“Canal-mania” –water system during the Industrial Revolution in Great-Britain
by Mónika Kiss
Britain canal-building process between 1760-1840 was extremly important in the process of industrial revolution, as it reduced the transport costs and caused agglomerations to rise.
Transport costs are the heart of the New Economic Geography theory, as they are the most important exogenous factor. If transport costs start to fall, until a particular point, nothing happens. Then the economy sharply renders to agglomeration, to a region which the first migrant decides to move or the outcome is solely the result of a historical accident.
The story of “canal-mania” is clearly based on the process of relatively sudden lowering of transport cost. This process speeded up the development of the industrial cities.
Let’s see the facts! Britain had very few proper canals before 1750, however its water system was perfectly suitable for such a purposes. (Year-round rainfall, perennial water supply.) The earliest canal building was undertaken as a local enterprise needing to ship goods, such as the Duke of Bridgewater's canal built to ship coal from Worsley to Manchester. The end of the American War of Independence and good years in agriculture helped the disposable income to rise, and people wanted to earn yield on their money.
In less than a generation, England was full of navigable waterways and heavy goods were carried by boat. Canal boats were massive: they could carry 30 tons pulled by a single horse, which was more than ten times the cargo per horse using a cart. Innovations: boat lifts, puddle-clay process (the process of lining the channel with puddle - a watertight material) helped the canal-building further. Historians say that this was the time when transition to the “business mentality” started, entrepreneurs were born, utilizing surpluses from agriculture and trade, and capital assured by manufacturers and other investors. But let’s get back to the transport costs!
The ‘canal mania’ of 1760–1840 converted England to an interconnected web of efficient all-year round waterways with 3,400 kilometers of navigable rivers, and 3200 kilometers of canals. Why the rush? Not only because of the trade. Coal and iron deposits were reachable via the water transport system in England, to a much larger extent than anywhere else. This made possible the raw materials to deliver to the production sites. Widely known that the manufacturing cities like Manchester or Birmingham were major economic drivers for the 'canal mania', and benefited vastly from a network of canals. Most of the traffic on the canals was solely internal. However the network linked the mainland cities with coastal port cities such as London, Liverpool, and Bristol, where cargo could be exchanged for import and export.
The end of the story? It happened also very fast, as usually things happen in revolution. From about 1840 railways began to threaten canals, canal companies were unable to compete against the speed of the new railways. With building the railway system another round of lowering of the transport costs occurred, but this is a different story. Consequence? The New Economic Geography theory showed us again: transport costs are the key.