Britain was once the richest country in the world, but that isn’t the case anymore. These six books help explain how the British economy became what it is today and why it has faced so many challenges recently.
In recent years, the British economy has often made the news for negative reasons. Growth has been slow, inflation has been high, and people’s living standards have gone down. Over the last 15 years, productivity has stalled, and income per person has fallen behind other developed countries. Brexit is part of the reason, along with poor government decisions during the 2008-09 financial crisis. The Labour government, which came into power in July 2024, has made boosting economic growth its top priority.
The economic decline of Britain is not a new phenomenon. It has been happening since the mid- to late 19th century. In the late 18th century, Britain was the first country to industrialize, making it the wealthiest nation of its time. But this lead couldn’t last forever. By the 20th century, Britain became the first country to experience large-scale deindustrialization. The story of how Britain rose to global power and then lost it is fascinating. Britain was also at the center of the first age of modern globalization before 1914 and played a significant role in the next wave of globalization in the 1980s. The lessons from British economic history are still important for other developed countries today.
The British Industrial Revolution in Global Perspective by Robert Allen
The Industrial Revolution was probably the most important event in human history. It led to modern economic growth, which increased productivity and improved living standards. Before the Industrial Revolution, when populations grew, living standards usually fell because resources were limited. After the revolution, both populations and incomes could grow.
Robert Allen supports a view called the materialist view of the Industrial Revolution. He argues that in the late 18th century, British entrepreneurs were in a unique situation where labor was expensive, but capital and energy were cheap. This made it easier for them to replace workers with machines, which led to the growth of mills and factories. Allen believes the Industrial Revolution happened in Britain because it made economic sense to innovate there.
The Enlightened Economy: An Economic History of Britain 1700-1850 by Joel Mokyr
Joel Mokyr believes that ideas were the real driving force behind the Industrial Revolution. He highlights the role of the European Enlightenment, which brought about scientific methods that produced useful inventions and encouraged people to rethink how institutions worked. According to Mokyr, Enlightenment ideas led to less power for elites and more competitive markets. The spread of Baconian science, which focused on experiments and sharing results, increased knowledge and encouraged innovation. Britain in the 18th and early 19th centuries was open to new ideas, which helped create innovations like railways that boosted productivity.
Forging Ahead, Falling Behind and Fighting Back: British Economic Growth from the Industrial Revolution to the Financial Crisis by Nicholas Crafts
Nicholas Crafts, who passed away in 2023, was a well-known historian of the British economy. In this book, Crafts gives a complete overview of Britain’s economic history, covering how the country led the world after the Industrial Revolution and how it faced competition from Germany and America by the end of the 19th century. He also writes about the decline after World War II and the recovery in the 1980s and 1990s. The book covers 250 years of economic history in fewer than 200 pages, giving a clear look at Britain’s rise, fall, and recovery.
Goodbye, Great Britain: The 1976 IMF Crisis by Kathleen Burk and Alec Cairncross
The 1976 IMF crisis was one of the most dramatic moments in modern British economic history. A combination of domestic and international problems forced the government to ask for an emergency loan from the International Monetary Fund to support the value of the British pound. The IMF required the government to meet tough conditions. This event is still remembered today, with Conservative politicians often criticizing the Labour Party for “going cap in hand” to the IMF. “Goodbye, Great Britain,” published in 1992, is the best account of this crisis, detailing how financial markets, economic data, and politics all played a role during the crisis.
Britain in Decline: Economic Policy, Political Strategy and the British State by Andrew Gamble
Andrew Gamble’s “Britain in Decline” was first published in the 1980s and later updated. It looks at British economic history through the lens of political economy, explaining the rise of the industrial middle class in the 19th century, the rise of the industrial working class in the 20th century, and the political shift that began with Margaret Thatcher’s government in the 1980s. Gamble believes that economic changes are shaped by political groups, which slowly shift in response to larger economic changes.
The Rise and Fall of the British Nation: A 20th Century History by David Edgerton
David Edgerton’s book covers the political, social, and cultural history of Britain in the 20th century, with a focus on the economy. Edgerton takes a different approach, arguing that the decline of Britain after World War II has often been exaggerated and that it was more about European countries catching up rather than Britain failing. He also points out that defense spending was higher than health spending in Britain even in the 1970s, showing that the “warfare state” was more significant than the “welfare state” during that time. Edgerton also argues that the British economy was only truly “British” between the 1940s and 1970s, while earlier and later periods were much more globalized.
