Globalization, 1815−1914: trade and development

1. Globalization, 1815−1914: trade and development Topics: • World economy in the long 19th century • Industrialisation, mid-19th century to 1914 • Transport & communications in 19th century • Long distance trade, 1815−1914 • Commodity market integration and convergence • Britain’s move to Free Trade • Liberal interlude in commercial policy, c1860−c1880 • Retreat from Free Trade: rise of Neo-Mercantilism • Free Trade Imperialism

2. The World Economy in the long 19th century • Move towards international Free Trade, 1840s−60s • Retreat from late 1870s with rise of neo-mercantilism • Industrialisation: western Europe caught up, 1850s−60s • Industrialisation: a “second” Industrial Revolution? • Globalisation: the first(?) phase 1860s−1914

3. Industrialisation, mid-19th century to 1914 • Technological advance in broad range of industries • Landes’s classification: I. “New materials and new ways of preparing old materials” II. “New sources of energy and power” III. “Mechanisation and division of labour”

4. Transport & Communications in the 19th cent. • Canals: linked oceans, inland waterways expanded • Ocean: improved ship design and refrigeration • Railroads: expanded across the world after 1840s • Telegraph: networks widespread from late 1840s

5. Long distance trade, 1815−1914 • Growth of trade faster than GDP; brief cyclical interruptions • Growth dominated by Europe and the New World • Shift from high-value/weight to bulk commodities • Changing trade patterns affected composition of domestic output and distribution of income • What determined of the changing patterns of trade?

6. Commodity market integration & convergence • International commodity markets became more integrated, 1815-1914 • Compare commodity prices at the origin (production) with those at the destination (consumption) • Commodity market integration and income distribution • Commodity prices -> trade patterns -> production patterns -> income distribution

7. Britain’s move to Free Trade • In 1815, Britain remained highly protectionist • Agricultural protection reinforced: Corn Law of 1815 • Corn Law repeal in 1846 signalled onset of Free Trade • Free Trade Imperialism: enforced foreign openness Sir Robert Peel

8. Liberal interlude in trade policy, c1860−c1880 • In 1815 most European nations were highly protectionist • Gradually less protectionist policies were adopted • Cobden-Chevalier Treaty between Britain & France, 1860 • Despite Free Trade Imperialism, much of the world remained protectionist

9. Retreat from Free Trade: rise of Neo-Mercantilism • From c1880, most nations retreated from trade liberalisation • Variety of causes: preservation of existing living standards and/or promotion of new industries • Varying national responses: some countries upheld free trade, others became more-or-less protectionist

10. Free Trade Imperialism • European overseas empires expanded during the 19C: • Mainly to impose trade “openness” • Greater autonomy for European offshoots • USA and Russia pursue continental expansion • A North-South divide? • Europe (`north’) versus the rest (mostly `south’)

11. Summing up • In 19C, international trade expanded faster than output • Globalisation: reflected in commodity price convergence • Convergence of incomes (returns to factors of production) • Partly from trade flows (goods and services) • Partly from factor flows (migration)