The Laissez-Faire Experiment by W. Walker Hanlon
Deep Dives
Explore related topics with these Wikipedia articles, rewritten for enjoyable reading:
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Lancashire Cotton Famine
15 min read
The article discusses the cotton crisis caused by the American Civil War and its devastating effects on towns like Blackburn and Preston, where 30-50% were on poor relief by 1862. This specific historical event is central to Hanlon's argument about why laissez-faire failed and local relief systems proved inadequate.
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Edwin Chadwick
14 min read
Chadwick appears in the article's key terms and was the most influential Victorian-era reformer on public health and sanitation - exactly the kind of government intervention Hanlon argues became necessary as urbanization created externalities that laissez-faire couldn't address.
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Friendly society
11 min read
The article discusses pre-welfare state forms of mutual aid and occupational insurance that existed before 1850. Friendly societies were the primary mechanism for working-class insurance in Victorian Britain, and understanding how they worked illuminates why they couldn't handle concentrated industrial shocks.
The original version of this review was published by Center for Enterprise, Markets and Ethics and is available at https://theceme.org/book_review/the-laissez-faire-experiment/. Below is a longer essay version.
Economic history is distinct as perhaps the only subfield in economics where publishing a book is still somewhat normal or perhaps even expected for a senior scholar. This was certainly true of the generation of scholars whose work has shaped our current understanding of economic history: the Joel Mokyr’s, Robert Allen’s, Greg Clark’s, Gavin Wright’s of the world. Sadly, there is a sense that this expectation is fading away, as in some departments at least economic history simply becomes another genre of applied economics. Walker Hanlon’s book The Laissez-Faire Experiment is a marvelous exception to this trend and certainly deserves more attention than it has so far received.
Economic historians have a growth preoccupation. The Industrial Revolution and its causes play the leading role in most prominent books in the field. And there are many other works that seek to explain the absence of an industrial revolution elsewhere in the world.
It is refreshing therefore to read a book that is not about the causes of industrialization but its consequences. If we reach back to the past, say 200 or more years ago, two dramatic transformations are visible: one is the abundance of material goods and transformative technologies due to industrialization; the second transformation is the rise of large, modern, welfare states.
Walker Hanlon’s book The Laissez-Faire Experiment addresses this second transformation. He asks two fundamental questions: ‘First, how well did limited government in mid-19th century Britain work? Second, why was limited government abandoned in favor of the more interventionist government found in the U.K., and essentially all other developed countries, today?’
Hanlon’s argument is elegant and simple and it is grounded in standard economic theory.
The main problem facing the British economy in the early 19th century was dismantling the inefficient policies of the pre-Napoleonic war era, i.e., the fiscal-military state of the 18th century which protected large land-owners and relied on local and ad hoc institutions. Hanlon suggests that laissez-faire was an appropriate economic philosophy in this context: ‘across the first half of the nineteenth century, Britain’s laissez-faire system was successful. Economic growth was booming, and the benefits were accruing not only for the rich but also for average workers. Technological progress continued at a rapid pace. As a global power,
...This excerpt is provided for preview purposes. Full article content is available on the original publication.