Use of Debt Market

One of the major and innovative reasons why Britain succeeded between the mid-eighteenth century and the mid-nineteenth century, while other European nations fell, was that it used the debt markets to fund its wars. The world’s first central bank—the Bank of England—was established to sell government debt to the money markets on the promise of a decent return on Britain’s defeating rival countries like France and Spain. Britain was thus enabled to spend much more on its military than its rivals. Britain’s rival France could not match the expenditure of the English; between 1694 and 1812, first under the monarchs, then under the revolutionary governments and finally under Napoleon Bonaparte, France simply went bankrupt with its outdated ways of raising money.