External Dimensions

Abstract

S O far we have stressed the domestic factors which contributed to the mid-Victorian economic expansion, but the growth of capital exports and a phenomenal increase in overseas trade were also of central importance. As a proportion of national income, trade rose rapidly, but unsteadily, to reach a peak at 22 per cent in the early 1870s. Throughout this time exports acted as a leading sector, drawing resources from the underemployed, low-productivity sectors, notably agriculture, to more productive employment. We should avoid the danger, however, of regarding exports as the only independent variable, with capital formation and consumption dependent upon them [95:213]. Superior machine technology and factory organisation gave British manufacturing industry a comparative advantage, enabling her to supply the rest of the world with a vast range of textiles at relatively low cost, to supply iron, machinery and railway equipment of high quality in quantities required by other countries, especially those which were themselves undergoing the process of industrialisation. Over 80 per cent of home-produced exports in this period were manufactured goods, of which textiles contributed about 70 per cent (or more than 60 per cent of the total) in the 1850s and 1860s, only a slightly lower proportion than in the earlier decades.