Ocean Freight Rates and Economic Development 1750-1913

TLDR: In this article, the authors present a progress report on a study initiated two years ago at the National Bureau of Economic Research on the costs of ocean transportation between i.e., between 750 and 1913.

Abstract: 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