The century of internationalism

Onset of protectionism

It is no exaggeration to say that the period from the latter half of the nineteenth century and right through the twentieth century was ‘the era of internationalism’. Britain was the pioneer in this. The period from 1840 to 1870 was one in which Britain strenuously advocated liberalism in economic ideas, and during this time the internationalization of the economy was pushed forward to the extent that the value of net imports and exports which had formed only 13% and 9% respectively of the Gross National Product in 1841 made up 24% and 20% in 1871. At the same time industrialization proceeded in Britain and she came to import food and raw materials from abroad and to sell industrial products to foreign countries. Britain thus became the ‘workshop of the world’ and other countries become ‘Britain's granary’. Such an international division of labour only became possible in the context of Britain's huge colonial empire. Britain's industrial pre-eminence also made her militarily strong. Thus with the establishment of this international division of labour which enabled Britain to concentrate on her industries, the British Empire became stronger and larger. All the cogs in the machine fitted smoothly.

Stimulated by Britain's success France and Germany both opened the doors of their economies, and then eventually even Japan began to march out into the markets of the world.