United Kingdom

Royal support aided Pitt’s control of his cabinet and political patronage. But what sustained him most in the 1780s and early 1790s was the quality and success of his measures. He reduced the national debt by £10 million between 1784 and 1793, in part by increasing tax revenue. He fostered legitimate trade and reduced smuggling by cutting import duties on certain commodities such as tea. In 1786 he signed an important commercial agreement, the Eden Treaty, with France. It was in keeping with the argument made by the economist Adam Smith in his The Wealth of Nations (1776) that Britain should be less economically dependent on trade with America and become more adventurous in exploring trading opportunities in continental Europe. At home, Pitt strove for cheaper and more efficient administration; for example, he set up a stationery department to supply government offices with the necessary paper at a more economical rate. Abroad, he restored Britain’s links with continental Europe and implemented imperial reorganization. In 1788 he signed the Triple Alliance between Britain, Prussia, and Holland, thereby ensuring that in a future war his country would not be bereft of allies as it had been during the American Revolution. In 1790 he demonstrated Britain’s renewed power and prestige by negotiating a peace between Austria and Turkey. In 1784 he passed his own India Act, creating a board of control regulating Indian affairs and the East India Company. The board’s members were nominated by the king from among the privy councillors. Finally, in 1791 the Canada Constitutional Act was passed. London became responsible for the government of both Lower and Upper Canada, but both provinces were given representative assemblies.

Economic growth and prosperity

Many of Pitt’s reforms and policies, such as his India Act, had been devised by previous ministers. But even though he did not originate all of his schemes, Pitt nonetheless deserves credit for actually implementing them. For all his priggish ruthlessness and occasional dishonesties (perhaps because of them), Pitt undoubtedly contributed to the restoration of national confidence; indeed, for many people, he became its very personification. But British recovery had wider and more complex causes than just one man’s measures. At bottom, it was rooted in accelerating economic growth and unprecedented national prosperity:

These figures illustrate two striking points. First, in the 1770s British export performance and industrial productivity were perceptibly damaged by the American war. But, second, Britain’s economic recovery after the war was rapid and dramatic. Particularly noticeable is the fact that the wars with revolutionary and Napoleonic France (1793–1802 and 1803–15) did not slow Britain’s buoyant prosperity. Although Napoleon tried to blockade Britain in 1808 and again in 1811–12, he never succeeded in cutting the lifeline of its trade. In the period 1794–96 British exports averaged £21.7 million per annum. In the period 1804–06 the equivalent figure was £37.5 million, and during 1814–16, £44.4 million. These figures demonstrate how quickly Britain regained its American markets after 1783 and how extensive its other colonial markets were. But they are also one of many signs that the nation was experiencing the first Industrial Revolution.

The Industrial Revolution

Some historians have questioned whether the term Industrial Revolution can really be applied to the economic transformation of late 18th- and early 19th-century Britain. They point out that in terms of employment the industrial sector may not have overtaken the agricultural sector until the 1850s and that even then the average unit of production employed only 10 people. Large, anonymous factories did not become common until the late 19th century. Other scholars have argued, rightly, that industry did not suddenly take off in the 1780s and that even in 1700 Britain was a more industrialized state than its European competitors. But, despite all these qualifications, the available evidence suggests that by 1800 Britain was by far the most industrialized state in the world and that, because of this, its rate of economic growth must have accelerated in the last third of the 18th century.