Chapter

The Second Kondratiev Wave: The Age of Iron Railways, Steam Power, and Mechanization

Chris Freeman and Francisco Louçã

in As Time Goes By

Published in print March 2002 | ISBN: 9780199251056
Published online November 2003 | e-ISBN: 9780191596278 | DOI: http://dx.doi.org/10.1093/0199251053.003.0006
 The Second Kondratiev Wave: The Age of Iron Railways, Steam Power, and Mechanization

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Major inventions and improvements in the design of high‐pressure steam engines made it possible to use them for steam‐powered locomotives as well as for steamships and a widening range of industrial machines, based on cheap coal and iron.

The highly successful demonstration trials of locomotives on the Liverpool to Manchester railway in 1831 triggered waves of railway investment in Britain in the 1830s and 1840s, amounting to ‘mania’ but leading ultimately to the creation of an efficient new transport infrastructure, first in Britain but later in many other countries.

Contrary to the views of some cliometric historians, we argue that the railroads and the telegraph were immensely important in bringing huge competitive advantages in speed and reliability of transport and communication to many American industries.

No less important were the institutional changes associated with the management of an efficient railway network and affecting many other industries in their capacity for managing stocks, forward planning, finance, personnel, industrial relations and government regulation.

The construction of a railway network in North America in the 1850s and 60s with the huge scale economies and efficiency improvements it brought to many other industries and services, enabled the US economy to overtake Britain, the erstwhile leader of the Industrial Revolution, in the second half of the nineteenth century.

Keywords: Britain; coal; innovation; institutional change; iron; railways; steam power; telegraph; transport infrastructure; US

Chapter.  13672 words.  Illustrated.

Subjects: Economic History

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