Economic Developments c1851-1886

Economic Developments c1851-1886

1. 'Workshop of the world'

   • in 1851, Britain dominated the world in terms of industrial production
     • By 1870s 30% of the world trade was connected to Britain in some way
   • May 1851 The Great Exhibition
     • More than 109,000 items on display
     • 3x the length of St Paul's Cathedral

2. agriculture

   • agriculture became increasingly mechanised and profitable
   • in 1857 the first steam-powered ploughs were introduced on farms
   • more efficient methods of agricultural production
     • consequently the real price of food was actually falling, working classes had more disposable income to spend on industrial products and better, more plentiful food - stimulus to the economy

3. industry

   • From 1830s railways began to spring up, linking important industrial and commercial centres
     • stimulating growth of engineering industry, massive increase in use of machinery and new technologies, better connections, communication and phenomenons like Suburbia
       • 1840, 'Penny post' system introduced
       • newspaper duties were reduced
         • making them cheaper
     • 1844 Railway Act
   • In 1844, Peel had introduced reform of banks (the Bank Charter Act) improving stability with new regulations that would underpin the British banking system until the Great War 1914-18
   • 1844, Peel introduced regulation of private companies (Companies Act) improved confidence that new companies were not frauds
   • expansion of service industries
     • 1880s 50% of female workforce was in domestic service
   • 1880s coal outpost rose by 23.5%
   • 1872: 1% unemployment 1879: 11.4%
   • increased market gardening
     • increased competition in production of fruit and vegetables
     • unemployment and underemployment in rural areas
     • lower earnings
     • population drift to urban areas

4. the onset of Depression

   • 1860s reminder that prosperity in Britain with its reliance on the imports of raw materials and access to export markets was vulnerable to events overseas
   • civil war in USA til 1865
     • northern states used a blockade of southern ports as economic weapon of war
     • cotton famine in Lancashire and Scotland
       • More than 10,000 factory workers were out of work or onto short-term working.
   • 1860-61 exceptionally severe weather
     • serious crisis as in London docks were forced to close, building projects put on hold and supplies of material ran short
       • causing widespread unemployment and hardship
     • short term
   • from 1872 series of short-term economic slumps that would persist into mid 1890s
   • 1885 Royal Commission on Depression of Trade and Industry
     • set up by PM Lord Salisbury
   • The Economist claimed the year had been "one of the most sunless and cheerless of the century"
   • Lord Randolph Churchill argued that Britain's trade was suffering from a 'mortal disease'
   • worldwide trend
     • Germany + USA
       • introduced import tax

5. trade

   • By the 1870s British farming was under pressure from world markets
     • cereals were arriving in increasing quantities from USA, Canada and eastern Europe

6. economic ideologies

   • protectionism
     • corn laws - protected producers from foreign competition by imposing duties on foreign imports
     • taxes on imports, bans on the imports of certain commodities , restrictions on trade and goods not transported in British ships
     • fair trade league
       • pressure group in conservatives
       • unionist free food league
     • Joseph Chamberlain
   • free trade
     • 1860 Cobden Treaty with France
       • decreased tarrifs
       • lowered or eliminated duties levied on goods traded between Britain and France
     • 1846 Corn Laws repealed by Robert Peel
       • 'laissez-faire' ideology
         • stimulated competition and innovation
         • favoured by middle-class manufacturers
           • increasingly influential
         • supported by Gladstone
           • defender of Peel’s legacy
         • minimal government involvement
     • peel reduced taxes on imports 1842 and 1845
       • to make it cheaper to import raw materials e.g cotton
         • cheaper to produce industrial goods for export
   • 1776 Scottish economist, Adam Smith published highly influential book The Wealth of Nations
     • argued against protectionism