"But then two changes came. First, as mentioned above, the Liberal Party was created and rose to power in the late 1850s and early 1860s, just as the empire was cresting in prosperity and glory, and a major plank of its platform was doing away with tariffs. Just years later, Bismarck united Germany, and on Britain’s doorstep sat a budding industrial behemoth that produced steel and coal on a scale commensurate with its size.
The confluence of those two changes was devastating. England went from being the leading industrial producer to one gradually edged out by its larger competitors, namely America and Germany. Critical to England’s deteriorating situation was that its competitors had protected markets it couldn’t touch, while Palmerston, Gladstone, and the other Liberals left England’s market open to being flooded with goods produced far more cheaply by its competitors thanks to their economies of scale.
With that came industrial decline, and with industrial decline came an increasing inability to produce the implements of war on a scale commensurate to England’s ambitions. At first, the issue was limited; at great expense, England could still produce more dreadnaughts than Germany, even with Germany’s industrial advantages.
But gradually those issues ate away at the empire and the Home Islands, with the problem becoming all the more severe as England had to buy weapons it could no longer make at the scale it needed from America in World War I to support its war effort even as American goods, from grain at the low end to cars at the upper end, put its domestic producers out of business, and thus its laboring classes out of work. All the while, the Liberals aided and abetted that destruction of British industry, claiming, as do our free traders now, that it was more “efficient” and thus good. Winston Churchill was a leading promoter of that view.
Then came disaster in World War II. Unable to produce the implements of war it needed at any real scale, particularly the mechanized equipment like trucks, planes, tanks, and automobiles, England bought them from America. But, before America entered the war, England had to pay in gold. Already limited, those gold reserves were emptied to pay for what England could no longer produce, and across the Atlantic came arms and equipment as ships full of gold went in the other direction. Even wedding rings were confiscated as Churchill’s armies armed themselves. Meanwhile, the other forms of wealth in the country, particularly dollar-denominated assets held by private parties, were confiscated and used for purchases of weapons left by retreating armies on the beaches of Dunkirk, the deserts of North Africa, and the streets of Singapore."
The confluence of those two changes was devastating. England went from being the leading industrial producer to one gradually edged out by its larger competitors, namely America and Germany. Critical to England’s deteriorating situation was that its competitors had protected markets it couldn’t touch, while Palmerston, Gladstone, and the other Liberals left England’s market open to being flooded with goods produced far more cheaply by its competitors thanks to their economies of scale.
With that came industrial decline, and with industrial decline came an increasing inability to produce the implements of war on a scale commensurate to England’s ambitions. At first, the issue was limited; at great expense, England could still produce more dreadnaughts than Germany, even with Germany’s industrial advantages.
But gradually those issues ate away at the empire and the Home Islands, with the problem becoming all the more severe as England had to buy weapons it could no longer make at the scale it needed from America in World War I to support its war effort even as American goods, from grain at the low end to cars at the upper end, put its domestic producers out of business, and thus its laboring classes out of work. All the while, the Liberals aided and abetted that destruction of British industry, claiming, as do our free traders now, that it was more “efficient” and thus good. Winston Churchill was a leading promoter of that view.
Then came disaster in World War II. Unable to produce the implements of war it needed at any real scale, particularly the mechanized equipment like trucks, planes, tanks, and automobiles, England bought them from America. But, before America entered the war, England had to pay in gold. Already limited, those gold reserves were emptied to pay for what England could no longer produce, and across the Atlantic came arms and equipment as ships full of gold went in the other direction. Even wedding rings were confiscated as Churchill’s armies armed themselves. Meanwhile, the other forms of wealth in the country, particularly dollar-denominated assets held by private parties, were confiscated and used for purchases of weapons left by retreating armies on the beaches of Dunkirk, the deserts of North Africa, and the streets of Singapore."
