Imagining Britain’s economic future, c.1800-1975

David Thackeray, Richard Toye, and Andrew Thompson
University of Exeter

This book considers how Britain has imagined its economic role in the wider world and how British ideas have influenced global debates about market relationships between the start of the nineteenth century and the UK’s first European referendum. In doing so, the authors explore the interplay between the high political thought of theorists, the activities of officials and businesspeople, and the everyday experience of the wider public. Across the contributions to this book there is a consideration of the competing factors which affected market decisions and the processes of ‘economic imagination’.

The economist Joseph Schumpeter put the concept of imagination at the heart of the entrepreneurial process. It was this quality which, above all, businesspeople required if they were to succeed: ‘the capacity of seeing things in a way which proves afterwards to be true, even though it cannot be established [as such] at the time’.[1] He saw that economies are, in a sense, imaginative constructs – making calculations about and placing faith in the future and its possibilities are key qualities of investors and entrepreneurs.

Schumpeter’s work on the entrepreneurial imagination was an important influence in the development of Ronald Robinson and John Gallagher’s concept of the ‘official mind’, which they saw as the key driving force behind British imperial expansion in the nineteenth century. As they noted in Africa and the Victorians, London policy-makers ‘were usually dealing with countries they had never seen, with questions apprehended intellectually from reports and recommendations on paper….it was the idea and analysis of African situations in Whitehall, and not the realities in Africa as such which moved Victorian statesmen to act or not to act’.[2]

The question of how changing levels of information available to economic actors has affected the role of imagination in decision making in the modern world is an important one. As international business scholars have acknowledged, economic imagination is ultimately shaped by the interpretation of past experience, access to information about markets (which can sometimes be faulty), and hopes placed in the future. Perceptions of distance between markets are ultimately culturally constructed. The ‘physic distance’ between markets perceived by businesspeople, policy makers, and consumers may not correspond to actual measurable differences in institutions, preferences, and values as economic actors may exaggerate or underestimate the cultural distance between two countries involved in a transaction.[3]

The 2016 EU referendum provides a good example of how public debates about an imagined economic future can radically reshape public policy. It hinged to a substantial degree on competing visions of how the UK should engage with foreign markets. The triumph of the Leave campaign in 2016 resulted from their ability to overhaul perceptions that European Community membership was vital to Britain’s economic future, which had widespread appeal during the 1975 EEC referendum, and to revitalise earlier narratives which presented the UK’s global trade role as key to its economic prosperity. The 2016 referendum campaign was also notable for controversies surrounding the role of expertise in debates about the economy, culminating in Michael Gove’s infamous off-the-cuff remark that ‘people in this country have had enough of experts’.[4] Leave’s surprise success is a useful reminder that we need to pay attention to the ‘cultural throw’ of economic theories, how they were articulated in debate, and received by the public. In short, why do some forms of expertise have a greater appeal at certain times than others?

We are now faced with a curious situation where Theresa May’s government appears likely to encourage aspects of globalisation in ways that can be presented as economically liberal (revivifying links with established and emerging markets through trade treaties, and encouraging investment through a low corporation tax) yet at the same time promoting a populist agenda, which plays into anti-globalisation sentiment (curbing the free movement of labour and leaving the Single Market). Britain now faces a period of profound uncertainty as we wait to see whether the promises of Brexit campaigners can be made real; or rather, which of their conflicting promises will take priority. In the face of the anxieties that this situation has provoked, this volume provides a much-needed long-term contextualisation for ongoing debates about Britain’s global trade role.

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[1] Joseph Schumpeter, The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle (Cambridge, MA, 1934), p. 85.

[2] Ronald Robinson and John Gallagher, Africa and the Victorians (London, 1961), p. 21.

[3] Srilata Zaheer, Margaret Spring Schomaker and Lilach Nachum, ‘Distance without direction: restoring credibility to a much-loved construct’, Journal of International Business Studies, 43 (2012), pp. 18-27; Gönter K. Stahl, Rosalie L. Tung, Tatiana Kostova, Mary Zellmer-Bruhn, ‘Widening the lens: rethinking distance, diversity, and foreignness in international business research through positive organizational scholarship’, Journal of International Business Studies, 47 (2016), pp. 621-30.

[4] ‘Britain has had enough of experts, says Gove’, Financial Times, 3 June 2016 https://www.ft.com/content/3be49734-29cb-11e6-83e4-abc22d5d108c.

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