Capital Formation in Great Britain

Abstract

Justification Conjecture: an opinion formed on slight or defective evidence or none. The above definition conveys very well the true character of many of the results which emerge from the exercise which follows: the estimation of capital accumulation over the period 1760–1860. As will soon be abundantly clear, the sources at present available for this period do not provide the evidence which would enable one to construct even moderately respectable estimates for certain key sectors – notably manufacturing – and hence for the whole economy. At crucial points we are able to proceed only by reliance on conjecture and speculation. The results are accordingly of limited pretension and humble status; the most that can be claimed for them is that they may indicate the broad orders of magnitude of the extent of the capital expenditures in each decade on both fixed assets and inventories, at home and abroad, and of the corresponding growth of the stock of capital; the approximate distribution, by sector, of domestic fixed capital; and the broad pattern and rate of change of capital over the hundred-year period in relation to the growth of population and of the national economy. What justification is there for attempting at this stage to construct new estimates for the economy as a whole, when so much still remains to be done on the individual sectors which can alone provide a proper foundation for aggregate estimates? Partly the answer is to be found in the great historical importance of this period of early industrialization in Britain, the uncertainty surrounding the existing estimates, and the desirability of bringing together the estimates for individual sectors which have resulted from investigations undertaken since the last synthesis was prepared.

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