Deep in the interior of South America, 10 weeks from Lima by mule, stands the 16,000-foot-high Cerro Rico peak, which towers over a bleak, frigid, barren landscape. This was the end of the world, but it became the center of the world. It became a magnet for tens of thousands of people who founded the city of Potosí. The world of colonial South America became irreversibly changed and the world economy transformed. This remote summit in this harsh land came to affect millions of people and the course of history because it was a mountain of silver, the richest motherlode ever found.

The Incas had already worked Potosí with their flint picks. They used silver for their temples and jewelry. They were not anxious to share their secret with their Spanish conquerors, but by 1545 the Spanish were aware of the mountain.

At first the Spaniards employed Incan techniques and Indian labor. This was quite successful for about two decades, as long as they could mine the four unbelievably rich veins that lay close to the surface. But the voracious Spanish appetite soon exhausted the easily exploitable veins. Potosí’s boom threatened to be very brief.

Spanish technology came to the rescue. Production was revolutionized in the early 1570s under the tutelage of Viceroy Toledo. The discovery of the rich mercury mine at Huancavelica, Peru, in 1565 made feasible the patio method of extracting silver from ore by applying mercury.

But first the ore, with its declining silver content, had to be crushed. Rich merchants and government officials turned miners invested millions of pesos in creating a maze of water works. To ensure water all year around in this dry land, four large reservoirs were built. Thirty dams and tunnels and canals brought the water to the crushing plants to provide hydraulic power.

Equally important, the viceroy solved the labor shortage. Labor was a major problem because Potosí was so far removed from population centers and because Peruvian and Bolivian Indians were not anxious to work for wages. They preferred their subsistence, barter economies. Toledo instituted a labor corvee system inherited from the Incas known as the mita. Indian villages were obliged by Spanish authorities to supply a certain number of men for the mines.

State coercion had to be used early on because Indians feared the dangerous mine work. The men worked six or seven days a week deep in the sweltering, dusty tunnels. They sometimes had to carry out 50-pound loads of ore, climbing up ladders as high as 250 meters and then face the frigid air at the mine’s mouth. To avoid the labor draft, some villages paid off government officials. If they failed in their efforts and had to provide laborers, funeral services were held in the village before the men’s departure. Funeral music was appropriate. A priest newly arrived in Potosí gasped at seeing miners trudge by: “I don’t want to see this portrait of hell.”

Indians unable to avoid the mita trekked to Potosí and remained there a year. As many as 14,000 to 16,000 Indians were used at a time. Whole families often accompanied married men to provide the men’s food. By 1650 there were some 40,000 Indians living on the outskirts of Potosí. This was only one-fourth of the city’s population, however.

The barren, remote mountain gave birth to the largest city in the Americas, indeed, one of the largest cities in the world. By 1600 there may have been as many as 160,000 people living in Potosí, making it as large as Amsterdam, London or Seville. Said one amazed observer in the 1570s: “New people arrive hour by hour, attracted by the smell of silver.”

But no more than about 15 percent of Potosí’s vast population came to work the mines. The rest came to mine the miners. There were hundreds of carpenters, hat makers, tailors, weavers, cooks. Government treasury officials who ran the mint kept a stern eye on activities. Numerous sumptuous churches sprang up as Dominicans, Franciscans and Jesuits competed to save souls. This was not another sprawling, dusty frontier boom town. Built on an orderly Spanish grid pattern, Potosí’s stone buildings in the town center lined at least 30 regular blocks.

But it certainly had its share of saloons, gambling dens and, by one count, 120 prostitutes. With some 30,000 transients, violence and gang warfare were common. An exasperated judge complained in 1585 that Potosí was a den of thieves with “the most perverse sort of people the world has created.”

All of these people had come to this distant place because for over a century it was the economic heart of South America and one of the most dynamic places in the Spanish world. With the most silver, Potosí also had the highest prices on earth. This made it a magnet for merchants because the city’s inhospitable surroundings demanded that all food and goods be imported.

The poorly paid Indian population could not afford much. But they purchased lots of potatoes, corn beer (chicha) and coca leaves. So much chicha was drunk on festival days that “small rivulets of urine” ran through Potosí’s streets. Coca under the Incas had been restricted to the aristocracy. But under the Spanish it became more “democratic” as thousands of workers chewed it to deaden hunger and energize themselves. It came from Cuzco, 600 miles away. Pack trains of 500 llamas regularly entered Potosí to bring these goods. The mining center required a total of 100,000 llamas to attend to its transportation needs. (One can imagine the fragrance.)

The Hispanicized population had far greater wants, turning Potosí into the center of a complex international trade network. Wine came from Chile and Argentina as did mules, cattle and wheat; cloth arrived from Ecuador. Brazil provided African slaves. Potosí’s millionaires also craved French hats and silks, Flemish tapestries, mirrors, and lace, German swords and Venetian glass. These arrived not only on the legal Spanish fleets via Seville and Panama but also through smugglers who circumvented the mercantilist routes.

Peruleros, Lima merchants who bought directly in Spain and avoided the expensive fleets and royal taxes, joined French, Dutch and Portuguese traders who landed goods in Argentina’s Río de la Plata and then carted them overland. At least a quarter of Potosí’s silver exited through these illegal routes.

Potosí also reached across the Pacific. Peruvian merchants sent silver to Acapulco, Mexico, partly in trade for Mexican cacao and cochineal, but mainly for Asian goods. From Acapulco the Manila Galleons shipped Cerro Rico’s treasure to the Spanish-owned Philippines, which was an emporium for Chinese porcelain and silks, Indian and Persian carpets, perfume from Malacca, cloves from Java, cinnamon from Ceylon and pepper from India. Anything available in Seville, London or Amsterdam could also be bought in Potosí—at a much higher price. But when one owns a silver mountain, price, distance and difficulties shrink in importance. Potosí brought the world to it. Potosí’s wealth was legendary. “To be as rich as Potosí” was the ultimate dream.

Then the silver gave out. After more than a century of prosperity, declining quality of ore and increased problems with production forced mines to close down. By 1800 the thriving metropolis, once the equal of any of Europe’s leading cities, had become little more than a ghost town. And the world, which had once strained to serve its greatest delicacies and luxuries to the distant miners, forgot about Potosí.

HOW RUBBER CHANGED THE WORLD

In the early hours of March 28, 1876, in Santarém, Brazil, Henry Wickham loaded a cargo of seeds onto the London-bound British freighter Amazonas. Wickham—a colorful world trader given to self-promotion and not, perhaps, the most reliable source—would later tell eager audiences that he secreted the contraband seeds on board in sight of a menacing Brazilian gunboat and then later slipped them by Brazilian customs agents in the capital city of Belém. Once in London, botanists quickly planted the seeds in the Kew Gardens. Nature handled much of the rest: The seeds sprouted, giving birth to rubber trees, heretofore confined to South and Central America. Some were transplanted in Malaya and, later, in other European colonies in the East Indies. By the outbreak of World War I, these colonies had seized control of the world rubber market from its former leader, Brazil.

The story Wickham told earned him a British knighthood and the eternal enmity of Brazilian nationalists. Whether or not the British adventurer’s exploits were as swashbuckling as he painted them, the transfer of rubber across the world certainly had dramatic consequences, only one of which was the decline and fall of the Brazilian rubber empire.

But until the Scotsman Charles Macintosh found a solvent for rubber in 1820 and the American Charles Goodyear discovered the vulcanization process in 1839, no one much cared where rubber grew. The ancient Maya and Aztecs had kicked rubber balls in their ceremonial games and Europeans had long noted rubber’s peculiar characteristics. But before Macintosh and Goodyear, rubber was too weather-sensitive. It melted in the heat. It became brittle in the cold. After Macintosh’s process and vulcanization, rubber’s impermeability made it ideal for raincoats (known as “mackintoshes”), boots (“rubbers”) and more personal waterproof wear. But it took the bicycle craze and John Dunlop’s pneumatic tire at the turn of the century, and later the automobile, to create the enormous demand that would revolutionize production and bring far-flung populations into its orbit.

Initially, rubber production could not increase rapidly enough to meet worldwide demand. That provoked a dizzying rise in prices. Nor, at first, was there much rubber merchants could do to increase supply, because the rubber-tapping process itself was unwieldy. Rubber trees did not grow naturally in convenient, concentrated stands, but in isolation across the immense Amazon rain forest. Tappers, known as seringueiros, wandered trails several miles long to gather the rubbermilk. As a result, the tapping process was slow and inefficient.

One way to expand production was to hire more tappers. Rubber merchants did so, contracting with more and more of the independent seringueiros, and reaching into ever more distant tributaries of the Amazon. But finding tappers was difficult. Because of the climate, disease and the previous lack of valuable natural resources, few people lived in the Amazon area. Many who did were indigenous peoples uninterested in money or working for someone else. Rubber did not care. The native populations became victims of the Amazon’s integration into the world economy. This last bastion of pre-Columbian culture fell to the disease or arms carried into the jungle by the Europeanized seringueiros. Luckier natives sometimes suffered enslavement as coerced tappers. Survivors settled in ever more distant, isolated corners of the Amazon.

But Indian labor was the exception. More often rubber employed seringueiros from the arid, overpopulated and desperate Northeast of Brazil. A devastating drought between 1878 and 1881, followed by another in 1889, starved hundreds of thousands of people and uprooted additional hundreds of thousands. Their misery drove them into the rubber forests of the Amazon. Even malaria and other tropical diseases that hid in the jungle did not frighten men, women and children driven by hunger.

Although the rubber boom caused much suffering, it also brought unprecedented wealth to the main cities of the Amazon. Great, colorful mansions that captured the world’s imagination popped up in remote Manaus, 900 miles upriver from the coast. More fantastic yet was the ornate Manaus Opera House where Enrico Caruso sang opening night. So extravagant were the nouveau riche merchant princes of Manaus, that they reportedly sent their laundry out. To France.

The wealth created by the rubber boom changed international boundary lines. As the virtually uninhabited, uncharted expanses of the tropical forest now became valuable, neighboring countries laid claim to them. The most notable area of dispute was the rubber-rich Bolivian province of Acre. Ignored by the highland populations of Bolivia, the Bolivian government attempted to profit from its territory by leasing the area to a U.S. company, all but issuing them sovereign rights in return for rent. The neighboring Brazilians protested loudly. Since the area was settled de facto by Brazilian citizens, the Bolivian government had little choice but to renounce the agreement. This did not satisfy Brazilian squatters, who seized the area and proclaimed its independence. After brief skirmishes and diplomatic wranglings, the area became incorporated into Brazil.

A more picturesque episode occurred in the imaginary country of Counani. French adventurers unsuccessfully attempted in 1887 to create an independent country by force of arms in this steamy, godforsaken disputed territory between Brazil and French Guyana. A later group of “visionaries” succeeded with guile where the earlier group had failed with arms when they floated a 2-million-franc company on the Paris stock market to exploit a concession in Counani. This was only one of many swindles during the rubber boom.

The frenzy and euphoria of the “black gold” rush were doomed, by Wickham’s theft, to be short-lived. East Indian plantations financed by European capital, supervised by European botanists, and amply staffed by the abundant populations of Southeast Asia soon overshadowed South American production. Brazil’s labor-intensive cultivation of wild trees was no match for industrial plantation production. The First and Second World Wars gave great impetus to the creation of synthetic rubber, which today provides most of the world’s rubber needs. By 1960, Brazil produced only 2 percent of the world’s rubber and indeed imported or synthesized from petroleum most of its own rubber needs.

The story Wickham told earned him a British knighthood and the eternal enmity of Brazilian nationalists. Whether or not the British adventurer’s exploits were as swashbuckling as he painted them, the transfer of rubber across the world certainly had dramatic consequences, only one of which was the decline and fall of the Brazilian rubber empire.

But until the Scotsman Charles Macintosh found a solvent for rubber in 1820 and the American Charles Goodyear discovered the vulcanization process in 1839, no one much cared where rubber grew. The ancient Maya and Aztecs had kicked rubber balls in their ceremonial games and Europeans had long noted rubber’s peculiar characteristics. But before Macintosh and Goodyear, rubber was too weather-sensitive. It melted in the heat. It became brittle in the cold. After Macintosh’s process and vulcanization, rubber’s impermeability made it ideal for raincoats (known as “mackintoshes”), boots (“rubbers”) and more personal waterproof wear. But it took the bicycle craze and John Dunlop’s pneumatic tire at the turn of the century, and later the automobile, to create the enormous demand that would revolutionize production and bring far-flung populations into its orbit.

Initially, rubber production could not increase rapidly enough to meet worldwide demand. That provoked a dizzying rise in prices. Nor, at first, was there much rubber merchants could do to increase supply, because the rubber-tapping process itself was unwieldy. Rubber trees did not grow naturally in convenient, concentrated stands, but in isolation across the immense Amazon rain forest. Tappers, known as seringueiros, wandered trails several miles long to gather the rubbermilk. As a result, the tapping process was slow and inefficient.

One way to expand production was to hire more tappers. Rubber merchants did so, contracting with more and more of the independent seringueiros, and reaching into ever more distant tributaries of the Amazon. But finding tappers was difficult. Because of the climate, disease and the previous lack of valuable natural resources, few people lived in the Amazon area. Many who did were indigenous peoples uninterested in money or working for someone else. Rubber did not care. The native populations became victims of the Amazon’s integration into the world economy. This last bastion of pre-Columbian culture fell to the disease or arms carried into the jungle by the Europeanized seringueiros. Luckier natives sometimes suffered enslavement as coerced tappers. Survivors settled in ever more distant, isolated corners of the Amazon.

But Indian labor was the exception. More often rubber employed seringueiros from the arid, overpopulated and desperate Northeast of Brazil. A devastating drought between 1878 and 1881, followed by another in 1889, starved hundreds of thousands of people and uprooted additional hundreds of thousands. Their misery drove them into the rubber forests of the Amazon. Even malaria and other tropical diseases that hid in the jungle did not frighten men, women and children driven by hunger.

Although the rubber boom caused much suffering, it also brought unprecedented wealth to the main cities of the Amazon. Great, colorful mansions that captured the world’s imagination popped up in remote Manaus, 900 miles upriver from the coast. More fantastic yet was the ornate Manaus Opera House where Enrico Caruso sang opening night. So extravagant were the nouveau riche merchant princes of Manaus, that they reportedly sent their laundry out. To France.

The wealth created by the rubber boom changed international boundary lines. As the virtually uninhabited, uncharted expanses of the tropical forest now became valuable, neighboring countries laid claim to them. The most notable area of dispute was the rubber-rich Bolivian province of Acre. Ignored by the highland populations of Bolivia, the Bolivian government attempted to profit from its territory by leasing the area to a U.S. company, all but issuing them sovereign rights in return for rent. The neighboring Brazilians protested loudly. Since the area was settled de facto by Brazilian citizens, the Bolivian government had little choice but to renounce the agreement. This did not satisfy Brazilian squatters, who seized the area and proclaimed its independence. After brief skirmishes and diplomatic wranglings, the area became incorporated into Brazil.

A more picturesque episode occurred in the imaginary country of Counani. French adventurers unsuccessfully attempted in 1887 to create an independent country by force of arms in this steamy, godforsaken disputed territory between Brazil and French Guyana. A later group of “visionaries” succeeded with guile where the earlier group had failed with arms when they floated a 2-million-franc company on the Paris stock market to exploit a concession in Counani. This was only one of many swindles during the rubber boom.

The frenzy and euphoria of the “black gold” rush were doomed, by Wickham’s theft, to be short-lived. East Indian plantations financed by European capital, supervised by European botanists, and amply staffed by the abundant populations of Southeast Asia soon overshadowed South American production. Brazil’s labor-intensive cultivation of wild trees was no match for industrial plantation production. The First and Second World Wars gave great impetus to the creation of synthetic rubber, which today provides most of the world’s rubber needs. By 1960, Brazil produced only 2 percent of the world’s rubber and indeed imported or synthesized from petroleum most of its own rubber needs.

The story is not an unrelieved tragedy for Brazil. If world trade eventually stripped the country of its rubber industry, it has also provided Brazilians with markets for coffee, sugar and soybeans—the exotic crops that blazed the trails rubber followed later.

The First Factories

When we think of the first factories, we usually think of Europe, particularly England. After all, factories were the definition of “modern” and Europe was the leader in modernization. We assume that they were first built in Europe where capital, machines and labor combined to create ever more efficient and productive methods. European ingenuity and entrepreneurship together with previously accumulated capital and budding markets led to the industrialization that was the secret of Europe’s centuries-long domination of the world economy. According to this story, the globe was divided between industrial Europe—and later the United States—and the agrarian exporting rest of the world. With this international specialization of labor, the agricultural countries only belatedly industrialized. In fact, there is good reason to turn this version on its head: The first factories arose in the colonial, export-oriented world.

To be sure, the importance of the New World colonies for the rise of industry was long recognized. Karl Marx observed a century and a half ago: “Direct slavery is as much the pivot of our industrialism today as machinery, credit, etc. Without slavery, no cotton; without cotton, no modern industry. Slavery has given the value to the colonies, the colonies have created world trade; world trade is the necessary condition of large-scale machine industry.” The Cuban historian Manuel Moreno Fraginals echoed this sentiment much more recently: “Sugar received and gave a strong thrust in the development of capital: It was essentially a big motor that accelerated English industrial growth.” In these versions, however, the colonies lead to industry in England because of the capital and markets they provided.

In fact, a good argument can be made that the first industrial factories were the sugar mills of the Americas. It is not surprising that one of Webster’s definitions of “factory” refers directly to the colonies: “a place where factors reside to transact business for their employers, as, the British merchants have factories in the colonies.”

But the colonies also had factories in the more standard definition: “an establishment for the manufacture of goods, including the necessary buildings and machinery.” Usually we think of the manufacture of goods as involving the production of a finished product from raw materials through the use of machinery on a large scale and a division of labor.

The last part is crucial. Although sizable workshops had existed since ancient times, bringing together scores of cobblers, tailors or weapons makers who used tools to transform raw materials into finished products, they did not have specialized labor. Each cobbler made the entire shoe; there was no integration of effort. One worker’s product was not dependent upon the work of his neighbor.

The emergence of factories is usually credited to the presence of wage laborers who were able to master the more sophisticated techniques demanded by industrialization. For Marx, industrialization and capitalism came hand in hand. But the fact is that arguably the first factories were the sugar mills of the Atlantic islands such as São Tomé and then the Caribbean. They not only did not issue from a natural process of domestic capital accumulation with their product intended for the domestic market, but they did not use much wage labor nor did they make great demands of expert laborers. On the contrary, sugar was refined by large slave forces for export to Europe.

Already in the 17th century, sugar plantations involved perhaps 200 slaves and freemen, with a mill, boiling house, curing house, distillery for rum, and storehouse. This involved not only some of the most sophisticated technology of the era and a large work force, but also investment of several thousand pounds.

True, nine-tenths of the work force were field hands engaged in brute labor. But the 10 percent in the crushing, boiling and distilling plants were very much specialized labor. More importantly, the scale, complexity and social organization of the sugar mills made them the first factories. Time was a ruthless master in the sugar production process. Once harvested, cane had to be rushed to the mill to prevent loss of sugar content. In the mills, especially the larger ones, close care of temperature was necessary. The boilers’ fires had to be constantly stoked; the liquid sugar had to be moved from kettle to kettle without permitting unwanted crystallization while running off the sediment at the right time. Then the sugar had to be quickly brought to the curing house where the molasses was run off. Sugar cane produced various qualities of sugar, as well as molasses and rum. The closer the attention to production, the better the final product and the greater the returns.

We think of labor-saving machinery when we think of factories. Indeed, technological advances from the 16th century on meant that the sugar mill was able to process much more sugar with far less mill labor. But the great cost of the mill and its voracious appetite meant that large armies of slaves were put to work 20 hours a day feeding the sweet monster. Technological improvement created the demand for greater and more disciplined labor. This was no leisurely tropical enterprise. A Barbadian colonist reported in 1700 on the sugar mill: “In short, ‘tis to live in a perpetual Noise and Hurry . . . the Servants [read: slaves] night and day stand in great Boyling Houses, where there are Six or Seven large Coppers or Furnaces kept perpetually Boyling . . . one part is constantly at the mill, night and day, during the whole Season of making Sugar.”

This led to sugar mills becoming the first factories ruled by the discipline of industrial time. The specialized work gangs had to coordinate their efforts: Cane had to be quickly cut when mature; carters had to carry it to the mill; the hungry crushers were constantly fed cane; the leftover cane, the bagasse, was carried to the boiling room to stoke the fire. The time exigencies of the production process meant that slaves had to work together as so many parts of a well-oiled machine. Efficiency and slavery, labor saving and labor intensification were combined.

The vast amount of sugar that this method produced caused the price of sugar to drop vertiginously, turning the one-time luxury spice and medicine into a mass food and eventually into a food additive. In the early stages of England’s industrialization, from 1650 to 1750, per capita sugar consumption rose, while that of bread, meat and dairy products stagnated. Sugar fueled not just the industrial revolution, but the European industrial work force.

Sugar, which we think of as a leisure and pleasure product, an import from the balmy Caribbean lands of mañana, was actually the first industrial product and a cruel master to the hundreds of thousands of slaves who labored to turn out sweet delights. Marx observed that “the veiled slavery of the wage-workers of Europe needed, for its pedestal, slavery pure and simple in the New World.” He could have added that the factories of the Caribbean were holding a mirror in which Europe could see its industrial future.

The Metric Revolution

When a French traveler visiting the Soviet Union shortly after World War I lavished praise on the universal applications and benefits of the meter, his Russian hosts laughed in disbelief at the foreigner’s stupidity: “As if the centimeter could measure our Russian roads!” This would be as much folly as making Russian vodka out of French grain.

We don’t understand the Russians’ reaction. Today we think of weights and measurements—if we think of them at all—as something natural and neutral. They are simply categories used to facilitate trade and calculations with no inherent values or ideology of their own. Yet our notion of weights and measures would have been extremely alien and troubling not only to those dumbfounded Russians but to most people throughout time. Measurements are the result of historic processes, social struggles and conceptual revolutions.

Most measures have been anthropomorphic. People measured with their arms (the fathom), their hands (span), their feet (feet), and their elbows (the el). They also measured according to their strength, sight or hearing. Nomads in the Sahara Desert, to whom the distance to the next oasis was a matter of life or death, used categories such as a stick’s throw, a bowshot, the distance one could see from level ground, and how far one could see from a camel’s back. Latvians used the distance one could hear a bull bellow.

Agricultural peoples measured their land by its usefulness, not abstract dimensions. In France the argent was the area that one man with two oxen could plow in a day. This of course would vary according to terrain, rocks and trees. Many other measures similarly were scaled to the amount of human labor needed to prepare land for harvest. In pre-capitalist societies with no functioning land market, this was the relevant calculation.

Productivity figured in places ranging from Brazil and Colombia to France and Italy to Japan. A unit of land was often determined by the amount of seed it produced. Thus the same unit might cover very different dimensions of territory and indeed might vary from year to year. For subsistence farmers, the size of the harvest was a much more important statistic than the dimensions of land worked.

These measures, even sometimes when they had the same name, varied tremendously in size. One department of France had nine different sizes of argent; the largest was five times the size of the smallest.

The use of very many different weights and measures resulted in good part from small, compartmentalized economies with little intercourse and strong senses of tradition. Local measures were the product of local feuds and struggles, were understood locally, and helped people define who they were and who was the “other.” Change was considered subversive; new measures were seen as means of cheating producers or consumers who were not familiar with them. Populations were barely numerate and did not even all use the same numerical system. In the early modern world, systems based on 20 (the number of toes and fingers) were more common than systems based on 10. Anything more than simple division was mysterious, so translating from one measure to another was extremely difficult and suspect.

The plethora of measuring systems was not simply a result of folk wisdom (or ignorance), however. For thousands of years weights and measures were seen as attributes of justice and sovereignty. Authority meant the power to define the scales. When the definer of measures was also the tax collector and lender, abuse often followed.

In pre-revolutionary China there were two dou that differed by more than a third. Officials often used the larger to collect peasant dues and the smaller when lending grain. Under feudalism each lord set his own standards and his court judged them. This complexity was compounded in places such as Silesia where in addition to the multitude of small seigniorial potentates, there were church and municipal authorities, each with their own weights and measures.

The definition of measures sometimes varied intentionally to hide price differences. Great changes in price were unsettling for pre-capitalist peoples to whom difference might mean the difference between life and death. Often they responded not by going to a different seller, but by revolting. To avoid this, merchants often varied the measures. In pre-metric Europe, an apothecary’s pound was minuscule, the spice merchant used a larger pound and the butcher a larger one yet. In the Piedmont of Italy in 1826, merchants agreed on using the libra. However, for sugar, coffee and groceries it weighed 12 Milanese ounces, for candles 14 ounces, good quality meat and cheese used 32 ounces. Bread, the most important and politically charged food in early modern Europe, was sold by the loaf. The price remained the same, but like today’s candy bars, the size of the loaf varied substantially depending on the price of grain. As the Polish historian Witold Kula insightfully observed: “It is reasonable to look upon the whole process, within limits, as a safety valve or a buffer against social reaction to market developments.”

The first three major efforts to unify measures were by-products of attempts by the Greeks, Romans and Charlemagne to spread and solidify their empires. The need to expand tax collection drove these attempts. But since they did not reflect or create any revolution in local perceptions, they largely failed.

Success only came at the end of the eighteenth century when French revolutionaries created and spread the metric system. Based on impersonal and unvarying astronomical calculations (the meter is one ten-millionth of the distance along a meridian from the equator to the pole) rather than local anthropomorphic usages, the meter required a revolution in thought: acceptance of the notion that all people are equal before the law, that is, that the law-giver or measurer not be arbitrary; and development of the process of commodification. As goods became produced for a distant market they lost the distinctiveness bestowed by the individual producer or consumer, becoming mass products with common attributes that could be measured.

As goods became commodities and their attributes were abstracted in measurable quantities, they became fungible, commensurate. This protected peasants from arbitrary local officials or merchants but destroyed the business of many international traders. Only the traders had been able to understand the plethora of local weights and measures and had been able to translate between them. Once their skills were no longer needed, their pivotal position was taken over by large-scale importers in the biggest consuming markets. Measures ceased symbolizing local history and traditions, struggles and victories, and became the mundane boxes and scales we think so little about today.

How Nineteenth Century America Ceded the Brazilian Market to Britain

Why did those crafty Yankee traders lose their knack in the nineteenth century? American merchantmen, setting out from Boston and New York, had been some of the most adventurous traders in the eighteenth and early nineteenth centuries. They dominated the trans-Atlantic passenger and mail service until 1840, and the California clipper ships, inspired by gold-fevered passengers, were the world’s fastest for a while. Robert Fulton was one of the first to develop commercial steamships. Yet despite a lead in shipping, a mercantile calling, and one of the world’s fastest growing economies, Americans turned away from their earlier vocation in international trade. By the end of the century, Americans had a trade deficit. U.S. trade with Brazil illustrates the sad story.

Americans were by far the greatest consumers of Brazilian coffee in the world. With such an overwhelming market position, one would have expected American traders, bankers and shippers to dominate trade. With so many ships laden with coffee and rubber unloading in New York and Baltimore, freight rates south should have been extremely low. With such a large proportion of Brazilian goods being purchased with dollars, American banks should have dominated exchange, discounting and short-term credit. And with such commercial and transportation infrastructure, Yankees should have been able to export to the Brazil market.

But that didn’t happen in the nineteenth century. Although taking most of Brazil’s exports, Americans supplied only one-eighth of Brazilian imports. The British found themselves in the exact opposite position. Tea drinkers, they purchased only one-fifth to one-third of Brazil’s exports while supplying as much as one-half of all imports.

North Americans had ceded the Brazil market because of the more prosperous, booming home market. While building the world’s largest railroad network, the merchant marine had been allowed to fall into obsolescence.

The problem began in the ports of North America. Freight rates from New York were higher than from London, even though New York was 25 percent closer to Rio than was London. North American steamships were 25 percent to 50 percent more expensive to operate than their European competitors because of higher ship construction costs in the United States, higher sailor wages, and greater coal consumption. Steamers were so expensive that even as late as the 1890s, four times as much cargo was carried in North American sail ships (which charged half the rate) as in its steamers. The ratio was almost the reverse for European ships clearing New York and Baltimore for Brazil.

Moreover, the much greater export trade of European countries to Brazil and Argentina (ships en route to or from Buenos Aires often put in at Rio) meant that many ships crossed the Atlantic southward at near full capacity, allowing a relatively low freight rate per unit. To take advantage of this trade, there were five regular British lines, three French, two Italian, two Austrian and two German companies. Twenty steamships a month arrived in Rio from Europe, but only one from the United States. The ratio was far worse in Argentina, where 1,153 British steamers arrived in 1885 while no U.S. ships did. These ships competed for return cargos to Europe, driving down the fares on the northward leg. They also were willing to carry Brazilian exports to the United States. Consequently, there were five regular lines and many tramp steamers that made the Brazil- to-U.S. run but only one company, the United States and Brazil Mail Steamship Company, regularly left the U.S. for Brazil. And it only sent two ships a month, one to Rio and one to the Northeast. As a result, not only did European exporters pay substantially less than North American traders for freight from their home countries to Brazil, but the freight tariff from New York to Rio was four times the rate of the return trip, encouraging the U.S. trade deficit with Brazil.

The considerable barriers to entry for U.S. shippers were heightened even more by a British-dominated shipping conference that set rates between Rio and New York. Shippers also used devices such as deferred rebates and contracts for future transport to lock in customers and marginalize new competitors.

To compete in this market, United States carriers would need government aid. The U.S. merchant marine had fallen into obsolescence after the Civil War. Despite the founding of the United States and Brazil Main Steamship Company (USBMSCo.) in 1883, complaints from consuls were constant and vituperative. Noting that only 8.2 percent of all U.S. imports and 15.5 percent of her exports were carried in North American bottoms, U.S. minister Thomas Thompson concluded that “to extend the commerce of the U.S., a merchant marine is absolutely necessary.” The Brazilian government did award the USBMSCo. a $105,000-a-year subsidy in the late 1880s, but the U.S. Congress refused to provide more than a nominal sum of $11,743. Meanwhile, the company’s British competitor received the much more sumptuous total of £109,653 ($531,817) from her majesty’s exchequer. Moreover, the Brazilian subsidy was not to encourage international trade between Brazil and the United States. Rather, the North American shipping line was paid to carry coastal freight in Brazil, forcing its ships to make stops in Pará, Recifeand Bahia.

Despite the hearty advocacy of President Harrison, strong political resistance from the South and the Midwest of the United States prevented the Merchant Marine Act of 1891 from providing adequate subsidies. Consequently, the United States and Brazil Mail Steamship Company, one of the few companies covered by the 1891 act, had to charge higher rates to cover its expenses and could not afford to expand its service to reduce unit costs and make itself more attractive to exporters. The company purchased two new North American ships for $450,000 each in anticipation of large subsidies since the new law required the use of North American–built ships. When the funds were not forthcoming, the line that had survived for eight years before the Merchant Marine Act went bankrupt in mid-1893.

As a result, the percentage of the Brazilian trade carried in North American ships did not increase. In 1889, 21.8 percent of the trade was carried in U.S. bottoms; in 1892, the figure was 22.8 percent. By 1897, U.S. ships carried only 5 percent of the commerce between the two nations. Three years later, there was no regular shipping line between the United States and Brazil.

The absence of the U.S. merchant marine in the Brazil trade is startling when one recalls that the United States had been the world’s largest market for Brazilian coffee since at least 1850, importing more than half the crop while the British imported a small and declining amount. Coffee rates between Brazil and New York, according to the Alexander Commission in 1913, were “fixed at the highest possible level.” Because coffee was the main cargo in the Brazil trade, it subsidized cheaper fares for exports to Brazil in the coffee freighters anxious for two-way cargo. Ironically, it was the British who took advantage of this by engaging in a triangular trade, coffee to New York, U.S. goods such as cotton, meat, and grains to London, and then British manufactures back to Brazil.

Americans did not cede the seven seas because they were nautically challenged. Clipperships, steamers, even the first submarine were American inventions. And vast amounts of U.S. commerce traveled over water—on the internal rivers such as the Mississippi, the Ohio, the Missouri and the Hudson, the Great Lakes, and along the coastline. Moreover, the U.S. government was not at all reluctant to assist private carriers with subsidies.

Americans lost the Yankee trading knack in the nineteenth century because of their incredible success in expanding westward. Their continental system was all within one nation. Thus, long-distance trade, as in China, was not even international trade. It was simply called regional commerce. Within the empire of the U.S. boundaries, American shippers and railroad men reigned supreme with a virtual monopoly. They were perfectly willing to allow other nationals to carry goods on the other seas.

Steven Topik is a professor of history at the University of California, Irvine. With Kenneth Pomeranz, he is the author of The World that Trade Created: Society, Culture and the World Economy, 1400 to the Present, published by M.E. Sharpe.

 The epic economic battle between early Americans Charles Flint and W.R. Grace raged across the late 1800s, severral industries and two hemispheres. So who won?

The breakup of a partnership often resembles a divorce in bitterness and acrimony. But usually the national government, its navy, spies and international intrigue are not involved. When Charles Flint broke with W.R. Grace, however, the battle raged over two hemispheres.

W.R. Grace, an Irishman with commercial houses in Peru and New York, took on Charles Flint as one-third partner in 1872. The young Flint was staked by his father, one of the United States’ larger shipbuilders and a substantial New York merchant. The new partnership’s main business was in Peru and Brazil. The company, which began as an international consignment agent, branched out; it became the exclusive agent for Peruvian guano (an important fertilizer made from cormorant dung) and nitrates (also used for fertilizer as well as gunpowder) in the U.S. market. It also wrangled concessions for coal mines and a railroad. In Brazil, the firm controlled a major share of rubber exports to the United States. The W.R. Grace trading house prospered: its capital swelled sevenfold within a decade.

But Grace’s fortunes began to sour when Peru, Bolivia, and Chile fought the War of the Pacific between 1878 and 1881. Although the commercial house benefited from the war itself, selling Peru armaments, munitions and ships, it suffered from Peru’s defeat. Chile now claimed the former Peruvian province of Tarapaca, where the guano and nitrate deposits lay. Despite the efforts of U.S. secretary of state James G. Blaine to convince the victorious Chileans to return the occupied territory or at least honor the concessions to American companies, Chile’s government refused. Throughout the decade of the 1880s, the Graces continued to plead their case and Chilean officials, angered that the Graces had armed the Peruvians, continued to deny them access.

In the middle of this, Grace and Flint split up. The divorce came when Grace and Flint decided in 1885 to form the New York Trading Co. to corner the raw rubber market. Flint and Grace disagreed over how the NYTC should be run. The Irishman was simply interested in a commercial corner on rubber while Flint, revealing the inclinations that would later make him the “Father of Trusts,” wanted to combine rubber manufacturers as well. Now “Charlie,” who W.R. had treated like a son, turned on Grace with a vengeance. He left the NYTC, joining his father and brother in Flint and Co., and began bringing together the largest rubber exporters to corner the market for himself. At the same time, he combined the rubber shoe, cloth and mechanical manufacturers to create U.S. Rubber in order to control the rubber industry. He also effectively seized control of the only American steamship line to run between the United States and Brazil—the United States and Brazil Mail Steamship Co.. The former Grace partner went so far as to use his political influence to have a Grace man replaced as U.S. consul in Belém and forced the only U.S. steamer line in Brazil to fire a Grace merchant as its agent. By the early 1890s, the Grace company had effectively withdrawn from the rubber trade, leaving it to Flint.

On the western side of South America, the battle between the two merchants raged even more fierce. The Graces, tired of being in the bad graces of Chile’s nationalist president Balmaceda, saw opportunity knock when the Chilean congress and navy revolted early in 1891. Hoping to ingratiate themselves, the company financed and supplied the rebels’ arms purchases.

At this point, Flint reentered the picture. Unlike the Grace brothers, who had long been closely associated with Peru—and were therefore unpopular in Chile—Flint had won important friends in Balmaceda’s country ever since he first visited it in the early 1870s. Indeed, he was Chile’s consul in New York for three years in the end of the 1870s. He continued his extraordinary relationship probably because he was one of the United States’ most active representatives at the first Pan American Conference in Washington, D.C., in 1889. By the time of the congressional revolt, Flint was Chilean consul general. Even more extraordinary, Flint, not the Chilean minister, had a power of attorney from Balmaceda to act in his behalf.

This he quickly used when his uncle tipped him off about Grace’s actions. Sending detectives on Grace’s trail, Flint soon discovered that weapons were being shipped to the insurgents. He notified the Chilean minister, who asked the secretary of state—once again James Blaine—to prevent the shipment on the grounds of the laws of neutrality. (At the same time, Flint was sending torpedoes to Balmaceda’s forces.)

But Blaine at first found no grounds for official action. Flint then suggested that Balmaceda hire John W. Foster (grandfather of John Foster Dulles and Allen Dulles) to represent him. Foster, a wealthy international lawyer and part-time diplomat, was a good friend of Blaine’s.

Another meeting was held, this time with Flint, Foster, the Chilean minister, and Blaine. Suddenly, Blaine—who was also friendly with Flint and had been the beneficiary of generous campaign funds from the U.S. and Brazil Mail S.S. Co.—recognized that the Grace arms shipment to the rebels was a violation of neutrality. He ordered a naval ship to intercept the cargo. Flint was fortunate that the Republicans were in office, since Grace, two-time Democratic mayor of New York, was intimate with Grover Cleveland, who as president certainly would have sided with the Irishman.

Receiving the Republican order, the ship took chase of the cargo now loaded on a Chilean ship, the Itata, safely out in international waters. The American naval vessel arrived in Iquique, Chile, the day before the Itata. The rebels, afraid of bringing the United States fully into the war since Blaine had earlier displayed hostility toward Chile, surrendered the weapons. By the time an American court ruled in favor of the Chileans, the fighting had ended. Luckily for the Graces, the congressional forces had overwhelmed Balmaceda even without the weapons aboard the Itata. So even though Flint won this battle too, the Graces won the war.

Flint withdrew from the west coast of South America. Today, as one walks down New York’s 42nd street, one comes across the graceful, towering Grace building. Charles Flint has slipped into anonymity.

Steven Topik is a professor of history at the University of California, Irvine. With Kenneth Pomeranz, he is the author of The World that Trade Created: Society, Culture and the World Economy, 1400 to the present (M.E. Sharpe).