World Growth since 1800

Presented by
Anam Sohail
Rubail Shahid

Introduction
By the mid-nineteenth century the efficiency of the English
economy was clearly growing at an unprecedented pace.
Improvement in efficiency was based on knowledge creation,
rather than the accumulation of physical capital or the
exploitation of natural resources.
The increasing prosperity and economic power of Britain
impressed both foreign governments and individuals,
especially.
Since it was accompanied by growing military and political
power.
Thus there were both private and governmental attempts to
import the new British technologies.

The Instruments of
Globalization
In the late eighteenth and early nineteenth centuries a series
of technological, organizational, and political developments
seemed to imply the coming integration of all countries into a
new industrialized world.
The technological changes were the development of
railways,
steamships,
the telegraph,
the mechanized factory.
The organizational change was the development of
specialized machine-building firms.
The political changes were the extension of European colonial
empires to large parts of Africa and Asia, and internal political
developments within Europe.

 The world before 1800 was one in which information and

people traveled at astonishingly slow speeds.
The estimated average transmittal time, shown in table was
56 days. Thus along the major trade routes of the Roman
Empire information flowed at an average speed of 1 mile per
hour.

 Thus in the Malthusian era people lived in a world where

information spread so slowly that many died fighting over
issues that had already been decided.
Information flows were not much faster in 1800 than in the
classical world.
In the mid-nineteenth century the introduction of the
telegraph in 1844, and particularly the laying of the first
undersea telegraph cable between France and England in
1851, changed by a factor of nearly 100 the speed of travel
of information.

 The cost of carriage for goods also declined dramatically in

the nineteenth century, both on land and across the sea.
Table 15.4 shows the miles of railroad completed in selected
countries by 1850, 1890, and 1910.
The great expansion of the rail network in the late nineteenth
century, even in countries otherwise little affected by the
Industrial Revolution, such as Russia and India, improved
communication immensely.

 In the 1850s and 1860s four innovations lowered the cost of

steam powered ocean transport:
the screw propeller,
iron hulls,
compound engine
surface condensers.
Screw propellers translated power into motion through the
water more effectively.
Iron-hulled ships were 3040 percent lighter and offered 15
percent more cargo capacity for a given amount of steam
power.
Compound engines converted coal into mechanical power
more efficiently.
Surface condensers conserved water.
Last two innovations greatly reduced the coal consumption of
engines per horsepower-hour

 Finally the completion of the Suez Canal in 1869 and the

Panama Canal in 1914 greatly reduced distances on some of
the major ocean routes.
The result of these technological changes was a significant
decline in real ocean transport costs by 1900.
By the late nineteenth century industrial locations with good
water access that were on well-established shipping routes
Bombay, Calcutta, Madras, Shanghai, Hong Kong could gain
access to all the industrial inputs of Britain at costs not too
much higher than those of many firms in Britain.

 The last of the great technological changes of the nineteenth

century was the introduction of the mechanized factory.
Industrial production before the Industrial Revolution was
generally directed by many skilled artisans who learned their
crafts through personal apprenticeships.
The textile industry during the Industrial Revolution was
revolutionary in its rate of productivity advance. But it was
also revolutionary in its ability to employ, with minimal skilled
supervision, large numbers of unskilled, untrained, shortterm workers.
The ability of the textile industry to keep operator skills,
education, and supervision requirements to a minimum is
well illustrated by ring spinning.

 This was a spinning technique, developed in the nineteenth

century, which succeeded in part because it minimized
necessary worker skills.
Ring spinning operators needed to perform only the following
five tasks:
Piecing.
Cree ling.
Cleaning.
Doffing.
Patrolling.
Work organization was extremely simple. Each spinner
( piecer in India) was assigned a set of spindles.

 In the early nineteenth century the heroic age of innovation

by the lone inventor ended, and a specialized machinebuilding sector developed within the Lancashire cotton
industry.
Similar capital goods exporters developed in the railway
sector, and later in the United States in the boot and shoe
industry.
The final set of developments in the nineteenth century that
should have speeded world industrialization was political.
By 1900 the European states controlled as colonies 35
percent of the land surface of the world, even excluding
Asiatic Russia.

 The British Empire was the largest, covering 9 million square

miles.
The French had nearly 5 million square miles.
Netherlands, 2 million square miles; and Germany, 1 million
square miles.
Despite its many unpleasant aspects, imperialism would
seem to have been a potent driving force for world
industrialization.
Foreign entrepreneurs investing in independent countries
always faced the danger of expropriation if local political
conditions changed.

 The most important colonial empire was that of the British,

whose major possessions by the end of the nineteenth
century included most of India, Pakistan, Burma, Sri Lanka,
South Africa, and Egypt.
The nature of British imperialism also ensured that, up until
1918, no country was restrained from the development of
industry by the absence of a local market of sufficient size.
In cotton textiles, the major manufacturing industry of the
world before 1918, table 15.7 shows the major net exporters
and importers of cotton yarn and cloth in the international
market of 1910.

 India, the largest market, was served almost exclusively by

English mills, but was in fact open to all countries, the only
barrier being a 3.5 percent revenue tariff on imports.
The Chinese market, the next largest, by fiat of the imperial
powers was similarly protected by only a 5 percent ad
valorem revenue tariff.
Australia also maintained an ad valorem tariff of only 5
percent, having no domestic industry to protect.
Thus in 1910 the total size of the open cotton textile market
was on the order of $400 million, a quarter of world
production.
This market would be enough to sustain 35 million spindles
and 400,000 looms

World Growth since 1800

England and the other European countries on the path to
rapid growth, much of the rest of the world languished in
poverty.
In India, after more than a hundred years of British rule,
there were still fifty million hand spindles and two million
hand looms in the 1920s.
The divergence of national incomes and living standards that
began with the Industrial Revolution continues to widen to
the present day.

 The gap between material living standards in the richest and

poorest economies of the world is now more than 50:1, while
in 1800 it was probably at most 4:1.
Material living standards have increased only tenfold in
successful economies such as England and the United
States since the Industrial Revolution.
Figure 15.5 shows per capita income for a sample of
countriesthe United
States, England, Argentina, Bolivia, India, and Ugandafrom
1800 to 2000,
all measured in U.S. dollars at the prices of 2000. The
divergence in fortunes since 1800 is very clear.

 The most notable success has been the United States, which
may even have surpassed Britain in per capita income
before 1870.20.
Certainly by 1913 the United States was the richest economy
in the world. By 2000 the United States share of world output
had risen to 22 percent.
Within Europe the countries of northwestern Europe
Belgium, Denmark, France, Germany, the Netherlands,
Norway, Sweden, and Switzerland all behaved as
expected and maintained a per capita income relative to
Britain similar to the levels of 1800.

 All of southern and eastern Europe remained poor, with

incomes per person at only 4060 percent of British levels.
By 1913 these countries also remained largely devoted to
peasant agriculture, just as they had been in the eighteenth
century.
Many other countries have witnessed a declining relative
income level as the result of the breakdown of political and
social institutions.
Thus many of the countries of Africa, which are now among
the worlds poorest, have suffered from ethnic strife and the
collapse of political institutions since their independence.

Conclusion
There is now almost instant communication between different
countries of the world; a vigorous exchange of foods, styles,
and music and an ever rising flow of goods internationally.
But the divergence of incomes ensures that the poor
countries of the world remain as exotic to the rich as they
were in the seventeenth or eighteenth century.
Even in as relatively prosperous part of the underdeveloped
world as India, workers new to cities sometimes still sleep on
the streets.
In contrast, in the richest major country in the world, the
average American in 2001 lived in a dwelling with 750 square
feet per person, and even the poorest fifth of the population
enjoyed 560 square feet per person.

Thank you