Disraeli’s Depression

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

When, as a newly arrived backbencher, Benjamin Disraeli had the temerity to announce to the British Commons that "half the cabinet are asses”, he was immediately called to order by the speaker and informed that he owed the House an apology. Disraeli replied, "I withdraw my statement. Half the cabinet are not asses."

Disraeli's longest tenure as prime minister was from February 1874 to April 1880. Those are usually categorized as the dates that were when the late 19th century’s severe “great depression” began. That fact has led most historians to judge Disraeli and his American counterpart, President Grant, as failures as the chief executive managers of their countries’ economies. Yet, throughout the years of that “great depression”, both men were viewed by almost all the “common” people as being the heroes of their age. They were both praised for having raised their countries’ standards of living and financial standing. For Disraeli, in particular, one has to ask how, in the midst of a “great depression” could Britain have risen to become the greatest financial power in the world, with the largest empire and a navy that literally ruled the seas?

The simplest answer to this seeming paradox is that "Britain" as a country did not have an economic depression in the 1870s and 1880s; its owners of capital did. As A. E. Musson puts it, "the standard of living improved. Prices certainly fell, but almost every other index of economic activity-output of coal and pig iron, tonnage of ships built, consumption of raw wool and cotton, import and export figures, shipping entries and clearances, railway freight and passenger traffic, bank deposits and clearances, joint-stock company formations, trading profits, consumption per head of wheat, meat, tea, beer, and tobacco - all these showed an upward trend….(T)he wail of distress did not come from the mass of the people, who were for the most part better off, but mainly from industrialists, merchants, and financiers, who felt the pinch of falling prices, profits, or interest rates."