EH.net Book Review

Published by EH.Net (February 2012)

Edward L. Glaeser, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier.  New York: Penguin Press, 2011.  ix + 338 pp. $30 (cloth), ISBN: 978-1-59420-277-3.

Reviewed for EH.Net by Fred H. Smith, Department of Economics, Davidson College.

In 1998 Edward Glaeser published an article in the Journal of Economic Perspectives entitled “Are Cities Dying?”  The article makes a strong case for why technology had not, and would not, make cities obsolete.  In the subsequent fourteen years, Glaeser has written dozens of articles on urban economics.  Many of the articles have touched on topics that are of great interest to urban economic historians: From “Are Ghettos Good or Bad” to “Why the Poor Live in Cities” Glaeser addresses topics that have informed our understanding of how, and why, cities have evolved over time. 

In his new book, Triumph of the City: How Our Greatest Invention Makes us Richer, Smarter, Greener, Healthier, and Happier, Glaeser assembles a layperson’s tour of his life’s work in urban economics.  Triumph of the City is an effective coda to his article from 1998, for it demonstrates that not only is the city not dying, it is essential to our continued well-being as a species. 

Published by EH.Net (February 2012)

Douglas W. Allen, The Institutional Revolution: Measurement and the Economic Emergence of the Modern World. Chicago: University of Chicago Press, 2011.  xiv + 267 pp. $30 (cloth), ISBN: 978-0-226-01474-6.

Reviewed for EH.Net by Mark Koyama, Department of Economics, George Mason University.

In this astute and elegantly written book, Douglas Allen argues that the industrial revolution was accompanied by an institutional revolution. This institutional revolution replaced many seemingly archaic institutions such as the practice of restricting some offices in government to aristocrats while selling others (including army commissions and the right to collect taxes). The revolution substituted public for private provision in areas such as the building of roads and lighthouses and led to the rise of a professional bureaucracy and police force.  Allen's point is not that these early pre-modern institutions were inefficient or wasteful. On the contrary, in his account, they were adapted for their environment: the high variance, high measurement cost, early modern world.

Published by EH.Net (January 2012)

Orfeo Fioretos, Creative Reconstructions: Multilateralism and European Varieties of Capitalism after 1950. Ithaca, NY: Cornell University Press, 2011. xix + 245 pp. $50 (hardcover), ISBN: 978-0-8014-4969-7.

Reviewed for EH.Net by David Coates, Department of Political Science, Wake Forest University.

There is now a long established interest in the character and economic fortunes of different models of capitalism. Important debates continue about their internal dynamics of change. Do modern economies flourish to the degree to which we find “institutional complementaries” within them, as in the original “varieties of capitalism” (VOC) formulation by Hall and Soskice; or do we need to bring something “back in” to supplement or replace the incipient “institutional determinism” of that approach? Do we need to make the “constructivist” turn favored by Vivien Schmidt and others, or do we need to make the “class” turn favored by analysts influenced by an on-going stream of Marxist scholarship? If the argument of this impressively researched and coherently argued work by Orfeo Fioretos holds, the intellectual turn we need to take is towards behavioral economics and the concerns of international political economy, by recognizing the role multilateral strategies play (and have played in the immediate past) in shaping the trajectory of particular European capitalisms and the incentive structures operating on their key firms. We need to bring “the state” back in to our analyses, but to do so in a new and important way.

Published by EH.Net (January 2012)

Donald W. Katzner, At the Edge of Camelot: Debating Economics in Turbulent Times. Oxford: Oxford University Press, 2011. xiv + 199 pp. $50 (hardcover), ISBN: 978-0-19-976535-5.

Reviewed by David F. Ruccio, Professor of Economics, University of Notre Dame

Donald W. Katzner, in invoking the Arthurian legend, may have run the risk of overselling the Department of Economics at the University of Massachusetts Amherst. However, both the department he and his colleagues built and his book documenting the history of that department are, in fact, quite honorable.*

The department was remarkable because, with very few exceptions (then or now) among the 125 or so Ph.D.-granting economics programs in the United States, it challenged the prevailing orthodoxy by hiring a significant number of “radical” economists and by training a much larger number of graduate students. It literally defined and then extended the frontiers of radical political economy. And it did so with a neoclassical economist (Katzner himself) as the chair during its early, formative years.

The book itself is noteworthy because it is the only history of an economics department of which I am aware (Frederic Lee’s [2011] effort, which can be usefully read as a companion volume, is a much wider history of heterodox economics in the twentieth century), and it was written by a key participant. The most valuable sections of the book consist of Katzner’s recollections from the 1976-1981 period when he served as chair (with the appropriate caveats about fallible memory), supplemented by interviews he conducted with other participants (both faculty and graduate students) and documents he collected (from before and during his time as chair).

Published by EH.Net (January 2012)

Jim Tomlinson, Carlo Morelli and Valerie Wright, The Decline of Jute: Managing Industrial Decline.  London: Pickering and Chatto, 2011.  xiii + 219 pp. $99 (hardcover), ISBN: 978-1-84893-124-4.

Reviewed for EH.Net by Gordon Stewart, Department of History, Michigan State University.

This superb book deserves to be considered for a prize. It is a close-grained account of the jute industry in Dundee from the 1940s to the 1980s but it is much more than that. In the course of their study of the decline of one industry the authors lay bare some of the fundamental economic, social, and political forces that shaped post-war Britain, and illuminate the complex impact of globalization on the manufacturing sector of the British economy. Many books on such topics end up by focusing on one aspect of the story – whether it be the role of capital, government policies, strategies of employers, or the responses and actions of workers. The three authors deftly bring together every dimension. The narrative and analysis move easily from women workers, who dominated the jute labor force until the late 1950s, to the policy deliberations of civil service mandarins at the Board of Trade, while fully acknowledging the ultimately inescapable pressures exerted by the international macroeconomic environment. Valerie Wright’s sure exposition of the complex gender issues at play among the workers sits informatively alongside the economic and policy analyses of Jim Tomlinson and Carlo Morelli. It is a remarkable achievement for three authors to produce such a coherent narrative, and a ringing tribute to the benefits of collaborative scholarship.

Published by EH.Net (January 2012)

James R. Fichter, So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism. Cambridge: Harvard University Press, 2010. xi + 384 pp. $35 (hardcover), ISBN: 978-0-674-05057-0.

Reviewed for EH.Net by Thomas H. Cox, Department of History, Sam Houston State University.

James R. Fichter’s So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism sheds new light on America’s early trade with Asia during the late 1700s and early 1800s. Seeking to move beyond traditional portrayals of national economic development, Fichter contends that “American trade to the East Indies as a whole had repercussions for society, economics, and politics on both sides of the Atlantic” (p. 4). In particular, competition from private American merchants undermined British mercantilism and “helped begin Britain’s nineteenth century free trade empire.” For the young American republic trade with Asia meant “the accumulation of wealth and financial capital into the hands of the wealthiest Americans, creating financiers who would profoundly alter the shape of American business” (p. 4). Located at the intersection of economic, cultural, American, and British history, Fichter’s work is necessarily broad based, painting in broad strokes themes for future historians to further flesh out.

Published by EH.NET (December 2011)

Roger E. Backhouse and Bradley W. Bateman, Capitalist Revolutionary: John Maynard Keynes. Cambridge, MA: Harvard University Press, 2011. 208 pp. $26 (hardcover), ISBN: 978-0-674-05775-3.

Reviewed for EH.Net by Steven Kates, School of Economics, Finance, and Marketing, RMIT University, Melbourne.

Two prominent economists, one English and one American, have written a book about how Keynes and Keynesian economics have shown their mettle over these troubled years since the Global Financial Crisis (GFC). Roger Backhouse and Brad Bateman have titled their work Capitalist Revolutionary: John Maynard Keynes. It is a work of counter-revisionist history even before we revisionists have had a chance to tell our own story first.

The book is about the non-war in economics that ought to be happening but isn’t. It is a defense of Keynes and Keynesian economics against post-stimulus attacks that, other than in a few instances, have not occurred at all. It sets Keynes up as a counter to an extreme libertarian laissez-faire strawman view of how economies ought to be left alone in all instances, first in their regulation and then in allowing recessions to burn themselves off when they come. They therefore conclude that given this is the choice, Keynes is the answer. Well, if that were the choice, Keynes would be the answer, but since it’s not the actual choice we have, they do not really satisfy the criticisms of anyone who holds neither Keynesian nor such extreme libertarian views.

Published by EH.NET (December 2011)

Eric L. Jones, Locating the Industrial Revolution: Inducement and Response. Singapore: World Scientific, 2010. vii + 272 pp. $68 (hardcover), ISBN: 978-981-4295-25-3.

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

The Industrial Revolution is often modeled as a national or continental phenomenon.  The most common questions are why did Britain industrialize first and not France, or why Europe and not Asia? However, there is a case to be made that the Industrial Revolution was a regional phenomenon. Here the classic question is why did northern England industrialize and southern England not. Southern England was more densely populated and had significant manufacturing ca.1700. Its de-industrialization poses a puzzle.  

Published by EH.NET (December 2011)

Branko Milanovic, The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality. New York: Basic Books, 2011. xiv + 258 pp. $28 (hardcover), ISBN: 978-0-465-01974-8.

Reviewed for EH.Net by Thomas N. Maloney, Department of Economics, University of Utah. 

With the emergence of the “Occupy” movement in the Fall of 2011, the issue of income inequality has gained an unusually prominent place in the political conversation in the United States.  The discussion of inequality has always been present to some degree, especially during the past 30 years or so as inequality has grown by a variety of measures.  Still, the American public lately appears to be engaged with issues of distribution in a newly vigorous, if not always rigorous, way.

Branko Milanovic’s “idiosyncratic history of global inequality” has thus appeared at a propitious moment.  In this book, Milanovic (an economist at the University of Maryland and the World Bank) combines three primary essays on income inequality with a series of brief “vignettes” designed to illustrate and expand on some of the issues raised in the primary essays.  This structure is perhaps not best suited to a straight read-through but rather invites some “grazing” by the reader, so that someone attracted to a five-page piece entitled “Who Was the Richest Person Ever?” might become curious enough to take on the more meaty material.  The book is not aimed primarily at those with a professional background in these topics, though it might provide a few new insights even for them, and it will almost certainly provide some useful new examples for classroom discussion.

Published by EH.NET (December 2011)

John Maynard Keynes, Keynes on the Wireless, edited by Donald Moggridge.  New York: Palgrave Macmillan, 2010.  vi + 228 pp.  $40 (hardcover), ISBN: 978-0-230-23916-6.

Reviewed for EH.Net by Wade E. Shilts, Department of Economics and Business, Luther College.

John Maynard Keynes described his Essays in Persuasion as “the croakings of a Cassandra who could never influence the course of events in time” (1931 [1963], p. v).  He of course would be proved twice wrong.  We might debate whether Keynes gets the economics correct, but his writings never croaked and he certainly hasn’t been without influence.  Indeed, a better title for that book, or for Keynes’ writings generally, might have been Essays That Have Been Really Persuasive (sometimes even when they shouldn’t have been).

Now appears Keynes on the Wireless.  Edited by Donald Moggridge, author of the important Maynard Keynes: An Economist’s Biography (1992) and co-editor with Elizabeth Johnson of the thirty volumes of The Collected Writings of John Maynard Keynes (1971-1989), Keynes on the Wireless assembles the twenty-one radio broadcasts Keynes made, most on the BBC, between 1925 and 1945. (Fifteen of these broadcasts were also published contemporaneously in The Listener and two in The Nation and Athenaeum.)

Published by EH.NET (December 2011)

David Stasavage, States of Credit: Size, Power, and the Development of European Polities. Princeton, NJ: Princeton University Press, 2011. xi + 192 pp. $40 (hardcover), ISBN: 978-0-691-14057-7.

Reviewed for EH.Net by Mauricio Drelichman, Department of Economics, University of British Columbia.

States of Credit revolves around a single, clearly articulated claim. In the Medieval and Early Modern periods, access to sovereign credit largely depended on the presence of a representative assembly with strong powers of control over the sovereign. This type of representative assembly was in turn more likely to emerge in the absence of substantial geographical barriers to travel. And, among comparable representative assemblies, those who were dominated by a merchant oligarchy were more likely to secure better access to credit.

Sovereign debt emerged in Medieval Europe and by the sixteenth century there were few polities that had not dabbled in it in one form or another. There was, however, enormous variation in the size and characteristics of the loans that different political entities were able to command. It is this variation that David Stasavage exploits to construct and support the argument in the book. In the process, he builds one of the most extensive databases available on both the characteristics of sovereign debt and of representative assemblies in Western Europe between the thirteenth and the eighteenth centuries. These data alone represent a major contribution, one on which economic and political historians will draw for years to come.

Published by EH.NET (December 2011)

Alexander J. Field, A Great Leap Forward: 1930s Depression and U.S. Economic Growth. New Haven, CT: Yale University Press, 2011.  ix + 387 pp. $45 (hardcover), ISBN: 978-0-300-15109-1.

Reviewed for EH.Net by Paul Rhode, Department of Economics, University of Michigan.

Sometimes if you look at a familiar object in a slightly different way, it takes on an entirely new appearance.  Many examples of the phenomenon are offered by Alexander Field’s path-breaking book, A Great Leap Forward, which re-examines the history of productivity growth in the United States.  In his leading example, Field observes that if one uses 1941 as a breakpoint, instead of the more conventional year 1937, then the rate of total factor productivity (TFP) growth of the private non-farm economy (PNE) during the Great Depression period is the fastest of any period on record.  The core facts are simple -- hours of labor in the PNE were roughly the same in 1941 as in 1929 and the capital stock was slightly smaller, yet output was 33 to 40 percent higher.  Labor productivity and total factor productivity grew rapidly despite high unemployment and weak income growth.  Indeed, the rates of productivity growth exceeded those in the 1920s or in the so-called Golden Age (1948-1973).

Published by EH.NET (November 2011)

Susanna Delfino, Michele Gillespie, and Louis M. Kyriadoudes, editors, Southern Society and Its Transformations, 1790-1860.  Columbia, MO:  University of Missouri Press, 2011.  vii + 260 pp.  $40 (paperback), ISBN: 978-0-8262-1918-3.

Reviewed for EH.Net by Jenny Wahl, Department of Economics, Carleton College.

Southern Society and Its Transformations, 1790-1860 contains wide-ranging micro-histories covering topics from lynching to corporate entrepreneurship in the antebellum American South.  The vignettes contained within various essays are often riveting, although the essays themselves are uneven in quality.  The strongest chapters -- particularly Gary Edwards’s work on yeoman farmers in Southwestern Tennessee -- intersperse case studies with aggregate data to illustrate temporal changes in a particular sector of antebellum Southern society.  The weakest offer sweeping assertions without much evidence; some barely relate to the general theme of the collection.

The opening piece is a case in point.  Keri Merritt claims that vagrancy laws controlled poor whites before the Civil War just as they “were used to control blacks in the postbellum period” (p. 27).  She says little about any transformation that may have occurred during the antebellum period.  What is more, she presents only spotty information about cases involving whites from a few antebellum Georgia court records, offering nothing tangible to connect pre- and post-Civil-War vagrancy laws.   Some inferences seem unsupported as well; for example, a person with $200 of personal property in 1850 was not necessarily impoverished, although Merritt seems to think so (p. 34). 

Published by EH.NET (November 2011)

Karen Ilse Horn, Roads to Wisdom: Conversations with Ten Nobel Laureates in Economics. Cheltenham, UK: Edward Elgar, 2009.  vii + 369 pp. $55 (paperback), ISBN: 978-1-84844-694-6.

Reviewed for EH.Net by Lall Ramrattan, University of California, Berkeley Extension, and Michael Szenberg, Lubin School of Business, Pace University.
 

Karen Ilse Horn states that the aim of this book is to “shed more light on the miraculous process of the generation of excellence and progress in science” by way of probing the “genesis and rise of new ideas, paradigms, approaches or methods ... as ‘history,’ ‘theory,’ and ‘personality of scholars.”’ The target audience includes “future scholars who might now grow up and later create different schools yet to be discovered.”

The ten Nobelists interviewed by Horn represent the prize given over a large span of time starting with Paul Samuelson, the first American to receive the prize (in 1970), and ending with Edmund Phelps, a 2006 Nobel Laureate. The sample is representative of mathematical economics (Samuelson), general equilibrium theory (Kenneth Arrow), experimental economics (Vernon Smith), growth theory (Robert Solow and Phelps), public choice theory (James Buchanan), social economics (Gary Becker), game theory (Reinhard Selten), and economic history and institutions (Douglass North). Although the economic Nobelists now number over sixty, the author justifies this selected sample on both subjective and objective bases to cover the “leftist Keynesians,” the “classical liberals,” people with methodologies ranging from “the more formal to the more verbal approaches,” “people of different generations,” and those “with whom it would be fun and exciting and enriching to speak” (pp. 25-26).

Published by EH.NET (November 2011)

Louis Hyman, Debtor Nation: The History of America in Red Ink.  Princeton, NJ: Princeton University Press, 2011.  xii + 378 pp.  $35 (hardcover), ISBN: 978-0-691-14068-1.

Reviewed for EH.Net by Katharine L. Shester, Department of Economics, Washington and Lee University.

In this book, Louis Hyman, Assistant Professor at Cornell’s ILR School, follows the evolution of America’s consumer credit system throughout the twentieth century.  His story begins in 1917, when personal debt existed only on the fringes of the economy, and continues through 2000, by which time the U.S. economy had become leveraged on debt.  America’s growing dependence on borrowing was supported by rising wages for much of the post-war period, but by the mid-1970s, consumer debt continued to grow amidst a much darker economic climate.  Real wage growth stagnated while the securitization of credit card and mortgage debt encouraged riskier lending.  At times near the end, the book reads as an ominous prelude to the current financial crisis. 

In the Introduction, Hyman states that historians have often neglected the history of business and politics in search for the “‘human’ face of capitalism,” and that in doing so, they have “miss(ed) the opportunity to tell an all-too-human story of how our choices ... have brought this debt-driven economy to pass” (p. 6).  In Debtor Nation, Hyman does just this, discussing the changing incentives that policymakers and investors faced and how their decisions collectively created and adapted the structure of American consumer debt.  He states that the “profit motive, government policy, technological progress, and even chance all played necessary but not sufficiently all-encompassing roles” and that the “shifts in lending and borrowing practices were neither inevitable nor obvious” (pp. 8-9, 2).