[PEN-L:11647] Re: Role of Total Foreign Trade

["Ricardo Duchesne" <RDUCHESN@xxxxxxxx>]

If WS theorists, including some Marxists (Hobsbawm, 1962; Mandel,
1968), have emphasised the colonial trade, scholars like Habakkuk and  Deane
(1963), and Davis (1954) have looked to *total* foreign trade as the primary
engine in the industrialization of England through the 18th century.
The verdict of  more recent scholarship, however, is that, while this
trade was significant, it was not the major cause of  the industrial
revolution. On the surface, or at first look, the stats do appear to indicate
that foreign trade was the 'engine of growth'. For example:

1) Deane and Cole calculated that, if we start with a base of 100 for
1700 for all industries, by 1800 the export industries grew to 544,
which means they expanded by more than five times, whereas the home
industries grew to 152 and agriculture to 143 (Thomas & McCloskey,
1981). Another way of saying this is that those industries oriented to
foreign trade rose by 444% during the 18th century, while those
industries oriented to domestic industry rose by 52% (Mathias, 1983)

2) Given that foreign trade was the fastest growing sector of the economy, it
can also be shown that the export demand for British goods was quite
important in employment creation and that, through imports,
certain basic raw materials and foostuffs were acquired in exchange
for manufactured goods. And that it was this sector which permitted
England to occupy a dominant position  in the international division
of labor, as an exporter of  finished goods in exchange for cheap raw materials
and foodstuffs that it could not produce (at all, or as efficiently) at home;
foodstuffs regulated through a system of tariffs so that they would
not compete with domestic English agriculture.

3) As Hobsbawm insisted, the cotton industries grew up as a
"by-product of overseas trade", specifically the colonial trade; and
it was this trade "which encouraged the entrepreneur to adopt the
revolutionary techniques required to meet it". That is, the export, not
the home market, was the the main incentive in the mechanisation of
the cotton industry: "In terms of sales, the Industrial Revolution can be
described except for a few initial years in the 1780s as the triumph
of the export market over the home: by 1814 Britain exported about
four yards of cotton cloth for every three used at home, by 1850
thirteen for every eight" .

And, if I may give more ammunition to the other side, in 1800 cotton
represented a quarter of *all* British exports, rising to 50% by 1850
(Braudel).  Moreover, "all its raw material came from abroad" (Hobsbawm).
Cotton also experienced one of the fastest rates of productivity
growth.