Measuring the national wealth in late-18th century Britain

"Early modern economic historians continue to be fascinated and perplexed in equal measure by the national income and social structural estimates of late seventeenth-century political arithmetic (for two recent discussions see Slack 2004; Arkell 2006). For Richard Stone, William Petty’s pioneering national accounts – which implied a national income of £40 million in 1665 – represent a ‘landmark in economic history’ (Stone 1997:30). By contrast, the income estimates of a century later, generated in connection with William Pitt the Younger’s income tax proposal, no longer command significant scholarly interest. Having been superseded by Deane and Cole (1962), whose estimates have in turn been challenged and revised by Crafts (1985) and Broadberry et al (2010), the national income estimates of William Pitt (£125 million), Henry Beeke (£209-£217 million), Benjamin Bell (£236–£243 million), and Patrick Colquhoun (£222 million) are now largely redundant from the point of view of historical national accounting, and indeed economic history more generally. It is arguably only Colquhoun’s updated version of Gregory King’s social table that has attracted any sustained analysis in the last three decades (Lindert and Williamson, 1983). The aim of this paper is not to rehabilitate these commentators’ calculations, but rather to assess the extent to which their estimates stemmed from similar methodological and theoretical assumptions concerning the measurement of national income. I aim to shed new light on how contemporaries conceptualized the national economy. Whereas Slack (2004:625) has argued that in the late seventeenth century ‘[William] Petty set the numerical parameters as well as the methodology for his successor [Gregory King]’, I find that the late eighteenth and early nineteenth-century heirs to the Petty-King tradition displayed a much greater degree of numerical and methodological autonomy. To account for this I examine the contrasting policy objectives of the commentators under consideration, drawing attention to the significance of Pitt’s decision to exempt labourers’ incomes from his new income tax. Although Pitt shared with Petty and King a desire to mobilize a greater share of national income for military ends, he differed on the means. Rather than increase excise duties, as Petty and King had consistently advocated, Pitt sought to make the tax burden fall more heavily on the wealth of landed, mercantile and professional classes in order to make the distribution of taxes more equal. Pitt’s decision to exempt wages from his new tax provoked a flurry of other, more comprehensive, national income estimates, one purpose of which was to cast doubt on the reliability of Pitt’s revenue forecasts. At one level, then, the alternative estimates of national income produced by Benjamin Bell and Henry Beeke in particular can be understood as deliberate interventions designed to influence (and change) fiscal policy. At another level, however, Bell and Beeke made profoundly different assumptions about the size of the British economy’s land and labour inputs to arrive at their estimates. I explore these differences and show how sensitive estimates of national income were to what were little more than conjectures about Britain’s recent demographic history. Thus while in some respects political arithmetic – or the art of expressing oneself ‘in Terms of Number, Weight, or Measure’ (Petty 1690) – had shed some of its methodological uniformity by the late eighteenth century, in other respects, it remained severely hampered by the failure of central government to provide better data on the basic parameters of economic activity. Seen in this light, late eighteenth-century efforts to measure national wealth thus provide one important, and hitherto neglected, context for understanding the origins of the first British census of 1801."