Why Were the Corn Laws Repealed in 1846 free essay sample

Although the repeal of the Corn Laws is one of the most studied questions in 19th century tariff politics, its historical interpretations are still disputable today. The repeal of the Corn Laws is historically relevant because of â€Å"its alleged significance as an indication of the waning of aristocratic domination of British politics† (McKeown 1989: 353). Historiography has to solve the following empirical puzzle: in 1846 Charles Villiers (a leading member of the Anti-Corn Law League in parliament) proposed total and immediate repeal of the Corn Laws, just as he had in preceding years. The motion was overwhelmingly defeated. Yet, only a few weeks later, Peel laid his motion for repeal before the House. By 16 May, Peel’s version of repeal had passed its third reading (Brawley 2006: 467). Sir Robert Peel counted on more than 300 votes for passage of repeal in 1846, implying a winning margin of 90 votes (McKeown 1989: 356). However, this shift in political support began as soon as 1842. Moreover, from the beginning of their implementation the Corn Laws were not without controversy in the Tory Party itself (section 5). After having sketched the historical debate (section 2), as well as the implementation of the Corn Laws with the Importation Act 1815 (section 3), this essay analyses in how far external shocks (4), theoretical development (5) or interest groups (6) contributed most to the policy reform in 1846. Another possible cause of the repeal might be found in the different understanding of the adjustment process of repeal, changing the interests of landowners (7). Finally, this essay concludes that several long term developments, the increasing fear of a new Irish Famine as well as the changing nature of landowners’ interests can explain why the Corn Laws were repealed. Furthermore, Peel as a person plays a role insofar as he was open to new evidence and can be considered as an undogmatic politician: a typical representative of British Empiricism. 2. THE HISTORICAL DEBATE Originally the Corn Laws were designed to protect cereal producers in the United Kingdom of Great Britain and Ireland against competition from less expensive foreign imports between 1815 and 1846. The high import duties, which were imposed by the Importation Act of 1815 (repealed by the Importation Act of 1846) prevented the import of grain from other countries. The Corn Laws improved the economic situation of landowners by increasing the price of grain and inducing cultivation on less productive land; the land rents thus increased. Since grain was the major consumption good of labourers, the high price of grain necessitated an increase in the nominal wages of labourers and thusly reduced the profits of manufactures (Irwin 1996: 94). The essential matter was therefore food prices, since the price of grain influenced the price of the most important food staple: bread. 3. THE IMPORTATION ACT OF 1815 The Importation Act of 1815 thus â€Å"provided protection to British agriculture, primarily benefiting the landlords who dominated parliament† (Irwin 1989: 41). Landowners were a long-established class, who were heavily represented in Parliament. The Tory Party, dominated by the landowning aristocracy, and Peel supported protection of agriculture in the form of the restrictive Corn Law of 1815. Additionally, the political representation of the landowners’ interests was supported by Malthus at his concern about the dependence on foreign supply (Irwin 1996: 95-97). After having sketched the political and economic logic of the implementation of the Corn Laws, this essay will deal with the question as to how and why the Corn Laws got repealed in 1846. I will consider whether it was the shocks or long-range developments, a shift in political representation of interest groups or the change of personal or public beliefs, which caused the repeal. 4. AN EXTERNAL SHOCK: THE GREAT FAMINE One of the most obvious explanations can be found in using external shocks leading to the different policy outcomes in 1846. As stated in the first section, on 1st of March 1846, Charles Villiers’ proposition to repeal the Corn Laws clearly failed as in preceding years. On March 7th, John Mitchel, one of the leading political writers of the Irish newspaper â€Å"Young Ireland†, wrote an article on English Rule that people could expect a famine any time soon and that this event would be not attributed to the rule of heaven as to the greedy and cruel policy of England† (Mitchel 1846). Although the government had â€Å"received already urgent notices beginning in October 1845 of a failure of the Irish potato crop, raising the fear of famine† (Irwin 1989: 52), this article expressed a new form of criticism of English trade policies. This indicates two things: first, that political pressure from Ireland increased during 1846. Second, that the famine had begun before March 1846. Therefore, the increase of the political pressure as well as the manifestation of the â€Å"Great Hunger† could have influenced the voting process in the House of Commons by 16 May. Irwin (1989: 53), however, disagrees with the view that the increasing fear of a famine would have pushed Peel to repeal the Corn Laws. If Peel would have still been convinced of the necessity to protect agricultural production, a temporary suspension had been more sufficient. This contrasts with the argument that a suspension would have made an ultimate re-imposition not only highly risky at the possible cost of violent public controversy, but would also confess that an Irish famine was at least partly promoted by the Corn Laws (Gash 1961: 593-4 and Black 1960: 143). A temporary suspension would have lead to a de facto repeal. Though, an aspect which weakens the role of the beginning Irish famine, points at the grain prices, which were higher in the early part of the debate than they were when the Corn Laws were repealed (McKeown 1989: 356). The economic situation was economically not worse in Ireland in 1846 than during the years before. In addition to that, McKeown argues that the shift in political support in the House of Commons took place over four years. Peel lost faith in the Corn Laws even over a long period starting before 1841 (McLean 2001: 53-4). Furthermore, from a public choice perspective the shift â€Å"can hardly be reconciled with the degree of economic change in that four-year period especially since there was no general election in that period† (McLean: 355). . THEORETICAL DEVELOPMENT AND ITS EFFECT ON POLICY MAKING The paradigm shift away from mercantilism in the intellectual history of free trade also played an important role: From the â€Å"eighteenth-century† rule onwards, which laid the path for the development of a theory of comparative advantage from 1815 on, by Torrens, Ricardo as well as James and John Stuart Mill, (Irwin 1996: 93) heavily influenced how politicians thought abou t the Corn Laws. John Stuart Mill argues that â€Å"if there were nothing in the whole process but a transfer; if whatever is lost by the consumer and by the capitalist were gains by the landlord; there might be robbery, but there would not be waste, there might be a worse distribution of the national wealth, but there would be no positive diminution of this aggregate wealth† (Mill 1814: 399ff cited in Irwin 1996: 93). Protectionist duties, instead, lead in any case to an absolute loss. According to Mill it would be even better to repeal the Corn Laws and to fully compensate the farmer for his loss caused by this policy. Moreover, all leading economists of the first half of the nineteenth century favoured free trade in their writings (Irwin 1996: 93). How these developments influenced Peel, the central figure in the repeal of the Corn Laws, in his view on the Corn Laws has been well described by Irwin (1989): first, although the Tories were the party which mainly represented landowners’ interests, they had a greater affinity with free trade than the Whigs (White 1968 cited in Irwin 1989: 43). The protection of agriculture was seen as an exception to the general rule of free trade and not as the status quo. Second, Peel did accept the principle of agricultural protection as an inheritance from his party in the 1820s and 1830s. This also becomes evident in his memoirs, in which he writes that he, in an early period in his public life, adopted â€Å"the opinions generally prevalent at the time among men of all parties, as to the justice and necessity of protection to domestic agriculture† (Peel et al. 1856 cited in Irwin 1989: 45). Third, Peel was inclined towards repeal long before 1846. In his speech on the 15th of March 1839, Peel, taking into account the worsening of the manufacturers’ economic situation, hinted at a possible repeal if no new evidence showing that the Corn Laws are consistent with the general interests of the country can be produced. In 1842, Peel proposed amendments to the original Corn Laws and acknowledged that unless given any new insights he would not oppose new amendments, even though he was the author of the new law (Irwin 1989: 46). All three of these aspects show that Peel’s attitude towards the Corn Laws has always been far from rigid. In all of his speeches, and later on in his memoirs, an increasingly critical evaluation of the Corn Laws became the norm. By the end of 1843 Gladstone noted that Peel mentioned â€Å"a strong opinion that the next change in the Corn Laws would be to total In early 1844, Cobden delivered a particularly cogent appeal in Parliament against the Corn Laws and, so the story goes, Peel crumpled up his notes for reply and turned to a minister next to him and said, â€Å"You must answer this, for I cannot. In early 1845, Cobden was of the opinion that Peel favored repeal and was just searching for a pretext to say so. Finally, Peel indicated to Prince Albert in late 1845 that he would have announced his new convictions before a general election in 1847 had not the Irish situation arisen giving him the opportunity to do so (Irwin 1989: 50-51). In late 1845, Peel’s decisio n to repeal the Corn Laws precipitated a deep split in the Cabinet. Since the Whigs failed to form a government, Peel resumed office in a dominant political position. In early 1846, Peel announced his plan for a three year phase out of the Corn Laws in conjunction with other tariff reductions† (Irwin 1989: 52). In general, Peel claimed it was the empirical relationship between wages and prices of taxed goods and not theoretical developments which indicated to him that the Corn Laws did vastly harm the labour force. On the other hand, what can be stated is that Peel was influenced, even in 1815, by the idea of free trade, making the debate about the form of the Corn Laws an empirical not an ideological matter. The progress in trade theory can go so far as to explain Peels openness towards evidence, leading to his proposal to finally repeal the Corn Laws. The increasing fear of an Irish famine explains the fact that he did not wait until 1847. 6. THE ROLE OF INTEREST GROUPS So far, though, the most obvious interest group in the context of the Corn Laws has not yet been considered: [The] well-defined and politically quite influential interest group [the landowners] who benefitted from duties on corn, while the costs of the duties were widely dispersed (McKeown 1989: 356). The question is, how far this interest group’s relative political power had declined. Many interpretations see this as a triumph of bourgeois, particularly manufacturing interests. The limitations of this theory, however, are obvious, since the large shift in House of Commons voting on the Corn Laws between 1842 and 1846 occurred in the absence of a general election, in a period of moderate economic growth, and with no obvious discontinuities in economic development (McKeown 1989: 358). According to McKeown (1989: 355) the only way that a policy change could have been explained lies in a changing price or quantity of output, degree of producer, consumer or geographic concentration, or in a shift in comparative advantage in the protected sector or in sectors that are strongly affected by the imposition of protection. However, this was not the case (McKeown 1989: 357-361). Another explanation could have been found in the (perceived) increasing pressure by the Anti-Corn Law League via a change in the organisational structure of the League. Yet, this remains doubtful since the most intense pressure from the League came in 1842-43, with the large public demonstrations, the bungled assassination attempt on Peel’s life, and a hostile verbal clash in Parliament with Cobden. As the economy recovered strength, social unrest subsided and the years after 1843 seem calm in comparison with the earlier tumultuous period (Irwin 1989: 52). The repeal of the Corn Laws occurred at a time when the Leagues influence was lower than during the years before (McKeown 1989: 359). When Members of Parliament are considered as an interest group itself, the votes of the anti-protection coalition of the Irish repealers and the Peelists is decisive. Both had their own reasons for supporting repeal and â€Å"neither had undergone any drastic change in economic circumstances in the few short years since the beginning of Peel’s ministry† (McKeown 1989: 378). Although Irwin (1989: 42) interprets the Peelites’ â€Å"personal allegiance† to Prime Minister Robert Peel as decisive, Aydelottes study suggests the potential loss of the Peelists’ posts in government office also played an important role (Aydelotte 1967: 47-60). In addition to these MP-interests McKeown (1989) shows that economic structure made a winning coalition feasible in 1846, since higher incomes, an increasing demand for meat and dairy products from cattle, as well as changing asset portfolios for the wealthy families of Britain, changed the pecuniary interests of MP’s. This assertion challenges the common historical assessment that Peels leadership was central to the successful repeal of the Corn Laws, since the pecuniary interests of MPs played an essential role, too. This restriction becomes even more evident when the dynamic character of interests is acknowledged. . AGRICULTURAL ADJUSTMENT So far we considered only arguments pointing to shifts in the political and economic power of interest groups as well as explanations for their inherent logic in forming respective interests. Another important explanation points at the malleability or more generally speaking the dynamism of interests them selves. For example, landowners w ould be more likely to support trade liberalisation when their risk of doing so declined. Brawley (2006: 468) argues that Peel staked out a distinct third position besides repeal and protection, based on agriculture adjusting its production. According to Brawley this explains why the Peelists rejected Villiers’ motion, but still endorsed repeal in 1846. This view challenges those that portray repeal as a sacri? cial act on the part of the whole of the agrarian elite. Brawley’s argument (2006) contains three steps: first, he argues that â€Å"agriculture† was segmented into two different sectors, since factors were used differently for grain farming (land intensive, little input of labour and capital) and dairy farming (capital and labour intensive). Given these two conditions, grain farming should be in favour of protection, dairy farming should support repeal. This, however, is not covered by the data (Brawley 2006: 469-70). Schonhardt-Baily (1991) explains this by a diversification of landowners’ investments. They were willing to accept losses in agriculture because they were compensated by gains in industry. Second, Britain’s changed position in the international economy did not lead to a transformation towards capital- or labour-intensive production in agriculture, since a landholder wishing to convert from grain to dairy production was confronted by a series of obstacles (Kindleberger 1964: 247 cited in Brawley (2006: 472)). Third, the reduction of these barriers faced by improving landowners allowed them them to adjust to a potential repeal of the Corn Laws: total and immediate repeal, as proposed by the Anti-Corn Law League, did nothing to diminish the risks landowners faced. Peel’s package – graduated repeal, coupled with various forms of government assistance for agriculture – did (Brawley 2006: 472). Peel considered the problems of adjustment in the form of temporary continuance of protection to corn (Irwin 1989: 52). He ensured that capital would be available to farmers, helping them to shift their output to face foreign competition under free trade (Jenkins 1999, 130). Additionally, â€Å"farmers availed themselves of the loans fully. The government lent farmers ? 2 million based on acts passed in 1846 and 1850† (Williamson 2002: 144 cited in Brawley 2006: 480). With the help of the extended DMM model, Brawley shows that Peel’s new funds were essential for owners of entailed land if these landowners were to adjust their production, because without it they would not be able to generate the capital required. Additional policies facilitating high farming were also implemented: duties on maize and buckwheat or livestock feeds as well as grass and clover seeds were reduced. Infrastructural measures supporting market access and the improved health of the national economy and the government loans convinced some landowners that the adjustment to repeal was an opportunity rather than a threat. This can explain why the same MPs voted against Villiers’ motion for immediate and complete repeal, yet only weeks later voted for Peel’s gradual repeal. Since agricultural interests split in the mid-1840s due to the improved economic climate, this shift in interests can explain why Peel spoke out publicly for repeal in the mid-1840s, even though he previously appeared to favour it (Brawley 2006: 470, 480-1, 6). As elaborated in the last two sections, there is empirical as well as theoretical evidence that members of the legislature did not vote against their preferences. This contrasts with Mclean’s interpretation (2001) in so far as he models preferences as preferences based on political decisions. Yet, there is no reason why preferences should not include MP’s material interests as e. g. staying in office. This points at the conceptual weakness of a rational choice approach, where the difficulties as in applied game theory in general lie in the question of what preferences consist of. An historical explanation of rational choice easily becomes a tautological undertaking. 8. CONCLUSION This essay shows that both the theoretical influences such as free trade theory and the shift in interests of owners of entailed land from the mid-1840’s made repeal feasible in 1846. Additionally, the increasing fear of a new Irish Famine might be seen as a trigger for the exact point of repeal, since a new type of political rebellion against the Corn Laws can be recorded during the last months of this policy. However, the explanatory power of an increasing fear of a new Irish famine is limited in that a shift in the assessment of the Corn Laws had taken place long before the famine was on the horizon: on a parliamentary and a party as well as on a personal level. Peel as a person seems to have played a role in that he was open towards new evidence. Even if the reader might disagree with the impact attributed to theoretical development, Peel’s empirical approach is at least noticeably typical of the tradition of British Empiricism. In general, the common interpretation which associates repeal with a decline of the agrarian aristocracy can be moderated as it was rather the transformation and diversification of agricultural production which made a political majority for repeal feasible. The political power of manufacturers and labourers did not increase before and during the time of repeal. The explanatory power of a sectoral diversification of agriculture offers a striking example for the limits of a theory of hegemonic stability in particular and macroeconomic approaches explaining political change in general. BIBLIOGRAPHY Aydelotte, W. O. , 1967. The Country Gentlemen and the Repeal of the Corn Laws. The English Historical Review, 82(322), pp. 48–60. Brawley, M. R. , 2006. Agricultural Interests, Trade Adjustment and Repeal of the Corn Laws. , 8, pp. 467–488. Gash, N. , 1961. Mr. Secretary Peel; the life of Sir Robert Peel to 1830. London: Longmans. Irwin, D. A. , 1996. Against the tide? : an intellectual history of free trade, Princeton, N. J. : Princeton University Press. Irwin, D. A. , 1989. Political Economy and Peel’S Repeal of the Corn Laws. Economics and Politics, 1(1), pp. 41–59. Available at: http://doi. wiley. com/10. 1111/j. 1468-0343. 1989. tb00004. x. [Accessed December 10, 2012] Kindleberger, C. P. , 1964. Economic growth in France and Britain, 1851-1950. , Cambridge, Mass. : Harvard University Press. Mckeown, T. J. , 1983. Hegemonic stability theory and 19th century tariff levels in Europe. International Organization, 37(1), pp. 73–91. McKeown, T. J. , 1989. The Politics of Corn Law Repeal and Theories of Commercial Policy. British Journal of Political Science, 19(3), pp. 353–380. McLean, I. , 2001. Rational Choice and British Politics: An Analysis of Rhetoric and Manipulation from Peel to Blair, Oxford University Press. Available at: http://www. oxfordscholarship. com/view/10. 1093/0198295294. 001. 0001/acprof-9780198295297 [Accessed December 3, 2012]. Mill, J. S. , 1814. The Corn Laws. Westminster Review 3, pp. 394–420. Mitchel, J. , 1846. English Rule. The Nation Newspaper. Available at: http://www. irishnewsarchive. com. [Accessed December 10, 2012] Peel, R. , Stanhope, P. H. Cardwell, E. , 1856. Memoirs by the Right Honourable Sir Robert Peel, London: J. Murray. Schonhardt-Bailey, C. , 1991. Specific Factors, Capital Markets, Portfolio Diversification, and Free Trade: Domestic Determinants of the Repeal Domestic of the Corn Laws. World Politics, 43(4). Stewart, R. , 1971. The