With the repeal of the tariffs, instituted to protect British corn farmers, liberal economic policies ascended. Free trade, free enterprise, free markets and limited government became the rule. And the world has not been the same since. (Schneiderman’s summary)
To me, it is highly questionable how much the elimination of tariffs had to do with limited government and internal free enterprise. The view that the British 1846 action was economically a very good thing for almost everybody is, however, generally accepted. From the Economist article:
The case for getting rid of British tariffs on imported grain was not a dry argument about economic efficiency. It was a mass movement, one in which well-to-do liberal thinkers and progressive businessmen fought alongside the poor against the landowners who, by supporting tariffs on imports, kept up the price of grain…When liberals set up the Anti-Corn Law League to organise protests, petitions and public lectures they did so in the spirit of the Anti-Slavery League, and in the same noble name: freedom. The barriers the league sought to remove did not merely keep people from their cake—bad though such barriers were, and strongly though they were resented. They were barriers that held them back, and which set people against each other. Tearing them down would not just increase the wealth of all. It would bring to an end, James Wilson believed, the “jealousies, animosities and heartburnings between individuals and classes…and…between this country and all others.”
Again, this is all mostly generally-accepted thinking. But Stuart’s post and the links reminded me of something I read–oddly enough, in a 1910 book on railroad history. The author (Angus Sinclair) describes the transition to steel rails (from cast iron) and the heavier trains they enabled, and then discusses the political-economic impact of this transition:
The invention of cheap methods of making steel rails has exerted a tremendous effect upon railroad transportation, and has created social revolutions in certain part of the world…It threw many farms in New England and along the Atlantic seaboard out of cultivation; it caused a semi-revolution in farming business in the British Isles, and strongly affected the condition and fortunes of millions of people in other countries. Irish peasants used to go in thousands to England and Scotland to work in the harvesting of grain crops and thereby earned enough money to pay the rent of their small holdings. Steel rails and Consolidation locomotives stopped the cultivation of so many wheat fields in the British Isles that the help of the Irish worker was no longer needed…
The woes of Ireland were merely the preliminary manifestations of hardships inflicted through the grim ordeal of competition worked out by our cheapened methods of land transportation. (The heavier locomotive enabled by steel rails) is steadily forcing more grain raising farms of Europe out of cultivation and is raising a demand for protection against cheap land, just as our politicians have so long urged the necessity for protection against the cheap labor of Europe.
About 60 years ago Great Britain abolished all duties on grain…By curious reasoning the statesmen believed that this policy would not only make the British Isles the manufacturers of the world, but that it would increase the prosperity of the agricultural communities as well. The first thirty years’ experience of free corn did not seriously challenge the correctness of the free trade theory, for more of the American wheat lands were yet unbroken prairie or virgin forests, and our steel rail makers and locomotive builders were merely getting ready…In 1858 the rate per bushel of wheat from Chicago to New York was 38.61 cents. The rate today is 11.4 cents…
The effect of that cheapening of transportation in the United States has been very disastrous to Great Britain, for during the last thirty years there had been a shrinkage of 3,000,000 acres in wheat and another of 750,000 acres in green crops; an enormous amount of land had reverted to pasturage…and the number of cultivators of the soil had declined 600,000 in thirty years–1,000,000 in fifty years.
That is a high price to pay for the devotion to a theory which fails to work out as expected.
But then he says…
The cheapening process represented by these figures involved changes that caused terrible affliction and suffering to a multitude of people, but their misfortune has been small compared to the benefits conferred upon the many by the invention of Bessemer steel and the development of the hundred-ton locomotive.
I think he is saying that the technological developments of which he speaks were greatly beneficial, the coupling of these with the elimination of the tariffs–a theory which fail(ed) to work out as expected, in his view–led to a great deal of unnecessary human suffering The Wikipedia article on this topic says that British agriculture, until 1880, “retained a kind of headship,” with its technology far ahead of most European farming, its cattle breeds superior, its cropping the most scientific and its yields the highest, with high wages leading to higher standard of living for agricultural workers than in comparable European countries. However, after 1877 wages declined and “farmers themselves sank into ever increasing embarrassments; bankruptcies and auctions followed each other; the countryside lost its most respected figures,” with those who tended the land with greatest pride and conscience suffering most as the only chance of survival came in lowering standards.
Books of economic history that I’ve read generally assert that the reduction of the farming population–first by enclosures and then by the imports from America and elsewhere–were an essential enabler of the Industrial Revolution. And certainly, large amounts of labor were needed to operate the emerging network of factories. But it’s also true that the pressure on people to leave the farming life created a downward pressure on the wages which factory owners needed to offer. While it’s often noted that people wouldn’t have taken the new factory jobs if they’d had better alternatives available, it does seem that the attractiveness of those alternatives had been considerably reduced by the combination of better transportation and the elimination of import restrictions.
Of course, railroads weren’t the only transportation mode that was achieving great efficiency improvements: improved ocean transportation was also a factor. Sinclair also doesn’t mention the Irish Famine, which was aggravated by the existence of the Corn Laws and the consequent difficulties in increasing supplies…indeed, the Famine was itself a key motivator for Corn Law repeal. There are certain parallels between the events described by Sinclair and the situation in our present era–for example, we now have the transportation technologies of air freight and container freight, plus the Internet and other forms of improved telecommunications. And during the earliest years of the reduced barriers to Chinese imports, the full impact of this regulatory change coupled with the above technologies was probably not fully grasped, because the Chinese manufacturers and internal infrastructure builders were merely getting ready, to use Sinclair’s terminology.
So…what do you think of Angus Sinclair’s argument and its possible applicability to our own time?