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The economy of Ricardo's day was far from a pre-industrial paradise, but that does not change the nature of your argument at all.  There were rather large steam-powered mills of all sorts, not only in textiles.  But the ability to manufacture the machinery for these mills was quite limited, and in that sense capital was not mobile.
by Zwackus on Tue Dec 8th, 2009 at 06:31:53 AM EST
I'd hardly call the agrarian pre-industrial world a "paradise" by any of the ordinarily employed definitions of that word.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Dec 8th, 2009 at 08:04:14 AM EST
[ Parent ]
In fifty years, it may look like on.  :-)
by Zwackus on Tue Dec 8th, 2009 at 04:54:57 PM EST
[ Parent ]
That would require a quite imaginative and historically unprecedented disaster, such as a nuclear war.

They did not have running water and central heating in the late 18th century. I can dispense with most of the wonders of modern civilisation if need be, as long as I am allowed to keep running water and central heating.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Dec 8th, 2009 at 08:22:50 PM EST
[ Parent ]
may yet match the imagined effects of  a major nuclear exchange.
by wu ming on Wed Dec 9th, 2009 at 08:04:21 AM EST
[ Parent ]
Possible, but unlikely.

However, global warming may yet trigger a major nuclear exchange.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 9th, 2009 at 08:08:39 AM EST
[ Parent ]
??? I find this troubling.

As recently as 50 years ago, plenty of people in Europe and the U.S. didn't have central heating or running water (cold, let alone hot).

It is not that big of a deal to not have these things. Admittedly it is easier to turn a tap and have hot water come out, but is it really so important?

by asdf on Wed Dec 9th, 2009 at 11:09:50 PM EST
[ Parent ]
I take it you're not living in the northern boundary of the temperate climate zone? It gets real cold in the winter up here...

Before central heating, people would use oil furnaces in their basement to heat their house - but I made the tacit assumption that those were going to go away long before central heating would. And distributing firewood to every household in Scandinavia would be a major undertaking.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 9th, 2009 at 11:17:56 PM EST
[ Parent ]
I live in Colorado Springs, where currently the outside temperature is 5 degrees F. I'm spoiled by my nice natural gas furnace and hot water system.

But my family lived in Steamboat Springs where it gets to 40 below zero (F and C) in the winter, and they only had coal stoves. Their domestic water supply was a pump in the kitchen, and a cistern. This was in the 1940s.

We lived in various European countries and Australia in the 1960s and 1970s in houses that did not have central heat. It's really a pretty recent innovation in rural areas...

by asdf on Wed Dec 9th, 2009 at 11:26:49 PM EST
[ Parent ]
Point taken.

But I'm assuming here that coal and oil stoves for private use will fall out of use before district heating in the event of a serious disruption of industrial society.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 9th, 2009 at 11:36:07 PM EST
[ Parent ]
Sweden managed to use firewood during ww2. Wood was actually used for cars too.

There are quite a lot of great ww2 pictures with big outdoors piles of chopped wood in swedish cities, but google was not with me today in finding any. And yes, it was a major undertaking.

(Saw btw a neat little propaganda film from 1941 that emphasised the values of riding your bike. "You will be saving energy for where it is needed better, you will feel well and you will even look better!")

But if we are to rebuild for a low energy future I think insulating is the first step. We have houses in Sweden that are heated by leftover heat from home appliances and the inhabitants.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Tue Dec 15th, 2009 at 06:11:00 PM EST
[ Parent ]
Running water is a pre-industrial technology.  Pressurized water from the tap might not be, but fresh water delivered to one's home, combined with adequate sewage, is something that's been done here and there since the dawn of civilization.

Central heating is overrated.  I haven't had central heating for the past five and a half years, living in a "modern" apartment in industrialized Japan, and I get along just fine.

But I'm just being silly and pedantic, here, and not meaningfully engaging with any of the primary issues in your diary.

by Zwackus on Wed Dec 9th, 2009 at 11:11:50 PM EST
[ Parent ]
But then, were there many towns ever with that kind of freshwater system without a powerful civilisation keeping the peace ? The Roman aquaducts quickly broke up after the fall of the empire...

Also, I'm in VietNam right now, and pressurised or drinkable tap water is not really existing. Most buildings have an individual water tank, and only bottles allow for drinkable water.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Thu Dec 10th, 2009 at 05:20:44 AM EST
[ Parent ]
The romans had both, perhaps we could learn something from the decline and fall of the roman empire?  Any bunch of gibbons would say so.
by njh on Sun Dec 13th, 2009 at 06:29:20 AM EST
[ Parent ]
Ok, a serious question.

Textile mill technology was developed in the 18th century in England, then borrowed (or stolen) for introduction in the USA. The technology was as mobile as the person who understood it. Similarly, 19th century gold mines in California and Colorado were generally run by European engineers. 20th century mines in South America were frequently run by American engineers.

Today, Global Foundries is setting up a new chip fab using technology from the USA and Far East, and money from the Middle East.

What is the difference?

by asdf on Wed Dec 9th, 2009 at 11:38:40 PM EST
[ Parent ]
People did not, as a rule, move around as much. Moreover, as soon as the mine or factory was set up, the factory did not tend to move around very much.

By contrast, today you can gut the factory, ship the machines halfway around the world and put them in a factory there. And your engineers will not take a month to get there, but a couple of days.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Dec 10th, 2009 at 12:15:25 AM EST
[ Parent ]
We're also forgetting capital controls, the fact that financial capital was also aptly assumed to be tied to its home country and that free movement of capital has become pretty much complete (and, moreover, a part of "free 'trade'" agreements in the last 30 years or so).

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Dec 10th, 2009 at 04:47:52 AM EST
[ Parent ]
I think a persuasive argument can be made that British financial capital, at least, was not seriously constrained by those capital controls. Probably not French either.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Dec 10th, 2009 at 04:51:07 AM EST
[ Parent ]
I think a persuasive argument can be made that British financial capital, at least, was not seriously constrained by those capital controls.

In Ricardo's time there was no need. The opportunities were right there in Britain. Plus, until 1815 there was the minor annoyance of the Napoleonic Wars. This probably remained the case at least through mid century. Why send your money overseas if there are ample opportunities at home, where you can keep a close eye on it and influence the government through known and traditional means?

By 1880 there was a need by those who held the capital, and who had great influence over the government, to find profitable investment opportunities abroad lest they cause the price of labor in Britain to rise and the return on their existing investments to decline. So long as they could manipulate the government into providing basic security in a destination country, such as India or South Africa, on pretext of colonial rivalry or "national interest" they could manufacture rails and locomotives in the U.K. from existing plants, build and operate railroads, etc. in India and South Africa, thereby bringing vast hinterlands into the reach, through their control, of "the market."

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Dec 10th, 2009 at 05:49:02 PM EST
[ Parent ]
I'd like to see more evidence of this. The railroads in Colorado were built (1880s) largely with English money.
by asdf on Thu Dec 10th, 2009 at 09:38:22 AM EST
[ Parent ]
That's 60 years after Ricardo, already in the middle of the Long Depression and after financial capitalism had already replaced the entrepreneurial capitalism of Smith/Ricardo, at least in capital-intensive sectors such as railways. What Veblen wrote in 1904 about railways and finance is not that different from what Minsky was writing in 1986, but both are a world apart from what Ricardo was writing about.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Dec 10th, 2009 at 10:23:02 AM EST
[ Parent ]
U.S. laws and institutions were sufficiently similar to those of the U.K. that British investors were generally comfortable investing in high potential return projects in the USA, not to mention Canada.  But they were also very active, for instance, in Argentina and Chile as well.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Dec 10th, 2009 at 05:51:56 PM EST
[ Parent ]
I believe russian railroads were similarly built with french money.

(This was also during the the first period of globalization so Mig's comment applies similarly to it.)

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Tue Dec 15th, 2009 at 06:15:55 PM EST
[ Parent ]
asdf:
The technology was as mobile as the person who understood it

Only as long as the technology was lite, using machines made of wood and other natural materials a craftsman could assemble. The colonists and later Americans did develop foundries and metal-working, but it took time to build an industrial infrastructure. It wasn't as quick and easy as you describe.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 10th, 2009 at 01:44:17 AM EST
[ Parent ]
We would have to get into a serious discussion of the history of technology to decide this. Worcester, Massachusetts, was in the middle of the industrial revolution pretty much from the start.

http://www.nps.gov/spar/upload/Tho%20Blanchard%20bulletin%201206%20A.doc

I suppose the first thing to do would be to choose some dates for comparison, say 1850 and 2000...

by asdf on Thu Dec 10th, 2009 at 09:43:58 AM EST
[ Parent ]
My remark applies to the colonial and early American period (your reference to 18th century). By the mid-nineteenth century America had built up considerably more infrastructure.

The Blanchard story is interesting, but more a story of an individual craftsman's ingeniosity than the mobility of technology.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 10th, 2009 at 09:59:55 AM EST
[ Parent ]
I suppose to be fair, the first date would have to be 1800, when Ricardo was still alive. However, I agree that the U.S. was at least 50 years behind Britain in industrialization, up until perhaps 1850. I suspect it was more a matter of population than anything else; even in eastern New England, the population was pretty low in 1800. Massachusetts had fewer than 500,000 people, mostly farmers. Sure, they could put up a mill, but why bother? The standard of living even for regular farmers was astoundingly high at the time.

Look at this house that Bronson Alcott lived in in Concord, for example. And he was broke most of the time.

by asdf on Thu Dec 10th, 2009 at 08:06:45 PM EST
[ Parent ]
The first ironworks in the Mass. Bay Colony was established prior to 1640 so as to support ship building and other local industry, some of the most advanced technology of the day. The Puritans came from the north east of England and brought with them the best practices of all the various trades of the time required for this industry. The volumes were relatively low and the source of iron was limonite or rock ore from bogs, which was the same source as in England. And timber, both for ships and for furnaces was much more abundant in New England than in England. See Creating the Commonwealth by Stephen Innes, p.239 & fff.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Dec 10th, 2009 at 06:17:31 PM EST
[ Parent ]

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