DE-GLOBALIZED

De-Globalized

De-Globalized

As is well-known, Britain on the eve of the First World War was an extraordinarily 'globalized' economy in comparison with any other large state. Within Britain there was a spectrum of local and regional levels of exposure to international economic forces, and on that spectrum Dundee was an extreme case of openness. This derived from the city being overwhelmingly dominated by one industry, jute, which drew its raw material from abroad and sold most of its output in international markets. This industry directly employed almost half of all workers in the city in the early 1900s, two-thirds of them women. The economic welfare of the inhabitants of Dundee was thus especially affected by international economic forces in the era of free trade. Like other Britons, Dundonians had gained enormously from cheap imported food in the last quarter of the nineteenth century, but they had also begun to be affected by serious competition in jute markets, especially from Calcutta. This competition acted to keep down money wages in the industry, and from the early 1900s led to the beginnings of the decline of the industry in Britain, with output and employment starting to fall.

Thus, like all the staples, jute eventually had to contend with both shifting patterns of demand for its product and increased competition. The great boom in the industry in the second half of the nineteenth century was built above all on the production of jute bags, used for the transportation of all manner of agricultural products, coal, fertilizers and chemicals. Thus in this period jute boomed as part of the enormous growth in international trade, especially in primary products. In the twentieth century other uses of the product became more important, partly because substitutes developed to the use of bags for the transport of bulk products, notably containerization, and partly because of the use of different material for bags, notably paper and later polypropylene. Alternative uses for jute were found especially in backing for linoleum and woven carpets, so that even by 1936 such non-bag uses consumed around a third of the total of Dundee production. The other aspect of the story was competition from other countries. The most important of these was India, though there was also significant production in continental Europe. Competition from India was evident even in the home market before the end of the nineteenth century, but was even more significant in capturing overseas markets. As Gordon Stewart rightly emphasizes, by the 1930s the Calcutta industry was the key player in the world market, Dundee reduced to a bit part.

Faced with this competitive pressure, the jute employers (acting both individually and collectively) developed a number of strategies to resist or manage this decline. These can be summarized under three broad headings: protection, 'modernization' of jute production and corporate diversification by erstwhile jute companies.

The story of protectionism in jute is discussed at length elsewhere. The bulk of jute employers became committed to a protectionist stance before the First World ...