Free trade, alone, explains the varying fortunes of British industry

"Free trade, alone, explains the varying fortunes of British industry and agriculture". How valid is this view of the period 1846-68? There is doubt that during the years 1846-68, the British industry and agriculture experienced a period of vast growth and varying fortunes. Free trade has been seen by many historians as the main motive for such a successful period, it in theory makes the world a richer place, but undoubtedly there were other remarkable improvements in Britain which accounted for the varying fortunes of industry and agriculture.

There had been good developments in agriculture, seeing an increase in prices and exports. Firstly, there was stability in the price of wheat and other prices rose steadily; wheat in 1851-55 was 3% above the 1840 price. However, the best growth in prices laid in livestock related areas.

A steady increase in major elements of production also had a good impact on farmers generally. There was a huge increase in drainage projects to help the quality of land and amount of land that was cultivated. This ignited a growth of technical efficiency; with much more intensive farming developments in production and use of fertilisers. Machinery, such as the steam-driven threshing machines made it possible for farmers' to produced more output per acre and a lot of attention went into the correct feeding of animals, they way land was used and crops rotated. 

The British industry also saw great improvements in exports and growth. Over the period, the British industry enjoyed a remarkable export boom like which they had never experienced before. For example, exports in steel increased from 458,000 tones in 1845-9 to over 2,027,000 tones by 1856-9. Coal also endured the same growth in exports, with 2.5 million tones in 1845-9 to 9.86 million tones by 1865-9. The total value of exports from Britain in 1840-9 was set at �83 million, this figure rose to �244 million by 1870.

This was down to a steady rise in prices, although real wages grew, as did investment and production increase too. Free trade was a major cause for the growth in this area, due to a number of reasons. It allowed Britain to make a great deal of money in opening up and developing industries in other countries, e.g. at one stage in the early 1860'2, Brassey, the English Contractor, had railways building on five separate continents. In the period of 1846-68, between 20% and 25% of world trade was British. In addition, free trade gave more choice to consumers, adding to the GDP and growth of economy. This also allowed Britain to flood the world with cheap manufactured goods. 

Free trade was finally introduced by Sir Robert Peel in his "controversial" 1845 budget act, influenced greatly by the Manchester School, a group of northern industrialist who came to believe that tariffs were stifling British industry. Their judgement was by no means wrong, as import duties on raw material made them more expensive less foreign countries were willing to trade than they would be otherwise. This was also keeping production costs too high the British businesses and reducing their sales, hence corrupting the economy. In Peel's budget of 1842 and 1843, Peel demolished large number of the remaining duties, so that after 1845, duties on over 600 articles had been removed completely.

By 1853, the attack on tariffs had initiated yet again. Gladstone's 1853 budget abolished nearly all remaining duties on partially manufactured goods, food and nearly all remaining duties on fully manufactured goods, effecting over 350 separate articles. The 1860 budget continued this trend; only 48 import duties on articles left once duties were abolished on a further 375 articles. This was restricted down further in 1864 when Gladstone reduced the duty on sugar and halved the duty on tea. This provided a great stimulus to the British economy and industry. The 1860 Cobden Treaty alone produced a three-fold increase in trade with France by 1880. 

Nevertheless, with the benefit of hindsight, you can clearly see that there were other causes for such a period of success in both industry and agriculture. 

Firstly, Britain was still enjoying the advantage of being the first nation to industrialize and competition from abroad was limited. The US were having tremendous difficulty in supplying their own rapid increase of population and was held back by the Civil War of 1861-5; Germany did not become unified until 1871 so both of these countries were interdependent on British manufacturing exports. Secondly, the population growth increased the demand for such manufactured products domestically. Britain saw population increase from 27.4 million in 1851 to 31.5 million in 1871, which acted as a stimulus to industry. 

One major factor which contributed to the boom was the spread of railways. The decade saw immense investments in railway building. In 1843 there was only 2000 miles of track, but this soon resulted in the construction of a further 5000 miles of track by 1850, and in 1873 a total of 14,510 miles of track was opened.

The industry employed large amounts of labour which were spending their wages on item such as clothing and housing which was being pumped back into the economy and helped the growth of domestic demand. In addition, the industry also encouraged technological developments in the iron and steel as vast amounts were demanded for construction. The demand for coal grew, as did the demand for service from mechanical and civil engineers. Most important of all, railways made it possible to transport manufactured goods to the ports much moor quickly. 

One last factor which also contributed to the boom of British industry was the vast sums of capital available for investment. Banking and credit facilities became more reliable after the Bank Charter in 1844. Even investments abroad helped the demand of British manufactured goods, as railways and factory projects were implemented overseas; the foreigners were able to buy British goods.