Capital Exports during the Victorian Period

Between 1860 and 1914 net foreign investment averaged 1/3 of national income with net overseas assets forming 7% of national income in 1850 which more than quadrupled to reach 32% by 1913 (Edelstein). Contemporaries of the time along with recent economic historians have speculated that this vast amount of capital being sent abroad was detrimental to domestic growth believing that if the capital had instead been invested at home Britain would have seen more rapid growth. We will explore these arguments to find that whilst capital exports may have been slightly too excessive during the period, it didn’t cause a huge impact on domestic growth.