British exports, they suggest, suffered from reliance upon commission agents, which meant that there was little contact between the foreign consumer and the home producer. Above all, it is claimed that merchant bankers were more concerned with foreign loans and the finance of overseas trade, and neglected the needs of domestic industry for investment. The merchant bankers were socially distinct from provincial industrialists, and it is argued that they formed marriage alliances with the landed aristocracy and shaped economic policy in the interests of finance rather than industry. The validity of these criticisms is open to dispute in the late nineteenth century, and it would certainly be inappropriate to apply them to the period before 1850 when British industry was establishing an unrivalled dominance of world trade. The use of commission agents allowed manufacturers to penetrate new markets, and to escape from problems of declining profit and over-production; the provision of trade credit by acceptance houses freed industrialists to use their own capital in production. It is by no means obvious that the German or American pattern of investment by bankers in industrial concerns was preferable to the British pattern of provision of trade credit, which gave industrialists a greater degree of flexibility and autonomy.
Between 1700 and 1850, some of the most significant changes in the British economy were in marketing and distribution: goods were more easily moved around the country as a result of changes in the transport system; and the pattern of wholesale and retail trade was transformed. The consequent fall in transaction costs was as significant as changes in production: markets became more integrated, and competition less 'imperfect', which allowed specialization to develop, both in agriculture and in manufacturing. This in turn led to a fall in costs, as regional economies concentrated on goods in which they had the greatest comparative advantage; the division of labour could be carried further; there were internal economies in the firm and external economies as a result of the emergence of specialist services within regional networks of towns.