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A History of Mechanical Invention

Author(s):Usher, Abbott Payson
Reviewer(s):Grantham, George

Classic Reviews in Economic History

Abbott Payson Usher, A History of Mechanical Invention. New York: McGraw-Hill, 1929. xi + 401 pp. (Revised edition, Cambridge, MA: Harvard University Press, 1954, 450 pp.)

Review Essay by George Grantham, Department of Economics, McGill University.

How Economic Change Happens: Usher’s History of Mechanical Invention

Among the seminal works in economic history fewer are more perplexing than Abbot Payson Usher’s History of Mechanical Invention. The bland title offers no suggestion of a great ambition, which is nothing less than to establish logical foundations for an empirically based explanation of economic change, the prose is stern and unrelenting, and like a car that runs out of gas just before reaching its destination, the book simply comes to a stop with no conclusion,. Few historians consult the work today. Once ransacked for information on the early history of clocks, windmills, textile machinery, steam engines and machine tools, its encyclopedic function has been superseded by more accessible and up-to-date compilations. So why should we be tempted to study it now? What gain repays the effort required to master the technical minutia of several branches of mechanics and the erudite byways of classical and medieval scholarship? The main reason is that, along with Kuznets’ studies in historical income statistics, The History of Mechanical Invention is a founding text of a science dedicated to explaining economic change, what Usher called the “mutual transformations taking place between human societies and their environment.”

We begin with the pesky problem of how to tell that story. At the time Usher was composing the first edition of Mechanical Invention (1929), the narrative of general economic history was dominated by the “stages” approach, according to which the development of individual economies is displayed in a chronological sequence of conceptually distinct types. Conceiving economies as identifiable types goes back to generalizations proposed by the ancient Greeks to interpret the customs of the strange peoples they encountered in Asia and the European hinterland. In the eighteenth century the notion received a fillip from speculations attributing the evident segregation of human societies by type to adaptation to different geographical conditions. Adam Smith’s four-fold classification of societies into hunting and gathering, pastoral, agricultural and commercial economies is an unexceptional instance of this reasoning. As individual types were considered to reflect static environmental constraints, the typology contained no chronological implications, so that although Montesquieu, Smith and Turgot certainly believed that commercialized societies represented an “advanced” state of civilization, they held no strong view that it represented the latest phase of an historical sequence. Indeed, the conviction that men are physically and psychologically similar and the great prestige of Roman civilization stood in the way of a progressive narrative of social states. Reason is timeless.

In the hands of early nineteenth-century philosophers exalted by the Romantic concept of becoming, that static conception of social types acquired a temporal dimension. To position societies on the thin line of Time’s Arrow, however, implied that they are discrete entities historically expressing ontogenetic development that is independent of the particular environment. But exactly what force causes such entities to cohere and persist, and drives their historical development? The cause could not be definitely stated, any more than one could then explain ontogenetic development of living organisms.[1] Whatever it was — life-force, God’s will, the national Geist, it was ineffable. It could be felt, appreciated and asserted, but not explained. All that could be declared with any degree of confidence was that each society develops through a sequence of stages marked by increasing complexity of organizational forms, methods of production, degrees of regional and occupational specialization, and movement from small to large units of social and economic organization.

In the different versions supplied by successive generations of German historical economists and American Institutionalists the stages approach provided a serviceable framework for characterizing the range of societies revealed by geographical discovery and the general trend of European development since the early Middle Ages. It was a capacious tent within which several generations of economists and historians were able to get on with the business of investigating the evolution of the myriad institutions and activities that constitute an economy without having to worry much about what it all meant.[2] Yet despite conjectures that recall elements of the New Institutional Economics, the stages “theory” offered little in the way of a systematic interpretation of how particular societies interact dynamically with their environment. It did not explain how things change.

Much the same can be said of the empiricist tradition exemplified by Clapham’s Economic History of Modern Britain (1926). Making abundant use of contemporary statistical sources, Clapham aimed at correcting catastrophic accounts of Britain’s industrial revolution concocted from impressionistic sources by asking the quantitative questions, how much, how often, and for how long. The overall impression left by this monumental exercise in error correction was that one can draw few generalizations beyond the fact of the geographic diversity of England’s nineteenth-century economic experience. To the question, what happened in history, Clapham answered, many things to many people in many places. A thoughtful reviewer characterized the work as a tour book laced with numbers.[3] As Usher observed in a second review, that criticism was unfair. Clapham had an implicit model of England’s industrial transformation, but left it to the reader to parse it out for himself.[4] Yet, although honest enough, this leave-it-to-Beaver approach to historical synthesis was hardly the stuff of a science capable of building on past achievements. As Darwin had observed sixty years earlier, a fact is not neutral; it is either for or against an argument. Clapham refused to argue.

Neither Clapham’s sprawling narrative nor the ethereal holism of the stages approach adequately addressed the main question of how things change. Kuznets eventually resolved the problem posed by Clapham by reducing quantitative indicators of output to a scalar measure of economic activity that tracks the flows connecting income with aggregate saving and expenditure. That synthesis rests on well-understood accounting principles permitting one to speak intelligibly of an economy in time. It utilizes a measure that can be statistically decomposed to its proximate causes and even unto the causes of those causes. By contrast, synthesis offered by the stages vision of economic change achieved only an aesthetic coherence, where the significance of particular facts depended on their relation to an a priori compositional scheme. As Usher noted, the rhetorical persuasiveness is generally secured by “discreet omissions.” The notion that “history,” economic or otherwise can be described as the movement of a holistic entity implies the existence of an immanent principle determining the whole course of events, which makes it little more than a thinly disguised Natural Theology, where, as the Austrian novelist Robert Musil once said of allegory, “everything takes on more meaning than it honestly ought to have.”[5]

Particular Systems of Events

Usher’s answer to holistic history was to restrict analysis of historical causation to sequences of events for which temporal connections can be empirically demonstrated.

We ought not to say that the present is derived from the past and the future from the present. The proposition must be formulated in much more specific terms: every event has its past. The principle of historical continuity does not warrant any presumption about the relations among events occurring at the same time. This assumption is very frequently made, but it will be readily seen that it is not warranted (1954, p. 19).

Usher termed the sequences for which historical continuity can in principle be verified “particular sequences of events.” Such sequences are distinct from series of events resulting from similar responses to similar situations, such as the predictable responses of economic agents to changes in the environment, because a narrative adds nothing to our understanding of them. As Paul Veyne observes,

If the revolutions of people were as entirely reducible to general explanations as physical phenomena are, we would lose interest in their history; all that would matter to us would be the laws governing human evolution; satisfied with knowing through them what man is, we would omit historical anecdotes, or else we would be interested in them only for sentimental reasons, comparable with those that make us cultivate, alongside great history, that of our village or of the streets of our town.[6]

Objects of historical thinking acquire meaning from their place in a plot that explains them. Usher held that innovation was the critical element of such plots, because it adds something that could not be predicted from initial conditions and therefore has to be explained by links to events preceding it in time.

A particular system of events must therefore be shown to be a truly genetic sequence. It must rest upon one or more acts of innovation that have been preserved by tradition and developed by further innovations (1954, p. 48).

Invention, then, makes up an intrinsically historical element in a series of events. It cannot be predicted with certainty ex ante, but it can be explained ex post as a narrative of verified acts. The History of Mechanical Invention proposed just such a narrative.

How does one identify a particular sequence? What principles make them distinct objects of empirical investigation? Several alternatives suggest themselves. One might distinguish events by their goal or purpose. Usher doubted that this principle could be applied to technological sequences because there are too many ways to skin a cat. The boomerang, bow and arrow, and blow-gun all kill game at a distance, but because they do not belong to the same technological system of events, none could plausibly have evolved out of any of the others. The presence of a common scientific principle suggests a better defining principle, but general principles may be too broad to define relevant boundaries identifying the particular sequence. Steam engines and steam turbines both exploit the expansion of steam to transform heat into mechanical energy, but they employ radically different mechanical means of doing it. Reciprocating piston engines descend from a pneumatic technology that originated in the hand pump; the genealogy of the turbine starts with the horizontal water wheel. The same is true of the transmission of motion by gear trains. While the devices invoked common mechanical principles in watches, clocks, and heavy equipment, the particular problems facing inventors differed so much from one application to another that the historian needs carefully to specify the context to explain the path of invention in each class of application. The boundaries of particular systems of technological events are thus narrower than their underlying scientific principles might suggest. Usher believed that the determination of those boundaries is ultimately an empirical question, as the boundaries have clearly widened over time as a consequence of advances in pure and applied science.

Systems of events consume time. Economists are not much concerned about the logical status of time except insofar as it serves as the metronome for growth theory. Not everything happens at the same time, however, and particular systems of events unfold at different speeds. One does not see that bicameralism, coitus interruptus, the mechanics of central taxation, the detail of rising lightly on one’s toes when uttering a subtle or strong sentence (as M. Birotteau did), and other events of the nineteenth century must evolve with the same rhythm.[7]

Usher held that intelligible history is necessarily pluralistic. Particular sequences, which we currently call paths of temporal dependence, demand separate treatment to track down cause and effect. A subtler problem concerns the historian’s temporal perspective. Usher insisted that particular events should not be conceived as constituting the “end” of a sequence.

Historical sequences do not have terminal points. To understand the significance of Watt’s engine is to place it in a series of events that extend backward to sixteenth-century investigations into the vacuum pump and forward towards the Corliss engine.

The Emergence of Novelty

The heart of the matter is how new things happen. By what intellectual and social processes do new methods of production, new products, and new patterns of behavior become objects of choice in the stream of economic and social life?

Historians traditionally answered this question in two ways. The first was that inventions are inspired intuition given to exceptionally gifted persons. This approach stressed the discontinuity of inventions and the importance of a small number of inventors in creating the modern world. Usher deemed it “transcendental,” because in taking invention to be what amounts to a miracle, it puts the event logically outside time, so that it can have no mere historical explanation. The second approach took the opposite tack of holding that inventions occur continuously in small steps induced by the stress of necessity, somewhat like Darwinian evolution.[8] Usher termed this approach “mechanistic,” because it relegated the inventor to the status of “an instrument or an expression of cosmic forces.”[9] Neither the transcendental nor the mechanistic account of invention, then, was historical in the sense that explanation necessarily takes the form of a narrative. To the transcendentalist, inventions just happen (and we should all be grateful they do); to the mechanist, they occur automatically in the fullness of time. Neither explains how inventions happen.

Invention is an event in the mind, so an empirically grounded model of invention should be based on its cognitive properties. The properties that Usher found most useful in this respect are drawn from the findings of Gestalt psychology, which in the 1920s was a thriving field of experimental research. Gestalt psychology proceeds from the observation that the mind commonly perceives things as wholes rather than as a chaotic flux of sensory stimuli. That perception or gestalt, however, is not an ex post “interpretation” of the stimuli; it is how they are literally “seen,” what Wittgenstein called a “particular organization” of sensory (visual) experience.[10] The physiological basis of this well-documented phenomenon stems from evolutionary adaptations in neural circuitry that enhanced the capacity of early hominids to quickly extract signals from a perceptually noisy environment. As those adaptations took place prior to acquisition of language, gestalt perception does not obey the cognitive constraints of propositional logic embedded in language, but conforms to the spatial logic of pictorial composition, in where things take meaning from their “fit.”[11] Because of this a given stimulus can generate more than one true perception. For example, in the classic “figure-ground” form, we may see a black goblet against a white ground, or alternatively two white heads staring at each other across a black field, but never both at the same time. As the philosopher Russell Hansen put it, “There is more to seeing than meets the eyeball.”[12]

Usher contended that invention is seeing a “particular organization” of data present in the inventor’s mind. The gestalt paradigm opens the door to an historical treatment of invention, because what we see is influenced by our past experience, which is to say, our history. Darwin confessed that he saw the “plainly scoured rocks, the perched boulders, the lateral and terminal moraines” on his geological rambles through the mountains of North Wales, but he did not see what Agassiz had seen in Switzerland: that the eskers and eccentric boulders were the product of glacial transportation. [13] What we know limits what we are able to “see” at any point in time. That constraint imparts directionality to discovery because in time we come to know more things. But that directionality raises a further question. What happens when we see something no one has ever seen before, which by definition we do not know? In the figure-ground experiment, could we recognize the goblet rather than the faces if we had never before seen a goblet?[14] The inventor “sees” something no one has ever seen before; it has no referent. What exactly does the inventor recognize? What forces the data in his mind into a “particular organization” that makes sense?

Usher proposed that the inventor “sees” a solution to the specific problem occupying his mind at the instant of insight. The problem serves as a focal point for organizing bits of information into a pattern that potentially resolves it. Drawing on a graphical device used by gestalt theorists to illustrate the “law of closure,” Usher compared the moment of insight to mentally arranging a set of broken arcs into a circle, thereby satisfying the desire for completion stimulated by the problem. The event is emotional, which accounts for the common denial by cranks that their finding doesn’t work. Looked at in this way, invention is necessarily contextual, because in order to be solved the problem has to be specific enough to support a solution. When Watt was struck by the lightening bolt on Glasgow green, he was not pondering the general problem of conservation of heat; he was deliberating the concrete problem of its conservation in a specific Newcomen engine.[15] That specificity puts dates on the causal history of invention. Watt could not have posed his specific problem the way he did before 1760 because an adequate quantitative concept of heat had not yet been achieved. The balance cranes invented by Brunelleschi to hoist materials for the dome of Florence cathedral and that so impressed the young Leonardo solved the specific problem of how to safely lift stone, brick and bronze objects to the unprecedented height of 300 feet without knocking down the walls of the building it rested on. The use of pullies and counterweights goes back to antiquity; but their combination was something new made possible by a more complete mathematical analysis of the lever.[16]

In the instant of insight the elements of a potential solution to a problem come into a new relation. Extrapolating from K?hler’s experiments on cognition in higher primates, Usher posited that the elements must be actively present in the inventor’s mind for insight to occur. In the experiments, K?hler placed fruit just beyond a caged ape’s reach, placing a baton near the animal with which it could capture the prized object. In repeated trials he found that the ape solved her problem only when fruit and baton simultaneously lay within her visual field; otherwise she remained baffled and frustrated.[17] The experiment suggests that achieving a satisfactory solution depends on serendipitous concatenation of its elements. That condition imparts significant unpredictability to the achievement of an invention, as nature rarely arranges the elements to in a form revealing a satisfactory pattern.[18] There was a large measure of luck in Edison’s nervous fiddling with compressed lampblack while reflecting on his frustrated efforts to find a satisfactory filament for a light bulb.

Except in the rare instances in which inventors have left an autobiographical account of their work, the historian can rarely observe the actual moment of insight. What can be obtained from the documentation are the problems that were posed and the presence or absence of elements needed for their solution. This is usually enough to construct an explanatory narrative. Usher noted that “even at a level of incomplete verification, the historian can proceed to develop the techniques of analysis that will reveal the grosser features of the processes by which man makes himself.” The invention of printing provides a good, though complex example. The elements needed to resolve the general problem of “mechanical writing” included a suitable support (paper), suitable ink (oil-based), a press (the woolen cloth calender) and moveable type. All of these elements were available by the early fifteenth century, and were being combined to make inexpensive wooden block prints by the 1430s and 1440s. The general impediment to the using of this technique to print books commercially was its inferior cost-effectiveness as compared with that of books currently being produced in specialized workshops by hand. The specific obstacle arose from the need to produce type in large numbers, which meant casting metal pieces in molds capable of holding matrices of variable size, and finding suitable materials for the matrix and metal punches. To judge from an incomplete documentation, the synthesis of the various elements that solved this problem was a drawn-out affair lasting from the early 1440s to the 1470s, of which the decisive invention was the adjustable type mold. The invention of printing was not the product of a single mind or even a single firm, but can be seen as a collective effort stretching over a whole generation. Its timing seems to be dictated not so much by an overwhelming demand for printed material, which until the price of books fell was satisfied by the output of workshops, but by the convergence of independent strands of technological know-how that suggested the possibility of substituting machinery for men in making letters.

The gestalt experiments indicate that the process of invention is strictly sequential, in that a problem must be adequately posed and the materials for its solution assembled before insight can occur. Usher identified a fourth stage in the process. Just as a new scientific finding has to be integrated into the existing stock of knowledge, so technological insight has to be translated into a working model and scaled up (or down) to the size needed to perform the desired task. Not every insight is workable. It took Watt nearly a decade to transform his insight into a commercially viable steam engine, and had it not been for the skills of Matthew Boulton’s machinists and Wilkinson’s boring machine, the effort probably would have failed. Usher termed that stage “critical revision.” Like the other stages, it consists of many acts of problem-solving.

Because of the necessary sequencing of its events, invention uses up calendar time. At each stage problems arise that require to be solved by insight, making the system inherently indeterminate. At best, the historian can evaluate rough probabilities from objective constraints imposed by the definition of the problem and the availability of appropriate materials for its solution at a given point of time. Usher stressed that because it is drawn out invention is by nature a social process; nothing logically requires successive stages to be achieved by a single individual or within a single epoch. The idea of applying the principle of the Archimedean screw to propulsion of vessels through water was first raised by a scientist in 1729, but it took four decades of intense and expensive effort finally to bring the screw propeller to fruition in the 1840s.[19] Usher regarded such delays as the consequence of temporally definable “resistances.” In general, the resistances are not social or economic, but reflect difficulties with respect to adequate formulation of the problem, the absence of one or more of the essential elements to its solution, failure to achieve the insight, and difficulties of its implementation. All of these elements are in some measure subject to verification, and thus narrated. Each makes invention time-consuming and time-dependent.

Usher’s approach also supplied the means to explain the history of the economy. As noted above, optimizing adjustments by agents to preferences and material constraints do not represent fundamental change, because change comes ultimately from the introduction of novelty into a social system. Usher situated that introduction in man’s capacity for problem-solving, thereby linking narrowly economic history to the broader evolutionary history of mankind. That history is not ruled by a timeless algorithm, but like the history of biological evolution rests on specific events that can in principle be identified.

[[T]he act of insight does not rise above the contingency of our knowledge upon specific contexts. Because these activities are conditioned, analysis is possible; but because they are conditioned they must be conceived as contingent upon the relevant contexts. Acts of insight seek particular modes of action or thought as a means of achieving specific ends. They do not seek absolutes or eternal verities.

Problem-solving covers most spheres of life. Usher was particularly interested in the technological sphere; but the general approach applies to the more complex area of social problem-solving, of which the construction of economic and social policy are the most important examples. That history, however, is intrinsically more complicated and harder to pin down than the history of invention. Like most pragmatists of his day, Usher believed that the problems posed in this sphere were largely created by the technological changes that he regarded as having an autonomous history. They were not less important, for all that, just more difficult

The Proof of the Pudding

A model is only as good as its implementation. Usher implemented his model of invention through a chronological account of mechanical invention in Europe from classical antiquity to the mid-twentieth century. The selection of the mechanical band of the technological spectrum was strategic, in that the decisive technological breakthroughs driving falling transport costs and productivity growth from the seventeenth through the mid-twentieth century were mainly due to mechanization of operations previously carried out by hand and the invention of new ways of generating power. It was strategic for another reason: machines combine different techniques for transmitting and controlling motion. A study focusing on the history of specific syntheses held out the possibility of identifying the circumstances that led to the combining of “the simple but relatively inefficient mechanisms of early periods into the complex and more effective mechanisms of today” (1929, p. 67). A final practical reason was the comparative abundance of documentation.

The substantive chapters begin with a discussion of the difference between scientific and technological knowledge. Until the seventeenth century, science was, as it remains, an interpretation of the physical world.[20] But outside celestial mechanics, where the Ptolemaic system was used to calculate celestial positions, that interpretation was either too broad to identify technological opportunities, or too flawed to be of practical use. Drawing on Pierre Duhem, Usher argued that the chief impediment to scientific treatment of mechanics arose from the belief that the principles of force and motion are self-evident. “Attention was thus drawn towards logical demonstrations and mathematical theorems that involved pure reasoning rather than towards experimental study of the phenomena.” Invention of devices for transmitting rotary motion and lifting heavy objects thus rested on knowledge of the strength of materials apprehended through practical experience, just as in ceramics and metallurgy. It was only from the middle of the fifteenth century that computational methods began to be applied to these problems, and it was only from the middle of the seventeenth that they acquired the power accurately to predict moments of force. From that point on, progress in mathematical analysis of mechanical problems was rapid. By the eighteenth century mathematicians and engineers were applying Newton’s third law of motion and Hooke’s law of elasticity to calculate the strength of materials, and using the embryonic science of fluid mechanics to compute the pressure of water on water wheel paddles and turbine blades.[21] Fulton’s work on the application of steam power to water craft is an outstanding example of this work.[22] The contribution to invention was situated mainly in the stage of critical revision.

The next chapter inventories the state of mechanical technology in classical antiquity. Although classical scholarship has revised Usher’s understanding of draft animal harness, the diffusion of water power, and the extent of geographical and occupational specialization, his assessment of the possibilities for invention remains sound.[23] At the end of the fourth century BC, classical civilization knew the five basic machines: lever, pulley, wedge, winch, and screw, and by the Christian era understood how gear trains translate and transmit rotary motion. As noted above, scientific analysis of these devices was not much help in designing new devices, which meant that the opportunities to combine the elemental machines into more complex devices depended on opportunities that manifested in the more immediate perceptual field. The classical presses are a good example: the beam press utilized pulleys to raise the weighted beam, while the screw press combined beam and screw. These simple combinations were closely tied to an immediate economic context setting the problem to be solved. Thus, displacement of hand mill by the rotary quern and the beam by the screw press to in the second century BC responded to the immediate problem of efficiently meeting the demand for large amounts of processed foods created by the growth of cities and trade. One can see the same dynamic at work in the invention of equipment for transporting and shaping exceedingly heavy ornamental stones.[24]

The transition to greater input of conceptual knowledge in the inventive process explains the tectonic shift in the complexity of mechanical inventions between 1500 and 1700. Early machines synthesized information obtained by visual and tactile perception (and in the case of foods, by taste and smell). Such perceptual insights are typically apprehended at low levels of generality and have been achieved many times in many places. Parallel development of lithic technology in the prehistoric world is explained by the repeated discovery that siliceous stones flake predictably enough to shape into useful forms.[25] The same was true of crafts based on manipulation of physical materials. Getting beyond that immediate level of insight, however, usually required the input of more generalized knowledge. As machines grow more complex, the physical and conceptual elements involved in achieving solutions to particular problems multiply, but as general concepts in mechanics are not immediately perceived by the senses, they are less likely to be conceived, and thus culturally idiosyncratic.[26] At this point it makes sense to compare concepts specific to civilizations as an explanation of the divergence in technological development. Usher regarded formulation of generalized scientific concepts as part of a “round-about” process of invention, in which the problems addressed are not immediately directed towards achieving a practical result. Huygens analysis of the pendulum as a means of timing the escapement mechanism in clocks is a good example.

Chapters 7 and 8 document the medieval history of two distinct branches of mechanical invention dominated by the perceptual element. The first harnessed the power of water and wind to mechanize the operations of grinding, crushing, stamping, sawing and fulling; the other captured the potential energy of gravitational force to drive and time clockwork. Both developments worked out mechanical principles mostly implicit in machines present in classical antiquity. The development of water mills and wind mills is the best documented, the critical element being the gear train translating vertical rotation of the wheel to the horizontal plane of the millstones. Gearing had been used in devices employed to measure distance and angles, but its extension to heavy-duty work was something new. One can imagine, but never demonstrate, that the idea of the water mill was taken from the gear train utilized in the cyclometer. Following an argument advanced by Lefebvre des No?ttes, and since shown to be erroneous, Usher supposed that the diffusion of water power was retarded by the deadening effect of slavery on incentives to save labor. Archaeological evidence has since demonstrated widespread diffusion of water-powered grain mills by the second century AD, which speaks volumes to the value accorded to economizing labor in the most burdensome tasks.[27] It also speaks to the wide distribution of requisite carpentering skills. The smaller horizontal and generally larger vertical mills diffused simultaneously, their geographical distribution depending on the nature of the stream and the economic advantage of high volume milling. The increased incidence of vertical wheels after 1000 AD is best explained not by technological innovation, but by opportunities for scaling up milling operations created by the growing commercialization of corn farming.[28]

Growing commercialization in the twelfth and thirteenth centuries provided incentives to apply water power to other industrial activities. The most important uses required translating the rotary motion of the water wheel into reciprocal motion used to drive bellows, stamping devices, and saws. Although Usher considered the crank and cam to be medieval inventions, Ausonius’s fourth-century description of a water-powered device for sawing marble blocks in the Rhineland indicates its presence in Antiquity. As in other areas, the surviving documentation suffers from severe selection bias against evidence for its early use. Gear trains were adapted to other power sources where running water was unavailable or inconvenient. Of these the most complicated mechanism was the gearing for the windmill, which pivoted with the sail as it turned towards the wind. The most revealing aspect of the windmill, however, illustrates how purely perceptual knowledge produced inventions that achieved high levels of technical efficiency. When Euler, MacLaurin and Coriolis undertook mathematical and experimental studies of the optimal angle and shape of windmill sails in the eighteenth and early nineteenth century, they found that Dutch craftsmen had solved the problem as a practical matter by the seventeenth century.[29] As in the case of the watermill, the path of invention seems to have mainly reflected the accretion of experience under conditions of expanding demand for the apparatus.

Clockwork presents a different chronology. Timing devices controlled by the flow of water through a self-regulating float valve were more accurate than clocks whose timing was controlled by an escapement mechanism and remained in use down to the eighteenth century because they were cheaper to build and repair than the by then more accurate mechanical clocks.[30] While the invention of the escapement mechanism is obscure, its presence in clockwork is securely dated to the third quarter of the thirteenth century. Subsequent development of what was originally a massive mechanism exploited momentum of weighted bars or wheels to time the escapement and damp the recoil. Usher’s discussion of these points is highly technical and directed at questions of dating. In the broader history of mechanical invention the importance of clockwork resulted from its complexity, and demands for greater accuracy giving rise to a sequence of problems that were gradually resolved by scientists and craftsmen of the highest order. An important by-product of the construction of the early tower clocks was the transfer of knowledge of how to cut and design gears from the millwrights to blacksmiths. In the seventeenth and eighteenth centuries the demand for greater accuracy created opportunities to develop gear-cutting machines that gave solutions on a small scale and for work in softer metals to problems that were to emerge on a larger scale and in iron and steel.

The next chapter considers the place of Leonardo da Vinci in the development of mechanical invention. Leonardo’s role is both symbolic and real. As a symbol he marks the shift towards scientific analysis of mechanical problems (as an adult he taught himself geometry), and the use of scale models to test the apparatus (a procedure pioneered by Massacio to study pictorial composition). Of the 18,000 sheets he bequeathed to his pupil Francesco Melzi, only 6,000 have survived, and as they are not dated, it is impossible to determine the representativeness of the sample and the sequence of his thought. He invented a centrifugal pump, anti-friction roller bearings, a screw-cutting machine, and a punch to make sequins for ladies’ dresses. He conceived a machine to make needles, and in 1514 was given a room in the Vatican to construct a machine for grinding parabolic mirrors to capture solar energy for boiling dyestuffs. He expected to get rich from his inventions, and was alert to potential opportunities to substitute machines for labor. He was not confident in his Latin, and of Greek he had none. He sensed that mechanisms were subject to common principles, but did not have the training to bring the abstract concepts of force and movement into focus. His workshop method of jotting down rough notes and cases was not suited to sustained trains of abstract thought. But his capacity to imagine three-dimensional mechanical connections, which his artistic training permitted him visually to describe, was unequalled. His papers circulated widely after his death, and provided ideas and inspiration to inventors for nearly a century. Usher viewed Leonardo as embodying the shift from perceptual to conceptual invention in the practical sphere of mechanics.

Save for relatively isolated cases, mechanical innovation was empirical, realistic, and practical. Achievements of great consequence had been realized, but by a process in which the immediate end was ever in the foreground. It is only with Leonardo that the process of invention is lifted decisively into the field of the imagination; it becomes a pursuit of the remote ends that are suggested by the discoveries of physical science and the consciously felt principles of mechanics (1954, p. 237).

The remainder of the book, with the exception of the chapter on printing discussed above, traces out that subsequent history through a chronology of the development of textile machinery, clocks and watches, steam power, machine tools, and the development and exploitation of the turbine. As these developments are well-known there is no need here to review them here. In his account of particular inventions, often in eye-glazing and occasionally impenetrable detail, Usher was primarily concerned with showing the cumulative nature of mechanical achievement, much of it by unknown or relatively little known inventors. The development of textile machinery provided a well-documented case in point. While the increasing complexity of the material makes it difficult to reduce to an intelligible story following the lines set out in his model of invention, his broad conclusion was that the acceleration of invention in textile machinery was conditioned more by the nature of the mechanical difficulties to be overcome than economic factors. By the early eighteenth century the technical capacity and craft skills needed to overcome those difficulties were well in hand, as any visit to a well-appointed museum of technology will demonstrate. From that point on, progress depended on the way specific problems came to be posed, or not posed, and how the stage was set for insight. By the mid-eighteenth century, the increasing indirectness of invention and its rising cost made securing and protecting intellectual property rights increasingly important.

These factors are all evident in the development of the steam engine. Caus’s discovery that steam is evaporated water made it possible to conceive the possibility of extracting power from atmospheric pressure by condensing steam in a closed vessel. Exploitation of that insight raised a series of technical problems associated with positioning and controlling the valves regulating the flow of steam and water. Watt’s invention of the separate condenser was critical revision of Newcomen’s atmospheric engine. Translating that insight into a commercially viable machine raised new problems the solution of which largely depended on the skill and experience of Boulton’s craftsmen. The role of conditioning factors is illustrated by the serendipitous appearance of Wilkinson’s boring machine, which machined a cylinder four feet in diameter to tolerances no thicker than a dime. The development and diffusion of the steam engine in turn led to greater use of metal gears connecting increasingly powerful engines to increasingly heavy machinery, and as the speed and force of the engines increased, the resulting stress and friction induced intensive theoretical and practical study of the optimal shape and position of toothed wheels and pinions. The sequence thus illustrates Usher’s general model of mechanical invention as a sequence of problems raised and solved. We see in these developments a comprehensible narrative of how one thing led to another in the most critical region of the new technology.

The history of tools for shaping metal to high tolerances has a parallel history. The basic elements of the mandrel lathe, slide rest and lead screw were present by the end of the sixteenth century. In the eighteenth century the wooden parts were replaced by metal, increasing their accuracy and making it possible to machine heavier pieces of metal. Senot’s screw-cutting lathe (1795) displayed at the Mus?e du Conservatoire des Arts et M?tiers is an outstanding example of this development, and attests its international scope.[30] Usher argued that after the substitution of iron for wooden headstocks, the principal obstacle to the development of heavy-duty machine tools was the difficulty of obtaining accurate lead screws. Here the problem was well-specified, but achieving a solution required years of painstaking work. Maudslay invented a device to correct errors of one-sixteenth of an inch in a seven-foot screw, tested the result with a micrometer, and made further corrections until he achieved the desired result. Such accuracy was essential to achieve mass-produced metal parts at low cost, though as Usher noted, the applications were initially confined to narrow fields, most notably in the manufacture of wooden pulley blocks, and firearms. Of more initial importance was use of heavy machine tools to shape large pieces of metal to the fine tolerances demanded by working parts of steam engines and locomotives. By the middle of the nineteenth century that capacity was available to be applied to a widening range of mass-consumed products like agricultural equipment, sewing machines, typewriters and bicycles. By that date the process by which specific mechanical problems were posed, the stage set and critical revision of the resulting insight carried out had become largely autonomous. It is difficult to imagine what plausible reconfiguration of relative factor endowments could have significantly affected the ensuing wave of labor-saving innovation.

The final chapter sketches out the history of the turbine, of which the applications range from more efficient exploitation of the power in falling water to the exploitation of the energy in expanding steam and gasses. Although it runs parallel to the development of the reciprocal steam engine, the story of the contemporary development of the turbine is a “particular system of events” that is entirely distinct from it. As with machine tools, investigation of impulse motors can be traced back to the early sixteenth century. The technical problems to be resolved, however, were of the highest order of difficulty, involving the invention of materials capable of withstanding extremely high temperature and rotational friction, finding optimal shapes and positions of the tubes and vans for the different media that propelled them. All this took time. Mathematical studies of turbulence relevant to the performance of turbines date to the eighteenth century; the basic breakthroughs in design by Fourneyron and Burdin date to the 1820s and 1830s. By the 1840s the accuracy of machine tools was high enough to produce a tight fit between the rotor and its casing. Parts rotating at ten to thirty thousand rpm required grades of steel that became available only towards the end of the nineteenth century; in the case of gas turbines, the materials became available only in the 1930s. The history of turbines, then, encapsulates the general trend in mechanical invention from problem-solving directed at an immediate solution with means assembled in the perceptual field to problem-solving based on scientific analysis and assembly of materials from a wide range of sources. The point is that all of this took time, and although the rough outlines of a solution might be fleetingly glimpsed, the timing of its achievement could not be predicted. The first patent for a gas turbine was taken out in 1791; a practical solution to the problem of exploiting the expansive power of heated gas in jet engines was achieved only in the 1930s.

The development of the turbine leads the discussion to the generation and transmission of electric power. The potential of large heads of water and great heads of steam could not be exploited as long as it had to be employed in situ, because no establishment could take more than a small proportion of the total power available. The invention of the dynamo and means of long-distance transmission relieved that constraint. The early development of that technology was achieved between 1830 and 1880, by which time the crucial problems had been resolved. That history, too, represents a particular system of events. The history of internal combustion engines illustrates the same pattern. An early recognition of the possibility of using the explosive power of gas in a piston (Huygens, 1680, Papin, 1690), followed a century later by patented engines (Street, 1794; Lebon (1799), lack of success for an extended period of time due to the inaccuracy of machining, difficulties of controlling the timing of the ignition and opening and closing of the valves, followed by a successful inefficient engine leading to closer analysis of the sources of that inefficiency. The sequence plays itself out as a narrative. Usher observed that from a broad perspective the history of the individual sources of power revealed a tendency to develop all possible forms of application of a general principle. The result was that by 1950 the world possessed a set of power-generating devices that spanned the gamut of weight and power capacity.

The History ends with that observation. Over the course of more than 300 pages of substantive discussion, it gives an overview of the development of what was the central strand of technological development through the early twentieth century. It explains within the limitations of the documentation and the level of detail appropriate to a general overview how novelty emerged in the sphere of mechanization and the generation of power. Usher offered no conclusion to this work. Indeed, in the introduction to the second edition he noted that he deliberately avoided forcing the narrative into a preconceived mold. The History was not a test of the theory of emergent novelty, only an illustration. In his later work Usher returned to the question of how to combine the insights of economics with an empirical treatment of time. He argued that “any consistently empirical interpretation of history must find some adequate explanation of the processes of change.”[32] The great enemy to a rational understanding of the past in his time, as in ours, was radical idealism, which seeks to explain events by their presumed final ends or purpose.

Usher’s work raises a number of problems that have been imperfectly addressed. His insights on the nature of mechanical invention are generally accepted and have been extended by historians of technology and economic historians, but the model has not been generally applied to other spheres.[33] A significant obstacle to its implementation is the extremely high degree of technical detail required to give an adequate account of any particular technological development. While detail at that level is common in the fields of political and institutional history, the desire to read such accounts is an acquired taste, though perhaps no more so than in the arcane corners of art history. As a consequence, the deployment of Usher’s method by economic historians has tended to be illustrative rather than narrative and probative. The rhetorical difficulties turn on the audience to be addressed, and the level of generality required by the narrative. On the broader question of the role of time in economic processes, the picture is equally discouraging. The debate over the nature and significance of path-dependence touched analytical issues raised by Usher, but it was deflected by questions relating to dynamic optimality, which as Usher had anticipated, originate in a transcendentalist obsession with final ends. As a result, the question of what happened and how it happened got pushed aside by the question why it happened. “Why” questions are intrinsically non-empirical.

Usher’s focus on explaining the emergence of novelty as the special province of economic historians is nevertheless worth preserving. Bill Parker organized his lectures on economic history around the framework of challenge and response, which is just a broader way of identifying the history as a history of problems posed and resolved (or not). The problems are not just technological. The analysis of organizational and political responses to economic change can be carried out on lines similar to those that Usher considered workable for the study of scientific and mechanical invention. Some responses are comparatively easy to model using standard tools derived from the calculus of optimization; others require more contextual detail. A workable history, however, requires limiting the field to a “particular system of events” that permits a narrative account. An outstanding example of this type of economic history is Wright’s account of American slavery.[34] Since the early 1960s the main thrust of economic history was directed away from Usher’s concept of explanation by narration. The power of Kuznets’ categories to organize numerical data provided nearly two generations of economic historians with productive work filling in the gaps and running down the tangled chains of quantifiable explanation. But Kuznets took the technological revolution as a given; the modern economic epoch was its consequence. Yet in the end, to quote one of the less illustrious figures in American history, “stuff happens.” Part of the task of economic history is to find out exactly what that stuff was, and how it happened. Usher’s work is a model of that type of economic history, and also shows how difficult it is to successfully pull off.

Postscript

I was distractedly browsing through my alumni bulletin this evening — checking the latest mortalities and other alumni affairs — when I came across the following passage in an article on Leland C. Clark (Antioch College 1941), who received the Frit J. and Dolores H. Russ Prize (the nation’s stop award for scientific engineering) in 2005 shortly before his death.

Here’s the story of his oxygen electrode invention.

Late one night, Clark — then in his thirties — was opening a pack of cigarettes while relaxing with colleagues after assisting in a by-pass surgery using his prototype heart-lung machine. Although the surgery had been successful, Clark knew that such procedures require precise monitoring of oxygen levels in the blood. But the platinum electrode he had originally designed wasn’t working well; red blood cells were blocking the oxygen molecules near the electrode.

What happened next was one of many shining moments in Clark’s career. “He was fiddling with his cigarette pack and suddenly got the idea that oxygen might permeate cellophane.” Soon thereafter, Clark tried moving the two electrodes close together, protected inside a glass tube by a cellophane membrane. The innovation allowed oxygen to enter and be measured with no interference from the red blood cells. To test the new oxygen sensor he needed to find a way to pull the oxygen out of a control solution to calibrate the sensor settings. He added glucose and the enzyme glucose oxydase, as a catalyst, and the oxygen was quickly removed.

Before long, however, he realized that by equipping his oxygen sensor with a thin film of the enzyme, he could read the decrease in the oxygen recorded in the presence of glucose. Suddenly Clark had a simple device for measuring glucose, also inventing the first biosensor for that purpose. Today, electrochemical biosensors have been designed to measure lactate, cholesterol, lactose, sucrose, ethanol and many other compounds.[35]

One sees here all of Usher’s stages in exceptional relief: the posing of the problem, the setting of the stage, the insight and critical revision, followed by extension into new problems and new solutions.

Notes:

1. Perhaps no better example of that vision can be found than in following passage composed by the aged Friedrich Meinecke in its wreckage. “Behind the growing pressure of increased masses of population … stands the struggle for the way of life of the individual nations. By way of life we mean here the totality of the mental and material habits of life, the institutions, customs and way of thinking. All of these seem to be bound together by an inner tie, by some guiding principle from within, to form a large, not always clearly definable but intuitively understandable, unity.” The German Catastrophe: Reflections and Recollections. Boston (1950), p. 87.

2. Erik Grimmer-Solem, The Rise of Historical Economics and Social Reform in Germany, 1864-1894, Oxford (2001).

3. T. H. Marshall, English Historical Review 42 (1927), 624.

4. “The Application of the Quantitative Method to Economic History,” Journal of Political Economy 40 (1932), 186-209.

5. Cited by Veyne, Writing History: Essay on Epistemology, Middletown, CT (1984), 119.

6. Veyne, Writing History, 63

7. Veyne, Writing History, 26-27. The literary reference is to Balzac’s Grandeur et d?cadence de C?sar Birotteau.

8. Mokyr appears to adopt this perspective in his evolutionary interpretation of technological change. “Like mutations, new ideas, it is argued, occur blindly. Some cultural, scientific, or technological ideas catch on because in some way they suit the needs of society, in much the same way as some mutations are retained by natural selection for perpetuation. In its simplest form, the selection process works because the best adapted phenotypes are also the ones that multiply the fastest.” The Lever of Riches, New York (1990), 276. The proposition is defensible with respect to economic factors conditioning the diffusion of inventions. It does not explain, as Usher surely would have observed, how inventions happen. Mokyr’s concept of a unit technique or idea subject to selection bears an obvious resemblance to Leibniz’s monad, and the sufficient reason that generates in the fullness of time the “best of all possible worlds.”

9. Explaining technological change by Malthusian population pressure is an example of this kind of approach. For a recent example, see Oded Galor and David Weil, “Population, Technology and Growth,” American Economic Review 90 (2000), 806-28.

10. Ludwig Wittgenstein, Philosophical Investigations, Oxford (1972), 196.

11. See Norbert Russell Hanson, Perception and Discovery, Cambridge (1958), and more generally Wittgenstein, Philosophical Investigations.

12. Hanson, Patterns of Discovery, 7. A celebrated instance of dual perception was the inability of researchers to identify the cause of the potato blight, in which the fungus Phytophthorus infenstans was alternatively believed to be a cause and consequence of the disease.

13. The Autobiography of Charles Darwinz edited by Francis Darwin, New York: Dover Publications (1958)z 26.

14. Locke reports a conjecture made to him by a French correspondent who suggested a man cured of blindness might not be able to distinguish between a box and a sphere. That conjecture has been experimentally confirmed.

15. “I was thinking of the engine at the time, … when the idea came into my mind that as steam was an elastic body it would rush into a vacuum and might there be condensed without cooling the cylinder” (cited in Usher (1954; 71)).

16. Salvatore di Pasquale, “Leonardo, Brunelleschi, and the Machinery of the Construction Site,” in Montreal Museum of Fine Arts, Leonardo da Vinci: Engineer and Architect, Montreal (1987), 163-81.

17. In another set of experiments with chickens food was placed outside a rectangular enclosure having an opening on one side. The hens “solved” the problem of obtaining the food only when the food and the doorway were in their line of sight.

18. The one major exception may be the “invention” of agriculture in the Near East, which most likely occurred through an improbable sequence of climatic changes that induced incipient domestication in a handful of small grains and pulses harvested in naturally occurring stands. The term invention is inappropriate in this context. See David Rindos, The Origins of Agriculture: An Evolutionary Perspective, Orlando FL: Academic Press (1984), and Donald O. Henry, From Foraging to Agriculture: The Levant at the End of the Ice Age, Philadelphia: University of Pennsylvania Press (1985).

19. The chief obstacles were intellectual, one being disbelief that a device as small as a propeller could drive a large ship, and the other concerning the optimal shape of the device in the context of extremely complex issues with respect to fluid mechanics. The history is reviewed by Maurice Daumas, ed., A History of Technology and Invention, Vol. 2, New York (1972).

20. Prior to the seventeenth century it also interpreted the non-physical world, as the medieval enquiry into the physics of the Eucharist amply demonstrates. On this and other topics relevant to the present discussion, see Edith D. Sylla, The Oxford Calculators and the Mathematics of Motion, 1320-1350, New York (1991).

21. Maurice Daumas, ed., A History of Technology and Invention, Volume III, New York (1979), 25-27, 81-89.

22. Fulton made countless experiments calculating the resistance to paddlewheels of varying design and to the form of the hull in relation to the weight and velocity of the engine. His work was based on Colonel Mark Beaufoy’s experiments testing Euler’s theorems on the resistance of fluids. This was critical revision. H. W. Dickson, Robert Fulton: Engineer and Artist, London (1913).

23. See my manuscript, “Prehistoric Origins of European Economic Integration.”

24. J.B. Ward-Perkins, “Quarries and Stone-working in the early Middle Ages: The Heritage of the Ancient World,” Artigiano e tecnica nella societ? dell’alto medioevo, Spoleto (1971), 525-44; Valery A. Maxfeld, Stone Quarrying in the Eastern Desert with Particular Reference to Mons Claudianus and Mons Porphyrites, in David Mattingly and John Salmon, eds., Economies Beyond Agriculture in the Classical World, London (1991), 143-70.

25. Brian Cotterell and Johan Kamminga, Mechanics of Pre-industrial Technology, Cambridge (1991), 127-30.

26. Within restricted ranges of perception many mechanical concepts are indistinguishable. Where friction is present, the Aristotelian theory that constant force is needed to keep an object in uniform motion is observationally equivalent to Newton’s principle of inertia.

27. The archaeological evidence, which was not available to Usher, is abundant. For a compilation of European finds, see Orjan Wikander, “Archaeological Evidence for Early Watermills: An Interim Report,” History of Technology (1985), 151-79, and Richard Holt, The Mills of Medieval England, Oxford (1988). North African evidence is surveyed by David Mattingly and R. Bruce Hitchner, “Roman Africa: An Archaeological Review,” Journal of Roman Studies (1985), 165-213.

28. A similar transformation around the same time can be seen in the substitution in northern France of naked wheat (triticum aestivum) for spelt (triticum spelta), which being a bearded cereal costly to transport and difficult to mill was less suited to commerce. The displacement and the appearance of the vertical mill went hand in hand. See Jean-Pierre Devroey, “Entre Loire et Rhin: Les fluctuations du terroir de l’agriculture au moyen ?ge,” in J.-P. Devroey and J.-J. van Mol, L’?peautre (triticum spelta): Histoire et ethnologie, Bruxelles (1989), 89-105.

29. Daumas, History of Technology and Invention, Volume III, 20-22.

30. Galileo used water clocks in his experiments on falling objects.

31. Maudslay’s all-metal bar lathe is dated to the same year.

32. Usher, “The Significance of Modern Empiricism for History and Economics,” Journal of Economic History (1949), 149.

33. I made a preliminary stab in “The Shifting Locus of Agricultural Innovation in Nineteenth-century Europe: The Case of the Agricultural Experiment Stations,” in Gary Saxonhouse and Gavin Wright, eds., Technique, Spirit and Form in the Making of the Modern Economies: Essays in Honor of William N. Parker, Research in Economic History, Supplement 3, Greenwich, CT (1984), 91 214.

34. Gavin Wright, Slavery and American Economic Development, Baton Rouge (2006).

35. “Leland C. Clark Leaves a Medical Legacy,” Antiochian (Autumn 2006), 31.

George Grantham teaches economics and economic history at McGill University. He is the author of several works on the productivity of French agriculture in the nineteenth century, the macroeconomics of pre-modern agricultural societies, and the economic history of prehistoric Europe. He is presently applying Usher’s concept of a “particular system of events” to reconstruct the pre-modern history of European agricultural productivity.

Subject(s):History of Technology, including Technological Change
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Slavery’s Capitalism: A New History of American Economic Development

Editor(s):Beckert, Sven
Rockman, Seth
Reviewer(s):Wright, Gavin

Published by EH.Net (March 2017)

Sven Beckert and Seth Rockman, editors, Slavery’s Capitalism: A New History of American Economic Development.  Philadelphia: University of Pennsylvania Press, 2016.  viii + 406 pp. $40 (cloth), ISBN: 978-0-8122-4841-8.

Reviewed for EH.Net by Gavin Wright, Department of Economics, Stanford University.

In case any economic historian has been asleep or on Mars for the past three years, you may want to know that the economics-of-slavery culture wars have broken out again.  Though only a pale shadow of the dust-up we had back in the 1970s, the aggressive assertions of the “new history of capitalism” regarding the centrality of slavery for U.S. economic development, and critiques of this work by economic historians, have generated much commotion in academic circles, including numerous review articles and a lengthy survey in The Chronicle of Higher Education (December 8, 2016). The present volume is a manifesto of sorts for the slavery wing of the NHC insurgency, originating in a conference at Brown University (co-sponsored by Harvard) in 2011.

The claims of the editors for the new history of capitalism and slavery are not modest.  The opening sentence of the Introduction reads: “During the eighty years between the American Revolution and the Civil War, slavery was indispensable to the economic development of the United States” (p. 1).  They acknowledge that “the argument is more easily asserted than substantiated” (p. 3), but this cautionary note does not deter them from announcing the “impossibility of understanding the nation’s spectacular pattern of economic development without situating slavery front and center” (p. 27).  The publisher’s summary of the book (presumably approved by the editors) deploys even more extravagant language, declaring that the book “identifies slavery as the primary force driving key innovations in entrepreneurship, finance, accounting, management, and political economy,” “the originating catalyst for the Industrial Revolution and modern capitalism” (University of Pennsylvania Press web site).

Having thus allowed the editors to dig their own rhetorical graves, let me urge economic history readers not to overreact to the bluster and bombast.  After decades of untouchability, the new interest in economic aspects of slavery on the part of younger scholars is a good thing, an opportunity for cross-disciplinary learning and cooperation.  Scholars from different disciplines will inevitably differ in their framing of the issues, their choice of language and styles of historical writing, but there is no deep reason here for an ideological Great Divergence regarding slavery.  Suffice it to say here that virtually none of the claims in the preceding paragraph are supported in any substantial way by the research presented in the volume. But most of the writers do not seem committed to this agenda anyway.  It is unfortunate that historians pursuing original inquiries on slavery-related topics have been persuaded to present their work as apparent disciples of a militant insurgency.  But there is no intellectual gain in recasting this historical project as a team sport.

Putting the editors’ introduction aside, only the chapter by Edward E. Baptist stands out for tendentious claims in support of a preconceived agenda.  Here Baptist is somewhat defensive, his book having been roundly criticized by Alan Olmstead and Paul Rhode for inventing the term “pushing system,” neglecting improvements in cotton varieties, and misusing historical sources, including the WPA slave narratives.  But this does not stop Baptist from adding a few more half-baked morsels to his mélange.  Among many candidates, most irksome to this reviewer is this one: “The three million white people in the cotton states were per capita the richest people in the United States, and probably the richest group of people of that size in the world” (p. 36). A footnote cites James Huston’s Calculating the Value of the Union (the whole book) and p. 87 of Robert Fogel’s Without Consent or Contract.  The statement gets the population wrong, conflates wealth with income, ignores the widening gap between slave owners and non-owners, and aggregates real and slave property.  To be sure, the value of slave property was very real to the owners. The essential point is that the South was the wealthiest region in the nation when slave values are included, but the poorest when they are not.  (See Gavin Wright, Slavery and American Economic Development, p. 60.)  This deficiency, coupled with the failure to invest in education and infrastructure — not the purported decline in plantation productivity (p. 43) — explains the emergence of southern economic backwardness when slavery was abolished.

Because the Baptist debate is ongoing, it will not be pursued further here.  Following my own injunction to accentuate the positive, let me recommend the chapters by Caitlin Rosenthal on accounting practices on slave plantations; by Daina Ramey Berry on attitudes toward life and death in the shadow of slave markets; by Calvin Schermerhorn on the entwining of financial and mercantile interests in the coastwise slave trade; by Craig Steven Wilder on the role of slavery in financing Catholic colleges in the Age of Revolution; by Alfred L. Brophy on “proslavery instrumentalism” in legal thought; and by Andrew Shankman on Matthew Carey’s embrace of slavery in formulating his Whig political economy for the nation.  Independent scholar Bonnie Martin has performed extraordinary labor compiling records on slave mortgages from county deed books, and here she adds 10,000 additional loans to her previous collection (Journal of Southern History, November 2010).  One hopes that these data will at some point be put to use by economic historians.  Here, unfortunately, Martin struggles to draw interesting conclusions from her evidence.  She suggests that “an image of capitalistic sophistication … runs counter to the traditional assumptions about the economy of the South,” (p. 119) appending a footnote including no less than three books by the current reviewer.  Since none of these books advance any claims about the “lack of sophistication in the southern economy” — quite the contrary — one can only conclude that the author is grasping for straws.

Let me call particular attention to the chapters by Daniel B. Rood and by John Majewski, which should be read conjointly.  Rood writes about the slave-using wheat farms of Virginia, building on his earlier article on that topic (Journal of American History, June 2014).  The particular focus here is the invention of the reaper by Cyrus McCormick on his father’s wheat farm in the Shenandoah Valley.  The reaper’s Virginia origins are well-known to economic historians, but Rood asks us to see this “quintessentially American machine as a Creole artifact, a tropical technology, and, more than anything, a product of Atlantic slavery” (p. 87).   According to Rood’s account, pressure to mechanize came from a premium on speed in marketing, which arose as planters sought the patronage of new mills in Richmond, producing flour for the Brazilian market.  Rood is persuasive in describing the “pools of expertise and the plantation laboratory” (p. 94) in Virginia, including the contribution of skilled slaves.  (Oddly, there is no citation to Charles Dew’s Bond of Iron [1994], which discusses Virginia’s skilled slave machinists in considerable detail.)  What he does not come to grips with is the fact that the reaper did not diffuse rapidly in Virginia, which McCormick largely abandoned after 1845, moving into what he knew to be a more promising market for mechanical implements in the Midwest.  Obed Hussey, McCormick’s arch-rival in mechanical reaping, had been there all along.

Majewski, the only card-carrying economic historian in the group, also shows the compatibility between slavery and a “thriving, diversified economy,” (p. 279) focusing on what he calls the Limestone South, a fertile alfisol area encompassing Kentucky’s Bluegrass region, Virginia’s Shenandoah Valley, and Tennessee’s Nashville Basin.  According to Majewski, the decisive feature differentiating the Limestone South from the free states was the absence of support for public schools, a consequence of slaveholders’ stranglehold on state politics.  Majewski argues that this stark difference in access to educational opportunity helps to explain northern opposition to the expansion of slavery.  He quotes Abraham Lincoln: “Free Labor insists on universal education,” but evidently the first step toward this goal was to keep large slaveholders out.

The book’s broad characterization of slave owners as calculating, acquisitive, financially sophisticated and linked to international networks, is not one that economic historians will be inclined to object to, in large part because we have been arguing along similar lines for decades.  The striking divergence between slave and free states, on the other hand, in the geography of settlement, population growth, urbanization, schooling, and politics (a partial list) cries out for more intensive study by historians of all types.  With only occasional exceptions, that major topic is largely missing from the volume under review.  One thing seems certain: calling one region or the other “capitalist” will not contribute much to historical understanding.

Gavin Wright is William Robertson Coe Professor of American Economic History Emeritus at Stanford University. His book, Sharing the Prize: The Economics of the Civil Rights Revolution in the American South, will be issued in paperback by Harvard University Press in the Fall of 2017.

Copyright (c) 2017 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (March 2017). All EH.Net reviews are archived at http://eh.net/book-reviews/

Subject(s):Servitude and Slavery
Geographic Area(s):North America
Time Period(s):19th Century

Economic History Classics

Selections for 2006

During 2006 EH.NET published a series of “Classic Reviews.” Modeled along the lines of our earlier Project 2000 and Project 2001 series, reviewers were asked to “reintroduce” each of the books to the profession, “explaining its significance at the time of publication and why it has endured as a classic.” Each review summarizes the book’s key findings, methods and arguments, as it puts it into the larger context and discusses any weaknesses.

This year’s selections are (alphabetically by author):

Selection Committee

  • Gareth Austin, London School of Economics
  • Ann Carlos, University of Colorado
  • John Murray, University of Toledo
  • Lawrence Officer, University of Illinois at Chicago
  • Cormac Ó Gráda, University College Dublin
  • Peter Scott, University of Reading
  • Catherine Schenk, University of Glasgow
  • Pierre van der Eng, Australian National University
  • Jenny Wahl, Carleton College

History of the U.S. Telegraph Industry

Tomas Nonnenmacher, Allegheny College

Introduction

The electric telegraph was one of the first telecommunications technologies of the industrial age. Its immediate predecessors were homing pigeons, visual networks, the Pony Express, and railroads. By transmitting information quickly over long distances, the telegraph facilitated the growth in the railroads, consolidated financial and commodity markets, and reduced information costs within and between firms. This entry focuses on the industrial organization of the telegraph industry from its inception through its demise and the industry’s impact on the American economy.

The Development of the Telegraph

The telegraph was similar to many other inventions of the nineteenth century. It replaced an existing technology, dramatically reduced costs, was monopolized by a single firm, and ultimately was displaced by a newer technology. Like most radical new technologies, the telecommunications revolution of the mid-1800s was not a revolution at all, but rather consisted of many inventions and innovations in both technology and industrial organization. This section is broken into four parts, each reviewing an era of telegraphy: precursors to the electric telegraph, early industrial organization of the industry, Western Union’s dominance, and the decline of the industry.

Precursors to the Electric Telegraph

Webster’s definition of a telegraph is “an apparatus for communicating at a distance by coded signals.” The earliest telegraph systems consisted of smoke signals, drums, and mirrors used to reflect sunlight. In order for these systems to work, both parties (the sender and the receiver) needed a method of interpreting the signals. Henry Wadsworth Longfellow’s poem recounting Paul Revere’s ride (“One if by land, two if by sea, and I on the opposite shore will be”) gives an example of a simple system. The first extensive telegraph network was the visual telegraph. In 1791 the Frenchman Claude Chappe used a visual network (which consisted of a telescope, a clock, a codebook, and black and white panels) to send a message ten miles. He called his invention the télégraphe, or far writer. Chappe refined and expanded his network, and by 1799 his telegraph consisted of a network of towers with mechanical arms spread across France. The position of the arms was interpreted using a codebook with over 8,000 entries.

Technological Advances

Due to technological difficulties, the electric telegraph could not at first compete with the visual telegraph. The basic science of the electric telegraph is to send an electric current through a wire. Breaking the current in a particular pattern denotes letters or phrases. The Morse code, named after Samuel Morse, is still used today. For instance, the code for SOS (… — …) is a well-known call for help. Two elements had to be perfected before an electric telegraph could work: a means of sending the signal (generating and storing electricity) and receiving the signal (recording the breaks in the current).

The science behind the telegraph dates back at least as far as Roger Bacon’s (1220-1292) experiments in magnetism. Numerous small steps in the science of electricity and magnetism followed. Important inventions include those of Giambattista della Porta (1558), William Gilbert (1603), Stephen Gray (1729), William Watson (1747), Pieter van Musschenbroek (1754), Luigi Galvani (1786), Alessandro Giuseppe Antonio Anastasio Volta (1800), André-Marie Ampere (1820), William Sturgeon (1825), and Joseph Henry (1829). A much longer list could be made, but the point is that no single person can be credited with developing the necessary technology of the telegraph.

1830-1866: Development and Consolidation of the Electric Telegraph Industry

In 1832, Samuel Morse returned to the United States from his artistic studies in Europe. While discussing electricity with fellow passengers, Morse conceived of the idea of a single-wire electric telegraph. No one until this time had Morse’s zeal for the applicability of electromagnetism to telecommunications or his conviction of its eventual profitability. Morse obtained a patent in the United States in 1838 but split his patent right to gain the support of influential partners. He obtained a $30,000 grant from Congress in 1843 to build an experimental line between Baltimore and Washington. The first public message over Morse’s line (“What hath God wrought?”) echoed the first message over Chappe’s system (“If you succeed, you will bask in glory”). Both indicated the inventors’ convictions about the importance of their systems.

Morse and His Partners

Morse realized early on that he was incapable of handling the business end of the telegraph and hired Amos Kendall, a former Postmaster General and a member of Andrew Jackson’s “Kitchen Cabinet,” to manage his business affairs. By 1848 Morse had consolidated the partnership to four members. Kendall managed the three-quarters of the patent belonging to Morse, Leonard Gale, and Alfred Vail. Gale and Vail had helped Morse develop the telegraph’s technology. F.O.J. Smith, a former Maine Representative whose help was instrumental in obtaining the government grant, decided to retain direct control of his portion of the patent right. The partnership agreement was vague, and led to discord between Kendall and Smith. Eventually the partners split the patent right geographically. Smith controlled New England, New York, and the upper-Midwest, and Morse controlled the rest of the country.

The availability of financing influenced the early industrial organization of the telegraph. Initially, Morse tried to sell his patent to the government, Kendall, Smith, and several groups of businessmen, but all attempts were unsuccessful. Kendall then attempted to generate interest in building a unified system across the country. This too failed, leaving Kendall to sell the patent right piecemeal to regional interests. These lines covered the most potentially profitable routes, emanating from New York and reaching Washington, Buffalo, Boston and New Orleans. Morse also licensed feeder lines to supply main lines with business.

Rival Patents

Royal House and Alexander Bain introduced rival patents in 1846 and 1849. Entrepreneurs constructed competing lines on the major eastern routes using the new patents. The House device needed a higher quality wire and more insulation as it was a more precise instrument. It had a keyboard at one end and printed out letters at the other. At its peak, it could send messages considerably faster than Morse’s technique. The Bain device was similar to Morse’s, except that instead of creating dots and dashes, it discolored a piece of chemically treated paper by sending an electric current through it. Neither competitor had success initially, leading Kendall to underestimate their eventual impact on the market.

By 1851, ten separate firms ran lines into New York City. There were three competing lines between New York and Philadelphia, three between New York and Boston, and four between New York and Buffalo. In addition, two lines operated between Philadelphia to Pittsburgh, two between Buffalo and Chicago, three between points in the Midwest and New Orleans, and entrepreneurs erected lines between many Midwestern cities. In all, in 1851 the Bureau of the Census reported 75 companies with 21,147 miles of wire.

Multilateral Oligopolies

The telegraph markets in 1850 were multilateral oligopolies. The term “multilateral” means that the production process extended in several directions. Oligopolies are markets in which a small number of firms strategically interact. Telegraph firms competed against rivals on the same route, but sought alliances with firms with which they connected. For example, four firms (New York, Albany & Buffalo; New York State Printing; Merchants’ State; and New York and Erie) competed on the route between New York City and Buffalo. Rates fell dramatically (by more than 50%) as new firms entered, so this market was quite competitive for a while. But each of these firms sought to create an alliance with connecting firms, such as those with lines from New York City to Boston or Washington. Increased business from exchanging messages meant increased profitability.

Mistransmission Problems

Quality competition was also fierce, with the line that erected the best infrastructure and supplied the fastest service usually dominating other, less capable firms. Messages could easily be garbled, and given the predominately business-related use of the telegraph, a garbled message was often worse than no message at all. A message sent from Boston to St. Louis could have traveled over the lines of five firms. Due to the complexity of the production process, messages were also often lost, with no firm taking responsibility for the mistransmission. This lack of responsibility gave firms an incentive to provide a lower quality service compared to an integrated network. These issues ultimately contributed to the consolidation of the industry.

Horizontal and System Integration

Horizontal integration-integration between two competing firms-and system integration-integration between two connecting firms-occurred in the telegraph industry during different periods. System integration occurred between 1846 and 1852, as main lines acquired most of the feeder lines in the country. In 1852 the Supreme Court declared the Bain telegraph an infringement on Morse’s patent, and Bain lines merged with Morse lines across the country. Between 1853 and 1857 regional monopolies formed and signed the “Treaty of Six Nations,” a pooling agreement between the six largest regional firms. During this phase the industry experienced both horizontal and system integration. By the end of the period, most remaining firms were regional monopolists, controlled several large cities and owned both the House and the Morse patents. Figure 1 shows the locations of these firms.

Figure 1: Treaty of Six Nations

Source: Thompson, p. 315

The final phase of integration occurred between 1857 and 1866. In this period the pool members consolidated into a national monopoly. By 1864 only Western Union and the American Telegraph Company remained of the “Six Nations.” The United States Telegraph Company entered the field by consolidating smaller, independent firms in the early 1860s, and operated in the territory of both the American Telegraph Company and Western Union. By 1866 Western Union absorbed its last two competitors and reached its position of market dominance.

Efficiency versus Market Power

Horizontal and system integration had two causes: efficiency and market power. Horizontal integration created economies of scale that could be realized from placing all of the wires between two cities on the same route or all the offices in a city in the same location. This consolidation reduced the cost of maintaining multiple lines. The reduction in competition due to horizontal integration also allowed firms to charge a higher price and earn monopoly profits. The efficiency gain from system integration was better control of messages travelling long distances. With responsibility for the message placed clearly in the hands of one firm, messages were transmitted with more care. System integration also created monopoly power, since to compete with a large incumbent system, a new entrant would have to also create a large infrastructure.

1866-1900: Western Union’s Dominance

The period from 1866 through the turn of the century was the apex of Western Union’s power. Yearly messages sent over its lines increased from 5.8 million in 1867 to 63.2 million in 1900. Over the same period, transmission rates fell from an average of $1.09 to 30 cents per message. Even with these lower prices, roughly 30 to 40 cents of every dollar of revenue were net profit for the company. Western Union faced three threats during this period: increased government regulation, new entrants into the field of telegraphy, and new competition from the telephone. The last two were the most important to the company’s future profitability.

Western Union Fends off Regulation

Western Union was the first nationwide industrial monopoly, with over 90% of the market share and dominance in every state. The states and the federal government responded to this market power. State regulation was largely futile given the interstate character of the industry. On the federal level, bills were introduced in almost every session of Congress calling for either regulation of or government entry into the industry. Western Union’s lobby was able to block almost any legislation. The few regulations that were passed either helped Western Union maintain its control over the market or were never enforced.

Western Union’s Smaller Rivals

Western Union’s first rival was the Atlantic and Pacific Telegraph Company, a conglomeration of new and merged lines created by Jay Gould in 1874. Gould sought to wrest control of Western Union from the Vanderbilts, and he succeeded in 1881 when the two firms merged. A more permanent rival appeared in the 1880s in the form of the Postal Telegraph Company. John Mackay, who had already made a fortune at the Comstock Lode, headed this firm. Mackay did what many of his telegraph predecessors did in the 1850s: create a network by buying out existing bankrupt firms and merging them into a network with large enough economies of scale to compete with Western Union. Postal never challenged Western Union’s market dominance, but did control over 10-20% of the market at various times.

The Threat from the Telephone

Western Union’s greatest threat came from a new technology, the telephone. Alexander Graham Bell patented the telephone in 1876, initially referring to it as a “talking telegraph.” Bell offered Western Union the patent for the telephone for $100,000, but the company declined to purchase it. Western Union could have easily gained control of AT&T in the 1890s, but management decided that higher dividends were more important than expansion. The telephone was used in the 1880s only for local calling, but with the development in the 1890s of “long lines,” the telephone offered increased competition to the telegraph. In 1900, local calls accounted for 97% of the telephone’s business, and it was not until the twentieth century that the telephone fully displaced the telegraph.

1900-1988: Increased Competition and Decline

The twentieth century saw the continued rise of the telephone and decline of the telegraph. Telegraphy continued to have a niche in inexpensive long-distance and international communication, including teletypewriters, Telex, and stock ticker. As shown in Table 1, after 1900, the rise in telegraph traffic slowed, and after 1930, the number of messages sent began to decline.

Table 1: Messages Handled by the Telegraph Network: 1870-1970

Date Messages Handled Date Messages Handled
1870 9,158,000 1930 211,971,000
1880 29,216,000 1940 191,645,000
1890 55,879,000 1945 236,169,000
1900 63,168,000 1950 178,904,000
1910 75,135,000 1960 124,319,000
1920 155,884,000 1970 69,679,000

Source: Historical Statistics.
Notes: Western Union messages 1870-1910; all telegraph companies, 1920-1970.

AT&T Obtains Western Union, Then Gives It Up

In 1909, AT&T gained control of Western Union by purchasing 30% of its stock. In many ways, the companies were heading in opposite directions. AT&T was expanding rapidly, while Western Union was content to reap handsome profits and issue large dividends but not reinvest in itself. Under AT&T’s ownership, Western Union was revitalized, but the two companies separated in 1913, succumbing to pressure from the Department of Justice. In 1911, the Department of Justice successfully used the Sherman Antitrust Act to force a breakup of Standard Oil. This success made the threat of antitrust action against AT&T very credible. Both Postal Telegraph and the independent telephone companies wishing to interconnect with AT&T lobbied for government regulation. In order to forestall any such government action, AT&T issued the “Kingsbury Commitment,” a unilateral commitment to divest itself of Western Union and allow independent telephone firms to interconnect.

Decline of the Telegraph

The telegraph flourished in the 1920s, but the Great Depression hit the industry hard, and it never recovered to its previous position. AT&T introduced the teletypewriter exchange service in 1931. The teletypewriter and the Telex allowed customers to install a machine on their premises that would send and receive messages directly. In 1938, AT&T had 18%, Postal 15% and Western Union 64% of telegraph traffic. In 1945, 236 million domestic messages were sent, generating $182 million in revenues. This was the most messages sent in a year over the telegraph network in the United States. By that time, Western Union had incorporated over 540 telegraph and cable companies into its system. The last important merger was between Western Union and Postal, which occurred in 1945. This final merger was not enough to stop the continuing rise of the telephone or the telegraph’s decline. Already in 1945, AT&T’s revenues and transmission dwarfed those of Western Union. AT&T made $1.9 billion in yearly revenues by transmitting 89.4 million local phone calls and 4.9 million toll calls daily. Table 2 shows the increasing competitiveness of telephone rates with telegraph rates.

Table 2: Telegraph and Telephone Rates from New York City to Chicago: 1850-1970

Date Telegraph* Telephone**
1850 $1.55
1870 1.00
1890 .40
1902 5.45
1919 .60 4.65
1950 .75 1.50
1960 1.45 1.45
1970 2.25 1.05

Source: Historical Statistics.
Notes: * Beginning 1960, for 15 word message. Prior to 1960 for 10 word message. ** Rates for station-to station, daytime, 3-minute call

The Effects of the Telegraph

The travel time from New York City to Cleveland in 1800 was two weeks, with another four weeks necessary to reach Chicago. By 1830, those travel times had fallen in half, and by 1860 it took only two days to reach Chicago from New York City. However, by use of the telegraph, news could travel between those two cities almost instantaneously. This section examines three instances where the telegraph affected economic growth: railroads, high throughput firms, and financial markets.

Telegraphs and Railroads

The telegraph and the railroad were natural partners in commerce. The telegraph needed the right of way that the railroads provided and the railroads needed the telegraph to coordinate the arrival and departure of trains. These synergies were not immediately recognized. Only in 1851 did railways start to use telegraphy. Prior to that, telegraph wires strung along the tracks were seen as a nuisance, occasionally sagging and causing accidents and even fatalities.

The greatest savings of the telegraph were from the continued use of single-tracked railroad lines. Prior to 1851, the U.S. system was single-tracked, and trains ran on a time-interval system. Two types of accidents could occur. Trains running in opposite directions could run into one another, as could trains running in the same direction. The potential for accidents required that railroad managers be very careful in dispatching trains. One way to reduce the number of accidents would have been to double-track the system. A second, better, way was to use the telegraph.

Double-tracking was a good alternative, but not perfect. Double-tracked lines would eliminate head-on collisions, but not same direction ones. This would still need to be done using a timing system, i.e. requiring a time interval between departing trains. Accidents were still possible using this system. By using the telegraph, station managers knew exactly what trains were on the tracks under their supervision. Double-tracking the U.S. rail system in 1893 has been estimated to cost $957 million. Western Union’s book capitalization was $123 million in 1893, making this seem like a good investment. Of course, the railroads could have used a system like Chappe’s visual telegraph to coordinate traffic, but such a system would have been less reliable and would not have been able to handle the same volume of traffic.

Telegraph and Perishable Products Industries

Other industries that had a high inventory turnover also benefited from the telegraph. Of particular importance were industries in which the product was perishable. These industries included meatpacking and the distribution of fruits and vegetables. The growth of both of these industries was facilitated by the introduction of the refrigerated car in 1874. The telegraph was required for the exact control of shipments. For instance, refrigeration and the telegraph allowed for the slaughter and disassembly of livestock in the giant stockyards of Chicago, Kansas City, St. Louis and Omaha. Beef would then be shipped east at a cost of 50% that of shipping the live cattle. The centralization of the stockyards also created tremendous amounts of by-products that could be processed into glue, tallow, dye, fertilizer, feed, brushes, false teeth, gelatin, oleomargarine, and many other useful products.

Telegraph and Financial Markets

The telegraph undoubtedly had a major impact on the structure of financial markets in the United States. New York became the financial center of the country, setting prices for a variety of commodities and financial instruments. Among these were beef, corn, wheat, stocks and bonds. As the telegraph spread, so too did the centralization of prices. For instance, in 1846, wheat and corn prices in Buffalo lagged four days behind those in New York City. In 1848, the two markets were linked telegraphically and prices were set simultaneously.

The centralization of stock prices helped make New York the financial capital of the United States. Over the course of the nineteenth century, hundreds of exchanges appeared and then disappeared across the country. Few of them remained, with only those in New York, Philadelphia, Boston, Chicago and San Francisco achieving any permanence. By 1910, 90 percent of all bond and two-thirds of all stock trades occurred on the New York Stock Exchange.

Centralization of the market created much more liquidity for stockholders. As the number of potential traders increased, so too did the ability to find a buyer or seller of a financial instrument. This increase in liquidity may have led to an increase in the total amount invested in the market, therefore leading to higher levels of investment and economic growth. Centralization may also have led to the development of certain financial institutions that could not have been developed otherwise. Although difficult to quantify, these aspects of centralization certainly had a positive effect on economic growth.

In some respects, we may tend to overestimate the telegraph’s influence on the economy. The rapid distribution of information may have had a collective action problem associated with it. If no one else in Buffalo has a piece of information, such as the change in the price of wheat in New York City, then there is a large private incentive to discover that piece of information quickly. But once everyone has the information, no one made better off. A great deal of effort may have been spent on an endeavor that, from society’s perspective, did not increase overall efficiency. The centralization in New York also increased the gains from other wealth-neutral or wealth-reducing activities, such as speculation and market manipulation. Higher volumes of trading increased the payoff from the successful manipulation of a market, yet did not increase society’s wealth.

Conclusion

The telegraph accelerated the speed of business transactions during the late nineteenth century and contributed to the industrialization of the United States. Like most industries, it faced new competition that ultimately proved its downfall. The telephone was easier and faster to use, and the telegraph ultimately lost its cost-advantages. In 1988, Western Union divested itself of its telegraph infrastructure and focused on financial services, such as money orders. A Western Union telegram is still available, currently costing $9.95 for 250 words.

Telegraph Timeline

1837 Cooke and Wheatstone patent telegraph in England.
1838 Morse’s Electro-Magnetic Telegraph patent approved.
1843 First message sent between Washington and Baltimore.
1846 First commercial telegraph line completed. The Magnetic Telegraph Company’s lines ran from New York to Washington.
House’s Printing Telegraph patent approved.
1848 Associated Press formed to pool telegraph traffic.
1849 Bain’s Electro-Chemical patent approved.
1851 Hiram Sibley and associates incorporate New York and Mississippi Valley Printing Telegraph Company. Later became Western Union.
1851 Telegraph first used to coordinate train departures.
1857 Treaty of Six Nations is signed, creating a national cartel
1859 First transatlantic cable is laid from Newfoundland to Valentia, Ireland. Fails after 23 days, having been used to send a total of 4,359 words. Total cost of laying the line was $1.2 million.
1861 First Transcontinental telegraph completed.
1866 First successful transatlantic telegraph laid
Western Union merges with major remaining rivals.
1867 Stock ticker service inaugurated.
1870 Western Union introduces the money order service.
1876 Alexander Graham Bell patents the telephone.
1908 AT&T gains control of Western Union. Divests itself of Western Union in 1913.
1924 AT&T offers Teletype system.
1926 Inauguration of the direct stock ticker circuit from New York to San Francisco.
1930 High-speed tickers can print 500 words per minute.
1945 Western Union and Postal Telegraph Company merge.
1962 Western Union offers Telex for international teleprinting.
1974 Western Union places Westar satellite in operation.
1988 Western Union Telegraph Company reorganized as Western Union Corporation. The telecommunications assets were divested and Western Union focuses on money transfers and loan services.

References

Blondheim, Menahem. News over the Wires. Cambridge: Harvard University Press, 1994.

Brock, Gerald. The Telecommunications Industry. Cambridge: Harvard University Press, 1981.

DuBoff, Richard. “Business Demand and the Development of the Telegraph in the United States, 1844-1860.” Business History Review 54 (1980): 461-477.

Field, Alexander. “The Telegraphic Transmission of Financial Asset Prices and Orders to Trade: Implications for Economic Growth, Trading Volume, and Securities Market Regulation.” Research in Economic History 18 (1998).

Field, Alexander. “French Optical Telegraphy, 1793-1855: Hardware, Software, Administration.” Technology and Culture 35 (1994): 315-47.

Field, Alexander. “The Magnetic Telegraph, Price and Quantity Data, and the New Management of Capital.” Journal of Economic History 52 (1992): 401-13.

Gabler, Edwin. The American Telegrapher: A Social History 1860-1900. New Brunswick: Rutgers University Press, 1988.

Goldin, H. H. “Governmental Policy and the Domestic Telegraph Industry.” Journal of Economic History 7 (1947): 53-68.

Israel, Paul. From Machine Shop to Industrial Laboratory. Baltimore: Johns Hopkins, 1992.

Lefferts, Marshall. “The Electric Telegraph: its Influence and Geographical Distribution.” American Geographical and Statistical Society Bulletin, II (1857).

Nonnenmacher, Tomas. “State Promotion and Regulation of the Telegraph Industry, 1845-1860.” Journal of Economic History 61 (2001).

Oslin, George. The Story of Telecommunications. Macon: Mercer University Press, 1992.

Reid, James. The Telegraph in America. New York: Polhemus, 1886.

Thompson, Robert. Wiring a Continent, Princeton: Princeton University Press, 1947.

U.S. Bureau of the Census. Report of the Superintendent of the Census for December 1, 1852, Washington: Robert Armstrong, 1853.

U.S. Bureau of the Census. Historical Statistics of the United States: Colonial Times to 1970: Bicentennial Edition, Washington: GPO, 1976.

Yates, JoAnne. “The Telegraph’s Effect on Nineteenth Century Markets and Firms.” Business and Economic History 15 (1986):149-63.

Citation: Nonnenmacher, Tomas. “History of the U.S. Telegraph Industry”. EH.Net Encyclopedia, edited by Robert Whaples. August 14, 2001. URL http://eh.net/encyclopedia/history-of-the-u-s-telegraph-industry/

An Economic History of Patent Institutions

B. Zorina Khan, Bowdoin College

Introduction

Such scholars as Max Weber and Douglass North have suggested that intellectual property systems had an important impact on the course of economic development. However, questions from other eras are still current today, ranging from whether patents and copyrights constitute optimal policies toward intellectual inventions and their philosophical rationale to the growing concerns of international political economy. Throughout their history, patent and copyright regimes have confronted and accommodated technological innovations that were no less significant and contentious for their time than those of the twenty-first century. An economist from the nineteenth century would have been equally familiar with considerations about whether uniformity in intellectual property rights across countries harmed or benefited global welfare and whether piracy might be to the advantage of developing countries. The nineteenth and early twentieth centuries in particular witnessed considerable variation in the intellectual property policies that individual countries implemented, and this allows economic historians to determine the consequences of different rules and standards.

This article outlines crucial developments in the patent policies of Europe, the United States, and follower countries. The final section discusses the harmonization of international patent laws that occurred after the middle of the nineteenth century.

Europe

The British Patent System

The grant of exclusive property rights vested in patents developed from medieval guild practices in Europe. Britain in particular is noted for the establishment of a patent system which has been in continuous operation for a longer period than any other in the world. English monarchs frequently used patents to reward favorites with privileges, such as monopolies over trade that increased the retail prices of commodities. It was not until the seventeenth century that patents were associated entirely with awards to inventors, when Section 6 of the Statute of Monopolies (21 Jac. I. C. 3, 1623, implemented in 1624) repealed the practice of royal monopoly grants to all except patentees of inventions. The Statute of Monopolies allowed patent rights of fourteen years for “the sole making or working of any manner of new manufacture within this realm to the first and true inventor…” Importers of foreign discoveries were allowed to obtain domestic patent protection in their own right.

The British patent system established significant barriers in the form of prohibitively high costs that limited access to property rights in invention to a privileged few. Patent fees for England alone amounted to £100-£120 ($585) or approximately four times per capita income in 1860. The fee for a patent that also covered Scotland and Ireland could cost as much as £350 pounds ($1,680). Adding a co-inventor was likely to increase the costs by another £24. Patents could be extended only by a private Act of Parliament, which required political influence, and extensions could cost as much as £700. These constraints favored the elite class of those with wealth, political connections or exceptional technical qualifications, and consciously created disincentives for inventors from humble backgrounds. Patent fees provided an important source of revenues for the Crown and its employees, and created a class of administrators who had strong incentives to block proposed reforms.

In addition to the monetary costs, complicated administrative procedures that inventors had to follow implied that transactions costs were also high. Patent applications for England alone had to pass through seven offices, from the Home Secretary to the Lord Chancellor, and twice required the signature of the Sovereign. If the patent were extended to Scotland and Ireland it was necessary to negotiate another five offices in each country. The cumbersome process of patent applications (variously described as “mediaeval” and “fantastical”) afforded ample material for satire, but obviously imposed severe constraints on the ordinary inventor who wished to obtain protection for his discovery. These features testify to the much higher monetary and transactions costs, in both absolute and relative terms, of obtaining property rights to inventions in England in comparison to the United States. Such costs essentially restricted the use of the patent system to inventions of high value and to applicants who already possessed or could raise sufficient capital to apply for the patent. The complicated system also inhibited the diffusion of information and made it difficult, if not impossible, for inventors outside of London to readily conduct patent searches. Patent specifications were open to public inspection on payment of a fee, but until 1852 they were not officially printed, published or indexed. Since the patent could be filed in any of three offices in Chancery, searches of the prior art involved much time and inconvenience. Potential patentees were well advised to obtain the help of a patent agent to aid in negotiating the numerous steps and offices that were required for pursuit of the application in London.

In the second half of the eighteenth century, nation-wide lobbies of manufacturers and patentees expressed dissatisfaction with the operation of the British patent system. However, it was not until after the Crystal Palace Exhibition in 1851 that their concerns were finally addressed, in an effort to meet the burgeoning competition from the United States. In 1852 the efforts of numerous societies and of individual engineers, inventors and manufacturers over many decades were finally rewarded. Parliament approved the Patent Law Amendment Act, which authorized the first major adjustment of the system in two centuries. The new patent statutes incorporated features that drew on testimonials to the superior functioning of the American patent regime. Significant changes in the direction of the American system included lower fees and costs, and the application procedures were rationalized into a single Office of the Commissioners of Patents for Inventions, or “Great Seal Patent Office.”

The 1852 patent reform bills included calls for a U.S.-style examination system but this was amended in the House of Commons and the measure was not included in the final version. Opponents were reluctant to vest examiners with the necessary discretionary power, and pragmatic observers pointed to the shortage of a cadre of officials with the required expertise. The law established a renewal system that required the payment of fees in installments if the patentee wished to maintain the patent for the full term. Patentees initially paid £25 and later installments of £50 (after three years) and £100 (after seven years) to maintain the patent for a full term of fourteen years. Despite the relatively low number of patents granted in England, between 1852 and 1880 the patent office still made a profit of over £2 million. Provision was made for the printing and publication of the patent records. The 1852 reforms undoubtedly instituted improvements over the former opaque procedures, and the lower fees had an immediate impact. Nevertheless, the system retained many of the former features that had implied that patents were in effect viewed as privileges rather than merited rights, and only temporarily abated expressions of dissatisfaction.

One source of dissatisfaction that endured until the end of the nineteenth century was the state of the common law regarding patents. At least partially in reaction to a history of abuse of patent privileges, patents were widely viewed as monopolies that restricted community rights, and thus to be carefully monitored and narrowly construed. Second, British patents were granted “by the grace of the Crown” and therefore were subject to any restrictions that the government cared to impose. According to the statutes, as a matter of national expediency, patents were to be granted if “they be not contrary to the law, nor mischievous to the State, by raising prices of commodities at home, or to the hurt of trade, or generally inconvenient.” The Crown possessed the ability to revoke any patents that were deemed inconvenient or contrary to public policy. After 1855, the government could also appeal to a need for official secrecy to prohibit the publication of patent specifications in order to protect national security and welfare. Moreover, the state could commandeer a patentee’s invention without compensation or consent, although in some cases the patentee was paid a royalty.

Policies towards patent assignments and trade in intellectual property rights also constrained the market for inventions. Ever vigilant to protect an unsuspecting public from fraudulent financial schemes on the scale of the South Sea Bubble, ownership of patent rights was limited to five investors (later extended to twelve). Nevertheless, the law did not offer any relief to the purchaser of an invalid or worthless patent, so potential purchasers were well advised to engage in extensive searches before entering into contracts. When coupled with the lack of assurance inherent in a registration system, the purchase of a patent right involved a substantive amount of risk and high transactions costs — all indicative of a speculative instrument. It is therefore not surprising that the market for assignments and licenses seems to have been quite limited, and even in the year after the 1852 reforms only 273 assignments were recorded.

In 1883 new legislation introduced procedures that were somewhat simpler, with fewer steps. The fees fell to £4 for the initial term of four years, and the remaining £150 could be paid in annual increments. For the first time, applications could be forwarded to the Patent Office through the post office. This statute introduced opposition proceedings, which enabled interested parties to contest the proposed patent within two months of the filing of the patent specifications. Compulsory licenses were introduced in 1883 (and strengthened in 1919 as “licenses of right”) for fear that foreign inventors might injure British industry by refusing to grant other manufacturers the right to use their patent. The 1883 act provided for the employment of “examiners” but their activity was limited to ensuring that the material was patentable and properly described. Indeed, it was not until 1902 that the British system included an examination for novelty, and even then the process was not regarded as stringent as in other countries. Many new provisions were designed to thwart foreign competition. Until 1907 patentees who manufactured abroad were required to also make the patented product in Britain. Between 1919 and 1949 chemical products were excluded from patent protection to counter the threat posed by the superior German chemical industry. Licenses of right enabled British manufacturers to compel foreign patentees to permit the use of their patents on pharmaceuticals and food products.

In sum, changes in the British patent system were initially unforthcoming despite numerous calls for change. Ultimately, the realization that England’s early industrial and technological supremacy was threatened by the United States and other nations in Europe led to a slow process of revisions that lasted well into the twentieth century. One commentator summed up the series of developments by declaring that the British patent system at the time of writing (1967) remained essentially “a modified version of a pre-industrial economic institution.”

The French Patent System

Early French policies towards inventions and innovations in the eighteenth century were based on an extensive but somewhat arbitrary array of rewards and incentives. During this period inventors or introducers of inventions could benefit from titles, pensions that sometimes extended to spouses and offspring, loans (some interest-free), lump-sum grants, bounties or subsidies for production, exemptions from taxes, or monopoly grants in the form of exclusive privileges. This complex network of state policies towards inventors and their inventions was revised but not revoked after the outbreak of the French Revolution.

The modern French patent system was established according to the laws of 1791 (amended in 1800) and 1844. Patentees filed through a simple registration system without any need to specify what was new about their claim, and could persist in obtaining the grant even if warned that the patent was likely to be legally invalid. On each patent document the following caveat was printed: “The government, in granting a patent without prior examination, does not in any manner guarantee either the priority, merit or success of an invention.” The inventor decided whether to obtain a patent for a period of five, ten or fifteen years, and the term could only be extended through legislative action. Protection extended to all methods and manufactured articles, but excluded theoretical or scientific discoveries without practical application, financial methods, medicines, and items that could be covered by copyright.

The 1791 statute stipulated patent fees that were costly, ranging from 300 livres through 1500 livres, based on the declared term of the patent. The 1844 statute maintained this policy since fees were set at 500 francs ($100) for a five year patent, 1000 francs for a 10 year patent and 1500 for a patent of fifteen years, payable in annual installments. In an obvious attempt to limit international diffusion of French discoveries, until 1844 patents were voided if the inventor attempted to obtain a patent overseas on the same invention. On the other hand, the first introducer of an invention covered by a foreign patent would enjoy the same “natural rights” as the patentee of an original invention or improvement. Patentees had to put the invention into practice within two years from the initial grant, or face a tribunal which had the power to repeal the patent, unless the patentee could point to unforeseen events which had prevented his complying with the provisions of the law. The rights of patentees were also restricted if the invention related to items that were controlled by the French government, such as printing presses and firearms.

In return for the limited monopoly right, the patentee was expected to describe the invention in such terms that a workman skilled in the arts could replicate the invention and this information was expected to be made public. However, no provision was made for the publication or diffusion of these descriptions. At least until the law of April 7 1902, specifications were only available in manuscript form in the office in which they had originally been lodged, and printed information was limited to brief titles in patent indexes. The attempt to obtain information on the prior art was also inhibited by restrictions placed on access: viewers had to state their motives; foreigners had to be assisted by French attorneys; and no extract from the manuscript could be copied until the patent had expired.

The state remained involved in the discretionary promotion of invention and innovation through policies beyond the granting of patents. In the first place, the patent statutes did not limit their offer of potential appropriation of returns only to property rights vested in patents. The inventor of a discovery of proven utility could choose between a patent or making a gift of the invention to the nation in exchange for an award from funds that were set aside for the encouragement of industry. Second, institutions such as the Société d’encouragement pour l’industrie nationale awarded a number of medals each year to stimulate new discoveries in areas they considered to be worth pursuing, and also to reward deserving inventors and manufacturers. Third, the award of assistance and pensions to inventors and their families continued well into the nineteenth century. Fourth, at times the Society purchased patent rights and turned the invention over into the public domain.

The basic principles of the modern French patent system were evident in the early French statutes and were retained in later revisions. Since France during the ancien régime was likely the first country to introduce systematic examinations of applications for privileges, it is somewhat ironic that commentators point to the retention of registration without prior examination as the defining feature of the “French system” until 1978. In 1910 fees remained high, although somewhat lower in real terms, at one hundred francs per year. Working requirements were still in place, and patentees were not allowed to satisfy the requirement by importing the article even if the patentee had manufactured it in another European country. However, the requirement was waived if the patentee could persuade the tribunal that the patent was not worked because of unavoidable circumstances.

Similar problems were evident in the market for patent rights. Contracts for patent assignments were filed in the office of the Prefect for the district, but since there was no central source of information it was difficult to trace the records for specific inventions. The annual fees for the entire term of the patent had to be paid in advance if the patent was assigned to a second party. Like patents themselves, assignments and licenses were issued with a caveat emptor clause. This was partially due to the nature of patent property under a registration system, and partially to the uncertainties of legal jurisprudence in this area. For both buyer and seller, the uncertainties associated with the exchange likely reduced the net expected value of trade.

The Spanish Patent System

French patent laws were adopted in its colonies, but also diffused to other countries through its influence on Spain’s system following the Spanish Decree of 1811. The Spanish experience during the nineteenth century is instructive since this country experienced lower rates and levels of economic development than the early industrializers. Like its European neighbors, early Spanish rules and institutions were vested in privileges which had lasting effects that could be detected even in the later period. The per capita rate of patenting in Spain was lower than other major European countries, and foreigners filed the majority of patented inventions. Between 1759 and 1878, roughly one half of all grants were to citizens of other countries, notably France and (to a lesser extent) Britain. Thus, the transfer of foreign technology was a major concern in the political economy of Spain.

This dependence on foreign technologies was reflected in the structure of the Spanish patent system, which permitted patents of introduction as well as patents for invention. Patents of introduction were granted to entrepreneurs who wished to produce foreign technologies that were new to Spain, with no requirement of claims to being the true inventor. Thus, the sole objective of these instruments was to enhance innovation and production in Spain. Since the owners of introduction patents could not prevent third parties from importing similar machines from abroad, they also had an incentive to maintain reasonable pricing structures. Introduction patents had a term of only five years, with a cost of 3000 reales, whereas the fees of patents for invention varied from 1000 reales for five years, 3000 reales for ten years, and 6000 reales for a term of fifteen years. Patentees were required to work the patent within one year, and about a quarter of patents granted between 1826 and 1878 were actually implemented. Since patents of introduction had a brief term, they encouraged the production of items with high expected profits and a quick payback period, after which monopoly rights expired, and the country could benefit from its diffusion.

The German Patent System

The German patent system was influenced by developments in the United States, and itself influenced legislation in Argentina, Austria, Brazil, Denmark, Finland, Holland, Norway, Poland, Russia and Sweden. The German Empire was founded in 1871, and in the first six years each state adopted its own policies. Alsace-Lorraine favored a French-style system, whereas others such as Hamburg and Bremen did not offer patent protection. However, after strong lobbying by supporters of both sides of the debate regarding the merits of patent regimes, Germany passed a unified national Patent Act of 1877.

The 1877 statute created a centralized administration for the grant of a federal patent for original inventions. Industrial entrepreneurs succeeded in their objective of creating a “first to file” system, so patents were granted to the first applicant rather than to the “first and true inventor,” but in 1936 the National Socialists introduced a first to invent system. Applications were examined by examiners in the Patent Office who were expert in their field. During the eight weeks before the grant, patent applications were open to the public and an opposition could be filed denying the validity of the patent. German patent fees were deliberately high to eliminate protection for trivial inventions, with a renewal system that required payment of 30 marks for the first year, 50 marks for the second year, 100 marks for the third, and 50 marks annually after the third year. In 1923 the patent term was extended from fifteen years to eighteen years.

German patent policies encouraged diffusion, innovation and growth in specific industries with a view to fostering economic development. Patents could not be obtained for food products, pharmaceuticals or chemical products, although the process through which such items were produced could be protected. It has been argued that the lack of restrictions on the use of innovations and the incentives to patent around existing processes spurred productivity and diffusion in these industries. The authorities further ensured the diffusion of patent information by publishing claims and specification before they were granted. The German patent system also facilitated the use of inventions by firms, with the early application of a “work for hire” doctrine that allowed enterprises access to the rights and benefits of inventions of employees.

Although the German system was close to the American patent system, it was in other ways more stringent, resulting in patent grants that were lower in number, but likely higher in average value. The patent examination process required that the patent should be new, nonobvious, and also capable of producing greater efficiency. As in the United States, once granted, the courts adopted an extremely liberal attitude in interpreting and enforcing existing patent rights. Penalties for willful infringement included not only fines, but also the possibility of imprisonment. The grant of a patent could be revoked after the first three years if the patent was not worked, if the owner refused to grant licenses for the use of an invention that was deemed in the public interest, or if the invention was primarily being exploited outside of Germany. However, in most cases, a compulsory license was regarded as adequate.

After 1891 a parallel and weaker version of patent protection could be obtained through a gebrauchsmuster or utility patent (sometimes called a petty patent), which was granted through a registration system. Patent protection was available for inventions that could be represented by drawings or models with only a slight degree of novelty, and for a limited term of three years (renewable once for a total life of six years). About twice as many utility patents as examined patents were granted early in the 1930s. Patent protection based on co-existing systems of registration and examination appears to have served distinct but complementary purposes. Remedies for infringement of utility patents also included fines and imprisonment.

Other European Patent Systems

Very few developed countries would now seriously consider eliminating statutory protection for inventions, but in the second half of the nineteenth century the “patent controversy” in Europe pitted advocates of patent rights against an effective abolitionist movement. For a short period, the abolitionists were strong enough to obtain support for dismantling patent systems in a number of European countries. In 1863 the Congress of German Economists declared “patents of invention are injurious to common welfare;” and the movement achieved its greatest victory in Holland, which repealed its patent legislation in 1869. The Swiss cantons did not adopt patent protection until 1888, with an extension in the scope of coverage in 1907. The abolitionists based their arguments on the benefits of free trade and competition, and viewed patents as part of an anticompetitive and protectionist strategy analogous to tariffs on imports. Instead of state-sponsored monopoly awards, they argued, inventors could be rewarded by alternative policies, such as stipends from the government, payments from private industry or associations formed for that purpose, or simply through the lead time that the first inventor acquired over competitors by virtue of his prior knowledge.

According to one authority, the Netherlands eventually reinstated its patent system in 1912 and Switzerland introduced patent laws in 1888 largely because of a keen sense of morality, national pride and international pressure to do so. The appeal to “morality” as an explanatory factor is incapable of explaining the timing and nature of changes in strategies. Nineteenth-century institutions were not exogenous and their introduction or revisions generally reflected the outcome of a self-interested balancing of costs and benefits. The Netherlands and Switzerland were initially able to benefit from their ability to free-ride on the investments that other countries had made in technological advances. As for the cost of lower incentives for discoveries by domestic inventors, the Netherlands was never vaunted as a leader in technological innovation, and this is reflected in their low per capita patenting rates both before and after the period without patent laws. They recorded a total of only 4561 patents in the entire period from 1800 to 1869 and, even after adjusting for population, the Dutch patenting rate in 1869 was a mere 13.4 percent of the U.S. patenting rate. Moreover, between 1851 and 1865 88.6 percent of patents in the Netherlands had been granted to foreigners. After the patent laws were reintroduced in 1912, the major beneficiaries were again foreign inventors, who obtained 79.3 of the patents issued in the Netherlands. Thus, the Netherlands had little reason to adopt patent protection, except for external political pressures and the possibility that some types of foreign investment might be deterred.

The case was somewhat different for Switzerland, which was noted for being innovative, but in a narrow range of pursuits. Since the scale of output and markets were quite limited, much of Swiss industry generated few incentives for invention. A number of the industries in which the Swiss excelled, such as hand-made watches, chocolates and food products, were less susceptible to invention that warranted patent protection. For instance, despite the much larger consumer market in the United States, during the entire nineteenth century fewer than 300 U.S. patents related to chocolate composition or production. Improvements in pursuits such as watch-making could be readily protected by trade secrecy as long as the industry remained artisanal. However, with increased mechanization and worker mobility, secrecy would ultimately prove to be ineffective, and innovators would be unable to appropriate returns without more formal means of exclusion.

According to contemporary observers, the Swiss resolved to introduce patent legislation not because of a sudden newfound sense of morality, but because they feared that American manufacturers were surpassing them as a result of patented innovations in the mass production of products such as boots, shoes and watches. Indeed, before 1890, American inventors obtained more than 2068 patents on watches, and the U.S. watch making industry benefited from mechanization and strong economies of scale that led to rapidly falling prices of output, making them more competitive internationally. The implications are that the rates of industrial and technical progress in the United States were more rapid, and technological change was rendering artisanal methods obsolete in products with mass markets. Thus, the Swiss endogenously adopted patent laws because of falling competitiveness in their key industrial sectors.

What was the impact of the introduction of patent protection in Switzerland? Foreign inventors could obtain patents in the United States regardless of their domestic legislation, so we can approach this question tangentially by examining the patterns of patenting in the United States by Swiss residents before and after the 1888 reforms. Between 1836 and 1888, Swiss residents obtained a grand total of 585 patents in the United States. Fully a third of these patents were for watches and music boxes, and only six were for textiles or dyeing, industries in which Switzerland was regarded as competitive early on. Swiss patentees were more oriented to the international market, rather than the small and unprotected domestic market where they could not hope to gain as much from their inventions. For instance, in 1872 Jean-Jacques Mullerpack of Basel collaborated with Leon Jarossonl of Lille, France to invent an improvement in dyeing black with aniline colors, which they assigned to William Morgan Brown of London, England. Another Basel inventor, Alfred Kern, assigned his 1883 patent for violet aniline dyes to the Badische Anilin and Soda Fabrik of Mannheim, Germany.

After the patent reforms, the rate of Swiss patenting in the United States immediately increased. Swiss patentees obtained an annual average of 32.8 patents in the United States in the decade before the patent law was enacted in Switzerland. After the Swiss allowed patenting, this figure increased to an average of 111 each year in the following six years, and in the period from 1895 to 1900 a total of 821 Swiss patents were filed in the United States. The decadal rate of patenting per million residents increased from 111.8 for the ten years up to the reforms, to 451 per million residents in the 1890s, 513 in the 1900s, 458 in the 1910s and 684 in the 1920s. U.S. statutes required worldwide novelty, and patents could not be granted for discoveries that had been in prior use, so the increase was not due to a backlog of trade secrets that were now patented.

Moreover, the introduction of Swiss patent laws also affected the direction of inventions that Swiss residents patented in the United States. After the passage of the law, such patents covered a much broader range of inventions, including gas generators, textile machines, explosives, turbines, paints and dyes, and drawing instruments and lamps. The relative importance of watches and music boxes immediately fell from about a third before the reforms to 6.2 percent and 2.1 percent respectively in the 1890s and even further to 3.8 percent and 0.3 percent between 1900 and 1909. Another indication that international patenting was not entirely unconnected to domestic Swiss inventions can be discerned from the fraction of Swiss patents (filed in the U.S.) that related to process innovations. Before 1888, 21 percent of the patent specifications mentioned a process. Between 1888 and 1907, the Swiss statutes included the requirement that patents should include mechanical models, which precluded patenting of pure processes. The fraction of specifications that mentioned a process fell during the period between 1888 and 1907, but returned to 22 percent when the restriction was modified in 1907.

In short, although the Swiss experience is often cited as proof of the redundancy of patent protection, the limitations of this special case should be taken into account. The domestic market was quite small and offered minimal opportunity or inducements for inventors to take advantage of economies of scale or cost-reducing innovations. Manufacturing tended to cluster in a few industries where innovation was largely irrelevant, such as premium chocolates, or in artisanal production that was susceptible to trade secrecy, such as watches and music boxes. In other areas, notably chemicals, dyes and pharmaceuticals, Swiss industries were export-oriented, but even today their output tends to be quite specialized and high-valued rather than mass-produced. Export-oriented inventors were likely to have been more concerned about patent protection in the important overseas markets, rather than in the home market. Thus, between 1888 and 1907, although Swiss laws excluded patents for chemicals, pharmaceuticals and dyes, 20.7 percent of the Swiss patents filed in the United States were for just these types of inventions. The scanty evidence on Switzerland suggests that the introduction of patent rights was accompanied by changes in the rate and direction of inventive activity. In any event, both the Netherlands and Switzerland featured unique circumstances that seem to hold few lessons for developing countries today.

The Patent System in the United States

The United States stands out as having established one of the most successful patent systems in the world. Over six million patents have been issued since 1790, and American industrial supremacy has frequently been credited to its favorable treatment of inventors and the inducements held out for inventive activity. The first Article of the U.S. Constitution included a clause to “promote the Progress of Science and the useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Congress complied by passing a patent statute in April 1790. The United States created in 1836 the first modern patent institution in the world, a system whose features differed in significant respects from those of other major countries. The historical record indicates that the legislature’s creation of a uniquely American system was a deliberate and conscious process of promoting open access to the benefits of private property rights in inventions. The laws were enforced by a judiciary which was willing to grapple with difficult questions such as the extent to which a democratic and market-oriented political economy was consistent with exclusive rights. Courts explicitly attempted to implement decisions that promoted economic growth and social welfare.

The primary feature of the “American system” is that all applications are subject to an examination for conformity with the laws and for novelty. An examination system was set in place in 1790, when a select committee consisting of the Secretary of State (Thomas Jefferson), the Attorney General and the Secretary of War scrutinized the applications. These duties proved to be too time-consuming for highly ranked officials who had other onerous duties, so three years later it was replaced by a registration system. The validity of patents was left up to the district courts, which had the power to set in motion a process that could end in the repeal of the patent. However by the 1830s this process was viewed as cumbersome and the statute that was passed in 1836 set in place the essential structure of the current patent system. In particular, the 1836 Patent Law established the Patent Office, whose trained and technically qualified employees were authorized to examine applications. Employees of the Patent Office were not permitted to obtain patent rights. In order to constrain the ability of examiners to engage in arbitrary actions, the applicant was given the right to file a bill in equity to contest the decisions of the Patent Office with the further right of appeal to the Supreme Court of the United States.

American patent policy likewise stands out in its insistence on affordable fees. The legislature debated the question of appropriate fees, and the first patent law in 1790 set the rate at the minimal sum of $3.70 plus copy costs. In 1793 the fees were increased to $30, and were maintained at this level until 1861. In that year, they were raised to $35, and the term of the patent was changed from fourteen years (with the possibility of an extension) to seventeen years (with no extensions.) The 1869 Report of the Commissioner of Patents compared the $35 fee for a US patent to the significantly higher charges in European countries such as Britain, France, Russia ($450), Belgium ($420) and Austria ($350). The Commissioner speculated that both the private and social costs of patenting were lower in a system of impartial specialized examiners, than under a system where similar services were performed on a fee-per-service basis by private solicitors. He pointed out that in the U.S. the fees were not intended to exact a price for the patent privilege or to raise revenues for the state – the disclosure of information was the sole price for the patent property right – rather, they were imposed merely to cover the administrative expenses of the Office.

The basic parameters of the U.S. patent system were transparent and predictable, in itself an aid to those who wished to obtain patent rights. In addition, American legislators were concerned with ensuring that information about the stock of patented knowledge was readily available and diffused rapidly. As early as 1805 Congress stipulated that the Secretary of State should publish an annual list of patents granted the preceding year, and after 1832 also required the publication in newspapers of notices regarding expired patents. The Patent Office itself was a source of centralized information on the state of the arts. However, Congress was also concerned with the question of providing for decentralized access to patent materials. The Patent Office maintained repositories throughout the country, where inventors could forward their patent models at the expense of the Patent Office. Rural inventors could apply for patents without significant obstacles, because applications could be submitted by mail free of postage.

American laws employed the language of the English statute in granting patents to “the first and true inventor.” Nevertheless, unlike in England, the phrase was used literally, to grant patents for inventions that were original in the world, not simply within U.S. borders. American patent laws provided strong protection for citizens of the United States, but varied over time in its treatment of foreign inventors. Americans could not obtain patents for imported discoveries, but the earliest statutes of 1793, 1800 and 1832, restricted patent property to citizens or to residents who declared that they intended to become citizens. As such, while an American could not appropriate patent rights to a foreign invention, he could freely use the idea without any need to bear licensing or similar costs that would otherwise have been due if the inventor had been able to obtain a patent in this country. In 1836, the stipulations on citizenship or residency were removed, but were replaced with discriminatory patent fees: foreigners could obtain a patent in the U.S. for a fee of three hundred dollars, or five hundred if they were British. After 1861 patent rights (with the exception of caveats) were available to all applicants on the same basis without regard to nationality.

The American patent system was based on the presumption that social welfare coincided with the individual welfare of inventors. Accordingly, legislators rejected restrictions on the rights of American inventors. However, the 1832 and 1836 laws stipulated that foreigners had to exploit their patented invention within eighteen months. These clauses seem to have been interpreted by the courts in a fairly liberal fashion, since alien patentees “need not prove that they hawked the patented improvement to obtain a market for it, or that they endeavored to sell it to any person, but that it rested upon those who sought to defeat the patent to prove that the plaintiffs neglected or refused to sell the patented invention for reasonable prices when application was made to them to purchase.” Such provisions proved to be temporary aberrations and were not included in subsequent legislation. Working requirements or compulsory licenses were regarded as unwarranted infringements of the rights of “meritorious inventors,” and incompatible with the philosophy of U.S. patent grants. Patentees were not required to pay annuities to maintain their property, there were no opposition proceedings, and once granted a patent could not be revoked unless there was proven evidence of fraud.

One of the advantages of a system that secures property rights is that it facilitates contracts and trade. Assignments provide a straightforward index of the effectiveness of the American system, since trade in inventions would hardly proliferate if patent rights were uncertain or worthless. An extensive national network of licensing and assignments developed early on, aided by legal rulings that overturned contracts for useless or fraudulent patents. In 1845 the Patent Office recorded 2,108 assignments, which can be compared to the cumulative stock of 7188 patents that were still in force in that year. By the 1870s the number of assignments averaged over 9000 assignments per year, and this increased in the next decade to over 12,000 transactions recorded annually. This flourishing market for patented inventions provided an incentive for further inventive activity for inventors who were able to appropriate the returns from their efforts, and also linked patents and productivity growth.

Property rights are worth little unless they can be legally enforced in a consistent, certain, and predictable manner. A significant part of the explanation for the success of the American intellectual property system relates to the efficiency with which the laws were interpreted and implemented. United States federal courts from their inception attempted to establish a store of doctrine that fulfilled the intent of the Constitution to secure the rights of intellectual property owners. The judiciary acknowledged that inventive efforts varied with the extent to which inventors could appropriate the returns on their discoveries, and attempted to ensure that patentees were not unjustly deprived of the benefits from their inventions. Numerous reported decisions before the early courts declared that, rather than unwarranted monopolies, patent rights were “sacred” and to be regarded as the just recompense to inventive ingenuity. Early courts had to grapple with a number of difficult issues, such as the appropriate measure of damages, disputes between owners of conflicting patents, and how to protect the integrity of contracts when the law altered. Changes inevitably occurred when litigants and judiciary both adapted to a more complex inventive and economic environment. However, the system remained true to the Constitution in the belief that the defense of rights in patented invention was important in fostering industrial and economic development.

Economists such as Joseph Schumpeter have linked market concentration and innovation, and patent rights are often felt to encourage the establishment of monopoly enterprises. Thus, an important aspect of the enforcement of patents and intellectual property in general depends on competition or antitrust policies. The attitudes of the judiciary towards patent conflicts are primarily shaped by their interpretation of the monopoly aspect of the patent grant. The American judiciary in the early nineteenth century did not recognize patents as monopolies, arguing that patentees added to social welfare through innovations which had never existed before, whereas monopolists secured to themselves rights that already belong to the public. Ultimately, the judiciary came to openly recognize that the enforcement and protection of all property rights involved trade-offs between individual monopoly benefits and social welfare.

The passage of the Sherman Act in 1890 was associated with a populist emphasis on the need to protect the public from corporate monopolies, including those based on patent protection, and raised the prospect of conflicts between patent policies and the promotion of social welfare through industrial competition. Firms have rarely been charged directly with antitrust violations based on patent issues. At the same time, a number of landmark restraint of trade lawsuits have involved technological innovators. In the early decades of the 20th century these included innovative enterprises such as John Deere & Co., American Can and International Harvester, through to the numerous cases since 1970 against IBM, Xerox, Eastman Kodak and, most recently, Intel and Microsoft. The evidence suggests that, holding other factors constant, more innovative firms and those with larger patent stocks are more likely to be charged with antitrust violations. A growing fraction of cases involve firms jointly charged with antitrust violations that are linked to patent based market power and to concerns about “innovation markets.”

The Japanese Patent System

Japan emerged from the Meiji era as a follower nation which deliberately designed institutions to try to emulate those of the most advanced industrial countries. Accordingly, in 1886 Takahashi Korekiyo was sent on a mission to examine patent systems in Europe and the United States. The Japanese envoy was not favorably impressed with the European countries in this regard. Instead, he reported: ” … we have looked about us to see what nations are the greatest, so that we could be like them; … and we said, `What is it that makes the United States such a great nation?’ and we investigated and we found it was patents, and we will have patents.” The first national patent statute in Japan was passed in 1888, and copied many features of the U.S. system, including the examination procedures.

However, even in the first statute, differences existed that reflected Japanese priorities and the “wise eclecticism of Japanese legislators.” For instance, patents were not granted to foreigners, protection could not be obtained for fashion, food products, or medicines, patents that were not worked within three years could be revoked, and severe remedies were imposed for infringement, including penal servitude. After Japan became a signatory of the Paris Convention a new law was passed in 1899, which amended existing legislation to accord with the agreements of the Convention, and extended protection to foreigners. The influence of the German laws were evident in subsequent reforms in 1909 (petty or utility patents were protected) and 1921 (protection was removed from chemical products, work for hire doctrines were adopted, and an opposition procedure was introduced). The Act of 1921 also permitted the state to revoke a patent grant on payment of appropriate compensation if it was deemed in the public interest. Medicines, food and chemical products could not be patented, but protection could be obtained for processes relating to their manufacture.

The modern Japanese patent system is an interesting amalgam of features drawn from the major patent institutions in the world. Patent applications are filed, and the applicants then have seven years within which they can request an examination. Before 1996 examined patents were published prior to the actual grant, and could be opposed before the final grant; but at present, opposition can only occur in the first six months after the initial grant. Patents are also given for utility models or incremental inventions which are required to satisfy a lower standard of novelty and nonobviousness and can be more quickly commercialized. It has been claimed that the Japanese system favors the filing of a plethora of narrowly defined claims for utility models that build on the more substantive contributions of patent grants, leading to the prospect of an anti-commons through “patent flooding.” Others argue that utility models aid diffusion and innovation in the early stages of the patent term, and that the pre-grant publication of patent specifications also promotes diffusion.

Harmonization of International Patent Laws

Today very few developed countries would seriously consider eliminating statutory protection for intellectual property, but in the second half of the nineteenth century the “patent controversy” pitted advocates of patent rights against an effective abolitionist movement. For a short period the latter group was strong enough to obtain support in favor of dismantling the patent systems in countries such as England, and in 1863 the Congress of German Economists declared “patents of invention are injurious to common welfare.” The movement achieved its greatest victory in Holland, which repealed its patent legislation in 1869. The abolitionists based their arguments on the benefits of free trade and competition and viewed patents as part of a protectionist strategy analogous to tariffs. Instead of monopoly awards to inventors, their efforts could be rewarded by alternative policies, such as stipends from the government, payments from private industry or associations formed for that purpose, or simply through the lead time that the first inventor acquired over competitors by virtue of his prior knowledge.

The decisive victory of the patent proponents shifted the focus of interest to the other extreme, and led to efforts to attain uniformity in intellectual property rights regimes across countries. Part of the impetus for change occurred because the costs of discordant national rules became more burdensome as the volume of international trade in industrial products grew over time. Americans were also concerned about the lack of protection accorded to their exhibits in the increasingly more prominent World’s Fairs. Indeed, the first international patent convention was held in Austria in 1873, at the suggestion of U.S. policy makers, who wanted to be certain that their inventors would be adequately protected at the International Exposition in Vienna that year. It also yielded an opportunity to protest the provisions in Austrian law which discriminated against foreigners, including a requirement that patents had to be worked within one year or risk invalidation. The Vienna Convention adopted several resolutions, including a recommendation that the United States opposed, in favor of compulsory licenses if they were deemed in the public interest. However, the convention followed U.S. lead and did not approve compulsory working requirements.

International conventions proliferated in subsequent years, and their tenor tended to reflect the opinions of the conveners. Their objective was not to reach compromise solutions that would reflect the needs and wishes of all participants, but rather to promote preconceived ideas. The overarching goal was to pursue uniform international patent laws, although there was little agreement about the finer points of these laws. It became clear that the goal of complete uniformity was not practicable, given the different objectives, ideologies and economic circumstances of participants. Nevertheless, in 1884 the International Union for the Protection of Industrial Property was signed by Belgium, Portugal, France, Guatemala, Italy, the Netherlands, San Salvador, Serbia, Spain and Switzerland. The United States became a member in 1887, and a significant number of developing countries followed suit, including Brazil, Bulgaria, Cuba, the Dominican Republic, Ceylon, Mexico, Trinidad and Tobago and Indonesia, among others.

The United States was the most prolific patenting nation in the world, many of the major American enterprises owed their success to patents and were expanding into international markets, and the U.S. patent system was recognized as the most successful. It is therefore not surprising that patent harmonization implied convergence towards the American model despite resistance from other nations. Countries such as Germany were initially averse to extending equal protection to foreigners because they feared that their domestic industry would be overwhelmed by American patents. Ironically, because its patent laws were the most liberal towards patentees, the United States found itself with weaker bargaining abilities than nations who could make concessions by changing their provisions. The U.S. pressed for the adoption of reciprocity (which would ensure that American patentees were treated as favorably abroad as in the United States) but this principle was rejected in favor of “national treatment” (American patentees were to be granted the same rights as nationals of the foreign country). This likely influenced the U.S. tendency to use bilateral trade sanctions rather than multilateral conventions to obtain reforms in international patent policies.

It was commonplace in the nineteenth century to rationalize and advocate close links between trade policies, protection, and international laws regarding intellectual property. These links were evident at the most general philosophical level, and at the most specific, especially in terms of compulsory working requirements and provisions to allow imports by the patentee. For instance, the 1880 Paris Convention considered the question of imports of the patented product by the patentee. According to the laws of France, Mexico and Tunisia, such importation would result in the repeal of the patent grant. The Convention inserted an article that explicitly ruled out forfeiture of the patent under these circumstances, which led some French commentators to argue that “the laws on industrial property… will be truly disastrous if they do not have a counterweight in tariff legislation.” The movement to create an international patent system elucidated the fact that intellectual property laws do not exist in a vacuum, but are part of a bundle of rights that are affected by other laws and policies.

Conclusion

Appropriate institutions to promote creations in the material and intellectual sphere are especially critical because ideas and information are public goods that are characterized by nonrivalry and nonexclusion. Once the initial costs are incurred, ideas can be reproduced at zero marginal cost and it may be difficult to exclude others from their use. Thus, in a competitive market, public goods may suffer from underprovision or may never be created because of a lack of incentive on the part of the original provider who bears the initial costs but may not be able to appropriate the benefits. Market failure can be ameliorated in several ways, for instance through government provision, rewards or subsidies to original creators, private patronage, and through the creation of intellectual property rights.

Patents allow the initial producers a limited period during which they are able to benefit from a right of exclusion. If creativity is a function of expected profits, these grants to inventors have the potential to increase social production possibilities at lower cost. Disclosure requirements promote diffusion, and the expiration of the temporary monopoly right ultimately adds to the public domain. Overall welfare is enhanced if the social benefits of diffusion outweigh the deadweight and social costs of temporary exclusion. This period of exclusion may be costly for society, especially if future improvements are deterred, and if rent-seeking such as redistributive litigation results in wasted resources. Much attention has also been accorded to theoretical features of the optimal system, including the breadth, longevity, and height of patent and copyright grants.

However, strongly enforced rights do not always benefit the producers and owners of intellectual property rights, especially if there is a prospect of cumulative invention where follow-on inventors build on the first discovery. Thus, more nuanced models are ambivalent about the net welfare benefits of strong exclusive rights to inventions. Indeed, network models imply that the social welfare of even producers may increase from weak enforcement if more extensive use of the product increases the value to all users. Under these circumstances, the patent owner may benefit from the positive externalities created by piracy. In the absence of royalties, producers may appropriate returns through ancillary means, such as the sale of complementary items or improved reputation. In a variant of the durable-goods monopoly problem, it has been shown that piracy can theoretically increase the demand for products by ensuring that producers can credibly commit to uniform prices over time. Also in this vein, price and/or quality discrimination of non-private goods across pirates and legitimate users can result in net welfare benefits for society and for the individual firm. If the cost of imitation increases with quality, infringement can also benefit society if it causes firms to adopt a strategy of producing higher quality commodities.

Economic theorists who are troubled by the imperfections of intellectual property grants have proposed alternative mechanisms that lead to more satisfactory mathematical solutions. Theoretical analyses have advanced our understanding in this area, but such models by their nature cannot capture many complexities. They tend to overlook such factors as the potential for greater corruption or arbitrariness in the administration of alternatives to patents. Similarly, they fail to appreciate the role of private property rights in conveying information and facilitating markets, and their value in reducing risk and uncertainty for independent inventors with few private resources. The analysis becomes even less satisfactory when producers belong to different countries than consumers. Thus, despite the flurry of academic research on the economics of intellectual property, we have not progressed far beyond Fritz Machlup’s declaration that our state of knowledge does not allow to us to either recommend the introduction or the removal of such systems. Existing studies leave a wide area of ambiguity about the causes and consequences of institutional structures in general, and their evolution across time and region.

In the realm of intellectual property, questions from four centuries ago are still current, ranging from its philosophical underpinnings, to whether patents and copyrights constitute optimal policies towards intellectual inventions, to the growing concerns of international political economy. A number of scholars are so impressed with technological advances in the twenty-first century that they argue we have reached a critical juncture where we need completely new institutions. Throughout their history, patent and copyright regimes have confronted and accommodated technological innovations that were no less significant and contentious for their time. An economist from the nineteenth century would have been equally familiar with considerations about whether uniformity in intellectual property rights across countries harmed or benefited global welfare, and whether piracy might be to the advantage of developing countries. Similarly, the link between trade and intellectual property rights that informs the TRIPS (trade-related aspects of intellectual property rights) agreement was quite standard two centuries ago.

Today the majority of patents are filed in developed countries by the residents of developed countries, most notably those of Japan and the United States. The developing countries of the twenty-first century are under significant political pressure to adopt stronger patent laws and enforcement, even though few patents are filed by residents of the developing countries. Critics of intellectual property rights point to costs, such as monopoly rents and higher barriers to entry, administrative costs, outflows of royalty payments to foreign entities, and a lack of indigenous innovation. Other studies, however, have more optimistic findings regarding the role of patents in economic and social development. They suggest that stronger protection can encourage more foreign direct investment, greater access to technology, and increased benefits from trade openness. Moreover, both economic history and modern empirical research indicate that stronger patent rights and more effective markets in invention can, by encouraging and enabling the inventiveness of ordinary citizens of developing countries, help to increase social and economic welfare.

Patents Statistics for France, Britain, the United States and Germany, 1790-1960
YEAR FRANCE BRITAIN U.S. GERMANY
1790 . 68 3 .
1791 34 57 33 .
1792 29 85 11 .
1793 4 43 20 .
1794 0 55 22 .
1795 1 51 12 .
1796 8 75 44 .
1797 4 54 51 .
1798 10 77 28 .
1799 22 82 44 .
1800 16 96 41 .
1801 34 104 44 .
1802 29 107 65 .
1803 45 73 97 .
1804 44 60 84 .
1805 63 95 57 .
1806 101 99 63 .
1807 66 94 99 .
1808 61 95 158 .
1809 52 101 203 .
1810 93 108 223 .
1811 66 115 215 0
1812 96 119 238 2
1813 88 142 181 2
1814 53 96 210 1
1815 77 102 173 10
1816 115 118 206 10
1817 162 103 174 16
1818 153 132 222 18
1819 138 101 156 10
1820 151 97 155 10
1821 180 109 168 11
1822 175 113 200 8
1823 187 138 173 22
1824 217 180 228 25
1825 321 250 304 17
1826 281 131 323 67
1827 333 150 331 69
1828 388 154 368 87
1829 452 130 447 59
1830 366 180 544 57
1831 220 150 573 34
1832 287 147 474 46
1833 431 180 586 76
1834 576 207 630 66
1835 556 231 752 73
1836 582 296 702 65
1837 872 256 426 46
1838 1312 394 514 104
1839 730 411 404 125
1840 947 440 458 156
1841 925 440 490 162
1842 1594 371 488 153
1843 1397 420 493 160
1844 1863 450 478 158
1845 2666 572 473 256
1846 2750 493 566 252
1847 2937 493 495 329
1848 1191 388 583 256
1849 1953 514 984 253
1850 2272 523 883 308
1851 2462 455 752 274
1852 3279 1384 885 272
1853 4065 2187 844 287
1854 4563 1878 1755 276
1855 5398 2046 1881 287
1856 5761 1094 2302 393
1857 6110 2028 2674 414
1858 5828 1954 3455 375
1859 5439 1977 4160 384
1860 6122 2063 4357 550
1861 5941 2047 3020 551
1862 5859 2191 3214 630
1863 5890 2094 3773 633
1864 5653 2024 4630 557
1865 5472 2186 6088 609
1866 5671 2124 8863 549
1867 6098 2284 12277 714
1868 6103 2490 12526 828
1869 5906 2407 12931 616
1870 3850 2180 12137 648
1871 2782 2376 11659 458
1872 4875 2771 12180 958
1873 5074 2974 11616 1130
1874 5746 3162 12230 1245
1875 6007 3112 13291 1382
1876 6736 3435 14169 1947
1877 7101 3317 12920 1604
1878 7981 3509 12345 4200
1879 7828 3524 12165 4410
1880 7660 3741 12902 3960
1881 7813 3950 15500 4339
1882 7724 4337 18091 4131
1883 8087 3962 21162 4848
1884 8253 9983 19118 4459
1885 8696 8775 23285 4018
1886 9011 9099 21767 4008
1887 8863 9226 20403 3882
1888 8669 9309 19551 3923
1889 9287 10081 23324 4406
1890 9009 10646 25313 4680
1891 9292 10643 22312 5550
1892 9902 11164 22647 5900
1893 9860 11600 22750 6430
1894 10433 11699 19855 6280
1895 10257 12191 20856 5720
1896 11430 12473 21822 5410
1897 12550 14210 22067 5440
1898 12421 14167 20377 5570
1899 12713 14160 23278 7430
1900 12399 13710 24644 8784
1901 12103 13062 25546 10508
1902 12026 13764 27119 10610
1903 12469 15718 31029 9964
1904 12574 15089 30258 9189
1905 12953 14786 29775 9600
1906 13097 14707 31170 13430
1907 13170 16272 35859 13250
1908 13807 16284 32735 11610
1909 13466 15065 36561 11995
1910 16064 15269 35141 12100
1911 15593 17164 32856 12640
1912 15737 15814 36198 13080
1913 15967 16599 33917 13520
1914 12161 15036 39892 12350
1915 5056 11457 43118 8190
1916 3250 8424 43892 6271
1917 4100 9347 40935 7399
1918 4400 10809 38452 7340
1919 10500 12301 36797 7766
1920 18950 14191 37060 14452
1921 17700 17697 37798 15642
1922 18300 17366 38369 20715
1923 19200 17073 38616 20526
1924 19200 16839 42584 18189
1925 18000 17199 46432 15877
1926 18200 17333 44733 15500
1927 17500 17624 41717 15265
1928 22000 17695 42357 15598
1929 24000 18937 45267 20202
1930 24000 20888 45226 26737
1931 24000 21949 51761 25846
1932 21850 21150 53504 26201
1933 20000 17228 48807 21755
1934 19100 16890 44452 17011
1935 18000 17675 40663 16139
1936 16700 17819 39831 16750
1937 16750 17614 37738 14526
1938 14000 19314 38102 15068
1939 15550 17605 43118 16525
1940 10100 11453 42323 14647
1941 8150 11179 41171 14809
1942 10000 7962 38514 14648
1943 12250 7945 31101 14883
1944 11650 7712 28091 .
1945 7360 7465 25712 .
1946 11050 8971 21859 .
1947 13500 11727 20191 .
1948 13700 15558 24007 .
1949 16700 20703 35224 .
1950 17800 13509 43219 .
1951 25200 13761 44384 27767
1952 20400 21380 43717 37179
1953 43000 17882 40546 37113
1954 34000 17985 33910 19140
1955 23000 20630 30535 14760
1956 21900 19938 46918 18150
1957 23000 25205 42873 20467
1958 24950 18531 48450 19837
1959 41600 18157 52509 22556
1960 35000 26775 47286 19666

Additional Reading

Khan, B. Zorina. The Democratization of Invention: Patents and Copyrights in American Economic Development. New York: Cambridge University Press, 2005.

Khan, B. Zorina, and Kenneth L. Sokoloff. “Institutions and Technological Innovation during Early Economic Growth, 1790-1930.” NBER Working Paper No. 10966. Cambridge, MA: December 2004. (Available at www.nber.org.)

Bibliography

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Bugbee, Bruce. The Genesis of American Patent and Copyright Law. Washington, DC: Public Affairs Press, 1967.

Coulter, Moureen. Property in Ideas: The Patent Question in Mid-Victorian England. Kirksville, MO: Thomas Jefferson Press, 1991

Dutton, H. I. The Patent System and Inventive Activity during the Industrial Revolution, 1750-1852, Manchester, UK: Manchester University Press, 1984.

Epstein, R. “Industrial Inventions: Heroic or Systematic?” Quarterly Journal of Economics 40 (1926): 232-72.

Gallini, Nancy T. “The Economics of Patents: Lessons from Recent U.S. Patent Reform.” Journal of Economic Perspectives 16, no. 2 (2002): 131–54.

Gilbert, Richard and Carl Shapiro. “Optimal Patent Length and Breadth.” Rand Journal of Economics 21 (1990): 106-12.

Gilfillan, S. Colum. The Sociology of Invention. Cambridge, MA: Follett, 1935.

Gomme, A. A. Patents of Invention: Origin and Growth of the Patent System in Britain, London: Longmans Green, 1946.

Harding, Herbert. Patent Office Centenary, London: Her Majesty’s Stationery Office, 1953.

Hilaire-Pérez, Liliane. Inventions et Inventeurs en France et en Angleterre au XVIIIe siècle. Lille: Université de Lille, 1994.

Hilaire-Pérez, Liliane. L’invention technique au siècle des Lumières. Paris: Albin Michel, 2000.

Jeremy, David J., Transatlantic Industrial Revolution: The Diffusion of Textile Technologies between Britain and America, 1790-1830s. Cambridge, MA: MIT Press, 1981.

Khan, B. Zorina. “Property Rights and Patent Litigation in Early Nineteenth-Century America.” Journal of Economic History 55, no. 1 (1995): 58-97.

Khan, B. Zorina. “Married Women’s Property Right Laws and Female Commercial Activity.” Journal of Economic History 56, no. 2 (1996): 356-88.

Khan, B. Zorina. “Federal Antitrust Agencies and Public Policy towards Patents and Innovation.” Cornell Journal of Law and Public Policy 9 (1999): 133-69.

Khan, B. Zorina, “`Not for Ornament': Patenting Activity by Women Inventors.” Journal of Interdisciplinary History 33, no. 2 (2000): 159-95.

Khan, B. Zorina. “Technological Innovations and Endogenous Changes in U.S. Legal Institutions, 1790-1920.” NBER Working Paper No. 10346. Cambridge, MA: March 2004. (available at www.nber.org)

Khan, B. Zorina, and Kenneth L. Sokoloff. “‘Schemes of Practical Utility’: Entrepreneurship and Innovation among ‘Great Inventors’ in the United States, 1790-1865.” Journal of Economic History 53, no. 2 (1993): 289-307.

Khan, B. Zorina, and Kenneth L. Sokoloff. “Entrepreneurship and Technological Change in Historical Perspective.” Advances in the Study of Entrepreneurship, Innovation, and Economic Growth 6 (1993): 37-66.

Khan, B. Zorina, and Kenneth L. Sokoloff. “Two Paths to Industrial Development and Technological Change.” In Technological Revolutions in Europe, 1760-1860, edited by Maxine Berg and Kristine Bruland. London: Edward Elgar, London, 1997.

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Khan, B. Zorina, and Kenneth L. Sokoloff. “Innovation of Patent Systems in the Nineteenth Century: A Comparative Perspective.” Unpublished manuscript (2001).

Khan, B. Zorina, and Kenneth L. Sokoloff. “Institutions and Democratic Invention in Nineteenth-century America.” American Economic Review Papers and Proceedings 94 (2004): 395-401.

Khan, B. Zorina, and Kenneth L. Sokoloff. “Institutions and Technological Innovation during Early Economic Growth: Evidence from the Great Inventors of the United States, 1790-1930.” In Institutions and Economic Growth, edited by Theo Eicher and Cecilia Garcia-Penalosa. Cambridge, MA: MIT Press, 2006.

Lamoreaux, Naomi R. and Kenneth L. Sokoloff. “Long-Term Change in the Organization of Inventive Activity.” Science, Technology and the Economy 93 (1996): 1286-92.

Lamoreaux, Naomi R. and Kenneth L. Sokoloff. “The Geography of Invention in the American Glass Industry, 1870-1925.” Journal of Economic History 60, no. 3 (2000): 700-29.

Lamoreaux, Naomi R. and Kenneth L. Sokoloff. “Market Trade in Patents and the Rise of a Class of Specialized Inventors in the Nineteenth-century United States.” American Economic Review 91, no. 2 (2001): 39-44.

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Machlup, Fritz. “The Supply of Inventors and Inventions.” In The Rate and Direction of Inventive Activity, edited by R. Nelson. Princeton: Princeton University Press, 1962.

Machlup, Fritz, and Edith Penrose. “The Patent Controversy in the Nineteenth Century.” Journal of Economic History 10, no. 1 (1950): 1-29.

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Citation: Khan, B. “An Economic History of Patent Institutions”. EH.Net Encyclopedia, edited by Robert Whaples. March 16, 2008. URL http://eh.net/encyclopedia/an-economic-history-of-patent-institutions/

Mechanical Cotton Picker

Donald Holley, University of Arkansas at Monticello

Until World War II, the Cotton South remained poor, backward, and un-mechanized. With minor exceptions, most tasks — plowing, cultivating, and finally harvesting cotton — were done by hand. Though sharecropping stifled the region’s attempts to mechanize, too many farmers, both tenants and owners, were trying to survive on small, uneconomical farms, trapping themselves in poverty. From 1910 to 1970 the Great Migration, which included whites as well as blacks, reduced the region’s oversupply of small farmers and embodied a tremendous success story for both migrants and the region itself. The mechanical cotton picker played an indispensable role in the transition from the prewar South of over-population, sharecropping, and hand labor to the capital-intensive agriculture of the postwar South.

Inventions and Inventors

In 1850 Samuel S. Rembert and Jedediah Prescott of Memphis, Tennessee, received the first patent for a cotton harvester from the U.S. Patent Office, but it was almost a century later that a mechanical picker was commercially produced. The late nineteenth century was an age of inventions, and many inventors sought to perfect a mechanical cotton harvester. Their lack of success reinforced the belief that cotton would always be picked by hand. For almost a hundred years, it seemed, a successful cotton picker had been just around the corner.

Inventors experimented with a variety of devices that were designed to pick cotton.

  • Pneumatic harvesters removed cotton fiber from the bolls with suction or a blast of air.
  • Electrical cotton harvesters used a statically charged belt or finger to attract the lint and remove it from the boll.
  • The thresher type cut down the plant near the surface of the ground and took the entire plant into the machine, where the cotton fiber was separated from the vegetable material.
  • The stripper type harvester combed the plant with teeth or drew it between stationary slots or teeth.
  • The picker or spindle type machine was designed to pick the open cotton from the bolls using spindles, fingers, or prongs, without injuring the plant’s foliage and unopened bolls.

The picker or spindle idea drew the most attention. In the 1880s Angus Campbell of Chicago, Illinois, was an agricultural engineer who saw the tedious process of picking cotton. For twenty years he made annual trips to Texas to test the latest model his spindle picker, but his efforts met with ridicule. The consensus of opinion was that cotton would always be picked by hand. Campbell joined with Theodore H. Price and formed the Price-Campbell Cotton Picker Corporation in 1912. The Price-Campbell machine performed poorly, but they believed they were on the right track.

Hiram M. Berry of Greenville, Mississippi, designed a picker with barbed spindles, though it was never perfected. Peter Paul Haring of Goliad, Texas, worked for thirty years to build a mechanical cotton picker using curved prongs or corkscrews.

John Rust

John Rust, the man who was ultimately credited with the invention of the mechanical cotton picker, personified the popular image of the lone inventor working in his garage. As a boy, he had picked cotton himself, and he dreamed that he could invent a machine that would relieve people of one of the most onerous forms of stoop labor.

John Daniel Rust was born in Texas in 1892. He was usually associated with his younger brother Mack Donald Rust, who had a degree in mechanical engineering. Mack did the mechanical work, while John was the dreamer who worried about the social consequences of their invention.

John was intrigued with the challenge of constructing a mechanical cotton picker. Other inventers had used spindles with barbs, which twisted the fibers around the spindle and pulled the lint from the boll. But the problem was how to remove the lint from the barbs. The spindle soon became clogged with lint, leaves, and other debris. He finally hit on the answer: use a smooth, moist spindle. As he later recalled:

The thought came to me one night after I had gone to bed. I remembered how cotton used to stick to my fingers when I was a boy picking in the early morning dew. I jumped out of bed, found some absorbent cotton and a nail for testing. I licked the nail and twirled it in the cotton and found that it would work.

By the mid-1930s the widespread use of mechanical cotton harvesters seemed imminent and inevitable. When in 1935 the Rust brothers moved to Memphis, the self-styled headquarters of the Cotton South, John Rust announced flatly, “The sharecropper system of the Old South will have to be abandoned.” The Rust picker could do the work of between 50 and 100 hand pickers, reducing labor needs by 75 percent. Rust expected to put the machine on the market within a year. A widely read article in the American Mercury entitled “The Revolution in Cotton” predicted the end of the entire plantation system. Most people compared the Rust picker with Eli Whitney’s cotton gin.

Rust’s 1936 Public Demonstration

In 1936, the Rust machine received a public trial at the Delta Experiment Station near Leland, Mississippi. Though the Rust picker was not perfected, it did pick cotton and it picked it well. The machine produced a sensation, sending a shutter throughout the region. The Rust brothers’ machine provoked the fear that a mechanical picker would destroy the South’s sharecropping system and, during the Great Depression, throw millions of people out of work. An enormous human tragedy would then release a flood of rural migrants, mostly black, on northern cities. The Jackson (Miss.) Daily News editorialized that the Rust machine “should be driven right out of the cotton fields and sunk into the Mississippi River.”

Soon a less strident and more balanced view emerged. William E. Ayres, head of the Delta Experiment Station, encouraged Rust:

We sincerely hope you can arrange to build and market your machine shortly. Lincoln emancipated the Southern Negro. It remains for cotton harvesting machinery to emancipate the Southern cotton planter. The sooner this [is] done, the better for the entire South.

Professional agricultural men saw the mechanization of cotton as a gradual process. The cheap price of farm labor in the depression had slowed the progress of mechanization. Still, the prospects for the future were grim. One agricultural economist predicted that mechanical cotton picking would become reality over the next ten or fifteen years.

Cotton Harvester Sweepstakes

International Harvester

Major farm implement companies, which had far more resources than did the Rust brothers, entered what may be called the cotton harvester sweepstakes. Usually avoiding publicity, implement companies were happy to let the Rust brothers bear the brunt of popular criticism. International Harvester (IH) of Chicago, Illinois, had invented the popular Farmall tractor in 1924 and then experimented with pneumatic pickers. After three years of work, Harvester realized that a skilled hand picker could easily pick faster than their pneumatic machine.

IH then bought up the Price-Campbell patents and turned to spindle pickers. By the late 1930s Harvester was sending a caravan southward every fall to test their latest prototype, picking early cotton in Texas and late-maturing cotton in Arkansas and Mississippi. In 1940 chief engineer C. R. Hagen abandoned the idea of a tractor that pulled the picking unit. Instead of driving the tractor forward, the tractor moved backward enabling the picking unit to encounter the cotton plants first. The transmission was reversed so that it still used forward gears.

After the 1942 caravan, Fowler McCormick, chairman of the board of International Harvester, formally announced that his company had a commercial cotton picker ready for production. The IH picker was a one-row, spindle-type picker, but unlike the Rust machine it used a barbed spindle, which improved its ability to snag cotton fibers. This machine employed a doffer to clean the spindles before the next rotation. Unfortunately, the War Production Board allocated IH only enough steel to continue production of experimental models; IH was unable to start full-scale production until after World War II was over.

In late 1944, as World War II entered its final months, attention turned to a dramatic announcement. The Hopson Planting Company near Clarksdale, Mississippi, produced the first cotton crop totally without the use of hand labor. Machines planted the cotton, chopped it, and harvested the crop. It was a stunning achievement that foretold the future.

IH’s Memphis Factory, 1949

After the war, International Harvester constructed Memphis Works, a huge cotton picker factory located on the north side of the city, and manufactured the first pickers in 1949. Though the company had assembled experimental models for testing purposes, this event marked the first commercial production of mechanical cotton pickers. The plant’s location clearly showed that the company aimed its pickers for use in the cotton areas of the Mississippi River Valley.

Deere

Deere and Company of Moline, Illinois, had experimented with stripper-type harvesters and variations of the spindle idea, but discontinued these experiments in 1931. In 1944 the company resumed work after buying the Berry patents, though Deere’s machine incorporated its own innovative designs. Deere quickly regained the ground it had lost during the depression. In 1950, Deere’s Des Moines Works at Ankeny, Iowa, began production of a two-row picker that could do almost twice the harvesting job of one-row machines.

Allis Chalmers

Despite his success, John Rust realized that his picker was substandard, and during World War II he went back to his drafting board and redesigned his entire machine. His lack of financial resources was overcome when he received an offer from Allis Chalmers of Indianapolis, Indiana, to produce machines using his patents. He signed a non-exclusive agreement.

Pearson

In late 1948 cotton farmers near Pine Bluff, Arkansas, suffered from a labor shortage. Since cotton still stood unpicked in the fields at the end of the year, they invited Rust to demonstrate his picker. The demonstration was a success. Rust entered into an agreement with Ben Pearson, a Pine Bluff company known for archery equipment, to produce 100 machines for $1,000 each, paid in advance. All the machines were sold, and Ben Pearson hired Rust as a consultant and manufactured Rust cotton pickers.

Ancillary Developments

The mechanization of cotton did indeed proceeded slowly. The production of cotton involved three distinct “labor peaks”: land breaking, planting, and cultivating; thinning and weeding; and harvesting. Until the 1960s cotton growers did not have a full set of technological tools to mechanize all labor peaks.

Weed Control

The control of weeds with herbicides was the last labor peak to be conquered. Desperate to solve the problem, farmers cross-cultivated their cotton, plowing across rows as well as up and down rows. Taking advantage of the toughness of cotton stalks, flame weeders used a flammable gas to kill weeds. The most peculiar sight in northeast Arkansas was flocks of weed-hungry geese that sauntered through cotton fields. The weed problem was solved not by machines, but by chemicals. In 1964, the preemergence herbicide Treflan became a household word because of a television commercial. Ultimately, the need to chop and thin cotton was a problem of plant genetics.

Western cotton growers embraced mechanization earlier than did southern farmers. As early as 1951, more than half of California’s cotton crop was mechanically harvested, with hand picking virtually eliminated by the 1960s. Environmental conditions produced smaller cotton plants, not the “rank” cotton in the Delta, and small plants favored machine picking. Western farmers also did not have to overcome the burden of an antiquated labor system. (See Figure 1.)

Figure 1. Machine Harvested Cotton as a Percentage of the Total Cotton Crop, Arkansas, California, South Carolina, and U.S. Average, 1949-1972

Source: United States Department of Agriculture, Economic Research Service. Statistics on Cotton and Related Data, 1920-1973, Statistical Bulletin No. 535 (Wash­ing­ton: Government Printing Office, 1974), 218.

Mechanization and Migration

The most controversial issue raised by the introduction of the mechanical cotton harvester has been its role in the Great Migration. Popular opinion has accepted the view that machines eliminated jobs and forced poor families to leave their homes and farms in a forlorn search for urban jobs. On the other hand agricultural experts argued that mechanization was not the cause, but the result of economic change in the Cotton South. Wartime and postwar labor shortages were the major factors in stimulating the use of machines in cotton fields. Most of the out-migration from the South stemmed from a desire to obtain high paying jobs in northern industries, not from an “enclosure” movement motivated by landowners who mechanized as rapidly as possible. Indeed, the South’s cotton farmers were often reluctant to make the transition from hand labor, which was familiar and workable, to machines, which were expensive and untried.

Holley (2000) used an empirical analysis to compare the impact of mechanization and manufacturing wages on the labor available for picking cotton. The result showed that mechanization accounted for less than 40 percent of the decrease in handpicking, while the other 60 percent was attributed to the decrease in the supply of labor caused by higher wages in manufacturing industries. Hand labor was pulled out of the Cotton South by higher industrial wages rather than displaced by job-destroying machines.

Timing of Migration

The evidence is overwhelming that migration greatly accelerated mechanization. The first commercial production of mechanical cotton pickers were manufactured in 1949, and these machines did not exist in large numbers until the early 1950s. Since the Great Migration began during World War I, mechanical pickers cannot have played any causal role in the first four decades of the migration. By 1950, soon after the first mechanical cotton pickers were commercially available, over six million migrants had already left the South. (See Table 1.) A decade later, most of the nation’s cotton was still hand picked. Only by the late 1960s, when the migration was losing momentum, did machines harvest virtually the total cotton crop.

Table 1
Net Migration from the South, by Race, 1870-1970 (thousands)

Decade Native White Black Total
1870-1880 91 -68 23
1880-1890 -271 88 -183
1890-1900 -30 -185 -215
1900-1910 -69 -194 -218
1910-1920 -663 -555 -1,218
1920-1930 -704 -903 -1,607
1930-1940 -558 -480 -1,038
1940-1950 -866 -1,581 -2,447
1950-1960* -1,003* -1,575* -2,578
1960-1970* -508* -1,430* -1,938
Totals for 1940-1970 -2,377 -4,586 -6,963

Source: Hope T. Eldridge and Dorothy S. Thomas, Population Redistribution and Economic Growth, vol. 3 (Philadelphia: American Philosophical Society, 1964), 90. *United States Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 (Washington: Government Printing Office, 1975), Series C 55-62, pp. 93-95.

Migration figures also provide a comparison of statewide migration estimates in Arkansas, Louisiana, and Mississippi with estimates for counties that actually used mechanical pickers (79 of 221 counties or parishes). During the 1950s these counties accounted for less than half of the total white migration from the three-state region and just over half of the black migration. The same was true in the 1960s except that the white population showed a net gain, not a loss. (See Table 2.) Though push factors played some role in the migration, pull factors were more important. People deserted the cotton areas because they hoped to obtain better jobs and more money elsewhere.

Table 2
Estimated Statewide Migration, Arkansas, Louisiana, and Mississippi
Compared to Migration Estimates for Cotton Counties, 1950-1970

 

1950-1960 1960-1970
State as a Whole Counties Using Mechanical Pickers Percent­age State as a Whole Counties Using Mechanical Pickers Percent­age
White
Arkansas -283,000 -106,388 37.6 38,000 -26,026 68.5
Louisiana 43,000 -15,769 36.7 26,000 -28,949* 111.3
Mississippi -110,000 -50,997 46.4 10,000 -771 7.7
Totals -350,000 -173,154 49.6 74,000 -55,746 75.3
Black
Arkansas -150,000 -74,297 49.5 -112,000 -64,445 57.5
Louisiana -93,000 -42,151 45.3 -163,000 -62,290 38.2
Mississippi -323,000 -175,577 54.4 -279,000 -152,357 54.6
Totals -566,000 -292,025 51.6 -554,000 -279,092 50.4

Source: Donald Holley. The Second Great Emancipation: The Mechanical Cotton Picker, Black Migration, and How They Shaped the Modern South (Fayetteville: University of Arkansas Press, 2000), 178.

*The selected counties lost population, but Louisiana statewide recorded a population gain for the decade.

Most of the Arkansas migrants, for example, were young people from farm families who saw little future in agriculture. They were people with skills and thus possessed high employment potential. They also had better than average educations. In other words, they were not a collection of pathetic sharecroppers who had been driven off the land.

Conclusion

During and after World War II, the Cotton South was caught up in a complex interplay of economic forces. The region suffered shortages of agricultural labor during the war, which led to the collapse of the old plantation system. The number of tenant farmers and sharecroppers declined precipitously, and the U.S. Department of Agriculture stopped counting them after its 1959 census. The structure of southern agriculture changed as the number of farms declined steadily, while the size of farms increased. The age of Agri-Business had arrived.

The migration solved the long-standing problem of rural overpopulation, and did so without producing social upheaval. The migrants found jobs and improved their living standards, and simultaneously rural areas were relieved of their overpopulation. The migration also enabled black people to gain political clout in northern and western cities, and since Jim Crow was in part a system of labor control, the declining need for black labor in the South loosened the ties of segregation.

After World War II southern farmers faced a world that had changed. While the Civil War had freed the slaves, the mechanical cotton picker emancipated workers from backbreaking labor and emancipated the region itself from its dependence on cotton and sharecropping. Indeed, mechanization made possible the continuation of cotton farming in the post-plantation era. Yet cotton acreages declined as farmers moved into rice and soybeans, crops that were already mechanized, creating a more diversified agricultural economy. The end of sharecropping also signaled the end of the need for cheap, docile labor — always a prerequisite of plantation agriculture. The labor control that the South had always exercised over poor whites and blacks proved unattainable after the war. Thus the mechanization of cotton was an essential condition for the civil rights movement in the 1950s, which freed the region from Jim Crow. The relocation of political power from farms to cities was a related by-product of agricultural mechanization. In the second half of the twentieth century, the South underwent a second great emancipation as revolutionary changes swept the region that earlier were unattainable and even unimaginable.

Selected Bibliography

Carlson, Oliver. “Revolution in Cotton.” American Mercury 34 (February 1935): 129-36. Reprinted in Readers’ Digest 26 (March 1935): 13-16.

Cobb, James C. The Most Southern Place on Earth: The Mississippi Delta and the Roots of Regional Identity. New York: Oxford University Press, 1992.

Day, Richard H. “The Economics of Technological Change and the Demise of the Sharecropper.” American Economic Review 57 (June 1967): 427-49.

Drucker, Peter. “Exit King Cotton.” Harper’s 192 (May 1946): 473-80.

Fite, Gilbert C. Cotton Fields No More: Southern Agriculture, 1865-1980. Lexington: University of Kentucky Press, 1984.

Hagen, C. R. “Twenty-Five Years of Cotton Picker Development.” Agricultural Engineering 32 (November 1951): 593-96, 599.

Hamilton, C. Horace. “The Social Effects of Recent Trends in the Mechaniza­tion of Agriculture.” Rural Sociology 4 (March 1939): 3-19.

Heinicke, Craig. “African-American Migration and Mechanized Cotton Harvesting, 1950-1960.” Explorations in Economic History 31 (October 1994): 501-20.

Holley, Donald. The Second Great Emancipation: The Mechanical Cotton Picker, Black Migration, and How They Shaped the Modern South. Fayetteville: University of Arkansas Press, 2000.

Johnston, Oscar. “Will the Machine Ruin the South?” Saturday Evening Post 219 (May 31, 1947): 36-37, 94-95, 388.

Maier, Frank H. An Economic Analysis of Adoption of the Mechanical Cotton Picker.”Ph.D. dissertation, University of Chicago, 1969.

Peterson, Willis, and Yoav Kislev. “The Cotton Harvester in Retrospect: Labor Displacement or Replacement.” Journal of Economic History 46 (March 1986): 199-216.

Rasmussen, Wayne D. “The Mechanization of Agriculture.” Scientific American 247 (September 1982): 77-89.

Rust, John. “The Origin and Development of the Cotton Picker.” West Tennessee Historical Society Papers 7 (1953): 38-56.

Street, James H. The New Revolution in the Cotton Economy: Mechanization and Its Consequences. Chapel Hill: University of North Carolina Press, 1957.

Whatley, Warren C. “New Estimates of the Cost of Harvesting Cotton: 1949-1964.” Research in Economic History 13 (1991): 199-225.

Whatley, Warren C. “A History of Mechanization in the Cotton South: The Institutional Hypothesis.” Quarterly Journal of Economics 100 (November 1985): 1191-1215.

Wright, Gavin. Old South, New South: Revolutions in the Southern Economy since the Civil War. New York: Basic Books, 1986.

Citation: Holley, Donald. “Mechanical Cotton Picker”. EH.Net Encyclopedia, edited by Robert Whaples. June 16, 2003. URL http://eh.net/encyclopedia/mechanical-cotton-picker/

An Economic History of Copyright in Europe and the United States

B. Zorina Khan, Bowdoin College

Introduction

Copyright is a form of intellectual property that provides legal protection against unauthorized copying of the producer’s original expression in products such as art, music, books, articles, and software. Economists have paid relatively little scholarly attention to copyrights, although recent debates about piracy and “the digital dilemma” (free use of digital property) have prompted closer attention to theoretical and historical issues. Like other forms of intellectual property, copyright is directed to the protection of cultural creations that are nonrivalrous and nonexclusive in nature. It is generally proposed that, in the absence of private or public forms of exclusion, prices will tend to be driven down to the low or zero marginal costs and the original producer would be unable to recover the initial investment.

Part of the debate about copyright exists because it is still not clear whether state enforcement is necessary to enable owners to gain returns, or whether the producers of copyrightable products respond significantly to financial incentives. Producers of these public goods might still be able to appropriate returns without copyright laws or in the face of widespread infringement, through such strategies as encryption, cartelization, the provision of complementary products, private monitoring and enforcement, market segmentation, network externalities, first mover effects and product differentiation. Patronage, taxation, subsidies, or public provision, might also comprise alternatives to copyright protection. In some instances “authors” (broadly defined) might be more concerned about nonfinancial rewards such as enhanced reputations or more extensive diffusion.

During the past three centuries great controversy has always been associated with the grant of property rights to authors, ranging from the notion that cultural creativity should be rewarded with perpetual rights, through the complete rejection of any intellectual property rights at all for copyrightable commodities. However, historically, the primary emphasis has been on the provision of copyright protection through the formal legal system. Europeans have generally tended to adopt the philosophical position that authorship embodies rights of personhood or moral rights that should be accorded strong protections. The American approach to copyright has been more utilitarian: policies were based on a comparison of costs and benefits, and the primary emphasis of early copyright policies was on the advancement of public welfare. However, the harmonization of international laws has created a melding of these two approaches. The tendency at present is toward stronger enforcement of copyrights, prompted by the lobbying of publishers and the globalization of culture and commerce. Technological change has always exerted an exogenous force for change in copyright laws, and modern innovations in particular provoke questions about the extent to which copyright systems can respond effectively to such challenges.

Copyright in Europe

Copyright in France

In the early years of printing, books and other written matter became part of the public domain when they were published. Like patents, the grant of book privileges originated in the Republic of Venice in the fifteenth century, a practice which was soon prevalent in a number of other European countries. Donatus Bossius, a Milan author, petitioned the duke in 1492 for an exclusive privilege for his book, and successfully argued that he would be unjustly deprived of the benefits from his efforts if others were able to freely copy his work. He was given the privilege for a term of ten years. However, authorship was not required for the grant of a privilege, and printers and publishers obtained monopolies over existing books as well as new works. Since privileges were granted on a case by case basis, they varied in geographical scope, duration, and breadth of coverage, as well as in terms of the attendant penalties for their violation. Grantors included religious orders and authorities, universities, political figures, and the representatives of the Crown.

The French privilege system was introduced in 1498 and was well-developed by the end of the sixteenth century. Privileges were granted under the auspices of the monarch, generally for a brief period of two to three years, although the term could be as much as ten years. Protection was granted to new books or translations, maps, type designs, engravings and artwork. Petitioners paid formal fees and informal gratuities to the officials concerned. Since applications could only be sealed if the King were present, petitions had to be carefully timed to take advantage of his route or his return from trips and campaigns. It became somewhat more convenient when the courts of appeal such as the Parlement de Paris began to issue grants that were privileges in all but name, although this could lead to conflicting rights if another authority had already allocated the monopoly elsewhere. The courts sometimes imposed limits on the rights conferred, in the form of stipulations about the prices that could be charged. Privileges were property that could be assigned or licensed to another party, and their infringement was punished by a fine and at times confiscation of all the output of “pirates.”

After 1566, the Edict of Moulins required that all new books had to be approved and licensed by the Crown. Favored parties were able to get renewals of their monopolies that also allowed them to lay claim to works that were already in the public domain. By the late eighteenth century an extensive administrative procedure was in place that was designed to restrict the number of presses and engage in surveillance and censorship of the publishing industry. Manuscripts first had to be read by a censor, and only after a permit was requested and granted could the book be printed, although the permit could later be revoked if complaints were lodged by sufficiently influential individuals. Decrees in 1777 established that authors who did not alienate their property were entitled to exclusive rights in perpetuity. Since few authors had the will or resources to publish and distribute books, their privileges were likely to be sold outright to professional publishers. However, the law made a distinction in the rights accorded to publishers, because if the right was sold the privilege was only accorded a limited duration of at least ten years, the exact term to be determined in accordance with the value of the work, and once the publisher’s term expired, the work passed into the public domain. The fee for a privilege was thirty six livres. Approvals to print a work, or a “permission simple” which did not entail exclusive rights could also be obtained after payment of a substantial fee. Between 1700 and 1789, a total of 2,586 petitions for exclusive privileges were filed, and about two thirds were granted. The result was a system that resulted in “odious monopolies,” higher prices and greater scarcity, large transfers to officials of the Crown and their allies, and pervasive censorship. It likewise disadvantaged smaller book producers, provincial publishers, and the academic and broader community.

The French Revolutionary decrees of 1791 and 1793 replaced the idea of privilege with that of uniform statutory claims to literary property, based on the principle that “the most sacred, the most unassailable and the most personal of possessions is the fruit of a writer’s thought.” The subject matter of copyrights covered books, dramatic productions and the output of the “beaux arts” including designs and sculpture. Authors were required to deposit two copies of their books with the Bibliothèque Nationale or risk losing their copyright. Some observers felt that copyrights in France were the least protected of all property rights, since they were enforced with a care to protecting the public domain and social welfare. Although France is associated with the author’s rights approach to copyright and proclamations of the “droit d’auteur,” these ideas evolved slowly and hesitatingly, mainly in order to meet the self-interest of the various members of the book trade. During the ancien régime, the rhetoric of authors’ rights had been promoted by French owners of book privileges as a way of deflecting criticism of monopoly grants and of protecting their profits, and by their critics as a means of attacking the same monopolies and profits. This language was retained in the statutes after the Revolution, so the changes in interpretation and enforcement may not have been universally evident.

By the middle of the nineteenth century, French jurisprudence and philosophy tended to explicate copyrights in terms of rights of personality but the idea of the moral claim of authors to property rights was not incorporated in the law until early in the twentieth century. The droit d’auteur first appeared in a law of April 1910. In 1920 visual artists were granted a “droit de suite” or a claim to a portion of the revenues from resale of their works. Subsequent evolution of French copyright laws led to the recognition of the right of disclosure, the right of retraction, the right of attribution, and the right of integrity. These moral rights are (at least in theory) perpetual, inalienable, and thus can be bequeathed to the heirs of the author or artist, regardless of whether or not the work was sold to someone else. The self-interested rhetoric of the owners of monopoly privileges now fully emerged as the keystone of the “French system of literary property” that would shape international copyright laws in the twenty first century.

Copyright in England

England similarly experienced a period during which privileges were granted, such as a seven year grant from the Chancellor of Oxford University for an 1518 work. In 1557, the Worshipful Company of Stationers, a publishers’ guild, was founded on the authority of a royal charter and controlled the book trade for next one hundred and fifty years. This company created and controlled the right of their constituent members to make copies, so in effect their “copy right” was a private property right that existed in perpetuity, independently of state or statutory rights. Enforcement and regulation were carried out by the corporation itself through its Court of Assistants. The Stationers’ Company maintained a register of books, issued licenses, and sanctioned individuals who violated their regulations. Thus, in both England and France, copyright law began as a monopoly grant to benefit and regulate the printers’ guilds, and as a form of surveillance and censorship over public opinion on behalf of the Crown.

The English system of privileges was replaced in 1710 by a copyright statute (the “Statute of Anne” or “An Act for the Encouragement of Learning, by Vesting the Copies of Printed Books in the Authors or Purchasers of Such Copies, During the Times Therein Mentioned,” 1709-10, 8 Anne, ch. 19.) The statute was not directed toward the authors of books and their rights. Rather, its intent was to restrain the publishing industry and destroy its monopoly power. According to the law, the grant of copyright was available to anyone, not just to the Stationers. Instead of a perpetual right, the term was limited to fourteen years, with a right of renewal, after which the work would enter the public domain. The statute also permitted the importation of books in foreign languages.

Subsequent litigation and judicial interpretation added a new and fundamentally different dimension to copyright. In order to protect their perpetual copyright, publishers tried to promote the idea that copyright was based on the natural rights of authors or creative individuals and, as the agent of the author, those rights devolved to the publisher. If indeed copyrights derived from these inherent principles, they represented property that existed independently of statutory provisions and could be protected under common law. The booksellers engaged in a series of strategic litigation that culminated in their defeat in the landmark case, Donaldson v. Beckett [98 Eng. Rep. 257 (1774)]. The court ruled that authors had a common law right in their unpublished works, but on publication that right was extinguished by the statute, whose provisions determined the nature and scope of any copyright claims. This transition from publisher’s rights to statutory author’s rights implied that copyright had transmuted from a straightforward license to protect monopoly profits into an expanding property right whose boundaries would henceforth increase at the expense of the public domain.

Between 1735 and 1875 fourteen Acts of Parliament amended the copyright legislation. Copyrights extended to sheet music, maps, charts, books, sculptures, paintings, photographs, dramatic works and songs sung in a dramatic fashion, and lectures outside of educational institutions. Copyright owners had no remedies at law unless they complied with a number of stipulations which included registration, the payment of fees, the delivery of free copies of every edition to the British Museum (delinquents were fined), as well as complimentary copies for four libraries, including the Bodleian and Trinity College. The ubiquitous Stationers’ Company administered registration, and the registrar personally benefited from the monetary fees of 5 shillings when the book was registered and an equal amount for each assignment and each copy of an entry, along with one shilling for each entry searched. Foreigners could only obtain copyrights if they presented themselves in a part of the British Empire at the time of publication. The book had to be published in the United Kingdom, and prior publication in a foreign country – even in a British colony – was an obstacle to copyright protection.

The term of the copyright in books was for the longer of 42 years from publication or the lifetime of the author plus seven years, and after the death of the author a compulsory license could be issued to ensure that works of sufficient public benefit would be published. The “work for hire” doctrine was in force for books, reviews, newspapers, magazines and essays unless a distinct contractual clause specified that the copyright was to accrue to the author. Similarly, unauthorized use of a publication was permitted for the purposes of “fair use.” Only the copyright holder and his agents were allowed to import the protected works into Britain.

The British Commission that reported on the state of the copyright system in 1878 felt that the laws were “obscure, arbitrary and piecemeal” and were compounded by the confused state of the common law. The numerous uncoordinated laws that were simultaneously in force led to conflicts and unintended defects in the system. The report discussed but did not recommend an alternative to the grant of copyrights, in the form of a royalty system where “any person would be entitled to copy or republish the work on paying or securing to the owner a remuneration, taking the form of royalty or definite sum prescribed by law.” The main benefit would be to be public in the form of early access to cheap editions, whereas the main cost would be to the publishers whose risk and return would be negatively affected.

The Commission noted that the implications for the colonies were “anomalous and unsatisfactory.” The publishers in England practiced price discrimination, modifying the initial high prices for copyrighted material through discounts given to reading clubs, circulating libraries and the like, benefits which were not available in the colonies. In 1846 the Colonial Office acknowledged “the injurious effects produced upon our more distant colonists” and passed the Foreign Reprints Act in the following year. This allowed the colonies who adopted the terms of British copyright legislation to import cheap reprints of British copyrighted material with a tariff of 12.5 percent, the proceeds of which were to be remitted to the copyright owners. However, enforcement of the tariff seems to have been less than vigorous since, between 1866 and 1876 only £1155 was received from the 19 colonies who took advantage of the legislation (£1084 from Canada which benefited significantly from the American reprint trade). The Canadians argued that it was difficult to monitor imports, so it would be more effective to allow them to publish the reprints themselves and collect taxes for the benefit of the copyright owners. This proposal was rejected, but under the Canadian Copyright Act of 1875 British copyright owners could obtain Canadian copyrights for Canadian editions that were sold at much lower prices than in Britain or even in the United States.

The Commission made two recommendations. First, the bigger colonies with domestic publishing facilities should be allowed to reprint copyrighted material on payment of a license to be set by law. Second, the benefits to the smaller colonies of access to British literature should take precedence over lobbies to repeal the Foreign Reprints Act, which should be better enforced rather than removed entirely. Some had argued that the public interest required that Britain should allow the importation of cheap colonial reprints since the high prices of books were “altogether prohibitory to the great mass of the reading public” but the Commission felt that this should only be adopted with the consent of the copyright owner. They also devoted a great deal of attention to what was termed “The American Question” but took the “highest public ground” and recommended against retaliatory policies.

Copyright in the United States

Colonial Copyright

In the period before the Declaration of Independence individual American states recognized and promoted patenting activity, but copyright protection was not considered to be of equal importance, for a number of reasons. First, in a democracy the claims of the public and the wish to foster freedom of expression were paramount. Second, to a new colony, pragmatic concerns were likely of greater importance than the arts, and the more substantial literary works were imported. Markets were sufficiently narrow that an individual could saturate the market with a first run printing, and most local publishers produced ephemera such as newspapers, almanacs, and bills. Third, it was unclear that copyright protection was needed as an incentive for creativity, especially since a significant fraction of output was devoted to works such as medical treatises and religious tracts whose authors wished simply to maximize the number of readers, rather than the amount of income they received.

In 1783, Connecticut became the first state to approve an “Act for the encouragement of literature and genius” because “it is perfectly agreeable to the principles of natural equity and justice, that every author should be secured in receiving the profits that may arise from the sale of his works, and such security may encourage men of learning and genius to publish their writings; which may do honor to their country, and service to mankind.” Although this preamble might seem to strongly favor author’s rights, the statute also specified that books were to be offered at reasonable prices and in sufficient quantities, or else a compulsory license would issue.

Federal Copyright Grants

Despite their common source in the intellectual property clause of the U.S. Constitution, copyright policies provided a marked contrast to the patent system. According to Wheaton v. Peters, 33 U.S. 591, 684 (1834): “It has been argued at the bar, that as the promotion of the progress of science and the useful arts is here united in the same clause in the constitution, the rights of the authors and inventors were considered as standing on the same footing; but this, I think, is a non sequitur, for when congress came to execute this power by legislation, the subjects are kept distinct, and very different provisions are made respecting them.”

The earliest federal statute to protect the product of authors was approved on May 31 1790, “for the encouragement of learning, by securing the copies of maps, charts, and books to the authors and proprietors of such copies, during the times therein mentioned.” John Barry obtained the first federal copyright when he registered his spelling book in the District Court of Pennsylvania, and early grants reflected the same utilitarian character. Policy makers felt that copyright protection would serve to increase the flow of learning and information, and by encouraging publication would contribute to democratic principles of free speech. The diffusion of knowledge would also ensure broad-based access to the benefits of social and economic development. The copyright act required authors and proprietors to deposit a copy of the title of their work in the office of the district court in the area where they lived, for a nominal fee of sixty cents. Registration secured the right to print, publish and sell maps, charts and books for a term of fourteen years, with the possibility of an extension for another like term. Amendments to the original act extended protection to other works including musical compositions, plays and performances, engravings and photographs. Legislators refused to grant perpetual terms, but the length of protection was extended in the general revision of the laws in 1831, and 1909.

In the case of patents, the rights of inventors, whether domestic or foreign, were widely viewed as coincident with public welfare. In stark contrast, policymakers showed from the very beginning an acute sensitivity to trade-offs between the rights of authors (or publishers) and social welfare. The protections provided to authors under copyrights were as a result much more limited than those provided by the laws based on moral rights that were applied in many European countries. Of relevance here are stipulations regarding first sale, work for hire, and fair use. Under a moral rights-based system, an artist or his heirs can claim remedies if subsequent owners alter or distort the work in a way that allegedly injures the artist’s honor or reputation. According to the first sale doctrine, the copyright holder lost all rights after the work was sold. In the American system, if the copyright holder’s welfare were enhanced by nonmonetary concerns, these individualized concerns could be addressed and enforced through contract law, rather than through a generic federal statutory clause that would affect all property holders. Similarly, “work for hire” doctrines also repudiated the right of personality, in favor of facilitating market transactions. For example, in 1895 Thomas Donaldson filed a complaint that Carroll D. Wright’s editing of Donaldson’s report for the Census Bureau was “damaging and injurious to the plaintiff, and to his reputation” as a scholar. The court rejected his claim and ruled that as a paid employee he had no rights in the bulletin; to rule otherwise would create problems in situations where employees were hired to prepare data and statistics.

This difficult quest for balance between private and public good was most evident in the copyright doctrine of “fair use” that (unlike with patents) allowed unauthorized access to copyrighted works under certain conditions. Joseph Story ruled in [Folsom v. Marsh, 9 F. Cas. 342 (1841)]: “we must often, in deciding questions of this sort, look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work.” One of the striking features of the fair use doctrine is the extent to which property rights were defined in terms of market valuations, or the impact on sales and profits, as opposed to a clear holding of the exclusivity of property. Fair use doctrine thus illustrates the extent to which the early policy makers weighed the costs and benefits of private property rights against the rights of the public and the provisions for a democratic society. If copyrights were as strictly construed as patents, it would serve to reduce scholarship, prohibit public access for noncommercial purposes, increase transactions costs for potential users, and inhibit learning which the statutes were meant to promote.

Nevertheless, like other forms of intellectual property, the copyright system evolved to encompass improvements in technology and changes in the marketplace. Technological changes in nineteenth-century printing included the use of stereotyping which lowered the costs of reprints, improvements in paper making machinery, and the advent of steam powered printing presses. Graphic design also benefited from innovations, most notably the development of lithography and photography. The number of new products also expanded significantly, encompassing recorded music and moving pictures by the end of the nineteenth century; and commercial television, video recordings, audiotapes, and digital music in the twentieth century.

The subject matter, scope and duration of copyrights expanded over the course of the nineteenth century to include musical compositions, plays, engravings, sculpture, and photographs. By 1910 the original copyright holder was granted derivative rights such as to translations of literary works into other languages; to performances; and the rights to adapt musical works, among others. Congress also lengthened the term of copyright several times, although by 1890 the term of copyright protection in Greece and the United States were the most abbreviated in the world. New technologies stimulated change by creating new subjects for copyright protection, and by lowering the costs of infringement of copyrighted works. In Edison v. Lubin, 122 F. Cas. 240 (1903), the lower court rejected Edison’s copyright of moving pictures under the statutory category of photographs. This decision was overturned by the appellate court: “[Congress] must have recognized there would be change and advance in making photographs, just as there has been in making books, printing chromos, and other subjects of copyright protection.” Copyright enforcement was largely the concern of commercial interests, and not of the creative individual. The fraction of copyright plaintiffs who were authors (broadly defined) was initially quite low, and fell continuously during the nineteenth century. By 1900-1909, only 8.6 percent of all plaintiffs in copyright cases were the creators of the item that was the subject of the litigation. Instead, by the same period, the majority of parties bringing cases were publishers and other assignees of copyrights.

In 1909 Congress revised the copyright law and composers were given the right to make the first mechanical reproductions of their music. However, after the first recording, the statute permitted a compulsory license to issue for copyrighted musical compositions: that is to say, anyone could subsequently make their own recording of the composition on payment of a fee that was set by the statute at two cents per recording. In effect, the property right was transformed into a liability rule. The next major legislative change in 1976 similarly allowed compulsory licenses to issue for works that are broadcast on cable television. The prevalence of compulsory licenses for copyrighted material is worth noting for a number of reasons: they underline some of the statutory differences between patents and copyrights in the United States; they reflect economic reasons for such distinctions; and they are also the result of political compromises among the various interest groups that are affected.

Allied Rights

The debate about the scope of patents and copyrights often underestimates or ignores the importance of allied rights that are available through other forms of the law such as contract and unfair competition. A noticeable feature of the case law is the willingness of the judiciary in the nineteenth century to extend protection to noncopyrighted works under alternative doctrines in the common law. More than 10 percent of copyright cases dealt with issues of unfair competition, and 7.7 percent with contracts; a further 12 percent encompassed issues of right to privacy, trade secrets, and misappropriation. For instance, in Keene v. Wheatley et al., 14 F. Cas. 180 (1860), the plaintiff did not have a statutory copyright in the play that was infringed. However, she was awarded damages on the basis of her proprietary common law right in an unpublished work, and because the defendants had taken advantage of a breach of confidence by one of her former employees. Similarly, the courts offered protection against misappropriation of information, such as occurred when the defendants in Chamber of Commerce of Minneapolis v. Wells et al., 111 N.W. 157 (1907) surreptitiously obtained stock market information by peering in windows, eavesdropping, and spying.

Several other examples relate to the more traditional copyright subject of the book trade. E. P. Dutton & Company published a series of Christmas books which another publisher photographed, and offered as a series with similar appearance and style but at lower prices. Dutton claimed to have been injured by a loss of profits and a loss of reputation as a maker of fine books. The firm did not have copyrights in the series, but they essentially claimed a right in the “look and feel” of the books. The court agreed: “the decisive fact is that the defendants are unfairly and fraudulently attempting to trade upon the reputation which plaintiff has built up for its books. The right to injunctive relief in such a case is too firmly established to require the citation of authorities.” In a case that will resonate with academics, a surgery professor at the University of Pennsylvania was held to have a common law property right in the lectures he presented, and a student could not publish them without his permission. Titles could not be copyrighted, but were protected as trade marks and under unfair competition doctrines. In this way, in numerous lawsuits G. C. Merriam & Co, the original publishers of Webster’s Dictionary, restrained the actions of competitors who published the dictionary once the copyrights had expired.

International Copyrights in the United States

The U.S. was long a net importer of literary and artistic works, especially from England, which implied that recognition of foreign copyrights would have led to a net deficit in international royalty payments. The Copyright Act recognized this when it specified that “nothing in this act shall be construed to extend to prohibit the importation or vending, reprinting or publishing within the United States, of any map, chart, book or books … by any person not a citizen of the United States.” Thus, the statutes explicitly authorized Americans to take free advantage of the cultural output of other countries. As a result, it was alleged that American publishers “indiscriminately reprinted books by foreign authors without even the pretence of acknowledgement.” The tendency to reprint foreign works was encouraged by the existence of tariffs on imported books that ranged as high as 25 percent.

The United States stood out in contrast to countries such as France, where Louis Napoleon’s Decree of 1852 prohibited counterfeiting of both foreign and domestic works. Other countries which were affected by American piracy retaliated by refusing to recognize American copyrights. Despite the lobbying of numerous authors and celebrities on both sides of the Atlantic, the American copyright statutes did not allow for copyright protection of foreign works for fully one century. As a result, American publishers and producers freely pirated foreign literature, art, and drama.

Effects of Copyright Piracy

What were the effects of piracy? First, did the American industry suffer from cheaper foreign books being dumped on the domestic market? This does not seem to have been the case. After controlling for the type of work, the cost of the work, and other variables, the prices of American books were lower than prices of foreign books. American book prices may have been lower to reflect lower perceived quality or other factors that caused imperfect substitutability between foreign and local products. As might be expected, prices were not exogenously and arbitrarily fixed, but varied in accordance with a publisher’s estimation of market factors such as the degree of competition and the responsiveness of demand to determinants. The reading public appears to have gained from the lack of copyright, which increased access to the superior products of more developed markets in Europe, and in the long run this likely improved both the demand and supply of domestic science and literature.

Second, according to observers, professional authorship in the United States was discouraged because it was difficult to compete with established authors such as Scott, Dickens and Tennyson. Whether native authors were deterred by foreign competition would depend on the extent to which foreign works prevailed in the American market. Early in American history the majority of books were reprints of foreign titles. However, nonfiction titles written by foreigners were less likely to be substitutable for nonfiction written by Americans; consequently, the supply of nonfiction soon tended to be provided by native authors. From an early period grammars, readers, and juvenile texts were also written by Americans. Geology, geography, history and similar works would have to be adapted or completely rewritten to be appropriate for an American market which reduced their attractiveness as reprints. Thus, publishers of schoolbooks, medical volumes and other nonfiction did not feel that the reforms of 1891 were relevant to their undertakings. Academic and religious books are less likely to be written for monetary returns, and their authors probably benefited from the wider circulation that lack of international copyright encouraged. However, the writers of these works declined in importance relative to writers of fiction, a category which grew from 6.4 percent before 1830 to 26.4 percent by the 1870s.

On the other hand, foreign authors dominated the field of fiction for much of the century. One study estimates about fifty percent of all fiction best sellers in antebellum period were pirated from foreign works. In 1895 American authors accounted for two of the top ten best sellers but by 1910 nine of the top ten were written by Americans. This fall over time in the fraction of foreign authorship may have been due to a natural evolutionary process, as the development of the market for domestic literature over time encouraged specialization. The growth in fiction authors was associated with the increase in the number of books per author over the same period. Improvements in transportation and the increase in the academic population probably played a large role in enabling individuals who lived outside the major publishing centers to become writers despite the distance. As the market expanded, a larger fraction of writers could become professionals.

Although the lack of copyright protection may not have discouraged authors, this does not imply that intellectual property policy in this dimension had no costs. It is likely that the lack of foreign copyrights led to some misallocation of efforts or resources, such as in attempting to circumvent the rules. Authors changed their residence temporarily when books were about to be published in order to qualify for copyright. Others obtained copyrights by arranging to co-author with a foreign citizen. T. H. Huxley adopted this strategy, arranging to co-author with “a young Yankee friend … Otherwise the thing would be pillaged at once.” An American publisher suggested that Kipling should find “a hack writer, whose name would be of use simply on account of its carrying the copyright.” Harriet Beecher Stowe proposed a partnership with Elizabeth Gaskell, so they could “secure copyright mutually in our respective countries and divide the profits.”

It is widely acknowledged that copyrights in books tended to be the concern of publishers rather than of authors (although the two are naturally not independent of each other). As a result of lack of legal copyrights in foreign works, publishers raced to be first on the market with the “new” pirated books, and the industry experienced several decades of intense, if not quite “ruinous” competition. These were problems that publishers in England had faced before, in the market for books that were uncopyrighted, such as Shakespeare and Fielding. Their solution was to collude in the form of strictly regulated cartels or “printing congers.” The congers created divisible property in books that they traded, such as a one hundred and sixtieth share in Johnson’s Dictionary that was sold for £23 in 1805. Cooperation resulted in risk sharing and a greater ability to cover expenses. The unstable races in the United States similarly settled down during the 1840s to collusive standards that were termed “trade custom” or “courtesy of the trade.”

The industry achieved relative stability because the dominant firms cooperated in establishing synthetic property rights in foreign-authored books. American publishers made payments (termed “copyrights”) to foreign authors to secure early sheets, and other firms recognized their exclusive property in the “authorized reprint”. Advance payments to foreign authors not only served to ensure the coincidence of publishers’ and authors’ interests – they were also recognized by “reputable” publishers as “copyrights.” These exclusive rights were tradable, and enforced by threats of predatory pricing and retaliation. Such practices suggest that publishers were able to simulate the legal grant through private means.

However, private rights naturally did not confer property rights that could be enforced at law. The case of Sheldon v. Houghton 21 F. Cas 1239 (1865) illustrates that these rights were considered to be “very valuable, and is often made the subject of contracts, sales, and transfers, among booksellers and publishers.” The very fact that a firm would file a plea for the court to protect their claim indicates how vested a right it had become. The plaintiff argued that “such custom is a reasonable one, and tends to prevent injurious competition in business, and to the investment of capital in publishing enterprises that are of advantage to the reading public.” The courts rejected this claim, since synthetic rights differed from copyrights in the degree of security that was offered by the enforcement power of the courts. Nevertheless, these title-specific of rights exclusion decreased uncertainty, enabled publishers to recoup their fixed costs, and avoided the wasteful duplication of resources that would otherwise have occurred.

It was not until 1891 that the Chace Act granted copyright protection to selected foreign residents. Thus, after a century of lobbying by interested parties on both sides of the Atlantic, based on reasons that ranged from the economic to the moral, copyright laws only changed when the United States became more competitive in the international market for literary and artistic works. However, the act also included significant concessions to printers’ unions and printing establishments in the form of “manufacturing clauses.” First, a book had to be published in the U.S. before or at the same time as the publication date in its country of origin. Second, the work had to be printed here, or printed from type set in the United States or from plates made from type set in the United States. Copyright protection still depended on conformity with stipulations such as formal registration of the work. These clauses resulted in U.S. failure to qualify for admission to the international Berne Convention until 1988, more than one hundred years after the first Convention.

After the copyright reforms in 1891, both English and American authors were disappointed to find that the change in the law did not lead to significant gains. Foreign authors realized they may even have benefited from the lack of copyright protection in the United States. Despite the cartelization of publishing, competition for these synthetic copyrights ensured that foreign authors were able to obtain payments that American firms made to secure the right to be first on the market. It can also be argued that foreign authors were able to reap higher total returns from the expansion of the market through piracy. The lack of copyright protection may have functioned as a form of price discrimination, where the product was sold at a higher price in the developed country, and at a lower or zero price in the poorer country. Returns under such circumstances may have been higher for goods with demand externalities or network effects, such as “bestsellers” where consumer valuation of the book increased with the size of the market. For example, Charles Dickens, Anthony Trollope, and other foreign writers were able to gain considerable income from complementary lecture tours in the extensive United States market.

Harmonization of Copyright Laws

In view of the strong protection accorded to inventors under the U.S. patent system, to foreign observers its copyright policies appeared to be all the more reprehensible. The United States, the most liberal in its policies towards patentees, had led the movement for harmonization of patent laws. In marked contrast, throughout the history of the U.S. system, its copyright grants in general were more abridged than almost all other countries in the world. The term of copyright grants to American citizens was among the shortest in the world, the country applied the broadest interpretation of fair use doctrines, and the validity of the copyright depended on strict compliance with the requirements. U.S. failure to recognize the rights of foreign authors was also unique among the major industrial nations. Throughout the nineteenth century proposals to reform the law and to acknowledge foreign copyrights were repeatedly brought before Congress and rejected. Even the bill that finally recognized international copyrights almost failed, only passed at the last possible moment, and required longstanding exemptions in favor of workers and printing enterprises.

In a parallel fashion to the status of the United States in patent matters, France’s influence was evident in the subsequent evolution of international copyright laws. Other countries had long recognized the rights of foreign authors in national laws and bilateral treaties, but France stood out in its favorable treatment of domestic and foreign copyrights as “the foremost of all nations in the protection it accords to literary property.” This was especially true of its concessions to foreign authors and artists. For instance, France allowed copyrights to foreigners conditioned on manufacturing clauses in 1810, and granted foreign and domestic authors equal rights in 1852. In the following decade France entered into almost two dozen bilateral treaties, prompting a movement towards multilateral negotiations, such as the Congress on Literary and Artistic Property in 1858. The International Literary and Artistic Association, which the French novelist Victor Hugo helped to establish, conceived of and organized the Convention which first met in Berne in 1883.

The Berne Convention included a number of countries that wished to establish an “International Union for the Protection of Literary and Artistic Works.” The preamble declared their intent to “protect effectively, and in as uniform a manner as possible, the rights of authors over their literary and artistic works.” The actual Articles were more modest in scope, requiring national treatment of authors belonging to the Union and minimum protection for translation and public performance rights. The Convention authorized the establishment of a physical office in Switzerland, whose official language would be French. The rules were revised in 1908 to extend the duration of copyright and to include modern technologies. Perhaps the most significant aspect of the convention was not its specific provisions, but the underlying property rights philosophy which was decidedly from the natural rights school. Berne abolished compliance with formalities as a prerequisite for copyright protection since the creative act itself was regarded as the source of the property right. This measure had far-reaching consequences, because it implied that copyright was now the default, whereas additions to the public domain would have to be achieved through affirmative actions and by means of specific limited exemptions. In 1928 the Berne Convention followed the French precedent and acknowledged the moral rights of authors and artists.

Unlike its leadership in patent conventions, the United States declined an invitation to the pivotal copyright conference in Berne in 1883; it attended but refused to sign the 1886 agreement of the Berne Convention. Instead, the United States pursued international copyright policies in the context of the weaker Universal Copyright Convention (UCC), which was adopted in 1952 and formalized in 1955 as a complementary agreement to the Berne Convention. The UCC membership included many developing countries that did not wish to comply with the Berne Convention because they viewed its provisions as overly favorable to the developed world. The United States was among the last wave of entrants into the Berne Convention when it finally joined in 1988. In order to do so it complied by removing prerequisites for copyright protection such as registration, and also lengthened the term of copyrights. However, it still has not introduced federal legislation in accordance with Article 6bis, which declares the moral rights of authors “independently of the author’s economic rights, and even after the transfer of the said rights.” Similarly, individual countries continue to differ in the extent to which multilateral provisions governed domestic legislation and practices.

The quest for harmonization of intellectual property laws resulted in a “race to the top,” directed by the efforts and self interest of the countries which had the strongest property rights. The movement to harmonize patents was driven by American efforts to ensure that its extraordinary patenting activity was remunerated beyond as well as within its borders. At the same time, the United States ignored international conventions to unify copyright legislation. Nevertheless, the harmonization of copyright laws proceeded, promoted by France and other civil law regimes which urged stronger protection for authors based on their “natural rights” although at the same time they infringed on the rights of foreign inventors. The net result was that international pressure was applied to developing countries in the twentieth century to establish strong patents and strong copyrights, although no individual developed country had adhered to both concepts simultaneously during their own early growth phase. This occurred even though theoretical models did not offer persuasive support for intellectual property harmonization, and indeed suggested that uniform policies might be detrimental even to some developed countries and to overall global welfare.

Conclusion

The past three centuries stand out in terms of the diversity across nations in intellectual property institutions, but the nineteenth century saw the origins of the movement towards the “harmonization” of laws that at present dominates global debates. Among the now-developed countries, the United States stood out for its conviction that broad access to intellectual property rules and standards was key to achieving economic development. Europeans were less concerned about enhancing mass literacy and public education, and viewed copyright owners as inherently meritorious and deserving of strong protection. European copyright regimes thus evolved in the direction of author’s rights, while the United States lagged behind the rest of the world in terms of both domestic and foreign copyright protection.

By design, American statutes differentiated between patents and copyrights in ways that seemed warranted if the objective was to increase social welfare. The patent system early on discriminated between nonresident and domestic inventors, but within a few decades changed to protect the right of any inventor who filed for an American patent regardless of nationality. The copyright statutes, in contrast, openly encouraged piracy of foreign goods on an astonishing scale for one hundred years, in defiance of the recriminations and pressures exerted by other countries. The American patent system required an initial search and examination that ensured the patentee was the “first and true” creator of the invention in the world, whereas copyrights were granted through mere registration. Patents were based on the assumption of novelty and held invalid if this assumption was violated, whereas essentially similar but independent creation was copyrightable. Copyright holders were granted the right to derivative works, whereas the patent holder was not. Unauthorized use of patented inventions was prohibited, whereas “fair use” of copyrighted material was permissible if certain conditions were met. Patented inventions involved greater initial investments, effort, and novelty than copyrighted products and tended to be more responsive to material incentives; whereas in many cases cultural goods would still be produced or only slightly reduced in the absence of such incentives. Fair use was not allowed in the case of patents because the disincentive effect was likely to be higher, while the costs of negotiation between the patentee and the more narrow market of potential users would generally be lower. If copyrights were as strongly enforced as patents it would benefit publishers and a small literary elite at the cost of social investments in learning and education.

The United States created a utilitarian market-based model of intellectual property grants which created incentives for invention, but always with the primary objective of increasing social welfare and protecting the public domain. The checks and balances of interest group lobbies, the legislature and the judiciary worked effectively as long as each institution was relatively well-matched in terms of size and influence. However, a number of legal and economic scholars are increasingly concerned that the political influence of corporate interests, the vast number of uncoordinated users over whom the social costs are spread, and international harmonization of laws have upset these counterchecks, leading to over-enforcement at both the private and public levels.

International harmonization with European doctrines introduced significant distortions in the fundamental principles of American copyright and its democratic provisions. One of the most significant of these changes was also one of the least debated: compliance with the precepts of the Berne Convention accorded automatic copyright protection to all creations on their fixation in tangible form. This rule reversed the relationship between copyright and the public domain that the U.S. Constitution stipulated. According to original U.S. copyright doctrines, the public domain was the default, and copyright merely comprised a limited exemption to the public domain; after the alignment with Berne, copyright became the default, and the rights of the public and of the public domain now merely comprise a limited exception to the primacy of copyright. The pervasive uncertainty that characterizes the intellectual property arena today leads risk-averse individuals and educational institutions to err on the side of abandoning their right to free access rather than invite potential challenges and costly litigation. A number of commentators are equally concerned about other dimensions of the globalization of intellectual property rights, such as the movement to emulate European grants of property rights in databases, which has the potential to inhibit diffusion and learning.

Copyright law and policy has always altered and been altered by social, economic and technological changes, in the United States and elsewhere. However, the one constant feature across the centuries is that copyright protection involves crucial political questions to a far greater extent than its economic implications.

Additional Readings

Economic History

B. Zorina Khan. The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790-1920. New York: Cambridge University Press, 2005.

Law and Economics

Besen, Stanley, and L. Raskind. “An Introduction to the Law and Economics of Intellectual Property.” Journal of Economic Perspectives 5 (1991): 3-27.

Breyer, Stephen. “The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies and Computer Programs.” Harvard Law Review 84 (1970): 281-351.

Gallini, Nancy and S. Scotchmer. “Intellectual Property: When Is It the Best Incentive System?” Innovation Policy and the Economy 2 (2002): 51-78.

Gordon, Wendy, and R. Watt, editors. The Economics of Copyright: Developments in Research and Analysis. Cheltenham, UK: Edward Elgar, 2002.

Hurt, Robert M., and Robert M. Shuchman. “The Economic Rationale of Copyright.” American Economic Review Papers and Proceedings 56 (1966): 421-32.

Johnson, William R. “The Economics of Copying.” Journal of Political Economy 93 (1985): 1581-74.

Landes, William M., and Richard A. Posner. “An Economic Analysis of Copyright Law.” Journal of Legal Studies 18 (1989): 325-63.

Landes, William M., and Richard A. Posner. The Economic Structure of Intellectual Property Law. Cambridge, MA: Harvard University Press, 2003.

Liebowitz, S. J. “Copying and Indirect Appropriability: Photocopying of Journals.” Journal of Political Economy 93 (1985): 945-57.

Merges, Robert P. “Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations.” California Law Review 84, no. 5 (1996): 1293-1393.

Meurer, Michael J. “Copyright Law and Price Discrimination.” Cardozo Law Review 23 (2001): 55-148.

Novos, Ian E., and Michael Waldman. “The Effects of Increased Copyright Protection: An Analytic Approach.” Journal of Political Economy 92 (1984): 236-46.

Plant, Arnold. “The Economic Aspects of Copyright in Books.” Economica 1 (1934): 167-95.

Takeyama, L. “The Welfare Implications of Unauthorized Reproduction of Intellectual Property in the Presence of Demand Network Externalities.” Journal of Industrial Economics 42 (1994): 155–66.

Takeyama, L. “The Intertemporal Consequences of Unauthorized Reproduction of Intellectual Property.” Journal of Law and Economics 40 (1997): 511–22.

Varian, Hal. “Buying, Sharing and Renting Information Goods.” Journal of Industrial Economics 48, no. 4 (2000): 473–88.

Varian, Hal. “Copying and Copyright.” Journal of Economic Perspectives 19, no. 2 (2005): 121-38.

Watt, Richard. Copyright and Economic Theory: Friends or Foes? Cheltenham, UK: Edward Elgar, 2000.

History of Economic Thought

Hadfield, Gilliam K. “The Economics of Copyright: A Historical Perspective.” Copyright Law Symposium (ASCAP) 38 (1992): 1-46.

History

Armstrong, Elizabeth. Before Copyright: The French Book-Privilege System, 1498-1526. Cambridge: Cambridge University Press, 1990.

Birn, Raymond. “The Profits of Ideas: Privileges en librairie in Eighteenth-century France.” Eighteenth-Century Studies 4, no. 2 (1970-71): 131-68.

Bugbee, Bruce. The Genesis of American Patent and Copyright Law. Washington, DC: Public Affairs Press, 1967.

Dawson, Robert L. The French Booktrade and the “Permission Simple” of 1777: Copyright and the Public Domain. Oxford: Voltaire Foundation, 1992.

Hackett, Alice P., and James Henry Burke. Eighty Years of Best Sellers, 1895-1975. New York: Bowker, 1977.

Nowell-Smith, Simon. International Copyright Law and the Publisher in the Reign of Queen Victoria. Oxford: Clarendon Press, 1968.

Patterson, Lyman. Copyright in Historical Perspective. Nashville: Vanderbilt University Press, 1968.

Rose, Mark. Authors and Owners: The Invention of Copyright. Cambridge: Harvard University Press, 1993.

Saunders, David. Authorship and Copyright. London: Routledge, 1992.

Citation: Khan, B. “An Economic History of Copyright in Europe and the United States”. EH.Net Encyclopedia, edited by Robert Whaples. March 16, 2008. URL http://eh.net/encyclopedia/an-economic-history-of-copyright-in-europe-and-the-united-states/

Structures of Change in the Mechanical Age: Technological Innovation in the United States, 1790-1865

Author(s):Thomson, Ross
Reviewer(s):Cook, Lisa D.

Published by EH.NET (February 2010)

Ross Thomson, Structures of Change in the Mechanical Age: Technological Innovation in the United States, 1790-1865. Baltimore: Johns Hopkins University Press, 2009. xiv + 432 pp. $68 (hardcover), ISBN: 978-0-8018-9141-0.

Reviewed for EH.NET by Lisa D. Cook, Department of Economics, Michigan State University.

The author cleaned the Augean stables of historical data related to invention to bring the reader a rich and detailed study of the early development of the American system of technological innovation. The volume starts with a vivid juxtaposition of the antebellum and postbellum economic and inventive environments. Path-breaking inventors in the mid- to late nineteenth century, like Thomas Edison, Joseph R. Brown, and George Corliss, had the advantage of a pre-existing innovation system resting upon the pillars of ideas, markets, institutions, and skilled labor. In the earlier period output was rising because small-scale production was increasing in scale. Yet, technological progress occurred more slowly, because there was no change in techniques. Among the initial conditions were several factors constraining development and adoption of mechanization, including small markets, scarce human and financial capital, and limited technological knowledge. Thomson argues that the innovation system that developed as a result of actions from above ? government ? and below ? among self-interested innovators ? was integral to the success of the American Industrial Revolution.

In Thomson?s view, this new system of firms, individuals, and markets had two critical components. First, knowledge had to be gained and developed. Scientific investigation had to be undertaken (or taken from Britain) and applied. Second, it had to be disseminated and developed further to augment future technological development. He emphasizes important feedback effects throughout the process of innovation and building innovative capacity. Embodied technological progress appeared in machines, which were related or unrelated to a given invention. General purpose technologies were critical for cross-fertilization. Embodied technological progress also appeared in machinists and inventors.

The new innovation system was characterized by two seemingly opposing but intricately intertwined features: structure and change. Structures, like the patent system and scientific institutions, are the midwives that bring to fruition new ideas and technological change. To explain the evolution of structure and change, he organizes chapters chronologically and then thematically.

The significant contributions of this book derive from three sources: the amount and type of data collected and examined, the extension of previous work on major innovators, and the exposition of the relevance of social interactions in innovative systems.

Thomson carefully presents systematic evidence on the emerging innovation system in the mid-1800?s, using data on innovators, firms, industries, patents, and various technologies. One thousand individual innovators and 14 industries are covered in 50 data sets and other primary and secondary sources. The focus of the volume is patented invention. However, like Moser (2005) and a number of subsequent studies, he extends the examination to include exhibits at industrial fairs, including the New York Crystal Palace Exhibition and the New York World?s Fair in 1853 and other unpatented inventions. As a result the data,, and the book more generally, constitute a rich resource for research on innovation during this period.

The research presented on major innovators extends the work of Ciarlante (1978) and Khan and Sokoloff (1993). While he starts from the Dictionary of American Biography (1937) to identify major innovators as do Ciarlante and Khan and Sokoloff, he broadens the scope of investigation by adding those who may not have been as well known or socially connected as those in the DAB, e.g., from the Biographical Dictionary of Civil Engineers (1972 and 1991). To demonstrate how learning and dissemination evolved in this innovation system, he provides detailed summaries of data on location, occupation, specialization, educational attainment, and patent usage and commercialization.

Thomson argues persuasively that interactions beyond formal institutions were as important for development of the American system of innovation as those within them. Institutions ? firms, markets, occupations, patenting systems, publications, schools, and civil organizations ? often created asymmetries in knowledge and in its dissemination, and individuals through networks served as a corrective mechanism. He offers science as an illustration of the balance between institutions and individual networks, given its dual focus on institutions and policies and on individuals with respect to integrating science into economic life.

Further, he asserts that technological centers, large groups that played a significant role in processes of invention, diffusion, and development and fostering growth and innovation broadly across the economy, were the locus of networked innovative activity. In particular, he places machinists and the machinery industry and science and the institutions of transmission of scientific output at the epicenter of this innovation system. Using data from the Manufacturing Manuscripts of the Census and the Patent Office, he exposes mobility and linkages across industries and demonstrates that machinists were such industry-spanning technological centers.

One might have three minor quibbles about this volume. First, while the clear intent is to reinforce and provide further support for his thesis, the book is repetitive in places. For those who will use it as a reference and individual chapters by themselves, this feature may be inconsequential, and each chapter being self-contained may be an advantage.

Second, some counterfactual analysis appears in the volume. Nonetheless, more of such analysis would have been helpful to the reader. For example, in Chapter 8, Thomson argues that without distinct knowledge bases, the U.S. ?might well have succeeded in some innovations and failed in others. Without science the United States could have developed the sewing machine but not the telegraph …? (p. 257). Such statements require further probing. International comparisons, particularly to England, are deployed effectively in other places and are desirable here and elsewhere in the book. Are there places where varying innovations emerged in the absence of innovators? access to many kinds of knowledge? The reader clearly gets the sense that America?s system of innovation was exceptional but is not entirely sure why.

Finally, I believe Thomson misses an opportunity to provide a vivid example of his thesis by repeating the conventional wisdom related to Eli Whitney. A reference to his negative experience with his cotton gin and the patent system is briefly invoked early in the book (pp. 19-20). Lakwete?s (2003) careful research challenges the received wisdom about Whitney and shows that southern machinists and farmers quickly tested and improved his version of the cotton gin. Before Whitney?s patent expired, southern farmers developed incremental improvements and adopted a new gin with circular saw teeth rather than Whitney?s wire teeth, the source of novelty but less of usefulness. This more complete story would have provided clear support for Thomson?s innovative-feedback thesis while acknowledging imperfections in the patent system and its enforcement.

These quibbles notwithstanding, this book accomplishes a Herculean task of data collection and analysis. The antebellum period has been understudied, allowing scholarship on later periods to take the foundations of the innovation system for granted. It is an important work and likely to become required reading for generations of scholars of the innovative process.

References:

Biographical Dictionary of Civil Engineers, 2 volumes. New York: American Society of Civil Engineers, 1972 and 1991.

Ciarlante, Marjorie Heins. A Statistical Profile of Eminent American Inventors, 1700–1860: Social Origins and Role. Ph.D. Dissertation, Northwestern University, 1978.

Drake, Francis S., editor. Dictionary of American Biography. Boston: Houghton, Osgood, 1879.

Johnson, Allen and Dumas Malone, editors. Dictionary of American Biography, 21 volumes. New York: Charles Scribner?s Sons, 1937.

Khan, B. Zorina and Kenneth Sokoloff. ??Schemes of Practical Utility?: Entrepreneurship and Innovation among ?Great Inventors? in the United States, 1790-1865,? Journal of Economic History, 53 (2) June 1993: 289-307.

Lakwete, Angela. Inventing the Cotton Gin: Machine and Myth in Antebellum America. Baltimore: Johns Hopkins University Press, 2003.

Moser, Petra. ?How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World’s Fairs,? American Economic Review, 95(4) Sept. 2005: 1214-36.

Lisa D. Cook is an assistant professor in the Department of Economics and James Madison College at Michigan State University. Her research focuses on the economics of innovation and economic growth and development. The subject of a recent article (in the American Economic Review: Papers and Proceedings 2009) is Africa?s growth experience in recent economic history.

Subject(s):History of Technology, including Technological Change
Geographic Area(s):North America
Time Period(s):19th Century

The Government Machine: A Revolutionary History of the Computer

Author(s):Agar, Jon
Reviewer(s):Middleton, Roger

Published by EH.NET (September 2004)

Jon Agar, The Government Machine: A Revolutionary History of the Computer. Cambridge, MA: MIT Press, 2003. viii + 554. $50 (cloth), ISBN: 0-262-01202-2.

Reviewed for EH.NET by Roger Middleton, Department of Historical Studies, University of Bristol.

Jon Agar, sometime Director of the National Archive for the History of Computing, University of Manchester, and now a Research Fellow at the Department of Science and Technology Studies, University College London, here contributes a further volume to MIT’s prestigious series on the history of computing. The government in question is the United Kingdom; the topic the mechanization of its activities; and the time span from c.1798, when a standardized mass questionnaire was first used by agents of the British state, through to the beginning of the twenty first century. So far so good, though the “revolutionary history” of the computer here offered will, I suspect, surprise many in its emphasis as much upon the discursive as the material qualities of the general-purpose machine which comprises the centerpiece of what is now routinely referred to as the second informational revolution, that under which we are currently living. Accordingly, this is most decidedly not the sort of “anorak” account of heroic inventions that we have come to expect of the older style of writings on the history of technology, but instead draws upon insights from business and economic history, the sociology of professionalization and the sorts of approaches to the history of science and technology which will be familiar to readers of journals such Technology and Culture and Enterprise and Society.

The Government Machine is a story about humans and machines, but particularly about humans who promoted machines as members of what he calls expert movements (or what historians of ideas now term, epistemic communities), in this case relatively small communities of academics, civil servants, engineers and others claiming professional expertise who per force had to persuade outsiders of the legitimacy of their claims and did so by championing the introduction of new techniques. We have thus a contribution to on-going debates about the role of experts in British government since the nineteenth century, and there is much here that is pertinent to the debate prompted by MacDonagh (1958) and continued by MacLeod (1988), upon which Agar makes some important revisionist points. But his ambitions are very much greater. The central thesis comes early and typically in provocative mode, when he proclaims “that the apotheosis of the civil servant can be found in a place unfamiliar to most historians and in a form that will surprise them: the computer.” He is explicit that this is “intended to discomfort many readers” (p. 3) and that to convince them of his case requires that two hitherto largely separate disciplines be bridged.

On the one hand, Agar aims to convince political historians and historians of public administration that they have much to learn from the history of technology and the material culture of bureaucracy, with this study highlighting:

* that the changing capacities of government depended on the implementation of new technologies;

* that the civil service contained technocratic movement of experts, the full implications of which can only be appreciated when stereotyped notions of the dead hand of the Treasury are abandoned; and

* that during the twentieth century a very British style solution to the state’s needs for registers of its citizens evolved and is still evolving.

On the other hand, he wants to provoke historians of science and technology to re-examine their understanding of the role of government; in particular:

* that the uptake of office technology depended on a vision of government, even if it was typically commercial business that formed the main market for such technology;

* that the state provided a model of organization so fundamental that considerations of order, framework, structure and machine are inextricably linked with understandings of state or government — in effect, that to study the history of technology is to study the state, and vice versa; and

* that the civil service, cast as a general-purpose universal machine, framed the language of what a computer was and what it could do.

Before assessing the extent to which these ambitions are realized a note is appropriate here about the organization of and sources and inspirations for this study. First, we have a broadly chronological account, though certain topics (Babbage’s analytical engine) and characters (Turing) make more frequent appearances. Second, this is an archive-based study, and particularly rich in the use of official papers deposited in what now calls itself The National Archive (previously, the Public Record Office). Thirdly, and connectedly, while the study does come up to the new millennium, the post-1970 chapters are inevitably affected by the Thirty Year Rule for official papers. Fourthly, Agar’s work borrows and extends into the latter period Mayr’s (1986) thesis about the prevalence of particular metaphors and their profound technological consequences, whilst also building on path-breaking work on office mechanization and data processing, both public and private sector, by Campbell-Kelly. Finally, the text is liberally interspersed with images taken from the National Archive for the History of Computing, appropriately located in Manchester for it was there that the Small-Scale Experimental Machine (known as the Baby, the first machine comprising all of the components now classically regarded as characteristic of a computer) was designed, built and successfully operated on 21 June 1948. As the saying goes, what Manchester does today …

In chapter 1, Agar considers why machine-like characteristics have been attributed to governments, and it is here that he extends Mayr on the interplay between metaphorical machines and styles of government. The prevalent metaphor gives rise to a mechanical discourse of government which guided and constrained thought and action, though he does not deny that other discourses (government as organic) have featured also. However, what was particularly important in Britain was how the machine metaphor underpinned a triadic division of labor within the civil service (of generalists, the intellectual and upper class; the middle class specialists; and a lower class of mechanicals and clerks) which had particular significance for the technological trajectory of government as influenced by the expert machinery movement he goes on to chart in subsequent chapters. Chapter 2 deepens the historical analysis of the civil service from the late eighteenth century through to Second World War with Turing’s conception of a universal computing machine and Bletchley Park code breaking. An immense repertoire of mechanical language concerning government is unveiled and he shows how this became a resource for the expert movement of mechanizers. One very important conclusion at this stage is that the existing historiography’s portrayal of the generalist’s hostility to specialists, to quantification and to modern mechanization of governmental activities is deeply flawed. Thus, machines must be incorporated into histories of Britain’s civil service, and we need to take seriously the Treasury’s role in the twentieth century as an instrument for labor-saving new office technologies.

Subsequent chapters then develop in broadly chronological order the debates, deliberations and lobbying of this expert movement of mechanicals. Chapter 3 covers the period from approximately the second quarter of the nineteenth through to the early twentieth century, and demonstrates how the movement propagated its message by contrasting the chaotic state of knowledge about contemporary social and economic conditions in relation to the much more rational and ordered state of statistical knowledge assumed in competitor economies. This portrayal of Britain as a laggard then becomes a standard rhetorical technique, while we see — in terms of professionalization — an increasing emphasis on official statisticians claiming privileged expertise in terms of the production and use of statistics, though — as with the economists at this time — they were far from able to exercise monopoly rights. There is much of interest here for economic historians on the lobbying for a Census of Production, successful in 1907; on the campaign to rationalize and centralize statistical production and dissemination through the establishment of a Central Statistical Office, not achieved until 1941; and in contemporary anxieties about the avalanche of numbers and informational overload confronting policy-makers, a concern which added to the rhetorical armory of the expert movement.

In chapter 4 the emphasis shifts from efforts to aggregate for social and economic policy purposes to the demands of the First World War for knowledge, total knowledge for the more ambitious, of the population through the creation of a universal or national register. The informational needs of war quickly raised the issue of whether the number of partial registers in existence might be brought together into one universal register, duly cross-referenced. Had this transpired, the current state of computing technology available (punch cards had been used for the first time in the 1911 census) would have raised interesting questions about how it could have been used, but Agar shows that efforts at this time to bureaucratize the British were a failure because of deep-seated cultural and political antipathies towards the state having such capabilities. Partial registers were thus a hallmark of British government, and have been since as the current Home Secretary is finding in the storm of protests that have erupted against his proposals for a national identity card.

Chapters 5 through 7 are also concerned with the relationship between warfare and different information technologies. In chapter 5, Agar discusses how the upward shift in the mechanization of government activities that had occurred during the First World War was then given a further boost between the wars by the implicit bargain struck between the expert movement and the generalists working to Treasury expenditure control ambitions. Chapter 6 discusses the 1930s as another informational crisis for the British state which was met by the establishment of the Telecommunications Research Establishment (which developed radar) and the much more widely known Bletchley Park. The Second World War also marks the beginnings of an expert movement (a technocratic network) within the Treasury, in the form of Organisation and Methods (O&M) which Agar later argues comprises a non-military counterpart to Edgerton’s (1991) thesis that British governments in the twentieth century pursued a policy of “liberal militarism” which required the creation of technocratic departments of state. The British computer industry of the 1940s and 1950s forms the focus of chapter 7, confirming how the computer shaped and in turn was decisively shaped by the Cold War.

Treasury O&M and its importance for the computerization of postwar government work is then the subject of chapter 8. The installation of punch-card machines, numbering twenty-six installed or planned in 1948, was to expand rapidly thereafter. By 1958, seven departments had installed or were in the process of ordering computers, while by 1965 there were forty-five installed and a program of 250 to 300 more installations planned for the next decade. Treasury O&M staff were crucial in this process whereby the computer was reconceptualized from being an exclusively scientific tool, as it had been say at Bletchley Park, to that of a general-purpose business and office tool. Agar provides in Table 8.1 (pp. 316-17) a breakdown by department and by function of these installation plans which had now extended beyond the traditional areas of government office mechanization (the military, national insurance and other civil registry functions) to encompass most of Whitehall, save one very noticeable exception in the 1950s: the Treasury itself! Treasury officials charged with macroeconomic management did eventually lobby for a Treasury computer for long-term forecasting, but meanwhile for budget forecasting purposes had to rent time on LEO, the world’s first office computer which was owned by J. Lyons & Co, a countrywide chain of tea shops.

In chapter 9 Agar sets out to examine why concerns about privacy, and in particular a perceived threat from government computers, emerged in the late 1960s after the decade had begun so well and was then fortified with the rhetoric of the “white heat of the technological revolution.” In part, of course, the state of technology did now pose more of an objective challenge to established British notions of privacy and data protection, and we are reminded here of the First World War and the antipathy towards universal registers. Agar does not find that explanation wholly satisfactory and argues further that it was at this time that there was a shift in anxieties about threats to the collectivity posed by universal registers to anxieties about threats to individuals which are part-and-parcel of changes in the nature of public trust.

Chapter 9 ends with the Data Protection Act (1984), which was the interim product of these concerns. Chapter 10 extends the story to further data protection legislation which came into force in 2000, but is more concerned with the implications of what political scientists call the hollowed-out state for public sector computer projects where in recent years there have been some spectacular disasters, so much so that in Britain today a successful large-scale IT project is considered something of an oxymoron. Agar’s conception of the hollowed-out state is actually not much informed by the academic literature (Holliday 2000 provides a short survey of the debate) and, very surprisingly, he has nothing to say on the growth of audit and its implications, but the key for Agar is that the hollowed-out British state has lost key capabilities with respect to IT. His expert movement of mechanizers are no longer centered on Whitehall, for large-scale contracting-out has led to the locus of power — based in knowledge, competence and expertise — now residing in private sector specialists like the multinational EDS. Ironically, of course, this trend has increased the threat to privacy as private sector companies are less accountable than government.

Finally, there is a short concluding chapter which inter alia examines in international context whether British governments were backward in office mechanization and asks whether there are links here with the broader decline literature. Rejecting the deadhand of the Treasury orthodoxy, and citing approvingly Campbell-Kelly (1998) and other studies demonstrating that government departments were in the vanguard of productivity enhancing mechanization, he concludes “If there has been a distaste for the machine it has been among writers on government rather than in government itself” (p. 414). This economic historian would have liked rather more evidence on the extent of the efficiency gains attained, rather than those claimed. The Solow paradox is conspicuous for its absence here. Nonetheless, Agar is to be congratulated for his path-breaking study of a fascinating topic which he has opened up in a way which others can now develop.

References:

Campbell-Kelly, M. (1998) “Data Processing and Technological Change: The Post Office Savings Bank, 1861-1930,” Technology and Culture 39 (1): 1-32.

Edgerton, D.E.H. (1991) “Liberal Militarism and the British State,” New Left Review 185 (January/February): 138-69.

Holliday, I. (2000) “Is the British State Hollowing out?” Political Quarterly 71 (2): 167-76.

MacDonagh, O. (1958) “The Nineteenth-century Revolution in Government: A Reappraisal,” Historical Journal 1 (1): 52-67.

MacLeod, R.M. (ed.) (1988) Government and Expertise: Specialists, Administrators and Professionals, 1860-1919. Cambridge: Cambridge University Press.

Mayr, O. (1986) Authority, Liberty and Automatic Machinery in Early Modern Europe. Baltimore: Johns Hopkins University Press.

Roger Middleton’s latest publications include a chapter on government and the economy, 1860-1939 for the recent Cambridge Economic History of Modern Britain (2003), and a co-authored book, Economic Policy under the Conservatives, 1951-64 (2004). He is beginning work on a political economy of Thatcherism and continuing to examine the growth consciousness of the 1960s.

Subject(s):History of Technology, including Technological Change
Geographic Area(s):Europe
Time Period(s):20th Century: WWII and post-WWII

The Second Great Emancipation: The Mechanical Cotton Picker, Black Migration, and How They Shaped the Modern South

Author(s):Holley, Donald
Reviewer(s):Heinicke, Craig

Published by EH.NET (March 2002)

Donald Holley, The Second Great Emancipation: The Mechanical Cotton Picker,

Black Migration, and How They Shaped the Modern South. Fayetteville, AR:

University of Arkansas Press, 2000. xvi + 284 pp. $36 (cloth), ISBN:

1-55728-606-X.

Reviewed for EH.NET by Craig Heinicke, Department of Economics, Baldwin-Wallace

College, Berea, Ohio.

At the end of World War II, the southern United States stood at a turning

point — would the region continue to catch up with the rest of the nation with

respect to wages, education levels and other economic indicators or return to

its separate path of labor-intensive agriculture, paternalism, racial strife,

underemployment, and lagging wages? Without the mechanical cotton picker there

is no doubt that the former would have been delayed; with it by the late 1960s

the South lost much of its regional character. How important can any one

implement or invention be in bringing about social and economic change?

Although Donald Holley (Professor of History at the University of Arkansas at

Monticello) does not show that the mechanical harvester was indispensable for

the South’s transformation (more on this below), he builds a good case that

this machine was more important than any other since the cotton gin in

transforming the region. By the author’s account, the cotton picker

“emancipated” both southern farmers and black workers from among the most

arduous forms of “stoop” labor, and with it from perpetual misery, inadequate

education, low standards of living and the tedium of unchanging expectations.

Donald Holley’s thoroughness in addressing the associated questions that arise

suggests that this book will be a lasting reference for those interested in

this subject.

After setting out the context in the early chapters, Holley documents how the

mechanical cotton picker came to be mass produced and marketed, beginning with

how its promoters struggled with cotton’s exasperating resistance to machine

techniques, the hallmark of American agricultural advance for much of the

twentieth century. Every aspect of the somewhat familiar story of the Rust

brothers’ inventive activity is examined (chapter three), along with the Rusts’

consciousness of the potential social upheaval that mechanization of the

harvest could unleash (chapter five). The fears of other contemporaries are

documented at length; one particularly striking comment was published amid the

Depression’s high unemployment, when the Rusts’ experiments seemed poised for a

final breakthrough: “The machine is said to be quite practical … That being

true, it should be driven right out of the cotton fields and sunk into the

Mississippi River” (p. 77, quoting The Jackson Daily News, August 31,

1936). The fears of the Rusts and others were for the unemployed themselves,

but the hesitancy of some was mixed with white paranoia: “Imagine, if you can,

500,000 Negroes in Mississippi just now lolling around on cabin galleries or

loafing on the streets” (p. 78). Ten years after that editorial, when the

mechanical harvester was on the verge of becoming a commercial reality, more

fears were expressed, but many also foresaw that the picker would solve the

problem of labor scarcity (chapter eight). Holley’s strength is documenting the

extremes as well as the middle ground, revealing that the harvester was neither

savior nor “Frankenstein’s monster.”

Part of the cotton picker story includes an account of how each major

manufacturer (not only International Harvester, but also John Deere,

Allis-Chalmers, and Ben Pearson) made a bid in the “cotton harvester

sweepstakes.” Among the most interesting passages are those that lay out

International Harvester’s marketing studies (chapter six), and two “case

studies” of cotton producers using the new machinery (chapter seven). While

past accounts have implied only the wealthy used the mechanical harvester in

its early stages, one of Holley’s cases involves a small landowner.

How did it come about that after years of tinkering, doubts, and anxiety about

the consequences, the International Harvester committed itself to regular

production of the “spindle” (so-called, due to the rotating “spindles” that

pulled lint from the cotton boll) picker? In late 1942 Fowler McCormick of

International Harvester announced that a viable picker was perfected —

although scheduled production awaited the year 1948. It is plausible that

war-time migration and the resulting labor scarcity would have increased the

anticipated value of the machine. Still, 1942 was relatively early in the

process; we know only in retrospect of the sustained rise in harvesting wages.

If the experience of World War I had been repeated, however, might not southern

landowners have expected a return to pre-war wages in the future? How much

different would the timing have been without the war?

The above questions are worth pondering, and are indeed to some extent

suggested by the text. The issue involves to what extent changes outside the

cotton and southern labor markets influenced the timing of the cotton picker’s

commercial production. What else was going on at the boardrooms and

decision-making units of the major farm implement makers? Knowing this, would

help us understand exactly how much of the move toward marketing this machine

was due to changes peculiar to the South, and how much of the move was

exogenously determined. Cotton was certainly a key commodity and machinery

makers would no doubt have been aware of the breadth of the potential market.

Still, other trends in the implement industry may well have influenced the

timing of the major manufacturers’ entries into this market. Despite leaving us

to ponder these questions, the book provides extensive documentation of

southern developments and makes a solid contribution to our understanding of

how a production “bottleneck,” a machine invented to fill that need, and the

social consequences that followed, shaped other major demographic and social

changes.

Related to the timing of the picker’s production is a well-documented debate

over whether the picker would “push” workers from the field or replace those

who had been “pulled” to better jobs in the cities (chapters eight and nine).

The book extensively surveys the range of contemporary and scholarly views. The

documentation is rich in its breadth of viewpoints; the author, however, also

forwards a statistical assessment of whether the “push” of workers from the

fields was greater than the “pull.” He finds that the latter dominated,

although not by much. The author’s labor supply and demand estimation is

perhaps too uncritical of the existing data series — for instance the “piece

rates” paid to hand pickers omit important expenses for hand labor — and his

county level regressions are somewhat unconvincing on the matter of causality,

while omitting important variables. The exercise, however, does provide another

angle from which to view the relevant questions. The documentary evidence,

thoroughly presented, will form a highly valued reference from which to assess

these important questions.

Government crop programs of the New Deal era are also important (chapter four)

in the overall process. The author takes the unconventional view that the

Agricultural Adjustment Act was less a cause of tenant “displacement” than

economic trends themselves, and argues that the AAA had positive effects in

helping to rid the South of rural overpopulation. It is not that Holley is

unsympathetic to the plight of the displaced. He recognizes, like those writing

a half century ago, that the poverty of South could not be abated with too many

people on the land. He also appreciates the limited alternatives that existed

in a place and time where the aftermath of slavery still held its loathsome

grip.

The book is convincing that the mechanical cotton picker was important beyond

its value to southern farmers, and thus that we can learn much from examining

the forces which brought it about and those which delayed its arrival. The

author goes one step further, arguing that the cotton picker was

“indispensable” for both the success of the Civil Rights Movement (p. 195), and

for the “transition from the pre-World War II South of overpopulation, poverty,

and sharecropping to the postwar, modern South” (p. 185). Reminiscent of the

“axiom of indispensability” in another context, this is an intriguing idea, but

not one that is tested directly. To show that momentous events (themselves

difficult to measure in any conventional sense) would not have taken

place absent a particular invention is indeed a demanding standard. A problem

with the cotton picker as “indispensable,” is that in part it was an

intermediary between other large demographic and economic shifts and their

results for southern markets and society. These include the effects of World

War II, the New Deal, and the internal evolution of southern society and

economy among others. These observations do not necessarily imply the cotton

picker was dispensable, but they certainly provide perspective on the idea. In

this case — as with railroads, economic growth and the question of

indispensability — the substitutes for the picker from the landowner’s

perspective may have been less attractive, but they were substitutes

nonetheless. Among those that could have relieved the southern plantation

sector’s thirst for a large docile labor force were abandonment of the cotton

“mono-culture” or capital movement to the cities and other industries. On the

labor supply side, there was also migration to the cities.

A slightly different point involves the degree to which the mechanical cotton

picker “emancipated” the southern farmer and African-American. For the latter,

the analogy is laced with meaning. We should note that if the harvester

“emancipated” blacks, then there was also a good deal of self “emancipation”

that preceded it. African-Americans chose to leave the South in large numbers

for three decades prior to 1948, before the first commercially marketed cotton

harvester entered the fields. In fact, that is part of the story the author

forwards, and why it was that many contemporaries thought the harvester mainly

“replaced” those who left the fields rather than kicking workers off the land.

By 1950 when the mechanical picker first became a viable alternative for hand

picking, the percentage of black workers in the South employed in agriculture

was 31 percent. Southern African-Americans were doing other things in addition

to picking cotton. The busses of Montgomery and lunch counters of Greensboro

were more than a step away from the fields.

Perhaps the term “emancipation” is used by the author to counter some of the

“bad press” that labor saving machines, including this one, have attracted over

the years; but we must be careful of overstatement on the other side. Still, we

can agree that on balance the cotton picker represented a positive step,

despite the fact that it brought with it ambiguities and pain for those workers

with few alternatives. It is certainly true that the changes in racial and

economic relationships associated with mechanical harvesting took place

rapidly.

It is difficult to get a handle on exactly how much one should attribute social

and economic change to any one any invention, and this case is no exception. A

great value of the book is that Donald Holley draws attention to the mechanical

cotton picker as among the most consequential inventions for the South in over

two centuries of history. It also was among the more important in

twentieth-century American agriculture, even if it was not indispensable for

the major social changes that followed it. In part, the cotton picker was

important because the demographic and social changes with which it was

entangled were so consequential; Holley is aware of this at every step, and in

the end provides the balance and completeness of documentation that should

assure the longevity of his work as a reference.

Craig Heinicke, Associate Professor of Economics at Baldwin-Wallace College,

has authored, “Driven from the Fields or Enticed to the City? The Cotton

Picking Machine and the Great Migration from the Cotton Belt, 1949-1964,” with

Wayne Grove (Syracuse University), Allied Social Sciences Association Annual

Meeting, Cliometric Society Sessions, 2002; and “African-American Migration and

Mechanized Cotton Harvesting, 1950-60,” Explorations in Economic History

1994, 31: 501-520.

Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII