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Joseph Chamberlain and Retailing
Joseph Chamberlain (1836-1914) the radical nineteenth-century businessman and politician who terrified Queen Victoria and many others, is back in the news again.
The man who broke not one but two political parties has been twice cited by Prime Minister Teresa May as an inspiration. Her joint chief of staff, Nick Timothy, has even written a pamphlet about him (Timothy, 2012). Once-despised concepts like 'industrial strategy', city mayors, educational excellence and the regions are back in fashion again. What can this mean for retail strategy?
Keen readers of this website will know that our ploy is to see all activity through its impact on shopping and shopkeeping. Hence the title of this page is 'Joseph Chamberlain and Retailing'. Admittedly, this is not the most obvious slant on Joseph Chamberlain. In fact it may be a world first for us.
Starting as a shoemaker, then manager, of the family store in Cheapside, London, he was sent by his father to Birmingham to look after the family interests in a new engineering company. Chamberlain and Nettlefold under Chamberlain's leadership combined new engineering technology with excellent management and sales skills to become the largest manufacturer of screws and fastenings in the UK, making worldwide sales. The company was the precursor to today's GKN and Chamberlain himself became a millionaire, in the days when 'millionaire' meant very, very rich indeed.
'Gas and Water Socialism'
Birmingham's population had grown rapidly in the nineteenth century (by +358%, 1801-71), but comparatively little had been done for this population. There were shanty towns, acres of slums, poor sanitation, an inadequate water supply, and comparatively few schools.
Chamberlain became mayor of Birmingham in 1873, determined to put right decades of neglect. Declaring, 'in twelve months the town shall not, with God's help, know itself', he started a rapid overhaul of the town and its administration, which made him a legend of municipal activism.
The town bought out the local private water companies at a time when 80% of homes had no piped water supply and the others had water for only three days a week. Birmingham Water Department replaced private companies and was run efficiently as a non-profitmaking concern. Chamberlain thought it immoral to make a profit from a necessity like water. The death rate in central Birmingham had risen in ten years from 14.6 per thousand to 27.2 per thousand, but the changes made on his watch cut the death rate by one-half in five years.
Chamberlain bought out the local gas company, the profits of which were spent on the central museum and art gallery, making him a pioneer of what became known as 'gas and water socialism'. Taking over the private water companies and the gas company was the prelude to launching a massive Improvement Scheme. The scheme eliminated 50 acres of slums in central Birmingham (Chamberlain provided £10,000 of his own money [£1mn in today's money]) to the project.
'The Best Run City in the World'
The degraded buildings in the town centre were replaced with wide streets including the new Corporation Street, and new shops and offices to enable Birmingham to become the commercial centre of the Midlands. Chamberlain noted that the number and quality of shops in Birmingham was well below what should be expected for a town of that size. Slum clearance was actually profitable for the town because the council made speculative profits on the land and paid comparatively low compulsory-purchase prices. The leases on city centre property were set by Chamberlain to expire in the late 1950s/1960s, which he planned so that the Council would then become the outright owners of the town centre. There were heavy debts of course from this municipal activism.
Chamberlain combined social concerns to alleviate the sufferings of the poor with the need for urban development, public buildings shops and department stores. Schemes also provided new housing, libraries, swimming pools, and schools.
Chamberlain was not interested in promoting socialism, but saw the town council as a type of business, 'like a joint stock company of co-operative enterprise in which the dividends are received in improved health and .... increased comfort and happiness of the community'.
Chamberlain, the former shoemaker and store manager, worked closely for most of his political life with Jesse Collings, a Birmingham retailer of hardware [DIY] goods (trading as Collings and Wallis). By the time Chamberlain had finished, Birmingham at the time was regarded as the 'best-run city in the world' and experts from many other countries travelled to Birmingham to see whether they could borrow some of that magic.
The Civic Gospel
George Dawson (minister of the Church of the Saviour, Chamberlain's Church) urged his flock to see their responsibilities to the city as part of their responsibility to God, a doctrine known as the Civic Gospel. He proclaimed that 'a great town exists to discharge towards the people of that town the duties that a great nation exists to discharge.' Chamberlain was obviously a powerful American-style city mayor of the type advocated by Labour and the Coalition governments since 1997 - except of course that Chamberlain, as always, was doing this 100 years earlier. One thing that historians often do not focus on was the way that Birmingham at that time was a town led by prominent nonconformists running family businesses, whose children knew one another and married each other, and often took leadership roles in political campaigns, local government, education and the arts as well as business. This was what the Germans call Mittelstand. Chamberlain needed that second tier of experienced and enthusiastic men and women to administer and carry through his programmes.
The radicalism and the 'Unionism' Chamberlain proclaimed were identified closely with the interests of the middle and working classes: for many he was a cult figure who obsessed both supporters and opponents. Others hated him: Prime Minister Lord Salisbury called him 'a Sicilian bandit'. Beatrice Webb (whom he was courting at the time) said that when he spoke at mass meetings the audience responded to him like a lover. He used the profits from Chamberlain and Nettlefold to ensure that the company paid the best wages and got low staff turnover. Although he was not desperately sympathetic to trades unions, Birmingham Trades Council thought him sufficiently fair to make him a trustee of their funds; he also chaired the meeting called to form a Co-operative retail society in the city. Chamberlain and Jesse Collings, the quintessential urban capitalist businessmen, had a great interest in the lives of agricultural workers and promoted schemes of allotments, kitchen gardens and smallholdings to allow them to grow their own food. Collings ensured that the millionaire chaired the meeting called by Joseph Arch to raise funds from Birmingham citizens for the first Agricultural Workers' strike.
The Four F's
The first Chamberlain campaign, mainly influenced by Jesse Collings' personal report on American education, was first the Birmingham Educational League which became the National Education League, advocating free nondenominational education for every child. Two million children did not attend school and the quality of many schools was inadequate.
Chamberlain later expanded this to the 'Four Fs' - free church, free schools, free land and free labour. This meant:
- Free Church: the disestablishment of the Church of England;
- Free Schools: compulsory education for all children in non-denominational technical and arts subjects, and ending support for church schools (ie no 'faith' schools);
- Free Land: the rights of tenants to share in the increase in value they made by improving their land and property (rather than it being appropriated by landlords); and
- Free Labour: ending oppressive legal curbs on trades unions.
He was an early advocate of old age pensions and support for the workless, on the (then) German model that many reformers believed would improve living standards. Although he is often considered to have been a radical in his youth and conservative in old age, in fact he was radical throughout all his life in domestic policies (including the need for an old age pension) and imperialist in foreign affairs.
It was not all plain sailing. Chamberlain found it difficult to get approval for his ideas in Parliament because he failed to create a consensus for radical policies. He failed to get the support of establishment Liberals. For example, although Chamberlain was President of the Board of Trade and an early advocate of a statutory Plimsoll line on the bows of ships to protect the lives of sailors, he failed to persuade his fellow Liberals to pass this measure. Liberalism at this time was split on the issue of Irish Home Rule: Chamberlain, though originally a friend of Parnell, felt this was a diversion from the work of improving living standards and transforming the UK. He split the Liberal Party and later left it to work in conjunction with the Conservatives, which he also split. He felt the Conservatives reneged on their promises of support for a more radical domestic programme made when he joined them.
Powell's (1977) book on Chamberlain commented on Chamberlain's career:
'All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs.' (often misquoted as 'all political lives end in failure')
Chamberlain did not achieve even one-half of what he set out to do. For Winston Churchill, Joseph Chamberlain had been
'incomparably the most live, sparkling, insurgent, compulsive figure in British affairs'....'the one who made the weather'.
He was the first modern politician, a superb organiser. Chamberlain was probably thinking fifty years ahead. With the benefit of hindsight we can see that a large number of his ideas and attitudes are now part of the consensus and are still provoking even today.
Industrial Policy and Jobs
Chamberlain, his allies and the towns of the north and the midlands were of course in favour of the continued development of industry, technical training and the encouragement of exports. Britain remained a free trading nation at a time when her trade competitors in Germany, France and elsewhere imposed tariffs. Hence Chamberlain became an advocate of 'protection' (tariffs to support British manufacturing) and imperial trade.
He was always opposed to what he saw as economic policies that gave preference to banking, finance and commerce centred on London at the cost of manufacturing jobs, infrastructure and manufacturing businesses in the rest of the country. His policies were radical and generally involved action rather than hoping that something would turn up.
But Chamberlain's approach was not activism for its own sake. It was linked to a careful strategy. His strategy was based on:
- a clear understanding of local needs and sympathy for employees and the workless;
- a good financial basis for projects and a strong treasury;
- close cooperation between local business leaders, municipal enterprise and the state; and
- excellent administration.
He felt that the capitalist system created too many pockets of wealth: working families needed to be protected from aristocrats with their inherited land and wealth, but also from rapacious businessmen and greedy landlords. Chamberlain's ideas about the need to protect people in lower income groups from oppression and bad faith seem resonant today.
So what does Chamberlainism mean for Mrs May, industry and retail?
Probably a recalibration of policy with a much greater focus on work, opportunities and living standards using an expansionist industry policy. We can discern five themes relevant to today:
- A comprehensive industrial strategy, based on local needs and using local knowledge intended to replace imports and create the vital supply chains needed by British business.
- New housing, potentially a provider of 1 mn new jobs and a swift way of improving the living standards and opportunities.
- For education, an increased focus on science, maths, technical subjects and foreign languages; abandoning the current emphasis on university as the only useful goal for young people; and increased focus on vocational training, retraining and part-time study for adults.
- A concern for manufacturing industry and jobs once again, rather than assuming that retail, service industries, banking and the City of London are all one needs to worry about to provide work.
- Requiring Government permission before a significant UK business is purchased by a foreign company.
- A level playing field where online businesses face the same levels of corporation tax and property tax as does retailing through stores.
- Higher wages for retail workers and better jobs, which will probably mean fewer jobs, more automation and perhaps fewer stores.
- Reform of Insolvency laws to ensure that creditors, employees and pensioners are better served than they are at present by legislation designed to keep failing companies alive.
Crosby, T. L. (2011) Joseph Chamberlain: A Most Radical Imperialist, London: I.B.Tauris.
Hunt, T. (2004) Building Jerusalem: The Rise and Fall of the Victorian City, London: Weidenfeld and Nicolson.
Marsh, P. T. (1994) Entrepreneur in Politics, New Haven and London: Yale University Press.
Powell, J. E. (1977) Joseph Chamberlain, London: Thames and Hudson.
Timothy, N. (2012) Our Joe: Joseph Chamberlain's Conservative Legacy, Conservative History Group (available probably only online).