Eric Hobsbawm (1917 to 2012) was one of Britain’s leading Marxist historians. Of Jewish parentage he spent his boyhood in Vienna and Berlin during the rise of the Nazis. With Hitler’s accession to power in 1933, the family moved to Britain in 1933, although his Wikipedia page is at pains to point out that, because his father was originally from London’s East End, he had always had British citizenship. Hobsbawm excelled at school and went to Cambridge where he joined the communist party in 1936.

Twenty-two when the Second World War broke out, Hobsbawm served in the Royal Engineers and the Army Educational Corps, though he was prevented from serving overseas due to his communist beliefs. In 1947 he got his first job as a lecturer in history at Birkbeck College, University of London, the start of a long and very successful career as a historian, which included stints teaching in America at Stanford and MIT.

As a Marxist Hobsbawm had a special interest in what he called the ‘dual revolutions’ i.e. the political revolution in France in 1789 and the parallel industrial revolution in Britain. His most famous books are the trilogy describing what he himself termed ‘the long 19th century’, i.e. from the outbreak of the French Revolution in 1789 to the Great War in 1914. These three books are:

• The Age of Revolution: Europe 1789–1848 (1962)
• The Age of Capital: 1848–1875 (1975)
• The Age of Empire: 1875–1914 (1987)

A series he completed with a fourth volume, his account of the ‘short’ 20th century, The Age of Extremes (1994).

Industry and Empire was commissioned by the high-minded Pelican books back in the mid-1960s, as the third and concluding volume in a series about economic history (part 1 being The Medieval Economy and Society by M.M. Postan, part 2 Reformation to Industrial Revolution by Hobsbawm’s fellow Marxist historian, Christopher Hill).

I read it as a student and had a vague memory of finding it rather boring, but on rereading I found it riveting. Setting out to cover such a huge period of just over 200 years means that individual chapters are relatively brief at around 20 pages long and highly focused on their subjects.

State of England 1750

Arguably the most interesting section is the opening 50 pages where Hobsbawm sets the scene for the industrial revolution which is to come, describing the state of England (the book focuses overwhelmingly on England with only occasional remarks about the other three nations of the UK) around 1750, and making a number of interesting observations.

The most interesting is that, although England was ruled by an oligarchy of a relatively small number of mighty families – maybe as few as 200 – who owned most of the land, the key thing about them was that they were a post-revolutionary elite (p.32). Their equivalents in France or the German or Italian states were genuinely hidebound reactionaries obsessed with aping the accoutrements and etiquette of kings and princes. By sharp contrast England’s elite had survived not one but two revolutions (the execution of Charles I in 1649, then the Glorious Revolution of 1688). As a result they did not submit to their monarch but had reached a position of constitutional ascendancy over their king in the form of a dominating Parliament. They were powerful and independent.

Above all, England’s elite were devoted to commerce and profit. One of the motive forces of the civil war of the 1640s had been King Charles’s insistence on granting monopolies of trade to favoured courtiers and spurning genuine entrepreneurs who came to form a powerful bloc against him. But all that had been sorted out a century ago. Now this politically independent oligarchy was interested in trade and profit of all sorts.

But these were only one of the many differences which distinguished 1750s England from the continent. Foreign visitors also remarked on the well-tended, well-organised state of the land and the thoroughness of its agriculture. They commented on the flourishing of trade: England was noted as a very business-like nation, with well-developed markets for domestic goods of all kinds.

Multiple origins of the Industrial Revolution

Hobsbawm points out that the industrial revolution is one of the most over-determined and over-explained events in history. He amusingly rattles off a list of reasons which have been given by countless historians over the years for why the industrial revolution first occurred in Britain, for why Britain was for several generations the unique workshop of the world and pioneer of revolutionary new ways of working, new industrial machinery, new ways of producing and distributing goods. Historians have attributed it to:

• Protestantism and the Protestant work ethic
• the ‘scientific revolution’ of the 1660s
• Britain’s political maturity compared with Europe (i.e. the Glorious Revolution)
• the availability of large sources of coal
• the presence of numerous fast-flowing streams to provide water power
• a run of good harvests in mid-18th century
• Britain’s better road and canal infrastructure

And many more. The list is on page 37.

Hobsbawm’s explanation – colonies and colonial trade

Hobsbawm lists all these putative causes in order to dismiss them and attribute Britain’s primariness to one reason. The first wave of the industrial revolution was based on the mass processing of raw cotton into textiles. 100% of Britain’s cotton was imported from the slave plantations of the American South and a huge percentage of it was then exported to foreign markets, in Africa and then to India where, in time, the authorities found it necessary to stifle the native cloth-making trade in order to preserve the profits of Lancashire factory owners. The facts are astonishing: Between 1750 and 1770 Britain’s cotton exports multiplied ten times over (p.57). In the post-Napoleonic decades something like one half of the value of all British exports consisted or cotton products, and at their peak (in the 1830s), raw cotton made up twenty per cent of total net imports (p.69). So the industrial revolution in Britain was driven by innovations in textile manufacturing and these utterly relied on the web of international trade, on importing raw materials from America and then exporting them in huge quantities to captive markets in British colonies.

Cotton manufacture, the first to be industrialised, was essentially tied to overseas trade. (p.48)

If Britain had had to rely on a) domestic sources of raw materials and b) its domestic market to sell the finished product to, although the native population was growing during the 1700s it wasn’t growing that fast. What provided the crucial incentive to the cloth manufacturers of Lancashire to invest and innovate was the certainty of a vast overseas market for manufactured cloth in the British Empire, which was finally made safe for British control after the Seven Years War (1756 to 1763).

Britain had established itself as master of the world’s seas as a result of the Seven Years War and already had a thriving trade infrastructure at ports like Glasgow, Liverpool, Bristol and London. What kick-started things, in Hobsbawm’s view, was the opening up of overseas markets. It was the ability to send ships full of cloth products to India and other colonial markets, to make large profits and then reinvest the profits in further innovations that led a generation of Lancashire entrepreneurs to experiment with new devices and machines and ways of working.

So, Hobsbawm’s thesis rests on a set of linked propositions, that:

• Britain had a uniquely warlike series of governments through the 18th century (pp.49 to 50)
• Britain was able to rely on a far more advanced and sizeable navy than its nearest rival, France, which was always distracted by wars on the continent and so preferred to spend resources on its army, thus, in effect, handing rule of the oceans over to Britain
• in the mid-1700s a series of foreign wars conquered all of north America, most of the Caribbean and India for Britain
• and it was the complex web of international trading thus established by its a) warlike government and b) its world-dominating navy which provided the economic framework which motivated the technological and business innovations which led to the Industrial Revolution (pages 48 to 51)

This vast and growing circulation of goods…provided a limitless horizon of sales and profit for merchant and manufacturer. And it was the British – who by their policy and force as much as by their enterprise and inventive skill – captured these markets. (p.54)

And again:

Behind our industrial revolution there lies this concentration on the colonial and underdeveloped markets overseas, the successful battle to deny them to anyone else…the exchange of overseas primary products for British manufactures was to be the foundation of our international economy. (p.54)

And:

The Industrial Revolution was generated in these decades – after the 1740s, when this massive but slow growth in the domestic economies combined with the rapid – after 1750 extremely rapid – expansion of the international economy; and it occurred in the country which seized its international opportunities to corner a major share of the overseas market. (p.54)

1. Manufacturers in a pre-industrial country, in agriculture and artisans in trade, have to wait fairly passively on market requirements. But an aggressive foreign policy which seizes territory overseas creates new markets, potentially huge markets with massive opportunities for rapid and massive expansion (p.42).

2. Hobsbawm makes the interesting point that it wasn’t the inventions per se that accelerated and automated cotton manufacture. The level of engineering skill required to start the industrial revolution was very low. Most of the technology and ideas already existed or had been lying around for decades (pages 59 to 60). It was the guarantee of tasty profits by exporting finished goods to captive colonial markets which gave individual entrepreneurs the certainty of profit and so the incentive to experiment and innovate. One factory owner’s innovation was copied by all his rivals, and so an ever-accelerating cycle of innovation was created.

All the other conditions historians have suggested (listed above) were present and many were important contributors. But it was the spur of guaranteed profits abroad which, in Hobsbawm’s opinion, provided the vital spark.

Is British industrialisation a model for the developing world?

It is an odd feature of the book that Hobsbawm has barely articulated his thesis before he is worrying about the plight of the developing world. He keeps asking, particularly in the opening ‘Origins’ chapters, whether Britain’s experience of industrialisation could be a model for the newly industrialising and newly independent post-colonial nations of the 1960s to emulate?

The short answer is an emphatic No and in answering it, Hobsbawm makes clearer than ever the uniqueness of Britain’s history. Britain was unique in being able to fumble its way towards industrialisation slowly and piecemeal and on a very small scale, one factory owner here trying out a new machine, another, there, devising a more efficient way of organising his factory hands and so on.

There was no ‘barrier to entry’ into the industrialised state for Britain because it was the first nation ever to do so, and so had the luxury of making it up as it went along. It started from 0. A little bit of tinkering could produce surprising rewards. There were no leaps but a series of pragmatic steps. And there was no competition and no pressure from anyone else.

Obviously, 150 years later, any nation trying to industrialise in the 1960s (or now) is in a totally different situation in at least two obvious ways: the shift from non-industrial to modern industrial production now represents an enormous leap. The technology and scale and infrastructure required for industrialisation is huge and can only begin to be achieved by dint of enormous planning (to create a co-ordinated energy and transport and distribution infrastructure) and huge investment, money which by definition a non-industrialised country does not have, and so has to go cap-in-hand to international banks which themselves dictate all kinds of terms and conditions.

Above all, a newly industrialising nation will be entering a very crowded marketplace where over a hundred nations are already fighting tooth and claw to maintain competitive advantage in a multitude of areas and practices, not least trade and tariff and tax and financial arrangements which a country with few financial resources will find difficult to match.

At first I found Hobsbawm’s adversions to this question of whether Britain’s history and example could be useful to developing nations a modish digression (it occurs on pages 38, 39, 61 to 62 and many more). But in fact placing British history in this contemporary frame turns out to be very thought-provoking. It not only sheds light on the challenges developing nations face, still, today – but also highlights the huge advantage Britain enjoyed back in the later 18th century by virtue of being the pioneer.

Because it industrialised and developed a transport infrastructure and financial systems first, Britain could afford to do them pretty badly and still triumph. Nobody, nowadays, could industrialise as amateurishly as Britain did.

To contemporaries who didn’t understand economics (pretty much everyone) the transformation and inexorable rise of Britain seemed inexplicable, miraculous, and it was this that gave rise to the simplistic, non-economic, cultural explanations for Britain’s success – all those explanations which foreground the anti-authoritarian, Protestant spirit of free enquiry, the independence of thought and action guaranteed by the Glorious Revolution, the nonconformist values of thrift and discipline and hard work espoused by dissenting tradesmen and factory owners excluded from politics or the professions by the Test Acts and so forced to make their way in the world through business, innovation and investment. And so on.

All these are aspects of the truth but are, ultimately, non-economists’ ways of trying to explain economics. And Hobsbawm is first and foremost an economic historian and proposing a Marxist thesis – Britain’s industrial primacy was based on a) her aggressive control of the seas and b) the huge and complex web of transoceanic trading arrangements which linked foreign suppliers with endless marketing opportunities in her foreign colonies.

The second industrial revolution

The second industrial revolution is the term commonly applied to the second wave of industrialisation associated with the rise of the new capital goods industries of coal, iron and steel, generally credited with starting in the 1840s.

Hobsbawm pauses to consider the teasing counter-factual notion that the industrial revolution based on textiles alone might conceivably have fizzled out in the 1830s, for the 15 years after the end of the Napoleonic Wars saw a catastrophic depression with much rural poverty. If nothing new had come along, it is conceivable that industrial development might have stalled or even stopped and the world remained at the level of having highly efficient machines to turn out cloth and no more.

But the railways came along. Hobsbawm explains that the great railway ‘mania’ of the 1840s was the result of the huge accumulation of capital derived from textiles looking for something to invest in (p.112). This explains the hysterical tone of wild investment and speculative mania which surrounded the early railways, and the irrationality of many of the lines which were opened with great fanfare only to go bust within years. To quote Wikipedia:

The mania reached its zenith in 1846, when 263 Acts of Parliament setting up new railway companies were passed, with the proposed routes totalling 9,500 miles (15,300 km). About a third of the railways authorised were never built — the companies either collapsed due to poor financial planning, were bought out by larger competitors before they could build their line, or turned out to be fraudulent enterprises to channel investors’ money into other businesses.

Between 1830 and 1850 6,000 miles of railways were opened in Britain (p.110) soaking up an investment of £240 million of capital (p.112), most of them during the intensest period of railway mania in between 1844 and 1846. By way of comparison, the total mileage of the modern UK railway network is around 11,000 miles.

Social historians dwell on the immense cultural changes the coming of the railways created. I remember being struck as a student when I learned that the standardisation of time and clocks across the UK required for railway timetables to work, was a huge innovation which dragged even the remotest locations into a modern, synchronised timeframe. If you visit any of the seaside towns of Britain you’ll discover their fortunes were transformed with the coming of the railways which allowed large numbers of visitors to travel cheaply to the coast, causing a building boom in hotels. And so on.

But as an economic historian, Hobsbawm makes the more obvious point that the building of all these railways required a vast expansion in the production of iron and then, quickly, of the more durable material, steel.

The railways acted as an immense spur to technical innovations in all aspects of metal manufacture, which in turn created a huge increase in demand for the coal to fuel all this industrial production, which in its turn created a need for quicker, more cost-effective bulk transportation, and so commercial motivation for yet more railways, and for trains which were more powerful, more cost effective, and so on. Innovation in one field spurred innovation all down the line.

British investors were able to invest because the act of investing in business speculations was itself a fast-growing area of business activity, creating cadres of stockbrokers and financial lawyers, jobs which didn’t exist 50 years earlier.

And this matrix of industries and professions spread abroad, with a huge growth of British investment in foreign companies, especially in the USA and South America. Profits from these foreign holdings gave rise to an entirely new class of rentiers, people able to afford a moneyed middle-class lifestyle without doing a day’s work, solely off the profit of shrewd investments.

By 1870 Britain had about 170,000 people of rank and property, living lives of luxury without any visible occupation. Hobsbawm emphasises that most of them were women (p.119). These were the ladies of independent means swanning off to spa resorts in Switzerland or villas in Italy who festoon the pages of late Victorian and Edwardian novels, like the Italophiles of E.M. Foster, like the continent-trotting Aunt Mary in Somerset Maugham’s novel Mrs Craddock. These comfortably-off parasites were still living a wonderful life between the wars, floating around Tuscany vapouring about Art and Life, as documented in the early novels of Aldous Huxley, living lives of luxury off the sweat and labour of working men in three continents.

Competitors and the long decline

The scale and speed of development, particularly of the second wave of the industrial revolution, with entire cities mushrooming into existence stuffed with factories, and a country swiftly criss-crossed by the loud, noisy new technology of the railways, awed contemporaries and again and again gave rise to essays and books and speeches extolling the miraculous qualities of the British nation.

It was only when competitor nations such as America and Germany began to harness the new technologies of the second industrial revolution, the ones which rotated around the production of coal, iron and the new material of steel, taking and improving techniques in the area of metal and machine production which rotated around the great boom in railways from the 1840s onwards, that the shortcomings of British production methods and efficiency began, very slowly, to be revealed.

The entire developed world entered a prolonged agricultural depression in the 1870s which lasted a decade or more (different historians give different start and end points but contemporaries thought it lasted from about 1873 into the 1890s) and when Britain emerged from this depression in the 1890s, she had been decisively overtaken in all measures of industrial production by Germany and America.

Between 1890 and 1895 both the USA and Germany passed Britain in the production of steel. During the ‘Great Depression’ Britain ceased to be ‘the workshop of the world’ and became merely one if its three greatest industrial powers; and, in some crucial respects, the weakest of them. (p.127)

The wealth pouring in from protected imperial trade with an empire was now vastly bigger than it had been in 1750 and so hid our industrial shortcomings from the unintelligent (which included most of the ruling class) and the Daily Mail-reading middle classes. But even the rousing jingoism of Kipling the imperialist poet and Joseph Chamberlain the imperialist politician during the 1890s couldn’t conceal Britain’s relative decline. The pomp and circumstance of the turn of the century was a fool’s paradise.

After the middle of the nineteenth century [the British cotton trade] found its staple outlet in India and the Far East. The British cotton industry was certainly in its time the best in the world, but it ended as it had begun by relying not on its competitive superiority but on a monopoly of the colonial, and underdeveloped markets which the British Empire, the British Navy and British commercial supremacy gave it. (p.58)

While the Germans and Americans developed new ways of organising industrial concerns, with huge cartels and monopolies, developed ever-better methods of mass production, invested heavily in technical education and pioneered new ways of selling high quality products to their domestic markets, Britain was still expending its time and energy expanding its already huge empire and trying to create a global imperial market with preferential treatment of what slowly came to be seen as inferior British goods. This remained the case into the period between the wars and even into the 1940s and 50s.

Imperialism, which reached its peak of rivalry and competition in the 1890s and 1900s, concealed the deep structural reasons for Britain’s long decline, which were already well established by 1900 (p.131).

Related reviews

Eighteenth century

• 1759: The Year Britain Became Master of the World by Frank McLynn (2004)
• Battle For Empire: The Very First World War by Tom Pocock (1998)

Slavery

• Black Ivory: A History of British Slavery by James Walvin (1992)
• Black Ivory: A History of British Slavery (2)

Industrial revolution

• Industry and Empire: From 1750 to the Present Day by Eric Hobsbawm (1968)
• The Age of Capital: 1848 to 1875 by Eric Hobsbawm (1975)

Victorian

• Victoria’s Wars by Saul David (2006)

Imperialism

• The Boer War 1899 to 1902 by Thomas Pakenham (1979)
• The Scramble For Africa by Thomas Pakenham (1991)
• Empire: How Britain Made the Modern World by Niall Ferguson (2003)
• After Tamerlane by John Darwin (2008)
• Civilisation: The West and the Rest by Niall Ferguson (2011)