An Economic History of London, 1800-1914

Published by EH.NET (April 2003)

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Michael Ball and David Sunderland, An Economic History of London, 1800-1914. London and New York: Routledge, 2001. x + 470 pp. ?75/$110 (hardback), ISBN: 0-415-24691-1.

Reviewed for EH.NET by David R Green, Department of Geography, King’s College, London.

Any analysis of the economy of the largest nineteenth-century city in the world that claims to be comprehensive is bound also to be ambitious. The two authors of this sizeable volume, Michael Ball and David Sunderland, have produced a wide-ranging study that trawls through most of the existing literature and attempts to systematize our knowledge of the structure, processes and changes in London’s economy between about 1800 and 1914. At the same time, it argues that others who have written about the metropolitan economy have largely misinterpreted the evidence and made claims about the city’s uniqueness that do not stand scrutiny when set again economic location theory. Suggestions that London was somehow “preindustrial,” or backward, are dismissed, as too are claims that the city’s service sector was somehow the motor that drove the economy forward. Theories of urban change that interpret London as a “jewel-encrusted terror” (p. 4) and that provide “heaven and hell-fire conclusions” (p. 417) regarding metropolitan development do not, according to the authors, make much economic sense. They dismiss the arguments of immiseration theorists who have interpreted the evidence to suggest that London’s economy suffered structural crises, which impacted adversely on significant sections of the population. In short, we have a polemical book that seeks to dispel the myth of metropolitan uniqueness and instead tries to use relatively well-known economic location theories to explain the city’s economic trajectory.

The book is divided into seven sections dealing with different topics that impinge more or less directly on the urban economy. After a brief overview and discussion of theoretical concepts, there are chapters on population, work, wealth and living standards. This is followed by discussions of the growth of retailing and the mass market, leisure, suburbanization and housing. The provision of the infrastructure necessary to transport goods, services and people, is dealt with next, followed by chapters on manufacturing, services and finance. Welfare, social policy and government are then examined, followed by a final assessment of the structure, processes and patterns of change that characterized London’s economy.

Although much of the book’s contents will be familiar, what is novel is the way in which the authors try to weave various aspects of economic location theory into the explanation. Agglomeration economies, institutional theory and economies of scale form the core set of concepts around which the explanation is structured. The interrelationships among these economic processes and the London economy lie at the heart of the book. By clustering together, London trades and services were able to save costs in two sets of ways: the first are savings to be made by the fact of clustering — sharing of tools, access to labor and ideas etc.; the second concerns those savings made as a result of being part of a larger urban economy such as encouraging innovation, widening scope and providing insurance. Of course, diseconomies also existed, particularly as the city’s economy boomed and both population and traffic increased. Rising land costs, pollution, congestion and higher local taxes, to name a few, hindered growth and in a few cases outweighed the benefits of remaining in the capital. Clustering also helped reduce transaction costs, as did the institutional frameworks — those conduits through which economic processes work themselves out — that developed over time to ease the flows of capital and information and without which business could not function efficiently. Finally, economies of scale resulting from the sheer volume of economic activity made possible by the size of the London market, as well as its role as an export center, also helped firms reduce costs by encouraging a greater division of labor. In this way, rather than responding to the availability of cheap labor that arose as a result of large-scale immigration, the desire to capture a greater market share drove forward changes in production methods. That machinery was not used to a greater extent reflected both the nature of demand for fashionable goods that could not be mass produced and the difficulties of providing power. Instead, the production process was subdivided and speeded up to allow more efficient use of labor, thereby reducing unit costs. Although the concepts are articulated more explicitly here and applied to a wider range of activities than in other accounts, little of this will come as much surprise to those with a broad grasp of the London economy.

As well as the articulation of economic theory, the other main strength of this book is its breadth of coverage. The highly diverse nature of London’s economy is mirrored by the range of topics. It is correct that a large number of works, though by no means all, have focused on manufacturing — partly because they were interested in other issues and not just the way in which goods were produced and services delivered. Other research has explored different aspects, such as banking and financial services. However, here we have a single work that seeks to encompass all and, moreover, to use similar kinds of economic theory to explain common processes affecting location and economic change. Breadth is the name of the game here. When it comes to examining manufacturing, we not only have the better known examples of metropolitan industries such as clothing, shoemaking and furniture, but also some of the lesser well known trades, such as piano making, cigarettes and candles. Domestic, clerical and professional services are included as well as the City’s financial services. When it comes to spending on leisure and pleasure we have, to name but a few of the attractions that loosened Londoners’ purses, hotels and gentlemen’s clubs as well as pubs, music halls and pleasure gardens. The chapter on utilities encompasses gas, electricity and water, as well as the operation of metropolitan markets. Woven into the narrative are also chapters on retailing, suburbanisation and housing, transportation, migration, living standards and poverty, welfare and social policy, and government at the local and municipal level. In each chapter, topics are broken down into discrete sections, a form of structure that provides case studies but which always stands in danger of breaking up the flow of the argument. Providing choice examples whilst maintaining continuity is for the most part handled well — something for which students will most certainly be thankful.

Inevitably, perhaps, in a book that relies entirely on secondary evidence, there are gaps in knowledge and coverage. There are chronological gaps that arise either because of the lack of work in specific fields, or the omission of existing references. For example, when dealing with the provision of poor relief, there is hardly any mention of the period after the Metropolitan Poor Act of 1867 and the subsequent crusade against out-relief, a result of the over-reliance on my own work that ends in that year. James Treble’s work on urban poverty (Urban Poverty in Britain, Batsford, London, 1979), one of the very few to adopt an explicitly comparative framework on the topic, is not cited. There is relatively little on London’s role as an imperial capital, with all that entailed in terms of conspicuous expenditure on the paraphernalia of empire such as government offices and architectural achievements. Whether or not the cultural dimensions of imperialism are considered important — and culture is deliberately downplayed throughout — anyone who has ever considered the economics of aesthetics will know that grandeur costs money and although London’s imperial architecture might not have matched that of Vienna or Paris, the range and scope of expenditure was impressive. More too might have been said of the very rich and the economics of emulation that being rich in the capital city entailed. Nor is there much on the range of institutions that fostered the spread of ideas so crucial to maintaining London’s industries and services at the forefront of technological and organizational innovation. Learned societies, universities, mechanics institutes and other such institutions that fostered flows of information and ideas are conspicuous by their absence. Institutional theory is, in part, about the rules of the game, but it is also about the means by which those rules are disseminated and in this respect such knowledge creating institutions play a central role in fostering innovation. Finally, with some judicious copy editing the book could have been made shorter and the bibliography more accurate. Volumes and page numbers are given inconsistently and some articles from the London Journal are attributed to a non-existent journal noted as London Studies. One hopes that in a second edition – perhaps one more suited to the pockets of undergraduates — these infelicities will be corrected.

However, to end on this note would not do justice to the book — even if the authors’ own tone sometimes verges on the quarrelsome. An enormous amount of information has been synthesized and presented in an articulate and clearly organized fashion — no mean feat given the range of examples and issues covered As a review of the existing evidence, this work has no parallel and is an extremely useful reference point for anyone interested not only in nineteenth-century London but also more generally in economic change over the period. Linking theory to evidence in a jargon-free way also allows the reader to move from one to the other in a seamless way that raises serious questions not just about London’s economic structure but also about the processes that linked the capital to the rest of the UK economy. Though it might not excite the imagination, it certainly provides food for thought.

David Green is editor of the London Journal. His publications include From Artisans to Paupers: Economic Change and Poverty in London, 1790-1870 (1995).