Wednesday, June 03, 2009

Alternative Histories: not proven

Neil Craig writes in a ‘A Place to Stand’ HERE:


“I have made it clear I believe that free enterprise, free trade & traditional liberalism is the most successful way to run an economy & modern practice shows this. Yet there is one quite overwhelming counter example. Up to about 1850 Britain was easily the world's leading industrial power. At that stage it repealed the Corn Law tariff by the Importation Act 1846 which represented the triumph of Adam Smith's commitment to free trade & of the liberal ideal. Yet by 1914 Britain had fallen to 3rd place behind the USA & Germany, both of which, while no bastions of socialism had significant tariff barriers. Indeed Bismark's Germany did have a significant amount of government, if not planning, at least encouragement of particular industries

But what would have been the effect of not repealing the Corn Laws on Britain’s relative place in the table?

Much else happened both in Britain and in other major economies. The 19th century decades were also the years of the second British empire, which drained off capital investment in either defence expenditures (military technologies were increasingly expensive to acquire and to service with men and materials leading up to the First World War) and overseas unproductive state administration, added to which the far more significant overseas British investment which soared in North America. All of which reduced productive domestic capital investment in Britain.

Case: not proven (as we say in Scotland) either way.

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