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British Public Investment, Government Spending, Housing, and the Industrial Revolution: A Study of Governmental and Social Surplus Absorption

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  • Lambert, Thomas

Abstract

When it comes to the British Industrial Revolution of the 18th Century, much of the mainstream economics literature has tended to focus on how property rights, limitations on the crown or government, and changes in agricultural and manufacturing techniques have caused a great transformation in the nation’s economic formation. Marxian and other heterodox economics views acknowledge these developments but also emphasize the enclosure movement and the development of a class of people that becomes an exploited proletariat. Both sets of views acknowledge the role of the British government in facilitating the Industrial Revolution, but in doing a review for this paper, there is only a small amount of literature on how government investment and spending and the housing of workers may have helped to spur on or exist simultaneously with the revolution. This is especially true within heterodox schools of thought, and this paper aims to add to the heterodox economics literature by discussing how government investment and spending, and investment in housing, dramatically assist with surplus absorption during the Industrial Revolution, which in turn helps the British economy to achieve greater heights. Datasets that have been developed over the last 15 years or so can be used to illustrate this. Finally, by using the concept of the Baran Ratio, it can be shown that a significant portion of the nation’s economic surplus is absorbed by government spending and investment and housing investment, and much of this in turn would have helped private business investment and spending in absorbing as much of the surplus as possible.

Suggested Citation

  • Lambert, Thomas, 2022. "British Public Investment, Government Spending, Housing, and the Industrial Revolution: A Study of Governmental and Social Surplus Absorption," MPRA Paper 115196, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:115196
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    References listed on IDEAS

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    1. Broadberry, Stephen & de Pleijt, Alexandra M., 2021. "Capital and Economic Growth in Britain, 1270-1870: Preliminary findings," CAGE Online Working Paper Series 546, Competitive Advantage in the Global Economy (CAGE).
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    3. Barro, Robert J., 1987. "Government spending, interest rates, prices, and budget deficits in the United Kingdom, 1701-1918," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 221-247, September.
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    5. Dan Bogart & Oliver Buxton Dunn & Eduard J. Alvarez‐Palau & Leigh Shaw‐Taylor, 2022. "Organizations and efficiency in public services: The case of English lighthouses revisited," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 975-994, April.
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    7. Dan Bogart, 2012. "Profiting from Public Works: Financial Returns to Infrastructure and Investment Strategies during Britain's Industrial Revolution," Working Papers 121304, University of California-Irvine, Department of Economics.
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    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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