ABSTRACT
W hat eventually underm ined the Gladstonian consensus and threatened the ability o f governing elites to keep economic policy out o f the public eye were rising defence costs and the new demands made upon civil expenditure by policies designed to m eet the needs o f the m ore democratic electorate created by the 1867 and 1884 R eform Acts. Gladstone’s great budgetary feats were made possible by neglecting defence spending and by the luck w hich enabled Britain, given the state o f Europe, to enjoy naval supremacy on the cheap.1 The extent o f the luck was made plain during brief periods o f adversity like the Crimean W ar, w hen soaring military expenditure pushed up direct taxation sharply, Bank R ate rose steeply to stem a drain o f gold, governments were forced to add to the national debt and even free trade was threatened before the war came abruptly and unexpectedly to an end in 1856.2 H alf a century later, the Boer W ar also triggered off a similar financial crisis, w hich threatened orthodoxy and the C ity’s supremacy.3 Like the earlier conflict, it also led to sharp criticism o f the amateurism and inefficiency o f Britain’s governing institutions.4 The Crim ean conflict was a set-back to Gladstonianism soon retrieved: by 1900 the Boer conflict only exacerbated the tendency for defence, especially naval expenditure, to grow in response to the threat posed to the Pax Britannica by first French and Russian and, later, German expansion.
