David Armitage looks at the pyrotechnic career of the founder of the Bank of England (300 years old this summer) and his contribution to the Financial Revolution that arguably launched Britain on the road to economic pre-eminence.
Every schoolchild once knew that Britain rose to greatness with a roll of revolutions, variously English and Glorious, Puritan and Scientific, Financial and Industrial. Yet quite which did the most to propel Britain to pre-eminence has been as much a matter of contention as whether any of them took place at all. Revisionists and sceptics have cut Britain's revolutions down to size as rebellions or evolutions, but this pruning has left one revolution flourishing all the more vigorously. The Financial Revolution in England - first so called by P.G.M. Dickson in 1967 - was a late-comer onto the historiographical stage, but in recent times it has stolen the show. The undeniable fact that by the mid-eighteenth century England had grown from a bystander in European power-politics to the major player demands explanation: the strength of Britain's institutions of public finance and revenue-collection provides a large part of the answer.
Eighteenth-century Britain became, in John Brewer's phrase, a |fiscal-military' state like Prussia or France, able to command vast domestic resources of tax and credit in order to underpin the pursuit of international war. The second Hundred Years' War between France and England - from William III's wars to the battle of Waterloo - demanded the commitment of huge resources of blood and, especially, treasure. Taken together, the institutional innovations compelled by those wars amounted to a revolution in public finance which took off in the 1690s. Even before any putative industrial revolution, therefore, those institutions which answered to the imperatives of war had long since supplied the indispensable platform on which pre-eminence would be raised.
The Financial Revolution has not escaped the revisionists. They have argued that there was no miraculous take-off in the years after 1688-89: the major developments in banking, public finance, and credit of that period were continuous with at least three decades of earlier, albeit slower, institutional innovation. Financial evolution had marked the years since 1660. though the pressures of England's entry into its first sustained continental military commitments since the mid-fifteenth century quickened the pace of change to revolutionary speed. Yet none of this would have been possible without the major institutional changes which gave the English a strong Treasury, the mixed blessing of a National Debt and - most memorably of all to that mythical schoolchild - the great physical symbol of Britain's monetary muscle, the Bank of England, which was chartered 300 years ago next month on July 27th, 1694.
The financial innovations of the late seventeenth century made revolutionaries of some unlikely characters. These were ingenious, persuasive and vigorous men who made up what Macaulay later called |a crowd of projectors, ingenious, absurd, honest and knavish, who employed themselves in devising new schemes for the employment of redundant capital' in the decades after the Restoration, and who truly came into their own under the new pressures of the Williamite wartime economy. Daniel Defoe, in his Essay on Projects (1697), thought his own time |The Projecting Age', and indiscriminately listed among those who pretended to the Despicable Title of Projector' the inventors of diving-bells and turnpikes, windmill-makers and stock-jobbers, saltpetre-men and bank-promoters. Even contemporaries had difficulty in telling apart the honest and the dishonest, the ingenious and the absurd, from the crowd of lively minds. Among them was a charismatic Scotsman with a varied background in colonial and Continental trade, a silver tongue, and a few guiding conceptions for projects which he peddled ceaselessly around Europe. …