Sunday evening TV and Victorian Economics

ITV`s stunning dramatisation of the early life of Queen Victoria has just concluded and included some poignant lessons in market and government failure. In Victorian times food security was a key preoccupation of economic theory and policy. It was the same period that gave birth to much of what is now regarded as standard microeconomic theory through the work of David Ricardo and Alfred Marshall. 

Episode 6 tells the tragic tale of the Irish potato famine, caused by a crop failure but exacerbated by a lack of government intervention as British traders in Ireland found it more profitable to export grain to England rather than sell it at a lower price to the domestic market. Parallels can be drawn with many commodity rich developing countries today. Sadly famines are invariably worsened by political mismanagement and conflict.

 Victoria was eventually persuaded by Catholic priest Dr Robert Trail to put pressure on the government to find a solution. Tory ministers resisted by blaming the famine on single crop dependency and rapid population growth in Ireland.  Many quoted the arguments of contemporary economist Thomas Malthius which showed that exponential population growth exceeded the growth in a country`s food supply. In the end Peel secretly arranged a shipment of cheap grain from America, but an estimated 1 million people died between 1845 and 1852.

 The Irish potato was also exemplified by some economists as behaving as a Giffin good, as the negative income effect of higher prices exceeded the substitution effect thus leading to a rise in demand for potatoes. 

Last Sunday`s episode 8  focused heavily on British Prime minister Robert Peel`s efforts to finally repeal the Corn laws, a policy which imposed a tariff on imported grain and kept food prices higher than the free market price. This had benefited wealthy English landowners but made food less affordable to the poor.

These episodes of Victoria are still available on the ITV Hub until at least the end of the month.

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