“A British Deutsche Bank”: Imperial Business Competition and the End of Laissez-Faire

Ian Kumekawa, Harvard University

This paper describes how early 20th century British state administrators dramatically moved from a laissez-faire approach to heavy industry toward a much more proactive set of policies, explicitly modeled on German private-public partnerships. In particular, it focuses on how British officials and businessmen cooperated to form a “British Deutsche Bank” during World War I. War with Germany and the anticipation of increased competition with the United States pushed the British state to explicitly support British business. To promote trade, Britain hired hundreds of people, spent millions of pounds, and formed a new agency. In so doing, it also broke with decades of established wisdom about the role and size of the state. Before World War I, London was a principal guarantor of British economic prosperity and geopolitical hegemony; as a result, British banks were largely unregulated by the state. But in 1917, despite ferocious resistance, the government founded a trade bank, the British Trade Corporation (BTC), that directly challenged the big London banks’ business. Inspired by German industrial combines and largely funded by British industrialists, the BTC was a triumph of industrial lobbying. The official trade promotion schemes firmly entrenched a wartime attitude within the postwar British state. The close wartime cooperation between industrialists – particularly arms producers – and civil servants was calcified into new departments and initiatives that would far outlast the war, permanently joining public and private into the business-state.

No extended abstract or paper available

 Presented in Session 116. Empire, Industry and State Finance in the Late 19th and Early 20th Centuries