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Time on the Cross: The Economics of American Negro Slavery

Author(s):Fogel, Robert William
Engerman, Stanley L.
Reviewer(s):Weiss, Thomas

Project 2001: Significant Works in Economic History

Robert William Fogel and Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery. Boston: Little, Brown and Company, 1974. xviii + 286 pp.

Review Essay by Thomas Weiss, Department of Economics, University of Kansas.

“It takes a licking, but keeps on ticking.” John Cameron Swayze

It is a rare monograph in economic history that gets reviewed in magazines and newspapers such as Newsweek, Time, The Atlantic Monthly, The New York Times, The Wall Street Journal and The Washington Post among others; or whose authors appear on television talk shows. Robert Fogel and Stanley Engerman’s Time on the Cross was one such book — perhaps the only one.

Perhaps equally rare is the book that could have withstood the onslaught of unrelenting, withering criticism directed at Time on the Cross. The book was described as “simply shot through with egregious errors” (David, et al, 1976, p.339). It was “vulnerable not only to attack — but to dismissal.” Some thought the book should be consigned “to the outermost ring of the scholar’s hell, obscurity” (Haskell, 1975, p. 35). Richard Sutch could only conclude that “Time on the Cross is a failure” (1975, p. 339).

Yet here it stands among those books that still attract attention, a classic in the field. And it was recognized as such by many at the time, especially in the first wave of reviews. Peter Passell, for example, said, “If a more important book about American history has been published in the last decade, I don’t know about it” (1974, p. 4). Even after the first barrage of criticism appeared, Gary Walton ventured to say that “Time on the Cross was destined to become a classic” (1975, p. 333).

Time on the Cross was not the run of the mill book; neither was it that rare book which on its own would have drawn the attention it did. Of course, the subject matter of slavery was of great interest and would have generated a fair amount of attention; the ‘cliometric’ methodology was still somewhat new and would have elicited some additional interest; and the combination of the two, the application of quantitative methods to a morally-laden topic, would have sparked some controversy. Its popularity, however, went way beyond that, in part because the book was written and produced so as to attract an abnormally great amount of attention. As is well-known, the results and interpretation were published in one volume written for the general educated reader, and was not laden with footnotes and technical jargon. That volume, subtitled The Economics of American Negro Slavery, was described on the jacket cover as “a sweeping reexamination of the economic foundations of American Negro slavery.” The text continued in that bold and provocative style. As indicated above, it got the attention it sought. And, it was a topic of conversation at faculty cocktail parties where economic theorists would seek out economic historians and solicit their opinion: what do economic historians make of the book? Did Fogel and Engerman really argue that slavery was profitable? It became clear quickly that most of them had read the reviews and not the book, but still for a brief moment they had noticed what was going on in the field.

All the painstaking details of scholarship were relegated to a second volume, subtitled Evidence and Methods, so that anyone interested in ‘checking the facts’ or the methods of estimation had to go through a process of cross-referencing. That cross-referencing could be done only after one made sense of the condensed presentation in volume II, which itself relied on extensive cross-referencing. Consider the following simple example from Volume II that supports five pages of textual presentation in volume I regarding the decrease in the slave population of cities.

“3.9 (pp. 99-102). figures 30 and 31 are computed from data in Goldin [146; cf. 148]. See 6.6. for a summary of her findings.” (vol. II, p. 87).

Scholars, as you can imagine, were all too eager to plow through that material. And rightly so, for another bold claim of the book was that it would demonstrate the value and superiority of applying mathematical and statistical techniques to history. This was not only a red flag waved in front of the traditional historians, it got the attention of cliometricians as well. Anyone who has attended a cliometrics conference knows how thoroughly the audience combs through the technical details, no matter what the topic. Imagine when the topic is as popular and controversial as slavery.

The book was intended to do more than just straighten out the traditional interpretation of the economics of slavery. It aimed to “strike down the view that black Americans were without culture, without achievement, and without development for their first two hundred and fifty years on American soil” (p. 258). According to Fogel and Engerman this view derived from the traditional interpretation of the economics of slavery, beginning with the debate between the critics and defenders of slavery and continuing through the writings of historians, most especially U.B. Phillips and Stanley Elkins. Fogel and Engerman argued further that even those historians, such as Richard Hofstadter and Kenneth Stampp, who questioned one or more aspects of the traditional view did not do away with the myth of the inferiority of slave labor (pp. 227-31).

The traditional interpretation of the economics of slavery is obviously long and complex, as was brought out by Stampp in his critique of the book. That complexity has influenced the subsequent writings of Fogel and Engerman but in Time on the Cross they summarized it in five main propositions. “1, …slavery was generally an unprofitable investment …; 2, … slavery was economically moribund; 3, … slave labor, and agricultural production based on slave labor, was economically inefficient; 4, … slavery caused the economy of the South to stagnate, or at least retarded its growth …; 5, … slavery provided extremely harsh material conditions of life for the typical slave” (p. 226).

Their chief conclusions were also neatly summarized in a list of 10 “principal corrections of the traditional characterization of the slave economy” (pp. 4-6).

1. Slavery was not a system irrationally kept in existence by owners who failed to perceive or were indifferent to their best economic interests. The purchase of a slave was generally a highly profitable investment which yielded rates of return that compared favorably with the most outstanding investment opportunities in manufacturing.

2. The slave system was not economically moribund on the eve of the Civil War. There is no evidence that economic forces alone would have soon brought slavery to an end without the necessity of a war or other form of political intervention. Quite the contrary; as the Civil War approached, slavery as an economic system was never stronger and the trend was toward even further entrenchment.

3. Slaveowners were not becoming pessimistic about the future of their system during the decade that preceded the Civil War. The rise of the secessionist movement coincided with a wave of optimism. On the eve of the Civil War, slaveholders anticipated an era of unprecedented prosperity.

4. Slave agriculture was not inefficient compared with free agriculture. Economies of large-scale operation, effective management, and intensive utilization of labor and capital made southern slave agriculture 35 percent more efficient than the northern system of family farming.

5. The typical slave field hand was not lazy, inept, and unproductive. On average he was harder-working and more efficient than his white counterpart.

6. The course of slavery in the cities does not prove that slavery was incompatible with an industrial system or that slaves were unable to cope with an industrial regimen. Slaves employed in industry compared favorably with free workers in diligence and efficiency. Far from declining, the demand for slaves was actually increasing more rapidly in urban areas than in the countryside.

7. The belief that slave-breeding, sexual exploitation, and promiscuity destroyed the black family is a myth. The family was the basic unit of social organization under slavery. It was to the economic interest of planters to encourage the stability of slave families and most of them did so. Most slave sales were either of whole families or of individuals who were at an age when it would have been normal for them to have left the family.

8. The material (not psychological) conditions of the lives of slaves compared favorably with those of free industrial workers. This is not to say that they were good by modern standards. It merely emphasizes the hard lot of all workers, free or slave, during the first half of the nineteenth century.

9. Slaves were exploited in the sense that part of the income which they produced was expropriated by their owners. However, the rate of expropriation was much lower than has generally been presumed. Over the course of his lifetime, the typical slave field hand received about 90 percent of the income he produced.

10. Far from stagnating, the economy of the antebellum South grew quite rapidly. Between 1840 and 1860, per capita income increased more rapidly in the south than in the rest of the nation. By 1860 the south attained a level of per capita income which was high by the standards of the time. Indeed, a country as advanced as Italy did not achieve the same level of per capita income until the eve of World War II.

Several of these, such as the matter of the profitability and viability of slavery or the growth of demand for slaves in cities, were already well-known conclusions at the time and were the product of other researchers (Conrad and Meyer, Stampp, Yasuba, and Goldin, among others). Fogel and Engerman may have added a bit to these sorts of issues, but their role was more that of making such results more widely known among the general public and integrating that information into their bold, new vision of the way the slave system functioned.

Other revisionist claims were provocative. Could slave agriculture possibly be more efficient than free? Was the family the basic unit of social organization under slavery? Was the material condition of slaves as favorable as that of free industrial workers? Was the rate of exploitation or expropriation really that small? Did southern per capita income increase faster than that in the rest of the nation? The slave-based, monocultural agricultural system of the South was Douglass North’s archetypal example of an economy that was not going to be successful. Did he get it all wrong?

What followed was an avalanche of criticism. Criticism may be putting it mildly; the book and the authors were lambasted from every direction. There was an outpouring of research, papers, special journal issues, edited volumes, monographs, conference sessions, and indeed an entire conference — the Rochester Conference: “Time on the Cross: A First Appraisal.” There is no question this was a seminal work, if by that one means it was responsible for bringing forth further work. In this case it did so in abundance. In addition to the work by those who questioned many aspects of Time on the Cross, there was the continuing work by Fogel and Engerman and their students, much of which ultimately appeared in Without Consent or Contract: Evidence and Methods, and Without Consent or Contract: Technical Papers (2 vols.). A re-interpretation of all this work culminated in Fogel’s Without Consent or Contract: The Rise and Fall of American Slavery (which appeared in print long before all the supporting material).

Much of the criticism, at least that which materialized in the first wave, was brought together in two edited volumes: a special issue of Explorations in Economic History (October 1975) and Reckoning With Slavery (David, et al, 1976); and a single authored work Slavery and the Numbers Game (Gutman, 1975). In most cases, the articles in these volumes were also published in journals, usually in a more technical style. The Journal of Economic History, for example, had published a long review essay written by Paul David and Peter Temin, which became part of Reckoning With Slavery. Subsequently the American Economic Review published an important exchange between David and Temin (1979) and Fogel and Engerman (1977 and 1980) regarding the relative efficiency of slave agriculture.

Scholars argued about everything — including what the traditional characterization of slavery was. Sutch produced a monograph questioning almost every aspect of the material treatment of slaves; Gavin Wright criticized the argument that the long run prospects of slavery were good; David and Temin, and others examined the efficiency calculation; Richard Vedder and others questioned the definition and measurement of exploitation; Herbert Gutman examined the arguments about the Protestant work ethic and family values among other things. And as expected, Fogel and Engerman, and their students, published articles that defended their findings.

Not everyone agreed on which of the conclusions was most startling, or which was more in error. On the one hand, Richard Sutch saw the “authors’ claim that the physical and psychological well-being of American slaves was much greater than previously believed” as the lightning rod that attracted so much attention to the book (1975, p. 335). Thomas Haskell argued that the ‘book’s central argument, [was] the claim that slaves were more efficient workers than free men.” (1975, p. 36). In a sense it was the conjunction of interrelated claims, or what critics saw as the whole house of cards, that made for so much controversy.

By itself, for example, the finding that farms using slave labor were estimated to have been more efficient than farms using free workers might not have been controversial. It may have been surprising, but that was in part because no one had thought to look before. If that were an isolated finding, only those who worry about the details of estimating production functions would have cared. But it was not an isolated piece of information, it was part of a different view of the slave regime — the centerpiece of it according to Haskell (1975, p.36). In the Fogel-Engerman scheme the efficiency of southern agriculture was the joint product of shrewd capitalistic planters and hard-working slaves. The innovative, and highly controversial point, was that slaves worked hard because they were rewarded for doing so, not because they were driven to it. Critics pointed out that there was little evidence on rewards; to a large extent this was inferred from the economic outcomes, and from the evidence on the slaves’ material standard of living and the hierarchy of occupations in which they were employed, and from the evidence that whipping did not appear to be widely used to motivate the slaves.

Of course, slaves were motivated by a combination of the stick and the carrot. Fogel and Engerman may have exaggerated the role of the carrot, but a more lenient view is that they were attempting to shift the balance towards well-motivated economic behavior and a more reasonable treatment of slaves. In their summary of the traditional view they argued that Kenneth Stampp had come “remarkably close to discovering the true nature of the slave system…” but had overestimated the use of cruelty.” In Fogel and Engerman’s view, force was necessary, and, although it “could, and often did, lead to cruelty” there was less of it than Stampp believed. Planters, being capitalistic businessmen “used force for exactly the same purpose as they used positive incentives — to achieve the largest product at the lowest cost. Like everything else, they strove to use force not cruelly, but optimally” (p. 232).

In the opinion of Fogel and Engerman, it was the traditional view in which slaves were lazy and not well motivated that gave rise to the false stereotype of black labor that still plagues blacks today (p. 215). In their revised view slaves were hard working; slave labor was of superior quality. Indeed, this helps explain why large slave plantations were much more efficient than free southern farms. “This advantage was not due to some special way in which land or machinery was used, but to the special quality of plantation labor” (p. 209). Ordinary slaves were “… imbued like their masters with a Protestant ethic” (p. 231). They could not exercise that work ethic in whichever direction they wished, but within the confines of the slave system they could, and to a large extent did, strive hard. This revised view, as you can see, shifts attention away from the effect of slavery on the conditions and behavior of blacks today, and puts it back on the conditions of black life that took place after the Civil War (p. 260). And one can imagine this revised view would have bearing on the question of black reparations.

Critics addressed as well the question of the proper role of quantitative methods in history. Could cliometrics make a contribution to our understanding of history in general and slavery in particular? Or is it the case that some of the issues related to slavery are not amenable to quantification or economic analysis?

One calculation from Time on the Cross, for example, that got a lot of attention, perhaps more than any other, was the attempt to measure the extent to which slaves were whipped. It may seem like this point was belabored by critics, but it was an important piece of information in the Fogel-Engerman edifice. Whipping was an example of the methods used to socialize and motivate slaves; the less important these incentives of the ‘stick’ variety, the more believable would be the argument about the incentive effect of carrots. According to Fogel and Engerman, whipping was not common; there were only “an average of 0.7 whippings per hand per year.” The quantification alone was an affront to some, while the interpretation bothered many more. The criticism of this one point suggests the extent to which scholars were examining the book’s methodology. Gutman (1975) took the matter up in great detail, pointing out that their argument rested on evidence from a single plantation and one not likely to be representative of the plantation economy. Moreover, they were careless in their use of those limited statistics; they used an “inaccurate count of the number of whippings, [a] greatly exaggerated estimate of the number of hands, and their erroneous measurement of the length of time covered,” to arrive at their estimate. Gutman argues that it is more relevant to ask how often the whip was used, and using the same evidence calculated that “A slave — on average — was whipped every 4.56 days.” Moreover, the precision as to the number of whippings is not as important as the impact, and that depended on the external effects of whipping. Slaves who witnessed the whipping may have altered their behavior.

Historians were all too eager to think that cliometric techniques had led Fogel and Engerman to what historians saw as outlandish conclusions. Perhaps for this reason, cliometricians felt some duty to defend the cliometric methodology and came down harder on the authors, questioning the quality of Fogel and Engerman’s data, analysis and interpretation. Sutch’s work on the material treatment of slaves, was a detailed attempt to replicate the results of Fogel and Engerman and he “found so many errors of computation or citation, data so selective or weak, and the presentation of the results so distorted that I have been forced to conclude that Time on the Cross is a failure” (1975, p. 339) But it was not a failure of the cliometric methodology; “the fault must lie with the authors.” In Sutch’s view, “quantitative methods can help in producing a more accurate and complete portrayal of slavery” (1975, p. 429).

Somehow Time on the Cross has survived all this firepower. Its conclusions are not all intact, but neither have they been completely dismantled. Despite all the criticisms of the calculation of the relative efficiency of southern agriculture, for example, the leading cliometrics textbook says “The bottom line of the debate is that Fogel and Engerman’s measure of relative efficiency seems to be robust, although many scholars remain troubled by quite how to interpret the estimates. [And] The sources of productivity differences remain a mystery” (Atack and Passell, 1994, p. 316). And although slaves are not seen as having been imbued with the Protestant work ethic, there is little question that they were motivated in part by positive incentives and not just by force and cruelty.

The material conditions of slaves were not as good as Fogel and Engerman made them out to be, but they were better than many had imagined. Fogel and Engerman in effect forced others to confront the issue and look more carefully at the variation in treatment across space, time and size of slave holding. Much research was produced as a result of this, and much of it was produced by students of, and under the direction of, Fogel and Engerman. Thomas Haskell thought that Time on the Cross would probably survive in part because “there were dozens of graduate research assistants who are now fiercely loyal to their company and its product” (1975, p. 39). He envisioned that these assistants would work to shore up the various parts of the structure laid out in the book, and it is unlikely he imagined the sort of work on the stature and nutrition of slaves that was carried out by Richard Steckel, Robert Margo and others. That evidence, the quantitative sort that Fogel and Engerman desired and paid attention to, ran heavily against Time on the Cross, and has clearly influenced Fogel and Engerman’s views. According to Time on the Cross, “Slave health care was at its best for pregnant women. ‘Pregnant women,’ wrote one planter, ‘ must be treated with great tenderness, worked near home and lightly” (p.122). In the “Afterword” of the re-issued Norton edition of the book they put it this way: “It now appears that children rather than adults were the principal victims of malnutrition. [and] Much of the new story turns on the overwork of pregnant women” (1989, p. 285). In Without Consent or Contract, Fogel puts it this way “Masters were not generally guilty of working field hands to death, but they were guilty of so overworking pregnant women that infant death rates were pushed to extraordinary levels” (p. 153).

And despite the pronouncements by some historians that the book was a “flash in the pan, a bold but now discredited work” (Kolchin, 1992, p. 492), it remains in publication and on the reading lists in economics as well as history courses. Of course one cannot tell from the reading list what use is made of the book in each course, and it may be that historians use it as an example of methodology that should not be tried. Nevertheless, it is still in use and still being paid attention to. Moreover, many economic historians, in both economics and history departments, agree with the major conclusions put forth by Fogel and Engerman. Robert Whaples (1995) surveyed members of the Economic History Association in order to find out where there is consensus on a broad range of issues, and included four hypotheses taken straight out of Time on the Cross. As one might expect, two of the propositions that were not very controversial in 1974 — those having to do with the profitability and viability of slavery — were still uncontroversial and agreed to by nearly 100 percent of both economists and historians. More surprising is that most economists and historians accept Fogel and Engerman’s proposition that slave agriculture was efficient compared with free labor. Some of those who agreed did so with unspecified provisos, but only 28 percent of economists and 35 percent of historians disagreed. Their proposition about the material standard of living has not fared as well, 58 percent of historians and 42 percent of economists disagreed with the proposition that the material condition of slaves compared favorably with those of free industrial workers. This, I would think should not be too surprising in light of the work cited above on the treatment of slave children and pregnant women. Many of Fogel and Engerman’s students might have disagreed with this claim, and even Fogel and Engerman have backed off somewhat on this claim (1989, p. 285).

Clearly the book had an impact. At the time it seemed that the attention of the field was devoted entirely to this subject; Fogel and Engerman must have been consumed by it. Its impact, however, even if not all of its conclusions, was longer lasting. It led to a large volume of subsequent research, the compilation of data sets, and helped as well to foster new areas of work, such as that on stature and the standard of living. Whether its conclusions are right or wrong, it is a book that has not been ignored.

References Cited:

Jeremy Atack and Peter Passel. A New Economic View of American History, second edition. New York and London: W.W. Norton, 1994.

Alfred Conrad and John Meyer. “The Economics of Slavery in the Antebellum South.” Journal of Political Economy 66 (1958): 95-130.

Paul David, et al, editors. Reckoning With Slavery: Critical Essays in the Quantitative History of American Negro Slavery. New York: Oxford University Press, 1976.

Paul David and Peter Temin. “Slavery: The Progressive Institution?” Journal of Economic History 34, no. 3 (1974): 739-83.

Paul David and Peter Temin. “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South: A Comment.” American Economic Review 69 (1979): 213-18.

Robert Fogel. Without Consent or Contract: The Rise and Fall of American Slavery. New York: W.W. Norton, 1989.

Robert Fogel, et al. Without Consent or Contract: Evidence and Methods. New York: W.W. Norton, 1992.

Robert Fogel, et al. Without Consent or Contract: Technical Papers. New York: W.W. Norton, 1992.

Robert Fogel and Stanley Engerman. Time on the Cross: The Economics of American Negro Slavery. Boston: Little, Brown and Company, 1974.

Robert Fogel and Stanley Engerman. Time on the Cross: Evidence and Methods. Boston: Little, Brown and Company, 1974.

Robert Fogel and Stanley Engerman. “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South.” American Economic Review 67 (1977): 672-90.

Robert Fogel and Stanley Engerman. Time on the Cross: The Economics of American Negro Slavery. New York: W.W. Norton, 1989.

Robert Fogel and Stanley Engerman. “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South: A Reply.” American Economic Review 70 (1980): 672-90.

Claudia Goldin. “The Economics of Urban Slavery: 1820 to 1860,” Ph.D. dissertation, University of Chicago, 1972, subsequently published as Urban Slavery in the American South, 1820-1860: A Quantitative History. Chicago: University of Chicago Press, 1976.

Herbert Gutman. Slavery and the Numbers Game: A Critique of Time on the Cross. Urbana: University of Illinois Press, 1975.

Thomas Haskell. “The True and Tragical History of ‘Time on the Cross.’ The New York Review of Books (October, 1975): 33-39.

Peter Kolchin. “More Time on the Cross? An Evaluation of Robert William Fogel’s Without Consent or Contract.” Journal of Southern History LVIII, no. 3 (1992): 491-502.

Robert Margo and Richard Steckel. “Height, Health, and Nutrition: Analysis of Evidence for U.S. Slaves” Social Science History 6 (1982): 516-58

Peter Passel. “An Economic Analysis of that Peculiarly Economic Institution.” New York Times Book Review (April 28, 1974): 4.

Kenneth Stampp. The Peculiar Institution: Slavery in the Antebellum South. New York: Alfred Knopf, 1956.

Richard. Steckel. “A Peculiar Population: The Nutrition, Health, and Mortality of American Slaves from Childhood to Maturity.” Journal of Economic History 46 (1986a): 721-41.

Richard. Steckel. “Birth Weights and Infant Mortality among American Slaves.” Explorations in Economic History 23 (1986b): 173-98.

Richard Sutch. “The Treatment Received by American Slaves.” Explorations in Economic History 12 (1975): 335-438.

Richard Vedder. “The Slave Exploitation (Expropriation) Rate.” Explorations in Economic History 12 (1975): 453-58.

Gary Walton. “A Symposium on Time on the Cross.” Explorations in Economic History 12 (1975): 333-34.

Robert Whaples. “Where Is There Consensus Among American Economic Historians?” Journal of Economic History, 55 (1995): 139-147.

Gavin Wright. “Slavery and the Cotton Boom.” Explorations in Economic History 12 (1975): 439-52.

Tom Weiss teaches economics at the University of Kansas and is a research associate of the National Bureau of Economic Research. He is a former editor of the Journal of Economic History, and is currently the Executive Director of the Economic History Association. His current research is a collaborative project on economic development in colonial North America being carried out with Joshua Rosenbloom and Peter Mancall.

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

Economy of England at the Time of the Norman Conquest

John McDonald, Flinders University, Adelaide, Australia

The Domesday Survey of 1086 provides high quality and detailed information on the inputs, outputs and tax assessments of most English estates. This article describes how the data have been used to reconstruct the eleventh-century Domesday economy. By exploiting modern economic theory and statistical methods the reconstruction has led to a radically different assessment of the way in which the Domesday economy and fiscal system were organized. It appears that tax assessments were based on a capacity to pay principle subject to politically expedient concessions and we can discover who received lenient assessments and why. Penetrating questions can be asked about the economy. We can compare the efficiency of Domesday agricultural production with the efficiency of more modern economies, measure the productivity of inputs and assess the impact of feudalism and manorialism on economic activity. The emerging picture of a reasonably well organized economy and fair tax system contrasts with the assessment of earlier historians who saw the Normans as capable military and civil administrators but regarded the economy as haphazardly run and tax assessments as “artificial” or arbitrary. The next section describes the Survey, the contemporary institutional arrangements and the main features of Domesday agricultural production. Some key findings on the Domesday economy and tax system are then briefly discussed.

Domesday England and the Domesday Survey

William the Conqueror invaded England from France in 1066 and carried out the Domesday Survey twenty years later. By 1086, Norman rule had been largely consolidated, although only after rebellion and civil dissent had been harshly put down. The Conquest was achieved by an elite, and, although the Normans brought new institutions and practices, these were superimposed on the existing order. Most of the Anglo-Saxon aristocracy were eliminated, the lands of over 4,000 English lords passing to less than 200 Norman barons, with much of the land held by just a handful of magnates.

William ruled vigorously through the Great Council. England was divided into shires, or counties, which were subdivided into hundreds. There was a sophisticated and long established shire administration. The sheriff was the king’s agent in the county, royal orders could be transmitted through the county and hundred courts, and an effective taxation collection system was in place.

England was a feudal state. All land belonged to the king. He appointed tenants-in-chief, both lay and ecclesiastical, who usually held land in return for providing a quota of fully equipped knights. The tenants-in-chief might then grant the land to sub-tenants in return for rents or services, or work the estate themselves through a bailiff. Although the Survey records 112 boroughs, agriculture was the predominant economic activity, with stock rearing of greater importance in the south-west and arable farming more important in the east and midlands. Manorialism was a pervasive influence, although it existed in most parts of England in a modified form. On the manor the peasants worked the lord’s demesne in return for protection, housing, and the use of plots of land to cultivate their own crops. They were tied to the lord and the manor and provided a resident workforce. The demesne was also worked by slaves who were fed and housed by the lord.

The Domesday Survey was commissioned on Christmas day, 1085, and it is generally thought that work on summarizing the Survey was terminated with the death of William in September 1087. The task was facilitated by the availability of Anglo-Saxon hidage (tax) lists. The counties of England were grouped into (probably) seven circuits. Each circuit was visited by a team of commissioners, bishops, lawyers and lay barons who had no material interests in the area. The commissioners were responsible for circulating a list of questions to land holders, for subjecting the responses to a review in the county court by the hundred juries, often consisting of half Englishmen and half Frenchmen, and for supervising the compilation of county and circuit returns. The circuit returns were then sent to the Exchequer in Winchester where they were summarized, edited and compiled into Great Domesday Book.

Unlike modern surveys, individual questionnaire responses were not treated confidentially but became public knowledge, being verified in the courts by landholders with local knowledge. In such circumstances, the opportunities for giving false or misleading evidence were limited.

Domesday Book consists of two volumes, Great (or Exchequer) Domesday and Little Domesday. Little Domesday is a detailed original survey circuit return of circuit VII, Essex, Norfolk and Suffolk. Great Domesday is a summarized version of the other circuit returns sent to the King’s treasury in Winchester. (It is thought that the death of William occurred before Essex and East Anglia could be included in Great Domesday.) The two volumes contain information on the net incomes or outputs (referred to as the annual values), tax assessments and resources of most manors in England in 1086, some information for 1066, and sometimes also for an intermediate year. The information was used to revise tax assessments and document the feudal structure, “who held what, and owed what, to whom.”


The Domesday tax assessments relate to a non-feudal tax, the geld, thought to be levied annually by the end of William’s reign. The tax can be traced back to the danegeld, and, although originally a land tax, by Norman times, it was more broadly based and a significant impost on landholders.

There is an extensive literature on the Norman tax system, much of it influenced by Round (1895), who considered the assessments to be “artificial,” in the sense that they were imposed from above via the county and hundred with little or no consideration of the capacity of an individual estate to pay the tax. Round largely based his argument on an unsystematic and subjective review of the distribution of the assessments across estates, vills and the hundreds of counties.

In (1985a) and (1986, Ch. 4), Graeme Snooks and I argued that, contrary to Round’s hypothesis, the tax assessments were based on a capacity to pay principle, subject to some politically expedient tax concessions. Similar tax systems operate in most modern societies and reflect an attempt to collect revenue in a politically acceptable way. We found empirical support for the hypothesis, using statistical methods. We showed, for example, that for Essex lay estates about 65 percent of variation in the tax assessments could be attributed to variations in manorial net incomes or manorial resources, two alternative ways of measuring capacity to pay. Similar results were obtained for other counties. Capacity to pay explains from 64 to 89 percent of variation in individual estate assessment data for the counties of Buckinghamshire, Cambridgeshire, Essex and Wiltshire, and from 72 to 81 percent for aggregate data for 29 counties (see McDonald and Snooks, 1987a). The estimated tax relationships capture the main features of the tax system.

Capacity to pay explains most variation in tax assessments, but some variation remains. Who and which estates were treated favorably? And what factors were associated with lenient taxation? These issues were investigated in McDonald (1998) where frontier methods were used to derive a measure of how favorable the tax assessments were for each Essex lay estate. (The frontier methods, also known as “data envelopment analysis,” use the tax and income observations to trace out an outer bound, or frontier, for the tax relationship.) Estates, tenants-in-chief and local areas (hundreds) of the county with lenient assessments were identified, and statistical methods used to discover factors associated with favorable assessments. Some significant factors were the tenant-in-chief holding the estate (assessments tended to be less beneficial for the tenants-in-chief holding a large number of estates in Essex), the hundred location (some hundreds receiving more favorable treatment than others), proximity to an urban center (estates remote from the urban centers being more favorably treated), economic size of the estate (larger estates being less favorably treated) and tenure (estates held as sub-tenancies having more lenient assessments). The results suggest a similarity with more modern tax systems, with some groups and activities receiving minor concessions and the administrative process inducing some unevenness in the assessments. Although many details of the tax system have been lost in the mists of time, careful analysis of the Survey data has enabled us to rediscover its main features.


Since Victorian times historians have used Domesday Book to study the political, institutional and social structures and the geography of Domesday England. However, the early scholars tended to draw away from economic issues. They were unable to perceive that systematic economic relationships were present in the Domesday economy, and, in contrast to their view that the Normans displayed considerable ability in civil administration and military matters, economic production was regarded as poorly organized (see McDonald and Snooks, 1985a, 1985b and 1986, especially Ch 3). One explanation why the Domesday scholars were unable to discover consistent relationships in the economy lies in the empirical method they adopted. Rather than examining the data as a whole using statistical techniques, conclusions were drawn by generalizing from a few (often atypical) cases. It is not surprising that no consistent pattern was evident when data were restricted to a few unusual observations. It would also appear that the researchers often did not have a firm grasp of economic theory (for example, seemingly being perplexed that the same annual value, that is, net output, could be generated by estates with different input mixes, see McDonald and Snooks, 1986, Ch. 3).

In McDonald and Snooks (1986), using modern economic and statistical methods, Graeme Snooks and I reanalyzed manorial production relationships. The study shows that strong relationships existed linking estate net output to inputs. We estimated manorial production functions which indicate many interesting characteristics of Domesday production: returns to scale were close to constant, oxen plough teams and meadowland were prized inputs in production but horses contributed little, and villans, bordars and slaves (the less free workers) contributed far more than freemen and sokemen ( the more free) to the estate’s net output. The evidence suggested that in many ways Domesday landholders operated in a manner similar to modern entrepreneurs. Unresolved by this research was the question of how similar was the pattern of medieval and modern economic activity. In particular, how well organized was estate production?

Clearly, in an absolute sense Domesday estate production was inefficient. With modern technology, using, for example, motorized tractors, output could have been increased many-fold. A more interesting question is: Given the contemporary technology and institutions, how efficient was production?

In McDonald (1998) frontier methods were used to measure best practice, given the economic environment. We then measured how far, on average, estate production was below the best practice frontier. Providing some estates were effectively organized, so that best practice was good practice, this will be a useful measure. If many estates were run haphazardly and ineffectively, average efficiency will be low and efficiency dispersion measures large. Comparisons with average efficiency levels in similar production situations will give an indication of whether Domesday average efficiency was unusually low.

A large number of efficiency studies have been reported in the literature. Three case studies with characteristics similar to Domesday production are Hall’s (1975) study of agriculture after the Civil War in the American South, Hall and LeVeen’s (1978) analysis of small Californian farms and Byrnes, Färe, Grosskopf and Lovell’s (1988) study of American surface coalmines. For all three studies the individual establishment is the production unit, the economic activity is unsophisticated primary production and similar frontier methods are used to measure efficiency.

The comparison studies suggest that efficiency levels varied less across Domesday estates than they did among postbellum Southern farms and small Californian farms in the 1970s (and were very similar for Domesday estates and US surface coalmines). Certainly, the average Domesday estate efficiency level does not appear to be unusually low when compared with average efficiency levels in similar production situations.

In McDonald (1998) estate efficiency measures are also used to examine details of production on individual estates and statistical methods employed to find factors associated with efficiency. Some of these include the estate’s tenant-in-chief (some tenants-in-chief displayed more entrepreneurial flair than others), the size of the estate (larger estates, using inputs in different proportions to smaller estates, tended to be more efficient) and the kind of agriculture undertaken (estates specialized in grazing were more efficient).

Largely through the influences of feudalism and manorialism, Domesday agriculture suffered from poorly developed factor markets and considerable immobility of inputs. Although there were exceptions to the rule, as a first approximation, manorial production can be characterized in terms of estates worked by a residential labor force using the resources, which were available on the estate.

Input productivity depends on the mix of inputs used in production, and with estates endowed with widely different resource mixes, one might expect that input productivities would vary greatly across estates. The frontier analysis generates input productivity measures (shadow prices), and these confirm this expectation — indeed on many estates some inputs made very little contribution to production. The frontier analysis also allows us to estimate the economic cost of input rigidity induced by the feudal and manorial arrangements. The calculation indicates that if inputs had been mobile among estates an increase in total net output of 40.1 percent would have been possible. This potential loss in output is considerable. The frontier analysis indicates the loss in total net output resulting from estates not being fully efficient was 51.0 percent. The loss in output due to input rigidities is smaller, but of a similar order of magnitude.

Domesday Book is indeed a rich data source. It is remarkable that so much can be discovered about the English economy almost one thousand years ago.

Further reading

Background information on Domesday England is contained in McDonald and Snooks (1986, Ch. 1 and 2; 1985a, 1985b, 1987a and 1987b) and McDonald (1998). For more comprehensive accounts of the history of the period see Brown (1984), Clanchy (1983), Loyn (1962), (1965), (1983), Stenton (1943), and Stenton (1951). Other useful references include Ballard (1906), Darby (1952), (1977), Galbraith (1961), Hollister (1965), Lennard (1959), Maitland (1897), Miller and Hatcher (1978), Postan (1966), (1972), Round (1895), (1903), the articles in Williams (1987) and references cited in McDonald and Snooks (1986). The Survey is discussed in McDonald and Snooks (1986, sec. 2.2), the references cited there, and the articles in Williams (1987). The Domesday and modern surveys are compared in McDonald and Snooks (1985c).
The reconstruction of the Domesday economy is described in McDonald and Snooks (1986). Part 1 contains information on the basic tax and production relationships and Part 2 describes the methods used to estimate the relationships. The tax and production frontier analysis and efficiency comparisons are described in McDonald (1998). The book also explains the frontier methodology. A series of articles describe features of the research to different audiences: McDonald and Snooks (1985a, 1985b, 1987a, 1987b), economic historians; McDonald (2000), economists; McDonald (1997), management scientists; McDonald (2002), accounting historians (who recognize that Domesday Book possesses many attributes of an accounting record); and McDonald and Snooks (1985c), statisticians. Others who have made important contributions to our understanding of the Domesday economy include Miller and Hatcher (1978), Harvey (1983) and the contributors to the volumes edited by Aston (1987), Holt (1987), Hallam (1988) and Britnell and Campbell (1995).


Aston, T.H., editor. Landlords, Peasants and Politics in Medieval England. Cambridge: Cambridge University Press, 1987.
Ballard, Adolphus. The Domesday Inquest. London: Methuen, 1906.
Brittnell, Richard H. and Bruce M.S. Campbell, editors. A Commercialising Economy: England 1086 to c. 1300. Manchester: Manchester University Press, 1995.
Brown, R. Allen. The Normans. Woodbridge: Boydell Press, 1984.
Byrnes, P., R. Färe, S. Grosskopf and C.A. K. Lovell. “The Effect of Unions on Productivity: U.S. Surface Mining of Coal.” Management Science 34 (1988): 1037-53.
Clanchy, M.T. England and Its Rulers, 1066-1272. Glasgow: Fontana, 1983.
Darby, H.C. The Domesday Geography of Eastern England. Reprinted 1971. Cambridge: Cambridge University Press, 1952.
Darby, H.C. Domesday England. Reprinted 1979. Cambridge: Cambridge University Press, 1977.
Darby, H.C. and I.S. Maxwell, editor. The Domesday Geography of Northern England. Cambridge: Cambridge University Press, 1962.
Galbraith, V.H. The Making of Domesday Book. Oxford: Clarendon Press,1961.
Hall, A. R. “The Efficiency of Post-Bellum Southern Agriculture.” Ann Arbor, MI: University Microfilms International, 1975.
Hall, B. F. and E. P. LeVeen. “Farm Size and Economic Efficiency: The Case of California.” American Journal of Agricultural Economics 60 (1978): 589-600.
Hallam, H.E. Rural England, 1066-1348. Brighton: Fontana, 1981.
Hallam, H.E., editor. The Agrarian History of England and Wales, II: 1042-1350. Cambridge: Cambridge University Press, 1988.
Harvey, S.P.J. “The Extent and Profitability of Demesne Agriculture in the Latter Eleventh Century.” In Social Relations and Ideas: Essays in Honour of R.H. Hilton, edited by T.H. Ashton et al. Cambridge, Cambridge University Press, 1983.
Hollister, C.W. The Military Organisation of Norman England. Oxford: Clarendon Press. 1965.
Holt, J. C., editor. Domesday Studies. Woodbridge: Boydell Press, 1987.
Langdon, J. “The Economics of Horses and Oxen in Medieval England.” Agricultural History Review 30 (1982): 31-40.
Lennard, R. Rural England 1086-1135: A Study of Social and Agrarian Conditions. Oxford: Clarendon Press, 1959.
Loyn, R. Anglo-Saxon England and the Norman Conquest. Reprinted 1981. London: Longman, 1962.
Loyn, R. The Norman Conquest. Reprinted 1981. London: Longman, 1965.
Loyn, R. The Governance of Anglo-Saxon England, 500-1087. London: Edward Arnold, 1983.
McDonald, John. “Manorial Efficiency in Domesday England.” Journal of Productivity Analysis 8 (1997): 199-213.
McDonald, John. Production Efficiency in Domesday England. London: Routledge, 1998.
McDonald, John. “Domesday Economy: An Analysis of the English Economy Early in the Second Millennium.” National Institute Economic Review 172 (2000): 105-114.
McDonald, John. “Tax Fairness in Eleventh Century England.” Accounting Historians Journal 29 (2002): 173-193.
McDonald, John. and G. D. Snooks. “Were the Tax Assessments of Domesday England Artificial? The Case of Essex.” Economic History Review 38 (1985a): 353-373.
McDonald, John. and G. D. Snooks. “The Determinants of Manorial Income in Domesday England: Evidence from Essex.” Journal of Economic History 45 (1985b): 541-556.
McDonald, John. and G. D. Snooks. “Statistical Analysis of Domesday Book (1086).” Journal of the Royal Statistical Society, Series A 148 (1985c): 147-160.
McDonald, John. and G. D. Snooks. Domesday Economy: A New Approach to Anglo-Norman History. Oxford: Clarendon Press, 1986.
McDonald, John. and G. D. Snooks. “The Suitability of Domesday Book for Cliometric Analysis.” Economic History Review 40 (1987a): 252-261.
McDonald, John. and G. D. Snooks. “The Economics of Domesday England.” In
A. Williams, editor, Domesday Book Studies. London: Alecto Historical Editions, 1987.
Maitland, Frederic William. Domesday Book and Beyond. Reprinted 1921, Cambridge: Cambridge University Press, 1897.
Miller, Edward, and John Hatcher. Medieval England: Rural Society and Economic Change 1086-1348. London: Longman, 1978.
Morris, J., general editor. Domesday Book: A Survey of the Counties of England. Chichester: Phillimore, 1975.
Postan, M. M. Medieval Agrarian Society in Its Prime, The Cambridge Economic History of Europe. Vol. 1, M. M. Postan, editor. Cambridge: Cambridge University Press, 1966.
Postan, M. M. The Medieval Economy and Society: An Economic History of Britain in the Middle Ages. London: Weidenfeld & Nicolson, 1972.
Raftis, J. A. The Estates of Ramsey Abbey: A Study in Economic Growth and Organisation. Toronto: Pontifical Institute of Medieval Studies, 1957.
Round, John Horace. Feudal England: Historical Studies on the Eleventh and Twelfth Centuries. Reprinted 1964. London: Allen & Unwin, 1895.
Round, John Horace. “Essex Survey.” In VCH Essex. Vol. 1, reprinted 1977. London: Dawson, 1903.
Snooks, G. D. “The Dynamic Role of the Market in the Anglo-Saxon Economy and Beyond, 1086-1300.” In A Commercialising Economy: England 1086 to c. 1300, edited by R. H. Brittnell and M. S. Campbell. Manchester: Manchester University Press, 1995.
Stenton, D. M. English Society in the Middle Ages. Reprinted 1983. Harmondsworth: Penguin, 1951.
Stenton, F. M. Anglo-Saxon England. Reprinted 1975. Oxford: Clarendon Press, 1943.
Victoria County History. London: Oxford University Press, 1900-.
Williams, A., editor. Domesday Book Studies. London: Alecto Historical Editions, 1987.

Citation: McDonald, John. “Economy of England at the Time of the Norman Conquest”. EH.Net Encyclopedia, edited by Robert Whaples. September 9, 2004. URL

Europe and the Maritime World: A Twentieth Century History

Author(s):Miller, Michael B.
Reviewer(s):Sicotte, Richard

Published by EH.Net (June 2013)

Michael B. Miller, Europe and the Maritime World: A Twentieth Century History. New York: Cambridge University Press, 2012. xvi + 435 pp. $99 (hardcover), ISBN: 978-1-107-02455-7.

Reviewed for EH.Net by Richard Sicotte, Department of Economics, University of Vermont.

In Europe and the Maritime World, Michael Miller describes the process of globalization in the twentieth century through the prism of maritime history.? Miller, professor of history at the University of Miami, organizes his study into two parts.? In the first part, entitled ?Networks,? the author describes the interrelationships of shipping, ports, trading companies, commodity trades, commercial and transport intermediaries and business culture, as they existed in the world up to around 1960.? The network of networks that Miller describes comprised nothing less than the world ocean-borne trading and transport system.? The second part of his book, entitled ?Exchanges,? depicts the evolution of this system from World War I to the present day.? In this part, Miller?s focus is on the ?exchanges? between ?maritime history and the larger currents of the twentieth century.?? The four chapters cover World War I, the interwar period, World War II and reconstruction, and the period from the 1960s to the present.? The scope of the book, therefore, is very wide.? Indeed, the author states that Europe and the Maritime World is ?better understood as an investigation into how the modern world has worked.?

Miller argues persuasively that the ?commercial maritime world? helped to shape the modern world?s organization of consumption and production.? The inclusion of ?Europe? in the title is appropriate.? Much of the book discusses the activities of European individuals and firms, although the geographic scope of their activities is worldwide.? Dutch, German, Belgian, French and British firms predominate, which is justified, Miller argues, on the basis that Europeans were the principle builders and operators of the global trading and transport system up to 1960.? This is not to give the impression that the system evolved out of some coordinated European plan.? Indeed, Miller?s descriptions succeed in conveying how the competitive and cooperative decisions of millions of people over a century developed this system.? It is just simply that European shipping, trading and logistical firms were the major players, particularly in trans-oceanic transport.? In some fascinating descriptions of Asian commerce, Miller describes how through competitive advantage, network relationships and colonialism, Europeans also came to integrate themselves into and influence the shape of local feeder networks there as well.

One of the many strengths of this volume is its encyclopedic display of maritime and commercial history.? The book is a virtual one-stop shop for valuable information and citations on seemingly every topic in those already very broad areas. Among the many topics that I found especially strong were Miller?s discussions of ship agents, freight forwarders, the cruise industry, oil shipping and trade, and the European-based business culture that supported the network linkages.? Perhaps most importantly, Miller provides a sense of how the individual network industries interact with one another.? Through the labor market, competition, collusion, mergers and acquisitions, individual employees and firms move across and interact with counterparts in other parts of the commercial and transport system.

Miller argues that the shock of World War I was a body blow to the system, but also one that created opportunities for the creation of new linkages and the rise of alternative centers of influence, especially in the Americas and Asia.? During the interwar years, Miller is careful to juxtapose the contraction of world trade in goods and immigration to the United States with the expansion of tourism, migration elsewhere, the creation of some new important commercial relationships, and the qualitative deepening of the system in other respects.? Indeed, Miller believes that the view held by many economic historians that the interwar years were a period of de-globalization is deeply misplaced.? He argues that view is conditioned by the influence of a social scientific approach that puts metrics of market integration at the center of the definition of globalization.? Miller takes issue with that perspective, and believes that an alternative historical approach that emphasizes what he calls ?global connectedness? is more fruitful.? His goal is to tell the tale of globalization as a ?story of progressions and mutations [rather] than one of interruptions and new beginnings.?? The last two chapters of the book, in that regard, are excellent depictions of the evolution of the world commercial system since World War II.? Through his descriptions of ports, entrepreneurs, firms and industries, the reader gets a nice sense of the tumultuous interplay between air transport, containerization, de-colonization, world economic growth and the maritime trading system.? I would have liked to read more about the evolving intermodal relationships between rail, trucking and shipping, but it seems absurd to criticize the book for not doing more when its scope is already so wide.

Miller?s narrative history is founded on a truly impressive command of an incredible variety of subject matters.? The author has read extremely widely, combed many archives, and interviewed numerous individuals in a number of countries.? The bibliography is outstanding and will be extremely useful as a starting point for research on any number of industries or themes touching on globalization during the twentieth century.? There are seven informative tables, but the book is not a go-to source for quantitative data.? There are a number of evocative photographs that are well chosen and complement the narrative wonderfully.? I am confident that this book will be an indispensable source and inspiration for future work on globalization, especially as it relates to international maritime history.

Richard Sicotte has published several articles on ocean shipping, and is currently investigating price discrimination and cartel organization in the ocean shipping industry.

Copyright (c) 2013 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 ( Published by EH.Net (June 2013). All EH.Net reviews are archived at

Subject(s):International and Domestic Trade and Relations
Transport and Distribution, Energy, and Other Services
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

On Trans-Saharan Trails: Islamic Law, Trade Networks, and Cross-Cultural Exchange in Nineteenth-Century Western Africa

Author(s):Lydon, Ghislaine
Reviewer(s):Daddi Addoun, Yacine

Published by EH.NET (February 2011)

Ghislaine Lydon, On Trans-Saharan Trails: Islamic Law, Trade Networks, and Cross-Cultural Exchange in Nineteenth-Century Western Africa. New York: Cambridge University Press, 2009. xxviii + 468 pp. $95 (hardcover), ISBN: 978-0-521-88724-3.

Reviewed for EH.Net by Yacine Daddi Addoun, Harriet Tubman Institute for Research on the Global Migrations of African Peoples, York University.

In a period when the Sahara is mentioned only in relation to terrorism, it is a breath of fresh air to read Ghislaine Lydon’s On Trans-Saharan Trails. The author uses the unfortunate succession of deaths, between 1848 and 1850, of four W?d N?n network traders, who were operating between the two shores of the Sahara, to illustrate and test the strengths and weaknesses of what she terms the ?paper economy of faith?: the complex relationships between literacy, the corpus of Islamic law, its clerks, and trade. This study of trans-Saharan long-distance exchange economy can be studied thanks to numerous private collections and archives holding all kinds of commercial contracts, correspondence between traders, as well as judicial opinions deeply rooted in the M?lik? school of law. The author visited no less than 35 private collections in four countries: Mauritania, Mali, Morocco, and Libya, demonstrating the span of her research, a trans-Saharan enterprise in itself. In addition, Lydon collected more than 200 oral interviews, in a conscious effort to complement information available in written documents, especially colonial archives, and to seek for explanation of legal, judicial, and social concepts and practices, names of merchandise, and location of places — using at least six languages. This book is in fact a manifesto for the centrality of orality, even in a context studying ?paper economy.? The result is a well-informed study that shows a trans-Saharan trade network at work.

The book is an attempt to bridge the gap between North Africa and sub-Saharan Africa. It succeeds in establishing the place of the Sahara desert in the center of events and not just as a mere space of passage, and its inhabitants as active agents in the transformation of this region as a whole. The first two chapters focus on the longue dur?e. They lay out the transformations and introduction of new elements (camels, Islam, Arabs) that made this space an important node of commerce and communication. These chapters also contain a much-appreciated presentation of primary and secondary sources. Lydon is quite exhaustive in presenting works on trans-Saharan networks. She, however, leaves out Pierre-Philipe Rey and his disciples, such as Faouzia Belhachemi and Olivier Meunier[1] — important scholars who have tried to ?bridge the African divide.? The two subsequent chapters concentrate mainly on nineteenth-century developments. While the third chapter is a general overview putting the developments of market centers and their shift within the general framework of jihads, the fourth chapter concentrates more on the W?d N?n network, and its components, mainly Guelmim, Tikna and Awl?d B? Siba?. The author highlights the heterogeneous nature of the trade network because it was composed of Jews and Muslims, but also because it was ethnically diverse, including Berbers and Arabs. In common, they shared a certain kind of cosmopolitanism and transnational identity. The remaining chapters concentrate more specifically on trade and issues relating to paper economy. An important contribution of Lydon’s study is the emphasis on the role of women as agents on their own rights. Women not only contributed to the social reproduction of the network (which other historians have already acknowledged), but they also held the shore-side institutions and acted as immobile caravanning partners, besides supervising domestic and enslaved workers. Lydon stresses the role of some women in financing caravans and acting as shareholders. Indeed, others, such as the M?sna women of Tish?t, participated in caravans as traders and cross-cultural brokers. Lydon highlights the Muslim and patriarchal institutional weight on women in a way to appreciate their active role even further. As a female historian in a conservative society, Lydon had the unique opportunity to interview women (at least 60) and thus is able to bring out their voices as active participants in the trans-Saharan trade and counteract the androcentric paradigm that is prevalent especially in the history of African Islamic societies.

Lydon takes us into the details of trans-Saharan trade including contracts, currencies, and weights and measures in a well written book, accessible to non-specialist. In chapter six she brings out what I think is her major contribution in the historiography. By exploring the dialectics between commerce and literacy, she demonstrates how written contracts ordered by the Qur??n were instrumental in the development and consolidation of the trans-Saharan trade. Paradoxically, at the same time, those written contracts, even when authenticated by witnesses, were invalid as evidence in courts, in case of a conflict where the witnesses were far away or dead. The author considers this fact, as well as the absence of legal personality in Islam along with inheritance laws, as the causes for lack of capital accumulation over generations and thus the underdevelopment of the Muslim world. This argument expands our knowledge about the limits of Islamic economic practices and the ways traders tried to circumvent them by creating their own set of practices and rules. In chapter seven she illustrates this issue through a meticulous examination of a complex inheritance case triggered by the death of the four network traders mentioned above. She also highlights, through Shaykh b. Brah?m al-Khal?l, who had to resolve the case, how network structure could be so heavy that it forced out some of its best members. In an interesting competition between legal service providers over who were liable to pronounce a judgment on the case, it turned out that in conflict situations there was not always good-faith and certainly not much faith in the ?paper economy of faith.?

I am not sure, however, to what extent the invalidity of contracts in courts was widespread in practice. Even if M?lik was accredited to this opinion, Ibn al-Qayyim al-Jawziyya, states that it was rather an exception.[2] Also, the author acknowledges that she is writing about the fringes of Islamic world, in the sense that she deals with a space where no centralized state existed. So it is not clear to what extent this constraint on development can be generalized. Arguably, Lydon has a major argument that deserves to be investigated further.

On Trans-Saharan Trails is a great addition to African history, Islamic legal history, and the history of trade networks and diasporas. Lydon gives us a refined and nuanced analysis of the theory and practice of long-distance trade. It is an exceptionally well researched and crafted book and cannot be ignored by anyone interested in these topics. Lydon raises important questions and any future study on the trans-Saharan trade networks, and financial transaction in Islam will have to consider her contribution.

1. Maxime Haubert and Pierre-Philippe Rey, Les soci?t?s civiles face au March?: Le changement social dans le monde postcolonial (Paris: Karthala, 2000); Olivier Meunier, Les routes de l’islam: Anthropologie politique de l’islamisation de l’Afrique de l’ouest en g?n?ral et du pays Hawsa en particulier du VIII? au XIX? si?cle (Paris: L’Harmattan, 1997), Faouzia Belhachemi, ?Anthropologie ?conomique et historique des Touareg du Hoggar,? Doctoral dissertation, Universit? de Paris VIII Vincennes, 1992.

2. Ab? ?Abd Allah Mu?ammad b. Ab? Bakr b. Ayy?b, Ibn al-Qayyim al-Jawziyya (751-691 H.), Al-?uruq al-?ukmiyya f? ‘l-siy?sa ‘l-shar?iyya, (Jaddah: D?r al-Faw?’id, 2007), 544-560.

Yacine Daddi Addoun is a post-doctoral fellow at the Harriet Tubman Institute for Research on the Global Migrations of African Peoples, at York University, Toronto, Canada. He is interested in the history of slavery and its abolition in Algeria, the Maghrib and the Muslim world. His latest publication is ?`So that God Free the Former Master from Hell Fire:’ Salvation through Manumission in Nineteenth-century Ottoman Algeria,? in Ana Lucia Araujo, Mariana P. Candido and Paul E. Lovejoy, Crossing Memories: Slavery and African Diaspora (Trenton, NJ: Africa World Press, 2011), 237-260.

Copyright (c) 2011 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 ( Published by EH.Net (February 2011). All EH.Net reviews are archived at

Subject(s):Government, Law and Regulation, Public Finance
International and Domestic Trade and Relations
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):Africa
Middle East
Time Period(s):19th Century

Tracks Across Continents, Paths through History: The Economic Dynamics of Standardization in Railway Gauge

Author(s):Puffert, Douglas J.
Reviewer(s):Bogart, Dan

Published by EH.NET (October 2010)

Douglas J. Puffert, Tracks Across Continents, Paths through History: The Economic Dynamics of Standardization in Railway Gauge. Chicago: Chicago University Press, 2009. xii + 360 pp.? ISBN-13: 978-0-226-68509-0, ISBN-10:0-226-68509-8.

Reviewed for EH.NET by Dan Bogart, Department of Economics, University of California, Irvine.

Debates about the significance of path dependence have erupted periodically in the economic history literature over the past two decades. The notion that early technological choices can result in lock-in and potentially inefficiencies has evoked strong reactions. Many are familiar with Paul David?s arguments concerning the QWERTY keyboard and the response by Stan Liebowitz and Stephen Margolis. The latter argued that market participants generally have perfect foresight and thus there were ample opportunities to avoid inefficient technological lock-in through advertising, ownership control, and other contractual measures. The concept of path dependence has since spread into the arena of institutions and social norms, although often it is not subjected to rigorous economic and historical analysis.

Douglass Puffert of King?s College, New York, advances the literature on path dependence through a fascinating new book on the dynamics of standardization in railway gauges. Railway gauges offer an excellent case study. Differing widths of railway track make it impossible or costly to exchange rolling stock like locomotives and wagons. Therefore neighboring railway operators can realize network integration benefits from adopting the same gauge. Inefficiency can arise in this setting for two reasons.? First, regional gauges can become the standard implying higher costs of inter-regional trade. Second, early choices can result in the adoption of a gauge standard which turns out to be inferior because it implies higher operating costs.?

Puffert?s book has two main parts: (1) a historical narrative on gauge selection and conversion and (2) an analytical framework for studying gauge choice and economic efficiency. The narrative is impressive in terms of its geographic coverage. Every region of the world is discussed. Britain and the U.S. are given more extensive treatment in part because gauge diversity was a more substantial issue in these two countries.? The historical narrative suggests three key periods. The first lasted from the 1800s to the 1840s and is best described as a period of initial experimentation. Several gauge widths were tried but it was not clear which was superior. Most governments and investors followed the advice of engineers who preferred certain gauges because of their experience. The most influential was George Stephenson, who used the 4 ft. 8.5 in. (1435 mm) gauge in constructing the Manchester and Liverpool railway during the 1820s. Stephenson?s gauge became the most common width among early railways, but others were tried ranging from 3 ft. 10 in. to 5 ft.? Interestingly it does not appear that Stephenson favored this width because of its advantages in steam locomotion.? 4 ft. 8.5 in. was apparently the gauge that Stephenson used in constructing mining tramways drawn by horses.?

The second period from the 1840s to the 1870s witnessed expanding diversity into broad gauges. By this time several prominent engineers advocated gauges ranging from 5 ft. to 7 ft. on the grounds that operating costs would be lower than the Stephenson gauge, especially on high volume routes. Gauge width became a contentious issue and spawned several pamphlets and government inquiries.? Through innumerable quotes, Puffert demonstrates that historical actors were aware of the potential losses from gauge diversity, but these were not sufficient to ensure standardization. Broad gauge regional networks emerged in places like the U.S. South or they became the basis for new networks as in Russia and India. In some cases idiosyncratic factors were at work in the expansion of broad gauges, but more generally it appears that broad gauge advocates were convinced that the savings from wider gauges outweighed the costs.? As it turns out the savings proved to be illusory and the costs associated with breaks of gauge mounted with time. By the 1870s many broad gauge networks were converted to the Stephenson gauge.

The third period lasting from the 1870s through the 1920s witnessed the expansion of narrow gauges from 2 ft. to 4 ft. The poor financial performance of many Stephenson and broad gauge railways gave rise to the view that costs might be lowered through the use of narrow gauges. Narrow gauges were built alongside broader gauge networks and were often government owned. Narrow gauges also became the standard on emerging networks in Asia and Africa. In Japan there was regret associated with the adoption of narrow gauges as traffic volumes grew. However, the adoption of narrow gauges appears to have been crucial in the expansion of railways to mountainous and other low traffic volume areas.

Puffert?s narrative convincingly dispels the extreme version of the Liebowitz and Margolis critique which argues that market participants had perfect foresight. On the other hand, it does suggest historical actors understood the role of positive feedbacks and tried to manipulate gauge adoption in an effort to lock-in their preferred standard. The degree to which gauge selection was efficient is a lingering question throughout the book.? Puffert does not take a stand on the relative efficiency of different gauges, but an argument is made that diversity entailed large costs.

Towards the end of the book, Puffert provides a model of gauge choice which yields outcomes that are then evaluated according to efficiency criteria. The model assumes emergent railways occupy cells on a lattice. Their objective function includes an idiosyncratic preference for one of two gauges and a network integration benefit that depends on past gauge choices of neighboring railways.? The model also includes as a second stage, the choice to convert to a new gauge given the structure that was adopted in the first stage. The model nicely illustrates how diversity can emerge because of early choices and how standardization can later emerge depending on network integration benefits and conversion costs. However, the model is not calibrated to investigate counter-factual histories of gauge adoption in specific countries. In my view, imposing some assumptions on network structure would yield insights. For example, early U.S. railways were built east-west to link the interior to the coast. Perhaps the inefficiency of gauges would be smaller in such a setting if east-west links all shared the same gauge.? Second, the model could be extended to allow for time-varying network integration benefits. Interregional trade tended to increase with time and thus it might have been efficient for a railway to adopt a variant gauge if its idiosyncratic preference was sufficiently strong compared to the discounted present value of future network integration gains.? In short, the efficiency of gauge selection remains an open issue. Readers might wonder whether additional insights could be gained from an estimation of a structural model along the lines outlined by Puffert.? More broadly, Puffert?s book should serve as a model for rigorous examination of path dependence.

Dan Bogart (Associate Professor, Economics Department, UC Irvine) has recently written ?A Global Perspective on Railway Inefficiency and the Rise of State Ownership, 1880-1912,? Explorations in Economic History (April 2010), as well as a work in progress on State Ownership, Regulation, and Railway Performance in India co-authored with Latika Chaudhary.

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Subject(s):Transport and Distribution, Energy, and Other Services
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century
20th Century: Pre WWII

The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times

Author(s):Landes, David S.
Mokyr, Joel
Baumol, William J.
Reviewer(s):Blackford, Mansel G.

Published by EH.NET (May 2010)

David S. Landes, Joel Mokyr and William J. Baumol , editors, The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times. Princeton: Princeton University Press, 2010. xv + 566 pp. $49.50 (hardcover), ISBN: 978-0-691-14370-5.

Reviewed for EH.NET by Mansel G. Blackford, Department of History, Ohio State University.


The second volume published in the Ewing Marion Kauffman Foundation?s Series on Innovation and Entrepreneurship, this collection of eighteen essays explores entrepreneurship, innovation, and economic development in parts of the world from ancient times to the present.? This work, states William J. Baumol, an economist at New York University and one of the study?s editors, was designed to test three basic hypotheses: 1) ?that the practical utilization of inventions? and accompanying economic growth would be lower without the work of entrepreneurs; 2) that ?entrepreneurial activities are not always productive?;? and 3) that ?the direction taken by entrepreneurial activity depends heavily, at any particular time and in any particular society, on the prevailing institutional arrangements? (p. ix).? David Landes, another editor and an economic historian at Harvard University, argues further that ?the countries and regions that have done best are precisely those that have taken advantage of the opportunities offered by active trade and entrepreneurial freedom.?? Those areas, Landes claims, have been mainly in the West, with ?China and the Arabic Middle East? offering ?pungent case studies? of ?resistance to innovation?(p. 2) — surely an outdated assertion.? The essays comprising this volume bear out Baumol?s hypotheses, but not the statements made by Landes.[1]

Six essays investigate preindustrial entrepreneurship and innovation.? Michael Hudson explores the development of entrepreneurship and business enterprises in ancient Mesopotamia (3500-1200 BC), where the association of businesses with public temples and palaces led to a commercial take off.? Many of the business practices first created in Mesopotamia — the use of money, uniform weights and measures, price systems, interest charges, and profit-sharing — Hudson shows, then spread to the Mediterranean world, only to collapse in Roman times.? In an essay on the Neo-Babylonian Empire (626-539 BC), Cornelia Welch looks at family entrepreneurship in agriculture and trade.? Particularly valuable is her case study of the Egibi family, which left an archive of 2,000 cuneiform tablets spanning five generations.? ?The Egibi family represents,? she concludes, ?an outstanding example of Schumpeter?s idea that the main entrepreneurial opportunities for profit or quasi-rent lie in creating new business opportunities.?? The Egibi family had ?far-flung operations? based on a ?marketing plan that integrated agricultural production, tax payments, and the shipment of crops to cities along Babylon?s canal system? (p. 53).? Timur Kuran claims that Islam first spurred entrepreneurship and economic development in the Middle East by creating ?institutions well suited to personal exchange,? but later ?became a source of retardation with the transition to impersonal exchange.?? Islamic institutions, Kuran finds, ?supported small-scale entrepreneurship,? but ?inhibited larger-scale entrepreneurship? (p. 63).? James Murray suggests that the European Middle Ages ?deserve a special place in the history of entrepreneurship,? for by 1500 merchants ?came to direct many of society?s ?productive forces?? (p. 88).? John Munro then examines the ideas of Max Weber and Richard Tawney, about economic development.? He finds that the alterations in mindsets and institutions that Tawney claimed were needed as precursors to industrialization in Great Britain occurred in 1640-1740, not, as Tawney posited, a century earlier.? Oscar Gelderblom defines entrepreneurs broadly as ?not just merchants involved in long-distance trade, but also shipmasters, fishermen, millwrights, farmers, artisans, and shopkeepers,? in arguing for the importance of entrepreneurial actions as the sources of economic development in the Dutch Republic between 1580 and 1650 (p. 156).

Eight essays probe entrepreneurship in Western Europe and the United States during industrial and post-industrial times.? Joel Mokyr, the third editor of this volume and a faculty member in history and economics at Northwestern University and Tel Aviv University, argues for the importance of institutions, especially informal ones such as codes of conduct, as stimuli for entrepreneurship in industrializing Great Britain.? In two jointly authored essays, Mark Casson and Andrew Godley debunk the idea that entrepreneurial failure retarded British economic development in the late-nineteenth and twentieth centuries — a well-worn topic.? They find that entrepreneurs rationally shifted their attentions from manufacturing to infrastructural projects and other undertakings (such as finance) in Great Britain and abroad, in which they were very successful.? Ulrich Wengenroth surveys the ?tortured? history of entrepreneurship in Germany from the early 1800s to the present, emphasizing the roles institutions (including educational ones) played in creating opportunities for innovation.? Pulling no punches, he also looks at anti-Semitism and the unbalanced nature of Germany?s economy, which he concludes became over-industrialized and lacking in service businesses.? Turning to France, Michael Hau presents a picture of varying regional developments and changing roles taken by the national government, concluding that after declining in importance for several decades after World War II ?entrepreneurs have greatly gained in power? in the present day (p. 323).? Louis Cain examines entrepreneurship in the antebellum United States, first exploring innovations in law, finance, and transportation that allowed entrepreneurship to flourish and then describing the processes of industrialization and the diffusion of products to American markets.? Discussing the United States between 1865 and 1920, Naomi Lamoreaux stresses the importance of institutions, including federal and state governments, and big businesses, which encouraged entrepreneurship.? In a particularly wide-ranging essay, Margaret Graham offers a nuanced picture of American entrepreneurship after 1920, looking at the varied roles played by people in companies of all sizes and in many sectors of the economy.

Three essays and a short conclusion complete the volume.? Susan Wolcott examines supplies of financial credit, especially ?informal? types, available to entrepreneurs in Colonial India.? She addresses issues about economic growth in India from the 1700s to the present, emphasizing the importance of family and ethnic networks defined, in part, by caste distinctions.? Wolcott concludes that, while such networks and the informal credit they commanded initially aided economic development, they ultimately limited business development — a finding similar to Kuran?s conclusions about the Islamic Middle East.? Wellington Chan looks at entrepreneurship and innovation in China from the late 1800s, emphasizing continuities in stressing the roles personal relationships and networks have played for business people throughout Chinese history.? ?Chinese entrepreneurship,? Chan concludes, ?has always been an inherent part of Chinese history and tradition? (p. 495).? Seiichiro Yonekura and Hiroshi Shimazu find entrepreneurship at the core of the development of zaibatsu in Japan before World War II and present accounts of the development of Mitsui and Mitsubishi, unfortunately ignoring the significant roles small and medium size business played in Japan?s economic development.? Finally, Baumol and Robert Strom (a director of the Kauffman Foundation) offer short concluding remarks underlining the importance of cultural developments and institutions for the evolution of entrepreneurship and innovation over time.

Anyone interested in entrepreneurship, innovation, and economic development will find much to ponder in this work, and extensive multilingual notes and bibliographies at the end of each essay will lead readers to additional sources.? However, even such an extensive volume as this one has limitations.? The focus is clearly on Western Europe and the United States.? Only a few essays examine developments in Asia and the Middle East, and none look at entrepreneurship in Latin America or Africa.? Then too, most of the essays approach entrepreneurship and innovation from the vantage points of economics and economic history.? The substantial contributions of business historians — Harold Livesay, Thomas McCraw, and William Lazonick, among many others, come to mind — are largely ignored.[2]? Moreover, the authors of the essays follow no commonly agreed-upon definition of entrepreneurship, making cross-national comparisons difficult.? Most of the authors bow in the direction of Joseph Schumpeter, but essentially fail to adopt a common approach.? I was disappointed that little effort was expended by the editors or authors to reach comparisons across boundaries of time or space.? For the most part, this study consists of fairly traditional national studies. ?Ironically for a book about innovation, this volume contains little in the way of conceptual breakthroughs.? The authors might well have explored more fully innovative business networks and industrial districts that often spread across national lines, especially in modern times.[3].? Even with these caveats, however, I think these essays deserve close consideration, as much for the questions they raise as for the answers they give about innovation and entrepreneurship.


1. On innovation in China, see for example, William T. Rowe, China?s Last Empire: The Great Qing (Cambridge, 2009); and Peter Zarrow, China in War and Revolution, 1895-1949 (London, 2005).? Landes? main source on Islamic developments is Bernard Lewis, _What Went Wrong? The Clash between Islam and Modernity in the Middle East_ (Oxford, 2002), a one-sided study.

2. Harold Livesay, American Made: Shapers of the American Economy (New York, 2007); William Lazonick, ?Business History and Economic Development,? in Geoffrey Jones and Jonathan Zeitlin, eds., The Oxford Handbook of Business History (Oxford, 2007), 67-95; and Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, MA, 2007).

3. See, for example, Louis Galambos and Jane Eliot Sewell, Networks of Innovation: Vaccine Development at Merck, Sharpe & Dohme, and Mulford, 1895-1995 (Cambridge, 1995); and Charles Sabel and Jonathan Zeitlin, eds., World of Possibilities: Flexibility and Mass Production in Western Industrialization (Cambridge, 1995).


Mansel G. Blackford is a business historian at Ohio State University and, most recently, is the author of The Rise of Modern Business: Great Britain, the United States, Germany, Japan, and China Chapel Hill, 2008 (third edition).

Subject(s):Business History
Economywide Country Studies and Comparative History
Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative
16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times

Author(s):Landes, David S.
Mokyr, Joel
Baumol, William J.
Reviewer(s):Brenner, Reuven

Published by EH.NET (May 2010)

David S. Landes, Joel Mokyr and William J. Baumol , editors, The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times. Princeton: Princeton University Press, 2010. xv + 566 pp. $49.50 (hardcover), ISBN: 978-0-691-14370-5.

Reviewed for EH.NET by Reuven Brenner, Desautels School of Management, McGill University.

Carl Schramm, who wrote the Foreword to this book, and who, through the Kauffman Foundation, paid for it, states clearly that the book is about “entrepreneurship? as people ? entrepreneurs in particular ? understand the term: Someone who creates a business that, in some respects, differs from existing ones.

Yet, just two pages later, William Baumol writes in his Preface that the book is about both “redistributive” and “productive” entrepreneurship, the former covering warfare, crime, bribes, lobbying ? any innovative ideas. Since this covers just about everything from Napoleon and his Code to Robin Hood, and from Muhammad, the merchant and one of the very few of Heavens’ intermediaries on this Earth to 35,000 registered lobbyists in Washington ? it is little wonder that most of the 18 chapters, written by 18 different academics are all over the map, and provide little illumination on Schramm’s targeted subject matter. If one just went from the Foreword and Preface straight to the Index of the book, one could immediately realize that. “Finance, credit, debt” appear in less than 40 pages of the 541 pages of text, and the terms “equity” and “partner(ship))” do not even appear in the Index, though the few relevant chapters in the book highlight the importance of both in financing entrepreneurial ventures across some countries and time. How can one write anything about entrepreneurs without starting the examination with the ways they were financed? Where was the risk capital coming from and in what shapes and forms? And if there was no risk capital ? then why not? Even if just parts of the book dealt with “productive entrepreneurs,” these should have been the questions framing the discussion in the 18 chapters.

Susan Wolcott’s chapter, “An Examination of the Supply of Financial Credit to Entrepreneurs in Colonial India,” is among the exceptions that actually does that and sheds light on the unusual features of India’s credit markets. The chapter describes the options entrepreneurs faced if they wanted their businesses to grow; how the lack of openness of its credit markets forced entrepreneurs to rely on family savings; how the caste system and the English come into the financial landscape. This chapter provides insights into the financial difficulties of launching and growing a business when capital markets are in their infancy, and also a brief glimpse into how lack of tolerance hinders entrepreneurship.

The only other chapters that cover these topics are Oscar Gelderblom’s and Timur Kuran’s. The first is about “The Golden Age of the Dutch Republic,” which shows in detail how equity combined with limited liability financed the Dutch entrepreneurs, though even he gets distracted at first by categorizing things and then stating that Amsterdam’s 2,600 shopkeepers (butchers, bakers, cobblers etc.) were the city’s entrepreneurs. Luckily, after only three pages, he forgets about this, and deals with the ways “entrepreneurs and innovations” were financed as the Dutch Republic became both the first religiously tolerant place in Europe, and also allowed its financial markets to thrive, with sophisticated futures trading on the world’s first stock exchange. Timur Kuran’s chapter deals with the same topics but is focused more on obstacles to entrepreneurs under Islam.

Although here and there other chapters mention in a few paragraphs financial conditions (though I cannot recall anyone in the book ever using the term “risk capital”), often the topic is more about impediments and antagonism to the notion of “business.” Authors make reference to usury laws and the low social status of businessmen and traders in many societies ? from Babylon to Rome, Cicero defining their endeavors as “vulgar and dishonest.” This latter view resonates centuries later within Islam (with the doctrine of bid’a, in Kuran’s good piece subtitled “Inhibitive Roles of Islamic Institutions”) and later in the English view of commerce: Jane Austen referred to the endeavor in a similar vein as a violation of aristocratic principles, though with timeless humor. And yes, this anti-business view resonates across all countries and time with Jews, always the Jews.

In fact large chunks of the book are more about the topic of inhibitions to enterprise and both the variety of ideas people came up with to rationalize them and the institutions rulers and governments put in place to enforce these ideologies. Strangely there is only passing mention of Latin America, Russia and communism ? and though there is a chapter on China, the twenty pages jumping from 200 BC to our days offer not one insight. It first concludes that politics there is “as central as ever, and having no access to party officials remains a critical impediment to any successful entrepreneurial operation,” yet the last sentence reads “if the past record is a guide, [the entrepreneurs] will overcome future challenges that come their way.” I am no expert on Chinese history, but as far as I know it has been well documented that under the Ming, and even more under the Manchu dynasties, when rigid Confucianism was imposed by state power, Chinese inventiveness ceased for centuries ? about which the chapter is mum.

Unfortunately most of the chapters dealing with the topic of inhibitions miss the forest from the trees, as not one addresses what is to me the basic issue when examining “the invention of enterprise.” There is nothing more threatening to an established order ? any order ? than opening up, deepening, democratizing capital markets ? accountably, allowing people to leverage their inventive, enterprising spirit. True, this would also disperse power ? political power in particular. The deeper capital markets would also threaten established industries and commerce. Entrepreneurs, brilliant and ambitious as they might be, are not a threat. They can be sent to Siberia, forced into complacency by the Maos of this world, and the opportunistic ones will channel their ambition through the established powers.

But entrepreneurs with access to different, independent sources of risk capital ? now that’s threatening, be they Brin and Page, Jobs or Milken at the time (quickly taking away much of the banks’ bread and butter of providing loans). Understanding this, even if not wanting to articulate it, provides enough incentives for those in power to subsidize, spread, and promote ideas and institutions inhibiting the deepening of capital markets under a wide variety of jargons, and thus inhibiting the invention and reinvention of enterprises. With time, people get accustomed to these institutions, their origins lost in the mist of time, inhibiting entrepreneurship and business for centuries. Today this may be happening a bit before our eyes. Suddenly, everything becomes a “bubble” ? Internet, oil, houses, gold, bonds. Guess what: if everything is ? why have capital markets to start with? If pricing no longer offers guidance to allocate capital; if stock and bond markets are not there to help correct mistakes faster ? why should they continue to exist? And if they do not exist, who else remains but politicians, bureaucrats and the academics surrounding them ? none of whom ever worked in a business even one day in their lives ? who would then tax and borrow and subsequently allocate capital and “invent enterprises” based on ? well ? whatever.

While I know who Schramm had in mind with this project ? and it is a worthy project ? I do not know what the editors wanted to convey with their selections, or who they had in mind as an audience for this book. Baumol warns that “entertainment is not the purpose of this book.” That’s an unnecessary warning: 90 percent of its pages are dry, tedious, and some ? especially those with bombastic titles such as “History of Entrepreneurship: Britain, 1900-2000,” “History of Entrepreneurship: Germany after 1815,” and “Entrepreneurship in the United States, 1920-2000″ ? are little more than jargon-ridden, superficial texts, providing zero insight. They are filled with taxonomies and referenced sentences such as “Computer and computer-based technologies in particular, later collectively known as information technology, extended across all boundaries (Coopey 2004)” or “The one thing that it is impossible to have too much of is good judgment (Casson 2000)” ? Casson quoting himself on this observation. Apparently both sentences were unheard of before the years 2000 and 2004.

Even just a little judgment by, perhaps, talking to some entrepreneurs and following them in the daily execution of their ventures before writing treatises about them, could have reshaped this book into something far more concise, sharply written and surprising. After all, learning means being surprised. There were very few pages where I was.

Reuven Brenner, Repap Chair, Desautels Faculty of Management, McGill University, is the author of Force of Finance: The Triumph of Capital Markets (Thomson/Texere) and A World of Chance (Cambridge University Press). His early books, History: The Human Gamble (Chicago), Betting on Ideas (University of Chicago Press), and Rivalry (Cambridge University Press), were, in part, about entrepreneurship. His latest article, “Venture Capital: Building (or Restoring) National Wealth,” appeared in the Winter 2010 issue of the Journal of Applied Corporate Finance.

Subject(s):Business History
Economywide Country Studies and Comparative History
Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative
16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

The Fisherman?s Cause: Atlantic Commerce and Maritime Dimensions of the American Revolution

Author(s):Magra, Christopher P.
Reviewer(s):Surdam, David

Published by EH.NET (April 2010)

Christopher P. Magra, The Fisherman?s Cause: Atlantic Commerce and Maritime Dimensions of the American Revolution . Cambridge: Cambridge University Press, 2009. x + 243 pp. $75 (hardcover), ISBN: 978-521-51838-3.

Reviewed for EH.NET by David Surdam, Department of Economics, University of Northern Iowa.

Christopher Magra, Assistant Professor at California State University, Northridge, has proposed a startlingly new interpretation of the American War for Independence. He believes that participants in the cod fishing industry, whether owners of fishing boats, merchants of cod, fishermen, and associated businesses were crucial instigators of the Revolution and necessary ingredients for the Revolution?s success.

He opens with a thrilling account of a British man-of-war intercepting a fishing brig, the Pitt Packet, in order to press gang some of the crewmen. When the crew fought the boarding party, fatally injuring a navy lieutenant, the event was another flashpoint along the road to revolution. John Adams, who later defended the British soldiers involved in the Boston ?Massacre,? defended the Pitt Packet?s crew, winning an acquittal on the grounds of self defense. This is an effective beginning of Magra?s tale; he draws the reader in.

Magra takes the reader through a step-by-step investigation. The first part of his book describes the colonial cod fishing industry. He then examines the Atlantic origins of the war before finishing with a discussion of the fishing industry?s participation in the war. Magra describes how the Massachusetts cod fishing industry ended up at the forefront of New England?s discontent with the British government. He acknowledges that his account differs from the traditional accounts that apportion the lion?s share of the revolution?s fervor to rural agrarian factions. Arguing that the Pitt Packet affair ?serves as a stark reminder that colonial resistance to British authority during the Revolutionary Era cannot be fully explained without investigating why those who made their living from the sea participated in this resistance? (p. 5), his purpose, therefore, is to ?investigate the connections between commercial fishing and the American Revolution? (p. 13).

There are no tables in the book. While official statistics on the value and weight of cod exports may be spotty, some sort of table would have aided his verbal description of the industry?s growth. This point aside, Magra has marshaled an impressive body of sources to support his arguments, including much archival information. He has delved deeply into sources held at Marblehead, Massachusetts, a key fishing port during the 1700s. He also examined records at Kew, England. These sources are meticulously mined.

His description of the attributes of cod is well done. Readers learn more about cod fishing than they ever thought to ask. Not only can cod be easily preserved, but the preservation process allows the meat to be stored for years. Cod has more food value per pound than beef or pork, having more protein and less fat. Cod was also cheaper than beef or pork. Cod are prolific, so that, given the existing technology, the fishing industry was unlikely to exhaust the supply. Catholics in French and Spanish colonies ate cod on meatless Fridays. Because cod was cheap, British and French plantation owners fed their slaves with cod.

The New England cod fishing industry competed with fishermen from Newfoundland and the West Country of England. The West Country fishermen grew envious of New England?s burgeoning trade with British and French West Indian sugar plantation owners. The New England fishermen had the advantage of being closer to the islands and of returning with molasses and sugar for the New England rum industry. The West Country businessmen were better connected with Parliament and got the Sugar Act passed. A decade later, Parliament passed the New England Trade and Fishery Prohibitory Bill. From the colonists? point of view, this bill was the final Parliamentary insult. The bill sought to prohibit New England colonies from trading with French sugar growers, among others, and to end their fishing in the Great Banks off Newfoundland.

While historically-literate Americans can enumerate the obnoxious policies enacted in the years between the French and Indian War and Lexington and Concord in April 1775, it is only fair to point out that the colonists benefited from British military and naval protection. The New England cod fishing industry grew out of the turmoil of the English Civil War and associated military victories over France. While the slogan protesting ?taxation without representation? is memorable, the colonists-turned-Americans also disliked ?taxation with representation.? The Continental Congress began enacting policies with more than a passing similarity to British policies during the Revolutionary War. Many of these policies adversely affected the cod fishing industry.

Magra?s third section on the fishing industry?s activities during the war is perhaps the least satisfying of the book. The cod fishing industry?s contributions to the war effort were many. Owners of fishing vessels, crews, and other members of the industry served in the American army and navy in greater proportions than average. Fishermen helped Washington cross the Delaware; Congress leased fishing boats for use as warships; and fishermen served as crewmen on the warships. Some of the fishing vessels shipped crucial war materiel from the West Indies to American ports. While such contributions were valuable, I?m not sure how key their contributions were. Sorting out the indispensable from the merely valuable is tricky business.

This is an impressive effort from a young scholar. I anticipate that Christopher Magra will continue to provide us with interesting and well-written books in the future.

David Surdam is an Associate Professor at the University of Northern Iowa. He has a forthcoming book, Can?t Anyone Here Make Any Money? Major League Baseball during the Depression, from the University of Nebraska Press. Email:

Subject(s):Military and War
Geographic Area(s):North America
Time Period(s):18th Century

Reputation and International Cooperation: Sovereign Debt across Three Centuries

Author(s):Tomz, Michael
Reviewer(s):Oosterlinck, Kim

Published by EH.NET (February 2008)

Michael Tomz, Reputation and International Cooperation: Sovereign Debt across Three Centuries. Princeton, NJ: Princeton University Press, 2007. xxi + 299 pp. $60 (cloth), ISBN: 978-0-691-12930-3.

Reviewed for EH.NET by Kim Oosterlinck, Solvay Business School, Universit? Libre de Bruxelles.

In view of the sovereign nature of their issuer, and in the absence of a supranational court to judge them in case of default, one may wonder why countries would ever bother to repay their debts. The economic literature has suggested several motivations: fear of reputation loss (which would ban the access to future borrowing or make it much more costly), fear of a military intervention or of trade sanctions, as well as, but to a lesser extent, fear of the seizure of collaterals. Michael Tomz, assistant professor of political science at Stanford University, provides an interesting analysis of the importance of reputation for sovereign debt repayment and on its relevance in a broad historical perspective.

After a brief review of the literature, Tomz presents his theory of cooperation through reputation. Its development proceeds as follows. Investors cannot know in advance whether a given government will decide to honor its debts or decide to default. However, these investors may form beliefs regarding the probabilities of each of these outcomes. These beliefs represent the country’s reputation. Tomz classifies countries in three broad groups: stalwarts (for which repayment is expected whatever the economic conditions), fair-weather (expected to repay in good conditions but not during hard times) and lemons (expected to default in all times). According to Tomz, investors will reassess the reputation of each country in view of its actions. Domestic elections may change priorities and the importance of reputation. However, decisions to default or repay allow governments to try shifting from one form of reputation to another. The remainder of the book aims at testing the validity of the above-mentioned theory.

Chapter three compares the reputations of new and seasoned borrowers. More precisely, the author tests whether new borrowers face worse credit terms than seasoned ones with a good reputation, whether there is a “graduation effect” (new borrowers who repay should eventually get similar terms as seasoned borrowers) and whether defaulters are excluded from the market. The author relies on empirical evidence from the Amsterdam market in 1771 and 1783 and from the London market in 1824 and 1872. Comparing the yield for new and seasoned borrowers, he finds that new borrowers had to pay a statistically significant premium to borrow.

I found Chapter 4 one of the most interesting and original chapters of the book. Tomz has done an impressive job by analyzing the investment literature published between 1919 and 1929. To my knowledge the history of economic thought in this field remains unwritten. By relying on expert opinion as expressed at the time, Tomz shows that reputation was perceived as the most important element, especially when compared to other conventional reasons invoked for debt repayment.

Chapter 5 assesses to which extent governments’ actions are judged in a similar way in good or bad economic times. More precisely, it analyzes the reward for states which exceeded expectations during the Great Depression by repaying their debts. The author finds that defaulters in bad times where not badly punished but that unexpected good payers such as Argentina, Australia and Finland were rewarded.

Chapters 6 through 8 are dedicated to the alternative theories suggested to explain debt repayments: gunboat diplomacy (Chapter 6), trade sanctions (Chapter 7), and collective retaliation (Chapter 8). Regarding military enforcement, Tomz puts into perspective the number and motivation of actual interventions, the number of debt defaults and the respective military strength of lenders and defaulters. In view of the limited number of interventions attributable to defaults, he concludes that military intervention only played a minor role in the repayment process. Trade sanctions are analyzed by comparing debt service and trade dependency with creditors. Here again, Tomz finds only limited evidence that potential trade sanctions forced debtors to repay. Chapter 8 discusses the relative importance of creditors’ ability to form a retaliatory cartel. Based on evidence from the end of the twentieth century, Tomz finds that lending and default patterns were the same for unorganized lenders as for more organized ones, suggesting that retaliation by cartels was not viewed as credible. Chapter 9 concludes by stressing once more how crucial reputation is when assessing motivations to default.

The book has several obvious merits. First, it relies on extensive data sources, most of them original and covering a very large time-span and geographical area. Secondly, it shows the importance of politics when assessing debt defaults, an element often overlooked by economists. Indeed, defaults represent a unilateral decision made by a given government: defaults are not automatically triggered by an economic variable (even though these variables play an obvious role in the decision to default). Furthermore, this book provides an interesting and refreshing approach to reputational theories in the sovereign debt context. The main point of the book is to prove that reputation is key to understanding decisions to default. At the end of the book, the reader should end up being convinced of its prominent role.

All interesting books raise questions and remarks and this one is no exception. Despite its qualities, as an economic historian I found the book presents a series of shortcomings. Economic variables are omitted most of the time when comparing yields, and when included, limited to one or two macroeconomic factors. For some periods, these data do not exist; for the more recent ones they do and have been used in recent papers. In a sense, the reader gets the impression that economics plays almost no role in the perceived probabilities of defaults. This is rather hard to believe. The author analyzes each alternative motivation to repay separately. It would have been interesting to analyze the relationship between these motivations (as for example, in Mitchener and Weidenmier, 2005a).

Another question is raised by the way the yields are computed. “For each country [the author] identified the lowest nominal interest rate on bonds that were not guaranteed by a foreign power, and then calculated yields based on the average of the minimum and the maximum quoted prices for bonds at that interest rates” (footnote, p. 41). I am unconvinced by this approach since it does not take into account volatility, a key measure in finance when one wishes to assess risk. In other words, two bonds with similar coupon rates would end up having the same yield even if one remained constant at, for example a price of 80 percent of par, whereas the other moved from 60 percent to 100 percent. Unless investors were risk neutral at the time, which I doubt, they should find the second bond riskier and hence ask for a higher yield. Furthermore, the yields used by the author are current yields (the ratio of the coupon rate divided by the price of the bond). Even though current yields have often been used by economic historians, yields to maturity would have provided a much better measure since they take into account the impact of bonds’ duration and maturity and capture expected returns from capital gains (for example zero-coupons would have a 0 percent current yield because all their return is made via capital gains).

The relative importance of each motivation to repay has been analyzed in very different ways. Whereas for reputation the main indicator was the current yield, the author relies on other variables for military interventions or trade sanctions. These variables are certainly interesting, but one wonders whether some of the impact of potential military interventions or trade sanctions would not have materialized had the author relied on current yields in these sections. Recent work by Mitchener and Weidenmier (2005a and 2005b) seems to indicate that this would have been the case.

Since the book is subtitled, “Sovereign Debt across Three Centuries,” I was expecting a more in-depth historical analysis. I fully understand that the book jumps from one time period to another depending on the point the author wants to make. However, I found surprisingly little references to history when discussing the findings. In Chapter 3, the author concludes that the higher yield paid by a series of countries in 1771 stemmed from their new borrower status. For some of these countries, alternative historical explanations seem more (or at least as) convincing. Was the high yield required from Russia in 1771 a consequence of its “new borrower” status or was it due to the Russo-Turkish War? To what extent can we attribute the Swedish high yield to the political instability at the time? Etc.

Eventually, the book omits some recent theories using historical approaches to assess the probabilities of defaults. For instance, no mention is made of “original sin” issues (Eichengreen and Hausmann, 1999, Eichengreen, Hausmann and Panizza, 2003) or “debt intolerance” (Reinhart, Rogoff, and Savastano, 2003). The same holds for the few papers which have attempted to make a link between sovereign defaults and politics (political system but also type of regime, etc.) such as Kohlscheen (2006) or Van Rijckhegem and Weder (2004) for example.


Barry Eichengreen and Ricardo Hausmann, “Exchange Rates and Financial Fragility,” NBER Working Paper 7418, 1999.

Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza, “Currency Mismatches, Debt Intolerance and Original Sin: Why They Are Not the Same and Why It Matters,” NBER Working Paper 10036, 2003.

Emmanuel Kohlscheen, “Why Are There Serial Defaulters? Quasi-experimental Evidence from Constitutions,” Warwick Economic Research Papers 755, 2006.

Kris Mitchener and Marc Weidenmier, “Supersanctions and Sovereign Debt Repayment,” NBER Working Paper 11472, 2005a.

Kris Mitchener and Marc Weidenmier, “Empire, Public Goods, and the Roosevelt Corollary,” Journal of Economic History, 2005b, 66: 658-92.

Carmen M. Reinhart, Kenneth S. Rogoff, and Miguel A. Savastano, “Debt Intolerance,” Brookings Papers on Economic Activity, 2003, 1: 1-74.

Caroline Van Rijckhegem, and Beatrice Weder, “The Politics of Debt Crises,” CEPR Discussion Paper 4683, 2004.

Kim Oosterlinck is associate professor at the Universit? libre de Bruxelles. He recently published “Hope Springs Eternal: French Bondholders and the Soviet Repudiation (1915-1919)”, Review of Finance, 2006 (jointly with John Landon-Lane) and “How Occupied France Financed Its Own Exploitation during World War II,” American Economic Review, Papers and Proceedings, 2007 (jointly with Filippo Occhino and Eugene N. White).

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

China Maritime Customs and China’s Trade Statistics, 1859-1948

Author(s):Lyons, Thomas P.
Reviewer(s):Wright, Tim

Published by EH.NET (July 2004)

Thomas P. Lyons, China Maritime Customs and China’s Trade Statistics, 1859-1948. Trumansburg, NY: Willow Creek Press, 2003. viii + 168 pp. + data and text files on CD. $34.95 (paperback), ISBN: 0-9729147-5-7.

Reviewed for EH.NET by Tim Wright, Chinese Studies, University of Sheffield.

Studies of the economic history of China (and of many other developing countries) are bedeviled above all by the lack of trustworthy economic statistics. By far the most reliable and comprehensive set of statistics on nineteenth and early twentieth-century Chinese economic history are those produced by the Maritime Customs, and there are few scholars of the period who do not use them extensively. So historians will be grateful to Thomas P. Lyons (Professor of Economics at Cornell University) for publishing this thorough guide to their conventions, reliability and compilation.

This book originates in Professor Lyon’s important work on the economic history of Fujian province (which spans the whole period from the nineteenth century to the present), and it must be stated immediately that the contents are more limited than the title suggests. Essentially this is an account of the compilation of the Customs statistics, but one based mainly on a case study of the Fujian tea trade — which was one of China’s main export trades in the late nineteenth and early twentieth centuries. The book is of broader relevance than just the tea industry, however, and the problems identified and the methods suggested can certainly be extrapolated to other situations. But that work is left to other scholars.

The book consists of two parts: a general analysis of the Customs organization and statistics (albeit with the examples still from the Fujian tea trade), and a detailed case study of the figures for Fujian tea exports and the way they can be used in Chinese economic history. In the first of five chapters, the author outlines the history, institutional structure and key functions of the Maritime Customs, as these changed over time. The second chapter outlines the structure and nature of the customs statistics. Although the various distinctions will be familiar in outline to most scholars who have worked on the figures, Lyons makes a major contribution by systematically explaining them. The third chapter points to the key problems in the statistics. Although the figures themselves have a high degree of reliability, when using them one has to be careful of variations in nomenclature and classifications, of issues arising from the aggregation of figures for different commodities — even different types of tea — or for different ports, of changes through time in degrees of inclusiveness (for example, increasing coverage of existing levels of trade, or inclusion and then exclusion of Taiwan and Manchuria), and of what is not covered in the statistics (much overland trade and all illegal trade).

The two chapters of Part II first examine what the customs statistics tell us about the tea trade of Fuzhou, and then expand the vision to take in the tea trade of the whole province of Fujian. The author illustrates the pitfalls that can face scholars by comparing the figures for Fuzhou tea exports he gathered directly from the Customs statistics with earlier series published by Robert Gardella and Chen Ciyu. It turns out that both the earlier series are an amalgam of figures for different variables, some for total exports to foreign countries, some for original exports to all destinations. Even if the differences are not very consequential, it is sobering to think that even a scholar as careful and thorough as Gardella can be misled by the intermediate sources from which he draws his statistical material. Finally, Lyons analyzes the issues involved in aggregating figures for tea exports over the whole province, and very productively shows how the Customs statistics can be used to cross-check other figures, for example those for the production and consumption of tea in the province (basically he shows that existing estimates of production in the early twentieth century are almost certainly too low).

Within each chapter, Lyons also provides a series of “boxes” — more detailed discussions of particular issues that are of tangential relevance to the general argument. Some of these are again extremely useful, for example Boxes 11 and 12 (pp. 77-85) on the format of the Returns of Trade that are the original source for most of the statistics used by scholars. Finally, with the book comes a CD that presents an extensive set of Customs data, mainly on the tea trade of Fujian. This includes sixty-five spreadsheets and seven documents, providing both a substantial amount of raw data on the tea industry and the aggregate estimates underlying all the charts and tables in the book, so that the author’s analysis is reproducible. One must hope that this is a harbinger of things to come, and that increasingly authors will provide in electronic form the raw data underlying their conclusions.

All scholars will be grateful to Lyons for making available such a thorough guide to the Customs Statistics, albeit one based on one particular (but important) case. In the future, scholars using these statistics will, at the minimum, be more aware of the institutional origins of the figures and the pitfalls involved in their use. As the author himself points out (pp. 154-155), there is an issue of the marginal productivity of effort in going into the level of detail and of thoroughness that he himself is prepared to invest. While some will, therefore, probably still want to use the available aggregate figures without going so deeply into the details, everyone will benefit from having a better idea of the problems involved.

Tim Wright is Professor of Chinese Studies at the University of Sheffield. His recent publications include Modern Chinese Economic History: Recent Chinese Studies, and “Distant Thunder: The Regional Economies of Southwest China and the Impact of the Great Depression,” Modern Asian Studies 34.3 (July 2000): 697-738. He is currently working on the history of the 1930s Great Depression in China, and on economic reform in the contemporary Chinese coal industry.

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Asia
Time Period(s):20th Century: Pre WWII