British Economic History

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  • Topic: International trade, United Kingdom, Industrial Revolution
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  • Published : May 6, 2012
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''To what extend did the growth of overseas trade led to Britain's Industrial revolution?''

Introduction

The development of Britain as a modern industrial economy, happened simultaneously with the expansion of foreign trade and that led many scholars to stress on the significance of exports. Some went even further to express the idea, that the growth during the industrial revolution depended on the overseas trade. During the industrial revolution,some of the major developing industries ,like textiles and coal,grew even more by selling their products abroad. The technological innovations of the late 18th century made the British goods cheaper,''attracting'' export markets,and soon Britain became the new commercial capital and the ''international industry'' of Europe because of its exports. However, it seems that this flourishing of trade did not contribute substantially to the industrial revolution since the benefits of trade in the economy are much higher after the classical years of industrial revolution,although the trade's importance should not be neglected or even worse be underestimated. For example,in 18th century, the proportion of national income derived from exports and then spent on imports doubled in comparison to the national income. However, in 19th century although the ratio of trade to national income continued to grow,paradoxically this ratio did not increase during the industrial revolution itself. Undoubtedly trade contributed to the industrialisation of Britain but it is more difficult to find causal connections between trade and economic growth[1] .

General evaluation of trade during Industrial Revolution 1760-1850

During the classical years of industrial revolution,we can distinguish two different periods of changes in the trend of trade growth.

1760-1781

This period follows a recovery period for the growth of exports that it was attributed to the end of the Seven Years War and its special circumstances. Thus in 1764, exports reached 11.5 million pounds which was a record figure up to then. However, after 1764 there was a downward trend for the exports. More specifically,exports declined after 1764 up to 1770-1 when there was an imperceptible recovery .After 1771 there was an uninterrupted fall in the amount of exports that ended in 1781,reaching the lowest since 1945 of 7 million pounds. Furthermore the growth of exports during the whole period of 1760-1781 was negative. The above is an argument for the scholars that stress the importance of the home market and its contribution to the early years of the industrial revolution. The causes of this fall in the number of exports , is justified initially by the difficulties in the European markets and then by the conflict of Britain with the 13 colonies and their boycott to the British products.

1781-1856

This period is very significant for Britain,since during these years the momentum of exports that had been defined from the previous period,changes. In fact,exports in 1780s entered in a completely new age and during this period it was observed the most ''rapid and sustained upsurge of exports than in any other previous period'.'[2]Exports increased dramatically from 7.6 to 18.3 million pounds from1781 to 1792. However,many scholars are of the idea, that the reason for this upsurge lies in a combination of factors like the artificially forced low level of exports set by the War Of American Independence,the cessation of hostilities,the backlog of export orders that had been accumulated when Britain was in War and finally the fact that the starting point of 1781 was very low and thus any growth in exports would be exaggerated.[3] In addition, it seems that the losses of the previous period were not canceled by the post-1781 gains. During 1799-1802 there is positive growth of exports but afterward there is the period of 1803-1808 in which the volume of exports declines again. In the next few years from 1809 to 1814 the...
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