3 - Economy and finance

Summary

The geographical expansion of the British state in the eighteenth century benefited from a pre-existing maritime economy of global dimensions, within which was constructed a structure of trade and navigation laws intended to promote trade between mother country and colonies. Trade within and beyond the empire, built upon networks of credit, helped to support the state's system of credit, debt and taxation, of which some of the leading beneficiaries were contractors operating in the colonies. The maritime economy and financial system proved resilient and adaptive to wars of growing scale. Indeed, the combination gave Britain her special power. Moreover, reform and rising trust enhanced confidence in Britain's economic capacity to sustain war. But the process of reform was a long one. Private profiteers had to be checked and control of public expenditure shifted slowly from Parliament to the Treasury. By their spending, the military departments during the second half of the eighteenth century were able to exert considerable influence on the growth of the British economy, for they added to domestic demand, had some flexibility in the management of their money and audited their own accounts. Yet from the late 1790s public insistence on individual responsibility and a growth of Treasury control gradually checked the power of the bureaucracy and counteracted fears of the uncontrolled growth of debt.