Essays on a Mature Economy: Britain After 1840

Essays on a Mature Economy: Britain After 1840

Edited by Donald N. McCloskey
Copyright Date: 1971
Pages: 456
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  • Book Info
    Essays on a Mature Economy: Britain After 1840
    Book Description:

    Debating the promises and limits of the "new economic history," seventeen economists and economic historians look at Great Britain, from the peak of her industrial dominance in 1840 to her eclipse by the surging economies of Germany and the United States. Their discussion brings a new methodological challenge to the field of economic history and a new interpretation of the British economy in the nineteenth and early twentieth centuries.

    Originally published in 1972.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-7016-5
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-viii)
  3. The Mathematical Social Science Board
    (pp. ix-xii)
    Robert W. Fogel
  4. Preface
    (pp. xiii-xiv)
    Donald N. McCloskey
  5. Participants of the Conference
    (pp. xv-xvi)
  6. Editor’s Introduction
    (pp. 1-10)

    The papers in this volume examine selected issues in the history of the British economy during the century following the Industrial Revolution from the perspective of economic theory and applied statistics. Nothing could be more natural than to apply the tools that have been used with some success in economics for two hundred years to economic history. It would be strange if the insights into the use of economic logic and economic fact that have been acquired since Adam Smith’s day proved of little use in economic history, the more so considering that these insights were acquired by men studying...


    • 1 The American tariff, British exports and American iron production, 1840–1860
      (pp. 13-38)

      The two decades preceding the American Civil War were years of significant changes in the iron producing sector in both the United States and Britain. To some extent these developments reflected the general pattern of economic change within the two economies, but there remain features unique to the industry. Developments in the two economies were related, by trade relations and factor flows, but in few industries were the trade relations so important and with such profound effect as in iron production. In this paper I shall describe the role of the American market in British iron production, as well as...

    • 2 Demographic determinants of British and American building cycles, 1870–1913
      (pp. 39-80)

      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...


    • 3 Rigidity and bias in the British capital market, 1870–1913
      (pp. 83-112)

      Like similar structures in other advanced economies of western Europe and North America in the late nineteenth and early twentieth centuries, the organized institutions of the British capital market conducted two types of transactions. First, claims to ownership of domestic and overseas capital goods were traded in the equity market. Second, claims to future amounts of domestic and foreign monies were traded for current liquid assets in the debenture and preference securities market. In so far as its operation facilitated the accumulation of capital goods by, on the one hand, making the traded assets more attractive than alternative forms of...

    • 4 British controls on long term capital movements, 1924–1931
      (pp. 113-142)

      Peacetime controls on long term international capital movements undertaken primarily for balance-of-payments reasons are relatively modern phenomena. In Great Britain they date from the period of the inter-war gold standard. This paper concerns itself with the origins, operation and effectiveness of these British inter-war controls in an attempt to add to our understanding of the operation, from Britain’s point of view, of the inter-war gold standard.

      By returning to gold at $4.86 in 1925, the British authorities saddled themselves with an overvalued exchange rate [1]. Given their policy goals [2] – pre-war levels of unemployment, free trade, unrestricted foreign lending...


    • 5 The landscape and the machine: technical interrelatedness, land tenure and the mechanization of the corn harvest in Victorian Britain
      (pp. 145-214)

      The observation that the mid-nineteenth-century farming landscape in Britain was not congenial to the introduction of agricultural machinery forms the point of departure in this inquiry. Certainly there is little novelty attached to this observation. Contemporary writers in the agricultural press frequently discussed the problems of using horse-drawn and steam-powered equipment in field operations where terrain conditions were ‘unsuitable’, and references to these difficulties dot the major scholarly works on the modernization of British agriculture. The admirable account of the 1846-1914 era provided by Christabel S. Orwin and Edith H. Whetham is, perhaps, rather unusual in going beyond mere mention...

    • 6 The shift from sailing ships to steamships, 1850–1890: a study in technological change and its diffusion
      (pp. 215-238)

      Radical improvements in transportation were one of the hallmarks of the late nineteenth century. Alfred Marshall believed that ‘probably more than three quarters of the whole benefit [Britain] has derived from progress of manufactures during the nineteenth century has been through its indirect influences in lowering the cost of transport’ [1]. The technological changes involved were primarily the railroads and the improvements in ocean shipping; surprisingly there has been little recent research on the improvements in late nineteenth-century shipping. A casual debate exists in the literature about the relative importance of improvements in sailing ship technology and in steamship technology,...

    • 7 Yardsticks for Victorian Entrepreneurs
      (pp. 239-284)

      While no major question in economic history can be said to have been ‘fully’ researched, coverage of the quality of Victorian industrial management has been relatively heavy. Authors seeking to generalize about the role of entrepreneurial failure in Britain’s relative decline after 1870 have been able to draw on numerous contemporary and retrospective industry studies. Perhaps as a consequence allegations concerning the quality of management have abounded. Writers stressing the shortcomings of businessmen [1] have linked them to amateurism, the family ownership of firms, complacency based on past achievements, an underemphasis of technical education and a range of other factors....

    • 8 International differences in productivity? Coal and steel in America and Britain before World War 1
      (pp. 285-310)

      The assumption that the New World has yielded unusually high returns to the factors of production has been a part of our thinking from the time of Adam Smith and before. It is a congenial assumption, suggesting as one might wish that the right to life, liberty and the pursuit of happiness had material as well as moral advantages. The evidence for it, however, has been collected somewhat casually. In the nineteenth century Anglo-American comparisons were made with scattered data on real wages, that is, data on labour’s marginal product. After the first British census of production in 1907 they...


    • 9 Changes in the productivity of labour in the British machine tool industry, 1856–1900
      (pp. 313-344)

      Discussion of trends in the growth of labour productivity is central to an evaluation of the behaviour of the British economy during the second half of the nineteenth century. It has conventionally been argued that the growth rate of labour productivity fell during the period from 1.2 per cent per annum in the decade 1870-80 to a low point of 0.2 per cent per annum in the decades 1890-1900 and 1900-13, and that the overall growth rate for the period 1870-1913 was only 0.6 per cent per annum [1]. Other calculations have suggested that output per hour worked rose more...

    • 10 Nihilistic impressions of British railway history
      (pp. 345-366)

      Originally the intention of this paper was to investigate productivity on Scotland’s railways between 1870 and 1900, in order to assess whether the railway sector shared the fate of the Scottish economy in general and slowed down in its rate of growth. Ample evidence exists tosuggestthat railway productivity growth was decelerating: increasingly adverse traffic patterns, high urban land costs for relocated termini, severe intercompany rivalry, the growing drag of interrelatedness, and unfortunate investment decisions in suburban railways and branch lines – ‘more than half of the North British (the largest Scottish railway company) is made up of branches...

    • 11 Railway passenger traffic in 1865
      (pp. 367-388)

      My invitation to participate in this seminar on the Application of Mathematical Techniques to British Economic History was presumably based on my recent work on the economic effects of the innovation of railways in England and Wales between 1840 and 1870 [1]. That work is too recent for me to engage in any comprehensive revision; too recent, indeed, for me to review the reviewers if there are any reviewers. But this invitation did provide an opportunity for me to pursue some further thoughts, especially some thoughts of a mathematical kind, with reference to the passenger traffic of the railways.


    • General discussion on the performance of the late Victorian economy
      (pp. 389-392)

      Hughes: He wanted to turn the discussion to the more general underlying issue. Economic historians his age or older had been raised to believe in a ‘Great Depression’ of the late nineteenth century. A student of his, William Kennedy, had found that there was a good deal to be said for turning the idea on its head. One would expect a developed industrial economy like Britain to stop expanding its pig iron and coal output at some point and start expanding its tertiary industries. This is exactly what the British were doing before 1914: Britain serviced the world then as...

    • 12 Some thoughts on the papers and discussion on the performance of the late Victorian economy
      (pp. 393-398)

      Five of the papers at this conference were concerned directly with the question of the response of different sectors of the British economy to the opportunities and challenges offered by technological and institutional change in the second half of the nineteenth century. It may therefore be useful to comment briefly on the implications of these pieces of research for our interpretation of the performance of the British economy at and since that time. With the exception of Floud, none of the writers concerned himself with evaluating absolute levels of achievement. For the others, the question was: Given the objective conditions...


    • 13 Is the new economic history an export product?
      (pp. 401-412)

      I will not begin by questioning the legitimacy of this conference. It would not only be ill mannered of me, but an outrage against common sense. We have all gone to considerable trouble to be here, and one must suppose there are sufficient reasons. As I understand it, the purpose of these meetings is the encouragement of quantitative economic history in the United Kingdom. We do not ask whether we think there is enough there now, or whether more would be a good thing. Is the object to ‘export’ our New Economic History to Britain? I am going to ask...

    • 14 Is the new economic history an export product? A comment on J. R. T. Hughes
      (pp. 413-422)
      R. M. HARTWELL

      Why does the new economic history flourish in the U.S.A. and not in Britain? Why, in spite of a distinguished tradition of counting from Thomas Tooke to Colin Clark, in spite also of a long association between economics and history from W. Cunningham (the runner-up when Marshall got his chair in Cambridge) and Clapham (once professor of economics at Leeds) to B. Thomas and A. Lewis, are the economic historians of Britain today so different, in training, work and outlook, from those of the U.S.A.? Posing the difference in terms of persons and their writing highlights the contrast: the difference...

    • 15 Can the new economic history become an import substitute?
      (pp. 423-430)

      The departure point for this paper is Hughes’s analysis of the export prospects (from the American viewpoint) of the new economic history. My aim is to elaborate some of the points he made about the institutional setting, which may, or may not, explain the British reaction to and acceptance of the new economic history – and, incidentally, to attempt to give some sort of response to the questions about the counterfactual past and the hypothetical future, which, with unnecessary modesty, he declines to answer.

      There is, I hope, no need for me to say anything in detail about the recent...

    • 16 The new economic history in Britain: A comment on the papers by Hughes, Hartwell and Supple
      (pp. 431-434)
      R. C. O. MATTHEWS

      This note is not intended to register dissent from the three stimulating papers that have been circulated. Its intention is to add certain supplementary points, relating particularly to the appeal, or rather lack of it, offered by economic history to young British economics graduates.

      The major premise of my argument is that work in the style of the new economic history is generally bound in the nature of things to come from those whose original training was in economics rather than history; and from those, moreover, whose original training in economics was carried to quite an advanced level. The reason...

    • General discussion on the future of the new economic history in Britain
      (pp. 435-439)
      B. Supple

      Hughes: Someone had suggested to him that his paper was somewhat out of date, and he hoped this was true. On the basis of the sample at the conference, the pessimism in the paper may have been unwarranted. Nonetheless, Matthews is right to stress the need in Britain for graduate training in economics. It is not clear where the substitute for the American programme in theory and statistics is to come from.

      Feinstein: He agreed with Hughes. A number of people, by no means economic historians alone, were concerned with this lack and are doing something about it. Cambridge, for...