One of the many virtues of this fine monograph is that it spares readers the need to read D. C. M. Platt’s work on Latin America and British trade. Platt argued that British trade to republican Latin America was of little economic consequence to either side. There was, and could be, then, no imperialism of free trade.
Llorca-Jaña’s careful reconstruction of the volume and value of British trade to Latin America shows that “neither Latin America nor the Southern Cone were marginal markets for British exports during the first half of the nineteenth century, including from the 1810s–1830s when Latin America took over a fifth of Briton’s world exports” (p. 42). Moreover, and crushingly, “[If] Latin America was made up of essentially small, easily saturated markets [as Platt had argued] … why were so many British merchants operating there?” (p. 71). Small markets are typically not characterized by competition but by some form of imperfect competition.
As Llorca-Jaña concludes, this was “not a tale of two or three big manufacturers sending goods to one country and saturating its demand—one or two could not have possibly overstocked the market” (p. 54). Moreover, these producers were scattered widely throughout the United Kingdom, depending on the type of textile produced. Llorca-Jaña mentions at least thirteen cites, including Manchester, Glasgow, Bradford, and Belfast, as deeply involved in producing for Latin America.
As any economist will tell you, if you are on the wrong side of both theory and evidence, you are on the wrong side of the question. Period. As far as I am concerned, Llorca-Jaña has demolished Platt’s work once and for all. As Llorca-Jaña puts it, “Platt completely distorted the facts” (287n). Agreed.
Why, indeed, was Latin America not the consumption desert that Platt claimed it was? Llorca-Jaña offers a wide variety of explanations, all of which come down to productivity change in international trade. Marine insurance as a share of invoice cost fell. Competition made the British extremely sensitive to variations in Latin American demand, and the productivity of port facilities (loading and unloading time) increased pari passu. The capacity to import in places like Chile, Argentina, and Uruguay rose along with the production of precious metal. The home accumulation of claims against third parties—the balance of payments—worked against the constraints of bilateral trade, upon which much incorrect speculation had been based: “multilateral trades were crucial to balance the visible bilateral trades of the recently created republics … [Data] on bilateral exchanges show only a very limited part of the whole picture when trying to explain the exchange of goods between two countries” (p. 168). Moreover, the British innovated in their ability to make remittances from South America: “Bills on London allowed multilateral clearances to cover the total deficit of the republics with Britain” (p. 169).
Further reductions in the prices of British cottons, woolens, and linens led to improvement in the net barter terms of trade for Chile and the River Plate. Some of these savings came in reduced costs of production driven by well-studied technological processes and the pressure of competitive markets. Other sources of price reductions independent of productive efficiencies encouraged Latin American consumption as well. The use of tarpaulins in packing textiles considerably reduced seawater damage in transit, and promoted lower insurance rates as a fraction of invoice costs. Larger iron-hulled sailing vessels economized on both sailing time and the use of labor in shipping, which, in turn, reduced freight rates. Free trade sentiments in the United Kingdom (which, incidentally, did not outlast Joseph Chamberlain as British Secretary of State for the Colonies in 1895), as well as tariff reductions in the Americas, played a part in encouraging increased exchange with the Americas. Finally, “the second half of the nineteenth century was a period marked by comparative political stability [in the River Plate and Chile] to the great benefit of British exports” (p. 220). Taken together, these factors, summarized and quantified in a remarkable table (p. 279), clearly explain why the quantum of British textile exports to South America grew between 1815 and 1875.
Frankly, there is much to like and very little to dislike in this well-researched study. It will be an important reference for economic historians of all persuasions, not the least of whom will be cliometricians searching for reliable time series in English for an extremely difficult period. For that reason, I wish the valuable statistical appendices had been made available online, rather than a nearly useless index that only summarizes the volume. Cambridge University Press owes its distinguished authors and dedicated readers something a bit more useful than this.
