Technological diffusion and the Union blockade
This 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.
If 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.
References listed on IDEAS
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.:
- Robert B. Ekelund, Jr. & John D. Jackson & Mark Thornton, 2004. "The "Unintended Consequences" of Confederate Trade Legislation," Eastern Economic Journal, Eastern Economic Association, vol. 30(2), pages 187-205, Spring.
- 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.
- 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.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eee:exehis:v:48:y:2011:i:2:p:310-324. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.