C. Knick Harley

Ocean Freight Rates and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaffirmed

This article demonstrates that new industrial technology caused a revolutionary decline in nineteenth-century freight rates. This overturns Douglass Norths well-known conclusion that organizational improvements were the dominant source of savings. While Norths American freight rate series declines prior to the use of the metal steamship, British rates decline only modestly prior to 1850 and then rapidly as metal steamships come into use. Cotton freights dominate Norths index and declined when cotton became more tightly packed for shipment. Metal ships and steam propulsion, however, caused a general decline in freight rates after 1850.

Cotton Textile Prices and the Industrial Revolution

C otton textile technology defined the British industrial revolution. To contemporaries and historians the invention of spinning machines, the development of the factory system, and the social consequences of the transformed cotton industry marked the beginning of a new age. The histories of the great inventors and of the working class have long attracted attention, but our understanding of the economic effects of the technological change remains incomplete. New technology reduces the price of existing goods and introduces new ones and, even if we believe that technology affected society primarily by profoundly altering work and social structure, change occurred because new ways of doing things were cheaper, yielded products of higher value, and increased profits. It is surprising, then, that we know little about the change in cotton textile prices and the cost of production between the 1 760s and the early nineteenth century. Edwards, who has written the most thorough recent economic examination of the period, provides only sporadic information about cotton cloth prices. Recently, Cuenca Esteban has attempted to fill the gap by estimating cloth prices using partial information and various assumptions. He argues that the price of cotton cloth fell dramatically despite wartime inflation-by nearly one-third between 1770 and 1801 and nearly 50 per cent more by 1815. In Cuencas view, then, prices before the industrial revolution were nearly three times their 1815 level; the wartime inflation almost doubling the cost of living notwithstanding. More direct evidence from accounts of cotton textile firms shows that, although cotton textile prices declined dramatically relative to other prices, Cuenca greatly exaggerated the scale of the fall.2 Surviving company records and government archives contain information that can, with careful manipulation, show the trend of prices of many cotton goods in the late eighteenth and early nineteenth centuries. The new technology had different impacts in different circumstances and

COAL EXPORTS AND BRITISH SHIPPING, 1850-1913

Abstract We export of British coal was a major feature of late 19th-century ocean shipping. It has often been argued that British coal was key to the success of British shipping, but close examination raises doubts. Most British coal went to European ports where British ships carried a smaller proportion of the trade than they did in more distant trades. Shared costs between outward and homeward freights created an important relationship between coal freight rates and the freight rates on imports into northwestern Europe. In general, however, there seems to be little connection between Britains shipping success and the export of coal.

The Antebellum American Tariff: Food Exports and Manufacturing

Abstract The American antebellum tariff provided high levels of protection to most of American manufacturing. Yet most economic historians have concluded that the tariff had a modest effect on American industrialization in part because of terms of trade improvements arising from Americas dominance as a raw cotton exporter. A computational general equilibrium analysis contradicts these conclusions. The tariff had no important terms of trade effects because Americas marginal export was food not cotton. Furthermore, appropriate modeling of the competition between imports and domestic production shows that much of American manufacturing was dependent on tariff protection.

Oligopoly Agreement and the Timing of American Railroad Construction

The railroads in the American West were constructed in a few concentrated building booms. This timing of construction resulted from the alternate creation and collapse of imperfect property rights to rights of way in partially settled areas. These “property rights†arose from strategic behavior within the railroad oligopoly. When enforcement costs of cooperative action were low, the railroads were able to create rents by avoiding construction ahead of demand. When enforcement became difficult, however, construction was the only way to capture rents on unbuilt lines so a construction boom ensued.

Cotton textile prices revisited: a response to Cuenca Esteban

prices during the industrial revolution. His exploration of the partial evidence on current values of exports and on the East India Companys sales contributed significantly to our understanding of price movements during this period. His work stimulated my research in the surviving firm records. None the less, I continue to believe that he is mistaken in his conclusions. Three issues require response. First, he argues that his cotton textile prices estimate seriously undermines the Crafts-Harley view of British economic growth. Second, he maintains that my procedure seriously underestimates the decline in the price of cotton textiles between the 1790s and the end of the Napoleonic Wars. And third, he asserts the superiority of his estimates based on export valuations. I wish to challenge all three of these assertions. The Crafts-Harley view, properly understood, would not be weakened if cotton textile prices, in fact, fell as fast as Cuenca asserts. However, analytic issues we have discussed but have not emphasized in our presentations would now need emphasis. Certainly gaps in the data make the series of cotton textile prices that I presented weaker than I could hope, but Cuencas alternative calculations rely on a serious misunderstanding and some questionable assertions. Finally, his belief in the a priori superiority of the trade data cannot be accepted. I While there is no doubt that competing estimates of the rate of decline of cotton textile prices significantly affect interpretation of the history of cotton textiles, I would like first to confront their importance to our understanding of the beginnings of sustained growth in British per caput income. The Crafts-Harley challenge to previously held views of the industrial revolution arose from re-examination of Hoffmanns and Deane and Coles industrial production estimates. We found no evidence of significant acceleration in per caput growth in any but the famous industries. When we constructed new industrial production indices, largely using Hoffmanns sources, we found that the pioneering estimates had unintentionally overstated aggregate growth. The modest per caput acceleration in the growth of aggregate industrial production that our calculations revealed came almost entirely from the famous industries. Furthermore, our lower estimates of the growth of industrial production led to the conclusion that per caput growth of British national income had been modest before the railway age.

Computational general equilibrium models in economic history and an analysis of British capitalist agriculture

A general equilibrium arbitrated by prices arising from consumers and firms interacting in markets is a core idea in economic analysis and provides powerful insight into many historical issues. Modern computational models permit investigators to exploit the insights of general equilibrium. This article outlines the ideas of general equilibrium and of computational general equilibrium models. In the process, strengths and limitations are discussed. The discussion is given focus by using the Harley-Crafts model as its focus and explores briefly the consequences of changing the allocation principals in the agricultural sector of the model from a capitalist arrangement to a peasant arrangement.

Una nueva evaluacion macroeconomica de la Revolucion Industrial

Aggregate estimates of British growth during the classical Industrial Revolution have been reassessed in the past decade and present a significantly revision of earlier views of British growth. Growth was slower dian previously believed and industrial change more localized and with a smaller impact Agricultural improvement and die relative ease with which labour moved to urban industry seems central to the experience. Although industrys impact now seems less than previously believed, industrial cities transformed society because die cotton textile industry expanded to exploit the advantage of its new technology and labour moved to the cities. But while exports expanded the share of industry and caused urbanization, they did not raise per capita income much because competition ensured that the benefits went to consumers. Finally, die specific features of die British industrial revolution seem to provide only weak guide to die growth process elsewhere.