The Impact of ‘Early’ Nineteenth-Century Globalization on Foreign Trade in the Southern Cone: a Study of British Trade Statistics

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1 The impact of ‘early’ nineteenth-century globalization on foreign trade in the Southern Cone: a study of British trade statistics1 Manuel Llorca-Jaña, Visiting Lecturer, Universitat Pompeu Fabra manuelalberto.llorca@upf.edu

Abstract: This paper deals with the impact of „early‟ nineteenth-century globalization (c.1815-1860) on foreign trade in the Southern Cone (SC). Most of the evidence is drawn from bilateral trades between Britain and the SC, at a time when Britain was the main commercial partner of the new republics. The main conclusion drawn is that early globalization had a positive impact on foreign trade in the SC, and this was due to: improvements in the SC‟s terms of trade during this period; the SC‟s per capita consumption of textiles (the main manufacture traded on world markets at that time) increased substantially during this period, at a time when clothing was one of the main items of SC household budgets; British merchants brought with them capital, shipping, insurance, and also facilitated the formation of vast global networks, which further promoted the SC‟s exports to a wider range of outlets.

JEL Codes: N70, N76, O19, R11. Keywords: Lost decades; Anglo-Latin American trade; Early globalization. 1. Introduction. Few concepts are more fashionable than „globalization‟. Yet, despite the popularity of this term, there is no standard definition of it, and „indeed, globalization is in danger of becoming, if it has not already become, the cliché of our times‟.2 Although several mainstream economic historians tend to work with a rather narrow definition of this concept (i.e. market integration3 and price convergence),4 other, more inclusive, definitions are also widely used by scholars with a background in political theory, international relations or social theory. For example, in perhaps the most influential textbook published during the last two decades on the topic, globalization is seen as 1

An earlier draft of this paper was presented at Trade, poverty and growth in history (Madrid, May 2012), a conference organized by A. Tena; G. Federico and J. G. Williamson. I am very grateful to Fundación Areces for funding my attendance to this event. I am also very grateful to Antonio Tena for some comments to an earlier draft. Finally, I am also indebted to Phil Cottrell, Jorge Selaive, Rory Miller, Huw Bowen, Marcello Carmagnani, Bernard Attard, Katharine Wilson, Xavier Tafunell, Cristián Ducoing, Xabier Lamikiz and Mark Latham. This paper was funded by the ESRC (PTA-0302005-00308), Fondecyt Chile (project 11100022) and Universitat Pompeu Fabra (Department of Economics & Business). 2 Held et al 2000, p. 1. See also De Vries 2010, pp. 710-711; Flynn & Giraldez 2004, p. 82. 3 Three markets in particular: commodity markets; labour markets and capital markets. 4 Take for instance Persson 2010 (p. 221): „globalization is market integration on a world scale‟. See also Findlay & O‟Rourke 2003, pp. 1-2. Likewise, in a celebrated article on globalization written by two of the leading scholars on the subject, globalization was taken „to mean the integration of international commodity markets … [where] it is commodity price convergence that matters‟. O‟Rourke & Williamson 2002, pp. 25-26. See also Williamson 2006a, pp. 7-8 & 25, where „market integration‟ is used interchangeably with „globalization‟. Economic historians, though, are aware „that this definition excludes much that also matters‟. Bordo et al 2003, p. 2.

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2 „the widening, deepening and speeding up of worldwide interconnectedness‟.5 In the same vein, but more recently, Flynn and Giraldez have defined globalization as the permanent existence of global trade, „when all heavily populated continents began to exchange products continuously – both with each other directly and indirectly via other continents – and on a scale that generated deep and lasting impacts on all trading partners‟.6 Due to these differences in definition, the beginning of...
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