Information costs and commercial integration. The impact of the 1692 Swedish postage tariff.

The concept of ‘information costs’ has attracted attention as a means of understanding economic dynamics. In the early modern trade economy, the costs of maintaining business correspondence were an important part of information costs. In this article, the Swedish general postage tariff (used in 1693–1747) is analysed in order to reveal the geographic pattern of information costs, measured as postage. It is shown that central parts of Sweden benefited, including the iron-producing regions and its export harbours, while important trade ports in the eastern parts of the empire faced high costs even though Sweden claimed control over large parts of the Baltic Sea area up to 1721. Swedish correspondence with western and southern Europe carried lower costs than correspondence with eastern Europe. This was an effect of a tariff constructed on postage-per-distance and of letting profitable lines subsidise a dense, territorial postal network. Sea post became particularly expensive as the volume of letters was too small for effective use of the post ships' carriage capacity; this challenges the view that early modern commercial networks were connected by sea since transport on sea was superior to land-bound transport. Transfer of information was often better provided on land. [ABSTRACT FROM PUBLISHER]