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Cliometrics

John Lyons, Miami University

Lou Cain, Loyola University Chicago and Northwestern University

Sam Williamson, Miami University

Introduction

In the 1950s a small group of North American scholars adopted a revolutionary approach to investigating the economic past that soon spread to Great Britain and Ireland, the European mainland, Australia, New Zealand, and Japan. What was first called “The New Economic History,” then “Cliometrics,” was impelled by the promise of significant achievement, by the novelties of the recent (mathematical) formalization of economic theory, by the rapid spread of econometric methods, and by the introduction of computers into academia. Cliometrics has three obvious elements: use of quantifiable evidence, use of theoretical concepts and models, and use of statistical methods of estimation and inference, and an important fourth element, employment of the historian’s skills in judging provenance and quality of sources, in placing an investigation in institutional and social context, and in choosing subject matter of significance to history as well as economics. Although the term cliometrics is used to describe work in a variety of historical social and behavioral sciences, the discussion here focuses on economic history.

A quantitative-analytical approach to economic history developed in the interwar years through the work of such scholars as Simon Kuznets in the U.S. and Colin Clark in Britain. Characteristic elements of cliometrics were stimulated by events, by changes in economics, and by an intensification of what might be called the statistical impulse.

First, depression, war, the dissolution of empires, a renewal of widespread and more rapid growth in the Western world, and the challenge of Soviet-style economic planning combined to focus attention on the sources and mechanisms of economic growth and development.

Second, new intellectual currents in economics, spurred in part by contemporary economic problems, arose and came to dominate the profession. In the 1930s, and especially during the war, theoretical approaches to the aggregate economy and its capabilities grew out of the new Keynesian macroeconomics and the development of national income accounting. Explicit techniques for analyzing resource allocation in detail were introduced and employed in wartime planning. Econometrics, the statistical analysis of economic data, continued to grow apace.

Third, the gathering of facts – with an emphasis on systematic arrays of quantitative facts – became more important. By the nineteenth century governments, citizens and scholars had become preoccupied with fact-gathering, but their collations were ordinarily ad hoc and unsystematic. Thoroughness and system became the desideratum of scholarly fact-gathering in the twentieth century.

All these forces had an impact on the birth of a more rigorous way of examining our economic past.

The New Economic History in North America

Cliometrics was unveiled formally in Williamstown, Massachusetts, in the autumn of 1957 at an unusual four-day gathering sponsored by the Economic History Association and the Conference on Research in Income and Wealth. Most of the program was designed to showcase recent work by economists who had ventured into history.

Young scholars in the Income and Wealth group presented their contributions to the historical national accounts of the United States and Canada, spearheaded by Robert Gallman’s estimates of U.S. commodity output, 1839-1899. A pair of headline sessions dealt with method; the one on economic theory and economic history was headed by Walt Rostow, who recalled his undergraduate years in the 1930s at Yale, where he had been led to ask himself “why not see what happened if the machinery of economic theory was brought to bear on modern economic history?” He asserted “economic history is a less interesting field than it could be, because we do not remain sufficiently loyal to the problem approach, which in fact underlies and directs our efforts.”

Newcomers John R. Meyer and Alfred H. Conrad presented two papers. The first was “Economic Theory, Statistical Inference, and Economic History” (1957), a manifesto for using formal theory and econometric methods to examine historical questions. They argued that particular historical circumstances are instances of more general phenomena, suitable for theoretical analysis, and that that quantitative historical evidence, although relatively scarce, is much more abundant than many historians believed and can be analyzed using formal statistical methods. At another session Conrad and Meyer presented “The Economics of Slavery in the Antebellum South,” which incorporated their methodological views to refute a long-standing proposition that the slave system in the southern United States had become moribund by the 1850s and would have died out had there been no Civil War. Conrad and Meyer buttressed the point by showing that slaveholding, viewed as a business activity, had been at least as remunerative as other uses of financial and physical capital. More broadly they illustrated “the ways in which economic theory might be used in ordering and organizing historical facts.”

Two decades later Robert Gallman recalled that the Williamstown “conference did more than put the ball in motion … It also set the tone and style of the new economic history and even forecast the chief methodological and substantive interests that were to occupy cliometricians for the next twenty-one years.” What began in the late 1950s as a trickle of work in the new style grew to a freshet and then a flood, incorporating new methods, examining bodies of data previously too difficult to analyze without the aid of computers, and investigating a variety of questions of traditional importance, mostly in American economic history. The watershed was continent-wide, collecting the work of small clusters of scholars bound together in a ramifying intellectual and social network.

An important and continuing node in this network was at Purdue University in West Lafayette, Indiana. In the late 1950s a group of young historical economists assembled there, among whom the cross-pollination of historical interests and technical expertise was exceptional. In this group were Lance Davis and Jonathan Hughes and several others known primarily for their work in other fields. One was Stanley Reiter, a mathematical economist who traveled with Davis and Hughes to the meetings of the Economic History Association in September 1960 to present their paper explaining the new quantitative historical research being undertaken at Purdue – and to introduce the term “cliometrics” to the profession. The term was coined by Reiter as a whimsical combination of the words Clio, the muse of history, and metrics, from econometrics. As the years went by, the word stuck and became the name of the field.

To build on the enthusiasm aroused by that presentation, and to “consolidate Purdue’s position as the leader in this country of quantitative research in economic history,” Davis and Hughes (with Reiter’s aid) sought and received funds from Purdue for a meeting in December 1960 of about a dozen like-minded economic historians. They gave it the imposing title, “Conference on the Application of Economic Theory and Quantitative Methods to the Study of Problems of Economic History.” For obvious reasons the meetings were soon called “Clio” or the “Cliometrics Conference” by their familiars. Of the six presentations at the first meeting, none was more intriguing than Robert Fogel’s estimates of the “social saving” accruing from the expansion of the American railroad network to 1890.

Sessions were renowned from Clio’s early days as occasions for engaging in sharp debate and asking probing (and occasionally unanswerable) questions. Those who attended the first Clio conference established a tradition of rigorous and detailed analysis of the presenters’ work. In the early years at Purdue and elsewhere, cliometricians developed a research program with mutual support and encouragement and conducted an unusually large proportion of collaborative work, all the while believing in the progressiveness of their efforts.

Indeed, like Walt Rostow, other established economic historians felt that economic history was in need of renewal: Alexander Gerschenkron wrote in 1957 “Economic history is in a poor way. It is unable to attract good students, mainly because the discipline does not present any intellectual challenge …” Some cliometric young Turks were not so mild. While often relying heavily on the wealth of detail amassed in earlier research, they asserted a distinctive identity. The old economic history, it was said, was riddled with errors in economic reasoning and embodied an inadequate approach to causal explanation. The cliometricians insisted on a scientific approach to economic-historical questions, on careful specification of explicit models of the phenomena they were investigating. By implication and by declaration they said that much of conventional wisdom was based on unscientific and unsystematic historical scholarship, on occasion employing language not calculated to endear them to outsiders. The most vocal proponents declared a new order. Douglass North proclaimed that a “revolution is taking place in economic history in the United States … initiated by a new generation of economic historians” intent on reappraising “traditional interpretations of U.S. economic history.” Robert Fogel said that the “novel element in the work of the new economic historians is their approach to measurement and theory,” especially in their ability to find “methods of measuring economic phenomena that cannot be measured directly.” In 1993, these two were awarded the Nobel Memorial Prize in Economics for, in the words of the Nobel committee, being “pioneers in the branch of economic history that has been called the ‘new economic history,’ or cliometrics.”

The hallmark of the top rung of work done by the new economic historians was its integration of fact with theory. As Donald [Deirdre] McCloskey observed in a series of surveys, the theory was often simple. The facts, when not conveniently available, were dug up from surviving sources, whether published or not. Indeed the discipline imposed by the need to measure usually requires more data than would serve for a qualitative argument. Many new economic historians expended considerable effort in the 1960s to expand the American quantitative record. Thus, with eyebrow raised, so to speak, Albert Fishlow remarked in 1970, “It is ironic … to read that … most of the “New Economic History” only applies its ingenuity to analyzing convenient (usually published) data.'” Many cliometricians worked their magic not merely by relying on their predecessors’ compilations; as Scott Eddie comments, “one of the most significant contributions of cliometricians’ painstaking search for data has been the uncovering of vast treasure troves of useful data hitherto either unknown, unappreciated, or simply ignored.” Very early in the computer age they put such data into forms suitable for tabulation and statistical analysis.

William Parker and Robert Gallman, with their students, were pioneers in analyzing individual-level data from the United States Census manuscripts, a project arising from Parker’s earlier study of Southern plantations. From the 1860 agricultural census schedule they drew a carefully constructed sample of over 5,000 farms in the cotton counties of the American South and matched those farms with the two separate schedules for the free and slave populations. The Parker-Gallman sample was followed by Census samples for northern agriculture and for the post-bellum South.

The early practitioners of cliometrics applied their theoretical and quantitative skills to some issues well established in the more “traditional” economic historiography, none more important than asking when and how rapidly the North American economy began to experience “modern economic growth.” In the nineteenth century, economic growth in both the U.S. and Canada was punctuated by booms, recessions and financial crises, but the new work provided a better picture of the path of GNP and its components, revealing steady upward trends in aggregate output and in incomes per person and per worker. This last, it seemed clear from the work in the 1950s of Moses Abramovitz and Robert Solow, must have derived significantly from the introduction of new techniques, as well as from expansion of the scale and penetration of the market. Several scholars thus established a related objective, understanding – or at least accounting for – productivity growth.

Attempting to provide sound explanations for growth, productivity change, and numerous other developments in modern economic history, especially of the U.S. and Britain, was the objective of the cliometricians’ theory and quantification. They were much criticized from without for the very use of these technical tools, and within the movement there was much methodological dispute and considerable dissent. Nonetheless, the early cliometricians spawned a sustained intellectual tradition that diffused worldwide from its North American origins.

Historical Economics in Britain

Cliometrics arrived relatively slowly among British economic historians, but it did arrive. Some was homegrown; some was imported. When Jonathan Hughes expressed doubts in 1970 that the American style of cliometrics could ever be an “export product,” he was already wrong. Admittedly, by then the new style had been employed by only a tiny minority of those writing economic history in Britain. Introduction of a more formal style, in Britain as in North America, fell to those trained as economists, initially to Alec Cairncross, Brinley Thomas and Robin Matthews. Cairncross’s book on home and foreign investment and Thomas’s on migration and growth developed, or collected into one place, a great deal of quantitative information for theoretical analysis; their method, as David Landes noted in 1955, was “in the tradition of historical economics, as opposed to economic history.” Matthews’s Study in Trade Cycle History (1954), which examines the trade cycle of 1833-42, was written, he said, in a “quantitative-historical” mode, and contains theoretical reasoning, economic models, and statistical estimates.

Systematic use of national accounting methods to study British economic development was a task undertaken by Phyllis Deane at Cambridge. Her work resulted in two early papers on British income growth and capital formation and in two books of major importance and lasting value: British Economic Growth, 1688-1959 (1962), written with W. A. Cole, and a compendium of underlying data compiled with Brian Mitchell. Despite skeptical reviews, the basics of the Deane-Cole estimates of eighteenth- and early nineteenth-century aggregate growth were accepted widely for two decades and provided a quantitative basis for discussing living standards and the dispersion of technical progress in the new industrial era. Also at Cambridge, Charles Feinstein estimated the composition and magnitude of British investment flows and produced detailed national income estimates for the nineteenth and twentieth centuries, augmenting, refining and revising, as well as extending, the work of Deane and Cole.

All these studies belong to a decidedly British empirical tradition, despite the use of contemporary theoretical constructs, and contained nothing like the later claims of some American cliometricians about the virtues of using formal theory and statistical methods. Research in a consciously cliometric style was strongly encouraged in the 1960s at Oxford by Hrothgar Habakkuk and Max Hartwell, although neither saw himself as a cliometrician. Separately and together, they supported the movement, encouraging students to absorb both quantitative and formal analytical elements into their work.

The incursion of cliometrics into British economic history was – and has remained – neither so widespread nor so dominant as in North America, partly for reasons suggested by Hughes. Although economic history had been taught and practiced in British universities since the 1870s, after the first World War most faculty members were housed in separate departments of economic (and social) history that tended to require of their students only a modicum of economics and little of quantitative methods. With the establishment of new British universities and the rapid expansion of others, a dozen new departments of economic history were founded in the 1960s, staffed largely by people taught in history and economic history departments. The limited presence of cliometric types in Britain at the turn of the 1970s did not come from deficient demand, nor was it due to hostility or indifference. It was due to limited supply stemming from the small scale of the British academic labor market and an aversion to excessive specialization among young economists. Yet the situation was being rectified. On the demand side, British faculties of economics began to welcome more economic historians as colleagues, and, on the supply side, advanced students were being aided by post-graduate stipends and research support provided by the new Social Science Research Council.

During the 1970s a British version of new historical economics began to take shape. Its practitioners expanded their informal networks into formal institutional structures and scholarly ventures. The organized British movement opened in September 1970 at an Anglo-American “Conference on the New Economic History of Britain” in Cambridge (Massachusetts), followed by two others. From these meetings grew a project to re-write British economic history in a cliometric mode, which resulted in the publication in 1981 of a path-breaking two-volume work, The Economic History of Britain since 1700, edited by Roderick Floud and Donald [Deirdre] McCloskey.

Equally path-breaking, perhaps more so, was the outcome of parallel developments in English historical demography, whose practitioners had become progressively more quantitatively and theoretically adept since the 1950s, and for whom 1981 was also a banner year. Although portions of the book had been circulating for some time, E. A. Wrigley’s and R. S. Schofield’s Population History of England, 1541-1871: A Reconstruction and its striking revisions of English demographic history were now available in one massive document.

As in North America, after the first wave of “quanitifiers” invaded parts of British historiography, cliometrics was refined in the heat of scholarly debate.

Controversies

Cliometricians started or continued a series of debates about the nature and sources of economic growth and its welfare consequences that decidedly have altered our picture of modern economic history. The first was initiated by Walt Rostow, who argued that modern economic growth begins with a brief and well-defined period of “take-off,” with the necessary “preconditions” having already become the normal condition of a given national economy or society. His metaphor of a “take-off into self-sustained growth”, which first appeared in a journal article, was popularized in Rostow’s famous book, The Stages of Economic Growth (1960). Rostow asserted that “The introduction of the railroad has been historically the most powerful single initiator of take-offs.” To test this contention, Robert Fogel and Albert Fishlow both wrote Ph.D. dissertations dealing in part with Rostow’s view: Fogel’s Railroads and American Economic Growth (1964) and Fishlow’s American Railroads and the Transformation of the Antebellum Economy (1965). These books contain their estimates of the extent of resource saving that had accrued from the adoption of a new transport system, with costs lower than those of canals. Their results rejected Rostow’s view.

Until the cliometricians made a pair of disputatious incursions into its economic history, the American South was largely the province of regional historians – almost a footnote to the story of U.S. economic development. Sparked by Conrad and Meyer, for two decades cliometricians focused intently on the place of the South in the national economy and of slavery in the Southern economy. To what extent was early national economic growth driven by Southern cotton exports and how self-sufficient was the South as an economic region? Douglass North argued that the key to American economic development before 1860 was regional specialization, that Southern cotton was the economy’s staple product, and that much of Western and Northern economic growth derived from Southern demand for food and manufactures. Indeed, Conrad and Meyer had touched a nerve. Their demonstration of current profitability did not demonstrate long-run viability of the slave system; Yasukichi Yasuba was able to fill that gap by showing that slave prices were regularly more than enough to finance rearing slaves for future sale or employment. Many others tested and refined these early results. As a system of organizing production, American slavery was found to have been thriving on the eve of the Civil War; the sources of that prosperity, however, needed deeper examination.

In Time on the Cross (1974), Robert Fogel and Stanley Engerman not only reaffirmed the profitability and viability of Southern slavery, but they also made claims about the superior productivity of Southern versus Midwestern agriculture and about the relatively generous material comforts afforded to the slave population. Their book sparked a long-running controversy that extended beyond academia and prompted critical examinations and rebuttals by political and social historians and, above all, by their fellow cliometricians. A major critique was Reckoning with Slavery (by Paul David and others, 1976), as much a defense of cliometric method as a catalogue of what the authors saw as the method’s improper or incomplete application in Time on the Cross. Fogel subsequently published Without Consent or Contract (1989), a defense and extension of his and Engerman’s earlier work.

The remarkable antebellum prosperity of the Southern slave economy was followed by an equally remarkable relative decline in Southern per-capita income after the war. While the remainder of the American economy grew rapidly, the South stagnated, with a distinctively low-wage, low-productivity economy and a poorly educated labor force, both black and white. The next generation of cliometricians asked “Why?” Was it the legacy of the slave system, of the virtual absence of industrial development in the antebellum South, of post-Civil War Reconstruction and backlash, of continued reliance on cotton, of Jim Crow, or of racism and discrimination? Roger Ransom and Richard Sutch investigated share-tenancy, debt peonage and labor effort in maintaining cotton cultivation, using individual level data, some derived a la Parker and Gallman, from a sample of the manuscript U.S. Censuses. Gavin Wright focused on an effective separation of the Southern from the national labor market, and Robert Margo examined the region’s low level of educational investment and its consequences.

An entirely new line of investigation derived from the research on slavery, measuring the “biological standard of living” using anthropometric data. Richard Steckel’s paper on slave height profiles led directly to the discussion of “Anthropometric Indexes of Malnutrition” in Without Consent or Contract. In a corrective to the Fogel-Engerman interpretation of the slave diet, Steckel showed how stunted (and thus how poorly fed) slave children were before they came of working age. John Komlos discovered that heights (of West Point cadets) were declining even as American per capita income was rising in the years before the Civil War, what he called the “Antebellum Puzzle.” Elsewhere, Roderick Floud led a project employing anthropometric data from records of British military recruits, while Stephen Nicholas, Deborah Oxley and Steckel analyzed records for male and female convicts transported to Australia.

Industrialization and its new technologies in the U.S. long predate the Civil War. In writing about technological progress, economic historians had, before the 1960s, tended to concentrate on single industries or economies. Yet distinctive “national” technologies emerged in the early nineteenth century (e.g., contemporary British observers distinguished “The American System of Manufactures” from their own). Amid the early ferment of quantitative economic history in the United States, Hrothgar Habakkuk published American and British Technology in the Nineteenth Century: The Search for Labour-Saving Inventions, a truly comparative study. It was 1962, when, as Paul David writes, “economic historians’ interests in Anglo-American technological divergences were suddenly raised from a quiet simmer to a furious boil by the publication of … Habakkuk’s now celebrated book on the subject.” Habakkuk expanded on an idea that the apparent labor-saving bias of American manufacturing techniques was due to land so abundant that American workers were paid (relative to other factors) much more than what their British counterparts received, but he did not resolve whether the bias was due to more machines per worker, better machines, or more inventiveness.

One strand of the debate over what Peter Temin called Habakkuk’s “labor-scarcity paradox” left to one side the question of “better machines.” It fell to Nathan Rosenberg and Paul David to explore the distinctive technological trajectories of different economies. Rosenberg pointed to the emergence of “technologically convergent” production processes and to the importance of very low relative materials costs in American manufacturing. Paul David reviewed the debate, beginning to formulate a theoretical approach to explain sources of technical change (and divergence). He argued that an economy’s trajectory of technological development is conditioned, perhaps only initially, by relative factor prices, but then by opportunities for further progress based on localized learning from, or constrained by, existing techniques and their histories. David developed the concept of “path dependence,” which is “a dynamic process whose evolution is governed by its own history.”

The first systematic cliometric debate involving European economic history was over an alleged British technological and economic failure in the late nineteenth century. The slower growth of income and exports, the loss of markets even in the Empire, and an “invasion” of foreign manufactures (many American) alarmed businessmen and policymakers alike and led to opposition to a half-century of British “Free Trade.” Who was to blame for loss of competitiveness? Although some scholars attributed Britain’s “climacteric” to the maturation of the technologies underpinning her success during the Industrial Revolution, others attributed it to “entrepreneurial failure” and cited the inability or refusal of British business leaders to adopt the best available technologies. Cliometricians argued, by and large, that British businessmen made their investment and production decisions in a sensible, economically rational fashion, given the constraints they faced; they had made the best of a bad situation. Subsequent research has demonstrated the problem to be more complex, and it is yet to be resolved.

Many results of the cliometrics revolution come from the application of theory and measurement in the service of history; a converse case comes from the macro economists. Monetarists, in particular, have placed economic history in the service of theory, prominently in analyzing the Great Depression of the 1930s. In 1963, Milton Friedman and Anna Schwartz, in A Monetary History of the United States, 1867-1960, opened a discussion that has led to widespread, but not universal, acceptance among economists of a sophisticated version of the “quantity theory of money.” Their detailed examination of several episodes in American monetary development under varying institutional regimes allowed them to use a set of “natural experiments” to assess the economic impact of exogenous changes in the stock of money. The Friedman-Schwartz enterprise sought support for the general proposition that money is not simply a veil over real transactions – that money does matter. Their demonstration of that point for the Great Depression initiated an entire scholarly literature involving not only economic historians but also monetary and macro economists. Peter Temin was among the first of the economic historians to question their argument, in Did Monetary Forces Cause the Great Depression? (1976). His answer was essentially “No,” stressing declines in consumer spending and in investment in the late 1920s as initiating factors and discounting money stock reductions for the continued downturn. In a later book, Lessons from the Great Depression (1989), Temin in effect recanted his earlier position, impelled by a good deal of further research, especially on international finance. The present consensus is that what Friedman and Schwartz call “The Great Contraction, 1929-1933″ may have been initiated by real factors in the late 1920s, but it was faulty public policy and adherence to the Gold Standard that played major roles in turning an economic downturn into “The Great Depression.”

A broad new approach to economic change over time has emerged from the mind of Douglass North. Confronted in the later 1960s with European economic development in its variety and antiquity, North became dissatisfied with the limited modes of analysis that he had applied fruitfully to the American case and concluded that “we couldn’t make sense out of European economic history without explicitly modeling institutions, property rights, and government.” For that matter, making sense of a wider view of American economic history was similarly difficult, as exemplified in the Lance Davis and North venture, Institutional Change and American Economic Growth (1971). The core of North’s model, conceptual rather than formal, is that, when changes in underlying circumstances alter the cost-benefit calculus of existing arrangements, new institutions will arise if there is a net benefit to be realized. Although their approach arose from dissatisfaction with the static nature of economic theory in the 1960s, North and his colleagues nonetheless followed what most other economists would do in arguing that optimal institutional forms will arise dynamically from an essentially profit-maximizing response to changes in incentives. As Davis and North were quick to admit, their effort was “a first (and very primitive) attempt” at formulating a theory of institutional change and applying that theory to American institutional development. North recognized the limitations of his early work on institutional change and has endeavored to develop a more subtle and articulated approach. In Understanding the Process of Economic Change (2005), North stresses again that modeling institutional change is less than straightforward, and he continues to examine the persistence of “institutions that provided incentives for stagnation and decline.”

Retrospect and Prospect

In the 1960s, when the first cliometricians began to group themselves into a distinct intellectual and social movement, buoyed by their revisionist achievements, they (at least many of them) thought they could use their scientific approach to re-write history. This hope may not have been a vain one, but it is yet to be realized. The best efforts of cliometricians have merged with those in other traditions to develop a rather different understanding of the economic past from views maintained half a century ago.

As economic history has evolved, so have the environs economic historians inhabit. In the Anglophone world, economic history – and cliometrics within it – burgeoned with the growth of higher education, but it has recently suffered the effects of retrenchment in that sector. Elsewhere, a new multi-lingual generation of enthusiastic economic historians and historical economists has arisen, with English as the language of international discourse. Both history and economics have been transformed by dissatisfaction with old verities and values, by adoption of new methods and points of view, and by posing new or revived questions. Economic history has been beneficiary of and contributor to such changes.

Although this entry focuses on the development of historical economics in the United States and the United Kingdom, we note that the cliometric approach has diffused well beyond their boundaries. In France the economist’s quantitative approach was fostered when Kuznets’s historical national accounts project recruited scholars in the 1950s to amass and organize the agricultural, output and population data available, in a new histoire quantitative. Still, that movement was overshadowed by the Annales school, whose histoire totale involved much data collection but limited economic analysis. Economic history of France, produced in the cliometric mode by scholars trained there, did not arrive in force until the mid-1980s. French cliometrics was first written by economic historians from (or trained in) North America or Britain; the Gallic cliometrics revolution occurred gradually, for “peculiarly French” institutional and ideological reasons. In Germany similar institutional barriers were partially breached in the 1960s with the arrival of a “turnkey” cliometrics operation in the form of an American-trained American scholar, Richard Tilly, who went from Wisconsin to Munster. Tilly was joined later by a few central Europeans who received American degrees, and all have since taught younger German cliometricians. Leading cliometric scholars from Italy, Spain and Portugal likewise received their post-graduate educations in Britain or America. The foremost Japanese cliometrician, Yasukichi Yasuba, received his Ph.D. from Johns Hopkins, supervised by Simon Kuznets.

If cliometrics in and of continental Europe could trace its roots to North America and Britain, by the 1980s it had developed indigenous strength and identity. At the Tenth International Economic History Congress in Leuven, Belgium (1990), a new association of analytical economic historians was founded. Rejecting the use of “cliometrics” as descriptor, the participants endorsed the nascent European Historical Economics Society. Subsequently national associations and seminars have grown up under the umbrella of the EHES – for example, French historical economists have the Association Francaise de Cliometrie and a new international journal, Cliometrica, while the Portuguese and Spaniards have sponsored a series of “Iberometrics” Conferences.

Cliometrics has transformed itself over the past half-century, forging important links with other disciplines and continuing to broaden its compass, and interpreting “new” phenomena. They are showing, for example, that recent “globalization” has origins and manifestations going back half a millennium and, given the recent experience of the formerly Socialist “transitional” economies, they are showing that the deep historical roots of institutions, organizations, values and behavior in the developed economies cannot be duplicated by following simple formulae. Despite the presentism of contemporary society, economic history will continue to address essential questions of origins and consequences, and it seems likely that cliometricians will complement and sometimes lead their colleagues in providing the answers. Cliometrics is a well-established field of study and its practitioners continue to increase our understanding of how economies evolve.

Source Note: The bulk of this article is a condensed version of the introduction to Lyons, Cain, and Williamson, eds., Reflections on the Cliometrics Revolution: Conversations with Economic Historians (2008), copyright (c) The Cliometric Society, Inc., which receives the royalties; reproduced by permission. Readers should consult that book for a more complete presentation, notes, and a full bibliography.

Further Reading

Coats, A. W. “The Historical Context of the ‘New’ Economic History.” Journal of European Economic History 9, no. 1 (1980): 185-207.

“Cliometrics after 40 Years.” American Economic Review: Papers and Proceedings 87:2, (1997): 396-414 [commentary by Claudia Goldin, Avner Greif, James J. Heckman, John R. Meyer, and Douglass C. North].

Crafts, N. F. R. “Cliometrics, 1971-1986: A Survey.” Journal of Applied Econometrics 2, no. 3 (1987): 171-92.

Davis, Lance E., Jonathan R. T. Hughes and Duncan McDougall. American Economic History. Homewood, IL: Irwin, 1961. [The first textbook of U.S. economic history to make systematic use of economic theory to organize the exposition. Second edition, 1965; third edition, 1969.]

Davis, Lance E., Jonathan R. T. Hughes and Stanley Reiter. “Aspects of Quantitative Research in Economic History.” _Journal of Economic History_ 20:4 (1960): 539-47 [in which “cliometrics” first appeared in print].

Drukker, J. W. The Revolution That Bit Its Own Tail: How Economic History Has Changed Our Ideas about Economic Growth. Amsterdam: Aksant, 2006.

Engerman, Stanley L. “Cliometrics.” In The Social Science Encyclopedia, second edition, edited by Adam Kuper and Jessica Kuper, 96-98. New York: Routledge, 1996.

Field, Alexander J. “The Future of Economic History.” In The Future of Economic History, edited by Alexander J. Field, 1-41. Boston: Kluwer-Nijhoff, 1987.

Fishlow, Albert, and Robert W. Fogel. “Quantitative Economic History: An Interim Evaluation. Past Trends and Present Tendencies.” Journal of Economic History 31, no. 1 (1971): 15-42.

Floud, Roderick. “Cliometrics.” In The New Palgrave: A Dictionary of Economics, edited by John Eatwell, Murray Milgate and Peter Newman, vol. 1, 452-54. London: Macmillan, 1987.

Goldin, Claudia. “Cliometrics and the Nobel.” Journal of Economic Perspectives 9, no. 2 (1995): 191-208.

Grantham, George. “The French Cliometric Revolution: A Survey of Cliometric Contributions to French Economic History.” European Review of Economic History 1, no. 3 (1997): 353-405.

Lamoreaux, Naomi R. “Economic History and the Cliometric Revolution.” In Imagined Histories: American Historians Interpret the Past, edited by Anthony Molho and Gordon S. Wood, 59-84. Princeton: Princeton University Press, 1998

Lyons, John S., Louis P Cain, and Samuel H. Williamson, eds. Reflections on the Cliometrics Revolution: Conversations with Economic Historians. New York: Routledge, 2008.

McCloskey, Donald [Deirdre] N. Econometric History. London: Macmillan, 1987

Parker, William, editor. Trends in the American Economy in the Nineteenth Century. Princeton, N.J.: Princeton University Press, 1960. [Volume 24 in Studies in Income and Wealth, in which many of the papers presented at the 1957 Williamstown conference appear.]

Tilly, Richard. “German Economic History and Cliometrics: A Selective Survey of Recent Tendencies.” European Review of Economic History 5, vol. 2 (2001): 151-87.

Whaples, Robert. “A Quantitative History of the Journal of Economic History and the Cliometric Revolution.” Journal of Economic History 51, no. 2 (1991): 289-301.

Williamson, Samuel H. “The History of Cliometrics.” In The Vital One: Essays in Honor of Jonathan R. T. Hughes, edited by Joel Mokyr, 15-31. Greenwich, Conn.: JAI Press, 1991. [Research in Economic History, Supplement 6.]

Williamson, Samuel H., and Robert Whaples. “Cliometrics.” In The Oxford Encyclopedia of Economic History, vol. 1, edited by Joel Mokyr, 446-47. Oxford: Oxford University Press, 2003.

Wright, Gavin. “Economic History, Quantitative: United States.” In International Encyclopedia of the Social and Behavioral Sciences, edited by Neil J. Smelser and Paul B. Baltes, 4108-14. Amsterdam: Elsevier, 2001.

Citation: Lyons, Cain and Williamson. “Cliometrics”. EH.Net Encyclopedia, edited by Robert Whaples. August 27, 2009. URL http://eh.net/encyclopedia/cliometrics/

Global Perspectives on Industrial Transformation in the American South

Author(s):Delfino, Susanna
Gillespie, Michele
Reviewer(s):Carlson, Leonard A.

Published by EH.Net (March 2012)

Susanna Delfino and Michele Gillespie, editors, Global Perspectives on Industrial Transformation in the American South. Columbia, MO: University of Missouri Press, 2005.? x + 240 pp.? $30 (paperback), ISBN: 978-0-8262-1583-3.

Reviewed for EH.Net by Leonard A. Carlson, Department of Economics, Emory University.

This volume is a part of the Southern Industrialization Project (SIP), an effort among historians to promote research on the relatively neglected topic of industrial development in the southeastern U.S.? The goal is to counter the view that the South was exclusively agrarian and backwards relative to contemporary nations.? The global perspective in the title reflects in part the research interests of one of editors, Susanna Delfino, who is an historian of Italy and an Italian national.? She compares the U.S. and Italy in ?The Idea of Southern Economic Backwardness: A Comparative View of the United States and Italy.?? Looking at Italy as similar to the U.S. allows one to separate the issues of underdevelopment from race to a degree that is hard in the U.S. case alone.? She emphasizes role of the northern political elites in overstating the relative backwardness in both ?Souths,? as part of an attempt to affirm the importance of a liberal state in economic development.

Some authors work within the framework put forward by Fogel and Engerman in Time on the Cross and later works that the slave system in the antebellum South was a prosperous, flexible form of capitalism.? Engerman himself, in his essay ?Southern Industrialization: Myths and Realities,? argues that the problems of the South after emancipation and war cannot be used as evidence about the performance of the antebellum economic system.? Others, notably Gavin Wright in Old South, New South, have reached a somewhat different conclusion.? Wright argues that while the antebellum South was indeed prosperous, slavery retarded development of industry and cities and that poor performance of the postwar southern economy is a direct consequence of the negative effects of the legacy of slavery.? Some of the essays in this volume examine the performance of the post-Civil War southern economy and discuss structural factors that slowed the development of manufacturing in the South.

As is inevitable in such a collection, the articles vary in methodology and topics.? Emma Hart in ?Charleston and the British Industrial Revolution, 1750-1790,? looks at Charleston as a typical eighteenth-century British city with a thriving community of small artisans within a larger Atlantic economy.? By the 1750s Charleston had evolved to serve the prosperous low country rice plantations.??

Brian Schoen, ?Alternatives to Dependence: The Lower South?s Antebellum Pursuit of Sectional Development through Global Interdependence,? looks at the views on political economy expressed by the planter elites.? The arguments centered on how to protect their regional interests.? Free trade fit the interests of the South and by supporting free trade planters also hoped to gain support from the fact that free trade fit the ideology and interests of British manufacturers.? Opinion leaders also advocated developing domestic industry and the railroad system as a way to protect the southern economy from excessive dependence on the North.?

Shearer Bowman, ?Industrialization and Economic Development in the Nineteenth-Century U.S. South: Some Global and Intercontinental Comparative Perspectives,? looks at the South as compared both with the North and with the six eastern-most provinces in Prussia, the most agricultural region in rapidly industrializing Germany in the nineteenth century.? He finds that a common theme that explains industrial underdevelopment is the lack of integration of markets and regional divisions.? Schoen sees these as stemming from geographical and environmental features in both regions.?

John Majewski and Viken Tchakerian, in ?Markets and Manufacturing: Industry and Agriculture in the Antebellum South and Midwest,? focus on comparing two agricultural areas, the Midwest and the South.? They emphasize the role of lower population densities in the South as discouraging the growth of industry relative to the Midwest.? They see this as a function of both geography and rational profit-oriented decisions made by southern planters.?

David Carlton and Peter Coclanis, ?Southern Textiles in Global Context,? emphasize that the southern textile industry was part of a world market competing with stable producers in England and New England as well as newly developing regions in Brazil and India, often using the same British-built machinery.? The shift of the industry from the North in the 1920?s also meant that the products were competing in new markets with other global producers.

Beth English, ?Beginnings of the Global Economy: Capital Mobility and the 1890s U.S. Textile Industry,? looks at the move of the Dwight Manufacturing Company from New England to the South.? The shift began in the 1890s and was not complete until 1927.? This adds an interesting dimension to understanding the gradual collapse of the New England textile industry.

Erin Clune, ?Black Workers, White Immigrants, and the Postemancipation Problem of Labor: The New South in Transnational Perspective? discusses the Southern response to labor shortages in the textile industry in the 1890s.? She sees racism and ideology as blocking the use of black workers in the textile industry.? One alternative was to look to southern and eastern European immigration.? This was resisted on racist grounds and led to an unsuccessful attempt to encourage immigration from the British Isles as a way of protecting racial homogeneity in the white population.

This collection is too broad in its topics and methodology to use in most undergraduate courses.? It offers a good introduction to a wide range of research by a number of researchers and will be helpful to scholars interested in these topics.

Leonard A. Carlson?s recent publications include ?Similar Societies, Different Solutions: U.S. Indian Policy in Light of Australian Policy toward Aboriginal Peoples,? in Economic Evolution and Revolution in Historical Time, edited by Paul W. Rhode, Joshua L. Rosenbloom, and David F. Weiman (Stanford University Press, 2011).

Copyright (c) 2012 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 (March 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economywide Country Studies and Comparative History
Servitude and Slavery
Industry: Manufacturing and Construction
Markets and Institutions
Geographic Area(s):General, International, or Comparative
North America
Time Period(s):18th Century
19th Century
20th Century: Pre WWII

Human Capital and Institutions: A Long Run View

Author(s):Eltis, David
Lewis, Frank D.
Sokoloff, Kenneth L.
Reviewer(s):Mitch, David

Published by EH.NET (February 2010)

David Eltis, Frank D. Lewis, and Kenneth L. Sokoloff, editors, Human Capital and Institutions: A Long Run View. New York: Cambridge University Press, 2009. ix + 342 pp. $85 (hardcover), ISBN: 978-0-521-76958-7.

Reviewed for EH.NET by David Mitch, Department of Economics, University of Maryland ? Baltimore County.

The Cliometric movement is now a half century old and throughout its existence Stanley Engerman has been one of its leading lights. Thus it is no surprise that this volume based on papers from a festschrift conference in honor of Engerman offers some exceptionally strong scholarship. However, it also bears some of the characteristics peculiar to festschrift volumes. The human capital and institutions theme suggested by the title has been applied quite broadly and loosely in order to incorporate all the contributions in this volume. Only three of its ten contributions deal with this theme directly; of the rest, two are anthropometric, one deals with employment and income stability, two with human talent, one with legal standing of labor contracts and one with usury laws. And while about half of the contributions are based ? as best I can tell ? on fresh research, the other half are largely reprises in varying degrees of work published elsewhere. Moreover, the book?s status as a festschrift in honor of Engerman is obscured by two aspects. The same editors, David Eltis (Emory University), Frank Lewis (Queens University), and Kenneth Sokoloff (late of UCLA), put together Slavery in the Development of the Americas published in 2004 which also honors Engerman and it is that earlier volume which has the usual introductory tributes and concluding bibliography of published work of the honoree. And in addition, one of the editors, Kenneth Sokoloff, died before the volume under review was completed and this current volume begins with a two page memoriam to Sokoloff while the editor?s introduction gives as much mention to Sokoloff as to Engerman. All the same, given his contributions to economic history, one can hardly begrudge Engerman at least a second festschrift volume and I suspect that at least one memorialschrift to Sokoloff is in the works. Having now actually read the chapters of this volume, I found that their cumulative quality more than offset any lack of cohesiveness, freshness or clarity on festschrift status. In fact, the diversity of topics was a plus in at least one respect; I found a definite merit of this book as an edited volume to be the opportunity it provided to sample the range of approaches currently undertaken by some of the senior practitioners of economic history.

The essays in the volume are grouped into four parts. The first part deals with ?health and living standards.? Two of the essays in this section are anthropometric: Robert Fogel?s survey of his work on biotechnology and what he calls the technophysio evolution and its implications for current health care policy along with Richard Steckel?s overview of his project on using skeletal remains to examine very long run trends in health and nutrition. It is these two essays which truly offer long run perspectives spanning in the case of Fogel?s project several centuries and in the case of Steckel some millennia. Although both these essays stem from much larger research projects, I found each informative as overviews of the authors? work. The third essay in the section is by George Boyer on income and employment instability in Victorian and Edwardian England. Boyer extends previous work with Timothy Hatton on unemployment estimates in substantial new ways with careful marshalling of evidence from diverse sources to argue that important but not fully appreciated changes occurred between the late eighteenth and early twentieth centuries in how British society coped with income and employment insecurity. Boyer argues that provision for poverty ?was not a ?unilinear progression in collective benevolence? from poor relief to national insurance? (p. 83). Instead, compared to what came before or after, the Victorian era was dominated by the role of self-help, friendly societies and other forms of mutual assistance rather than government-funded poor relief.

The second part of the volume is the one that directly addresses the topic of human capital and institutions. While two of the chapters in this part are based on work published elsewhere, they are both fundamental contributions and thus worth bringing together in one volume. One of these chapters is Stanley Engerman, Elisa Mariscal, and Kenneth Sokoloff?s piece on the evolution of schooling in the Americas. It is a slightly revised version of Mariscal and Sokoloff (2000). In this chapter, the authors build on the now influential Engerman/Sokoloff thesis on the importance of resource endowments in shaping long run institutional change. They attribute the much more advanced state of schooling North America over Central and Southern America to the more equal distributions of land and wealth in the former area. This chapter is a model of careful comparative argument and is also valuable for its collection of schooling data for various dates for a wide range of North and South American countries. In their contribution, Claudia Goldin and Lawrence Katz, like the Engerman et al chapter, consider the comparative question of why the U.S. led in education over other countries of the world. However, they address this question by looking at variation across U.S. states throughout the early twentieth century and they focus on secondary education. Like Engerman et al, they attribute much of the advance to social homogeneity in U.S. communities but in contrast to the previous study they give less consideration to the franchise. To their credit, the authors are quite clear in opening notes on how their chapter builds on previous working papers and also on material taken up in greater depth in their recent book The Race between Schooling and Technology. And they provide a sense of the care taken in compiling their data. They thus nicely offer readers ?Goldin and Katz Concise? rather than ?Goldin and Katz Lite.? The remaining chapter in this part reports Michael Edelstein?s new time series estimates of engineering graduates in the State of New York over the nineteenth and twentieth centuries. Edelstein does a thorough job of explaining his choices in compiling his numbers and the significance of his findings on trends in a profession that he argues convincingly has been central to modern economic growth.

The third part is titled ?human capital outliers? and consists of chapters on artists and very rich Jews. In their chapter, David Galenson and Robert Jensen revisit work Galenson has been doing for about a decade on the life cycle of artists based on a distinction between incremental, experimental innovators and conceptual innovators. They provide examples of artists in each category and then some empirical support by showing fitted profiles of prices of artworks on age in each case. Edward Tufte (2006, pp. 148-50) has objected to this modus operandi of displaying fitted curves without displaying the underlying auction price data ? and that the dichotomy in creative types may over-simplify. Still the exposition is lucid and the price-age profiles are intriguing. The other chapter in this part is Peter Temin?s study of why there have been a disproportionate number of very wealthy Jews. After providing a quite cogent formulation of the problem, Temin argues that Jews attaining great wealth were able to do so not as is sometimes suggested because discrimination in large business corporations spurred their entrepreneurial endeavors but rather because of the social networks they could draw on due to their clearly defined religious and ethnic identity. He supports his argument with simulations showing contagion effects. Despite this volume?s title, neither Galenson and Jensen nor Temin give much attention to the role of institutions in shaping and influencing the factors they consider although Galenson has done so elsewhere (see for example Galenson (2001)). I was surprised that Temin did not reference Andrew Godley?s (2001) comparison of Russian immigrant Jews in London versus New York City as a way of ascertaining the role of institutional environment in influencing the promotion of entrepreneurship for groups with a common Jewish heritage.

The final part of the volume takes up the theme of constraints. Robert Steinfeld?s chapter takes up constraints in the labor market. His point of departure is the Fogel and Engerman finding in Time on the Cross that slave labor was not necessarily less efficient than free labor. He then argues that the emergence of free labor contracting and in particular the reform of the Masters and Servants Act in Victorian England was not due to market forces or the perception by employers that free labor was more efficient than coerced or constrained labor but rather to the extension of the franchise with the Reform Bill of 1867 and related political factors. Steinfeld?s is the only non-cliometric chapter in the volume making minimal use of quantification and with no tables or figures.

Hugh Rockoff?s concluding chapter deals with the non-human resource issue of usury laws in the North American British colonies and U.S. He has compiled evidence on the evolution of usury laws in the North American colonies and the U.S. He argues for the importance of both intellectual attitudes as well as competitive market forces in influencing imposition and relaxation of usury laws. Until I read his chapter, I am not sure I fully appreciated that Adam Smith had actually advocated usury restrictions in The Wealth of Nations, albeit with moderation. Rockoff gives careful attention to the usury provision of the National Currency Act of 1863, arguing that concern for promoting the flow of capital to Western states implied provisions allowing national banks in a given state to charge the highest allowed interest in that state rather than some lower uniform national level. Rockoff?s weighing of the evidence leads him to conclude that on balance usury laws in the U.S. did have an impact on capital markets, though he leaves it as an issue for future research to assess its magnitude. Interestingly, Rockoff admits (p. 313, note 36) that compared with Bodenhorn and Rockoff (1992), his current work on usury laws implies somewhat less regionally integrated capital markets in the nineteenth century U.S.

To use David Galenson?s distinction, the cliometric movement was initially perceived by many as making a conceptual breakthrough in the practice of economic history; however, this volume raises the issue of whether many of the founding cliometricians should in retrospect be classified as experimental innovators. Comparing the second section of this volume with the human capital section of the manifesto of the cliometric movement, The Reinterpretation of American Economic History (Fogel and Engerman 1972), one is certainly struck by the variety of incremental advances both conceptually and in data collection that have occurred in the interim. The current volume also highlights at least some of the interdisciplinary directions in which cliometrics has proceeded over the last 40 years. This is particularly evident in the anthropometric work of Fogel and Steckel. As Galenson (2009, p. 2) has recently acknowledged, efforts to extend quantification to art history have met with definite resistance by art historians. All the same, the use of quantification in this volume while certainly abundant is generally worn lightly and in a nuanced manner as would seem fitting for the honoree?s intellectual style. While Steinfeld?s is the only non-quantitative chapter, only three of the remaining nine chapters by my reckoning explicitly report econometric results.

It is certainly a tribute to the breadth of both Engerman?s and Sokoloff?s work as well as the reach of cliometrics that this volume features just one aspect of their endeavors. One can turn to Slavery in the Development of the Americas for an entirely different dimension of Engerman?s contributions and I would anticipate at least one Sokoloff memorialschrift dealing extensively with his work on technological innovation and other topics barely touched on in this volume.

References:

Howard Bodenhorn and Hugh Rockoff (1992), ?Regional Interest Rates in Antebellum America? in Claudia Goldin and Hugh Rockoff eds. Strategic Factors in Nineteenth Century American Economic History, A Volume to Honor Robert W. Fogel (Chicago: University of Chicago Press).

David Eltis, Frank D. Lewis, and Kenneth L. Sokoloff, editors (2004), Slavery in the Development of the Americas (Cambridge University Press).

Robert Fogel and Stanley Engerman (1972), The Reinterpretation of American Economic History (New York: Harper and Row).

David Galenson (2001), Painting Outside the Lines (Cambridge, MA: Harvard University Press).

David Galenson (2009), Conceptual Revolutions in Twentieth-Century Art (Cambridge University Press).

Andrew Godley (2001), Jewish Immigrant Entrepreneurs in New York and London, 1880-1914 (New York: Palgrave).

Claudia Goldin and Lawrence Katz (2008), The Race between Education and Technology (Cambridge, MA: Harvard University Press).

Elisa Mariscal and Kenneth L. Sokoloff (2000), ?Schooling, Suffrage, and the Persistence of Inequality in the Americas, 1800-1945? in Stephen Haber ed. Political Institutions and Economic Growth in Latin America (Stanford: Hoover Institution Press).

Edward Tufte (2006), Beautiful Evidence (Cheshire, CT: Graphics Press LLC).

David Mitch is Professor of Economics at the University of Maryland, Baltimore County. His chapter ?Chicago and Economic History? is forthcoming (2010) in Ross Emmett ed., The Elgar Companion to the Chicago School of Economics. Email: mitch@umbc.edu.

Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):General or Comparative

Slavery and American Economic Development

Author(s):Wright, Gavin
Reviewer(s):Atack, Jeremy

Published by EH.NET (May 2007)

Gavin Wright, Slavery and American Economic Development. Baton Rouge, LA: Louisiana State University Press, 2006. x + 162 pp. $25 (cloth), ISBN: 0-8071-3183-0.

Reviewed for EH.NET by Jeremy Atack, Department of Economics, Vanderbilt University.

My mother always told me that “good things come in small packages.” This slender volume, which began its life as the Fleming public lecture series delivered at Louisiana State University in 1997, is a case in point. Wright returns to the subject ? American slavery ? that marked his professional debut and which has punctuated much of his distinguished career. Despite, or perhaps because of, his long association with the topic, this work is far more than a simple synopsis of past research. While the book is not path-breaking and innovative in the ways that The Political Economy of the Cotton South (Wright 1978) or Old South, New South (Wright 1986) were, it reflects new insights and research (such as the work by Olmstead and Rhode (2005) on cotton picking rates) and restates past arguments more forcefully, more eloquently, and more persuasively as well. Nowhere is this clearer than in the lengthy third chapter which expands and elaborates upon Wright’s 1979 invited American Economic Review critique of Fogel and Engerman’s work on the relative efficiency of slavery (Wright 1979).

The book’s pervasive theme is that of slavery as a set of property rights which vested the slave’s human capital in the slave owner rather than the slave. This made the slave a highly portable resource that could be employed in any way that best served the slave owner’s interests. Property rights, not personhood, defined the system and it was the rejection of the former in favor of the latter that ultimately distinguished the North from the South with respect to labor. A defining moment in the philosophical switch was the Indiana Supreme Court’s decision in Mary Clark, a Woman of Color whereby the court denied specific performance as a remedy to the claim that Mary Clark had voluntarily agreed to a long-term labor contract with her putative master, General Johnson, noting that “such performance … would produce a state of servitude as degrading and demoralizing … as a state of absolute slavery” (Indiana 1821; Williams 1997).

The first substantive chapter, “Slavery, Geography and Commerce,” is the least focused of the three. About two-thirds of the chapter is devoted to linking the rise of the Atlantic slave trade to the development of the Atlantic Economy and the growth of European demand for Caribbean sugar. Wright’s argument is that sugar production was so unpleasant and arduous yet demand for it was so strong that it could only be satisfied through the involuntary reallocation of labor as profit overcame moral scruples. The balance of the chapter addresses the disappearance of northern slavery from collective consciousness in the years following the Revolution so that the “Peculiar Institution” became a peculiarly southern institution despite persistent but failed efforts to extend slavery to the rich bottomlands of southern Illinois and other areas covered by the Northwest Ordinances.

Chapter 2 examines the pace of economic progress in the North and South in the decade prior to the Civil War. It concludes that the illusion of southern progress depended critically upon the accounting convention of treating the human capital of a portion of the population – slaves ? as the personal property of the slave-owning classes. The result of this was to raise southern wealth far above that in the North where the rate of population growth was 80 percent higher. While people were voting with their feet moving into the northern states which also invested more in general public education, thus beating the South on both the quantity and quality dimension, southerners hoarded a specific form of labor instead of investing in land and infrastructure. The resulting differences at the county-level are vividly shown in maps: the percentage of slaves in the total population correlates highly with the value of personal property per capita and inversely with the value of farms per acre. One paradox of this was that slave labor became expensive labor which owners sought to protect from injury and death by means of more complete contracts and life insurance, while free labor bore all the vicissitudes of workplace dangers. Meanwhile, the lack of effective demand from the enslaved population limited and skewed southern economic development (Russel 1938; Linden 1940; Genovese 1961, 1962).

In “The Efficiency of Slavery: Another Interpretation,” Wright (1979) focused upon just two factors ? the exceptionalism of the 1859-60 crop year and effects which the crop mix had upon the apparent efficiency of slavery ? in attacking Fogel and Engerman’s position on the relative efficiency of slave agriculture (Fogel and Engerman 1971, 1977). Here, in Chapter Three, he elaborates on his earlier critique. Wright also follows up on some “alternatives lines of interpretation” he did not follow then and also makes new points. Specifically, Wright supplements the customary total factor productivity (TFP) estimates from the Parker-Gallman sample for 1860 with new estimates from the much less well-known Foust and Swan sample for 1850, revealing quite different patterns in the two years and between the Southeast and the Southwest. Even without these contradictory data, those who have not followed the debate especially closely and those who are unfamiliar with the underlying data will find the scatter plots of average TFP by number of slaves (Figure 3.4) damning of the simple relative efficiency histograms in Time on the Cross (Fogel and Engerman 1974) and elsewhere. One more or one less slave turns out to be associated with very large variations in average TFP especially among the bigger plantations.

Among the alternative lines of interpretation for the relative efficiency story which Wright explores is the role played by Fogel and Engerman’s weights in reducing male and female labor to “hand equivalents.” Men and women often performed different tasks throughout the year and their relative contributions to revenue were not synonymous to physical productivity differences. This latter point is particularly important since TFP is measured in dollar rather than physical terms. Among the new issues raised by Wright is the role played by land value. The census only reports the “cash value of land and buildings” but by regressing farm value on improved and unimproved acres, Wright shows that slave owners consistently farmed more valuable land (unimproved as well as improved) than those who relied upon free labor. Wright attributes this to the slave owners’ high degree of mobility which enabled them, as first comers, to claim the most fertile and best situated land at the most favorable prices.

Although Slavery and American Economic Development is not expressly couched as a critique of Time on the Cross and Without Consent or Contract (Fogel 1989; Fogel, Engerman et al. 1992; fogel, Galantine et al. 1992), make no mistake: it is. As Wright remarks in his Epilogue “Contrary to depictions of the slave South as a prosperous economy devastated by war and abolition, these essays locate the roots of postbellum regional backwardness firmly in the antebellum period. This era was prosperous indeed for the slaveowners [but] … the antebellum South is [more] appropriately grouped with the middling countries of that era, such as Spain, Austria, Norway or Portugal” (p. 123-24).

References:

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

Fogel, R. W. and S. L. Engerman (1971). “The Relative Efficiency of Slavery: A Comparison of Northern and Southern Agriculture in 1860.” Explorations in Economic History 8(3): 353-67.

Fogel, R. W. and S. L. Engerman (1974). Time on the Cross: The Economics of American Negro Slavery. Boston,, Little Brown.

Fogel, R. W. and S. L. Engerman (1977). “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South,” American Economic Review 67(3): 275-96.

Fogel, R. W., S. L. Engerman, et al. (1992). Without Consent or Contract: The Rise and Fall of American Slavery (Technical Papers). New York, Norton.

Fogel, R. W., R. A. Galantine, et al. (1992). Without Consent or Contract: The Rise and Fall of American Slavery: Evidence and Methods. New York, Norton.

Genovese, E. D. (1961). The Political Economy of Slavery: Studies in the Economy and Society of the Slave South. New York: Pantheon.

Genovese, E. D. (1962). “The Significance of the Slave Plantation for Southern Economic Development.” Journal of Southern History 28(4): 422-37.

Indiana (1821). In re Clark, 1 Blackf. 124-5

Linden, F. (1940). “Repercussions of Manufacturing in the Antebellum South.” North Carolina Historical Review 17: 313-31.

Olmstead, A. and P. W. Rhode (2005). “Wait a Cotton Pickin’ Minute! A New View of Slave Productivity.” NBER Summer Institute: Development of the American Economy.

Russel, R. R. (1938). “The General Effects of Slavery upon Southern Economic Progress.” Journal of Southern History 4(1): 34-54.

Williams, S. B. (1997). “The Indiana Supreme Court and the Struggle against Slavery.” Indiana Law Review 30: 305-17.

Wright, G. (1978). The Political Economy of the Cotton South: Households, Markets, and Wealth in the Nineteenth Century. New York, Norton.

Wright, G. (1979). “The Efficiency of Slavery: Another Interpretation.” American Economic Review 69(1): 219-26.

Wright, G. (1986). Old South, New South: Revolutions in the Southern Economy since the Civil War. New York: Basic Books.

Jeremy Atack is editor of the Journal of Economic History.

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

Divided Mastery: Slave Hiring in the American South

Author(s):Martin, Jonathan D.
Reviewer(s):Pritchett, Jonathan B.

Published by EH.NET (September 2006)

Jonathan D. Martin, Divided Mastery: Slave Hiring in the American South. Cambridge, MA: Harvard University Press, 2004. 237 pp. $45 (cloth), ISBN: 0-674-01149-X.

Reviewed for EH.NET by Jonathan B. Pritchett, Department of Economics, Tulane University.

For an economist, the owners’ attempts to master or control their slaves are examples of the principal-agent problem. In order to maximize economic profit, owners constructed elaborate systems of monitoring, punishments and rewards (see, for example, Fogel and Engerman’s Time on the Cross and the ensuing literature). For many owners, control required the threatened use of force. Southern society placed very few restrictions on the owner’s right to coerce labor from his slaves. As interpreted by the courts, such absolute mastery was only restrained by the owner’s self interest. Coercion through harsh punishments risked possible injury to the slaves, thus reducing the market value of the owner’s property.

Like owners, renters sought the absolute mastery of their slaves. Renters’ absolute mastery was not recognized by the courts, however, because they lacked the owner’s self interest when it came to the protection of slaves as property. The title of Jonathan D. Martin’s book, Divided Mastery, refers to the conflict of interests between owners, renters, and slaves. Although Martin’s book is a comprehensive survey on slave hiring in the American South, “the story about hiring is, at bottom, one about conflict” (p. 11).

Chapter 2, entitled “A Blessing and a Curse,” is written from the viewpoint of the hired slaves. Hiring was a curse because it threatened the separation of families, but it was also a blessing because slaves could exploit the conflict of interests between the owner and the renter. Slaves were empowered by their ability to modify the rental contract, by refusing to work for some renters or by threatening to run away.

The owner’s views are considered in Chapter 3. Although owners expressed many different reasons for hiring out their slaves, money was the most important. “Worth, values, profit, and expense — these were the criteria by which slaveholders judged their slaves. As a result, slaves and owners approached each other on ground thoroughly shaped by the market, in particular by the potential returns for owners in the hiring market” (p. 86). In addition to prompt payment, owners wanted renters who would protect the property value of their slaves. Although the renter’s reputation was important, many owners required legal contracts that specified the treatment of their slaves.

Although renters sought absolute mastery, owners placed checks on the use and treatment of their slaves. Despite these limitations, Martin argues in Chapter 4 that renters still preferred hired slaves to free labor. Renting gave poor Southern whites an “enticing taste of mastery” and could change “an individual’s social and personal identities overnight” (pp. 11, 109). Apparently Martin attributes conspicuous consumption to the renters of slaves.

Disputes over hiring contracts are discussed in Chapter 5. In general, the courts restricted the absolute mastery of renters for fear such punishments would violate the property rights of owners. Renters had the right to enforce obedience by moderate correction but the difference between prudent actions and abuse was ill defined. Especially troublesome was the lack of recognized witnesses of the renters’ actions. Although slaves could not serve as witnesses in a court of law, their actions could be used to infer abusive behavior by a renter. For example, a rented slave who ran back to his owner might be taken as evidence of brutal treatment by the renter (p. 156). Consequently, a slave’s threat of running away might have deterred some of the most abusive behavior by renters.

Chapter 6 addresses self hire, where the slave promised payment to his owner in exchange for greater independence. Because self hires often lived on their own, with little supervision from their owners, this arrangement is sometimes referred to as a form of quasi freedom. But as Martin stresses, self hires faced constant threats and hardships — the slaves were under the constant pressure to acquire money for their owners; they were exploited by their costumers; and threatened by white workers fearing competition. According to Martin, self hires were just another form of slavery rather than a form of quasi freedom.

According to Martin, historians have paid little attention to the practice of slave hiring. This “neglect is no doubt due in part to scholarly suspicion that slave hiring was merely one of the ‘business’ aspects of slavery, an insipid subject that reflects only on the viability and profitability of the system” (p. 8). Instead, Martin promises to “take the story of slave hiring beyond the basic economics of supply and demand” (p. 9). Despite his promises, Martin could have benefited from some basic economic analysis. For example, Martin calculates a high rate of return from hiring out slaves and concludes that it was lucrative (p. 80). A high rate of return from hiring suggests that owners demanded compensation for risking their slaves with others. In addition, Martin speculates that the scale of slave hiring was nothing short of monumental (p. 8). Consequently, the conflict of interests between owners and renters was not large enough to prevent the operation of this market.

Jonathan B. Pritchett is the author of “Quantitative Estimates of the United States Interregional Slave Trade, 1820-1860,” Journal of Economic History, 61 (June 2001): 467-75.

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

The Slavery Debates, 1952-1990: A Retrospective

Author(s):Fogel, Robert William
Reviewer(s):Carlson, Leonard

Published by EH.NET (February 2006)

Robert William Fogel, The Slavery Debates, 1952-1990: A Retrospective. Baton Rouge: Louisiana State University Press, 2003. ix + 106 pp. $23 (cloth), ISBN: 0-8071-2881-3.

Reviewed for EH.NET by Leonard Carlson, Department of Economics, Emory University.

This short book by Nobel Prize winner Robert Fogel gives a survey of the historical literature published before 1990 about the economics of slavery, the economy of the South before 1860, and the origins of the emancipation movement. This book is a tour de force that gives Fogel’s judgments about which issues are settled and his view of a new consensus about southern economic history.[1] I can only mention a few highlights in what follows. The book has a bibliography but no footnotes and a reader seeking citations for some of the points made in the book will need to search the bibliography or look at the earlier Without Consent or Contract. There are three main chapters: “Breaking Away from the Phillips Tradition,” “Coming to Terms with the Economic Viability of Slavery” and “Toward a New Synthesis on the Shaping of American Civilization.”

Fogel sees the debate about the nature of slavery in the South as part of a larger intellectual debate between the “old” anthropology (which saw races as being innately superior or inferior) and the “new” anthropology of Franz Boas (which saw human beings as innately equal but shaped by different cultural circumstances). To Fogel World War II was in part a struggle between the “old” anthropology (championed by the Nazis) and the “new” anthropology (championed by the allies, including the United States). This gives a new twist to Keynes’ observation that madmen in authority distill their ideas from “academic” scribblers. The paradox for the U.S. was that it fought the Nazis at the same time that it practiced segregation in its own army and at home, a contradiction that had be resolved after World War II.

Chapter one begins with a discussion of U.B. Phillips, whose work published in the early twentieth century dominated the scholarly work on slavery for many years. Fogel condemns the racism in Phillips’ research (the old anthropology), but praises him for setting forth a number of interesting hypotheses, many of which have held up to recent research. Phillips concluded that masters in the South treated slave relatively well and that slavery itself was an unprofitable relic that lead masters to pursue status rather than profit. The view that slavery was unprofitable and a burden on the economic development of the both South and the U.S. became embedded in the work of progressive historians such as Charles and Mary Beard. This view was also embraced by historians with a Marxist emphasis. Kenneth Stamp in a 1952 article (hence the date in the title) and his 1956 book, the Peculiar Institution, launched a major challenge to the dominant interpretation. Unlike Phillips, Stamp argued that slaves were treated in a harsh and more dehumanizing manner. In 1957 Conrad and Meyer added a new dimension to the historical debate by using theory and data to address the old question of whether slavery was profitable. Scholars also pursued other lines of inquiry that have helped shape a revised view of slavery and the anti-slavery movement. For example, John Blassingame, John Hope Franklin, and Eugene Genovese explored the development of a separate black culture under slavery. Other scholars began to explore the impact of evangelical religion on American life.

The second lecture deals with debates about the economics of the slave system and the treatment received by slaves in the South. Much of the discussion was generated by challenges to conclusions reached either by Conrad and Meyer or Fogel and Stanley Engerman in Time on the Cross. Conrad and Meyer concluded that an investment in a slave could have earned a master a normal rate of return — that is, slavery was profitable. This result was very controversial to many scholars in the 1950s and 1960s and their results were challenged in a variety of ways. The conclusion that in static terms slavery was profitable is now generally accepted by economists, however, as is the conclusion that per capita incomes were growing in the South up to the Civil War. In Time on the Cross, Fogel and Engerman went further and concluded that slavery in the South was a viable, flexible form of capitalism. They also found that slaves had a standard of living and level of treatment by masters that were not as harsh as Stamp had claimed. This set loose a torrent of criticism, much of it very hostile. Fogel concludes that in the end there were no losers from all the controversy. Fogel does, however, cite a letter to him from John Meyer that asks rhetorically “… how would you react to listening to one hour of fairly substantive implications that you lacked sensitivity to the race issue?” I don’t think that it is too big a leap to conclude that Fogel himself relates very well to Meyer’s rhetorical question in light of some critiques of Time on the Cross.

Fogel and Engerman were the first to argue that farms in the South in general, and slave plantations in particular, were an average more efficient than northern free farms, based on a sample of farms drawn from the census. Their conclusion was hotly debated in scholarly journals. Over time the argument was refined into a claim that there were economies of scale in gang labor on plantations. Some recent empirical studies support that conclusion and Fogel sees the issue as settled. I expect that we have not seen the end of research on this topic, however.

One particularly controversial set of issues raised in Time on the Cross concerned the argument that slaves had won for themselves a better standard of living than Stamp had claimed. In discussing these issues, Fogel gives special attention to the work of Stephen Crawford and Richard Steckel, two of his former graduate students. Using evidence from interviews with former slaves recorded in the 1930s, Crawford found that there was more stability in the typical slave family than earlier research had concluded. Slaves on large plantations fared better than those on small plantations, which might explain some differences with earlier research. Data on slave heights analyzed by Steckel show that slaves were well fed and lived long lives, once they were old enough to work in the fields. Slaves were not well-fed as children, however, (there was apparently little protein in the diet) and slave mothers were often required to work hard during the first and third trimesters of pregnancy, which had adverse effects on both mother and child.

In Fogel’s opinion from the Civil War to present the traditional condemnation of slavery, the “Republican indictment of slavery,” rested on the assumption that slavery was inefficient. However, the fact that slavery was profitable does not make it a just or moral system. In place of the older view, Fogel argues that slavery was immoral because it: 1) gave one group of people legal rights to exercise personal domination over another; 2) denied slaves economic opportunity; 3) denied slaves citizenship; and 4) denied slaves cultural identification.

The third section, “Toward a New Synthesis on the Shaping of American Civilization,” addresses the abolition movement and the end of slavery. Progressive historians had downplayed morality as a cause of the Civil War. In this view, the South blocked needed changes and a northern victory was essential for America’s rise as an industrial power in the later part of the nineteenth century. But if slavery wasn’t dying out and the North was not held down by the South, why did the anti-slavery movement ultimately succeed and why did the North fight to keep the South in the union? In contrast to the economic origins emphasized by the progressive historians, Fogel argues that the slavery issue became an important issue because many people saw slavery as against the wishes of God. This view grew out of the moral sensibility that arose out of the evangelicalism that resulted from the “second great awakening” in the 1830’s. This religiously-based condemnation of slavery led to heated political debate about whether slavery should be allowed in new territories in the West. The Whig party split into northern and southern branches over the issue and faded from national importance.

The 1850s also saw increased hostility toward immigrants, especially Catholic immigrants, by native workers who feared that they would lose their jobs to new workers willing to take lower wages. This tension was further fueled by economic recession in the mid 1850’s. One result was the growth of the nativist Know Nothing Party which was opposed to immigrants and Catholics. Fogel argues that enterprising politicians in the 1850’s blended the anti-slavery movement, anti-immigrant fears and remnants of the Whig Party to form the ultimately successful Republican Party. The Republicans rallied around the cause of keeping slavery out of western territories. Southerners responded to these attacks on slavery in the territories by trying ever harder to allow slavery to spread. Fogel’s nuanced view is sure to stimulate interesting new research — as will his emphasis on the impact of religious movements on political reform.

Undoubtedly this short book will be widely cited and should be read by anyone interested in the economic history of slavery or, indeed, the economic history of the United States.

Note: 1. This is the fourth major review of the literature on slavery and the South by Fogel. A reader new to this literature would benefit by looking at all of them, since each covers somewhat different topics and a reader can see the evolution of Fogel’s thinking. These are found in Reinterpretation of American Economic History (1971), Time on the Cross (1974), and Without Consent or Contract (1989).

Leonard Carlson teaches a course on the political economy of the U.S. South. His research interests are in the economic history of the United States, the economics of federal Indian policy, applied microeconomics, and labor economics.

Subject(s):Servitude and Slavery
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

The Final Victims: Foreign Slave Trade to North America, 1783-1810

Author(s):McMillin, James A.
Reviewer(s):Misevich, Philip

Published by EH.NET (August 2005)

James A. McMillin, The Final Victims: Foreign Slave Trade to North America, 1783-1810. Columbia, SC: University of South Carolina Press, 2004. xi + 207 pp. $39.95 (cloth), ISBN: 1-57003-546-6.

Reviewed for EH.NET by Philip Misevich, History Department, Emory University.

Since the publication of Philip Curtin’s Census, we have moved steadily toward a better understanding of the movement of coerced African laborers throughout the Atlantic world. With its broad outlines sketched more than a quarter century ago, recent scholarship on the Atlantic slave trade has focused on more specific issues including the roles played by national carriers based in Europe and the Americas, studies of African points of embarkation and their relationship to the continent’s interior, and examinations of slave-importing regions across the Atlantic. The Final Victims takes the latter of these approaches, exploring the “foreign” slave trade to North America after the American Revolution. Despite the almost hegemonic influence that scholarship on North American slavery has had on slave studies as a whole, this work is the first book-length study of the post-Independence American slave trade to appear.

The book is organized topically. In five chapters, James McMillin (Southern Methodist University) examines the ideological and commercial factors that contributed to an increased demand for slave labor subsequent to the War, the volume of North American slave imports between 1783 and 1810, the origins of slaves transported to North America, merchant participation in the trade and the changing conditions captives endured while in transport. Evidence is largely quantitative in nature but qualitative information is also employed to good effect. Broadly speaking, McMillin argues that far more slaves were imported into post-Independence North America than previously estimated; that Revolutionary ideology did little to slow the import of African labor after the War; and that slave ship conditions worsened following the resumption of the North American slave trade in 1783. Although he does not challenge the notion that natural increase was the dominant factor that accounted for the growth of North America’s black population, McMillin argues persuasively that “the foreign slave trade contributed much more to the growth than previously thought” (13).

A thorough use of archival sources is one of the great strengths of the book. McMillin draws on census records, contemporary accounts, customs records and, perhaps most significantly, a list of more than thirty separate newspapers from the late-eighteenth and early-nineteenth centuries. The variation in sources allows for three independent estimates of the volume of the North American slave trade, each calculated from a different method. The first is based on census records in 1790, 1800 and 1810 using a regionally-modified growth rate. Two additional estimates are then derived from shipping records, the first a summation of hard numbers of slave imports that appear mainly in newspapers and the second estimated from the total carrying capacity of vessels suspected to have delivered slaves to North America. Combining these approaches, a total volume of 170,300 slaves imported from 1783 to 1810 is advanced, a figure significantly higher than Curtin’s estimate (92,000) but much smaller than the 291,000 suggested by Fogel and Engerman in Time on the Cross.[1]

McMillin’s conclusions will do little, in the end, to change the bigger picture of the movement of unfree Africans across the Atlantic. The volume of the North American trade still accounts for barely five percent of the slave trade as a whole. Moreover, McMillin’s findings on the African origins of North American slaves are broadly consistent with the work of previous scholars, concluding that a disproportionately high percentage came from ports between Senegambia and the Gold Coast, though he does reveal slight changes in the years just prior to the abolition of the United States’ slave trade. But by focusing on a smaller slave-importing region, the author is able to highlight the ways in which American merchants struggled against the more powerful nations engaged in the African slave trade. The relatively disadvantaged position of North American businessmen following the War meant that when the African slave trade reopened in 1783, it was left in the hands of a few wealthy vendors. Indeed the concentrated nature of investment in the slave trade is clear from this work and it is perhaps here that McMillin makes his most significant contribution. In Charleston, 60 percent of all slaves imported were sold by a group of eighteen individuals and firms. The most active firm, Austin, Laurens, and Appleby, sold as many as 60 separate slave cargos. From these early years, the city’s trade grew to such an extent that from 1804 to 1808, Charleston became “one of the great slaving ports of the world” (94), its ships exceeding the number of vessels that made slaving voyages from London and Bristol, England, in the four-year period. As McMillin rightly concludes, the end of the slave trade surely dealt a major blow to the Charleston shipping industry.

Readers interested in an Atlantic World perspective may be disappointed in the near total lack of attention paid to the relationship between developments in Africa and their effect on the North American slave trade. Although the author recognizes that “geography and economic, political, and social forces, not only in North America, but in Europe and Africa as well, continued to bear on the trade” (71), New World factors are certainly privileged. However, scholars familiar with slave trader accounts written in Africa may question whether an American planter’s ability to “specify the quantity, gender, age and origin of slaves” (60) meant much to a captain struggling to complete a slaving voyage along the Guinea Coast, where slaves were often purchased two or three at a time and captains were rushing to avoid confrontation with deadly diseases. Now that the idea of African agency in the development of the Atlantic World is beyond question, pointing out such an omission is more than just the reviewer’s wish that the author had written a different book. Finally, McMillin is to be commended for providing a dataset of more than 1,700 slaving voyages, though as a pdf file some might find it difficult to work with.

Note:

1. Philip Curtin, The Atlantic Slave Trade: A Census. Madison: University of Wisconsin Press, 1969, p. 140; Robert W. Fogel and Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery. Boston: Little, Brown, 1974, p. 25.

Philip Misevich is a Ph.D. candidate at Emory University. His article, “In Pursuit of Human Cargo: Philip Livingston and the Voyage of the Sloop Rhode Island,” will appear in the August 2005 issue of the journal New York History.

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

Growing Public: Social Spending and Economic Growth since the Eighteenth Century, Volume 2: Further Evidence

Author(s):Lindert, Peter H.
Reviewer(s):Margo, Robert A.

Published by EH.NET (June 2004)

Peter H. Lindert, Growing Public: Social Spending and Economic Growth since the Eighteenth Century, Volume 2: Further Evidence. New York: Cambridge University Press, 2004. v + 230 pp. $70 (cloth), ISBN: 0-521-82175-4.

Reviewed for EH.NET by Robert A. Margo, Department of Economics, Vanderbilt University.

Earlier this year I reviewed Volume 1 of Peter Lindert’s new book, Growing Public: Social Spending and Economic Growth since the Eighteenth Century, for EH.Net. This is a book about why countries spend more today on public schools, welfare, public pensions, and redistribution in general than in the past. Volume 1’s intended readership is the general public and thus technical apparatus is kept at a bare minimum. For social scientists eager to see how the sausages (data) are made or who otherwise prefer first order conditions and regression equations to prose, there is Volume 2. This is a (self-contained) review of Volume 2 but to fully understand what is going on, the reader should refer to my earlier review of Volume 1. Lindert is Distinguished Professor of Economics at the University of California, Davis, and a Research Associate of the National Bureau of Economic Research.

Volume 2 is divided into a preface, seven substantive chapters, and seven appendices. The chapter numbers begin with thirteen. (Volume 1 ends with chapter twelve.) Chapter 13 presents the theoretical framework that underlies the analysis in Volume 1. Chapters 14-18 present the regressions that correspond with the analogous chapters in Volume 1. Chapter 19, “Reconciling Unemployment and Growth in the OECD” (with Gayle J. Allard) appears to be stand-alone (although clearly related).

Just as it is impossible to figure out fully what is going in Fogel and Engerman from reading just Volume 2 of Time on the Cross, one cannot fully appreciate Lindert from reading just Volume 2 of Growing Public. Busy social scientists can get the gist, however, by reading Chapters 13, 14, and one of 15-17 (probably 15 is best), and maybe 18 (the effects of social spending on growth).

In the long run, the biggest contribution that economic history makes to scholarship is the production of fresh data. Whether or not one agrees with Lindert’s analysis, one can thank him for (and use) his data. These data consist of three country-level panels. The first pertains, approximately, to the 1880-1930 period; the second two, approximately, to the post-1960 period. The principal data are available on-line (at Lindert’s website at the University of California at Davis). Some of the historical schooling data are printed in the appendices, along with detailed source notes for them — not enough (in my opinion) to literally reproduce each figure with ease, but more than enough for those who wish to probe deeper into the sausage making.

Chapter 13, as just noted, presents the theoretical framework, a version of Gary Becker’s well-known “pressure group” model. According to this model, individuals have a utility function defined over their own consumption, and possibly that of two other groups, one of which is to receive a positive transfer from the government and the other is to be taxed. These “caring” coefficients are positive; that is, the individual values positively the transfer to the subsidized group but also has her utility reduced from the fact that the taxed group has to finance the transfer. Utility is also a negative function of the deadweight losses occurring because of the transfer. Individuals can undertake actions (spend money) to favor or oppose the transfer, or possibly do nothing. The government in this framework is a passive actor; that is, there is an assumed function that maps the value of the transfer into the aggregate amounts spent in favor or in opposition. Under certain conditions, a “pure strategies” Nash equilibrium will exist.

This simple framework yields predictions that, broadly speaking, conform with the historical evidence on social spending (for example, if individuals are very poor they will likely place a high value on their own consumption, and choose to not participate rather than lobby in favor or oppose a policy). On the other hand, the model is not well suited, in my opinion, for understanding changes over time in voting rights. Preferences are also taken as given, although there is ample evidence from the historical record that whether or not a polity views “outsiders” as worthy of support (or derision) can be manipulated by politicians.

The chapters on social spending (15-17) all share more or less the same basic regression specification (18 is also similar in this regard). Rather than review each separately, I think it is more helpful to elucidate the specification, focusing on the implementation in Chapter 15. Although the criticisms made below are specific to Chapter 15 some of them are also relevant, albeit in different form, to the other chapters.

The basic specification consists of two structural equations:

Social spending = a + b*voting rights + c*per capita income + d*growth in per capita income over the previous ten years + other X’s + error

Growth = e + f*social spending + other Z’s + error

Growth and per capita income are endogenous in the social spending equation, while social spending is endogenous in the growth regression.

“Voting rights” are measured by dummy variables for autocracies and whether or not women voted in the recent past; a cubic polynomial in percent enfranchised; and turnover of the chief executive. The autocrat dummy and the percent enfranchised are predicted values from a first stage regression. In some cases the actual equations estimated depart from this basic specification by leaving out one or more right hand side variables. For example, some equations include a full set of country and time period dummies, while others do not.

With regard to the rise of social spending Lindert’s key point is that voting rights matter (see my review of Volume 1). As voting rights are extended into the population, social spending rises, but it does not do so in a nice, linear fashion. Lindert attempts to capture this non-linearity with the cubic polynomial and the dummy variables. Using the regressions coefficients, Lindert presents (many) computations of “effects” — these are simulations as to what happens to a particular type of social spending if voting rights are extended. These computations clearly show that voting matters — for example, the public school enrollment clearly increases as the franchise is extended from 30 to 80 percent of the adult population (p. 36).

As with all econometrics a key issue is identification. What is Lindert’s identification strategy? In a phrase: arbitrary exclusion restrictions. The general strategy is diagrammed in Figure 14.1 (the specific implementation differs across time periods because of data availability). Per capita income depends on social spending and vice versa. Per capita income also depends on “accumulated prior capital,” a lagged Gershenkron-like “catch-up” variable in per capita income, various “global” variables, plus fixed country and time effects. Social spending also depends on demographics, religion, openness, “social affinity” (ethnic fractionalization), and the voting regime. “Prior accumulated human capital” does not appear in the spending equation, nor does the voting rights regime or religion appear in the growth regression. However, models of the intergenerational transmission of human capital would seem to suggest prior accumulations matter in social spending. Excluding voting rights from the growth equation (see Appendix Table D2) implies that autocracy does not affect growth. Recent work by Robert Barro, among others, suggests that religion should not be excluded from the growth regression.

The first stage regressions of the voting rights variables, as reported for the 1880-1930 period, are problematic. These equations, shown in Table 15.3, are regressions of the autocrat dummy and the percent enfranchised on lags of these variables plus lagged per capita income, lagged school enrollments, lagged percent urban, a variable measuring the growth of the global economy plus two dummies for whether the country recently lost a war. There are no country fixed effects in these regressions.

The use of lagged values of voting rights as instruments is not very convincing if there is any serial correlation in social spending. The issue is not whether past values of voting rights predict current values — this is not surprising, particularly when there are no country fixed effects in the regression — but whether transitions from one regime to another can be viewed as credibly exogenous to the process that drives social spending. It is difficult to imagine why the percent urban in the recent past affects voting rights but not social spending or growth. Wars sometimes occur for unpredictable reasons. Autocrats (and democracies) need soldiers (and others) to fight wars. When a war is won the victor might extend political rights to the previously disenfranchised out of gratitude. The losing side might be forced to extend the franchise as a condition of surrender. So war is a candidate instrument for voting rights — and it “works,” in the sense that the two dummies are significant (positive) predictors of percent enfranchised (but not the autocrat dummy — nothing matters here, except for lagged values of the voting regime). However, it is easy to imagine that war might affect social spending or growth in a direct manner, or indirectly through subtle changes in demographics that are not adequately captured by the controls Lindert includes.

I am not saying we should be dismissive of Lindert’s conclusions merely because of quibbles with the econometrics. Personally I believe that voting rights matter for the rise of social spending, and I also believe that any deleterious effects of social spending on growth have been greatly exaggerated. However, some (technically obsessed) readers, unaware of the pain and suffering necessary to produce data like those analyzed in this book, might be less forgiving out of hand and that is unfortunate. I wish the presentation in Volume 2 were clearer and the justification of the identification strategy more convincing. I also wish the implementation of the econometrics was more straightforward. (For example, I would have preferred starting with a “reduced form” social spending regression on just the voting rights regime, to which is then added county and time dummies, and maybe country-specific linear time trends. If voting rights survive this stringent an econometric test, we can take notice. If it does survive we could add more variables or try some instruments for voting rights, consider adding growth as an endogenous variable, and so on).

My review of Volume 1 concluded that it was important and deserved a wide readership. Although I am troubled by some of the econometrics in Volume 2, that does not change my assessment of Volume 1. The data are a fundamental and lasting contribution. Regardless of what one thinks of the specifics of the empirical analyses, there is surely much to the story. In any case, because the data are available everyone can run their own regressions.

Robert A. Margo is Professor of Economics and of History at Vanderbilt University, and Research Associate, National Bureau of Economic Research. He is the editor of Explorations in Economic History.

Subject(s):Historical Demography, including Migration
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

Growing Public: Social Spending and Economic Growth Since the Eighteenth Century, Volume I: The Story

Author(s):Lindert, Peter H.
Reviewer(s):Margo, Robert A.

Published by EH.NET (April 2004)

Peter H. Lindert, Growing Public: Social Spending and Economic Growth Since the Eighteenth Century, Volume I: The Story. New York: Cambridge University Press 2004. ix + 377 pp. $65 (hardcover), ISBN: 0-521-82174-6; $24 (paperback), ISBN: 0-521-52916-6.

Reviewed for EH.NET by Robert A. Margo, Department of Economics, Vanderbilt University.

Peter Lindert is one of the most prolific economic historians on the planet. In early 2003, I walked into the MIT Press bookstore and purchased a copy of what was, at the time, his latest book — on soil erosion — very recently published. It’s not his latest, however — that would be Growing Public: Social Spending and Economic Growth since the Eighteenth Century, the subject of this review. Lindert is Distinguished Professor of Economics at the University of California, Davis, and a Research Associate of the National Bureau of Economic Research.

Lindert has always followed the McCloskey fifty-year rule — that is, he only works on topics that are really important. Growing Public is about a central topic. Why do governments spend so much more on “social spending” today than they did, say, two hundred, or even one hundred, or even fifty years ago?

Like Time on the Cross, another work satisfying the fifty-year rule, Growing Public is in two volumes. Volume 1 — subtitled “The Story” — is “written for human beings,” while Volume 2 is written for “social scientists.” Operationally, this means that simple tables and figures abound in Volume 1 but no math (save a bit of algebra here and there) and no regression equations. The “story” is explicitly comparative and makes use of a wide range of data and secondary sources. This is a review of Volume 1; at the time of writing, Volume 2 was not yet available. A separate review of Volume 2 will follow.

Volume 1 is divided into four parts, with twelve chapters in total. Human beings with short attention spans can get the fundamentals of the book by reading the first two chapters. These set forth two puzzles and summarize the key findings, nine in all. The two puzzles are the “Robin Hood” paradox and the “free lunch” paradox. The Robin Hood paradox is really the stylized fact that motivates the book: social spending is negatively correlated with poverty and with inequality. The paradox, according to Lindert, is that social spending “ought” to be higher where people “need it” — poverty is high — and when there are relatively few rich compared with the poor, so the rich can be soaked — inequality is high. But history is not so kind: social spending is higher in rich countries that have a relatively equal distribution of income and wealth.

The second puzzle is the free lunch puzzle. According to the textbook models of supply and demand, taxes and transfers are supposed to produce deadweight losses. Deadweight losses are not supposed to promote economic growth. Yet, according to Lindert, the data provide very little evidence that social spending is negatively associated with growth; social spending seems to be a free lunch.

The nine principal findings appear conveniently on pages 20 and 21 of Volume 1. Rather than repeat them here, I summarize the key motifs. Motif #1 is that political voice matters. Social spending rises when political voice is relatively equalized; that is, when the franchise is extended. This is the resolution of the Robin Hood paradox. Motif #2 is that Rawls matters: when the middle ranks of society really know what it is like to be poor — either through personal experience, or because the poor “look like them” (ethnic homogeneity) — social spending rises. Motif #3 is that social spending doesn’t harm growth because governments aren’t stupid. When social spending is a large fraction of GNP, taxes and transfers are designed to reduce (“minimize” is probably too strong a word) deadweight loss. This is the resolution of the free lunch paradox. Moreover, even when the interventions do look stupid on paper — a minimum wage, say, close to the median wage, or draconian laws governing the firing of workers — they aren’t really as costly as they look, because the people who aren’t employed aren’t very productive anyway, and the “leisure” they enjoy has economic value.

Part Two of the book, composed of chapters 3 through 7, focuses on the rise of social spending. Chapters 3 and 4 are about poor relief. Chapter 3 presents an overview of the early (pre-twentieth century) history of poor relief. In a phrase, life for the poor was nasty, brutish, and short. Measured as a fraction of per capita income, most governments spent very little on poor relief, with very little trend in generosity. There was, as Lindert notes, one interesting, albeit partial exception to this general pattern — England, which experienced a sharp rise in poor relief spending after 1750 and an equally abrupt decline after 1820. Lindert also claims that very little “crowding out” took place because private relief was almost as non-existent as public relief. Chapter 4 explains the major empirical patterns in early poor relief, emphasizing politics and decentralization. Borrowing heavily from George Boyer’s well-known work on the subject, Lindert argues that England was an early leader in poor relief because large landowners wanted to keep their rural labor supply around in the winter. The locus of control mattered because, in the early history of poor relief, more support for helping the poor could be generated at the local level rather than as the national level.

Chapter 5 focuses on the expansion of public schooling before World War I. Among other findings, Lindert points out that, once its statistics are properly interpreted, France was actually an early leader in education. As in the case of poor relief, the self-interest of elites, voting rights, and centralization play important roles. The non-Southern U.S. was also an early leader, because school finance was largely a local issue and because voting rights were (relatively-speaking) widespread. Communities that wanted to tax themselves for the support of public schools could, in other words, without interference from a central authority.

Chapter 6 is titled “Public Schooling in the Twentieth Century” but the title is somewhat misleading, being that the chapter is really about America’s position relative to other countries in the late twentieth century. As is well known, American students lag behind other countries in scores on internationally comparable tests of school achievement. Lindert considers, and ultimately rejects, several well-known explanations for the test score gap, but does acknowledge that the gap might reflect poor incentives to take such tests seriously, and declines in competition among schools, brought on by school consolidation and the rise of teacher unions. Chapter 7, “Explaining the Rise of Social Transfers since 1880,” closes Part II. Enfranchisement, aging populations, “globalization”, rising per capita income, and whether or not the middle class can relate to the impoverished (important, Lindert thinks, because of the Great Depression and World War II) are offered as explanations.

Part Three, made up of Chapters 8 and 9, focuses on prediction. Chapter 8 examines public pensions in the distant and not-so-distant future. It reaches two conclusions: aging populations will have to give something back (as the proportion B of the population is retired, the willingness of 1 – B to support them goes down) and that pay-as-you go is here to stay. Chapter 9 asks whether the history of social spending in rich countries applies to the developing world as it develops. For the most part, Lindert says “yes,” but notes that pension crises in such countries may have more to do (in the short run) with government mismanagement than aging populations per se.

Chapter 10 elaborates on the “free lunch” puzzle. Standard blackboard economics “demonstrates” that, most of the time, taxes have a deadweight loss. More elaborate blackboard economics, a.k.a. simulation models, add numerical magnitudes to the chalk talk. Both, according to Lindert, are “educated fiction.” When we turn to the “facts” as elucidated by panel regressions, it is difficult to find any negative effect of the welfare state on growth. This, Lindert claims, is no accident. West European countries that have embraced high levels of social spending choose taxes that have relatively small deadweight losses and pay attention to disincentive effects. Labor force participation has fallen in these countries but labor productivity of those working has gone up, partly due to a composition effect and partly because some of what government spends money on — schools, public health, and so on — is growth enhancing. Chapter 11 is a case study of the free-lunch puzzle, focusing on Sweden. Lindert argues that relatively slow growth in Sweden in recent decades can be blamed on bad macroeconomic policies, not the welfare state. Chapter 12, very brief, offers further reflections on the free lunch puzzle, emphasizing two points, the “budget stakes principle” and “universalism.” The budget stakes principle says that if a country spends more on welfare policies, it takes greater care in designing efficient taxes and transfers. Universalism says that the costs of administering the welfare state are lower if taxes and entitlements are broad based. There is no concluding chapter as such.

Volume 1 of Growing Public is a mixed bag. There is no question that the subject matter is first order important and no question that Lindert has an incredible command of a vast array of historical and contemporary evidence. If my casual empiricism is any guide, there are many among us (not me) who embrace comparative economic history as a superior methodology and will, therefore, find the approach (if not all the details) compelling.

However, the book is not as well-written as it could or should be. Some portions read like rough drafts of working papers as opposed to polished, finished products. Chapter 6, as noted, is mis-titled; there should be a Chapter 5.5 that is much broader in score. I cannot pretend to the same scope of knowledge as Lindert, but as to the stuff I do know, I find myself with raised eyebrows at certain passages. Chapter 3 fails to cite, for example, anything in the Summer 1997 special issue of the Quarterly Review of Economics and Finance, which is all about nineteenth century U.S. poor relief. Pages 124-126 of Growing Public discuss public schools in the South in the early twentieth century. Lindert writes (bottom of page 125, top of page 126): “One could rightly ask whether Southern employers would not have felt an incentive to pay taxes for schools that would keep … laborers from leaving [the South]. Why didn’t they use schools as a magnet against emigration, just as in the Northeast?” At this juncture Lindert cites (vaguely) my work (Margo, Race and Schooling in the South, 1880-1950: An Economic History, chapters 2-5). But, as pointed out in my book [pp. 48-49] and in a paper in the Quarterly Journal of Economics (1991, not cited by Lindert) Southern local governments did consider the threat of exit in deciding how much discrimination against black schools they could get away with. Chapter 10 discourses about the static deadweight losses of taxes and transfers, but moves on to measuring dynamic effects on growth without doing much to help the reader link the former to the latter.

This is a review of Volume 1, not Volume 2, where the panel regressions reside and which I haven’t seen yet. Still, I am struck as I read Volume 1 at how certain issues don’t seem to show up in the text as much as I thought they would (or should). Causality is a case (actually, the case) in point. A dominant issue these days in contemporary econometrics is exogeneity — is an estimated “treatment effect” truly causal, or just a correlation? Lindert is telling us that voting matters. On a priori grounds, it does not seem plausible that variations in voting rights, across countries or within countries over time, are random, dropped (by governments) from proverbial helicopters. Maybe some of this variation, however, is credibly exogenous, the outcome of forces that are uncorrelated with social spending. What, exactly, are these forces? Perhaps I missed something — and perhaps I will read more about it in Volume 2 — but Lindert doesn’t really tell us much about identification in Volume 1.

Criticisms aside, Volume 1 of Growing Public is an important book that will be widely read and debated. I look forward to Volume 2.

Robert A. Margo is Professor of Economics and History at Vanderbilt University, Nashville, TN, and a Research Associate of the National Bureau of Economic Research. He is the Editor of Explorations in Economic History.

Subject(s):Historical Demography, including Migration
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

Sexual Revolutions: Gender and Labor at the Dawn of Agriculture

Author(s):Peterson, Jane
Reviewer(s):Steckel, Richard H.

Published by EH.NET (June 2003)

Jane Peterson, Sexual Revolutions: Gender and Labor at the Dawn of Agriculture. New York: Altamira Press, 2002. xii +177 pp. $70 (hardcover), ISBN: 0-7591-0256-2; $26.95 (paperback), ISBN: 0-7591-0257-0.

Reviewed for EH.NET by Richard H. Steckel, Departments of Economics and Anthropology, Ohio State University.

Generations of economic historians have examined the evolution of labor organization, emphasizing patterns of the industrial era. Many recent efforts consider changes in women’s work over the past century that accompanied declining fertility, rising levels of education and new opportunities for employment in the industrial world. Sexual Revolutions extends the agenda far back in time, to the dawn of settled agriculture. Jane Peterson, who is assistant professor of Anthropology at Marquette University, asks how the rise of farming may have created or changed the sexual division of labor in the southern Levant (the modern regions of Palestine, Israel, and Jordan) as long as 10,000 years ago. One strand of the literature cites biological differences between men and women such as size, strength and the burden of pregnancy and childrearing as the fundamental sources of sexual labor patterns. Others claim that agriculture triggered significantly new labor roles for men and women.

There are no drawings or graphic images, much less written accounts of the process, and so anthropologists and archaeologists must construct their portraits from surviving remains of ancient cultures. Skeletons occupy center stage in this study, suggesting ways that the body adapted to mechanical and biological stress. Peterson explains that the wellsprings of this methodology originated in the late nineteenth century, when surgeons and anatomists observed that the type and intensity of work helped to sculpt the body. Doctors identified skeletal modifications with various occupations or habitual activity patterns, features that have been refined by modern industrial, sports and forensic medicine.

Skeletal Markers of Occupational Stress (MOS) may be confounded by nutrition, disease and other factors, and so Peterson is appropriately cautious in qualifying results. Bony changes are commonly interpreted within the framework of Wolff’s Law, which states that skeletal tissue places itself in the direction of functional demand. Because it has a blood supply, the skeleton remodels or responds to mechanical forces throughout life. Indicators used in the book include joint modification, trauma, and the sizes and shapes of ligament attachments. The latter take the form of bone buildup, rough patches and projections that can be graded using a visual reference system, as illustrated by photos in the book. Some repetitive motions, such as throwing, leave well-defined bony signatures, but other actions are the complex outcome of a large suite of muscle groups that are not easily identified with particular activities. Many actions utilize similar muscle groups, making it impossible, for example, to distinguish repetitive downward blows in pulverizing soil from chopping wood. Contextual information about inhabited sites, obtained from the remains of structures, tools, material goods, animal bones and so forth help to identify likely activity patterns associated with specific skeletal formations.

Although Peterson draws upon the work of other researchers to formulate and test hypotheses, her major contribution originates from careful study of 158 individual remains (93 males and 65 females) that were excavated at 14 sites. Seventy-two of the skeletons fall into the Natufian period, which predates settled agriculture. The hypothesis of sexual division of labor is supported for this period, with well-developed muscle attachments for overhand throwing among the males, while female musculature was oriented toward bilateral tasks associated with processing. During the Neolithic, male activities became increasingly bilateral, more closely resembling the female pattern while activity patterns became more intense for both sexes.

In appraising the book by standards familiar to economic historians, who often work with large quantities of data, one could easily complain about the small sample sizes. Economic historians are familiar, however, with ambiguous or qualified results, which in this case follow from limits in connecting detailed features of skeletal development with specific activities. On the upside, this is a local study and far more evidence is available on a continental or global scale for the transition under consideration. Moreover, the methodology on display is relatively recent and the outlook is promising for developing more nuanced and robust interpretations of activity patterns from skeletal evidence.

At first blush the methods articulated in Sexual Revolutions may appear to be uninteresting or of little use to economic historians, but applications do exist. One involves interpretation of high rates of productivity among American slaves, reported by Robert Fogel and Stanley Engerman in Time on the Cross. They claim this follows from the organization of work in gangs — a type of factory in the field. An alternative explanation, however, is exertion or speed-up– drivers simply forced slaves to work more intensively so that they produced more than free white farmers. Skeletal evidence may be able to distinguish between these explanations, in that slaves who worked intensively in the field should have had more robust skeletons and larger muscle attachments than those of free whites. Second, Robert Fogel recently argued that prior to the agricultural revolution of the nineteenth century, many European peasants had such poor diets that they were incapable of a full day’s work (and by extension, considerable physical exertion). If correct, their skeletons should have been relatively frail and lacking large muscle attachments that characterize more vigorous populations. In sum, skeletons provide useful markers of physical vigor and activity that can be useful for interpreting sources of long-run productivity growth. Thus, economic historians have good reasons to remain tuned to developments in this area of research.

Richard H. Steckel’s latest book (co-edited with Jerome Rose) is The Backbone of History: Health and Nutrition in the Western Hemisphere (Cambridge, 2002), which employs skeletal remains to investigate long-term trends in health.

Subject(s):Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):Middle East
Time Period(s):Prehistoric