Corn Laws

Free trade promotion along with cancellation of Corn Laws would make Britain stronger in a long term.

Summary

For nearly two centuries, the Corn Laws protected British agriculture. However, growing industrial development in Britain in 19xx’s showed that Corn Laws, in a long term, became a barrier for economic growth. Corn Laws increased price for grain and limited manufacturing development, while free trade could improve situation in Britain by:

❖ Decreasing price for wheat, decrease unemployment rate and increase purchase power of customers

❖ Enhance human and capital distribution and amplify British comparative advantage in manufacturing

❖ Low-tech to High-tech industries economic transition could be accelerated as well as value-added chain could be optimized.

As a result, the Corn Laws cancelation and introduction of Free trade would improve the economy in the long term.

Free trade as a way to Increase purchase power of customers, decrease unemployment rate and decrease price of wheat.

❖ Free Trade will decrease the wheat price and increase customer purchase power

• In 1800-1850 period wheat prices in Britain where two times bigger than those in United States. (Exhibit 1) This was the consequence of Corn Laws, which restricted imports of corn as well as competition amongst corn producers. That made consumers to suffer. Moreover price for agricultural and industrial products was fluctuating. (Exhibit 3)

• Free trade would “unchain” corn market, stop fluctuation of wheat price and lower them, this would improve customer purchase power and overall life standards.

❖ Free Trade will decrease unemployment

• Corn Laws caused massive job losses in the manufacturing industry as a result of the Economic downturn of 1839. People had to reduce consumption of any luxury goods in order to buy basic products for high prices. That lead to decrease of industrial production and manufacturers had to lay off...