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How Britain Turned to Free Trade

Published online by Cambridge University Press:  11 June 2012

William D. Grampp
William D. Grampp
Affiliation:
William D. Grampp is professor emeritus of economics at the University of Illinois, Chicago.
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Abstract

British free trade has been variously attributed to the importuning of business interests, to the advanced state of manufacturing, to politicians acting on improper or unworthy motives, or to imperialism. Professor Grampp examines a critical event in the history of free trade: Parliament's declaration in 1820 that future commercial policy should be guided by that principle. By 1850, all major restrictions had been abolished. The decision of 1820, according to Thomas Tooke, a principal in the event, was made by the Tory Government with the concurrence of the Whig Opposition, both of which had come to believe free trade would increase per capita real income: that is, both acted in what they and others since have understood to be the public interest.

Type
Research Article
Information
Business History Review , Volume 61 , Issue 1 , Spring 1987 , pp. 86 - 112
Copyright
Copyright © The President and Fellows of Harvard College 1987

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References

1 Grampp, William D., “Economic Opinion When Britain Turned to Free Trade,” History of Political Economy 14 (Winter 1982): 496–520CrossRefGoogle Scholar, and “An Episode in the History of Thought and Policy,” in Methodological Controversy in Economics: Historical Essays in Honor of T. W. Hutchison, ed. Coats, A. W. (Greenwich, Conn., 1983)Google Scholar.

2 The petition is printed in full and the circumstances surrounding it are described by Tooke, Thomas (with William D. Newmarch) in A History of Prices and the State of the Circulation from 1792 to 1856 (London, 1857), 6:335–44Google Scholar, and in an anonymous pamphlet attributed to him, Free Trade: Some Account of the Free Trade Movement as It Originated with the Petition of the Merchants of London (London, 1853)Google Scholar.

3 See, for example, Porter, George Richardson, The Progress of the Nation (London, 1838), 2:151Google Scholar.

4 Tooke, and Newmarch, , History of Prices, 6:343Google Scholar.

5 Hilton, Boyd, Corn, Cash, and Commerce: The Economic Policies of the Tory Governments, 1815–1830 (Oxford, England, 1977), 174–75Google Scholar. Hilton found the signatures among the Huskisson Papers (Add. MS. 38760, fols. 239–44, British Library). The names were copied from the original before the death of Huskisson in 1830 but seem not to be in his hand. I am most grateful to Dr. Hilton for directing me to these papers. The original petition and signatures are not in the library of the House of Lords where petitions to both Houses are kept; the original is believed to have been destroyed in the fire of 1834.

6 Hansard, T. C., The Parliamentary History of England, 1:182–97 (8 May 1820)Google Scholar.

7 Ibid., 1:546–66.

8 The report and testimony of the Commons committee are printed in the Journal of the House of Commons, 75: 909–12; those of the Lords committee are in the Journal of the House of Lords, 53: 190. The petitions received by each House are printed or summarized in the volumes of these Journals. Of some twenty papers (most of them published in London) that commented on the petition, eleven supported it, including the influential Morning Chronicle, Morning Post, and Times; three were opposed. Five of the six Radical papers were in favor of free trade but scorned the merchants and their petition, while the sixth (Leigh and John Hunt's Examiner) supported them grudgingly and their petition fully.

9 Deacon Hume brought together some 450 separate laws and consolidated them into eleven, then published The Laws and Customs with Notes and Also with Supplements (London, 1829)Google Scholar for the use of merchants, shipowners, and others. He is said, by a loyal and affectionate biographer, to have been “more than any other person” the first to put into practice the theory of free trade which—the biography claims—was discovered by David Hume, “the greatest of the name”—a claim that does something more than justice to each of them. Badham, Charles, The Life of James Deacon Hume, etc. (London, 1859) 302, 326Google Scholar. The most talkative of the name must have been Joseph Hume, who in his thirty-eight years in Parliament made more speeches than any other member on behalf of classical economic policy as he understood it. Fetter, Frank Whitson, The Economist in Parliament, 1780–1868 (Durham, England, 1980), 234–35Google Scholar.

10 Baring expressed his view in the speech he made when he submitted the petition, cited in note 6. Robinson made his statement in reply to Baring; Hansard, 1: 181; Torrens, Robert, An Essay on the Production of Wealth; etc. (London, 1821), 227–28Google Scholar. For Ricardo's views, see his speeches in the Commons, 30 May 1820, and 6 June 1823, of which the more reliable report is given in The Works and Correspondence of David Ricardo, ed. Sraffa, Piero (Cambridge, England, 1951), 5: 51, 305–6Google Scholar; and his letter to Trower of 30 Jan. 1823, ibid., 9:269.

11 Hansard, 1:846–61 (5 June 1820).

12 The testimony of Buckle is given in “Report of the Select Committee on the Foreign Trade of the Country, 1820,” British Parliamentary Papers. Industrial Revolution, Trade (Irish Universities Press, 1968), 1:26–31Google Scholar.

13 Compare Grampp, William D., “The Economists and the Combination Laws,” Quarterly Journal of Economics 93 (Nov. 1979): 507CrossRefGoogle Scholar.

14 The accusation was made in Wooler's British Gazette (a journal of Radical opinion), 14 May 1820; in the anonymous Remarks on the Merchants Petitions and Publications Respecting Restrictions on Foreign Commerce, etc. (London, 1820)Google Scholar; and in the Lords by Lauderdale, who said that the London petition was “nothing more or less than a remonstrance against the corn-laws.” Hansard, , 1:595 (26 May 1820)Google Scholar.

15 The debate over the motion for a select committee on agriculture is reported in Hansard, , 1: 635–94 (30 May 1820) and 702–42 (31 May)Google Scholar. The report and testimony are given in British Parliamentary Papers. Reports from Select Committees, etc. Agriculture (Irish Universities Press, 1968), 1:3–10Google Scholar.

16 In Parliament, the Corn Laws were opposed by Baring (Hansard, , 1: 169, 8 May 1820)Google Scholar; by Robinson (ibid., 1:646, 30 May); Huskisson (ibid., 1;679, 30 May); Liverpool (ibid., 1:577, 26 May); Lansdowne (ibid., 1:549 26 May). All except Huskisson expressly opposed the laws and his opposition was implied by his belief in the principle of free trade and his wanting to apply it when feasible.

17 The report of the Commons committee is in Journal of the House of Commons, 75: 909–12Google Scholar, and Wallace's speech submitting it is in Hansard, 2: 546–48 (18 July 1820).

18 Evidence of the influence of the classical economists is given in Grampp, William D., “Economists and Politicians: Some Cautionary History,” Review of Social Economy 40 (April 1982): 14–21Google Scholar.

19 Hansard, 1:191–93 (8 May 1820).

20 Ricardo's activity on Parliamentary committees is described by Sraffa in his editorial notes to Ricardo's Works, 5: xxiii-xxvii, in which volume Ricardo's testimony before Parliamentary committees is also given.

21 Hansard, 1:429 (16 May 1820).

22 Ricardo to McCulloch, 15 May 1820, in Works, 8: 190.

23 The Scotsman, 29 April, 13, 20 May, 5 June 1820. The language is similar to that used by McCulloch in his reference to the petition in his edition of The Wealth of Nations (Edinburgh, 1845), 218nGoogle Scholar.

24 The Traveller, 24, 25 April, 8, 27 May, 4, 19 July 1820.

25 Tooke's testimony is given in the Journal of the House of Lords, 53: 200–207Google Scholar.

26 An anonymous pamphleteer said, “a reference to Malthus's work on population” would show the free traders they were mistaken when they claimed the Baltic countries would increase their imports of British manufactures if Britain imported more timber, He said they were much too poor. Observations on the Reports of the Select Committees on the Timber Trade and Commercial Restrictions; etc. (London, 1820), 43Google Scholar.

27 The shipowners’ petition was printed in its entirety in the Times, 17 May 1820. [Clissold, Stephen], Considerations on the Trade, Manufactures, and Commerce of the British Empire, etc. (London, 1820), 18, 27–28Google Scholar. The same idea was expressed by The English Chronicle and Whitehall Evening Post 25/27 April 1820.

28 “A reform of Parliament is the only security we can have for a real reform of abuses”, Ricardo wrote to McCulloch (2 Dec. 1820), and in other letters and in his speeches he specified that among the abuses that should be eliminated were the laws that favored particular economic interests at the expense of the mass of consumers. Works, 8: 317, 7: 299, 5: 478.

29 Grampp, William D., “Scots, Jews, and Subversives among the Dismal Scientists, “Journal of Economic History 36 (Sept. 1976): 1–20CrossRefGoogle Scholar.

30 Hilton, Corn, Cash, and Commerce, vii.

31 Gordon, Barry, Political Economy in Parliament, 1819–1823 (London, 1976)CrossRefGoogle Scholar.

32 Ibid., 70.

33 Smart, William, Economic Annals of the Nineteenth Century ([1910]; New York, 1963)Google Scholar.

34 Brown, Lucy, The Board of Trade and the Free-Trade Movement, 1830–1842 (Oxford, 1958)Google Scholar.

35 Ibid., 183.

36 McCord, Norman, Free Trade: Theory and Practise from Adam Smith to Keynes (Newton Abbot, 1970), 49Google Scholar.

37 Hartwell, R. M., “Economic Change in England and Europe, 1780–1830,” New Cambridge Modern History (Cambridge, England, 1965), 9: 42, 58Google Scholar.

38 Buxton, Sidney, Finance and Politics: A Historical Study, 1789–1885 (London, 1888)Google Scholar.

39 Among the works that attribute free trade to the profit-seeking of business interests, the opus classicus is Hobson, J. A., Imperialism. A Study ([1905]; Ann Arbor. 1965)CrossRefGoogle Scholar, for example, 105. See also Halevy, Elie, Growth of Philosophic Radicalism, trans. Morris, Mary (New York, 1928), 326Google Scholar; and Harnetty, Peter, Imperialism and Free Trade: Lancashire and India in the Mid-Nineteenth Century (Vancouver, 1972), 5–6Google Scholar.

That the structure of the economy directed Britain to free trade is maintained by Evans, Douglas, The Politics of Trade (London, 1974), 1CrossRefGoogle Scholar; Johnson, Harry G., The World Economy at the Cross Roads (Oxford, England, 1965), 14Google Scholar; Fielden, Kenneth, “the Rise and Fall of Free Trade,” in Britain Pre-Eminent, ed. Bartlett, C. J. (London, 1969), 84Google Scholar; and Gayer, Arthur D. et al. , The Growth and Fluctuations of the British Economy, 1790–1850 (Oxford, England, 1953), 1:202Google Scholar.

That free trade was a form of imperialism is said by Gallagher, John and Robinson, Ronald, “The Imperialism of Free Trade,” Economic History Review, 2d ser. 6 (1953): 1–15CrossRefGoogle Scholar; Semmel, Bernard, The Rise of Free Trade Imperialism, Classical Political Economy, and The Empire of Free Trade and Imperialism, 1750–1850 (Cambridge, England, 1970)Google Scholar, passim. A precedent for the idea and a less improbable statement of it is to be found in List, Friedrich, The National System of Political Economy ([1841]; New York, 1966), 290Google Scholar; and Schmoller, Gustav, The Mercantile System and Its Historical Significance ([1884]; New York, 1931), 76, 79Google Scholar.

40 Grampp, William D., The Manchester School of Economics (Stanford, Calif., 1960), chap. 5Google Scholar.

41 William D. Grampp, “Britain and Free Trade: In Whose Interest?” Public Choice (forthcoming).