Manchester School

("Classical Liberals")

 Newall's Buildings, Manchester; the headquarters of the Anti-Corn-Law League

The "Manchester School" was the term British politician Benjamin Disraeli used to refer to the 19th Century free trade movement in Great Britain.   The movement had its roots in the Tooke's 1820 petition of the London merchants and, took its name from  the Anti-Corn Law League (ACLL) of Richard Cobden and John Bright, which was headquartered in Newall's Buildings in Manchester, UK.

The British Corn Laws had been strengthened in 1815 to prohibit the importation of corn (i.e. wheat) until the home price became eighty shillings a quarter. More flexible Corn Laws were instituted in 1828 with a sliding scale of import duties rather than outright prohibition.  Although beneficial to landlords, the Corn Laws were detrimental to the populations in the cities, faced with higher food costs, and, consequently, industrial manufacturers, faced with higher wage bills and restricted foreign trade possibilities. The ACLL was thus set up in 1838 by Cobden and Bright.  After a concerted campaign, the Corn Laws were finally repealed by parliament in 1846.

Since then,  the general term "Manchester School" has been used to refer to radical liberalism/libertarianism in economic policy: laissez-faire, free trade, government withdrawal from the economy, and an optimistic stress on the "harmonious" effects of free enterprise capitalism.  As a result, the school's nature is largely "political" rather than purely "economic".   Its arguments are not necessarily couched in any particular economic theory.  Certainly in the early part of the 19th Century, its governing  principles were consonant with the economic theory of the Classical Ricardian School.  But the Manchester School was not tied to all the parts of that theoretical system, or wedded to any single coherent theory,  It was more likely to simply use intuitive supply-and-demand arguments á la Adam Smith.  Moreover, in its heyday, the Manchester School, strictly speaking, was associated narrowly with a single cause - that of free trade, that is, across countries, which did not necessarily imply the application of the principles of laissez faire internally within a country.  Many had only a vague idea of what the economic benefits might be, and approached it purely from a political or pacifist angle, believing that increasing trade across countries, would diminish enmity and the risk of war between them..

As the 19th Century progressed, classical liberalism increased in influence.  It was particularly influential through the medium of the interminable stream of pamphlets of the Cobden Club and newspapers such as Walter Bagehot's The Economist.  It had counterparts in the French Liberal School, founded by Jean-Baptiste Say, Charles Dunoyer and Frédéric Bastiat.  In America, its influence was mixed.  Although laissez faire was an item of faith internally, the manufacturing interests of the north vigorously favored external protectionism (the "American System"), and the case for free trade was marred by its association with Southern slave power.  Nonetheless, despite the triumph of protectionism in the US after 1861, Manchester school propaganda wafted across the Atlantic, and new voices were eventually raised in its favor.

Classical liberalism reached its apogee in the 1860s.  The Cobden-Chevalier treaty, signed January 23,1860, greatly lowering tariffs between England and France, were followed up in the next few years by additional treaties with other countries, e.g  Belgium (May 1861), Prussia and the German Zollverein (August 1862), Italy (January 1863), Switzerland (June 1864), Sweden and Norway (February 1865), the Hanseatic towns (March 1865), Spain (June 1865), Netherlands (July 1865), Portugal (July 1866) and Austria-Hungary (Dec 1866).  The "most favored nation" clauses ensured that additional benefits signed with a new country would also be given to prior treaty partners.  As such, from the Anglo-French kernel, a network of trade treaties created a nearly free trade zone across Europe, making the old Manchester dream a reality.  Among major powers, only the US and Russia remained stubbornly outside the system.  Although Russia finally capitulated and joined the network a decade later (April, 1874), the US stayed by its protectionist tariffs until 1913.

The era of liberalism did not remain unchallenged.  Socialist movements, launched in the 1860s, gradually became a force by the 1880s.  From the other side, the new imperialism of the 1880s-90s revived old Mercantilist ideas about autarkic imperial zones.  Joseph Chamberlain's campaign for an "imperial tariff system" around the turn of the century was defeated, but only just.

The bloodbath of World War I and the subsequent economic crises shook the faith of Europeans in the liberal bourgeois-capitalist order.  Liberalism reached its lowest period of influence in the inter-war period, as nation after nation embraced socialist planning and fascist corporatism as better ways of organizing economy and society.  The shock of  the Great Depression escalated the rapid raising of protectionist tariffs.

Liberalism was hobbled, but not quite dead.  After World War II, the GATT and Bretton Woods helped de-escalate and reverse the trade wars of the inter-war period.  During the post-war period of the "Keynesian" consensus, the erection of welfare states and the rise of development planning, its influence was faint. Nonetheless, the liberal flame was kept alive in public discourse by popular economists and statesmen such as John Jewkes, Walter Eucken, Wilhelm Röpke, Luigi Einaudi  Friedrich A. von Hayek, Milton Friedman, Murray Rothbard, Henry Hazlitt, James Buchanan and organizations such as the Mont Pelerin Society.  Things changed considerably in the 1980s, when "neo-liberalism" began to gain sway among policymakers in America and Europe.  Since the collapse of the Soviet Union in 1991, the consensus quickly came full circle.  With varying degrees of success, liberal policy doctrines have been exported not only to ex-socialist nations of Eastern Europe but have been taken on board by many developing nations.  Today, liberalism is at the height of its influence on public policy, having regained much of the ground that it lost since the late 19th Century.  

 

 

 HET

 

Resources on the Manchester School and Libertarianism

  • "The Tariff Question", 1824, NAR [moa]
  • "The Sophisms of Free Trade: Money, Labor, and Capital", 1854, NAR [moa]
  • "What Constitutes Real Freedom of Trade?", 1850, American Whig Review [moa]
  • "The Prospects of Liberalism in Germany", by K. Hildenbrand, 1871, Fortnightly Review, p.387
  • "The International and the Manchester School", by Lord Hobart, 1872, Fortnightly Review, p.191
  • "Individualism and State Action", by Thomas Whitakker, 1888, Mind, p.52

Modern

 


All rights reserved, Gonçalo L. Fonseca
 

 

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