Saturday, September 17, 2011

The Eighteenth Century: Building a Better Future Through Higher Energy Density?

No "series" post here, but I missed a moment in the blogosphere a few weeks ago when people were talking about how the transition to high intensity energy use (burning coal, that is), created modernity. So this whole global warming thing has us back on the road to the caves, or something. It's nice to see John Landers' closely argued thesis finally get some traction.

On the other hand, I was disappointed by The Field and the Forge. It's not that I disagreed with it or anything. I just thought that Landers was offering the wrong global explanatory framework, one that has already gone sideways in Chinese history. So now that the moment has passed me by, my unfashionably late thoughts.

Also, links to myself: this isn't one of my little series, but it is a sequel to this, this, and above all, to this. Above all, it's bout taking Daniel Szechi seriously.
So let's get  in the mood!

So what does coal have to do with romanticising the Celts this time? Here's the meditation: sure, "The Skye Boat Song" is another sporran-full of schmaltz. ( I was going to post the Real McKenzies' version, but that particular selection challenged my heteronormative assumptions, and how often does an old-fashioned historian get to say "heteronormative?" Besides,  it's not a particularly impressive reinterpretation.) Old Kenneth McKellar, on the other hand, is pretty powerfully affecting. At least, to me, but then I've probably been exposed to more of his over-orchestrated prime than most. The Skye Boat Song is about the whole "lost cause" thing, and having an old man sing it seems to catch what the song is about (now) very well. "Seems," he said. There those Hanoverian spin doctors go again. People get old. Countries and political options don't. Find a way to buy enough people (and, admittedly, it would have to be a very large "lots"), and the Jacobite restoration could happen tomorrow.

What's really going on is simple enough. If you can't put a solid, rational argument for preferring the Hanoverian dynasty to the Stuarts, you use illegitimate rhetorical devices instead. If that makes the practice of history harder two centuries down the road, well that's a problem for the historians of two centuries in the future.
That is, if you care enough to be seen making bad arguments in public, something that good people don't do unless they think there's something important at stake. So it's time to talk about what's important, and where it leads.

Sigh. It's money, of course. And the conjunction of money and politics and guilty, weak arguments leads to foreign military misadventures, and corrupt people getting rich. But before I mutter about how the more things change and retire to cultivate my garden, I am going to stop and propose that it also led to the industrial revolution, in a much clearer way than the notional proposition that people suddenly discovered that coal burned real good.

The first thing you have to know is that in the fall of 1688, William III, head of the senior branch of the house of Nassau and thus titular Prince of Orange, enjoyed as a proximate result of this the right to dispose of a Netherlander fleet and army. He was also the nephew of one Stuart king and married to the eldest daughter of another. This put him in the way of inheriting the Stuart thrones, until his father-in-law/cousin had a son in the summer.

And so, for reasons various at the time and even more varied once all after-the-fact rationalisations and theoretical appropriations are taken into account, William landed his army in the southwest of England, had a  glorious revolution, and became co-monarch with his wife, Mary. William and Mary had  no children, I suspect part of the implicit social contract that allowed them to reach the throne. More problematically, neither did Mary's younger sister. Even more troubling, their younger half-brother, an exile at the court of Louis XIV, matured into a robust youth.

Come 16 September 1701, when James II died in France, Louis XIV was placed in a difficult position. There was an ongoing dispute over the succession to the throne of Spain in another dynastic failure. William had wanted to intervene in that dispute and start a war with France. Many in London recalled that William had raised £6.8 million to fight his last war with Louis, and that it had not ended well, with the London market refusing to subscribe his last issue of bonds and forcing William out of the war in 1698. The court had to step in and reorganise the state monopoly on the trade with India as the New East India Company and issue stocks with a face value equal to the outstanding war debt in return for the bonds. The only way to make this possible was to push even more capital (in the form of silver coinage) India-wards and hope for a profit before impoverished widows and orphans had to hand their stocks over to conniving jobbers for the price of a loaf of bread. (Or whatever. It's not like the court had much of a grasp on who owned the stocks and what their economic situation might be. The point is that the threat was there, hanging over everyone's head. As to what that threat really was, read on!) More importantly, William died in an accident while lobbying for his new war.

And that's why many people think that Louis made quite the mistake when he recognised young James Francis Edward Stuart as James III. Because the very fact that France recognised an alternate claimant to the thrones of Britain was such an existential threat to Britain that the country had to leap into the War of the Spanish Succession with both feet.

There are other explanations for the decision to go to war. A former generation of British historians found this account quite discomforting. They claimed to prefer more rational accounts of the decision for war in which the fate of the economy, or issues of grand strategy or the future of the British state churches (and therefore Science!) were at stake. After a careful consideration of the arguments, I don't think that they hold up, and since this is a blog posting and its overlong before I even get to the meat of the argument, you're just going to have to trust me and gallop onto the denouement; not much changed, and a £7 million debt augmented by a new £29 million one.

Oops. What was to be done? The answer is laid out in great detail in some classics of economic history, notably Dickson's Financial Revolution*, Dickson's work is summarised and advanced in an Internet-available way here. The solution was to consolidate the debt as negotiable, interest-bearing instruments. After much fumbling, the more-or-less final solution of 1751 was the famous "three-percent consoles" that funded the Seven Years War, American Revolution, and Napoleonic Wars, with the 1739--48 war of many names as a warm-up exercise. Three percent interest is quite a reduction from the 9% that the Crown was offering at the height of the War of the Spanish Succession. Clearly something very important had happened, and British historians have spent considerable energy ever since giving themselves pats on the back over it ever since. One reading is that the country had become a great deal more stable. Another is that it had developed a fiscal-military state fully capable of financing the enormous national debt with the returns of an equally national excise, or sales tax.

And clearly there is something to that. A great deal to be said for that. On the one hand, you have an unstable, threatened regime. On the other hand, you have a vast national debt, widely held and the fuel of a secondary market that kept the financial industry happy. Clearly the interests of the investing class are aligned with that of the regime, and it will be willing to support a high level of taxation, even one bearing mainly on itself, in order to maintain that regime. Sure, the Stuarts could promise to honour the consoles if they came to power, but the collapse of the market on the news of the Young Pretender reaching Derby is evidence of how little weight those promises carried.

Except the sell-off is a problem, and there is a much, much more cynical explanation.  Or, rather, a codicil to John Brewer and P. G. M. Dickson's explanation that takes us back into the world of the nerds. It's one implicit in this other, relatively neglected classic on finance and the Wars of 1688--1712. The argument? England had itself a military-industrial-agronomic complex.

It's hard to do justice to the riches of D. W. Jones' War and Economy in the Age of Marlborough, and I'm not going to try. Seriously. Get it. Somehow. But one of the things that Jones concentrates on is the issue of "direct supply." Armies (and navies) need supplies: mostly fodder for the horses, bread and salt meat for the men, and cash money. Throughout the Wars of the League of Augsburg and the War of the Spanish Succession, a strong lobby in Britain, aligned with the opposition to the court, argued that these items ought to be procured in Britain and shipped to the armies in the field.

Instead, the British war efforts were largely maintained by "continental supply." The Crown bought the necessary supplies on Continental markets. Jones explains at some length why this could not be done with bullion exports, even if there did need to be clearance payments. Instead, the Crown paid for its wars by maintaining a trade surplus with the theatres of war. In order to do this, it taxed re-exported goods from places such as America and India, and subsidised the export of a range of British goods.

I've mentioned this before because I can't overstate how important it is to understand the way in which the rise of coal mining in Eighteenth Century Britain is linked, not to the endogenous rise of coal-burning industry, but to the willingness of the British taxpayer to pay in the future for the effort required to win coal from the ground and sell it below-cost to Belgian homeowners for the sake of the war effort. But there's more. Far more. To make war in this way is to advantage the landowners/coalowners with easy access to export markets. It's less clear that it disadvantages another. Navies are a more complicated case than armies, but it is at least clear that a fleets based respectively on the Nore, Devonport, and Portsmouth are a potential boon to local elites.

Stop me if you've heard this one, but the Industrial Revolution started in Coalbrookdale.It's way up in the Midlands, far away from obvious export opportunities.It's also up the Severn river from the great west coast port of Bristol. In the latter part of the 1739--48 war, the British began operating a Western Squadron from Plymouth to blockade the French port of Brest, from which French fleets could threaten British merchant squadrons, bringing all those excisable/re-exportable goods. I couldn't remember from my patriotic instruction whether we gave the credit for that to Lord Anson or Edward Hawke these days. Imagine my surprise to find that Peter Warren came between the two! (Well, don't imagine it, because I haven't spun any stories about Admiral Warren yet.)

And with the effort of operations came the long-term headache of maintenance. In 1749, the Royal Navy's total of ships available for sea plummeted from almost 100 to 39 as the cramped and understaffed Royal Dockyards faced a backlog of needed maintenance that simply could not be completed before the ships in question decayed even further. Worse, these conditions had applied during the war, resulting in new construction with built-in problems summarised ( a bit simplistically) as having been "green-built," i.e., of young, unseasoned timber. The reason for my charge of simplification is even more troubling; on the evidence, construction timber was being poorly stored for lack of space. Timber that, whether the Admiralty realised it or not, was coming out of the Wealden forests in which charcoal burners sought fuel for the Wealden iron industry that fed its appetite for iron. The price of charcoal rose, while the iron industry began to migrate towards intact forests. In the 1740s, a grand scheme was even mooted to transfer the basic level of the English iron industry to America, where pig iron would be made with presumably ample charcoal. Such utopian fantasies suggested other solutions. Solutions that only implied coal where charcoal wasn't available. Since in fact charcoal fed a number of the iron industries of the Industrial Revolution, we can be sure that coal isn't necessarily the heart of it. (Source; other source; snarky footnote.**

Meanwhile, desperate for preservatives and squeezed out of the market for pine tar by the Admiralty's willingness to buy on tardy credit (which acted to inflate prices as well as take up supply), people began buying noxious coal tar to treat the underside of carriages, ropes, canvasses and the like. There was no shortage of coal tar, because only coked coal could be used to make beer and, in general, substitute for wood in this and that trade. Some people were even using coke in blast furnaces to make low-grade pigs. For as low as was the quality of the "cast iron" made in, for example, the Darby's works in Coalbrookdale, it was still good enough to make a frying pan. Most people who used the blast furnace method to make cast iron used charcoal, however. Wood tends to have less mineral sulphur and silicon in it than coal.

The implications of this pressure on time and supplies are not that the Royal Navy declined. On the contrary, it was even stronger by 1756. This was achieved by contracting out production to private yards and by attempting to rationalise production in the Dockyards. I can't help but notice that along the way to expanding the Dockyard shipwright force from 2000 to over 3000 between 1739 and 1765, there were episodes of both layoffs and experiments with piecework. The former sent Admiralty-trained shipwrights and other artificers into the civilian economy. Almost equally interesting is the fact that the Navy's debts from the two mid-century wars are rolled over into bonds at 4%. Lending to the Navy is unusually profitable.

The latter, and I think that this is interesting, bemused supervisors reported, led to the best and most experienced men simply absenting themselves from the yards as soon as they'd done enough work to maintain their income at the old salaried rates. In the old tradition of supercilious patronisation, one imagines them knocking off early for a pint. The reality of the hardworking, highly skilled men I know is that they were going off to use their skills (and probably some timber that "no-one would miss") in more productive ways. Or maybe blogging about history on the Internet. Either way, I'm seeing a much more complex relationship with the larger economy than is sometimes allowed.

Yet more civilian yard-built ships meant even more maintenance headaches in the future. So in 1765, the administration of the Admiralty set in motion a major expansion of the dockyards of Portsmouth and Plymouth. They weren't done in time to have any effect on the War of the Revolution, but they were in full swing during the Napoleonic wars.

Have I mentioned how Plymouth is close by that circuitous route over sea and river and road to Coalbrookdale? I guess I have.

I could talk here about the casting of iron guns, or about the comparatively early Brunel experiment in "mass-producing" blocks at Portsmouth. But in my guts I don't think that that's the heart of the explanation here. If only there were some  industrial product made out of iron with a wide range of applications in construction and ship-building. One needed in such quantities that it provoked the development of "mass production" techniques before the days of James I. While the Admiralty would not buy British iron over high-quality Swedish for any demanding uses, it was happy with Coalbrookdale coke-made nails, as it had been with Wealden-cast guns.

In an incremental story, I've probably got myself as far as I need to go here. We can situate ourselves between 1763 and 1776, and look at an Admiralty that is trying to establish and stabilise its finances at ever-higher levels in response to ever-accelerating French competition. It needs to hire more artificers, and for strategic reasons is electing to do it in a remote part of the kingdom. It needs more iron, and more specifically it needs it in the West Country. The last thing on its mind is promoting a domestic iron industry. On the contrary, it is happy to buy Swedish iron, like Swedish naval stores.

What it has set in motion, however, is a massive acceleration of production of the navy's needs, including high-income skilled labour. That its appetite for nails and guns, and perhaps also its role as a sink-and-source of skilled labour will expand the domestic iron industry is no more obviously important going in as that it will expand the domestic hemp trade. That it will create a massive market for cokemaking byproducts is entirely unsuspected, because no-one realises just how useful creosote will be before it has even been invented! That the establishment is making money by lending money to the Navy, and by participating in its expanding industrial output provides the most obvious reason for the panic of 1745.

Stop me if you haven't heard this one: national debt and taxation are linked. When the elite pays high taxes and invests in the national debt, the state has arranged it so that the rich landlords who deliver salt pork and lumber to the Admiralty gates can take money out of one can marked "the Navy," put it in another marked "taxes," and pocket 1% in perpetuity over the consoles on money that they'd otherwise have to bury in the backyard or drop on wild speculation. It follows that even people who aren't that worried about a Stuart Restoration might have reason to worry that the Stuarts will withdraw from the War of the Austrian Succession and stop issuing Navy bonds.

In the end, though, I'm a great deal more interested in the nexus between labour skills, wages, and technology. The Admiralty budget expands and contracts, expands and contracts; and the dockyards (and the fleet) breathe skilled labour out into the economy. Meanwhile, productivity-enhancing improvements are arguably inherent in the nature of things. The navy's investment in its own efficiency is going to spur technological development even in the absence of splurges on high-tech.

Given that we're creating new industries, we are also creating labour shortages. (And slaking them with post-war mass layoffs so that new ventures aren't chocked out; it's important here that due to maintenance costs, Admiralty expenditure can't fall too low between the wars, so that new ventures can't lose their public sector market.) Labour shortages intimate high wages, which are spent on more and better food and better accommodation. A ruling class of landlords is making money on the Navy. Money is pulsing into the economy. But interest rates are low, intimating low inflation. Right? I don't really understand these things, so I'm not going all in on that one. Are taxes holding inflation in check? Anyway, the elite can see their taxes coming back to them in the form of higher food prices and rents. Their income is rising; they have investment instruments to buy. Interest rates are falling, so they can borrow (with their bonds as collateral) to invest on agricultural improvement, taking water power out of low-return industrial return and putting it into high value provision/canvas/whatever production. (I throw that in as an unbalancing factor pointing in the direction of the imminent proliferation of steam engines.) It looks to me like a self-reinforcing cycle. Whatever the follies and sterilities of foreign wars as drivers of economic growth, the process is incidentally creating wealth.

Two things: I'm clearly missing a substructural factor here. The process broadly implies a new level of agricultural surplus. I'm going to need to explain that, not that it's hard. Second, it occurs to me to wonder what would happen if someone launched a crazy experiment in running up a debt on national security expenditure while at the same time cutting taxes on the elite. Would there be some kind of decoupling of the relationship between technological change and wage growth? Or would people turn to Charlie --or some other lost cause? Or both? Other than a single modern empirical data point, I'm not sure I can see why there would be a connection.

 *It's another revolution that they had in the Eighteenth Century that led to modernity! For those keeping score at home, that's an Agricultural, Glorious, American, Industrial, Transportation, and Financial Revolution just here alone. I assume that the French Revolution hangs unspoken over this discussion, but I shall leave a national obsession to the citizens of that nation, as no good can come of even the greatest foreign historians intruding themselves.

**The story here is often told heroically. We learn that the blast furnace was invented in Europe only after the Protestant Reformation, for obvious reasons; in China  a week Tuesday after the beginning of time. This goes nowhere in China since there's something wrong with Asiatics, but in Europe leads immediately to an Industrial Revolution, because blast furnaces are better than that thing that they made iron with before blast furnaces, whatever it was. And also steel. Something about steel. It's kind of like iron, right? 

The reality is that, cast iron guns apart, there's not much need for cast iron, so that if you're going to go the blast furnace route, the limiting factor is the finery and chafery. But slitting mills are sort of an industrialised finery. At least, they turn not-very useful pigs of cast iron into more useful bits ready to be made into nails. On the other hand, since you can cast guns directly out of cast iron, there are other reasons why the Royal Navy's growth was midwife to the cast iron industry of Coalbrookdale. I would try to write more about this, but I'd just look like an  idiot, and there's already too many of those running around trying to explain abstruse technological matters. Again, if you want to understand iron and steel, there's better places to go. (What the Hell? Why isn't this on Google Books??)

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