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The strange birth of liberal Denmark: Danish trade protection and the growth of the dairy industry since the mid‐nineteenth century 1
Author(s) -
HENRIKSEN INGRID,
LAMPE MARKUS,
SHARP PAUL
Publication year - 2012
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/j.1468-0289.2010.00595.x
Subject(s) - globalization , diversification (marketing strategy) , subsidy , danish , profitability index , economics , production (economics) , international trade , agriculture , market economy , economy , agricultural economics , economic history , business , geography , linguistics , philosophy , archaeology , finance , marketing , macroeconomics
The usual story of the ‘first era of globalization’ at the end of the nineteenth century sees Denmark as something of an outlier: a country which, like the UK, resisted the globalization backlash in the wake of the inflow of cheap grain from the New World, but where agriculture, rather than going into decline, in fact flourished. Key to the success of Danish agriculture was an early diversification towards dairy production. This article challenges this simple story which sees Denmark as something of a liberal paragon. Denmark's success owed much to a prudent use of trade policy which favoured dairy production. Moreover, this favouritism continued even after a more general movement to free trade in the 1860s. Using micro‐level data from individual dairies, we quantify the implied subsidy to dairy production from the tariffs, and demonstrate that in many cases this ensured the profitability of individual dairies.