Trade and Empire, 1700-1870



and cloves did not fall before the 19th century, and there was substantial price divergence
for cloves in the 1650s, coinciding with the establishment of Dutch control over clove
supplies around that time. Mercantilist policies could have directly prevented price
convergence during this period, as the figures for cloves suggest, but mercantilism also
created an international political environment in which wars were frequent, and this was
perhaps the key factor preventing long run price convergence. Peaks in the clove price
gaps during the first and second Anglo-Dutch wars, the Seven Years War, and the wars
of 1792-1815, lend credence to this view. More systematic price evidence is available for
the latter conflict, and shows clearly that warfare led to a dramatic, worldwide
disintegration of commodity markets (O'Rourke 2006). For example, the price of wheat
rose by over 40% during 1807-14 relative to textiles in Britain, which imported wheat
and exported textiles, but it fell in France, which was a wheat exporter and cotton textile
importer. Similarly the price of raw cotton rose relative to textiles in Europe, but fell
substantially in the United States.

Figure 4.2 shows dramatic price convergence between Southeast Asia and the
Netherlands once the wars had ended, and a vast array of evidence documents
international price convergence more generally during the 19th century. Figure 4.3
shows that while the Anglo-American wheat price gap fluctuated widely before 1840 or
so, around a roughly constant trend, it started to drop dramatically after that date,
coinciding with the commencement of large-scale shipments of wheat between United
States and Britain. Jacks (2005, p. 399) concludes that there is evidence of a "truly
international market for wheat from around 1835". This evidence (cf. Federico and
Persson 2007) is important, since it shows that international price convergence
characterised the 19th century as a whole, not just the years after 1870.

Another important change after 1800 concerns the types of commodities which
could be transported profitably between continents. As Table 4.6 shows, European
imports from the rest of the world before then were mostly high value-to-weight ratio
commodities, which could bear the cost of transport because they were not produced in
Europe at all, or only with some difficulty. There was a gradual evolution, to be sure.
During the 16th century, silver and spices were the dominant imports from the Americas
and Asia respectively. Around the middle of the 17th century Indian textiles became the



More intriguing information

1. The ultimate determinants of central bank independence
2. Education Responses to Climate Change and Quality: Two Parts of the Same Agenda?
3. DISCUSSION: POLICY CONSIDERATIONS OF EMERGING INFORMATION TECHNOLOGIES
4. Psychological Aspects of Market Crashes
5. The name is absent
6. The name is absent
7. Evaluating the Success of the School Commodity Food Program
8. Personal Income Tax Elasticity in Turkey: 1975-2005
9. The name is absent
10. The mental map of Dutch entrepreneurs. Changes in the subjective rating of locations in the Netherlands, 1983-1993-2003
11. The Effects of Attendance on Academic Performance: Panel Data Evidence for Introductory Microeconomics
12. WP RR 17 - Industrial relations in the transport sector in the Netherlands
13. fMRI Investigation of Cortical and Subcortical Networks in the Learning of Abstract and Effector-Specific Representations of Motor Sequences
14. Placenta ingestion by rats enhances y- and n-opioid antinociception, but suppresses A-opioid antinociception
15. Bird’s Eye View to Indonesian Mass Conflict Revisiting the Fact of Self-Organized Criticality
16. The name is absent
17. AGRICULTURAL PRODUCERS' WILLINGNESS TO PAY FOR REAL-TIME MESOSCALE WEATHER INFORMATION
18. Towards Teaching a Robot to Count Objects
19. The Impact of Cognitive versus Affective Aspects on Consumer Usage of Financial Service Delivery Channels
20. The name is absent