British Colonial Empire and Industrial Policy: Protection, Monopolized Trade, and Industrialization
This chapter explains (i) the pre-industrial industrial policies in the UK that enabled the Industrial Revolution—thus supporting the hypothesis “industrialization was never an accident”—and (ii) the post-industrial industrial policies in the UK that aime
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British Colonial Empire and Industrial Policy: Protection, Monopolized Trade, and Industrialization
British colonization of the world came in two phases. The first phase unfolded during the seventeenth century and the second—major one—in the eighteenth and nineteenth centuries. The second phase coincided with the Industrial Revolution and gave rise to a completely new international order—a post-industrial new world order different from the ‘old’ and ‘pre-industrial new’ world orders. The Industrial Revolution in Great Britain started in the mid-eighteenth century. Between 1760 and 1860, the British share of the world’s industrial output went up from 1.9% to 19.9%.1 This was due in large part to increased labour productivity caused by industrialization and was at a time when the world population was 1.2 billion,2 whereas the British comprised only 2%. The growth of manufacturing capacity soon led to the quest for external markets, as the domestic market was quickly saturated. However, protective policies in fellow European nations and their sizes did not allow large amounts of exports of British industrial goods into continental Europe, which meant that the search had to be shifted to further afield. In addition to markets, British industries needed raw materials. Some of them, such as the crucially important cotton, were simply not produced in Great Britain due to the unfavourable climate. For others, there were different reasons to import such as inadequate domestic production or ability to import at much cheaper, sub-market prices from other countries such as India, which Britain controlled anyway. © The Author(s) 2018 M. A. Yülek, How Nations Succeed, https://doi.org/10.1007/978-981-13-0568-9_3
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M. A. YÜLEK
By the second half of the nineteenth century, the UK produced half of the world’s iron, coal, and lignite. And just as important, as Paul Kennedy (1989) notes, it consumed just under half of the world’s raw cotton output and its energy consumption was five times that of the USA and Prussia, six times that of France, and 155 times that of Russia.3 Thus, Kennedy (1989) considers it no surprise that the Victorian economist Jevons famously boasted: The plains of North America and Russia are our corn-fields; Chicago and Odessa our granaries; Canada and the Baltic are our timber-forests; Australasia contains our sheep-farms, and in South America are our herds of oxen; Peru sends her silver, and the gold of California and Australia flows to London; the Chinese grow tea for us, and our coffee, sugar, and spice plantations are in all the Indies. Spain and France are our vineyards, and the Mediterranean our fruit-garden; and our cotton-grounds, which formerly occupied the Southern United States, are now everywhere in the warm regions of the earth.4
Where possible in these markets, Britain monopolized the trade of raw materials and end-products—as, for example, through the East India Company in Asia—enabling Britain control prices of both. By time, as Britain became an industrialized country, it turned to
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