*BRITISH ECONOMY AND

SOCIAL*
ECONOMIC HISTORY OF THE
UNITED KINGDOM
 The economic history of the United Kingdom relates the economic development in the British
state from the absorption of Wales into the Kingdom of England after 1535 to the modern
United Kingdom of Great Britain and Northern Ireland of the early 21st century
 Scotland, England, and Wales shared a monarch from 1601 but their economies were run
separately until they were unified in the 1707 Act of Union.[2] Ireland was incorporated in the
United Kingdom economy between 1800 and 1920; from 1921 the Irish Free State (the
modern Republic of Ireland) became independent and set its own economic policy.
 Great Britain, and England in particular, became one of the most prosperous economic regions
in Europe between 1600 and 1700
16TH–17TH CENTURIES
During 16th and 17th century many fundamental economic changes occurred, these resulted in rising incomes and
paved the way to the industrialisation
 Growth in money supply

Spanish and Portuguese colonies in the New World exported large quantities of silvr and gold to Europe, some of
which added to the English money supply.
 Wool industry

Woollen cloth was the chief export and most important employer after agriculture
 Diets

Diet depended largely upon social class. The rich ate meat—beef, pork, venison and white bread; the poor ate coarse
dark bread, with a little meat, notably at Christmas.
 Poverty

About one-third of the population lived in poverty, with the wealthy expected to give alms to assist the impotent poor.
18TH CENTURY
*The trading nation
The 18th century was prosperous as entrepreneurs extended the range of their business around the globe. By
the 1720s Britain was one of the most prosperouworld. Countries in the world.
Britain had a different set of primary interests. Its main diplomatic goal (besides protecting the homeland
from invasion) was building a worldwide trading network for its merchants, manufacturers, shippers and
financiers. This required a hegemonic Royal Navy so powerful that no rival could sweep its ships from the
world’s trading routes, or invade the British Isles.
*The Age of Mercantilism
The basis of the British Empire was founded in the age of mercantilism, an economic theory that stressed
maximising the trade outside the empire, and trying to weaken rival empires.
*Manufacturing
Besides woollens, cotton, silk and linen cloth manufacturing became important after 1600, as did coal and
iron.
*The Industrial Revolution
In period loosely dated from the 1770s to the 1820s, Britain experienced an accelerated process of
economic change that transformed a largely agrarian economy into the world’s first industrial
economy. This phenomenon is known as the “industrial revolution”, since the changes were far-
reaching and permanent throughout many areas of Britain, especially in the developing cities.
Economic, institutional, and social changes were fundamental to the emergence of the industrial
revolution.
FREE TRADE
19th century Britain was the world’s richest and most advanced economy
Free trade was intellectually established by 1780 and implemented in the 1840s, thanks to the
unusually strong influence of political theorists such as Adam Smith. They convincingly argued
that the old policy of mercantilism held back the British economy, which if unfettered was
poised to dominate world trade. As predicted, British dominance of world trade was apparent by
the 1850s
As industrialisation took effect in the late 18th and early 19th century, the United Kingdom
possessed a strong national government that provided a standard currency, an efficient legal
system, efficient taxation, and effective support for overseas enterprise both within the British
Empire and in independent nations. Parliament repealed medieval laws that restricted business
enterprise, such as specification of how many threads could be in a woollen cloth, or regulating
interest rates. Taxation fell primarily on landed wealth, not accumulated capital nor income
SOCIAL HISTORY OF
POSTWAR BRITAIN (1945–1979)
The social history of the United Kingdom from 1945 to 1979 began with the aftermath of the
Second World War. The United Kingdom was one of the victors, but victory was costly in social
and economic terms. Thus, the late 1940s was a time of austerity and economic restraint, which
gave way to prosperity in the 1950s. The Labour Party, led by wartime Deputy Prime Minister
Clement Attlee, won the 1945 postwar general election in an unexpected landslide and formed
their first ever majority government. Labour governed until 1951, and granted independence to
India in 1947
Prosperity returned in the 1950s, reaching the middle-class and, to a large extent, the working-
class across Britain. London remained a world centre of finance and culture, but the nation was
no longer a superpower. In foreign policy, the UK promoted the Commonwealth (in the
economic sphere) and the Atlantic Alliance (in the military sphere).