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The European Macroeconomy: Growth, Integration and Cycles 1500-1913

Author(s):Craig, Lee A.
Fisher, Douglas
Reviewer(s):Broadberry, Stephen N.

Published by EH.NET (October 2000)

Lee A. Craig and Douglas Fisher, The European Macroeconomy: Growth,

Integration and Cycles 1500-1913. Cheltenham, UK and Northampton, MA, USA:

Edward Elgar, 2000. xii + 389 pp. $120.00 (cloth), ISBN: 1-85278-643-4.

Reviewed for EH.NET by Stephen Broadberry, Department of Economics, University

of Warwick.

European economic history currently lacks a good textbook that might appeal

to undergraduate students with a background in economics. Floud and McCloskey

(The Economic History of Britain since 1700, Cambridge University

Press, second edition, 1994) exists, but there is nothing comparable for any

other European country or for the early modern period. This book by Lee Craig

and Douglas Fisher, both from North Carolina State University, is thus to be

welcomed as filling an important gap in the textbook market. It is to be

doubly welcomed, however, for doing an excellent job. In many ways, this book

builds on two earlier volumes, the first by Fisher (1992), The Industrial

Revolution: A Macroeconomic Interpretation, and the second by Craig and

Fisher (1997), The Integration of the European Economy, 1850-1913.

Parts III and IV of this book are essentially compressed and simplified

versions of the earlier two volumes, while parts I and II provide a

theoretical overview and a new section on the early modern period.

Part I sets out the theoretical framework, emphasizing four basic ideas that

recur throughout the book: (1) Institutions have an important role to play in

determining economic performance. In particular, increasing political and

economic integration plays an important role in helping to bring about

convergence of per capita incomes within and between countries. (2) Within a

given institutional setting, the long run rate of economic growth is driven by

population growth and technological progress, with investment affecting the

level of per capita income, but not the long run growth rate, as in the basic

neoclassical growth model. (3) Money and financial services play an important

role in real economic activity, but excessive monetary growth causes inflation

along simple quantity theory lines. (4) Business cycles are driven largely by

shocks to real activity, as in real business cycle models. Armed with this

theoretical toolkit, Craig and Fisher cut a swathe through European economic

history between about 1500 and 1914. The starting date reflects the belief

that integration within nation states had largely occurred by 1500, while

subsequent developments are seen as reflecting integration between those

states.

Part II deals with the growth of the European market economy 1500-1750 in four

chapters, covering population and agriculture (chapter 3), inflation, money

and banking (chapter 4), trade, industry and mercantilism (chapter 5) and

trends and cycles (chapter 6). There are some excellent sections here,

including the analysis of the price revolution in the sixteenth century and

the Kipper- und Wipperzeit inflation in terms of the quantity theory of money,

and the use of real wage data in England, Austria, Alsace, Germany and Spain

to make inferences about living standards. However, apart from population,

there is a serious shortage of macroeconomic data for many countries, so that

at times the authors seem constrained by their framework. Would it not be more

useful, for example, to get at the issue of European integration at this time

by using the abundant microeconomic data on variables such as grain prices,

rather than searching for a common European cycle in the fragments of

macroeconomic data?

Part III then turns to the First Industrial Revolution in Europe, 1750-1850,

with separate chapters on Britain (chapter 7), the “major” continental

economies of France, Germany and Belgium (chapter 8) and the “periphery”

(chapter 9). The discussion of Britain embraces the Crafts/Harley gradualist

view of growth during the Industrial Revolution, although I would have liked

more emphasis on the accompanying and more revolutionary structural change

that the British economy underwent at this time. Traditional microeconomic

themes such as the standard of living and other distributional issues receive

only the briefest mention, and although the “wave of gadgets” that spread

across the continent as well as Britain is discussed in chapter 8, the

treatment is brief by comparison with other texts. By contrast, a great deal

of space is devoted to an innovative attempt to identify a common

international cycle as a sign of the integration of the European economy.

Although the extent to which the peripheral countries can be seen as

integrated into the European economy and hence sharing in this common cycle is

limited, Craig and Fisher are keen to emphasize that right down to the “bottom

of the table,” all these countries were experiencing economic and population

growth rates that were uniquely rapid for any sustained period in their

history.

Part IV contains three chapters on the maturing of the Industrial Revolution

1850-1913 and a final chapter on growth and cycles 1500-1913. The chapters on

the 1850-1913 period cover population and overall economic growth (chapter

10), financial issues (chapter 11) and business cycles (chapter 12). With a

much more complete data set than for earlier periods, it is possible to show

clearly that most West European countries converged towards British levels of

per capita income between 1850 and 1913, but that South and East European

countries did not share in this process of convergence. It is also possible to

show how convergence was linked to a willingness to permit a shift of

resources out of agriculture and out of the industries of the First Industrial

Revolution into the industries of the Second Industrial Revolution. The fuller

data set for this period also permits a much more detailed analysis of the

role of money, drawing on the monetary approach to the balance of payments.

The close correlation of inflation rates across countries during the gold

standard era, combined with the very low correlation of monetary growth rates

across countries is explained by arbitrage in goods markets combined with a

commitment to fixed exchange rates, rather than by a specie-flow mechanism. As

in the previous sections, the chapter on business cycles identifies a common

European cycle.

There is much to commend in this approach. A broad sweep of history can be

covered without getting lost in excessive detail. And by sticking to some

basic ideas, Craig and Fisher have made the book accessible to students with

only a basic knowledge of economics. However, there are also drawbacks. One

concern is that by sticking to a macroeconomic approach, many of the issues

that economic historians have traditionally emphasized are simply not covered

or mentioned only briefly in passing. Maybe traditional texts do sometimes get

a bit bogged down in the details of how the spinning jenny worked, but the

macroeconomic emphasis of this book also has its drawbacks. For one thing, we

can probably be more confident about our knowledge of what happened in the

cotton industry than we can about the growth of national income during the

Industrial Revolution. This makes it instructive to work up to the aggregate

data from the micro evidence, not just to present micro data when macro

estimates are unavailable.

A second area of concern is that economics students studying economic history

should pick up a clear message that history matters. The authors do state at

the beginning that institutions are important, but much of the subsequent

material emphasizes smooth convergence on a global optimum apart from a few

exogenous shocks. One obvious way of emphasizing the importance of the

particular historical path taken would be to cover the twentieth century more

fully, since the period of European integration before 1914 was followed by a

long period of disintegration, some of the consequences of which are still

with us. The excluded twentieth century anyway looks eminently more suitable

for the quantitative macroeconomic treatment favored by the authors than the

included sixteenth and seventeenth centuries.

Overall, I found this a stimulating book. European economic history badly

needs a fresh approach and this is one way of doing it. It is to be hoped that

a paperback version will be issued, otherwise it may prove too expensive for

the mass undergraduate audience that it undoubtedly deserves.

Stephen Broadberry is Professor of Economic History in the Department of

Economics, University of Warwick, United Kingdom. He is currently an editor of

the European Review of Economic History, and his 1997 book, The

Productivity Race: British Manufacturing in International

Perspective,1850-1990, was published by Cambridge University Press.

Subject(s):Macroeconomics and Fluctuations
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII

The Great Divergence: China, Europe and the Making of the Modern World Economy

Author(s):Pomeranz, Kenneth
Reviewer(s):Lal, Deepak

Published by EH.NET (October 2000)

Kenneth Pomeranz, The Great Divergence: China, Europe and the Making of the

Modern World Economy. Princeton, NJ: Princeton University Press, 2000. x

+382 pp. $39.95 (cloth); ISBN: 0-691-00543-5.

Reviewed for EH.NET by Deepak Lal, Department of Economics, University of

California, Los Angeles.

Kenneth Pomeranz (Professor of History at the University of California,

Irvine) has written an important and scholarly book. Yet, despite his

scholarship, at the end of the day I was not convinced by his basic thesis.

The question he asks is one that has tantalized scholars for over a century:

Why did Europe alone of the great Eurasian civilizations escape the binding

land constraint and initiate that process of unbounded Promethean intensive

growth which has transformed humankind’s economic prospects, so that, mass

structural poverty need no longer be the universal scourge it has been for

millennia? As a scholar of China he uses the comparative method to see if any

advantages can be discerned which led core areas in Europe to diverge so

markedly from the core areas primarily in southern China, but also in Japan and

India. In this task, he brilliantly deconstructs the various materialist

explanations that have been advanced by economic historians to explain this

great divergence.

He shows quite convincingly that, until the turn of the eighteenth century,

there was no marked divergence in living standards between the Chinese and

European cores. He then painstakingly shows with an impressive command of the

Chinese literature (much of it recent) that various purported differences in

demography, ecology, accumulation and the pervasiveness of markets which have

been claimed to have given the Europeans an inherent advantage do not stand up

to scrutiny. As late as 1750, the similarities between the Yangtze Delta and

England were greater than the differences. So why did England and subsequently

Europe not follow the labor-intensive path of the “industrious revolution” of

their Far Eastern cousins, and instead take the capital-intensive path of the

industrial revolution?

His answer is in two parts. The first is that coal, which fueled the English

industrial revolution, was geographically not as readily available to the

eighteenth-century core in southern China, since it was concentrated in the

Northwest. The spectacular development of the coal and iron complex in the

northwestern China in the eleventh century, documented by Hartwell, was

dismantled and depopulated by the invaders of the twelfth century, and by the

fifteenth century when the region was stabilized China’s economic and

demographic center of gravity had shifted to the South. He notes that,

retrospectively, the returns to linking the Yangtze delta with the northwestern

coal deposits were huge, but that these returns were invisible ex ante, and it

is not clear what could have been done to realize them. But this explanation

surely will not do, for the Chinese state had acted under the Sung to

disseminate the new wet rice technology to southern China. If the coal-steam

technology had been available to China — as it was in principle but not

developed for reasons to be taken up below — could the powerful bureaucratic

authoritarian state that has ruled China not have taken the necessary action to

link these two geographical regions under its sway?

Nor does the relative geographical distribution of coal reserves in the various

Eurasian civilizations bear up as the decisive factor in the European

divergence, if we consider their location in another Eurasian civilization —

India. Its core lay in the eastern Gangetic plain — in modern Bihar — because

it was here that they found the iron deposits they needed for the iron

implements needed to clear the forests and the iron ploughshares for deep

ploughing. We now know that this area also contains India’s coal reserves. But

despite this, no one has claimed that the Indians could have developed the

coal-steam industrial revolution. By contrast, we know China had nearly all the

ingredients of this revolution in place by the eleventh century, and it still

did not take place. It is highly dubious that the geographical distribution of

its coal reserves had anything to with this lapse.

The second part of Pomeranz’s answer about the causes of the great divergence

is Europe’s discovery and exploitation — partly through trade — of the New

World. There can be no doubt that this extended Europe’s land frontier. But how

decisive was it and why could China not do something similar?

Pomeranz, himself in his last chapter in a section called “Comparisons and

Calculations: What Do the Numbers Mean?” admits the increment to the supply of

land- intensive products from the New World to Europe could not have been

large, but then uses various forms of handwaving including an appeal to chaos

theory to justify his thesis that they were the basis of the great divergence!

But it is the larger question — why did China not seek to exploit areas where

free land was available overseas to overcome its growing land constraint —

which points to the basic flaw in Pomeranz’s and other purely materialist

explanations for the great divergence. As Pomeranz shows, there were empty

lands in South East Asia which “like the post-contact New World, was sparsely

populated and capable of supplying vast quantities of land-intensive resources

that were in demand ‘back home.’ Chinese went there in significant numbers, but

South East Asia never became for coastal China what the New World was for

western Europe” (p. 200). Why? Because unlike Europe’s New World empires, “the

Chinese merchants . . . established themselves in South East Asia without state

backing” (p.200). This is the crucial point. To see why, it is important to

note two important points not even taken into account by Pomeranz.

First, under Kublai Khan the Chinese had created a powerful navy. The famous

admiral Cheng Ho took his “treasure ships” on expeditions to the India Ocean in

the fifteenth century, and William McNeill (The Pursuit of Power:

Technology, Armed Force, and Society since A.D. 1000, University of Chicago

Press, 1982) notes that these expeditions eclipsed anything that the later

Portuguese explorers could muster. Nor did Cheng Ho desist from coercion. He

sealed Chinese suzerainty everywhere he went if necessary by force. McNeill

argues that if the Chinese had continued to expand their overseas empire “a

Chinese Columbus might well have discovered the west coast of America half a

century before the real Columbus blundered into Hispaniola in his vain search

for Cathay. Assuredly Chinese ships were seaworthy enough to sail across the

Pacific and back. Indeed, if the like of Cheng Ho’s expeditions had been

renewed, Chinese navigators might well have rounded Africa and discovered

Europe before Prince Henry the Navigator died (1460)” (p.45).

But instead — the second point — after 1433 the Chinese abandoned their navy

and began to restrict foreign trade and contacts. The shipbuilding and

sea-going skills thereafter degenerated, and China continued in relative

isolation until the “new barbarians” came knocking at its doors in the

nineteenth century.

To understand this shift in policy and the accompanying closing of the Chinese

mind — and the comparable one in Japan following its adoption of the policy

sakoku under the Tokugawa — one has to look at what I have elsewhere (in

Unintended Consequences) called the “cosmological beliefs” of the

various Eurasian civilizations. As these cosmological beliefs are also related

to the different polities, they also help to explain the divergences in state

policy. It would take me too far afield to outline this story here. But without

bringing the mind back in, there is no way to explain China’s failure to

generate the coal-steam industrial revolution and the overseas empire, which

Pomeranz with so many other economic historians rightly see as the proximate

causes of the European miracle.

The great historian of Chinese science, Joseph Needham, used to maintain that

the rise of the West could not be explained in terms of a single or a few

factors but was due to a “package.” Pomeranz’s greatest service is to show that

the material differences in this “package” cannot account for the great

divergence — particularly once one discounts his own materialist differences

as being unconvincing. So as both Weber, and more recently Landes have

maintained, we are back to culture. Both, however, in my judgment got the date

of this cultural divergence wrong. I have argued in Unintended

Consequences that it goes back to at least the sixth century. But that is

another story.

One indication of this cultural divergence is provided by a visit to the great

archeological museum in Xian. The first few rooms of the collection show the

great cultural and scientific efflorescence in China from neolithic times to

the middle ages, and then in room after room there are the same shapes, the

same forms continuing in unending repetition — at least to this untrained eye.

It is to see a civilization that seemed to have seen itself as reaching

perfection and then being frozen in aspic from about the sixteenth century. By

contrast in England this was to be the age of Shakespeare, followed by those of

Locke, Newton, Hume and Smith. The sheer intellectual curiosity and

creativeness of these centuries preceding the industrial revolution are in

stark contrast to what was happening in the other great Eurasian civilizations.

If we are to understand the modern world it is this great divergence which

needs to be explained, and which Pomeranz’s book does not even touch upon.

Deepak Lal is James S. Coleman Professor of International Development Studies,

University of California, Los Angeles, and the author of Unintended

Consequences: The Impact of Factor-Endowments, Culture and Politics on Long Run

Economic Performance (MIT Press, 1998). A third collection of his essays

entitled Unfinished Business, was published by Oxford University Press

in 1999.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Geographic Area(s):Asia
Time Period(s):General or Comparative

Europe in the International Economy, 1500-2000

Author(s):Aldcroft, Derek H.
Sutcliffe, Anthony
Reviewer(s):Persson, Karl Gunnar

Published by EH.NET (August 2000)

Derek H. Aldcroft and Anthony Sutcliffe, editors, Europe in the

International Economy, 1500-2000, Cheltenham: Edward Elgar Publishing,

1999. xi + 289 pp. $90 (cloth), ISBN: 1-85898-670-2.

Reviewed for EH.NET by Karl Gunnar Persson, Institute of Economics, University

of Copenhagen.

This volume carries an endorsement on the book jacket by Peter Mathias saying,

“This will surely prove to be the definitive account — an authoritative text

by six leading authors. Well integrated, clearly written, objective and

balanced in judgment, excellently documented with key bibliographies — the

answer to the needs of all students of the subject.” This assessment sounds too

good to be true, but it is not completely wrong. Although the well-read in the

profession will learn little new from the book, it can be a very useful text

for a course in European economic history when little time can be devoted to

the subject and a comprehensive text is needed — say, at business schools or

at non-European universities.

The purpose of this book, according to the editors, is to explain the

pre-eminence of Europe and its impact on the international economy from the

early modern period, surveying the recent “rise of the west” literature in the

introductory chapter. There are few surprises here, but it gives a

comprehensive overview of the subject.

The first substantial chapter, by Jan L. Van Zanden and Edwin Horlings, offers

a balanced account of recent re-interpretations of early modern and

pre-industrial growth (c.1500 to c. 1800). It stresses the regional and

national differences in growth experiences and contrasts that story with the

traditional view of general stagnation in productivity levels before the

industrial revolution. Most of the quantitative results stem from van Zanden’s

recent research, most of which is not easily available, and the underlying

methodology is not extensively discussed. The results seem plausible, however,

with growth centers in the Low Countries, England and some parts of France as

suggested by other researchers such as Robert Allen, Philip Hoffman and myself.

Sidney Pollard, who died just before the book went to press and to whom the

book is dedicated, writes about the “Europeanization” of the international

economy from 1800 to 1870, giving a fair amount of attention to dissenting

voices when presenting the mainstream account. Like the preceding chapter, the

quantitative information is extensive and the focus is not only on Europe but

also its impact on the rest of the world.

The book proceeds chronologically to the 1870-1918 period, which James

Foreman-Peck describes as the “zenith” of European power. Although clearly the

most thought provoking of the contributions, it does not fit well into the

narrative stream of this volume. Where the rest of the book relies on main

economic indicators, this section concentrates on institutions and regulation

of the international economy. Foreman-Peck also returns to the discussion of

the costs and benefits of empire, offering something for all tastes.

Derek H. Aldcroft follows Foreman-Peck with his chapter on the disintegration

of Europe in the interwar period. Barry Eichengreen and others have made this

narrative familiar to us, and the reference list to this chapter, like most of

the others, is extensive and accurate, as is the survey of the topic. I am

surprised, however, that the excellent little textbook by Charles Feinstein,

Peter Temin and Gianni Toniolo (The European Economy between the Wars,

Oxford University Press, 1997), which is a more wide-ranging alternative to

this compact chapter, is missing from Aldcroft’s list.

The final two chapters by Anthony Sutcliffe and Steven Morewood deal with the

present and focus quite a bit on European institutional integration. By and

large I find these chapters rather less penetrating, and they do not satisfy

the quantitative economic historian’s appetite for numbers and rigorous

economic reasoning. However, both chapters survey the main issues discussed in

relation to the acceleration and decline in European growth rates.

All in all, this book can be useful as a comprehensive textbook on European

economic history since it surveys, over a limited number of pages, such an

extended period. It gives little specific information on national experiences,

so one must go elsewhere for that. If I were teaching this course I would

probably replace the final chapters with excerpts from Economic Growth in

Europe since 1945 (Cambridge University Press, 1996) edited by Nick Crafts

and Gianni Toniolo. I would also like to have a text on the European backlash

to free trade from the 1870s in the O’Rourke-Williamson vein.

The price of the hardcover version of the book might deter teachers from

recommending it. However, if the publisher decides to print a paperback

edition, it should urge the editors to add a workbook section that would assist

students in facing the issues and controversies surveyed in the main text.

K.G. Persson is professor at the Institute of Economics, University of

Copenhagen and co-editor of the European Review of Economic History. His

most recent book is Grain Markets in Europe, 1500-1900: Integration and

Deregulation, Cambridge University Press, 1999 and a recent article

(jointly with Mette Ejrn?s) is “Market Integration and Transport Costs in

France, 1825-1900: A Threshold Error Correction Approach to the Law of One

Price,” in Explorations in Economic History, Vol. 37, pp. 149-73, 2000.

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):General or Comparative

The Poverty of Slavery: How Unfree Labor Pollutes the Economy

Author(s):Wright, Robert E.
Reviewer(s):Geloso, Vincent

Published by EH.Net (May 2018)

Robert E. Wright, The Poverty of Slavery: How Unfree Labor Pollutes the Economy. New York: Palgrave Macmillan, 2017. vii + 302 pp. $45 (paperback), ISBN: 978-3-319-48967-4.

Reviewed for EH.Net by Vincent Geloso, Department of Economics, Bates College.
There are three analytical traditions regarding the consequences of slavery on the broader economy. These traditions are best illustrated in the context of the debates regarding slavery in the United States. The first is best labelled as the “cliometric” tradition initiated by Robert Fogel and Stanley Engerman. It is not the results of this group which define it but its resolute adhesion to methodological individualism as a scientific philosophy. This is what sets it apart from the second tradition whose modern representatives, Sven Beckert and Edward Baptist, play the role of antiheroes to Fogel and Engerman (the term “antiheroes” is selected to divulge the present writer’s biases and priors). They adhere to a more holistic approach where the analysis begins at the level of collectivities and then moves down to the individual. Unlike the “cliometric” group, this latter tradition is more unified in its core conclusions — that slavery established political and economic structures which still last to this day. While there are overlaps between both traditions, the third tradition overlaps both. This tradition, relying nearly universally on methodological individualism, emphasizes a broad political economy approach to the topic arguing that slavery is a form of rent-seeking which can spill over into spheres of societies in ways that impose long-term costs in excess of the private returns. This tradition is less unified than the other two.[1] In The Poverty of Slavery, Robert Wright synthesizes and expands on many key points of this tradition.

In fact, Wright’s greatest service to this underappreciated tradition is to simplify a complex body of ideas into a simple sentence: slavery is pollution. If pollution is the form that externalities take when they divorce social cost from private, then slavery was pollution. It polluted other social, economic and political institutions.

Consider the case of the infamous slave patrols in antebellum America. Slaveowners need to police their slaves who might run away if the option presents itself. Policing slaves is not inexpensive and the costs reduce the returns from owning said slaves. As such, the cost of policing is a deterrent to slavery, which is why thinkers as far back as Adam Smith considered that slaves would unavoidably be less efficient than free workers. However, slaveowners have large concentrated interests, which is in itself a strong incentive for them to organize. If they organize successfully, they can convince the state to spread the cost of policing onto the broader population. If the population that bears the cost is sufficiently large, the costly policy may be small enough on a per capita basis for those burdened to not care or not even know. Yet, slave patrols entailed a large social cost. Economic historian Jeffrey R. Hummel (2012: 123) places the annual subsidy (because that is what it was) at $4.5 million in 1850 which was a little more than fifty cents per capita (including slaves – closer to $1 per person when slaves excluded) in the U.S. South – about 0.3% of annual per capita income. And this does not include the deadweight loss of reallocating workers to tracking down slaves. For such a “small” (for lack of a better term) policy, these are heavy costs. They are also an illustration of slavery as pollution – the slaveowners polluted other institutions by co-opting them to their bidding.

Wright provides a very long list (especially in chapters 6 and 7) of channels through which this pollution materializes (beyond scarring the lives of slaves and coerced workers in many direct and indirect ways). All of these amount to the same core point, those who reap the private benefits of slavery are content with their gains even though they come at a larger social cost and they will work to find ways to drive a wider wedge between the two by shifting costs onto other parties. Hence, slavery as pollution.

Wright argues (in chapter 2) that we ought not to use his synthesis only for the purposes of analyzing slavery. Rather, it should extend to analyzing “unfree labor” on a spectrum going from “free labor” on one end to “chattel slavery” on the other end. Indeed, Wright correctly points out that there were many instances of unfree labor markets that were not as extreme as slavery but which polluted institutions in ways that hindered economic development. As relevant illustrations, one can think of the work of Melissa Dell (2010) on the mita system in colonial Peru, Sheilagh Ogilvie (2011) on feudal systems in Central Europe and Marlous van Waijenburg (2018) on the corvée system of forced labor in French colonial Africa. Wright’s synthesis provides tools to analyze the wider economic costs imposed by less extreme forms of labor coercion.

However, Wright needs to pay more attention to the role of ideas. He only spends two pages on “public perceptions.” Yet, slaveowners not only rent-seek through convincing legislators to support their interest, they also rent-seek by shaping narratives as Grynaviski and Munger (2017) point out. One ought to remember that, in the early days of the American Republic, slavery was seen as a necessary evil which would have, eventually, to be eradicated. However, this view gradually changed to one where slaves were considered lesser human beings which were not responsible enough to be free. This became the leitmotiv not only of slaveowners but also of non-slaveholding southerners. As slaveowners had the ability to shape laws, they had the ability to set the parameters of any discussion and, as such, possessed a strong advantage in imposing their preferred explanation and propositions. In a way, they increased the costs of holding an egalitarian ideology in ways which still persisted into the Reconstruction, Jim Crow and contemporary eras. This form of “intellectual” pollution was caused by unfree institutions.

Given the enormity of the stack of articles and books to be read on the topic of slavery in antebellum America alone, adding an additional volume on the pile appears futile, since it will most likely be ignored. It is likely that Robert Wright’s The Poverty of Slavery will not be an exception to this rule. This is unfortunate. Wright’s book ought to be considered as the synthesis of an underappreciated analytical tradition regarding the broader economic consequences of slavery.

Note:

1. I would place Thomas Sowell (1981) in this tradition alongside Gordon Tullock (1967) and Grynaviski and Munger (2014; 2017). Jeffrey R. Hummel also places the eighteenth-century French physiocrat Anne-Robert Jacques Turgot, the early nineteenth century French economist Jean-Baptiste Say and British political philosopher John Stuart Mill into this tradition (2012: 4-6).

References:

Dell, Melissa. “The Persistent Effects of Peru’s Mining Mita.” Econometrica 78, 6, 2010, pp. 1863-1903.

Grynaviski, Jeffrey D., and Michael Munger. “Did Southerners Favor Slavery? Inferences from an Analysis of Prices in New Orleans, 1805–1860.” Public Choice 159, 3-4, 2014, pp. 341-361.

Grynaviski, Jeffrey D., and Michael C. Munger. “Reconstructing Racism: Transforming Racial Hierarchy from ‘Necessary Evil’ into ‘Positive Good’.” Social Philosophy and Policy 34, 1, 2017, pp. 144-163.

Hummel, Jeffrey Rogers. Deadweight Loss and the American Civil War: The Political Economy of Slavery. Ph.D. dissertation, University of Texas at Austin, 2001 [2012].

Ogilvie, Sheilagh. Institutions and European Trade: Merchant Guilds, 1000–1800. Cambridge University Press, 2011.

Sowell, Thomas. Markets and Minorities. New York: Basic Books, 1981.

Tullock, Gordon. “The Economics of Slavery,” Left and Right, 3, 2, Spring-Summer 1967, pp. 5-16.

van Waijenburg, Marlous. “Financing the African Colonial State: The Revenue Imperative and Forced Labor,” Journal of Economic History 78, 1, 2018, pp. 40-80.

 

Vincent Geloso is the author of Rethinking Canadian Economic Growth and Development since 1900: The Quebec Case (Palgrave Macmillan, 2017).

Copyright (c) 2018 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (May 2018). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Servitude and Slavery
Geographic Area(s):North America
Time Period(s):18th Century
19th Century

From Warfare to Wealth: The Military Origins of Urban Prosperity in Europe

Author(s):Dincecco, Mark
Onorato, Massimiliano
Reviewer(s):Koyama, Mark

Published by EH.Net (February 2018)

Mark Dincecco and Massimiliano Onorato, From Warfare to Wealth: The Military Origins of Urban Prosperity in Europe. New York: Cambridge University Press, 2017. xi + 196 pp. $30 (paperback), ISBN: 978-1-316-61259-0.

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

 
Mark Dincecco and Massimiliano Onorato have authored numerous papers on the relationship between warfare, urbanization, state capacity, and economic development. This book presents the results of their research program in a single slim volume.

Their research sheds new light on the role warfare played in Europe’s urban and economic development before the industrial revolution. In particular, it helps to illuminate the historical origins of the “blue banana” — the corridor of urban development that spreads out from south-eastern England to northern Italy. Rather than relying on geography or national-level institutions to account for different patterns of economic development, Dincecco and Onorato focus on the role played by warfare

There are two main elements to their argument: (1) the safe-harbor effect; and (2) the warfare-to-welfare effect. The safe-harbor effect links frequent interstate warfare to rural to urban migration, which in turn spurred city growth. The warfare-to-welfare effect links conflict to modern economic development via several channels including human capital accumulation, state capacity, and more inclusive political institutions.

The Low Countries, for example, is often referred to by historians as a “cockpit of war.” Indeed, from the Hundred Years’ War to World War I many contests for European supremacy have involved battles in what is now modern Belgium. And, the Low Countries was both high urbanized in the past and highly developed today. A similar argument could be given for northern Italy.

Rather than just relying on historical examples, however, Dincecco and Onorato bring together several different types of data on historical conflict, city size, and regional development today to establish their argument. Chapter 2 confirms that Europe was indeed very bellicose and that the late Middle Ages and Early Modern period were especially warlike. Chapters 3 and 4 show that conflict helped give rise to urban development in a panel setting. Chapter 5 links the data on conflicts with regional income levels today. The authors find that the legacy of this bloodshed is a positive one. A one standard deviation increase in historical conflict exposure is associated with a 5 to 9 percent increase in regional per capita GDP today. The majority of the analysis is conducted for all Europe. But the authors also draw on specific evidence from regions like Italy and from historical case studies.

The main focus of this volume is on Europe but in Chapter 6 the authors consider why similar developments did not occur in East Asia or Sub-Saharan Africa. China tended to be historically unified and hence did not experienced frequent interstate warfare (Ko et al., 2018). In sub-Saharan Africa, in contrast, the high land-to-labor ratio meant that warfare was over slaves rather than territory. War in Africa did not lead to urban growth.

This is a very focused book. The writing is clear and concise and Dincecco and Onorato excel at presenting their empirical results in an intuitive and transparent fashion. As a result, this volume will be a very valuable resource for scholars working on related themes and an excellent model for students learning how to write research papers.

One consequence of this brevity is that Dincecco and Onorato do not make use of the opportunity afforded to them to develop a more expansive argument. Many of the 112 pages of main text are devoted to tables and discussions of empirical results. Perhaps the argument would have been strengthened by considering counterarguments and possible exceptions in more detail?

In summary, this book will be very useful for scholars in economic history, political science, political economy and development economics. But, despite the discussion of historical case studies, it is not probably not a suitable book for the lay reader.

Reference:

Chiu Yu Ko, Mark Koyama and Tuan-Hwee Sng (2018), “Unified China; Divided Europe,” International Economic Review 59(1), 285–327.

 
Mark Koyama is an Associate Professor of Economics at George Mason University and a National Fellow at the Hoover Institution. He is the author of Persecution and Toleration: The Long Road to Religious Freedom (with Noel Johnson) which is forthcoming from Cambridge University Press.

Copyright (c) 2018 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (February 2018). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Military and War
Markets and Institutions
Urban and Regional History
Geographic Area(s):Europe
Time Period(s):Medieval
16th Century
17th Century
18th Century

A Culture of Growth: The Origins of the Modern Economy

Author(s):Mokyr, Joel
Reviewer(s):Diebolt, Claude

Published by EH.Net (November 2017)

Joel Mokyr, A Culture of Growth: The Origins of the Modern Economy. Princeton, NJ: Princeton University Press, 2017. xiv + 403 pp. $35 (cloth), ISBN: 978-0-691-16888-3.

Reviewed for EH.Net by Claude Diebolt, Department of Economics, University of Strasbourg.

 
I enjoyed this new book by Joel Mokyr, which is praiseworthy for its elegance and erudition. It tells the story of economic growth with “culture” — a mushy word for most of us — as the invisible hand. However, I regret the lack of in-depth consideration of the German language literature. Significantly more attention could also have been given to economic cycles. Werner Sombart, for example (Der moderne Kapitalismus and Der Bourgeois. Zur Geistesgeschichte des modernen Wirtschaftsmenschen), was the first to come to mind while reading this fantastic book. It also reminds me of George Akerlof and Robert Schiller’s Animal Spirits, where confidence, fear, a propensity to gamble, and follow-the-leader effect stories are presented as central to explain the decision making process. The Bourgeois Trilogy by Deirdre McCloskey is another seminal work in that spirit: ideas, not capital or institutions enriched the world. A growth theorist would probably also see strong connections between Mokyr’s latest effort and the unified growth theory initiated by Oded Galor.

The book is about the roots of the Industrial Revolution, the Great Enrichment, and radical changes in values, beliefs, and preferences. It is not about a mass movement. It is a phenomenon related to an elite: philosophers and scientists of course, but also engineers, instrument makers, and even industrialists who spawned the process. In any case, it is a minority of the population. Mokyr’s ambition is to understand and to explain how these beliefs and values emerged — why some people developed new ideas and why these ideas replaced the ones in place.

According to Mokyr, we know pretty much what happened, how it happened and where it happened, but we still do not know why it happened. Why, after thousands of years of stagnation, have a number of countries and regions of the world experienced an unprecedented increase in both the scale and speed of their economic growth? Why Europe and not China? Why England? Is it the result of happenstance? The Black Death perhaps? What about the influence of religion (Max Weber and the Protestant ethic?), of major intellectual and scientific personalities who changed the game (Martin Luther, Francis Bacon, Isaac Newton, Adam Smith, Charles Darwin)? What role should be given to natural resource saturation, innovation (the compass, gunpowder, printing) and capital accumulation, trade networks, market institutions and organizations, ideas, violence (battles, dynastic arrangements, power struggles…), women, etc.? For Mokyr, the Gordian knot is a Culture of Growth — a “Useful knowledge,” scientific and technological knowledge, the meeting of motivations and incentives, of attitudes and aptitudes toward Nature and the ability to persuade others. These are the key elements of the puzzle.

“No theory-no history! Theory is the pre-requisite to any scientific writing of history,” wrote Werner Sombart (1929) in the Economic History Review. I urge you to carefully read Joel Mokyr’s evolutionary approach to culture in the spirit of Schumpeter’s theory on Unternehmergeist. It will give you a fresh insight into one of the most fascinating questions in our field: the origins of the Great Enrichment. It will invite everyone to visit economic history with an optimistic vision for the future of the World!

 
Claude Diebolt is CNRS Research Professor of Economics at the University of Strasbourg and editor of the journal Cliometrica.

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

Subject(s):Economic Development, Growth, and Aggregate Productivity
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):General, International, or Comparative
Europe
Time Period(s):Medieval
16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Law and the Economy in Colonial India

Author(s):Roy, Tirthankar
Swamy, Anand V.
Reviewer(s):Hejeebu, Santhi

Published by EH.Net (August 2017)

Tirthankar Roy and Anand V. Swamy, Law and the Economy in Colonial India. Chicago: University of Chicago Press, 2016. x + 240 pp. $45 (cloth), ISBN: 978-0-226-38764-2.

Reviewed for EH.Net by Santhi Hejeebu, Department of Economics and Business, Cornell College.
Historical and developmental economists have been captivated by the interplay between institutions — from cultural values, beliefs, and norms to formal property rights and the rule of law — and economic growth. For the last three decades, researchers have blurred the traditional boundaries of economics to rigorously explore why the blessings of economic growth fall so unevenly across the world. What role did European imperialism play in this disparity? How might a nation’s history with European colonial rule shape its growth trajectory in its post-colonial era? Onto this vast intellectual canvas, Tirthankar Roy and Anand V. Swamy masterfully illustrate the evolution of legal institutions in British India from 1772 to 1947. With an eye toward evaluating the impact of this inheritance on today’s Indian economy, Roy and Swamy showcase the limits of imported institutions.

The first chapter frames “the problem”: Contemporary India’s legal infrastructure is in urgent need of reform. Today, many regard it as restrictive, cumbersome, backlogged and, according to the McKinsey Global Institute, a significant drag on economic growth. Roy and Swamy believe the system’s weaknesses originate, partly, in colonial law and legislation. They identify two hypotheses that link the economic quality of legal institutions with European colonial rule. The first conjecture, “extractive states,” correlates strong, growth-inducing institutions with mass European migration and settlement into the colony. The second hypothesis, dubbed “legal origins,” posits that economies importing British (common law) institutions would have stronger economic performance than those importing French (civil law) institutions. Both hypotheses, the authors demonstrate, fit the Indian case poorly.

The second chapter broadly narrates the evolution of British law on the subcontinent. Beginning with the period from the East India Company’s mayoral courts of the early eighteenth century to the creation of the cosmopolitan, Anglo-Indian legal codes of the late eighteenth century, the colonial codifiers’ perspective dominates the discussion of how values and norms were understood and characterized. The authors portray precolonial systems of law and justice as a “vacuum” (p. 16) in which the imperial authorities attempted to build an innovative, new system providing both access and due process to all litigants, while leaving alternative, local juridical practices in place. During the first half of the nineteenth century, this syncretic infrastructure grew in complexity. Presidency councils promulgated laws that varied with litigants’ local custom and religious practices, Parliamentary Acts (when specifying application to the colonies) remained in effect, Mughal civil and criminal courts operated in some regions, and everywhere English common law filled in the blanks. The second half of the nineteenth century witnessed a spirit of reform, a more integrated and hierarchical system of courts and legislatures, and the ascension of the idea “that lex loci could not be constructed on the foundation of Hindu or Islamic law” (p. 25).

The next six chapters focus on specific domains of law — both statutory and case law — that bear particular importance to private economic development and the fiscal health of the colonial state. These domains include land rights, property rights, labor law, contract law, and corporate law. Upon starting these sections, I marveled at the scope of the inquiry. Having dispensed with the broad hypotheses on imperial institutions and growth, could the authors make the whole cohere? How would Roy and Swamy synthesize and qualitatively evaluate colonial India’s changing legal infrastructure, given the breadth of legal domains under review, given their very long temporal horizon as well the significant variations in customary practices within the country and across industries? Each chapter corrals mature literatures and draws evidence from Victorian gazetteers, law commission reports, and case compendia. Each chapter describes how colonial legislative acts affected an area of economic relations. Throughout these chapters, contract theory often disciplines the discussion by identifying how law altered incentives between transacting parties and reconfigured the sharing of risk between them. The project is wonderfully ambitious.

In the two chapters on land, the authors, following the seminal work of the late Ratnalekha Ray, unpack the traditional land “ownership” terms of zamindari or raiyatwari. The authors deconstruct ownership as a set of use rights, or dimensions of control, over the asset. From an economic development perspective, these dimensions of control include 1) proprietorship, in other words liability for paying tax; 2) tenancy, the right to occupy land; and 3) transferability, the ability to alienate the land or use it as collateral in credit transactions. This characterization gives rise to a wider set of possible tenurial relationships than the traditional dichotomy. The discussion carefully integrates landmark legislation — the Permanent Settlement Act (1793), Bengal Tenancy Act (1885), Madras Estates Land Act (1908), Central Provinces Tenancy Act (1898), Deccan Agriculturists’ Relief Act (1879), Usurious Loans Act (1918) — and key court cases, many introduced to the literature for the first time. In each case, law recalibrated bargaining power between owners and tenants and between lenders and borrowers. In aggregate, did the Raj’s land regulations aid economic growth? The authors cautiously answer: it depends on when and where.

Chapter 5 examines the succession of property with particular emphasis on joint versus individual rights. Early British codifiers recognized that secure property rights, based on Hindu or Muslim religious codes, were already in effect. This chapter tells the story of colonial rulers unevenly incorporating Hindu and Muslim personal law into the new Anglo-Indian jurisprudence.

Chapter 6 explores labor law, beginning with the grim reality of slavery and bonded labor and delving more deeply to the case of penal contracting in the Brahmaputra and Surma Valleys. The authors maintain a clinical attitude toward penal contracting, explaining the persistence of legislation allowing such harsh labor contracts as a solution to a contractual problem. The chapter also addresses legislation aimed to regulating modern factory labor in Bombay and Bengal. The factory acts might well have created an industrial labor force, protected from internal competition, had the acts been enforced.

Chapter 7 examines contract law, the legal recognition and enforcement of privately-arranged agreements. As in earlier chapters, this one begins with the late eighteenth century exploration of a “Hindu law of contract” (p. 124) followed by the revealed inadequacy of this “artificial” legal inheritance. Prior to specific contract legislation, silk, hides, cloth and other indigenous trades flourished without resort to formal contracts through intermediaries who could exert social control along the supply chain. In the case of indigo, from roughly 1830 to 1860, the contract problems between peasant cultivators and indigo planters often devolved into coercion and oppression. According to the authors, a key legacy of the Blue Mutiny of 1860 was the Indian Contract Act of 1872. The authors doubt the Act’s contribution to economic growth, given the availability of informal and extralegal mediation and given the limited number of disputes that reference the Act.

Chapter 8 addresses laws affecting organizational forms including partnerships, the managing-agency contract, and joint stock corporate forms. Roy and Swamy describe Hindu partnerships as extensions of the Hindu joint family and governed by property and succession laws. Industrial firms in Bombay and Calcutta preferred the limited liability, joint stock organization form. Synthesizing both family partnership and the joint stock corporation was the popular, opaque, and uniquely Asian business form called the managing agency. The authors carefully analyze the shareholders’ opportunities and risks in managing agencies and the role of law in allocating rights between owners and agents. In both chapters 7 and 8, numerous legal cases effectively demonstrate the law in practice.

The final substantive section, chapter 9 provides a macro view of the evolution of law and litigation over the colonial period. The steady growth in judicial capacity, legislation, and litigation is illustrated in a series of time series graphs. The authors discover that in the early twentieth century, the majority of appellate civil suits were tried under procedural laws rather than laws pertaining to property, contract, or agency. Disputes over process gummed up the courts, a trend that has persisted to the present day. The brief conclusion notes five additional points of continuity or discontinuity between past and present.

This extraordinary synthesis of legal and historical scholarship should be read by anyone serious about the capacity and limits of law in shaping economic development. The Raj is portrayed here as improvisational, often slow and reactive, accommodating conservative impulses within India, while also embracing modernist trends from without. The recurring use of agency theory analysis and case law deliver analytical clarity and thick description. The work will be essential reading for future students of Anglo-Indian law.

While the project does a stellar job of characterizing formal institutions, the approach has its limitations. The framework largely ignores the informal economy and the multifarious, decentralized, informal systems of conflict remediation and heritable rights. To the degree that Anglo-Indian law failed to act as a centripetal force on the colonial economy, the study leaves critical institutions unnamed and unexamined. The variety of indigenous remediation systems — especially those that did not require literacy, travel to district courts, and payments to vakils — remains outside the scope of the study. It is a critical omission given that, in the study period and even seven decades after independence, the vast bulk of Indian employment remains in unorganized sectors, beyond governmental writ. As Rajalaxmi Kamath, of IIM Bangalore recently noted, the informal sector is “far from being ‘un-legislated’… [and] is very heavily regulated by social structures”[1]. A survey of such structures and their complex interactions with the legal infrastructure remains to be done. Future scholars will thank Roy and Swamy for an important point of departure.

Endnote:
1. Rajalaxmi Kamath (June 15, 2017), “India’s Informal Sector: The Vilified-glorified ‘Other’ Side of the Formal,” http://www.forbesindia.com/article/iimbangalore/indias-informal-sector-thevilifiedglorified-other-side-of-the-formal/47245/1. Retrieved July 30, 2017.
Santhi Hejeebu is Ringer Distinguished Professor of Economics and Business at Cornell College. Her recent publications include, Humanism Challenges Materialism in Economics and Economic History, Chicago: University of Chicago Press, 2017, co-edited with Roderick Floud and David Mitch.

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

Subject(s):Government, Law and Regulation, Public Finance
Geographic Area(s):Asia
Time Period(s):18th Century
19th Century
20th Century: Pre WWII

The Chinese Market Economy, 1000-1500

Author(s):Liu, William Guanglin
Reviewer(s):Pomeranz, Kenneth

Published by EH.Net (June 2017)

William Guanglin Liu, The Chinese Market Economy, 1000-1500. Albany, NY: State University of New York Press, 2015.  xviii + 374 pp., $30 (paperback), ISBN: 978-1-4384-5568-6.

Reviewed for EH.Net by Kenneth Pomeranz, Department of Economics, University of Chicago.

William Guanglin Liu has written a valuable book on a big, important, topic: the general trajectory of the Chinese economy from roughly 1000-1650.  (The title says 1500, but the argument goes beyond that date.) The research is excellent, and the author comes up with some original and inventive ways to use his data.  At times, however, it frames its arguments in overly stark forms, and makes claims that go beyond what it can prove.  But despite these concerns, this is a book well worth reading, which will stimulate very useful debate on fundamental questions of Chinese economic history.

As a first approximation, Liu’s theses are hard to argue with.  The author shows that China experienced very impressive growth during the Song dynasty (ca. 960-1279), a period in which there was also a striking expansion of the role of markets in Chinese society.  He also show that the policies of Zhu Yuanzhang (r. 1368-1398), founder of the Ming Dynasty (1368-1644) dealt a major blow to China’s economy by trying to resurrect an idealized world of largely autarkic and demonetized villages.  It took a long time for China to recover from this: in contrast to many scholars who think that by 1500 China had returned to a market economy generating at least a Song level of prosperity, Liu argues that this did not happen until at least 1600, and quite likely not even then.  Moving beyond China, Liu then suggests that this historical case shows the centrality of market institutions for stimulating economic growth, beginning at a very low level of development.

The first three of these points — the marketization and relative prosperity of Song times, and the damaging effects of early Ming policies — are broadly accepted.  The first controversy concerns matters of degree: how prosperous? How marketized?  How big and lasting a blow did the early Ming inflict?  A second set of controversies centers on causation, and thus on the role of other factors.  For instance, Liu says very little about the many technological innovations during the Song — including the invention of gunpowder, the magnetic compass, paper money, and the importation (from Southeast Asia) of early-ripening rice — except to note that some of the most important innovations did not diffuse rapidly.  Some others would assign those innovations (and some that began in the Tang, such as printing) a good deal of credit for the growth that occurred in the Song, and continued into the Yuan (1279-1368) in some parts of the empire. While we will never have the data necessary to arrive at a precise allocation of growth to different factors, there is still room for further productive discussion about relative weights. Likewise, it is possible to show that the Mongol conquests of the mid-thirteenth century had a devastating impact in some places (especially North China and Sichuan), and very little elsewhere (the Middle and Lower Yangzi Valley, and in the far south); the relative weight of those different regional stories is still unsettled, and matters greatly in whether Liu is justified in placing an overwhelming emphasis on early Ming anti-market policies in explaining an apparent stagnation or decline in living standards between the eleventh and sixteenth centuries.

One of the book’s contributions is to concentrate in one place the arguments for transformational change concentrated in the Song period, and followed by a later reversal: a once popular view (e.g. Elvin 1973) that has lately given way to a tale of more gradual progress across several centuries (Smith and Von Glahn 2003).  Making the best of flawed data, Liu estimates population growth of 0.92% per year between 980 and 1109, a remarkable rate for a pre-modern society.  And drawing on a large body of secondary scholarship, he points to considerable evidence for changes in agriculture — capital deepening, especially in the form of massive investments in irrigation, and increasing use of oxen – which should, logically, have raised agricultural yields significantly, allowing a population that had more than tripled to eat as well or better than its forebears.

Unfortunately, however, we lack much good data on actual yields in the Song.  Liu notes that Dwight Perkins’ well-known estimates are (like most others for this period) inferences from agricultural rents, and that much of the land in question was land used to support schools; he further argues that school land was often rented out at below-market rates, depressing these inferred yields, and that the land which families donated to schools was often their least fertile property, anyway.  Meanwhile several of Perkins’ later data points come from agricultural handbooks, and probably represent optimal results.  Thus Liu argues, the impression of slow but steady growth across centuries that emerges from Perkins’ highly influential work may well be a statistical illusion. He prefers the older idea of a Song boom followed by little progress in subsequent dynasties.   Building on work by Zhou Shengchan, Liu tries to work backwards from data on population and average food consumption to estimate thirteenth century yields in the Lower Yangzi region; the results vary considerably among prefectures, but are generally near the high end of our range of estimates for any period before the arrival of modern farm inputs.  They would therefore leave little room for continued growth in the Yuan, Ming, or even Qing.

If verified, this would be a very important finding, but I have my doubts.  In part, my doubts come from personal experience, as adopting a similar methodology for estimating eighteenth century output of various crops led to extremely high estimates.[1]  There are also technical problems with some of this data (particularly in Table 7.8), though probably not big enough to change the results dramatically.[2]   The most we can say with strong confidence, I think, is that some Song farmers achieved yields near the pre-modern maximum, and more and more of their neighbors caught up over time — though whether this happened over decades or centuries remains very uncertain.

For most non-food items, we simply lack the data to generate serious estimates of per capita consumption in Song times; and while anecdotal evidence of rising consumption exists, Liu prefers not to rely on it.  Instead, he relies on an estimate of real wages for unskilled workers to show that living standards in the Song were as high as they ever got in China prior to the twentieth century.  Because we have not found for China any very long series of wages for privately-hired workers in a relatively standardized occupation in a particular place — like the long runs of wages for construction workers on European cathedrals and colleges, for instance — Liu constructs a long-run series of military wages, for which data are comparatively rich; and because we lack data for enough commodities to construct a long-run price index, he uses grain prices as the denominator for his series.  The resulting series peaks at its very beginning (in 1004) and fluctuates wildly while declining overall for the next roughly 170 years. It is then relatively stable until another steep drop in the early Ming, and recovers slightly in the late Ming before declining again in the early Qing (Figure E-1).

Liu has done us a considerable service by piecing this data series together, but as a proxy for the living standards of ordinary people it must be taken with a very large grain of salt.  Governments did not engage soldiers through a true labor market, nor did the institutional setting of military recruitment or the conditions of being a soldier (aside from the wage) remain constant over time.  Moreover, even if we had a reliable private sector wage series, it would not necessarily follow that this was a reliable basis for estimating popular living standards, much less per capita GDP, as Liu argues (p. 133).  Wage earners were never more than 15 percent of the labor force in late imperial China, and most farmers either owned their own land or had a relatively secure tenancy (especially in Qing times).  Consequently, they earned far more than unskilled laborers did — perhaps three times as much on average, according to preliminary estimates I have made for the eighteenth century (and for the early twentieth, where the data are better). (Among other things, this is confirmed by the fact that tenants and smallholders could support families, while unskilled laborers could rarely afford to marry. And for GDP per capita, we would also have to average in the earnings of well-to-do families.  Last but not least, if the ratio between wages and average farm earnings changed over time — as it might well have, given a gradual strengthening of tenant usufruct rights over the course of the late empire — even a much better wage series might not tell us what we want to know about general living standards.

But if Liu does not prove his most ambitious claims, he does succeed in proving many of his smaller empirical claims.  In particular, the evidence for relative prosperity in the Song and a sharp decline in the early Ming seems too much to explain away, even if one can raise doubts about each individual measurement.  The money supply contracted very sharply in early Ming times, followed by the introduction of government notes (for state payments) that soon became almost worthless; customs receipts (and presumably long-distance trade declined; and the wage decline between ca. 1050 and ca. 1400 is too big to be explained entirely by data problems.  A separate estimate, later in the book, suggests that per capita income in North China might have fallen by as much as half between 1121 (on the eve of the Song loss of the North) and 1420, though output per capita seems to have remained stable in the Yangzi Delta.  Liu also makes a strong case that Song people were freer than their early Ming counterparts, and perhaps even less unequal economically (though Song writing shows so much worry about inequality that one is tempted to believe there was fire behind so much smoke).

This brings us to the problem of explaining these differences.  Liu provides a straightforward answer: Song reliance on the market worked while the early suppression of it backfired.  Moreover, this represents a timeless truth, most recently vindicated by the sharp contrast between the Maoist and post-Maoist periods.  Here. I think, Liu lets his argument outrun his evidence, focusing too exclusively on one broad-brush contrast.

It would be hard to deny that the increased influence of market principles in the Song stimulated growth: above all, probably, the agricultural growth of the south, which required significant investment (especially for water management) that would surely have been more modest had earlier dynasties’ restrictions of private landowning remained in force; and given the surpluses that southern agriculture soon generate, and the relatively easy transportation that its rivers offered, impressive commercial and urban growth soon followed.  Since the coastline south of the Yangzi also has far more good sites for ports than the coastline north of the Yangzi, the southward shift of China’s economic center of gravity was also propitious for foreign trade, which boomed under both the Song and the (Mongol) Yuan.

Even in the south, however, the state provided essential infrastructure (though its role declined over time), and often played a very active role in foreign trade. In the north, meanwhile, both the enormous system of canals built by the Song government and the huge concentration of demand in the capital region were crucial, both for consumer markets and the growth of a precocious iron industry stimulated by unprecedented levels of military spending.   A variety of inventions also must have contributed something to the robust growth of the Song period.

Nor, I think, would many people deny that the early Ming attempt to return to local autarky had serious and lasting negative consequences. But we should bear in mind that the North, where Liu’s decline in estimated output between 1121 and 1420 was concentrated, suffered a number of  major shocks in this period, all of which bypassed or fell much more lightly on the south (except for Sichuan). These included conquests by three sets of northern invaders (including, most devastatingly, the Mongols); the prolonged turmoil that toppled the Mongols and brought the Ming to power; a civil war between supporters of two Ming heirs; and repeated, enormous, Yellow River floods, including two that dramatically shifted the river’s course (out of six such incidents in the last 4,000 years) and made it impossible to rebuild the Song-era canal system.   Ming policies certainly did great damage, too, but the relative size of these setbacks needs more detailed analysis before we can accept Liu’s almost exclusive emphasis on the Ming founder’s anti-market policies.

I would also caution against lumping all the parts of Ming anti-commercialism under the heading “command economy,” and comparing it to an ideal type of “market economy,” as Liu often does (e.g. pp. 1, 4-12, 134-136, 197, 199).  No pre-modern state could maintain the vigorous intervention needed to run a true command economy for long.  The Ming may have been more effective than most, but their massive redistribution of property and forced migration was over by about 1425, with land and labor again being exchanged in private markets;[3] the system of artisan conscription unraveled during the fifteenth century; foreign trade outside the official tribute system gradually returned; and so on.  This did not mark the end of Ming anti-commercialism as an attitude, or of its effects: among other problems, the dynasty never tried to provide the money supply that the private economy needed, saddling its subjects with costs that lingered for centuries.[4]   But even if this failure was originally part of an aggressive state’s attempt at command economy, it soon evolved into something else: the failure of a relatively weak state to undertake even those interventions that could have benefited both itself and the private economy.  The succeeding Qing dynasty (1644-1912) certainly had no dream of a command economy, and often (though not always) sought to encourage markets;  and the state’s share of GDP may have slipped as low as 2 percent, compared to at least 10 percent and perhaps as much as 20 percent at the peak of Song military-fiscalism.[5]  Yet the Qing provided the most stable bronze currency — the money used for most everyday transactions — China had ever known, while uncoined silver provided a reasonably adequate currency for big transactions; and it mobilized impressive resources for various physiocratic projects, from water control to grain price stabilization to promotion of best practices in agriculture and handicrafts. (That it spent much less, proportionately, on its military than the Song or Ming had facilitated this combination of low extraction and significant services.[6])  And for about a century and a half, they presided over impressive demographic and economic growth, Interestingly,  three prominent economic historians — Loren Brandt, Debin Ma, and Thomas Rawski, none of them remotely anti-market — have argued that the principal reason why Qing economic development was not even better was that the government was too minimalist: that a small government spread across a vast area was unable to prevent all sorts of local actors — from bandits to local elites employing private enforcers to rogue government clerks — from interfering with local markets and property rights.[7]  Such interference was clearly a problem in the late Ming as well, though it is not precisely measurable in either period.  It does, however, remind us that a simple contrast between “market economy” and “command economy” does not give us enough tools to understand the different relationships between state and market in imperial China, or anywhere else.

Nonetheless, the book does an impressive job of demonstrating how much dynamism the marketizing economy of the Song generated, and how much of those gains had been lost by the mid-Ming, at least in certain regions.  The author’s efforts to quantify trends that many others have been content to describe qualitatively are impressive; this is a book where the appendices are often as thought-provoking as the text.  The results are not as revolutionary or dispositive as the book sometimes suggests, but they will stimulate productive debates for years to come.

Notes:

1. Lacking data on the acreage devoted to non-grain crops in certain areas, I decided to estimate how much land must have been devoted to non-grain crops, relying on generally accepted numbers for population, grain consumption, and imports, and then multiply the acreage left over by conservative estimates of yields for the non-grain crops.  The results came out so high that I cut them in every way I could think of — including, in one case, arbitrarily reducing the estimate of non-grain acreage by half. The results I came up with were still at the high end of the existing range of estimates, or in some cases significantly beyond it.  I am not ready to toss out those estimates completely, and would be happy to see this approach vindicated; but I am inclined to be cautious here, especially since Liu has not made the same efforts to depress his results as I did.

2. The conversions from Zhou’s numbers, which mostly use Yuan dynasty measurements, is complicated. Trying to reproduce his results for one prefecture after an email exchange with me, Prof. Liu got a figure about 1 percent lower.

3. A rare set of household-level records, for instance, shows a family with modest landholdings in Huizhou engaged in no less than 18 land purchases or sales between 1391 (not long after the Ming came to power) and 1432.  See Von Glahn 2016: 291-293.

4. Von Glahn 1996 and Kuroda 2000 suggest that this was finally addressed with moderate success in the Qing.

5. Perkins 1967: 492; Wang 1973: 133 for the Qing; Golas 1988: 93-94 comes up with 24 percent for the Song, but admits that this seems unlikely.  Hartwell 1988: 79-80 suggests a bit over 10 percent.

6. On military spending compare Hartmann 2013: 29 with Zhou 2000: 36-38.

7. Brandt Ma and Rawski 2014: 60, 76, and 79.

References:

Brandt, Loren, Debin Ma and Thomas Rawski. 2014.  “From Divergence to Convergence: Reevaluating the History behind China’s Long Economic Boom,” Journal of Economic Literature 52(1):45-123.

Elvin, Mark. 1973.  The Pattern of the Chinese Past.  Stanford: Stanford University Press.

Goals, Peter, 1988. “The Sung Economy: How Big?”  Bulletin of Sung-Yuan Studies 20: 89-94.

Hartmann, Charles. 2013.  “Sung Government and Politics,” in John Chafee and Dennis Twitchett, eds., The Cambridge History of China, Volume V Part 2: Sung China, 960-1279 (Cambridge: Cambridge University Press):19-133.

Hartwell, Robert. 1988. The Imperial Treasuries: Finance and Power in Song China,” Bulletin of Sung-Yuan Studies 20: 18-89

Kuroda Akinobu. 2000. “Another Monetary Economy: The Case of Traditional China,” in A.J. H. Latham and Heita Kawakatsu, eds, Asia-Pacific Dynamism, 1500-2000 (London: Routledge): 187-198.

Perkins, Dwight. 1967. “Government as an Obstacle to Industrialization: The Case of Nineteenth-Century China,” Journal of Economic History 27 (4): 478–92

Perkins, Dwight. 1969. Agricultural Development in China, 1368-1968.  Chicago: Aldine Publishing.

Smith, Paul, and Richard Von Glahn, eds., 2003. The Song-Yuan-Ming Transition in Chinese History.  Cambridge:  Harvard Asia Center.

Von Glahn, Richard. 1996.  Fountain of Fortune: Money and Monetary Policy in China, 1000-1700.  Berkeley: University of California Press.

Von Glahn, Richard. 2016.  The Economic History of China: From Antiquity to the Nineteenth Century.  Cambridge: Cambridge University Press.

Wang Yeh-chien. 1973. Land Taxation in Imperial China, 1750-1911.  Cambridge, MA: Harvard University Press.

Zhou Yumin. 2000.  Wan Qing caizheng yu shehui bianqian (Late Qing Fiscal Administration and Social Change).   Shanghai: Shanghai renmin chubanshe.

Kenneth Pomeranz is University Professor of History at the University of Chicago.  His best known book is The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, 2000).  His most recent publication is “The Data We Have vs. the Data We Want: A Comment on the State of the Divergence Debate,” Pt. I and Pt II New Economics Papers (June 8, 2017) https://nephist.wordpress.com/2017/06/06/the-data-we-have-vs-the-data-we-need-a-comment-on-the-state-of-the-divergence-debate-part-ii/. Forthcoming publications include “Water, Energy, and Politics: Chinese Industrial Revolutions in Global Environmental Perspective,” in Gareth Austin, ed., Economic Development and Environmental History in the Anthropocene (forthcoming, 2017: Bloomsbury Academic).

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

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):Medieval
16th Century
17th Century

A History of the Global Economy: 1500 to the Present

Editor(s):Baten, Joerg
Reviewer(s):La Croix, Sumner

Published by EH.Net (January 2017)

Joerg Baten, editor, A History of the Global Economy: 1500 to the Present.  Cambridge:  Cambridge University Press, 2016.  xiv + 369 pp. $40 (paperback), ISBN: 978-1-107-50718-0.

Reviewed for EH.Net by Sumner La Croix, Department of Economics, University of Hawaii-Manoa.

In the past two years, there has been a boomlet in global economic histories targeted to a variety of audiences.  They include a handbook oriented towards academics and graduate students (Francesco Boldizzoni and Pat Hudson, editors, Routledge Handbook of Global Economic History (2016)) and two books more oriented to undergraduates and a general audience (Robert Allen, Global Economic History: A Very Short Introduction (2015) and Larry Neal and Rondo Cameron, A Concise Economic History of the World: From Paleolithic Times to the Present, fifth edition (2015)). A new addition to this field is A History of the Global Economy, a collection of 32 essays edited by Joerg Baten (University of Tübingen), which provides a sweeping introduction to the history of the global economy from 1500.  The volume was commissioned by the International Economic History Association and the editor states that his aim is to organize a “non-Eurocentric history” that presents “economic history in a balanced way.”  The volume is anchored by essays on ten regions that each have “circa 500 million inhabitants today,” although it might have been useful to split the Southeast-Asia-Australia-New Zealand region into two parts given the disparate development paths of economies in Southeast Asia and Australasia.  The regional essays are supplemented by “interlinking notes” that summarize critical debates among economic historians and “take a global perspective” on “core indicators” of development and growth and “highlight notes” that consider particularly interesting puzzles and topics. Senior scholars specializing in each region have written the ten anchor essays, while some of the most distinguished economic historians (e.g., Jeffrey Williamson and Steven Broadberry) were recruited to write some of the interlinking and highlight notes.

Anchor chapters are by Jan Luiten van Zanden (North-western Europe), Joerg Baten (Southern, eastern, and central Europe), Price Fishback (United States and Canada), Luis Bértola and José Antonio Ocampo (Latin America), Osamu Saito (Japan), Debin Ma (China), Rima Ghanem and Joerg Baten (Middle East, North Africa, and Central Asia), Tirthankar Roy (South Asia), Martin Shanahan (Southeast Asia and Australia/New Zealand), and Gareth Austin (Sub-Saharan Africa).  Each author makes a sustained effort to incorporate four measures of the “core dimensions of development” into their analysis: Gross domestic product per capita, height as an indicator of health and the quality of nutrition, basic numeracy as an indicator of education, and the Polity IV index as an indicator of democracy.  Baten argues that while these measures are not available for all regions and times, they are sufficiently available to allow the reader to compare the welfare of populations across regions over at least some of the four dimensions.  The core dimensions of development are presented in each chapter via a unified set of figures and maps.  Another common set of nicely-conceived maps is used to identify directions and compositions of trade flows within and across regions, centers of economic activity in each region, and specialization in production within regions.

One of the strengths of this book is that the text is kept to a manageable length of 355 pages, but this also means that some important topics receive sparse coverage.  For example, the chapter on North-western Europe devotes no space to cataloging major inventions of the industrial revolution while devoting considerable space to more general interpretations of its origins.  Not much space is devoted in any of the chapters to national or international macroeconomic policy.  Instead the emphasis is placed on broader demographic trends, market integration and international trade, and institutional change.  The chapter on Japan is lucid and informative on the 1500-1868 period, but then provides just two pages of analysis for the 1868-2010 period.  This is unfortunate, as a more complete discussion of Japan’s rapid pre-World War II development, its post-war economic miracle, and subsequent stagnation over the 1990-2010 period would surely have been of great interest to many readers.  The effects of war receive little attention except in the U.S./Canada essay.  All that aside, some of the missing topics are filled in by the ten highlight notes and the twelve interlinking notes.  Examples of topics covered by the notes include brain drain from India, the Sputnik shock, the natural resource curse in Latin America, trade and poverty in the third world, women in global economic history, Alfred Chandler’s insights into business history, state finances in civil wars, and Japanese industry during the Second World War.

In sum, Joerg Baten has brought together some of the best people in the field of economic history, and they have written a great set of essays that is surprising unified by the questions they consider as well as by the use of core indications of development and a unified set of maps and figures.  The book is particularly noteworthy for its avoidance of economic jargon and its clear writing.  Authors avoid extensive citation of sources in the text, keep footnotes to a minimum, and provide a brief list of references for each chapter. Students in an introductory or upper-division course in global economic history could easily digest its contents while specialists in economic history could also benefit from reading this volume, as its regional syntheses incorporate the larger literature on regional and economic growth that has emerged in the last 25 years.

Sumner La Croix is the author (with Alan Dye) of “The Political Economy of Land Privatization in Argentina and Australia, 1810-1850,” Journal of Economic History 73(4), 2013.

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

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):General, International, or Comparative
Time Period(s):16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Taxing the Rich: A History of Fiscal Fairness in the United States and Europe

Author(s):Scheve, Kenneth
Stasavage, David
Reviewer(s):Poulson, Barry W.

Published by EH.Net (December 2016)

Kenneth Scheve and David Stasavage, Taxing the Rich: A History of Fiscal Fairness in the United States and Europe. Princeton: Princeton University Press, 2016.  xv + 266 pp. $30 (hardcover), ISBN: 978-0-691-16545-5.

Reviewed for EH.Net by Barry W. Poulson, Department of Economics, University of Colorado.

In this study Kenneth Scheve (Professor of Political Science at Stanford University) and David Stasavage (Professor of Politics at New York University) address an important question:  given evidence of increasing inequality in recent years, why is there not greater effort to tax the rich? To answer this question they survey the history of progressive taxation in twenty countries over the past two centuries, and the literature on taxation and the distribution of income and wealth.

Their evidence reveals an inverted-U curve for the average top marginal rates of income taxation in these countries in the twentieth century. Using evidence for the income share going to the top 0.01 percent of the income distribution, their evidence suggests an inverse relationship between the top rate of income taxation and the share of income received by the top income group.  They also find evidence of an inverted-U for average top rates of inheritance taxation in the twentieth century. Using evidence for the share of wealth owned by the top 1 percent of wealth holders, their evidence suggests an inverse relationship between the top rate of inheritance taxes and the share of wealth held by this wealthy group.

The authors maintain that higher tax rates on the rich were a form of compensatory taxation. Mass conscription during World War I and World War II imposed a heavy burden on citizens. The rich, as owners of most of the capital, captured extraordinary profits during these war years. Higher marginal tax rates on the rich compensated for this privileged position they enjoyed during the war, and the differential burdens imposed on citizens by mass conscription.

Their explanation for declining tax rates on the rich in the post-World War II period is the converse of this argument. Technological changes eliminated the requirement for massive conscription of citizens into the military. As countries relied on a voluntary army, this argument for compensatory taxation of the rich no longer held. Further, they find that other arguments for compensatory taxation of the rich based upon privilege or rent seeking are not persuasive. The authors conclude that current economic and political conditions are such that the compensatory compensation argument for taxing the rich is no longer valid.   The authors agree with Thomas Piketty that taxation of the rich and income inequality in the twentieth century were linked to war; but, they do not agree that this was a random process (Piketty 2014, Piketty and Saez 2007). They argue that taxation of the rich and trends in income inequality were driven by long-run trends involving international rivalries and technologies available for waging war.

My major concern with this study is that their analysis ignores fundamental issues in this debate, especially as it relates to tax and fiscal policy in the U.S. Their analysis is based on the ‘public interest theory’ of government; the assumption is that progressive taxation satisfies a norm of fairness or equality. The public choice literature provides an alternative explanation for the differential tax burdens imposed on the rich relative to the non-rich. If the preferences of elected officials differ from those of their constituents, self-interested politicians will attempt to minimize the political costs associated with raising a given budget or revenue, where political costs result from opposition to taxes by taxpayer interest groups. Politicians can minimize these costs by shifting the tax burden to citizen groups that are less sensitive or effective in influencing tax policy. The use of a specific tax or marginal tax rate will then depend upon this tax price defined in terms of political costs. Allan Meltzer and Scott Richard use this model to show why preferences of voters for taxes are ranked by income, and how extension of the franchise could lead to higher taxation and redistribution of income from rich to poor (Meltzer and Richard 1981). (Scheve and Stasavage refer to this literature in a footnote on page 220, but argue that there is no general theory supporting the argument.)

The public choice literature reveals a systematic bias toward increased spending and deficits. From this perspective, the challenge in democratic societies is to design fiscal rules and institutions to constrain the growth of government, and to allow the preferences of citizens to dominate those of their elected representatives. Progressive tax systems are analyzed within the context of these fiscal rules and institutions (Merrifield and Poulson 2016b).

After World War II, under the leadership of the U.S., industrialized countries successfully removed barriers to international trade and capital flows. This so called “Pax Americana” set the stage for rapid growth in international trade and the global economy. To compete in this new global economy countries significantly reduced tax burdens.

As Chris Edwards and Daniel Mitchell document, the tax reforms enacted in major competitors have left the U.S. behind (Edwards and Mitchell 2008). While the U.S. retains certain tax advantages, there are a growing number of disadvantages. Its top individual income tax rate is now about average compared to other OECD countries, although it kicks in at a higher income level than most countries, and thus penalizes fewer people. However, U.S. businesses are increasingly at a competitive disadvantage with respect to tax burdens when compared to businesses in other OECD countries. The U.S. now has the second highest corporate income tax rate, at 40 percent when calculating federal and state corporate income taxes. U.S. businesses face high business tax and compliance costs. American businesses face a tax penalty when they repatriate profits earned by their foreign subsidiaries. The U.S. has the eighth highest dividend tax rate, and the highest estate and inheritance tax rate among OECD countries. Finally, the U.S. has one of the highest tax rates in the world on corporate capital gains. Much of this tax burden on business is borne by workers in the form of lower wages and employment opportunities.

In contrast, the most successful OECD countries have enacted new fiscal rules to constrain the growth in government spending. John Merrifield and I document how new fiscal rules have enabled these countries to reduce taxes and borrowing. By the end of the twentieth century Switzerland and the Scandinavian countries imposed the lowest top income tax rates compared to other OECD countries; and these countries are successfully addressing unfunded liabilities in their entitlement programs (Merrifield and Poulson 2016a).

Fiscal rules in the U.S. have been relatively ineffective in constraining the growth in federal spending. For half a century rapid growth in federal spending has been accompanied by deficits and debt accumulation. With total debt now in excess of 20 trillion dollars, the U.S. is one of the most indebted countries in the OECD. The total debt burden as a share of GDP exceeds 100 percent, and is projected to grow even higher in coming decades under current law. Growing unfunded liabilities threaten the viability of federal entitlement programs. These flaws in tax and fiscal policy are causing a massive redistribution of income and wealth in the U.S (Merrifield and Poulson 2016b).

References:

Chris Edwards and Daniel Mitchell. 2008. Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It. Cato Institute, Washington D.C.

Allan H. Meltzer and Scott F. Richard. 1981. “A Rational Theory of the Size of Government,” Journal of Political Economy 81: 914-927.

John Merrifield and Barry Poulson. 2016a. “Swedish and Swiss Fiscal Rule Outcomes Contain Key Lessons for the United States,” The Independent Review 21: 251-74.

John Merrifield and Barry Poulson. 2016b. Can the Debt Growth be Stopped? Rules Based Policy Options for Addressing the Federal Fiscal Crisis. New York, Lexington Books.

Thomas Piketty. 2014. Capital in the Twenty-First Century. Cambridge: Harvard University Press.

Thomas Piketty and Emmanuel Saez. 2007. “How Progressive is the U.S. Federal Tax System? A Historical and International Perspective,” Journal of Economic Perspectives 21: 3-24.

Copyright (c) 2016 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (December 2016). All EH.Net reviews are archived at http://eh.net/book-reviews/

Subject(s):Government, Law and Regulation, Public Finance
Geographic Area(s):Europe
North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII