Published online by Cambridge University Press: 28 March 2008
In the mid-eighteenth century Britain was the world’s greatest trading nation. Manufacturers exported a wide variety of textiles and hardware. Rich London and Bristol merchants imported tropical goods and more modest provincial merchants dealt in Baltic timber and grain. Two centuries earlier, England had been an economic backwater, exporting un-finished heavy woollen cloth to the Low Countries for further finishing before sale throughout Europe. During the century and a half after 1750, British firms and British investors provided leadership in industrial revolution technology and policy shift that created a fully globalised trading world.
Trade from the mid-sixteenth century to the end of the industrial revolution may be envisaged, somewhat oversimply, in two periods. Until the late eighteenth century, incorporation of the Americas drove change. The British industrial revolution introduced a shorter second period that lasted until about 1850. Late in the eighteenth century, British firms in a few key industries developed technological superiority over producers elsewhere. As British firms adopted superior technology and competition among them drove prices down, they captured world markets. Since the new cotton textiles depended on a tropical raw material, new import trades grew as well. In 1846 repeal of the corn laws symbolised a shift in policy from mercantilism to free trade. Later in the nineteenth century, a new phase of multilateral globalisation occurred, driven primarily by technology that dramatically lowered transportation costs, reinforced by liberal economic policy and population growth.