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Slouching Towards Utopia?
The Economic History of the World in theLong Twentieth Century1870-2010
J. Bradford DeLong
Professor of Economics, U.C. BerkeleyResearch Associate, NBER
This Draft: May 2009
 
Chapter VISlow Income Growth and Absolute Poverty inthe North Atlantic Region, 1800-1870
J. Bradford DeLong
This Draft: May 29, 2009
Back to the Past: 1870
Take the WABAC machine back in time to 1870. Why 1870? One reasonis that we have to start sometime—an economic history of the twentiethcentury does not properly begin with East African Plains Apes evolvinglanguage back on the veldt. More important is that the years around 1870are a sea change, because they do contain inflection points in threeimportant aspects of material life: communication, finance, andorganization; goods transportation and human migration; and invention,innovation, and productivity growth.1870 saw Isambard Kingdom Brunel’s
Great Eastern
—the largest shipthen ever built (nothing larger was to be built until 1901)—lay thesubmarine telegraph cable from Yemen to Bombay that completed theundersea line from London: rather than taking months for news andcommands to reach around the globe from London to Bombay and back,after 1870 it took only minutes. 1871 saw 34-year old American financierJ. Pierpont Morgan join the 45-year old Anthony Drexel in an investmentbanking partnership the purpose of which was to guide and profit from theflow of investment funds from capital-rich Britain to resource- and land-abundant America. Before 1870 figuring out what was going on on othercontinents was a lengthy and difficult process, and investing wealth across
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