Biophysical economic analysis of the Long Depression, 1873–1896: the Age of Steel

The invention of cheap steel was a critical factor in the tremendous growth of the world's transportation systems and trade over the 23 years of the Long Depression (1873–1896). Taking a biophysical economic perspective, this paper examines how developments in iron and steel technology intersected with the various booms and recessions of the Long Depression. Recessions following the Panics of 1873 and the Barings Crisis of 1890 had their roots in shortages of coal, iron-ore, and mining labor in the UK; while other recessions were tied to rising prices of iron-ore, anthracite and coke in the US. Moreover, some of the recessions correspond with revolutionary periods in the application of steel technologies, such as steel rails superseding iron rails in the US during the 1870s, and the switch from iron to steel in British shipbuilding 1885–87. The paper has important lessons for sustainable resources management today, demonstrating the necessity of going beyond business cycle theory and taking a fully biophysical perspective in understanding economic impacts.