How the Georgians embraced energy abundance

  • Themes: Economics, History

Europe must rediscover the Georgian hunger for abundance and offer vigorous support to today’s equivalents of Arkwright, Hargreaves, Watt, Wedgwood, and Stephenson.

Train crossing Stockport viaduct on the London & North Western Railway, c 1845.
Train crossing Stockport viaduct on the London & North Western Railway, c 1845. Credit: The Print Collector

In the global scramble for power, Europe is having to rethink its entire approach towards energy security. Many countries – like the UK – have imposed strict net zero targets while the superpowers – China and the United States – dash for energy dominance, whether it be through the flooding of renewables supply chains or the call to ‘drill, baby, drill’. But economic growth and technological innovation everywhere will require massive amounts of power to support electrification, data centres, re-industrialisation, and new infrastructure. Energy has long been a critical part of geopolitical competition. It has allowed the stratospheric improvements in global living standards since the 19th century.

Britain stands out as a remarkable example in this story. It has experienced rapid de-industrialisation that owes much more to post-2000s decarbonisation than the free market reforms of the 1980s. There is a growing consensus that Europe needs to rebuild its productive capacity if it is going to keep up with China and the US, but Britain is starting from a disturbingly low base. This is astonishing for the country that once led the world in industrialisation. The truth is that the industrial revolution and Britain’s 18th-century geopolitical rise could not have happened without energy abundance.

In the popular imagination of many on the British right, the industrial revolution was the product of laissez-faire liberalism and free trade, reaching its zenith in the mid-Victorian afterglow of Palmerston and Gladstone. But industrialisation occurred in a country that was economically nationalist, using the Navigation Acts to protect British trade, stimulating credit through a large National Debt and the Bank of England, and raising significant revenue through the Excise to help fund public infrastructure. This framework, the ‘fiscal-military state’ as historian John Brewer called it, was designed to give Britain the necessary stamina to support the heavy costs of waging almost constant war against France, while having certain side benefits for nascent British industry.

As important as this institutional framework would be for Britain, making it a prosperous and stable polity, this still does not explain how the industrial revolution was sparked. Historians have long debated what exactly caused industrialisation to begin on a grey, damp island to the northwest of Europe rather than anywhere else. Many have made provocative and persuasive arguments for a variety of factors, such as agricultural productivity, urbanisation, consumerism and trade, demographic change, colonialism and slavery, and wages and occupational structure. The rather nuanced answer is there was a serendipitous combination of many factors that helped Britain become the workshop of the world. But of fundamental importance was the role of energy.

E.A. Wrigley has given the most definitive account of how an abundant supply of energy created the conditions for economic take-off. Substantial deposits of coal in the north of England, Scotland, and Wales made it possible for British inventors and industrialists to scale up their technologies and transform the economy. Of course, these energy deposits had to be exploited by the rich supply of intellectual talent and private capital made possible by Georgian Britain’s political and economic culture, but none could have succeeded without cheap coal transported through publicly built canals and turnpikes.

The fact is that Britain became a great power because of its success in developing its own productive capacity. Before the industrial revolution, Wrigley argued that the ‘underlying constraint that prevented sustained growth in organic economies arose from the nature of its energy sources’. By ‘organic’, he means that societies depended on the limited energy provided by wood and charcoal or human and animal muscle for power before the shift to a ‘mineral’-based economy, in which coal became the new power source that could spur economic growth and technological innovation.

This paradigm was at first gradually, and then quickly, transformed by the increase in coal consumption, which doubled every 50 years from the reign of Elizabeth I to that of Victoria. Coal went from 33 per cent of energy consumption in Tudor England to 92 per cent by the 1850s. The development of the Watt steam engine made the process of mining coal more efficient and pushed industrial growth even further. Wrigley argued that Britain ‘moved from an almost exclusive dependence on a flow to gaining access to a stock of heat energy, from wood to coal, from the product of the annual round of plant photosynthesis to its accumulation over a geological age’.

Coal did not just have to be extracted from the earth. It needed to be transported across the country at affordable rates to major population centres where commerce and industry were focused. Canal construction was specifically carried out from the 1760s onwards to enable the transportation of coal. This helped with the transportation of other goods, such as limestone, benefitting rural towns along the way. Wrigley said, ‘fundamental importance of gaining access to a new and far more abundant source of energy in the form of coal is unmistakable’. There were 52 Acts of Parliament regarding navigation in a decade. Ahead of the arrival of railways, there were 25,000 barges on inland waterways.

Canals were accompanied by other Georgian infrastructure, too. Turnpike trusts sprung up after 1706 to facilitate road construction across the country. Initially concentrated around London and the south, they spread to the industrial north during the 1770s. Lancashire and Yorkshire made up a third of new turnpike legislation in the 1790s to 1830s. But it was the arrival of railways that brought about massive change, connecting Liverpool and Manchester in 1830. It could not have happened without coal. By 1851 there were more than 6,000 miles of rail track built.

This supply of cheap energy also depended on individual creativity. James Hargreaves’s spinning jenny, the Watt steam engine, Stephenson’s Rocket, and the first factories all sprung up during the long 18th century under Georgian rule. Joel Mokyr believes that Britain was especially well-equipped to nurture technological innovation. Mokyr has made a persuasive case for Britain’s ‘industrial enlightenment’ rooted in the scientific discoveries of the 17th century and the spread of useful knowledge in the 18th century. According to Mokyr, ‘the methods of scientific endeavour spilled over into the technological sphere: concepts of measurement, quantification and accuracy, which had never been an important part of the study of nature, gradually increased in importance’. Energy alone was essential but not sufficient. It needed scientific, technological, and industrial talent to fully exploit it.

As oil and gas took over coal after the 1880s, new advances were made with electricity, chemicals, and the internal combustion engine. Although Britain would continue to benefit from coal well into the 20th century, it could not escape relative industrial decline following the rise of the United States and Germany. Again, the explanation for this involved a complex web of factors. But what cannot be ignored is that these great powers also had incredible access to abundant energy. Germany could mine vast quantities of coal in the Ruhr valley, building up its industry. The United States not only found coal in Pennsylvania and then West Virginia, but also discovered the power of crude oil and led the way in the next wave of industrialisation. Great power status is just not possible without energy abundance.

Rising tensions in the Euro-Atlantic, Indo-Pacific, and the Middle East have brought about a new Cold War, but the major European powers – Britain, France, and Germany – have diminished in strength since the fall of the Berlin Wall. To prepare for the possible return of hot conflict and have the stamina to fight a prolonged war with a peer power like Russia, European nations need to rebuild their productive capacity. The strain on defence stockpiles from supplying Ukrainian forces has exposed the West’s vulnerabilities. But to reshore supply chains and expand manufacturing – especially in conjunction with climate goals – will require vast amounts of cheap energy if it is going to have any chance of success. Britain dropped from the world’s top ten manufacturing nations last year, while Germany’s manufacturing sector has been slowing down in recent years.

De-industrialisation in the West goes back several decades and entered a period of marked acceleration during the 1980s. Despite having a smaller manufacturing sector, many key products continued to be made in Britain and exported to the world. Germany held onto a large, productive, and successful manufacturing sector that became the envy of Europe. What has led to the manufacturing base of Europe being whittled away and offshored has been, among other things, expensive energy. Germany has been particularly hard hit by the energy crisis, and Britain has suffered from being a net importer of energy for 20 years. European energy supply has been weakened by a series of strategic mistakes, including overly ambitious decarbonisation goals, declining production in the North Sea basin, dependency on Russian gas, and – with the notable exception of France – a decades-long failure to invest in nuclear, all of which have led to higher industrial energy prices.

Europe is currently experiencing its worst bout of declinism since the 1970s. Civil unrest, stagnant growth, balkanised communities, falling living standards, spiralling welfare and healthcare costs, and low productivity are all serious problems that need to be fixed – and fixed quickly. For all of this, Europe is still home to significant talent and potential that is just waiting to be unleashed. The world is on the brink of the next wave of industrial change, driven by AI, robotics, quantum computing, and biotech. Britain and France have been home to many of the exciting tech startups that have appeared in recent years, but they often do not stay. Instead, they up sticks and move to the United States or elsewhere.

Tax, regulation, investment, and culture have all created a tough environment for tech and industry to flourish in European cities, but energy costs have been a massive factor. Global data centre capacity needs to rapidly grow, and could cost as much as $7 trillion to power the next industrial revolution, but we barely have enough power to supply our current needs. From blackout risks to poor grid planning, Europe is struggling to keep moving forward. Politicians have promised planning reform and new spending to improve energy infrastructure and support industry, but it is not enough. Europe is brimming with raw talent that needs to be nurtured and anchored in London, Paris, Munich, and Berlin instead of fleeing to Silicon Valley.

The unavoidable fact is that manufacturing requires high levels of capital expenditure, and this means getting investors interested in atoms as well as bits. New industrial startups, led by entrepreneurs and engineers from the tech scene, have sprung up with the explicit goal of rebooting the industrial revolution and rapidly rearming Europe. Companies like Arondite are doing exciting work on software to manage unmanned platforms for the military. ARX Robotics is a German dual use company making unmanned systems. Helsing, a German defence-tech company, is building autonomous submarines. Organisations like the European Defence Tech Hub have emerged, connecting people through hackathons and demonstrations to inspire new thinking and spread best practice. Ukraine’s defence tech sector has been helping other European countries to learn more about how to exploit drone warfare.

Isambard, led by Alexander Fitzgerald and named after the great industrialist Isambard Kingdom Brunel, has a manifesto for restoring British industrial greatness and should be a rallying call to Europe as a whole. Fitzgerald believes manufacturing needs a cultural shift to make it attractive for elite talent, in the same way finance was after the neoliberal revolution and the internet after the financial crash. Europe has just not been investing enough in productive innovation with a low level of industrial robot installations compared with China and others. The prominence of automation should be an opportunity to reverse offshoring and use efficient robots over cheap foreign labour. None of this can be achieved without cheap energy.

To bring about this cultural shift, European industry cannot wait for politicians to act. Founders, venture capitalists, machinists, engineers, toolmakers, and software engineers need to embrace the spirit of the Georgians. They need to get organised and just do things, starting with energy. Neither fossil fuels nor renewables can deliver energy abundance alone. Both still need to play a role in Europe’s energy mix. But the best solution is nuclear. Britain used to be a world leader in civil nuclear power, and it can be again. France has kept its edge, but can help Germany and others to catch up. The Georgian state was certainly active in economic life, but it only succeeded by enabling a movement that already existed.

On top of radical regulatory reform and major public investment, European industry needs to support today’s equivalents of Arkwright, Hargreaves, Watt, Wedgwood, and Stephenson. China might be following the Georgians with its massive coal consumption, but Europe can match Georgian ingenuity to grasp cheap energy from nuclear to power new technology and weapons. This means finding answers to problems like building gigawatt nuclear plants more quickly and more affordably, developing the use of advanced modular reactors and small modular reactors, as well as finally unlocking the power of fusion. Nuclear can deliver true energy abundance that is clean and makes the next industrial revolution happen in Europe. It just requires Europe to rediscover the Georgian hunger for abundance.

Author

David Cowan