ABSTRACT
The British readjustment after the Napoleonic Wars is of analytic interest because each of the aspects of the process was more or less successfully achieved without positive intervention by the state. In economists' terms, Britain's situation from 1793 to 1815 is best understood as a case in increased capital exports. Theoretically, a shift from domestic to foreign investment should result in the following interrelated changes: a rise in the domestic rate of interest, an increase in exports relative to imports, a relative slackening of the rate of domestic investment, a decline, or at least a check on the rate of increase, of real wages. In 1814 a speculative foreign trade expansion, based largely on extravagant hopes concerning the Continent's power to absorb British manufactures and re-exports, collapsed. The period from 1815 to 1850 was dominated by the continued growth of foreign markets and an enlarged volume of domestic investment.
