Tuesday, 26 January 2021

250 years after the Spinning Frame: How Britain can regain its technological leadership

Acknowledging the 250th anniversary of the Spinning Frame feels somewhat odd. The machine that would go on to revolutionise the textile industry and help cement the United Kingdom (UK) as the world’s first industrial nation in the 19th century, seems quaint in relation to the information economy that is celebrated today. But the tale is important because the Spinning Frame’s role in developing textile production was heavily tied to the assertive economic policies pursued by the UK at the time, which were linked to its technological dominance.

The chief inventor of the Spinning Frame, Sir Richard Arkwright, is also famous for developing the first modern factory operation. His inventions, though ingenious, were only as strong as his ability to develop fledgeling industries which required two additional competencies, a suitably large and mobile labour force, and the organisational ability to meld technology and labour together. This triad between technology, personnel and organisation is paramount when focusing on any strategic objective, and it is worth considering to what extent the UK of today mirrors the Britain of Arkwright’s day, which gave birth to the nation’s global economic ascendancy.

But firstly, it is worth noting that the kind of environment Arkwright developed his machines and businesses in is markedly different to the one of today. Invented just years before Adam Smith’s The Wealth of Nations was published in 1776, the spinning frame and its equivalent in the water-frame were invented in a Britain that was decidedly more protectionist and single-minded than many have come to believe.

From the early reign of Henry VII, England had been running an effectively protectionist manufacturing strategy based on the wool and cloth markets. In 1564, the Merchant Adventurers of England were incorporated and gradually set about driving weaker guilds and foreign actors like the Hanseatic League from English markets. A comparatively small and weak country at the time, England’s wealth gradually improved with the growing interconnectedness and trade between inter-continental markets. In this first wave of globalisation, it was understood that national prestige rested on control of international markets. Though crude in its assessment, the preservation of mercantilism for nearly two centuries made England the ideal location for budding inventors like Arkwright to deploy their technologies, and with it, help Britain dominate the textile trade throughout the late 18th and early 19th centuries.

It is important to note this in relation to the present day, where Britain has slid down the international league table of industrial powers to become the world’s ninth-largest manufacturer.

It is important to note this in relation to the present day, where Britain has slid down the international league table of industrial powers to become the world’s ninth-largest manufacturer and is increasingly struggling to assert technological dominance of any kind in any sub-segment. In fact, the decline of British industrial might, relative to its chief challengers Germany and the United States (US), occurred just at the time Britain reached its zenith. In February 1846, Sir Robert Peel, the then Prime Minister, triumphantly dictated the British turn towards free-trade:

Our Capital far exceeds that which they can command. In ingenuity, in skill, in energy, we are inferior to none. Our national character, our free institutions under which we live, the liberty of thought and action, an unshackled press spreading the knowledge of every discovery…place us at the head of nations which profit by the free interchange of their products…is this the country to stand shivering on the brink of exposure to the healthful breezes of competition?

Sir Robert had plenty of reason to be optimistic, but eventually, Britain did feel the exposure of foreign competition, to the extent that by the late 19th century it was rapidly losing its industrial and technological dominance. A key case was steel. Despite perfecting the mass-production of steel through inventions like Besssener’s converter and the Gilchrist-Thomas basic process, British steel production was behind that of the US and Germany by the 1890s. In 1910, America was producing twice as much steel as Britain. Ultimately the opening of markets, coupled with the UK’s relative inability to produce a similar proportion of highly educated engineers and scientists as other countries, meant its position as the ‘workshop of the world’ was effectively over.

Today, the sentiment of Sir Robert Peel is still alive but is more pronounced in the US. While Donald Trump seized the White House on a wave of national protectionism and populists like Bernie Sanders and Elizabeth Warren gain traction in the Democratic Party through pushing reinventions of the New Deal, the Washington Establishment remains as staunchly convinced of the benefits of free trade and a lack of  decisive industrial direction as they were in the 1990s. At the Munich Security Conference this year, Joe Biden, former US Vice-President, sounded eerily similar to Sir Robert in denouncing the apparent ‘smallness’ of not believing in competition and developing an industrial policy based on self interest and protectionism:

The America I see doesn’t embrace the self-defeating tariffs and trade wars that are underway, America was built on innovation and creativity, there is no one in the world we are afraid to compete with.

Mr Biden can believe what he wants, but every president on the dollar bill advocated what would today seem extreme ‘Trumpian’ protectionism. Alexander Hamilton, the first US Secretary of the Treasury, explicitly supported tariffs, outright import bans, subsidies for key innovations, and federal infrastructure investment. In reality, the idea of fair competition with other nations is little more than a facade, and the idea that America was built on free markets just is clearly disingenuous. The same applies to Britain.

While the value of innovation and creativity in developing the machines of the Industrial Revolution should be acknowledged, the notion that the industries of either the UK or the US were built by a motley crew of inquisitive introverts freely trading between each other is fantastical.

Despite the continual lip-service paid to ‘openness’ and ‘free trade’, there is growing consensus amongst policymakers that if Britain is to compete on the world stage via technology and industrial development, it can no longer rely on the market or a false sense of individual genius triumphing over collectivism. The Brexit Party, though ostensibly lacking a manifesto beyond their namesake, have campaigned on the development of a national strategic corporation that will provide ample state capital for British steel and develop a system of shared ownership. The association of steel with backwardness and the prevailing desire of many conservatives to neglect this national strategic asset ignores the importance of domestic steel for developing high-end military products. It also neglects the importance of these large industrial assets to peripheral communities and the local economies they help buttress.

If Britain is to navigate its way through the coming turbulence of a multipolar world, it has to acknowledge the important role economic nationalism played in its rise, and how it might help it in the future.

Meanwhile, although Britain does officially have an industrial strategy, it is not ‘strategic’ insofar as it does little to explain how to prevail against competitor economies. The focus is skewed towards fashionable but vague areas like ‘clean growth’, ‘mobility’, ‘Artificial Intelligence’ (AI), ‘data’ and ‘ageing’. Ultimately, while the UK has advantages in the broad range of technologies grouped together as AI, key microprocessor and semiconductor companies like CSR, Autonomy and ARM have all been sold to foreign buyers. While £20 billion in business investment is valuable, it is so small in relation to comparative industrial strategies that there will need to be significant additional resources.

What is more, the aim to boost Research and Development spending to 2.4% of Gross Domestic Product by 2027 falls woefully short of making up for decades of underinvestment, and barely matches the plans put forward by the UK’s economic competitors.

Importantly, the discourse in the US is shifting, and will hopefully trickle down to affect British attitudes. Recently, Marco Rubio spearheaded a report on countering China’s MiC 2025 program through a national innovation strategy. Furthermore, President Trump’s more assertive posture towards China has galvanised a conversation towards the re-emergence of national developmental economics, as articulated by Rob Atkinson and Michael Lind. Overall, the American debate, on both Left and Right, is coming to grips with the failure of successive governments to protect and nourish key industrial and technological assets, from rare-earth mining capacity to the relative decline of National Laboratories.

A similar conversation needs to be had in the UK. While calls for increased defence expenditure and the tacit realisation that a more detailed industrial policy needs to be developed are welcome, a lot more needs to be done. Unfortunately, many of the holdouts for the free trade consensus rest in the Conservative Party. In a speech decrying the rise of populism, David Guake MP suggested the moving of the manufacturing supply chain to China had been beneficial to the West and suggested any attempt to rebalance the economy would not result in job gains due to the apparent threat of automation. Firstly, in part due to the lack of an industrial strategy, Britain has one of the lowest adoption rates in the developed world. Secondly, as elaborated elsewhere, automation is largely a phantom threat, while the threat of technology subordination to authoritarian China is very real.

So, the 250th anniversary of the invention of the Spinning Frame should be a time to reflect not just what has been lost, but also on Britain’s collective misunderstanding of how it established its industrial and technological leadership. It was not merely a perfect storm of individual genius, though pioneers like Arkwright are worth celebrating. Rather, the integration of advanced technology, an educated population and state-backed organisation from the factory to the national level allowed the UK to gain a competitive edge on its continental rivals. As the formula for Britain’s success diffused, other countries quickly began to replicate what had worked and competed against British industry. To this day, China is directing its own highly modified industrial policy to supplant the US, in ways not dissimilar to how Germany and the US supplanted the UK over 100 years ago. If Britain is to navigate its way through the coming turbulence of a multipolar world, it has to unburden itself of its prevailing myths and acknowledge the important role economic nationalism played in its rise, and how it might help it in the future.

This article was made possible due to the kind support of the Engelsberg Programme for Applied History, Grand Strategy and Geopolitics at the Forum on Geopolitics, supported by the Axel and Margaret Ax:son Johnson Foundation for Public Benefit.

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