CHAPTER VII. Modern Industrial England

MODERN INDUSTRIAL ENGLAND

§ 1. THE GROWTH OF OUR INDUSTRY--We have now traced the industrial growth of England from the diffused beginnings of manufactures and agriculture in the isolated manors, and have seen how gradually towns grew up, commerce extended and markets arose, while manufacturers became organized in various centres and regulated by gilds. We have seen that for several centuries the back-bone of our national wealth was wool, but that in time we ceased to export it, and worked it up into cloth ourselves, thereby gaining great national wealth. We have seen, too, how our foreign trade, after its petty beginnings in the Middle Ages, took a fresh start {212} in the buccaneering days of the Elizabethan sea-captains and then rapidly developed, by means of the various great Companies, till England became commercially supreme throughout the world. From commercial beginnings we traced the rise of our Indian Empire, and the growth of the American colonies. Meanwhile at home there came an Industrial Revolution which, happening as it did at the moment that was politically most favourable to its growth, gave England a very useful start over all other European nations in manufacturing industries of all kinds, and enabled her to endure successfully the enormous burdens of the great Continental war. Now comes a time of still greater progress, economic as well as commercial, for the old restrictive barriers to trade are to be swept away, and a new economic policy is to be inaugurated.

§ 2. STATE OF TRADE IN 1820--If we now endeavour to gain some idea of the trade of the country soon after the war, we may look for a moment at its condition in 1820, just before Free Trade measures were begun. The official value of foreign and colonial imports was declared to be £32,000,000, which with a population of about 21,000,000 was at the rate of about thirty shillings a head. The exports of home produce amounted to some £36,000,000. The tonnage of shipping entering and leaving our harbours was 4,000,000 tons, of which 2,648,000 tons belonged to the United Kingdom and its dependencies. Steamers were, of course, as yet unknown. Professor Leone Levi calculates the trade of the country at not more than one-eighth or one-ninth of what it is at the present time. The wealth and comfort accessible to the people in general was much more limited, the consumption of tea, for instance, being only 1 lb. 4 oz. per head, and of sugar 18 lbs. a head. In fact, if we compare {213} the £244,710,066 worth of our exports in 1889–90 with the £32,000,000 worth in 1820 we see at once how gigantic has been the growth of our trade. In 1889, again, the imports (for the first ten months) were £347,985,087, which is more than nine times their value in 1820. But even at the beginning of the century England was far ahead of her old rival France, for French imports were only worth £8,000,000 in 1815, and her exports only about double that amount, or less than half England’s exports, which in that year rose to over £42,000,000 (official value).

§ 3. THE BEGINNINGS OF FREE TRADE--Now the year 1820 is memorable not merely as showing the condition of our trade, but for the great enunciation of Free Trade principles which it witnessed. For in that year the London merchants formulated a noteworthy Petition praying that every restrictive regulation of trade, not imposed on account of the revenue, together with all duties of a protective character, might be at once repealed. At last the teachings of economists were being put into practice by men of business. The Edinburgh Chamber of Commerce sent up a similar petition; a Committee was appointed in Parliament to investigate the wishes of the petitioners of our two capitals; and it brought in a report thoroughly in agreement with the Free Trade principles of the merchants. In the following year Mr Huskisson, the President of the Board of Trade, proposed the first measures of commercial reform, and one by one the restrictions upon our trade were removed. The most important of the new measures was the gradual alteration of the old Navigation Laws (cf. p. 130), finally culminating in their total repeal in 1849.

It is true that in the period 1821 to 1830 the foreign {214} trade of the United Kingdom did not exhibit much material improvement, but still there was a steady increase. The official value of imports rose from £30,000,000 to £46,000,000, and the value of British manufactures exported from £40,000,000 to £60,000,000. But the declared value of exports remained pretty steady at about £37,000,000. Yet in the United Kingdom itself trade was growing rapidly, and the increase of wealth gave an opportunity for a general diminution of taxes, and our sorely strained finances were set in order. Many of the injurious duties upon raw materials and articles of British manufacture--as e.g. those on raw silk, coal, glass, paper, and soap--were taken off, to the great advantage of our manufacturing industries.

§ 4. REVOLUTION IN THE MEANS OF TRANSIT--Now, too, another great industrial revolution was effected. I refer to the introduction of railways, steam navigation, and the telegraph, which have done almost as much as the great inventions of the eighteenth century to revolutionize the commerce of the world. In 1830 the Liverpool and Manchester Railway was opened. In 1838 the first ocean passages to New York by steamship were accomplished by the Great Western from Bristol, and the Sirius from Cork; although ever since the beginning of the century small steamers and tugs had been used for coasting purposes, and on the River Clyde. In 1837 Cooke and Wheatstone patented the needle telegraph, and the Electric Telegraph Company was formed in 1846 for bringing the new inventions into general use. In 1840 the penny postage came into operation. Yet more recently the Suez Canal (1869) has shortened immensely the distance to the East. It is obvious to all how incalculably all these inventions and appliances {215} have aided the development, not only of English trade, but of the commerce of all the world.

§ 5. MODERN DEVELOPMENTS. OUR COLONIES--Now I do not propose, in the limits of a little work like this, to go into a detailed account of the growth of commerce since these great modern inventions. There is ample material for the student in larger works; and the statistics of our progress may be consulted in the invaluable pages of Mr Giffen’s and Professor Leone Levi’s books. Here I can only indicate in the broadest outlines the chief features of the recent developments of industry. We have followed the industrial history of England up to a period more prolific in commercial events, and more remarkable for commercial progress than any that preceded it. The experiments and tentative measures of Mr Huskisson and other statesmen paved the way for a bolder and more assured policy on the part of subsequent governments, till at length Sir Robert Peel, urged on by the Anti-Corn Law League (p. 201), and stimulated by great famine in Ireland in 1845, openly adopted the principles of Free Trade. Under his leadership the Corn Laws were repealed (1846); the tariff was entirely remodelled, and the old protective restrictions abolished, Mr Gladstone’s Budget of 1853 being particularly memorable in this direction. A great increase of trade followed the inauguration of the policy which is always associated with the great name of Cobden, and the wealth of the country was even further developed. The extension of the railway system was at the same time a cause and an effect of this development, and when the great Exhibition of 1851, the precursor of several others, was held, England was able to show to all the world her immense superiority in productive and manufacturing industries. {216} A further stimulus to trade was supplied by the discovery of gold in California and Australia (1847–51), which supplied a much-needed addition to the currency of the world. Meanwhile, since the war of American Independence, England had been building up a great colonial empire, and she had the sense not to attempt again to levy taxes upon her unwilling offspring. India was taken over from the East India Company (1858). The colonies of Canada and the Cape were gained by conquest; those of Australia and New Zealand were the result of spontaneous settlement. The two former were captured from the French and Dutch, but of the second of them at least we have not made a commercial or even a political success; nor are we likely to do so unless we can contrive to keep on good terms with the original settlers, and to allow no misplaced sentiment about native races to disturb cordial relations between Europeans. As regards our Australasian colonies, they have grown far beyond the expectations of former generations, and gained for themselves entire political freedom, though they have chosen to use it chiefly in carrying on a one-sided war of hostile protective tariffs against their mother-country. As, however, they owe English capitalists a good deal of money, the interest on which is paid in colonial goods, there is a strong commercial bond of union between us and them; a bond which protectionists in England are strangely anxious to break, by placing unnatural obstacles upon the payment in goods of the interest due upon colonial loans.

§ 6. ENGLAND AND OTHER NATIONS’ WARS--But besides the extension of our colonial relations, English trade has benefited by the quarrels of her competitors. The prostration of Continental nations after 1815 precluded much competition till almost the middle of the century, and {217} then the Crimean War broke out (1854–56). As mentioned before, this war gave a great stimulus to our agriculture, and had a similar effect upon our manufactures. The Indian Mutiny which followed it did not much affect our trade, but it rendered necessary the deposition of the East India Company and the assumption of government by the Crown (1858), and thus eventually served to put our relations to that vast and rich empire upon a much more satisfactory and profitable basis. About the same time the Chinese wars of 1842 and 1857, regrettable as they were, established our commercial relations with the East generally upon a firm footing, and since then our trade with Eastern nations has largely developed. Then came the Civil War in America (1861–65), after which there was an urgent demand for English products to replace the waste caused by this severe conflict. The Civil War was succeeded by a series of short European wars, chiefly undertaken for the sake of gaining a frontier, as was the war waged by Prussia and Austria upon Denmark (1864), followed by another struggle between the two former allies (1866). Then in 1870–71 all Europe was shaken by the tremendous fight between France and Germany, and since then the Continental nations have occupied themselves in keeping up an armed peace at an expense almost equal to that of actual warfare. All their conflicts have arrested their industrial development, to their own detriment but to England’s great advantage. Not content however with that, they increase their difficulties by a dogged protectionism. As a result, they are far poorer in general wealth than our own land, and only succeed in competing with us by means of underpaid and overworked labour. But the labourer will not {218} always consent to be overworked and underpaid, and signs are not wanting that his discontent is fast ripening into something more dangerous.

§ 7. PRESENT DIFFICULTIES. COMMERCIAL DEPRESSIONS--But although English commerce has reached a height of prosperity considerably above that of other nations, it has not been and is not now without serious occasional difficulties. It has been throughout the century visited at more or less periodic intervals by severe commercial crises. In the earlier portion of the century they occurred in the years 1803, –10, –15, –18, –25, and –36; and were short, sharp, and severe. Since 1837 they have occurred at regular periods of about ten years, namely in 1847, –57, –66, –73, and –82; latterly depression has been most persistent, though with short cessations for special industries. In the last year or two, however, trade has again revived, and on the whole we may now (1896) be said to be enjoying a fair measure of prosperity.

The causes of such depressions in trade are various, and not always obvious. They are, so to speak, dislocations of industry, resulting largely from mistaken calculations on the part of those “captains of industry” whose raison d’être is their ability to interpret the changing requirements in the great modern market of the civilized world. A failure in their calculations, a slight mistake as to how long the demand for a particular class of goods will last, or as to the number of those who require them, results inevitably in a glut in the market, in a case of what is called (wrongly) “over-production”; and this is as inevitably followed by a period of depression, occasionally enlivened by desperate struggles on the part of some manufacturer to sell his goods at any cost. With such a huge field as the international market, it is not to be wondered at that such mistakes are by no means {219} rare, nor does it seem as if it were possible to avoid them under the present unorganized and purely competitive industrial system. They have been aggravated in England by a belief that our best customers are to be found in foreign markets, and the importance of a steady, well established, and well understood home market is not fully perceived. “A pound of home trade is more significant to manufacturing industry than thirty shillings or two pounds of foreign.” Now one of the most important branches of our home trade must be the supplying of agriculturists with manufactures in exchange for food. But when the purchasing power of this class of the community has sunk as much as £43,000,000 per annum, it is obvious that such a loss of custom must seriously affect manufacturers. Again, no small portion of our home market must consist in the purchases made by the working classes, yet it does not seem to occur to capitalist manufacturers that if they pay a large proportion of the industrial classes the lowest possible wages, and get them to work the longest possible hours, while thus obtaining an ever-increasing production of goods, the question must sooner or later be answered: who is going to consume the goods thus produced?

§ 8. THE PRESENT CAPITALIST SYSTEM. FOREIGN MARKETS--The answer as far as the capitalist is concerned seems to be: foreign customers in new markets. English manufacturers and capitalists have consistently supported that policy which seemed likely to open up these new markets to their goods. For a long time, as we saw (p. 213), they occupied themselves very wisely in obtaining cheap raw material by passing enactments actuated by Free Trade principles and removing protective restrictions. Cheap raw material having thus been gained, and machinery having now been developed to such an extent as to {220} increase production quite incalculably, England sends her textile and other products all over the world. She seems to find it necessary to discover fresh markets every generation or so, in order that her vast output of commodities may be sold. This policy naturally receives the approval of those engaged in foreign commerce, and most of our wars with countries like China, Egypt, or Burmah, involve commercial interests. But as other foreign nations are also engaging more widely in external trade, the international struggle for new markets is liable to assume at any time a dangerous phase. To-day, indeed, the industrial history of our country seems to have reached a point when production under a purely capitalist system is overreaching itself. It must go on and on without ceasing, finding or fighting for an outlet for the wealth produced, lest the whole gigantic system of international commerce should break down by the mere weight of its own immensity. Meanwhile, English manufacturers are complaining of foreign competition in plaintive tones, which merely means that, whereas they thought some years ago that they had a complete monopoly in supplying the requirements of the world, they are now perceiving that they have not a monopoly at all, but only a good start, while other nations are already catching them up in the modern race for wealth.

§ 9. OVER-PRODUCTION AND WAGES--With all this, too, we hear cries of over-production, a phrase which economically is meaningless, more especially at a time when a very large number of people in the civilized world are daily on the verge of starvation, when the paupers of every civilized country are numbered by thousands, and plenty of people who never complain have not enough clothes to wear and not enough food to eat. Wages are certainly better than they were fifty years ago, but no one who knows {221} the facts of the case will deny that for the average workman--I am not speaking of skilled artisans and the élite of the working classes--it is practically impossible to save anything out of his wages against old age or sickness. It is not the business of a historian to vituperate any particular class, but he may justly point out the mistakes to which classes have as a matter of history been liable. And the great mistake of the capitalist class in modern times has been to pay too little wages. It is an old agricultural saying--I believe of Arthur Young’s--that one cannot pay too much for good land, or too little for bad land. The same remark applies to labour. Capitalist employers rarely make the mistake of paying too much for bad labour, but they have constantly, as a matter of history, committed the worse error of paying too little for good labour. At the beginning of this century, as I have shown, the coming of the capitalist and of the capitalist factory system, beneficial as it was ultimately to England, was followed by a time of unprecedented misery and poverty for those whom they employed. The day of the capitalist has come, and he has made full use of it. The day of the labourer will come when he has the wisdom, and, we may add, the self-denial, necessary for a right use of his opportunities.

§ 10. THE POWER OF LABOUR. TRADE UNIONS AND CO-OPERATION--But the labourers of to-day are a very different class from their ancestors of fifty or seventy years ago. They have learnt, at least the most advanced among them, the power of combination, a remedy which at one time was forbidden them, but which is now fortunately once more theirs. The steady growth of Trade Unions and of Co-operative Societies has taught them habits of self-reliance and of thrift, and has made them {222} look more closely into the economic conditions of industry. These unions and societies do not yet embrace all the workmen of England, but they contain the best and worthiest of them, and their members are able to preserve a certain independence in treating with their employers. The power of capital is now opposed by the strength of united labour, and some of the great strikes of recent years have shown how great this united strength may be. But the power of labour may often in such cases degenerate into what readily becomes its weakness; and in any event, the attitude of mutual distrust and hostility between employer and employed is one which those who have the best interests of labour at heart cannot fail to deplore. It is true that the labourer can look back in his history to times when the power of his employer was used too selfishly and he himself was miserably oppressed. The miseries of the early days of the Industrial Revolution, the pauperism of agricultural labour in the early days of the nineteenth century, the sad conditions of children’s employment at the beginning of Queen Victoria’s reign--all these show how the greed of gain has rendered masters callous to their workpeople’s welfare. But it must be remembered also that in many cases the workpeople themselves were by no means always anxious for the improvement of these conditions; and both masters and men have been slow to recognize the essential identity of interest, and the equal rights, of Capital and Labour. If the great principle of mutual interest and co-operation between employer and employed were more fully acted upon, then the industrial history of our country would enter upon a new era of well-founded prosperity.

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