While the precise causes of postwar trade growth are not well understood, declines in transport costs top the lists of usual suspects. However, there is remarkably little systematic evidence documenting the decline. This paper brings to bear an eclectic mix of data in order to provide a detailed accounting of the time-series pattern of shipping costs. The ad-valorem impact of ocean shipping costs is not much lower today than in the 1950s, with technological advances largely trumped by adverse cost shocks. In contrast, air shipping costs have dropped an order of magnitude, and airborne trade has grown rapidly as a result. As a result, international trade has also experienced a significant rise in speed.

https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.21.3.131

Transportation Costs and International Trade in the Second Era of Globalization

Some world historians attach globalisation ‘big bang’ significance to 1492 and 1498. Such scholars are on the side of Adam Smith who believed that these were the two most important events in recorded history. Other world historians insist that globalisation stretches back even earlier. There is a third view which argues that the world economy was fragmented and completely de-globalised before the early nineteenth century. None of these three competing views has distinguished explicitly between trade expansion driven by booming import demand or export supply, and trade expansion driven by the integration of markets between trading economies. This article makes that distinction, and shows that there is no evidence supporting the view that the world economy was globally integrated prior to the 1490s; there is also no evidence supporting the view that this decade had the trading impact that world historians assign to it; but there is abundant evidence supporting the view that a very big globalisation bang took place in the 1820s.‘The year 1500 marks an important turning point in world history . . . The European discoveries made the oceans of the earth into highways for their commerce . . .’ William H. McNeill 1999, p. 295.

https://www.tcd.ie/Economics/staff/orourkek/offprints/EREH2002.pdf

When did globalisation begin

1. Economic growth during the long twentieth century Nicholas Crafts 2. From empire to Europe: Britain in the world economy Kevin O'Rourke 3. Population, migration and labour supply Tim Hatton 4. Health and welfare Bernard Harris 5. Income and living standards Ian Gazeley 6. Technology, innovation and economic growth Tom Nicholas 7. Consumption and affluence Avner Offer 8. Cycles and depressions Matthias Morys 9. The City and the corporate economy David Chambers 10. Armaments and the economy Jari Eloranta 11. The deindustrial revolution: the rise and fall of UK manufacturing, 1870-2010 Michael Kitson and Jonathan Michie 12. The rise of the service sector Steve Broadberry 13. The household economy Peter Scott 14. Growth of the public sector Bob Millward 15. Soft power: the media industries Gerben Bakker 16. Sterling and monetary policy Catherine Schenk 17. Economic policy and management Roger Middleton 18. Economic ideas and ideology Roger Backhouse and Keith Tribe.

The Cambridge economic history of modern Britain

Due primarily to transport improvements, commodity prices in Britain and the United States tended to converge between 1870 and 1913. Heckscher and Ohlin, writing in 1919 and 1924, thought that these events should have contributed to factor-price convergence. It turns out that Heckscher and Ohlin were right: a significant share of the Anglo-American real-wage convergence was due to commodity-price convergence. It appears that this late nineteenth-century episode was the dramatic start of world-commodity and factor-market integration that continues today.

Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?

Energizing historical materialism: Fossil fuels, space and the capitalist mode of production

REVOLUTIONARY developments in transport have been an essential feature of the rapid growth of the western world of the past two centuries. Reduction in the cost of carriage has enabled specialization and division of labor on a national and international basis to replace the relatively self-sufficient economies that predominated in the western world two centuries ago. The striking role of the railroad in the nineteenth century is well known. However, it was water transport in which the bulk shipment of commodities began, and it was the development of ocean shipping that was an integral aspect of the growing economic interdependence of the western world, the opening up of the undeveloped continents, and the promotion of the settlement of the "empty lands." The declining cost of ocean transportation was a process of widening the resource base of the western world. The agriculture of new countries was stimulated (and that of old countries at least temporarily depressed), the specter of famine as a result of crop failure reduced, and the raw materials were provided for industrialization. In short, the radical decline in ocean freight rates was an important part of the redirection of the resources of the western world in the course of the vast development of the past two centuries. This paper is in effect a progress report on a study I initiated two years ago at the National Bureau of Economic Research on the costs of ocean transportation between i750 and 1913. The initial statistical objective was to gather annual data on every major bulk commodity on every major trade route in the world over this period. Needless to say, this immodest objective was confronted with limitations of available data; yet I think it can be said with some confidence now that a fairly comprehensive picture of the costs of ocean transportation over this period will result. Most of the data have now been gathered and we now know where we can obtain the rates to fill in the gaps that remain. The data are, as yet, far from completely organized and analyzed, but the conclusions that have emerged already will, I believe, be of interest to you. What I propose to do in this paper is summarize and illustrate a few of these conclusions and go on to explore briefly

DouDlass North

Papers

Ocean Freight Rates and Economic Development 1750-1913