–17. Feinstein, C.H. (1961) ‘Income and investment in the United Kingdom, 1856– 1941’, Economic Journal 71:367–85. Ford, A.G. (1962) The Gold Standard 1880–1914: Britain and Argentina, London and New York: Oxford University Press: Ch. 8. ——(1971) ‘British investment in Argentina and long swings, 1880–1914’, Journal of Economic History 31:650–63. Friedman, M. and Schwartz, A.J. (1963) A Monetary History of the United States, 1867–1960, Princeton, NJ: National Bureau of Economic Research, Princeton University Press. Gallman, R.E. (1966) ‘Gross national product in the United States, 1834– 1909’, in Output Employment and Productivity in the United States after 1800, Studies in Income and Wealth by the Conference on Research in Income and Wealth, New York: National Bureau of Economic Research, Columbia University Press: vol. 30:15. Hickman, B.G. (1963) ‘The post war retardation: Another long swing in the rate of growth?’ American Economic Review 53:490–507. Imlah, A.H. (1958) Economic Elements in the Pax Britannica, Cambridge, MA: Harvard University Press: 96–8. Johnson, H.G. (1958) ‘The transfer problem and exchange stability’, in International Trade and Economic Growth, London: Allen and Unwin: 169– 95.

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Kendrick, J.W. (1961) Productivity Trends in the United States, Princeton, NJ: National Bureau of Economic Research, Princeton University Press. Kuznets, S. (1958) ‘Long swings in the growth of population and in related economic variables’, Proceedings of the American Philosophical Society, 102: Tables 11, 13, 15. ——(1961) Capital in the American Economy, Princeton, NJ: National Bureau of Economic Research, Princeton University Press: 342–6. Lee, C.H. (1969) ‘A stock-adjustment analysis of capital movements: The United States-Canadian case’, Journal of Political Economy 77: 514–15., University of Chicago. Lewis, J.P. (1965) Building Cycles and Britain’s Growth, New York: Macmillan: 164–85. Lipsey, R.E. (1963) Price and Quantity Trends in the Foreign Trade of the United States, Princeton, NJ: National Bureau of Economic Research, Princeton University Press: 154–5. Matthews, R.C.O. (1959) The Trade Cycle, London and New York: Cambridge University Press: 194. Manila, J.M. and Thompson, W.R. (1956) ‘Residential-service construction: A study of induced investment’, Review of Economics and Statistics 38:465– 73. Mitchell, B.R. and Deane, P. (1962) Abstract of British Historical Statistics, London and New York: Cambridge University Press: 367. O’Leary, P.J. and Lewis, W.A. (1955) ‘Secular swings in production and trade, 1870–1913’, The Manchester School of Economic and Social Studies 23(2):129. Saul, S.B. (1965) ‘The export economy 1870–1914’ in J.Saville (ed.) ‘Studies in the British economy 1870–1914’, Yorkshire Bulletin of Economic and Social Research, Special Number 17:12, 16. Sigsworth, E.M. and Blackman, J. (1965) ‘The home boom of the 1890’s’ in J.Saville (ed.) ‘Studies in the British Economy 1870–1914’, Yorkshire Bulletin of Economic and Social Research, Special Number 17:75–97. Thomas, B. (1954) Migration and Economic Growth: A Study of Great Britain and the Atlantic Economy, 2nd ed., London and New York: Cambridge University Press, 1973. ——(1971) ‘Demographic determinants of British and American building cycles, 1870–1913’ in D.N.McCloskey, (ed.) Essays on a Mature Economy: Britain after 1840, London: Methuen: 39–74. ——(1972) Migration and Urban development: A reappraisal of British and American Long Cycles, London: Methuen, University Paperback (distributed in the United States by Harper, New York). Wilkinson, M. (1969) ‘European migration to the United States: An econometric analysis of aggregate labor supply and demand (mimeo-graphed)’, European Meeting of the Econometric Society, Brussels, September. Williamson, J. (1964) American Growth and the Balance of Payments 1820– 1913, Chapel Hill: University of North Carolina: 147–8.

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9

A CAULDRON OF REBIRTH: THE INDUSTRIAL REVOLUTION AND THE WELSH LANGUAGE1

In an article, ‘Wales and the Atlantic Economy’, published in 1959, the present writer argued that the population explosion in Wales in the second half of the nineteenth century was a blessing to the Welsh language. Welsh people who had to leave the countryside did not have to emigrate to England or overseas: they were able to migrate to the rapidly expanding industrial areas of South and North Wales, where they raised large families who were Welsh speaking. The 1891 census recorded nearly 900,000 people speaking Welsh in Wales (excluding Monmouthshire), while 70 per cent of them were living in five counties most affected by industrialization—Glamorgan, Carmarthenshire, Denbighshire, Flintshire and Caernarfonshire. I ventured to conclude as follows: Instead of bemoaning the rural exodus, the Welsh patriot should sing the praises of industrial development. In that tremendous half century before the First World War, economic growth in Wales was so vigorous that her net loss of people through emigration was a mere four per cent of her bountiful natural increase over that period. Few countries in Europe came anywhere near to that. The unrighteous Mammon in opening up the coalfields at such a pace unwittingly gave the Welsh language a new lease of life and Welsh Nonconformity a glorious high noon. (Thomas 1959:192)

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INDUSTRIAL REVOLUTION AND THE WELSH LANGUAGE

This doctrine did not go down very well; it departed too abruptly from the orthodox view enshrined in the Welsh history textbooks. Had we not all been brought up to believe that industrialization and capitalism were a powerful anglicizing force which swept over most of Wales in the nineteenth century, leaving the rural counties of the north and west as the strongholds of the Welsh tradition? The countryside—y cefn gwlad—was regarded as the heartland of all that is enduring in our national culture, and the flight from the land had been a paralysing disease. David Williams, a leading Welsh historian, in his authoritative A History of Modern Wales, published in 1950, put the matter as follows: In the course of the nineteenth century the industrialization of Wales added a further division in so far as it brought in a large non-Welsh population which has never been assimilated…. The building of roads and railways, and the enormous growth of Welsh industry as part of the economic development of Britain, profoundly affected Welsh life; so much so that there is a marked tendency to regard Welsh culture as being in essence the culture of rural Wales and not of the industrial areas. (Williams 1950:269) My studies had led me to the opposite proposition that, from the point of view of the Welsh language, industrialization in the nineteenth century was the hero, not the villain, of the piece. For some time there was scepticism about this notion, but then the intellectual climate began to change and the dissenting proposition became respectable enough to appear as a question in an A-level Welsh history examination paper. Several economic historians and geographers entered this field of research and a substantial body of new evidence accumulated. At a recent conference in Gregynog, it seemed that the heresy of yesterday may now be admitted to the canon. However, controversy still persists. Dudley Baines, in his book on migration in England and Wales, 1861–1900, criticizes what he calls ‘the Brinley Thomas thesis that the pattern of Welsh migration was qualitatively different from the English’ (Baines 1985:268). The essence of his case is as follows: Emigration (abroad, including Scotland and Ireland) from rural Wales was at its peak in the decade (1880s) when 209


the South Wales coalfield was at its maximum rate of expansion in the century…. The pattern of emigration from rural Wales was no different from the pattern from most of the English urban and rural counties. Consequently, the industrialization of Wales cannot have seriously affected either the rate or the timing of emigration from the Welsh rural counties. (ibid: 270) This argument, however, is based on misleading statistics. Baines’ estimated total of 40,600 Welsh rural-born emigrants in the 1880s represents persons born in rural Wales wherever they were living in England and Wales (ibid.: Tables 10.2 and 10.3).2 The figure needs to be corrected for stage emigration, that is, persons born in rural Wales who had moved to Glamorgan, Monmouthshire or England, and had emigrated abroad from their new places of residence. Baines’ own estimate of average stage emigration from rural Wales for 1861– 1900 is 43 per cent for males and 40.5 per cent for females (ibid.: 254)3 This correction yields the following results: Areas of departure of Welsh rural-born emigrants 1881–90 England 10,300 Glamorgan and Monmouth 6,800 Rural Wales 23,500 Thus, the volume of direct net emigration abroad from rural Wales in the 1880s is 23,500 not 40,600. This is 2.4 per cent of the native population instead of Baines’ 4.2 per cent. In contrast, the rate of emigration from England in that decade is 3.5 per cent (ibid.: Table 10.3). The inference drawn by Baines that the rate of emigration from rural Wales in the 1880s was ‘exceptionally high’ (ibid.: 270), in line with the English pattern, is unwarranted. The industrialization of Wales was the major factor determining the rate and timing of emigration from Welsh rural and industrial counties. Baines himself implicitly admits this when he finds that ‘the migration pattern of industrial South Wales and London was quite different from that in the other urban counties’ (ibid.: 245), and he adds that this distinctive pattern ‘is consistent with the idea that the building cycle in London and South Wales was distinct from that in the country as a whole’ (ibid.: 206). This point confirms the present writer’s analysis (see Thomas 1972:26–39). 210


Baines expresses strong judgements on anglicization and Welsh culture, without any reference to the census sources on the Welshspeaking population. Stressing that half the population of Glamorgan in 1901 was of English extraction, he declares that ‘the migration of rural Welsh to Glamorgan and Monmouth cannot of itself disprove the view that industrial Wales was anglicized in the late nineteenth and early twentieth centuries’ (Baines 1985:277). There is no dispute about the powerful wave of anglicization early in the twentieth century or that Monmouthshire had been thoroughly anglicized by the late nineteenth century. The question at issue is the scale of Welshness achieved in Wales (excluding Monmouthshire) by the end of the nineteenth century, and the part played in its causation by migration and natural increase induced by industrialization. An important feature of Welsh migration was its bias in favour of the valley communities as against the coastal towns. In 1891, 65 per cent of the population of 304,000 in the Registration District of Merthyr Tydfil, Pontypridd and Neath were Welsh speaking, as against 14 per cent of the population of 164,000 in the Registration District of Cardiff (Census 1893:56–62). As Philip Jones pointed out, this clustering resulted in ‘a massing of reserves’, so that Welshness in the valleys had intensity and depth instead of being spread thinly over the wide area (Jones, 1960:88). In 1891 in Wales (excluding Monmouthshire) 891,000 out of a population of 1,503,000, or 59 per cent, were Welsh-speaking. They were distributed as follows: 320,000 or 36 per cent, in Glamorgan; 307,000, or 34 per cent, in partly industrialized counties; and 264,000, or 30 per cent, in rural counties (see Census 1893). The main explanatory factors are the net migration of rural Welsh into industrial areas, and the natural increase of these inmigrants and of the indigenous Welsh in the industrial areas, allowing for those who left Wales. There is nothing in Baines’ book which refutes this conclusion. Philip Jones, after a thorough appraisal of the evidence, reached the following verdict. Seen in the perspective of the economic history of the Celtic counties from the late eighteenth century forward, Professor Thomas’s argument is a very valid one. During the eighty or so years after 1800 Welsh rural emigration was diverted to an industrial region within Wales, where it immensely strengthened the fabric of Welsh cultural 211


life in the nineteenth century, rather than being dissipated in the alien culture realms of England, America, or Australasia. (Jones 1960:93) It is proposed here to take a broad look at the whole of the nineteenth century. The title of this chapter, ‘A cauldron of rebirth’, suggested itself as the writer read Emyr Humphreys’ brilliant book, The Taliesin Tradition: A Quest for the Welsh Identity. In this paragraph, the author is referring to Pedair Cainc y Mabinogi (The Four Branches of the Mabinogi). Great works of art are rarely put together by accident. These dramatic tales have a timeless element, but they were written for an audience well acquainted with the repertoire. There was, for example, a story about Pwyll and Pryderi heading an expedition to Annwn (the Underworld or the Otherworld) in order to capture its chief treasure, the cauldron of rebirth, or resuscitation. A poem of considerable antiquity known as Preiddiau Annwfn (The Spoils of Annwfn) deals with a similar raid, but led on that occasion by Arthur. This obscure poem has a refrain: Nam saith ni ddyriaith (‘Only seven came back’), which would seem to be echoed in the ending of the tragic second story in the Pedair Cainc, Branwen Ferch Lly^r (Branwen, the Daughter of Lear) where only seven warriors returned from the ill-fated expedition to Ireland, which also involved a cauldron of rebirth. The contemporary audience must have been well aware of the symphonic correspondences both between incidents and between variant versions. In this case they would also be alive to the military value of a utensil that could be used for recycling dead soldiers. A people at the wrong end of an historic sequence of demographic swings would know just how much value, ironic or otherwise, to attach to such a conception. (Humphreys, 1984:25) That last sentence was music to the ears—‘an historic sequence of demographic swings’. In that phrase, Emyr Humphreys has an unerring instinct for the language of demographers. The theme of this chapter is that the Welsh in the nineteenth century were at the 212


right end of a historic sequence of demographic swings; they captured the cauldron of demographic rebirth from industrial capitalism (which we can regard as either the Underworld or the Otherworld, according to taste). Between 1841 and 1901 the population of Wales doubled to just over 2 million, of whom 50 per cent were Welsh speaking. In sharp contrast, Ireland and the number speaking Irish Gaelic were at the wrong end of a historic sequence of demographic swings. Between 1841 and 1901 the population of Ireland was almost halved from 8,175,000 to 4,459,000, of whom only 19 per cent were Gaelic-speaking. Dr Garrett FitzGerald, exPrime Minister of Ireland, published a masterly analysis of the decline of Gaelic in the Proceedings of the Royal Irish Academy in 1984. He shows that a sharp decline in Gaelic speaking among the young started in the first half of the nineteenth century—before the Great Famine and before stateaided primary education was introduced. The movements of population which affected the number speaking Welsh arose out of the fact that Wales happened to be endowed with valuable resources of high-grade coal, iron, steel, non-ferrous metals and slate. Wales became the scene of major technological advances and dynamic capitalist investment. The argument here is not concerned with the period after 1900. A watershed was reached at the end of the nineteenth century. With the exception of Monmouthshire, the dominating increase in English immigration into Wales (which David Williams located in the nineteenth century) did not occur until the first decade of the twentieth century. The question is: what was the effect of population growth and migration on the number speaking Welsh in Wales at the end of the nineteenth century? To put it another way: what would have happened to the Welsh-speaking population in the nineteenth century if Wales had not had an industrial revolution but had been, like Ireland, a predominantly agricultural society without coal, iron, steel, non-ferrous metals and slate? THE INDUSTRIAL REVOLUTION The Industrial Revolution can best be understood as Britain’s response to an energy crisis in the second half of the eighteenth century (Thomas 1980). At the heart of the problem was a severe shortage of timber and timber products such as charcoal; Britain was dangerously dependent on foreign sources—particularly Norway, Sweden and Russia—for supplies of timber and iron. 213


This crisis could not be solved until coal or coke could be substituted for charcoal in refining pig iron into bar iron. It was necessary to switch the energy base of the economy from wood fuel to fossilized fuel, that is, from the flow of solar energy to the stock of solar energy underground. After many inventors had tried in vain to solve the technical problems, success came at last in 1784 when the great inventor Henry Cort patented his puddling and rolling process. This proved to be a landmark. Britain’s plentiful supplies of coal could now be substituted for charcoal to produce a brand new type of bar iron. It was the quality of Henry Cort’s new bar iron, together with James Watt’s steam engine, which made possible the modern world of machine tools, railways and steamships. The industrialization of the world in the last 200 years has been fuelled largely by the terrestrial dowry of coal, iron, oil, electricity and gas. The Industrial Revolution was a drama in three acts. In Act I, 1784–1800, the energy crisis was solved; in Act II, 1800–46, the foundations of a modern economy were laid through the creation of machine tools, railways and steamships; Act III, 1846–1900, was the era of fulfilment when Britain became the workshop of the world and the centre of the Atlantic economy (Thomas 1973: Ch. 15). In each act of this great drama, South Wales played a directive role. In was in South Wales that the new puddling process and the steam locomotive were first used. Richard Crawshay introduced puddling in Cyfarthfa in November 1787, and Richard Trevithick ran a steam engine along a tramline in Merthyr Tydfil in 1804, the first in the world. By the middle of the nineteenth century, South Wales was a leading producer of pig iron; after 1860 its unrivalled steam coal dominated world markets. The nineteenth century was the unique story of a dynamic Wales with a record rate of industrial growth. Between 1780 and 1901 the population of Wales increased fivefold from about 400,000 to 2 million. The implication is unavoidable. Without the cauldron of economic and demographic rebirth and the creation of a large industrialized Welsh-speaking working class, what was hailed as the rebirth of a nation by the end of the nineteenth century would have been impossible. The interplay between industrial change and the growth of the Welsh-speaking population during each of the three phases of the Industrial Revolution will now be examined.

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Act I: The end of the eighteenth century In the last two decades of the eighteenth century, Wales was in the throes of a cultural as well as an industrial renaissance. Thanks to the Methodist Revival, Gruffydd Jones’ circulating schools and the Sunday schools, the majority of the people were literate in their mother tongue. Apart from its profound religious significance, this was one of the most remarkable literacy programmes in history. For example, in the Vale of Glamorgan there was a strong increase in Welsh speaking in the second half of the eighteenth century. An illustration can be given through a translation of a letter written by Iolo Morganwg in the 1780s and the reply to him by Lewis Hopkin of Llandyfodwg. This is what Iolo wrote: The Welsh language in Glamorgan is greatly increasing as is already to be seen, and this in great part through the Welsh schools being more numerous in our county than in almost any county of Wales, and also very largely through the dissenters who are one and all Welsh readers. And in several of the parishes of Glamorgan where there was only a church service in English, it is now in Welsh or at least half of it is so. and here is Lewis Hopkin’s reply: As to your opinion of the Welsh language in Glamorgan you are right that it is on the increase… I know of hardly any parishes where the whole church service is in English from the Usk to the Neath, apart from Cardiff, Newport, Cowbridge and Llantwit Major, and there is need enough of Welsh in these places since the ordinary people there use Welsh more than English. (James 1972:34) By the beginning of the nineteenth century, as Brian James’ researches have demonstrated (ibid.: 23–8), Welsh was the normal language being used throughout the Vale of Glamorgan, except of course among the gentry. We dare not imagine the language Iolo Morganwg would use if he came back and saw his beloved Vale as it is now—almost entirely anglicized, with only a few beautiful Welsh place-names left as sorrowful reminders of a rich culture long departed. 215


That culture was at its richest at the end of the eighteenth century, as Prys Morgan has shown in his illuminating book, The Eighteenth Century Renaissance (Morgan: 1981). One of the greatest sons of the Vale was Richard Price, author of Observations on the Nature of Civil Liberty, staunch supporter of the American and French Revolutions, whose views prompted Edmund Burke to write his Reflections. The Atlantic connection had an outstanding representative in Morgan John Rhys. The Cymmrodorion and the Gwyneddigion also had a wide influence. The Atlantic connection has been vividly portrayed by Gwyn A. Williams in The Welsh and their History, The Search for Beulah Land and Madoc: the Making of a Myth (Williams 1982, 1980a, 1980b). The curtain falls on our Act I with Britain at war with Napoleon’s France. At the end of the eighteenth century, Wales was in the vanguard of the Industrial Revolution and there was a rich legacy of Welshness, powered by religious dissent, cultural renaissance and political radicalism. Wales entered the nineteenth century with a strong sense of nationhood, and much of its inspiration came from the remarkable group of Welshmen in London, the real capital of Wales at that time. Act II: 1800–46 For the first fifteen years of the new century, Britain was at war. One of the great advantages of the new iron made possible by the Industrial Revolution was that lighter cannons with greater fire-power could be produced, and this was a crucial factor in the victory over Napoleon. The Battle of Waterloo was won not on the playing fields of Eton but in the puddling furnaces of South Wales. The output of pig iron in South Wales increased tenfold between 1806 and 1847 (from 71,000 to 707,000 tons), and in North Wales the expansion was fivefold (from 3,000 to 16,000 tons). Coal output in South Wales went up sevenfold (from 1,200,000 tons to 8.5 million tons), and in North Wales it rose fourfold to 1.5 million tons. The areas that were being turned into hives of industry at this fantastic pace were drawing in thousands of young workers from the rural areas, particularly agricultural labourers from Pembrokeshire, Carmarthenshire, Brecknockshire and Cardiganshire. In the first half of the nineteenth century the population of South Wales grew from 315,000 to 726,000. Of this increase of 411,000, about two-thirds

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were in Glamorgan and Monmouthshire, and the vast majority of the in-migrants were Welsh speaking. The cradle of the Industrial Revolution in Wales was Merthyr Tydfil, and what a Welsh cradle it was. Fortunately, a statistical survey of the town in 1841 was carried out by G.S.Kenrick, manager of the Varteg works; it was published in the Journal of the Statistical Society of London in 1846. The population of Merthyr was 33,000, and 84 per cent of them were Welsh. There were 26 nonconformist chapels with accommodation for over 13,000; they were entirely Welsh and the attendance was described as ‘full’ or ‘tolerably full’. The two Church of England churches accommodated 1,500 and the attendance was estimated at 850. There were 6,800 children aged from 3 to 12, and seven out of every ten of these attended Welsh Sunday schools. The Census of Religious Worship in 1851 registered the enormous triumph of nonconformity. In 1851 there were in Wales 2,770 Welsh nonconformist chapels accommodating 611,000 people, or 70 per cent of all church accommodation (Census 1852–3: Table B). There was a fascinating contrast between the worshipping habits of the church and chapel folk. In the whole of Wales in 1851, the number attending Church of England evening services was only 40,000, whereas in the nonconformist chapels the attendance in the evening was ten times that number, 369,000.4 The building of new churches in the industrialized areas could not keep pace with the extraordinary increase in population. In north-east Wales, according to the researches of W.T.R. Pryce, industrial growth caused the number of Welsh speakers to double, from 62,000 to 118,000, in the first half of the nineteenth century (Pryce 1975:92). By 1851 the population of the whole of Wales was 1,152,000. It had doubled since 1801; it was over-whelmingly nonconformist, and three out of every five were living in industrial areas. The history of the Welsh language in Monmouthshire in the 1820s and 1830s throws a flood of light on the impact of the Industrial Revolution. We need to distinguish between the old dissenting denominations which originated in the seventeenth century and the new ones which came with the Welsh Revival of the eighteenth century. The language of the Old Dissent was English. In eastern and northern Monmouthshire at the end of the eighteenth century, the dissenting churches that had been founded by Howell Harris and his followers were as English as those of 217


John Wesley. All this was changed by the population movements brought about by the Industrial Revolution. Thousands of Welshspeaking young people moved into the Monmouthshire valleys from the rural areas of Montgomeryshire, Brecknockshire, Carmarthenshire and Cardiganshire. This was a massive in-migration of Welsh Calvinistic Methodism which radically altered the linguistic balance in Monmouthshire in favour of Welsh. In Varteg and Nantyglo (1829), Ebbw Vale (1830) and Rhymney (1837) new Welsh churches were established, Old Dissent became a minority, and the Wesleyans became a Welsh denomination. Here was the border county of Monmouthshire, so susceptible to English influences, being reoccupied by a large Welsh-speaking population. This was the demographic basis for a Welsh cultural revival in Monmouthshire in which the eisteddfod was a prominent feature. It was also the basis for a militant Welshspeaking working class in the Monmouthshire valleys, where iron-making was expanding rapidly. The researches of Sia^n Rhiannon Williams have stressed the vital role of migration in the rise and fall of the Welsh language in the county of Gwent (Williams 1985). The congested townships in the iron and coal areas of Glamorgan and Monmouthshire had to come to terms with the Industrial Revolution. In the twenty-five years after 1815, South Wales was a volcano which erupted several times. In the agricultural districts of Carmarthenshire and North Pembrokeshire, the severe depression after the end of the Napoleonic War led to the Rebecca Riots. The countryside and the expanding industrial areas were closely interlinked through migration. A climax was reached in the armed uprising of 1839. Recent research has argued that the response of the Welsh workers to the injustices and degradation of the Industrial Revolution was heavily influenced by the ethnic barrier dividing them from the English. For centuries English rulers had sought to destroy the Welsh identity. The ironmasters who now controlled Welsh lives were mainly foreigners from England. The workers were conscious not only of being an oppressed class but also of being a different nation in their own right with a separate language and culture. The enemy was not just the capitalist but the hated English capitalist. Preparations for an armed rising in 1839 could be kept secret from the authorities because they were carried out in the Welsh language, and the majority of the population was on the side of the rebels. 218


Despite the assurances given to the Chartist leader, John Frost, there was no support from workers in other parts of Britain. The armed assault on Newport in November 1839 was crushed by English troops. The significance of the rising was profound. Ivor Wilks, in his authoritative book on the subject, concludes that ‘industrialisation produced the first serious challenge to the English dominion in Wales since, perhaps, the fifteenth century’ (Wilks 1984:251). The fusion of religious dissent, Welshness and political radicalism proved to be a powerful force in the grim setting of uncontrolled industrial exploitation. The government in London and the ruling authorities in South Wales had no illusions about the threat. What was the answer? How could this militant Welsh-speaking working class be made to mend its ways? In 1846 the House of Commons decided to set up a commission to inquire into the state of education in Wales, and in 1847 Wales was shocked by the infamous Blue Books. The strategy had been clearly stated by the mover of the motion, William Williams, MP for Coventry, a self-made, Welshspeaking businessman. These were his words: It should be borne in mind that an ill-educated and undisciplined population, like that existing among the mines in South Wales, is the one that may be found most dangerous to the neighbourhood in which it dwells, and that a band of efficient schoolmasters is kept up at a much less expense than a body of police and soldiery. (Parl. Deb 1846:848) This brought loud cheers in the House of Commons. Seldom has the policy of social control been more explicitly spelt out—a band of efficient schoolmasters would be much more cost effective than a body of police or soldiers. Only one comment need be made on Brad y Llyfrau Gleision (The Treachery of the Blue Books). All the efforts made to force English education on Wales were unable to prevent a spontaneous upsurge of Welsh speaking among the mass of the people from the 1850s to the 1890s. The cauldron of demographic rebirth was far more efficient than the anglicizing Victorian schoolmasters. No one in 1847 ever dreamt that in fifty years over a million people would be speaking Welsh. 219


The impact of the Industrial Revolution on the lives of the people brings to mind that great Welshman Robert Owen, born in Newtown in 1771. He was an enigmatic personality—a millowner with his eye on the millennium, a successful capitalist who was the founding father of British socialism. He was far in advance of his time. He saw clearly that, to quote his words, ‘the general diffusion of manufacture throughout the country generates a new character in its inhabitants…and will produce the most lamentable and permanent evils unless its tendency is counteracted by legislative interference and direction’ (Owen 1815:5; see Thomas 1960). His famous schools for workers’ children at his New Lanark mills were one of the wonders of the age. They attracted over 20,000 visitors between 1815 and 1825. In a book of extraordinary originality, A New View of Society (1814), Owen proposed a Ministry of employment which would organize public investment to counter unemployment during slumps, together with a system of unemployment and wage statistics in every county. It was a century later before anything like it was achieved. At an early age Robert Owen went to London because he had a brother there. If the brother had been at Merthyr Tydfil, Robert Owen might have become an ironmaster instead of a textile millowner. South Wales could have done with a capitalist with a social conscience. Act III: 1846–1900 The last phase in the industrial drama began in 1846, the year when Ireland was devastated by the disastrous failure of the potato crop and Britain repealed the Corn Laws, thereby inaugurating the era of free trade. In 1851 the parish of Ystradyfodwg (which later became a large part of the Rhondda) had a population of only 950. It was a wellwooded valley of incredible beauty. At that time, an able-bodied squirrel could go all the way from Tonypandy to Maerdy without touching the ground. By 1871, with the opening of twenty steamcoal pits and the Taff Vale Railway, the population of the parish had gone up from 950 to 17,000. Between 1871 and 1911 the population of the Rhondda Valleys grew from 24,000 to 153,000, as a result of the insatiable demand for Welsh steam coal throughout the world. At the end of this amazing expansion there were 24,000 persons per square mile built upon. Describing the Rhondda

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in 1896, the Report of the Welsh Land Commission said: ‘Speaking broadly, the characteristics of Welsh life, its Non-conformist development, the habitual use of the Welsh language, and the prevalence of a Welsh type of character, are as marked as in the rural districts of Wales’ (Report of the Royal Commission 1896:176). The growth of the Welsh-speaking population was due not only to immigration from the Welsh countryside but also to the natural increase (the excess of births over deaths) in the industrial areas. The majority of the migrants were men of between 15 and 30 years of age and they married young. Each wave of in-migrants was a rejuvenating stimulus; the marriage rate was exceptionally high, and the birth rate in the colliery districts was the highest in Britain. In the forty years 1861–1901, the population of Glamorgan went up by more than half a million; less than a third of this (167,000) was due to net inward migration, and over two-thirds (367,000) was due to excess of births over deaths (Thomas 1930). The bountiful number of children raised in the Welsh coal-mining valleys was a major factor. THE WELSH NONCONFORMIST CULTURE After the mid-century, the new industrial communities developed a remarkable cultural life which absorbed the creative faculties of the nonconformists. The railway age had arrived and this greatly increased travel and means of communication. The democratic culture expressed itself in an extraordinary range of publications in the Welsh language. By the late-1890s, there were twenty-eight monthlies, twenty-five newspapers, two quarterly journals, two bi-monthlies, making a total of thirty-two magazines and twentyfive newspapers. The total circulation of Welsh weekly periodicals exceeded 120,000 and that of Welsh magazines 150,000. The children were not neglected; for example, Trysorfa’r Plant had a huge circulation. The main publishing centres were in Glamorgan and Carmarthenshire in the south, and in Caernarfonshire and Denbighshire in the north. One of the leading Welsh firms put the annual value of all Welsh literature published at £200,000 (Thomas 1896: App. C, 195–7). It was a deeply religious culture and it had a robust selfassurance. It is easy to exaggerate its solemnity, as some historians such as A.L.Rowse are apt to do. The stern element in the Puritan 221


view of life could not extinguish what John Cowper Powys called ‘that peculiar vein of Rabelaisian humour which appears not only in a genius like Twm o’r Nant but is forever cropping up out of the hidden recesses of the Welsh nature’ (Powys 1973:40). By their very nature, the nonconformist chapels shunned the state and relied entirely on their own resources. This democratic culture was particularly rich and creative in the slate-quarrying districts of North Wales. The contrast between the 1870s and 1830s may be seen in the strength of the temperance movement which began as a religious issue and became a major political goal. As Kenneth O.Morgan has pointed out, ‘the 1881 Welsh Sunday Closing Act was a landmark in British constitutional history, the first legislative statement of the nationhood of Wales’ (Morgan 1980:36–7). On the industrial front there was relative quiescence; the heroes of the past, Dic Penderyn and Lewsyn yr Heliwr, were held in honour, but the charismatic leader of the South Wales miners in the Victorian age was William Abraham, ‘Mabon’, the peace-loving nonconformist. The ‘media’ in Victorian Wales did not confine themselves to religious topics. Ieuan Gwynedd Jones has thrown new light on the wide range of cultural issues discussed in the newspapers and journals, and in the numerous local eisteddfodau (Jones 1985:13– 20). All kind of topics, from heavy philosophy to light entertainment, are to be found in publications such as Taliesin, Seren Cymru, Y Gwron, Y Gweithiwr, and dozens of others. A favourite theme was the importance of the Welsh language in the working man’s struggle for justice. The long-term programme of cultural control devised by the English establishment of 1847 had been a total failure as far as the Welsh working class was concerned. The infamous Blue Books were no match for the cauldron of rebirth. In 1886, D.Isaac Davies published a book of essays under the title Yr laith Gymraeg, 1785, 1885, 1985! neu Tair Miliwn o Gymry Dwy-ieithawg mewn Can Mlynedd (The Welsh Language, 1785, 1885, 1985! or, Three Million Bilingual Welsh People in a Hundred Years) (see also Hughes 1984). The new society looked to the future with a sturdy optimism. Indeed, the demographic tide was flowing so strongly in favour of the Welsh language in the 1880s that Isaac Davies and his followers failed to recognize the flaws in their long-term bilingual policy (see Okey 1986:90–6). 222


The Welsh language was safe in communities where the growth of the Welsh-speaking population was substantially greater than the immigration from England. Up to the 1890s, in the words of a commission of enquiry in 1917, ‘the native inhabitants, in many respects, showed a marked capacity for stamping their own impress on all newcomers, and communicating to them a large measure of their own characteristics’ (Commission of Inquiry 1917–18:12–13). There were numerous examples of non-Welsh immigrants learning Welsh in order to be able to do their jobs. An inspector of mines in 1885 declared that nine out of ten miners in the steam-coal pits of South Wales carried out their duties in Welsh (Davies 1886:43). For several years after 1900, the Rhondda District of the South Wales Miners Federation continued to print its rules in Welsh and English, and summarized every report in Welsh (Smith 1980:12). Nevertheless, even before the Welsh language reached its peak, there were some disturbing signs of change. The middle class was increasingly opting for English as the passport to material gain. If Sir Huw Owen had had his way, the National eisteddfod would have become a bilingual Social Science Association, with outhouses for poetry and music. Fortunately, that did not happen: the National eisteddfod became a major force in Welsh life. In the religious sphere, Welsh denominations were zealous in looking after the spiritual needs of the English immigrants by providing English services and separate chapels for them. This did far more to anglicize the Welsh than to evangelize the English, as a Congregationalist minister in Monmouthshire pointed out as early as 1867 (Williams 1985:116). In many areas of public life the Welsh were always decent enough to turn to English if there were one or two present who did not understand Welsh. The road to anglicization was paved with many acts of Welsh good intentions. In certain areas, the retreat of Welsh began early, for example in the Vale of Glamorgan, where at the beginning of the century Welsh had been the language of everyday life, literature and religion. In 1884 Thomas Powell, professor of Welsh at the newly created University College of Cardiff, persuaded the Cymmrodorion to survey the ‘use of the Welsh language in elementary schools in Welsh-speaking districts’ (Lewis 1960:28–40). They found that, of the 123 schools questioned in Glamorgan, 77 were in favour of the introduction of Welsh but 48 were firmly against. The opponents argued that the exclusion of Welsh was the surest means of promoting facility in English; and one of the reasons put forward 223


by those who wanted Welsh in the schools was significant—it would help to eradicate the sense of shame felt by many Welsh children. There can be no doubt that many who had been brought up in Welsh homes became indifferent and even opposed to their children speaking the mother tongue. This attitude was deplored and denounced by Welsh leaders such as D. Isaac Davies. He was saddened by the fact that many Welsh people, particularly women and teenage girls, were ashamed to acknowledge that they could understand Welsh; and he was convinced that a census count would be misleading unless those who did not care for the language could be persuaded to be proud of being bilingual (Davies 1886:22– 3). The anglicization of Monmouthshire was mainly due to substantial English immigration accompanied by the out-migration of many thousands of Welsh people from the declining iron districts to the expanding coal communities in the Rhondda and Aberdare valleys. The watershed in the fortunes of the language came in the 1890s. Up until then, the assimilation forces were stronger over most of Wales than was the English immigration. Over a million people spoke Welsh. Then suddenly, in the first ten years of the century, there was a flood of 100,000 immigrants from outside Wales. Even in the Rhondda, the status of Welsh was now threatened, so much so that David James (Defynog), secretary of the Welsh Language Society for twenty-five years, brought out a book, The Rhondda Scheme for Teaching Welsh, in 1910, to try to maintain a knowledge of Welsh among the young. The proportion of Welsh speakers in the population of Wales fell from 49.9 per cent in 1901 to 43.5 per cent in 1911. Thus began a long-period decline until the Welshspeaking proportion reached 20.8 per cent in 1971 and 18.9 per cent in 1981 (see Aitchison and Carter 1985). There was a significant levelling-off in the 1970s. THE FRENCH LANGUAGE IN CANADA An instructive comparison can be drawn between the rise and fall of the Welsh language and the fortunes of the French language in Canada. Wales was not unique in experiencing a cauldron of rebirth. In a similar manner, industrialization was a blessing to the French language in the province of Quebec. The Scottish capitalists who developed a large industrial and financial sector based on Montreal enabled the French-speaking migrants from the rural areas of Quebec 224


to be employed in Canada. They were able to remain in their own culture. Like the Welsh miners in the valleys of South Wales, the French Canadians had a very high birth-rate and the French-speaking population increased rapidly. In 1871 there were 930,000 French speakers in Quebec, most of them in the rural areas; by 1961 there were 4.5 million French speakers, with over 3 million living in the industrial areas (Population Census). But for the enterprise of those mainly Scottish capitalists, most of the French Canadians leaving the rural areas of Quebec would have had to emigrate to the United States and they would have become English speakers. There are as many as 2.5 million people who were born in French Canada living in the United States, mainly in New England states. It is ironic that, both in Wales and Quebec, the Nationalist parties have fiercely attacked past industrialization as a destructive influence on their language. For a Welshman, it is also bitterly ironic that the supportive attitude of nineteenth-century English governments to the French language in Canada is a glaring contrast to their attempts to destroy the Welsh language. The 1847 commission declared that ‘the Welsh language is a vast drawback to Wales and a manifold barrier to the moral progress and the commercial prosperity of the people. It is not easy to overestimate its evil effects’ (Reports of the Commission of Inquiry 1847). The Constitution of Canada, based on the Durham Report (1867), contained strong guarantees for the language and culture of the French Canadians. René Levesque, leader of the Quebec Nationalists, appealed to this constitution in his fight against Pierre Trudeau’s policy for the future of federalism in Canada. Here at home, successive British governments in the nineteenth century based their policy towards the Welsh language on the arrogant doctrines of the 1847 Blue Books. There was a perverse quirk in the attitude of the English. They had a soft spot for minority languages in faraway countries, but they had nothing but contempt for the Celtic languages next door to them in these islands. If British governments in the nineteenth century had applied to the Welsh language the same civilized policy which they adopted towards French in Canada, the status and destiny of Welsh would have been very different.

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SOME SPECULATIONS What would have happened if Wales had been wholly agricultural and had not been industrialized? Her population of 350,000 in the mid-eighteenth century might have grown to about 700,000 by the middle of the nineteenth century, on two conditions: if the Welsh had taken to the potato as the Irish did, and if Welsh agriculture had been able to compete with the Irish in exporting dairy products and grain to the industrial areas of England. However, in 1845 Wales might have been attacked by the same potato fungus that ruined Ireland and such a disaster would have meant mass emigration to England and overseas. The population would then have probably fallen to about 400,000. But even if Wales escaped such a tragedy, Welsh farmers would not have been able to avoid the disastrous consequences of the great agricultural depression which began in the 1880s, when cheap food from overseas flooded the market. Welsh agriculture did not have any special comparative advantage; even when it had the huge purchasing power of the coalfields at its doorstep, the number of men employed in farming fell by 50 per cent between 1881 and 1901. Without that industrial market, things would have been much worse. In all probability, the population of Wales would have fallen below half a million by 1901. Even if the Welsh-speaking proportion was as high as 70 per cent, the number speaking Welsh at the beginning of this century would have been only about 300,000, instead of over a million as it actually was. A small agrarian society would not have had the resources to create institutions such as the National Library, the National Museum and the University. Nevertheless, the patriot will reply, would not quality be better than quantity? This tiny Welsh nation of about half a million, rooted in its traditional heartland, would have brought forth a great renaissance of Welsh literature, even if it were a nation of R.S.Thomas’s hill-farmers struggling to exact a bare living from a cruel earth. That is certainly possible. However, Wales would have had to face not only the great agricultural depression of the 1880s but also the relentless avalanche of English and American influences in the twentieth century. During the last eighty years Welsh children could not have stayed on the farm; they would have had to emigrate to England and overseas, as the Irish did. The likelihood is that the Welsh nation would be an aged society surviving in a small rural 226


bunker, a casa geriatrica, instead of a large youthful urban society which can afford cultural institutions to express and strengthen the national identity. That is not how the poets see it. Here is R.S.Thomas (What is a Welshman?): The industrialists came, burrowing in the corpse of a nation for its congealed blood. I was born into the squalor of their feeding and sucked their speech in with my mother’s infected milk, so that whatever I throw up now is still theirs. (Thomas 1974) And here is a translation of some lines of ‘The Deluge’ by Saunders Lewis in 1939. The tramway climbs from Merthyr to Dowlais, Slime of a snail on a heap of slag; Here once was Wales, and now Derelict cinemas and rain on barren tips. We have neither language nor dialect; we feel no insult, And the masterpiece we gave to history is our country’s M.P.s. (Jones and Thomas 1973) Where does the truth lie—in the poetic or the prosaic view? As a biological species, the Welsh were fortunate; in the nineteenth century, they found themselves in a very favourable niche and they multiplied fast. Their number increased fivefold, and the Welsh language was given a new lease of life by a unique sequence of demographic swings. It was a windfall and in the nature of things it could not last. At the height of Victorian optimism, there was a dream of 3 million bilingual Welsh people by 1985; that dream turned into a nightmare in the twentieth century. The hectic capitalist growth, the population explosion, and the nonconformist golden age went into reverse. The economic environment became very unfavourable; in the last sixty years the population of Wales has 227


hardly increased at all. According to the 1981 census, the number able to speak Welsh was 504,000 out of a population of 2,646,000 aged three and over. The complex reasons for this deterioration are the subject of much debate, which lies outside the scope of this chapter. In conclusion, a word must be said about the so-called Welsh identity crisis. Emyr Humphreys declares eloquently that the essential basis of Welshness is the continuity of Welsh language and literature, traceable as far back as the sixth century. It is this continuity that has enabled the Welsh to survive many a threat of extinction. On the other hand, there is the opposite point of view exemplified by Gwyn A.Williams: The existence of a historical British nation, dominated by but qualitatively distinct from the English polity, is a central fact in the modern history of these islands…. The history of the Welsh is totally incomprehensible without it. The Welsh, the original British, have survived by finding a distinctive place for themselves within a British nation. (Williams 1982:195) It is the Taliesin tradition versus the Gramsci effect! To resolve this conflict, it is necessary to recognize that a major cause of the decline of the Welsh language was the collapse of the Welsh economy after the First World War. Between 1860 and 1913, South Wales was the most dynamic part of Britain’s capitalist economy; far from being an exploited colony, Wales had a faster rate of economic development than any part of England or Scotland. Because of the dazzling heights reached just before the First World War, the subsequent fall was all the more disastrous. The class war in the coalfields intensified, and the clarion call was Marxist not Methodist. What the potato famine did to the Irish economy, the great depression did to the Welsh economy. In the twentieth century, economic and demographic contraction, the decline of nonconformity, severe unemployment and emigration, together with a number of other important factors, have been a curse to the language. This does not mean that the future of the Welsh lies in a secondhand British identity. Cultural and linguistic continuity is a necessary condition of being a separate nation. When Welsh literature has ceased to renew itself and has become a mere memory, we shall 228


have lost a vital part of our identity. A Dylanesque way with English words is no substitute for a living Welsh tongue. If Wales is to survive, everything possible must continue to be done to reverse the long decline in the fortunes of the Welsh language. The striking levelling-off in the rate of decline between 1971 and 1981 is a great tribute to the wholehearted labours of thousands of Welsh patriots who have made the language the centre-piece of the national effort. Cenedl heb iaith. cenedl heb iaith. A nation without a language is a nation without heart. NOTES 1 2 3

4

This article is a revised version of the O’Donnell lecture delivered in the University of Wales in 1985–6. Rural Wales in Baines’ analysis means the counties of Wales other than Glamorgan and Monmouthshire. Baines points out that ‘most of the lifetime migrants from the counties of Montgomery, Merioneth, Flint, Caernarfon and Anglesey were living in Lancashire and the West Midlands, where the natives were also more likely to emigrate in the 1880s’ (Baines 1985:257). If the subject of this chapter and of ‘Wales and the Atlantic Economy’ (Thomas 1959) were not restricted to the Welsh language within Wales, it would have been interesting to examine the Welsh communities in England, particularly in Liverpool. The intense devotion of Welsh nonconformists to religious worship continued throughout the second half of the nineteenth century. Baines is not impressed by the evidence. The calibre of his argument may be judged by the following assertion: ‘It does not follow from the fact that the Rhondda had 151 nonconformist chapels containing 85,105 seats which “alone could accommodate three-quarters of the entire population of the Rhondda Urban District”, that the seats were filled, or that they were filled by Welshmen’ (Baines 1985:277).

REFERENCES Aitchison, J. and Carter H. (1985) The Welsh Language 1961–1981: an Interpretative Atlas, Cardiff: University of Wales Press. Baines, D. (1985) Migration in a Mature Economy. Emigration and Internal Migration in England and Wales, 1861–1900, Cambridge: Cambridge University Press. Census of England and Wales 1891 (1893) P.P., C–7058, Vol. III. Census of Great Britain 1851 (1852–3) Religious Worship, England and Wales: Report and Tables ( ) P.P., LXXXIX. Commission of Inquiry into Industrial Unrest. Report for Wales and Monmouthshire (1917–18), P.P., XV.

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Davies, D.I. (1886) Yr Iaith Gymraeg 1785, 1885, 1985! neu Tair Miliwn o Gymry Dwy-ieithawg mewn Can Mlynedd, Dinbych: T.Gee. FitzGerald, G. (1984) ‘Estimates for Baronies of minimum level of Irishspeaking amongst successive decennial cohorts: 1771–81 to 1861–71’, Proceedings of the Royal Irish Academy, Vol. 84, C. No. 3, Dublin: 117–55. Hughes, J.E. (1984) Arloeswr Dwyieithedd: Dan Isaac Davies 1839–87, Cardiff: University of Wales Press. Humphreys, E. (1984) The Taliesin Tradition. A Quest for the Welsh Identity, London: Black Raven Press. James, B.L. (1972) ‘The Welsh language in the Vale of Glamorgan’, Morgannwg, XVI. Jones, A.R. and Thomas, G. (eds) (1973) Presenting Saunders Lewis, Cardiff: University of Wales Press. Jones, I.G. (1985) Communities: the Observers and the Observed, Cardiff: University College Cardiff Press. Jones, P.N. (1960) ‘Some aspects of immigration into the Glamorgan coalfield between 1881 and 1911’, Transactions of the Honourable Society of Cymmrodorion. Kenrick, G.S. (1846) ‘The population of Merthyr Tydfil’, Journal of the Statistical Society of London, IX, March: 14–21. Lewis, J.P. (1960) ‘The anglicisation of Glamorgan’, Morgannwg, IX. Morgan, K.O. (1980) Rebirth of a Nation: Wales, 1880–1980, Oxford: Clarendon. Morgan, P. (1981) The Eighteenth Century Renaissance, Llandybie: Christopher Davies Press. Okey, R. (1986) ‘The first Welsh Language Society’, Planet, 58. Owen, R. (1814) A New View of Society, London: R. and A.Taylor. ——(1815) Observations on the Effects of the Manufacturing System, London: Hatchard. Parliamentary Debate (1846) House of Commons, LXXXIV. Population Census of Canada 1971, Ottawa: Dominion Bureau of Statistics. Powys, J.C. (1973) Obstinate Cymric: Essays 1935–47, London: Village Press. Pryce, W.T.R. (1975) ‘Migration and the evolution of culture areas: cultural and linguistic frontiers in north-east Wales, 1750 and 1851’, Transactions of the Institute of British Geographers, June. Report of the Commission of Inquiry into the State of Education in Wales (1847), 3 vols, London: HMSO. Report of the Royal Commission on Land in Wales and Monmouthshire (1896), London: HMSO. Smith, D. (ed.) (1980) A People and a Proletariat, London: Pluto Press. Thomas, B. (1930) ‘The migration of labour into the Glamorganshire Coalfield, 1861–1911’, Economica (reprinted in W.E.Minchinton [ed.] [1969] Industrial South Wales, 1750–1914, London: 37–55). ——(1954) Migration and Economic Growth: A Study of Great Britain and the Atlantic Economy, 2nd ed. 1973, Cambridge: Cambridge University Press. ——(1959) ‘Wales and the Atlantic economy’, Scottish Journal of Political Economy, VI, November, 169–92. ——(1960) ‘Robert Owen of Newtown (1771–1858)’, Transactions of the Honourable Society of Cymmrodorion: 18–35. 230


——(ed.) (1962) The Welsh Economy: Studies in Expansion, Cardiff: University of Wales Press. ——(1972) Migration and Urban Development, London: Methuen. ——(1980) Towards an energy interpretation of the Industrial Revolution’, Atlantic Economic Journal, VIII, March: 1–15. Thomas, D. (1896) ‘Bibliographical, Statistical and other miscellaneous memoranda’, Report of the Royal Commission on Land in Wales and Monmouthshire, Appendix C. Thomas, R.S. (1974) What is a Welshman?, Llandybie: Christopher Davies Press. Wilks, I. (1984) South Wales and the Rising of 1839, Urbana and London: Croom Helm. Williams, D. (1950) A History of Modern Wales, London: John Murray. Williams, G.A. (1980a) The Search for Beulah Land, London: Croom Helm. ——(1980b) Madoc: The Making of a Myth, London: Eyre Methuen. ——(1982) The Welsh and Their History, London: Croom Helm. Williams, S.R. (1985) ‘Welsh in the Valleys of Gwent’, Planet, 51, June-July: 112–18.

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10

A PLEA FOR AN ORGANIC APPROACH TO ECONOMIC GROWTH

Two outstanding critics of standard economics, Kenneth Boulding and Nicholas Georgescu-Roegen, have argued powerfully that the mechanical analogue should be replaced by an evolutionary approach (Boulding 1981: Georgescu-Roegen 1971). In recent years the challenge has evoked a growing response; a significant number of economists are exploring economic biology and there are signs that cliometricians are beginning to question the dominant influence of mechanical models on their work.1 The patron saint of this movement is Alfred Marshall, whose famous declaration provides a motto: ‘The Mecca of the economist is economic biology rather than economic dynamics’ (Marshall 1898:43). Let us explore Marshall’s case for economic biology and assess the contribution which he made to advance the cause. THE DARWINIAN LEGACY By about 1875 Marshall had completed his ideas on the theory of value, but he did not publish his work at that time, partly because he was grappling with the problems raised by time and increasing returns. During this fertile period he stood at the confluence of two great intellectual traditions—the classical or Newtonian (Adam Smith, Ricardo, John Stuart Mill), and the Darwinian (Paley, Malthus, Darwin). The Darwinian tradition can be traced to William Paley who, in the words of Keynes ‘was for a generation or more an intellectual influence on Cambridge only second to Newton. Perhaps in a sense he was the first of the Cambridge economists’ (Keynes 1933:108). In 1785 Malthus, in his first year as an undergraduate in Cambridge, was tutored by William Frend, a pupil of Paley’s, and it is significant that in that year Paley’s Principles of Moral and Political 232

A PLEA FOR AN ORGANIC APPROACH

Philosophy was published. This book left a deep mark on the mind of the young Malthus and had a strong influence on the Essay on Population (1798). Paley’s Principles also helped to mould the thinking of the young Charles Darwin. The central idea was that: the functions and structures of an organism are to be explained in terms of its own good—not in terms of the desires or needs of any other species, man not excepted…. An Augustinian, confronted with a remarkable natural phenomenon, must seek its utility for man; if he cannot find it he is in a bad way…. A Paleyan, in contrast, asking what is the function of this structure or ability in the life of the organism possessing it? necessarily becomes a close and attentive student of nature. Paley made naturalists: Darwin was one of them. (Hardin 1960:57–8) In his autobiography Darwin recalled that, when he was an undergraduate in Cambridge, Paley’s books: gave me as much delight as did Euclid. The careful study of these works, without attempting to learn any part by rote, was the only part of the Academical Course which, as I then felt and as I still believe, was of the least use to me in the education of my mind. I did not at that time trouble myself about Paley’s premises; and taking these on trust I was charmed and convinced by the long line of argumentation. (Darwin 1958:59) Malthus’s Essay had a dramatic influence on the process of thought leading to the theory of evolution. Darwin related how in October 1838 he happened to be reading the Essay when it suddenly struck him that in the struggle for existence favourable variations would tend to be preserved and unfavourable ones destroyed and this would lead to the formation of new species. He concluded triumphantly: ‘Here then I had at last got a theory by which to work’ (ibid.: 120). Malthus’s theory was also responsible for a crucial change in Darwin’s approach—the substitution of individuals for species as the unit of population analysis. The intellectual contributions of the two great pioneers were dissimilar: ‘Paley stresses 233


adaptation; Malthus stresses conflict. These were at one level antithetical. Darwin synthesizes them. Struggle both explains and produces adaptation’ (Young 1969:118). The young generation of intellectuals was swept off its feet by the Darwinian revolution. For Marshall the writings of Herbert Spencer were even more significant than those of Darwin; he remembered how ‘a saying of Spencer sent the blood rushing through the veins of those who a generation ago looked eagerly for each volume of his as it issued from the press’ (Marshall 1975, I: 109). IRREVERSIBILITY AND EVOLUTION At the outset of his career Marshall had come up against the problem of reconciling increasing returns with competitive conditions. Sometime in the early 1870s it became clear to him that, given increasing returns, the long-period supply curve is irreversible. The first account of this is to be found in The Pure Theory of Foreign Trade and Domestic Values, written around 1873 and privately printed in 1879.2 The following quotation indicates the nature of the problem: In economics every event causes permanent alterations in the conditions under which future events can occur…. When any casual disturbance has caused a great increase in the production of any commodity, and has thereby led to the introduction of extensive economies, these economies are not readily lost. Developments of mechanical appliances, of division of labour and of organisation of transport, when they have been once obtained are not readily abandoned. (Marshall 1975, II: 201–2) Because of irreversibilities such as learning by doing and economies of scale, there can be no swing back along the long-period curve. In his diagram Marshall inserted a dotted line below the original curve to demonstrate the point (ibid.: 203). However, this device is misleading since the problem cannot be resolved within the static ambit of Marshall’s diagram. There was not much conviction in his hope that ‘the unsatisfactory character of these results…may conceivably be much diminished in a later age by the gradual improvement of our scientific machinery’ (Marshall 1961: I: 809). He drew on his creative imagination to try to shore up the edifice; 234


three of his well-known concepts—the representative firm, external economies and market imperfection—were brought into play to serve the purpose. In the end, how-ever, it was all in vain, as one can see from a significant change made in Book IV, Chapter XIII of the sixth edition of the Principles. In the earlier editions beginning with the second, the ‘trees of the forest’ passage reads as follows: As with the growth of trees so it is with the growth of businesses. As each kind of tree has its normal life, in which it attains its normal height, so the length of life during which a business of any kind is likely to retain full vigour is limited by the laws of nature combined with the circumstances of place and time, and the character and stage of development of the particular trade in which it lies. (Marshall 1961, II: 343–4) In the sixth edition (1910) this was replaced by the following sentences: And as with the growth of trees, so was it with the growth of businesses as a general rule before the great recent development of vast joint-stock companies, which often stagnate but do not readily die. Now that rule is far from universal, but it still holds in many industries and trades. (ibid., I: 316) As G.F.Shove pointed out: ‘this inconspicuous change of wording really knocks away—so far as a large and growing section of industry is concerned—the main prop on which the reconciliation between atomic competition and increasing returns had rested’ (Shove 1942:729). Marshall spent a great deal of time exploring the facts of industrial change in Britain and the USA, and by the first decade of this century he had seen ample evidence of the decline of competition and the emergence of large-scale corporations wielding monopolistic power. These significant empirical discoveries ran counter to his benign ‘trees of the forest’ story. When firms are reaping substantial internal as well as external economies, the competitive process tends to result in an increase in monopoly. In these circumstances, particularly when division of labour among industries is a major element in economic growth, the concept of the ‘representative firm’ loses all meaning. When Marshall produced the sixth edition 235


of his Principles in 1910, he was compelled to face the implications of these fundamental developments. The irreversibility problem has far-reaching consequences. Evolution may be defined as the history of a system undergoing irreversible changes (Lotka 1956:24). The long-period supply and demand curves are interdependent; in Marshall’s words, ‘every movement of the exchange-index entails some alteration in the shapes of the curves and therefore in the forces which determine its succeeding movements’ (Marshall 1975, II: 164). Therefore, the theory of economic growth cannot be based on the mechanical analogue: it must be a theory of organic growth on biological lines. In models of organic growth, time (T) is historical time—a continuous series of ‘moments’ entailing qualitative change—whereas in mechanical models time is ‘the measure of an interval (Ti, Tii) by a mechanical clock’ (Georgescu-Roegen 1971:135). Mechanical laws are invariable with respect to historical time; in the mechanical world each ‘moment’ is exactly like any other. Marshall did not concern himself with the wide implications of irreversibility, the theory of organic growth, when he was writing his Principles. The proof of this may be seen by examining the papers which he wrote on economic progress in the 1870s and 1880s. His major contributions in this area were the following: 1) 1875: 2) 1877:

Lectures on ‘Some features of American industry’. ‘Foreign trade in its bearing on industrial and social progress’ (Chapters 4 and 5 of the abortive book on the theory of foreign trade). 3) 1879: A lecture course on ‘Economic progress’ given in Bristol. 4) 1880–2: Notes on the theory of economic growth—a neo classical growth model. 5) 1883: Lectures on Henry George’s Progress and Poverty. The most telling item in this list is the mathematical model (written some time between 1880 and 1882) which was found among the manuscripts in the Marshall Library (Marshall 1975, II: 305–16). In the words of John K.Whitaker, ‘for the first time we have really clear and explicit evidence of a neoclassical author actually working in terms of what has come to be known as “the neoclassical aggregate growth model”’ (ibid.: 305). ‘It goes in some ways beyond anything appearing in the modern growth-theory literature, even though its 236


sophistication falls short in other ways’ (Whitaker 1974:15). This was magnificent but it was not organic growth. It was inspired by Book 4 of John Stuart Mill’s Principles which Marshall regarded as the most advanced and modern part of Mill’s work (Marshall 1975, II: 306). In the manuscript notes for the first lecture on ‘Economic progress’ delivered at Bristol in 1879, Marshall said that he planned ‘to endeavour to show that all or almost all the piles of statistics which state how some things have fallen and others have risen in value may be reduced under a few simple laws’ (ibid.). These were the laws of neoclassical growth in the tradition of mechanical reasoning. The model failed to throw any light on the main object of the exercise, an analysis of the forces governing the long-run movement of the rate of interest. Marshall saw no future in it. His arguments against Henry George’s (1879) Progress and Poverty were firmly rooted in the marginal productivity theory of distribution set out in the Economics of Industry. None of the pre-1885 essays on economic growth showed any evidence of the use of biological ideas. After 1881 Marshall seems to have turned away from problems relating to economic growth (Whitaker 1974:15). THE TREATMENT OF ‘TIME’ IN THE PRINCIPLES Principles of Economics, Volume I, was essentially a treatise on economic statics to be followed by Volume II on dynamics. In the second edition in 1891 the former Books 5 and 6 were merged to make the new Book 5 on ‘demand and supply as crude forces pressing against one another and tending to a mechanical equilibrium’ (Pigou 1925:318). In the preface to this edition Marshall wrote: ‘To myself personally the chief interest of the volume centres in Book V: it contains more of my life’s work than any other part: and it is there, more than anywhere else, that I have tried to deal with unsettled questions of the science’ (Marshall 1961, II: 40). Books 4 and 6 contain biological language relating, for example, to the principles of continuity and substitution. The purpose of those sections, as Marshall explained in the preface to the fourth edition (1898), was ‘to lay stress on the essentially organic character of the larger and broader problems towards which we are working our way’ (ibid.: 44). Presumably he was here thinking of the biological analysis which would appear in Volume II. According to Marshall’s plans in 1887 the second volume would cover ‘Foreign Trade, Money and Banking. Trade Fluctuations, 237


Taxation, Collectivism. Aims for the Future’ (Marshall 1975, I: 36). This volume was never completed. Part of the type for it set up in 1904 remained unused until 1919 when it was incorporated in Industry and Trade; Marshall was told that this lag was something of a record! The main ideas on foreign trade which had been thought out in the 1870s did not appear in print under Marshall’s own name until the publication of Money, Credit and Commerce in 1923, shortly before his death. At the end of his life, Marshall was struggling to put together material for yet another book to be called ‘Progress: its Economic Conditions’. Writing to the Dutch economist N.G.Pierson in 1891, Marshall described the objective of the Principles as follows: The book was written to express one idea, and one only. That idea is that whereas Ricardo & Co, maintain that value is determined by Cost of production, and Malthus, MacLeod, Jevons and (in a measure) the Austrians that it is determined by utility, each was right in what he affirmed but wrong in what he denied. They none of them paid, I think, sufficient attention to the element of Time. That I believe holds the key of all the paradoxes which this long controversy has raised. When Ricardo spoke of Cost of production as determining value he had in mind periods as to which cost of production is the dominant force; when Jevons emphasized utility, he had in mind shorter periods. The attempt to work all existing knowledge on the subject of value into one continuous and harmonious whole, by means of a complex study of the element of Time permeates every book, almost every page of my volume. It is the backbone of all that, from a scientific point of view, I care to say. (Marshall 1975, I: 97–8) Marshall’s achievement was based on his central concern with the fact that the nature and causes of equilibrium depend on the length of time over which the market extends. The great problem was broken up into parts with the aid of ceteris paribus, culminating in the full static equilibrium of the industry. On the surface it would seem that Marshall thought of Time in the ordinary non-technical sense; his term ‘normal’ refers to long periods of several years’, and ‘secular’ denotes a period covering one generation to another. 238


However, this is taking matters too literally. As the late Sir John Hicks (1965:50) pointed out, the ‘short’ and ‘long’ periods have no relation to the kind of ‘period’ used in dynamic economics. They are ‘technical terms of Marshallian economies’. ‘Time’ in Book 5 is neither the ordinal variable which applies to strictly mechanical systems nor the cardinal variable which applies to genuinely biological systems: it is a hybrid. Further light can be thrown on this by considering how biological is the analysis in the Principles. Marshall’s deep interest in the element of time, the source of the greatest difficulties in economics, helped to determine his attitude to the mathematical method: For many important considerations, especially those connected with the manifold influences of the element of time, do not lend themselves easily to mathematical expression: they must either be omitted altogether, or clipped and pruned till they resemble the conventional birds and animals of decorative art. And hence arises a tendency towards assigning wrong proportions to economic forces; those elements being most emphasized which lend themselves most easily to analytical methods. (Marshall 1961, I: 850)

ECONOMIC BIOLOGY: SUBSTANCE OR PROMISE? In the first edition of the Principles the opening paragraph of Book 5 was confined to stating that the book would be devoted to the balancing of the forces of demand and supply. In the fourth edition in 1898 that paragraph was replaced by a new one which stated that the mechanical equilibrium analysis of Book 5 (‘corresponding to the mechanical equilibrium of a stone hanging by an elastic string or of a number of balls resting against one another in a basin’) was a preliminary to an advanced study which would be biological in character—the balancing of the forces of life and decay (Marshall 1961, I: 323 and II: 350). Marshall regarded Book 6 as an analysis of demand and supply more and more from a biological point of view, and he thought this was particularly true of the chapter on the ‘Influence of progress on value’ (Marshall 1898:50). One cannot help feeling that in 1898, when Marshall was on the defensive against critics of the Principles, he tended to exaggerate 239


the biological element in his previous work. A striking example is that in 1898 he defined his concept of the ‘representative firm’ as biological rather than mechanical, and declared, ex post, that ‘its application to the theory of value is one mark of the gradual transition from the mechanical view of the composition of forces…to the biological notion of composite organic development’ (Marshall 1898:50). There was no mention of biological meaning when the notion of the representative firm was introduced in the first edition of the Principles (Marshall 1961, II: 346). If the ‘representative firm’ is a biological concept, is it not strange that two-thirds of the references to it in the Principles are in Book 5 which is devoted to mechanical equilibrium analysis? How much economic biology is there in the Principles? In the preface to the first edition Marshall emphasized the notion of continuity with regard to development and stated that writings such as those of Herbert Spencer and Hegel’s Philosophy of History had ‘affected more than any other the substance of the views expressed in the present book’ (ibid., I: ix). He regarded the law of substitution as ‘nothing more than a special and limited application of the law of survival of the fittest’ (ibid.: 597). If continuity and substitution are biological concepts, it has been suggested that Marshall really had in mind the notion of an economy in a biosystem (Levine 1983:276–93). One must distinguish between biological analogies and biological analysis. There are sound reasons for concluding that Marshall was for the most pan indulging in analogies or figures of speech. First, we have already shown that in the decade and a half leading up to the Principles Marshall’s thinking on economic development was based on neoclassical, mechanical models. His publications on economic progress in that period contained no biological analysis. He was a marginal-productivity theorist who in the 1880s worked out his own formulation in terms of production functions and their partial derivatives, but these were not displayed in the Principles (Marshall 1975, I: 96). His handling of development problems was also influenced by his macroeconomic growth modelling. The famous chapter on the ‘Influence of progress on value’, far from being a contribution to economic biology, was an elegant essay on economic history scantily dressed up in biological finery. Second, the significance attached to the principle of continuity with regard to development simply echoes the motto of the Principles—natura non facit saltum. It was Marshall’s general 240


philosophy of history that nature does not make jumps, and when the Mendelians came along with their big jumps he was careful to neglect that kind of biology. The important fact for him was ‘the accumulated effects of forces which, though weak at first, get greater strength from the growth of their own effects; and the universal form, of which every such fact is a special embodiment, is Taylor’s Theorem’ (Marshall 1961,1:844). In the seventh edition (1916) he added the following statement: This conclusion will remain valid even if further investigation confirms the suggestion, made by some Mendelians, that gradual changes in the race are originated by large divergences of individuals from the prevailing type. For economics is a study of mankind, of particular nations, of particular social strata; and it is only indirectly concerned with the lives of men of exceptional genius or exceptional wickedness and violence. (ibid.) The Hegelian influence was strong and always present; it helped to shape the peculiar features of his time analysis. He did not use the concept of ‘time’ which is appropriate to mechanical models; nor did he follow through his pioneering work on irreversibility to develop the concept of ‘time’ required for the analysis of organic growth. The nearest Marshall gets to economic biology is in Book 4 on ‘Industrial organization’. He starts with ‘the many profound analogies which have been discovered between social and especially industrial organization on the one side and the physical organization of the higher animals on the other’ (ibid.: 240–1). Then he moves on to suggest in effect that biology takes over part of economics, since there is ‘a fundamental unity of action between the laws of nature in the physical and in the moral world’ (ibid.). This was explained as follows: This central unity is set forth in the general rule, to which there are not many exceptions, that the development of the organism, whether social or physical, involves an increasing subdivision of functions between its separate parts on the one hand, and on the other a more intimate connection between them. Each part gets to be less self241


sufficient, to depend for its wellbeing more and more on other parts, so that any disorder in any part of a highly-developed organism will affect other parts also. (ibid.) In developing his thesis Marshall goes beyond analogy. In a few pages he summarizes the ‘bearings in economics of the law that the struggle for existence causes those organisms to multiply which are best fitted to derive benefit from their environment’ (ibid.). Book 4, Chapter 8 of the Principles, the wording of which, with a few minor changes, dates from the first edition, reads like an early blueprint of a book on economic biology. If Marshall had got around to it, this chapter would have been the nucleus of a large section of his Volume II. One of the puzzles about Marshall is why in the twenty years after 1890 he did not fulfil his ambition to write Volume II of his Principles. His own explanation, in the preface to Industry and Trade (1919), was that my progress has been delayed, not only by weak health and constitutional unfitness for rapid work; but also by heavy professional duties till 1908; by preparing evidence and memoranda for various Royal Commissions on currency and other matters; and by service on the Royal Commission on Labour, 1891–5, during which I received from working men and other witnesses, and from members of the Commission, the most valuable education of my life. (Marshall 1919:vi–vii) Mrs Marshall described how he wasted a great deal of time because he changed his method of treatment so often. In 1894 he began a historical treatment, which he called later on a White Elephant, because it was on such a large scale that it would have taken many volumes to complete. Later on he used fragments of the White Elephant in the descriptive parts of Industry and Trade. (Pigou 1925:58) Is it not probable that, in giving so much time to those Royal Commissions, the revising of his Principles and various professional activities, Marshall was really creating for himself a series of alibis? 242


In December 1902 he informed his publishers that ‘I am giving myself up to my Second Volume with ever increasing resoluteness so far as I am free. But I have not much freedom, and my progress is not fast’ (Whitaker 1990:201). Could it have been that there were over-riding intellectual reasons why he could not accomplish the big task? In a letter to J.B.Clark in November 1902 when he was 60 years of age, Marshall said that he had changed much since the years before 1870 when he worked out his theory of value. He added this revealing sentence: I then believed it was possible to have a coherent though abstract doctrine of economics in which competition was the only dominant force; and I then defined ‘normal’ as that which the undisturbed play of competition would bring about: and now I regard that position as untenable from an abstract as well as from a practical point of view. (Marshall 1961, II: 9) This was a striking admission for him to make. During the 1890s the old doubts generated by the irreversibility problem must have come back with renewed force. Was he satisfied with his handling of the element of time which he had described in the preface to the first edition as ‘the centre of the chief difficulty of almost every economic problem’? Had he changed his mind about what he had achieved in the Principles? He had never taken much notice of critics. However, an attack on the Principles in the Economic Journal in 1897 by a US economist, Arthur T.Hadley (1897:477–86), drew from Marshall a spirited reply in an article, ‘Distribution and exchange’, in the Journal in 1898. It is an important statement of his views on methodology. It was in this article that he first declared that ‘the Mecca of the economist is economic biology rather than economic dynamics’ (see Marshall 1898:43). Hadley’s criticism was summarized as follows: The problem of distribution is essentially a kinetic one… Marshall in general uses static methods for static problems and gets correct solutions. When he attempts to make connections with the kinetic problem the result is less satisfactory. The unsatisfactory character of these results is recognised by Marshall in his discussion of the 243


deficiencies of the statical method in economics; but he fails to see that those deficiencies make themselves chiefly felt when that method is applied to problems which are not statical at all. (Hadley 1897:485). In his reply Marshall apologized for the delay in bringing out his second volume and gave a careful account of what he meant by ‘static’ and ‘dynamic’. In the static stage the analogy of physics is appropriate; the variables do not change their character as they move through time; the forces of demand and supply tend towards a mechanical equilibrium, and much use is made of partial equilibrium analysis. The purpose of the statical method is to fix our attention on some centre, which for the time we regard as either at rest or in steady movement; to consider the tendencies of various elements to mutually adjust themselves relatively to that centre, or perhaps to change the position of that centre. (Marshall 1961, II: 67) In the dynamic stage there is no analogy with the physical sciences; variables change their character as they move through time; the analysis is biological and the balance or equilibrium is between the organic forces of life and decay. Marshall went out of his way to insist that though the treatment in Book 5 is static it does not lack ‘living force and movement’. There is a good deal of dynamics in the Principles ‘if the terms are interpreted as in physical science’ (ibid.: 48). This is not the sort of dynamics required for the analysis of organic growth. Written eight years after the appearance of the Principles, the 1898 article shows how far Marshall’s position had moved since 1870. In The Pure Theory of Foreign Trade and Domestic Values he had stressed that movements in the economic sphere alter ‘the magnitude if not the character of the forces that govern succeeding movements’ (Marshall 1975, II: 163). In the 1898 statement the emphasis is on changes in the character of the forces, as the following paragraph shows: The catastrophes of mechanics are caused by changes in the quantity and not in the character of the forces at work; whereas in life their character changes also. ‘Progress’ or ‘evolution’, industrial and social, is not mere 244


increase or decrease. It is organic growth, chastened and confined and occasionally reversed by the decay of innumerable factors, each of which influences and is influenced by those around it; and every such mutual influence varies with the stages which the respective factors have already reached in their growth. In this vital respect all sciences of life are akin to one another, and are unlike physical sciences. And therefore in the later stages of economics, when we are approaching nearly to the conditions of life, biological analogies are to be preferred to mechanical, other things being equal. (Marshall 1898:47–8) Marshall repeated his famous sentence about ‘the Mecca of the economist’ in every preface to the Principles from the fifth edition (1907) on, and he left it at that. Economic biology remained promise rather than substance. CONCLUSION Looking back in 1919 Marshall referred to weak health as one of the causes of his delays. However, a decline in vitality is difficult to believe in view of all that he achieved between 1890 and 1910. He could have chosen to produce Volume II of his Principles containing a substantial contribution to economic biology: instead he brought out seven editions of Volume I, each of which, according to his own estimate, entailed a full year’s work (Guillebaud 1942:349). If he seemed to have lost control over his material it was probably because the ideas he had up to 1887 about the contents of Volume II had changed by the end of the 1890s. He had come to realize more and more that the study of organic growth necessitated a break with his neoclassical system as definite as the break which he had made with the Ricardo-Mill system. His great achievement in the first half of his career had been that, in the words of Keynes, ‘he had worked out within him the foundations of little less than a new science, of great consequence to mankind’ (Keynes 1933:177–8). By about 1900 he must have become convinced that, if Volume II was to be true to his high standards, he would have to work out within him the foundations of yet another science—economic biology. If that was so, one could hardly blame him for regarding this as a task for his successors not for him. 245


Marshall’s basic insight was that the study of economic growth must mean the abandonment of mechanical equilibrium models based on the reversibility of time. This message was not heeded by his successors. The revival of growth theory which came after the Keynesian revolution was dominated by neoclassical model building, and its influence was widespread. Aggregate growth models became the ruling fashion and were applied to all countries irrespective of culture or history. Robert E.Lucas Jr, outstanding among today’s neoclassical theorists, has explained what he does in these words: This is what I mean by the ‘Mechanics’ of economic development—the construction of a mechanical, artificial world, populated by the interacting robots that economics typically studies, that is capable of exhibiting behavior the gross features of which resemble those of the actual world that I have just described. (Lucas 1988:5) The late Sir John Hicks, in a penetrating review of modern growth theory, reached the following conclusions: Growth theory, say since Harrod and Domar (or perhaps since von Neumann) has been the scene of a tremendous come-back of equilibrium. Trying to push on beyond Keynes it has slipped back behind him…. So long as attention was fixed on ratios (and the growth rate itself is a ratio) the Steady State could be absorbed into full-blown equilibrium economics, in which one point of time is just like another. It was just as much ‘out of time’ as the Stationary State itself…. It is my own opinion that [Steady State economics] has been rather a curse. It has encouraged economists to waste their time upon constructions that are often of great intellectual complexity but which are so much out of time, and out of history, as to be practically futile and indeed misleading. (Hicks, 1976:142–3) Subsequent developments of dynamic equilibrium theories suffer from similar disabilities: Though these are not Steady State theories, they are nevertheless equilibrium theories. One point of time is 246


not like another, even in the ratio sense; yet the whole of the plan is looked at together. The plan is mutually determined; there is no movement from past to future, except in the sense that there is also a movement from future to past. There is no room for the unexpected. (ibid.: 114) This trenchant verdict, with its emphasis on the irreversibility of time, would have been applauded by Marshall. The sequence of ideas described in this chapter contains an element of the paradoxical. The relevant methodological issues were thoroughly explored almost a century ago. When Marshall recognized the full implications of irreversibility he rejected his mechanical model of growth and called for a biological approach. Yet, strangely enough, when the study of economic growth became a major preoccupation in the 1950s and 1960s, Marshall’s conclusions were ignored, and mechanical models similar to the one which he discarded became a prominent element in economics curricula everywhere. The prevalence of mechanical equilibrium and steady-state modelling had the effect which Marshall had warned against—‘a tendency towards assigning wrong proportions to economic forces, those elements being most emphasized which lend themselves most easily to analytical methods’ (Marshall 1961, I: 850). This is particularly the case when such models are applied to less developed countries with cultures very different from those of developed countries. Two major problems to be explained are the large differences in growth rates between countries and between periods; and yet, in a comprehensive review of growth theory, F.H.Hahn and R.C.O.Matthews concluded that ‘it would be difficult to claim that any of the models we have discussed goes far towards explaining these differences or predicting what will happen to them in the future’ (Hahn and Matthews 1964:889–90). The solution of empirically important problems such as these will be facilitated by the current shift towards economic biology and the development of theories of growth which will be ‘in time’ not ‘out of time’. NOTES 1 2

Sigüenza (1982:1560) gives a list of contemporary economists in the English-speaking world interested in the biological method. For economic biology and economic history see Mokyr (1989). Reprinted by the London School of Economics and Political Science in

247


1930 in its Series of Reprints of Scarce Tracts in Economic and Political Science.

REFERENCES Boulding, K. (1981) Evolutionary Economics, Beverly Hills: Sage Publications. Darwin, C. (1958) The Autobiography of Charles Darwin, 1809–82, ed. by N.Barlow, London: Collins. George, H. (1879) Progress and Poverty, San Francisco: W.M.Minton. Georgescu-Roegen, N. (1971) The Entropy Law and the Economic Process, Cambridge, MA: Harvard University Press. Guillebaud, C.W. (1942) ‘The evolution of Marshall’s Principles of Economies’, Economic Journal 52:330–49. Hadley, A.T. (1897) ‘Some fallacies in the theory of distribution’, Economic Journal 7:477–86. Hahn, F.H. and Matthews, R.C.O. (1964) ‘The theory of economic growth: a survey’, Economic Journal 74:779–902. Hardin, G. (1960) Nature and Man’s Fate, London: Jonathan Cape. Hicks, J.R. (1965) Capital and Growth, London: Oxford University Press. ——(1976) ‘Some questions of time in economies’ in A.M.Tang, F. M.Westfield and J.S.Worley (eds) Evolution, Welfare and Time in Economics: Essays in Honor of Nicholas Georgescu-Roegen, Lexington, MA: Lexington Books: 135–51. Keynes, J.M. (1933) Essays in Biography, London: Macmillan. Levine, A.L. (1983) ‘Marshall’s Principles and the “biological viewpoint”: a reconsideration’, Manchester School 51:276–93. Lotka, A.J. (1956) Elements of Mathematical Biology, New York: Dover Publications. Lucas, R.E.Jr (1988) ‘On the mechanics of economic development’, Journal of Monetary Economics 22:3–42. Malthus, T.R. (1798) An Essay on the Principle of Population, London: J.Johnson. Marshall, A. (1890) Principles of Economics, 9th (variorum) ed. with annotations by C.W.Guillebaud 1961, London: Macmillan. ——(1898) ‘Distribution and exchange’, Economic Journal 8:37–59. ——(1919) Industry and Trade, London: Macmillan. ——(1923) Money, Credit and Commerce, London: Macmillan. ——(1975) The Early Economic Writings of Alfred Marshall, 1867–1890, ed. by J.K.Whitaker, London: Macmillan. Mill, J.S. (1848) Principles of Political Economy, London: J.W.Parker. Mokyr, J. (1989) ‘Evolutionary biology, technological change, and economic history’, mimeograph. Paley, W. (1785) Principles of Moral and Political Philosophy, London: R.Faulder. Pigou, A.C. (ed.) (1925) Memorials of Alfred Marshall, London: Macmillan. Shove, G.F. (1942) ‘The place of Marshall’s Principles in the development of economic theory’, Economic Journal 52, 294–329.

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Sigüenza, M. (1982) review of Boulding’s Evolutionary Economics, Journal of Economic Literature 20, 1558–61. Whitaker, J.K. (1974) ‘The Marshallian system in 1881: distribution and growth’, Economic Journal 84:1–17. ——(1990) ‘What happened to the second volume of the Principles’! The thorny path of Marshall’s last books’ in J.K.Whitaker (ed.) Centenary Essays on Alfred Marshall, Cambridge: Cambridge University Press. Young, R.M. (1969) ‘Malthus and the evolutionists: the common context of biological and social theory’, Past and Present 43:109–45.

249

Index

Abramovitz, M. 161, 165, 182, 200; Kuznets cycle 183, 202–4 Accum, F.C. 90 aggregate growth models 236–7, 246 agricultural prices 4, 5, 67, 68, 86, 87–90 passim agricultural regions 147, 156–8, 169, 170 ‘agricultural revolution’ 81–2, 96–8 agriculture: iron consumption 16; livestock farming 66–7, 83–4; productivity 67–8, 87; wages 90; Wales 226; see also food Aitchison, L. 103, 104, 108 Aitchison, J. 224 Albion, R.G. 14, 63, 69, 77 alkalies 74 Allen, R.C. 68 American colonies: differential population growth 36–7; interaction between Britain and 36–9, 47–53, 76; naval stores 63–5; slavery 37–8; taxation 46; see also United States American War of Independence 45, 46, 69–70 anglicization of Wales 211, 224 Argentina 165, 192, 193–4, 200 armies 54 Arrow, K.J. 7

Arthur, W.B. 104 Ashley, Sir W. 84 Ashton, T.S. 2, 39, 108 Atkinson, A.B. 104 Australia 165, 193, 194, 200 Austrian Succession, War of 43, 44, 46 Ayer, A.J. 141 Baines, D. 209–10,211,229 Bairoch, P. 16, 76 Baltic countries: naval stores trade 63–5; see also Sweden Bank of England 185, 191, 192, 194, 195, 200–1 bank rate 191, 192, 195–8 bar iron imports 8, 9, 13, 21, 24, 74; eighteenth century 60, 75–6, 111; seventeenth century 12, 25–30 bar iron prices 8, 29; eighteenth century 61, 100, 109; seventeenth century 10, 12, 12– 13 bar iron production 109; direct method 102–3; indirect method 103; reverberatory technique 109, 110–13, 214 Barker, T.C. 74 barley 84, 85, 89, 90, 96, 98; see also grain imports, meal 250

INDEX

Baugh, D.A. 44, 46, 64, 65 Beach, W.E. 192 beef 87, 88 Beer, G.L. 56 Beer, Max 126–7 Bentham, Jeremy 127, 141 Bernstein, E.M. 204 Beveridge, W.H. 6 bilingualism 223–4, 227 birth rate 72, 148, 156, 158, 221 Blackman, J. 93, 194 bloomeries 103 Bloomfield, A.I. 175, 183 Blue Books 219, 222, 225 ‘blue water’ strategy 46 board prices 29 Board of Trade 63–5 Böethius, B. 27 Boswell, J. 119 Boulding, K. 232 Boulton, Matthew 117 Bowley, A.L. 158 Bowring, J. 127 Boxer, C.R. 38 bread 88; white 89–90 Brewer, J. 46 Brougham, Lord 128 Brown, E.H.Phelps 63 building cycles see construction cycles Burnett, J. 83, 90 butter 87, 88, 91, 92, 93 Cagan, P. 184, 201–2 Caird, Sir J. 90, 98 Cairncross, A.K. 158, 159 Calvin, M. xvi Camberwell 158 Campbell, B.O. 148, 161–3 Canada 165, 193, 194, 200; British rule 54–6; French language in 224–5 cannon 20, 74, 119, 216 capital formation 197, 198; see also investment Capper, B.P. 67 Capron, W.J. 7 carronade 75, 119, 216 Carter, H. 224

cast iron 103; guns 20; thin-walled 61, 108 Cattle Acts 68, 86–7 Celtic periphery 82–7; see also Ireland, Scotland, Wales Chalklin, C.W. 39 Chalmers, G. 42–3 Chambers, J.D. 82 character, environment and 125–7 charcoal: consumption 23; fragility 103 charcoal prices xiii, 29, 30, 102; eighteenth century 61, 63, 74–5, 108–9, 109, 110; seventeenth century energy crisis 2–13 passim, 24 Charles II, King 18 Cheshire 154 children: employed in factories 134–5; schools for factory workers 133–4 Chorlton Twist Company 124 Cipolla, C.M. 6, 20 Civil Wars 17–18 Clapham, J.H. 135 Clarendon Code 102 class 122, 132 Clerke, Sir Clement 107, 117 Clough, Arthur Hugh 164–5 coal 1, 24, 78; consumption 62, 107; merchant shipping and 15; output xi, 3, 16, 60, 61–2, 78, 111; prices 62–3, 107; substitution for charcoal 3, 16, 101–2, 213–14; Welsh production 216, 220, 223; see also coke Coalbrookdale 108 coke 102; Connellsville 118–19; use in smelting xiv, 16, 61, 74, 103– 4, 108; see also coal Cole, G.D.H. 131–2, 139 Cole, W.A. 47, 87, 89 Coleman, D.C. 1, 4, 14, 101 Collins, E.J.T. 84, 86, 97 community living 124, 136, 140 competition 234–5, 243 Connellsville coke 118–19 conservation lobby 21–3 251

INDEX

consigned export goods 35 construction cycles 63, 72, 144–81, 183, 210; alternation of British and US 161–5; British regional 149–56, 167–75; demographic determinants 156–60; first Atlantic economy 39–40, 44–6, 47, 48, 49; see also infrastructure investment continuity 240–1 Cooperative movement 139 copper 107 coppice woods 2 cordwood 2, 3; see also timber Corn Laws 87, 89, 94, 95, 97 Cort, Coningsby 115 Cort, Henry xiv, 24, 45, 109, 110– 17; puddling and rolling process 110–12, 115, 214 Cort, Richard 114 Cottrell, W.F. 54 Crafts, N.F.R. xi, xii, 66, 67, 87, 118 craftsmen 117–18 Cranage brothers 112 Crawshay, Richard 114, 115, 214 Crawshay, William 115 Cromwellian revolution 14, 100–2 Crotty, R.D. 87 Cullen, L.M. 68, 88 culture, nonconformist 221–4 Currency Act (1764) 50–2 Dale, David 124, 131 Dale Owen, Robert 131, 134, 141 Darby, Abraham 16, 77, 102; coke smelting 61, 74, 103, 108; thinwalled casting 61, 108 Darwin, Charles 233 Darwinian legacy 232–4 Davies, D.I. 222, 223, 224 Davis, R. 15, 36, 87, 89, 91; exports 37; shipping industry 15, 72 Dean, Forest of 2, 17, 18, 19 Deane, P. 47, 88; food supply 87, 89; IHD index 146, 168, 169 death statistics 147, 172–3 debt: American colonies and 50; national 46, 101 Defynog, David James 224 252

demand shifts, energy crisis and 14–17 demographic changes see migration, natural increase, population changes determinism 125–7, 141 Dickenson, R. 73 Dickinson, H.W. 112–13, 115, 116 Dickson, R.J. 53 dissenting churches 217–18 Dolland, John 102 Donnelly, J.S. 96 drink, imports of 94–5 Drinkwater mill 123 Drummond, J. 66 Dundas, Henry 114 dynamic equilibrium theories 246– 7 dynamic shortage model 7, 11–13 dynamics, economic 243–4 Dyos, H.J. 158 East India Company 35, 70, 72–3 Easterlin R.A. 148, 165 economic biology 232–47; substance or promise 239–45; see also Marshall economic planning 136–9 education: Robert Owen and 133– 4, 139; Wales 219 Edwards, E. 140 Edwards, I. 20 Ehrman, J. 14 eisteddfod, National 223 employment see labour, unemployment energy abundance (1680–1750) 60– 3 energy crisis, seventeenth century xiii, 1–30, 104; conservation lobby 21–3; determinants of demand shifts 14–17; evidence of energy shortage 8–13; revisionists’ arguments 2–7; supply side 17–21 energy crisis, eighteenth century 66–78, 118–19,213–14 England, and Celtic periphery 82–7 entrepreneurship 35, 102

INDEX

entropy xiv-xv environment, character and 125–7 equilibrium, growth theory and 244, 246–7 Ernst, J.A. 50–2 Europe xv-xvi, 165, 185; see also under individual countries Evelyn, J. 18, 23 evolution: Darwinian tradition 232– 4; irreversibility and 234–7; see also economic biology; Marshall export sector 153–4 exports 183, 185; to American colonies 40, 49, 76; consigned 35; countries of new settlement 193–4, 195; interaction model 165–7; long swings 186–90 passim, 197, 198, 201; manufactured 16–17, 37, 38–9, 61, 183; during wars 43; see also imports; trade

Ford, A.G. 194 Ford, P.L. 50 fossil fuels xii, 78, see also coal, coke Fox, Charles James 70–1 France xiii, xv, 53–4, 118; Canada 55, 56; Pitt and 44–5 Franklin, Benjamin 55–6 French language in Canada 224–5 Friedman, M. 184, 195, 200, 201 furnaces 61, 74, 109; coke 104; constraints on charcoal 103; energy crisis and 19–20

Fabricant, S. 204–5 Factory Acts 136, 141 factory system 133–6 Fairlie, S. 94, 97 Farnie, D.A. 36 Feinstein, C.H. 78, 96 first Atlantic economy 34–56; interaction between Britain and American colonies 47–53; long swings in growth 39–40; peak and end of 53–6; slavery and westernization of England’s trade 36–9; wars and energy shortage 41–6 Fisher, H.E.S. 38 Fisher, R. 69 FitzGerald, G. 213 Flinn, M.W. 1, 19, 20; coal 3, 60, 62, 63, 107 flour 88–9 food 81–98; Britain’s supply 1795– 1846 87–94; change to meat diet 66–7; England and the Celtic periphery 82–7; population explosion 67–8 food imports 94–7; from Ireland 87, 88, 88–9, 90–4, 96

Gaelic language 213 Gallman, R.E. 199, 205 Galpin, W.F. 88, 89 Garscombe, J. 133 George III, King 54 George, Henry 237 Georgescu-Roegen, N. xv, 232, 236 Germany xv, 185 Gilboy, E.W. 39, 43, 63 Glamorgan 215, 221, 223–4 glass-making industry 104 gold flows 205; downswings 190, 194; upswings 188, 191, 192, 201 gold standard 184, 185, 191, 192; interaction model 165, 166, 189, 190 Gothenburg 25–8 passim Gottlieb, M. 40 gradualism xi-xii Graham, G.S. 70 grain imports 66, 88–9, 91, 92, 93, 94, 95–6; see also barley, oats, rye, wheat Grand National Consolidated Trades Union 124, 132 Grant, W.L. 54, 55 Grey, Earl 35 growth, economic: long swings 39– 40; organic approach 232–47; see also long swings Guadaloupe 54–5 Guillebaud, C.W. 245 guns 20, 74, 119, 216

253

INDEX

Habbakuk, H.J. 35, 144–5, 164 Hadley, A.T. 243–4 Hagen, E.E. 102 Hahn, F.H. 247 Hammersley, G. 2, 3, 12, 18, 25; charcoal price 3–4, 19; timber shortage 1, 101 Hart, C.E. 17 Hardie, D.W.F. 74 Hardin, G. 233 Harris, J.R. 107, 117–18 Hartlib, S. 21, 23 Hautala, K. 65 Heckscher, E.F. 26, 27, 76 Hegel, G.W.F. 240 Heliwr, Lewsyn yr 222 Hickman, B.G. 204 Hicks, J.R. 167, 239, 246 Hildebrand, K-G. 25–6, 27, 75 Hill, C. 101 Holyoake, G.J. 121 home construction sector 153–4 Home Counties 152, 156, 170, 176– 9 Homfray, Samuel 115 Hooke, Robert 22 Hopkin, L. 215 Hopkins, S.V. 63 Horner, F. 135 housebuilding 22, 204; see also construction cycles Hughes, J.E. 222 Humphreys, E. 212, 228 Hyde, C.K. 103; charcoal iron industry 13, 107, 109; coke smelting 61, 74; environment for technological progress 105 identity crisis, Welsh 228–9 imports: from American colonies 15, 48, 49, 65; food see food imports; gold 38; iron see bar iron imports; long swings and 40, 48, 49; naval stores 63–5; slaves into American colonies 37, 38; timber 39, 60, 71–2; see also exports, trade

254

increasing returns 234–5 industrial organization 241–2 industrial prices 4, 5; see also prices industry (change in meaning) 122 infrastructure investment 37, 185; interaction model 165–7; long swings 186–90 passim, 193, 194–5; see also construction cycles Inhabited House Duty statistics (IHD index) 146–7, 167–71, 176–7; building cycles 149–56, 159 interaction model 165–7, 200–2; downswings 188–90; historical evidence 191–9; upswings 185– 8 interest payments 187 International Labour Organization 136 international payments mechanism 52 investment xii; construction cycles and American colonies 47–53 passim; downswings in foreign 188–90; foreign 35; for full employment 137–8; infrastructure see infrastructure investment; interaction model 165–7, 185–90, 200–1; in iron industry 78; long swings and imports xiii; productivity and real income 197, 198–9; seventeenth century boom 11; upswings in foreign 185–8, 191– 2; upswing in home 193–8 Ireland 39; Cattle Acts 68, 86–7; food imports from 87, 88, 88–9, 90–4, 96; food production/ consumption 84–6; Gaelic language 213; timber imports from 21 iron: consumption xiii, 9, 75, 102; demand for 14–17 iron industry 100; direct technique 102–3; eighteenth century xiv, 60–3, 74–6, 77–8; imports see bar iron imports; indirect technique 103; prices see bar

INDEX

iron prices; production 111; puddling and rolling technique xiv, 110–13, 115, 214; reverberatory technique xiv, 61, 74, 100, 102, 103–10; seventeenth century 1–30; see also bar iron, pig iron irreversibility 234–7, 243, 247 Jackson, R.V. 68 Jacobite Rebellion 44 Jacobites 108 James, B.L. 215 Jellicoe, Adam 113, 114 Jenkins, R. 16, 105, 107 Jevons, W.S. 238 John, A.H. 43, 44, 67, 86, 140 Johnson, B.L.C. 18, 20 Johnson, H.G. 187 Johnson, Samuel 119 Jones, A.R. 227 Jones, E.L. 81–2 Jones, I.G. 222 Jones, P.N. 211–12 Kenrick, G.S. 217 Kerridge, E. 82 Keynes, J.M. 137, 232, 245 Kuznets, S. 164, 165, 201; cycle xv, 183, 202–4 labour 137–9; Owen’s proposed ministry of 138–9, 220 lambs, price of 86 Land Revenue Commissioners 71 Lansdowne, Marquis of 22 lead 107 Lee, C.H. 186 Lee, R.D. 72 lending: downswing in 188–90; upswing in 185–8; see also investment Levesque, René 225 Levine, A.L. 240 Lewis, J.P. 39, 47, 72, 183, 223 Lewis, Saunders 227 Literary and Philosophical Society 126

Liverpool 149–56, 180 livestock 87; agriculture 66–7, 83–4; imports from Ireland 91–3; see also meat London 184; construction cycles 149, 152, 156, 176–7, 210; population growth 47, 158, 170, 178–9 long swings xv-xvi, 182–204; American colonies’ interaction with Britain 47–56; downswing in migration and lending 188– 90; economic growth 39–40; interaction model 165–7; productivity and real income198–9; upswing in foreign investment 191–2; upswing in migration and lending 185–8; upswing in UK home investment 193–8; US and British alternation 144, 161–5; see also construction cycles Lotka, A.J. 236 Lucas, Jnr, R.E. 246 ‘Mabon’, William Abraham 222 machine tools 117 Macpherson, D. 87 Malone, J.J. 65 Malthus, T.R. 36, 232–3 Manchester 149–56, 180 manufactured exports 16–17, 38–9, 61, 76, 183 manufacturing industry 16–17, 183, 199 marriage rate 148, 156, 159, 221 Marshall, Alfred 232–47; Darwinian legacy 232–4; economic biology 239–45; irreversibility and evolution 234–7; treatment of time in the Principles 237–9 Martineau, H. 128 Martinique 54–5 Marx, Karl 132 Matthews, R.C.O. 247 Maudsley, H. 117 McCulloch, J.R. 86 McKinley Tariff Act 193 meal 88–9, 91, 93 255

INDEX

meat 87, 88, 92, 93 mechanical models 232, 236–7, 239, 240, 246, 247 Menger, A. 132 merchant shipping xiii, 15, 73–4; see also shipbuilding Merthyr Tydfil 217 Midlands 150, 156, 157, 170, 176–9 migration: construction cycles and 47–8, 145–6, 149–67 passim; long swings 182, 184, 185–90, 198, 203–4; statistical sources 147–8, 172–4, 174–5, 178–9, trans-Atlantic 53, 204; Wales 208, 209–12, 213, 216–17, 224, 229 Mill, J.S. 237 mine drainage 62, 105, 106, 107 Mingay, G.E. 82 Ministry of Labour, Owen’s proposed 138–9, 220 Mitchell, B.R. 88, 89, 146, 168 Mokyr, J. 86, 96, 101 monetary instability 188, 190 money stocks 189, 190; US 184, 191, 192, 194, 201–2 Monmouthshire 151, 176–9, 217–18 Morgan, Charles H. 116 Morgan, K.O. 222 Morgan, P. 216 Morganwg, Iolo 215 Morton, C.R. 109, 110–12 Mott, R.A. 108 Mutton, N. 109, 110–12 Namier, Sir L. 54 Napoleonic Wars 87, 89, 119, 216 National Equitable Labour Exchange 124 national income 197, 198–9 nationalism 225 natural increase in population 148, 173, 178–9; construction cycles 150–2, 155, 156, 158–9; Wales 221 naval stores 64–5 Navigation Laws 14, 15, 54, 72, 101 navy 24, 41–2; shipbuilding xiii, 14, 69–70, 72–3 256

Navy Board 14, 41; versus Board of Trade 63–5; timber 68, 69, 70 Neal, L. 41–2 Nef, J.U. xii, xiii, 1, 3, 24, 102 neoclassical aggregate growth model 236–7 Netherlands 27, 28 New Forest 17, 18, 71 New Harmony 124 New Lanark mills 124, 127, 132–4, 220 new settlement, countries of 165–7, 184–5, 190, 200 Newcomen, Thomas 77; atmospheric engine 62, 107, 117 nonconformists 102; Welsh 217, 221–4; 229 Northern England 151, 170, 176–9 North-western region 149–56, 170, 176–9 oak 14, 65, 68–71; see also timber oats 84–6, 89, 90, 96, 98 Okey, R. 222 Old Dissent 217–18 Olson, M. 89 Onions, Peter 112 Oppenheim, M. 14, 101 organic approach to economic growth 232–47 Owen, Anne Caroline (née Dale) 124, 131–2 Owen, Sir Huw 223 Owen, Robert xiv, 121–41, 220; career development 122–4; determinism 125–7; economic planning 136–9; factory system reforms 134–6; financial problems 124, 141; personal qualities 127–30; proposed Ministry of Labour 138–9, 220; religion 131–2, 140; schools 133–4, 220 Paley, William 232–3 Pant Glas community 140 Parker, W.N. 81 pastoral farming 66–7, 83–4

INDEX

pasture land 67 patents 105, 106 Paulinyi, A. 117 Peace of Paris 54 Pedair Cainc y Mabinogi 212 Penderyn, Dic 222 Pennant, T. 135 Percy, John 112–13 Petty, Sir William 22–3 Phelps Brown, H. xv pig iron 103; consumption 8, 9, 30; demand for 18–19; prices 13 pig iron output xi, 8, 9, 30, 78, 111; eighteenth century 74, 78; reverberatory technique 108, 109; seventeenth century xiii, 10, 11–12,29; Wales 216 Pigou, A. 237, 248 pitch 64–5 Pitman, F.W. 53 Pitt, William the Elder 44–5 Place, F. 128 planning, economic 136–9 plantings 18, 60, 63, 68 Plumb, J.H. 45 Podmore, F. 128, 131, 141 Pollard, S. 78 Ponsonby, G. 158 Pool, B. 65 population changes 8, 9, 11, 30, 47–8; American colonies 36–7; construction cycles and 145–6, 149–65; and energy crisis 66–78; and food 66–8, 81–2; statistical sources 147–8; 172–5, 178–9; Wales 208, 212–13, 214, 216–17, 220–1, 227; see also migration, natural increase pork 87, 88 Porter, G.R. 91, 93 Portugal 38 Postlethwayt, M. 44 potash 73 potatoes 84–6, 96, 98 Potter, J. 53 Powell, Thomas 223 Powys, J.C. 221–2 Price, J.M. 48, 49, 52 Price, R. 216

prices 3, 30; agricultural 4, 5, 67, 68, 86, 87–90 passim; bar iron see bar iron prices; charcoal see charcoal prices; coal 62–3, 107; long swings 191, 192; pig iron 13; relative 4–6, 102; seventeenth century iron industry 6, 10, 11–12; timber 4– 6, 10, 11, 29, 68 productivity 198–9, 205 profit maximization 35 profits, Schedule D 146, 171–2, 174 Pryce, W.T.R. 217 public works programme 137–8 puddling and rolling process xiv, 110–13, 115, 214 pumping engines 62, 105, 107 Quebec 224–5 Rawley, J.A. 37, 38 real national income 197, 198–9 Rebecca Riots 218–19 Reddaway, T.F. 15 regional building cycles 146–7, 149–60, 178–9; see also construction cycles religion 131–2, 140 representative firms 235, 240 ‘required additions’ 161–3 reverberatory technique xiv, 61, 75, 100, 102, 103–10; see also puddling and rolling Rhondda Valleys 220–1, 224 Ricardo, D. 238 rice 50, 51 Richardson, H.G. 21 Richmond, Sir H. 64 Riden, P. 78 riots: food 67; Welsh 218–19 rivers, navigable 18–19, 22 Roberts, R.O. 140 Robertson, F.L. 119 Rogers, J.E.Thorold 6, 11, 29 rolling see puddling and rolling Rovenson, John 104–5 royal forests 71 Royal Navy see navy

257

INDEX

Royal Society of Arts 68 Ruck, S.K. 158 rural regions 147, 156–8, 169, 170– 1 Russia 72, 75 rye 84 Salaman, R.N. 82, 96 Sargant, W.L. 121, 129–30 Saul, S.B. 145–6, 153, 154, 164, 183 Savery, Thomas 102, 107 sawing 77 Say’s Law 136–7 Schafer, R.G. 20 Schedule D profit income 146, 171–2, 174 Schlote, W. 36 Schofield, R. 11, 72 schools: factory workers’ children 133–4, 220; Welsh language in 223–4 Schubert, H.R. 2 Schumpeter, E.B. 39, 43, 48, 50, 63, 76; timber imports 39, 72 Schumpeter, J. xii Schwartz, A.J. 184, 195, 200 Scotland: cattle farming 83–4, 91–3; exports and war 42–3; grain consumption 85, 86, 97–8 Seven Years War 41–3, 45, 46, 54, 69 Severn river 18, 19 Shannon, H.A. 39 Sharp, L. 22, 23 Shelton, W.J. 67 Shepherd, J.F. 50 Sherman Silver Purchase Act 193 shipbuilding 12, 14, 24; merchant 72–3; naval xiii, 14, 69–70, 72–3, 101; Petty and 22 shipping industry 15–16, 53–4, 70 Shove, G.F. 235 Sigsworth, E.M. 194 slavery 36–9, 53, 76 Smalleys mill 135 Smeaton, John 102, 117 smelting: with coal 102–7; with coke xiv, 16, 61, 74, 103–4, 108 Smiles, S. 117 258

Smith, Adam 52, 77, 122 Smith, D. 223 social innovation 132–9 solar power xvi Solomou, S. xv-xvi Solow, B.L. 38 South African War 195 South Wales 171, 178–9; construction cycles 149, 151, 154, 176–7, 210 Southey, R. 128 Spain 27, 28, 44 Spanish Succession, War of 43 Spencer, H. 234, 240 Sperling, J. 52 stage emigration 210 Stamp, Sir J. 146, 167–8, 171 statics, economics 243–4 statistical uniformities 180 Steady State economics 246 steam engine xiv, 74, 100, 117, 214 Sweden: bar iron imports from 12, 21, 25–8, 60, 75; guns from 20; trade sanctions 13, 100, 108–9 Symon, J.A. 93 Syrett, D. 70 tar 64–5 taxation: American colonies 46; Owen and social innovation 136–7 technical progress: favourable environment for 105; neoclassical theory and 104 Temin, P. 119 temperance movement 222 textile industry 73; factory system 133–6 Thirsk, J. 5 Thomas, Brinley, 183, 201, 220; Atlantic economy 34; construction cycles 149, 164, 194, 210; Industrial Revolution 213, 214; long swings 40; Wales 208, 210, 221 Thomas, G. 227 Thomas, R.S. 227 timber 100, 101, 102; conservation lobby 21–3; demand shifts 14–

INDEX

15, 63; eighteenth century crisis 68–73, 76–7, 213; imports 39, 60, 71–2; plantings 18, 60, 63, 68; prices 4–6, 10, 11, 29, 68; sawing 77; seventeenth century crisis xiii, 1–24 passim; supply 17–18; unseasoned 69, 70; see also charcoal time 237–9, 241, 243, 246–7 tobacco 50, 51 Tomlinson, H.C. 75 Torrens, Colonel 136 trade 34–56; with American colonies 47–53; free 35; long swings 39–40; Navy Board vs Board of Trade 63–5; pre-1913 international economy 183–5; sanctions and Sweden 13, 100, 108–9; and war 35, 41–6, 54; westernization of British 36–9, 76, 77; see also exports, imports trade cycle 144–5, 164 trade unions 124, 132, 140 transport 18–19, 22, 70 Tranter, N.L. xi ‘trees of the forest’ story 235 Trevelyan, G.M. 82, 129 Trevithick, Richard 214 Tucker, J. 67 Turner, M. 68 turpentine 64–5 unemployment 182, 198; Owen’s economic planning 136–9; 220; pay 133 United States xv, xvi, 225; confidence in dollar 193; consigned imports from Britain 35; construction cycles 144–6, 161–5; immigration 53, 204; industrial revolution xiii, 118– 19; long swings 182–3, 191–204; passim; money stock 184, 191, 192, 194, 201–2; recognition of Cort 116; weight in pre-1913 international economy 183–5; see also American colonies unseasoned timber 69, 70 urban regions 147, 158–60, 169,

170–1 Utrecht Treaty 38 Villages of Cooperation 136 wages 67, 192; agricultural 90; unemployment 133 Wales 86, 169–70; agricultural regions 156, 157, 170–1; anglicization of 211, 224; coal production 216, 220, 223; collapse of economy 228; grain consumption 84, 85, 97; industrialization 208–10, 214; pig iron production 216; Robert Owen and 121, 139–40; see also South Wales; Welsh language Wallas, G. 128 Walton, G.M. 50 Ward, J.R. 39, 72 wars 35–6, 41–6, 54–5 warships 14, 69–70, 101 Watson, J.S. 35 Watt, James 24, 45, 78, 115–16; steam engine 74, 117, 214 Weald, the 74 Weber, B. 180; housebuilding index 146–7, 153, 168 Webster, C. 23 Wedgewood, Josiah 102 Welsh identity crisis 228–9 Welsh language 208–29; industrial revolution 213–21; nonconformist culture 221–4 Welton, T.A. 158 West Indies 52–3, 54–5; see also American colonies Westernization of trade 36–9, 76, 77 wheat 84–6, 89, 94, 97, 98; prices 86, 87–8, 90; see also grain imports Whitaker, J.K. 236, 237, 243 white bread 89–90 Wilbraham, A. 66 Wilks, I. 219 Williams, B. 41, 60 Williams, D. 209 Williams, G.A. 216, 228

259

INDEX

Williams, R. 122 Williams, S.R. 218, 223 Williams, William 219 Williamson, J. 205 wood see timber Woodcroft, B. 106 Wright, J. 71 Wrigley, E.A. xvi, 11, 47

Yarranton, A. 22 Yelling, J.A. 67 Yorkshire 151, 176–9 Young, A. 90 Young, D.B. 118 Young, R.M. 233–4 Ystradyfodwg Parish 220

260

The Industrial Revolution and the Atlantic Economy: Selected Essays

Selected Essays in Political Economy

The first industrial revolution

THE THIRD INDUSTRIAL REVOLUTION

Before the Industrial Revolution: European Society and Economy 1000-1700

The Early Modern Atlantic Economy

Understanding the Industrial Revolution

Industrial Revolution

Industrial Revolution

Makers: The New Industrial Revolution

Was the Industrial Revolution Necessary?

Ireland and the Industrial Revolution: The impact of the industrial revolution on Irish industry, 1801-1922

Energy and the English Industrial Revolution

Organizing the New Industrial Economy

Revolution And Other Essays

Industrial Policy and the International Economy

Industrial Organization and the Digital Economy

West Indies Accounts: Essays on the History of the British Caribbean and the Atlantic Economy

Selected Essays

China and the Global Economy: National Champions, Industrial Policy and the Big Business Revolution

Industrial Revolution. Biographies

First Industrial Revolution

Industrial Revolution. Almanac

Agency and Answerability: Selected Essays

Models and Interpretations: Selected Essays

Kierkegaard and Philosophy: Selected Essays

History and Heteronomy: Selected Essays

Natural Capitalism. The Next Industrial Revolution

Culture and materialism: selected essays

Revolution, and Other Essays 1910

The Industrial Revolution in America: Iron and Steel, Railroads, Steam Shipping (Industrial Revolution in America)

The Industrial Revolution and the Atlantic Economy: Selected Essays

Selected Essays in Political Economy

The first industrial revolution

THE THIRD INDUSTRIAL REVOLUTION

Before the Industrial Revolution: European Society and Economy 1000-1700

The Early Modern Atlantic Economy

Understanding the Industrial Revolution

Industrial Revolution

Industrial Revolution

Makers: The New Industrial Revolution

Was the Industrial Revolution Necessary?

Ireland and the Industrial Revolution: The impact of the industrial revolution on Irish industry, 1801-1922

Energy and the English Industrial Revolution

Organizing the New Industrial Economy

Revolution And Other Essays

Industrial Policy and the International Economy

Industrial Organization and the Digital Economy

West Indies Accounts: Essays on the History of the British Caribbean and the Atlantic Economy

Selected Essays

China and the Global Economy: National Champions, Industrial Policy and the Big Business Revolution

Industrial Revolution. Biographies

First Industrial Revolution

Industrial Revolution. Almanac

Agency and Answerability: Selected Essays

Models and Interpretations: Selected Essays

Kierkegaard and Philosophy: Selected Essays

History and Heteronomy: Selected Essays

Natural Capitalism. The Next Industrial Revolution

Culture and materialism: selected essays

Revolution, and Other Essays 1910

The Industrial Revolution in America: Iron and Steel, Railroads, Steam Shipping (Industrial Revolution in America)

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