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Can A Smithian Framework Be Used To Analyse The Importance Of The Atlantic Economy To The 18th Century British Lead Over France Notes

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Jonathan Lindsell, Trinity College 25/04/2011 Can a Smithian framework be used to analyse the importance of the Atlantic economy to the 18th century British lead over France?
"A Smithian Framework" could mean a lot of different things to a lot of different people. 'Wealth of Nations' is a big book, after all. This essay shall treat 'Smithian Framework' to encapsulate the pioneering economist's salient ideas, and his general assessment of the Atlantic economic situation. Therefore ideas such as the employment of division of labour to avoid a situation of diminishing returns, a drive to expand and diversify markets, attention paid to the advantages of transport and invention, appreciation of a government that allows laissez-faire capitalism with a minimum degree of intrusion, yet provides institutions promoting efficiency, a criticism of monopolies and an acceptance of the "invisible hand" are the elements of Smith's thinking that this essay will deal with1. With those in mind, this essay will contend that although the Atlantic economy was an important step towards Britain's 18th century lead over France, it was just that, a step. Dominance of the colonial trade with America is one part of the story, one piece of the puzzle that explains so notable a lead. A number of historians argue that a number of different factors caused the crosschannel divergence, and most of them criticise each other to some extent. The only factors usually raised that this essay will dismiss are the spread of literacy in the century, which seems to have had negligible impact2, and the importance of a democratic, constitutional government rather than an autocratic absolute one. This essay will investigate what property of Britain (and Holland)'s political frameworks promoted their economies over those of France, and argue that it was their policies and not their nonabsolutist natures. These factors aside, all contributing causes for the British lead will have their account. From 1066 Britain had an advantage over France on account of its greater proportion of draught- and manure producing-beasts, and its soil quality. After the Plague, from which France recovered far swifter than England, and hence received less benefits, France remained restricted by its institutions tying peasants to the land. Despite diminishing returns from population growth, the French stayed in the countryside, taking advantage of their strong property rights. Meanwhile, British agriculture experienced a gradual revolution on account of its animal ownership and the demand being posed by proto-industrial towns and cities, creating higher yields. This freed up labour, capital and wool, all of which stoked commerce in general and the cloth trade in particular. This in turn gave the merchants trading slaves, sugar and tobacco between Britain and the colonies an important capital, affording them a political say. They were able to make good on this political say, funding the armies of the Parliamentarian faction in the Civil War, and of William III of Orange in the Glorious Revolution. Having supported both winning parties, they were able to wrest control of the capital markets away from the monarch and massively improve them. Such improvement meant that the British government could borrow unprecedented sums, and it did so to fund several victorious wars with France which established British sea power. Such dominance of the Atlantic afforded the English merchants lucrative monopolies, allowing Britain to pull even further ahead of France by the end of the 18th century. To backtrack somewhat, the primary factors that started the chain of Britain's 18th century lead over France lay in the soil. The soil was less acidic, more receptive to 1 2

Wealth of Nations, Adam Smith, Chapters I and II Book I, and Chapter VII Book IV Progress and Poverty in Early Modern Europe, Robert C Allen, p.433


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