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Measuring British Economic Growth*

Published online by Cambridge University Press:  03 February 2011

J. R. T. Hughes
J. R. T. Hughes
Affiliation:
Purdue University
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Type
Review Articles
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The Journal of Economic History , Volume 24 , Issue 1 , March 1964 , pp. 60 - 82
Copyright
Copyright © The Economic History Association 1964

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References

1 Petty was the author of a considerable volume of work relating to economic questions. His Political Arithmetic was written in 1671, during the reign of Charles II, but was published posthumously in 1690. A year later, the equally well-known The Political Arithmetic of Ireland appeared. Both works were attempts to estimate income and wealth magnitudes. Petty's work was rudimentary compared to Gregory King's Natural and Political Observations … which was published in 1696.

Arthur Young's many writings included tracts on agriculture, husbandry, money, commercial policy, and national and international affairs. He is, of course, best known for his accounts of his travels in England, Ireland, and France. In 1774, he brought out his own Political Arithmetic, a volume in which an attempt was made to ascertain aggregative economic magnitudes.

Patrick Colquhoun, a London police magistrate and Lord Provost of Glasgow, is perhaps best known for his Treatise on the Population, Wealth, Power and Resources of the British Empire, published in 1814. His Treatise on Indigence, 1806, contained a more detailed breakdown of aggregates than King attempted more than a century earlier; but SirGiffin, Robert thought that many of Colquhoun's details were “fanciful”: Growth of Capital (London, 1890), p. 101.Google Scholar

2 Porter, G. R. and Lowe, Joseph, as cited by T. E. Gregory in his introduction to the Adelphi Press reprint (London: P. S. King and Son Ltd., 1928) of Tooke's History of Prices, p. 14.Google Scholar

3 Clark, , The National Income, 1924–31 (London: MacMillan, 1932).Google Scholar

4 Prest, “National Income of the United Kingdom, 1870–1946,” Economic Journal, LVIII, No. 229 (Mar. 1948), 31–62.

5 Deane, “Contemporary Estimates of the National Income in the First Half of the Nineteenth Century,” Economic History Review (2d Series), VIII (Apr. 1956), 339–54. “Contemporary Estimates of the National Income in the Second Half of the Nineteenth Century,” ibid. IX (Apr. 1957), 451–61. Also, her “The Implications of Early National Income Estimates,’ Economic Development and Cultural Change, IV (Nov. 1955), 3–38, and “The Industrial Revolution and Economic Growth,” ibid., V (Jan. 1957), 159–74.

6 Hoffmann's index appeared first in Weltwirtschaftliches Archiv, II (1934). The book analyzing the index came out a few years later, Wachstum und Wachstumsformen der englischen Wirtschaft von 1700 bis zur Gegenwart (Jena, 1940).Google Scholar A revision of this appeared as British Industry 1700–1950, translated by Henderson, W. O. and Chaloner, W. H. (New York: Kelley, 1955).Google Scholar

7 Schlote, original title, Entwicklung und Strukturwandlungen des englischen Aussenhandels von 1700 bis zur Gegenwart (Jena, 1938),Google Scholar and translated by Henderson, W. O. and Chaloner, W. H. as British Overseas Trade from 1700 to the 1930s (New York: Macmillan, 1952).Google Scholar

8 First published as three articles, as follows: Albert H. Imlah, “Real Values in British Foreign Trade, 1798–1853,” JOURNAL OF ECONOMIC HISTORY, VIII (Nov. 1948), 133–52: “The Terms of Trade of the United Kingdom, 1798–1913,” ibid., X (Nov. 1950), 170–94; and “The British Balance of Payments and Export of Capital, 1816–1913,” Economic History Review (2d Series), V (No. 2, 1952), 208–39. All of these were brought together in Economic Elements in the Pax Britannica, (Cambridge: Harvard Univ. Press, 1958).Google Scholar

9 Silberling, “British Prices and Business Cycles, 1779–1850,” Review of Economic Statistics, V (Oct. 1923), 219–62.

10 Shannon, “Bricks—A Trade Index, 1785–1849,” Economica (New Series), I (Aug. 1934), 300–18.

11 Tucker, “Real Wages of Artisans in London, 1729–1935,” Journal of the American Statistical Association, XXXI (Mar. 1936), 73–84.

12 Gilboy, “The Cost of Living and Real Wages in Eighteenth Century England,” Review of Economic Statistics, XVIII (Aug. 1936), 134–43.

13 Schumpeter, “English Prices and Public Finance, 1660–1822,” Review of Economic Statistics, XX (Feb. 1938), 21–37. The late Mrs. Schumpeter's work on early trade data has now been published in a volume with a lengthy technical introduction by T. S. Ashton and a personal memoir by Gilboy, Elizabeth: English Overseas Trade Statistics, 1697–1808 (Oxford: The Clarendon Press, 1960).Google Scholar

14 William Newmarch, “An Attempt to Ascertain the Magnitude and Fluctuations of the Amount of Bills of Exchange in Circulation at One Time in Great Britain,” Journal of the Statistical Society, Vol. XIV (1851). In this remarkable paper, the author sampled 4,367 foreign and domestic bills and, utilizing stamp-tax returns, made the first systematic estimates of movements over the trade cycle of this form of commercial credit; the data are quarterly from 1830 to 1853; the extension of the data from the 1851 publication was made in History of Prices, Vol. VI (see n. 37 following for full citation).

15 My count. The authors do not number the tables sequentially. Individual series are not numbered as in the Historical Statistics of the United States; nor have I counted them.

16 Caird, The Landed Interest (London, 1878), p. 160. This is an index of English wheat-harvest yields.

17 Accounts and Papers, 1884, XIX (C. 4078), x.

18 For example, Memoirs of the Geological Survey of Great Britain and the Museum of Practical Geology, Return of 1854, p. 85, for the year 1854.

19 Minchinton, , The British Tinplate Industry (Oxford: The Clarendon Press, 1957).Google Scholar

20 Thomas Ellison, The Cotton Trade of Great Britain (London, 1886), Table 1.

21 Deane and Cole say that before 1914 there is “no basis at all for estimates of stock variations … ” (p. 264). In addition to Ellison's figures for cotton stocks, The Times published annually reports on stocks of Scottish pig iron for the midcentury period. I do not know how long this practice continued. But stocks for Scottish pig iron are available from other sources for 1845–73. See R. H. Campbell, “Fluctuations in Stocks,” Oxford Economic Papers (New Series), IX (Feb. 1957), 41–55.

22 Meyer, “Review of British Industry, 1700–1950,” Explorations in Entrepreneurial History, VIII (Feb. 1956), 172–76.

23 J. R. T. Hughes and S. Reiter, “The First 1,945 British Steamships,” Journal of the American Statistical Association, LIII (June 1958), 360–81.

24 Horsefield, , British Monetary Experiments, 1650–1710 (Cambridge: Harvard Univ; Press, 1960).Google Scholar

25 Higonnet, “Bank Deposits in the United Kingdom, 1870–1914,” The Quarterly Journal of Economics, LXXI (Aug. 1957), 329–67.

26 Select Committee on the Bank Acts, Minutes of Evidence, Accounts and Papers, 1857–8, V, 381. Evidence of David Salomons, Director of the London and Westminster Bank, Q. 1134, table.

27 Levi, “On Joint Stock Companies,” Journal of the Statistical Society, Vol. XXXIII (1870).

28 Shannon, “The First Five Thousand Limited Companies and Their Duration,” Economic History (Supplement to the Economic Journal), II (Jan. 1932), 290–316.

29 Ellison, Cotton Trade, Table 2.

30 R. C. on Precious Metals, Accounts and Papers, 1888, Vol. XLV (C. 5512–1), Appendix xvi.

31 A brief survey is given, p. 40, of the many attempts to try to locate the Industrial Revolution in British history.

32 This finding can not easily be construed to support the 1745–60 thesis, especially below, when they find that the great change-over to wage incomes came before 1766.

33 Table 37, p. 166, shows income from foreign investments alone greater than agricultural income by 1901.

34 It might be noted that Hume's letter scarcely refers to receivers of wages and salaries. Much of Deane's and Cole's point depends upon (1) how accurate King was about people regarded as receivers of earned incomes from employment (as opposed to rents and profits); and (2), how seriously one ought to take Colquhoun's estimates (see above, n. 1, for Sir Robert Giffln's informed opinion). One might well be especially skeptical of estimates of labor income in years before census returns existed, simply because there was so little interest in people of “the poorer sort,” as Hume referred to those who worked for persons “who employ their stocks in commerce.” Modern studies of seventeenth-century Britain reveal no particular lack of reference to small capitalists, artisans, manufacturers, and tradesmen at the time of the Puritan Revolution, long before King's study.

It is difficult to imagine these classes not supported by a sufficiency of wage earners. For example, see: Dobb, Maurice, Studies in the Development of Capitalism (New York: Routledge, 1947), chs. iii-vi;Google ScholarLipson, E.,A Planned Economy or Free Enterprise (Toronto: Macmillan, 1944), ch. iii;Google ScholarTawney, R. H., Religion and the Rise of Capitalism (London: Penguin, 1938), ch. iv;Google ScholarHill, Christopher, Puritanism and Revolution (London: Secker and Warburg, 1959),Google Scholar ch. vi on the Earl of Clarendon's History of the Rebellion. In the composition of the Parliamentary armies and their supporters, one sees a significantly large portion of the population in commerce, manufactures, and trades, all of which are usually found in association with wage and salary earners. One cannot be certain of the numbers or proportions, of course, but it seems to me that procedures such as these are less strained than the deductions of Deane and Cole from the evidence they present, which scarcely supports a position that, somewhere between 1688 or so and 1760, there was a dramatic shift in British society that led to the rise of the wage earner. All of this, of course, is based upon guessing about possible transformations of literary evidence into numbers. It is a risky business but not, perhaps, more risky than Deane and Cole attempt in translating no evidence at all—the silence of King—into numbers.

35 The authors are bothered by the low estimate yielded by their data for the capital-output ratio in the late eighteenth and early nineteenth centuries, but they advance plausible arguments to show that such might indeed have been the case (pp. 275–77).

36 For power looms in 1835: Mann, James, The Cotton Trade of Great Britain (London: 1860), p. 32.Google Scholar Other data from: Parliamentary Papers, Factory Returns, Accounts and Papers, 1847, XLVI, 294; 1850, XLII, 745; 1857 (Sess. 1), XIV, 7; 1862, LV, 23: Oddly enough, the 1850, 1857, and 1862 Parliamentary Papers cited here were used by Deane and Cole in their research on woolens—p. 200, n. 3. But they apparently overlooked the implications for their growth-rate thesis in cotton textiles of the data included in these returns.

37 Nasmyth's conclusions are reported in Parliamentary Papers, Reports of Factory Inspectors, Accounts and Papers, 1852–1853, XI, 23–27.Google Scholar See also, Tooke, Thomas and Newmarch, William, History of Prices, VI (London, 1857), 536–37.Google Scholar

38 British Industry 1700–1950 (cited in n. 6), Table 54, parts A and B, shows total industrial production excluding building.

39 Edward Ames, “Trends, Cycles and Stagnation in U. S. Manufacturing Since 1860,” Oxford Economic Papers (New Series), XI (Oct. 1959), 270–81.

40 Not only those concerned with the path of growth determined by business-cycle experience are ignored (Gayer, Rostow, and Schwartz are cited, but not concerning their cycle scheme), but the relatively new “long-cycle” studies are also not mentioned. Not relevant to the study of growth? Was economic growth something other than the sum of experience, the sum of expansions and contractions in economic activity over time?

41 Bell, I. L., Principles of the Manufacture of Iron and Steel (London, 1884), p. 24.Google Scholar

42 T. S. Ashton's conclusions are cited, p. 89, n. 4. Keynes’ position on the role of good and bad harvests is found in The General Theory of Employment, Interest and Money (London: Macmillan and Co. Ltd., 1936), p. 330.Google Scholar See also, Matthews, R. C. O., A Study in Trade-Cycle History (Cambridge [Engl.]: The University Press, 1954), pp. 99–105.Google Scholar

43 A rough breakdown of the direction of British overseas trade in the relevant period is given in Mitchell and Deane Abstract, “Overseas Trade,” Table 10, pp. 310–311. The data hardly suggest bilateralism; in fact, they strikingly suggest the opposite. That British trade partners had no sources of increasing productivity of their own, or did not trade among themselves, is an odd notion. Even the North American colonies did a brisk trade outside the British Empire—a well-known case being the colonial outcry against the Sugar Act of 1764. New England merchants had “… been accustomed to disregarding the provisions of the Molasses Act of 1733 and importing the larger part of their molasses from the French and Spanish West Indies.” Morison, S. E. and Commager, H. S., The Growth of the American Republic (3d edition [New York: Oxford Press, 1942]), p. 147. In the case of trade outside the Empire, the majority of British trade, there is no reason at all to presume that ability to buy from Britain was limited strictly by ability to sell to Britain.Google Scholar

44 Under what conditions would a firm in a competitive market find its equilibrium position before its marginal cost reached the minimum?

45 Is Hume referring here specifically to England and Wales, as a matter of close observation, or is he just generalizing? It is not clear in Deane and Cole why Hume's observation is to be considered as the equivalent in numerical accuracy to King's explicitly numerical treatment. But that is partly the issue here.

46 The Great Famine, Studies in Irish History, 1845–52, Edwards, R. D. and Williams, T. D., eds. (New York: New York Univ. Press, 1957), chs. i and ii.Google Scholar

47 Gayer, A. D., Rostow, W. W., Schwartz, A. J., The Growth and Fluctuation of the British Economy, 1790–1850 (Oxford: The Univ. Press, 1953), I, 304, Fig. 82.Google Scholar

48 Clapham, J. H., An Economic History of Modern England (Cambridge [Engl.]: The University Press, 1942), II, 336–39.Google Scholar

49 Nurkse, Ragnar, “The Relation between Home Investment and the External Balance in the Light of British Experience, 1945–1955,” Review of Economics and Statistics, XXXVIII (May 1956), 121–54.CrossRefGoogle Scholar

50 Habakkuk, H. J., American and British Technology in the Nineteenth Century (Cambridge [Engl.]: The University Press, 1962), pp. 196–97.Google Scholar

51 Can it be shown that they do not? Considering the weight of the conclusion: “… something like one in ten of the population was in regular receipt of poor relief,” surely it is reasonable to suspect some double counting.

52 King, W. T. C., History of the London Discount Market (London: Routledge, 1936), ch. ii.Google Scholar

53 See prior discussion of this point.