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Tools of Progress: A German Merchant Family in Mexico, 1865-Present

Author(s):Buchenau, Jurgen
Reviewer(s):Francois, Marie

Published by EH.NET (April 2005)

Jurgen Buchenau, Tools of Progress: A German Merchant Family in Mexico, 1865-Present. Albuquerque: University of New Mexico Press, 2004. xi + 267 pp. $27.95 (paperback), ISBN: 0-8263-3088-6.

Reviewed for EH.NET by Marie Francois, Department of History, Auburn University.

The title of this book reflects in part the boom time for the German Boker family’s business enterprise during the positivist reign of Porfirio D?az (1876-1910), when Mexico experienced rapid liberal economic development. But the story starts earlier, when Robert Boker arrives as a “trade conquistador” to establish a hardware business during French rule under Maximilian, and continues through the 1990s. Jurgen Buchenau tells two parallel and interconnected stories in this engaging study. The first is about European immigration to Mexico, with the small German colony slowly transformed over a century and a half through accommodation, acculturation, and finally assimilation. The second story is about the changing political climates in which national and foreign entrepreneurs built, maintained, and sometimes lost their businesses in Mexico. While the Mexican climate for business ventures is the focus, German and worldwide political contexts were also important. This book is a successful marriage of elite family and business history which contributes an immigrant perspective to the literature which includes the studies by David Walker (1986) and Larissa Lomnitz and Marisol Perez-Lizaur (1987). The book also contributes to the growing literature on nineteenth- and twentieth-century Mexico City.

Buchenau, Associate Professor of History at the University of North Carolina in Charlotte, interprets this business immigrant family that identified as both Mexican and German through a framework of transnational theory. Building on his earlier work in diplomatic history, the author adeptly builds international relations into the story. He filters a wide range of sources through the concepts of diaspora, cross-cultural trade, cultural enclave, and hybrid identities, thus situating the book in world history literature. Diaspora here captures both thematic threads of the book — the dispersal of German families across the Atlantic, as well as the distribution of companies and goods in international trade. While primarily a book about doing business in Mexico in the past, readers will appreciate the pertinent background it offers to historicize today’s globalization trends, as the larger Boker family’s interests stretched across the Atlantic from Germany to Canada, the U.S., Mexico, and Argentina, and across the globe to Australia. Archival sources from Germany, Mexico, Great Britain and the United States are used in concert with company records, records from the German cultural institutions in Mexico City, and family sources. A member of the Boker family himself, Buchenau makes effective use of letters, diaries and photographs from family archives, with the richest material coming from extensive interviews with almost fifty members of the family. The book is organized into three parts. The first comprises two chapters covering the periods 1865-c. 1900 when the German family establish themselves in Mexico; the second has three chapters covering the family and its business during years of revolution in Mexico and world wars, c. 1900-1948; and the third consists of two chapters looking at the Bokers during the “Mexican Miracle” of the 1950-60s and its aftermath, c. 1948-present.

The immigration story chronicles the maintenance of German identity in family compounds, the development of German schools and clubs, the movement back and forth across the Atlantic between Germany and Mexico, changing socializing and marriage patterns, and the tracking of five generations of family diaspora in Mexico, the United States, Germany, and other parts of the world. Buchenau’s examination of the Colegio Al?man, which had Bokers on its board and in its classrooms, is particularly illuminating. The author distinguishes the Bokers from other foreign businessmen (Spanish merchants, French owners of department stores and textiles factories, Americans, and Chinese) as well as from other Germans. The small German colony was fairly unified in the nineteenth and early twentieth centuries, but the aftermath of World War II saw it splinter into at least five distinct communities along political and generational lines. This story is also situated comparatively in the Latin American immigration literature. Mexico was not a country that absorbed large numbers of immigrants, unlike the Southern Cone which absorbed hundreds of thousands of workers and refugees from Europe. Instead, Buchenau argues, Mexico experienced a “qualitative immigration” (p. 16) where a relatively few immigrants had a large impact. The Protestant German Bokers played key roles in the economy and occasionally politically, while practicing self-segregation socially from the Catholic Mexican mainstream. Not until the fourth generation did a few Bokers take Mexican spouses. With the separation of their Mexican business lives from their German private lives, the Boker women played to varying degrees a gendered role passing on German culture through language and lifestyle. The author successfully weaves emotions and perceptions into this analysis of cultural change as five generations of Boker men and women negotiated their relationship to both Mexico and Germany.

Taking a long view on the Boker hardware business, Buchenau highlights cycles in both the Mexican and world economy. The Casa Boker in the nineteenth century was the leading provider of imported tools, machinery, weapons, and household goods to a small modernizing middle class in Mexico City. By the twentieth century, the company found itself playing a declining role in the maturing consumer society. Into the twenty-first century, the Bokers are the “rearguard of globalization.” Challenging recent literature that emphasizes the role of U.S. capitalists in the modernization of Mexico, Buchenau argues that Europeans led the consumer revolution there. Without intermediaries such as the Bokers importing American goods along with European goods, American capitalism would not have had the reach it did in the late nineteenth century. This reviewer would have liked to have learned more about the merchandise sold by the early Casa Boker and the later Compa??a Ferretera Mexicana (Mexican Hardware Company, or CFM) which would allow a fuller look at the consumption contexts (such as domestic households, industrial arenas) of this business enterprise. Business historians will, nonetheless, find fascinating discussions and detailed examinations of business tactics and contrasting styles of successive generations of partners. The “kingly merchant”-minded German importers eschewed the emerging mass-marketing trends as consumption grew during the Porfiriato, sticking to their niche selling “inconspicuous goods” (p. 54). Careful diplomacy with revolutionary leadership combined with hiding the true ownership of the company amid Mexican nationalist fervor in the 1910s and 20s meant that the most tumultuous time in Mexican history was not bad for this particular business. In contrast, the firm was unable to avoid the biggest blow to company fortunes when it was taken over by the Mexican state during World War II after Mexico declared war on Germany, despite a careful “Mexicanization” of the company. Recovering control of the company after the war, the third generation of Bokers did not invest in the import-substitution “miracle” that hindered the growth of their import-based business. The mid-twentieth century company also faced a more combative union than in its heyday, and after the 1970s changing Mexican policies which alternated between hyperprotection and neoliberalism affected the company’s portfolio. Throughout the book, insight into organizational as well as operational decisions and outcomes will benefit those interested in issues such as the political and economic contexts for profit margins and the impact of shareholder interests in Germany on decision making by the closely held corporation’s directors in Mexico.

Tools of Progress is an intimate and fascinating examination of links between culture and economy in a transnational context. It successfully bridges disparate historiography on business, politics, immigration, and world history. Future historians of culture and economy will do well to follow Buchenau’s example.

Marie Francois is Associate Professor of History at Auburn University in Alabama. Her book, A Culture of Everyday Credit: Housekeeping, Pawnbroking, and Governance in Mexico City, 1750-1920, is forthcoming from the University of Nebraska Press.

Subject(s):Business History
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):20th Century: WWII and post-WWII

T.R. Malthus: The Unpublished Papers in the Collection of Kanto Gakuen University

Author(s):Pulle, J. M.
Parry, Trevor Hughes
Reviewer(s):Hollander, Samuel

Published by EH.NET (March 2004)

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J. M. Pullen and Trevor Hughes Parry, editors, T.R. Malthus: The Unpublished Papers in the Collection of Kanto Gakuen University. Cambridge: Cambridge University Press, Volume I, 1997. xxiv + 140 pp. $70/?45 (cloth), ISBN: 0-521-58138-9; Volume II, 2004. xviii + 341 pp. $100/?60 (cloth), 0-521-58871-5.

Reviewed for EH.NET by Samuel Hollander, Department of Economics, Ben-Gurion University.

Patricia James, Malthus’s biographer, who lived with her subject for fifteen years, found him “as interesting and lovable as his friends described him.” After only ten years of work on his economics I came away with the same impression of intellectual honesty and courage, and personal appeal belying all the old saws relating to his hardheartedness. This portrait is readily confirmed in the two-volume set of hitherto unpublished Malthus papers under review. The first volume contains 75 letters (presumed to have been lost) to and from Malthus, some of which have been cited by his biographers, contemporary and modern; the second comprises hitherto unknown materials by Malthus: four sermons, his diary of a tour of the Lake District in 1795, a document on the calculation of profits on bullion trade transactions, a draft essay on foreign trade of 1811, lecture notes on British and early European history and a series of brief items on miscellaneous economic topics. There are materials relating to Malthus’s wife Harriet, an appendix listing documents in the collection but not reproduced, and another containing “letters” to David Ricardo the authorship and dating of which is unclear. The second volume closes with a description of the Kanto Gakuen Catalogue.

All in all, while the materials in these volumes may not engender a fully-fledged revision of opinion regarding Malthus, their subject certainly emerges in sharper focus and, in some cases, from an unfamiliar perspective. The University and the editors are to be applauded for their achievement in saving the collection for posterity and providing so splendid an accompaniment. And if some of the correspondence will be found familiar, this is in no small part due to the earlier published researches by Professor Pullen himself. In any event, full appreciation of these volumes requires detailed knowledge of the background issues, and the editorial apparatus and commentary succeed brilliantly in providing access to the historical (including linguistic) context and relevant literature, making the work a joy to read.

The first volume includes seventeen letters relating to Malthus’s schooldays (1779-84) of which nine are to and four from his father Daniel; and twenty-five relating to his Cambridge University years (1784-93) of which thirteen are by Malthus and twelve by Daniel. Here father and son emerge as a delightful partnership, their relationship one of mutual consideration, affection and much good humor, both parties at once serious and fun-loving. The exchanges reveal only a few instances of tension, one reflecting Daniel’s nervousness regarding his financial difficulties and concern that Malthus may have been living at college too extravagantly, a concern the latter convinced him finally was unjustified; and another his wish that Robert apply himself to practical applications as a balance to his formal “speculative” studies, a difference that turned on a misunderstanding. On the whole, Daniel gave his son much sound advice; and Malthus fully merited his father’s confidence.

It remains unclear why Robert was sent to a Nonconformist school — though a non-conformist, Daniel was not a Nonconformist — and, when it closed down, to study with Gilbert Wakefield, a progressive teacher (subsequently found guilty of treason and jailed). Presumably Daniel found the curriculum more “progressive” than at Church of England schools. As for Malthus himself, the correspondence relating to his University years seems to point (at least to begin with) to other leanings than the Church: “If you will give me leave to proceed in my own plan of reading for the next two years (I speak with submission to your judgement) I promise you at the expiration of that time to be a decent natural philosopher, & not only to know a few principles, but to be able to apply those principles in a variety of useful problems” (11 February 1786; 42). The exchanges with his father turn on matters as diverse as the accuracy of thermometers, ice-skating and the theater but not theology. One letter (15 April 1784), however, does provide an early indication of his intention to seek ordination: “… before I went into orders, I should have liked to take a degree either at Oxford or Cambridge” (23); nonetheless, in response to his father’s observation (19 December 1785) regarding the desirability of applied science — “I desir’d to see you a surveyor, a mechanick, a navigator, a financier, a natural philosopher, an astronomer, & [not] a meer speculative algebraist” (36) — Robert simply pointed out that “a knowledge of [such] kind would be difficult to obtain before I took my degree …” (41), making no reference to alternative plans in the Church. And there is a letter from Daniel commenting on Robert’s expression of his “love of letters”: “I have no doubt that you will be able to procure any distinction from them you please — I am far from repressing your ambition …” (June 16, 1787; 51). That even at this time Malthus did not intend the Church as primary profession, is perhaps suggested by his response to advice received from the master of Jesus College regarding his prospects: “He seem’d at first rather to advise against orders upon the idea that the defect in my speech would be an obstacle to my rising in the Church, & he thought it a pity that a young man of some abilities should enter into a profession without, at least, some hope of being at the top of it. When however I afterwards told him that the utmost of [my] wishes was a retired living in the country, he said he did not imagine that my speech would be much objection in that case …” (19 April 1786; 47).

The correspondence reveals that Daniel was supportive of his son’s decision to seek ordination, for despite his own financial difficulties he offered to make up any shortfall from the stipendiary curacy at Okewood Chapel which he helped Robert secure in the first place (20 March 1789; 55); at the same time, his own “unorthodoxy” is apparent in a letter — one of six in a section on “later family correspondence” (1796-9) — in which he encourages Robert’s efforts to publish the (now non-extant) pamphlet “The Crisis,” even though success might harm his longer-term prospects in the Church (14 April 1796; 63).

The sermons published in Volume II reveal the seriousness of Malthus’s early commitment to his clerical duties. That of 7 June 1789 may be the first Malthus delivered as ordained deacon licensed to the curacy of Okewood Chapel; the second was read shortly thereafter. Equally important, as the editors point out, it can scarcely be said — as some have said — that Malthus’s commitment waned with the passage of time, since the third sermon was given at the East India College as late as 1832. Study of these sermons will doubtless fuel the on-going debate regarding the decision to remove the two theological chapters of the 1798 Essay from later editions, since their interpretation is by no means plain sailing.

I return to Volume I and a section containing fifteen letters involving “Themes from the Essay on Population,” all but one to Malthus. One written by Edward Daniel Clarke, fellow of Jesus College and traveling companion of Malthus, describes some characteristic objections to the two theological chapters, and here we find reference to a meeting between Malthus and William Godwin regarding the efficacy of “prudence” (20 August 1798; 73-7). A second, of 1806, by the physician Thomas Beddoes makes the important point that longevity and healthiness are not to be identified as Malthus sometimes implied in the Essay (78-9). One by Samuel Whitbread dated 5 April 1807 explains convincingly why the empowerment of parishes to build cottages, as envisaged in his Poor Law bill, should not raise Malthus’s concern since it would provide shelter for the existing population rather than encourage population growth (80-5). The section also involves seven letters dated 1822 by the mathematician Bewick Bridge regarding various demographic calculations. A letter dated 1821 by Pierre Pr?vost, French translator of the Essay, contains an unflattering remark regarding J.B. Say’s “sarcasms” (92). The sole letter by Malthus is to Wilmot-Horton on emigration (c. 15 February 1830), and will be of interest for those who see Malthus as increasingly optimistic regarding the operation of prudential control. While he points to the likelihood that the effect of contraction of labor supply in improving wages would be short-lived, we also find important qualifications: “It is a very just and philosophical observation … that when a population passes rapidly from a very depressed to a much better state, it is to be apprehended that the power of custom will ‘not give way immediately to the influence of an emproved condition and that the moral change will not be accomplished so quickly as the physical one.’ This would not however weigh with me against a plan of emigration in certain circumstances of a country; but surely the contemplation of the probability of it cannot be called unphilosophical if the conclusions of philosophy are to rest as they ought to do upon large experience” (103-4).

A series of nine items of miscellaneous correspondence bring the first volume to a close. One to Francis Horner dated 5 February 1810 is of high significance since it opines that even should the Bank of England not be responsible for the low sterling exchange rate, “the remedy … can be no other than a diminution of the issues of Bank paper” (110), which is, of course, Ricardo’s view. (In his “Pamphlets on the Bullion Question” of 1811, Malthus accepted that the empirical evidence did inculpate the Bank.) There is further confirmation of his conservative monetary policy, consistent with later published work, in the concern expressed with the discretionary scope allowed the Bank under inconvertability, and — while recognizing the deflationary dangers of note contraction — insistence on (gradual) contraction (111).

Other letters in the miscellaneous category include one on the Corn Laws from Francis Jeffrey of 12 May 1814 when Malthus was still known as a free trader (118); and one by Karl Heinrich Rau (15 June 1821) which intimates that he shared Malthus’s position against Say, though strangely proceeding: “I have felt it necessary to contest the possibility of a general Glut of Commodities” (127). He also seems to have read Malthus as favoring government “interference” but is not more specific; conceivably he intended Malthus’s case for public works. Two letters by Malthus (one dating to 1825 or later, the other to 1828 or later) relate to the Measure of Value. Here he spells out what he took to be the major difference with Ricardo — the “grand distinction” — that relative values reflect not only relative labor input but changes in the profit rate assuming differential organic corpositions (to use Marx’s terminology) (130). This scarcely seems a convincing reading of Ricardo, but at least there is confirmation that the measure is designed to mark “variations in the relative values of commodities with reference to the conditions of their supply …” (134). Here too we encounter Malthus’s adherence to the “proportionality theorem,” though with the qualification that “[a] rise of proportional wages is not the primary cause of low profits … but the consequence” (136). By this Malthus seeks to emphasize the secular fall in the profit rate due to “increased abundance of capital and consequent increase of the supply of commodities compared with the producers & consumers”; it need not be read as a general rejection of the Ricardian causal sequence which in fact is spelled out with eminent clarity in his Measure of Value (1823) and in the Quarterly Review (1824).

Two items in the second volume will be of particular interest to historians of economic thought. First, the analysis of bullion trade transactions which illuminates the Ricardo-Malthus exchanges of 1813 on the profitability of gold movements between London and Amsterdam; here the editors surpass themselves in their splendid commentary designed to make sense of, and bring order to, the notes. And the essay on foreign trade, a draft paper of 1811 elaborating aspects of Malthus’s position in the formal and informal “bullionist” controversy with Ricardo.

Samuel Hollander is Professor of Economics at Ben-Gurion University of the Negev, Israel. He is author of The Economics of Thomas Robert Malthus (1997) and Jean-Baptiste Say and the Classical Canon in Economics (Routledge 2005), and is completing his studies on the economics of Karl Marx.

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Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):19th Century

The Atlantic Slave Trade

Author(s):Postma, Johannes
Reviewer(s):Lin, Rachel Chernos

Published by EH.NET (August 2004)

Johannes Postma, The Atlantic Slave Trade. Westport, CT: Greenwood Press, 2003. xi + 177 pp. $45 (hardcover), ISBN: 0-313-31862-X.

Reviewed for EH.NET by Rachel Chernos Lin, Department of History, Brown University.

In the last few decades, there has been an explosion of interest in and research on the Atlantic slave trade. Despite such trends, however, the field has been lacking a solid textbook that would provide students early in their academic careers with an introduction to the topic. In the latest addition to the Greenwood Guides to Historic Events series, Johannes Postma (Minnesota State University, Mankato) fills this void, bringing us a concise survey of the Atlantic slave trade. Clearly intended for use in the classroom, his book, The Atlantic Slave Trade, neatly covers a wide range of topics and ideas, and should prove useful to high school and undergraduate students and teachers alike.

As with other books in the series, this one is divided into two main sections. The first section forms a brief overview of the Atlantic slave trade, numbering only 85 pages, tables and endnotes included. It is divided into six short chapters that roughly follow the course of the Atlantic slave trade.

In chapter one, Postma discusses various topics related to African forced migration, such as definitions of slavery, why Africans were enslaved, how the trade started, the African diaspora, and the role of Europeans in the trade. Chapter two covers the process of enslavement in Africa, the middle passage and ship-board rebellions, and briefly touches on the sale of slaves in the New World. In chapter three, Postma turns to issues of quantification and identification. He synthesizes some of the key trends that historians have identified about the origins of the slaves, their gender distribution, the European countries involved, the numbers transported, and mortality rates among both slaves and crews. Chapter four, which may be of particular interest to readers of this list-serve, outlines some of the economic implications of the trade for the world economy as well as for European and African merchants. While Postma cautions against exaggerating the importance of the slave trade for the growth of Atlantic trading nations, he supports arguments made by scholars such as Barbara Solow and Martin Klein who have emphasized the role of the slave trade in the economic development of the New World (pp. 52, 58, 60). The fifth chapter outlines the struggle for abolition, highlighting the role of British and North American abolitionists as well as the slaves themselves, particularly in St. Domingue. In the sixth and final chapter of the first section, Postma considers the legacy of the slave trade, looking at issues of racism, cultural change, and the existence of present-day slavery.

The second section, comparable in length to the first one, contains a variety of additional materials, including sixteen biographical sketches, thirteen primary source documents, a glossary of terms and an annotated bibliography, that are meant to supplement the preceeding narrative and spark further research.

What is perhaps most striking about this book is its textbook-style approach. There is no central argument or hypothesis structured around the author’s own archival research. This is a survey rather than a synthesis or monograph. Although Postma brings in primary- source evidence to demonstrate various points (such as shipping statistics, for example, to show Britain’s leading position as a carrier of slaves), he draws primarily on the work of others for the information he includes. And, while he occasionally refers to historiographical debates, such as Eric Williams’ thesis regarding the economic roots of abolition, he generally refrains from structuring his narrative around historiographical questions. Instead, Postma takes readers on a quick tour through numerous topics and issues that form central areas of study in Atlantic slave-trade research, provisioning his text with examples drawn from a limited number of carefully chosen primary and secondary sources (some reprinted in the documents section, others included in a useful annotated bibliography), thus introducing readers to countless subjects for potential study.

Postma’s approach has many benefits. First and foremost, it allows him to dispense with traditional approaches to the literature and instead pick and choose what to include and leave out, a necessity in such a short survey. He makes the most of his method by using primarily recent scholarship and sources that have been generating a certain degree of interest in historical circles, thereby giving his survey a sense of currency. For example, Postma draws his statistics largely from information contained in the The Transatlantic Slave Trade: A Database on CD-Rom (TSTD), and he makes a point of discussing the source itself in some detail in both the body of his text and in the bibliography. This source is likely to appeal to younger, computer-savvy students, and it could serve as a good starting point for further research.

In addition, Postma makes use of sources that provide a window into the African perspective. For instance, he includes slave narratives and accounts by Europeans who came into close contact with Africans during the enslavement process as evidence in the body of his text and he also reprints portions of such pieces in the documents section of the book. Along with the well-known narratives by slave Olaudah Equiano and slave-trader John Newton, he also presents less familiar figures. Not only are such narratives an increasingly popular area of inquiry within the historical community (see, for example, the recent collection of images put on the web by anthropologist and ethnohistorian Jerome S. Handler at http://hitchcock.itc.virginia.edu/Slavery/), but they also serve as a useful supplement, or counterpoint, to the numbers found in the TSTD. Thus, while students can avail themselves of statistical information, they are also encouraged to turn to the back of the text where the narratives provide a human voice to the numbers.

The brevity of the survey, however, has its drawbacks. In attempting to present a scholarly but concise overview, Postma is forced to make many choices in terms of what evidence to present or omit. It is not surprising that, as a leading scholar on the role of the Dutch in the Atlantic slave trade,[1] Postma should often turn to Dutch examples. Usually, his own scholarship shines through to great effect, such as when he discusses the effectiveness of rebellion and resistance by maroon communities and slaves in Dutch-controlled Surinam and Demerara (p. 69), or in his section on numbers and statistics, where he revises current estimates for the Dutch role, taking into account newly discovered voyages (p. 36), but his occasional failure to note other examples in certain contexts can be a bit misleading. For instance, when pointing out the role of North American slavers in the trade, he notes that “during the last decades of the eighteenth century, they shipped nearly 3,000 slaves to Dutch-controlled Suriname alone” (p. 43). However, a quick search of the TSTD reveals that Rhode Islanders, the principal North American slave traders in the late-eighteenth century, shipped more than twice that number to Cuba in this period.[2] As Postma himself points out, the Dutch held major carrier status only during the 1680s, whereas the British and the Portuguese were by far the largest carriers of slaves. So, in a short survey on the Atlantic slave trade intended for a general audience, an over-reliance on Dutch participation for evidence can lead to some misunderstanding.

That said, it is refreshing to read a clearly-written, broad survey that does not attempt to oversimplify or dumb-down the material. Far from it. Postma never shies away from complex, multi-causal answers to major questions. It is precisely this approach, especially when combined with the primary sources, biographical sketches and annotated bibliography included in this volume, that make this survey an ideal choice to introduce advanced high-school students and beginning undergraduate students to the Atlantic slave trade.

Notes:

1. See, for example, Johannes Postma, The Dutch in the Atlantic Slave Trade, 1600-1815 (Cambridge University Press, 1990) and Johannes Postma and Victor Enthoven, editors, Riches in Atlantic Commerce: Dutch Transatlantic Shipping, 1585-1817 (Brill, 2003). 2. David Eltis, Stephen D. Behrendt, David Richardson and Herbert S. Klein, The Transatlantic Slave Trade — A Database on CD-ROM (Cambridge University Press, 1999).

Rachel Chernos Lin is a PhD Candidate at Brown University. Her article, “The Rhode Island Slave-Traders: Butchers, Bakers, and Candlestick-Makers,” appeared in the December 2002 issue of Slavery and Abolition.

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

Globalization in Historical Perspective

Author(s):Bordo, Michael D.
Taylor, Alan M.
Williamson, Jeffrey G.
Reviewer(s):Collins, William J.

Published by EH.NET (November 2003)

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Michael D. Bordo, Alan M. Taylor and Jeffrey G. Williamson, editors, Globalization in Historical Perspective. Chicago: University of Chicago Press, 2003. ix + 588 pp. $95 (cloth), ISBN: 0-226-06598-7.

Reviewed for EH.NET by William J. Collins, Department of Economics, Vanderbilt University.

The late twentieth-century surge in international trade, capital, and labor flows has been accompanied by a surge in cliometric research on the history of international economic integration and, importantly, disintegration. Globalization in Historical Perspective, edited by Michael D. Bordo, Alan M. Taylor, and Jeffrey G. Williamson, consists of eleven main chapters that synthesize previous research on the history of globalization while frequently adding substantive original insights. As a whole, the chapters interact well with one another, but at the same time, any one of the chapters could stand alone as a provocative introduction to scholarship in a particular area. The volume reads, in some ways, like a handbook of the history of globalization, and I expect that I will assign several of its chapters in graduate economic history courses for years to come. The volume, however, is not written solely for an audience of economic historians. Rather, every chapter is written with an eye toward the most recent rise in global integration, and every chapter attempts to provide a long-run view of the process and its consequences, past and present. Thus, the volume should prove valuable to any scholar interested in the long and winding course the international economy has taken, including the political economy of its detours and dead-ends.

The eleven chapters are grouped into three parts: one on market integration (commodity, labor, and capital); one on convergence and divergence in national incomes and economic structure; and one on financial institutions and international macroeconomic regimes. Approximately four pages of commentary by leading scholars are appended to each chapter. Typically, the end-of-chapter comments clarify arguments, add valuable critical perspective, and pose questions for future research. I will not discuss their content at any length, but readers will find that the quality and the marginal value of the end-of-chapter comments are quite high.

The volume’s span of topics, geography, and time-periods is impressive. It is fair to say that, as in the quantitative economic history literature itself, the book’s coverage of the Atlantic economy from 1820 onwards is more dense than its coverage of other times and places. I would have welcomed a chapter (or more) akin to an updated and abbreviated version of A.J.H. Latham’s book, The International Economy and the Undeveloped World, 1865-1914 (1978), which situates the developing world in the international economy so effectively. But several chapters in the book, most notably the first chapter by Ronald Findlay and Kevin H. O’Rourke (“Commodity Market Integration, 1500-2000″) and the entire second section of the volume (four chapters on “The Great Divergence, Geography, and Technology”) do extend their coverage as widely as possible and directly investigate the economic consequences of interactions among places at different stages of development.

The first three chapters are: “Commodity Market Integration, 1500-2000″ by Findlay and O’Rourke; “International Migration and the Integration of Labor Markets” by Barry R. Chiswick and Timothy J. Hatton; and “Globalization and Capital Markets” by Maurice Obstfeld and Taylor. Although Williamson did not contribute directly to these chapters, he has in the past collaborated extensively with at least one co-author of each chapter, and the influence of those collaborative efforts is obvious. The Findlay and O’Rourke paper explicitly targets inter-continental market integration, is the most ambitious chapter in terms of temporal coverage, and contains a stunning (but well orchestrated) amount of historical evidence in a comparatively small space. It sets the bar high for all chapters that follow. Chiswick and Hatton’s chapter is especially useful in illuminating the motives and the economic and political impacts of free migrants prior to 1914 and after 1950. While the chapter summarizes research on slavery and indentured servitude, including migration from Asia, I wish it had gone further to link endowments, slavery, institutions, and subsequent growth along the lines of work by Stanley Engerman and Kenneth Sokoloff. The chapter by Obstfeld and Taylor reiterates the “policy trilemma” as an organizing principle for understanding the history of global capital markets. The essential idea is that policymakers may have two of the following three policy features (though they might desire all three): free capital mobility, a fixed exchange rate, and monetary policy that focuses on domestic economic concerns. The authors marshal an array of quantity (capital flows) and price (interest rates) data to illustrate changes in the degree of capital market integration over the last two centuries, including the interwar dislocation. Taken together, these first three chapters provide an effective economic history of globalization in its three central areas: commodity markets, labor markets, and capital markets.

The next group of chapters deals with the role that globalization has played in determining observed patterns of long-run macroeconomic growth and structural change. The first is “Globalization and Convergence” by Steve Dowrick and J. Bradford DeLong. The paper will be a pleasant surprise to anyone who sees the title and thinks “not another GDP/capita convergence paper ….” It takes a fresh view of the data, reconnects the discussion to the landmark work by Baumol and Wolff on the “convergence club” and how nations gain (or lose) membership in that club, and raises several big questions (e.g., Is conditional convergence meaningful? Why does the connection between openness and growth appear to change over time?). The subsequent commentary by Charles I. Jones is equally engaging. Peter H. Lindert and Williamson follow with a chapter that sounds a lot like the previous one (“Does Globalization Make the World More Unequal?”), but that in fact takes a very different approach. By focusing on how globalization affects factor returns (as opposed to income per capita), the authors provide more consideration of within-country changes in inequality while driving home the point that whether one perceives gains or losses from increasing integration may depend on one’s portfolio of factor ownership. Ultimately, the authors argue that inequality between countries has probably been mitigated, rather than augmented, by international economic integration. In “Technology in the Great Divergence,” Greg Clark and Robert C. Feenstra argue that total factor productivity (TFP) is the major component of income inequality across countries, and they go on to investigate whether TFP gaps are related primarily with labor inefficiencies (as opposed to unavailability of best-practice technology or competent managers). To guide their work, the authors undertake a cross-country analysis of railway efficiency, as well as a clever comparison of countries (with emphasis on India) in a Heckscher-Ohlin-Vanek framework (within which the factor content of trade has implications for relative factor productivity). The real sources of TFP differentials are never quite nailed down here, and so the TFP puzzle awaits future research. Nicholas Crafts and Anthony J. Venables put transaction and trade costs at the center of their discussion of “Globalization in History: A Geographical Perspective.” The chapter provides a welcome connection between the history of industrialization, particularly its clustering in the US, and the theoretical economic geography literature that Paul Krugman played a central role in developing in the 1980s and early 1990s.

The final four main chapters explore the historical and institutional foundations of modern financial markets, including their influence on broader macroeconomic performance. In “Financial Systems, Growth, and Globalization,” Peter L. Rousseau and Richard Sylla provide new evidence supporting the hypothesis that solid financial systems significantly enhanced growth performance (particularly prior to 1930), starting with simple historical correlations and progressing to more elaborate econometric analyses. The relevance of this hypothesis for contemporary policy, particularly in developing countries that could benefit from foreign capital inflows, is self-evident. Bordo and Marc Flandreau discuss the history of the relationship between exchange regimes of core and peripheral nations. A key point of their argument is that peripheral countries, lacking “financial maturity,” have had to borrow in terms of foreign currencies, an arrangement that bolsters the incentive to adopt a fixed exchange rate regime (the alternative being a float with more limited access to foreign capital). In response, Anna J. Schwartz offers one of the book’s more lively commentaries, including an alternative reading of the decision by “mature” economies to float their currencies in the late twentieth century and a note that “immaturity may be a euphemism for misguided monetary and fiscal policies” (p. 469). Larry Neal and Marc Weidenmier contribute a chapter on “Crises in the Global Economy from Tulips to Today: Contagion and Consequences.” As the title suggests, they review international financial crises from the 1630s (tulips) to the 1990s, with special emphasis on crises in the late nineteenth and early twentieth centuries. For that period, they examine an impressive collection of high-frequency (weekly) data from short-term capital markets for evidence of international contagion. The results are mixed, but on the whole, the authors lean toward there being little evidence of contagion, at least by the criterion of the modern econometric literature on the subject. The last main chapter is by Barry Eichengreen and Harold James on “Monetary and Financial Reform in Two Eras of Globalization.” The chapter provides a narrative description of how the international financial system has evolved since the nineteenth century, emphasizing gradual, market-driven change, but also including some major reforms and the economic circumstances under which they took place. Specifically, forces promoting significant, abrupt reforms have emerged (and prevailed) when instability in the international financial system was widely perceived to threaten the international trading system.

The volume concludes with relatively short musings on the costs, benefits, and future of globalization by a panel consisting of Clive Crook, Gerardo della Paolera, Niall Ferguson, Anne Krueger, and Ronald Rogowski. These short commentaries effectively zoom out from the previous chapters’ historical and econometric detail, back to the big picture issues associated with globalization. The panel’s members come at these issues from quite different and provocative directions. Together, they remind readers just how much may be at stake in the process of economic integration, and just how important a well-articulated understanding of that process may be in guiding the political responses to globalization. In that regard, this volume makes a valuable contribution.

William J. Collins is an Assistant Professor of Economics at Vanderbilt University and the Model-Okun Fellow in Economic Studies at the Brookings Institution (for 2003-2004). He is the author of “Labor Mobility, Market Integration, and Wage Convergence in Late Nineteenth-Century India,” Explorations in Economic History (July 1999); “Were Trade and Factor Mobility Substitutes in History?” (with Kevin O’Rourke and Jeffrey G. Williamson), in Migration: The Controversies and the Evidence, edited by R. Faini, J. de Melo, and K. Zimmerman, Cambridge University Press (1999); and more recently, “The Labor Market Impact of State-Level Anti-Discrimination Laws, 1940-1960,” Industrial and Labor Relations Review (January 2003).

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

Deforesting the Earth: From Prehistory to Global Crisis

Author(s):Williams, Michael
Reviewer(s):Libecap, Gary

Published by EH.NET (August 2003)

Michael Williams, Deforesting the Earth: From Prehistory to Global Crisis. Chicago: University of Chicago Press, 2003. xxvi + 689 pp. $70 (cloth), ISBN: 0-226-89926-8.

Reviewed for EH.NET by Gary Libecap, Department of Economics, University of Arizona.

Michael Williams is Professor of Geography at Oxford University and a Fellow of Oriel College. He is the author of numerous books and articles on forestry and historical geography.

Deforesting the Earth is valuable economic and environmental history. These two often do not go together, unfortunately. In much environmental history, humans (especially those from western industrial societies) are the problem. Nature in general and forests in particular, are often alleged to have been in a natural equilibrium with native peoples until both were ravaged by the onset of capitalist exploitation. With contemporary fears of globalization, global warming, species extinction, losses of biodiversity, deforestation, and depletion of many critical resources, advocacy groups and other special interests exaggerate environmental “crises” and fail to place them into their historical bases. In this setting it is difficult to find careful, reasoned examinations of key problems, their histories, complexities, and likely, long-term patterns and consequences. Deforestation, particularly of Amazon and other rainforests, certainly ranks at or near the top of any list of environmental crises. The issue is an impassioned one and a flood of alarmist books and articles have appeared on the subject, but they provide little understanding of the extent of deforestation, nature of regeneration, or of the underlying issues involved.

Michael Williams places deforestation into a broader historical and geographical context, and explores the linkages between forests and people since the end of the last Ice Age; identifies important economic forces; and provides estimates of the extent of forest clearing. He primarily examines Western Europe and North America, but also describes the extent and forces underlying deforestation in China, Japan, Australia, New Zealand, and parts of Africa and South America. There are extensive endnotes, figures, illustrations, and tables; an inclusive bibliography; and a complete index.

The book is divided into three parts: Clearing in the Deep Past, Reaching Out: Europe and the Wider World, and the Global Forest. Part I explores timber cutting from the end of the Ice Age through the medieval period. Williams points out that the thinning, changing, and elimination of forests is not a recent phenomenon, but rather is as old as the human occupation of the earth. Clearing, and indeed, deforestation, has been intricately tied to conditions of population growth and economic development for the past 14 to 15,000 years. He states that the book “is about how, why, and when humans eliminated trees and changed forests, and so shaped the economies, societies, and landscapes that lie around us.” He also provides some measures of the magnitude of deforestation. Chapter 1 describes the return of the forest as the ice sheets retreated some 16,000 years ago. Not only were Europe and North America affected by changes in the climate, but tropical regions as well — although less is known about the latter. As humans migrated to newly forested areas, they would have nearly as much impact on the forest over the subsequent 10,000 years as the glaciers had for 100,000 years. Chapter 2 points to fire as the main vehicle used by primitive peoples for deforestation. Williams argues that the manipulation and taming of nature by prehistoric and native peoples is commonly ignored and underestimated. Their actions have been romanticized and asserted to have been ecologically benign. But, according to Williams, natives never were “in perfect harmony” with nature, but attempted to transform it, and fire was the first great force. The combination of human predation and destruction of habitat through burning led to the extinction of many species across the planet, and Williams provides examples from Europe, North America, and Polynesia. He argues that the first Europeans to visit North America likely observed a profoundly disturbed landscape. At their peak around 1492, the Indian population of North America had long been transforming the forest for agriculture and hunting. Chapter 3 turns to the rise of agriculture, which involved both the domestication of animals and plant species and the removal of forest. The examination begins with the Neolithic period in the Middle East, Europe, and North and South America, and moves on to describe the gradual expansion of agricultural methods and clearing practices. Chapter 4 looks at agriculture and deforestation in the classical world of Greece and Rome. By this time three other factors in forcing timber cutting were becoming important, shipbuilding, urbanization, and metal smelting, and these were to become even greater forces in the harvest of trees in Europe by the fifteenth century. Williams provides some estimates of the amount of timber harvest necessary for ship construction and metal smelting. Chapter 5 turns to the medieval world, which brought new onslaughts on the forest. Population increases in Europe and the introduction of new plows and horsepower speeded the pace and extent of deforestation. Williams describes the complex relationship that medieval peoples had with the forest as a source of food, firewood, and other products. Forests were closely bound to everyday lives of ordinary people. At the same time, the forests were the enemy with dangerous animals and trees that blocked the paths of roads and fields. The Plague and the fall in population in the fifteenth century gave European forests some respite. The chapter ends with discussion of clearing in fourteenth century China.

Part II covers more modern factors in deforestation. Chapter 6 beings with the internal and external economic expansion of Europe between 1500 and 1750, with associated changes in cultural and economic forces affecting the forest. This was the age of discovery, and discovery needed ships of wood. Technological change brought new products and means of production and communication. Population growth surged, trade increased, and new sources of power were required. All of these dramatic changes impacted the forest. New views of nature arose, whereby trees and other natural resources became seen as instruments of human development. As described in Chapter 7, clearing accelerated in Europe during this period. The prices of firewood, charcoal, and timber stores increased sharply as population densities grew. This forced a turn to new, more distant, sources of supply, and importantly, for the first time, to a new concern with conservation. Plunder, preservation, and planting went hand in hand. Chapter 8 extends the analysis of this critical time, as the age of discovery, from Europe to the Americas, China, and Japan. Trade in timber products and clearing for European settlement in North and South America profoundly altered the landscape. In Chapter 9, Williams explores underlying driving forces that were eliminating primary forests across the world. These forces included industrialization, mechanization and motive power, population growth and migration, colonization, and improvements in transportation and communication. He illustrates the effect on the forest with a discussion of new, large-scale processes in timber harvest and industrial sawmilling. Steam power for cutting trees, sawing lumber, and transporting timber products changed the pattern and process of deforestation. As the eighteenth century began to end, however, the sense of inexhaustibility of the forest, at least temperate forests began to disappear. A new emphasis on conservation in Europe began to rise. Chapter 10 follows temperate deforestation from 1750 through 1920. In Europe and especially, the Americas, agricultural clearing was still viewed as “improvements.” The demands for shipbuilding, home fuel, construction, and charcoal continued to encourage timber harvest. Williams spends considerable time describing the path of clearing in the United States as frontier settlement expanded. Estimates of the extent and geographic pattern of clearing are provided. Experiences in Australia, New Zealand, and Japan are also included. Chapter 11 turns to clearing of tropical forests through 1920, beginning with an overview of the use of forest by indigenous peoples. As populations grew, indigenous agriculture expanded, with associated burning and clearing. Gradually, more permanent agriculture emerged. Precolonial forests were not untouched Edens or community resources shared equitably by all. Societies were stratified and elites had more forest. In any event, tropical forests were under siege even before Europeans arrived, and with European colonization, pressures grew. Experiences in India and Brazil receive considerable discussion in the chapter.

Part III, the Global Forest, turns to contemporary forest issues. Chapter 12 begins with early twentieth century scares and solutions to “timber famine.” By the turn of the century, the process of deforestation had been so relentless in many areas that fears arose that timber supplies, along with supplies of other natural resources, were soon to be depleted. Advocates for greater government ownership and regulation, such as Gifford Pinchot manipulated concerns about “the coming timber famine.” In America the National Forests were established and expanded and the Forest Service was created. Publications, such as The Forest Resources of the World, painted a bleak picture, not only in North America, but also in the less-developed world. Laissez-faire capitalism and self-interest became viewed as threats to the remaining forest. But in the Soviet Union, which certainly was not laissez-faire capitalist, timber removal moved into new areas with increased levels of exploitation. Chapters13 and 14 attempt to summarize the magnitude of the onslaught on the forest between 1945 and 1995. This modern period brought greater population growth in many previously relatively forested areas, new technologies, higher incomes in the developed world with greater demand for forest products. As forest cover dwindled, concerns arose not only regarding the impact of scarcity on prices, but on broader climatic and ecological effects. Biodiversity became an objective to be pursued, at least by influential populations in rich countries. Williams presents data on global land use through 1985 and the distribution of remaining forests. While forest harvest is regulated and/or moderated in most developed societies, disturbing rates of deforestation occur in tropical regions due to demand for teak, mahogany and other valuable species and due to agricultural settlement and a shift to cattle raising. In the Epilogue, Williams places these current concerns with deforestation into the historical context he has described earlier in the book. There is some optimism as he notes that reforestation occurs without gaining media notice. Nevertheless, pressures on the remaining forest are intense, and he is wary of much of the current literature on the issue prepared not only by advocacy groups, but also by the scientific community, whose interests are molded by funding agencies. Williams concludes with a call for more dispassionate analysis of the problem of deforestation and potential solutions.

Deforesting the Earth is a work of first-rate scholarship. Parts I and II are particularly impressive. The discussion of the more modern period and trends is somewhat less satisfying, in part because the underlying issues have become so complex that to address them in any detail would involve additional material for an already large book. Even so, some attention to the role of prices to encourage conservation and reforestation on private forests, as compared to the public National Forests, would have been useful. Further, discussion of secure property rights — the absence of which so critically affects harvests of tropical forests — also would have added to the analysis of contemporary conditions. In the end, however, this is an important and valuable book for economic and environmental historians for gaining a clearer understanding of the historical complex human relationship with forests.

Gary D. Libecap is Professor of Economics and Law at the University of Arizona and Research Associate with the National Bureau of Economic Research. Having just completed (for now) a project on homestead settlement, dryland farming, farm failure and the Dust Bowl on the American Great Plains, he is now turning to water. The project focuses on the history, law, and economics of water transfers from agriculture to urban and environmental uses. The initial task is to re-evaluate the Owens Valley water transfer to Los Angeles, 1905-1940, which was the subject of the movie Chinatown and which casts a dark shadow on all efforts to transfer water today.

Subject(s):Historical Geography
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Peasants of Languedoc

Author(s):Ladurie, Emmanuel Le Roy
Reviewer(s):McCants, Anne E.C.

Project 2001: Significant Works in Economic History

Emmanuel Le Roy Ladurie, The Peasants of Languedoc.

Review Essay by Anne E.C. McCants, Department of History, Massachusetts Institute of Technology.

There and Back Again: The Great Agrarian Cycle Revisited

It has been thirty-six years since the original publication of Le Roy Ladurie’s now classic Les Paysans de Languedoc, whose English translation appeared only eight years later. This work of “total” regional history (p. 8), grounded in the climate and topography of its fixed place, narrated around a loving reconstruction of time series data drawn from land tax registers, grain (and other commodity) prices, population registers and communicant lists, and ultimately nuanced by an anthropologist’s sensitivity to the social impact of even small changes in literacy and spiritual affiliation, is in many respects the crowning achievement of the Annales school for the post-Braudelian generation.1 It takes for its subject a place close to the heart of Braudel himself, the Mediterranean French province of Languedoc, and the people who tilled its fields and nurtured its vines, mostly in the small family holdings which so captured the historical imagination of French scholars of the inter- and post-war periods. It also takes as its time period those in-between centuries so favored by Braudel, following the dramatic collapse of the fourteenth century, but well before the acceleration of change brought on by industrialization in the late eighteenth century and thereafter. Despite the poverty and hardship, not to mention the periodic bouts of starvation and insanity, which cross the pages of this book, it retains nonetheless a bucolic vision of the French countryside, only superficially touched by the affairs of men, at least in anything but the very long run. Finally, it attends most fully to the natural and human processes characterized best by an ebb and flow of cyclical change: climate, the productivity of the soil, and population. In all of these respects the intellectual debts to Marc Bloch, Fran?ois Simiand, and of course Fernand Braudel are immediately obvious.

Yet in important ways Le Roy Ladurie also deviates from what had by the time of this publication become the normative format for a major work of Annales history. Instead of dividing his subject into the classic, and fundamentally non-sequential, tri-part formula of structure, conjuncture, et ?v?nement, Le Roy Ladurie instead follows the older norm of telling his story in time. He begins with the tailings of the fourteenth century crisis, what he calls “the low-water mark of a society.” He then traces the effects of the so-called “wage and price scissors” of the long sixteenth century, culminating once again with population collapse and economic depression in the seventeenth century. The self-proclaimed “protagonist” of this book is “a great agrarian cycle, lasting from the end of the fifteenth century to the beginning of the eighteenth, studied in its entirety” (p. 289). While as heroes go this is still a far cry from the kings and generals of old-fashioned history, it is clearly less fixed in time and space than Braudel’s mountains and seas with their capacity for geologic movement only. The Peasants of Languedoc is thus a narrative, and like all good narratives it is susceptible to accidental interventions in the plot and to their concomitant unanticipated outcomes. And so Le Roy Ladurie’s ‘great agrarian cycle’ turns out to have embedded in it a hint of something more linear, a harbinger of the demise of his otherwise so carefully crafted longue dur?e, and what he himself calls “the seeds of true growth” (p. 302). Yet his own lingering ambivalence about what others have been tempted to call progress is underscored by his choice of metaphor to describe it. In the same breath in which he invokes “incandescent particles in the darkest hours” he also speaks of the “contagion of true growth” (p. 303). Is economic growth (that is the “increase of individual wealth” (p. 303) in his definition) good or bad, or both simultaneously? This question, which seems so easily answered by anyone trained in neo-classical economics, lingers unresolved by La Roy Ladurie. Indeed, it perhaps remains to the present unanswered by those who have followed him in the French historical school, particularly as it has turned increasingly back towards the study of culture and in the process adopted many of the methodologies and proclivities of the anthropologist.2

What then are these (insidious?) interventions that push the great agrarian (read Malthusian) cycle off course? Perhaps somewhat surprisingly they are phenomena which Max Weber would have recognized even if their shading is not exactly that of a Protestant ethic. They include the spread of viticulture and sericulture to the detriment of the subsistence grain; the gradual appearance of an “industrial mentality,” admittedly never well defined but seemingly linked with the increase in production of exportable commodities; the spread of remedial education and its powerful accompaniment literacy; and finally, the most nebulous of all, “a certain psychological transfiguration and a general improvement in behavior,” that is best characterized by the “virtue of self-control” (p. 307). Le Roy Ladurie cites the decline of dueling, spontaneous knife fights, and religious fanaticism as just the most obvious evidence of the shift towards a more “intellectual” and “composed” life (p. 309). The link from this reform of manners to real (that is sustainable) economic growth is only inferred, but presumably those who can refrain from emotional outbursts of violence will also be better able to defer consumption gratification in order to invest for the future. Without these (overwhelmingly cultural) interventions the peasant smallholder might have been doomed to an endless Malthusian repetition of the great agrarian cycle of expansion — characterized by population growth, downward pressure on family farm size, the cultivation of marginal lands, the impoverishment of heirs, and rising subsistence prices — and retreat, in which all of the above signs would reverse. As long as subsistence agriculture remained the dominant activity of the agrarian economy population won the race over bread every time (p. 73). Malthus would have been right, if he had not been born too late. Certainly for La Roy Ladurie Malthus was the true prophet of the age that just preceded his own (p. 311)

Yet not many scholars remain unabashed Malthusians or even slightly watered-down neo-Malthusians these days. We have learned well from Ester Boserup that population pressure could and did drive human societies to greater intensity of work effort and the concomitant technological modifications suited to natural resource scarcity and labor abundance. We have learned from Adam Smith and his many followers the productivity advantages of specialization, encouraged as it was by the rise of urban places and the increasingly dense networks of trade among them. We have learned as well from the Marxists of Robert Brenner=s tribe that power relationships between and among individuals and social groups (dare I call them classes?) could powerfully impact the nature of economic response to demographic catastrophe, both on the individual level and for societies as a whole. And of course, we also know from the body of theory built up over the last century in mainstream economics departments that markets are capable of clearing an amazing range of commodities, and that they often did so even in the somewhat murky pre-industrial past. Finally, the “New” Institutional Economics has taught us that social and political institutions had a lot to do with how well markets were actually able to perform their pure function. What then is there for the Anglo-speaking economic historian (most likely trained in the neo-classical tradition) to take from this book and its larger research agenda nearly four decades out?

Fortunately lots. To begin with there is the terrific data series reconstructed over a substantially long period of time to allow for serious study of the macro-dynamics of a pre-industrial economy. For even if Le Roy Ladurie “confuses rent with profits” as Douglas North pointed out long ago, we do not have to follow in that confusion.3 We can read the rent series for what it really is, using it in tandem with price and wage series as a base for understanding the changing profitability of subsistence agriculture, particularly as it varied by the scale of the farm operation. For as La Roy Ladurie rightly emphasizes throughout his exposition, it is far too simplistic to speak only of booms and depressions in the agrarian economy overall. If you had a surplus to sell, falling grain prices induced hardship; but the story was very different for those forced onto the market to ensure sufficient quantities of bread for survival. For them agrarian depressions could be a time of relative plenty. Thus the macro-dynamics that inhere in his great agrarian cycle could produce both winners and losers simultaneously, depending on the distribution of property, and the larger social structure in which farming took place. It is always good for us to be reminded of this complication.

The Peasants of Languedoc also provides a model for the integration of cultural history into economic history which is still relevant today. Despite La Roy Ladurie’s now outdated reliance on Malthus for the structure within which his narrative operates, he nonetheless discerns the cultural forces which were at work in eighteenth-century Languedoc (and in nascent form even earlier) to disrupt the Malthusian paradigm. To the claim on this side of the Atlantic that ‘institutions matter’ a fresh reading of Le Roy Ladurie offers the reminder that mentalit? matters too. Adequate labor and capital resources may have been necessary conditions for economic growth of the modern variety, but they were hardly sufficient. Their application in new ways required whole new modes of thought and behavior. Thus, as any Frenchman would surely understand in the widest possible sense that we are what we eat, La Roy Ladurie would also have us understand that we produce what we think.

Finally this book remains the most accessible to the American student (of all ages) of all the major works to come out of the Annales school. It is neither geologic in its movement, nor overwhelming in its scope. Yet it achieves its stated goal to be “total” in its comprehension of its own subject. The barren mountain reaches, rolling fields of grain and vine, and scrub filled blessedly with chestnut trees; the long cycles of climate change, and the violent bursts of climatic extremes; the struggling peasant with too many children, the upstart coqs de village, and the emerging bourgeois of Montpellier; “Huguenot carders and Papist peasants” (p. 158); all of these characters come alive on the pages of this book. Their multiple, often conflicting, stories are woven together seamlessly by La Roy Ladurie into a complicated whole that looks remarkably like real human experience. If the master economic narrative sometimes goes astray or suffers from lapses of logical explanation, this seems a forgivable fault to this enthusiastic reader. There is much indeed for us to learn, not only about the agrarian economy of a Mediterranean province before industrialization, but about historical storytelling as well.

Notes:

1. All quotes from the text are taken from the English translation by John Day, published in paperback by the University of Illinois Press in 1976.

2. See Peter Burke, The French Historical Revolution: The Annales School 1929-89, Stanford, 1990, especially pp. 79-93.

3. Douglass North, AComment@ in Journal of Economic History, Vol. 31, no. 1, 1978, p. 80.

Anne McCants is the author of Civic Charity in a Golden Age: Orphan Care in Early Modern Amsterdam, University of Illinois Press, 1997, and numerous articles on living standards, migration, and marriage patterns in northern Europe. She teaches in history, economics and women’s studies at MIT.

Subject(s):Historical Demography, including Migration
Geographic Area(s):Europe
Time Period(s):Medieval

The Rise of the English Town 1650-1850

Author(s):Chalklin, Christopher
Reviewer(s):Stobart, Jon

Published by EH.NET (October 2001)

Christopher Chalklin, The Rise of the English Town 1650-1850.

Cambridge: Cambridge University Press, 2001. vii + 102 pp. $39.95 (hardback),

ISBN: 0-521-66141-2; $11.95 (paperback), ISBN: 0-521-66737-2.

Reviewed for EH.NET by Jon Stobart, Geography, School of Science and the

Environment, Coventry University.

Urban histories of England in the long eighteenth century are like buses: you

wait for ages and then three come along at once. Following a flurry of books

in the 1970s and early 1980s, there have been remarkably few introductory

texts written about this vital period in English urban development. As well as

the subject of this current review, we now have Roey Sweet’s The English

Town 1680-1840 (Longman, 1999) and Joyce Ellis’s The Georgian Town

1680-1840 (Palgrave, 2001).

Christopher Chalklin, formerly Reader in History at the University of Reading

in the UK, sets himself an ambitious task in this text. Rather than

concentrate on particular aspects of urban development, the book aims to

provide an introductory survey of the demographic, economic and social

structure of English towns through two centuries of change. As an introductory

text, this book has two great merits. One is that it makes some mention of

most aspects traditionally seen as being important in the English urban

history of this period. The coverage is certainly broad. The seven chapters

cover the urbanization of England, the growth of different types of towns,

urban demography and society, the built environment, the middle orders (two

chapters) and the lower orders. After reading this book, students will

certainly be aware of the complex and changing nature of English towns and

town life during the period. The other real plus is that the extensive

referencing. If the reader wants to know more, then they are guided to a

wealth of further reading with over 250 books and articles being cited,

although surprisingly few are chosen from the last few years. This reflects

the traditional approach, tone and structure of the book.

There are problems with Chalklin’s text, though. Two-hundred years of urban

history are packed in to just 76 pages of text, coverage is also patchy.

Migration, for example, is dealt with in very simplistic terms and there is

little on the debate over the role of London in national economic growth. In

contrast (and perhaps unsurprisingly given the author’s previous

publications), chapter four on the building of towns is the most convincing

and thorough. It is also the longest, accounting for nearly one-quarter of the

text. Here Chalklin has space to discuss processes, trends, debates and

methodologies in the sort of detail that is impossible in other, shorter

chapters. To this thematic unevenness is added considerable variability in

detail through time. Attention focuses very much on the second half of the

study period and we are told very little about towns in the seventeenth

century. Certainly, the stark contrasts between urban life during the

Commonwealth and that in Victorian cities are only glimpsed in the pages of

this book. Indeed, one wonders why such a long time period was chosen.

Throughout the text, there is a tension between breadth and depth. In general,

analysis, interpretation and debate are sacrificed in favor of ‘facts and

figures.’ That readers are left to come to their own conclusions is, in one

sense, a strength. But the lack of space to develop discussion of (new)

interpretations and ideas sometimes leaves one wondering what to make of the

riches on offer. Furthermore, whilst the level of detail is remarkable in such

a short book, only occasionally are the examples discussed in enough detail

to really tell us anything interesting or worthwhile. For example, in the

section covering the emergence of the middle orders, being told that the

wealthiest Liverpool merchant in the early-nineteenth century was probably

John Gladstone seems slightly pointless — what are we to do with this piece

of information? In contrast, the more detailed discussion of the Cadbury

family in early nineteenth-century Birmingham gives us a real insight into the

family life and household arrangements of the middle orders.

In all, this is a book that will prove very useful to students approaching the

subject for the first time, but does not, in itself, provide an adequate

introduction. There is a lack of balance between providing information and

presenting a cohesive argument about the changes occurring in and stimulated

by towns over these two centuries. Whilst remarkably detailed, this does not

form the coherent account that is promised.

Jon Stobart’s research interests include regional, urban and industrial

development in eighteenth-century England. He recently started a project on

leisure and consumption in the eighteenth century funded by the Leverhulme

Trust.

Subject(s):Urban and Regional History
Geographic Area(s):Europe
Time Period(s):19th Century

The Mediterranean Response to Globalization before 1950

Author(s):Pamuk, Sevket
Williamson, Jeffrey G.
Reviewer(s):Simpson, James

Published by EH.NET (August 2001)

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Sevket Pamuk and Jeffrey G. Williamson, editors, The Mediterranean Response to Globalization before 1950. London and New York: Routledge, 2000. xvi + 430 pp. $115 (cloth), ISBN 0-415-22425-X.

Reviewed for EH.NET by James Simpson, Universidad Carlos III de Madrid.

The title of the book is slightly misleading as the majority of the thirteen papers consider just the half-century prior to the First World War. The main agenda is to explain why economic backwardness in the Mediterranean persisted, and why the gap with the European leaders increased during this “first great globalization boom.”

The first problem is to show relative levels of development. Jaime Reis, after questioning the usefulness of existing real wages series for establishing cross-country comparisons, calculates new estimates of GDP for 1850 and concludes that there was “not a single ‘poor’ periphery” in Europe, but rather there existed a wide range of income levels among both Mediterranean and Scandinavian countries. Jeffrey Williamson, using real wages from a wide sample of Mediterranean countries also finds major differences, with northern Italian workers earning about four times more than Egyptian workers in the late nineteenth century. Williamson also notes that “there is absolutely no evidence of labor market integration in the Mediterranean, and plenty of evidence of segmentation” between 1820 and 1870. Although changes in real wages varied among Mediterranean countries in the half-century prior to the First World War, there was no consistent catch-up or fallback against the industrial nations. The global challenge produced different responses, the subject treated in most of the remaining essays.

The Mediterranean has been a great trading region for centuries, and some of the best papers in this book are devoted to trade. Gelina Harlaftis and Vassilis Kardasis contribute an interesting piece on international shipping in the eastern Mediterranean, which shows that shipping costs for bulk products such as cereals, coal and cotton fell almost as quickly as they did in the North Atlantic trade in the half century prior to 1914. Trade boomed, and provided rich opportunities for shipowners, especially Greek merchants. Falling transport costs and growing urban markets in the industrial economies also provided Mediterranean farmers with new and growing markets for their produce. Yet the response was often disappointing. Jose Morilla-Critz, Alan Olmstead and Paul Rhode show convincingly one of the reasons why this was so. In their paper on raisins and prunes, they show how California as a “late comer” was able first to imitate traditional European production techniques, and then develop better quality fruit, more efficient production processes and better selling techniques. What at the outset had appeared as promising niche markets for Mediterranean farmers had, by the early twentieth century, been largely captured by the Californians.

The theme of product quality and competition in the international food market is also pursued, again highly successfully, by Ramon Ramon-Munoz in his study of olive oil. This author argues that specialization took place in Mediterranean countries according to factor endowments. The labor-intensive nature of olive production implied that it was increasingly carried out in low wage regions (Tunisia, Algeria, Greece), whereas the capital-intensive nature of refining and building brand names were activities found in France and northern Italy.

Three interesting papers underline the importance of market integration for agricultural specialization in the Eastern Mediterranean. Ahmed Akarli shows that in Ottoman Macedonia the decline in international cereal prices after 1870 encouraged producers to switch into other cash crops, such as tobacco, silk, opium or cotton, although by the early twentieth century limits had already appeared to this sort of specialization. Tarik Yousef shows that local commodity markets for farm produce were fully integrated in Egypt during the interwar period. Finally, Jacob Metzer shows how exports of citrus fruit, which by the early 1930s accounted for 77 percent of all mercantile exports, contributed to the rapid growth in per capita incomes in Mandatory Palestine.

What of industry? Unfortunately there is no paper for the 1870-1914 period, or any indication of either industrial growth, or the relative importance of manufacturing exports. There are perhaps four major arguments usually advanced for why industrial growth in the Mediterranean was limited before 1914. First, coal deposits were few and of a poor quality, making the region heavily dependent on imported British coal. Second, domestic demand was limited because of low incomes. Third, international trade was small because producers’ costs were high, not just because of the need to import coal, but also because of the impact of domestic tariffs that inflated the costs of everything, from raw materials to workers’ food. Finally, growth suffered because of the low levels of human capital. In their growth model to explain the Mediterranean’s backwardness in comparison to the UK, James Foreman-Peck and Pedro Lains find that tariffs, coal production and human capital were indeed all important. Both tariffs and illiteracy appear to have increased in importance between 1870 and 1910, but growing imports compensated for the lack of domestic coal. Only in Italy were tariffs relatively unimportant, a point Giovanni Federico and Antonio Tena (1998, 1999) have also argued, and which is the subject of the chapter by Federico and Kevin O’Rourke. These authors, using a computable general equilibrium model, not only show that tariffs had a minimal impact on GDP, but that the relative importance of the agricultural and industrial sectors would have been little different in 1911 in their absence. Only within each sector would an important reallocation of resources have taken place if there had been free trade.

With respect to human capital, Joan Ramon Roses argues that the skill levels of the workforce determined technical choice in the cotton industry between 1830 and 1860. Looking at technology, product quality and skills in four different international centers, he finds that Catalan cotton workers were more skilled than those of New England or Piedmont, but less so than those in Lancashire. This implies that the available levels of human capital were not necessarily an obstacle in establishing a competitive textile industry at this period, at least for Catalonia.

Labor markets play an important role in the integration of the international economy in this period, and this was another area where the Mediterranean response was weak. For Spain, a country where most emigrants originated from the Atlantic coastal regions, Blanca Sanchez-Alonso argues that emigration was income constrained. As a heavily rural economy, the increase in tariffs after 1891 should, by raising incomes, have encouraged emigration. However the 30 percent depreciation of the peseta between 1895 and 1905 raised emigration costs even more, and reduced by an estimated 600,000 the number of migrants who would have left if the exchange rate had remained stable. Sanchez-Alonso argues that without this currency depreciation, numbers would have been similar to those of Italy.

The economic environment of the interwar period was very different from that of the pre-1914 period and virtually all countries faced considerable difficulties, especially after 1929. The Turkish government, as Sevket Pamuk shows here, responded with a series of protectionist measures encouraging import-substitution industrialization. Unfortunately, and here Turkey was not alone, the relative success of these polices in the 1930s encouraged their continuation in the post Second World War period, when they quickly became an obstacle to growth. One major exception in this period was Mandatory Palestine, where Metzer shows that per capita income increased by about five percent per year between 1922 and 1947, despite population increasing by almost four percent per year.

It is easy to point out the “gaps” in a book that examines a geographical area as large as the Mediterranean, but this would be unfair. Most of the region’s economic historians write highly specialized local or, at best, national studies, rather than follow in the footsteps of Fernand Braudel. However the majority of the authors in this book, no doubt in some cases responding to enthusiastic prodding by the editors, have attempted to present their work in a regional or international context. Although the papers are highly varied, the overall quality is high. The book is important for those interested in Mediterranean history before the First World War.

James Simpson is lecturer in Economic History at the Universidad Carlos III in Madrid. He is author of Spanish Agriculture: The Long Siesta, 1765-1965 (Cambridge University Press, 1995) and, with Juan Carmona, Latifundistas, colonos y jornaleros. Organizacion rural y el desarrollo agraio en Espana, 1850-1936 (Biblioteca Nueva, in print). He is currently working on a book on wine production and consumption in the nineteenth century.

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

New Spain’s Century of Depression

Author(s):Borah, Woodrow Wilson
Reviewer(s):Salvucci, Richard

Project 2001: Significant Works in Economic History
Woodrow Wilson Borah, New Spain’s Century of Depression. Berkeley: University of California Press, 1951. 58 pp.
Review Essay by Richard Salvucci, Department of Economics, Trinity University.

An Obscure Century in a Backward Country: Woodrow Borah and New Spain’s Century of Depression

In 1938, the English novelist Graham Greene traveled to Mexico to investigate the condition of the Catholic Church under the regime of President Plutarco El?as Calles. While there, Greene interviewed the strongman of San Luis Potos?, General Saturnino Cedillo. In the most memorable terms, Greene called Cedillo “an Indian general in an obscure state of a backward country.” So my title, I fear, is a plagiarism, but an appropriate one. For certainly some who read this essay will wonder why a brief (58 pages) book about seventeenth?century New Spain (as Mexico was then known) counts as influential at all, let alone very influential? After all, Lesley Simpson, an authority on Mexico, famously labeled the seventeenth as Mexico’s “forgotten” century, and everyone from Adam Smith to Thomas Jefferson thought the Spanish empire both backward and obscure.

Influence, of course, is a matter of audience. There must be few economic historians of Latin America and fewer still of Mexico who are unfamiliar with the work of Woodrow Borah and the so-called “Berkeley School” of historical demography. Even with prevailing intellectual fashions, it is hard to believe that most English?speaking historians of Latin America have not heard of Borah, although whether or not they read his work in graduate school or after is much less certain. So I might best define my task as to explain why New Spain’s Century of Depression, published in 1951 as number 35 of the University of California Press’s celebrated Ibero?Americana series, should be counted one of the truly important works of twentieth?century economic history, especially for those who have yet to make its acquaintance. I take it for granted that colleagues in my field would agree. But it is a small field, and I am under no illusion that even its best work is widely known, much less regarded as a crucial contribution to economic historiography.

Woodrow Borah, who died in 1999, was one of the outstanding members of the postwar generation of Latin Americanists that included Howard Cline, Charles Gibson, John Lynch and Stanley Stein. At Berkeley, Borah, who was Abraham D. Shepard Professor of History, was one of a stellar cast of scholars drawn from a wide range of disciplines — Sherburne Cook, George Foster, James Parsons, John Rowe, Carl Sauer, and Lesley Simpson come immediately to mind. They exercised a profound influence on each other, sometimes as collaborators, but more often as valuable colleagues. What emerged from their work was a distinctive scholarship that brought together striking research and insights drawn from the natural and social sciences, precocious social science history, you might say. And Borah, his prodigious reading, meticulous scholarship and personal austerity notwithstanding, was one of this group’s more daring and imaginative members. Indeed, in a rueful aside, Borah once told me that his critics (there were a few) had accused him of “inventing Indians,” and this he meant quite literally, not in the now prosaic historicist sense of the term.

The burden of New Spain’s Century of Depression was to suggest the impact of the massive decline of the aboriginal population of Central Mexico (whom we can simply, if incorrectly, call Indians) on the material prospects of the Iberian conquerors (whom we can simply, and equally incorrectly, call Spaniards) and their descendants. As Borah understood it, the intent of the Spaniards was to live off the labor of the dense Indian population they had encountered in Central Mexico, a population accustomed to the rule of a privileged upper stratum by generations of Mesoamerican conquerors of whom the Aztec were simply the most recent. The Spaniards’ intention was no mystery. They announced they had come to the “Indies” (wrong again, but who’s counting?) to get rich, and that they had no intention of tilling the soil “like peasants” in order to do so. To accomplish their goal, the Spaniards, victorious in the wake of Cort?s’ historic expedition, rewarded themselves with the famous encomienda, the right to extract labor from the Indians. For some, like Cort?s himself, the encomienda was the source of great personal wealth and social prestige, although others, including some of Cort?s’ outspoken critics, were less richly rewarded.

For the encomienda to function as an avenue of accumulation, evidently, there had to be Indians to be distributed. At the time of the arrival of the Spaniards, Central Mexico perhaps supported an Indian population as large as 25 million. Within a century, shockingly, the same Indian population had fallen to less than a million, the victims of European disease, massive economic disruption, and the destruction of a coherent civilization that the Spaniards willingly exploited but never really understood. It was one thing for the encomienda to yield a comfortable existence for the Spaniards when Indian labor was abundant. But, obviously, such a system could hardly be expected to function when the people who supported it had disappeared. And here, then, is the gist of the argument of New Spain’s Century of Depression. What happens to a system of colonial expropriation when the society on to which it is fixed essentially disappears?

A bald summary can hardly begin to capture the twists and turns of the research agenda that New Spain’s Century of Depression ultimately entailed. When Borah published it in 1951, Sherburne Cook and Lesley Simpson had produced the population figures for New Spain on which he relied. It would require fully another quarter century, down to 1976, for what are now the standard estimates of early colonial population to emerge. There was considerable controversy along the way, and to an extent, there still is. Yet it is important to keep several things in mind. Much of the controversy regarding the population of New Spain involves the pre?contact population. About the course of events after the Spanish invasion there is far less doubt. The Indian population fell, and it fell sharply within a century, on the order of 90 percent. From an economic standpoint, only one thing really matters: factor endowments. Before the Conquest, labor was the abundant factor in Mexico. By 1620, land had become the abundant factor. No amount of scholastic contention about how many Indians there “really” were can alter that.

The other point is that even if Borah used imperfect population figures or made arbitrary assumptions, his scholarship was sound. He knew the sources and was particularly well versed in the documents associated with the relaciones geogr?ficas, the reports prepared to give Philip II of Spain an idea of what his Mexican dominions contained. While these documents are widely available today due to the efforts of the Instituto de Investigaciones Antropol?gicas in Mexico, it must have required considerably greater difficulty to master them fifty years ago. The impression from reading Borah’s notes is of a reasonably extensive investigation of the archival and printed materials available in the 1940s. In other words, you need to know something about the history of colonial scholarship to appreciate what Borah and his colleagues at Berkeley accomplished and some of the critics simply did not.

The conclusion to which Borah came was straightforward. Beginning sometime in the 1570s, an “economic depression besetting the Spanish cities because of the shrinkage of the Indian base [would last] more than a century,” and a “large number of white families must have found themselves reduced from comparative wealth to straitened circumstances as the drag in the Indian population forced a downward spiral in the economy of the European stratum”(p. 27). Although Borah presented his findings as a “hypothesis of a century?long depression” or “a hypothesis which needs much additional investigation,” the hypothesis is generally accepted as settled fact. It was not until the early 1970s that the work of the English historian Peter Bakewell raised questions about the impact of population decline on the fortunes of silver mining, but Borah’s view of the economic circumstances of the settlers went largely unchallenged. Even John Lynch, whose brilliant synthesis, Spain under the Hapsburgs (1981), called into question the entire notion of a Mexican depression in the seventeenth century, did not address the crucial issue that Borah raised. How did the elite of Mexican society — in effect the advocates, bearers, beneficiaries and putative defenders of colonialism — adjust when deprived of the Indian population on which it depended? My suspicion is that New Spain’s Century of Depression seemed logically unassailable. Borah’s citation (p. 23) of Viceroy Velasco the Younger’s report to Philip II in 1595 was especially acute: “those who consume are many and the Indians who produce are few.” What more could be said?

If you have persisted this far, you may, perhaps, think otherwise or wonder at the peculiar way in which Borah shaped his investigation. Borah did not discuss the fate of the Indians, other than to note that they “seemed doomed to relentless extinction” (p. 28). And even so, life did not come to an end in Mexico in 1576, or 1626, or 1676. Emigration from Spain continued, a fact of which Borah was quite aware. Moreover, if Cook and Borah’s later research indicated that the Indian population reached its nadir around 1620 — Borah puts its size at 750,000 — it began to recover thereafter and probably continued to do so until the 1730s, when severe epidemic disease made is reappearance. A century of population growth in a preindustrial society, however slow, does not square easily with falling living standards. And other developments, particularly the growth of colonial textile production in the middle decades of the seventeenth century, give pause as well. If a “depression” had taken hold, and more people were producing more goods, what sort of a depression was it?

To the extent that there was much data available to answer the question — and by and large, there was not — Borah made some attempt to address the objections, postulating, for instance, the existence of not one, but two economies, one Spanish, the other Indian. But there was not much he could make of the distinction, although there was a hint as to where research might lead. A dramatic change in the land-labor ratio, with the Indian population falling by 90 percent, surely affected the marginal productivity of Indian labor.

However, as Borah pointed out (p. 21), it was inconceivable that rising productivity could have offset the sheer decline in the Indians’ numbers, but the upward drift in real wages of Indian workers in cloth manufactories toward the end of the sixteenth century suggests the horrible irony of a decimated Indian population now better able to sustain itself in the face of Spanish demands. Here was one reason for the subsequent recovery in the Indians’ numbers, along with greater resistance to European disease, more aggressive defense of the Indians’ interests by the Spanish Crown, and even changes in diet — the Spaniards brought chickens with them, which came to be a ubiquitous presence in rural villages. While Borah never said as much in New Spain’s Century of Depression, Borah and Sherburne Cook would go on to argue years later that the material conditions of a reconstituted Indian society may well have been higher than they were before the Conquest. So, in a sense, Borah’s argument about “depression” was potentially revolutionary even if, in some sense, it proved a trap to the unwary who did not think its implications through. The historical intuition was of a very high order, but it was exercised by a scholar who turned twenty in 1932; who hailed from Utica, Mississippi; and for whom the term “depression” was less a technical one than a shorthand for widespread impoverishment.

Another feature of New Spain’s Century of Depression should be attractive to economic historians. It concerns the nature of institutional change that occurred under the pressure of population decline in the sixteenth century. One is sometimes struck by the fact that much (but by no means, all) of the economic historiography that relies on institutions for explanation often does a poor job of explaining why a country has a given set of institutions to begin with. In Latin America, some mix of Divine Providence, Indians, bizarre political culture, difficult geography and dumb luck often seem to be the reasons for the existence of Mexican institutions. This, for all practical purposes, means that institutions are treated as exogenously given. Well, they aren’t, or at least, not always. While Borah, of course, never wrote in these terms, he carefully links the emergence of a Mexican regime of labor and land institutions to the shifting factor endowments with which the colonists had to work. For Borah, the ultimate significance of the dramatic decline of the Indian population was the emergence of the hacienda (which reflected increasingly abundant land) and debt peonage (which reflected increasingly scarce labor). Indeed, this was another central message of New Spain’s Century of Depression. The institutions that had given rise to the Mexican Revolution of 1910 — the hacienda and debt peonage — were a product of the seventeenth century and of the demographic disaster that had destroyed the Indians. This was a remarkably clear statement of what had long been the liberal view of the causes of the Mexican Revolution. Anyone who doubts its durability need do little more than read Alan Knight’s monumental history of the Revolution (The Mexican Revolution, 1986), which largely restates the old verities.

For an historian from Mississippi, an account of “debt peonage” as the defining characteristic of rural labor may not have been untoward. But what exactly one means by “debt peonage” is another matter. Borah’s position was a moderate one. This was not slavery, open or disguised (the enslavement of Indians was forbidden under most circumstances), but an Indian peon who owed a landlord, or, indeed, any employer money was legally required to work for that employer (and for him or her alone) until the debt was discharged. The notion that debt created a form of chattel slavery in rural Mexico does not seem to have entered the vocabulary until well into the regime of President Porfirio D?az (1876-1880, 1884-1910) and provided one explanation for the Revolution in a place like Yucat?n. For a time, colonial historians went to another extreme, intent on showing the agency of free peasants as makers of their own world. They forgot that seventeenth-century Mexico was an unlikely venue for the emergence of a smoothly functioning labor market in which buyers and sellers of labor had no recourse to force or fraud. Indeed, conquest is precisely about force and fraud, depriving the conquered of their possessions, and making them do things they otherwise would never do.

A more fruitful way of viewing the phenomenon of debt peonage — or simply workers’ indebtedness, for debt did not invariably impede their mobility — is to understand how it allowed employers to determine the rate of discount at which workers in a shifting, unstable, and terribly uncertain world valued future income. There is no point in beating around the bush. Life expectancy at birth for a Mexican in the colonial period was about twenty years, and in view of the catastrophic changes that had visited the Indian world since 1519, we can only conclude that Hobbes was right, and that Mexicans knew it. Their lives were short enough, and nasty and brutish as well. In a world in which only God (and whose God was up for grabs too) knew what the future would bring, it made sense for ordinary people to get as much as they could up front, which, after all, is all the “debt” part of debt peonage meant. This was just an extreme form of live for today, for tomorrow, literally, who knew? Workers bargained for better advances and often sought to enlarge them and employers understood this. The wide variance of debts reported by farms and factories for which we have records shows that their owners struck quite different bargains with different workers, a form of price discrimination that allowed them to “pay” no more than they had to, certainly less than raising wages to market-clearing levels. In fact, in the disorganized and fluid circumstances of the late sixteenth and early seventeenth centuries, when Indian villages were forming and reforming under the pressure of Castillian administration, it would have been impossible to gauge the overall willingness of Indians to leave their communities to work for wages, or even the willingness of their communities to allow individuals to leave, a point to which Borah was quite sensitive (pp. 41-42).

Besides, the point of indebtedness was not necessarily to reduce mobility. The Spaniards had other ways of doing so, which is another aspect of the system of land tenure they devised. As Evsey Domar once wrote, it is impossible to have free labor, free land and a nonworking landlord class simultaneously. One of the three must disappear. In Mexico, the Church prevailed in the 1540s in the struggle against the frank coercion of Indian labor. For most purposes, the labor of enslaved Africans was simply too expensive, even though there was a sizeable black population in seventeenth?century Mexico. No, the Spaniards made another choice, to deprive the Indians of access to free land, for free land they very well may have had. The dramatic decline in the Indian population left vast expanses of Central Mexico essentially empty, so what was to prevent the Indians from moving on to the land as a subsistence peasantry, to the lasting dismay of the Spaniards? The answer is that the Spaniards consciously set about driving the Indians into villages over which they could exercise some level of control, as Bernardo Garc?a Mart?nez demonstrated in Los pueblos de la Sierra (1987). At the same time, they sanctioned land?grabbing by the settlers, usually in amounts far in excess of anything the settlers could reasonably cultivate. At a stroke, the Spaniards accomplished two things. First, they shifted to a system of agriculture that reflected the abundance of land, a regime vastly different from the preconquest one based on the intensive use of labor, of which the famous raised?ridged fields (chinampas) of the Valley of Mexico were but one example. Second, they regularized the settlers’ land titles at the beginning of the seventeenth century, effectively transferring much land to Spanish control, whether or not it was cultivated. The hacienda thus circumscribed the ability of the Indian communities to survive independently of the Spanish economy, and in so doing, obviated the need for a draconian regime of forced labor, at least in Mexico.

This dramatic transition, from an economy based on intensive agriculture and the exploitation of a dense indigenous population, to one that relied on extensive agriculture and scarce Indian labor could not be accomplished rapidly. Moreover, the shift from an economy with relatively high levels of personal wealth in the form of Indians held in encomienda to a poorer one with fewer Indians and no encomiendas reduced New Spain’s capacity to import. It was now necessary to produce at home many goods that were, in the early years of the colony, imported through Spain. A reduction in consumption and a reorientation of expenditure toward investment was required to accommodate such a change. Borah, for instance, noted that the construction of churches tended to slow dramatically in the 1570s (p. 31), attributing this primarily to a redeployment of scarcer labor. (The demand for churches sadly fell as well, for there were far fewer souls to fill them.) For Borah, presumably, all this was a depression. To a later generation of historians, however, notably the British school headed by John Lynch, Borah’s “depression” was more a case of deferred consumption, the redirection of productive effort toward mining, manufacturing and farming that a colony living on its own required. None of this could have come easily or cheaply — the mining and irrigation works, the granaries, fences, sugar mills, ranches and textile manufactories absorbed resources. Hence, for Lynch and his followers, the apparent stagnation of the Mexican economy in the seventeenth century was just that, an apparent stagnation that marked the reorientation underway, one that would result in the visible renewal of economic growth under the Bourbon monarchs of the eighteenth century. It was not so much that Borah was wrong about what he had seen, but that he had, instead, seen wrongly.

Viewed fifty years after its publication, New Spain’s Century of Depression reads much like the pioneering work it was, full of insight, largely intuitive, sometimes wrong in detail and premature in judgment, but, all the same, arresting and audacious. It was, above all, a great work of history, for it sought to explain the present through the past, and to explain in simple but persuasive terms how what was distinctively Mexican, the play of institutions, political economy and an emerging social structure, came together out of the shock of the Conquest in the sixteenth and seventeenth centuries. If there is anything disappointing about New Spain’s Century of Depression, it is that the response to it has been admiration or assent from most students of Latin American history, but few studies in which appropriately trained scholars have undertaken the work necessary to establish Borah’s hypothesis fully, or to revise and extend it in ways consistent with contemporary population studies. That is the problem with writing a classic about an obscure century in a backward country: it is hard to get people to notice. Those of us who spend our time studying the history of Mexico know full well how important Borah’s elegant “hypothesis” was. It is time for mainstream economic historians, and, one hopes, their students, to develop an interest in replying to Woodrow Borah’s pioneering work as well.

Richard Salvucci teaches economics at Trinity University in San Antonio, Texas. He was a colleague of Woodrow Borah’s at the University of California, Berkeley, from 1980 through 1989. He works on the economic and financial history of Mexico between 1823 and 1884.

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Subject(s):Historical Demography, including Migration
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):17th Century

Losing Control? Sovereignty in an Age of Globalization

Author(s):Sassen, Saskia
Reviewer(s):Aaronson, Susan Ariel

EH-NET BOOK REVIEW

Published for H-Business@eh.net (April 1998)

Saskia Sassen. Losing Control? Sovereignty in an Age of Globalization. University Seminars/Leonard Hastings Schoff Memorial Lectures. New York: Columbia University Press, 1996. xvi + 148 pp. Bibliographic references and index. $24.95 (cloth), ISBN 0-231-10608-4.

Reviewed by for H-Business by Susan Ariel Aaronson , George Mason University

Reordering the World?

The spoken word is often easier to understand than the written word. That’s why I was eager to tackle a series of lectures on globalization by Columbia University Professor Sasskia Sassen. This collection however, is a tough hike. The language is like a jungle that the reader must cut through.

Although Sassen’s words are a thicket, it is a hike worth taking. Sassen’s turf has been well traveled by economists, business leaders, policy analysts, and historians, but Sassen brings a different perspective as a professor of Urban Planning who teaches at Columbia’s Graduate School of International and Public Affairs. She is interested in how a new economic system centered on cross border flows and global communication has affected “two distinct features of the modern state: sovereignty and exclusive territoriality”(p. xii). She wants the reader and listener to see how it will affect the institution of economic citizenship as a “strategic research site and nexus” (pp. xiii) (this is what I mean by a jungle of unnecessary words). Sassen alleges that “we must consider the possibility that there exists a form of economic citizenship that empowers and can demand accountability from governments.” But these economic citizens are not people; they are “firms and markets”: “The fact of being global gives these actions power over individual governments…I use the concept as a kind of theoretical provocation, outside the accepted lineage of the concept of citizenship” (p. xiv). Finally, Dr. Sassen is concerned about immigration and worries that we need to “deconstruct the state” in its role in the migration process. “It is in this sense,” she says, “that immigration is a strategic site to inquire about the limits of the new order…it is embedded in a larger dynamic of trasnationalization (sic) of economic spaces and human rights regimes” (p. xvi)

Sassen begins by tracing the evolution of the term sovereignty. Here her path is easy to follow. She describes how sovereignty has been affected by globalization and how globalization has been accompanied by the creation of new legal regimes and practices. To many observers that process has been U.S. driven. In many countries, international or transnational has become “a form of Americanization” (p. 18). Who can disagree as we listen to Madonna and type on our IBM computers while wearing our Levi’s jeans. Finally she notes that the “virtualization” (a new word?) “of economic activities is a challenge both to regulation and to business. “This,” she concludes, “may signal a control crisis in the making” (p. 21).

Sassen argues that this crisis is occurring at the same time that “global capital has made claims on national states, which have responded through the production of new forms of legality” (p. 25). These new legal regimes “negotiate between national sovereignty and the transnational practices of corporate economic actors” (p. 26). Thus, sovereignty is being transformed by economic globalization. The next two chapters compare how economics is undermining the role of states, while immigration in contrast is “renationalizing politics.” Chapter Two tries to relate these developments to the notion of citizenship and the rights associated with citizenship. Here Sassen has forged something new. She argues that our notions of citizenship will change as the global economy changes. Global forces challenge the authority of the nation states. “There are enormous problems,” she notes “of state membership for aboriginal communities, stateless people, and refugees” (p. 34). She believes the challenges of globalization and “virtualization” will have important implications for human rights, and who or what will enforce these rights: “Today’s welfare state crises, growing unemployment and growing earnings inequality…can certainly be read as signaling a change in all the highly developed countries in the entitlements of citizens.” Other analysts of globalization such as Dani Rodrik have taught us that globalization has undercut the social bargain that many democratic capitalist nations have adopted since the Great Depression (a welfare state, regulation, and capitalism). However, Sassen adds that international investments searching for global opportunities “do not favor the growth of a large middle class.” Thus, “economic globalization has hit at some of the major conditions that have hitherto supported the evolution of citizenship and particularly the formation of social rights” (pp. 37-38). All of us should worry if globalization undermines democracy. At the same time, however, Sassen notes that the powerful in the global economy, (global corporations, international financiers) have acquired new rights and that there is “a consensus among states to further the interests of economic globalization.” But Sassen shows no primary sources or evidence of government action over time to illustrate this allegation. She cites two articles in one book and her own forthcoming work to prove this point [1]. She then notes that fifteen agencies around the world (including the Justice Department) reviewed the merger of Gillette and Wilkenson in 1989 and acceded to it. But does this prove the consensus she alleges? I doubt it. The evidence she cites might also be used to make the opposite point. The fact that so many agencies reviewed this merger illuminates, I believe, elite and public concerns about the consequences of globalization and a desire to hamper and halt it. (We certainly hear this in the ongoing debates over refunding the IMF and in fast-track authority, how Congress grants authority to the President to negotiate trade agreements.) Moreover, globalization often pits one national champion against another. (We see this in the 1980 market competition between Japan’s Komatsu and America’s Caterpillar Corporations and even more recently the European Community’s response to the Boeing/McDonnell Douglas merger.) Governments weigh such mergers to ensure that some of their taxpayers, citizens, consumers, and shareholders benefit. Government actions can tilt the balance.

Sassen’s last chapter addresses how in the face of globalization, nations have retained sovereignty to control immigration. In fact, this week NPR noted that the largest police force in America was that of the Immigration and Naturalization Service. Sassen notes “a fundamental framework roots all the immigration policies of the developed countries in a common set of conceptions” (p. 64). She sees globalization behind many changes in immigration (“the international activities of the governments or firms of countries receiving immigrants may have contributed to the formation of economic links…that may invite the movement of people” [p. 84]). However, Sassen notes that human rights challenge immigration policies because “human rights are not dependent on nationality, unlike political, social, and civil rights” (p. 89). In recent years, court cases have shown that individuals and non-state actors brought claims based on the notion of international human rights codes as expanding international law. This lets the judiciary mediate “between these agents and the international legal order.” The result, she claims has been a shift to the rights of individuals “from an exclusive emphasis on the sovereignty of the people and right to self-determination” (p. 95). This has devalued the institution of citizenship, affecting “the configuration of the international order” (pp. 96-97). But perhaps the international defense of human rights may also make us better citizens because of our willingness to defend and attribute rights to individuals in states that do not honor or enforce human rights. I don’t see this phenomenon as a big negative but something positive.

This chapter ends with a summation of globalization’s impact upon sovereignty but no answers as to what to do about it. Moreover, the author has no suggestions for the public who surely should be worried about the effect on them as citizens in democratic regimes challenged by globalization. I will look forward to reading Sassen’s upcoming work on these issues. However, I wish she had not left us hanging.

Notes:

[1]. James H. Mittelman, ed., Globalization: Critical Reflections International Political Economy Yearbook vol. 9 (Boulder, Co: Lynne Riener, 1996).

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