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Assessment 1 Essay ECON144 The International Economy Matthew Ryan 220086769 Topic 1: 'How important were canals, railways and steamships in the growth of the British or French or German economies and the international economy in the nineteenth century?' Nation Britain Word Count: 2162

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'How important were canals, railways and steamships in the growth of the British and the international economy in the nineteenth century?'
'The Art by which the products of labour and thought, and the persons who labour and think, are transferred from place to place is, more than any other, essential to social advancement. Without it no other art can progress'(Lardner, D. 1850). Social advancement comes through an increased capital flow within that social structure. As the 'arts' of transport canals, railways and steamships develop in an industrialising environment, the economic impacts are widespread and exponentially effective. Between the years 1800 and 1899 the British economy went from being caught in the post Napoleonic war doldrums, to being the world power and most industrialised nation in the world. A key example of this growth was the increase in the stock of machinery per head; in the UK, this figure rose by a multiple of 155 from 1820. A direct flow-on effect from this was a need to increase efficiency in energy production the more that technology was used, the greater the push to advance it. Britain not only played a leading role in world trade, but also a diffusing one, with its capital and technologies flowing on into both the more developed and peripheral countries. The international economy was not only strengthened, but also more inter-connected than ever before in world history, with movement across the world for people and goods, alike, reduced in time and cost. The defining factor causing this dramatic growth was the development of transportation and communicative technologies, most importantly those of canals, railways and steamships. Commerce is simply the transference of goods from one person to another. An economy is the embracing environment that all these interchanges take place in. If we talk in broader terms than neighbours trading tomatoes for carrots, then commerce presupposes the existence of some form of transportation, and always in relation to the ability to transport, will be the strength of the economy. The produce of different regions or nations will always be in abundant supply, while goods that 2

220086769 aren't as well suited to production in that region or country will be of a lesser quality and quantity, if available at all. This is what creates a need for trade, and also is at the heart of one of the most important impacts of transport regions can specialise in production, and the tomato region can trade with their neighbouring carrot region. Both have more produce, of a higher quality, and, presumably, more goods left over to trade for lettuce. But for these trades to work, the means of transporting goods must be fast, safe, regular, and most of all, cheap. If when the cost of transportation is applied to the consumer, as it must be, that cost is then too high for the product, the trade will be unsuccessful, and we will return to the situation of regions producing and consuming exclusively within themselves. 'Every improvement in the art of transportation having a tendency to diminish cost, and augment speed and safety, operates in a variety of ways to stimulate consumption and production and thereby advance national wealth and prosperity'(Lardner, D. 1850). In looking at 'canals', we must notice the two different appreciations of the term. Saying 'canals' to one man might make him think of floating timber downstream in an early industrial nation. But to another, it could evoke the great canals, Suez, Panama, those that cut whole continents and allow dramatically easier international travel. Both types of canal made their mark on the growth of the international economy in the nineteenth century, and they will be examined with this in mind. Even in as early works as Adam Smith's Wealth of Nations (1776), it was observed that industry of any kind grows initially near water seas, and navigable rivers -, an idea of the ease of transportation allowed by canals to be further developed and explained by Clapham, J. 1926: 'Throughout the country, stone for building, paving and road-making; bricks, tiles timber;...beasts and cattle;... the heavy castings which were coming into use for bridge-making and other structural purposes all these moved along the new waterways over what a half century earlier, had been impossible routes or impassable distances.'

220086769 A real-world example of such a canal was the Duke of Bridgewater's canal, built in 1760 between Liverpool and Manchester. Originally, it was simply a means of transporting coal from the landlocked Worsley mines, but it became a major thoroughfare for goods in the nineteenth century, especially with the arrival of paddle-steamers. As the canal was extended around Worsley, soon sand, lime and stone quarries had direct access to the canal. With these links came growth in other areas most notably in boat-building, but also in accommodation, canal-side mills, and timber yards. Even the mud being dredged from the canal as maintenance was being mixed with dung to be spread on the Duke's fields, stimulating agriculture, and the stone chippings from the mine being used to turn nearby bogs into productive pasture. Here we see, in the early nineteenth century, the impacts of one single canal on the economy of a region an impact which was immense. Now multiply that by the dozens of similar canals around the English nation, and one begins to understand why that transport had such a huge effect. Not only does such transport allow the movement of produce from one place to another, but it stimulates the growth of tens of other industries in the process. Canals, however, dominated in the late eighteenth century, not the nineteenth. They had shown us a microcosm of what effective transport could do to stimulate growth in a national economy, as was then seen, especially in Britain. But, 'wherever mechanised methods of industrial production became established, even the improved non-mechanical modes of transport came to be seen as inadequate'(Ashworth, W. 1952). Enter steam power, the industrialisation of transportation itself. Canals were restricted to local traffic, and in the nineteenth century took on a role of feeding the railway and the seaports, which had greater reach and freedom from geographical limits. The railway was an invention which had a long period of development before it took off in the commercial sphere, limited by popular unfamiliarity and the logistics of demonstrating its potential on an appreciable scale. Initially managed in a private fashion, with individual companies

220086769 building small, but key, links around the countryside, with the first two larger regions investing in the technology being Britain and some of the eastern American states. The success of these local lines once again, the link between Liverpool and Manchester being one such successful enterprise - encouraged larger schemes to be embarked on, with the British government approving some 400 lines between 1844 and 1846. Wherever they were built though, an increase in economic activity was soon to follow, though not always in the anticipated fashion. Early railway were promoted mainly as a facility for the transport of goods, but a far greater revenue came from passenger traffic. Soon after they started becoming more common in usage, their impact on the production and marketing of goods was quickly noticed. For the first time large and heavy loads did not rely on water for their transportation, allowing shorter, direct routes and removing the advantage held by sea or waterfront towns. With both inland and landlocked areas now appreciating the same boon of transport, greater local specialisation could occur. And just as we had seen with canals, various other industries were supported by the new fascination with railiron and steel, timber, quarrying, and new jobs in the service and maintenance of trains. As rail was taken up world wide, these supplementing industries were needed worldwide, including as well the persons with the necessary expertise to extend the technology. All of this meant economic stimulus for Britain, and increased international trade. Of course on the mainland, rail could also link countries, facilitating that international trade itself. Financed almost exclusively by European investment, railways around the world in - Latin America, Asia, Africa and Australasia - all functioned to assist in the export of colonial resources, agriculture and minerals, and to increase international trade. Essentially, rail connected materials to factories, and then the produce of those factories to markets it was the beginning of outsourcing, and the internationalisation of markets. Like rail, its maritime sister, steam-shipping, took a long period of development before it

220086769 started to rival the firmly established sailing ships in all types of freight and transportation. There were many disadvantages to steam which had to be overcome before it could be seen as an economically viable alternative. Early engines were grossly inefficient; the materials needed for construction meant a high production cost; freight capacity was greatly reduced by the huge amounts of coal that needed to be carried; and routes were dependant on conveniently placed coal depots, evenly spaced along the way. However, just as those first few rail links received a large and unexpected patronage from personal transport, so did steamships. The cost was overlooked for the advantages, the reliable schedule, and the independence from wind, benefits that also secured work carrying mail around Britain. In fact, it was this reliability of scheduling that lead British steamship companies to secure more and more of Her Majesty's mail contracts, and create some level of commercial interest and investment in steam during the first half of the nineteenth century. There was a great shift in the favour of steamships in the eighteen sixties, with the invention and implementation of the 'compound' engine, one which dramatically reduced fuel consumption and cost. It was now that steam's real potential started to be realised, with fast, cheap transport of goods, independent of wind. Soon after this, in 1869, a further encouragement to the adoption of steam-shipping came in the form of the Suez Canal. At this point, it should be noted that this is the second meaning of canal, as mentioned earlier a canal nonetheless that had huge impact on the international economy, in conjunction with the steamship. Suez meant the bypassing of the African continent in shipping between Europe and Asia, and was the first time international markets were truly legitimised. The great canal relied on steamships though, for only they could utilise the canal thanks to their self-propulsion. Through the combination of the new and efficient compound engine, and the Suez canal, steam finally started to become a viable method of freight, and in the final three decades of the nineteenth century, the proportion of shipping tonnage hauled by steam in the leading countries rose from 12.5 percent in 1870 to 63.9 percent by 1900 (Ashworth, W. 1952).

220086769 Just as with railway, the global forerunner was Britain, as the industrialised nation with capital to invest. As Britain traded around the world more and more with steam, the USA and then others started to follow, and the technology of steam engines, iron hulls, and coal depots became diffused around the world a boon not only to British coal and iron markets, but to the engineers and shipbuilders who trained the rest of the world in this new art. Supplementary industries benefited, and markets were closer to the places of production than ever before, lowering prices and encouraging growth not only in Britain, but around the world as well. Now with some understanding of the development and impact of canals, railway and steamships in the nineteenth century, it becomes apparent just how important they were in the growth of both the British and, indeed, the international economies during this time period. Firstly, and most simply, these technologies revolutionised the transport of people and goods around the producing nations and the world. Canals were the first, chronologically, to establish themselves in a relatively unmechanised way, then rail improved upon the speed, sustainability and geographical possibilities of taking people and their produce around the world, linking resources to their factories, and then the end product to new markets. Steamships, once properly developed played the same role in a maritime environment. But there is more to how these revolutions stimulated growth than simply in what became possible in terms of transport. One must also note the flow-on effects, the way that their success creates new jobs and new markets the more successful rail is, the more people will need to work to keep the trains running, thus the more they impact on economic growth. Then, as these new technologies are taken up around the world, resources find new markets and the building of infrastructure around the world sees that initial leading nation, in the cases of railway and steamships Britain -, taking the role of teacher, sending out her engineers and specialists to diffuse the technology. Looking closely at this period, and the impact of these three technologies, I consider it very

220086769 safe to say there was no other factor of greater significance in the growth of both the British economy, and the internationalisation of the worlds markets and production.

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Reference List
Hope, R. (1990). A New History Of British Shipping. London, England: John Murry Ltd. Killingray, D. & Lincoln, M. and Rigby, N. (2004). Maritime Empires: British Imperial Maritime Trade in the Nineteenth Century. Suffolk, England: The Boydell Press. Kenwood, A. & Lougheed. A. (1999). The Growth of the International Economy 18202000. Oxon, England: Routledge. Ashworth, W. (1987). A Short History of the Internation Economy since 1850. London, England: Longman. Lardner, D. (1850). Railway Economy: A Treatise on the New Art of Transportation. New York, USA: Augustus M. kelley Publishers. Hobsbawm, E. (1964). The Age of Revolution: Europe 1789-1848. London, England: Readers Union, Weidenfeld & Nicolson. Porteous, J. (1977). Canal Ports: The Urban Achievement of the Canal Age. London, England: Willmer Brothers Limited. Maddison, A. (2007). Contours of the World Economy, 1-2030 AD. Oxford, England: Oxford. Cameron, R. & Larry, N. (2003). A Concise Economic History of the World: From Paleolithic Times to the Present. London, England: Oxford University Press Smith, A. (1976). An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford, England: Clarendon Press. St. Clair, R. Paternaiias and the Industrial Revolution. Retrieved from http://epistemicforms.com/Paterfamilias-3.html , 27/4/11.