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State and Market in Victorian Britain

State and Market in Victorian Britain: War, Welfare and Capitalism

Martin Daunton
Copyright Date: 2008
Published by: Boydell and Brewer,
Pages: 352
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  • Book Info
    State and Market in Victorian Britain
    Book Description:

    In the course of the nineteenth century, the economic structure and policies of Britain were remade, as the costs of the 'fiscal-military' state which fought successful wars against France were cut, and monopolies gave way to free trade, while monetary policy was determined by the automatic operation of the gold standard. However, the result was not, as might be expected, the triumph of ‘laissez faire’; there was continued concern about the moral and social consequences of economic change. In this magisterial collection, Professor MARTIN DAUNTON looks at the connections between state and market in this period, and the ways in which all society was affected. He argues that central to the politics of Victorian Britain was determining where the line should be drawn between private profit and social costs - a task that implicated the courts and politicians in defining the nature of capitalist society. The outcome was not determined by 'gentlemanly capitalists' comprising landowners and financiers who dominated the state and denied a voice to industrialists and their workers. Rather, the choices reflected the interplay between all interests, including those of the state itself. MARTIN DAUNTON is Master of Trinity Hall and Professor of Economic History at the University of Cambridge.

    eISBN: 978-1-84615-676-2
    Subjects: History

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Acknowledgements
    (pp. vii-x)
    Little Wilbraham
  4. 1 Introduction
    (pp. 1-38)

    In the ‘long eighteenth century’ from the arrival of William and Mary to the final defeat of Napoleon, England/Britain was repeatedly at war with the French, and in the process created a remarkably effective and successful ‘fiscal-military state’. The level of fiscal extraction rose from below 5 per cent of national income before 1688, to 8 to 10 per cent in the eighteenth century; between 1790 and 1810 total government spending reached 23 per cent of national income (see chapter 2). The compliance with these fiscal demands was the envy of other European countries; a system of state loans was...

  5. PART I

    • 2 The Fiscal-Military State and the Napoleonic Wars
      (pp. 40-60)

      These two great representatives of the French and Scottish Enlightenment realized that the finances of their two nations had taken very different paths. Despite the larger population of France and its great resources, it could raise much less revenue than Britain – yet the French people believed that their burdens were greater. Louis xiv’s finance minister, Jean-Baptiste Colbert (1619–83) put the matter more graphically in his reputed remark that ‘The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.’³ The British goose was...

    • 3 Trusting Leviathan: the Politics of Taxation, 1815–1914
      (pp. 61-88)

      In 1829 a cartoon in The State of the Nation portrayed a common view of British society. At the top of the image was a wooden beam, labelled ‘manufactures and commerce’, which had snapped under the weight of people dependent on it. Desperately clinging to the beam were four tattered workmen; hanging on to their legs were two prosperous businessmen; and clutching at their coat tails was a plump individual, splendidly attired in the robes of a bishop and peer. The caption spelled out the message: ‘Manufactures and commerce support the workmen they the merchants and masters who are the...

    • 4 Taxation and Representation in the Victorian City
      (pp. 89-110)

      Cities involve a huge transfer of costs and benefits, of external economies and diseconomies. They generate Rents and monopoly profits for some, and pollution, exploitation and disease for others. The relationship between these gains and losses troubled those responsible for the government of cities in the pre-industrial past, and still trouble politicians in the post-industrial present. However, they created particular intellectual and conceptual problems in early Victorian Britain. At this point Britain had emerged as the most urbanized nation in human history; it was also experiencing an unprecedented shift from organic to mineral fuels and raw materials.¹ The result was...

    • 5 The Material Politics of Natural Monopoly: Gas in Victorian Britain
      (pp. 111-127)

      One of the most influential interpretations of British history in the eighteenth and early nineteenth centuries has been Edward Thompson’s account of the decline of a ‘moral economy’ of fair prices and just wages set by a paternalistic élite, and its replacement by a ‘political economy’ which left prices and wages to the unfeeling laws of the market.¹ Recent research on both the eighteenth and nineteenth centuries suggests that such a simple account of binary oppositions obscures many important features of the intellectual and political response to capitalism. Many historians have queried the concept of a ‘moral economy’ in the...

    • 6 Tax Transfers: Britain and its Empire, 1848–1914
      (pp. 128-146)

      In a footnote to their influential two-volume account of British Imperialism, Peter Cain and Tony Hopkins comment that ‘taxation in Africa remains a neglected subject’, despite the fact that colonial officials had to wrestle with the problem of extracting revenue in the absence of an existing tax base. In India, there was a pre-existing tax base, but it was not necessarily one that British rulers saw as appropriate or sustainable. They pondered how it should be reformed in order to ensure that the Raj secured as much revenue as possible, while also ensuring political stability and encouraging economic growth. Similarly,...

  6. PART II

    • 7 ‘Gentlemanly Capitalism’ and British Industry, 1820–1914
      (pp. 148-178)

      ‘Manufacturers and merchants’, claimed Richard Cobden in 1863, ‘as a rule seem only to desire riches that they may be enabled to prostrate themselves at the feet of feudalism.’ Cobden, the spokesman of the Northern industrial middle class, the leading proponent of free trade, seemed to be admitting defeat. Rather than the bourgeois triumph which he desired, he feared that ‘feudalism is every day more and more in the ascendant in political and social life.’¹ Even Marx and Engels, whose theories presupposed a triumphant bourgeoisie, were not clear how to portray Victorian Britain. In 1852 Marx felt that Cobden and...

    • 8 Inheritance and Succession in the City of London in the Nineteenth Century
      (pp. 179-195)

      London, claimed Bagehot in 1870, differed from earlier commercial cities such as Venice and Genoa in its absence of ‘great families of merchant princes’. In his opinion, the City did not develop dynasties, for it was characterized by a fluid and democratic structure.¹ Bagehot was pointing to the ease of access into the mercantile world of mid-Victorian London, yet there is also an implication that successful merchants or their children did not aspire to remain in the City in order to found merchant dynasties. Bagehot’s view seems to contradict what historians have said of earlier and later periods. ‘In 1750’,...

    • 9 Firm and Family in the City of London in the Nineteenth Century: the Case of F. G. Dalgety
      (pp. 196-219)

      British business in the nineteenth century was dominated by what could be called ‘family capitalism’, and the trend towards corporate forms of enterprise was halting and patchy. During the phase of ‘family capitalism’ the nature of the family affected in a fundamental way the patterns of growth and development of the firm. Most obviously, ‘the search for safe income to support dependants – wives, children, younger siblings and adult female relatives – had a marked effect on investment and production decisions of the middle class as a whole, turning them from the sole pursuit of maximum profit.’ More generally, Davidoff...

    • 10 Britain and Globalization: Creating a Global Order, 1850–1914
      (pp. 220-252)

      A highly global economic order emerged between 1850 and 1914 which posed a central question in British economic policy: was the crucial consideration to be domestic prosperity or internationalism? Were these two concerns in tension or were they complementary? If they were in tension, how was the choice between the different priorities made? The question is central to British history since 1850, and not only for economic historians: it relates to the cultural identity of Britain as insular or cosmopolitan.

      Globalization and nationalism have been and remain in tension. In The End of Globalization: Lessons from the Great Depression, Harold...


    • 11 Payment and Participation: Welfare and State Formation in Britain, 1900–1951
      (pp. 254-289)

      The development of the British state in the twentieth century, James Cronin has recently suggested, was limited rather than rising inexorably, constrained both by the ‘anti-state logic’ of the Conservatives’ appeal to the taxpaying public, and by the ‘self-denying tendencies inherent in the unique structure of the British state’, most obviously the role of the Treasury and its allies in the City in limiting spending. As a result, he suggests, priority was given to the interests of taxpayers rather than to the beneficiaries of expenditure on welfare.¹ Such an emphasis on limitations to the expansion of the state carries a...

    • 12 Mutuality and State Formation: Britain and the United States, c. 1890–1940
      (pp. 290-316)

      The welfare systems of Britain and the United States differ in major ways, not least in the lag between the earlier adoption in Britain of tax-funded old age pensions in 1908 and social insurance for health and unemployment in 1911, and the introduction of pensions and unemployment insurance in United States in 1935. Even then, the United States did not adopt health insurance, and it remains alone among advanced industrial economies in the lack of a universal health care scheme. The divergence has been noticed by many commentators who have attempted to provide an explanation – and not least by...

  8. Index
    (pp. 317-342)
  9. Back Matter
    (pp. 343-343)