The conventional view asserts that sharply falling transport costs practically closed the transatlantic price gap for grain by the end of the nineteenth century. This article challenges that view on the basis of an analysis of a new data set of weekly wheat prices and freight costs from New York to UK markets. Although transport costs fell, the fall was neither sharp nor dramatic. The extent of the decline in real terms is very sensitive to the choice of deflator. It is argued that if you are assessing the trade-inhibiting effect of transport costs, the ‘freight factor’ approach, using the price of the transported good as deflator, is the appropriate one. Port charges, insurance and marketing costs also fell by the same modest rate and since these costs were almost as large as transport costs, the price gap remained substantial. One implication is that we need to look elsewhere for the causes of the dramatic increase in New World grain exports.

Germany overtook Britain in comparative productivity levels for the whole economy primarily as a result of trends in services rather than trends in industry. Britain's productivity lead in services before World War II reflected external economies of scale in a highly urbanised economy with an international orientation. Low productivity in Germany reflected the underdevelopment of services in an economy that was slow to move out of agriculture. As German agricultural employment contracted sharply from the 1950s, catching-up occurred in services. This was aided by a sharp increase in human and physical capital accumulation, underpinned by the institutional framework of the postwar settlement.

In this article the economic organisation of the infrastructure industries of transport, communications and energy in the period 1840–1914 is analysed and the role of government evaluated. The article attempts to explain the differences in government involvement across mainly Western European countries: Denmark, France, Germany, Italy, Norway, Spain, Sweden and the United Kingdom. Regulation via the concession system, municipal ownership, state guarantees of bond interest, profit sharing and nationalisation can all be found. In local networks for gas, electricity and tramways the pattern of regulation was determined by the structure and powers of local government and by fiscal considerations, such as the need to generate trading profits as a non-tax revenue for those town councils seeking funds for their mounting public health programmes. At the national level, central government objectives with respect to economic growth and political unification were pursued by the use of rate-of-return guarantees and subsidies to railway companies. State ownership was to be found only when speed in construction was paramount or when network segments were especially unprofitable or, and this applied also to telegraphs, when there was a very strong desire to control information and the flow of goods and persons. Neither a distrust of capitalism nor the advent of municipal socialism were motivating forces behind public ownership.

International migration is determined by both economic and political forces. This article examines the influence of economic, demographic and policy variables on British emigration to four principal destinations in two different eras. Before 1914 the economic and demographic forces that drove British emigration can be clearly identified. Had the same conditions applied in the post-Second World War period, mass emigration from Britain would have continued until the early 1990s. But from the mid-1960s these influences became less powerful as they were increasingly inhibited by immigration policies in the principal destination countries. The long-term decline in emigration is largely accounted for by shifts in policy, especially those that curtailed or abolished the preferences previously extended to settlers from the UK.

In this article we analyse the differences between the wages of skilled and unskilled workers in the period 1870–1930 for five countries with different levels of development and economic integration: the USA, France, the UK, Italy and Spain. We have constructed a ratio of skilled to unskilled wages (the skill premium) in the industrial sector for all these countries with the exception of the USA, for which data were already available. We study the impact of globalisation, technological and structural change and labour movements on the skill premium growth rate. The main conclusion we obtain is that the globalisation variables (migration and trade) explain only part of this growth. Technological and structural change also had an impact on the skill premium growth rate. The main responses of governments to globalisation were trade and migration policies. But as trade and migration were and are not the only sources of inequality growth, other policies had and have to be implemented.

This article examines the relative importance of sticky wages and sticky prices in explaining the length and the depth of the Great Depression. Econometric evidence shows that the supply failure was an outcome of widespread price stickiness and that wage stickiness only played a minor role as a propagating factor during the first years of the Depression. Microeconomic evidence suggests that there was widespread and increasing industrial concentration during the interwar period.

The Great Depression in Germany led to the radicalisation of the electorate, leading the country and then the world into the darkest days of Western civilization. Could it have been otherwise? This article explores whether the NSDAP takeover might have been averted with a fiscal policy that lowered the unemployment rate in those parts of Germany where their support rose most rapidly. A counterfactual simulation model based on estimates of the relationship between unemployment and the radical vote at the electoral district level provides a framework for considering how much lower unemployment would have to have been in those districts to prevent the NSDAP from becoming a formidable political force in Germany. Budget neutrality is maintained, so that the simulations do not depend on an expanded fiscal policy. The results indicate that such a policy could well have averted the NSDAP's seizure of power, and the catastrophe that followed in its wake.

The only thing we owe history is to rewrite it.

Oscar Wilde

This article examines the evolution of energy use and pollution emissions in Sweden over the past two centuries – a much longer period than has been investigated in the large literature on the environmental Kuznets curve. In this article we show that both energy consumption and pollution emissions in Sweden declined relative to GDP over the last two hundred years. In absolute terms both energy use and pollution increased up until 1970, after which date energy consumption stabilised and pollutant emissions declined, leading to less environmental stress. The energy intensity results are decomposed to determine the relative impact of structural changes in the output structure versus within-sector changes. For the period after 1970 another decomposition for pollution emissions is performed to separate out changes in preferences from energy-related changes. The analyses show that technical change in a broad sense has been crucial for explaining the long-term decline in both energy intensity and pollutant intensity, while the transition to the service economy had negligible effects. Changed preferences affected the decline in emissions after 1970.

The present article presents a consumer price index (CPI) for Norway 1819–1913. The CPI is a spliced series of three indices. For the period 1819–1871 a new and original index based on retail prices has been constructed. This new CPI is for the period 1871–1913 spliced with two cost of living indices and thereby stretches up to 1913. Thus, we conclude with a CPI for Norway for most of the nineteenth century and up to World War I.

The CPI reflects the business cycles of the period, with growing prices during upturns and shrinking prices during downturns. The series is compared to corresponding cost of living indices from Denmark and Sweden. We trace high conformity in price movements between the countries. Given the level of economic integration within the Scandinavian Currency Union from the 1870s onwards, this conformity confirms the reliability of the new CPI for Norway.

Stagnant levels of output and incomplete recoveries in the interwar business cycle have received fresh attention in recent work. Building on the work of Borchardt (1991 [1979]), Fisher and Hornstein (2001) calibrate an augmented RBC model of Germany's interwar economy. They find that sluggish productivity combined with high wage costs explain the depth of Germany's interwar depression. In the very different context of a dynamic Phillips curve, Dimsdale, et al. (2004) arrive at the same conclusion. Cole and Ohanian (1999, 2002) find that output in Great Britain and the United States failed to recover to historical trends after the Great Depression. Beaudry and Portier (2002) find that the labour policies of the Popular Front government contributed to stagnant output levels in France during the 1930s. A common perspective shared by these papers is that productivity growth was already low during the 1920s and failed to recover to trend before World War II.

The secular process of convergence in income and product per capita among industrial countries has attracted much well-deserved attention. In Western Europe especially, the cradle of modern industry, this attention has focused on the ways in which ‘follower countries’ have caught up with (or fallen behind) the long-time ‘regional’ technological leader, Great Britain. In this context, a long tradition considers France as offering the standard alternative to modern British economic institutions and development (Kindleberger 1964). With regard to economic performance, however, it is only recently that claims have been backed by systematic quantitative evidence. Despite sometimes conflicting interpretations, a consensus view has gradually emerged (Crouzet 2003) which concludes that the Anglo-French gap in income and productive capacity slowly closed from the mid-nineteenth to the mid-twentieth century, reconciling ex post calculations with some of the conclusions of enlightened contemporaries and later historians (Bairoch 1982, Crafts 1984). After World War II and the introduction of standardised national accounts, the course of productivity and real income per head in both countries is much better documented and suggests the completion of the secular catching-up process by the 1960s (Van Ark 1990). However, between the ‘controlled conjectures’ of the pre-World War I era and the quasi-certainties of post-1945, the interwar years still remain a grey zone. During the 1920s, Britain's industry, marred by industrial unrest, mass unemployment and loss of competitiveness, is supposed to have fared especially poorly compared with its competitors, Germany and the US. In a book published in 1931, a French scholar, André Siegfried, claimed that Britain was descending along the path of industrial decline (Siegfried 1931). By this time, France had completed its postwar reconstruction, the value of the franc had been stabilised, and the French economy was in full swing: in 1930 French public opinion basked complacently in the belief that the country would be spared the devastating effects of the depression sparked by the Wall Street crash.

In a recent issue of the European Review of Economic History (vol. 6, 2002, pp. 23–50), Kevin O'Rourke and Jeffrey Williamson dismiss claims by ‘World historians…[who] argue that globalisation is a phenomenon which stretches back several centuries, or even several millennia’ (p. 23). Rather, O'Rourke and Williamson insist that ‘[g]lobalisation did not begin 5,000 years ago, or even 500 years ago. It began in the early nineteenth century. In that sense, it is a very modern phenomenon’ (p. 47). O'Rourke and Williamson offer an explicit model of world trade that predicts specific outcomes; and they marshal empirical evidence to support their contention that there was no global economy until the early decades of the nineteenth century.

8–10 APRIL 2005, UNIVERSITY OF LEICESTER

Is globalisation 50, 500 or 5,000 years old? Most economists take the ‘big bang’ view, and think globalisation happened very recently. Most historians also take the big bang view, but point to globalisation in the distant past, citing famous dates like 1492. We argued recently in this (O'Rourke and Williamson 2002a) and another journal (O'Rourke and Williamson 2002b) that both views are wrong. Instead, we argued that globalisation has evolved since Columbus, but that the most dramatic change by far took place in the nineteenth century. Economically significant globalisation did not start with 1405 and the first junk armadas heading west from China, or with 1492 and Columbus sailing those little caravels west from Europe, or with 1571 and the arrival in Manila of those stately galleons from Mexico. Globalisation became economically meaningful only with the dawn of the nineteenth century, and it came on in a rush.

A workshop on quantitative

22–24 SEPTEMBER 2004, HUMBOLDT UNIVERSITY, BERLIN

The European Review of Economic History is the journal of the European Historical Economics Society (EHES). By joining the Society you obtain the Review at preferential rates. To join simply contact: Elvira Ryan, Secretary for EHES, Latin American Centre, St. Antony's College, Oxford OX2 6JF, United Kingdom.

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