Napoleon was wrong
- Capitalism, Culture and Decline in Britain 1750-1990 by W.D. Rubinstein
Routledge, 182 pp, £25.00, April 1993, ISBN 0 415 03718 2
- British Multinational Banking by Geoffrey Jones
Oxford, 511 pp, £48.00, March 1993, ISBN 0 19 820273 3
- Going for Broke: How Banking Mismanagement in the Eighties Lost Thousands of Billions of Pounds by Russell Taylor
Simon and Schuster, 384 pp, £17.50, April 1993, ISBN 0 671 71128 8
Britain emerged from the war still unquestionably a great power, its Prime Ministers Churchill and Attlee considered the equals in negotiations for the post-war settlement, of America’s Presidents Roosevelt and Truman and Soviet dictator Stalin at the Yalta and Potsdam Conferences of 1945.
By any rational and objective criteria ... Britain’s economy has never performed more strongly in its history than during the past twenty years.
Britain’s residual links in the former Empire and the Middle East unquestionably stood it in good stead, as did the reputation of the City for total probity and of British bankers for traditional honesty and gentlemanly behaviour.
Another ... very distinctive feature in British habits of thought is the attempt to be comprehensively accurate and even-handed in assessing the world. British commentary on events is notably marked by its great fairness and pains to achieve great accuracy ... The Times – long the world’s newspaper of record.
Those cheering sentiments would have raised few eyebrows in the immediate post-war years. Up to the Suez fiasco they were to a large extent the conventional wisdom. Since then, however, most comment on ‘the state of Britain’ question has been so derogatory that today they seem decidedly quaint. One might guess them to be the outpourings of some slightly deranged politician of the Far Right ranting against Maastricht or dismiss them as the post-prandial ruminations of the sort of men who select the English cricket team or oversee the starting arrangements for the Grand National.
In fact, they were written by W.D. Rubinstein, who is no Blimp and is far from deranged. He is an American who is currently a professor at an Australian university. He was once the research associate of Professor Harold Perkin, and has himself produced well-researched and well-received books and articles. As one would expect, Capitalism, Culture and Decline in Britain 1750-1990 is well-written, is vigorously but courteously argued, and contains an abundance of interesting information.
The aim of his book, Rubinstein tells us, ‘is to analyse and dispute a widely-held theory of Britain’s economic decline and to put forward an alternative view’. The theory he wishes to explode is the so-called ‘cultural critique’ which attributes Britain’s economic decline to an ‘anti-industrial culture’ that was allegedly inculcated by the English public schools in the Victorian and succeeding ages. This anti-industrial culture, so the cultural critique runs, turned people who would otherwise have become thrusting industrialists and innovative businessmen away from industry and commerce, and encouraged them to look instead to the land, the Empire, the Civil Service or the professions. As a result there was a haemorrhage of talent from industry, the English entrepreneurial spirit was stifled and Britain’s economic growth was stunted.
Rubinstein lists the main planks of the ‘cultural critique’: Britain was the earliest country to industrialise and was a primarily industrial and manufacturing economy; the main feature of her economic history since 1850 has been decline; indeed, she has experienced relative economic decline for more than a century and especially since the last war; the most important reason for this decline is an anti-industrial and anti-business culture; in consequence, British society is rooted in the past and cannot come to grips with the modern world. In Rubinstein’s belief all these contentions are wrong – ‘and not merely wrong, but arguably the very opposite of the truth’.
Rubinstein’s revisionist thesis is that
Britain’s was never fundamentally an industrial and manufacturing economy; rather, it was always, even at the height of the industrial revolution, essentially a commercial, financial and service-based economy whose comparative advantage always lay with commerce and finance. Britain’s apparent industrial decline was simply a working out of this process, a working out which became increasingly evident from about 1890, and which was, manifestly, coincidental with a continuing rise in the average standard of living in Britain rather than with a decline.
Hence, in Rubinstein’s view, the relative decline of British industry does not imply a decline in the overall performance of the British economy. The cultural critique is not merely misconceived: it seeks to explain something that never took place. If the book’s central thrust is correct – if, that is to say, Britain was never primarily an industrial country, and its economy has not declined since the 19th century – then, as Rubinstein claims, ‘it is no exaggeration to suggest that the whole evolution of modern Britain will appear significantly different.’
Prior to the later 18th century Rubinstein’s argument causes no difficulty. Britain was predominantly an agricultural and financial/commercial country. Bishop Berkeley wondered in 1735 whether ‘credit be not the principal advantage that England hath over France ... [and] over every other country in Europe’.[*] The years of the French Revolutionary and Napoleonic Wars present a little more of a problem. Britain was certainly the banker of the various coalitions, heavily subsidising the armies of her allies. Yet between 1788 and 1811 British pig-iron production multiplied by five. By the latter year more than 30 per cent of the British labour force was employed in manufacturing, mining and industry, and Britain’s industrial strength was a vital element in the alliance. Napoleon himself would probably have agreed with Rubinstein – he famously derided us as a nation of shopkeepers. Had he been right, he would probably have escaped defeat.
All the same it is on the next hundred years that Rubinstein’s argument stands or falls. He himself has no doubts: Britain was and continued to be a nation of shopkeepers. Britain’s economy, he writes, ‘was always, even during the period 1815-70, primarily a commercial/financial-oriented economy whose comparative advantage always lay in these areas and did so increasingly after 1870’.
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[*] Quoted in P.G.M. Dickson’s magisterial 1967 study, The Financial Revolution in England: A Study of the Development of Public Credit 1688-1756 (Gregg Revivals, 648 pp., £55, 17 June, 0 7152 0010 7).
[†] The Industrial Revolution and British Society, edited by Patrick O’Brien and Roland Quinault (Cambridge, 312 pp., £27.95 and £9.95, 4 February, 0 521 43154 9); ‘not a traditional Festschrift but a “Textschrift” ’ for Max Hartwell.