Dynamite regulations? Nobel dynamite, technological development and the regulatory state 1864-1915.

Alfred Nobel´s innovation of dynamite in 1864 was a starting point for the Swedish chemical-technical industry. Even though the techniques behind dynamite are relatively simple, the technological development of the product led to a continuous technical development, with new patents and more effective explosive merchandise, and grew to become one of the most important industries during the second industrial revolution. The development of the industry was lined with accidents, patent infringements, international competition and the formation of cartels that affected the outcome in various countries. In Sweden, a comprehensive legislation developed, and led to the establishment of The Inspectorate of Explosives in 1897, a state authority assigned to regulate, inspect and implement safety measures in the explosives industry. This regulation can be seen as a way for the state to protect the public, but on the other hand you can also see that technicians, experts and company CEOs took a major part in the regulatory process. As a result, the dynamite market was consolidated under the Nobel dynamite company in 1915.

Hence, in this paper we argue that the Swedish regulation of dynamite 1864-1915 is a case of regulatory capture, where the Nobel dynamite company during the period 1864 to 1897 succeeded, through negotiation with the state, to create regulations that benefited itself and limited the entry to the market for other companies. The aim of this paper is to investigate this regulatory capture process and to analyze how and when the Nobel dynamite company used regulation as a strategic instrument to control the market.