Laissez-faire and the Victorians

Just HOW did Britain become the Earth's mightiest power? A closer look at the economic thinking of the Victorian British....

Laissez-faire and the Victorians

By Professor Eric Evans

Victorian advertisements at Charing Cross Sation, 1874 ©

Could Victorian Britain be called in any way a 'nanny' state? The 19th century was certainly a period of increasing state intervention - but how far did things really go?

Britain's world dominance


Area (1850): 315,093 km≤ (slightly larger than what Italy is now)
Area (2007): 244,820 km≤

Population (1850): 18 million
Population (2007): 61 million

Economy (1850): world's largest
Economu (2007): world's 5th largest

Throughout the reign of Queen Victoria (1837-1901), the United Kingdom was the world's leading power. Its naval supremacy was unchallenged and its dominant influence in diplomacy and international power broking acknowledged on all sides. It was, however, the strength of Britain's economy that underpinned this pre-eminence.

Britain had progressed from being what Napoleon dismissed as a 'nation of shopkeepers' and had become instead 'the workshop of the world' - on the back of the world's first industrial revolution. Its control of international trade routes and its dominance of financial services also ensured that - for a while at least - the country could withstand the challenge of other newly industrial nations in the second half of the queen's reign.

But why was the UK, a small nation inconveniently situated at the north-west fringes of Europe, so dominant for so long? There are many answers to the question but, by the 1860s, it was almost an article of faith that the nation thrived because of 'laissez-faire'.

Understanding 'laissez-faire'

Prime minister Margaret Thatcher advocated a return to 'Victorian values'

Laissez-faire, a French term, means 'leave to do' or 'leave alone'. It relates to economic policies that rely on the power of unregulated markets to deliver the goods. The goods were secure economic growth, high levels of unemployment and international competitiveness. Applied to social policy, it indicates minimal government involvement.

Left to their own devices, according to this argument, people will develop habits of sturdy self-reliance, but if they are supported by the state, people will rapidly sink into a mode of dependency. As Samuel Smiles, the greatest propagandist of the self-help ideal, put it in 1859:
'Whatever is done for men or classes, to a certain extent takes away the stimulus and necessity of doing for themselves; and where men are subjected to over-guidance and over-government, the inevitable tendency is to render them comparatively helpless.'
'She called for a return to 'Victorian values' - by which she meant rolling back the powers of the state ...'

It was to these ideals of self-help and sturdy independence that Margaret Thatcher looked when, as Britain's prime minister from 1979 to 1990, she sought to revive the country's flagging fortunes. She called for a return to 'Victorian values' - by which she meant rolling back the powers of the state, lowering levels of direct taxation and encouraging people to stand on their own feet.

Thatcher also aimed to make Britain a more competitive trading nation. Here, she invoked the spirit of the Scottish political economist Adam Smith, whom she considered to be the high priest of free trade. Smith's famous book Wealth of Nations (1776) had advocated removing the tariffs, customs and other restrictions which nations traditionally used to advantage their own goods. Embracing free trade would encourage producers and traders. It would stimulate competitiveness and innovation. From the ensuing economic growth, everyone would benefit.


Prime Minister William Gladstone

Smith's ideas became dominant over the next century. His disciples and successors persuaded senior politicians such as George Canning, Robert Peel and William Gladstone of the virtues of free trade and low taxation. In the 1860s and 1870s, the age of Gladstone and Disraeli, income tax rates fluctuated between 3d and 6d (1.5 to 2.5p) in the pound.

So distasteful did Gladstone find the principle of direct taxation that he even promised to abolish income tax if he won the election of 1874. He lost, and income tax not only stayed but flourished to become the mainstay of government revenue for at least another century.

In 1869, though, only 2.1 per cent of all state expenditure went on government departments. The Victorian civil service was very small. Concerns about 'centralisation' and state power, which some critics voiced at the time, seemed ludicrously wide of the mark. One of our most distinguished historians, Eric Hobsbawm, has asserted that, 'By the middle of the 19th century government policy in Britain came as near laissez-faire as has ever been practicable in a modern state.'

'... against the general assumptions ... Victorian Britain was a country of growing state intervention.'

Mid-Victorian government, however, was much more interventionist in social and economic matters than it had been in the 18th, or indeed in any previous, century. The duties of 18th-century governments extended little beyond diplomacy, defence and warfare.

Taxes were raised to fight the frequent wars in which Britain was then engaged, but the welfare of its citizens was a local (and usually a parish) responsibility, if indeed there was any state involvement at all. By contrast, and against the general assumptions of laissez-faire ideology, Victorian Britain was a country of growing state intervention.

Locating the problems

'Punch' cartoon, 1894: Important meeting of smoke makers

It was industrialisation that did more than anything to develop state involvement in what Victorians called 'the social question'. The Industrial Revolution meant much bigger towns and huge population increases. Britain's population was almost twice as large in 1800 as in 1700, three times as large by 1850 and more than five times as great by 1900. By that year, it had reached 37 million.

Urbanisation and population growth combined to produce social problems on an unprecedented scale.

As early as 1832, a doctor working in Manchester, JP Kay, graphically illustrated the key problems.
'The state of the streets powerfully affects the health of their inhabitants ... Want of cleanliness, of forethought, and economy, are found in almost invariable alliance with dissipation, reckless habits and disease. The population gradually becomes physically less efficient as the producers of wealth ... Were such manners to prevail, the horrors of pauperism would accumulate.'
'A debilitated race would be rapidly multiplied. Morality would afford no check to the increase of population: crime and disease would be its only obstacles ... A dense mass, impotent alike of great moral or physical efforts, would accumulate ... They would drag on an unhappy existence, vibrating between the pangs of hunger and the delirium of dissipation - alternately exhausted by severe and oppressive toil, or enervated by supine sloth.'
Urban and rural squalor
'Punch' cartoon, 1894: Poverty caused increasing concern in rural areas
So, was Manchester better seen as the triumphant productive capital of the world's first industrial nation or as the 'shock city of the industrial age'? Should the Victorians celebrate their world-beating industrial triumphs or quake at a modern civilisation threatened by numberless hordes of the dirty, the disease-ridden and the ill-educated - all potential recruits to a vast criminal underclass?
Evidence steadily accumulated which confirmed Kay's early analysis. Severe social problems afflicted all the large cities of the United Kingdom. By the mid-Victorian period, it was also clear that these problems were not confined to urban areas.
Poverty and hopelessness abounded in rural areas, where the supply of agricultural labour became much greater than the demand for it, as efficiency and profit began to dominate the rural economy. The Victorians, great fact-grubbers that they were, started to accumulate evidence about what was happening - seeking information about those aspects of the health and morality of the nation that rang the most urgent alarm bells.
The growth of the state
Victorian cycle machine shop
Another influential ideology, Utilitarianism, developed in the early 19th century alongside laissez-faire. Associated primarily with the philosopher Jeremy Bentham (1749-1832), its central belief was that a well ordered society should seek to secure 'the greatest happiness of the greatest number'.
In theory, laissez-faire could deliver that happiness for the greatest number. Free trade stimulated economic growth. Economic growth created more jobs. More jobs meant more opportunities for people to consume, which in turn meant new market opportunities for producers and traders. A virtuous circle was thereby created and 'the greatest number' duly benefited.
However, what happened when large population growth was not matched by substantial economic progress was horrendously demonstrated in Ireland in the late 1840s. The potato famine killed one million people, and induced still more to emigrate in search of a better life.
'Without state intervention ... the whole Victorian economic miracle might be undermined.'
In Britain the evidence of JP Kay, Edwin Chadwick and the other Victorian social commentators also demonstrated the fragility of this supposedly virtuous circle. Without state intervention, they argued, it was clear that the whole Victorian economic miracle might be undermined. The solution adopted was central government intervention to mitigate the most damaging effects of unrestrained industrial capitalism.
Even before Victoria came to the throne, Parliament had passed the first Factory Act (1833), with government inspectors to ensure that its terms were met. Employment of very young children in textile factories was forbidden, and that of adolescents restricted. Employers had to provide at least two hours' education a day for child employees. Factory legislation was progressively extended to other branches of industry, beginning with mines legislation in 1842.
Education and health policies
'Punch' cartoon, 1847: A boy falls through the gap between 'voluntary' and 'state' education
In 1833, Parliament voted the first grant to support education for the poor. It was a very small sum of £20,000. This grant did not introduce state education but it helped the Church provide schooling. Despite these modest beginnings, within 40 years the cost of state support for education had increased to £800,000. Furthermore, there was also a bureaucracy which ensured that state funds were being properly spent.
Her Majesty's Inspectors of Schools were first appointed for this purpose in 1839, and the first state-sponsored teacher-training scheme followed in 1846. The path to still greater state intervention was securely paved in the early Victorian period and led to the 1870 Education Act, which developed local board schools to fill up the gaps left by Church provision.
'... "the workhouse", an indelibly powerful symbol of degradation and shame ...'
Compulsory elementary education followed in 1881 and the opportunity for almost all children to receive free elementary education without payment of any fees was provided by 1891. Responsibility for state-supported education was transferred, as Arthur Balfour put it, to 'those great public assemblies, the borough councils and the county councils of the country' in 1902.
A distinctive pattern of government growth was apparent in other areas too. Spurred on by fear of cholera epidemics, and by powerful propaganda led by Edwin Chadwick, a Health of Towns Commission reported in 1844/45 and a Public Health Act was passed in 1848. This established a central Board of Health with some compulsory powers.
The device of a central Board with certain powers and local administration was pioneered in 1834, when the Poor Law Amendment Act replaced a discredited older system. The aims were to save ratepayers' money, and to discourage idleness in working people. The new Poor Law created, in 'the workhouse', an indelibly powerful symbol of degradation and shame that lasted until the final and unlamented dismantling of the Poor Law system in 1929.
Centralisation, or not?
So, in the light of so many examples of state intervention in various aspects of social life, can we still say that there was 'an age of laissez-faire' in Victorian Britain? Some historians have argued not, but this is surely a mistaken view. By the middle of the 19th century, laissez-faire was firmly established as the guiding principle in economic life.
Furthermore, state intervention was grudgingly conceded an limited in its impact until at least the last quarter of the 19th century.
The state intervened only to prevent those greater evils that might threaten the efficiency of a free-trade economy - not to provide positive benefits for its citizens.
Also, the burden of provision rested overwhelmingly with local authorities, not with central government.
'Centralization. No. Never with my consent. Not English.'
Thus, the range of what local authorities might offer was massively expanded during the Victorian era. What either central or local government must provide, however, remained extremely limited. At the turn of the 20th century, there was no housing policy, there were no old-age pensions, and no national insurance schemes.
For many English property owners, reliance on local solutions to local problems remained an absolute priority. The last word might properly lie with Charles Dickens' fictional creation in Our Mutual Friend, Mr Podsnap: 'Centralization. No. Never with my consent. Not English.'

control of international trade routes didn't involve state intervention?
Invading the Indian subcontinent and spreading opium into China certainly involves interventionism ... and imperialist terrorism.
heh. Forgot about that. I was distracted by all those railroads popping out of the middle of nowhere.
Quote: Originally Posted by gopher View Post

Invading the Indian subcontinent and spreading opium into China certainly involves interventionism ... and imperialist terrorism.

Invading the Indian Sub-Continent - largely as a result of conflict with France and subsequently ensuring that hostile powers didn't get control of India's resources.
Whereas, of course, the U.S.A. has never shown any imperialist ambitions.... almost genocidal policies toward native Americans, taking half of Mexico, the Monroe Doctrine and military interventions to back attempts to control South and Central America, the Phillipines etc. etc.... no imerialist terrorism there, then.
Look to the beam in your own eye Uncle Sam.
If you're going to be picking fights its generally a good idea to get the point first.
Quote: Originally Posted by Blackleaf View Post

Prime minister Margaret Thatcher advocated a return to 'Victorian values'

This part cracks me up. Victoria was dead and buried long before Britain ever saw universal suffrage.
Not picking a fight, merely trying to show that people of pretty much every nation could do some self-examination before pointing the finger.
Quote: Originally Posted by Mulciber View Post

Not picking a fight, merely trying to show that people of pretty much every nation could do some self-examination before pointing the finger.

so what? only Brits, East Indians and Chinese can comment on the silk trade balance was dealt with?
and since I'm not Irish either I can't mention how Victoria's reign started with how it influenced the impact of the Potato Famine?
I can't see that my comment attempts to place any restriction on anyone's right to comment. It was intended to address a certain propensity, often found in the U.S.A. sadly, to slag off Britain without looking at one's own nation's historical shortcomings.

So do you think that because the guy is from Minnesota...

Quote: Originally Posted by Mulciber View Post

Look to the beam in your own eye Uncle Sam.

you can go right ahead and assume he hasn't?
You seem very fond of putting words into mouth. I'm sensing a goat/bridge/Norwegian mythological figure interface type situation here.
so if you didn't think he needed to why did you tell him to?
Deflection from topic isn't debate Mulciber - the discussion was the Victorian era

You want slagging? Read some of the UK papers' favorite slag of the day - the USA.

Your rhetorical linquistic exercise is absolutely rerun and worn out.
I think you'll find that the Mexican-American War, the Monroe Doctrine, the Spanish-American War all occured during the Victorian era.
I hope you'll find that I'm not an anti-American, in fact I'm generally pro and deplore the mindlessness of much anti-American sentiment.
Laissez-faire policies was a large reason why Britain became the greatest imperial power of its time. Not the only reason for certain, but Britain would not have risen without it.
Quote: Originally Posted by Toro View Post

...but Britain would not have risen without it.

I'd say that's a bit of a stretch but considering its still pretty well the best way we know how to accumulate the capital to create the means I'll say for the most part I'd agree, with the proviso that it has its limits, and leave it at that.
Quote: Originally Posted by Mulciber

I the U.S.A. has never shown any imperialist ambitions.... almost genocidal policies toward native Americans, taking half of Mexico, the Monroe Doctrine and military interventions to back attempts to control South and Central America, the Phillipines etc. etc.... no imerialist terrorism there, then.
Look to the beam in your own eye Uncle Sam.

Hey buddy - did you bother to look at my past posts on the subject?

As everybody who has been on this forum for a while can readily tell you, NOBODY on this or any other forum has criticized USA imperialism more than I have.

You're welcome.

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