Shared Prosperity?
The deep roots of conservatism
There are lots of different ways I could illustrate the social and economic crisis that followed the end of the Napoleonic Wars. Here’s the one I chose to use in the introduction to The Horrible Peace:
Don’t take those numbers to the bank—the general sense of things is more important. Here was a society characterized by massive inequality, with widespread unemployment, poverty, and misery. And as usual, the Irish had it even worse. The question was, would the government do anything about this? Would they listen to the petition?
You can guess the answer. When the attendees at the Spa Fields meeting heard the Prince Regent’s answer, they rioted. One group even tried to storm the Tower of London—the British Bastille, basically. The book has lots more details, so you should buy it if you want to learn more. Use the discount code MAS073 to get 30% off the paperback or MAS080 for free international shipping. And as always, share this post to help spread the good word.
Two weeks ago, I asked whether Britain benefitted from a peace dividend when the wars ended. Last week, I suggested that, in terms of Britain’s security, there wasn’t as much of a peace dividend as you might think. Cutting the budgets of the army and the navy weakened British power, especially in the western hemisphere. This week, let’s look at whether any of that military spending was actually repurposed towards sharing prosperity.
It was not, for two reasons.
There was no will.
Lord Liverpool, the prime minister, was a conservative. In the context of 1815, that meant he had two priorities for his government.
First, he believed that Britain’s greatest strength was its ability to borrow money to fund the military during wartime. That was the foundation of Britain’s victory in the long-term competition with France. Therefore, he had to make the interest payments on the debt to avoid default. All other budgetary considerations had to come second.
Second, Liverpool believed that spending on the military was an unfortunate necessity in wartime; otherwise, the government’s role was to maintain order and little else. The sooner the government’s borrowing and spending could be curtailed, the better, because government spending crowded out private investment.
Liverpool’s “laissez-faire” philosophy was best articulated by one of his protégés, the future prime minister Robert Peel. Liverpool had identified Peel as a rising star, and in 1812, he had appointed the 24-year-old to be the government’s chief secretary in Ireland. As the advertisement at the top of this post pointed out, Ireland’s experience of the postwar decade was miserable even by the standards of Irish history. Faced with a typhus epidemic in which 1.5 million people got sick and 65,000 died, Peel responded: “The Government might in case of extreme necessity administer relief by direct interference, but if half the population is in this state we cannot help trembling to think of the consequences of the first precedent.” In other words, let’s hope charities take up the slack because we don’t want poor people to learn that the government has the capacity to help them. They might come to expect it!
There was no way. Or was there?
To be fair to Liverpool and Peel, they were products of their time and place. We shouldn’t expect them to be proponents of social insurance or deficit spending in recessions. John Maynard Keynes was born in 1883, not 1783. And in any case, the bureaucracy they controlled existed to fund and fight wars, not to redistribute wealth. Remember the chart of the government’s budget I showed you two weeks ago: there was no early-nineteenth-century equivalent of the National Health Service.
But let’s not be too fair to them. Peel’s response to Irish suffering implies that he had considered that the government might be able to help. He rejected that course of action using the classic conservative idea that all government aid is a slippery slope to dependency, but the point is that the possibility occurred to him.
Moreover, the government was willing to intervene to prevent disaster in one case, and one case only: to protect the rich. I don’t want to bore you with all the details here, but a little context is necessary. The way parliament was structured meant that the government depended on the support of wealthy landowners. These men derived much of their income from agriculture, and they were worried in 1815 that peace would mean a collapse in agricultural prices. The Royal Navy was the largest single purchaser of flour, for example, and it no longer needed to feed 140,000 sailors every year. When it began selling off its surplus flour, prices began to fall, putting landowner’s incomes at risk.
To prevent that from happening, the government intervened in the economy, directly contradicting its own laissez-faire philosophy. The Corn Law of 1815 set the price at which imports of foreign wheat, barley, oats, and other grains were allowed (corn was a catch-all term for various grains). If the price was higher than the minimum, British farmers would have to compete fairly on the open market; but if it was lower than the minimum, they would be protected from that competition, thereby ensuring their profits.
Conservatism, then and now
Conservative ideology clearly has deep roots. Peel’s argument about dependency could have come straight from the mouth of Ronald Reagan: “The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help.” You can also see parallels between, for example, tax cuts that largely benefit the wealthy and the introduction of the Corn Law.
But there is one significant difference between conservative ideology in 1815 and 2023: Liverpool would never have risked defaulting on Britain’s debt. I will leave it to readers to draw their own conclusions from that observation.