Grampp on the Manchester School of Economics
Source: William Dyer Grampp, The Manchester School of Economics (Stanford: Stanford University Press, 1960). Chapter: 1: What the School Was.
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What the School Was
There were five fairly distinct groups in the school at the time of the campaign. One consisted of the businessmen who wanted free trade because they believed it would increase the demand for textiles, or lower wages and other costs, or arrest the growth of textile mills abroad, or would do all three. They were the Gradgrinds, and their behavior was regulated almost wholly by self-interest. They often are thought to have comprised the Manchester School in its entirety or to have dictated its policy. They were unquestionably important in numbers, and they furnished the massive financial support the campaign needed. But they were not the only people in the school, and its activities began against their opposition; they did not provide its leadership, and their counsel was not always taken. On occasion they were told by others in the school to put their house in order before trying to reform the country. One feels some sympathy for their position: at once so crassly self-interested and awkwardly expressed that they were an embarrassment to the others who nevertheless could not do without their numbers and money and who exhorted them to be both what they were and what they could not be.
A second group consisted of businessmen also, but of a very different kind. They were the humanitarians among the business classes and the counterparts of the rich in agriculture who used their privileges to improve the welfare of the lower classes. The humanitarian businessmen supported free trade for the same reason, which made them model employers: they believed it their duty to help the lower classes in whatever way they could, and they opposed the corn laws because they believed the laws imposed an unjust and impoverishing tax on food. They looked after the health of their workers, provided schools for the children they employed and in other ways treated them more considerately than was the custom; they refused to use the truck system of high-priced company stores at which workers were required to spend their wages, or to rent company housing at excessive rates; they sometimes paid higher than the going wage rate, and the real income of their workers, when account is taken of the amenities they were provided, usually was higher than the average; they promoted self-help organizations like the cooperatives and workers’ educational groups, sponsored such enterprises as the Manchester Statistical Society, which conducted some of the earliest investigations into the condition of factory labor, and they formed an employers’ association to help enforce the Factory Acts. They have not been celebrated in the Victorian novels, but a rather impressive bit of testimony about them was given by a worker who appeared before the Sadler Committee investigating the condition of factory labor during the House session of 1831-32. His name was James Turner, and he said, “the honorable employers . . . those that we call friendly to the work people . . . looked very strictly after that matter; and the masters in Manchester, having an eye continually upon the subject, do adhere to the law a great deal better.”1
The workers also made it plain that there were differences among employers. One told the Sadler Committee that they were treated best in the oldest, largest, and most prosperous mills, while they were driven hardest by the masters who themselves had “risen from very small beginnings.” The committee wanted to know whether working conditions were bad because the mills of the latter might be less prosperous or because they were owned by a different sort of men. It was the men, one witness said. “That is, from a principle of domination rather than from that of self-interest, they object to the due limitation of the hours of labour?—Most assuredly.”2
As noblesse oblige cannot be other than patronizing, the humanitarian employers did not satisfy everyone. Another worker, Thomas Daniel, told the same committtee that the masters used Sunday schools to make the children “as humble and as obedient to the wishes of the manufacturers as possible,” and to turn the workers away from unions. Among the humanitarian businessmen were the members of the Greg family, owner of one of the largest mills in Lancashire and whose practices the Hammonds (no friends of Manchester) called paternalism “at its best.”3
A third group consisted of the pacifists, of whom Cobden and, to a lesser extent, Bright were representative. They believed that free trade would give buyers and sellers all over the world so strong an economic interest in peace that they would prevent their governments from making war. The idea is derived from Ricardo and his statement of it is explained below. It is the only idea of Ricardo’s that Cobden seems to have used, and as he nowhere summons up Ricardo’s great name to support him he probably was not aware of its origin, although others were. It is noteworthy that Palmerston, one of the most aggressive and meddlesome of Britain’s foreign secretaries, should have been singled out by the school for its most savage attacks, which Palmerston returned in kind. The purpose of many of Palmerston’s ventures was to strengthen the liberal forces abroad, and the pacifists could not well object to it. What they could object to was his use of power to promote his purpose, because their pacifism was pretty nearly of the absolute kind. This group gave the Manchester School its reputation for being opposed to colonies and the empire. That opposition was confined to this group, and is not representative of other elements of the school.
Another group was the Philosophic (or London) Radicals, who were the authoritative (one might say, official) representatives of utilitarianism and who applied it to the political issues of the ’thirties and ’forties. Some had been pupils of James Mill, who took them through Bentham’s doctrine, and they put it before the public. Their doctrine was not, however, a utilitarian version of laisser faire; in fact, it became the justification for numerous forms of government intervention.4 They had been in the left wing of the campaign for the Reform Bill of 1832 (which provided much less than they wanted), and in 1836 in London they formed the Anti-Corn Law Association, two years before one was started in Manchester with their assistance. Charles Villiers, one of the group, was the leader of the free traders in the House until 1841, when he was replaced by Cobden—an instance of “worth giving way to genius,” it was explained—but he continued to make the annual motion on behalf of repeal. Others were John Bowring, William Molesworth, George Grote, J. A. Roebuck, Joseph Hume, Perronet Thompson, and (of a different sort) Francis Place. They brought intellectual distinction to the Manchester School, and the businessmen at first were flattered (Cobden was briefly under their spell in 1838). But the London radicals, excepting Place, did not get along with the Lancashire people. Manchester was brash, uncompromising, and commonsensible; the radicals were mannered, reflective, and practiced in political maneuvering. Many of them in time achieved positions in government, while the leading Manchester people usually refused them. The difference between the two groups was suggested by Place, who was more observant than most, when he wrote to Cobden: “The people here [London] differ very widely from you at Manchester. You . . . at Manchester resolve that something shall be done and then you . . . set to work and see it done—give your money and your time and need none but mere servants to carry out the details.”5 It is understandable that the Philosophic Radicals should not have cared for the role of carrying out details, most particularly since they had started the free-trade movement. Cobden once had to remind them of how far it had gotten before Manchester came along with its rough-and-tumble methods. Some of the radicals dissociated themselves from the school before the repeal campaign ended, and the others parted with Cobden and Bright afterward, often with recriminations on both sides.
The middle-class radicals were a fifth group. They differed from the London radicals in their social origins and occupations, most of them being in business, and in being less interested in the ideological justification for reform than in the methods of securing it. In energy, persistence, ingenuity, courage, and power, they were the most important group in the school. Among them were Archibald Prentice, a Manchester publisher; J. B. Smith, a veteran campaigner for parliamentary reform and free trade, and a self-taught economist; Edward Miall, the editor of the Non-Conformist; Joseph Brotherton, a manufacturer who retired early to devote himself to religion and reform; Joseph Dyer, an American-born inventor who settled in Manchester; the Potter family, who supplied a corps of radicals, and whose place of business was a center for reformers; George Wilson, a manufacturer and later a railway director, who was a national leader in the movement for parliamentary reform; Joseph Sturge, a Birmingham businessman, who was a Quaker, a leader in the antislavery movement, and an active participant in parliamentary reform movements; and John Bright, also a Quaker, who, with his brothers, owned a large textile Mill in Rochdale, and was motivated even more by political reform than by pacifism. The pacifists counted themselves among the radicals on some issues, but not on all, and during the Crimean War most of the radicals parted with them, with the notable exception of Bright.
The radicalism of the middle class was a remarkable feature of the nineteenth-century reform movements. Most of them were started by the middle class, sustained by it, and many were brought to a successful conclusion by its efforts. The campaign for free trade was one of many which were sponsored by them and by their fathers before them and by their children after them. They agitated for abolishing slavery in the British colonies and ending the slave trade; for prison reform and the abolition of capital punishment; for popular education; for repeal of the Combination Acts; for enacting the first Factory Act and extending it; for land reform and the removal of taxes on the press; for the penny post and the decimal system of coinage; for repeal of the Navigation Acts; for disarmament and the international arbitration of disputes; for ending the colonial system; for full rights to Catholics and Jews; and for parliamentary reform. The movements that engaged their greatest support were the repeal of the corn laws and the reform of Parliament including the extension of the franchise. Not all of the middle-class radicals supported all of the reform movements of their time, and not all of them were in the Manchester School. Most of them long had demanded repeal of the corn laws, but some withdrew from the movement when it was joined by the self-interested businessmen. They were suspicious of a campaign that enlisted the enthusiasm of those who had so strongly opposed the radical agitation for the Factory Acts, and the radicals who were closest to the Chartists in their viewpoint went over to the side of protection and the Tories. But the school did put forward the issue which, along with parliamentary reform, secured more middle-class radical support than any other. The radicals began the school, and were its most devoted and tireless members. Without them, the principle of free trade might have remained the intellectual property of the economists, and certainly never would have become something men talked about in the streets. Without them, the movement toward free trade might have been arrested. The movement was, of course, helped along enormously by the financial support of the manufacturers who saw great profit in it. But it was the radicals who forced them to screw up enough courage to act in their own interest, which they themselves were too timid to do. How the radicals did it, and why, are explained later. The fact that they did indicates that the Manchester School was something other than the embodiment of bourgeois orthodoxy brought into being by the cupidity of the textile manufacturers.
It is noteworthy that the free-trade movement, although it did not begin in Manchester, should have become effective there. One reason was the city’s being the center of the export industry. Another was its being a center of radicalism, reform, and dissent. Consumer cooperatives started there in 1820; other self-help groups also originated there, like the building and friendly societies, some started by the workers, some by the middle class for them, and most of them having middle-class support. It was in Manchester that the employers first gave close attention to the conditions of work in the factories, in part because it was the most industrial city in Britain and in part because they were responsible men. One of the sponsors of the first Factory Act, which was passed in 1802, was Sir Robert Peel, a textile manufacturer and the grandfather of the prime minister of the same name with whom Cobden contended and in the end converted. Peel said the children in his mill were overworked by the supervisors whose pay depended on the children’s output, and as he had no time to protect the children he wanted the law to do it.6 In 1833, some of the businessmen formed the Manchester Statistical Society, which investigated the health and welfare of the factory workers. The city was a center of political reform, and it was there that the most notable of the early battles for the Charter occurred, the Peterloo Massacre, in which troops put down a great meeting called to declare the Charter the law of the land and to “elect” representatives to Parliament.
It also must be noted that Manchester had been a center of protection, when costs in the textile mills there were higher than abroad; and opposition to free trade and its economic theory continued, though in less force, when this no longer was true. In 1839, about a year after the repeal movement began, there appeared a denunciation of “Ricardo-ism, . . . that canker of states, the legalized, though still lawless lusting after the goods, the wealth, the very bread of others, without a shadow of natural, moral, or religious right to justify the spoil.”7
Some of the men who supported the free-trade campaign cannot properly be placed in any of the foregoing groups. They were political figures, literary men, journalists, and clergymen. Some are identified with the Manchester School simply because they gave their assent to its campaign, others because they participated in it, and a few because they were among its leaders. One of the leaders was W. J. Fox, a Unitarian minister, the friend of Carlyle and John Stuart Mill; and he was prominent among the dissenting clergymen who were active in politics. He became one of the great orators of the campaign, and in his newspaper he advanced the cause of the free traders. Deacon Hume was identified with them because of long years of work for free trade. An authority on the customs, he had written on the corn laws as early as 1815, and in 1842, just before his death, he gave extensive testimony on them before the House. Still others were Edward Baines, an influential journalist, and Samuel Smiles, the author of the popular inspirational biographies and a force in the self-help movement.
Early in their campaign the free traders were given the blessing of the Earl of Durham, another radical Whig and leader of the “Durham party” with which some of the Philosophic Radicals were associated. When Durham was Governor-General of Canada, one of them—Charles Buller—was his secretary. Durham was succeeded in Canada by Poulett Thomson (later Baron Sydenham), who was one of the early free traders in the House and also a sponsor of the Bank Charter and Factory Acts of 1833. He represented Manchester between 1832 and 1839 (not to the complete satisfaction of its radicals), and was President of the Board of Trade. He established its special statistical department, which, after becoming permanent, was directed by George Richardson Porter. He wrote The Progress of the Nation, a descriptive study of the British economy of the early nineteenth century. Its statistics often were called upon in controversies, and it was one of the economic writings of the period best known to the public. In 1839, he published a pamphlet against the corn laws, and he was the translator of the Sophismes of Bastiat (who wished to do in France what Cobden did in Britain).
The most influential journalist was James Wilson (the elder brother of George Wilson), who began The Economist in 1843 to give the free-trade movement an intellectual respectability which, he believed, the Manchester people were unable to do. Cobden was skeptical of the enterprise, but after seeing the first issue he was enthusiastic and proposed that when the campaign was over Wilson be given the subscription list of The League, the official publication of the movement. It was on the pages of The Economist more than anywhere that the public found a policy of unqualified laisser faire expounded. Though he gave his assent to such ideas, Cobden himself was not so much directed by them as by pacifism, and he broke with Wilson over the Crimean War, which The Economist supported.
Another distinguished figure among the free traders was Lord Radnor, an old-fashioned Whig who, along with Wilson, deplored the economic reasoning of the Manchester people and their brash methods. He tried to form an “antimonopoly club” among the free traders in Parliament and in the Reform Club to give the campaign social and intellectual distinction.
A more original figure was George Combe, a philosopher and psychologist. Cobden when young was a close pupil of his writings, and always admired Combe to the point of reverence. His major work was The Constitution of Man, in which the leading idea is that natural laws have a benevolent design and a retributive power. It is man’s duty to act energetically in accord with them; if he does not, he will be punished. It reads a little like Joseph Butler of the Analogy of Religion and Adam Smith of The Theory of Moral Sentiments, and altogether it is an inspiration for a conscientious man of action. It is from Combe that Cobden probably took his belief in a universal moral law, and combined it with his piety and energy. He must have found it quite congenial to read in Combe that the laws of nature are independent of each other, a point Combe illustrated by saying that moral sailors are not enough to keep a ship afloat, and which Cobden put a point to when he wrote to a French free trader: “Well, what must be done? Why, help yourselves and God will help you.”8
Combe was best known for his work in phrenology, which he tried to make into an empirical and applied psychology, and Cobden was enthuiastic about it from his youth onward, much more than he was about classical economics. The lordly Jeffrey wrote of Combe: “Phrenology in his hands has assumed, for the first time, an aspect not absolutely ludicrous.”9 It did, however, have that aspect to most of Cobden’s contemporaries, just as it has today. One may remark that its notions were hardly more absurd than, say, the labor theory of value, and report that modern psychology has discredited more of the practical workings of phrenology than its principles—and hence it has had a fate just the opposite of classical economics.
In view of the heterogeneity of the Manchester School, there is nothing surprising in its not having had a consistent and comprehensive doctrine. Each of the groups in the school had his own reasons for wanting free trade. The belief that it was the quintessence of laisser faire may come from supposing that anyone who wants free trade must hold such a doctrine. One interesting feature of the school is that it showed people can believe in free trade and work tirelessly for it without having a particular interest in liberal economic policy (nor investments in an industry that will profit by free trade). As one would expect, there were serious disagreements within the school, on ideas and strategy and manners, and it is a tribute to its leaders that they should have held it together until the issue was won. But repeal was itself a unifying force. It was an issue on which there was agreement among a great many people of otherwise divergent views. After 1846, there was no issue of so great a unifying force, which probably accounts for the fact that the school was never again as effective—a fact which many historians have remarked upon and which has caused them to observe that the school did not have a lasting influence. It expressed itself on many issues, and tried often to engage mass support, but on none as successfully as on free trade.
[1.]Report from the Select Committee on the “Bill to Regulate the Labour of the Children in Mills and Factories of the United Kingdom.” Session 1831-32 (London, House of Commons, 1832), XV, 317.
[2.]Ibid., XV, 321-22.
[3.]J. L. and Barbara Hammond, The Town Labourer, 1760-1832 (London, 1917), p. 42.
[4.]See J. Bartlet Brebner, “Laissez Faire and State Intervention in Nineteenth Century Britain,” Journal of Economic History, Supplement VIII (1948), 59-73.
[5.]Francis Place, Political Correspondence (MS. 35, 151, British Museum), IV, f. 230.
[6.]Report of Minutes in Evidence Taken by the Select Committee on the State of Children in the Manufactories of the United Kingdom. Session 1816 (London, House of Commons, 1816), III, 134.
[7.]Manchester-Salford Advertiser, Dec. 21, 1839.
[8.]J. A. Hobson, Richard Cobden, the International Man (London, 1918), p. 44, emphasis in original.
[9.]Charles Gibbon, The Life of George Combe (London, 1878), I, 187.
- Aquinas on fraudulent dealing
- Atkinson: Protection promotes War - Free Trade promotes Peace
- Bentham on Usury
- Boehm-Bawerk’s Theory of Capital
- Böhm-Bawerk, “On the Completion of Marx’s System (of Thought)” (1896, 1898)
- Böhm-Bawerk, “Zum Abschluß des Marxschen Systems” (1896)
- Cobden’s Speeches on Free Trade
- Cobden: An Appreciation I
- Cobden: An Appreciation II
- Condillac’s Economic Thought
- Coquelin on Competititon
- Coquelin on Industry
- Coquelin on Political Economy
- Demsetz and Property Rights
- Early Republican Economic Policy
- Eugen Richter and the Critique of Socialism
- Famous Economists and Political Philosophers
- Faucher on Property
- Fetter’s Economic Thought
- Friedman on “I, Pencil” & the Invisible Hand
- Friedman on Capitalism and Freedom
- Garnier on the Origin of the Term Laissez-faire
- Garnier on the Physiocrats
- Grampp on the Manchester School of Economics
- Hazlitt, The Future of Capitalism
- Heyne, Economics as a Way of Thinking
- Higgs on the Influence of the Physiocrats
- Hirst on the Manchester School
- Hutt, Reflections on the Keynsian Episode
- Ingram, History of the Early Austrian School of Economics
- Invisible Hand Explanations of Society
- Jasay, The Capitalist State
- Jevons on Richard Cantillon
- Kirzner on the Economic Point of View
- Kirzner, Entrepreneurship & the Market Approach to Development
- Lachmann and the Subjective Paradigm
- Lachmann, The Significance of the Austrian School
- Lalor’s Cyclopedia - 19thC French Political Economy
- Lalor’s Cyclopedia - Preface and Table of Contents
- Marshall on The Growth of Free Industry and Enterprise
- Martineau on Property & Slave Labour
- Martineau’s Primer on Laissez-Faire Economics
- Marx’s Works
- McCulloch on Smuggling
- McCulloch on the Balance of Trade
- McCulloch on the Corn Laws
- O'Driscoll, Spontaneous Order and Coordination
- Polanyi and Spontaneous Ordering
- Political Ideas of the Classical Economists
- Rae on the publication of the Wealth of Nations (1776)
- Richard Cobden’s “I have a Dream” speech (1846)
- Rothbard on the Prehistory of the Austrian School
- Rothbard on the Public Sector
- Say on Colonial Slave Labor
- Say on Markets
- Say on Property Rights
- Selgin on Free Banking
- Sennholz, The Chicago Monetary Tradition
- Sirc, Problems of Economic Resposibility
- Smart on Boehm-Bawerk
- Smart on Wieser’s theory of value
- The Economic and Ethical Thought of Paul Heyne
- The Manchester School of Economics by William Grampp
- Tullock and Scientific Inquiry
- Tullock, Application of Economics in Biology
- Viner on International Trade
- Walker on Public Revenue (1899)
- Walker on the Wage Fund (1899)
- Walker on Wages (1899)
- Wicksteed on the Psychology of Choice
- Yeager & Smith on Central Banking