The economy 1851-1914 Flashcards
(62 cards)
what are the five interlined innovations in schumpeters model of capitalist growth and how did these benefit the economy
- innovation by product
- innovation by process
- innovation by market
- innovation by material
- innovation by organisation
- they increase productivity and output and help produce economies of scale, they also spread throughout society and create a dynamic interaction between industries stimulating demand, supply and thus growth
what was Britain classed as in 1851 and why - list reasons for economic
what event happened in 1851
- Britain was the workshop of the world in 1851 - the great exhibition 1851 which showcased Britains economic prosperity and led to an increase in exports
- britain was the 1st industrial nation
- they had a strong merchant navy and an empire which took in 40% of exports and supplied cheap and raw materials
- plentiful supply of natural resources
- rising population, 27 million in 1851 to 35 million in 1881 which provided demand and a larger workforce
- industrial development and innovation- technological advancements were beginning driving economic growth - steam power had emerged
- free trade which encouraged the growth of british exports
- mobility of workforce due to the establishment of the railways system, by 1875 every major town and sea port were linked which facilitated industrial development
-britain had peace whilst their competitors were at war, Germany and the USA
between 1856-1873 how much did british GDP increase per annum
2.2%
2-4% growth
by 1851 how much of world trade was britain responsible for compared to the usa and germany
-41% of manufacturing in world trade compared to 19% in germany and 3% in the usa
what did the 1851 census show about the british population and manufacturing
- 43% of the population worked in manufacturing, mining and building
for the first time in global history 50% of the national population lived in urban areas
what was the economic ideology of this period and why was free trade important
-laissez faire economics adopted by all parties, limited govt intervention in the economy due to full trust in the forces of the market
-adam smith advocated that govt intervention would restrict economic development
- free trade provides the stimulus for further growth
how much of coal output did britain produce by 1850
what did coal production rise to in 1870-74, what was it in 1875
50%
coal production rose to 123 million tonnes up from 56 million in 1845-9
-coal production in 1875 was 130 million
what two technological advancements helped the iron industry , what other technological innovation was there for steel
what did iron ore production increase to
- John Neilsons Hot Blast (1827)
- James Nasmyths steam hammer (1944)
- these helped double iron production to 15m tonnes pa by 1875
-Bessaimer process which improved steel for railways at home and abroad
- it increased from 9 million tonnes in 1855 to over 15 million tonnes by 1875
what percentage of goods did GB manufacture, what percentage of goods passed through GB and what amount of exports went to the empire and USA
-41%
-25%
-1/3 went to usa and the empire
outline the staple industries importance (name the staple industries) and what percentage of growth did they experience pa
- staple industries grew because they stimulated demand of each other
-steel
-railways and engineering
-iron
-coal
-shipbuilding
-textiles/ the cotton industry - interdependent nature of the staple industries meant that demand for one product stimulated the growth of another- they dominated the british economy and had growth of 2-3% pa
-profits from the staple industries were reinvested at home and abroad
what percentage of exports did textiles make up but what did they lack
- 2/3 of GBs exports but they lacked technological innovation
how much did steam power increase in GB in 1841-1870
by 329%
outline some prosperous railway towns, what was the first london underground line and when was it set up, how did the bessamer steel process improve railways
- prosperous railway towns such as Crewe. Doncaster and Derby developed
-the metropolitan line opened in 1863 and carried 10 million passengers in its opening year
-the bessamer steel process boosted the railway industry in the 60s, cutting production costs, increasing profits and providing more capital for further investment
outline the railway industries importance and growth in this period
- railways accounted for nearly 5% of britains GNP and stimulated demand for iron, steel and coal, facilitated urbanisation, movement of industrial material and goods to ports for exports
-it also stimulated technological advancements , steel rails replaced iron rails, engine design constantly improved , huge workshops were built in leeds, manchester and glasgow
-business organisation changed- local stock exchanges, new supplies of investment- these acted as models for other industries
-in 1860- 9,069 miles of track carried 153 million passengers and 88 million tons of freight (industrial material), earning £12.2 million from ticket sales and £14.2 million from freight charges
-in 1875 14,510 miles of track carried 490 million passengers and 196 million tons of freight earning 24.3 million from ticket sales and 32.1 million from freight charges
how did gladstones tax reduction policy help improve and enable economic growth
- this policy alone was only made possible due to the vibrant economy
- ## it allowed individual entrepreneurs and businessmen to build up their private fortunes as well as the wealth of the nation by investing the large sums of avaliable capital in industrial enterprises at home and abroad
outline agriculture and the golden age of agriculture
- James Caird in 1849 published a pamphlet called high farming which advised farmers how to adapt their methods to cope with a possible fall in prices
-sought to reorganise and modernise british farming so it could survive the challenges of free trade
-high framing methods increased productivity, mixed farming emerged which meant that farmers grew wheat and crops whilst also owning livestock so that they would be cushioned against a sudden downturn in prices of either
-the surplus crop fed the animals and the animals mannure fertilised the crops
-much of the profit from farming in this period came from livestock rearing
-richer farmers did modernise - britain experienced a golden age of farming not due to high farming but due instead to other factors:
- high global transport costs meant that the prices of foreign grain did not fall to levels that threatened british arable farmers
- there was a run of luck with good weather and high yielding harvests between 1850-1873 which produced bumper crops- rising prosperity and the general rising in wages meant that there was increased demand for food and the produce of the land
- the development of railways meant that foodstuff could be transported quickly
- by 1870 british farmers produced about 50% of the home consumption of wheat and 90% of meat
-dairy farmers supplied the home market with butter, milk and cheese
outline advancements in agriculture e.g chemical and drainage improvements and outline the problems with high farming techniques
-there was an increase in scientific knowledge and artifical fertilisers such as guano developed
- it was imported from peru and the industry was worth £8 million a year by 1870
-drainage systems were manufactured by clay pipes and the government introduced loan schemes to help farmers invest in drainage pipe systems - it involved 12 million worth of loans with interest of 7%
eval- was expensive
many farmers became heavily indebted
-cost and prices could limit the return on drainage e,g the duke of northumberland invested 1million for a return of 2.5%
-drainage and fertilisers combined helped improve crop yield
-eval of high farming- only suited farms 300 acres or bigger which only amounted to 1/3rd of the acreage of all farms and the average farm was 111 acres
-60% of farms were 5 to 100 acres and most farmers were constrained by lack of capital, lack of education and high rents to undertake high farming and feared that any improvements would lead to higher rents
why was britains economy stable- refer to the credit system and legal system in place - gold standard
-By 1851 an established credit system worked around bills of exchange; the Bank Charter Act 1844 restricted the ability of banks to print money and the pound was fixed to gold making it stable and the currency of world trade (the gold standard).
-GB had a developed legal system for trade and business; the legal system created limited liability private companies that could separate ownership from management to encourage good management and to foster investment.
how did free trade help the economy 1851-1876
- free trade allowed imports of cheap food into GB this allowed british capital to be directed towards industry rather than domestic agriculture enabling industrial growth
why was the london economy different from the rest of the country and what was it based on
London developed an economy different from the rest of the country. The London economy, stimulated by urbanisation, was based on consumer goods, services, construction and the financial services of the City of London.
what innovation helped agriculture
-the horse drawn reaper
there were better ploughs, seed drills and steam driven threshing machines to improve the efficency of crop production
what company was a world leader in engineering
GB dominated the world in ship building by the 1870s, successfully fighting off US competition.
Armstrongs, a company in the NE, made ships, armaments, hydraulic pumps, bridges and dock gates for the domestic and foreign markets. It was a world leader in engineering.
what reasons can account for the decline in the economy in 1873-1914 and did britain experience a depression
-increased global competition
-the great depression
-free trade- compounds global competition
-failure of entrepreneurship
-downturn in agriculture
-most importantly decline in this period was not fatal and was relative/incipient decline compared to the period before of economic prosperity- could not be sustained in the long term
-growth in this period continued albeit at a slower pace and the city of london emerged hiding the deficit of trade
what percentage of the worlds ships were built in 1892 and 1911
- 80% and 60%
