Fluctuations in House-Building in Britain and the United States in the Nineteenth Century

The notion that an “Atlantic Economy” developed in the nineteenth century does not depend simply on the large movements of capital and labor from Britain to the United States. For there were movements of comparable magnitude to other areas. If the economic relations of Britain and North America are to be regarded as distinctive, it is principally because of the reciprocal movement of investment and growth in the two areas. The argument is that the periods of most rapid growth and intensive use of resources in the two economies were inversely related to each other, and that this alternation was established because there existed a common stock of resources, so that when one area drew rapidly on this stock it was at the expense of the other. At one time, investment in buildings and equipment in the United States was particularly rapid, and there was a heavy movement of migrants to America; in Britain the stream of migrants from the countryside was diverted from the industrial districts, and building and home investment were relatively depressed, but the vigorous demand for exports facilitated the flow of funds abroad. In the next period, the position was reversed; development slackened in the United States, and there was a revival of domestic investment in Britain. This, as Phelps-Brown has said, “is the pattern of the Atlantic Economy, dividing a common fund of incremental energies between its regions in varying proportions from time to time. Whether a house is built in Oldham depends on and is decided by whether a house goes up in Oklahoma.”