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S5 Ep52: How empires rise, and how they fall

VoxTalks Economics

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How Trade Helps to Build Industrial Empires?

The industrial revolution meant a sharp productivity increase in the manufacturing sector. This generated comparative advantages between early industrializers and a periphery that increasingly specialized in primary commodities. So there were potential gains from trade and hence an incentive to reduce policy-induced trade barriers. But what was the institutional environment to do so? Nowadays, trade policies are negotiated between sovereign states. Back then, either the diplomatic tools were lacking to do the same or they were deliberately sidestepped by the industrial core.

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