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The Use of Quantitative Micro-data in Canadian Economic History: A Brief Survey

Livio Di Matteo, Lakehead University

Introduction1

From a macro perspective, Canadian quantitative economic history is concerned with the collection and construction of historical time series data as well as the study of the performance of broad economic aggregates over time.2 The micro dimension of quantitative economic history focuses on individual and sector responses to economic phenomena.3 In particular, micro economic history is marked by the collection and analysis of data sets rooted in individual economic and social behavior. This approach uses primary historical records like census rolls, probate records, assessment rolls, land records, parish records and company records, to construct sets of socio-economic data used to examine the social and economic characteristics and behavior of those individuals and their society, both cross-sectionally and over time.

The expansion of historical micro-data studies in Canada has been a function of academic demand and supply factors. On the demand side, there has been a desire for more explicit use of economic and social theory in history and micro-data studies that make use of available records on individuals appeal to historians interested in understanding aggregate trends and reaching the micro-underpinnings of the larger macroeconomic and social relationships. For example, in Canada, the late nineteenth century was a period of intermittent economic growth and analyzing how that growth record affected different groups in society requires studies that disaggregate the population into sub-groups. One way of doing this that became attractive in the 1960’s was to collect micro-data samples from relevant census, assessment or probate records.

On the supply side, computers have lowered research costs, making the analysis of large data sets feasible and cost-effective. The proliferation of low cost personal computers, statistical packages and data spread-sheets has led to another revolution in micro-data analysis, as computers are now routinely taken into archives so that data collection, input and analysis can proceed even more efficiently.

In addition, studies using historical micro-data are an area where economic historians trained either as economists or historians have been able to find common ground.4 Many of the pioneering micro-data projects in Canada were conducted by historians with some training in quantitative techniques, much of which was acquired “on the job” by intellectual interest and excitement, rather than as graduate school training. Historians and economists are united by their common analysis of primary micro-data sources and their choice of sophisticated computer equipment, linkage software and statistical packages.

Background to Historical Micro-data Studies in Canadian Economic History

The early stage of historical micro-data projects in Canada attempted to systematically collect and analyze data on a large scale. Many of these micro-data projects crossed the lines between social and economic history, as well as demographic history in the case of French Canada. Path-breaking work by American scholars such as Lee Soltow (1971), Stephan Thernstrom (1973) and Alice Hanson Jones (1980) was an important influence on Canadian work. Their work on wealth and social structure and mobility using census and probate data drew attention to the extent of mobility — geographic, economic and social — that existed in pre-twentieth-century America.

However, Canadian historical micro-data work has been quite distinct from that of the United States, reflecting its separate tradition in economic history. Canada’s history is one of centralized penetration from the east via the Great Lakes-St. Lawrence waterway and the presence of two founding “nations” of European settlers – English and French – which led to strong Protestant and Roman Catholic traditions. Indeed, there was nearly 100 percent membership in the Roman Catholic Church for francophone Quebeckers for much of Canada’s history. As well, there is an economic reliance on natural resources, and a sparse population spread along an east-west corridor in isolated regions that have made Canada’s economic history, politics and institutions quite different from the United States.

The United States, from its early natural resource staples origins, developed a large, integrated internal market that was relatively independent of external economic forces, at least compared with Canada, and this shifted research topics away from trade and towards domestic resource allocation issues. At the level of historical micro-data, American scholars have had access to national micro-data samples for some time, which has not been the case in Canada until recently. Most of the early studies in Canadian micro-data were regional or urban samples drawn from manuscript sources and there has been little work since at a national level using micro-data sources. However, the strong role of the state in Canada has meant a particular richness to those sources that can be accessed and even the Census contains some personal details not available in the U.S. Census, such as religious affiliation. Moreover, earnings data are available in the Canadian census starting some forty years earlier than the United States.

Canadian micro-data studies have examined industry, fertility, urban and rural life, wages and labor markets, women’s work and roles in the economy, immigration and wealth. The data sources include census, probate records, assessment rolls, legal records and contracts, and are used by historians, economists, geographers, sociologists and demographers to study economic history.5 Very often, the primary sources are untapped and there can be substantial gaps in their coverage due to uneven preservation.

A Survey of Micro-data Studies

Early Years in English Canada

The fruits of early work in English Canada were books and papers by Frank Denton and Peter George (1970, 1973), Michael Katz (1975) and David Gagan (1981), among others.6 The Denton and George paper examined the influences on family size and school attendance in Wentworth County, Ontario, using the 1871 Census of Canada manuscripts. But it was Katz and Gagan’s work that generated greater attention among historians. Katz’s Hamilton Project used census, assessment rolls, city directories and other assorted micro-records to describe patterns of life in mid-nineteenth century Hamilton. Gagan’s Peel County Project was a comprehensive social and economic study of Peel County, Ontario, again using a variety of individual records including probate. These studies stimulated discussion and controversy about nineteenth-century wealth, inheritance patterns, and family size and structure.

The Demographic Tradition in French Canada

In French Canada, the pioneering work was the Saguenay Project organized by Gerard Bouchard (1977, 1983, 1992, 1993, 1996, 1998). Beginning in the 1970’s, a large effort has been expended to create a computerized genealogical and demographic data base for the Saguenay and Charlevoix regions of Quebec going back well into the nineteenth century. This data set, known now as the Balsac Register, contains data on 600,000 individuals (140,000 couples) and 2.4 million events (e.g. births, deaths, gender, etc…) with enormous social scientific and human genetic possibilities. The material gathered has been used to examine fertility, marriage patterns, inheritance, agricultural production and literacy, as well as genetic predisposition towards disease and formed the basis for a book spanning the history of population and families in the Saguenay over the period 1858 to 1971.

French Canada has a strong tradition of historical micro-data research rooted in demographic analysis.7 Another project underway since 1969 and associated with Bertrand Desjardins, Hubert Charbonneau, Jacques Légaré and Yves Landry is Le Programme de recherche en démographie historique (P.R.D.H) at the University of Montréal (Charbonneau, 1988; Landry, 1993; Desjardins, 1993). The database will eventually contain details on a million persons and their life events in Quebec between 1608 and 1850.

Industrial Studies

Only for the 1871 census have all of the schedules survived and the industrial schedules of that census have been made machine-readable (Bloomfield, 1986; Borsa and Inwood, 1993). Kris Inwood and Phyllis Wagg (1993) have used the census manuscript industrial schedules to examine the survival of handloom weaving in rural Canada circa 1870 (Inwood and Wagg, 1993). A total of 2,830 records were examined and data on average product, capital and month’s activity utilized. The results show that the demand for woolen homespun was income sensitive and that patterns of weaving by men and women differed with male-headed firms working a greater number of months during the year and more likely to have a second worker.

More recently, using a combination of aggregate capital market data and firm-level data for a sample of Canadian and American steel producers, Ian Keay and Angela Redish (2004) analyze the relationships between capital costs, financial structure, and domestic capital market characteristics. They find that national capital market characteristics and firm specific characteristics were important determinants of twentieth-century U.S. and Canadian steel firms’ financing decisions. Keay (2000) uses information from firms’ balance sheets and income accounts, and industry-specific prices to calculate labor, capital, intermediate input and total factor productivities for a sample of 39 Canadian and 39 American manufacturing firms in nine industries. The firm-level data also allow for the construction of nation, industry and time consistent series, including capital and value added. Inwood and Keay (2005) use establishment-level data describing manufacturers located in 128 border and near-border counties in Michigan, New York, Ohio, Pennsylvania, and Ontario to calculate Canadian relative to U.S. total factor productivity ratios for 25 industries. Their results illustrate that the average U.S. establishment was approximately 7% more efficient than its Canadian counterpart in 1870/71.

Population, Demographics & Fertility

Marvin McInnis (1977) assembled a body of census data on childbearing and other aspects of Upper Canadian households in 1861 and produced a sample of 1200 farm households that was used to examine the relationship between child-bearing and land availability. He found that an abundance of nearby uncultivated land did affect the probability of there being young children in the household but the magnitude of the influence was small. Moreover, the strongest result was that fertility fell as larger cities developed sufficiently close by for there to be a real influence by urban life and culture.

Eric Moore and Brian Osborne (1987) have examined the socio-economic differentials of marital fertility in Kingston. They related religion, birthplace, and age of mother, ethnic origin and occupational status to changes in fertility between 1861and 1881, using a data set of approximately 3000 observations taken from the manuscript census. Their choice of variables allows for the examination of the impact of both economic factors, as well as the importance of cultural attributes. William Marr (1992) took the first reasonably large sample of farm households (2,656) from the 1851-52 Census of Canada West and examined the determinants of fertility. He found fertility differences between older and more newly settled regions were influenced by land availability at the farm level but farm location, with respect to the extent of agricultural development, did not affect fertility when age, birthplace and religion were held constant. Michael Wayne (1998) uses the 1861 Census of Canada to look at the black population of Canada on the eve of the American Civil War. Meanwhile, George Emery (1993) helps provide an assessment of the comprehensiveness and accuracy of aggregate vital statistics in Ontario between 1869 and 1952 by looking at the process of recording vital statistics. Emery and Kevin McQuillan (1988) use case studies to examine mortality in nineteenth-century Ingersoll, Ontario.

Urban and Rural Life

A number of studies have examined urban and rural life. Bettina Bradbury (1984) has analyzed the census manuscripts of two working class Montreal wards, Ste. Anne and St. Jacques, for the years 1861, 1871 and 1881. Random samples of 1/10 of the households in these parts of Montreal were taken for a sample of nearly 11,000 individuals over three decades. The data were used to examine women and wage labor in Montreal. The evidence is that men were the primary wage earners but the wife’s contribution to the family economy was not so much her own wage labor, which was infrequent, but in organizing the economic life of the household and finding alternate sources of support.

Bettina Bradbury, Peter Gossage, Evelyn Kolish and Alan Stewart (1993) and Gossage (1991) have examined marriage contracts in Montreal over the period 1820-1840 and found that, over time, the use of marriage contracts changed, becoming a tool of a propertied minority. As well, a growing proportion of contract signers chose to keep the property of spouses separate rather than “in community.” The movement towards separation was most likely to be found among the wealthy where separate property offered advantages, especially to those engaged in commerce during harsh economic times. Gillian Hamilton (1999) looks at prenuptial contracting behavior in early nineteenth-century Quebec to explore property rights within families and finds that couples signing contracts tended to choose joint ownership of property when wives were particularly important to the household.

Chad Gaffield (1979, 1983, 1987) has examined social, family and economic life in the Eastern Ontario counties of Prescott-Russell, Alfred and Caledonia using aggregate census, as well as manuscript data for the period 1851-1881.8 He has applied the material to studying rural schooling and the economic structure of farm families and found systematic differences between the marriage patterns of Anglophones and Francophone with Francophone tending to marry at a younger average age. Also, land shortages and the diminishing forest frontier created economic difficulties that led to reduced family sizes by 1881. Gaffield’s most significant current research project is his leadership of the Canadian Century Research Infrastructure (CCRI) initiative, one of the country’s largest research projects. The CCRI is creating cross-indexed databases from a century’s worth of national census information, enabling unprecedented understanding of the making of modern Canada. This effort will eventually lead to an integrated set of micro-data resources at a national level comparable to what currently exist for the United States.9

Business Records

Company and business records have also been used as a source of micro-data and insight into economic history. Gillian Hamilton has conducted a number of studies examining contracts, property rights and labor markets in pre-twentieth century Canada. Hamilton (1996, 2000) examines the nature of apprenticing arrangements in Montreal around the turn of the nineteenth century, using apprenticeship contracts from a larger body of notarial records found in Quebec. The principal question addressed is what determined apprenticeship length and when the decline of the institution began? Hamilton finds that the characteristics of both masters and their boys were important and that masters often relied on probationary periods to better gauge a boy’s worth before signing a contract. Probations, all else equal, were associated with shorter contracts.

Ann Carlos and Frank Lewis (1998, 1999, 2001, 2002) access Hudson Bay Company fur trading records to study property rights, competition, and depletion in the eighteenth-century Canadian fur trade and their work represents an important foray into Canadian aboriginal economic history by studying role of aboriginals as consumers. Doug McCalla (2005, 2005, 2001) uses store records from Upper Canada to examine and understand consumer purchases in the early nineteenth century and gain insight into material culture. Barton Hamilton and Mary MacKinnon (1996) use the Canadian Pacific Railway records to study changes between 1903 and 1938 in the composition of job separations, and the probability of separation. The proportion of voluntary departures fell by more than half after World War I. Independent competing risk, piecewise-constant hazard functions for the probabilities of quits and layoffs are estimated. Changes in workforce composition lengthened the average worker’s spell, but a worker with any given set of characteristics was much more likely to be laid off after 1921, although many of these layoffs were only temporary.

MacKinnon (1997) taps into the CPR data again with a constructed sample of 9000 employees hired before 1945 that includes 700 pensioners and finds features of the CPR pension plan are consistent with economic explanations regarding the role of pensions. Long, continuous periods of service were likely to be rewarded and employees in the most responsible positions generally had higher pensions.

MacKinnon (1996) complements published Canadian nominal wage data by constructing a new hourly wage series, developed from firm records, for machinists, helpers, and laborers employed by the Canadian Pacific Railway between 1900 and 1930. This new evidence suggests that real wage growth in Canada was faster than previously believed, and that there were substantial changes in wage inequality. In another contribution, MacKinnon (1990) studies unemployment relief in Canada by examining relief policies and recipients and contrasting the Canadian situation with unemployment insurance in Britain. She finds demographic factors important in explaining who went on relief, with older workers, and those with large families most likely to be on relief for sustained periods. Another unique contribution to historical labor studies is Michael Huberman and Denise Young (1999). They examine a set of individual strike data of 1554 strikes for Canada from 1901 to 1914 and conclude that having international unions did not weaken Canada’s union movement and that they became part of Canada’s industrial relations framework.

The 1891 and 1901 Census

An ongoing project is the 1891 Census of Canada Project at the University of Guelph under Director Kris Inwood, which is making the information of this census available to the research public in a digitized sample of individual records from the 1891 census. The project is hosted by the University of Guelph, with support from the Canadian Foundation for Innovation, the Ontario Innovation Trust and private sector partners. Phase 1 (Ontario) of the project began during the winter of 2003 in association with the College of Arts Canada Research Chair in Rural History. The Ontario project continues until 2007. Phase II began in 2005; it extends data collection to the rest of the country and also creates an integrated national sample. The database includes information returned on a randomly selected 5% of the enumerators’ manuscript pages with each page containing information describing twenty-five people. An additional 5% of census pages for western Canada and several large cities augment the basic sample. Ultimately the database will contain records for more than 350,000 people, bearing in mind that the population of Canada in 1891 was 3.8 million.

The release of the 1901 Census of Canada manuscript census has also spawned numerous micro-data studies. Peter Baskerville and Eric Sager (1995, 1998) have used the 1901 Census to examine unemployment and the work force in late Victorian Canada.10 Baskerville (2001a,b) uses the 1901 census to examine the practice of boarding in Victorian Canada while in another study he uses the 1901 census to examine wealth and religion. Kenneth Sylvester (2001) uses the 1901 census to examine ethnicity and landholding. Alan Green and Mary MacKinnon (2001) use a new sample of individual-level data compiled from the manuscript returns of the 1901 Census of Canada to examine the assimilation of male wage-earning immigrants (mainly from the UK) in Montreal and Toronto. Unlike studies of post-World War II immigrants to Canada, and some recent studies of nineteenth-century immigration to the United States, they find slow assimilation to the earnings levels of native-born English mother-tongue Canadians. Green, MacKinnon and Chris Minns (2005) use 1901 census data to demonstrate that Anglophones and Francophone had very different personal characteristics, so that movement to the west was rarely economically attractive for Francophone. However, large-scale migration into New England fitted French Canadians’ demographic and human capital profile.

Wealth and Inequality

Recent years have also seen the emergence of a body of literature by several contributors on wealth accumulation and distribution in nineteenth-century Canada. This work has provided quantitative measurements of the degree of inequality in wealth holding, as well as its evolution over time. Gilles Paquet and Jean-Pierre Wallot (1976, 1986) have examined the net personal wealth of wealth holders using “les inventaires après déces” (inventories taken after death) in Quebec during the late eighteenth and early nineteenth century. They have suggested that the habitant was indeed a rational economic agent who chose land as a form of wealth not because of inherent conservatism but because information and transactions costs hindered the accumulation of financial assets.

A. Gordon Darroch (1983a, 1983b) has utilized municipal assessment rolls to study wealth inequality in Toronto during the late nineteenth century. Darroch found that inequality among assessed families was such that the top one-fifth of assessed families held at least 65% of all assessed wealth and the poorest 40% never more than 8%, even though inequality did decline between 1871 and 1899. Darroch and Michael Ornstein (1980, 1984) used the 1871 Census to examine ethnicity, occupational structure and family life cycles in Canada. Darroch and Soltow (1992, 1994) research property holding in Ontario using 5,669 individuals the 1871 census manuscripts and find “deep and abiding structures of inequality” accompanied by opportunities for mobility.

Lars Osberg and Fazley Siddiq (1988, 1993) and Siddiq (1988) have examined wealth inequality in Nova Scotia using probated estates from 1871 and 1899. They found a slight shift towards greater inequality in wealth over time and concluded that the prosperity of the 1850-1875 period in Nova Scotia benefited primarily the Halifax- based merchant class. Higher levels of wealth were associated with being a merchant and with living in Halifax, as opposed to the rest of the province. Siddiq and Julian Gwyn (1992) used probate inventories from 1851 and 1871 to study wealth over the period. They again document a greater trend towards inequality, accompanied by rising wealth. In addition, Peter Wardhas collected a set of 196 Nova Scotia probate records for Lunenburg County spanning 1808-1922, as well as a set of poll tax records for the same location between 1791 and 1795.11

Livio Di Matteo and Peter George (1992, 1998) have examined wealth distribution in late nineteenth century Ontario using probate records and assessment roll data for Wentworth County for the years 1872, 1882, 1892 and 1902. They find a rise in average wealth levels up until 1892 and a decline from 1892 to 1902. Whereas the rise in wealth from 1872 to 1892 appears to have accompanied by a trend towards greater equality in wealth distribution, the period 1892 to 1902 marked a return to greater inequality. Di Matteo (1996, 1997, 1998, 2001) uses a set of 3,515 probated decedents for all of Ontario in 1892 to examine the determinants of wealth holding, the wealth of the Irish, inequality and life cycle accumulation. Di Matteo and Herb Emery (2002) use the 1892 Ontario data to examine life insurance holding and the extent of self-insurance as wealth rises. Di Matteo (2004, 2006) uses a newly constructed micro-data set for the Thunder Bay District from 1885-1920 consisting of 1,293 probated decedents to examine wealth and inequality during Canada’s wheat boom era. Di Matteo is currently using Ontario probated decedents from 1902 linked to the 1901 census and combined with previous data from 1892 to examine the impact of religious affiliation on wealth holding.

Wealth and property holding among women has also been a specific topic of research.12 Peter Baskerville (1999) uses probate data to examine wealth holding by women in the cities of Victoria and Hamilton between 1880 and 1901 and finds that they were substantial property owners. The holding of wealth by women in the wake of property legislation is studied by Inwood and Sue Ingram (2000) and Inwood and Sarah Van Sligtenhorst (2004). Their work chronicles the increase in female property holding in the wake of Canadian property law changes in the late nineteenth-century, Inwood and Richard Reid (2001) also use the Canadian Census to examine the relationship between gender and occupational identity.

Conclusion

The flurry of recent activity in Canadian quantitative economic history using census and probate data bodes well for the future. Even the National Archives of Canada has now made digital images of census forms available online as well as other primary records.13 Moreover, projects such as the CCRI and the 1891 Census Project hold the promise of new, integrated data sources for future research on national as opposed to regional micro-data questions. We will be able to see the extent of regional economic development, earnings and convergence at a regional level and from a national perspective. Access to the 1911 and future access to the 1921 Census of Canada will also provide fertile areas for research and discovery. The period between 1900 and 1921, spanning the wheat boom and the First World War, is particularly important as it coincides with Canadian industrialization, rapid economic growth and the further expansion of wealth and income at the individual level. Moreover, the access to new samples of micro data may also help shed light on aboriginal economic history during the nineteenth and early twentieth century, as well as the economic progress of women.14 In particular, the economic history of Canada’s aboriginal peoples after the decline of the fur trade and during Canada’s industrialization is an area where micro-data might be useful in illustrating economic trends and conditions.15

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Footnotes

1 The helpful comments of Herb Emery, Mary MacKinnon and Kris Inwood on earlier drafts are acknowledged.

2 See especially Mac Urquhart’s spearheading of the major efforts in national income and output estimates. (Urquhart, 1986, 1993)

3 “Individual response” means by individuals, households and firms.

4 See Gaffield (1988) and Igartua (1988).

5 The Conference on the Use of Census Manuscripts for Historical Research held at Guelph in March 1993 was an example of the interdisciplinary nature of historical micro-data research. The conference was sponsored by the Canadian Committee on History and Computing, the Social Sciences and Humanities Research Council of Canada and the University of Guelph. The conference was organized by economist Kris Inwood and historian Richard Reid and featured presentations by historians, economists, demographers, sociologists and anthropologists.

6 The Denton/George project had its origins in a proposal to the Second Conference on Quantitative Research in Canadian Economic History in 1967 that a sampling of the Canadian census be undertaken. Denton and George drew a sample from the manuscript census returns for individuals for 1871 that had recently been made available, and reported their preliminary findings to the Fourth Conference in March, 1970 in a paper that was published shortly afterwards in Histoire sociale/Social History (1970). Mac Urquhart’s role here must be acknowledged. He and Ken Buckley were insistent that a sampling of Census manuscripts would be an important venture for the conference members to initiate.

7 Also, sources such as the aggregate census have been used to examine fertility by Henripin (1968) and mortality by Bourbeau and Legaré (1982)).

8 Chad Gaffield, Peter Baskerville and Alan Artibise were also involved in the creation of a machine-readable listing of archival sources on Vancouver Island known as the Vancouver Islands Project (Gaffield, 1988, 313).

9 See Chad Gaffield, “Ethics, Technology and Confidential Research Data: The Case of the Canadian Century Research Infrastructure Project,” paper presented to the World History Conference, Sydney, July 3-9, 2005.

10 Baskerville and Sager have been involved in the Canadian Families Project. See “The Canadian Families Project”, a special issue of the journal Historical Methods, 33 no. 4 (2000).

11 See Don Paterson’s Economic and Social History Data Base at the University of British Columbia at http://www2.arts.ubc.ca/econsochistory/data/data_list.html

12 Examples of other aspects of gender and economic status in a regional context ar e covered by Muise (1991), Myers (1994) and Seager and Perry (1997).

13 See http://www.collectionscanada.ca/genealogy/022-500-e.html

14 See for example the work by Gerhard Ens (1996) on the Red River Metis.

15 Hamilton and Inwood (2006) have begun research into identifying the aboriginal population in the 1891 Census of Canada.

Citation: Di Matteo, Livio. “The Use of Quantitative Micro-data in Canadian Economic History: A Brief Survey”. EH.Net Encyclopedia, edited by Robert Whaples. January 27, 2007. URL
http://eh.net/encyclopedia/the-use-of-quantitative-micro-data-in-canadian-economic-history-a-brief-survey/

The Economic Impact of the Black Death

David Routt, University of Richmond

The Black Death was the largest demographic disaster in European history. From its arrival in Italy in late 1347 through its clockwise movement across the continent to its petering out in the Russian hinterlands in 1353, the magna pestilencia (great pestilence) killed between seventeen and twenty—eight million people. Its gruesome symptoms and deadliness have fixed the Black Death in popular imagination; moreover, uncovering the disease’s cultural, social, and economic impact has engaged generations of scholars. Despite growing understanding of the Black Death’s effects, definitive assessment of its role as historical watershed remains a work in progress.

A Controversy: What Was the Black Death?

In spite of enduring fascination with the Black Death, even the identity of the disease behind the epidemic remains a point of controversy. Aware that fourteenth—century eyewitnesses described a disease more contagious and deadlier than bubonic plague (Yersinia pestis), the bacillus traditionally associated with the Black Death, dissident scholars in the 1970s and 1980s proposed typhus or anthrax or mixes of typhus, anthrax, or bubonic plague as the culprit. The new millennium brought other challenges to the Black Death—bubonic plague link, such as an unknown and probably unidentifiable bacillus, an Ebola—like haemorrhagic fever or, at the pseudoscientific fringes of academia, a disease of interstellar origin.

Proponents of Black Death as bubonic plague have minimized differences between modern bubonic and the fourteenth—century plague through painstaking analysis of the Black Death’s movement and behavior and by hypothesizing that the fourteenth—century plague was a hypervirulent strain of bubonic plague, yet bubonic plague nonetheless. DNA analysis of human remains from known Black Death cemeteries was intended to eliminate doubt but inability to replicate initially positive results has left uncertainty. New analytical tools used and new evidence marshaled in this lively controversy have enriched understanding of the Black Death while underscoring the elusiveness of certitude regarding phenomena many centuries past.

The Rate and Structure of mortality

The Black Death’s socioeconomic impact stemmed, however, from sudden mortality on a staggering scale, regardless of what bacillus caused it. Assessment of the plague’s economic significance begins with determining the rate of mortality for the initial onslaught in 1347—53 and its frequent recurrences for the balance of the Middle Ages, then unraveling how the plague chose victims according to age, sex, affluence, and place.

Imperfect evidence unfortunately hampers knowing precisely who and how many perished. Many of the Black Death’s contemporary observers, living in an epoch of famine and political, military, and spiritual turmoil, described the plague apocalyptically. A chronicler famously closed his narrative with empty membranes should anyone survive to continue it. Others believed as few as one in ten survived. One writer claimed that only fourteen people were spared in London. Although sober eyewitnesses offered more plausible figures, in light of the medieval preference for narrative dramatic force over numerical veracity, chroniclers’ estimates are considered evidence of the Black Death’s battering of the medieval psyche, not an accurate barometer of its demographic toll.

Even non—narrative and presumably dispassionate, systematic evidence — legal and governmental documents, ecclesiastical records, commercial archives — presents challenges. No medieval scribe dragged his quill across parchment for the demographer’s pleasure and convenience. With a paucity of censuses, estimates of population and tracing of demographic trends have often relied on indirect indicators of demographic change (e.g., activity in the land market, levels of rents and wages, size of peasant holdings) or evidence treating only a segment of the population (e.g., assignment of new priests to vacant churches, payments by peasants to take over holdings of the deceased). Even the rare census—like record, like England’s Domesday Book (1086) or the Poll Tax Return (1377), either enumerates only heads of households or excludes slices of the populace or ignores regions or some combination of all these. To compensate for these imperfections, the demographer relies on potentially debatable assumptions about the size of the medieval household, the representativeness of a discrete group of people, the density of settlement in an undocumented region, the level of tax evasion, and so forth.

A bewildering array of estimates for mortality from the plague of 1347—53 is the result. The first outbreak of the Black Death indisputably was the deadliest but the death rate varied widely according to place and social stratum. National estimates of mortality for England, where the evidence is fullest, range from five percent, to 23.6 percent among aristocrats holding land from the king, to forty to forty—five percent of the kingdom’s clergy, to over sixty percent in a recent estimate. The picture for the continent likewise is varied. Regional mortality in Languedoc (France) was forty to fifty percent while sixty to eighty percent of Tuscans (Italy) perished. Urban death rates were mostly higher but no less disparate, e.g., half in Orvieto (Italy), Siena (Italy), and Volterra (Italy), fifty to sixty—six percent in Hamburg (Germany), fifty—eight to sixty—eight percent in Perpignan (France), sixty percent for Barcelona’s (Spain) clerical population, and seventy percent in Bremen (Germany). The Black Death was often highly arbitrary in how it killed in a narrow locale, which no doubt broadened the spectrum of mortality rates. Two of Durham Cathedral Priory’s manors, for instance, had respective death rates of twenty—one and seventy—eighty percent (Shrewsbury, 1970; Russell, 1948; Waugh, 1991; Ziegler, 1969; Benedictow, 2004; Le Roy Ladurie, 1976; Bowsky, 1964; Pounds, 1974; Emery, 1967; Gyug, 1983; Aberth, 1995; Lomas, 1989).

Credible death rates between one quarter and three quarters complicate reaching a Europe—wide figure. Neither a casual and unscientific averaging of available estimates to arrive at a probably misleading composite death rate nor a timid placing of mortality somewhere between one and two thirds is especially illuminating. Scholars confronting the problem’s complexity before venturing estimates once favored one third as a reasonable aggregate death rate. Since the early 1970s demographers have found higher levels of mortality plausible and European mortality of one half is considered defensible, a figure not too distant from less fanciful contemporary observations.

While the Black Death of 1347—53 inflicted demographic carnage, had it been an isolated event European population might have recovered to its former level in a generation or two and its economic impact would have been moderate. The disease’s long—term demographic and socioeconomic legacy arose from it recurrence. When both national and local epidemics are taken into account, England endured thirty plague years between 1351 and 1485, a pattern mirrored on the continent, where Perugia was struck nineteen times and Hamburg, Cologne, and Nuremburg at least ten times each in the fifteenth century. Deadliness of outbreaks declined — perhaps ten to twenty percent in the second plague (pestis secunda) of 1361—2, ten to fifteen percent in the third plague (pestis tertia) of 1369, and as low as five and rarely above ten percent thereafter — and became more localized; however, the Black Death’s persistence ensured that demographic recovery would be slow and socioeconomic consequences deeper. Europe’s population in 1430 may have been fifty to seventy—five percent lower than in 1290 (Cipolla, 1994; Gottfried, 1983).

Enumeration of corpses does not adequately reflect the Black Death’s demographic impact. Who perished was equally significant as how many; in other words, the structure of mortality influenced the time and rate of demographic recovery. The plague’s preference for urbanite over peasant, man over woman, poor over affluent, and, perhaps most significantly, young over mature shaped its demographic toll. Eyewitnesses so universally reported disproportionate death among the young in the plague’s initial recurrence (1361—2) that it became known as the Childen’s Plague (pestis puerorum, mortalité des enfants). If this preference for youth reflected natural resistance to the disease among plague survivors, the Black Death may have ultimately resembled a lower—mortality childhood disease, a reality that magnified both its demographic and psychological impact.

The Black Death pushed Europe into a long—term demographic trough. Notwithstanding anecdotal reports of nearly universal pregnancy of women in the wake of the magna pestilencia, demographic stagnancy characterized the rest of the Middle Ages. Population growth recommenced at different times in different places but rarely earlier than the second half of the fifteenth century and in many places not until c. 1550.

The European Economy on the Cusp of the Black Death

Like the plague’s death toll, its socioeconomic impact resists categorical measurement. The Black Death’s timing made a facile labeling of it as a watershed in European economic history nearly inevitable. It arrived near the close of an ebullient high Middle Ages (c. 1000 to c. 1300) in which urban life reemerged, long—distance commerce revived, business and manufacturing innovated, manorial agriculture matured, and population burgeoned, doubling or tripling. The Black Death simultaneously portended an economically stagnant, depressed late Middle Ages (c. 1300 to c. 1500). However, even if this simplistic and somewhat misleading portrait of the medieval economy is accepted, isolating the Black Death’s economic impact from manifold factors at play is a daunting challenge.

Cognizant of a qualitative difference between the high and late Middle Ages, students of medieval economy have offered varied explanations, some mutually exclusive, others not, some favoring the less dramatic, less visible, yet inexorable factor as an agent of change rather than a catastrophic demographic shift. For some, a cooling climate undercut agricultural productivity, a downturn that rippled throughout the predominantly agrarian economy. For others, exploitative political, social, and economic institutions enriched an idle elite and deprived working society of wherewithal and incentive to be innovative and productive. Yet others associate monetary factors with the fourteenth— and fifteenth—century economic doldrums.

The particular concerns of the twentieth century unsurprisingly induced some scholars to view the medieval economy through a Malthusian lens. In this reconstruction of the Middle Ages, population growth pressed against the society’s ability to feed itself by the mid—thirteenth century. Rising impoverishment and contracting holdings compelled the peasant to cultivate inferior, low—fertility land and to convert pasture to arable production and thereby inevitably reduce numbers of livestock and make manure for fertilizer scarcer. Boosting gross productivity in the immediate term yet driving yields of grain downward in the longer term exacerbated the imbalance between population and food supply; redressing the imbalance became inevitable. This idea’s adherents see signs of demographic correction from the mid—thirteenth century onward, possibly arising in part from marriage practices that reduced fertility. A more potent correction came with subsistence crises. Miserable weather in 1315 destroyed crops and the ensuing Great Famine (1315—22) reduced northern Europe’s population by perhaps ten to fifteen percent. Poor harvests, moreover, bedeviled England and Italy to the eve of the Black Death.

These factors — climate, imperfect institutions, monetary imbalances, overpopulation — diminish the Black Death’s role as a transformative socioeconomic event. In other words, socioeconomic changes already driven by other causes would have occurred anyway, merely more slowly, had the plague never struck Europe. This conviction fosters receptiveness to lower estimates of the Black Death’s deadliness. Recent scrutiny of the Malthusian analysis, especially studies of agriculture in source—rich eastern England, has, however, rehabilitated the Black Death as an agent of socioeconomic change. Growing awareness of the use of “progressive” agricultural techniques and of alternative, non—grain economies less susceptible to a Malthusian population—versus—resources dynamic has undercut the notion of an absolutely overpopulated Europe and has encouraged acceptance of higher rates of mortality from the plague (Campbell, 1983; Bailey, 1989).

The Black Death and the Agrarian Economy

The lion’s share of the Black Death’s effect was felt in the economy’s agricultural sector, unsurprising in a society in which, except in the most urbanized regions, nine of ten people eked out a living from the soil.

A village struck by the plague underwent a profound though brief disordering of the rhythm of daily life. Strong administrative and social structures, the power of custom, and innate human resiliency restored the village’s routine by the following year in most cases: fields were plowed, crops were sown, tended, and harvested, labor services were performed by the peasantry, the village’s lord collected dues from tenants. Behind this seeming normalcy, however, lord and peasant were adjusting to the Black Death’s principal economic consequence: a much smaller agricultural labor pool. Before the plague, rising population had kept wages low and rents and prices high, an economic reality advantageous to the lord in dealing with the peasant and inclining many a peasant to cleave to demeaning yet secure dependent tenure.

As the Black Death swung the balance in the peasant’s favor, the literate elite bemoaned a disintegrating social and economic order. William of Dene, John Langland, John Gower, and others polemically evoked nostalgia for the peasant who knew his place, worked hard, demanded little, and squelched pride while they condemned their present in which land lay unplowed and only an immediate pang of hunger goaded a lazy, disrespectful, grasping peasant to do a moment’s desultory work (Hatcher, 1994).

Moralizing exaggeration aside, the rural worker indeed demanded and received higher payments in cash (nominal wages) in the plague’s aftermath. Wages in England rose from twelve to twenty—eight percent from the 1340s to the 1350s and twenty to forty percent from the 1340s to the 1360s. Immediate hikes were sometimes more drastic. During the plague year (1348—49) at Fornham All Saints (Suffolk), the lord paid the pre—plague rate of 3d. per acre for more half of the hired reaping but the rest cost 5d., an increase of 67 percent. The reaper, moreover, enjoyed more and larger tips in cash and perquisites in kind to supplement the wage. At Cuxham (Oxfordshire), a plowman making 2s. weekly before the plague demanded 3s. in 1349 and 10s. in 1350 (Farmer, 1988; Farmer, 1991; West Suffolk Record Office 3/15.7/2.4; Harvey, 1965).

In some instances, the initial hikes in nominal or cash wages subsided in the years further out from the plague and any benefit they conferred on the wage laborer was for a time undercut by another economic change fostered by the plague. Grave mortality ensured that the European supply of currency in gold and silver increased on a per—capita basis, which in turned unleashed substantial inflation in prices that did not subside in England until the mid—1370s and even later in many places on the continent. The inflation reduced the purchasing power (real wage) of the wage laborer so significantly that, even with higher cash wages, his earnings either bought him no more or often substantially less than before the magna pestilencia (Munro, 2003; Aberth, 2001).

The lord, however, was confronted not only by the roving wage laborer on whom he relied for occasional and labor—intensive seasonal tasks but also by the peasant bound to the soil who exchanged customary labor services, rent, and dues for holding land from the lord. A pool of labor services greatly reduced by the Black Death enabled the servile peasant to bargain for less onerous responsibilities and better conditions. At Tivetshall (Norfolk), vacant holdings deprived its lord of sixty percent of his week—work and all his winnowing services by 1350—51. A fifth of winter and summer week—work and a third of reaping services vanished at Redgrave (Suffolk) in 1349—50 due to the magna pestilencia. If a lord did not make concessions, a peasant often gravitated toward any better circumstance beckoning elsewhere. At Redgrave, for instance, the loss of services in 1349—50 directly due to the plague was followed in 1350—51 by an equally damaging wave of holdings abandoned by surviving tenants. For the medieval peasant, never so tightly bound to the manor as once imagined, the Black Death nonetheless fostered far greater rural mobility. Beyond loss of labor services, the deceased or absentee peasant paid no rent or dues and rendered no fees for use of manorial monopolies such as mills and ovens and the lord’s revenues shrank. The income of English lords contracted by twenty percent from 1347 to 1353 (Norfolk Record Office WAL 1247/288×1; University of Chicago Bacon 335—6; Gottfried, 1983).

Faced with these disorienting circumstances, the lord often ultimately had to decide how or even whether the pre—plague status quo could be reestablished on his estate. Not capitalistic in the sense of maximizing productivity for reinvestment of profits to enjoy yet more lucrative future returns, the medieval lord nonetheless valued stable income sufficient for aristocratic ostentation and consumption. A recalcitrant peasantry, diminished dues and services, and climbing wages undermined the material foundation of the noble lifestyle, jostled the aristocratic sense of proper social hierarchy, and invited a response.

In exceptional circumstances, a lord sometimes kept the peasant bound to the land. Because the nobility in Spanish Catalonia had already tightened control of the peasantry before the Black Death, because underdeveloped commercial agriculture provided the peasantry narrow options, and because the labor—intensive demesne agriculture common elsewhere was largely absent, the Catalan lord through a mix of coercion (physical intimidation, exorbitant fees to purchase freedom) and concession (reduced rents, conversion of servile dues to less humiliating fixed cash payments) kept the Catalan peasant in place. In England and elsewhere on the continent, where labor services were needed to till the demesne, such a conservative approach was less feasible. This, however, did not deter some lords from trying. The lord of Halesowen (Worcestershire) not only commanded the servile tenant to perform the full range of services but also resuscitated labor obligations in abeyance long before the Black Death, tantamount to an unwillingness to acknowledge anything had changed (Freedman, 1991; Razi, 1981).

Europe’s political elite also looked to legal coercion not only to contain rising wages and to limit the peasant’s mobility but also to allay a sense of disquietude and disorientation arising from the Black Death’s buffeting of pre—plague social realities. England’s Ordinance of Laborers (1349) and Statute of Laborers (1351) called for a return to the wages and terms of employment of 1346. Labor legislation was likewise promulgated by the Córtes of Aragon and Castile, the French crown, and cities such as Siena, Orvieto, Pisa, Florence, and Ragusa. The futility of capping wages by legislative fiat is evident in the French crown’s 1351 revision of its 1349 enactment to permit a wage increase of one third. Perhaps only in England, where effective government permitted robust enforcement, did the law slow wage increases for a time (Aberth, 2001; Gottfried, 1983; Hunt and Murray, 1999; Cohn, 2007).

Once knee—jerk conservatism and legislative palliatives failed to revivify pre—plague socioeconomic arrangements, the lord cast about for a modus vivendi in a new world of abundant land and scarce labor. A sober triage of the available sources of labor, whether it was casual wage labor or a manor’s permanent stipendiary staff (famuli) or the dependent peasant, led to revision of managerial policy. The abbot of Saint Edmund’s, for example, focused on reconstitution of the permanent staff (famuli) on his manors. Despite mortality and flight, the abbot by and large achieved his goal by the mid—1350s. While labor legislation may have facilitated this, the abbot’s provision of more frequent and lucrative seasonal rewards, coupled with the payment of grain stipends in more valuable and marketable cereals such as wheat, no doubt helped secure the loyalty of famuli while circumventing statutory limits on higher wages. With this core of labor solidified, the focus turned to preserving the most essential labor services, especially those associated with the labor—intensive harvesting season. Less vital labor services were commuted for cash payments and ad hoc wage labor then hired to fill gaps. The cultivation of the demesne continued, though not on the pre—plague scale.

For a time in fact circumstances helped the lord continue direct management of the demesne. The general inflation of the quarter—century following the plague as well as poor harvests in the 1350s and 1360s boosted grain prices and partially compensated for more expensive labor. This so—called “Indian summer” of demesne agriculture ended quickly in the mid—1370s in England and subsequently on the continent when the post—plague inflation gave way to deflation and abundant harvests drove prices for commodities downward, where they remained, aside from brief intervals of inflation, for the rest of the Middle Ages. Recurrences of the plague, moreover, placed further stress on new managerial policies. For the lord who successfully persuaded new tenants to take over vacant holdings, such as happened at Chevington (Suffolk) by the late 1350s, the pestis secunda of 1361—62 often inflicted a decisive blow: a second recovery at Chevington never materialized (West Suffolk Records Office 3/15.3/2.9—2.23).

Under unremitting pressure, the traditional cultivation of the demesne ceased to be viable for lord after lord: a centuries—old manorial system gradually unraveled and the nature of agriculture was transformed. The lord’s earliest concession to this new reality was curtailment of cultivated acreage, a trend that accelerated with time. The 590.5 acres sown on average at Great Saxham (Suffolk) in the late 1330s was more than halved (288.67 acres) in the 1360s, for instance (West Suffolk Record Office, 3/15.14/1.1, 1.7, 1.8).

Beyond reducing the demesne to a size commensurate with available labor, the lord could explore types of husbandry less labor—intensive than traditional grain agriculture. Greater domestic manufacture of woolen cloth and growing demand for meat enabled many English lords to reduce arable production in favor of sheep—raising, which required far less labor. Livestock husbandry likewise became more significant on the continent. Suitable climate, soil, and markets made grapes, olives, apples, pears, vegetables, hops, hemp, flax, silk, and dye—stuffs attractive alternatives to grain. In hope of selling these cash crops, rural agriculture became more attuned to urban demand and urban businessmen and investors more intimately involved in what and how much of it was grown in the countryside (Gottfried, 1983; Hunt and Murray, 1999).

The lord also looked to reduce losses from demesne acreage no longer under the plow and from the vacant holdings of onetime tenants. Measures adopted to achieve this end initiated a process that gained momentum with each passing year until the face of the countryside was transformed and manorialism was dead. The English landlord, hopeful for a return to the pre—plague regime, initially granted brief terminal leases of four to six years at fixed rates for bits of demesne and for vacant dependent holdings. Leases over time lengthened to ten, twenty, thirty years, or even a lifetime. In France and Italy, the lord often resorted to métayage or mezzadria leasing, a type of sharecropping in which the lord contributed capital (land, seed, tools, plow teams) to the lessee, who did the work and surrendered a fraction of the harvest to the lord.

Disillusioned by growing obstacles to profitable cultivation of the demesne, the lord, especially in the late fourteenth century and the early fifteenth, adopted a more sweeping type of leasing, the placing of the demesne or even the entire manor “at farm” (ad firmam). A “farmer” (firmarius) paid the lord a fixed annual “farm” (firma) for the right to exploit the lord’s property and take whatever profit he could. The distant or unprofitable manor was usually “farmed” first and other manors followed until a lord’s personal management of his property often ceased entirely. The rising popularity of this expedient made direct management of demesne by lord rare by c. 1425. The lord often became a rentier bound to a fixed income. The tenurial transformation was completed when the lord sold to the peasant his right of lordship, a surrender to the peasant of outright possession of his holding for a fixed cash rent and freedom from dues and services. Manorialism, in effect, collapsed and was gone from western and central Europe by 1500.

The landlord’s discomfort ultimately benefited the peasantry. Lower prices for foodstuffs and greater purchasing power from the last quarter of the fourteenth century onward, progressive disintegration of demesnes, and waning customary land tenure enabled the enterprising, ambitious peasant to lease or purchase property and become a substantial landed proprietor. The average size of the peasant holding grew in the late Middle Ages. Due to the peasant’s generally improved standard of living, the century and a half following the magna pestilencia has been labeled a “golden age” in which the most successful peasant became a “yeoman” or “kulak” within the village community. Freed from labor service, holding a fixed copyhold lease, and enjoying greater disposable income, the peasant exploited his land exclusively for his personal benefit and often pursued leisure and some of the finer things in life. Consumption of meat by England’s humbler social strata rose substantially after the Black Death, a shift in consumer tastes that reduced demand for grain and helped make viable the shift toward pastoralism in the countryside. Late medieval sumptuary legislation, intended to keep the humble from dressing above his station and retain the distinction between low— and highborn, attests both to the peasant’s greater income and the desire of the elite to limit disorienting social change (Dyer, 1989; Gottfried, 1983; Hunt and Murray, 1999).

The Black Death, moreover, profoundly altered the contours of settlement in the countryside. Catastrophic loss of population led to abandonment of less attractive fields, contraction of existing settlements, and even wholesale desertion of villages. More than 1300 English villages vanished between 1350 and 1500. French and Dutch villagers abandoned isolated farmsteads and huddled in smaller villages while their Italian counterparts vacated remote settlements and shunned less desirable fields. The German countryside was mottled with abandoned settlements. Two thirds of named villages disappeared in Thuringia, Anhalt, and the eastern Harz mountains, one fifth in southwestern Germany, and one third in the Rhenish palatinate, abandonment far exceeding loss of population and possibly arising from migration from smaller to larger villages (Gottfried, 1983; Pounds, 1974).

The Black Death and the Commercial Economy

As with agriculture, assessment of the Black Death’s impact on the economy’s commercial sector is a complex problem. The vibrancy of the high medieval economy is generally conceded. As the first millennium gave way to the second, urban life revived, trade and manufacturing flourished, merchant and craft gilds emerged, commercial and financial innovations proliferated (e.g., partnerships, maritime insurance, double—entry bookkeeping, fair letters, letters of credit, bills of exchange, loan contracts, merchant banking, etc.). The integration of the high medieval economy reached its zenith c. 1250 to c. 1325 with the rise of large companies with international interests, such as the Bonsignori of Siena and the Buonaccorsi of Florence and the emergence of so—called “super companies” such as the Florentine Bardi, Peruzzi, and Acciaiuoli (Hunt and Murray, 1999).

How to characterize the late medieval economy has been more fraught with controversy, however. Historians a century past, uncomprehending of how their modern world could be rooted in a retrograde economy, imagined an entrepreneurially creative and expansive late medieval economy. Succeeding generations of historians darkened this optimistic portrait and fashioned a late Middle Ages of unmitigated decline, an “age of adversity” in which the economy was placed under the rubric “depression of the late Middle Ages.” The historiographical pendulum now swings away from this interpretation and a more nuanced picture has emerged that gives the Black Death’s impact on commerce its full due but emphasizes the variety of the plague’s impact from merchant to merchant, industry to industry, and city to city. Success or failure was equally possible after the Black Death and the game favored adaptability, creativity, nimbleness, opportunism, and foresight.

Once the magna pestilencia had passed, the city had to cope with a labor supply even more greatly decimated than in the countryside due to a generally higher urban death rate. The city, however, could reverse some of this damage by attracting, as it had for centuries, new workers from the countryside, a phenomenon that deepened the crisis for the manorial lord and contributed to changes in rural settlement. A resurgence of the slave trade occurred in the Mediterranean, especially in Italy, where the female slave from Asia or Africa entered domestic service in the city and the male slave toiled in the countryside. Finding more labor was not, however, a panacea. A peasant or slave performed an unskilled task adequately but could not necessarily replace a skilled laborer. The gross loss of talent due to the plague caused a decline in per capita productivity by skilled labor remediable only by time and training (Hunt and Murray, 1999; Miskimin, 1975).

Another immediate consequence of the Black Death was dislocation of the demand for goods. A suddenly and sharply smaller population ensured a glut of manufactured and trade goods, whose prices plummeted for a time. The businessman who successfully weathered this short—term imbalance in supply and demand then had to reshape his business’ output to fit a declining or at best stagnant pool of potential customers.

The Black Death transformed the structure of demand as well. While the standard of living of the peasant improved, chronically low prices for grain and other agricultural products from the late fourteenth century may have deprived the peasant of the additional income to purchase enough manufactured or trade items to fill the hole in commercial demand. In the city, however, the plague concentrated wealth, often substantial family fortunes, in fewer and often younger hands, a circumstance that, when coupled with lower prices for grain, left greater per capita disposable income. The plague’s psychological impact, moreover, it is believed, influenced how this windfall was used. Pessimism and the specter of death spurred an individualistic pursuit of pleasure, a hedonism that manifested itself in the purchase of luxuries, especially in Italy. Even with a reduced population, the gross volume of luxury goods manufactured and sold rose, a pattern of consumption that endured even after the extra income had been spent within a generation or so after the magna pestilencia.

Like the manorial lord, the affluent urban bourgeois sometimes employed structural impediments to block the ambitious parvenu from joining his ranks and becoming a competitor. A tendency toward limiting the status of gild master to the son or son—in—law of a sitting master, evident in the first half of the fourteenth century, gained further impetus after the Black Death. The need for more journeymen after the plague was conceded in the shortening of terms of apprenticeship, but the newly minted journeyman often discovered that his chance of breaking through the glass ceiling and becoming a master was virtually nil without an entrée through kinship. Women also were banished from gilds as unwanted competition. The urban wage laborer, by and large controlled by the gilds, was denied membership and had no access to urban structures of power, a potent source of frustration. While these measures may have permitted the bourgeois to hold his ground for a time, the winds of change were blowing in the city as well as the countryside and gild monopolies and gild restrictions were fraying by the close of the Middle Ages.

In the new climate created by the Black Death, the individual businessman did retain an advantage: the business judgment and techniques honed during the high Middle Ages. This was crucial in a contracting economy in which gross productivity never attained its high medieval peak and in which the prevailing pattern was boom and bust on a roughly generational basis. A fluctuating economy demanded adaptability and the most successful post—plague businessman not merely weathered bad times but located opportunities within adversity and exploited them. The post—plague entrepreneur’s preference for short—term rather than long—term ventures, once believed a product of a gloomy despondency caused by the plague and exacerbated by endemic violence, decay of traditional institutions, and nearly continuous warfare, is now viewed as a judicious desire to leave open entrepreneurial options, to manage risk effectively, and to take advantage of whatever better opportunity arose. The successful post—plague businessman observed markets closely and responded to them while exercising strict control over his concern, looking for greater efficiency, and trimming costs (Hunt and Murray, 1999).

The fortunes of the textile industry, a trade singularly susceptible to contracting markets and rising wages, best underscores the importance of flexibility. Competition among textile manufacturers, already great even before the Black Death due to excess productive capacity, was magnified when England entered the market for low— and medium—quality woolen cloth after the magna pestilencia and was exporting forty—thousand pieces annually by 1400. The English took advantage of proximity to raw material, wool England itself produced, a pattern increasingly common in late medieval business. When English producers were undeterred by a Flemish embargo on English cloth, the Flemish and Italians, the textile trade’s other principal players, were compelled to adapt in order to compete. Flemish producers that emphasized higher—grade, luxury textiles or that purchased, improved, and resold cheaper English cloth prospered while those that stubbornly competed head—to—head with the English in lower—quality woolens suffered. The Italians not only produced luxury woolens, improved their domestically—produced wool, found sources for wool outside England (Spain), and increased production of linen but also produced silks and cottons, once only imported into Europe from the East (Hunt and Murray, 1999).

The new mentality of the successful post—plague businessman is exemplified by the Florentines Gregorio Dati and Buonaccorso Pitti and especially the celebrated merchant of Prato, Francesco di Marco Datini. The large companies and super companies, some of which failed even before the Black Death, were not well suited to the post—plague commercial economy. Datini’s family business, with its limited geographical ambitions, better exercised control, was more nimble and flexible as opportunities vanished or materialized, and more effectively managed risk, all keys to success. Datini through voluminous correspondence with his business associates, subordinates, and agents and his conspicuously careful and regular accounting grasped the reins of his concern tightly. He insulated himself from undue risk by never committing too heavily to any individual venture, by dividing cargoes among ships or by insuring them, by never lending money to notoriously uncreditworthy princes, and by remaining as apolitical as he could. His energy and drive to complete every business venture likewise served him well and made him an exemplar for commercial success in a challenging era (Origo, 1957; Hunt and Murray, 1999).

The Black Death and Popular Rebellion

The late medieval popular uprising, a phenomenon with undeniable economic ramifications, is often linked with the demographic, cultural, social, and economic reshuffling caused by the Black Death; however, the connection between pestilence and revolt is neither exclusive nor linear. Any single uprising is rarely susceptible to a single—cause analysis and just as rarely was a single socioeconomic interest group the fomenter of disorder. The outbreak of rebellion in the first half of the fourteenth century (e.g., in urban [1302] and maritime [1325—28] Flanders and in English monastic towns [1326—27]) indicates the existence of socioeconomic and political disgruntlement well before the Black Death.

Some explanations for popular uprising, such as the placing of immediate stresses on the populace and the cumulative effect of centuries of oppression by manorial lords, are now largely dismissed. At times of greatest stress —— the Great Famine and the Black Death —— disorder but no large—scale, organized uprising materialized. Manorial oppression likewise is difficult to defend when the peasant in the plague’s aftermath was often enjoying better pay, reduced dues and services, broader opportunities, and a higher standard of living. Detailed study of the participants in the revolts most often labeled “peasant” uprisings has revealed the central involvement and apparent common cause of urban and rural tradesmen and craftsmen, not only manorial serfs.

The Black Death may indeed have made its greatest contribution to popular rebellion by expanding the peasant’s horizons and fueling a sense of grievance at the pace of change, not at its absence. The plague may also have undercut adherence to the notion of a divinely—sanctioned, static social order and buffeted a belief that preservation of manorial socioeconomic arrangements was essential to the survival of all, which in turn may have raised receptiveness to the apocalyptic socially revolutionary message of preachers like England’s John Ball. After the Black Death, change was inevitable and apparent to all.

The reasons for any individual rebellion were complex. Measures in the environs of Paris to check wage hikes caused by the plague doubtless fanned discontent and contributed to the outbreak of the Jacquerie of 1358 but high taxation to finance the Hundred Years’ War, depredation by marauding mercenary bands in the French countryside, and the peasantry’s conviction that the nobility had failed them in war roiled popular discontent. In the related urban revolt led by étienne Marcel (1355—58), tensions arose from the Parisian bourgeoisie’s discontent with the war’s progress, the crown’s imposition of regressive sales and head taxes, and devaluation of currency rather than change attributable to the Black Death.

In the English Peasants’ Rebellion of 1381, continued enforcement of the Statute of Laborers no doubt rankled and perhaps made the peasantry more open to provocative sermonizing but labor legislation had not halted higher wages or improvement in the standard of living for peasant. It seems likely that discontent may have arisen from an unsatisfying pace of improvement of the peasant’s lot. The regressive Poll Taxes of 1380 and 1381 also contributed to the discontent. It is furthermore noteworthy that the rebellion began in relatively affluent eastern England, not in the poorer west or north.

In the Ciompi revolt in Florence (1378—83), restrictive gild regulations and denial of political voice to workers due to the Black Death raised tensions; however, Florence’s war with the papacy and an economic slump in the 1370s resulting in devaluation of the penny in which the worker was paid were equally if not more important in fomenting unrest. Once the value of the penny was restored to its former level in 1383 the rebellion in fact subsided.

In sum, the Black Death played some role in each uprising but, as with many medieval phenomena, it is difficult to gauge its importance relative to other causes. Perhaps the plague’s greatest contribution to unrest lay in its fostering of a shrinking economy that for a time was less able to absorb socioeconomic tensions than had the growing high medieval economy. The rebellions in any event achieved little. Promises made to the rebels were invariably broken and brutal reprisals often followed. The lot of the lower socioeconomic strata was improved incrementally by the larger economic changes already at work. Viewed from this perspective, the Black Death may have had more influence in resolving the worker’s grievances than in spurring revolt.

Conclusion

The European economy at the close of the Middle Ages (c. 1500) differed fundamentally from the pre—plague economy. In the countryside, a freer peasant derived greater material benefit from his toil. Fixed rents if not outright ownership of land had largely displaced customary dues and services and, despite low grain prices, the peasant more readily fed himself and his family from his own land and produced a surplus for the market. Yields improved as reduced population permitted a greater focus on fertile lands and more frequent fallowing, a beneficial phenomenon for the peasant. More pronounced socioeconomic gradations developed among peasants as some, especially more prosperous ones, exploited the changed circumstances, especially the availability of land. The peasant’s gain was the lord’s loss. As the Middle Ages waned, the lord was commonly a pure rentier whose income was subject to the depredations of inflation.

In trade and manufacturing, the relative ease of success during the high Middle Ages gave way to greater competition, which rewarded better business practices and leaner, meaner, and more efficient concerns. Greater sensitivity to the market and the cutting of costs ultimately rewarded the European consumer with a wider range of good at better prices.

In the long term, the demographic restructuring caused by the Black Death perhaps fostered the possibility of new economic growth. The pestilence returned Europe’s population roughly its level c. 1100. As one scholar notes, the Black Death, unlike other catastrophes, destroyed people but not property and the attenuated population was left with the whole of Europe’s resources to exploit, resources far more substantial by 1347 than they had been two and a half centuries earlier, when they had been created from the ground up. In this environment, survivors also benefited from the technological and commercial skills developed during the course of the high Middle Ages. Viewed from another perspective, the Black Death was a cataclysmic event and retrenchment was inevitable, but it ultimately diminished economic impediments and opened new opportunity.

References and Further Reading:

Aberth, John. “The Black Death in the Diocese of Ely: The Evidence of the Bishop’s Register.” Journal of Medieval History 21 (1995): 275—87.

Aberth, John. From the Brink of the Apocalypse: Confronting Famine, War, Plague, and Death in the Later Middle Ages. New York: Routledge, 2001.

Aberth, John. The Black Death: The Great Mortality of 1348—1350, a Brief History with Documents . Boston and New York: Bedford/St. Martin’s, 2005.

Aston, T. H. and C. H. E. Philpin, eds. The Brenner Debate: Agrarian Class Structure and Economic Development in Pre—Industrial Europe. Cambridge: Cambridge University Press, 1985.

Bailey, Mark D. “Demographic Decline in Late Medieval England: Some Thoughts on Recent Research.” Economic History Review 49 (1996): 1—19.

Bailey, Mark D. A Marginal Economy? East Anglian Breckland in the Later Middle Ages. Cambridge: Cambridge University Press, 1989.

Benedictow, Ole J. The Black Death, 1346—1353: The Complete History. Woodbridge, Suffolk: Boydell Press, 2004.

Bleukx, Koenraad. “Was the Black Death (1348—49) a Real Plague Epidemic? England as a Case Study.” In Serta Devota in Memoriam Guillelmi Lourdaux. Pars Posterior: Cultura Medievalis, edited by W. Verbeke, M. Haverals, R. de Keyser, and J. Goossens, 64—113. Leuven: Leuven University Press, 1995.

Blockmans, Willem P. “The Social and Economic Effects of Plague in the Low Countries, 1349—1500.” Revue Belge de Philologie et d’Histoire 58 (1980): 833—63.

Bolton, Jim L. “‘The World Upside Down': Plague as an Agent of Economic and Social Change.” In The Black Death in England, edited by M. Ormrod and P. Lindley. Stamford: Paul Watkins, 1996.

Bowsky, William M. “The Impact of the Black Death upon Sienese Government and Society.” Speculum 38 (1964): 1—34.

Campbell, Bruce M. S. “Agricultural Progress in Medieval England: Some Evidence from Eastern Norfolk.” Economic History Review 36 (1983): 26—46.

Campbell, Bruce M. S., ed. Before the Black Death: Studies in the ‘Crisis’ of the Early Fourteenth Century. Manchester: Manchester University Press, 1991.

Cipolla, Carlo M. Before the Industrial Revolution: European Society and Economy, 1000—1700, Third edition. New York: Norton, 1994.

Cohn, Samuel K. The Black Death Transformed: Disease and Culture in Early Renaissance Europe. London: Edward Arnold, 2002.

Cohn, Sameul K. “After the Black Death: Labour Legislation and Attitudes toward Labour in Late—Medieval Western Europe.” Economic History Review 60 (2007): 457—85.

Davis, David E. “The Scarcity of Rats and the Black Death.” Journal of Interdisciplinary History 16 (1986): 455—70.

Davis, R. A. “The Effect of the Black Death on the Parish Priests of the Medieval Diocese of Coventry and Lichfield.” Bulletin of the Institute of Historical Research 62 (1989): 85—90.

Drancourt, Michel, Gerard Aboudharam, Michel Signoli, Olivier Detour, and Didier Raoult. “Detection of 400—Year—Old Yersinia Pestis DNA in Human Dental Pulp: An Approach to the Diagnosis of Ancient Septicemia.” Proceedings of the National Academy of the United States 95 (1998): 12637—40.

Dyer, Christopher. Standards of Living in the Middle Ages: Social Change in England, c. 1200—1520. Cambridge: Cambridge University Press, 1989.

Emery, Richard W. “The Black Death of 1348 in Perpignan.” Speculum 42 (1967): 611—23.

Farmer, David L. “Prices and Wages.” In The Agrarian History of England and Wales, Vol. II, edited H. E. Hallam, 715—817. Cambridge: Cambridge University Press, 1988.

Farmer, D. L. “Prices and Wages, 1350—1500.” In The Agrarian History of England and Wales, Vol. III, edited E. Miller, 431—94. Cambridge: Cambridge University Press, 1991.

Flinn, Michael W. “Plague in Europe and the Mediterranean Countries.” Journal of European Economic History 8 (1979): 131—48.

Freedman, Paul. The Origins of Peasant Servitude in Medieval Catalonia. New York: Cambridge University Press, 1991.

Gottfried, Robert. The Black Death: Natural and Human Disaster in Medieval Europe. New York: Free Press, 1983.

Gyug, Richard. “The Effects and Extent of the Black Death of 1348: New Evidence for Clerical Mortality in Barcelona.” Mediæval Studies 45 (1983): 385—98.

Harvey, Barbara F. “The Population Trend in England between 1300 and 1348.” Transactions of the Royal Historical Society 4th ser. 16 (1966): 23—42.

Harvey, P. D. A. A Medieval Oxfordshire Village: Cuxham, 1240—1400. London: Oxford University Press, 1965.

Hatcher, John. “England in the Aftermath of the Black Death.” Past and Present 144 (1994): 3—35.

Hatcher, John and Mark Bailey. Modelling the Middle Ages: The History and Theory of England’s Economic Development. Oxford: Oxford University Press, 2001.

Hatcher, John. Plague, Population, and the English Economy 1348—1530. London and Basingstoke: MacMillan Press Ltd., 1977.

Herlihy, David. The Black Death and the Transformation of the West, edited by S. K. Cohn. Cambridge and London: Cambridge University Press, 1997.

Horrox, Rosemary, transl. and ed. The Black Death. Manchester: Manchester University Press, 1994.

Hunt, Edwin S.and James M. Murray. A History of Business in Medieval Europe, 1200—1550. Cambridge: Cambridge University Press, 1999.

Jordan, William C. The Great Famine: Northern Europe in the Early Fourteenth Century. Princeton: Princeton University Press, 1996.

Lehfeldt, Elizabeth, ed. The Black Death. Boston: Houghton and Mifflin, 2005.

Lerner, Robert E. The Age of Adversity: The Fourteenth Century. Ithaca: Cornell University Press, 1968.

Le Roy Ladurie, Emmanuel. The Peasants of Languedoc, transl. J. Day. Urbana: University of Illinois Press, 1976.

Lomas, Richard A. “The Black Death in County Durham.” Journal of Medieval History 15 (1989): 127—40.

McNeill, William H. Plagues and Peoples. Garden City, New York: Anchor Books, 1976.

Miskimin, Harry A. The Economy of the Early Renaissance, 1300—1460. Cambridge: Cambridge University Press, 1975.

Morris, Christopher “The Plague in Britain.” Historical Journal 14 (1971): 205—15.

Munro, John H. “The Symbiosis of Towns and Textiles: Urban Institutions and the Changing Fortunes of Cloth Manufacturing in the Low Countries and England, 1270—1570.” Journal of Early Modern History 3 (1999): 1—74.

Munro, John H. “Wage—Stickiness, Monetary Changes, and the Real Incomes in Late—Medieval England and the Low Countries, 1300—1500: Did Money Matter?” Research in Economic History 21 (2003): 185—297.

Origo. Iris The Merchant of Prato: Francesco di Marco Datini, 1335—1410. Boston: David R. Godine, 1957, 1986.

Platt, Colin. King Death: The Black Death and its Aftermath in Late—Medieval England. Toronto: University of Toronto Press, 1996.

Poos, Lawrence R. A Rural Society after the Black Death: Essex 1350—1575. Cambridge: Cambridge University Press, 1991.

Postan, Michael M. The Medieval Economy and Society: An Economic History of Britain in the Middle Ages. Harmondswworth, Middlesex: Penguin, 1975.

Pounds, Norman J. D. An Economic History of Europe. London: Longman, 1974.

Raoult, Didier, Gerard Aboudharam, Eric Crubézy, Georges Larrouy, Bertrand Ludes, and Michel Drancourt. “Molecular Identification by ‘Suicide PCR’ of Yersinia Pestis as the Agent of Medieval Black Death.” Proceedings of the National Academy of Sciences of the United States of America 97 (7 Nov. 2000): 12800—3.

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Russell, Josiah C. British Medieval Population. Albuquerque: University of New Mexico Press, 1948.

Scott, Susan and Christopher J. Duncan. Return of the Black Death: The World’s Deadliest Serial Killer. Chicester, West Sussex and Hoboken, NJ: Wiley, 2004.

Shrewsbury, John F. D. A History of Bubonic Plague in the British Isles. Cambridge: Cambridge University Press, 1970.

Twigg, Graham The Black Death: A Biological Reappraisal. London: Batsford Academic and Educational, 1984.

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Citation: Routt, David. “The Economic Impact of the Black Death”. EH.Net Encyclopedia, edited by Robert Whaples. July 20, 2008. URL http://eh.net/encyclopedia/the-economic-impact-of-the-black-death/

The Economic History of Australia from 1788: An Introduction

Bernard Attard, University of Leicester

Introduction

The economic benefits of establishing a British colony in Australia in 1788 were not immediately obvious. The Government’s motives have been debated but the settlement’s early character and prospects were dominated by its original function as a jail. Colonization nevertheless began a radical change in the pattern of human activity and resource use in that part of the world, and by the 1890s a highly successful settler economy had been established on the basis of a favorable climate in large parts of the southeast (including Tasmania ) and the southwest corner; the suitability of land for European pastoralism and agriculture; an abundance of mineral wealth; and the ease with which these resources were appropriated from the indigenous population. This article will focus on the creation of a colonial economy from 1788 and its structural change during the twentieth century. To simplify, it will divide Australian economic history into four periods, two of which overlap. These are defined by the foundation of the ‘bridgehead economy’ before 1820; the growth of a colonial economy between 1820 and 1930; the rise of manufacturing and the protectionist state between 1891 and 1973; and the experience of liberalization and structural change since 1973. The article will conclude by suggesting briefly some of the similarities between Australia and other comparable settler economies, as well as the ways in which it has differed from them.

The Bridgehead Economy, 1788-1820

The description ‘bridgehead economy’ was used by one of Australia’s foremost economic historians, N. G. Butlin to refer to the earliest decades of British occupation when the colony was essentially a penal institution. The main settlements were at Port Jackson (modern Sydney, 1788) in New South Wales and Hobart (1804) in what was then Van Diemen’s Land (modern Tasmania). The colony barely survived its first years and was largely neglected for much of the following quarter-century while the British government was preoccupied by the war with France. An important beginning was nevertheless made in the creation of a private economy to support the penal regime. Above all, agriculture was established on the basis of land grants to senior officials and emancipated convicts, and limited freedoms were allowed to convicts to supply a range of goods and services. Although economic life depended heavily on the government Commissariat as a supplier of goods, money and foreign exchange, individual rights in property and labor were recognized, and private markets for both started to function. In 1808, the recall of the New South Wales Corps, whose officers had benefited most from access to land and imported goods (thus hopelessly entangling public and private interests), coupled with the appointment of a new governor, Lachlan Macquarie, in the following year, brought about a greater separation of the private economy from the activities and interests of the colonial government. With a significant increase in the numbers transported after 1810, New South Wales’ future became more secure. As laborers, craftsmen, clerks and tradesmen, many convicts possessed the skills required in the new settlements. As their terms expired, they also added permanently to the free population. Over time, this would inevitably change the colony’s character.

Natural Resources and the Colonial Economy, 1820-1930

Pastoral and Rural Expansion

For Butlin, the developments around 1810 were a turning point in the creation of a ‘colonial’ economy. Many historians have preferred to view those during the 1820s as more significant. From that decade, economic growth was based increasingly upon the production of fine wool and other rural commodities for markets in Britain and the industrializing economies of northwestern Europe. This growth was interrupted by two major depressions during the 1840s and 1890s and stimulated in complex ways by the rich gold discoveries in Victoria in 1851, but the underlying dynamics were essentially unchanged. At different times, the extraction of natural resources, whether maritime before the 1840s or later gold and other minerals, was also important. Agriculture, local manufacturing and construction industries expanded to meet the immediate needs of growing populations, which concentrated increasingly in the main urban centers. The colonial economy’s structure, growth of population and significance of urbanization are illustrated in tables 1 and 2. The opportunities for large profits in pastoralism and mining attracted considerable amounts of British capital, while expansion generally was supported by enormous government outlays for transport, communication and urban infrastructures, which also depended heavily on British finance. As the economy expanded, large-scale immigration became necessary to satisfy the growing demand for workers, especially after the end of convict transportation to the eastern mainland in 1840. The costs of immigration were subsidized by colonial governments, with settlers coming predominantly from the United Kingdom and bringing skills that contributed enormously to the economy’s growth. All this provided the foundation for the establishment of free colonial societies. In turn, the institutions associated with these — including the rule of law, secure property rights, and stable and democratic political systems — created conditions that, on balance, fostered growth. In addition to New South Wales, four other British colonies were established on the mainland: Western Australia (1829), South Australia (1836), Victoria (1851) and Queensland (1859). Van Diemen’s Land (Tasmania after 1856) became a separate colony in 1825. From the 1850s, these colonies acquired responsible government. In 1901, they federated, creating the Commonwealth of Australia.

Table 1
The Colonial Economy: Percentage Shares of GDP, 1891 Prices, 1861-1911

Pastoral Other rural Mining Manuf. Building Services Rent
1861 9.3 13.0 17.5 14.2 8.4 28.8 8.6
1891 16.1 12.4 6.7 16.6 8.5 29.2 10.3
1911 14.8 16.7 9.0 17.1 5.3 28.7 8.3

Source: Haig (2001), Table A1. Totals do not sum to 100 because of rounding.

Table 2
Colonial Populations (thousands), 1851-1911

Australia Colonies Cities
NSW Victoria Sydney Melbourne
1851 257 100 46 54 29
1861 669 198 328 96 125
1891 1,704 608 598 400 473
1911 2,313 858 656 648 593

Source: McCarty (1974), p. 21; Vamplew (1987), POP 26-34.

The process of colonial growth began with two related developments. First, in 1820, Macquarie responded to land pressure in the districts immediately surrounding Sydney by relaxing restrictions on settlement. Soon the outward movement of herdsmen seeking new pastures became uncontrollable. From the 1820s, the British authorities also encouraged private enterprise by the wholesale assignment of convicts to private employers and easy access to land. In 1831, the principles of systematic colonization popularized by Edward Gibbon Wakefield (1796-1862) were put into practice in New South Wales with the substitution of land sales for grants in order to finance immigration. This, however, did not affect the continued outward movement of pastoralists who simply occupied land where could find it beyond the official limits of settlement. By 1840, they had claimed a vast swathe of territory two hundred miles in depth running from Moreton Bay in the north (the site of modern Brisbane) through the Port Phillip District (the future colony of Victoria, whose capital Melbourne was marked out in 1837) to Adelaide in South Australia. The absence of any legal title meant that these intruders became known as ‘squatters’ and the terms of their tenure were not finally settled until 1846 after a prolonged political struggle with the Governor of New South Wales, Sir George Gipps.

The impact of the original penal settlements on the indigenous population had been enormous. The consequences of squatting after 1820 were equally devastating as the land and natural resources upon which indigenous hunter-gathering activities and environmental management depended were appropriated on a massive scale. Aboriginal populations collapsed in the face of disease, violence and forced removal until they survived only on the margins of the new pastoral economy, on government reserves, or in the arid parts of the continent least touched by white settlement. The process would be repeated again in northern Australia during the second half of the century.

For the colonists this could happen because Australia was considered terra nullius, vacant land freely available for occupation and exploitation. The encouragement of private enterprise, the reception of Wakefieldian ideas, and the wholesale spread of white settlement were all part of a profound transformation in official and private perceptions of Australia’s prospects and economic value as a British colony. Millennia of fire-stick management to assist hunter-gathering had created inland grasslands in the southeast that were ideally suited to the production of fine wool. Both the physical environment and the official incentives just described raised expectations of considerable profits to be made in pastoral enterprise and attracted a growing stream of British capital in the form of organizations like the Australian Agricultural Company (1824); new corporate settlements in Western Australia (1829) and South Australia (1836); and, from the 1830s, British banks and mortgage companies formed to operate in the colonies. By the 1830s, wool had overtaken whale oil as the colony’s most important export, and by 1850 New South Wales had displaced Germany as the main overseas supplier to British industry (see table 3). Allowing for the colonial economy’s growing complexity, the cycle of growth based upon land settlement, exports and British capital would be repeated twice. The first pastoral boom ended in a depression which was at its worst during 1842-43. Although output continued to grow during the 1840s, the best land had been occupied in the absence of substantial investment in fencing and water supplies. Without further geographical expansion, opportunities for high profits were reduced and the flow of British capital dried up, contributing to a wider downturn caused by drought and mercantile failure.

Table 3
Imports of Wool into Britain (thousands of bales), 1830-50

German Australian
1830 74.5 8.0
1840 63.3 41.0
1850 30.5 137.2

Source: Sinclair (1976), p. 46

When pastoral growth revived during the 1860s, borrowed funds were used to fence properties and secure access to water. This in turn allowed a further extension of pastoral production into the more environmentally fragile semi-arid interior districts of New South Wales, particularly during the 1880s. As the mobs of sheep moved further inland, colonial governments increased the scale of their railway construction programs, some competing to capture the freight to ports. Technical innovation and government sponsorship of land settlement brought greater diversity to the rural economy (see table 4). Exports of South Australian wheat started in the 1870s. The development of drought resistant grain varieties from the turn of the century led to an enormous expansion of sown acreage in both the southeast and southwest. From the 1880s, sugar production increased in Queensland, although mainly for the domestic market. From the 1890s, refrigeration made it possible to export meat, dairy products and fruit.

Table 4
Australian Exports (percentages of total value of exports), 1881-1928/29

Wool Minerals Wheat,flour Butter Meat Fruit
1881-90 54.1 27.2 5.3 0.1 1.2 0.2
1891-1900 43.5 33.1 2.9 2.4 4.1 0.3
1901-13 34.3 35.4 9.7 4.1 5.1 0.5
1920/21-1928/29 42.9 8.8 20.5 5.6 4.6 2.2

Source: Sinclair (1976), p. 166

Gold and Its Consequences

Alongside rural growth and diversification, the remarkable gold discoveries in central Victoria in 1851 brought increased complexity to the process of economic development. The news sparked an immediate surge of gold seekers into the colony, which was soon reinforced by a flood of overseas migrants. Until the 1870s, gold displaced wool as Australia’s most valuable export. Rural industries either expanded output (wheat in South Australia) or, in the case of pastoralists, switched production to meat and tallow, to supply a much larger domestic market. Minerals had been extracted since earliest settlement and, while yields on the Victorian gold fields soon declined, rich mineral deposits continued to be found. During the 1880s alone these included silver, lead and zinc at Broken Hill in New South Wales; copper at Mount Lyell in Tasmania; and gold at Charters Towers and Mount Morgan in Queensland. From 1893, what eventually became the richest goldfields in Australia were discovered at Coolgardie in Western Australia. The mining industry’s overall contribution to output and exports is illustrated in tables 1 and 4.

In Victoria, the deposits of easily extracted alluvial gold were soon exhausted and mining was taken over by companies that could command the financial and organizational resources needed to work the deep lodes. But the enormous permanent addition to the colonial population caused by the gold rush had profound effects throughout eastern Australia, dramatically accelerating the growth of the local market and workforce, and deeply disturbing the social balance that had emerged during the decade before. Between 1851 and 1861, the Australian population more than doubled. In Victoria it increased sevenfold; Melbourne outgrew Sydney, Chicago and San Francisco (see table 2). Significantly enlarged populations required social infrastructure, political representation, employment and land; and the new colonial legislatures were compelled to respond. The way this was played out varied between colonies but the common outcomes were the introduction of manhood suffrage, access to land through ‘free selection’ of small holdings, and, in the Victorian case, the introduction of a protectionist tariff in 1865. The particular age structure of the migrants of the 1850s also had long-term effects on the building cycle, notably in Victoria. The demand for housing accelerated during the 1880s, as the children of the gold generation matured and established their own households. With pastoral expansion and public investment also nearing their peaks, the colony experienced a speculative boom which added to the imbalances already being caused by falling export prices and rising overseas debt. The boom ended with the wholesale collapse of building companies, mortgage banks and other financial institutions during 1891-92 and the stoppage of much of the banking system during 1893.

The depression of the 1890s was worst in Victoria. Its impact on employment was softened by the Western Australian gold discoveries, which drew population away, but the colonial economy had grown to such an extent since the 1850s that the stimulus provided by the earlier gold finds could not be repeated. Severe drought in eastern Australia from the mid-1890s until 1903 caused the pastoral industry to contract. Yet, as we have seen, technological innovation also created opportunities for other rural producers, who were now heavily supported by government with little direct involvement by foreign investors. The final phase of rural expansion, with its associated public investment in rural (and increasingly urban) infrastructure continued until the end of the 1920s. Yields declined, however, as farmers moved onto the most marginal land. The terms of trade also deteriorated with the oversupply of several commodities in world markets after the First World War. As a result, the burden of servicing foreign debt rose once again. Australia’s position as a capital importer and exporter of natural resources meant that the Great Depression arrived early. From late 1929, the closure of overseas capital markets and collapse of export prices forced the Federal Government to take drastic measures to protect the balance of payments. The falls in investment and income transmitted the contraction to the rest of the economy. By 1932, average monthly unemployment amongst trade union members was over 22 percent. Although natural resource industries continued to have enduring importance as earners of foreign exchange, the Depression finally ended the long period in which land settlement and technical innovation had together provided a secure foundation for economic growth.

Manufacturing and the Protected Economy, 1891-1973

The ‘Australian Settlement’

There is a considerable chronological overlap between the previous section, which surveyed the growth of a colonial economy during the nineteenth century based on the exploitation of natural resources, and this one because it is a convenient way of approaching the two most important developments in Australian economic history between Federation and the 1970s: the enormous increase in government regulation after 1901 and, closely linked to this, the expansion of domestic manufacturing, which from the Second World War became the most dynamic part of the Australian economy.

The creation of the Commonwealth of Australia on 1 January 1901 broadened the opportunities for public intervention in private markets. The new Federal Government was given clearly-defined but limited powers over obviously ‘national’ matters like customs duties. The rest, including many affecting economic development and social welfare, remained with the states. The most immediate economic consequence was the abolition of inter-colonial tariffs and the establishment of a single Australian market. But the Commonwealth also soon set about transferring to the national level several institutions that different the colonies had experimented with during the 1890s. These included arrangements for the compulsory arbitration of industrial disputes by government tribunals, which also had the power to fix wages, and a discriminatory ‘white Australia’ immigration policy designed to exclude non-Europeans from the labor market. Both were partly responses to organized labor’s electoral success during the 1890s. Urban business and professional interests had always been represented in colonial legislatures; during the 1910s, rural producers also formed their own political parties. Subsequently, state and federal governments were typically formed by the either Australian Labor Party or coalitions of urban conservatives and the Country Party. The constituencies they each represented were thus able to influence the regulatory structure to protect themselves against the full impact of market outcomes, whether in the form of import competition, volatile commodity prices or uncertain employment conditions. The institutional arrangements they created have been described as the ‘Australian settlement’ because they balanced competing producer interests and arguably provided a stable framework for economic development until the 1970s, despite the inevitable costs.

The Growth of Manufacturing

An important part of the ‘Australian settlement’ was the imposition of a uniform federal tariff and its eventual elaboration into a system of ‘protection all round’. The original intended beneficiaries were manufacturers and their employees; indeed, when the first protectionist tariff was introduced in 1907, its operation was linked to the requirement that employers pay their workers ‘fair and reasonable wages’. Manufacturing’s actual contribution to economic growth before Federation has been controversial. The population influx of the 1850s widened opportunities for import-substitution but the best evidence suggests that manufacturing grew slowly as the industrial workforce increased (see table 1). Production was small-scale and confined largely to the processing of rural products and raw materials; assembly and repair-work; or the manufacture of goods for immediate consumption (e.g. soap and candle-making, brewing and distilling). Clothing and textile output was limited to a few lines. For all manufacturing, growth was restrained by the market’s small size and the limited opportunities for technical change it afforded.

After Federation, production was stimulated by several factors: rural expansion, the increasing use of agricultural machinery and refrigeration equipment, and the growing propensity of farm incomes to be spent locally. The removal of inter-colonial tariffs may also have helped. The statistical evidence indicates that between 1901 and the outbreak of the First World War manufacturing grew faster than the economy as a whole, while output per worker increased. But manufacturers also aspired mainly to supply the domestic market and expended increasing energy on retaining privileged access. Tariffs rose considerably between the two world wars. Some sectors became more capital intensive, particularly with the establishment of a local steel industry, the beginnings of automobile manufacture, and the greater use of electricity. But, except during the first half of the 1920s, there was little increase in labor productivity and the inter-war expansion of textile manufacturing reflected the heavy bias towards import substitution. Not until the Second World War and after did manufacturing growth accelerate and extend to those sectors most characteristic of an advance industrial economy (table 5). Amongst these were automobiles, chemicals, electrical and electronic equipment, and iron-and-steel. Growth was sustained during 1950s by similar factors to those operating in other countries during the ‘long boom’, including a growing stream of American direct investment, access to new and better technology, and stable conditions of full employment.

Table 5
Manufacturing and the Australian Economy, 1913-1949

1938-39 prices
Manufacturing share of GDP % Manufacturing annual rate of growth % GDP, annual rate of growth %
1913/14 21.9
1928/29 23.6 2.6 2.1
1948/49 29.8 3.4 2.2

Calculated from Haig (2001), Table A2. Rates of change are average annual changes since the previous year in the first column.

Manufacturing peaked in the mid-1960s at about 28 percent of national output (measured in 1968-69 prices) but natural resource industries remained the most important suppliers of exports. Since the 1920s, over-supply in world markets and the need to compensate farmers for manufacturing protection, had meant that virtually all rural industries, with the exception of wool, had been drawn into a complicated system of subsidies, price controls and market interventions at both federal and state levels. The post-war boom in the world economy increased demand for commodities, benefiting rural producers but also creating new opportunities for Australian miners. Most important of all, the first surge of breakneck growth in East Asia opened a vast new market for iron ore, coal and other mining products. Britain’s significance as a trading partner had declined markedly since the 1950s. By the end of the 1960s, Japan overtook it as Australia’s largest customer, while the United States was now the main provider of imports.

The mining bonanza contributed to the boom conditions experienced generally after 1950. The Federal Government played its part by using the full range of macroeconomic policies that were also increasingly familiar in similar western countries to secure stability and full employment. It encouraged high immigration, relaxing the entry criteria to allow in large numbers of southern Europeans, who added directly to the workforce, but also brought knowledge and experience. With state governments, the Commonwealth increased expenditure on education significantly, effectively entering the field for the first time after 1945. Access to secondary education was widened with the abandonment of fees in government schools and federal finance secured an enormous expansion of university places, especially after 1960. Some weaknesses remained. Enrolment rates after primary school were below those in many industrial countries and funding for technical education was poor. Despite this, the Australian population’s rising levels of education and skill continued to be important additional sources of growth. Finally, although government advisers expressed misgivings, industry policy remained determinedly interventionist. While state governments competed to attract manufacturing investment with tax and other incentives, by the 1960s protection had reached its highest level, with Australia playing virtually no part in the General Agreement on Tariffs and Trade (GATT), despite being an original signatory. The effects of rising tariffs since 1900 were evident in the considerable decline in Australia’s openness to trade (Table 6). Yet, as the post-war boom approached its end, the country still relied upon commodity exports and foreign investment to purchase the manufactures it was unable to produce itself. The impossibility of sustaining growth in this way was already becoming clear, even though the full implications would only be felt during the decades to come.

Table 6
Trade (Exports Plus Imports)
as a Share of GDP, Current Prices, %

1900/1 44.9
1928/29 36.9
1938/38 32.7
1964/65 33.3
1972/73 29.5

Calculated from Vamplew (1987), ANA 119-129.

Liberalization and Structural Change, 1973-2005

From the beginning of the 1970s, instability in the world economy and weakness at home ended Australia’s experience of the post-war boom. During the following decades, manufacturing’s share in output (table 7) and employment fell, while the long-term relative decline of commodity prices meant that natural resources could no longer be relied on to cover the cost of imports, let alone the long-standing deficits in payments for services, migrant remittances and interest on foreign debt. Until the early 1990s, Australia also suffered from persistent inflation and rising unemployment (which remained permanently higher, see chart 1). As a consequence, per capita incomes fluctuated during the 1970s, and the economy contracted in absolute terms during 1982-83 and 1990-91.

Even before the 1970s, new sources of growth and rising living standards had been needed, but the opportunities for economic change were restricted by the elaborate regulatory structure that had evolved since Federation. During that decade itself, policy and outlook were essentially defensive and backward looking, despite calls for reform and some willingness to alter the tariff. Governments sought to protect employment in established industries, while dependence on mineral exports actually increased as a result of the commodity booms at the decade’s beginning and end. By the 1980s, however, it was clear that the country’s existing institutions were failing and fundamental reform was required.

Table 7
The Australian Economy, 1974-2004

A. Percentage shares of value-added, constant prices

1974 1984 1994 2002
Agriculture 4.4 4.3 3.0 2.7
Manufacturing 18.1 15.2 13.3 11.8
Other industry, inc. mining 14.2 14.0 14.6 14.4
Services 63.4 66.4 69.1 71.1

B. Per capita GDP, annual average rate of growth %, constant prices

1973-84 1.2
1984-94 1.7
1994-2004 2.5

Calculated from World Bank, World Development Indicators (Sept. 2005).

Figure 1
Unemployment, 1971-2005, percent

Unemployment, 1971-2005, percent

Source: Reserve Bank of Australia (1988); Reserve Bank of Australia, G07Hist.xls. Survey data at August. The method of data collection changed in 1978.

The catalyst was the resumption of the relative fall of commodity prices since the Second World War which meant that the cost of purchasing manufactured goods inexorably rose for primary producers. The decline had been temporarily reversed by the oil shocks of the 1970s but, from the 1980/81 financial year until the decade’s end, the value of Australia’s merchandise imports exceeded that of merchandise exports in every year but two. The overall deficit on current account measured as a proportion of GDP also moved became permanently higher, averaging around 4.7 percent. During the 1930s, deflation had been followed by the further closing of the Australian economy. There was no longer much scope for this. Manufacturing had stagnated since the 1960s, suffering especially from the inflation of wage and other costs during the 1970s. It was particularly badly affected by the recession of 1982-83, when unemployment rose to almost ten percent, its highest level since the Great Depression. In 1983, a new federal Labor Government led by Bob Hawke sought to engineer a recovery through an ‘Accord’ with the trade union movement which aimed at creating employment by holding down real wages. But under Hawke and his Treasurer, Paul Keating — who warned colorfully that otherwise the country risked becoming a ‘banana republic’ — Labor also started to introduce broader reforms to increase the efficiency of Australian firms by improving their access to foreign finance and exposing them to greater competition. Costs would fall and exports of more profitable manufactures increase, reducing the economy’s dependence on commodities. During the 1980s and 1990s, the reforms deepened and widened, extending to state governments and continuing with the election of a conservative Liberal-National Party government under John Howard in 1996, as each act of deregulation invited further measures to consolidate them and increase their effectiveness. Key reforms included the floating of the Australian dollar and the deregulation of the financial system; the progressive removal of protection of most manufacturing and agriculture; the dismantling of the centralized system of wage-fixing; taxation reform; and the promotion of greater competition and better resource use through privatization and the restructuring of publicly-owned corporations, the elimination of government monopolies, and the deregulation of sectors like transport and telecommunications. In contrast with the 1930s, the prospects of further domestic reform were improved by an increasingly favorable international climate. Australia contributed by joining other nations in the Cairns Group to negotiate reductions of agricultural protection during the Uruguay round of GATT negotiations and by promoting regional liberalization through the Asia Pacific Economic Cooperation (APEC) forum.

Table 8
Exports and Openness, 1983-2004

Shares of total exports, % Shares of GDP: exports + imports, %
Goods Services
Rural Resource Manuf. Other
1983 30 34 9 3 24 26
1989 23 37 11 5 24 27
1999 20 34 17 4 24 37
2004 18 33 19 6 23 39

Calculated from: Reserve Bank of Australia, G10Hist.xls and H03Hist.xls; World Bank, World Development Indicators (Sept. 2005). Chain volume measures, except shares of GDP, 1983, which are at current prices.

The extent to which institutional reform had successfully brought about long-term structural change was still not clear at the end of the century. Recovery from the 1982-83 recession was based upon a strong revival of employment. By contrast, the uninterrupted growth experienced since 1992 arose from increases in the combined productivity of workers and capital. If this persisted, it was a historic change in the sources of growth from reliance on the accumulation of capital and the increase of the workforce to improvements in the efficiency of both. From the 1990s, the Australian economy also became more open (table 8). Manufactured goods increased their share of exports, while rural products continued to decline. Yet, although growth was more broadly-based, rapid and sustained (table 7), the country continued to experience large trade and current account deficits, which were augmented by the considerable increase of foreign debt after financial deregulation during the 1980s. Unemployment also failed to return to its pre-1974 level of around 2 percent, although much of the permanent rise occurred during the mid to late 1970s. In 2005, it remained 5 percent (Figure 1). Institutional reform clearly contributed to these changes in economic structure and performance but they were also influenced by other factors, including falling transport costs, the communications and information revolutions, the greater openness of the international economy, and the remarkable burst of economic growth during the century’s final decades in southeast and east Asia, above all China. Reform was also complemented by policies to provide the skills needed in a technologically-sophisticated, increasingly service-oriented economy. Retention rates in the last years of secondary education doubled during the 1980s, followed by a sharp increase of enrolments in technical colleges and universities. By 2002, total expenditure on education as a proportion of national income had caught up with the average of member countries of the OECD (Table 9). Shortages were nevertheless beginning to be experienced in the engineering and other skilled trades, raising questions about some priorities and the diminishing relative financial contribution of government to tertiary education.

Table 9
Tertiary Enrolments and Education Expenditure, 2002

Tertiary enrolments, gross percent Education expenditure as a proportion of GDP, percent
Australia 63.22 6.0
OECD 61.68 5.8
United States 70.67 7.2

Source: World Bank, World Development Indicators (Sept. 2005); OECD (2005). Gross enrolments are total enrolments, regardless of age, as a proportion of the population in the relevant official age group. OECD enrolments are for fifteen high-income members only.

Summing Up: The Australian Economy in a Wider Context

Virtually since the beginning of European occupation, the Australian economy had provided the original British colonizers, generations of migrants, and the descendants of both with a remarkably high standard of living. Towards the end of the nineteenth century, this was by all measures the highest in the world (see table 10). After 1900, national income per member of the population slipped behind that of several countries, but continued to compare favorably with most. In 2004, Australia was ranked behind only Norway and Sweden in the United Nation’s Human Development Index. Economic historians have differed over the sources of growth that made this possible. Butlin emphasized the significance of local factors like the unusually high rate of urbanization and the expansion of domestic manufacturing. In important respects, however, Australia was subject to the same forces as other European settler societies in New Zealand and Latin America, and its development bore striking similarities to theirs. From the 1820s, its economy grew as one frontier of an expanding western capitalism. With its close institutional ties to, and complementarities with, the most dynamic parts of the world economy, it drew capital and migrants from them, supplied them with commodities, and shared the benefits of their growth. Like other settler societies, it sought population growth as an end in itself and, from the turn of the nineteenth century, aspired to the creation of a national manufacturing base. Finally, when openness to the world economy appeared to threaten growth and living standards, governments intervened to regulate and protect with broader social objectives in mind. But there were also striking contrasts with other settler economies, notably those in Latin America like Argentina, with which it has been frequently compared. In particular, Australia responded to successive challenges to growth by finding new opportunities for wealth creation with a minimum of political disturbance, social conflict or economic instability, while sharing a rising national income as widely as possible.

Table 10
Per capita GDP in Australia, United States and Argentina
(1990 international dollars)

Australia United States Argentina
1870 3,641 2,457 1,311
1890 4,433 3,396 2,152
1950 7,493 9,561 4,987
1998 20,390 27,331 9,219

Sources: Australia: GDP, Haig (2001) as converted in Maddison (2003); all other data Maddison (1995) and (2001)

From the mid-twentieth century, Australia’s experience also resembled that of many advanced western countries. This included the post-war willingness to use macroeconomic policy to maintain growth and full employment; and, after the 1970s, the abandonment of much government intervention in private markets while at the same time retaining strong social services and seeking to improve education and training. Australia also experienced a similar relative decline of manufacturing, permanent rise of unemployment, and transition to a more service-based economy typical of high income countries. By the beginning of the new millennium, services accounted for over 70 percent of national income (table 7). Australia remained vulnerable as an exporter of commodities and importer of capital but its endowment of natural resources and the skills of its population were also creating opportunities. The country was again favorably positioned to take advantage of growth in the most dynamic parts of the world economy, particularly China. With the final abandonment of the White Australia policy during the 1970s, it had also started to integrate more closely with its region. This was further evidence of the capacity to change that allowed Australians to face the future with confidence.

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Economic History of Tractors in the United States

William J. White, Research Triangle Institute

The farm tractor is one of the most important and easily recognizable technological components of modern agriculture in the United States. Its development in the first half of the twentieth century fundamentally changed the nature of farm work, significantly altered the structure of rural America, and freed up millions of workers to be absorbed into the rapidly growing manufacturing and service sectors of the country. The tractor represents an important application of the internal combustion engine, rivaling the automobile and the truck in its economic impact.

A tractor is basically a machine that provides machine power for performing agricultural tasks. Tractors can be used to pull a variety of farm implements for plowing, planting, cultivating, fertilizing, and harvesting crops, and can also be used for hauling materials and personal transportation. In the provision of motive power, tractors were a replacement for human effort and that of draft animals, both of which are still used extensively in other parts of the world.

Technical Description

The heart of a farm tractor is a powerful internal combustion engine that drives the wheels to provide forward motion. Direct ignition (diesel) and spark-driven engines are both found on tractors, just as with cars and light trucks. Power from the engine can be transmitted to the implement being used through a power take-off (PTO) shaft or belt pulley. The engine also provides energy for the electrical system, including the ignition system and lights, and for the most recent models, air conditioner, stereo system, and other creature comforts.

The drawing below, taken from an undated John Deere operating manual, shows a typical general-purpose tractor from the period around 1940. The machine is little more than an engine on wheels, with a seat for the operator and a hitch for pulling implements centered in the rear. Later models would feature an enclosed cab to keep the operator out of the weather, but this model features only simple controls and the metal seat. The drawing shows a wheel-tractor, which comprised more than 95% of machines sold for farm use. Tracked units, also called crawler tractors, were common in California, and of course, dominated construction and other non-farm uses for tractors.

Background and Technological History

Farmers in 1900, whether engaged in growing wheat, corn, or cotton, raising livestock, producing dairy products, or combining a variety of these or other products, had only two sources of power aside from their own strength: steam engines and draft animals. Steam boilers provided motive power for threshing small grains, and a very small number of farmers were using recently-developed steam traction engines for plowing and other arduous tasks. Draft animals provided most of the power on all types of farms, however. As of 1910, there were more than 24 million horses and mules on American farms, about three or four animals for the average farm. In addition to supplying farm power, the horses were also relied upon for transportation, of both goods and people.

Horses and mules pulled an impressive variety of farm implements at the turn of the century, including plows, disks, harrows, planters, cultivators, mowers, and reapers. Several important farm tasks were typically done by hand at this time, including picking of corn and cotton. The greatest amount of power was needed for plowing, often forcing farmers to keep one or two extra horses above the number needed for the remainder of the year. As an example, power requirements during plowing have been estimated at 60% of the annual total needs for growing wheat at that time. A new source of power, then, would be valuable to the farmer if it could replace the horsepower requirements of plowing, as long as the cost was less than that of maintaining one to two extra horses. It would be even more valuable if it could economically replace all of the functions currently performed by draft animals, and further if it could facilitate automation of the cotton and corn picking operations.

As early as the 1870s, engineers had succeeded in producing steam traction engines, referred to today as steam tractors. These monsters, weighing in excess of 30,000 pounds (excluding water), could move under their own power, and had impressive horsepower capacity. Unfortunately, their size, mechanical complexity, and constant danger of explosion made these traction engines unusable for most farms in North America. In all but the driest soils, steam traction engines tended to become mired in the mud and refuse to move. Because of these handicaps, the use of steam tractors increased slowly in the United States during the last two decades of the nineteenth century. Annual production of less than 2000 units per year in the 1890s had increased to around 4000 in the ten years after 1900. Nonetheless, the rate of growth of steam horsepower was far smaller than the growth in animal horsepower. For the reasons mentioned above, adoption of steam power was clearly not a candidate to replace the horse.

The First Gasoline Tractors

With the commercialization of the internal combustion engine, a more practical alternative emerged. Farmers bought large numbers of stationary gasoline engines in the first decade of the twentieth century, and quickly became familiar with their operation. A wide variety of household chores were simplified by the use of stationary engines, including pumping water, washing clothes, and churning butter. Companies began developing gasoline-powered traction engines during the same period; the first commercial machines were sold in 1902, and quickly became known as ‘tractors’.

The first tractors shared similar traits to the steam traction engines. Weighing between 20,000 and 30,000 pounds, with huge steel wheels or tracks, these models were large and expensive. Fairly quickly, the large manufacturers, including Hart-Parr, International Harvester, Case, and Rumely had reduced the size and cost. By the time Ford introduced its Fordson model, the first successful small tractor, average weights were down to 2000-6000 pounds, and prices were under $1000. These tractors proved to be excellent at plowing, and were quite capable of driving mowers and reapers. The large steel wheels, low clearance, and substantial weight made them unsuitable for cultivating growing crops like corn and cotton, however.

Technological Improvements

Henry Ford, who had tinkered with steam and gasoline tractors prior to achieving his success with automobile production, introduced a small, inexpensive model which he called the Fordson during the World War I. This model sold well for several years, aided considerably by a war-caused shortage of horses. After a post-war crash in farm prices drastically reduced sales in 1920-21, Ford initiated a price war in 1922 by cutting the price of its Fordson from $625 to $395. Alone of the large competitors, International Harvester matched Ford’s price, and sales boomed for those two firms throughout the rest of the 1920s. Ford’s production of tractors were always a sidelight to his main business of manufacturing automobiles, however, and when the Fordson production lines were needed for the critical Model-A launch in 1928, Ford decided to leave the tractor business.

The competition with Ford drove International Harvester to make significant improvements in its tractors. The first innovation to appear was the power take-off, offered after 1922. This device, a metal shaft turned by the rotation of the tractor motor, allowed implements to be driven directly by the tractor engine, as opposed to obtaining power from a wheel rolling along the ground. The power take-off quickly became a standard feature on all tractors, and implement makers began the process of re-designing their equipment to take advantage of this innovation.

An even more important improvement by International Harvester was the introduction of a general-purpose tractor, the Farmall, in 1925. This model, with high ground clearance, small front wheels, and minimal weight, was designed for cultivating, as well as for plowing and cutting. It was tested in Texas in 1923, and was released for broad scale distribution in 1925. Competitors, such as Deere, Massey-Harris, and Case rushed to develop a general-purpose tractor (a ‘GP’) of their own, and by the mid-1930s, GPs had replaced the standard Fordson-type tractor. In addition, these same firms began the process of modifying their implements for these tractors, and the wholesale replacement of the horse began in earnest.

A Dominant Design Emerges

Three other improvements were critical in completing the technology base for the tractor. Deere released a power lift for its models beginning in 1927. This device allowed the implement to be raised before every turn by pulling a lever. Prior to this, the farmer had to lift the implement by hand at each turn, which was a time-consuming and enervating task. As with the power takeoff, the power lift was rapidly adopted by other tractor makers. Rubber tires first became available for tractors in 1932, and by 1938 had largely replaced steel wheels. The low-pressure tires not only did less damage to fields, but also allowed a higher forward speed, due to reduced friction. Finally, the development of diesel engines in the mid-1930s gave farmers access to a lower-cost fuel for their machines. Many tractors from that time forward had a small gasoline tank for cold starts, and a large diesel tank for the majority of the operation.

International Harvester pioneered a ‘one plow’ tractor at about this time, and began selling it in 1934. This tractor was smaller and less expensive than the original Farmall, but had the same general-purpose capabilities. Its introduction offered operators on small farms the chance to replace their one horse or mule with a tractor, and was responsible for the beginnings of the tractor’s diffusion in the South. These small tractors often featured adjustable front wheels and high ground clearance, which made them considerably more flexible than the larger models. Within a few more years, manufacturers were offering their larger models in ‘high-clearance’ versions as well.

A final innovation was responsible for bringing Ford back into the tractor business in 1937. In that year, the firm agreed to enter into a joint venture with Irish inventor Harry Ferguson. Ferguson had worked for almost 20 years to perfect a ‘three-point hitch,’ a device that produced superior plowing by continuously leveling the implement as it traveled over uneven terrain. The Ford-Ferguson tractors quickly amassed a significant market share (14% by 1940), and the hitch design was rapidly imitated.

By about 1938, the technology of tractor development had achieved what is known as a ‘dominant design.’ The Farmall-type general-purpose tractors, both large and small, would change little, except for increasing in size and horsepower, over the next 30 years. Beginning in the mid-1930s, and despite the ongoing depression in the United States, tractor sales increased rapidly. Figure 1 shows the number of tractors on farms from 1910 through 1960. By the latter date, the process of technological diffusion was essentially complete. With the exception of the deep South, the increase in percent of farms with tractors from year to year had stopped.

Development of Related Equipment

The general-purpose tractor proved to be an excellent replacement for the horse in plowing, soil preparation, planting, and cultivating tasks for a wide variety of field crops. In addition, the tractor was fully capable of providing power for mowing hay and for harvesting of wheat and other small grains. In the latter application, it facilitated the practice known as ‘combining,’ the simultaneous reaping and threshing of wheat. Horse-drawn combines had been available since the 1880s, and had found limited acceptance on the larger farms of the arid West. However, a large team of horses was required to drag the heavy, complex machine through the fields. The tractors of the 1930s and 1940s had no trouble pulling a re-designed combine, and they began a process of rapid adoption in the Midwest. Eventually, a self-propelled combine was produced, with the tractor engine and cab subsumed into the combine apparatus.

The general-purpose tractor was not capable of bringing mechanization to the corn and cotton harvest until separate, but related innovations produced a corn picker in the 1920s and a mechanical cotton picker after the Second World War. Prior to the development and adoption of the corn picker, corn was often cut with a binder, followed by manual shelling. One of the more important uses of stationary gas engines early in the twentieth century was for the shelling of corn. The picker combined the operations of cutting and shelling, and also distributed the stalks back onto the field, eliminating an additional step.

Mechanical cotton pickers fundamentally altered not only the harvesting of cotton, but the very nature of cotton growing in the United States. The mechanical picker, even after extensive development, produced higher crop losses than hand picking in the hot, humid areas where most cotton was grown — Mississippi, Alabama, and east Texas. In the dry areas of west Texas, however, the picker was very efficient, both in terms of labor effort and crop yields. The mechanical cotton picker thus precipitated a relocation of cotton production westward, resulting in large-scale migration out of the deep South in the years after World War II.

As with the combine, self-propelled corn and cotton pickers were soon developed, combining the power train and cab of the tractor within the implement’s apparatus. For this reason, pickers and combines are often considered as separate machines, and their development and diffusion are not included in discussions of the impact of the tractor. It should be pointed out, however, that none of these devices could have been powered efficiently by horses or steam; the gasoline-powered tractor was necessary for their development. As such, I will include combines and mechanical pickers in assessing the impact of the tractor on inputs to agriculture.

Recent Developments

The recent history of tractor development is less dramatic than the first 50 years. The peak year of tractor production was 1951, during which 564,000 units were made. From that time, the approaching saturation of the market produced a steady fall in production and sales. As one might expect, manufacturers responded by developing ever-larger tractors to supply farms that were growing in size. Interestingly enough, this pursuit of size left the small end of the market open to foreign competition, and, as in the case of the U.S. automobile industry, imports grew to dominate the small-tractor market.

Creature comforts have been improved markedly since the 1950s as well. Enclosed cabs soon had heating and air conditioning, and are now likely to be supplied with a television and stereo-CD. As a result, modern tractors are quite comfortable in comparison with the machines of 40 years ago, let alone versus the monsters of the early tractor era.

Production and Corporate History

From a slow start in the 1920s and 1930s, tractor production grew through the late Depression years, as farmers increasingly parted with their horses and mules. Figure 2 shows the annual output of farm tractors from 1909 to 1970, including the peak years of the early 1950s. It is likely that this peak would have been reached much sooner, had it not been for the disruption of the Second World War. Not only were raw materials such as steel, copper, and rubber severely limited due to wartime production needs, but the government actually limited the total number of machines that could be built each year, and allocated only the raw materials needed for that production. Many of the tractor factories were converted over to production of tanks, airplanes, vehicles, and other military goods.

Despite the presence of corporate giants such as International Harvester and Ford in the early development of the farm tractor, there were hundreds of firms that began producing or selling machines in the first two decades of the twentieth century. As is the case with many emerging industries, inventors, entrepreneurs, and promoters were attracted to this important and rapidly-growing field. The agricultural depressions of 1920-21 and 1930-32 drove many of these firms into mergers or out of business, and by the early 1930s seven companies dominated the industry. These firms, along with Ford, would make almost all of the wheel-tractors sold in the United States from 1930 through 1955.

The dominance of the seven firms is shown in Table 1, which presents market share data by decade for the key years of tractor industry growth. As discussed above, Ford dominated the market in the 1920s, then left the business to create production capacity for the Model A; upon returning to tractors in the 1940s, Ford once again became an important presence. International Harvester was the largest consistent seller, as well as being the technological leader, while Deere would grow into the most significant challenger. By 1963, Deere overtook International Harvester in a declining market, and remains the largest presence in agricultural equipment today.

Table 1. Market Share of Leading Wheel Tractor Manufacturers by Decade
1910s 1920s 1930s 1940s 1950-55 Overall

Deere

4.0% 6.4% 21.7% 17.0% 14.5% 14.5%
International Harvester 21.4% 28.6% 44.3% 32.7% 30.6% 32.5%
Ford 20.1% 44.2% 0.0% 7.9% 19.3% 16.7%
Massey-Ferguson 2.9% 1.9% 2.9% 14.7% 10.8% 9.1%
Case 7.2% 3.6% 7.4% 7.6% 5.1% 6.2%
Allis Chalmers 6.2% 3.5% 12.6% 9.7% 10.3% 9.1%
Oliver 2.1% 2.2% 5.0% 4.8% 5.4% 4.4%
Minneapolis Moline 8.0% 0.7% 2.9% 3.2% 3.6% 3.1%
All Others 28.0% 9.0% 3.2% 2.5% 0.2% 4.4%
Source: White (2000)
Note: Totals include production of predecessor companies

Social and Economic Significance

The farm tractor had made a major impact on the social and economic fabric of the United States. By increasing the productivity of agricultural labor, mechanization freed up millions of farm operators, unpaid family workers, and farm hands. After the Second World War, many of these people relocated to the growing cities across the country and provided technically-skilled, hard-working labor to the manufacturing and service industries. Millions of others remained in rural areas, working off-farm either part-time or full-time in a variety of professions.

The landscape of the country has changed as a result. Farms have grown larger as one proprietor can manage to cultivate the land that several families would have worked in 1900. Small market towns, especially in the Plains states, have almost ceased to exist as the customer base for local businesses has dwindled. Land formerly devoted to raising and feeding horses has been converted to alternate uses or reverted to grassland or forest. Several generations of agricultural families have experienced the sadness of giving up the farm and the rural way of life.

On balance, however, the tractor has had a markedly positive economic impact. Horses and mules, while providing farm power, ate up more than twenty percent of the food they helped farmers grow! By replacing them with machines that consumed much less expensive quantities of fuel, oil, and hydraulic fluid, farmers were able to reduce their costs and pass these social savings along to food buyers. More importantly, the millions of farm workers freed up by the technology were able to contribute their labor elsewhere in the economy, creating large economic benefits. According to a recent estimate by the author, the U.S. would have been almost ten percent poorer in 1955 in the absence of the farm tractor. Along with the revolution in yields generated by the advances in biological and chemical research, the farm tractor has helped agriculture make a significant contribution to economic growth in the United States.

References for Further Study

Ankli, Robert E. “Horses vs. Tractors on the Corn Belt” Agricultural History 54 (1980): 134-148.

Berardi, Gigi M., and Charles C. Geisler, editors. Social Consequences and Challenges of New Agricultural Technology. Boulder, CO: Westview Press, 1984.

Broehl, Wayne G., Jr. John Deere’s Company. New York: Doubleday, 1984.

Clarke, Sally H. Regulation and the Revolution in United States Farm Productivity. Cambridge: Cambridge University Press, 1994.

Danbom, David B. Born in the Country: A History of Rural America. Baltimore: Johns Hopkins University Press, 1995.

Gray, R. B. The Agricultural Tractor: 1855 – 1950. St. Joseph, Michigan: American Society of Agricultural Engineers, 1954 (revised, 1975).

Griliches, Zvi. “The Demand for a Durable Input: Farm Tractors in the United States, 1921-57.” In The Demand for Durable Goods, edited by Arnold C. Harberger. Chicago: University of Chicago Press, 1960.

Hayami, Yujiro, and Vernon W. Ruttan. Agricultural Development: An International Perspective. Baltimore: Johns Hopkins Press, 1971.

Jasny, Naum. Research Methods on Farm Use of Tractors. New York: Columbia University Press, 1938.

Jones, Fred R. Farm Gas Engines and Tractors, fourth edition. New York: McGraw-Hill, 1966.

McCormick, Cyrus. The Century of the Reaper. Boston: Houghton Mifflin, 1931.

Rogin, Leo. The Introduction of Farm Machinery in Its Relation to the Productivity of Labor in the Agriculture of the United States during the Nineteenth Century. University of California Publications in Economics: Volume 9. Berkeley: University of California Press, 1931.

Sargen, Nicholas Peter. “Tractorizationin the United States and Its Relevance for the Developing Countries. New York: Garland Publishing, 1979.

Schultz, Theodore W. “Reflections on Agricultural Production, Output, and Supply.” Journal of Farm Economics 38 (1956): 748-62.

Whatley, Warren C. “Institutional Change and Mechanization in the Cotton South.” Ph.D. dissertation, Stanford University, 1983.

White, William J. “An Unsung Hero: The Farm Tractor’s Contribution to Twentieth-century United States Economic Growth.” Ph.D. dissertation, Ohio State University, 2000.

Wik, Reynold M. Steam Power on the American Farm. Philadelphia: University of Pennsylvania Press, 1953.

Wik, Reynold M. Benjamin Holt & Caterpillar: Tracks & Combines. St. Joseph, Michigan: American Society of Agricultural Engineers, 1984.

Williams, Robert C. Fordson, Farmall, and Poppin’ Johnny. Urbana, Illinois: University of Illinois Press, 1987.

Citation: White, William. “Economic History of Tractors in the United States”. EH.Net Encyclopedia, edited by Robert Whaples. March 26, 2008. URL
http://eh.net/encyclopedia/economic-history-of-tractors-in-the-united-states/

Debt and Slavery in the Mediterranean and Atlantic Worlds

Reviewer(s):Engerman, Stanley L.

Published by EH.Net (October 2013)

Gwyn Campbell and Alessandro Stanziani, editors, Debt and Slavery in the Mediterranean and Atlantic Worlds. London: Pickering & Chatto, 2013. xiv + 185 pp. $99 (hardcover), ISBN: 978-1-84893-374-3.

Reviewed for EH.Net by Stanley L. Engerman, Department of Economics, University of Rochester.

Debt and Slavery in the Mediterranean and Atlantic Worlds contains nine essays plus a long introduction by the co-editors, dealing with topics related to the importance of debt in leading to enslavement in many places over a long period of time. The period covered ranges from about 300 B.C. (Early Rome) to 1956 (Anglo-Egyptian Sudan), and covers various nations of the world in Europe, Asia, and Africa.

The editors introduction discusses the various types of slavery and the meaning of enslavement. While they consider most slaves to be the result of wartime capture, they point to the relative importance (though few numerical estimates are given) of slavery resulting from the failure to pay debt in full, which permits the creditor to enslave the debtor, presumably for life. They note the occasional practice of self-enslavement for debt and sale of children (p. 13), but little attention is given to its major role in times of subsistence crises. They distinguish, as do several of the authors, between pawnship (the provision of collateral for loans) and debt slavery, although they indicate that these categories are often difficult to distinguish ? and while pawnship may lead to slavery in some times and places, at other times and places it does not.

Marc Kleijwegt’s chapter on early Rome focuses on Moses Finley’s contention that chattel slavery began in Rome only after 326 B.C., with the abolition of the nexum as a form of temporary bondage, requiring its replacement by a different form of coerced labor. Kleijwegt argues, against Finley, that chattel slavery in Rome had begun earlier, and that debt enslavement did not end in 326 B.C., so that while some aspects of the arguments made by Finley did take place, these changes were less dramatic and sharp than Finley argued, and that this complicates the belief in an abrupt transition from debt bondage to chattel slavery? (p. 37).

In the most wide-ranging essay in terms of time and location, Alessandro Stanziani deals with enslavement for debt and by war captivity in several Mediterranean and Central Asian states as well as in Russia, China, and India. In some cases these were suppliers of slaves, and in others users of slaves.? In most cases, although debt slavery was important, war captives played a dominant role (p. 48), reflecting the political instability and military operations that characterized these areas.

Michael Ferguson details the Ottoman Empire state-initiated emancipations, mainly of African slaves from the third quarter of the nineteenth century. These may have been a minority of emancipations, but state-initiated emancipation generally led to keeping ex-slaves under state protection, where they often served in the military, or performed agricultural work. Two essays on debt slavery and pawnship, by Paul Lovejoy in West Africa and Olatunji Ojo on the Yoruba, focus on the distinctions and similarities between pawnship and slavery. Pawnship, a form of providing an individual as security for debt, did not necessarily lead to slavery, although there were important legal changes over time and its conditions varied from place to place. In West Africa, as elsewhere, most slaves were the result of violence, including kidnapping, not debt. The same was apparently the case among the Yoruba, where many slaves were also the result of violence, not debt. Most pawns who were to become slaves were women and children, “whereas adult males” were more likely to be taken in combat? (p. 90).

In an update of his classic article of some forty years ago, in “The Africanization of the Work Force in English America,” Russell R. Menard analyzes the transition from the debts entered into by indentured labor, mainly from England, to the growth in the importance of African slaves in the colonial Chesapeake and in Barbados. Based on the detailed work of Lorena Walsh and John C. Coombs in pointing to the differences in the types of tobacco produced in different parts of the Chesapeake, Menard argues for a shift in chronology and explanation from his earlier arguments. In regard to Barbados, he argues that the transition to slavery had begun prior to the sugar revolution, based on other export crops, although sugar greatly accelerated the growth in slavery.

In an attempt to link the development of commerce and credit in various parts of Europe, the Americas, and Africa to the role of slavery and the slave trade, Joseph Miller describes the role of European states and merchants in obtaining and shifting specie and funds in trading with Africa and elsewhere.? While this commercialization did benefit the Europeans, he argues that its effect upon African societies and economies was negative, leading to more militarization and the need to provide slaves to pay for the debts accumulated.

Henrique Espada Lima presents a detailed examination of various forms of coerced labor in Brazil in the nineteenth century, including some labor based on voluntary immigration from Portugal and the Azores.? There were provisions made for self-purchase by slaves, making for a conversion of slavery into debt, and thus having slaves pay financial compensation to their former owners (p. 131). Slavery finally ended in Brazil in 1888, 17 years after passage of the so-called law of the free womb, with no compensation paid to either slaves or slave owners. According to Steven Serels, it was debt, not taxation, which led to the increased labor force participation in cotton production in the Anglo-Egyptian Sudan between 1898 and the coming of independence in 1956. This debt influenced both laborers and tenants, and bound these cultivators to the land and prevented them from regaining their lost independence? (p. 142) over the first half of the twentieth century.

All the essays are based upon extensive primary and secondary research, are clearly presented, and are quite useful additions to understanding the historical meaning of slavery, serfdom, pawnship, and different forms of coerced labor. As with such a diverse set of essays, there are differences in the caliber of the argument and in the authors? perceived importance of the role of debt slavery in different times and places. Nevertheless, the great value of this collection is to indicate the widespread frequency and social importance of this particular form of enslavement.

Stanley Engerman is co-author (with Kenneth Sokoloff) of Economic Development in the Americas since 1500: Endowments and Institutions, Cambridge University Press, 2012.

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (October 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Servitude and Slavery
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Economic Development in the Americas since 1500: Endowments and Institutions

Author(s):Engerman, Stanley L.
Sokoloff, Kenneth L.
Reviewer(s):Nonnenmacher, Tomas

Published by EH.Net (September 2013)

Stanley L. Engerman and Kenneth L. Sokoloff, Economic Development in the Americas since 1500: Endowments and Institutions. New York: Cambridge University Press, 2012. xx + 417 pp. $99 (hardcover), ISBN: 978-1-107-00955-4.

Reviewed for EH.Net by Tomas Nonnenmacher, Department of Economics, Allegheny College.

Economic Development in the Americas since 1500: Endowments and Institutions brings together the works of Stanley Engerman and the late Kenneth Sokoloff ? along with coauthors Stephen Haber, Elisa Mariscal and Eric Zolt ? on the topic of geography, institutions, and economic development. Their thesis will be very familiar to economic historians: a causal chain links initial endowments in New World colonies to the organization of economic activity, economic power, political power, institutions, and long-run economic performance. Institutions, in Engerman and Sokoloff?s story, are endogenous, and knowing the resource allocation of a colony in 1500 explains much of its future economic performance. The book begins with three chapters that lay out the big picture and then turns to case studies on suffrage, schooling, taxation, land and immigration policies, and banking. The concluding chapters offer commentary on the use of institution-based explanations of growth and a comparison with alternative explanations of development.

The New World constituted a vast and heterogeneous set of opportunities for European nations. Engerman and Sokoloff group colonies into three categories: those with land most suitable for growing lucrative crops like sugar and tobacco, those with rich mineral resources and a substantial native population, and those with land most suitable for small-scale agriculture. Europeans exploited the natural resources in the first two categories of colonies by either importing slaves from Africa or using the Native American population. Doing so led to an uneven distribution of economic and political power that persisted via the adoption of institutions designed to protect that power. In contrast, in areas where the initial endowment of natural resources did not encourage the use of forced labor, a virtuous cycle of political competition generated pro-growth institutions. The long-run economic prosperity of the U.S. and Canada relative to their neighbors is not due to ?better? British institutions, but due to the British coming to the New World late to the game and acquiring colonies that did not possess the valuable natural endowments that made slavery so profitable. Indeed, the economic development of the British sugar colonies (Barbados, Jamaica, and Belize) is more similar to that of Spanish, Dutch, and French colonies in the Caribbean than to the U.S. and Canada. Even the Puritan work ethic has a counterexample in Providence Island off the coast of Nicaragua.

The middle chapters of the book are the heart of Engerman and Sokoloff?s analysis and provide compelling narratives and statistical evidence supporting their hypothesis of a link between inequality and institutional choice. The chapter on voting establishes the link between economic and political inequality. The original thirteen colonies had rules that linked property or wealth to the right to vote. While these restrictions were fairly strict, they still allowed a broad set of elites to participate in elections. In order to attract immigrants, new western states, which had lower population density and lower income inequality, restricted the franchise much less, using race, gender, age, and criminal record rather than wealth and property. The pattern of extending the franchise in areas with lower population density and lower income inequality is a central piece of Engerman and Sokoloff?s story. In Latin America, the right to vote was greatly limited via a literacy test. Racial boundaries were generally more porous in Latin America, making the implementation of an explicit racial criterion politically difficult. While generally rising over time, the proportion of the population voting in Latin America remained well below that in the United States and Canada through 1940. This pattern limited the access of the general population to the political process and led to rules being written for the elites.

Using literacy as a requirement for the franchise reduced the incentive to provide public school education. The schooling ratio was highest in cities (where inequality was lower), in countries with higher income, and in countries in which a higher percentage of the population voted. Political inequality and education are thus directly linked. Inequality is also linked to the tax structure, with more unequal countries relying on regressive sales and trade taxes and more equal countries relying on property and income taxes. Immigration and land policy was open in the United States and Canada and restrictive in Latin America. The cumulative effect led to enormous differences in land ownership rates by the early 1900s. In Mexico, the highest rural land ownership rate was 5.6% in the Pacific Northwest. The rural land ownership rate was 83.4% in the western United States and 87.1% in Canada. Finally, the chapter on the banking system (by Stephen Haber) draws links between elite power and banking regulation. A powerful Latin American elite manipulated the opaque regulatory process in their favor.

One measure of the importance of a research agenda is the number of scholars who build on it, and, by this measure, Engerman and Sokoloff have achieved great success. Many subsequent studies find support for their hypotheses or raise questions about the links between economic and political inequality and underdevelopment. The work of Engerman and Sokoloff is foundational to the literature on colonialism, institutions, and economic development and anyone interested in development or new institutional economics will need to read this book.

Tomas Nonnenmacher is a Professor of Economics at Allegheny College. His most recent article, ?Stability and Change on Henequen Haciendas in Revolutionary Yucat?n: Two Case Studies from the Henequen Zone? is coauthored with Shannan Mattiace and is forthcoming in Estudios Mexicanos/Mexican Studies. He is currently working on a project exploring entrepreneurship in the telegraph industry.

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (September 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
North America
Time Period(s):16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics

Author(s):Fogel, Robert William
Fogel, Enid M.
Guglielmo, Mark
Grotte, Nathaniel
Reviewer(s):Heston, Alan

Published by EH.Net (September 2013)

Robert William Fogel, Enid M. Fogel, Mark Guglielmo and Nathaniel Grotte, Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics. Chicago: University of Chicago Press, 2013. xiii +148 pp. $32 (hardcover), ISBN: 978-0-226-255661-0.

Reviewed for EH.Net by Alan Heston, Department of Economics, University of Pennsylvania.

Nobel-laureate Robert Fogel died June 11, 2013 at which time he was the Charles R. Walgreen Distinguished Service Professor of American Institutions and Director of the Center for Population Economics at the University of Chicago’s Booth School of Business.? His wife Enid, one of this volume?s co-authors (who died in 2007), had a long career as Associate Dean of Students at the Booth School.? Fogel has said that Enid was my ?most confident supporter and my keenest critic.? This short book sums up many of Fogel?s interests and views of the profession often shaped by Enid, as well as his mentor, Simon Kuznets, who also won the Nobel Prize in economics.

The organization of the book is chronological beginning with the rise of academic economists in the United States and following through with the contributions of Simon Kuznets and his legacy and impact.? The number of academic economists in the federal government rose from 5 in 1876 to 848 during the Hoover administration.? This growth paralleled the creation of data gathering agencies like the Bureau of Labor Statistics and the need for information in supporting the efforts of World War I.? Chapter 1 discusses some of the influential academics of the period including the Reverend John Bascom and his Social Gospel tenets.? Bascom?s social activist attitudes evolved from hostility to support of labor movements by the time he took a chair at the University of Wisconsin.? Robert LaFollette, Wisconsin?s governor from 1901 to 1906, sought the advice of Bascom and his associates in formulating protective labor legislation, illustrating the innovative role of state governments at the time.? Bascom?s successors like Richard Ely and John R. Commons furthered the Wisconsin tradition of active involvement in economic and social policies and the role of institutions.

The book devotes another chapter to the establishment of the National Bureau of Economic Research (NBER) beginning in 1914 with discussions with the Rockefeller Foundation about establishment of a social science research center.? Edwin Gay of Harvard proposed a non-teaching institute to the Rockefeller Foundation with Wesley Clair Mitchell as director focusing on prices, wages and rents, but the war stalled negotiations.? The book points out the support that Herbert Hoover provided for increasing collection of economic data both as Commerce Secretary and President.? As economists became involved with the war effort in terms of price controls, production planning, energy needs, and transport issues the need for better economic data became obvious.? This provided and impetus for the incorporation of the NBER in 1920 with Gay as president.? The involvement of universities on the governing board was formalized in 1927 and Mitchell was the first research director, a post he held until 1945.

An early project of the NBER was estimation of personal income and production, an area of research that Kuznets directed.? During the Great Depression, the Senate directed that the Department of Commerce provide national accounts estimates for the years 1929-31. Kuznets was invited to direct this project and he accepted.? Kuznets had been teaching part time at the University of Pennsylvania since 1930 and one of his students in Penn?s MA program, Robert Nathan, assisted him at Commerce.? They provided the Senate estimates on time and included calculations for 1932 as a bonus, and Nathan became the first director of national accounts at Commerce.? Another student of Kuznets, Milton Gilbert, joined Nathan in 1935 to work on national accounts and edit the Survey of Current Business.? In 1941 Nathan left Commerce to direct the War Production Board and Gilbert became director of National Accounts until 1951, the post-war period being a crucial time in development of the UN System of National Accounts.? Kuznets in 1935 initiated a cooperative research program, the Conference on Research in Income and Wealth (CRIW) that continues to bring together academics and practitioners to discuss major conceptual and measurement issues.

Kuznets put national accounts estimates to good use in his major study of comparative economic growth cited by the Nobel Committee in presenting his award in 1971.? The book discusses this study in Chapter 4, where its origin and results are described.? When Kuznets first proposed this study to the NBER in the late 1940s, the response was underwhelming so he turned to Social Science Research Council who supported the proposal and created their Committee on Economic Growth.? One can see Fogel?s own views in his exposition of Chapter 4 and his treatment of Kuznets? methodology in Chapter 5.? Kuznets? theory is set out in 14 interconnected relationships, described in tables and charts, and involving formal algebraic models.? The modeling is implicit in all of Kuznets? work and Fogel emphasizes the implicit theory, including the interactions between technology, production, per capita product, population growth, sectoral shifts out of agriculture and distributional shifts in income distribution.

Richard Easterlin, another student of Kuznets, has pursued a successful career eschewing algebraic formulations for tables, charts and ample explanation.? Easterlin?s current work on comparative studies of income and happiness follows studies of migration and regional growth and incomes within the United States historically.? The emphasis on regional growth has been incorporated in the regional income division within the Bureau of Economic Analysis.? Fogel?s own research has often used a more econometric approach, but always with attention to a logical narrative.? Kuznets was not against formal models but believed that they should emerge from a body of data and a problem to be addressed.? He would question empirical findings that apparently supported a formal model but produced results that did not have other plausible explanations.? In Chapter 5 Fogel argues that Kuznets was the most important theorist since Keynes, implicitly and often explicitly questioning trends in the economics profession over the last fifty years.

Chapters 6 and 7 are short summaries of the legacy of Kuznets in economics and what has happened since his death in 1985.? In addition to his many articles and books, Chapter 6 describes the role of Kuznets in organizing cooperative research umbrellas like the CRIW and the Committee on Economic Growth at SSRC.? Within the NBER tent a group of Kuznets? students were invited by Martin Feldstein in 1978 to establish a program to carry out the Kuznets tradition in economic research.? This became the Development of the American Economy (DAE) projects that took on subjects like nutrition and heights and the role of women in the U.S. economy.? This research went in new and much less aggregative directions, becoming a very successful initiative. Not surprisingly Chapter 7 is hastily written.

Let me note one other legacy of Kuznets in the tradition of comparative growth.? In addition to Milton Gilbert, Irving Kravis was a student of Kuznets at Penn.? When Gilbert left the BEA he became Director of Statistics at the OECD (then OEEC).? One early project was a study of purchasing power parities of the U.S. with respect to the four large European economies ? France, Germany, Italy and the UK.? At the time the exchange rate was a poor conversion factor because of exchange controls in Europe.? Gilbert asked Kravis to come to Paris to join him in the study, resulting in the Gilbert-Kravis study that was very well received.? It led the United Nations to lead an initiative to compare a set of more diverse economies, including Colombia, Hungary, India, Japan, Kenya and the five OEEC countries.? The Ford Foundation funded part of the project through Penn with Kravis a joint director with the UN Statistical Office.? The International Comparison Program (ICP) began in 1968, left Penn after the 1975 round of 34 countries; a derivative contribution ? the Penn World Table (PWT) ? continued academic involvement.? ICP has grown to involve 182 countries in its 2011 round.? This extension of comparative national accounts to employ PPP national currency conversions is another legacy of Kuznets.?

This is a very readable and informative book that provides a reminder of the many contributions that Kuznets has made to the field including students as influential as Robert Fogel.

Alan Heston is Emeritus Professor of Economics and South Asia Studies at the University of Pennsylvania where he taught from 1962 to 2003.?

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (September 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Development of the Economic History Discipline: Historiography; Sources and Methods
History of Economic Thought; Methodology
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy

Reviewer(s):Bodenhorn, Howard

Published by EH.Net (August 2013)

Dora L. Costa and Naomi R. Lamoreaux, editors, Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy. Chicago: University of Chicago Press, 2011. x + 390 pp. $110 (hardcover), ISBN: 978-0-226-11634-1.

Reviewed for EH.Net by Howard Bodenhorn, Department of Economics, Clemson University.

Economic history lost one of its best and brightest with Ken Sokoloff?s death in May 2007. To celebrate and commemorate his contributions to economics, Dora Costa and Naomi Lamoreaux collected an impressive and diverse group of essays contributed by Ken?s friends, colleagues, coauthors, and classmates. Ken?s interests were wide-ranging ? he wrote on early industrialization and heights and health, but his signal contributions concerned invention and innovation, as well as the complex connections between geography, institutions and long-run economic growth. Fittingly, the essays are equally wide ranging.

The first article is an essay Ken was working on with Stan Engerman and advances the initial conditions-geography-institutions approach explored in their earlier research. The central argument is that differences in initial conditions between North America and Central and South America set those regions on markedly different social, economic and political trajectories. With its relative shortage of indigenous labor, early settlers recognized that North America would prosper only through European settlement and they adopted institutions in which new arrivals were welcomed (eventually) into the polity and might, with good fortune and hard work, rise in society. Blessed with an abundance of indigenous workers, the earliest settlers in South and Central America adopted institutions that discouraged European immigration by restricting economic and political privilege. Moreover, the nature of staple crop production pushed the returns to unskilled labor so low that few Europeans came. The argument, briefly stated, is that early inequality begat later inequality through endogenously arising institutions that favored the few, the elite.

Sokoloff and Engerman?s research raises fundamental questions: Are institutions exogenously determined by idiosyncratic events, such as the arrival of British rather than Spanish colonizers, as the legal origins approach posits?[1]? Are institutions, once established, persistent, as the colonial origins approach contends?[2]? Or, are institutions endogenous to geographies as societies struggle with how best to deal with the challenges of environments, technologies, and factor endowments? Sokoloff and Engerman are clearly in the endogenous institutions camp.

It is fitting, then, that the next two articles take on the exogeneity/endogeneity debate from alternative perspectives. Camilo Garcia-Jimeno and James A. Robinson explore the long-run implications of Frederick Jackson Turner?s thesis that the American frontier shaped its egalitarian representative democracy. Garcia-Jimeno and Robinson recognize that the U.S. was not the only New World country with a frontier and offer the ?conditional frontier hypothesis,? which posits that the consequences of the frontier are conditional on the existing political equilibrium when settlement of the frontier commences. They consider 21 New World countries and, from a series of regressions, conclude that if political institutions were bad at the outset (which they define as 1850) the existence of a frontier may have made them worse. The oligarchs divvied up the frontier among themselves, which further entrenched their economic and political power. Exogenous institutions rule.

Or do they? Stephen Haber next explores banking and finance in three countries ? the U.S., Mexico and Brazil ? but starts from a very different, very Sokoloff-ian (if I may) perspective. For Haber, as for Sokoloff, the task facing the economic historian interested in institutions involves tracing the many and complex ways in which economic and political power becomes embedded in institutions, how those institutions influence the formation of competing coalitions, and how competition between them either entrenches or alters the original institutions. Pursuing these connections is, Haber (p. 90) argues, ?a task better suited to historical narratives than to econometric hypothesis testing.? What connects banking in these three countries is that the elite used their existing power to rent seek ? to elicit government sanction of limited entry and privileged monopoly. What separated the three countries was that rent seeking efforts largely failed in the U.S. If Jackson?s war on the Second Bank was emblematic of anything it was that U.S. populists had little tolerance for government-sanctioned economic privilege. Haber doesn?t, and I doubt that Ken would, attribute the Jacksonian attitude to an accident of history. It was organically, indelibly American.

Joel Mokyr summarizes Ken?s approach to his other great intellectual passion: invention and innovation. Innovation was the consequence of purposive, rational behavior. Inventors, at least at some level, were motivated and directed by costs and benefits. Ken also recognized that inventive activity was sensitive to the institutions that generated markets that defined the rewards for innovation. Zorina Khan takes these issues head on in her analysis of patents versus prizes. At the risk of gross oversimplification, the English and the French preferred prizes for inventions believing that what motivated inventive genius was the esteem of one?s peers. Americans proceeded under the pragmatic and republican belief that profits motivated and markets would ?allow society to better realize its potential? (p. 207). Prizes were subject to momentary whims, were idiosyncratic, difficult to predict, and therefore less useful in pushing out the frontiers of useful knowledge. Markets elicited more innovation, at least as markets were organized in America.

The second article in the volume to which Ken directly contributed is coauthored with Naomi Lamoreaux and Dhanoos Sutthiphisal. They, too, explore the connection between markets and inventions in the ?new economy? of the 1920s. They argue that the rapid expansion of equity markets afforded many small enterprises on the technological frontier access to finance that was unavailable a generation earlier. Big firms dominated patenting in the Northeast. In what became the Rust Belt, small, entrepreneurial firms with new products or processes issued equities or attracted the venture capital necessary for them to bring their products to market. Markets influence innovation in all kinds of direct and indirect ways.

The constraints of a book review, unfortunately, preclude a discussion of the many other very good essays in the volume but which venture so far afield that they are not readily condensed. They are all worth reading; I was particularly fascinated by Dan Bogart and John Majewski?s article comparing the British and American transportation revolutions, and touched by Manuel Trajtenberg?s reflections on Ken as scholar and friend.

On a personal note, I am a beneficiary of Ken?s gentle but firm guidance. It was inadvertently revealed to me that Ken was one of the anonymous reviewers of my State Banking in Early America (2003). While the manuscript was well outside his research interests, he offered several insightful comments, one of which forced me to think more deeply about a central idea. My book is better for Ken?s advice. Many of the chapters included in this volume are undoubtedly better for Ken?s prodding, pushing and provocation. He is missed.

Notes:
1. See, for example, Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny.? 1998. ?Law and Finance.? Journal of Political Economy 106(6).

2. See, for example, Daron Acemoglu, Simon Johnson and James A. Robinson. 2001. ?The Colonial Origins of Comparative Development.? American Economic Review 91(4).

Howard Bodenhorn is currently studying early corporate governance in the United States.???

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (August 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Economic Development, Growth, and Aggregate Productivity
Education and Human Resource Development
Financial Markets, Financial Institutions, and Monetary History
Historical Demography, including Migration
Historical Geography
History of Technology, including Technological Change
Urban and Regional History
Geographic Area(s):General, International, or Comparative
Time Period(s):17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Europe and the Maritime World: A Twentieth Century History

Author(s):Miller, Michael B.
Reviewer(s):Sicotte, Richard

Published by EH.Net (June 2013)

Michael B. Miller, Europe and the Maritime World: A Twentieth Century History. New York: Cambridge University Press, 2012. xvi + 435 pp. $99 (hardcover), ISBN: 978-1-107-02455-7.

Reviewed for EH.Net by Richard Sicotte, Department of Economics, University of Vermont.

In Europe and the Maritime World, Michael Miller describes the process of globalization in the twentieth century through the prism of maritime history.? Miller, professor of history at the University of Miami, organizes his study into two parts.? In the first part, entitled ?Networks,? the author describes the interrelationships of shipping, ports, trading companies, commodity trades, commercial and transport intermediaries and business culture, as they existed in the world up to around 1960.? The network of networks that Miller describes comprised nothing less than the world ocean-borne trading and transport system.? The second part of his book, entitled ?Exchanges,? depicts the evolution of this system from World War I to the present day.? In this part, Miller?s focus is on the ?exchanges? between ?maritime history and the larger currents of the twentieth century.?? The four chapters cover World War I, the interwar period, World War II and reconstruction, and the period from the 1960s to the present.? The scope of the book, therefore, is very wide.? Indeed, the author states that Europe and the Maritime World is ?better understood as an investigation into how the modern world has worked.?

Miller argues persuasively that the ?commercial maritime world? helped to shape the modern world?s organization of consumption and production.? The inclusion of ?Europe? in the title is appropriate.? Much of the book discusses the activities of European individuals and firms, although the geographic scope of their activities is worldwide.? Dutch, German, Belgian, French and British firms predominate, which is justified, Miller argues, on the basis that Europeans were the principle builders and operators of the global trading and transport system up to 1960.? This is not to give the impression that the system evolved out of some coordinated European plan.? Indeed, Miller?s descriptions succeed in conveying how the competitive and cooperative decisions of millions of people over a century developed this system.? It is just simply that European shipping, trading and logistical firms were the major players, particularly in trans-oceanic transport.? In some fascinating descriptions of Asian commerce, Miller describes how through competitive advantage, network relationships and colonialism, Europeans also came to integrate themselves into and influence the shape of local feeder networks there as well.

One of the many strengths of this volume is its encyclopedic display of maritime and commercial history.? The book is a virtual one-stop shop for valuable information and citations on seemingly every topic in those already very broad areas. Among the many topics that I found especially strong were Miller?s discussions of ship agents, freight forwarders, the cruise industry, oil shipping and trade, and the European-based business culture that supported the network linkages.? Perhaps most importantly, Miller provides a sense of how the individual network industries interact with one another.? Through the labor market, competition, collusion, mergers and acquisitions, individual employees and firms move across and interact with counterparts in other parts of the commercial and transport system.

Miller argues that the shock of World War I was a body blow to the system, but also one that created opportunities for the creation of new linkages and the rise of alternative centers of influence, especially in the Americas and Asia.? During the interwar years, Miller is careful to juxtapose the contraction of world trade in goods and immigration to the United States with the expansion of tourism, migration elsewhere, the creation of some new important commercial relationships, and the qualitative deepening of the system in other respects.? Indeed, Miller believes that the view held by many economic historians that the interwar years were a period of de-globalization is deeply misplaced.? He argues that view is conditioned by the influence of a social scientific approach that puts metrics of market integration at the center of the definition of globalization.? Miller takes issue with that perspective, and believes that an alternative historical approach that emphasizes what he calls ?global connectedness? is more fruitful.? His goal is to tell the tale of globalization as a ?story of progressions and mutations [rather] than one of interruptions and new beginnings.?? The last two chapters of the book, in that regard, are excellent depictions of the evolution of the world commercial system since World War II.? Through his descriptions of ports, entrepreneurs, firms and industries, the reader gets a nice sense of the tumultuous interplay between air transport, containerization, de-colonization, world economic growth and the maritime trading system.? I would have liked to read more about the evolving intermodal relationships between rail, trucking and shipping, but it seems absurd to criticize the book for not doing more when its scope is already so wide.

Miller?s narrative history is founded on a truly impressive command of an incredible variety of subject matters.? The author has read extremely widely, combed many archives, and interviewed numerous individuals in a number of countries.? The bibliography is outstanding and will be extremely useful as a starting point for research on any number of industries or themes touching on globalization during the twentieth century.? There are seven informative tables, but the book is not a go-to source for quantitative data.? There are a number of evocative photographs that are well chosen and complement the narrative wonderfully.? I am confident that this book will be an indispensable source and inspiration for future work on globalization, especially as it relates to international maritime history.

Richard Sicotte has published several articles on ocean shipping, and is currently investigating price discrimination and cartel organization in the ocean shipping industry.

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (June 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):International and Domestic Trade and Relations
Transport and Distribution, Energy, and Other Services
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

German Immigration and Servitude in America, 1709-1920

Author(s):Grubb, Farley
Reviewer(s):Wegge, Simone A.

Published by EH.Net (May 2013)

Farley Grubb, German Immigration and Servitude in America, 1709-1920. New York: Routledge, 2011. xxvi + 433 pp. $190 (hardcover), ISBN: 978-0-415-61061-2.

Reviewed for EH.Net by Simone A. Wegge, Department of Economics, CUNY.

In the eighteenth and nineteenth centuries Germans represented the largest non-English speaking group of immigrants in English North America and later what became the United States. Many of them settled in the state of Pennsylvania; by the middle of the eighteenth century those who claimed German ancestry made up over 50 percent of the population of Pennsylvania, and by the first U.S. census in 1790 over half of all Germans in the U.S. could be found living in the Keystone state. Farley Grubb focuses on German immigration to the state of Pennsylvania in this book, discussing what economic factors guided their decisions, what their immigrant experiences were like, and why they resorted to servitude contracts. The book is divided into three parts, the first on German immigration which focuses on the immigrant experience and immigrant characteristics, a second part covering the servitude market and its demise, and a third part which is an epilogue. The heart of the book consists of the first two parts.

Farley Grubb is a researcher?s researcher, or a scholar?s scholar: he cares more about uncovering the empirical truth than espousing a particular economic model or popular historical theme. Grubb is brutally honest about his work, how he came to the data, what they can do and cannot do, and what is old and what is new in this book.? In another life he would make a great Atticus Finch or Detective Columbo. This is part of the reason this book was such a pleasure to read. I felt like I was getting the truth as best as he sees it, pretty or not.

Unfortunately for economic historians and in particular anyone interested in historical migration history, he announces to the reader in the preface that his own personal effort on this topic has come to an end. So this book is both a compilation of most of Grubb?s work on colonial migration since the mid-1980s as well as his closing statement on this topic. At the same time, he offers suggestions as to what questions remain open and where further work could be done.

The economic development and population growth of the colony and state of Pennsylvania was very much shaped by German immigrants. The first population census of the U.S. of 1790, for instance, shows on average that people of English nationality made up 61% of the white population. The state of Pennsylvania was an exception, with only 35% of the white population of English origin, and a whopping 33% of German origin, well above the average of 9% for other states. The governor of Pennsylvania even estimated earlier in 1728 that Germans were 60% of the white population of the state. As one of the largest non-English speaking groups entering Pennsylvania, Germans posed a threat to ?English culture and political control? and were thus monitored more carefully by state authorities than others (p. 6). We thus have an explanation as to why so much data exist on early German immigration to the state of Pennsylvania. Grubb bases his study mostly on the passenger records collected by ships disembarking in Philadelphia in addition to the servant auction records that exist for several years in the eighteenth and nineteenth centuries.

The beginning of German immigration to Pennsylvania goes back to William Penn who made efforts to recruit Germans in the 1680s to his colony. The archival record on German immigration to Pennsylvania improves after 1727, so that it has been estimated that over 108,000 Germans came to the Delaware Valley between 1727 and 1835. Most came in the months of August, September, October and November, as they feared the colonial fevers of the summer, a pattern that is remarkably rigid before 1775. In spite of much literary evidence suggesting high mortality and morbidity rates relative to English immigrants and even slaves, Grubb finds that ship mortality rates in the eighteenth century were under 4%, twice as high as nineteenth century rates and a fraction of slave mortality rates of the time. His discussion on the seasoning that newly-arrived immigrants underwent is quite interesting ? Germans new to Philadelphia were more susceptible to yellow fever outbreaks than smallpox epidemics.

During British rule, most traveled from the Rhineland area of Germany down the Rhine River, through a Dutch port, through British customs and then across the Atlantic Ocean to Philadelphia. This journey could take anywhere from 2 to 8 months. Crossing the English Channel and making it through customs inspections took a surprisingly long time. Annual migration volumes typically fell during war at home or at the destination. Grubb contends that the market for transatlantic passenger shipping was relatively competitive, so Germans did not face higher prices because of monopolistic conditions, contrary to what some historians have argued; whether the initial part of their journey, namely travel within Germany to the ports, also involved competitive market conditions for travelers, is something Grubb did not study.

Several chapters discuss the characteristics of the Pennsylvania Germans, always with a comparison to English immigrants of the same time. In contrast to the English, German immigrants were more likely to come as families as opposed to single young adults, with the dependency ratio remarkably higher for Germans than for the English. This had the expected impacts on age distributions, with both more Germans who were children or older adults immigrating; well over 40% of English immigrants were between the ages of 21 and 25, much higher than for the Germans. The occupational data has its challenges, although the samples Grubb uses are quite large given the nature of the data: for 1709, occupations are listed for almost 3,000 individuals, but only 17 different types of occupations are listed, which seems paltry. This number quadrupled by the end of the century. Still one can make a basic summary: Grubb states that ?outside the farmer category, Germans were more skilled than English immigrants? (p. 101).

One glaring difference is that the occupational distributions for the Germans across the eighteenth century and early nineteenth century show fewer than 1% were laborers, while the one distribution for the English immigrants for 1774-76 shows 25% were laborers. Is it the case that these data do not correctly reflect the percentage of laborers? Or is it the case that even with the institution of servitude, migration was so expensive (especially in the interior of Germany) that German laborers could not afford to leave? If the latter is closer to the truth, this is evidence of positive self-selection in terms of comparing those who left Germany to those who stayed home. Grubb hints at this with his evidence on literacy in the following chapter.

The last three chapters of Part I deal with literacy and education. Immigrants to the colonies tended to be more literate than those in their homelands, which had the additional effect of making for a highly literate colonial population. German immigrants, in spite of Benjamin Franklin?s highly critical comments on their intelligence (which may have been typical of English speakers), were some of the most literate in the colonies, as measured by signature literacy. Over time, however, within the eighteenth century, literacy got worse but then improved again: Grubb cites evidence from other scholars of degeneracy in literacy among many groups in the colonies in the early eighteenth century, which seems to be related to population density and the ability or inability of immigrant parents to transmit literacy to their children.

The second chapter on literacy, Chapter 7 of the book, provides an interesting estimation of illiteracy, controlling carefully for ?life-cycle effects within each generation? as separate from ?secular trends across generations.? Scholars of literacy might want to avail themselves of Grubb?s Figure 7.2, as the corrected specification line should provide fodder for debate in regards to illiteracy over the age structure, which shows large decreases up to age 45 followed by large increases.? Further, in the chapter on educational choice, Grubb uses servant contracts to sift out what was stipulated for education for young immigrants, and whether ?education time? was to be done on an informal basis or a formal basis; this is interesting material, as we have little understanding as to what methods were used in acquiring literacy outside of formal education institutions.

In the second part of the book (Chapters 9 through 18) Grubb focuses on German immigrants to discuss a myriad of issues involving the institution of servitude. A large proportion of immigrants to the American colonies worked as indentured servants in their first years to pay off passage costs. Grubb estimates the incidence of German immigrant servitude to be 44.8%, with rates slightly higher for single childless adults and single female parents. Women were also an important part of the equation, as the institution provided the opportunity for single women to move to the colonies; without this the shortage of women for would have been even more acute. Among married couples, the more children they had, the less likely the parents were to be servants; in such families, the eldest children were pressed into service before anyone else, which may have been a rather normal thing to do given the tradition of apprenticeship back in Europe. Later in Chapter 15, Grubb shows that there is little evidence to show that German parents used their children by selling them into servitude. His sample however, is quite small. Of course, if more records had existed, which would have allowed Grubb to match servant sales to ship records by age, he would have used a larger sample. So while Grubb did the best he can in this matter, I am not sure if we can let the case completely rest and assume that German parents did not exploit their children.

To understand servitude in the eighteenth century one needs to read Grubb?s many chapters on this subject. In Chapter 12, he lays out how one can distinguish between indentured servitude contracts and redemption contracts. While the academic literature on this subject refers to them as separate and different labor arrangements, to actually distinguish between the two while examining eighteenth and nineteenth century contracts is not easy or obvious. Grubb?s Chapter 12 provides a tutorial in this; it is useful to combine one?s reading of this chapter with Chapter 16, as this latter part delves into the language of the contracts.

Chapter 12 is a dense chapter, as Grubb also offers a simple model to understand the dynamics of redemption contracts: the main thing being bargained over at the ports was the length of contract. In Chapter 13, Grubb provides econometric evidence that contract length can be explained by a number of variables, particularly those related to productivity and in the later period by the year of arrival. As Grubb concludes on page 270, ?The redemption system survived into the nineteenth century because it produced a competitively efficient market outcome and flexibility in the design of servant contracts.?

While this statement is not at all astonishing coming from a Chicago-trained economist, what Grubb has to say about settlement patterns is more thought-provoking. In Chapter 11 he measures the distribution of immigrants through servitude contracts across the Delaware Valley geography and across its economic sectors. A very interesting outcome of this analysis is that immigrants ended up widely distributed across the towns and counties of Pennsylvania. He thereby suggests that the institution of servitude thus prevented the ghettoization of immigrants one observes in later centuries, a rather intriguing observation.

One of the more fascinating questions in this literature remains ? why did this institution die? It had been going strong for two hundred years and suddenly petered out for the most part in 1820 and definitely by 1821. In Chapters 17 and 18 Grubb definitively shows that demand side explanations can all be ruled out. Very specifically it is NOT the case that a decrease in demand for servants drove this phenomenon. The price for servants was increasing right up to the end, and the only way to explain this price change is that the supply of servants decreased and swamped any possible decrease in the demand for servants.

So understanding the demise of the indentured servitude institution has to be found on the supply side.? Grubb?s main answer to this is that chain migration effects kicked into high gear, that there were enough previous immigrants who could support and pay for those who wanted to leave Germany. Remittances displacing redemption! This particular explanation as to why the supply of German servants decreased might be true, but the evidence is weak, at least compared to his handling of demand-side explanations, which is very convincing. Grubb?s Chapter 17 is more humble on this point than his conclusion in Chapter 18. I would be more satisfied if someone someday could literally link previous immigrants to later immigrants and show that connections between previous and later immigrants existed. Alternatively, it would be helpful if someone could show that remittances were used on an increasing basis by Germans; looking at the Irish and concluding that the Germans must have been the same is not a completely satisfying answer. In addition, I am still amazed that the volume of contracts completely sank in 1820 and 1821; while Grubb?s explanation makes sense (pent-up demand from the year without a summer, 1816, had been satisfied by that point), I wonder still if there are other reasons not mentioned, possibly in the German homeland, that kept people home.

Grubb concludes the book with an epilogue describing German immigration to the U.S. between 1820 and 1920. These last two chapters provide a roadmap for anyone wishing to delve into this particular subject, as they provide an overall picture of where Germans came from, where they settled, their occupational background and how this changed over time, their literacy rates, etc.?????

Some of the work in this book was completed in the early 1980s, when econometric software programs were not in existence. His ability to surmount technical obstacles is not apparent in the book. Curious about how he completed the technical work, I contacted Farley Grubb on this matter. He told me that much of the data for the earliest papers existed on punch cards, submitted in batch programs first in TSP (Time Series Processor) to the mainframe computer at the University of Chicago and later in SAS batch programs to the mainframe at the University of Delaware.? Grubb explained further how some of the graphs were produce: ?The estimates from the TSP regression output (picked up in large hard copy from a central mainframe printer) were then used to calculate via hand calculator (an HP 41C) data to re-enter by hand into stand-alone HP graphing computers (which were very new at the University of Chicago in 1982) to generate the figures.? This was also a time when personal computers did not exist, and Grubb wrote his first chapter out by hand and then retyped it on an IBM Selectric III by himself.

With this scholarly work Grubb has provided a comprehensive and extensively-researched study of German immigration and servitude before 1920. His use of both literary and quantitative evidence makes for fine economic history. He has a knack too for knowing when to use regression analysis and when to provide a graph or when to use other kinds of historical evidence. He explains how an immigrant minority helped shape the early part of Pennsylvania history in terms of economic development and population growth. Further, their participation in free and servant labor markets most probably staved off the use of slave labor in this state. With this body of work he offers many insights into the servitude market and answers many outstanding issues about this most interesting institution that thrived and evolved over two hundred years and then died suddenly. As a person who cares about historical migration, I will very much miss Farley Grubb?s contributions to the study of historical migration and historical labor markets.

Simone A. Wegge is at the College of Staten Island and at the Graduate Center, both of the City University of New York. Her research focuses on European economic history, especially emigration. Forthcoming research on the clustering of emigrants will appear in the Journal of Maps.

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Subject(s):Historical Demography, including Migration
Servitude and Slavery
Geographic Area(s):North America
Time Period(s):18th Century
19th Century
20th Century: Pre WWII