3.3: Manufacturing

INTRODUCTION

The emergence of new ideas on state and nation in the early years of the nineteenth century cannot be understood in isolation from the socio-economic changes that were also characteristic of that era. The term 'industrial revolution' is no longer widely used by economic historians who, today, point to the slow and uneven nature of change in the period, but, nonetheless, it can hardly be denied that major changes were taking place in the productive capacities of societies and the lives of ordinary people. First the factory system and the application of steam power to production, then, later in the nineteenth century, industrialism and mass production proper, transformed, directly or indirectly, the lives of most of the inhabitants of the planet. Part of this 'Great Transformation' involved increasing importance for trade and international financial transactions.

Whereas before the nineteenth-century foreign trade in bulk goods such as foodstuffs rarely accounted for more than a small percentage of domestic consumption, by 1900 a full-scale international division of labour had been established, with a number of countries specializing in manufacturing products and no longer capable of feeding themselves without imports. That this became a possibility reflected the revolution in transportation and communication during the period, in particular the development of the electric telegraph, the steamship, and techniques of refrigeration. Britain, in particular, had ceased to be a predominantly agricultural country in the middle of the nineteenth century, and by 1914 was living off the earnings of her manufacturing sector and the interest on her enormous portfolio of foreign investment. Her rather more successful industrial competitors, the United States and Germany, still had large agricultural sectors, and most other European and non-European economies had experienced even less the great domestic changes of the Transformation, but all alike - 'developed' and 'underdeveloped' - found themselves caught up in the new global economy.

What would be the implications of this new situation for the general conduct of international relations? In the pre-industrial world, international economic activity had been judged largely from the perspective of the power of the state. The underlying assumption of this world was that trade always produced winners and losers and that states should manage their international activities with a view to ending up as the former: Generally, this meant having a positive trade balance and an inflow of gold, although some argued that any flow of goods out of the country, even if paid for in bullion, represented a weakening of the state. Either way, from this mercantilist perspective, the emergence of higher levels of trade and a global division of labor could only be regarded as a source of potential dissension.

MANUFACTURING VALUE INDICATORS DASHBOARD

Glossary of Manufacturing Indicators

Manufacturing, value added (% of GDP): Manufacturing refers to industries belonging to ISIC divisions 15-37. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3. Note: For VAB countries, gross value added at factor cost is used as the denominator.

Manufacturing, value added (current US$): Manufacturing refers to industries belonging to ISIC divisions 15-37. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3. Data are in current U.S. dollars.

Note: Microstates and islands those account for less than 1 per cent of the world population were excluded from the analysis.