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Osaka Keidai Ronshu, Vol. 61 No. 1 May 2010
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An Agenda for Constructing a World
History of Information1)
Toshiaki Tamaki
Introduction
More than 10 years have passed since the study of global history was advocated. However, a
global history of ‘information’, broadly defined, has not been forthcoming in the intervening
years. We cannot find any record of global information history in the Global Economic History
Network＝GEHN conferences (20022006) led by Patrick O’Brien2). Nevertheless, information has always held great significance for humans. For example, a hunter in the Neolithic age
needed to know where to find animals to be successful. In short, he needed good information.
In our present-day world, the importance of information has been recognized in the field of economics since Stiglitz and Akerlof received their Nobel Prize in economics for their study of
asymmetric information. Therefore, it is curious why there are not more studies on the global
history of information.
If we study information in a broad sense, the relationship between the business world and
the economy may be understood. Neoclassical economics assumes that all people share the
same information. An illustrative example of this could be one in which everyone has the same
CD containing the same information. In reality, our “CDs” do not contain the same information.
Merchants would still do business by utilizing asymmetric information. In the real world, asymmetric information always exists, and successful merchants seek to acquire better information
to increase their profits. However, if the asymmetry of the information is too large, markets
will not function well because nobody will enter them. Moreover, a society that facilitates better and more accurate information exchange will have better institutions for economic growth.
Similar to services and technology, information is classified as an intangible good. But in contrast, information is less visible and more difficult to grasp. The value of information varies depending on the person/people, the time, or the place. Accordingly, it would be difficult to write
an economic history that focused chiefly on information because it might tend to be too abstract. This is maybe why global historians have not written a history of information.
Nevertheless, as a background to the ‘Great Divergence’3) we should not ignore the problem
of information exchange. The exchange of accurate information may have been much faster in
Europe than in Asia in the early modern period. The European economy may have developed
1) This paper is based on my Japanese article, “‘Joho no Sekaishi’ Kochiku ni Mukete (Towards the Construction of ‘The World History of Information’)”, Kyoto Management Review, Vol. 13, pp. 1
17.
2) See http://www.lse.ac.uk/collections/economicHistory/GEHN/GEHNWorkshops.htm
3) Kenneth Pomeranz, The Great Divergence : China, Europe, and the Making of the Modern World Economy,
Princeton, N. J, 2000.
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Osaka Keidai Ronshu, Vol. 61 No. 1
much more quickly than that in Asia, and a ‘Great Divergence’ might have occurred as a result
of this disparity. How did Europe utilize information for its economic development from the
early modern to modern period ? How was it connected with ‘Great Divergence’ ?
The aim of this paper is to answer these questions. The period we explore is between the
early modern and modern periods. This was also the age of transition, when hegemony shifted
from The Netherlands to Britain. I also refer briefly to the later hegemony of United States.
This essay discusses an agenda for a ‘History of Information’ in terms of economic history fundamentally centered on the different hegemonic characteristics of The Netherlands and Britain.
1. Gutenberg Revolution ?
Gutenberg was not the first person to invent mechanical printing in world history. But, it is
certain that his inventions or improvements in printing had an immense impact on European
society. The increasing number of printing presses enabled Europe to expand literacy. Before
Gutenberg made his printing press, few people could read or write ; and the literate were
mainly among the clergy. As a result of the advent of the printing press, the number of literate
people increased greatly. Moreover, greater numbers of the church laity became literate. From
a Protestant point of view, the printing press promoted translations of the Bible into various
vernaculars and led to the Protestant Reformation. This is referred to as the ‘Gutenberg
revolution’.
Without a doubt, Gutenberg’s impact was enormous. However, the Gutenberg revolution did
not accelerate the speed of information transmission. This is an important fact that has not received much discussion, but one I shall consider further.
Throughout most of history, the speed of information transmission has not surpassed that of
the movement of people. In medieval and early modern Europe, international merchants specializing in wholesale goods would transmit information the quickest. The spread of commercial information was fundamentally based on networks composed of relatives or same sects.
This structure continued from medieval ages to the early modern period. Instead of breaking
this long-established system, the Gutenberg revolution strengthened it. The revolution made
possible the transmission of more accurate information not by verbal communication but by
printed material. It is true that handwritten commercial paper had been used since medieval
ages, but commercial papers−printed and using a standardized style−increased dramatically,
reducing transaction costs greatly and rapidly. The latter was a very important phenomenon in
commercial history. The accelerating transmission of information was caused not by the
Gutenberg revolution but by faster ships, development of railway systems, and improved maintenance of roads.
The more active merchants became, the more volume of goods they traded. The more
‘circulatable’ information became, the more quickly it was expected. Because a greater number
of merchants used the same commercial techniques, the result was a homogeneous society in
a commercial sense. These factors caused the reduction of transaction costs. The Gutenberg
revolution contributed to the birth of such a world. Where did it occur ? This is the topic dealt
with in the next section.
An Agenda for Constructing a World History of Information
37
2. The Rise of Northern Europe
Before the Great Divergence occurred between the West and the East, a Great Divergence existed between Northern and Southern Europe. The economy of Northern Europe surpassed
that of Southern Europe, and The Netherlands and Britain became the leading economic areas
in early modern Europe.
The Rise of Northern Europe occurred approximately in the latter half of the sixteenth century. Antwerp, Amsterdam, and London became the centers of European economies. This shift
has often been related to the increasing importance of the Atlantic economies. However, the
focus of this paper is ‘information’. Therefore, we should consider the relationship between the
transformation of Europe’s economic structure and information exchange.
This paper argues that the economy of Northern Europe flourished because accurate information began to flow in Northern Europe. One of the most important words that will represent
this phenomenon is ‘diaspora’4). In the early modern period, nation states began to be born in
Europe. Many states forced non-natives to flee for the purpose of forming homogeneous states.
Many people were forced to migrate because of religious persecution. For example, after the
revocation of the Edict of Nantes in 1685, the Huguenots became refugees and were forced to
settle outside of France. Most important among these displaced groups were the Sephardim,
the Armenians, the Jacobites, and the Greeks, as well as the Huguenots. These groups had extended commercial networks independent of nation states.
According to recent studies, merchants also denote entrepreneurs5)−or ‘actors’ of economic
development. Entrepreneurs, many of whom were international merchants exiled from their
home countries, expanded commercial and business areas. Moreover, their trading area was
scattered because of diaspora. Wars in early modern Europe were much smaller and not so
devastating to property and economies as contemporary ones. Wars forced many merchants to
leave their homelands to settle in foreign countries, if they wanted to continue their business.
Therefore, the networks of international merchants expanded. This also impacted the commercial and economic development of areas where they settled. New industrial equipment and
commercial systems were introduced.
What kind of impact did the homogeneous merchant networks bring ? Tracts for merchants
had been published already in medieval Italy. Nevertheless, the leading work on this subject
6)
was French writer Jacques Savary’s Le parfait Savary’s tract was translated and
copied into foreign languages. As a result, homogeneous merchant networks expanded rapidly
and information transaction costs were reduced.
Tracts facilitated commerce because merchants became familiar with using the same kind of
manuals. Merchants could follow the ‘language’ of papers without necessarily understanding
each others’ language, if the style of the paper contract was the same. As a result, transactions
4) For example, Ina Baghdiantz McCabe, Gelina Harlaftis and Ioanna Pepelasis Minoglou (eds.), Diaspora
Entrepreneurial Networks : For Centuries, Oxford and New York, 2005.
5) Ferry De Goey and Jan Willem Veluwenkamp (eds.) Entrepreneurs and Institutions in Europe and Asia
1500
2000, Amsterdam, 2002.
6) Jacques Savary, Le Parfait Paris, 1675 (rep. 1995).
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Osaka Keidai Ronshu, Vol. 61 No. 1
became smoother. Moreover, it became much easier to acquire information on commodities.
The earliest surviving examples of published commodity prices are from Venice and the major
northern European trading cities of Frankfurt, Amsterdam, and Hamburg. Such an information
shift from Southern to Northern Europe is important to the perspective of this paper.
Thanks to the publication of printed information on prices and commodities, the European
fairs gave way to markets where there was a continuous exchange of market information
among cities. A commodity’s price that had previously appeared four times a year now began
to be published weekly, even twice-weekly. Up-to-date commodity prices made it easier to display a full range of local products available for trade and opened the markets to anyone with
enough money to buy the products. The data also had an official character because a group of
officials monitored the publication. The publication of commercial newspapers reflected the
economic power of cities. From Italian cities, especially Venice, which dominated in the fourteenth and fifteenth centuries ; to Antwerp, in the first half of the sixteenth century ; to Genoa,
in the second half of the sixteenth century ; to Amsterdam from the early seventeenth to the
early eighteenth century ; and then to London7), which ruled the next two centuries. This shift
of an information center represents a transition of economic power.
Price data provided valuable information with which merchants could trade. Information on
goods now flowed efficiently and became more transparent. Customers could acquire knowledge about the commodities they would purchase. Commodity chains became smoother with
respect to the spread of accurate information on the commodities people traded. The length of
commodity chains became longer and longer, especially because Europe imported colonial
goods from the New World and Asia. If accurate information had not been transmitted, commodity chains could not have stood because many merchants were engaged in commodity
chains ; thus, good information flows had to be built between merchants. The expansion of commodity chains8) was closely connected with information chains.
Commodities imported into Europe were fundamentally consumer goods ; for example, these
included sugar, coffee, tea, and tobacco. European merchants could not engage in trade without
accurate information on commodities and their trading price. However, having access to the
then current commodity prices did not give access to all the data merchants needed.
Merchants also sent information on commodities and prices by correspondence. Correspondence included the commodities’ nature and qualities, as well as important information about
commodities merchants purchased and sold. Merchants’ correspondence was in some sense a
record of the commodities they traded. The correspondence belonged to informal information
exchanges, away from formal information exchanges supported by authorities. The exchanges
of correspondence stimulated exchanges of commodities. In this respect, sophisticated merchant networks worked effectively. Both formal and informal information would promote the
exchange of accurate information on commodities and commodity chains.
7) John J. McCusker and C. Gravesteijn, The Beginnings of Commercial Financial Journalism : The
Commodity, Price Currents, Exchange Rates, and Money Currents of Early Modern Europe, Amsterdam,
1991, pp. 2345.
8) Steven Topik, Carlos Marichael and Zephyr Frank (eds.), From Silver to Cocaine : Latin American
Commodity Chains and the Building of the World Economy, 1500
2000, Durham and London, 2006.
An Agenda for Constructing a World History of Information
39
The extent of asymmetric information became smaller and smaller. These factors would
greatly reduce transaction costs in Northern Europe9). In the next section, I will explore the
role Amsterdam−the center of commerce in seventeenth-century Northern Europe−played in
the development of Europe’s economy.
3. The Role of Amsterdam
Dutch historiography emphasizes the importance of the hierarchy of the Amsterdam staple system. Some researchers maintain that the international staple system had a distinctive hierarchy, involving local, regional, and international markets. Klein and Veluwenkamp wrote,
“Surpluses of these regional markets were traded on market of a higher level, so that a hierarchy of markets came into existence, at the top of which there was a central permanent the concrete world market.”10) Many of the goods traded internationally were stored in
Amsterdam. Amsterdam was the warehouse of the world and at the top of this hierarchy.
Against this historiography, Lesger maintained that Amsterdam was a ‘gateway’ that
served as an intermediary between the hinterland and the rest of the world. Lesger denied the
existence of such a hierarchy. Although Amsterdam imported many kinds of goods, Lesger argued the city was not situated at the top of the hierarchy for all commodities11) . However,
Amsterdam was not only a ‘gateway’ for commodities. The city also facilitated the migration of
people and the flow of money and information. In this sense, Amsterdam was the most important city in Europe because the city provided people with many types of, and sometimes the
most reliable, commercial information.
Possibly the most important role of Amsterdam lay in its function as a commodity and information intermediary. If we look only at Amsterdam’s small size, it would not be obvious that
Amsterdam functioned as a warehouse of the world. But, in contrast to tangible goods, intangible goods were able to be stored within this small city because Amsterdam was a staple of
information12). We should pay attention to the difference between the two forms of goods.
It would be useful to explain the main features of the rise of Amsterdam in connection with
the Hanseatic League because researchers tend to focus on the difference in commerce between the Hanseatic League and Amsterdam. On the one hand, Hanseatic merchants dominated the Baltic trade until the middle of the sixteenth century. By the end of that century, the
merchants of Amsterdam were supreme in this trade. On the other hand, there was a difference between the merchants of Hansa and Amsterdam. In fact, as Milja van Tielhof shows, several Hanseatic merchants in Danzig married Amsterdam merchants in the latter part of the six9) Toshiaki Tamaki, “‘Fiscal-Military State’, Diaspora of Merchants and Economic Development in Early
Modern Northern Europe : Diffusion of Information and its Connections with Commodities”, Shigeru
Akita (ed.), Cross-regional Chains in Global History : Europe-Asia Interface through Commodity and
Information Flows, 2008, pp. 69
86.
10) Peter W. Klein and Jan Willem Veluwenkamp, “The Role of the Entrepreneur in the Economic
Expansion of the Dutch Republic” in Karel Davids and Leo Noordegraaf (eds.), The Dutch Economy in
the Golden Age, Amsterdam,1993, p. 31.
11) Lesger, The Rise of the Amsterdam Market and Information Exchange : Merchants, Commercial
Expansion and Change in the Spatial Economy of Low Countries, c. 1550
1630, Aldershot, 2006, p. 7.
12) Lesger, The Rise of the Amsterdam Market, passim.
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Osaka Keidai Ronshu, Vol. 61 No. 1
teenth century13). The merchants in Amsterdam therefore inherited the commercial know-how
of Hanseatic merchants. Moreover, many people migrated to and from Amsterdam14) , and
Amsterdam became the largest melting pot of merchants in Europe. Amsterdam rose to the
top of the merchant networks and became the largest ‘gateway’ in seventeenth- and eighteenth-century Europe. In Northern Europe, apart from Amsterdam, Hamburg, Stockholm,
, Copenhagen, Antwerp, Cadiz, and Bordeaux, among others, emerged as a ‘gateway’.
Amsterdam was a center of European commerce and finance. Commercial information and
know-how accumulated in the city. Therefore, many merchants found it convenient to settle in
Amsterdam permanently, or at least temporarily. Even if merchants lived only temporarily in
Amsterdam, they could acquire the commercial knowledge necessary to participate in international commerce. For example, Louis de Geer, a founder of the Swedish iron industry, did not
come to Stockholm directly from Liege (his birthplace)15) but came via Amsterdam. He was
able to have connections with international merchants in Amsterdam, a city through which
many merchants went to other European cities. It was common for merchants to immigrate to
Amsterdam, obtain commercial know-how, and go on to work in other European cities using
the knowledge and connections they obtained in Amsterdam. Through the gateway of
Amsterdam, the Dutch Republic was able to contribute to the rise of the economies in Northern
Europe with trade in commodities, money, and information.
Another important aspect of Amsterdam’s commerce lay in its religious tolerance. In general, European countries and cities were not as tolerant as The Netherlands and Amsterdam.
Different sects found it difficult to trade with one another. However, Amsterdam allowed merchants of different loyalties a tolerant environment to trade amongst each other. This was one
of the most significant functions of Amsterdam.
Important commercial information and know-how spread to other areas as a result of the development of the printing press ; information could be diffused cheaply and rapidly. Amsterdam
was at the center of publication and information. Without Amsterdam, European markets could
not have functioned so well.
4. Hegemonic Transition−The Netherlands, Britain, and Hamburg
In the seventeenth century, The Netherlands was the most affluent and hegemonic state in
Europe. It was a decentralized country16), and the government did not intervene much in economic spheres. However, other states were economically backward and had more incentive to
support and to promote economic development by the government’s ‘visible hand’ than The
Netherlands did. As a result, many European states adopted mercantilist policies to catch up
with The Netherlands17). The most successful state in this sense was Britain.
13) Milja van Tielhof, “Der Getreidehandel der Danziger Kaufleute in Amsterdam um die Mitte des 16.
Jahrhundert”, Hansische Vol. 113, 1995, pp. 93
110.
14) Jan Lucassen, “Immigranten in Holland 1600
1800 Een kwantitatieve benadering”, Centrum voor de
Geschidenis van Migranten Working Paper 3, Amsterdam, 2002.
15) E. W. Dahlgren, Louis de Geer 1587
1652 : Hans lif och verk, 2 Vols, 1923 (rep. Stockholm, 2002).
16) Marjolein’t Hart, The Making of a Bourgeois State : War, Politics, and Finance during the Dutch Revolt,
Manchester and New York, 1993.
An Agenda for Constructing a World History of Information
41
The British government had great success adopting protectionist policies, which reduced
transaction costs for them. On one hand, Dutch merchants found comparative advantages in
the emigration to foreign countries and in cutting their relations with their mother country.
The Dutch had the most advanced commercial techniques, and they expected to obtain money
by using their superiority in commerce. On the other hand, British merchants saw comparative
advantages in continuing their relations with their mother country partly because their commercial activities were protected by the British government. The British merchants contributed to the formation of the British Empire, which did not occur in the case of the Dutch
Republic. This country was a ‘Republic of Merchants’, and the Dutch government did not protect its subjects’ commerce as efficiently as did the British government. Once other states
adopted protectionist policies and promoted centralization in terms of governmental and economic policies, Dutch political institutions were not suited for economic developments, because
of the lack of governmental protectionist policies.
The transition of hegemony did not progress so easily. Amsterdam’s merchants migrated to
many places in Northern Europe, especially England and Hamburg. At the time of the Bank of
England’s founding in 1694, Dutch money was very important. Much Dutch money was invested in establishing the Hamburg Bank in 161918). Comparing London and Hamburg, the former would have been more advantageous as a successor to Amsterdam. That said, the
difference between London and Hamburg as a transportation center was not large. For example, the value of imports from the New World to Hamburg was as large if not larger than that
to London19).
The system centered on London was closely connected with the rise of the British Empire.
Thus, London’s role changed from the capital of Britain to the capital of the British Empire.
Contrarily, the system centered on Hamburg was established as a logistics system. Hamburg
was a ‘gateway’ to the continent. The competition between London and Hamburg ended with
London victorious when the Napoleonic wars concluded in 1815. The success of Britain as a
‘Fiscal-Military State’20) led to its triumph over a city centered on providing logistics. Furthermore, although London depended on Amsterdam’s financial market in the seventeenth century,
by 1815 Amsterdam was subject to London. London became the center of European finance.
The establishment of the British Empire in 1815 meant the birth of a new system, by which a
centralized state intervened strongly in the economic sphere. The new system was very different from the Dutch staple system, which had allowed cosmopolitan merchants to trade more
freely than under the British system.
According to Immanuel Wallerstein, The Netherlands did not need mercantilist policies be17) Cf. Lars Magnosson, Mercantilism : The Shape of an Economic Language, London and New York, 1994.
18) Hermann Kellenbenz, “Sephardim an der unteren Elbe : Ihre wirtscahliche und politische Bedeutung von
Ende des 16. bis zum Beginn des 18. Jahrhunderts”, Vierteljarhschrift sozial- und wirtschaftsgeschichte,
Beihefte, No. 40, 1958, p. 250.
19) Toshiaki Tamaki, “Amsterdam, London und Hamburg−A Tale of Three Cities. zur Wirtschaft und zum Aufstieg des british Empire”, Hamburger Wirtschafts-Chronik
Neue Folge Band 7, 20072008, pp. 6190.
20) John Brewer, The Sinews of Power : War, Money and the English State, 1688
1783, London, 1989.
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cause it was strong both inside and outside of the country. Moreover, the Dutch military was
strong enough to wage wars21). We should bear in mind, however, that Amsterdam was an arms
trading center. As a result, the Dutch could acquire information needed for strategy and tactics
more easily than other countries ; Amsterdam accumulated the most military information of any
European country. We should keep in mind that a powerful army or navy was not the only way
for a state to become a strong military state. Military information was also of great significance.
Strong armies usually incur huge expenditures, a heavy financial burden. A smaller state would
be more efficient, if two states had the same military power. As exemplified in the case of The
Netherlands in the seventeenth-century, military information was the most important factor for
achieving great military power. The image of the ‘Military Revolution’ advocated by Geoffrey
Parker, which emphasized the role of guns and ‘gunpowder’, should be reconsidered22).
From the above arguments, it is clear that the image of the military state in early modern
Europe should be changed. Information obtained by merchants engaged in arms trading can be
regarded as indispensable for strategic military purposes. The military information merchants
acquired contributed to the Dutch ‘Golden Age’.
5. The British Empire and the Importance of Information
Britain took The Netherlands’ place to become a hegemonic state by 1815. The Netherlands
remained a decentralized country, and Britain formed an ‘empire’. In the early modern period,
Britain moved, especially in a fiscal sense, toward becoming a more centralized state−a
‘Fiscal-Military State’. The British government promoted industrialization by defending its
markets with military power. Britain became the first industrial state by the second half of the
nineteenth century.
We can find a large difference in hegemony between The Netherlands and Britain. The
Netherlands was a hegemonic state in the age of merchant capitalism, and Britain was
hegemonic in the age of industrial capitalism. In the early modern period, the hegemonic state
dominated distribution ; in the modern period, it dominated the industrial sector. Wallerstein
supposes that all hegemonic states were superior to other countries in industrial power.
However, this point is mistaken because Wallerstein applied the theory of industrial capitalism
to merchant capitalism23). British merchants were not assimilated by the countries they immigrated to, and instead brought the wealth they gained back to their home country. Contrarily,
Dutch merchants migrated to and settled in other countries. Therefore, they did not contribute
so much to the formation of wealth in their home country.
The fundamental reason for the difference between The Netherlands and Britain is that
Britain became a centralized state, adopted Mercantilist policies, and managed to import wealth
obtained abroad. However, the Dutch Republic was a decentralized and fractured country that
21) Immanuel Wallerstein, The Modern World-System II : Mercantilism and the Consolidation of the European
World-Economy, 16001750, New York, 1980.
22) Geoffrey Parker, The Military Revolution : Military Innovation and the Rise of the West, 1500
1800,
Cambridge, 1988.
23) Katsumi Fukasawa, Shonin to Sarasa : Kinsei Furansu-Revanto Bouekishi Kenkyu (Les et des
indiennes : une histoire du commerce franco-levantin moderne), Tokyo, 2007, p. 29
An Agenda for Constructing a World History of Information
43
showed less concern for the interests of merchants. The difference of trade policy in both
states brought about different results. Britain was, as is often assumed, not a laissez-faire state.
She provided support or public goods for commercial prosperity.
In the eighteenth century, British commerce strengthened the connections of an empire.
This structure continued to the nineteenth century and was far different from the Dutch
Republic’s structure. In the eighteenth century, Britain became the most successful ‘FiscalMilitary State ‘and had vast financial power. The British Empire became a worldwide financial
empire. During the period of the Seven Years War, India, her colony at the time, played a great
role in British State finance24).
If we apply the term ‘empire’ to The Netherlands, it was not a ‘political empire’ but a ‘merchant empire’. That is, it could not be considered an empire that had an integrated fiscal structure. The Dutch moved to many areas without regarding the interests of The Netherlands.
Contrarily, the British state protected merchant activities and promoted commerce aligned
with the interests of the British Empire. The Dutch merchants in the seventeenth century
were ‘cosmopolitan merchants’ with little nationalistic concern. But British merchants in the
eighteenth century were ‘multinational merchants’ supported by the British state.
Britain could not have become a global empire without the development of the telegraph.
Since 1830, steamships, railways, canals, and telegraphs covered and connected the world25).
Samuel Morse developed his telegraph in 1844 ; One year later the Magnetic Telegraph Company was formed to lay telegraph lines from New York City to Philadelphia, Boston, Buffalo,
and the U. S. states of New York and Mississippi. In Britain, the telegraph spread rapidly, and
by 1851 the first underwater cable was built between Britain and France. The underwater cable
was extended to Yokohama, Japan, by 187126). During the 1880s, telegraph networks centered
in London were expanded across the world. As a result, the speed of information transmission
increased greatly. For example, the time needed to transfer trade data decreased from 60 to 4
days upon completion of the intercontinental telegraph in 187627). By 1913, Britain had established almost all of the world’s cables28).
Underwater cable lines thus connected the world. Previously, merchants relied on information up to four months late to export goods from Britain to India. The telegraph reduced asymmetric information and facilitated quick business transactions. It also brought about an information revolution surpassing the Gutenberg revolution29). That is, the telegraph made it possible
1833,
24) Huw Bowen, The Business of Empire : The East India Company and Imperial Britain, 1756
Cambridge, 2006.
25) Daniel R. Headrick, When Information Came of Age : Technologies of Knowledge in the Age of Reason and
Revolution, 17001850, Oxford, 2000, pp. 181216 ; Seija-Riita Laakso, Across the Oceans : Development of
Overseas Business Information Transmission 18151875, Helsinki, 2007.
26) Jorma Ahvenainen, “The Role of Telegraphs in the 19th Century Revolution of Communications” in
Michael North (ed.), Kommunikationsvebolutionen : Die neuen Medien des 16. und 19. Jahrhunderts, 2001, p. 74.
27) Ahvenainen, “The Role of Telegraphs in the 19th Century Revolution of Communications”, p. 75.
28) Robert Boyce, “Submarine Cable As a Factor in Britain’s Ascendancy as a World Power, 1850
1914”, in
Michael North (ed.), Kommunikationsvebolutionen : Die neuen Medien des 16. und 19. Jahrhunderts,
Colonnue, 2001, p. 89.
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to transfer information faster than though the movement of people30). It is curious, however,
that this fact has not received more attention. Although the telegraph’s significance for military
purposes has been well documented, its importance for commercial purposes has been underrated. The spread of the telegraph greatly increased the accuracy and speed of information
chains and caused the globalization of commerce. Commercial networks expanded globally, and
commodity chains were enlarged.
The transformation of information transmission brought about a fundamental change in financial systems. If the telegraph had not been extended to Asia at the end of the nineteenth century, the international gold standard based in London would not have spread so rapidly.
Although Asia had long used a silver standard, many Asian countries changed to the gold standard around the 1870s. This could be ascribed to the telegraph’s direct connection between
London’s and Asia’s monetary markets. If a merchant in Asia drew a bill of exchange in
London, it would be accepted much faster than during the period prior to the telegraph. British
banks played a central role in multilateral settlements, and their total wealth increased rapidly.
Before the invention of the telegraph, bills of exchange were physically carried to London via
ports, where they took weeks to settle. The construction of the Suez Canal or the development
of railways in India did not change the fact that without the telegraph, the speed of information
transmission could not be faster than that of human movement. By using the telegraph, merchants could identify consumer demand immediately.
Previously, trading companies stored many goods in warehouses. The development of railways and steamships greatly reduced the stocks held in warehouses31) . Trading companies
were able to reduce their stocks, and their business burdens correspondingly decreased.
In Britain, telegraph companies were at first private ones, but from 1870 they became national enterprises32). Until the first half of the twentieth century, the British telegraph was a
government-led public enterprise. From this we can understand that the British government
played an important role in forming the infrastructure for economic activities.
London became a center of information because of the development of the telegraph, and
therefore became the core of international finance. If the telegraph had not developed so rapidly, the British system and its dominance would have been much less efficient. Moreover, the
British Empire might not have functioned well as a unit, if it lacked its most important tool for
communication. The telegraph succeeded in standardizing trading customs across the world,
which reduced transaction costs. Finally, the birth of the so-called nation-states was essentially
and Jari Ojala, “Information Flows and Economic Performance over the Long Term : an
29) Leos Introduction,” in Leos and Jari Ojala (eds.), Information Flows : New Approaches in the Historical
Study of Business Information, Helsinki, 2007, p. 17.
30) Jorma Ahvenainen, The Far Eastern Telegraphs : The History of Telegraphic Communications between the
Far East, Europe and America before the First World War, Helsinki, 1981 ; Jorma Ahvenainen, The History
of the Caribbean Telegraphs before the First World War, Helsinki, 1996 ; Jorma Ahvenainen, The European
Cable Companies in South America before the First World War, Helsinki, 2004.
31) Shizuya Nishimura, Kokusai Kin Honisei to Rondon Kinyu Shijo (International Gold Standard and London
Financial Market), Tokyo, 1980, p. 139.
32) Sadao Hoshina, Joho to Tsushin no Bunkashi (A Cultural History of Information and Communication),
Tokyo, 2006, p. 404.
An Agenda for Constructing a World History of Information
45
an artificial process, one in which a central government needed rapid and accurate information
transmissions to govern.
Furthermore, merchants relied on information that governments provided. Merchants in the
early modern period could trade without using the infrastructure governments provided.
However, the transition of hegemony from The Netherlands to Britain saw a much different
system for information exchange. This is also a difference between the early modern and modern age. The Gutenberg Revolution did not bring about quicker information transmission. The
information revolution with respect to the speed of information began with the construction of
the telegraph. For the first time, the telegraph made the transfer of information faster than the
movement of humans.
6. Conclusions
There have been few attempts to present a global history based on information. Although in
the debate on the ‘Great Divergence’ we find a thesis related to the ‘knowledge economy’33)
−the spread of useful knowledge−a global history of information appears not to exist.
In this paper, we do not consider the Gutenberg revolution to be as revolutionary as has been
argued in terms of its impact on information transmission speeds. In many cases, it was merchants engaged in foreign trade who brought foreign information with them. These merchants
were very important actors for information transmission. In the latter stages of this period, that
is, the ‘Golden Age’ of the Dutch Republic, the spread of commercial information found its roots
in Amsterdam. A homogeneous commercial society was formed, contributing to economic development in Northern Europe.
The development of the telegraph was a turning point, if we study history in terms of the
speed of information transmission. This is one means by which Britain managed to rule the
world economy. The telegraph made possible both the concentration of information in Britain
and the emergence of London as the center of international finance.
Today, we often talk about the impact of the IT revolution34). It is true that the speed of information transmission has increased at an incredible pace, but it remains a debatable topic
whether IT has been as revolutionary as was the telegraph in terms of information transmission. At the same time, however, we should accept IT as a historically important phenomenon
from the viewpoint of information transmission. Moreover, because IT originated as a military
technology, we can study the relationship between military and commercial information.
This paper is essentially an agenda for the study of information. What is presented here is
the importance of the role of information transmission in world history. Additional studies on
this topic will necessarily follow.
33) Joel Mokyr, The Gifts of Athena : Historical Origins of The Knowledge Economy, Princeton, 2004.
34) Lars Magnusson, Den tredje industriella revolutionen−och den svenska arbetsmarknaden, Stockholm,
2004.
* I received financial support from Kyoto Sangyo University Research Grants.