The ambitions of the editors of this revised history of the British economy have not diminished since the first edition appeared in 1981. Quite the contrary. Whereas the first edition consisted of two volumes, containing 29 essays written by 30 different authors, the new edition offers 40 essays by 39 different hands. The biggest change has been in the coverage of the years since 1939. The first edition attempted to cover this entire period with only one long essay. In contrast, the current edition devotes an entire volume to it, 11 essays in all. Even for the pre-1939 periods, where the coverage of the two editions overlap extensively, most of the essays are completely new, either because they deal with different topics there is, for example, a treatment of the impact of the Hanoverian state on nascent industrial development in the current edition whereas the first was silent on this important issue or because the same topic, such as agriculture during the Industrial Revolution, has been written by different authors in the two editions. Even when the same topic has been covered by the same author, such as the period surveyed by McCloskey and Floud, it has been completely re-written, although the underlying interpretations have remained largely intact. The few essays which have not been completely rewritten, such as that on trade in the 19th century by Knick Harley, have benefited from the insertion of new material or at the very least an updating of footnotes (though the impact of Harley's additions is curtailed by the fact that his essay's introduction and conclusion remain virtually unaltered).
But despite the changes, the overall aims remain largely the same: to produce a standard textbook, especially suitable for first and second-year university students, embodying a synthesis of recent research on defined topics written by active scholars. The approach to these aims has been modified rather more: the underlying economic analysis is less evident (but still present) in the new edition and there is less explicit quantification. Additionally, thematic coverage has been changed, generally for the better. Gone are unwieldy omnibus chapters, arbitrary lumps, on such matters as "Factors in demand", "Labour supply" and "Social history"; in their place are, for instance, more focused and consistent treatments of technological change (at least for the period up to 1860), of industrial organisation, of government intervention and of the operation of the welfare state. Not all these changes are uniformly successful the new chapters on the "Service industries" and "State ownership of industry, 1945-1990" involve subjects still too unwieldy to yield to consistently penetrating analysis but they are an improvement.
Reading the volumes straight through, one has an impression of a kaleidoscope of great scholarship. Most sparkle with intelligence, inevitably some more than others, and all contain references to the wider literature. But while kaleidoscopes can dazzle, they are not known for presenting a unified picture. And so it is with these volumes. Most essays are competent expositions, some of a high order, written with conviction and dedication. But at the end of each one, the reader is released by one author to the attentions of the next, who is invariably determined to set off in a completely different direction with equal conviction and dedication, unburdened by any but the most cursory references to his predecessors. While this format precludes the possibility of sustained narrative development, it does offer a depth of specialised coverage which no single author (or perhaps even a pair of authors) could match. These volumes may be found more useful as a reference work than as a unified, coherent textbook.
This is not to say that there is a total lack of coherence. The editors have ensured that each volume has a theme and approach which is discernible, albeit sometimes with difficulty. In the first volume,covering the period 1700-1860, the theme is that the Industrial Revolution ook a long time in coming, so much so that several authors note the misleading impression conveyed by the term revolution. This theme is well displayed in the early essay on technological change by Joel Mokyr, who makes clear that technological change was commonplace in Britain well before the mid-18th century. Unfortunately Mokyr's provocative insights on the evolution of technological change, reinforced by a later chapter in the first volume by Nick von Tunzelmann, are not pursued in subsequent volumes.
The second volume (1860-1939) has two themes, one for the period of troubled ascendancy 1860-1914, the other for the period of adjustment to world war and its aftermath, 1914-39. In his survey of the first period, Roderick Floud stresses the factors that made Britons wealthier. Drawing on his own research on the nutritional status of the British population, he argues that conditions improved substantially from a low point in the mid-19th century, when the terrible pressures of rapid urbanisation were most acute. Such an improvement, he believes, must be consistent with good overall economic performance, although he does note the conspicuous failure of a large section of the population to benefit from this. Indeed, while the economy clearly grew in the late 19th century, there were increasing premonitions not to say outright manifestations, in trade, industrial production and technology, of the relative economic failure that is the over-riding concern of the third volume, a failure that has deeply marked the historiography of the period. Floud must refer to it repeatedly, though he does so with express annoyance.
His portrayal of growing prosperity contrasts oddly with the evidence on emigration set out in the next essay in the volume, by Dudley Baines ("Population, migration and regional development, 1870-1939"). Baines shows clearly in this systematic study that after 1899 Britain experienced one of its recurring waves of emigration, giving it the highest emigration rate of any large European economy. In Europe, only Ireland (then entirely within the UK), Italy and Norway had higher emigration rates over the 19th century. Moreover, as Mary MacKinnon makes clear in her later chapter on late Victorian standards of living, British emigrants were drawn by the prospect of significantly higher incomes and better opportunities than those available at home. While a proportion of emigrants was probably taking advantage of ties of language and culture shared with the lands of recent settlement, the upsurge in emigration strongly suggests that those alive at the time did not take Floud's sanguine view of Britain's performance and future in the decades before 1914.
Sidney Pollard, in his essay on entrepreneurship, 1870-1914, can hardly avoid the issue of faltering performance. He notes that entrepreneurship only becomes a focus of attention when overall economic performance is bad and a scapegoat for failure has to be found. Unfortunately his essay is a rather mechanical, if extensive, survey of the literature which produces only a welter of example and counter example. In the middle of the essay, he makes the brief and perceptive observation that the debate over Victorian entrepreneurship is really a debate about the competitive environment, but he does not build on this important insight. Had he done so, his conclusion might have been more forceful.
Michael Edelstein, surveying British capital markets 1860-1914, is in a particularly good position to assess the extent of competitive pressures in the Victorian economy. Moreover, given the extraordinary magnitude of Britain's foreign investment at this time, his topic is crucial to any assessment of Britain's performance.
Edelstein lays out the issues clearly and concretely, drawing on his own pioneering research into realised rates of return on foreign and domestic investment. However he does not pursue the question of how adequately Britain's markets identified and priced domestic investment opportunities and his analysis is marred by the implausible and unsupported assertion that financial markets that are adept at accurately pricing the bonds of sovereign states and large railroads are equally good at pricing the equity issues of new ventures, especially in areas of advanced technology.
Essays by William Lazonick on employment relations in manufacturing and international competition, by Clive Lee on the service industries, by Cormac O'Grada on agriculture, by Michael Edelstein on the costs and benefits of imperialism, by Forrest Capie and Geoffrey Wood on money 1870-1939, and by Solomos Solomou on economic fluctuations, round out the coverage of the latter half of the 19th century.
The last four essays in the second volume concern the inter-war years, beginning with Barry Eichengreen's characteristically incisive essay comparing Britain's macro-economic experience systematically with the western European (unweighted) average. His conclusion is provocative. Noting especially inter-war Britain's relatively low level of gross domestic fixed capital formation, Eichengreen asks whether the regeneration of British industry perceived by many historians of the period was actually riddled with reliance on government action, rather than business competence, to shield both workers and managers from domestic and foreign competitors. If this is true, then the public and private sector response to the undeniable economic difficulties of the inter-war period were the basic ingredients of Britain's durable post-war problems.
Eichengreen's essay is followed by Mark Thomas's lucid examination of the macro-economics of the inter-war years, with particular attention given to "the Norman Conquest of $4.8665" and to the scope for an expansive fiscal policy advocated by Keynes and Lloyd George but never actually tried, and by Tim Hatton's competent analysis of unemployment and the inter-war labour market. The second volume then concludes with a concise treatment of industry and industrial organisation by James Foreman-Peck, who tends to believe rather fatalistically that Britain's problems with the "new" industries of the "second industrial revolution" lay in restricted markets, a condition which, if true, was one Britain could not readily rectify, especially given the blighted opportunities for international trade at the time. He is, for no very compelling reason, less inclined than Eichengreen to see anti-competitive behaviour in the inter-war period as a serious problem.
The final volume of the trilogy opens with Peter Howlett's examination of the wartime economy, 1939-45. This important essay looks at Britain's remarkable mobilisation for total war, arguably the most comprehensive and surely, in the circumstances, one of the most successful achieved by any belligerent power. Regrettably, the exact mechanism behind the war-time allocations how do planners make a rational trade-off between munitions, long-term maintenance of infrastructure and the welfare of workers, for example? remains untreated, even cursorily.
The next two chapters, by Sir Alec Cairncross, deal with economic policy and performance, 1945-90. Cairncross seeks to record events but not to analyse them, leaving that task to others in later chapters. His treatment is especially forceful in discussing early post-war problems with the balance of payments. In the course of the war Britain had borrowed some £10bn to finance the deficit of imports over exports. Of this, £3.5bn was in the form of short-term sterling balances held in London, notably by Egypt and India. These sterling balances overhung Britain's balance of payments for many years, and no wonder no other belligerent had incurred debts of this kind or on this scale. This fact borne firmly in mind helps to make comprehensible Britain's trade policy in the crucial early post-war period, the seedbed of the astonishing "golden years" of growth. Cairncross's sections on domestic economic policy are less successful, occasionally lapsing into a bloodless chronicle in which policy makers appear dumbfounded as the most amazing disasters unfold around them. Cairncross is surprisingly uninterested in the consequences of direct controls over economic activity, noting merely that they were imposed with good intentions and shed gradually, to be replaced by "demand management" and a shifting host of other policy instruments such as import surcharges, wage and price controls, credit restrictions, tax "regulators" and so on ad nauseam. Whether these policies ever had a chance of success or just hastened decline is a question that remains resolutely unasked.
Charles Feinstein's essay serves to set out the theme of the third volume: the Janus-like nature of Britain's post-war economic performance, in which, relative to Britain's past, growth has been good, yet relative to Western Europe it has been bad. He offers a concise, lucid overview of British economic growth since 1948, relying heavily on the concept of "convergence" to explain the performance paradox.
The argument is intriguingly plausible, yet it does not necessarily exclude alternative explanations which see the cause of Britain's relatively poor performance as arising from failed policies and incompetence in both the public and private sectors. It is a pity that Feinstein did not make more explicit the grounds on which he favours convergence.
His overview is followed by a series of detailed studies that look at various aspects of Britain's economic experience: Robert Millward examines industrial and commercial performance since 1950; Leslie Hannah, the economic consequences of state ownership of industry, 1945-90; Stephen Broadberry, employment and unemployment; Susan Howson, money and monetary policy, 1945-90; and Jim Tomlinson complements Cairncross's narrative description of economic policy with one rather more analytical, noting both successes and failures, the greatest of the latter being the absence of a supply-side strategy directed towards industrial modernisation, without which macro-policy initiatives foundered repeatedly.
The volume concludes with a trenchant consideration of the welfare state by Paul Johnson and a summing up of the British experience of relative decline since 1945 by Barry Supple. In a masterful overview of a complex topic, Johnson persuasively absolves the welfare state of most of the oft-heard charges against it, namely that it adversely affected economic efficiency through either the blunting of incentives or the imposition of excessive taxation.
Supple argues that the British experience of decline has been widely misconceived. While not denying that performance could have been better or that relatively slow growth brings with it discontent, he emphasises the benefits of the considerable absolute growth Britain has achieved since 1945. Moreover, stressing the vast historical momentum that complex economies inevitably acquire, he joins Feinstein in doubting that a drastic, sudden reform of the post-war British economy was ever possible. One cannot help thinking, however, that it was easier to make such an argument in 1994 than it was in 1981, at the time of the first edition, before Britain had demonstrated any capacity to close the increasingly alarming economic gap between it and the rest of developed Europe.
Thus, after three centuries, the trilogy draws to a close. While it is not quite a story of "clogs to clogs" in three centuries, it comes close. It ends much as it began, with a comparatively poor, marginal island off the northwestern coast of the European mainland struggling to improve its relative material lot, with some hint of success. In the interval of 13 years between the two editions of this history of the British economy it has become easier to give the story an optimistic spin. If the arguments about convergence (and possibly of overtaking) that abound in the final essays of the current edition are even half right, there will be room for yet more optimism in future editions. In the meantime, the essays in the second edition offer useful food for thought.
William P. Kennedy is a lecturer in the department of economic history, London School of Economics.
The Economic History of Britain Since 1700, Volume One
Editor - Roderick Floud and Donald McCloskey
ISBN - 0 521 41498 9 and 42520 4
Publisher - Cambridge University Press
Price - £50.00 and £17.95
Pages - 484