When a giant dies

August 14, 2012

Danny Boyle must be an happy fellow. The man who directed the 2012 London Olympics opening ceremony made no mystery of his very critical view of the Industrial Revolution: that dark, unfair, flesh-eating process which brought an insignificant green island to the position of sole world power for almost two centuries. To Danny’s great relief, one of the last remaining monuments of this time has finally succumbed to poor timing, lack of credit and depressed prices.

Stephenson Clarke, the oldest shipping company in the UK, created in 1730, was put in liquidation last week (read article). The Germans and the Taiwanese have taken over. The Greeks too, these old friends of the British navy are among the rare beneficiaries of the dire times most of the industry is sailing through. After having been the main hub of the world’s shipping, Britain is now out of the competition. How does a country loses such a strong advance over its competitors? Rather than silly sabre-rattling about the success of the athletes of team GB, the British would be well-inspired to reflect upon this national catastrophe.

Unlike most of the industries inherited from the Industrial Revolution, shipping is still a viable sector. The problems faced by another grand old British company, Barclays, may shed some light on the causes of the debacle of British shipping. The bank is accused to have practiced what amounts to insider trading on the interbank market, this shows that the city has failed to engage in the financing of British industry. International finance may be more glamorous but it has little impact on the country at large. Boastful Cameron should bear in mind that local country banks, not the city, bankrolled the Industrial Revolution.

Opper S. (1993): the incredible story of the fleeing Dutchmen

December 13, 2010

Oppers, Stefan E. (1993) The Interest Rate Effect of Dutch Money in Eighteen-Century Britain. The Journal of Economic History, 53/1: 25-43.

Dutch citizens invested heavily in Britain over the 18th century. Even though the English themselves regarded this phenomenon as a necessary evil, it greatly help the Crown to levy the necessary capital for its expenses over the century (p.28). In the 1740s Dutch financiers in London had become critical for the funding of the government’s deficit. To a large extent it can even be said that the Seven Years War was won thanks to foreign money.

Read the rest of this entry »

Carlos A., Key J. and Dupree J. (1998) Early finance’s learning curve

August 10, 2009

Carlos, Ann M., Jennifer Key and Jill L. Dupree (1998) “Learning and the Creation of Stock-Market Institutions: Evidence from the Royal African and Hudson’s Bay Companies, 1670-1700”, The Journal of Economic History, 58/2: 318-344.

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Disclaimer: this summary is written by the blog and not by the authors of the article. Any mistake is Manuel’s fault.


“England’s emergence as an international trading nation in the seventeenth century can be linked to the growth of trading arrangements that allowed for a longer life of capital either […] as a joint-stock trading company” (p.318).

According to North and Weingast’s famous thesis this emergence was made possible by the reforms brought by the 1688 Glorious Revolution. However the authors underline the fact that markets don’t grow instantaneously and it takes some times for the actors to learn how to use the market (p.319). Read the rest of this entry »

Temin P. and Voth H.-J. (2008) A case for deregulation… in 18th-century Britain

April 28, 2009

Temin, Peter and Voth, Hans-Joachim (2008) “Private borrowing during the financial revolution: Hoare’s Bank and its customers, 1702-24”, Economic History Review, 61/3, 541-564.



The Financial Revolution is said to have allowed the British government to borrow widely and cheaply. Famously, North and Weingast added that it also had a profound and beneficial effect on private businesses (p.541). To assess the latter claim, the authors use data collected from the archives of a small London goldsmith bank, Hoare’s (p.542). It is likely that their sample is fairly representative since there were only a dozen such establishments around 1700s. The key event of the period is the lowering of the legal maximum interest rate from 6 to 5% in 1714 by the heavily indebted British government at the end of the War of Spanish Succession (p.543). Read the rest of this entry »