The First Industrial Nation: An Economic History of Britain, 1700–1914 by Peter Mathias, and: Britain Yesterday and Today: An Outline Economic History from the Middle of the Eighteenth Century by W.M. Stern (review)

214 THE CANADIAN HISTORICAL REVIEW The FirstIndustrialNation:An Economic Historyof Britain,•7oo-•9•4 . MATH•S.London, Methuen[Toronto, Methuen],•969. Pp.xiv,5•. $8.95cloth, $4.5 øpaper. BritainYesterday andToday:An OutlineEconomic HistoryfromtheMiddle of theEighteenth Century.w.M. Sa'•gN. Second edition.London,Longmarts [Toronto ,Longroans], •97o.PP.xii, •9o. $5.7o. Thesetwo books are textbooks for sixth-formanduniversity students. Bothare lucid,comprehensive, well written,and balanced. Neitheris concerned overtly togrindanypartypolitical axes. Botharewrittenin thecooltradition whichhas become fashionable in economic historiography duringthe pastfifteenyears. That is,theyaremoreconcerned with understanding thewholeprocess of economicchangethan with the sufferings of the workingclasses, the riseof the parliamentary labourparty, or the horrorsand uglifications of industrialism. Bothauthors havereadalmosteverything relevant,and havedigested mostof this. Either book could be used as a text or reference. Both will be useful to university lecturers in otherfields whohavelosta criticaldateorfigure.Mathias will alsobea usefulintroduction to manycurrentcontroversies - matterswhich Stern,in hisshortervolume,cannottreat. Indeed,Sternhastriedto covertoomuchasit is.Generally he hasoptedfor description not analysis - sensibly enough, ashisventures intoexplanation are not always verypersuasive. Mathias'is the betterbookchieflybecause he has roomfor detail,for explanation, for differing viewpoints, andfor footnotes and bibliographies - whichin Mathiasareconsistently excellent, butwhichin Stern are sketchy in the extreme. Mathiasalsoincludes a substantial statistical appendix ,largelyextracted from Mitchell and Deane.And he usesdiagrams to goodeffect. ThoughMathiashasdividedhistestinto a 'birthpangs' periodand an 'evolution 'period,witha shortepilogue on x9•4-39, bothbooks areorganized topicallynotchronologically . And thetwoauthors havetriedto relatetheirbooks to currentconcerns - Mathiasto the development problems of poorcountries, and Stern to the current British social scene. One wishes that Stern had not tried too hardtobe'withit.' Hisremarks onthesixties seem perfunctory, andhis'relevant' lastchapter,onthestandard of living,isactively misleading in thatit discusses Britishaffluence since•945 solely in termsof thewelfarestateandfull employment .Here,perhaps, a politicalaxeisindeedbeinggroundsomewhere in the substructure. Surelya gooddealof Britishaffluence mustbe creditedto rising labourproductivity. Admittedly, since•945thishasbeenrisingratherslowly in Britain- butwe knowof no periodin whichit rosefaster.Surely,too,evena narrativeeconomic historianshouldpoint out that a gooddealof Britishaffluencehasnotbeenearned . The Britishbalance of payments hasbeenin frequent current-account deficitprecisely because Britishproduction hasnot keptpace with Britishconsumption. In otherwords,Britain hasbeenborrowingsomeof thefoodshehasbeeneating. Indeed,Sternhasgiven usaveryoddandmisleading account in hisstandard- REVIEWS 215 of-livingchapter. Like Mathias,hetreads a carefulandscholarly paththrough the thickets of the IndustrialRevolutioncontroversy, and he notesthat standardsunequivocally roseafter•85o.Butwhendiscussing livingstandards heinserts a greatdealof miscellaneous materialon socialphilosophy, government policy,andtradeunions, noneof whichcouldhavehad mucheffecton living standards before•900.Further,whendealing with thiscentury, Stemproperly stresses the rise of the welfare state,but doesnot tell the reader that, for the employed worker,livingstandards rosesteeply duringthetwenties andthirties. In short,thelatterpart ofthischapterisratheroutof date. The living-standards chapteris certainlythe oddestin Stem'sbook.But othersare strewnwith smallpitfallsfor the unwary.Sternbelieves that British agriculture was'shortof capital'for zooyears - fromthe •77osto the •87os.As therewasmassive investment in enclosure and agriculturalimprovementduring this century, 'itishard tosee inwhat sense capital was specially short. Obviously agriculture couldhaveused moreor cheaper capitalfundsthanit got- but this is true at all times,in all sectors, for all economies. Stem regretsthat because Britishrailroads competed with oneanotherandwith thecanals androadsthey couldnot'develop asa publicservice' (p. •54). While therewascertainlysome over-investment in Britishtransportduringthe nineteenthcentury,it remains tobeshown whetherornota centrally planned system wouldhaveserved Britain better.If oneconsults therecordof nineteenth-century France,onefeelsskeptical .Contraryto the evidence, Sternbelieves that in the late nineteenth century theBritishempirewas'an exclusive or at leastpreferentialsource of raw materialsanda marketfor Britishmanufactures' (p. 173). In fact, preferentialtariffs werenotused,andempireraw materials weresoldto anybody whowouldbuy them.Finally,Stemismuddledabouttheexchange rate,foreigntrade,andthe balance ofpayments in the •9•os (p. •77), andheasserts incorrectly thatBritain wasthehardest-hit of anyindustrial nationin the i93os(p. •75). In short,thoughStemisusefulhemustbehandledwith care.Mathiasismuch morereliable.I havefoundnoerrors of fact, andthe oddities of interpretation, which are discussed below,are muchmore excusable, because they arisefrom an honest attemptto useeconomic analysis in the interpretation of the past. Further,thoughneitherbookoffersmuchnewinterpretation, in Mathiaseven thespecialist will findmuchof value,because the bookissocogent a summary ofrecent research andbecause Mathiasissowiseandperceptive a commentator. Fortunately,mostof the time Mathiasuses the fight economic analysis, and uses it correctly. I recorded onlya few perplexities, and theserelatedmostlyto money,trade,and capital- the threetrapsin whichcommonsense economics mostreadilyloses itsway. At onepointMathiasdeems to deny (p. •7•) that bankdeposits are money whichthebanking system cancreate. The pointrecurs later (p. 359). Like most historians and someeconomists, he sometimes getsa little muddledaboutthe savings-investment nexus(seepp. •4, 40, 46-7, •44). The troubleis partly terminological: capitalgoods arenotcapitalfunds, andneitherisquitethesame asloanablefunds.More serious, however...