The second half of the nineteenth century saw the first great wave of economic globalisation of the modern era, with Britain at its core. Through enormously rapid growth of international trade, capital flows and migration, the world became economically interdependent to an unprecedented extent. This wave coincided, of course, with the rising tide of European imperialism in the last decades of the century, and so this growth of economic interdependence was intertwined with changing relations of imperial power. We can therefore usefully describe this period up until the First World War as one of ‘imperial globalisation’, a term which emphasises the interconnectedness of these two processes, and obliges us to analyse how the connections operated. This chapter outlines these two aspects of global developments, and then situates Dundee as an important case study of how globalisation and empire impacted upon industrial Britain.

Economic historians have emphasised the combined effects of falling transport costs and reductions in trade barriers in generating an upsurge in trade volumes in the nineteenth century. These processes have been most intensively studied for trade across the North Atlantic, where the expansion of the grain traded from North America into European markets epitomised much of what was happening. The rapid spread of European settlement, displacing indigenous land use with extensive cultivation of marketed farm crops, coupled with railway and steamship development, led to a huge fall in the price of food grains in Europe, with volumes also being driven up by fast-growing urban populations as Europe industrialised. But while the North Atlantic was at the centre of this process, similar forces were at work in many other parts of the globe. Cheap freight changed the economics of trade in a whole series of bulky commodities, raw materials and manufactured goods as well as foodstuffs. A striking summary measure of this process is the fall in the gap in the price of raw jute between Calcutta and London, which went from 35 per cent in 1873 to 4 per cent by 1913, as shipping rates tumbled; transport costs now made little difference to the price of the material, wherever it was sold.