Innovation & Wealth › The Gilded Age
First globalization: trade, migration, empire
c. 1870–1914· Event· Society: who gained, who lost
Mostly agreedGood evidence; some details uncertain.
From about 1870 to 1914, steamships, railways, telegraph cables and the gold standard knit the world economy together as never before.
See it on the Innovation & Wealth map →What happened
Freight costs fell sharply as steamships and railways spread, and undersea cables carried prices across oceans in minutes. Britain kept free trade, and most major economies adopted the gold standard, which fixed exchange rates. Wheat from the American Midwest, Argentina and Russia flooded Europe; the Chicago–Liverpool wheat price gap fell from nearly 60% in 1870 to under 20% by 1895. British investors funded railways from Argentina to India. World War I ended the era in 1914.
Impact on society and the economy
Consumers got cheaper food and goods, and capital flowed to new lands. European farmers, artisans undercut by imports and colonized peoples bore much of the cost, fueling tariffs and backlash.
How we know
Trade, price and migration statistics analyzed by economic historians, notably Kevin O'Rourke and Jeffrey Williamson's Globalization and History (1999), plus shipping, cable and customs records.
Still debated
Did war alone end it, or was a backlash of tariffs and migration limits already building? Trade's share of world output did not regain its 1913 level until roughly the 1970s.
Inside this (3)
Connections (5)
▸Repeal of the Corn Laws set the free-trade stage for First globalization: trade, migration, empireMostly agreed
The connection
Repealing tariffs on imported grain in 1846 committed Britain, then the world's leading economy and biggest food importer, to free trade. Once railways and steamships cut freight costs after 1870, that open market drew cheap wheat from the American Midwest, Russia and Argentina, anchoring the global trading system.
When and how
Britain, 1846, under Prime Minister Robert Peel, after Richard Cobden's Anti-Corn Law League campaign; grain imports surged from the 1870s.
How sure are we?
Trade statistics show Britain's grain imports soaring and wheat prices converging worldwide; Britain kept free trade until 1932 while most rivals raised tariffs.
Debates
How much repeal mattered versus falling transport costs is debated; its full effect came only decades later, when the American prairie opened.
▸Electric telegraph tied together the markets of First globalization: trade, migration, empireMostly agreed
The connection
Undersea cables, starting with a lasting transatlantic line in 1866, let prices, orders and news cross oceans in minutes instead of weeks. Merchants could match supply and demand across continents, banks could move money and governments could direct empires, so markets for grain, cotton and gold began moving together.
When and how
Transatlantic cable 1866 (Cyrus Field, laid by the Great Eastern); cables to India 1870 and Australia 1872; by 1900 a global network, mostly British-owned.
How sure are we?
Studies of New York and Liverpool cotton prices show the gap between them shrank sharply once the 1866 cable opened.
Debates
How much the telegraph mattered relative to steamships and railways, which cut the cost of moving goods rather than information, is hard to separate.
▸First globalization: trade, migration, empire included Mass migration to the AmericasWell documented
The connection
The same steamships and railways that carried cheap grain also carried people. Falling fares, letters and money from relatives abroad, and New World wages often double Europe's drew millions. Cheap American grain also hurt European farmers, pushing many off the land and into emigration.
When and how
Atlantic world, about 1870–1914, from ports such as Liverpool, Hamburg, Bremen and Naples to New York and Buenos Aires.
How we know
Migration and wage data analyzed by Timothy Hatton and Jeffrey Williamson link emigration rates to wage gaps and falling transport costs.
Debates
How much people left for economic reasons versus persecution, as for Jews in Russia, or simply followed relatives varies by group and is debated.
▸First globalization: trade, migration, empire was intertwined with Colonial empires and extractionWell documented
The connection
Industrial economies wanted raw materials such as rubber, cotton, copper and oil, plus secure markets and places to invest. Steamships, telegraphs, quinine against malaria and machine guns made conquest cheaper, so trade and empire grew together, with colonies wired into global commodity markets.
When and how
Africa, South and Southeast Asia and the Pacific, about 1870–1914; driven by Britain, France, Germany, Belgium, Italy, Portugal, the US and Japan.
How we know
Trade statistics show colonial exports rising; historian Daniel Headrick's The Tools of Empire (1981) documented how technology enabled conquest.
Debates
Whether economics drove empire, as J. A. Hobson and Lenin argued, or politics, prestige and great-power rivalry did, remains a classic debate.
▸First globalization: trade, migration, empire was not matched in scale until Globalization and offshoringMostly agreed
The connection
Before 1914, steamships, telegraphs and the gold standard pushed trade and capital flows to record levels, and tens of millions migrated. Two world wars and the Depression shut much of that down. By common measures, trade as a share of world output only regained its 1913 level around the 1970s, then surged far past it.
When and how
A Britain-centered world economy, 1870–1914; the new wave from about 1980, led by the US, China and global supply chains.
How sure are we?
Trade and capital-flow data compiled by economic historians such as Kevin O'Rourke and Jeffrey Williamson show the rise, collapse and recovery.
Debates
Whether today's tariff wars mean globalization is reversing again, as it did after 1914, is a live debate.