Last night at the Economic History Association annual meeting, Dick Easterlin quoted J.H. Clapham making fun of the Great Eastern as part of an argument that there is nothing to the idea of "economies of scale" as a factor driving economic growth independent of better technology.
Afterwards Alex Field and I caucused. While we don't want to maintain that the investors in and owners of the Great Eastern profited, we do want to maintain that the Great Eastern's construction was a positive social net present value investment. A lot was learned about materials (and their limits) as a result of its construction and operation. And a great deal was done that had a very high social value that could have been acomplished by no other ship at that time: chiefly the laying of the second first twos, the unsuccessful Whitehouse cable of 1858 and, the successful Thompson cable of 1866.
It's not that we want to attack Easterlin's critique of the growth-accounting tradition (well, maybe I do: it seemed to me that Dick was attacking weak targets--that growth accounting can be done well, but not always is), but we do want to defend the memory and honor of a mighty if unprofitable vessel.
There is a great book on this subject, "The Victorian Internet" which discusses the transoceanic telegraph cables and how they were laid.
Posted by: Peter Schaeffer | September 10, 2007 at 12:55 PM