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Readings for this lecture:
- IMF, "Globalization in Historical Perspective," World Economic Outlook May 1997.
- Douglas Irwin, "The United States in a New Global Economy? A Century's Perspective," American Economic Review May 1996
- Albert Fishlow, "Lessons from the Past: Capital Markets in the 19th Century and the Interwar Years," International Organization 1985.
- Michael Bordo, Barry Eichengreen, and Jongwoo Kim, "Was There Really an Earlier Period of International Financial Organization Comparable to Today?" in The Implications of Globalization for World Financial Markets (Bank of Korea, 1998).
- Mark Carlson
- Chris Mitchener
- Michael Enriquez
Five Things to Keep in Mind
- Even the most advanced economies at the start of this century were still very, very poor as we would count things.
- In the late nineteenth century transportation costs had finally fallen low enough and transport and communication speeds had become high enough to make mass intercontinental shipments--of goods, of information, and of people--possible.
- Third, this fall in transport costs created the possibility of a global economy--an economy in which movements of people and goods across oceans were central to how the economy worked, rather than mere luxury froth on the surface of a deep ocean of "material life."
- Fourth, that much of the economic history of the years before WWI can be read as the working-out of the economic, political, and technological logic of the--relatively sudden--creation of this first true global economy.
- In the long run this pre-WWI pattern would not last. It was destroyed by politics and war in the years after 1914.
- In Britain alone was the economy predominantly industrial at the start of the twentieth century.
- Even Britain was hardly a "modern" economy. Only 6% of students finished high school.
- Other economies--even the most advanced economies--still had 30% of their people working as farmers in 1900.
- American standards of living: Homestead, PA
Transport Costs and the Global Economy
- Previous waves of exports: splendid and trifling
- Staples begin to cross the seas in the first half of the nineteenth century
- Impact of cotton on British industrialization
- Responsible for a 4% income gain (holding consumption constant)? For between 15 and 60 percent of output per worker growth in Britain in the first half of the nineteenth century?
- Explosion of railroad mileage: India from 0 in 1850 to 32000 by 1910, China from 0 in 1870 to 5000 by 1910, U.S. from 9000 in 1850 to 250000 by 1910, Australia from 0 in 1850 to 17000 by 1910.
- 100 million people--14% of the global population--change continents in the 50 years before World War I
- Capital flows
The Global Economy
- Manufacturing exporst as a share of GDP among "advanced" countries up from 5% in 1800 to 12% in 1913. Increase in long-distance shipments much greater...
- In 1870 wheat cost 60% more in Liverpool than in Chicago; by 1913 it cost only 15% more.
- In 1870 copper cost 33% more in Philadelphia than in London; by 1913 it cost the same.
- International financial crises
- Effect on living standards of trade and migration? Hard to see that big an effect through trade; easier to see through migration
- Technological diffusion? There but surprisingly slow.
Dealing with the Global Economy
- Backlash: Chamberlain; whites-only; immigration restrictions
- Exploitation by the metropole
- Exploitation by the periphery
Links to relevant draft chapters I have written...