Published by EH.NET (August 1998)
Marc Egnal, Divergent Paths: How Culture and Institutions Have Shaped North
American Growth. New York, Oxford University Press, 1996. xi + 300 pp.
$19.95 (paper), ISBN: 0-19-510906.
Reviewed for EH.NET by Leonard Carlson, Department of Economics, Emory Univers
This book is provocative, informative, and fun-to-read. In the preface,
Marc Egnal, an Associate Professor of History at the University of Toronto,
states that the book “. . . explores the impact of institutions (such as
and the seigniorial system) and culture (including religion,
literacy, and the entrepreneurial spirit, and intellectual activity) on
development” (p. vii). How institutions and culture shape economic growth are,
of course, important and controversial topics in economic history.
Egnal ventures into territory that is both novel and familiar. The work
compares the U.S. North, U.S. South, and Quebec. His single most important
contribution is his comparison of Quebec with the U.S. South and U.S.
North. Most comparative work has ignored Quebec and this has been a big
omission. An example of the familiar is Egnal’s use of Max Weber’s
“Protestant Ethic” hypothesis.
Egnal draws on the debates as to whether colonial British North America was
” or not, and a similar debate about Quebec. In a nutshell,
his conclusion is that all three regions were similarly pre-capitalist in
outlook and had comparable standards of living in 1750. The North,
however, had a tradition of thrift and hard work that differed from the South
and Quebec. Drawing on these traditions in the century after 1750,
the North became truly “capitalist,” while the South and Quebec stayed
hierarchical and pre-capitalist. To Egnal, capitalism is distinct from
capitalists. Capitalists could operate in the South and Quebec without their
values dominating the social and economic life of either region. By contrast
he concludes that capitalist values favoring entrepreneurship,
risk taking, and profits dominated in the North, making it truly capitalist.
I am on the side of those who do not find it useful to draw a distinction
between capitalist and pre-capitalist societies, but Egnal is part of a large
tradition that sees this as important.
Chapter one, “the paths diverge,” sets
the stage for the arguments that follow. Egnal makes a good case that as of
1750 there was relatively little difference in the material standard of living
in Quebec, the North,
and the South. All three were traditional, agricultural, slow growing, and
pre-literate (although literacy was widespread in the Northeast, according to
Egnal, it was not important in the economic realm). The South, with its wealth
in slaves and export-oriented economy was something of a special case, but
still pre-capitalist and hierarchical. By 1840, however, per capita incomes
in the North (the eight original northern states) were much higher than either
the South (the five original southern states) or Quebec.
The North also led the other two regions in urbanization and manu facturing.
The fact that Egnal leaves out the western states at this point in the
comparison is important. As he discusses in later chapters, the North Central
states in 1840 had lower than average per capita incomes while states in the
South Central region had much higher per capita incomes.
Since there was a notable east-west pattern of migration, many scholars treat
the old northwestern states as an extension of the “North,” and the old
southwestern states as an extension of the “South.” Egnal might
be right in limiting his comparison to the same states in 1750 and 1850, but
since it is so favorable to his argument, he could do more to justify the
choice. Similarly, the use of per capita income in 1840 is important,
since the south was a slave society and slaves are both part of the population
and treated as a capital asset. Thus most scholars discuss both per capita
income and per capita income of free persons. Egnal does discuss the
distributional consequences of slavery, but his arrangement of
the data in a way most supportive of his argument is typical of the book’s
Egnal is building a case that culture and institutions matter, not trying to
reject the null-hypothesis that there is no difference.
Chapters two through four look at the eighteenth-century origins of the
differences among the regions. As Egnal sees it, even in the eighteenth
century, there was a ” . . . gulf separating the entrepreneurial North and the
other two regions that were less concerned with money making” (p. 21
Egnal supports his claims by citing evidence from sources ranging from the
writings of contemporary observers to examples of how people chose to be
depicted in family portraits. Contemporary observers described the French as
more luxury loving and less concerned with making money than New Englanders.
Similarly, contemporaries saw the southerners as more concerned with luxurious
living and “lazier”
than northerners. In paintings, wealthy northerners had themselves portrayed
as busy and prosperous, while wealthy southerners had themselves pictured as
idle aristocrats. Quebecois portrayed themselves as pious. In contrast to
more quantitative historians,
Egnal uses this type of “soft evidence” to illustrate his points.
Legal structures also differed
among the regions. French Canada had the seignorial system and property rights
that made it hard to sell land outside the family. These feudal vestiges and
the outlook that went with them persisted after the English takeover of Canada
in 1765. The South had bound labor and, in Egnal’s view, slave labor was
obviously less motivated and efficient than free labor (a claim that Robert
Fogel and Stanley Engerman would dispute). French Canadian society was based
on traditions and hierarchy in the eighteenth
century and remained so throughout the nineteenth. By contrast southern
colonies developed new institutions as fast as the north, but plantation
agriculture and slavery lead to a commitment to hierarchy and status missing in
the north. Egnal sees the shared commitment to a hierarchical society as
factors that united the South and Quebec and caused both regions to trail the
northeast for so long. It is important, however, to keep in mind that the
North had a higher per capita income than any other region in the world except
Australia in 1860, not just Quebec and the South (Fogel and Engerman,
Time on the Cross, 1974, p. 250).
In chapters five through eight, Egnal argues that the differences in attitudes
played out in the growing differences among the three regions.
He conducts an imaginary dialogue with an advocate of the view that the South
was as profit oriented and rational as the North, and he rejects that claim.
Intellectually, the North in the nineteenth century had entered an “age of
. . . individualism, optimism, enthusiasm,
and reform.” (p. 120) These ideas helped make the North ready for the changes
needed to sustain modern economic growth. By contrast,
the southern intellectuals were closed off to new ideas, as the defense of
slavery became more intense. Similarly, Quebec saw the triumph of the Catholic
Church and a commitment to tradition.
This is not to say that Quebec and the South were identical. The French stayed
close to home, reflecting a desire to remain close to hearth and home that
Egnal traces back to the original unwillingness of the French to move to the
New World. Southerners were willing to move, but not to pursue manufacturing
and other risky activities in the same way as the northerners. In these
Egnal discusses the high rates of interstate migration of southern slaveholders
and high relative incomes in the southwest. From 1860 to 1940, incomes in the
South and Quebec remained low relative to both the North and English-speaking
Canada. Racism and
the politics of segregation may have held back the South, but what held back
Quebec? Gavin Wright (Old South, New South: Revolutions in the Southern
Economy Since the Civil War, 1986) emphasizes the isolation of the southern
labor market and the lack
of outside investment as key factors in the slow growth of the South. A
question for further research is whether Quebec was isolated in a similar way.
Chapter ten looks at the convergence of Quebec and the U.S. South to levels
close to the rest of the U
.S. and English-speaking Canada. Incomes in Quebec converged in the
mid-sixties, somewhat later than for the deep South. Egnal sees the narrowing
as based on the convergence of mind-sets. Southerners and Quebecois became
more entrepreneurial while New England businessmen became less aggressive and
more risk averse.
Again, adding Quebec changes the focus away from race. Did the Catholic
traditions and the active participation of the church lead to a lack of
entrepeneurship in Quebec in the first half of
the twentieth century? Did an increasing secularization change Quebec? Why
did New Englanders loose their edge (or did they?)?
In chapter 11, the author brings the story up to the present. This is,
perhaps inevitably, the weakest chapter. Egnal sees
the period since 1975 as the “Post-Industrial” economy. Fair enough, but it is
hard to use the tools of the historian to analyze the recent past, since it is
still too soon to know what will prove to be of lasting importance and what is
In the end, the value of this book lies in the thought-provoking questions it
raises, not with the definitive answers it provides. I still don’t know how to
test whether many of the “cultural factors” that Egnal cites are a cause of
lower incomes, an effect,
or a mere coincidence. But if “culture and institutions” (however defined) do
not explain the differences among the North and the other two regions, what
does provide the explanation? If they do provide the answer, we need to refine
the concepts to exp lain how this process worked. It is to Marc Egnal’s credit
that he raises these issues in such an interesting way.
Leonard A. Carlson Department of Economics Emory University
Leonard Carlson is author of Indians, Bureaucrats, and Land: The Dawes Act
the the Decline of Indian Farming(1981), “The Economics and Politics of
Irrigation Projects on Indian Reservations,” in Linda Barrington (ed), The
Other Side of the Frontier (forthcoming), and other articles on U.S. and
southern economic history.
|Subject(s):||Social and Cultural History, including Race, Ethnicity and Gender|
|Geographic Area(s):||North America|
|Time Period(s):||General or Comparative|