How Britain Achieved – And Lost – Economic Preeminence – And Lessons For The US

In the mid-19th century, and in the first few decades afterwards, Britain was an unmatched military, economic, colonial, and thus geopolitical colossus, by far the most powerful country in the world. There was no country that was even close to matching the military or economic power of Britain, which had the largest empire in the world, spanning all continents.

So vast was the empire that it was one on which the sun never set – because no matter where the sun was shining at that moment, it was shining on British colonies, dominions, and possessions. So powerful was Britain that she was able to exert influence all around the world and act as the arbiter of world affairs. Thus, the world experienced an era of Pax Britannica.

Why? Because Britain was by far the world’s most powerful country, both economically and militarily.

In the middle of the 19th century, around 1850, Britain was by far the world’s largest producer of coal, pig iron, steel, and warships, consumed the most cotton and coal, and her industrial machines were the most modern and most powerful in the world. This enabled Britain to have a Navy that was far larger than the combined navies of the US, France, Japan, and Russia. Whether the measure was total fleet tonnage or the number of any class of warships, the UK Royal Navy had far more of them than any other Navy in the world.

Britain Loses Her Economic, Military, and Geopolitical Preeminence

Fast forward half a century to 1900, and then to 1913, the eve of World War I, and we see a completely different picture. Britain had, by then, lost its first place in the world, both economically and militarily. The US, Japan, and Germany began building navies rivalling the Royal Navy. The US and Germany also overtook Britain economically by all key metrics. As a result, Britain had to assemble a coalition of countries, the Entente, and enlist the US as an Associated Power to win World War 1 – and contracted a huge debt to win that war, because Germany proved to be a very tough enemy to beat.

Even before then, before WW1, Britain had lost its economic preeminence. Consider:

  • In terms of coal production, Britain dominated the pack in 1870, producing 125 mn tons of coal vs 41 for the US and 42 for the German states (mostly Prussia). By 1900, it was producing 185 mn tons, but the US wasn’t far behind at 143 tons and Germany was at 89 tons. By 1913, the UK was producing only 292 tons, while America’s annual coal output was 517 tons and Germany’s was 277.
  • The UK producted 6.7 mn tons of pig iron in 1870, while the US produced only 1.9 mn tons. But in 1900, the US produced 9.4 tons vs 8.0 mn for Britain. In 1913, the US produced 31.5 mn tons, and Germany 19.3 mn tons, versus only 10.4 mn tons for Britain.
  • The US overtook Britain in terms of steel production even earlier, in 1886, and Germany did so in 1893.
  • In 1871, the efficiency and output of British steel mills was two times that of US steel mills, but by 1891 it was only 50% of America’s steel output.
  • In 1890, the power of steam machines in the US industry was 45% higher than those in the British industry.
  • In 1870, Britain’s share of the global industrial production was 32%; by 1913, it was only 14%. America’s share during the same timeframe rose from 23% to 35.8%, and Germany also overtook Britain, from 13.2% in 1870 to 15.7% in 1913. The US and Germany were simply producing – and earning – more. Period.

Thus, the country that was essentially the world’s biggest coal mine, steel mill, and factory in 1850 was, by 1913, only in third place – not even in the second place – by the key economic metrics of the time! In terms of industrial production, it was lagging behind Germany and far behind the US.

The military consequences of Britain’s economic decline followed, though not immediately or quickly. But inevitably, eventually, they did follow – and they weren’t pretty.

In 1883, Britain had 38 pre-dreadnought battleships, while the US and Japan had zero, Russia had but three, Italy had only 7, Germany 11, and France 19. This means Britain had more battleships – the key weapons of the day – than the next three countries combined!

In 1897, the gap was narrower, though Britain still led the pack: it had 62 battleships in service or construction, but France had 36, Russia had 18, Germany had 12, Italy also 12, the US had 11, and Japan had seven. The next three countries (France, Russia, and Germany or Italy) had more of these warships than the UK.

Matters grew even worse for Britain when she launched HMS Dreadnought, the most powerful battleship in the world at the time, in 1905. The British thought these warships would guarantee them naval supremacy. But they were wrong. Just three years later, the Germans had only three dreadnoughts fewer (9) than the British (12). And other nations were building such warships as well.

Moreover, at Tsushima in 1905, the Japanese Navy showed that a heavily outnumbered fleet can still trash a larger one. Despite being outnumbered two-to-one and not having any significant mineral resources, the Japanese still trounced the Russians in what was one of the biggest military victories in human history, a naval version of the Battle of the Cannae. The Japanese barely lost 3 torpedo boats and 117 men, while the Russians lost their ENTIRE fleet in the Far East – 21 warships – and over 5,100 KIA.

This showed that a smaller, heavily outnumbered fleet, could, in an individual battle, beat a twice larger navy if better led, manned, and equipped.

So Britain’s unquestionable naval supremacy was a thing of the past – ESPECIALLY since the Germans had only slightly fewer dreadnoughts than the British.

As a result, Britain needed to appease the US in the Western Hemisphere, court Japan to make it Britain’s ally in the Far East, and enlist former rivals France and Russia – with whom the UK nearly went to war just years before – as allies to counter growing German power.

By 1914, one hundred years ago, the three countries went to war together – and still couldn’t beat Germany, by now Europe’s preeminent economic and military power. Russia was driven out of the war, and the US had to be enlisted to help win the war. Britain itself was too weak to defeat Germany, even in an alliance with France and (until 1917) Russia.

In the course of World War I, Britain contracted such a huge war debt that it had difficulties paying it down later, and from the world’s banker became America’s debtor.

How Did It Come To Pass?

How did it happen? How did Britain lose its economic and military preeminence?

To some degree, this was because of the obsolete structure, growing technological obsolence, and the conservative mindsets of the leaders of, British industry. And partly it was due to the reunification of Germany, which produced a formidable rival for Britain.

But these obstacles could have easily been overcome. None of these were fatal illnesses.

The REAL cause of Britain’s economic and military decline was its embrace of the poisonous, suicidal, pernicious ideology of “free trade” and the consequent policies.

Until the mid-19th century, Britain – like every country that ever rose to economic preeminence – protected and nurtured its industry with protectionist laws and customs duties.

But beginning in the 1840s, the Parliament began repealing them. In 1846, it repealed tariffs on imported grain (the Corn Laws); in 1850, it got rid of the Navigation Act; and in 1860, it scrapped protective tariffs completely. That’s it – there were no more customs or tariffs on imports to Britain. Anyone was free to export to Britain free of any tariffs.

British industry was thus left without ANY protection against foreign competitors – because no other country had done such a thing. All other countries continued, to various degrees, to protect and nurture their own industry with tariffs as well as non-tariff barriers.

This was especially true of… the US and Germany, the two countries that overtook Britain and took away her crown. The US had high protective tariffs since the 1860s, and Germany since the times of the Customs Union, established in 1834.

Thus, Britain effectively committed unilateral disarmament in the trade arena, which is just as suicidal as disarmament in the military arena.

The problem was simple: US and German companies were protected by these countries’ tariffs and non-tariff barriers to imports, while British companies were left without ANY protection against foreign competitors.

Thus, the US and Germany began flooding the world – including Britain herself – with their products – and achieved greater shares of the world’s industrial production and trade than Britain.

This is not surprising to anyone knowledgeable about economics. For protectionism is the policy of RISING economic powers, while free trade is the policy of DECLINING ones.

Protectionism is the road to wealth, prosperity, and national power, while free trade is the road to deindustrialization, unemployment, and economic stagnation.

Contrary to what free trade ideologues may tell you, NO nation in history has ever risen to economic preeminence by indulging in free trade.

EVERY country that ever became an economic powerhouse did so by protecting, nurturing, and supporting its industry against foreign competition – England under the Acts of Navigation, Britain until 1860, France under Colbert and Napoleon, Germany under the Customs Union and Bismarck, the US from the 1860s to 1960s, postwar Japan, China today .

America Is Losing Her Preeminence – And Fast

In today’s world, America is losing her economic and military preeminence even faster than Britain did in the late 19th century – and America’s edge over the world was never as great as Britain, except the late 1940s and early 1950s.

Just recently, the World Bank predicted that China would overtake the US in GDP by the end of this year. In 2012, the IMF predicted China would leapfrog the US by 2016. The Economist predicts it will happen by 2019.

China is already the world’s top exporter, having surpassed Germany a few years ago, which itself surpassed the US in the early 2000s. China is also the world’s top maker of many goods of all sorts, and also has trade surpluses with many other countries in the world. For example, its trade surplus with France runs at over 30 bn euros per year!

In 2013, the US trade deficit with China – thanks to free traders’ suicidal policies – was the largest annual trade deficit EVER recorded between any two nations, at $315 bn.

The US is also running trade deficits with almost every other country in the world: with crisis-stricken Italy, at $20 bn per year; with Ireland, at $25 bn per year; with Germany, $60 bn per year; with Canada, $32 bn per annum; with Mexico, $61 bn; with Japan, $88 bn per year; with South Korea, $16.6 bn per year.

This is because the US has almost completely disarmed itself unilaterally in terms of trade. Foreign countries exporting goods to the US pay little in the way of tariffs, while US companies trying to export to foreign countries face steep tariffs – and heavily-subsidized competitors – abroad.

Also, many foreign countries, including China and Japan, manipulate their currencies by devaluing them, thus making their exports cheaper abroad (e.g. in the US). Yet, Japan plans to devalue its currency still further, making its exports still cheaper.

Yet, American free trade ideologues oppose taking ANY action against such blatant cheating and such uneven playing field, and demand that the last vestiges of protection for the US industry be scrapped: Buy American Laws, the Export-Import Bank, and the few tariffs that remain.

When, in 2012, GOP presidential candidate Mitt Romney pledged to designate China as a currency manipulator, free trade ideologues from the left and the right accused him of wanting to start a trade war… not realizing China has ALREADY been waging a trade war on the US for decades.

The Military Consequences

And just like Britain’s loss of economic preeminence was followed by her loss of military superiority, so is the US losing its last vestiges of military superiority over China (and Russia) as a consequence of committing economic suicide.

The US no longer has a monopoly on any military technology. Its military has always been smaller than China’s – the latter is the world’s most populous country after all – but China’s military is now also much more modern than a decade or two ago.

The PLAN, the Chinese Navy, is already larger than the USN and has more submarines. Their surface combatants are as good as American ones, and their diesel-electric submarines are far quieter than anything the USN has. Their anti-ship missiles are much faster and longer-ranged than America’s sole anti-ship missile, the Harpoon. China also has 100,000 naval mines, against which the USN is nearly helpless as it has only 13 minesweepers – none of them in the regular Navy.

The PLA Air Force has hundreds of modern Generation 4+ fighters, including Flankers and J-10s, plus 389 old but highly agile and fast J-7 fighters. And what does the USAF have? 180 top-notch Raptors and around 300 F-15C/Ds, I’ll give you that much; but its F-16s would not stand a chance against Chinese fighters other than the old J-7. And the F-35, the most expensive, heaviest, and most sluggish “fighter” in the world, will be such a heavy pig it will be inferior to EVERY fighter on the planet.

The PLAAF is now developing TWO stealthy fighters – the J-20 and the J-31 – which, when inducted into service, will make every other fighter in the world, except the F-22 and the Russian PAKFA, obsolete, useless, impotent, and irrelevant.

The PLA’s Second Artillery Corps now has 66-75 ICBMs capable of reaching the US, plus 140 medium- and over 1,600 short-range ballistic missiles and hundreds of ground-launched cruise missiles – weapons which the US does not have and is prohibited from developing.


The PLA also has a lopsided edge over the US in cyber and space warfare. Its hackers routinely penetrate US government networks with impunity, and it has an arsenal of anti-satellite weapons capable of shooting down all US satellites anytime.

Similarly, China’s anti-ship missiles are so fast, so long-ranged, so numerous, and so cheap that China could easily saturate USN warships with them – and USN defenses are incapable of intercepting supersonic, sea-skimming cruise missiles.

China also has many, many more nuclear weapons than the US DOD and American arms control afficionados are prepared to acknowledge: at least 1,600 (according to Russian General Viktor Yesin), and up to 3,000 (according to Dr Philip Karber, the top nuclear strategist in the Reagan Administration).

And, of course, China’s military has not been infected with political correctness and the open celebration of homosexuality and feminism – unlike the US military.

Let’s face the facts: America’s economic and military dominance is already largely a thing of the past. The US retains an advantage only in a few categories and on a few metrics – and China is now working hard on closing those few gaps as well.

China is now doing to the US what the US itself and Germany did to Britain in the late 19th and early 20th century: overtaking it economically and militarily.

The difference is that, unlike Britain, the US has no friendly power to whom hand over the torch.

So either the US will break free of its “free trade”, “noninterventionism”, “let’s mind our own business”, and “let’s cut the military” fantasies, or it will completely lose its preeminent status to China, with all the consequences stemming from that.