To Block or Not: Why the British Ruling Elite Enabled the Industrial Revolution during the 18th Century

Author: Emrah Gülsunar

Twitter: @GulsunarEng

For centuries before the Industrial Revolution, ruling elites used their political power to block or constrain technological and economic development in many countries from China to Europe with motivations to protect their power, keep economic rents, or avoid social disturbances.

Accordingly, it was possible for the British ruling elite to ban technological improvements or sustain growth-restraining institutions during the 18th century with the very same motivations, just as their predecessors already did in England.

However, during the 18th century, the British ruling elite never tried to block industrialization altogether. On the contrary, they generally promoted it. Then, the question is why Britain’s ruling elite behaved this way, even though the opposite was also possible.

The literature: political power, economic rents, international competition

The existing literature proposes three explanations for this question:

The first one is that the ruling elite benefited from the commercialized and industrializing economy during the 18th century, such as from rising land values in urban areas.

The second explanation is that regardless of whether the ruling elite benefited from the expanding economy, the main factor was that industrialization did not threaten their political power, especially in the short term.

And, the third explanation is the pressure of international competition, that is, economic and military rivalry among Western European countries during the 18th century.

However, these explanations depend on little to no direct empirical investigation. My article contributes to the economic history literature with a systematic and empirical examination of the firsthand sources of parliamentary legislation and debates on the textile — mainly cotton — industry during the 18th century in Britain to understand the motivations of the ruling elite in their not blocking technological and industrial development and support for it.

My findings: unemployment, international competition, political system

The study demonstrates that the cotton industry entered Parliament’s agenda after the 1770s as a result of its growth with the impact of mechanization. After its entrance, Parliament tried to support the cotton industry with a protectionist foreign trade policy, avoiding heavy taxation, and protecting machinery from technologically conservative groups.

In the ruling elite’s supportive policies, two publicly motivated factors were influential: The first was increasing employment levels and, thereby, combating poverty and potential social disturbances. This old motivation persisted in the 18th century with the ruling elite’s understanding of the long-term merits of mechanization despite its adverse short-term impacts on employment.

Secondly, the ruling elite was motivated by the fear of lagging behind other countries, especially France, economically and militarily, and supported the cotton industry to sustain the international competitiveness of the British economy.

These public motivations could be prevalent only if certain vested interests did not suppress them. In this regard, Britain’s undemocratic political system, essentially closed to ordinary workers and artisans, helped the ruling elite to reject the demands of technologically conservative groups. Moreover, despite intensive lobbying, the political system had no excessive cronyism. Thereby, the ruling elite acted as an arbiter against the demands of industrialists and merchants, eliminating any possibility of blocking mechanization in the cotton industry upon the pressure of other textile branches.

The close examination of ruling elite figures who actively participated in parliamentary debates on the cotton industry shows that the cotton interests were represented in Parliament, but the majority of the main speakers in Parliament were high-ranking statesmen acting with public motivations. Also, although the majority of the ruling elite prioritized landed interests, this never turned into a total blocking of technological and industrial development.

What do these findings tell us about the abovementioned hypotheses in the literature?

I find highly limited evidence regarding the first hypothesis that the ruling elite benefited from the commercialized and industrializing economy. There is, again, highly limited evidence regarding the second hypothesis that industrialization was not a threat to the ruling elite’s political power.

However, there is clear evidence for the third hypothesis: economic and military competition among countries in Western Europe pushed the British ruling elite to support industrialization. It is possible to observe the impact of this motivation in almost all the supportive policies of Parliament: suppressing the anti-machinery riots, avoiding heavy taxation, keeping raw material-rich colonies, preventing physical capital from moving abroad, and protectionist foreign trade regulations.

As a result, what distinguished Britain during the 18th century from its historical precedents that blocked technological and industrial development was the high pressure of international competition, a ruling elite who understood the long-term merits of mechanization related to employment, and a political system that prevented the dominance of private interests over these factors.