1851-73

• By 1851 Britain was the dominant country in the world in its industrial outputs, leading the nation in coal, steel and cloth production
• Free trade


  Selling at competitive prices both at home and abroad, leading to an increase in trade and encouraging further economic growth
• 1880s fair trade league argued for a more protectionist approach as other countries started to impose tariffs on British goods
• Economic cycle

  When the economy fluctuates between periods of prosperity and growth (boom) and slumps
• Boom


  High standards of living, employment and productivity
• Slump


  Productivity, employment and demand for goods fall, standard of living declines
• Free trade


  An economic system where no tariffs are placed on goods being imported to a country, allowing to compete for sales
• Protectionism


  An economic policy of restricting imports from other countries by placing tariffs on imported goods
• Laissez-faire


  The government deliberately not getting involved in people's lives or in affairs of business
• 1850-1873 was a period of economic prosperity and significant economic growth, known as the mid-Victorian boom
• Britain dominated the world economy, producing over 40% of total traded manufactured goods and 25% of the world's trade passing through British ports
• Britain was the leading nation in coal, steel and cloth production
• The Great Exhibition of 1851 demonstrated to the rest of the world the variety of skills and quality of Britain's manufacturing industries
• The economy grew on average by 3% per year during this period
• Railway construction increased, and the value of cotton cloth produced rose from £46M in 1851 to £105M in 1875
• Coal production increased from 60M tonnes in 1855 to 109M tonnes by 1870 throughout Europe
• One-third of all British goods were exported to the British Empire
• Britain was unchallenged for 20 years due to a lack of competition abroad
• 1873-1896 saw the start of industrial difficulties and a long economic decline for Britain
• Britain was still classed as the 'workshop of the world', but most raw materials were provided by British colonies
• Cyclical downturns happened in the years 1873-79, 1882-86 and 1890-96, seeming worse as they followed a period of outstanding growth
• The rate of production in major industries like coal, steel and cotton increased but more slowly
• Falling prices meant smaller profits for manufacturers and workers
• Unemployment reached a peak of 10% in 1886, causing hardship and a sense of depression
• By 1900, Britain imported 50% of its food and raw materials for industry, benefiting from low import prices
• Wages did not fall, leading to a rise in the standard of living, but the depression in agriculture remained
• Farmers successfully diversified into other areas of farming
• Evidence of the boom period (1850-1873)


  • Agriculture: Artificial fertilisers introduced, high farming methods increased productivity, problems of poor drainage solved
  • Industry: Growth of coal was immense, Britain dominated shipping, mass production of steel and iron
  • Trade: Economic growth rate of 2-3% per year, profits raised used for further investments at home and abroad, sustained by Britain's free trade policy and Gladstone's reduction in taxation
• Evidence of problems during the boom period (1850-1873)


  • Agriculture: Sudden wet and cold summers led to poor harvests, increasing imports of cheaper grain from overseas, profits for British farmers fell as they did not adapt to mixed/livestock farming
  • Industry: Expanding at a lower rate, supply overtaking demand at home and overseas markets leading to reduced profits, fell behind competitors due to lack of investment
  • Trade: Britain was dependent on its exports trade to maintain economic supremacy, growing number of countries industrialising, Britain's manufacturing supremacy challenged by foreign countries like USA and Germany
• Protectionism vs Free Trade

  • Protectionism: Traditional conservative ideology, protects from foreign competition, higher prices on foreign goods limits choice
  • Free Trade: Liberal ideology, more choice and lower prices, less government intervention
• The years 1870-1914 saw a slowdown in economic growth due to increased competition and countries abandoning free trade, but this was not a true depression
• By 1900, Britain made two-thirds of the world's cotton
• What made Britian strong in period 1851-80


  Britian First Nation to industrialise = no competition empire which provided markets to sell at home + abroad + labour controlled vital sea routes + plenty supply of natural resources coal and iron ore + growing population + lazier faire approach + element of good luck in agriculture
• Growing population in 1851-80


  27M in 1851 35M in 1881
• How laze-faire approach help British economy in 1851-80

  Less gov interference + limited regulation + encoaurged to invest + take risk