Also Great Britain has existed for a long time, we can trace the first signs of “legitimate economic activity” to the Roman times. Although back in the ages of the Roman Empire, Great Britain was a dull colony with little natural resources or other attractions to great masses of people. However, “already by the sixteenth century London has begun to function as a growth pole for the English economy” (Cameron, 168). The geographical advantage was the city’s location - the lowest point on the river Thames. By the middle Ages, London emerged as the most important port in England due to “it being the highest point on Thames accessible to ocean-going ships” (Clapham, 39).
FYI: By 1700 London had caught up and later surpassed Paris, -previously the largest city in Europe.
However, most historians trace the beginning of the British Empire to the victory over the Spanish Armada in 1588. There, the Spain’s dominance of the sea was transferred over to Great Britain, thus making it the chief naval power in the world.
In the early ages of the British Empire, new economic trends developed. Although “the English banking system was obscure” the foundation was laid by prominent “goldsmiths in London, who began to function as bankers in the years after the Restoration of 1660” (Cameron, 169). The establishment of the central bank, Bank of England, in 1694 followed.
Figure 1. Bank of England was the central bank in the British Empire.
“I, as a matter of fact, made my fortune on the London Stock Exchange. Later, I became the most influential spokesman for the classical economists, since Adam Smith”.
LET’S DISCOVER! – Click Here to find out more about the development of the British banking system and the Bank of
The other important economic aspect, which gave the British the cutting edge on the economic arena, was the trade. Before the British the Netherlands was the leading trading nation in the world.
“Holland is, by far the richest country in Europe with the greatest share of the carrying trade of Europe and England is perhaps the second richest country in Europe”.
However, “While, from 1672 to 1700, Dutch trade slipped, English overseas trade was growing impressively in the seventeenth and eighteenth centuries. (Kindleberger, 127). The main export of England was wool, and then woolen textiles.
Figure 2. The Royal Exchange in London, where merchants met here daily and it soon became the center of the country’s industry.
Agriculture was also an important aspect of the British economic growth. The reforms in various agricultural aspects, such as the field management, vastly increased productivity. On the picture below, one can see the enclosures, which were introduced in early 1700s. The enclosures replaced the medieval open fields, and contributed to rising food supply, which in turn helped feed a burgeoning population.
All those factors did not only establish Britain’s dominance on the political and economic arena in Europe; these also contributed to the beginnings of the Industrial Revolution.
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