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The Market, the State, and the Export-Import Bank of the United States, 1934-2000

Author(s):Becker, William H.
McClenahan Jr., William M.
Reviewer(s):Bean, Jonathan J.

Published by EH.NET (July 2003)

William H. Becker and William M. McClenahan, Jr., The Market, the State, and the Export-Import Bank of the United States, 1934-2000. New York: Cambridge University Press, 2003. xii + 340 pp. $80 (cloth), ISBN: 0-521-81143-0.

Reviewed for EH.NET by Jonathan J. Bean, Department of History, Southern Illinois University – Carbondale.

In recent years, “globalization” has become a hot topic in U.S., European and world politics, as young (and not-so-young) demonstrators have taken to the streets protesting free trade and the policies of the World Bank and the International Monetary Fund. The resulting media attention has raised the name recognition of those institutions. Yet very few Americans could properly identify the Export-Import Bank as “the United States’ export credit agency” (p. ix) and one of the country’s chief instruments of free trade. In this superbly researched monograph, Becker and McClenahan highlight the important role “Ex-Im” has played, not only in promoting international trade but also in serving U.S. foreign policy interests. In so doing, they have made an important contribution to the scholarly literature on international trade. The hefty price tag and thick narrative, however, will prevent this book from reaching a broader audience.

This is a commissioned history; Becker and McClenahan were successful bidders for a sixty-fifth anniversary commemoration of Ex-Im’s founding. Despite its commemorative status, this is a serious scholarly study enriched by “full access to the Bank’s records and to its personnel,” including many oral interviews with agency history makers (p. x). In addition to on-site records, the authors delved into documents at the National Archives and at other government agencies. The Export-Import Bank agreed to ongoing peer review by the eminent professor of economic history Richard Sylla (New York University) and the authors retained copyright. The end result is an exhaustively researched manuscript that stands among the best-documented histories of any federal agency.

The Export-Import Bank began as the offspring of President Franklin D. Roosevelt’s diplomatic recognition of the Soviet Union in December 1933. Two months later, prodded by U.S. exporters hoping to pry open a new market, FDR established, by Executive Order, an Export-Import Bank to finance trade with the U.S.S.R., a venture that foundered on the issue of unpaid pre-revolutionary loans. Simultaneously, Roosevelt created a second Export-Import Bank to do business with a new, friendly regime in Cuba. The Banks’ trustees merged the two banks into one — originally financed by the Reconstruction Finance Corporation — and expanded Ex-Im’s mission to include markets around the world, except the U.S.S.R. The Bank received Congressional backing in 1935 and became an independent agency ten years later. By statute, Ex-Im was to avoid competing with commercial banks; assume risk on longer-term loans that they would not accept; yet still assure a reasonable chance of repayment. At the same time, President Roosevelt and his successors repeatedly called on the Bank to serve foreign policy ends that went against the grain of these statutory requirements. Thus, from the beginning, Ex-Im served the conflicting interests of exporters and the foreign policy establishment of the U.S. government. In short, the Bank navigated uneasily “between the state and the market” (p. 8) throughout its history.

One major theme is that “businesslike values” (p. 2) permeated the Bank but U.S. diplomats “tested many times” this “core market orientation” (p. 3). Tested indeed! The authors spend so much time on the fascinating, ever-changing role Ex-Im played in foreign policy that the reader gets the impression that the bankers at Ex-Im were helpless pawns in the hands of diplomats and governments friendly to the United States. This is undoubtedly a false impression gained by the weight of presentation, yet one that could have been countered by more frequent mention of “businesslike” statistics such as loan loss rates, profitability, and so on.

As it stands, the foreign policy story is one that should interest diplomatic historians: During the late 1930s, Ex-Im made risky loans to Latin American countries to forestall German Nazi intervention; after World War II, the Bank was the first U.S. agency to help reconstruct Western Europe before the Marshall Plan went into effect; during the 1950s and 1960s, it financed development projects in the Third World to counter communist movements. Later, in the 1970s, Ex-Im negotiated with the Organization for Economic Cooperation and Development (OECD) to “level the playing field” among export credit agencies in Europe and North America after that era’s brutal trade wars.

The past two decades have proven particularly challenging for the Export-Import Bank. The Reagan Revolution of the 1980s brought to power laissez-faire conservatives who were skeptical of subsidies for bankers. Meanwhile, a Third World debt crisis and a strong dollar led to plummeting U.S. exports, a weak Ex-Im portfolio, and a severe institutional crisis. During the early 1990s, however, the Bank “reinvented” itself by abandoning the direct credit market and relying almost exclusively on loan guarantees through private banks. The authors note that this strong market orientation is unique among Western export credit agencies, which are much more state-oriented. In the epilogue, the authors reflect on recent international financial crises that have reintroduced the potential of Ex-Im as a “lender of last resort” when private capital flees foreign markets.

There is no evidence of institutional bias in this organizational history. Becker and McClenahan give plenty of airtime to critics who have accused Ex-Im of serving as “corporate welfare” and as an agent of the U.S. military-diplomatic-industrial complex. If anything, their judgments on these controversies are too even-handed: After presenting both sides, the authors frequently hedge their judgments, leaving the readers to judge for themselves the merits of the case. A bit more controversy might have spiced up an otherwise dry and neutral presentation of the facts. For readers short on time, the authors provide a splendid summary in their introduction. Specialists will gain much more, however, from the detailed narrative that follows. Overall, this book earns “two thumbs up.”

Jonathan J. Bean is Professor of History at Southern Illinois University – Carbondale. He is the author of Big Government and Affirmative Action: The Scandalous History of the Small Business Administration (University Press of Kentucky, 2001).

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Modelling the Middle Ages: The History and Theory of England’s Economic Development

Author(s):Hatcher, John
Bailey, Mark
Reviewer(s):Richardson, Gary

Published by EH.NET (March 2003)

John Hatcher and Mark Bailey, Modelling the Middle Ages: The History and

Theory of England’s Economic Development. Oxford: Oxford University Press,

2001. xiii + 254 pp. $49.95 (cloth), ISBN: 0-19-924411-1; $19.95 (paperback),

ISBN: 0-19-924412-X.

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

California, Irvine.

Modelling the Middle Ages, by John Hatcher and Mark Bailey, provides a

cogent and comprehensive survey of the history and economics of late medieval

England and an invaluable survey of the history of thought concerning those

topics. Scholars interested in these issues should read this book. It will be

especially valuable for graduate and undergraduate economic history courses,

where I expect it to be widely adopted, and for researchers, like myself, with

an interest in medieval England but who had to learn the material on their own,

because they studied at institutions that lacked leading (or any) scholars in

the field. I base my strong recommendation on three features of the text:

First, the book is insightful. It demystifies the beliefs underlying the

arguments of most economic historians — beliefs derived from intellectual

foundations established in the eighteenth and nineteenth centuries by Adam

Smith, Thomas Malthus, David Ricardo, Karl Marx, and other eminent scholars. It

explains how and why the work of those intellectual forefathers generated three

grand explanatory models, “population and resources,” “class power and property

relations,” and “commercialization,” and how those models influenced debates

among historians and social scientists concerning the causes and consequences

of economic development during the Middle Ages.

Second, the book is useful, in the most practical sense of the term. It

summarizes two hundred years of scholarly literature in a few hundred pages

while building a framework, a lexicon, and a syntax that will allow scholars to

compare and contrast their ideas more precisely than they currently can. It

will have wide applications in other fields, such as global history,

particularly global history, where similar models form the foundation of

similar debates.

Third, the book is clear, lucid, and accurate. In some cases, the book explains

author’s ideas better than the original expositors did themselves. The clarity

of the prose and the organization of the argument assure the material will be

accessible to students at all levels.

The foreword and introduction establish the motives of the authors and sketch

an outline of their argument. The authors hope to fulfill a “pressing need of

undergraduate students studying the medieval economy for an introduction to the

theory and practice behind the grand models of development which dominate the

subject (p. vii).” As I mentioned earlier, they more than accomplish that goal.

The authors also hope to contribute to the ongoing scholarly debates concerning

the economic development of medieval England. They plan to compare and contrast

the intellectual and empirical content of the methods and models used to study

medieval English economic history and in doing so shed light on the advantages

and disadvantages of each method as well as advance our knowledge of the Middle

Ages. They also accomplish this goal, as my description of the remainder of the

book, and hopefully your reading of the text, should demonstrate.

Chapter 1, Methods and Models, explains “why the medieval period has proved so

attractive to the builders of historical models, and theorizing so attractive

to medieval historians (p. 3).” The Middle Ages lasted for more than five

centuries. During that long era, transformations occurred in almost every area

of economic and social life. Merely describing these changes is a challenging

task. “Historians cannot hope to describe, analyze, and explain them by

gathering and narrating factual information alone (p. 4).” They must choose to

present certain facts and materials but not others. Their emphasize depends

upon their point of view, their prior beliefs, and the point which they wish to

make. Theory and speculation are therefore indispensable ingredients of any

grand survey. They impose a degree of coherence and clarity and force scholars

to fit the facts into a manageable working framework. In this way, order can be

imposed upon the chaos of vast numbers of pieces of information and answers

formulated to crucial questions. In addition, abstract concepts and formal

models help scholars explain why things happened as they did and what might

have happened in counterfactual cases. Explaining such things requires more

than mere narration. Historical changes lasting several centuries and

penetrating all spheres of economic, social, and political activity were the

culmination of an infinite number of individual events. No one can describe

them all. Comprehending them requires analysis, a systematic approach to the

material, the sorting and grading of information, and the weighing of the

relative merits of different concepts. Models, in other words, are needed to

seek the reasons behind vast historical processes such as the rise and decline

of serfdom and feudalism, the rise of the money economy and capitalism, the

rise and contraction of economic activity, and the growth of urbanization and

industrialization.

Chapter 2, Population and Resources, focuses on the first of the grand

supermodels, and the ways in which assumptions influence its results and in

which it impinges on historical analysis “in both a helpful and harmful

manner.” The population and resource model, also known as the demographic or

Malthusian model, stems from a core set of simple economic relationships. The

productivity of agriculture depends upon the relative scarcity of the two prime

factors of production: land and labor. As addition units of one input are

employed while the others are held constant, the output generated by each

additional unit will eventually fall (diminishing returns). Thus, when land is

abundant relative to labor, the productivity of the land will be low. The

productivity of labor will be high. Products of the land, like foodstuffs and

raw materials such as leather, wool, and wood, will be inexpensive. Wages will

be high. When labor is abundant relative to land, the productivity of the land

will be high. The productivity of labor will be low. Food and rents will be

expensive. Real wages will fall. There is clear potential for applying such

basic supply and demand analysis to conditions prevailing in medieval England.

“There is abundant evidence to show that over the longer term there was a

strong correlation between rising population, on the one hand, and increasing

land values and agricultural prices, and falling real wages, and, on the other,

between declining population, falling prices and land values, and rising real

wages. By this analysis the Middle Ages falls into two sharply contrasting

periods; with the broad experience of much of the era up until the fourteenth

century conforming to the former set of circumstances, and the later

characteristics persisting throughout much of the late fourteenth and fifteenth

centuries” (pp. 22-23).

Chapter 3, Class Power and Property Relations, examines the second grand

supermodel, which begins with the presumption that the keys to understanding

the economic development lie in the social relations and political and legal

institutions of society. Of particular importance are the “relations between

the leading classes and in developments of what are termed the ‘mode of

production'” (p. 67). The most popular models of this type are those

constructed by Karl Marx and his intellectual descendants. For Marxists,

“history is a dialectical process in which the future is shaped by the present,

just as the present was shaped by the past, and each distinct era of human

development — ancient, oriental, feudal, capitalist — generates from within

itself the conditions which will ultimately transform it” (pp. 67-8). Marxists

focus their attention on a limited range of issues, particularly relations and

conflicts among social classes as well as the mode, means, and relations of

production, as the main agents of social and economic change and development.

Thus, the dynamic for the transformation of medieval society lay primarily in

the relationship between lords and peasants, who were the two principle classes

of feudal society. The relationship was inevitably one of conflict, due to the

opposing interests of landlord and tenant, and eventually resulted in a ‘crisis

of feudalism,’ whose “onset is usually located in the late thirteenth and early

fourteenth centuries” (p. 71). At that time, the increasingly excessive

depredations of the landlord class undermined agricultural productivity,

plunged the peasantry into poverty, and inspired them to struggle against the

exploitative social system.

Chapter 4, Commercialization, Markets, and Technology, focuses on commercial

activity and technical progress. The bulk of the space is devoted to the

rapidly expanding evidentiary base and to the discussion of ways in which

markets and technology could overcome Malthusian, Ricardian, and Marxist

constraints on economic development. There are two basic theories. Improvements

in agriculture — such as improving land management, crop rotation, and

selective breeding of crops and animals — raised the productivity of land and

labor. Urbanization and commercialization expanded the scope of the market, the

division of labor, and the wealth of nations.

Chapter 5, The Importance of Time and Place, explores the weaknesses of the

models discussed in the previous chapters from three different perspectives.

The first exposes the difficulties that emerge when the models are applied to

both the early and later Middle Ages. In each case, assumptions needed to apply

and conclusions drawn from the application of a model to the earlier era

conflict with those from the later period. The second reviews the wide range of

alternative models that have been proposed and which illuminate inadequacies in

existing models. The third tests the validity of the assumptions and methods of

each of the major supermodels by applying them to a particular test case: the

rise and decline of serfdom in medieval England.

Chapter 6, Beyond the Classic Supermodels, stresses the limitations of the

models described during the previous chapters. The principal flaws are their

neglect of social factors, institutions, historical contingency, and the

uncertainties inherent in individual behavior and group dynamics. The chapter

ends on a hopeful note, by suggesting ways in which the limitations of these

models might be overcome historically, empirically, and theoretically.

Overall, the book does an excellent job of accomplishing its two goals. The

first was to provide a clear and accessible introduction to the conceptual

frameworks that have dominated this field for many decades. The second was to

assess the strengths, weaknesses, relevance, and credibility of the models. The

book itself has many strengths and few weaknesses. I think that in the future

students interested in this topic will read it.

Gary Richardson is Assistant Professor of Economics at UC-Irvine. His

dissertation, “Social Change and Industrial Expansion before the Industrial

Revolution” was completed at the UC-Berkeley.

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

The Soul’s Economy: Market and Selfhood in American Thought, 1820-1920

Author(s):Sklansky, Jeffrey
Reviewer(s):Frey, Donald

Published by EH.NET (January 2003)

Jeffrey Sklansky, The Soul’s Economy: Market and Selfhood in American

Thought, 1820-1920. Chapel Hill: University of North Carolina Press, 2002.

xiii + 313 pp. $45 (cloth), ISBN: 0-8078-2725-8; $19.95 (paperback), ISBN:

0-8078-5398-4.

Reviewed for EH.NET by Donald Frey, Department of Economics, Wake Forest

University.

Jeffrey Sklansky traces the ideas of seventeen nineteenth-century American

intellectuals as they rethought the nature of society and of the individual in

society (see listing at end of review.) He argues that this rethinking was

prompted by nineteenth-century changes in the American economy. The

Revolutionary era’s “republican” thought had assumed an autonomous individual

as the locus of economic productivity, buttressed by a wide dispersion of

ownership of productive wealth. Such an individual pursued economic interests

through contracts; society was constructed on this model (p. 5). This, of

course, paralleled the axioms of classical economics, which became the implicit

target of the intellectuals Sklansky covers.

Sklansky pictures an ever-growing dissonance between nineteenth-century

economic reality and the republican model as “manufacturers and planters laid

claim to the mantle of the autonomous individual as they consolidated control

over land, labor and capital” (p.6). According to Sklansky, the intellectuals

he writes about restated the meaning of individuality and society to conform to

this new reality, and in some measure validate it, while preserving the

terminology of the old era. For example, they “championed free will. But they

redirected willpower away from controlling labor and property, toward

controlling belief and habit instead” (p. 8). Another element common to almost

all seventeen thinkers is the interpretation of concepts once taken as

objective reality (e.g., physical property, natural law, natural prices based

on labor input) in subjective directions (e.g., intellectual property,

internalized cultural mores, or prices reflecting marginal utility). This

reconceptualization, along with others, allowed the emerging concentrated

economy to proceed with an intellectual framework to validate it, a framework

not otherwise supplied by the thought of the Revolutionary era. Sklansky is

clear that this framework had its blind spots, that its fruits were not all

good, and that it may have simply postponed the facing of some issues.

Sklansky’s book is the result of many years’ acquaintance with his subjects’

writings. It is obvious that he is thoroughly familiar with their writings and

with the nuances of their thought. Nevertheless, this reviewer would suggest

that the reader keep four caveats in mind.

First, in order to sharpen the difference between the ideas of his

nineteenth-century subjects and the Revolutionary-Enlightenment era, Sklansky

may exaggerate differences. For instance, he speaks in one place of “the

momentous shift of the center of economic analysis [in the late Enlightenment]

from the realm of production to the realm of exchange [in his subjects’

thought]” (p. 123). However, one does not find such an exclusive emphasis on

production in Adam Smith, who essentially defines economic analysis of the

earlier period. Very early in The Wealth of Nations (Book I, Chapter

II), Smith famously argued that the full advantages of the division of labor

resulted from the human “propensity to truck, barter and exchange one thing for

another.” Thus, Smith hardly pushed exchange to the periphery of economics.

Second, having perhaps sharpened differences too much in order to create his

thesis, Sklansky tries too hard to make his thinkers fit the pattern he has

established. I am familiar enough with Henry George to be uncomfortable with

Sklansky’s conclusion on George. According to Sklansky, Henry George “defined

the bountiful social force of market society in the terms not of political

economy but of modern sociology and psychology … not in terms of ownership of

resources but in terms of participation in a mainstream of guiding desires and

compelling social norms” (p. 135).

This description hardly describes George’s core analysis, which relied on

statements more like the following: “the denser the population the more minute

the subdivision of labor, the greater the economies of production and

distribution” (Progress and Poverty, Book III, chapter I). This quote

does not sound like psychology or sociology, but traditional political economy.

As well, there is little about “guiding desires and compelling social norms”

when George writes of urban land (which is the crux of the matter for him). He

writes “[To] labor expended in the subdivided branches of production, which

require proximity to other producers … [urban land] will yield much larger

returns [than in agriculture]” (Progress and Poverty, Book IV, Chapter

II). Not only does this not sound like psychology or sociology, but it is

typical of the technical, economic analysis that is central to George’s answer

to the question: how does progress produce poverty? George’s emphasis was

strongly on the productive process (he contributed early notions of scale and

agglomeration economies); on factors of production and their ownership (which

the single tax was to remedy); and on the staples of classical political

economy such as rent theory and the division of labor. Sklansky mars an

otherwise insightful summary of George by extrapolating to a conclusion that

lands too far from the original Henry George.

Third, it is fair enough for Sklansky to define a loose school of thought and

to concentrate on members of that school. However, given that this school

presumably arose in response to an intellectual crisis, Sklansky probably owes

his readers some check on whether other American intellectuals were aware of

this crisis. For example, Francis Wayland (not one of Sklansky’s subjects) in

the 1830s authored major texts on moral philosophy and political economy that

were to become the standards in American colleges. In them, Wayland promulgated

an economics that showed no discomfort with Enlightenment individualism,

property rights based on natural law, laissez-faire, competitive markets and

minimalist government. And he did this while replacing Malthusian pessimism

with an American optimism based on belief in technological and scientific

progress in the realm of production. Judging from the popularity and durability

of Wayland’s writings in American colleges, nineteenth-century economic changes

produced no intellectual crisis in the minds of many.

Fourth, in the nature of his case, Sklansky presents his school of thought in

contrast to what went before. Yet, at least some of the ideas of his subjects

simply restated longstanding themes in American thought. For example, several

of the ideas of Congregationalist theologian Horace Bushnell, as summarized by

Sklansky, hardly were new; and because they were not new, they can hardly be

viewed as a response to the changing economics of America. Played against

Enlightenment rationalism, Bushnell’s emphasis on faith as subjective

experience rather than as assent to the objective truth of doctrines might seem

new. However, a good hundred years before Bushnell, the Methodist John Wesley

and Moravians in Europe and America emphasized religion of the heart.

Similarly, evangelical revivalism (from as early as Jonathan Edwards) surely

was an effort to reach the heart of the listener — if not in ways Bushnell

would have approved.

Sklansky concludes, accurately I think, that Bushnell’s emphasis on the

formation of a child’s character by its family surely was a “model of social

life in which proprietary autonomy had no place, in which indeed dependence

formed the organizing principle [contrary to the republican model]” (p. 59).

True enough; but as early as the beginning of the eighteenth century, Cotton

Mather implied a role for parents in shaping their children.

These caveats aside, I believe Sklansky has provided essays that catch much of

the character of the thought of these nineteenth-century American

intellectuals. I base this on familiarity with the writings of some of his

subjects — admittedly not all. Even when Sklansky goes beyond summarizing his

subjects’ ideas, his thesis — subject to the caveats above — has merit. I

draw that conclusion, in part, from my acquaintance with some of the writings

of Horace Mann, the pioneer in public education. Although Sklansky does not

include Mann among his seventeen, Mann reacted in much the way Sklansky’s

subjects reacted to the conflict between nineteenth-century realities and

Revolutionary era philosophy. In Mann’s terminology, the autonomous

individualists who resisted paying education taxes were essentially

irresponsible moral “hermits.” He had a clear vision of the socialization of

children by culture; he claimed that society collectively owed a debt to its

children. He defined producers as the beneficiaries of hundreds of generations’

worth of accumulation of capital and knowledge, not as autonomous

wealth-creators. A main focus of Mann’s educational scheme was to create

workers disciplined for the emerging industrial America; as others in

Sklansky’s book did, Mann had turned his back on the Revolutionary era’s model

of small, autonomous producers who owned their own productive capital. This is

to say that Sklansky’s thesis seems generally consistent with other things I

know about the thought of that era.

Sklansky’s book covers the following thinkers: R. W. Emerson, Horace Bushnell,

Margaret Fuller in chapter 2; Henry C. Carey, George Fitzhugh and Henry Hughes

in chapter 3; William Graham Sumner and Henry George in chapter 4; William

James, John Dewey, and G. Stanley Hall in chapter 5; Simon Pattten, Thorstein

Veblen, Lester Ward and Edward Ross in chapter 6; Thomas and Charles Cooley in

chapter 7.

Donald Frey is author of “Francis Wayland’s 1830s Textbooks: Evangelical Ethics

and Political Economy,” Journal of the History of Economic Thought, June

2002.

Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

Class Theory and History: Capitalism and Communism in the USSR

Author(s):Resnick, Stephen A.
Wolff, Richard D.
Reviewer(s):Harrison, Mark

Published by EH.NET (January 2003)

Stephen A. Resnick and Richard D. Wolff, Class Theory and History:

Capitalism and Communism in the USSR. New York and London: Routledge, 2002.

xix + 353 pp. $85 (hardback), ISBN: 0-415-93317-X; $24.95 (paperback), ISBN:

0-415-93318-8.

Reviewed for EH.NET by Mark Harrison, Department of Economics, University of

Warwick.

This book has twin objectives. Parts I and II (“Communism” and “State

Capitalism”) lay out the authors’ theory of political economy and social

relations. Part III, which is more than half the book in length, then applies

the framework to “The Rise and Fall of the USSR.”

The book offers three main outcomes. First, at the core of Resnick and Wolff’s

understanding of what drives any society are the mechanisms and channels by

which it appropriates and distributes the surplus product. This, they argue,

follows the Marxian tradition. From here, they criticize a number of

alternative existing approaches, some that claim to be Marxian and some that do

not. The alternatives, they believe, place too much emphasis on the

distribution of power and not enough on the distribution of resources. The

problem that they find with starting from the distribution of power is that you

can’t pin it down empirically; when you look closely at the facts power turns

out always to be diffused through society. Instead, they prefer to try to pin

down how the surplus product is appropriated and distributed.

Second, Resnick and Wolff categorize various mechanisms for appropriating and

distributing the surplus product; most important from the point of view of the

book are “ancient,” feudal, capitalist, socialist, and communist mechanisms.

They use this framework to classify various kinds of institutions that existed

in Russia and the Soviet Union before 1917, during the 1920s, the 1930s, the

postwar period, and after the Soviet collapse.

Third, while properly impressed by the sheer variety and intermingling of

institutions of different kinds in all their phases of development, the authors

conclude that the dominant mode of production in Russia and the Soviet Union

throughout the twentieth century was capitalist: plain capitalist before 1917

and after 1991, and state-capitalist in between. Thus while political power

certainly changed hands during the Bolshevik Revolution and when the Soviet

Union fell, one way and then another, the basic mode of production did not

change and so less changed in an underlying sense than might appear at first

sight.

Does Soviet history truly bear out the authors’ theory? I must say yes, but in

a sense for which they may not thank me: in my view the theory is trivial. The

authors correctly wish to avoid the traps of determinism, and specifically

those of the economic kind. Many Marxists of earlier generations based

deterministic predictions on economic trends of one kind or another that

eventually came to nought. Instead of determinism Resnick and Wolff offer the

Althusserian concept of “overdetermination”: “all aspects of society condition

and shape one another” (p. 9). The result is that anything can lead to

anything, or not, as the case may be (p. 78). Consequently no predictions are

possible since anything or nothing can happen. A theory that is consistent with

anything happening clearly cannot be refuted from history; in Resnick and

Wolff’s hands the purpose of historical analysis is only to illustrate the

theory, not to subject it to any potentially damaging test.

Thus the book contains many statements that look substantial at first sight and

then seem to dissolve into word play. For example the authors state that the

“history of Russia was shaped, in part, by the specific and ever-changing class

positions occupied and negotiated by its people” (p. 146). Does “in part” mean

a lot or a little? Why doesn’t history shape class as well as class shaping

history? Is the influence of class on history greater than the influence of

history on class? How can we tell, and what difference does it make?

The authors’ criticism of power-based analysis seems to me to be somewhat lazy.

They view political power as a quicksilver that is always everywhere at once in

society, and therefore nowhere in particular. On Russia before the revolution

they write approvingly (p. 162) of the idea that “the czarist state was less

controlling than controlled by Russian society.” On the 1930s (p. 119) they

criticize the idea that Stalin held a “monopoly on power” or brought about a

“revolution from above”; here they refer to the recent “revisionist” historical

literature that shows how there was also a “revolution ‘from below’ in the

precise sense of all sorts of powers wielded by diverse groups of workers,

intellectuals, planners, managers, and others — powers with which Stalin had

to contend and compromise.” In a trivial sense this must be true: political

power is never unlimited. But in a narrower sense it is simply false. While

Stalin generally took decisions rationally, that is to say, taking into account

the opinions and information provided by others, the research of R.W. Davies,

Oleg Khlevniuk, and others has shown clearly that from 1932 onwards Stalin

ceased to have to persuade or compromise with others to reach a decision and

his decisions, once issued, were never challenged. While the political power of

Stalin’s successors was less untrammeled, general secretaries after Stalin

continued to retain extraordinary personal prerogatives, for example, over the

allocation of resources to the “military-industrial complex.”

Perhaps Resnick and Wolff have a fair point in the following sense: some kinds

of power matter more than others, and what they would like us to focus on is

the power to appropriate and distribute resources. The Soviet surplus product

was produced in state enterprises, but where exactly was it appropriated and

distributed? Their answer (p. 166) is that this happened in Vesenkha, the

“Supreme Council of National Economy,” established in 1923 to administer state

industry and “soon reorganised as the Council of Ministers.” Its leaders were

the “first receivers and distributors of the surpluses produced by industrial

laborers” and “functioned similarly to a centralized board of directors of a

private capitalist industrial combine.” There is a factual error: Vesenkha was

a ministry and its successor organization was not the Council of People’s

Commissars (from 1946 Ministers) which had existed from the first days of the

October Revolution, but separate ministries of heavy and light industry and

logging established in 1932. Setting that aside, the authors are still wrong:

the most important decisions about the Soviet surplus product, those that fixed

the annual budgets for investment and defense, were always taken at the very

vertex of the system by the general secretary in the Politburo with no more

than a handful of senior Politburo. Moreover this was no “board of directors”

that, in the worst run of capitalist enterprises, must ultimately account for

its decisions to the shareholders, the markets, or the courts.

The evidence base of the work is remarkable for its breadth, yet still

deficient. I will give two examples. First, Resnick and Wolff claim that the

burdens of taxation on “the desperately poor mass of individuals” had Tsarist

society on the edge of revolt, and this resulted in a growing reliance on

deficit finance in the “last decades” (pp. 160-61). I know of no serious

historical support for the former claim and the latter is plain wrong. From the

1880s onwards, if we exclude the years of the war with Japan, which was

financed by borrowing on orthodox tax-smoothing grounds, the reliance of the

state budget on loans declined steadily. Similarly in relation to the 1920s

Resnick and Wolff suggest that adverse terms of trade on the rural-urban market

deprived farmers of “sufficient revenues to secure their conditions of

existence,” an absurd exaggeration and misunderstanding of the true state of

affairs.

Second, Resnick and Wolff devote major efforts to trying to track changes in

the “appropriation and distribution” of the Soviet surplus product that

resulted from Soviet price policies in the 1920s and collectivization in the

1930s, but they are apparently ignorant of the monograph on this topic

published by A.A. Barsov in 1966, which led to a major controversy among

western economists and historians, notably James R. Millar, Michael Ellman, and

Alec Nove.

As a reader, despite being reasonably familiar with the historical literature

about the Russian and Soviet economies and also with the concepts of classical

Marxian political economy, I found this book very heavy going. On its own this

cannot be a criticism: when my first year students complain that they have to

work hard to learn new concepts I just tell them that’s why they’re at

university. In the present case the book would benefit from more of the

attributes of a good textbook such as definitions that are highlighted and

cross-referenced. My patience was especially taxed by the attempts to

mathematize various kinds of budget constraints, given in the form of equations

yet “the word ‘equation’ does not signal any necessity that … revenues equal

expenditures (p. 179n); the symbolization features many weird acronyms and

subscripts that have no obvious intrinsic meaning and are not indexed anywhere.

These are things that a good editor should have rooted out.

In summary this is a well-intentioned, complex work that is hard to do justice

in a short review, but even summary justice must make an attempt at balance.

The plaudits on the book’s back cover describe it as “path breaking” …

“Whether one agrees or disagrees … no future work … will be able to ignore

the sheer creative verve and intellectual rigor with which [the authors] lay

out their arguments.” While this reviewer is impressed by the efforts put in by

the writers and required of the reader, the path that has been opened seems to

lead nowhere; the rigor is superficial and the verve is not enough.

Mark Harrison is professor of economics at the University of Warwick and

honorary senior research fellow of the Centre for Russian and East European

Studies, University of Birmingham. He is the author of a number of books and

articles on Soviet economic history including most recently “Coercion,

Compliance, and the Collapse of the Soviet Command Economy,” Economic

History Review, 55(3), 2002, pp. 397-433.

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):20th Century: WWII and post-WWII

Consumerism in World History: The Global Transformation of Desire

Author(s):Stearns, Peter N.
Reviewer(s):Aimaq, Jasmine

Published by EH.NET (January 2003)

Peter N. Stearns, Consumerism in World History: The Global Transformation of

Desire. London and New York: Routledge, 2001. xii + 147 pp. $17.95

(paperback), ISBN: 0-415-24409-9; $60 (hardcover), ISBN: 0-415-24408-0.

Reviewed for EH.NET by Jasmine Aimaq, Department of History, University of

Southern California.

According to author Peter Stearns (George Mason University), the rationale

behind writing Consumerism in World History: The Global Transformation of

Desire is that our world is currently “permeated by consumerism” — hence

the importance of understanding why consumerism developed and what causes have

sustained it. Stearns, well established as a leading voice in World History,

argues that his study of consumerism will allow a better grasp of various

international issues, and offer some readers new perspectives on themselves. He

then presents a succinct, brief analysis of the evolution of consumerism in a

142-page volume broken into three main parts. The first part analyzes the

emergence of consumerism in the West; the second, the globalization of

consumerism; and the third, the future of consumerism.

A review of this work first requires an establishment of perspective. It

appears that the book is intended for a general readership, since it cites no

primary sources, nor makes references to secondary sources, and can therefore

not be evaluated primarily on the grounds of scholarly rigor and original

research. Stearns’ book must instead be reviewed in terms of the contribution

it makes in broader terms, namely, as a general, insightful presentation of

ideas and perspectives on the emergence of consumerism in human society. To

that end, Stearns proposes to focus on two phenomena: the historical

development of the consumer apparatus, and the emergence of needs and goals

from the customer side. He notes particularly that the book is value-neutral,

treating consumerism as neither inherently good or evil.

In his preface, Stearns explains that Consumerism in World History rests

on a fairly recent strand of research, which shows that contrary to what was

previously thought, the phenomenon of consumerism predates the Industrial

Revolution. Stearns does not, however, identify in what manner his work either

complements or challenges existing research. There is no direct link to

previous scholarship, making it impossible to evaluate the full value of

Stearns’ contribution. Also in his preface, Stearns signals that his work “…

rests on several assumptions, which of course need to be tested in the chapters

to come …” Here, Stearns risks the pitfalls of circular reasoning, namely,

the adoption of ideas that are at once assumptions and cases to be tested.

What follows, however, is a lucid, insightful and highly readable discussion on

the rise and nature of consumerist society, i.e. society in which many people

formulate their goals in life partly through acquiring goods that they clearly

do not need for subsistence or for traditional display. Since consumerism is

predominantly associated with “Western” civilization, Stearns spends a third of

the book discussing the emergence of consumerism in Europe, and its eventual

spread to the United States. Stearns argues that consumerism represented

compensation in a modernizing society — compensation for the disruption of

traditional social channels, a means of demonstrating modest achievement in new

ways.

While this point is illuminating, the argument would have greater depth if the

facets of traditional life, and exactly which facets were disrupted and

replaced with consumerism, were explored more fully. Stearns notes the decline

of traditional religion, for instance, but does not analyze the concept of

consumerism as a religion of its own. This has been one of the interesting

contributions of recent studies outside of history — in sociology,

environmental studies, and religious studies, for instance. The emergence of

consumerism parallels the emergence of the free market, and arguments presented

by scholars such as David R. Loy (“The Religion of the Market,” in Visions

of a New Earth: Religious Perspectives on Population, Consumption and

Ecology) and others emphasize the religious role that consumerism fills in

contemporary society.

The lack of a discussion on this perspective in Stearns’ work is somewhat

disappointing, particularly in light of growing recognition among scholars and

others that consumerism and environmental protection are fundamentally and

dangerously at odds. If, as Stearns states in his preface, we are to study

consumerism in large part to “better grasp a host of international issues,”

consumerism’s relationship to the deteriorating global environment should be

foremost among those. The absence of this issue is especially striking in

Chapter 6, which provides an otherwise illuminating discussion on “The dark

side of Western consumerism.” The strength in this chapter is that Stearns

effectively links critiques of consumerist values to broader movements such as

anti-Americanism. But the relationship between the environment and consumerism,

and the link between critics of consumerist values and spokesmen for the

environment, seems crucial to the subject of the chapter; for some reason,

however, it has been overlooked.

Similarly, the question of gender relations is addressed, but not fully

explored. Stearns provides an insightful account of changes in gender relations

as one aspect in the historical emergence of consumerism. But the relevance of

gender to consumerism extends beyond the early stages of the phenomenon; it

would be relevant to analyze whether contemporary relations between the genders

foster consumerist behavior today, i.e. whether women acquire material goods in

order to demonstrate economic parity with men, whether men pursue material

acquisition to a greater degree than before in an effort to out-compete women,

or alternatively, one another, in a society where women are increasingly

economically self-sufficient. Given Stearns’ expertise on gender in world

history, his full insights on this issue would have been especially welcome.

The discussion in the first part of the book serves largely as an insightful

introduction to different perspectives on consumerism, and provides an

excellent foundation for further research. But it is the second part of the

book that is perhaps the book’s most illuminating and original. Here, Stearns

offers a round-the-world view of consumerism, describing the phenomenon, its

character, manifestation and scope, in Russia, East Asia, Africa and the

Islamic Middle East. Readers who are familiar with studies on consumerism will

welcome this contribution. It is fair to say that so far, most scholars in the

field discuss these regions only to gauge the extent to which indicators of

“Western” civilization and modernization, including consumerism, have

effectively reached non-Western societies. In this work as well as previous

publications, Stearns, while well aware of the influence of the West in the

spread of consumerism, demonstrates a true knowledge and genuine appreciation

of the “world” in “world” history. Once again, however, the discussion would

have benefited from a deeper analysis of societal factors such as the role of

religion, which Stearns discusses as only one of numerous factors, and its

relationship to consumerist values.

The final part of the book, which contains only two brief chapters, deals

briefly with the accelerating pace of globalization and the spread of “Western”

style consumerism. While the first chapter of this section offers nothing

controversial, and serves as a sort of summary of globalization in terms well

understood by scholars, the media and social observers, the second chapter —

and book’s Conclusion — takes a surprising turn. Stearns spends the final

pages of his work investigating “Who wins — Consumerism or Consumers?” This is

surprising mainly because it seems to contradict the author’s introductory

declaration of this study as value-neutral, as an analysis that does not wish

to present consumerism as either ‘good’ or ‘bad.’

Particularly on pp.139-142, Stearns directly addresses the ‘good’ and ‘bad’ of

consumerism, asking, for instance, whether consumerism is making the world too

homogeneous, and directly asking whether consumerism “is a good thing, in terms

of human values.” The inclusion of this discussion does not follow from what

the reader is led to expect in the opening of the book, and is therefore a

structural weakness. In terms of the substance of Stearns’ response to the

questions, it is again notable that environmental issues are alluded to in only

the most general way, although they figure very prominently in today’s debate

on consumerism and globalization.

Stearns’ most recent book is nevertheless an excellent introduction to the

study of consumerism in world history, and a highly recommended read for anyone

interested in the subject. Graduate students or scholars interested in

developing a thesis relating to consumerism will come away from this book with

a good general grasp of the phenomenon, and will be happy to find abundant

secondary sources listed as “Suggested Readings” at the end of each chapter.

Jasmine Aimaq is a Visiting Professor at the Departments of History and

International Relations, University of Southern California. She is the author

of a book on French-American relations in Vietnam and several articles, and

currently conducts the USC History Department’s course on Modern World History.

Subject(s):Household, Family and Consumer History
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

American Exceptionalism, American Anxiety: Wages, Competition, and Degraded Labor in the Antebellum United States

Author(s):Glickstein, Jonathan A.
Reviewer(s):Margo, Robert A.

Published by EH.NET (December 2002)

?

Jonathan A. Glickstein, American Exceptionalism, American Anxiety: Wages, Competition, and Degraded Labor in the Antebellum United States. Charlottesville, VA: University of Virginia Press, 2002. viii + 361 pp. $39.50 (hardcover), ISBN: 0-8139-2115-5.

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

It is said that the longest running debate in British economic history is the standard of living debate. No debate in American history can be as long running as any debate in British history. Nevertheless, Americans have our own version of the British debate. The issue, simply put is: did American workers “benefit” from early industrialization? For the American case, this comes down to the period from 1820 to 1860.

Until recently the prevailing wisdom on this issue among economic historians — if not labor historians — could be described as strongly Whiggish. Estimates of per capita incomes suggest that these grew in real terms. The distribution of economic rewards may have become more unequal, but not enough to reverse the gains. The quantitative evidence, however, did not seem to square all that well with qualitative accounts, which emphasized the inconstancy of work, the grinding poverty experienced by some groups, the difficulty of moving up, growing pauperism in certain cities, and widespread misery experienced during any of the several antebellum financial “panics.”

This was also a period during which wage labor grew substantially in relative importance. Few people worked for wages early in the nineteenth century, but far more did in 1860, particularly in eastern cities. Labor became a commodity, bought and sold like flour or rum.

Recent cliometric work has challenged the Whiggish point of view. Data on heights and mortality suggest that health conditions were worsening during early industrialization. Robert Fogel has called attention to the so-called “hidden depression” that afflicted eastern urban labor during the late 1840s and early 1850s. Fogel emphasizes several aspects of the transformation of workplaces during this period — the intensification of the pace of work, “de-skilling,” and so on — that are hard to measure and, therefore, have not been incorporated into various quantitative measures of the standard of living.

New estimates of real wages prepared by your reviewer also challenge the Whiggish perspective. If you believe me, real wages grew overall at about 1 percent per year between 1820 and 1860. This number is greater than zero but rather less than previous estimates. Artisans fared worse than common laborers, who fared worse than white-collar workers. Perhaps most importantly, growth was in fits and starts, and there were several periods of poor performance, notably the 1850s. This decade experienced what was perhaps the first “welfare explosion” in American history, partly because real wage performance was so poor.

Jonathan A. Glickstein’s new book is also about wage labor during early American industrialization, but it is not a quantitative work. Rather, its “data” consist of the written record of commentators of the time, primarily elites, commenting about the transformation of work occurring around them. It is about questions like: what did these people think were the good and bad points about a “free” labor market? Were workers motivated by the positive incentive of upward mobility, or the threat of starvation? If one might starve, would it have been better to be a slave? Why did some commentators extol the “intrinsic” benefits of common labor, particularly if it were work that they themselves would never do (being elites)? Broadly speaking, the book about the differences between “perception” and “reality” — if elites thought America was really such a promised land for free labor, why were the promises unfulfilled for so many — particularly, for those other than white males? Were the elites simply misinformed, or did they simply not care, perhaps because they were more interested in constructing an ideology that rationalized their own privileged status. (Jonathan A. Glickstein is Associate Professor of History at the University of California, Santa Barbara, and the author of an earlier work on ante-bellum labor, Concepts of Free Labor in Antebellum America.)

Let it be said at the outset that, for someone like me, this book is not an easy read. It is full of words like “poststructuralism” and phrases like “linguistic turn.” There are no tables and no regressions and, therefore, no escaping the text. The text is densely written, the footnotes more so. However, the footnotes are also filled with references to the economic history literature and, allowing for publication lags, these are up-to-date. Your reviewer’s work is featured prominently in the Introduction, and in the footnotes, along with most of the other relevant economic historians. Glickstein doesn’t always agree with us, and sometimes he gets the story wrong. (For example, on p. 7, he claims that I find that eastern artisans “fared worst of all.” Assuming he means “northeastern,” these experienced higher real wage growth than artisans in the Midwest, or the South; see my Wages and Labor Markets, p. 51.) But he is never dismissive of economic history without reading, and I appreciate that (would that we economic historians were so charitable in reverse).

American Exceptionalism is divided into an Introduction, seven substantive chapters, and a Conclusion. The Introduction, as implied above, sets the stage, noting how recent work in economic history has challenged the Whiggish point of view. Glickstein’s interests, however, are not in the particulars of the debate in economic history, but rather in how individuals — as noted above, mostly elite — conceived of wage labor. Chapter One, “The World’s Dirty Work,” considers views expressed at the time about whether common labor carried “intrinsic” rewards (such as building character) or had only “extrinsic” value (that is, in facilitating consumption, as assumed in the standard labor-leisure model). It also considers the development of beliefs that America was exceptional in the opportunities it provided ambitious free labor — and, therefore, why those who failed did so through their own fault.

Chapter Two, “Pressures from the Bottom,” focuses on how evidence contrary to exceptionalism was to be reconciled. What is one to make of the benefits of a “free” labor system when paupers were swarming on city streets? Perhaps, some commentators suggested, they swarmed because the availability of poor relief “distorted natural market forces” (p. 69). It also considers some of the rhetoric of anti-slavery discourse, in particular, whether slavery “freed” the slave from the risk (and attendant anxiety of facing) starvation, and how this could be weighed against the loss of “hope” — that is, freedom and upward mobility.

Chapter Three, “Buy Cheap, Sell Dear,” takes as its point of departure some of Horace Greeley’s observations on strikes, “especially those of the Iron Puddlers of Pittsburgh.” Greeley admonishes the workers for complaining that their wages “ought” to be higher because the employer can “afford” it. Who among the strikers, Greeley asks, gave the same consideration to the poor widowed seamstress who made the men’s shirts? Glickstein points out, however, that one’s own pursuit of self-interest, given the rules of the economic game, does not mean that one would not prefer different rules. While acknowledging that self-interested behavior proceeded the “market revolution” of the early nineteenth century, Glickstein still insists that that “industrial and urban capitalist components” of the revolution led to a new social norm, one in which a “competitive free-market ethos … did come to govern a plethora of social and economic relationships” (p. 113). Chapter Four, “Further Social Consequences of the Market Mechanism,” examines some of the difficulties that early labor activists faced in reconciling nascent versions of the labor theory of value with the emerging capitalist ideology.

Chapters Five through Seven are inter-related in their use of Gresham’s Law as an organizing device. As originally conceived, Gresham’s Law applied to bad money but in its more general guise, it can apply to bad anything — in Glickstein’s case, “bad” labor arrangements driving out the “good.” Chapter Five examines an address by George M. Weston, a prominent anti-slavery writer of the era. Ostensibly “about” how slavery reduced the wages of free labor, Glickstein also uses the address to segue into two other forms of “cheap” labor. Attitudes towards the first of these, convict labor, are examined in Chapter Six. Convict labor refers to the practice on the part of state government officials of making prisoners available to private contractors. Never widespread, the practice was nevertheless widely condemned at the time by ante-bellum labor organizations. Chapter Seven draws attention to the fact that restrictions placed on the use of convict labor adopted by the New York State Legislature in the early 1840s exempted domestic employers who competed directly with imported manufactured goods. These exemptions recognized, or so the claim went, that such imports were produced by cheap (“pauper”) labor. As a consequence, American manufacturers needed the exemptions to be competitive.

American Exceptionalism is a demanding work. Glickstein makes few concessions to readers who are not fluent in contemporary “humanistic” approaches to historical writing. If I have one criticism, it is that Glickstein might have drawn more parallels with our own time. (Chapter Seven, which notes the resonance of the debate over “pauper” labor with contemporary debates over “globalization,” is a partial exception.) However, the questions that motivate this study are fascinating and well worth the attention of cliometricians, even if they are not the questions that we are used to asking.

Robert A. Margo is Professor of Economics and History, Vanderbilt University, and Research Associate of the National Bureau of Economic Research. He is the author of Wages and Labor Markets in the United States, 1820-1860 (Chicago, 2000) and (with Joel Perlmann) Women’s Work? American Schoolteachers, 1650-1920 (Chicago, 2001).

Subject(s):Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):North America
Time Period(s):19th Century

The Peasants of Languedoc

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

Project 2001: Significant Works in Economic History

Emmanuel Le Roy Ladurie, The Peasants of Languedoc.

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

There and Back Again: The Great Agrarian Cycle Revisited

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

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

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

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

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

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

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

Notes:

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

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

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

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

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

Surabaya, City of Work: A Socioeconomic History, 1900-2000

Author(s):Dick, Howard W.
Reviewer(s):Sutherland, Heather

Published by EH.NET (October 2002)

Howard W. Dick, Surabaya, City of Work: A Socioeconomic History,

1900-2000. Athens, OH: Ohio University Center for International Studies,

2002. xxvii + 541 pp. $30 (paperback), ISBN: 0-89680-221-3.

Reviewed for EH.NET by Heather Sutherland, Free University of Amsterdam.

This study of Surabaya, by Howard Dick, is a unique contribution to the

history of Indonesia, and should be read with pleasure and profit by anyone

with a serious interest in a variety of fields: economics, history, urban

studies, sociology or politics. Integrated history, uniting several approaches,

is notoriously difficult to write. The dramatic tension and clarity of the

chronological narrative is continually undermined by the necessary exposition,

as specific topics are explained and contextualized. However, if a thematic

rather than diachronic approach is chosen, historical events have to be

recapitulated to explain the setting of individual subjects. All too often, the

result of either approach is unwieldy, without a confident sense of direction.

In this case, the author has found an elegant solution, through a well-judged

combination of five major thematic chapters, within which a broad chronological

structure prevails.

Howard Dick, who is associate professor at the Australian Centre of

International Business at the University of Melbourne, is primarily an economic

historian. However, his knowledge extends beyond the narrowly economic,

encompassing a wide and well-informed interest in social and political history.

In this book he wears his expertise lightly. The combination of a confident

mastery of his material, tables, maps and illustrations, together with an

accessible style, ensure that his book is easy to read, and will impress both

students and specialists alike. The first two chapters are essentially

introductory. In Chapter One, “Aspects,” the reader accompanies Dick into

Surabaya, first by sea and then by land. During the journey the author provides

a painless introduction to geography, history, the urban landscape and the

rhythms of daily and annual life, giving a concrete (in every sense) and human

face to the city. “Episodes,” the second chapter, is an eighty-page survey of

Surabaya’s twentieth-century history, focusing on the institutional and

political developments that shaped economy and society. This chapter epitomizes

the careful selection and judicious use of material from English, Indonesian

and Dutch sources, which is typical of the book as a whole.

The next five chapters, some 340 pages, form the core of the book, as each

examines one aspect of Surabaya’s development. Chapter Three, “Profile,” is a

detailed analysis of Surabaya’s people: their numbers, ethnicity, occupational

profile, education and living conditions. Comparisons with Jakarta add depth to

Dick’s conclusions. “Government” is the theme of the next chapter, almost a

hundred pages in length. Here topics from the preceding chapter are

reconsidered, but with an emphasis on policy, so housing, markets, education,

and public health (including prostitution and venereal disease) are discussed.

In each section the situations under the colonial and various post-war

Indonesian regimes are compared. In Chapter Five, “Industry,” the focus is more

narrowly economic, analyzing policy, manufacturing and the informal sector

during the main phases in the growth of this most industrial of Indonesia’s

cities. The historical scope broadens again in Chapter Six, “Land,” as the

extent and morphology of Surabaya is traced, with sketch maps going back to the

seventeenth century, before the author discusses in more detail transport, land

rights, squatting and urban planning in Dutch and post-colonial eras. “Trade”

is the subject of the last chapter, which places Surabaya in the context of its

plantation hinterland as well as depicting its role in inter-island and

international commerce.

In the book’s relatively brief conclusion of eighteen pages, Dick selects

several points for specific discussion. Here also a long-term perspective is

central, as he concentrates on the nature of Indonesia’s New Order regime

(1965-1998), comparing it to the late colonial period. He makes this comparison

his point of departure for a consideration of patterns apparent in the

interaction between Surabaya’s local economy and the global economy. These

were, most notably, industrial retardation and a cycle of boom, bubble and bust

in the real estate market. Dick also describes the conflicts between state and

city-dwellers in the Dutch and post-colonial periods. On page 471 he comments,

with regard to the long-term patterns which run through twentieth century

Indonesia’s economic and political history: “Relations with the global economy

are sufficient to generate parallelism; the internal dynamics of Indonesian

society have given rise to a repeated cycle of reaction and revolution.”

Nonetheless, Dick concludes his book on a guardedly optimistic note, in the

hope that the new autonomy law in Indonesia will give Surabaya an opportunity

to shape a future less subject to Jakarta-generated shocks.

Urban history is not well developed for Indonesia; indeed, if we consider the

importance of Asia’s cities as a whole we can only conclude that they remain

critically understudied. Moreover, analyses of urban society are often problem

and policy oriented, with a specific issue being examined in isolation, and

usually without a historical perspective. Howard Dick’s study of Surabaya is an

example of what can be done. With its explicit emphasis on long-term trends and

the socio-political context, it is a readable book for the general student of

Indonesia or urban history. At the same time the richness of the data

presented, and the sophistication of his judgment, make it a rewarding source

for the specialist.

Heather Sutherland is Professor of Non-Western History at the Vrije

Universiteit Amsterdam. Her current research examines how incorporation into

long-distance trade and changing state structures shaped the Indonesian port

city of Makassar, East Indonesia, over a period of three hundred years. In 2003

she will publish, together with Gerrit Knaap, the book Monsoon Traders:

Trade, Commodities and Captains in Eighteenth-Century Makassar.

Subject(s):Urban and Regional History
Geographic Area(s):Asia
Time Period(s):20th Century: WWII and post-WWII

International Trade and Political Institutions: Instituting Trade in the Long Nineteenth Century

Author(s):McGillivray, Fiona
McLean, Iain
Pahre, Robert
Schonhardt-Bailey, Cheryl
Reviewer(s):Nye, John V.C.

Published by EH.NET (July 2002)

Fiona McGillivray, Iain McLean, Robert Pahre and Cheryl Schonhardt-Bailey,

International Trade and Political Institutions: Instituting Trade in the

Long Nineteenth Century. Cheltenham, UK and Northampton, MA: Edward Elgar,

2002. x + 242 pp. $80 (hardback), ISBN: 1-84064-690-X.

Reviewed for EH.NET by John V.C. Nye, Department of Economics, Washington

University in St. Louis.

This stimulating and well-written volume is based on the papers originally

presented at a mini-conference held at Washington University in St. Louis.

(Which, it should be noted, I now regret having missed.) The four lengthy

essays plus a substantial introductory essay and conclusion share the common

theme of analyzing the link between political institutions and the history of

European — especially British — trade policy in the century between the

Napoleonic wars and the coming of the First World War. This unity of theme

makes for something more than a hastily assembled collection of conference

essays. Furthermore, some of the methodological issues that are addressed

should prove of additional interest for economic historians trying to balance

the demands of social scientific reasoning and historical detail.

The nineteenth century is, of course, of central importance for historians of

international commerce as the latter half of the century provided the first and

arguably the only true period of relatively free trade among the major European

powers. Furthermore, the special role of Britain as apologist for and most

prominent nation in the drive towards freer trade commands the attention of

theorists in international relations as well as the political economy of trade

policy.

The opening essay — in its own way perhaps the most impressive piece in the

book — points to the tensions that arise between those who focus on the

narrowly political details of a particular historical event or political

transition and the desire to construct more generalizable theories of political

economy and trade relations. Furthermore, even among the theorizers, there is a

real clash — almost a culture clash — between those who favor international

level, states-as-single-actors explanations of policy common to the work in

“Realism” and the theory of “Hegemonic Stability” and the more economically

oriented explanations (overlapping with work in public choice theory) that

focus on the role of domestic interests in competition with one another.

The former approach seems to be the more traditional “political” approach

focusing on policy strategy and power relations, while the latter — often

called Endogenous Tariff Theory (ETT) — is more economistic, drawing on the

metaphor of politics as interest group competition derived from ideas of

economists such as Olson, Buchanan and Tullock, or North. Indeed, the latter

approach is especially congenial to economic historians who have played no

small role in advancing the state of knowledge in this area.

The latter approach, while often faulted for its tendency to oversimplify or

ignore important historical detail, can count as its achievement the production

of a body of theory and empirical evidence that is unmatched in the literature.

As is noted in the introduction, “It is unlikely that any other approach could

boast a comparable number of logically interrelated testable propositions” (p.

9) with strong empirical support. In contrast, proponents of the work in the

various areas of Realism “disagree even about the main assumptions and central

claims of the theory” (p. 9) which to this reviewer seems to be an incredibly

damning indictment of that body of research.

But a greater problem occurs from the desire to reconcile work that focuses on

material interests — common to ETT and to other “economic” approaches —

versus studies that concentrate on the role of ideas or on political ideology.

This contradiction is not resolved and if anything is deepened by the examples

given in this book.

Pahre’s long essay on tariff treaty regimes in the nineteenth century is the

most general work in the book and is itself a fine demonstration of the

benefits to be derived from even a simplified special interest model. Focusing

on competition between importers and exporters in a reduced form political

model in which the ruler or state throws his support to one faction or the

other, Pahre gives us an analysis of the movement towards trade liberalization

in the nineteenth century which does not suffer from the tendency of many

writers to over-emphasize the role of Britain. As this reviewer has argued in

other work, France and Germany should be viewed as the major figures in the

spread and eventual retreat of liberal trade policies in the century. British

tariff reform early in the century was neither as dramatic as has been

presented to us nor did it engender a response in the major trading partners.

Only the 1860 Anglo-French Treaty of Commerce and other events having little to

do with unilateral moves on the part of the British spurred the spread of freer

trade through bilateral treaties with third parties contrary to the arguments

of purist free traders.

Any such model will be bound to have multiple caveats ranging from the reduced

form concerns to the non-incorporation of economic conditions to the relatively

simplistic political model employed. Even at the level of his analysis Pahre

has some difficulties with the empirical tests finding, for example, that

openness measures work better than average tariff levels for his hypotheses.

But nothing in his model really gets at openness per se, and openness, unlike

tariff levels, is as much a function of the underlying economic fundamentals of

the countries as of any political decisions that could have been made by the

tariff setting authorities. Nonetheless, the effort is still impressive, and

there is much in the overview for political scientists and economists to chew

over.

McGillivray’s work focuses on the issue of U.S. tariff policy in the first few

decades after the Revolution. She uses recent work in economic history to

reject the claims of some political theorists that “under the Articles of

Confederation, states adopted beggar-thy-neighbour tactics towards each other”

(pp. 96-97). She points to the decentralized nature of the state system and the

prevalence of agricultural interests to explain why interstate trade flourished

among the states while the Republic found itself unable to create a unified

tariff regime which could be used to retaliate against the British. Though

employing neither formal theory nor detailed statistics, this essay shows how

suggestive arguments can still be developed with some rigor if they rely on

careful argument from theory and pay attention to the theoretically-relevant

findings of the historical literature.

A bigger problem arises when comparing Pahre’s work to the two essays by McLean

and Schonhardt-Bailey. McLean provides a nuanced, albeit fairly traditional,

account of the ideological aspects of the debates over repeal of the Corn Laws.

However, given that repeal of the Corn Laws did not decisively produce free

trade in Britain, and given the observations by Pahre and others regarding the

irrelevance of British tariff liberalization on the eventual spread of free

trade on the Continent, one is left to doubt the central role assigned to the

political debates by McLean. The struggle over the Corn Laws is no doubt

interesting in and of itself, but if Britain was neither the magnanimous free

trader of lore nor the successful free-trade hegemon of international relations

theorists, then this singular political event loses its central importance in

the historiography of nineteenth- century commercial policy.

Though broader and more analytic, Schonhardt-Bailey’s study of how ideas can be

strategically employed to nationalize what might have been seen as merely local

or narrowly ideological interests shares the same problem of overemphasis of

the role of the Corn Laws repeal. There is no attempt to distinguish between

political debates that were salient as politics versus the objective weight of

a given policy in the overall structure of British trade or tariffs. However,

the broader theoretical discussion of how ideas are generalized and the attempt

to use Continental examples in addition to the British back story make this

work rather more complementary to the Pahre essay than the work of McLean which

tends to stick out from the rest.

Indeed, the conclusion by Schonhardt-Bailey tries to reconcile all these papers

by arguing that they are complementary and co-exist by virtue of their

differing levels of analysis. While no one can argue with this sage and fairly

general claim, the case would have been better made if the four essays at least

took care to coordinate the background narrative or stylized facts that overlap

among them. If any claim is going to be made for the virtues of promoting these

differing levels of analysis we would benefit from seeing how they can all

combine to produce a whole greater than the sum of the parts. Sadly they lost a

great opportunity and the numerous contradictions among the component parts

leave the promise of the concluding chapter unfulfilled.

Nonetheless, none of these criticisms should detract from the value to be

derived from reading this remarkable volume. I do not exaggerate in saying that

this should be standard reading for international relations theorists as well

as economists and economic historians interested in the political economy of

trade reform.

John V. C. Nye specializes in French economic history and industrial

organization. His publications include “The Myth of Free Trade in Britain and

Fortress France: Tariffs and Trade in the Nineteenth Century” Journal of

Economic History (1991).

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):North America
Time Period(s):19th Century

Bonds of Enterprise: John Murray Forbes and Western Development in America’s Railway Age

Author(s):Larson, John Lauritz
Reviewer(s):Churella, Albert J.

Published by EH.Net and H-Business (June 2002)

?

John Lauritz Larson, Bonds of Enterprise: John Murray Forbes and Western Development in America’s Railway Age. Iowa City: University of Iowa Press, 2001. xxiii + 257 pp. $17.95 (paper), ISBN: 0-87745-764-6.

Reviewed for H-BUSINESS and EH.NET by Albert J. Churella, Social and International Studies Program, Southern Polytechnic State University.

Perhaps no other economic change has so consumed Americans than the emergence of big business in the 19th century. As the invisible hand of the marketplace gave way to the visible hand of management, output rose, prices fell, and the United States became an economic powerhouse. This process also fundamentally changed the nature of the relationship between business, businessmen, individual citizens, and their democratic system of governance. Big business concentrated wealth and power, and manipulated the streams of commerce in ways that seemed antithetical to the political rhetoric of Jacksonian Democracy. Technical discussions associated with the management of large, vertically integrated enterprises were thus matched with a passionate debate regarding the equitable relationship between capitalism and democracy. Railroads, the nation’s first big business, were at the center of these debates since they embodied massive concentrations of capital and constituted the lifeblood of many communities. While many scholars have studied parts of the railroad revolution, few have attempted to integrate all of the multifaceted effects of this process.

John Lauritz Larson, an associate professor of history at Purdue University, provides just such an integrated account in Bonds of Enterprise. Larson examines the career of John Murray Forbes (1813-1898), whose life spanned the very different worlds of personal, market capitalism and “visible-hand” big-business management. Like a spider at the center of a web (although Larson would probably eschew such a malevolent analogy) Forbes touched all of the varied aspects of the “railroad question.” As Larson points out, this book is not so much a biography as it is a selective depiction of Forbes’ role in developing the “bonds of enterprise” that linked both cities and competing interest groups to each other. Thomas McCraw used a similar approach in Prophets of Regulation, linking four notable individuals to the regulatory mechanisms that they hoped to create. While Bonds of Enterprise may not garner the same degree of notoriety, it is still a fascinating and important work. While still a young man, John Murray Forbes earned his fortune in the China trade. He relied heavily on the standard pillars of long-distance capitalism in the early 1800s; family connections and trust backed by an impeccable reputation. By the 1840s, Forbes settled into what he believed would be a respectable semi-retirement and he invested heavily in railroad securities.

Perhaps the pivotal moment in Forbes’ career occurred in 1846 when he acquired control of the moribund Michigan Central Railroad, a state-owned project that typified the internal improvement mania that had arisen before the Panic of 1837. Like most such rail and canal projects, the state initially envisioned the Michigan Central to be solely a trunk line designed to encourage general commercial development. Private entrepreneurs would then construct feeders to the mainline, allowing, in a very Jacksonian fashion, all of the common men equal access to the economic potential of the railway.

Forbes increasingly saw the economic function of the railroad in quite a different light. He realized that only a combined branch-and-trunkline railroad could earn a satisfactory profit, and he felt that railroad development should proceed gradually and sequentially, allowing each region of the frontier to develop before proceeding to the next. In the process, the railroad must inevitably change transportation patterns in the region that it served causing some regions-and some individuals-to prosper, and others to fail. Like many 19th century entrepreneurs, Forbes had only the haziest idea of the competitive forces that America’s first big business had unleashed. He was, however, deeply troubled by his role in this process. He had grown up in, and attained wealth by, a system of personal capitalism. He professed a life-long belief in the limitless potential of a virtuous citizen in a democratic society. Yet, like Henry Ford nearly a century later, he helped to bring about massive economic and social transformations that, within his lifetime, helped to shatter the moral principles that he held dear.

Forbes and his associates plunged into the “system-building” phase of railroading during the 1850s. No longer advocating a sequential approach to railroad expansion, Forbes increasingly saw railroads as essential to the economic development of the West. As he pieced together the Chicago, Burlington, and Quincy system, Forbes preferred to maintain the fiction of local control as long as possible, relying heavily on home-grown investors and managers. While this method allowed local entrepreneurs to assume many of the risks and enabling the Boston capitalists to expropriate all of the rewards, Larson does not see this as a stain on Forbes’ exemplary business ethics. Nor does he blame Forbes for any of the relatively mild financial machinations associated with the Burlington; these he lays at the feet of James F. Joy and other unscrupulous financiers who abused Forbes’ trust.

As farm prices fell after the Civil War, farmers in Iowa protested rate differentials and other types of “unfair” competition. They believed that a lack of competition had caused these problems, while Forbes and other system-builders increasingly understood that overbuilding and excess competition were to blame. Forbes believed that he was advancing the cause of progress by opening up the West and by increasing the general welfare through his business enterprises. He seemed genuinely astonished that the seemingly ungrateful beneficiaries of his efforts depicted him as a profit-hungry robber baron. Perhaps because Forbes’ “style of business was paternalistic, and his patient efforts to develop the Iowa country had been met with hostility,” (p. 142) he responded with a stubbornness that seemed to veer between puzzlement and outrage. For example, the Burlington deliberately inflamed the passions of westerners by raising long-haul rates to conform to Iowa rate-equalization-legislation. Forbes thought that grandstanding populist politicians like Iowa governor William Larrabee were ignorant of the fundamentals of railroad economics; Larrabee was determined to fight “a war against the arrogance of ‘experts’ who scorned the authority of popular government.” (p. 187) Forbes believed that, in the end, only railroad officials could adequately understand the complexities of rate-making, and could thus capture, or at least reduce, the deleterious effects of state and federal regulation.

Ultimately, Larson’s biographical approach strikes very near his target, but it is not quite a bullseye. The reader is left with a thorough knowledge of Forbes’ career, of the railroads that Forbes controlled, and of the regulatory problems that affected those railroads. Clearly, Forbes brought together many of the disparate threads that connected all of the institutions and all of the historical actors associated with the transformative effects of railroads on American life. But there were also many currents that swirled and eddied far from the gaze of that Boston-based Midwestern railroader. There is no doubt that Forbes was a pioneer; whether or not he was typical is another matter.

Portions of Larson’s analysis seem rather quaint and outdated. Bonds of Enterprise originally appeared in 1984, and has now been reprinted with a short additional introduction and amended bibliography. Still, this book employs scholarship that is nearly two decades old. Scholars such as Gabriel Kolko figure prominently in the original bibliography, even though their findings have been superseded by more balanced research efforts. Larson seems needlessly stereotypical in his descriptions of “the squalid poverty of the Chinese” (p. 11) and “that exquisite pride of Oriental leisure.” (p. 17-18) Nor can we be positive that “Forbes seemed to thrive on tension.” (p. 23) And, it may be giving Forbes too much credit to suggest that, “He generated a model for developing the vast interior of the United States, and he adapted or invented many of those instruments of corporate enterprise with which industrialists and financiers revolutionized American life.” (p. 169)

Larson’s obvious enthusiasm for his subject does not detract from the value of this book, however. On the contrary, Bonds of Enterprise is a beautifully written and superbly organized account of a pivotal time, and a pivotal person, in the history of American business. Historians of the 19th-century railroad industry, of business-government relations, and of entrepreneurship will not discover any startling revelations here. Certainly the work of scholars such as Naomi Lamoreaux and Colleen Dunlavy has done more to advance our knowledge of these issues. What the reader will find is an excellent overview of these issues in a form that is readily accessible to people lacking expertise in these areas, as well as to students in graduate-level, or even advanced undergraduate classes. At a time when the history profession seems inevitably destined for fragmentation, compartmentalization, and the study of minutiae, Larson is to be commended for this synthetic work.

Albert J. Churella is an assistant professor in the Social and International Studies Program at Southern Polytechnic State University in Marietta, Georgia. He is the author of From Steam to Diesel: Managerial Customs and Organizational Capabilities in the Twentieth-Century American Locomotive Industry (Princeton: The Princeton University Press, 1998).

Subject(s):Business History
Geographic Area(s):North America
Time Period(s):19th Century