The Royal Navy’s rapid expansion in the 1700s was not merely the result of a clamor for a larger fleet; it was an intrinsic driver of the domestic economy. Expansion was born from a pressing need to protect British commercial interests, and more pertinently to push and safeguard British goods, services, and most eminently, the British Empire and transatlantic slavery around the globe. These assets required fierce defense from larger, often more powerful colonial rivals who watched on with a longing hunger for global hegemony.
What we see here is that the number one agenda item of the state was driving exports and aggressively protecting them. Therefore, it is no coincidence that in 1694 as the English state was enduring bruising naval campaigns against France during the Nine Years' War and presiding over some of its worst maritime setbacks in fifty years the Bank of England was founded specifically to raise £1.2 million to fund a vital new naval reconstruction program (Gordon, 2024). It marked a definitive turning point in British and world history. For the first time, a state-backed initiative was tasked with selling equities in the Bank of England, promising a government-secured return of 8% (Bank of England, 2020) that was primarily funded by the wealthiest members of society.
The establishment of the Bank enabled the government to fund the structural changes needed to scale the Royal Navy’s size. In direct coordination, this fueled the British economic engine, ensuring continued returns for a growing empire. This prudent link between a collective, precision-targeted wealth accumulation effort and national security is laid bare in the historical data. In 1740, just over forty years after the Bank of England was formed, the number of ships in the Royal Navy had fully recovered from past defeats, surpassing 190 vessels and exceeding the fleets of its main rivals by a factor of two.
This point is further magnified by the conclusion of the Seven Years' War; by 1760, the fleet had swelled to over 370 ships just over double the size of its main rival, France (Statista, 2024). The core point is clear: this combined action by the state produced a system that could effectively levy money from all sectors of society based on collective capital investment. Though these gains were realized to varying economic degrees, the 8% returns corralled the poorest in society to pay into a system that could grow their wealth, while incentivizing the richest to invest in a strong Royal Navy to preserve and protect their fortunes that were flowing through global sea lanes.
While this outcome was heavily skewed toward a specific wealthy percentile of the economy, the underlying practice demonstrates a timeless truth: the state must take seriously the link between collective societal wealth and the raising of funds from differing sources to ensure the protection and prosperity of the United Kingdom. What, then, can we deduce from this historical example when examining the economy of the United Kingdom today?
The modern UK undoubtedly finds itself isolated in a fractured world filled with increasingly powerful adversaries, yet it currently lacks a dependent economic and diplomatic plan to restore its standing in the near future. With distinct and crass irony, Britain once again finds itself in a predicament over how to fund the future of its defense. While the halls, chambers, and classrooms of Whitehall and elite British universities clamor, discuss, and demand more defense expenditure, a broken exchequer is left scratching its head in agony simultaneously paralyzed and unable to protect the long-term interests of the state. If that loop sounds all too familiar, it is because the exact same paralysis occurred in the late 17th century.