Earlier this week the new International Trade Secretary, Liam Fox, made a rather unguarded comment at a reception for Conservative activists, accusing British businesses of being “too lazy and too fat” to be freewheeling free traders on the world stage.
Now while I am sure many people will debate the matter on both sides of the argument, there was one historical aspect I felt was worth exploring; the suggestion that British businesses were once much keener on exporting than is now the case. Looking at recent history, we are not doing too badly:
This chart from the World Bank shows that while we are slightly below the peaks in 1977 and 2011, we are well above the average since 1960. Now, I am sure Dr Fox is harking back to a time well before 1960, but unfortunately economic data is rather sketchy for earlier years, so it is hard to either refute or indorse his position based on hard numbers.
However, I recently read an interesting observation in a book called The Rise of Merchant Banking (Stanley Chapman, 1984), which made a remarkably similar point in relation to the manufacturing businesses that were in the vanguard of the Industrial Revolution and the foundation of the British Empire’s economic hegemony. What it also highlighted however was the success of British merchants, entirely independent of the manufacturers, in selling those same industrial goods all around the world (not just within the Empire), based mainly in London and Liverpool with agents around the world.
So perhaps Dr Fox is both right and wrong; it is not that British industry is less focussed on exporting than in the past, but that we have lost that cadre of merchants and agents? That it is not managing directors spending too much time on the golf course but that those hungry young men (and now women) who might have sought their fortunes selling goods around the world as commission agents in the past now find greater opportunities as City traders or tech start-ups?
Perhaps it is an activity that should now be revived; the British have after all always had a talent for being intermediaries?