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Can profitable arbitrage opportunities in the raw cotton market explain Britain’s continued preference for mule spinning?

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  • Leunig, Tim

Abstract

In an influential article Saxonhouse and Wright argued that the quality of local cotton was the single most important factor in explaining national preferences for ring or mule spinning. For Britain, they argue that mills using more flexible mule spindles could exploit arbitrage opportunities between different types of cotton in the Liverpool market, reducing the incentives to adopt rings. We use newly assembled price data to show that such cost-reducing arbitrage opportunities were small. We argue instead that the primary determinants of Lancashire’s technological choice were demand factors, but that the availability of good raw cotton did determine technological choice in emerging cotton industries.

Suggested Citation

  • Leunig, Tim, 2002. "Can profitable arbitrage opportunities in the raw cotton market explain Britain’s continued preference for mule spinning?," Economic History Working Papers 515, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:515
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    References listed on IDEAS

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    1. Copeland, Melvin Thomas, 1912. "The Cotton Manufacturing Industry of the United States," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number copeland1912.
    2. Leunig, Timothy, 2001. "NEW ANSWERS TO OLD QUESTIONS: EXPLAINING THE SLOW ADOPTION OF RING SPINNING IN LANCASHIRE, 1880–l913," The Journal of Economic History, Cambridge University Press, vol. 61(2), pages 439-466, June.
    3. Gary Saxonhouse & Gavin Wright, 1987. "Stubborn mules and vertical integration: the disappearing constraint?," Economic History Review, Economic History Society, vol. 40(1), pages 87-94, February.
    4. Gary R. Saxonhouse & Gavin Wright, 1984. "New Evidence on the Stubborn English Mule and the Cotton Industry, 1878-1920," Economic History Review, Economic History Society, vol. 37(4), pages 507-519, November.
    5. William Lazonick, 1981. "Factor Costs and the Diffusion of Ring Spinning in Britain Prior to World War I," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(1), pages 89-109.
    6. Cox, Alonzo B., 1928. "Marketing American Cotton in England," Technical Bulletins 156323, United States Department of Agriculture, Economic Research Service.
    7. Lars G. Sandberg, 1969. "American Rings and English Mules: The Role of Economic Rationality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(1), pages 25-43.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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