The Tory Origins of the Industrial Revolution

Since the nineteenth century, philosophers, historians and social scientists have examined the causes that transformed Europe and subsequently the globe from a closed world of custom to a relatively open, modern one founded on capitalism, scientific inquiry, contract, migration and trade. Hegel detected its emergence in the rise of the European rechtstaat. Marx, like Mill, discovered modernity in the rise of an urban bourgeois class freed from the shackles of feudalism and capable of exploiting financial capital and the market. Max Weber found its spirit emanating from the puritan reformation of religion in the sixteenth century.

During the Cold War, the American Social Science Research Council for Comparative Politics devoted itself to the study of the preconditions and processes by which traditional societies made the transition across the big ditch separating them from modernity. Identifying The Stages of Growth (1958, 1971) propelling modern political and economic development, W.W. Rostow demonstrated that whatever else, it was the unique British economic take-off from the 1780s and the diffusion of this model that decisively broke a “pre-Newtonian” cyclical pattern of expansion and decline.[1]

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In other words, as Martin Hutchinson argues in Forging Modernity: Why and How Britain Developed the Industrial Revolution it was Britain that created the modern condition. Prior to the UK’s industrial revolution, for two millennia, from prehistory to the Enlightenment, mankind lived highly circumscribed and impoverished lives. The shift from hunter-gatherer tribalism to the agrarian axial age resulted only in better-organised but rigidly hierarchical societies. A Malthusian trap naturally constrained population growth, whilst social standing determined fate.

Throughout human history, societies necessarily gave priority to the maintenance of order and security over the enhancement of productive capacity. Political and religious organisation on the whole dominated purely economic considerations. Until the eighteenth century, there was no exit from this closed circle, or there was one and it only happened once, miraculously, in the United Kingdom. As Ernest Gellner wrote in Conditions of Liberty:

Once only did the balance change definitively, under exceedingly favourable circumstances—England had a fine social infrastructure, a balance of power in its polity, and so the market could be given its head. The technology was just about powerful enough for that, and yet blessedly feeble enough not to destroy society or its environment, or give anyone power to dominate society militarily.[2]

From the eighteenth century, England necessarily tolerated a degree of religious difference. It was geographically isolated, and preferred its ancient constitution to the continent’s fashionable absolutism. English exceptionalism, in other words, forged the “miracle” of modernity. The empirical theory of knowledge associated with Locke, Boyle and Newton and its logic of scientific discovery caused the great economic and industrial transformation, first in the European and American world and eventually globally. Socially, it enabled the shift from status to contract. “The Miracle,” Jonah Goldberg writes in The Suicide of the West, “is the product of a bourgeois revolution, an eighteenth-century middle-class ideology of merit, industriousness, innovation, contracts, and rights.” [3]

Lamenting the recent decline of this ideology, Goldberg paraphrases the conventional Whig view of the industrial revolution, adumbrated by various progressive and critical accretions, that still exercise a profound grip over our understanding of modernisation in general and modern British economic history in particular.

This Whig interpretation holds that it was only after the Glorious Revolution of 1688, the subsequent formation of a United Kingdom in 1707 and the longue duree of Whig party supremacy first under Robert Walpole from 1721 to 1742 and then under the Marquess of Rockingham from the 1750s that created the liberal culture and stable political preconditions that enabled a London-based oligarchy to establish the fiscal basis for economic growth and scientific and industrial experiment.

Before the union of 1707 the three kingdoms of the Atlantic archipelago constituted a group of weak and failing states, which Claire Jackson aptly describes as a “Devil Land” of dysfunctional institutions committed to a failed political theology and outdated moral enthusiasms. Jonathan Swift characterised the condition of England at the time as “a heap of conspiracies, rebellions, murders, massacres, revolutions, banishments, the very worst effects that avarice, faction, hypocrisy, perfidiousness, cruelty, rage, madness, hatred, envy, lust malice and ambition could produce”. [4]

The Whig revolution in government, it is conventionally maintained, transformed this “heap” into an unlikely but hugely successful political union run by a pragmatic oligarchy that created a stable structure based on political parties, sound money, the Bank of England, the stock exchange and the bond market. This mode of governance, grounded in political and economic interest, constituted the modern, rational, calculative basis of order and stood in dramatic contrast to the traditional understanding it replaced, focused as it was on sentimental and irrational attachments to religion, honour and loyalty and its expression in traditional oaths of allegiance to lost kings “over the water”.[5]

It is this conventional wisdom that Martin Hutchinson’s rich and original study of “why and how Britain pioneered the industrial revolution” seeks to challenge and substantially modify. Hutchinson brings to his endeavour not the understanding of a professional historian, although he evinces a thorough knowledge of the period, but the training of a former merchant banker, and financial journalist with an MBA from the Harvard Business School. This gives his study a technical knowledge of the fiscal and monetary background vital to the industrial take-off of the late eighteenth century, absent from most histories of the period.

Not only does Hutchinson question the view regularly repeated since Whig ideologists first traced the rise of eighteenth-century British success to the Glorious Revolution of 1688, he also provides a fresh and provocative Tory interpretation of the emergence of an economically successful United Kingdom. What, we might wonder, does such a radical historical revision involve and, more importantly, is it plausible?

Reimagining the English Civil War and Restoration

The Whig interpretation of modern British history begins with Edmund Burke’s Reflections on the Revolution in France (1792) and subsequently crystallised in the histories of England written in the nineteenth century by Thomas Babington Macaulay and in the twentieth by his grand-nephew G.M. Trevelyan. As the leading twentieth-century critic of this interpretation Herbert Butterfield explained, the result of “the Whig method” imposed a certain form upon the whole historical story. It produced:

a scheme of general history which is bound to converge beautifully upon the present—all demonstrating throughout the ages the workings of an obvious principle of progress, of which the Protestants and Whigs have been the perennial allies while Catholics and Tories have perpetually formed obstructions. [6]

The Whig interpretation, Butterfield contended—and, we might add, the contemporary social science view of modernisation accepts too easily—“refers changes and achievements to this party or that personage”. It is apt to imagine that the British and, in its American extension, the US, constitutions have come down to us “by virtue of the work of long generations of Whigs and radicals in spite of the obstructions of a long line of tyrants and Tories”. In reality, Butterfield writes, “it is the result of the continual interplay and perpetual collision of the two”.[7]

It is this continual interplay and the neglected and transformative role that the Tory party and the country interest played in fomenting the conditions necessary for industrial experiment that Hutchinson discloses. In opposition to the Whig teleology of progress, Hutchinson offers a far more nuanced and distinctly conservative account of this most decisive of modern revolutions. Significantly, he traces its origins not to Walpole and the Whig ascendancy beginning in the 1720s but to a much earlier group of alienated royalist constitutionalists who formed the Great Tew circle of the 1630s. Lucius Cary, Viscount Falkland, founded the group at his manor house in Oxfordshire. Its members included Edward Hyde, the future Earl of Clarendon, Sidney Godolphin, Edmund Waller, Ben Jonson and Abraham Cowley. They opposed Charles I’s policy of arbitrary rule during the 1630s, but in the course of the 1640s opposed the root-and-branch reform of religion proposed by the Long Parliament in 1641 and took the side of the Crown against Parliament when political debate broke down in 1642 and civil war ensued.

Falkland died at the Battle of Newbury (1643) agonising over “the calamities and desolation the kingdom did and must endure”.[8] Clarendon revived his legacy at the Restoration of the monarchy in 1660. Great Tew constitutionalism informed the Clarendon Codes and the Restoration settlement and formed the basis of the first Tory party and the important, but largely neglected Oxfordshire School of Economic Thought. The school opposed state monopolies, promoted free domestic trade and influenced the Restoration’s scientific, economic and political “renaissance”. Thus, in economic theory, the Restoration merchant and statesman Sir Dudley North identified the importance of free markets long before Adam Smith. North believed that interest rates and trade should be as free as possible. In his Discourses upon Trade (1691) he wrote that “no People ever yet grew rich by Policies, but it is Peace, Industry and Freedom that brings Trade and Wealth and nothing else”.[9] As Hutchinson demonstrates, throughout the first half of the eighteenth century, the Tory Party evinced a much greater interest in free trade and peace than the mercantilist-inclined Whig oligarchs.

The Restoration witnessed not only an interest in free trade but also anticipated later revolutions in technology. Andrew Yarranton proposed a system of canal building to facilitate domestic trade in 1677. Charles II’s grant of a charter to the Royal Society, established on lines Francis Bacon first proposed in New Atlantis (1626), that legitimated the scientific environment necessary to industrial experiment. From 1665 the Society began publishing its Philosophical Transactions. Its founding members included Robert Boyle, Sir William Petty and Christopher Wren. By the 1670s its elected fellows included Isaac Newton, Gottfried von Leibnitz, John Flamsted and Edmond Halley.

Although English infrastructure remained poor and financial markets primitive, the period of political turmoil after 1688’s far from glorious revolution, saw the establishment of “rock solid property rights”, the foundations for “the investments and innovation that industrialisation would require”. [10] In the short term, political power swung from Whig domination during William and Mary’s reign to a Tory party revival when Anne assumed the throne in 1700. It also witnessed the Union of England and Scotland (1707) which, as Daniel Defoe noted in 1720, facilitated the prosperity and growth of Glasgow as well as Galloway.

The political volatility from 1688 to 1720 reflected the continuing tension between the “moneyed” metropolitan interest and the landed agricultural interest. Nevertheless, the Whig Land Tax (1692), which financed the Nine Years War, the passage of the act founding the Bank of England (1694), the growth of a government bond market as well as state lotteries and a stock exchange created the financial preconditions for entrepreneurial investment in new technologies and infrastructure. Continental war spurred developments in iron forging using coal and coke. Abraham Darby established the “world’s first industrial dynasty” at Coalbrookdale. Darby’s successors used Thomas Newcomen’s new steam engines to power their blast furnaces. This febrile climate of speculation and innovation culminated in the South Sea Company going spectacularly bust in 1720.

Its aftermath led to almost half a century of Whig party ascendancy over Hanoverian politics. Hutchinson contends, again revising the prevailing historical orthodoxy, that this dominant metropolitan oligarchy “hampered further industrial development” due to its hostility to innovation.[11] The Whig Supremacy nevertheless led to a number of important financial developments, notably the Sinking Fund and after 1748 the consolidation of government debt into long-term bonds or consols that paid a guaranteed 5 per cent and constituted an effective means of subsidising future wars and imperial expansion. The government-backed East India Company exercised control over large areas of the subcontinent by the end of century. Meanwhile the American and West Indian colonies, which generally supported the Whig political ascendancy, benefited from the slave trade.

As Hutchinson notes, although the slave trade contributed to the wealth and power of a merchant and political elite, it had little direct impact on industrialisation. If anything, the slave trade and the Whig supremacy that promoted it, actually impeded industrialisation during what Hutchinson considers a long, industrially stagnant, “Whig nap 1721–60”. Few industrialists had any background in or connection with slave-related enterprises, nor did their revenues depend on such business, “until the US cotton trade exploded in importance after American independence”.[12] This was because the crucial industrial breakthrough occurred later in the eighteenth century and outside Whig-dominated London politics and beyond the purview of monopolistic city financiers.

It was only with the accession of the conservative George III (who reigned from 1760 to 1820) that Tory politicians and the country interest began to revive and “helped to kick start the Industrial Revolution”.[13] The Idea of a Patriot King, by the neglected Tory statesman and theorist of the party system, Henry St John, Viscount Bolingbroke, influenced the new monarch’s distinctly conservative disposition towards domestic and European politics. George’s Tory sympathies led to his predictable denunciation as an arbitrary ruler by the Rockingham Whigs and even more fatuously as “a tyrant” by their New England counterparts.

Whig antipathy in both England and the American colonies to the King’s Tory principles eventually provoked the War of Independence over a relatively minor issue of taxation. Rather than the despot of American myth, George was, in fact, the epitome of a country squire, who facilitated “the Tory-assisted industrial take off after 1761”. As Hutchinson persuasively argues, it was in this period of Tory dominance that “provincial towns, emerging manufacturing districts and rural areas gained a voice”. Structural changes in finance and infrastructure, notably the seminal role that country banks played, and a flurry of canal building schemes, set off the industrial revolution. It was, for instance, Tory grandees like the Earl of Gower who financed the Trent and Mersey canal.

As new manufacturing industries in cotton, wool and pottery emerged and were served by a local infrastructure of canals and roads, the formation of regional “country” banks to fund new developments evolved organically. Hutchinson demonstrates the crucial significance of this form of local finance, “since the close-knit local networks and speed of communication gave such banks an immense advantage in both getting business and assessing credit compared to their distant London brethren”.[14] The efflorescence of country bankers like Taylor’s & Lloyd’s Bank in Birmingham or Gurney’s Bank in Norwich enabled entrepreneurs to finance start-ups, whilst small businesses were able to discount their receivables. Significantly, no financial “group-think was possible, no fashionable ideas quelled the eccentrics”. These Quaker bankers were never fashionable. “If an idea could work and could be begun on a modest scale, the chances were it could be financed.”[15]

It was on this country, rather than city, foundation that seminal industrialists like Josiah Wedgwood, John Roebuck, John Wilkinson, Richard Arkwright, Thomas Williams, Samuel Whitbread, Matthew Boulton and James Watt launched Britain’s ultimately irreversible industrial revolution. Only one of these path-breaking entrepreneurs hailed from London. All came from humble or small business backgrounds, and all demonstrated an interest in original scientific research and development, large-scale production (Arkwright established the modern factory system), aggressive marketing and a concentration on goods that carried a high profit margin. Most hailed from Nonconformist or Tory backgrounds and established their industries in Scotland, the North, the Midlands and South Wales. The roots of this fundamental change in economic activity stretched back over a century, but it was Tory statesmen like Earl of Gower and Lord North under the patronage of George III that nurtured the embryonic revolution, not the Whig ascendancy. 

War, Revolution and the legacy of Lord Liverpool

The American War of Independence, the French Revolution, and the European war that followed profoundly unsettled UK financial and economic stability at the end of the eighteenth century. In the 1790s the long war with France caused the worst recession the British economy experienced between 1640 and the 1940s. Real GDP per capita fell by 28 per cent. William Pitt’s government ran a massive budget deficit and had growing difficulty financing it. Inflation and interest rates rose. The war expanded the military industrial complex whilst at the same time exercising a negative effect on industrialisation. This notwithstanding the war encouraged the expansion of hand tool, textile and coal production and Merthyr Tydfil emerged as a leading producer of cast iron.

The economy began to improve after 1802, but even in 1806 living standards were well below those a quarter of a century earlier. Significantly, but not surprisingly, it was the abolition of the slave trade in 1807 that stimulated early-nineteenth-century industrial investment. Exploiting slave labour and Britain’s Indian possessions had been a major source of metropolitan enrichment during the eighteenth-century Whig ascendancy. Abolition had the unintended but entirely positive consequence of encouraging entrepreneurial activity focused on industrial development, working within “the constraint of a relatively high-cost” and skilled labour force rather than “profiting from workforce exploitation”. [16]

Ultimately it was the series of Tory administrations inspired by the neglected figure of Lord Liverpool between 1807 and 1830 that ultimately secured the industrial revolution and established the pragmatic policies for long-term economic growth. Subsequent Whig/Liberal, Tory/Conservative, and later Labour administrations honoured these policies and principles only in the breach. As a consequence of Lord Liverpool’s prudent economic management, Hutchinson contends that he was “Britain’s greatest Prime Minister”.[17] It was the pragmatic Tory reforms of the first decades of the nineteenth century, not the Whig ascendancy in the eighteenth century or the laissez-faire economics of the 1840s that laid the foundations for Victorian prosperity and Britain’s global power. Between 1807 and 1830, Liverpool:

led the UK through the take-off stage of the industrial revolution; he inherited a daunting fiscal situation that included a debt-to-GDP ratio of 250 per cent, implanted the austerity measures needed to put the ratio onto the path leading to later Victorian prosperity; he reformed the currency; he pushed through the return to the gold standard; he promoted both the Corn Laws and free trade; and he successfully managed the 1825 financial crisis and pushed through subsequent reforms that put the British banking system onto a stable trajectory that lasted a century.[18]

Given the scale of this achievement, it is extraordinary that Liverpool has been afforded little respect from the Conservative party (Disraeli considered him “the arch-mediocrity”) or from later historians. Yet as a result of Liverpool’s shrewd monetary and fiscal policies, the UK economy survived the dislocation of the post-war period, and experienced the first boom-bust cycle of the industrial age (1820 to 1825) leading to reforms that put the political union on a sound financial footing favourable to further innovation and development. At the same time, the Liverpool administration, following Tory policy since the 1780s, protected the agricultural interest still considered vital to a mixed and balanced constitution. Revising the Corn Laws in 1815, along lines first intimated by the Oxford school of economics, conservative policy encouraged free trade, but not at the expense of the national interest. As Liverpool explained:

The success of our manufactures does not depend on cheapness of labour but on capital, credit and fuel … As to the labourers themselves who are employed in manufactures, I have no doubt that if they had to choose between cheapness of bread and a reduction of wages, and bread at its present level with their present wages, they would not hesitate to prefer the latter.[19]

In this endeavour to avoid a low-wage economy, the Tory model departed from the free-market ideology that came to preoccupy the Manchester school and its liberal and conservative followers after the Reform Act of 1832 and the repeal of Liverpool’s Corn laws in 1848.

It was this uniquely British school of conservative pragmatism between 1815 and 1832 that also facilitated innovations in science and policies that favoured their practical industrial application. Humphry Davy created the modern chemical industry, gas lighting illuminated towns, large-scale dock building programs in London, Glasgow, Cardiff and Liverpool met the growing demands of trade, tunnelling, road and bridge-building schemes associated with figures like Brunel and McAdam radically improved infrastructure. The coming of the railway age and the steam train permanently transformed British transport and communication. The Liverpool administration’s achievements culminated with the opening of the Liverpool and Manchester railway (1830) serviced by George Stephenson’s railway engine, The Rocket. The engine achieved the unprecedented speed of thirty miles per hour on its maiden journey in September 1830. [20] Its speed also caused the first railway accident when the unfortunate President of the Board of Trade, William Huskisson, misjudged the train’s velocity as he crossed the track and died as a result.

Huskisson’s untimely death also led to the fall of the Liverpool–Wellington Tory coalition government. Summing up the achievement of forty years of Tory rule in 1830, the Whig historian Macaulay acknowledged that “the people live longer, because they are better fed, better lodged, better clothed and better attended in sickness and that these improvements are due to the increase in national wealth which the manufacturing system has produced”.[21] Shortly after Macaulay wrote, real GDP per capita was 42 per cent higher than it had been in 1791.[22]

After 1830, the political environment conducive to industrialisation and balanced growth altered and not for the better. The Whig Reform Act of 1832 cemented this alteration in place. Granting a limited household franchise not only fed working-class resentment, further exacerbated by the harsh Poor Law Amendment Act (1834), “based on Jeremy Bentham’s half-baked theorie”,[23] it also rewarded urban and manufacturing constituencies at the expense of the agricultural and landed interest. The Bank Charter Act of 1844, consolidating the banking sector, rendered that crucial source of local finance, the country bank, unsustainable. Meanwhile the repeal of the Corn Laws in 1845 did little to alleviate the Irish famine, but permanently undermined British agriculture and irreparably damaged the country’s food security.

The social and economic policies pursued by both liberal and conservative administrations after 1832 and the quality of governance, so helpful to industrialisation until then, increasingly damaged Britain’s dominant industrial and economic position. Britain lost its advantage as France, the United States and, after 1870, a united Germany industrialised in the second half of the nineteenth century.

Hutchinson traces the origins of British decline to the abandonment of Liverpool’s prudence and the intransigent Victorian commitment to the shibboleths of laissez-faire economics and unilateral free trade. Even as its newly industrialising competitors protected their domestic markets from British manufacturing whilst exporting their own goods to the tariff-free UK and imperial markets, Britain’s political parties failed to safeguard its industrial supremacy. Despite the evident absence of a level playing field in international trade, Joseph Chamberlain’s attempt to promote imperial preference to support British manufacturing after 1885 fell upon deaf ears. The inability to recognise the perverse consequences of this “unilateral free trade policy” coupled with the rise of socialism and trade unionism presaged the UK’s industrial atrophy.[24]

From the 1870s Britain became more dependent on its metropolitan and historically Whig financial sector, rather than its regional industrial one. British manufacturing became increasingly uncompetitive and the economy entered relative decline. Over the twentieth century that decline became vertiginous.

Only during the 1930s, when Stanley Baldwin and Neville Chamberlain’s conservative administrations belatedly adopted imperial preference and abandoned the gold standard, did the economy enjoy a brief boom. After 1944 and under hostile US pressure, the UK abandoned imperial preference and settled instead for “quasi socialist mediocrity”. The Thatcher government temporarily arrested the decline in the 1980s, but not for long. Trade union reform, privatisation and tax reform encouraged entrepreneurship, but did nothing to promote a manufacturing revival. After Thatcher, Britain “drifted further from the policies that produced industrialisation”.[25]

At the millennium, successive new Labour and eco-conscious Conservative administrations pursued regulatory policies inimical to industrial success. The inexorable rise of government regulation, particularly of the environmental variety, profoundly hindered entrepreneurial activity. New industries flourished before 1830 as a result of a Tory commitment to sacrosanct private property rights, cheap and abundant energy and a high-wage manufacturing economy. The latest woke version of Whig teleology promotes its polar opposite. The current “green energy revolution” offers only a post-industrial landscape based on uncertain property rights, economically punitive environmental, social and governance controls on investment, exorbitant and uncertain clean energy and a low-wage, migrant-dependent economy.

Real historical understanding, rather than the anachronistic Whig variety, Herbert Butterfield wrote, is not achieved by the subordination of the past to the present, but rather “by our making the past our present and attempting to see life with the eyes of another century than our own”.[26] The long-neglected Tory model of industrialisation that Martin Hutchinson has done so much to recover created the conditions for modernity, and the model forged in the UK was copied across the world. Its abandonment first by an insouciant Victorian liberalism and latterly by a post-Cold War progressivism has distorted the understanding of the conditions that gave the United Kingdom its wealth and prestige. Subordinating the past to the present has left us with a woke version of the Whig interpretation of history that requires atonement for past political and environmental sins. This post-industrial vision of the UK offers a carbon-free, public-service economy, guilty about its past and progressively immiserated.

Forging Modernity: Why and How Britain Developed the Industrial Revolution
by Martin Hutchinson
The Lutterworth Press, 2023, 433 pages, £60

David Martin Jones’s most recent book is The Strategy of Maoism in the West: Rage and the Radical Left, written with M.L.R. Smith and published by Edward Elgar last year. He wrote on Gyorgy Matolcsy’s On the Edge of Times: The Rerun of the 1940s and the 1970s in the October issue

[1] W.W. Rostow, The Stages of Growth

[2] Ernest Gellner Conditions of Liberty Civil Society and its Rivals London, Hamish Hamilton 1994 pp.167-8

[3] Jonah Goldberg The Suicide of the West: How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics is Destroying American Democracy New York, Crown, 2018, p.27

[4] Jonathan Swift, Gulliver’s Travels (1726) cited in Claire Jackson Devil Land England under Siege 1588-1688 London, Penguin, 2021 p.512.

[5] See David Martin Jones, Conscience and Allegiance in Seventeenth Century England; The Political Significance of Oaths and Engagements Rochester, University of Rochester Press, 1999.

[6] Herbert Butterfield, The Whig Interpretation of History Oxford, Oxford University Press 1931 p.11

[7] Butterfield Ibid pp.22-24

[8] Edward Hyde The Life of Edward Earl of Clarendon Basel J.J. Turnneisen, 1789 p.20

[9] Hutchinson Forging Modernity Ibid p,130. He adds as an aside the quotation should be ‘forced recitation for every Keynesian and Marxist economist’.

[10] Hutchinson Ibid p.140.

[11] Ibid p.181

[12] Ibid p.208

[13] Ibid p.226

[14] Ibid p232

[15] Ibid p.241

[16] Ibid p.319

[17] Martin Hutchinson, Britain’s Greatest Prime Minister, Lord Liverpool (Cambridge, The Lutterworth Press, 2020)

[18] Hutchinson, Forging Modernity p.323.

[19] Ibid p.328

[20] Ten miles an hour faster than the Welsh Assembly can tolerate as it restricts all roads in Wales to a ‘risk free’ 20mph in September 2023. Meanwhile in Transport for London applies a similar limit on road speeds across London.

[21] Thomas Babington Macaulay, The Edinburgh Review 1830.

[22] Ibid p.394

[23] Ibid p.378

[24] Ibid p.386

[25] Ibid p.395

[26] Butterfield, Ibid p.37.