Perkin Harold. The Origins of Modern English Society

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merely meant coalfield-wide organization, which helps to account for their

repeated failure until 1889 to set up a successful, permanent national body.

From a class point of view, a more important step was the amalgamation of all,

or most of, the unions into a national entity capable of co-operation in industrial

conflict and political agitation. Again, this was an aim as old as the National

Association for the Protection of Labour of 1830 or even the ‘Philanthropic

Hercules’ of 1818, but it was not until the solidly-based industry-wide

amalgamations came into being that it could be achieved. Even then, it was force

of circumstances which thrust it upon the unions. The London Trades Council,

one of its founding constituents, grew out of the strike committee which

organized support for the London builders’ dispute of 1859.

Many attempts

were made in the 1860’s to graft on to it a national organization, but they were

all thwarted by personal rivalries, notably between Potter of the Beehive and the

Junta, until a political crisis forced the unions to combine in self-defence.

The

crisis, brought on by the revival of immature, and now mainly outgrown, violent

industrial relations in the Sheffield outrages, and the forensic attack on the

security of trade-union funds in the case of Hornby v. Close, demanded

concerted countermeasures, especially on the public stage provided by the Royal

Commission on Trade Unions appointed in 1867.

Even then, it required the

separate initiative of the provincial unions, notably the mainly cotton unions of

the Manchester and Salford Trades Council, to overcome the divisions of the

London crafts and bring the Trades Union Congress into being, and the further

crisis, created by the Criminal Law Amendment Act o 1871 and its prohibition

of peaceful picketing, to keep it in being, in the shape of its permanent

Parliamentary Committee, in its early crucial years.

Reluctant yet inescapable national organization, however, was a solider basis

for the institutionalization of the working class than the premature and hollow

‘gigantism’ of the Grand National Union and its ilk. And if at first it was

confined to the few, small and exclusive unions of the labour aristocracy, it was

to prove an adequately flexible framework for the enormous expansion of the

late Victorian age, and ultimately for the political institutionalization of the

working class in the trade unions’ creation of the Labour Party.

Thus the aristocratic trade unions of the mid-Victorian age were forced by

their class character to create the institutional framework by means of which they

not only taught their employers, the Government and the public much of the art

of viable class relations, but preserved for a later age with a more favourable

socio-political climate the remnant of the working-class ideal. Meanwhile, they

also helped to modify and even to undermine the self-confidence of the main

middle-class ideal, and so with portentous consequences to open up a fissure

R.C. on Trade Unions, Evidence, qq. 8646, 8684, 8924; Clements, loc. cit., p. 103.

Cf. Turner, op. cit., pp. 185–92.

Cole and Filson, op. cit., p. 86.

334 RISE OF A VIABLE CLASS SOCIETY

between the ideal and the reality of the entrepreneurial society of mid-Victorian

England.

Cf. A.E.Musson, The Trades Union Congress of 1868 (1955).

Cf. S. and B.Webb, Trade Unionism, pp. 259–64.

B.C.Roberts, The Trades Union Congress, 1868–1921 (1958), chap. ii.

RISE OF A VIABLE CLASS SOCIETY 335

Entrepreneurial Society: Ideal and Reality

BY mid-century the entrepreneurial class could feel well pleased with the new

society which they had created and persuaded the other classes to accept. In May

1853 Absolom Watkin, Manchester cotton merchant and one of the leading

lights of the Anti-Corn Law league, wrote in his diary:

This is the last day of Whitsun week, and the people of Manchester have

never enjoyed it more, nor have I seen clearer evidence of general well-

being. Our country is, no doubt, in a most happy and prosperous state. Free

trade, peace, and freedom. Oh, happy England! Mayest thou know and

deserve thy happiness.

The result of nearly a century of revolutionary industrialism and material

progress was that Britain was the richest and most powerful country in the

world, the world’s workshop, carrier and banker, and head of the greatest empire

the world had ever known.

Palmerston in 1850 explained Britain’s strength and happiness in terms of the

viability and openness of its society:

We have shown the example of a nation, in which every class in society

accepts with cheerfulness the lot which Providence has assigned to it;

while at the same time every individual of each class is constantly striving

to raise himself in the social scale—not by injustice and wrong, not by

violence and illegality, but by preserving good conduct, and by the steady

and energetic execution of the moral and intellectual faculties with which

his Creator endowed him.

Here was the aristocratic statesman who almost personified mid-Victorian

England embracing on behalf of his order the entrepreneurial ideal of a viable

A.Watkin, Extracts from his Journal, 1814–56 (ed. A.E.Watkin, 1920), p. 275;

Read, op. cit., p. 58.

class society tempered by social mobility. The entrepreneurial society had indeed

arrived.

But what was the reality underlying the ideal of mid-Victorian society? Was it

quite so progressive and prosperous as it has been painted? Or were there already

signs of a slackening of industrial growth and technological innovation? Was it,

as its champions believed, the best possible society not merely for increasing

wealth but for sharing it out more equally between the classes? Or were the rich

becoming richer and the poor, if not absolutely, then relatively poorer? Was

poverty a relatively minor problem to be solved by individual exertion, or was it

a massive one involving a substantial fraction of the population? If upward

mobility was the chief compensation for poverty and inequality, how much of it

was there, and was it expanding or contracting? If the answers to these questions

prove unsatisfactory, then the tensions between ideal and reality were

undermining the stability of entrepreneurial society and storing up trouble for the

future.

There are still more fundamental questions, however. Did the ideal view of the

social structure itself correspond to the reality? Or were changes taking place in

the middle class, especially the business middle class, which were transforming

the outlook and attitudes of some entrepreneurs and, indeed, evolving them into a

new and rather different class of big, corporate business men, the harbingers of

the new plutocracy of late Victorian and Edwardian England?

Finally, could the entrepreneurial ideal escape unscathed these tensions and

changes in society? Or was it coming under attack from without and defection

from within which would ultimately discredit it? And if the ideal lost its grip on

society, could the society itself survive unchanged?

So far we have traced the rise of the new class society created by industrialism.

In this last chapter we must look, admittedly beneath the surface, for the first

signs of its decline.

PROGRESS AND POVERTY

The ideal assumed, first of all, that this was the best of all practicable societies for

economic growth. In the 1880’s, when the economic system came under open

attack for the first time in a generation, Sir Robert Giffen, the representative

orthodox economist of his age, told the Statistical Society:

Whatever may be said as to the ideal perfection or imperfection of the

present economic régime, the fact of so great an advance having been

possible for the masses of the people in the last half-century is encouraging.

It is something to know that whether a better régime is conceivable or not,

Speech in Don Pacifico debate, 1850, A.Briggs, Victorian People (1954), p. 106.

ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY 337

human nature being what it is now (and I am one of those who think that

the régime is the best, the general result of a vast community living as the

British nation does, with all the means of healthy life and civilisation at

command, being little short of a marvel if we only consider for a moment

what vices of anarchy and misrule have had to be rooted out to achieve this

marvel); still, whether best or not, it is something to know that vast

improvement has been possible with this régime. Surely the lesson is that

the nation ought to go on improving on the same lines, relaxing none of the

efforts which have been so successful. Steady progress in the direction

maintained for the last fifty years must soon make the English people

vastly superior to what they are now.

It is true that Britain was a much wealthier country than fifty years before; in

terms of real national income per head, nearly twice as wealthy, and nearly three

times as wealthy as at the beginning of the century. As we saw in Chapter I, it

was the defining characteristic of an Industrial Revolution to raise by a multiple

both the population and their average real income. Yet there were already signs

in the mid-Victorian age that the great acceleration of economic growth

inaugurated by the Industrial Revolution had passed its peak and, though it had

by no means exhausted itself, was beginning to slow down. General economic

growth actually reached its lowest rate for the century in the middle decades

centred on the 1850’s, the worst decade of all, and although it regained and even

topped the old maximum in the late Victorian age, that was due to the increasing

shift from slow growing agriculture to faster growing industry and services

rather than to greater productivity in any particular sector.

More significantly,

industrial production itself, on which everything else hinged, achieved its

maximum rate of growth, at 3.5 per cent per annum, in the previous generation,

from the 1810’s to the late 1840’s, and though from then until the early 1870’s it

was only slightly lower, at 3.2 per cent per annum, in the last few years of the

period it slumped to 1.7 per cent per annum, only half the peak rate of the

Industrial Revolution.

To a large extent this slackening of the rate of growth was disguised by an

increase in the proportion of production exported and in ‘invisible exports’ like

shipping, banking, insurance and overseas investments, the returns from which

paid for a considerable but somewhat smaller increase in the rate of growth of

imports, until foreign trade too slackened off in the later 1870’s.

Britain’s

phenomenal success as firstcomer in the new industrialism was reflected in her

record 38 per cent share of the world trade in manufactures in 1876–80, and in

her overseas capital balances which quadrupled between 1850 and 1873.

But

none of this could disguise the fact that it was in the mid-Victorian age that

R.Giffen, ‘The Progress of the Working Classes in the Last Half-Century’, Statistical

Society, 20 November 1883, reprinted in Essays in Finance (2nd series, 1886), p. 406.

338 ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY

Britain ceased to be the world’s only workshop, and that other countries,

Belgium, France, Germany and the U.S.A., ‘took off’ into industrialism, and

began, in the last two cases, to achieve rates of growth much faster than anything

Britain had ever achieved, which would inevitably take them into the lead in

industrial production by the end of the century.

The reasons for this absolute and relative slackening of industrial growth are

not altogether clear. There was no slackening of investment. On the contrary, it

was in the 1850’s and 1860’s that capital formation reached its zenith, more

indeed than the British economy could absorb, even with the vast amounts sunk

in the railways, so that between 3 and 4 per cent of the total national product was

invested abroad.

The production of producers’ goods, although slackening off

compared with the previous generation, was still growing at a much faster rate

than that of consumers’ goods.

It was in this period that man-made capital in the

shape of buildings, machines, railways and so on came decisively to outweigh

the non-man-made, in the form of land—a fact of considerable significance for

society.

The explanation would seem to be that most of this vast investment was going

into now traditional means of production, textile machinery, coal mining,

ironworks, and the like, which had exhausted most of their first, once-for-all

potentiality for revolutionary growth in productivity, and now grew more by

multiplying plants and workers than by labour-saving machinery. In other words,

a broadening of investment, in capital-extensive methods, took over from the

deepening of investment, in capital-intensive production. British industrialists

were content to exploit on a wider scale the means and devices they knew rather

than to risk new and untried lines. There was in fact no lack of British

inventions, like Elder’s compound marine engine (1845), Bessemer’s steel

converter (1856), Perkin’s aniline dyes (1856), Siemens, Wheatstone and

Varley’s principle of the dynamo (1867), Bell’s telephone (1878), Swan’s

electric lamp (1878), or the Gilchrist-Thomas steel process (1879). But it is

significant that many of these were taken up much faster and on a larger scale in

America, Germany and elsewhere, and that many of the most fundamental

inventions for future industry, like the sewing machine, the internal combustion

Deane and Cole, op. cit., p. 283.

Rostow, British Economy, p. 8; cf. Deane and Cole, op. cit., p. 297: peak rate of growth

of industrial production 1820/29–1830/39 1.7×that of 1850/59–1860/69.

Rostow, British Economy, p. 8; Deane and Cole, p. 311.

W.A.Lewis, Economic Survey, 1919–39 (1960), p. 75; A.H.Imlah, ‘British Balance of

Payments and Export of Capital’, Ec.H.R., 1952, V. 235–7.

The average annual increase of manufacturing production, 1875–1913, in Germany and

the United States was 3.9 and 4.8 per cent respectively, as against 1.8 for the United

Kingdom, and 3.5 per cent at peak for U.K. in 1813/17–1845/9— Lewis, op. cit., p. 74;

Rostow, loc. cit.

ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY 339

engine, and electric traction, now originated overseas. Compared with America,

Germany and France, technical education was neglected in Britain, as shrewd

observers began to point out.

Beneath, and perhaps because of, the undoubted

industrial supremacy of Britain there was a complacency towards innovation

which goes far towards explaining the loss of momentum which ultimately cost

her the leadership.

It may of course be argued that this policy of expanding known and traditional

lines paid off in the short run, in the prosperity of the so-called mid-Victorian

boom. People are as prosperous as they feel, and to this extent the age was

prosperous, but by objective standards it was much less prosperous than they

supposed. National income per head in terms of current prices rose between 1855

and 1873 by 56 per cent. But part of this was due to inflation, and the increase in

real income per head was only 46 per cent, most of it coming in the cyclical

boom from 1869 to 1873, so that for most of the 1850’s and 1860’s real incomes

stagnated or crept up very slowly.

Moreover, the evidence suggests that real

national income per head was rising no faster in the ‘prosperous’ and ‘contented’

mid-Victorian period than in the ‘depressed’ and ‘discontented’ periods before

and after it.

As was argued in Chapter IX vis-à-vis the depression and discontent

of the previous period, the belief in prosperity and the contentment of the mid-

Victorian age were at least in part due to the mollifying effect of inflation on

class conflict and the struggle for income.

On the question of the distribution of income between the classes the ideal

assumed, secondly, that entrepreneurial society had a built-in mechanism for

sharing out the benefits of material progress not merely with reasonable fairness

but with increasing equality. Sir Robert Giffen in the paper quoted above proved

to his own satisfaction that

the rich have become more numerous but not richer individually; the

‘poor’ are, to some smaller extent, fewer; and those who remain ‘poor’ are,

individually, twice as well off on the average as they were fifty years ago.

The ‘poor’ have thus had almost all the benefit of the great material

advance of the last fifty years.

While aggregate wages had increased by 160 per cent and average wages by 100

per cent, income from capital had increased in aggregate by only 30 per cent and

on average ‘hardly at all’.

His friend Leone Levi went even further, and almost

Deane, First Industrial Revolution, pp. 156, 160.

Rostow, loc. cit.

Cf. P.P., 1868, S.C. on Scientific Instruction; Michael Angles, South Kensington to

Robbins: an Account of English Technical and Scientific Instruction since 1851 (1964),

pp. 25–7.

Deane and Cole, op. cit., p. 329.

340 ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY

proved too much: while over the shorter period, 1851–80, average wages had

increased by 59 percent, the average business man’s ‘family income’ had

actually declined by 30 (strictly, 34) per cent.

These gratifying conclusions were in fact based on elementary statistical

errors. Both Giffen and Levi compared subjectively selected wage rates,

themselves open to question, with the average income of a taxpaying class which

was not a fixed but an increasing fraction of the occupied population, and

radically changed its composition between the chosen dates. While money

incomes rose steeply, the fixed tax-exemption limit cut off an increasing

segment of the income pyramid, thus weighting the average with a large influx

of small incomes which automatically reduced it. Giffen’s wage statistics,

moreover, were a very haphazard collection, showing increases ranging from 20

‘and in most cases from 50 to 100 per cent’, which he then interpreted as an

average of 100 per cent.

Levi was even more cavalier in his treatment of income

tax statistics, and by a species of legerdemain turned a supposed 10 per cent fall

in average profits under Schedule D into a 34 per cent fall in ‘incomes per

family’.

In short, both eminent statisticians were so eager to tell their hearers

what they wanted to hear that they failed to compare like with like, and even

doctored the already erroneous results to fit their theories.

The objective facts of profits and wages for the period 1850– 1880 are set out

in Table 5. They show that, far from declining, average business profits assessed

under Schedule D for the same fraction of the occupied population as paid tax in

1850 had risen by 1880 by no less than 60 per cent, while average wages,

allowing for unemployment and for the movement to better-paid occupations,

had increased by 47 per cent (39 per cent allowing for unemployment) and for

the worker of unchanged occupation by only 31 per cent (24 per cent allowing for

unemployment).

Real national income (at 1900 prices) rose 1855/59–1875/79 by 47 percent, or 2.4 per

cent p.a.; 1875/79–1895/99 by 52 per cent, or 2.5 per cent p.a.—calculated from

B.R.Mitchell and P.Deane, Abstract of British Historical Statistics (Cambridge, 1962), p.

367. Reliable comparative figures are not available before 1855, but contemporary

estimates suggest a doubling between 1812 and 1851, equal to a rate of c. 2.5 per cent p.a.

—P.Deane, ‘Contemporary Estimates of National Income in 19th Century’, Ec.H.R.,

1957, IX. 459.

Giffen, op. cit., p. 405.

L.Levi, Wages and Earnings of the Working Classes (1885 ed.), p. 55.

Giffen, op. cit., pp. 372, 405.

Levi, op. cit., pp. 47–50, 54–5.

ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY 341

PROFITS AND WAGES, 1850–80

A. Profits returned under Schedule D, 1850/51 and 1879/80

1850/51 1879/80

1 2 3 4 5 6 7 8

Income

1850/51

(1879/80)

Number Amount

 000

Mean  Equivale

Number

Amount

 000

Mean  Percenta

increase

in mean

 3,000+ 1,889 14,678 7,770 2,626 33,937 12,924 66.3

( 4,887

 500–

 3,000

( 793–

 4,887)

18,335 17,054 930 25,486 38,055 1,493 60.5

 150–

 500

( 235–

 793)

90,231 20,282 223 125,421 43,752 349 56.5

All tax-

payers

1850/51

 150+

 235+) 110,455 52,014 471 153,533 115,744 754 60.1

Non-tax-

payers

1850/51

Under

 150

( 160–

 235)

– – – 199,510 34,091 171 –

All tax-

payers

1879/80

( 150+) – – – 353,043 149,835 424 –

B.Indices of Money Wages, 1850–80

1850 1880

Unweighted average (not allowing for changes in occupation): 100 131

Ditto, allowing for unemployment: 100 124

Weighted average (allowing for changes in occupation): 100 147

Ditto, allowing for unemployment:

100 139

342 ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY

TABLE 5

A. Profits returned under Schedule D, 1850/51 and 1879/80

1850/51 1879/80

1 2 3 4 5 6 7 8

Income

1850/51

(1879/80)

Number Amount

 000

Mean  Equivale

Number

Amount

 000

Mean  Percenta

increase

in mean

SOURCES: A.Return giving Number of Persons and Gross Amount of Profits assessed

under Schedule D in Great Britain, 1850–51 and 1879–80, specially supplied

by the Commissioners of Inland Revenue to Leone Levi, Wages and Earnings

of the Working Classes (1885 ed.), p. 58. The 1850–51 returns include a small

number of public companies (excluding mines, quarries, ironworks, gasworks,

railways, waterworks, canals, etc) not included in 1879–80; in so far as they

inflate the mean for 1850–51 their effect is to depress slightly the real increase

in the mean. The ‘equivalent number’ in column 5 is calculated from column

2×1.39 (= increase in occupied population, 1851–81), and column 6 is their

aggregate income estimated by graphing (Lorenz curve: percentage assessment/

percentage income). B.G.H.Wood, ‘Real Wages and the Standard of Comfort

since 1850’. Stat.J., 1909, LXXII. 102–3.

The table suggests that distribution of income was becoming more unequal not

only between the business and working classes but within the business class

itself, where the average income of the highest group of taxpayers was increasing

significantly faster than those of the middle and lower groups. This is not

surprising in an age when, as we shall see in the next section, a new type of big

business man was beginning to emerge from the entrepreneurial class.

A similar increase in inequality was taking place in the landed class, where the

small agricultural squires were doing less well than the great landlords with

supplementary income from mining, transport and urban property. While non-

agricultural rents continued to rise much faster than prices, the rent of land alone

lagged behind, so that real income from agricultural land may even have begun

to decline. The aggregate rent of land (as distinct from buildings, etc.) returned in

England and Wales under Schedule A1 by a practically stationary landed class

rose between 1850 and 1873 by no more than 16 per cent, while agricultural

prices rose by 29 per cent and general prices by 32 per cent.

As their historian

writes, ‘Behind the façade of the “Golden Age of English Agriculture”, a distinct

weakening in the economic position of the agricultural landowners can be

detected.’

It is a wry comment on mid-Victorian ‘prosperity’ that it began the

modern decline of the gentry. Meanwhile, aggregate rents of houses, etc., over the

same period increased by over 100 per cent,

and though this did not all accrue to

the great landlords, enough did so to more than compensate them for their

agricultural losses, thus further widening the gap between the great and small

landowners. The ‘New Domesday Book’ of 1873–76 showed that some 2,500

ENTREPRENEURIAL SOCIETY: IDEAL AND REALITY 343