6 - A ruinous expedient

Summary

The growth of the public debt in Britain during the first half of the eighteenth century was one of the most remarkable economic developments in the period following the Whig Settlement. More perhaps than any other institutional innovation, the new system of public borrowing was responsible for the interconnected growth of Britain's commercial and military strength during this period. Together with the creation of the Bank of England, the spread of paper money, and the rise to prominence in the capital market of the joint stock companies, the public debt provided a basis for what has justly been called a ‘financial revolution’. The political and economic implications of this revolution gave rise to a debate which was, in its own way, as profound as that aroused by the more familiar revolution associated with industry during the early decades of the nineteenth century. Most of the opposition to the new financial institutions was concentrated on the political implications of the growth in size and influence of the moneyed interest associated with the debt. During the first half of the century the most determined and vocal opposition came from Bolingbroke, Pulteney, and other spokesmen for ‘Country’ interests, for whom public borrowing represented one of the main pillars of ‘ Robinocracy' – Wai pole's sinister network of influence. The two main points of attack centred on the corrupting relationship which had grown up between the executive and the stockholders; and on the additional burden of taxation borne by landowners as a result of having to service a debt which grew steadily during frequent wars.