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15: World Growth since 1800

The efficiency of the English Economy grew at an unprecedented rate during the nineteenth century, and this improvement was created by efficiency - which is to say, by knowledge rather than by accumulated capital. The achievements of Britain impressed foreign governments, which were eager to import or imitate the new British technologies - after all, developing knowledge is an arduous task, but copying the work of others is relatively simple.

Since wealth was tied to political power, Britain sought to defend its technology for a time: artisans were forbidden to work aboard and the exportation of industrial machinery was highly regulated - but relented on these measures by the mid-nineteenth century, finding them utterly pointless and ineffective.

While England could not prevent technology from being exported or imitated by act of law, it did seem to enjoy a long lead - such that other nations lagged behind. Other countries in Europe took about 13 years to copy most technologies, it took China and India thirty-five, and Latin America was 52 years behind. This lag gave England a significant advantage: by the time one generation of technologies was copied, it would already be obsolete in England.

It was generally hoped that the improvement in the speed of travel might help disseminate information faster, and that the "diffusion age" would drop dramatically to bring industrialization to even the poorest countries. But to this day, many developing economies are decades behind the leading economies.

The Instruments of Globalization

The spread of technology from Britain and the US to the rest of the world was facilitated by transportation and communication technology, coupled with a new social construct: the company.

In the world before 1800, information traveled at an astonishingly slow speed - "astonishing" in that it moved even slower than a person might walk at a leisurely pace: about one mile per hour. Some (tedious) detail is given about the speed at which legal documents traveled from Rome to various outposts in the age of its empire, as well as to trade documents in Venice in the 1500s and the average speed is "very similar."

Even into the early nineteenth century, there are instances where transmission speeds were very slow. The author looks at the lag between the occurrence of events and their appearance in the Times of London during the 1800s to find speeds were very slow. A few examples:

The telegraph system, introduced in 1844, considerably speeded news along, though it was slow to expand: cable connected England to France in 1851; to America in 1866, to India in 1870.

The cost and speed of shipping goods and people, both on land and across the sea, also declined dramatically in the nineteenth century. The author provides some statistics on the miles of track laid for railroads, and considers the evolution of steamships, even though they were at first too small and consumed so much coal that shipping cargo in bulk was not feasible until the early twentieth century.

An example to drive home the value of this: In 1907 it cost 0.4 pounds to ship a ton of cotton from Manchester to Liverpool (30 miles) by train, but only about twice as much to send it by ship from Liverpool to Bombay. Since a ton of cotton goods was worth about 80 pounds, shipping costs represented merely 2 percent of the value of the product. Shipping times and cost per ton are provided for various other routes - with similar results.

Another significant change is the introduction of the mechanized factory. Prior to the revolution, work was done by skilled artisans who learned their craft through lengthy apprenticeships - and to make crafted goods available to more of the population, a country needed to recruit entire communities of foreign artisans. In 1660, the French went to the extreme of capturing and abducting a group of Swedish ironworkers in hopes of establishing an iron industry.

The British textile industry, in particular, underwent significant growth during the early years of the revolution, and it did so in an innovative way: the factory enabled them to employ unskilled workers, provide a small amount of training, and set them to work with minimal supervision. Not only was the labor cheaper, but productivity levels were much higher.

There's an extended example of how this was done in the spinning operations - thread was twisted into yarn on a "ring spinner" and the tasks of the operator were simplified to five simple things: loading thread, removing yarn, fixing breaks in the treat, wiping away loose fibers, and keeping an eye on the works to know when the other four tasks were needed. These tasks needed no literacy, advanced skills, or physical strength. A supervisor could periodically walk down a row of machines to see that work was going well - the machines were running, the bobbins were full, and skeins of finished yarn were stacking up - and identifying which employees were most productive, though the pace at which the machines ran largely determined the speed of work for all.

There's an oblique mention of suitability to culture: in an advanced culture with educated people, the monotony of machine work would be tedious and intolerable - so what this led to, which is highly evident in the present day - is that technology would be designed by those people (cultures and countries) with high levels of education, but operated in less advanced cultures where the people were less erudite. Such is the relationship of Britain and the United States to India and China to this day.

In that sense, the manufacturing industry in leading economies transitioned from companies that manufactured cloth to companies that created processes and machines for the manufacturing of cloth, with the manufacturing activity performed elsewhere. As an example, the author looks top the Platt Ring Frame company, which transitioned from a yarn spinning firm to a supplier of manufacturing equipment. There's a long list of countries to which they exported ring frames, some of which are nations in continental Europe, others of which are in Asia and Africa.

For some industries, such as railway construction, it was inevitable that work world be done overseas. Britain enjoyed a forty-five year boom in the railway industry, constructing rail lines through India and southeast Asia.

Another important development, more political than technical, was globalization. The nineteenth century was the time in which "the sun never sets on the British empire," and even nations that were not colonized were open for trade. To give a sense of the extent of colonization: European colonies accounted for 35% of the world's land surface. (EN: which is a bit of an exaggeration, as this is the territory that was claimed, not necessary controlled or even explored.)

In spite of the common claim that imperialism was looting the undeveloped world, history shows that it did more to improve it than raid it, often at the risk of having the industrial infrastructure appropriated by local governments. The power of the British military was more often an instrument of peace than warfare, safeguarding the colonists and population against raiders and warlords and clearing the seas of pirates and privateers, enabling their domestic economies to flourish. Witness that many of the regional powers of the modern age were industrialized by Britain during the colonial era.

In that sense, the "globalization" that is spoken of in recent times is merely a continuance of a process that began in the nineteenth century, was interrupted (by two world wars and the rise of communism) and is today merely resuming its original course.

World Growth since 1800

While industrialization, chiefly in Britain, was on a course to spread globally, this never actually materialized. History demonstrates that instead of following England and other European nations on the path to rapid growth, much of the rest of the world failed to develop and remained impoverished. Citizens in developed economies enjoyed a flood of cheap imported goods, and while those in the developing world improved in terms of living standards, it was not at the same pace.

In Europe, the economies in the northwest (German, France, Belgium, Denmark, and the Netherlands) largely paced Britain, maintaining about 80% of per-capita income. But all of southern and eastern Europe remained poor, with per-capita income of 40-60% that of Britain - and in 1913 it could be observed that most of these nations were still devoted primarily to peasant agriculture, as they had been previous to en industrial revolution. Consider that the poorest nations in Europe, Romania and Bulgaria, remained in a Malthusian state, with over 80% of the population employed in agriculture.

The most successful European colony was the United States, which surpassed Britain in per-capita income before 1870 and grew to the richest economy in the world by 1913, a position it has held for a century. By the year 2000, the US accounted for 22% of the world's industrial output. It was, however, an exceptional case as most did not follow the same course, with a few exceptions (Argentina, Australia, Canada, and a few others) which achieved some degree of success.

Other colonies did not develop, and some even saw per capita output decline. For example, both India and China began exporting raw materials rather than finished goods to pay for manufactured imports from Europe (a table is provided with granular detail). A demonstration of this was trade between Bombay and Lancashire - Indian cotton was imported to Britain, made into cloth (by English workers whose wages were five times higher), then shipped back to India for sale. It was by this method that foreign territories were sapped of their wealth and resources.

It's also noted that while colonies and foreign territories had industry, it was on a much smaller scale. Taking the example of India, only 1% of her population was involved in manufacturing. The majority of the population remained in agriculture, developing either food or raw materials.

As such the manufacturing operations of the industrial revolution were concentrated in a small number of countries, as evidenced by the productivity of their people. A table is presented - to summarize:

Looking at the figures from 1800, it's evident that Western Europe and America already had a significant lead, in terms of per-capita productivity, even before the industrial revolution took hold. Between then and the present day, their population share dwindled while their productivity rose - comparing America to Africa, the average African produced only 42% as much in 1800, which has dropped to around 7%.

Advances in transportation and communication have significantly increased: a message can be sent in seconds over the internet, and cargo can arrive within a day by plane. And yet, the gap in productivity in poor and prosperous nations continues to widen. Some of the explanations for this will be provided in the following chapter.

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