While the material in the previous two chapters shows that the Conservative Party is superlatively well integrated into the British ruling class, it also raises an obvious question. What sort of ruling class is it whose political personnel remained until the 1880s dominated by landowners? What kind of capitalist class would leave political leadership to Greek and Latin students and allow its mass education system to be on so primitive a level as inevitably to hold back its economic future? How could the "First Industrial National" come to have a ruling class party dominated by bankers and brewers?
This point is important because it relates to a common misunderstanding both of the Conservative Party and of Thatcherism - one which sees the cause of Britain's economic and political crisis in such questions as the weight of the public schools, the supremacy of the cultural values of landowners, etc, and believes that there is something "irrational", from the point of view of British capitalism, in Thatcher's enormous destruction of British manufacturing industry. Such views can be found expressed at a popular level in the various editions of Anthony Sampson's Anatomy of Britain or, at a more sophisticated level, in what is now one of the classics on the "British crisis" – Martin Wiener's English Culture and the Decline of the Industrial Spirit.
At a political level such concepts form a basis of some of the political appeal of the SDP and the Liberals. On such an analysis there is of course no need to question capitalism as such in Britain. All that need be done is to remove certain of its most backward features – probably in alliance with "modernising" sections of the capitalist class against "backward" layers who support Thatcher.
While we cannot deal with all the ramifications of these issues here (but see the Guide to Reading) it is simple to make a few fundamental points. We shall do so by tracing the history of the British capitalist class itself.
Dominance within the British ruling class
To find that the Tory Party had its origins among landowners is not surprising. At least a century before manufacturing industry arose on a large scale in Britain the greatest concentrations of wealth and power in the country were in the capitalist landowning class. What is not so well known, however, is that the greatest concentrations of wealth in Britain were still in the hands of the capitalist landlords probably as long as a century after the Industrial Revolution had taken place. There is not the slightest doubt about this fact, either in relation to individual or to institutional forms of capital.
Although concentrations of personal capital are notoriously difficult to measure accurately, a relatively reliable guide, for the period prior to the introduction of death duties, can be gained from wealth left at death. Records of this have been extensively studied – by Marx in the 1860s and subsequently in much greater detail. All these studies show essentially the same, and extremely clear, historical distributions of wealth in Britain.
If we take as a measure of wealth those leaving £500,000 or more on death then the numbers of owners of such capital outside land did not overtake capitalist landlords in Britain until the 1860s.
If the criterion of leaving over £1,000,000 is taken then the shift did not take place until the 1880s (i.e. almost exactly the same time that the shift between the dominance of landed and non-landed capital was taking place in the Tory Party). Even if we assume that industrialists represented a younger generation which died later – and there are good reasons for assuming that this was not an important element in the situation - this still means that for almost a century after the Industrial Revolution it was landownership which continued to represent the greatest individual concentration of economic wealth in Britain.
This specific pattern of capitalist economic development becomes even clearer if wealth is looked at not just on an individual level, but also in terms of the concentrations of capital in the different institutions and sectors of the economy. As far as industry is concerned, Raphael Samuel, in his scintillating essay "The Workshop of the World", has shown on what extremely small units of production the Industrial Revolution and the manufacturing economy of the Victorian epoch was based. As Samuel puts it,
In juxtaposing hand and steam-powered technologies one is speaking of a combined as well as an uneven development. In mid-Victorian times, as earlier in the nineteenth century, they represented concurrent phases of capitalist development, feeding on one another's effects.... The industrial revolution rested on a broad handicraft basis, which was at once a condition of its development and a restraint on its further growth.Any idea that Britain leapt during the Industrial Revolution from the primarily agricultural based economy of the early part of the eighteenth century into a modern industrial epoch has no basis in fact. British industrialisation followed a far more long-drawn-out course than the process seen later in Germany, Russia, or today's "Newly Industrialising Countries". The scale of British industry in its period of industrialisation was also incomparably smaller than that of its later rivals.
The same pattern can be seen if the concentration of industrial capital, as well as the scale of individual units of production, is considered. Even by the 1880s the largest 100 industrial firms in Britain accounted for less than 10 per cent of total production - and this had only risen to around 15 per cent by 1909. Really rapid concentration of industrial capital in Britain began only after the First World War, when the share of industrial production accounted for by the largest 100 firms rose to 26 per cent by 1930, fell slightly to 23 per cent by 1948, and then rapidly moved ahead to 33 per cent in 1958, 38 per cent in 1963, and 45 per cent in 1970. However even then, as we will see, the most powerful development and concentration of capital in Britain still existed in sectors primarily outside heavy industry. In countries such as Germany, the United States, and Japan, the economy became dominated by industrial sectors such as steel, electronics, chemicals, and vehicle production. In Britain the economy was dominated by banking and land, and the manufacture of food, drink, and tobacco. Only in one truly modern sector, oil, did British capitalism develop an extremely strong position - and that was particularly linked to the military needs of its navy.
Concentration of land
In contrast to the situation of industry the concentration of landed capital in Britain had acquired quite staggering proportions by the last half of the nineteenth century. The most comprehensive survey of this period, the official Return of Owners of Land for 1873, showed that four-fifths of the land in Britain was owned by a mere 7,000 people. In certain areas of the country the situation was even more extreme. For example, in East Anglia 350 people owned 55 per cent of the agricultural land, and in Scotland the 25 largest estates alone accounted for a quarter of all land.
Seven people - the Dukes of Buccleuch, Devonshire, Northumberland, Portland and Sutherland, the Marquess of Bute and the Earl Fitzwilliam - had estates of over 100,000 acres and annual incomes of over £100,000 each (and income approximately equivalent to £2 million in rent in 1980 purchasing power). Two others – the Dukes of Norfolk and Westminster - had smaller estates but enormous incomes due to the geographical positions of their land (the Duke of Westminster, who owns much of London's Belgravia, is still today the richest individual person in Britain). A further six people - the Duke of Richmond, the Earls of Breadalbane, Fife and Seafield, Alexander Matheson and Sir James Matheson - had slightly smaller incomes but estates even larger than 100,000 acres. These fifteen persons alone can be said to have constituted the core of the British landed capitalist class.
Finally, the actual process of the building of towns, but before and after the Industrial Revolution, itself increased the wealth of landed capital. By the end of the eighteenth century, probably one-fifth of the expansion of London in the previous 200 years had been onto land owned by dukes and much of it was on leases under which the building reverted to the landowner. By 1866 out of 261 provincial towns, 69 were largely built on land owned by great landlords and 34 by gentry.
To rent directly derived from land in Britain another element must be added to understand the wealth of the British capitalist landowning stratum - and one with the profoundest historical consequences for the Tory Party and British politics. This is the question of Ireland. As subsequent developments have greatly distorted the true historical relations between British capitalism and Ireland, it is necessary to outline them briefly.
The first point that should be noted is that even the relative sizes of the populations of Britain and Ireland which exist today are in no sense a natural development. At the beginning of the nineteenth century the population of Ireland comprised some 33 per cent of the population of the British state.
By 1966 it had fallen to less than 8 per cent of the population of the states of Britain and the South of Ireland combined. In 1966 the population of England alone was ten times that of Ireland whereas in 1821 the English population had been only one and a half times the population of Ireland.
This tremendous transformation in the relative weights of populations did not come about through "natural" increase of the English population over the Irish. It was achieved through genocidal policies of the British state which resulted in the annihilation of large sections of the Irish people and the de-population of large areas of the country - the South of Ireland is today the only country in Western Europe which actually has a lower population than the same area had at the beginning of the nineteenth century. At the time of the first Irish census of 1821 the population of what is today the Southern Irish state stood at 5,086,000. By 1961 it had fallen by almost half to 2,818,000. As a comparison, the population of England from 1801 to 1961 rose from 8,538,000 to 43,350,000 and even the population of the North of Ireland expanded marginally.
The collapse in the population of the south of Ireland is explained not by any "voluntary" factors but by the effects of famine - above all the great famine of 1846 - mass emigration forced by poverty, and the effects of a standard of living based on mass misery. Anyone who had any illusions as to the supposedly "peaceloving" characteristics of British politics, and of its ruling class, need not even look to the barbarous policies carried out by Britain in Asia, Africa, or the Middle East. They need simply note the regime of mass annihilation and repression in Ireland - a policy which in its cumulative effects, if not its methods, stands comparison with anything achieved by Hitler. Its policy towards Ireland alone brands the British ruling class, and the Tory Party in particular, as one of the greatest groups of mass murderers in history.
The profits which this regime of extortion and massacre produced were, however, equally astronomic. By the middle of the eighteenth century £750,000 was being extracted annually in rents from Ireland to absentee landlords in England (roughly £45 million a year in 1980 prices). To give some idea of comparison it may simply be noted that at that time a "knight" might live quite adequately on £800 a year. By the beginning of the nineteenth century, roughly 1.5 per cent of British GNP alone was accounted for by rent from Ireland - most of it available for capital accumulation in Britain.
In the nineteenth century this struggle over British rule became one of the most decisive issues not only of Irish but of British politics. And by this time the need to maintain control of the crucial shipbuilding plants of Belfast had been added to the question of English landlordism. The outcome of this struggle, the clash over Irish Home Rule and Independence brought Britain closer to civil war than any other event in the twentieth century. Thefanatical Tory attachment to the Union with Ireland, its support for armed Unionist resistance to Home Rule and for the Curragh army mutiny of 1914, the fact that after 1886 the Conservatives publicly named themselves the "Unionist Party" - later amended to "Conservative an Unionist Party" - cannot be understood simply as a question of romantic attachment to Empire or the "integrity of the British state". It was rooted historically in the profound economic interests in Ireland of British capitalism in general and of the landed capitalist class in particular.
Industry, banking and commerce
The form of derivation of its wealth by the British landlord class gave to landed capital in Britain an enormous economic flexibility. Being derived from rent rather than tied down in direct agricultural production, capital accumulated in land could potentially be utilised in other sectors of the economy. Similarly, as no skill in agricultural production was required for landownership in Britain, it was easy for wealth made in other sectors of the economy to buy its way into land. This latter path then constituted a route to both political and social respectability and created a ready fusion of landed and various other forms of capital.
Wealth made in land was invested in trade and banking, and wealth made in trade and banking was invested in land. British landed capital, at least in its greatest concentrations, never constituted a cut-off estate as did the more feudal aristocracy of Germany, France and other European states.
Thus, for example, the two Mathesons already referred to were from families involved in Far Eastern commerce, while London bankers and merchants (such as Lloyd, Baring, Drummond and Rothschild) all bought their way into land. So also did brewers such as Barclay, Hanbury and Whitbread as well as West Indian merchants and plantation owners. Later in the nineteenth century, industrialists such as Tennant, Armstrong, Coats and Wills repeated the same process.
Developments throughout the nineteenth century also progressively opened up wider opportunities for British landed capital to participate in more general economic activities. The development of large-scale railway building from the 1840s onwards, for example, provided enormous opportunities for investment. Initially, the railway construction directly involved buying of land on estates and later created massive opportunities for portfolio investment - a type of utilisation of funds particularly suited to the rentier incomes of British landed capital. The wholesale creation of joint-stock companies in the last half of the nineteenth century opened up opportunities for investment to any section of landed capital with money available.
Despite this increasing opening for non-agricultural forms of activity for landed capital, however, for reasons discussed later, this fusion of landed capital with other sections of the ruling class was not achieved in anything like an even fashion. On the contrary, the unevenness of this fusion became one of the principal features of the British ruling class. Whereas in the eighteenth century the intermixture of landed, merchant, and banking capital had been achieved, no equivalent fusion took place in the nineteenth century between industrial capital and wealth made in land, banking, or overseas trade. The notorious division between banking and industry in Britain in reality has its origins in the very earliest periods of British capitalism.
Landed and non-landed wealth
The separation of industrial capital from other sections of the British ruling class can be easily illustrated by the most politically active section of the capitalist class - the membership of the House of Commons. The Parliament of 1841-47 that created the Conservative Party has been subjected to an extremely detailed examination by W.O. Aydelotte. We have already noted earlier that in this Parliament 81 per cent of MPs came from landed families. A further 9 per cent had made wealth in business. Between these two capitalist interests there was some important degree of overlap - 17 per cent of members of the landowning families in the House of Commons had major connections with business outside land and 40 per cent had at least some minor business connections.
But when the actual layers of overlap are considered a rather different reality is revealed. Of the fifty MPs from landed families who were regularly connected with non-agricultural capitalism, only six were manufacturers and three others were involved in railways, whereas there were eighteen bankers, nineteen merchants, a planter, a distiller and a stockbroker. In short, significant numbers among the most politically active landed capitalist in the mid-nineteenth century were involved with merchants and banking but virtually none with manufacturing industry. Landed capitalists with manufacturing interests represented under 2 per cent of the landed families represented in the House of Commons.
Throughout the rest of the nineteenth century this pattern is also clear. Manufacturing industry had in any case ceased to expand proportionately as a sector of the British economy by the middle of the nineteenth century, and this might in any case have tended to restrict the fusion of manufacturing capital with other layers of the economy. Even more importantly, however, the British economy had already begun to undergo an internal transformation to reach a structure which was very distant from one based on the core sections of heavy industry. Although the weight of non-landed capital increased throughout most of the nineteenth century, this was not due to any increase of wealth in what in other countries would have been regarded as the heart of the industrial economy.
To show this shift in the composition of the ruling class, we may once more take both criteria of individual wealth and the institutional measures of capital. Of those leaving over £1,000,000 at death, fortunes deriving from landed capital declined from around 89 per cent of the total in 1809-58 to around 36 per cent in 1880-99 - although, as can be seen, even this latter figure is still high. Textiles, the key nineteenth-century sector of British industrial capitalism, accounted, in contrast, for around 5 per cent of the total. Furthermore the proportion of fortunes made in textiles tended to decline in the latter part of the nineteenth century.
A similar trend can be seen in the metal industry. This accounted for around 10 per cent of non-landed millionaire wealth in the first part of the nineteenth century - that is under 5 per cent of the total - and it then declined. This pattern of individual wealth is easily explained by the changing economic structure of the period which we will discuss later.
The real sustained development of non-landed wealth from the mid-nineteenth century onwards came from layers outside the core of heavy industry. The financial and banking sector consistently accounted for between 10 and 20 per cent of those leaving more than £1,000,000 at death - meaning that land and finance between them easily accounted for the majority of the greatest concentration of individual and family wealth in Britain. From the middle of the nineteenth century onwards the food, drink and tobacco industries also accounted for around one tenth of millionaires (i.e. twice as much as the metal industry) and from 1858 onwards the distributive trades accounted for another 5 per cent.
A similar pattern of economic power shows up within the manufacturing sector if we consider not just individual wealth-holders but also companies. A list of the ten largest manufacturing companies for 1914, for example, shows four textile firms, three food, drink and tobacco companies, one construction supplier, and only one firm each from engineering and chemicals. The types of companies that were by this time dominating modern German and American capitalism (Siemens and AEG in electronics, IG Farben in chemicals, Krupp, Thyssen and Carnegie in metals, Rockefeller in oil) simply were not the dominant sections of British industry, let alone British capital. The core of heavy manufacturing industry - metal engineering, electronics, chemicals, steel - was already, by the late nineteenth century, a subordinate section of British capitalism. The peculiarities of the Tory Party we noted earlier, the weakness, and even collapse of manufacturing industry under Thatcher, are therefore not some "out of the blue" freak, but a logical link in an historical process.
Indeed, the point can be put very simply. The fundamental question which must be answered for the British economy is not why it is "deindustrialising", but why it ceased to develop its manufacturing industry so early in the first place. After rapidly expanding overall from roughly 1770 to 1830, the expansion of manufacturing industry as a proportion of the British economy then ended for a century - until after the defeat of the General Strike of 1926 and the onset of the depression of the 1930s. The entire flow of labour from agriculture, and the essential proportionate growth in the economy in the last two-thirds of the nineteenth century, went into what would now be regarded as the "service" sectors of the economy - finance, retailing, transport and communications. Only much later (around 1930), and under very different circumstances, did the growth of manufacturing industry as a proportion of the economy start again – although the effects of this have been undone, during the 1970s in general and by Thatcherism in particular. It is this grinding halt to the growth of manufacturing industry as a proportion of the British economy from roughly 1830 that underlies the relatively low level of individual and company wealth in sectors such as the metal industry, textiles, etc. and helps to explain the continued weight of landed capital and the growth of sectors such as banking, retailing and food, drink and tobacco manufacture which we have looked at.
This development of the economy, however, also explains the archaic features of the Tory Party, the nature of its leadership, the weight of the public schools and so on. As the British economy was not dominated by heavy manufacturing - as were the German and US economies, for example - the need to educate an advanced industrial workforce was a low priority for the British ruling class. So also was the creation of the type of political leadership necessary to run a modern industrial state. It was not the prevalence of public schools and the cultural supremacy of landowners that created the backwardness of the industrial structure, but the backwardness of the industrial structure which created the nature of the public schools and the cultural supremacy of landowners.
The anachronistic features of the Tory Party are not aberrant but reflect the character of the British ruling class itself. The dominance of the Tory Party corresponds to, and reflects, in the victory within the ruling class of layers outside the core of manufacturing industry. But to see why they were victorious we must consider why the modern political party system arose in the first place.