The Bear’s Lair: One-party governance kills economic progress

The United States is currently in a situation where, after a short and beleaguered period of partial opposition control, one party controls the Presidency, both houses of Congress, much of the judiciary, the media and the tech sector. We have seen such dominance before in Britain: in the Whig Supremacy of 1714-62 where with Royal support Britain became a one-party state; the Industrial Revolution was thereby delayed by half a century. We should examine the structural reasons why this happened and their applicability to our day.

Much like the 2020 election, the shift to Whig rule in 1714 did not meet with universal acclaim. Most of the country did not want a Catholic King, so since the Old Pretender (son of James II) had refused to convert to Protestantism in 1713, there was general acceptance of George I’s accession to the throne, by the Act of Settlement, 1701. However, George I, a dull-witted man, insisted on replacing the existing Tory government with Whigs who were more to his taste. Since September 1714, when he did this, was less than a year after a Tory landslide victory (about 354 seats to 148) in the election of 1713, his coronation the following month was met with serious riots, everywhere except in the Whig hell-hole of London, with cries of “Sacheverell for Ever! Down with the Roundheads!” As Linda Colley nicely put it, political life for the first six months of George I’s reign had a “gangland” quality.

Once the Whigs had established themselves in power by the 1715 election (in which the Whigs controlled the “close” boroughs though Tories got a majority of votes cast, as they continued to do through the 1730s) they took care, with support from George I and George II, to ensure that the Tories were kept out until 1760, with any voter dissent from this one-party state rigorously repressed. Only when a new King, George III acceded in 1760, did the Tories get a look in; the Whig Duke of Newcastle was finally levered out of office in May 1762 and power thereafter alternated between the parties.

During their long tenure of power, the Whigs ran a thoroughly repressive government. They passed the Septennial Act in 1716 to give Parliament a 7-year term instead of the existing 3, reducing opportunities for the opposition and postponing the next election until 1722. Then they passed the Transportation Act, 1717, allowing them to transport dissidents to the American colonies as contract labor, the Artificers Act 1718, preventing skilled workers from emigrating, the Black Act of 1722, inventing no less than 100 new working-class crimes that were eligible for the death penalty and the Workhouse Test Act 1723, modifying the benign 1601 system of “outdoor relief” to force indigent workers into “workhouses,” where their lives were subject to arbitrary control.

After that, the Whigs’ flow of repressive legislation slackened, though as late as 1750 their attitude to the working classes was shown by the Calendar (New Style) Act 1750, which forced tenants rather than landlords or employers to absorb the full cost of losing 11 days in changing from the Julian to the Gregorian calendar.

The result of all this repression was quite clear – it stopped the Industrial Revolution stone dead. Industrialization had already started in the mixed Whig/Tory reign of Queen Anne, with Abraham Darby’s coke-based iron foundry beginning operation in 1709 and Thomas Newcomen’s steam engine seeing the light of day in 1712. Then progress stopped for half a century. There was no expansion of Darby’s iron ore smelting at Coalbrookdale until the late 1750s, while Newcomen’s steam engines, although widely adopted for pumping water out of mines, remained the “state of the art” in steam technology until 1780 or so.

The Industrial Revolution, which had made extraordinary progress in the Tory-led Restoration years and continued its momentum in 1688-1714, was thus stalled. Only in the 1760s did the number of patents suddenly double from the modest levels of the previous half century, while Josiah Wedgwood, Richard Arkwright and the Carron Iron Works all got going during that productive Tory-dominated decade.

The Whigs of 1714-62 were not trying to stop the Industrial Revolution; since it had barely got going they had no idea of its existence. They were simply trying to repress dissent and social turmoil, but their policies made it more difficult for a skilled craftsman (the principal instigator of industrial progress, as the future was to show) to try anything new and greatly increased the downside risks, through transportation, the Black Act and the workhouse, of any corner-cutting or failure. Thereby, they changed the technological climate from the pluralistic and highly innovative Restoration period to one of un-innovative placidity. There were opportunities for clever, unscrupulous and greedy young men (mostly middle-class ones) under the Whigs, but they were in finance, in running slave plantations in America or the West Indies, or in appropriating portions of the immense wealth of India.

This discussion has I hope made it clear that the problem was not the Whigs’ social and economic ideas themselves – they barely had any of the latter – but the suppression of differing opinions and approaches characteristic of a one-party state. The unhappy history of centrally-planned economies in the Soviet Union and Eastern Europe further illustrates the same problem – those societies were even more intolerant of outside dissent than Sir Robert Walpole, and their economies suffered accordingly. China also is running into difficulties now because Xi Jinping is far less tolerant of dissent than his predecessors; if he succeeds in imposing his authoritarian approach over China for the long-term, the Chinese economy can be expected to break down, unless it can continue to suck in subsidies from foolish Westerners.

In the United States today, we are close to having a 1-party state like that of the Whigs in 1714-62. The brief 4-year respite from “woke” government represented by President Donald Trump was at best partial and is now over. More important, the media, the bureaucracy and the tech sector, effectively all the major institutions of our polity, are pulling in the same direction.

Under Walpole, the government and the King pulled in the same direction and a high percentage of the press was effectively controlled by the government through bribery. However at least after 1727 there was a very effective opposition press in Henry St. John, Viscount Bolingbroke’s “Craftsman” as well as other lesser journals such as the “Free Briton.” By the 1730s, despite the government’s lavish subsidies to reliably Whig if dull journals, most of the talent was working for opposition papers. As Dr. Johnson said when taking up the position of parliamentary reporter for the “Gentleman’s Magazine,” (at that time illegal) disguising his efforts as debates in the mythical Senate of Lilliput, he would always “make sure that the damned Whig dogs did not get the better of it.”

Today, there is no equivalent talent among opposition journalists; if Dr Johnson today attempted to report on Congressional proceedings with the same attitude, he would be struck off Twitter, cancelled by Facebook and probably de-platformed by Google. Walpole, much to his fury, had no such instruments of censorship available to him.

Today’s effective one-party state will have the same effect as Walpole’s. Blue-collar types are thoroughly repressed, as crazy monetary policies inflate asset prices and deflate wages, so they find it very difficult to break out on their own and set up small businesses – thus the business formation rate is half the level of the late 70s. Ideologically, their non-“woke” opinions are condemned by their bosses in the companies they work for (who are led to do so by HR goons) as well as by the media and the tech behemoths. Consequently, like the skilled working men of 1730, they are prevented from pursuing the innovation that might lead us to a second Industrial Revolution. As for the MIT and Stanford graduates, from whom such innovations are supposed to come, they have now been so suppressed by decades of thought control that they are incapable of having any original ideas at all, except the dull pointless innovations approved by the authorities. Thus, the Second Industrial Revolution will prove stillborn.

One can only hope, that the inevitable economic crash and burst of inflation scares the public straight, so that they replace the current one-party system with something of greater diversity. Unfortunately, the Chilean referendum last weekend suggests that, given bad enough education, the public is quite capable of reacting to adversity by voting for something even worse. Argentina has gone down that route, Chile looks likely to follow and if we are unlucky, the United States will also turn in that direction. Such are the disadvantages of democracy.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)