Re: Role of Total Foreign Trade

If WS theorists, including some Marxists (Hobsbawm, 1962; Mandel, 
1968), have emphasised the colonial trade, scholars like Habakkuk and  Deane 
(1963), and Davis (1954) have looked to foreign trade as the primary 
engine in the industrialization of England through the 18th century.  
The verdict of  more recent scholarship, however, is that, while this 
trade was significant, it was not the major cause of  the industrial 
revolution. On the surface, or at first look, the stats do appear to indicate 
that foreing trade was the 'engine of growth':

1) Deane and Cole calculated that, if we start with a base of 100 for 
1700 for all industries, by 1800 the export industries grew to 544, 
which means the expanded by more than five times, whereas the home 
industries grew to 152 and agriculture to 143 (Mathias, 1983). 
Another way of saying this is that those industries oriented to 
foreign trade rose by 444% during the 18th century, while those 
industries oriented to domestic industry rose by 52%.

2) Given that this was the fastest growing sector of the economy, it 
can also be shown that the export demand for British goods was quite 
important in employment creation and that, through imports, 
certain basic raw materials and foostuffs were acquired in exchange 
for manufactured goods. Thus, that England was able to specialized in 
the export of  finished goods in exchanged for cheaply produced/regulated 
raw materials and foodstuffs that did not compete with domestic English 
agriculture. 

3) The industrial revolution began with a few great innovations in 
the cotton industry. This industry experienced the fastest rate of 
growth in the first phase of the revolution. In 1800 cotton 
represented a quarter of all British exports, rising to 50% by 1850.  
Moreover, "all its raw material came from abroad" (Hobsbawm).