Capitalism: Its Origins in the North East

Jack Turner investigates the potential origins of Capitalism right here in the North East. The region's industrial and trading heritage, tied in with examples such as Crowley's Works close to the Tyne, makes it a compelling case.


It is no controversial thing to state that capitalism has successfully dominated the world. Capitalism - as we know it today in its current form - is often said to have begun during the time of the industrial revolution. The below piece highlights the importance of industry on Tyneside throughout the centuries prior to the industrial revolution. It also comments on how the region can arguably be perceived as the birthplace of the revolution itself.


The North East of England is an area that has long been synonymous with industry - and in particular the industrial revolution. Famous regional legends such as Joseph Swan invented the lightbulb in his home on Kells Lane, in Gateshead in 1850. Swan did not publicly demonstrate it until 1879 - where it worked more effectively than it had in the previous years.

A further example of leaders in industry within the region were George and Robert Stephenson who designed the first locomotive in 1814 - used to haul coal on the Killingworth waggon way. What is lesser known however is the specific role that the region played as a progenitor to the capitalist world that today we view as normal.


To get a true picture of this impact we can journey all the way back to the 13th century. During this time, the burgesses of Newcastle upon Tyne attempted to fully control the export of coal from the River Tyne and the surrounding areas during the time period. Trade Guilds formed by King John in 1216 facilitated this monopolisation attempt.

This attempt to fully control the trade of the region would eventually lead to disputes between the burgesses and North Shields - at the time owned by Prior of the Tynemouth - regarding the export of coal shipments. Things came to a head between the two when in 1267 Nicholas Scott - then the Mayor of Newcastle - attacked North Shields burning down several buildings in a show of force.


By 1290 the export of coal from North Shields was disavowed by King Edward I and the monopoly returned, illustrating both the power of the burgesses and also the economic importance of the region to the monarchy.


The importance of the North East was viewed as fundamental to the nation by a succession of sovereigns over the centuries. In 1583 Queen Elizabeth I leased the mines of Gateshead and Whickham to Henry Anderson and William Selby, two Newcastle merchants who in turn gave them to the leading hostmen of the town. This became known as ‘The Grand Lease’ and the hostmen themselves were termed ‘Lords of the Coal’ as they tightened their grip over the production of the resource.


Illustrating the might of the North East during this time we see that by the 17th century:

‘the great traders of the town had become the bankers for the whole of North England, from the Tweed to the Tees… their involvement in trade brought prosperity to the town, and many of the Newcastle hostmen, or coal-shippers, used their business gains as a nucleus for money-lending.’


The coal-merchants had a powerful influence within the region during the 17th century:

‘in Northern Society they had come to form the most influential group. This is particularly true of the inner ring of hostmen, a small group of perhaps twenty, who exercised political and economic control in the Tyne Valley far greater than would be expected from their numbers.’


The region was heralded in 1643 as supplying:


‘the greatest Part of this Kingdom, and more especially the City of London, and most Maritime Towns, are served and furnished with Coals from the town of Newcastle upon Tyne, and the adjacent Parts of Northumberland, and the Bishopric of Durham.’

The North East truly was the engine room of the nation for centuries. Newcastle and its relation to coal was truly the furnace that the city - and, by extension, the nation as a whole - was built upon. For centuries to speak of the city was to talk of coal.

In contemporary times the region’s relationship with mining and miners is storied throughout the United Kingdom despite the vast majority of coal mines being closed for decades (the last in the North East being the Bradley Mine in Consett, County Durham, which closed for the final time on Monday 17th August, 2020.)


A further dimension of the region’s history that is less familiar than its storied history with coal is that the North East of England was potentially the birthplace of the modern Capitalism system as we know it today.


This is effectively illustrated by the fact that the Derwent Valley was the home of the world’s first industrial proletariat. They sold their time in exchange for work doing industrial labour as far back as 1700 at Crowley’s metal works. This was many decades prior to the 1783 opening of the first cotton mill in Manchester, an event which is commonly cited by historians as the beginning of the industrial revolution.

Photograph of the ruinous iron works some time after its closure. It seems nature has taken ownership of the buildings that made up the site, though various bits of machinery and a chimney can be seen. This particular building is Winlaton Mill, part of the site.

The initial seeds from which the growth of the industrial revolution would later sprout worldwide were planted within the North East of England; the true beginning of the industrialised society.


Bill Lancaster in his illuminating study ‘The Lower Derwent Valley and the Making of the Modern World’ references Crowley’s metal manufacturing business within the valley as being: ‘the world’s largest capitalist enterprise, employing as many as 1,500 workers.’ He goes on to state that: ‘the expansion of coal mining in the Whickham and Winlaton area was seen as the driving force of the British coal industry.’.


These areas within the region were the driving force of the coal industry and the coal industry itself was the driving force of the industrial revolution. Coal supplied the means to turn iron ore into iron, build steam engines and also helped build the machinery in the factories that powered the revolution itself.


It is hard to overstate the impact of the industrial revolution on such areas as diverse as: urbanisation, child labour, economic growth, the role of women, the working-class, the emergence of a middle-class and an untold amount more. Following the logical thread here it can be argued that the Whickham/Winlaton coalfields were two degrees of separation from the fundamental re-ordering of the way societies across the world work.


Bill Lancaster highlights that the ‘analysis of iron manufacturing and coal mining highlights the proletarian nature of local society where the vast majority of the population were employed in capitalist enterprises and were almost totally dependent on wage labour for survival.’


Clavering also mentions the capitalist nature of the coal industry leaders during the time period by stating that the: ‘coal-owners had begun as model free-market entrepreneurs, bargaining for access to coal, buying in services and materials and knew the insecurity and inefficiency of mining this way.’


The entrepreneurs were willing to take the risk - an economic model at the time that truly represented the principles of the free-market. To put it more bluntly - sink, or swim. This was at a time far prior to the Keynesian tenet of government interventionism.


What can undeniably be asserted is that - for centuries - industry within the North East defined:

a) the region itself

b) the nation as a whole


What can potentially be asserted is that in instances such as:

a) being the seat of the world’s first industrial proletariat in 1700

b) the region being the birth of - and having a formative impact on the development of- the industrial revolution which would go on to change the world.


The seeds of the capitalist system that define our times could have been planted right here, within the North East of England.



Jack Turner is a recent graduate of Northumbria University studying History & Politics. He writes freelance for the North East Heritage Library, UpWork & WhatCulture. He has a keen interest in the social history of the North East and how that has moulded and shaped the present. In his spare time he enjoys creative writing, making music and listening to podcasts/lectures online.