- Manchester was part of a global network. Cotton textiles were shipped to Africa from cities like Liverpool and exchanged for slaves in Africa, who were subsequently transported across the Atlantic and sold to cotton farmers in the American South. British traders then purchased the raw cotton at low prices to ship back to Britain. Cities like Manchester manufactured the next round of cotton textiles, ready for the next outbound journey.
- Not only did Manchester sell cotton goods, it also exported the secret to its success: the machinery, which had made it super-productive. In Japan, Russia or Turkey you could literally order it “off the peg” from a contact in Manchester.
- Industrial Manchester allowed women many freedoms. In 1833, 58% of cotton factory workers were female and women accounted for almost 10% of business owners as early as 1788.
- Manchester is currently negotiating its urban and economic regeneration, and once again acting as a trailblazer by demonstrating the necessity of marrying creativity with entrepreneurialism. A recent study suggests that it is the entrepreneur and the artist, and not the politicians, the religious figures or the military that most contribute to successful city growth.
In the words of the historian Eric Hobsbawm, “whoever says Industrial Revolution says cotton”. And whoever says cotton says Manchester. Through both its economic successes and its economic sufferings, Manchester has been central to the great political and social movements of the last two centuries—from laissez-faire to the labour movement and the rise of the suffragettes—movements that changed Britain forever.
While cities have always existed, it is only relatively recently that they have assumed their modern dominance. In 1800, only 3% of the world’s population lived in urban areas. Today the proportion is one in two, and predictions suggest that 85% of the global population will live in towns and cities by 2100. This shift to modern-scale urbanisation began in Europe.
In the case of Britain, market orientation combined with technological developments, taking the country to the top of the urban league table. A productivity race between agriculture and industry, with industry was improving at the faster rate, reduced the relative cost of manufactured goods, while competition between producers lowered prices. Customers at home and abroad bought British manufactures, boosting the production of industrial goods and the development of urban centres such as Manchester.
Although for Marx and Engels, Manchester was capitalism in action, historians such as Ha-Joon Chang have suggested that British industrial success was largely due to state intervention dating back to Tudor times. However, there is a limit to how much Manchester’s (and Britain’s) success can be attributed to the state as opposed to the free market.
The global nature of the cotton industry cannot be underplayed. Manchester’s history in textiles dates back to Flemish immigrants of the fourteenth century, and is one that benefited from international labour flows. By the nineteenth century, Manchester had out-competed Indian textiles to become the leading global cotton manufacturer. Yet, however much Manchester benefitted from international influences, its technological innovation was utterly novel and a powerful formative influence on the modern world.
Manchester’s specialisation in cotton brought significant growth opportunities during the Victorian age, allowing the city to benefit from economies of scale, skilled labour, and knowledge spillovers. However, whilst specialisation can bring success, it can also tempt disaster. This was to be the fate of Manchester. After the First World War, the deterioration of economic conditions and the de-globalisation of the world economy hit the cotton industry hard. Unemployment soared, planting the roots of the North-South divide.
Cities are the drivers of long-term growth. They combine high levels of competition with deep labour markets, swift spread of ideas, and diverse entrepreneurial and intellectual capital. The West’s established urban structures still requires continual redevelopment if they are to continue to be competitive Maintaining economic success requires these cities to be connected to each other and their surrounding areas.
European cities are relatively small; a city like Manchester now pales in comparison with those found in emerging economies. In the future urbanisation will be most significant outside the West. There is a lot to be learned from the experiences of a city like Manchester—and a lot of mistakes that can be avoided.
The story of Manchester also has lessons for the capital. London thrives today, just as Manchester did, but it should not take its success for granted.
About the Speaker
Victoria Bateman is a Fellow in Economics at Gonville and Caius College, University of Cambridge, where she is Director of Studies for the Economics Tripos. She grew up in Manchester, and has degrees from both Cambridge and Oxford Universities. Her research focuses on the question of how the West grew rich and how modern day societies can become more prosperous, bringing together insights from a range of disciplines that help to challenge the standard set of answers provided by economists. Whilst her area of expertise is Europe, she has a broad interest in the economic history of all times and places with a view to drawing lessons that can help inform economies in the present. Bateman is author of the book Markets and Growth in Early Modern Europe (Pickering and Chatto, 2012), regularly reviews books for The Times Higher Education magazine and has contributed to programmes for BBC Radio 4 on everything from the welfare state to the causes of boom and bust. She is an outspoken critic of mainstream economics and has also sought to challenge traditional attitudes towards women. Bateman, who is also a Legatum Fellow, is a firm believer that gender equality is essential for economies to successfully prosper.
About the History of Capitalism Series
This series of lectures, which forms part of the Legatum Institute's 'The Culture of Prosperity' programme, investigates the origins and development of a movement of thought and endeavour which has transformed the human condition. Capitalism's characteristic emphasis on freedom of trade and market expansion has encouraged social mobility, global exploration and intellectual curiosity. Wherever and whenever it has appeared across the world's continents capitalism has undermined monopolies, economic protectionism and restrictive practices. The series' lecturers therefore assess case studies in business history and the individual biographies of thinkers, writers and inventors as well as describing particular periods in the histories of cities, states and nations. Further information available here.