English/British Economy


Figure 1.--Britain in the 19th century became the preminant industrial power of the day, although America and Germany had become major competitors by the end if the century. One impact of industrialization was that England lost the ability to feed itself. And as late as the 1930s, English agriculture was not mechannized. Here we see hay making with oxen pulled waggons in 1927. And English agricuture was some of the most efficent in Europe. Unmechanized farming meant expensive food and a drag on living standards. The reliance on imported food resulted in German U-boat campaigns to starve Britain out of World war I and II. This early color image is from the Biocolour film, 'The Open Road'.

The history of the English economy is an especially important subject. Until the 18th century, it was like other countries, primarily reliant on agriculture. Pastoral profuction of wool was especially important. And as England became a seafaring nation (16th centyry), trading became important as well. Then all of a sudden the industrial revolution took hold which transformed not only England, but eventually the world. A student of both economics and history has to explain why the various social, political, and economic forces came together in England during the 18th century to create the first modern economy. The economy of medieval England was based on the wool trade. Before the 18th century several important elements were in place. Laws protected private property even from royal excesses. The English appropriated capitalism which the Dutch invented. And social attitutudes a well as laws protected and even promoted free thought, including scientific inquiry which led to practical applications. This combined with the availability of key natural resources (coal and iron) led to the industrial revolution (mid-18th century). The first steps were to develop textile weaving machines. The need for efficent naval construction also helped bring about the industrial revolution. The result was an extrodiarily efficent economy and the creation of great wealth. At about the sane timne, the loss ofthe American colonies (1783) taught the British an important lesson, to allow the colonies to participate in free trade with relatuively few trade limitations compared to the other European empires. The economy allowed England to resist Napoleon and to emnerge after the Napoleon as the preminent world power. The United States followed the English system, only without an empire. The English capitalist economy is often accused of creating poverty. Marx of course wrote Das Kapital in the British Library. This is a major error. English capitalism created wealth. Poverty existed in England before the industrisl revolution. Capitalism fid create greater disparities in wealth because of the wealth it created. Gradually Germany emerged as a major economic competitor with capitalist system developing with greater government direction. After World War II, the governing British Labour Party embarked on an experiment with socialism. Some social inequities were addressed, but Britain fell behind many continental countries. The Thstcher era only partially reversed this course. Britaian today along with many other European countries is facted with Mrs. Thstcher's famous dictum, "Socialism is fine until they run out of other people's money to give away."

Pre-history


Stone Age

Most of British pre-history was the long neolithic or Stone Age with ashort Bronze Age period. relatively little is known about these people as ghey left no written record. They didleave numerous sites which have been found by archeologists, the most famous being Stonehenge. Major developsment occurred in the late Stone Age, including the first elaborate burials, the introduction of pottery, huge engineering projects and the construction of Britain's most famous ancient monuments, both Stonehenge and Avebury. The economy of these peoplewas baserdon agriculture. At is no accident that ritual observances at Stonehenge and other sites was oriented towards the midwinter sun with obvious association with agriculture. European Neolithic agricultural practices and the domesticated crops spread to Britain. Pastoral herding wasalso practiced. Milk wasan important part of the diet. Britain became part of the Bell Beaker material culture, idespread across much of Western Europe in period before the Bronze Age.

Iron age: Celtic Britain


Roman Britain


Medieval England

The medieval era is generally dated from the decline of Rome, in Britain's case the departure of the Legions (5th century to the onsert of the Renaissance (16th century). That is an epic of over a millenium which encompassed massive social and political shape. And for a substantial part of that period, England did not even exist and was instead divided into warring Anglo-Saxon kingdoms as well as the Dane Law. Modern england did not begin to choalenseuntil Alfred the Great defeated the Vikings (Danes) (9th century). But it was not until Duke Willian invaded (1066) tht England as weknow it today began to take shape. As a result, economic historians commonly separate their work into the early- and late-medieval periods with Willian the Conqueror and the Battle of Hasings (1066) the dividing point. Agriculture dominated the economy throughout the middle ages, but the character of agriculture and the growth of cities separated the early- and late-medieval period. Hastings is a good dividing point for economic historianrs because it was not until William and the assent of the Normans that the Feudal System was fully planted in England. The Normans imposed Feudal institutions like serfdom upon the existing Saxon/Danish system of open fields and mature, well-established if small towns. Under the Normans perhaps the major economic factor besides Feudalism was the growth in population. Two developmets had huge economic consequence (14th century). First was the the twin disasters of famine and plage which substabtially reduced the population. Some historians believe thart as much as lalf the population perished. The second was the enclosures and shit to pastoral agricultute. England is a well-watered country where grasses grew well. Gradually sheep and wool became a vital part of the late-medieval economy. This set up trade between England and the Low Countries where the wool was used to weave textiles. This tied England firmly into the wider European economy.

Mercantil England


Industrial England

The history of the English economy is an especially important subject. Until the 18th century, it was like other countries, primarily reliant on agriculture. Pastoral profuction of wool was especially important. And as England became a seafaring nation (16th centyry), trading became important as well. Then all of a sudden the industrial revolution took hold which transformed not only England, but eventually the world. A student of both economics and history has to explain why the various social, political, and economic forces came together in England during the 18th century to create the first modern economy. The economy of medieval England was based on the wool trade. Before the 18th century several important elements were in place. Laws protected private property even from royal excesses. The English appropriated capitalism which the Dutch invented. And social attitutudes a well as laws protected and even promoted free thought, including scientific inquiry which led to practical applications. This combined with the availability of key natural resources (coal and iron) led to the industrial revolution (mid-18th century). The first steps were to develop textile weaving machines. The need for efficent naval construction also helped bring about the industrial revolution. The result was an extrodiarily efficent economy and the creation of great wealth. At about the sane timne, the loss ofthe American colonies (1783) taught the British an important lesson, to allow the colonies to participate in free trade with relatuively few trade limitations compared to the other European empires. The economy allowed England to resist Napoleon and to emnerge after the Napoleon as the preminent world power. The United States followed the English system, only without an empire. The English capitalist economy is often accused of creating poverty. Marx of course wrote Das Kapital in the British Library. This is a major error. English capitalism created wealth. Poverty existed in England before the industrisl revolution. Capitalism fid create greater disparities in wealth because of the wealth it created. Gradually Germany emerged as a major economic competitor with capitalist system developing with greater government direction. After World War II, the governing British Labour Party embarked on an experiment with socialism. Some social inequities were addressed, but Britain fell behind many continental countries. The Thatcher era only partially reversed this course. Britain today along with many other European countries is facted with Mrs. Thstcher's famous dictum, "Socialism is fine until they run out of other people's money to give away."

Labor Movement

The British labour movement developed in a class-bound society. The Industrail Revolution began in Britain and as might be expected, Britain's labour movement is the oldest in the world. Marxist doctrine was an important component of the the country's labor movement. From an early point the labor movement took on a political character. As a result, the history of the labor movement in Britain becomes the history of socialism in the country. The Communists unlike many other Europen contrues gnered only limited support. The movement's goals gradually went far beyond demanding higher wages and sworking conditions. The movement rejected the profit motive and the market capitalism. Rather the British Labour Party, a socialist party, aspired to nationalize basic industry including steel, coal, and transport and to run them as state corportations. The Labour Party finally won a general election (1945). The Labour Government proceeded to carry out their goals of nationlizing industry. The result was economic failure. Britain had to continue World War II rationing into the post-War era. The economy lagged behinf that of theor continental neigbors which had more market based economies. State-owned industries fared pooerly and as a result were unable to pay wages as high as on the Cintinent. Britain had been the wealthiest, most affluent European country, fell behind Continental Western Europe. The German Economic Miracle soon offered the people of Germany rebuilding from a sea of rubble a higher living stndard than the British. The political showdown with the Labour Party came with the premiership of Margaret Thatcher.

The Welfare State

Although there were some medieval and early industrial precursors like the Work House, The foundation of the British welafe system was layed by Liberal Party. This began under the leadership of Prime Minister H. H. Asquith and Chancellor of the Exchequer David Lloyd George in the years preceeding World WarI. British liberals unlike the Labour Party was not hostile to capitlism and big business. The Liberals had been primarily interested in free trade (19th century). This was classical liberalism, free trade and laissez faire economics. They were competing with the Conservative Party which at the time was defending the interests of the lannded aristocracy. The Liberal Party by the turn of the 20th century began to shift and became concerned with social legislation to achieve opportunities for working people. They were competing with the Labour Party with a Marxist iderology hostile to capitalism and a Conservative Party which was replacing the Liberal connection with business and the middle-class. Chancellor Bismarck's success in Germany with social reforms, especially old pensions, was influential in Britain. The Old-Age Pensions Act enacted by the Liberal Government was the first major step in building Britain's the modern welfare system (1908). Further reforms followed both World War I and even more importantly World War II following the Labour victory in the 1945 General Election. The Liberals had begun a second pillar to the welfare system in the inter-War era--public housing. After World War II, Labour added the third pillar--the National Health System. A fourth pillar, state ownership as proscribed by Marxist ideology proved to be an unmitigated disaster. Labour differed from the Liberals in that as a result of their Marrxist foundation, did not understand the importance of a sucessful capitalist economy to pay the bills for their costly welfare system. The result was that after World War II, the British economy and as a result the prosperity of the country fell behind America and even war-wrecked Continental Western Europe. This did not change until the premiership of Margaret Thatcher.







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Created: 12:39 AM 3/1/2011
Last updated: 8:15 AM 2/3/2019