The Cotton Industry and the British Empire

The British cotton industry was the first manufacturing industry of the modern world. By 1840 Britain was producing more than half of the world’s cotton cloth; by 1860, the figure was perhaps 60 per cent. The Lancashire cotton towns of Manchester, Bolton, Blackburn, Burnley, Rochdale, Oldham, Stockport, and Wigan were the principal centres of the industry; by 1860 they employed perhaps 400,000 workers. The 1861 census recorded that 31 per cent of the workforce of Blackburn worked in cotton; in Oldham the figure was 41 per cent. The cotton industry was, in the words of the economic historian S. D. Chapman, “the single most important determinant of British industrial growth between 1780 and 1850.”

Sven Beckert, in Empire of Cotton (2014), placed the British cotton industry at the centre of his account of the making of global capitalism. The argument is that the British cotton industry was the first modern industry because it was, from the outset, a colonial industry. The raw material came from the American South (a slave economy), from India (a colonial economy), and later from Egypt and the Sudan (colonial or quasi-colonial economies). The finished goods were sold in the British domestic market, in the European market, in the protected markets of the British Empire, and in the markets of the wider world. As Beckert put it: “Cotton was the leading edge of European global power.” The British cotton industry was both the model and the precondition of the modern industrial economy.

The Origins of the British Cotton Industry

The earliest British cotton manufacturing was conducted in the East Midlands, the West Riding of Yorkshire, and the west of Scotland. The 1733 invention of the flying shuttle by John Kay, the 1765 invention of the spinning jenny by James Hargreaves, the 1769 invention of the water frame by Richard Arkwright, the 1779 invention of the spinning mule by Samuel Crompton, and the 1785 introduction of the power loom by Edmund Cartwright together constituted what Kenneth Pomeranz, in The Great Divergence (2000), has called “the cluster of innovations that made Lancashire.” The innovations were technical, but their commercial viability depended on the supply of cheap raw cotton from the American South, where the invention of the cotton gin by Eli Whitney in 1793 had, by unlocking the long-staple upland cotton, made American production the cheapest in the world.

The British cotton industry, in its early decades, was a colonial industry. The 1784 Pitt India Act, which excluded the East India Company from direct involvement in the Indian textile trade, was the political precondition for the British industry’s competitive advantage. The Indian hand-loom weavers, who had supplied the world market in the eighteenth century, were progressively destroyed by the British tariff regime and the bulk imports of British machine-spun yarn. Tirthankar Roy, in The Economic History of India, 1857–1947 (2000), has estimated that Indian cotton-weaving employment fell from perhaps 5 million in 1800 to 1.5 million in 1900. The deindustrialisation of the Indian textile industry was, in Prasannan Parthasarathi’s phrase in Why Europe Grew Rich and Asia Did Not (2011), “the necessary condition for British industrial ascendancy.”

The Lancashire Cotton Industry

The 1830s saw the consolidation of the Lancashire cotton industry as the principal industrial enterprise of the British Empire. The 1840s saw the construction of the Liverpool-Manchester railway (1830) and the Manchester Ship Canal (1894), the two infrastructure investments that made Lancashire the centre of the world cotton trade. The 1850s saw the emergence of the “manufacturer” system, in which a small number of large firms came to dominate the industry, and the 1860s saw the consolidation of the industry under the joint-stock form.

The 1860s Lancashire Cotton Famine, the result of the 1861–65 American Civil War, was the worst economic crisis of Victorian Britain. The supply of American raw cotton — which had been 88 per cent of British imports in 1860 — fell to 2 per cent by 1862, and the price of raw cotton rose from 7d per pound to 31d. The number of workers in the Lancashire cotton industry fell by perhaps a third. The 1862 Cotton Supply Association, founded in Manchester by a coalition of cotton manufacturers and colonial officials, attempted to find alternative sources of supply. The Indian cotton exports to Britain increased from 200 million pounds in 1860 to perhaps 600 million pounds by 1865. The Indian supply, however, was of a different (shorter) staple, and could not be used for the finer goods that the American long-staple had made possible. The famine was a powerful argument, in British commercial and political circles, for the cultivation of cotton in the British Empire.

The Indian Cotton Industry

The Indian cotton industry was, in the late-Victorian period, one of the largest in the world. The 1919 establishment of the Indian Central Cotton Committee, the principal Indian cotton body, was the institutional foundation of the modern Indian cotton industry. The 1920s saw the emergence of the Indian cotton-mill industry in Bombay and Ahmedabad, producing yarn and cloth for the Indian domestic market. The 1930s and 1940s saw the consolidation of the industry under Indian ownership. The 1947 independence of India, the 1949 devaluation of the Indian rupee, and the 1950s import-substitution policies were the political and economic conditions for the post-independence Indian cotton industry.

The 1947 independence of India was the political marker of the decolonisation of the British cotton industry. The economic markers came more slowly. The 1950s and 1960s saw the emergence of the Indian, Pakistani, and Hong Kong cotton industries as serious competitors in the world market. The 1970s and 1980s saw the rapid growth of the Chinese, Indonesian, and Thai textile industries. The 1990s saw the consolidation of the world textile industry under a small number of transnational firms, and the 2000s and 2010s saw the concentration of textile production in China, Bangladesh, Vietnam, and (latterly) Ethiopia.

The American Cotton Supply

The American cotton supply was, for the nineteenth century, the structural condition of the British cotton industry. The 1861–65 American Civil War, by interrupting the supply, demonstrated the dependence. The 1880s saw the recovery of the American cotton industry and the re-establishment of the American dominance of the British cotton market. The 1920s saw the beginning of the relative decline of the British cotton industry, as the Japanese, Indian, and Chinese cotton industries emerged as serious competitors. The 1950s and 1960s saw the consolidation of the British cotton industry under a small number of large firms, and the 1980s and 1990s saw the disappearance of most of the firms. The Lancashire cotton industry, as a major employer, was, by 1990, an economic memory.

A Primary Source: Beckert on Cotton and Empire

Sven Beckert, in Empire of Cotton (2014), wrote: “Capitalism, as it arose in the late eighteenth and nineteenth centuries, was fundamentally and intrinsically woven out of cotton — and, equally, of slavery. The creation of the European-dominated global economy depended on the violent expropriation of land in the Americas, the enslavement of millions of Africans, and the destruction of textile industries around the world. … Cotton was, in short, at the heart of a complex set of transformations that historians are still struggling to understand.” The passage has been the single most influential statement of the “war capitalism” thesis in the early twenty-first century.

Historiographical Note

The historiography of the British cotton industry has been transformed since the 1960s. The older celebratory accounts — the histories of the Lancashire cotton towns, the biographies of Arkwright, Peel, and Whitbread — have been supplemented, and in places supplanted, by the critical literature: Beckert’s Empire of Cotton (2014), Parthasarathi’s Why Europe Grew Rich and Asia Did Not (2011), Pomeranz’s The Great Divergence (2000), and Roy’s The Economic History of India (2000). The unresolved question is how far the British cotton industry was a model of technological and commercial achievement, or an instrument of colonial extraction. The consensus, as the work of Branko Milanovic has shown, is that the two readings are not mutually exclusive.

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