2. Quantitative trends, 1700-1870
2.1. Trade volumes
Using the shipping data in Figure 4.1, Jan de Vries (2003) estimates that the
tonnage returned from Asia to Europe grew at 1.01% per annum during the 16th century,
1.24% during the 17th, 1.16% during the 18th, and at 1.1% over the three centuries as a
whole. O'Rourke and Williamson (2002a), using a more eclectic mix of data, calculate
average growth rates per annum of European trade with both Asia and the Americas of
1.26% during the 16th century, 0.66% during the 17th, 1.26% during the 18th, and 1.06%
per annum overall. An average growth rate of roughly 1% per annum over a period of
three centuries was an impressive achievement relative to what had gone before, and led
to Europe, or at least the maritime powers of Western Europe, becoming more open,
albeit from very low levels. According to Maddison (2003), Western European GDP
grew at roughly 0.4% per annum between 1500 and 1820, implying rising ratios of
intercontinental trade to GDP.2 As a result, trade with Asia, Africa and America was a
very important share of European trade in 1790 (Table 4.1).
The wars of 1792-1815 and the Industrial Revolution were a turning point for
European trade, dramatically increasing the relative importance of the United Kingdom
(contrast Table 4.1 and Table.2 with Table 4.54.3), and reducing European trade to GDP
ratios. Both phenomena are partly explained by the fact that pre-1800 trade to GDP ratios
were inflated by entrepôt trade (Table 4.4.4) which declined following the end of the
“first” French and Iberian colonial empires and the collapse of the Dutch East India
Company. Trade started growing again during the 1830s. Between 1820 and 1870, the
volume of trade grew ninefold (Table 4.5) and the European trade to GDP ratio more than
doubled.
2.2. Commodity market integration
Perhaps surprisingly, the increase in early modern trade volumes between Europe
and the rest of the world was not accompanied by commodity price convergence, at least
according to the data that have been analysed up to now (O'Rourke and Williamson
2002b). Figure 4.2 shows that the ratio of the Amsterdam to the Asian prices for pepper
2 The Maddison figures probably represent an upper bound, given the lower growth figures (around 0.1%
per annum) calculated by van Zanden (2005) and Alvarez-Nogal and Prados de la Escosura (2007).