ABSTRACT
This chapter provides comprehensive empirical evidence on the status of economies of scale in mid-nineteenth century manufacturing industry. Probably the most widespread assumption on scale economies in the nineteenth century is of their absence, that is, of the presence of constant returns to scale. Neither the work on labor scarcity nor that on general equilibrium offers evidence in support of the assumption of constant returns to scale, although, if pressed on the point, the authors would probably cite contemporary evidence on scale economies in the twentieth century. In manufacturing industries, Walsh has laid great stress upon the role played by economies of scale in the development of manufacturing in six Wisconsin counties. One of the most fundamental and important statements of scale economies in nineteenth century manufacturing industry, however, concerns the position of southern manufacturing before the Civil War vis a vis industry in the North.
