This video is a follow on from the previous videos dealing with the beginnings of the Bank of England and giving some important historical background information. If you haven’t seen those videos, I would recommend you doing so before watching this one.
Let’s now focus on the ramifications regarding the creation of the Bank of England.
Ramifications
What were the ramifications?
Point number one - the British Economy
It had a transformative effect on the British Economy. Britain did benefit to quite some degree. The new money in circulation obviously had a stimulative effect. Nowadays, what happened back then would be regarded as having been “a credit boom”. Direct impact was on industries associated with the war effort, such as ship building. For example, the iron industry benefitted for the new nails required.
Point number two - Financial revolution
Historians talk in terms of a “Financial Revolution” having taken place in Britain from the time of William IIIs crowning in 1688, stretching into the 18th Century.
The movement can be characterized as being a movement from feudalism to capitalism –
Feudalism in Britain was on the wane from the late medieval period, circa 1500, onwards, but it officially ended with the passing of the “Tenures Abolition Act” in 1660. Feudalism was then effectively replaced by capitalism – but really this was just a different type of socio-economic-political classification. “Same same, but different”.
Anyway, the Financial Revolution saw the rise of merchants, markets and a monied class.
The London Stock Exchange started to look like something we would recognize today. A new Royal Exchange building had been built in 1669 following the Great Fire of London in 1666. This represented a move away from the Coffee houses where trading had formerly taken place and gave the emerging merchant class a proper place to trade shares in commodities and joint stock companies. Making money was thus made more respectable.
I should say that many of the changes that took place were modelled on Dutch financial practices. The aforementioned Government Bonds, which were part of this new form of financing, is one such instance.
The Financial Revolution in the late 17th Century and 18th century could be regarded as being the first “Big Bang”, The phrase the “Big Bang” was used in reference to the deregulation of the financial markets in Britain in the mid 1980s brought about by Prime Minister Margret Thatcher.
Point number three - far reaching effects
The impacts of the setting up of the Bank of England went way beyond mere matters of finance.
The effects were far reaching.
I think that it’s true to say that it set in place the foundations for the later Industrial Revolution which helped build Britain into a force to be reckoned with in the world.
Point number four - the British Empire
The movement could be considered as being a significant factor in the building of the British Empire – I’ve done a series of videos on t
