The American Tribune considers how war-exhausted Britain staged a brilliant recovery after the decades of war against Republican and then Imperial France culminating in the exile of Napoleon to a remote island in the south Atlantic:

The grinding war is finally over after what feels like decades of bitter conflict on an inconceivably large scale. The entire world had become a battlefield in which the British had fought desperately to keep their imperial possessions secure in the face of vast hordes of enemies of all sorts, with the Navy and Army strained to the breaking point as battalions launched expeditionary raids and grinding, years-long campaigns everywhere from the steamy Orient to the Mediterranean, the bitter cold of the North to the coast and shores of Northern Africa.

Truth be told, victory, though it came in the end, had strained everything nearly to the breaking point. High taxes had driven the landed element to the breaking point. The necessity of convoys, of relying on domestic agriculture, of keeping the empire intact from an island the size of Michigan … had strained the British people and British society to the breaking point. Class tensions were high, taxes were already ruinously high, and to many elements, rich and poor alike, victory hardly seemed worth the immense cost in gold and blood.

And that was before considering the debt. The ruinous, mountainous, inconceivable debt. Well over 200% of GDP, it would later be calculated … and not at the negative interest rates of modernity either. Over 200% of GDP priced in real, somewhat gold-backed currency, with those who bought it demanding a real return. Ruinous, it was, ruinous! For this final conflict had been preceded not by many long years of peace, but by a similarly large, long conflict that had also involved campaigns across every corner of the earth, mutinous colonials, immense expense, and heavy taxation.

So victory had come. The war against an immense continental hegemon had been won, the international order was stabilized to the liking of and in accord with the ideology of the political elite, and the empire kept together in a hugely expanded state. But the cost had been high. Perhaps the cost had been ruinous …

I am, of course, describing Britain circa 1815, after its final victory over Napoleon at Waterloo. What followed was its century atop Olympus, the century where it ruled a quarter of the Earth’s surface, dominated all the sea lanes, was the world’s reserve currency, and became the world’s financial capital. Despite the expense, the defeat of Napoleon did not bring ruin, but success on an unimaginably immense scale.

What happened? Why did the Britain that defeated Napoleon become the hugely successful nation of the Victorian Age, but the Britain that followed the defeat of Hitler became a wrecked backwater, a miserable shell of its former self? The post-war debt load was similar. The human cost had been higher, but not remarkably so, particularly if the immigration outflows of the 19th century are considered.¹ The logistical strains were similar, the social strains similar, and the fractious politics of the wars similar.

But the Britain of the 19th century became the hegemon of note, whereas that of the 20th century became essentially irrelevant. Mindset makes all the difference in the world, as I’ll show in this article, along with why this matters for Americans.

Britain after Napoleon

It is important to note that Britain’s immense imperial and economic success after the defeat of Napoleon was no sure thing. Yes, unlike much of Europe, it hadn’t been ravaged by invading armies. But it had lost its best colonies in the disastrous rebellion that followed the immensely expensive Seven Years’ War, a world war in all but name. It was staggering under a ruinous mountain of debt that could scarcely have been imagined earlier in the century: the national debt stood at somewhere around 210% of GDP, after post-war deflation had been accounted for, with somewhere around 10% of national GDP going just toward paying the interest on that debt.

Perhaps, worse, the population was restive. During the war, farmers and landlords had been pushed into embarking on extremely expensive schemes to drain and enclose land, schemes costing millions of dollars per thousand acres in today’s money; while that worked tolerably well during the war itself, as grain prices remained high, the expense and the cost of the debt used to achieve it was a crushing burden after the end of the war meant renewed trade and a fall in grain prices. That expense and the pain caused by it meant that not only were the farmers and the landlords struggling to make ends meet, but they had little left to pay agricultural laborers, who had their wages cut as a result, putting that bottom rung of the social ladder in an immensely precarious and dire economic position.

Much the same situation played out in the nascent industrial sector, where the end of war meant falling prices for finished goods and thus both lower profits and lower wages, angering industrialists and workers alike. As food remained expensive compared to wages, this meant major unrest, too. Thus, other than perhaps some financiers who were doing well off the debt, particularly given post-war deflation, most segments of society were unhappy at how the government was being run.

A high debt load that could only be maintained with high taxes, a highly restive and discontented population, and an economy-punishing bout of deflation are not the stuff of which great empires are typically made.

But the British figured it out, and did so without massive inflation, government default, or authoritarian societal repression.

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1. This is noted by AJP Taylor in his The First World War and Its Aftermath