Technological diffusion and the Union blockade
AbstractThis paper answers the following question. If returns from smuggling cotton and contraband through the blockade of Confederate ports during the American Civil War were significantly lower than earnings from alternative investments, why did private firms so quickly adopt costly purpose-built steam ships in the face of the strengthening Northern blockade? First, we note that the rate of diffusion of steam ships, specially designed to run the blockade significantly exceeded any reported for innovations from the late 19th or early 20th century. Second, we correct an error in Stanley Lebergott's (1981) seminal work and conclude that that returns to infamous steamer, the Banshee (I) of 700% to be quite plausible. This finding of high returns is confirmed by two other historical sources, which have not been previously used. Additionally, we calculate that investors in the one of the leading blockade running firms, known as the Bee Company, earned in excess of 86% return on their investment, over double the profits previously reported. Finally, we demonstrate that adoption of purpose-built ships, significantly decreased the arrival rate of capture, thus increasing expected profits.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Explorations in Economic History.
Volume (Year): 48 (2011)
Issue (Month): 2 (April)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622830
Technology Civil War Blockade runners;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard C. K. Burdekin & Marc D. Weidenmier, 2001.
"Inflation Is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864,"
American Economic Review,
American Economic Association, vol. 91(5), pages 1621-1630, December.
- Richard C.K. Burdekin & Marc D. Weidenmier, . "Inflation is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864," Claremont Colleges Working Papers 1999-31, Claremont Colleges.
- Lebergott, Stanley, 1981. "Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861–1865," The Journal of Economic History, Cambridge University Press, vol. 41(04), pages 867-888, December.
- Atack, Jeremy & Bateman, Fred & Weiss, Thomas, 1980. "The Regional Diffusion and Adoption of the Steam Engine in American Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 40(02), pages 281-308, June.
- Hetherington, Bruce W. & Kower, Peter J., 2009. "A Reexamination of Lebergott's Paradox About Blockade Running During the American Civil War," The Journal of Economic History, Cambridge University Press, vol. 69(02), pages 528-532, June.
- repec:cup:cbooks:9780521635677 is not listed on IDEAS
- repec:cup:cbooks:9780521632010 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If references are entirely missing, you can add them using this form.