Rear Window: Free Trade: An idea made in Lancashire that came home to roost

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BILL Clinton remarked last week that there was no alternative to free trade. 'No one has yet made any convincing case,' he said, 'that any wealthy country can lower unemployment and raise incomes by closing up its borders.'

The President was expressing a modern economic orthodoxy. Many tariffs still impede trade and there is no shortage of people wanting to close up borders, but the theory of free trade commands the high ground of international politics.

The General Agreement on Tariffs and Trade, whose latest package of measures will stand or fall in the next few weeks, is widely seen as the means of bringing closer that economic nirvana where the market will be the world.

In the last century, the words 'free trade' divided Britain. A lecturer at Cambridge who advocated it to students in 1839 precipitated 'a destructive and sanguinary riot'. The local paper praised the outraged undergraduates who brought the lecture to an end as 'the friends of good government and the upholders of the religious institutions of the country'.

In favour of removing the protectionist shield were the new industrialists, who were finding insufficient markets. The poor, too, wanted an end to the Corn Laws, which kept food prices artificially high. Opposed to change were the traditional ruling classes, whose incomes came from the land.

Nowhere was the cause more ardently supported than in the cotton belt of Lancashire. There it was, says John Garrard, a historian of the 19th century at Salford University, 'a sort of religion'.

Its great evangelists were two mill-owners, John Bright and Richard Cobden, who made the Anti-Corn Law League a mass movement embracing merchants and workers alike. 'The cause was portrayed in moralistic terms,' says Garrard, 'as a movement of the progressive, urban industrial

areas against the backward, aristocratic rural areas.'

Over the seven years from 1839 the argument was won, as Sir Robert Peel (a Tory, but from a Lancashire mill-owning family) repealed the Corn Laws, scrapped hundreds of other tariffs and, to balance the government's books, introduced income tax. Somehow, good government and religious institutions survived.

Did Lancashire prosper? It did, beyond the most extravagant dreams of Cobden and Bright. Cotton became the country's biggest industry and the towns between Manchester and Preston clothed half the world. Oldham most of all symbolised this explosion. A small town in the 1830s, by the end of the century it had more spindles than all of France and Germany combined. Oldham was held in awe locally, its big limited companies obsessed with profit margins and machinery and indifferent to the fripperies of civic grandeur that seduced their neighbours.

How far free trade deserves the credit for this boom is not clear today, although 19th-century Lancashire never lost its passion for the cause. Free trade had a short reign. France and Germany accepted it, but the United States did not, and as recession struck towards the end of the 19th century the barriers went up again. Even India, the jewel in the British crown, took steps to defend itself against British cotton.

If free trade served British cotton well, it did so only when Lancashire had the technical and financial advantage. When the rest of the world caught up - often having nurtured its young industries behind barriers of protection - the mills of Oldham were doomed.

(Photographs omitted)