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The British Balance Of Payments, 1772 1820: India Transfers And War Finance. Javier Cuenca Esteban. Economic History Review, Liv, 1 (2001). Pp. 58 86

1208 words - 5 pages

The article written by Javier Cuenca Esteban, “The British balance of payments, 1772-1820: India transfers and war finance” focuses on the British ability to finance the wars with Napoleonic France. Esteban challenges the academic state of debate regarding the importance of exports on British Industrialization by pointing out that he believes without the exports from India, Britain would have struggled to finance her wars with France and may have never become the incubator of Industrialization. His argument comes back to the numbers he presents projecting the gap between foreign indebtedness actual and counterfactual would increase from 1802 to 1815 by over ninety million British pound sterling. The significant increase in debt was projected at nearly a one hundred percent increase in foreign indebtedness, making it nearly impossible for any nation in a normal economic cycle to finance any endeavors. The author roots his argument in the belief that industrialization occurred due to military-fiscal states, which based their economic policy on sustaining prolonged military action overseas during the eighteenth and nineteenth centuries. Esteban argues the credit level achieved between India and Britain allowed for Britain to finance their global war, while also keeping the balance of payments from becoming uncontrollable. There remain little historiographical arguments claiming the British were obtaining Indian goods at fair market price for British exports and commodities as Esteban points out. This cycle of profit from imports from India explains the ability for Britain to expand while maintaining sustained military action on multiple fronts over these five decades. The author’s ability to attempt to quantify these figures in a practical sense makes his writing worth the analysis.
The author looks to pinpoint the trade value accounts by finding a solid base figure and moving the numbers forward through the time period. He spends great length analyzing the accounts of balance of payments for numerous categories to add up to the accumulated balance of Britain’s net credits (end years) in the final line of his ledger. Esteban sets the value of his calculations by creating an average of pre-existing calculations for the earliest time frame of 1772-1775 of net British debts. He relies mainly on figures derived from Walter Nash and Albert H. Imlah, both of which are Economic British Historians. The author then begins to advance each line according to their own specific histories. For instance he takes into account the raise of tariffs on certain products such as tobacco that would affect the quantity of illegal imports, thus affecting the real credit value. The author also goes into great detail to compensate for the stated inaccuracies of some numbers, by showing how numbers counter-balance one another to give an accurate final account of net credits. In the appendix he goes into great depth to explain each category as well as giving a price evidence...

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