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Abstract:
Good economic history tells dramatic stories of ingenuity and aspiration, greed and national self-interest. Sven Beckert writes good economic history. But why cotton? Mr Beckert’s answer is that for 900 years, until 1900, it was the world’s most important manufacturing industry. Cotton is relevant now because the story explains how and why an industry goes global. It is a story of wildly fluctuating fortunes, from stunning wealth to dire social disasters.
Full Text
Good economic history tells dramatic stories of ingenuity and aspiration, greed and national self-interest. Sven Beckert writes good economic history. But why cotton? Mr Beckert’s answer is that for 900 years, until 1900, it was the world’s most important manufacturing industry. Cotton is relevant now because the story explains how and why an industry goes global. It is a story of wildly fluctuating fortunes, from stunning wealth to dire social disasters.
India runs like a thread through this tale. Cotton was being spun in the Indus Valley in 3000BC; Herodotus admired its quality. Spinning and weaving cotton (the word comes from qutn in Arabic) were introduced to Europe by Muslim invaders in the tenth century. In India cotton as a cottage industry was so successful that it established a substantial market in Britain. This had two consequences. The first was technological innovation in the industrial north; spinning machines, the invention of the flying shuttle, the spinning jenny and power looms were the forerunners of the Industrial Revolution. The second, introduced in 1774 to assist English spinners and weavers, was protectionist legislation that made it illegal to sell imported cotton.
By 1800 mass-produced British cotton dominated world markets, including in India where the industry collapsed. In the three decades to 1820 innovation helped productivity in Britain’s new cotton factories increase 370 times. Mr Beckert, a history professor at Harvard, calls this new economic order “War Capitalism” as it is based on imperial expansion, expropriation of land, and slavery.
Slaves and wide open spaces in the southern states transformed America’s economy, too. Capital, raised mainly in London, financed the expansion. By the late 1850s, 77% of the cotton consumed in Britain came from America. Profits soared on both sides of the Atlantic. Manchester became a centre of the universe, always feeding on cheap labour, mostly women, who, unlike slaves, were paid a wage, albeit a poor one. (This reviewer’s great-aunt was among the first women to earn a guinea a week from piece-work in her Rochdale mill, in the 1920s.)
Deprived of raw American cotton when the civil war broke out in 1861, English manufacturers rediscovered India. Railways were built in the newly acquired state of Berar to shift raw cotton for export to Bombay. By 1862, 75% of Britain’s cotton originated in India. The industry had gone global; Egypt and Brazil also provided new sources of supply. When news of the Union Army’s victories in 1865 reached India, property prices in Bombay collapsed, anticipating the renewed competition that the end of the war might bring. In the event, as peace returned to the American South and former slaves became sharecroppers, the global industry recovered quickly, helped by a surge in demand.
In the late 19th century the cotton industry in England began to decline. At the height of the Great Depression in 1932 only 11% of the world’s mechanical spindles were operating in Britain, compared with 61% in 1860. The terrible blight that has overwhelmed cotton towns such as Rochdale began then, and has grown worse since. By the late 1960s Britain accounted for only 2.8% of global cotton exports.
Today the main sources of raw cotton are China (29%) and India (21%). Supported by grotesque subsidies ($35 billion between 1995 and 2010), America clings on in third place. Producers sell to the new merchants of cotton: global retailers such as Gap and Adidas. Mr Beckert’s story is both inspirational and utterly depressing, a reflection of the white-knuckle ride that has been the characteristic of globalisation through the centuries.