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Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective

Editor(s):Collins, William J.
Margo, Robert A.
Reviewer(s):Craig, Lee A.

Published by EH.Net (May 2018)

William J. Collins and Robert A. Margo, editors, Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective. Chicago: University of Chicago Press, 2015. viii + 287 pp. $110 (cloth), ISBN: 978-0-226-26162-1.

Reviewed for EH.Net by Lee A. Craig, Department of Economics, North Carolina State University.

 
This volume of essays, the product of a well-deserved conference celebrating the career of Jeremy Atack, covers a lot ground in nineteenth-century U.S. economic history. I learned something useful from every chapter, and, importantly, a few of them led me to unlearn some things I knew that, it turns out, are incorrect. The volume would be a good companion (for good students) in an upper-level undergraduate course.

The volume is organized into three sections. Following the editors’ introduction, the first section is entitled “Business Organization and Internal Governance.” In the first chapter, Naomi Lamoreaux reviews the legislative history of incorporation in Pennsylvania. She documents a messy process that produced the state’s general incorporation laws, which, frequently, were not all that general. The legislative process exposed tradeoffs between efficiency and other objectives. Running controlled experiments to test the merits of alternative arrangements was never a possibility, and efficiency was not necessarily the primary objective of the key players. In the big picture, this highly-micro story matters, because when economists analyze long-run growth rates across countries, they often find that common-law countries outperform civil-code countries. The complexity of Lamoreaux’s tale of common-law Pennsylvania suggests that we should not be too sanguine about such results. A variable, or two, might be missing from the relevant equations.

Since the seminal work of Adolf Berle and Gardiner Means, the advent of the modern corporate enterprise has been dated from “the turn of the twentieth century” (p. 8 and p. 73). Eric Hilt pushes that date back a bit in the volume’s second chapter. Employing a data set that matches the 1875 Massachusetts’ manufacturing census with firm-level data on ownership, he reveals and analyzes some of the key characteristics of the state’s corporations. He finds that rates of incorporation were high in industries in which average firm size was large. He also finds that, controlling for size, firms with large investments in fixed assets, such as steam engines, and those more likely to employ unskilled labor displayed higher rates of incorporation. In addition, the largest textile firms were “widely held” even by today’s standards, and, again controlling for size, the steam/unskilled labor combination was associated with more concentrated ownership. Overall, Hilt concludes that, at least in Massachusetts, “modern” corporate enterprises could be found by 1875.

In the third chapter, Howard Bodenhorn and Eugene White report on the evolution of bank boards in New York between 1840 and 1950. They focus on two key features: Timing the separation of ownership and control (essentially, Hilts’s question), and the trend in the number of directors on bank boards. With respect to the first question, like Hilt, they find that the “fraction of shares held by directors was smaller in larger banks” (p. 109), but they also find that, in the nineteenth century, bank directors owned, by any reasonable standard, a lot of stock in the banks they directed. As for average board size, they find that, over time, boards got smaller. The authors speculate that this trend might have been a response to regulatory changes, or changes in the business of banking, or both.

The second section of the volume is entitled “Bank Behavior and Credit Markets.” The first chapter in this section, by Jeremy Atack, Matthew Jaremski, and Peter Rousseau (henceforth AJR), documents and analyzes the positive correlation between local railroad access and local bank performance in the antebellum United States. AJR argue that access to a railroad may have contributed to a bank’s success in at least three ways: (1) Railroads enhanced overall economic activity by increasing bank liquidity and the returns on bank loans. (2) Railroad access increased the demand for a bank’s notes, while decreasing the discount on those notes. (3) The railroad may have created an inverted version of the “lemons problem;” specifically, the outside scrutiny that came with railroad access led to the self-selection of good bankers locating near a railroad. AJR’s econometric results also suggest that banks in existence before the railroad came to town improved their behavior following its arrival. Either way, the lemons, i.e. the wildcat banks, would have been more likely to locate in the hinterlands.

In the other chapter in this section, Mary Eschelbach Hansen sheds new light on an old topic: Bankruptcies during the Great Depression. Using a dataset that contains information on thousands of debts associated with 789 bankruptcies in Mississippi, between 1929 and 1936, Hansen analyzes the sources of credit employed by both consumers and businesses. She notes that much of the previous work on credit networks has “been biased toward banks and manufacturers” (pp. 194-95). She finds that, while the majority of the cases in her sample involved businesses rather than consumers, the modal reported type of business was “merchant,” and the majority of debts (roughly 60 percent) were owed to commercial rather than financial lenders. Loans for inventory seem to have played a particularly important role in the Mississippi economy.

The third, and final, section of the volume contains two chapters and is entitled “Scale Economies in Nineteenth-Century Production.” The first, by Robert Margo, addresses an issue familiar to anyone who has handled firm-level data from the era: How does one address the “entrepreneurial labor input?” In short the problem is that by omitting the labor of the owner-operator-entrepreneur, which census of manufacturing data tend to do, the denominator in output-per-worker measures is too small and thus productivity estimates are biased upwards. Space constraints prohibit a detailed explanation of Margo’s analysis, but the bottom line is that the findings of his chapter “can be seen as half empty (negative) and half full (positive)” (p. 240). On the negative side, the U.S. Census of Manufacturing data are flawed, and, without arcane adjustments, they probably cannot answer some of the key questions economic historians typically ask of them. On the positive side, the “rise of big business” narrative so common to nineteenth-century U.S. economic history misses a major point: Small firms were arguably quite productive, and there’s an important story to be told about that phenomenon.

The final chapter of this section, and the volume, is by Alan Olmstead and Paul Rhode. They address a specific question: Is it accurate to describe antebellum cotton plantations as “factories in the field?” To address this question, the authors employ several large data sets from the manufacturing censuses and the censuses of agriculture, for both northern and southern farms, to compare the operations of firms and farms from the era. After a detailed analysis of the relevant economic concepts, such as scale of operation and capital-labor ratios, Olmstead and Rhode conclude that the metaphor fits in some areas (e.g. professional managers overseeing large workforces), but, overall, the expression “factories in the field” is probably best thought of as a rhetorical device used by earlier authors to connote a degree of “modernity and efficiency” (p. 272) that obscures more about U.S. slave agriculture than it reveals.

 
Lee A. Craig is Alumni Distinguished Professor and Head of the Department of Economics at North Carolina State University. His most recent work in economic history is “The Impact of Mechanical Refrigeration on Market Integration: The U.S. Egg Market, 1890-1911,” with Matthew T. Holt, in Explorations in Economic History.

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

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Business History
Financial Markets, Financial Institutions, and Monetary History
Industry: Manufacturing and Construction
Transport and Distribution, Energy, and Other Services
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII

The Singularity of Western Innovation: The Language Nexus

Author(s):Dudley, Leonard
Reviewer(s):Sasaki, Yu

Published by EH.Net (May 2018)

Leonard Dudley, The Singularity of Western Innovation: The Language Nexus. New York: Palgrave MacMillan, 2017. vii + 316 pp. $170 (hardcover), ISBN: 978-1-137-40317-9.

Reviewed for EH.Net by Yu Sasaki, Waseda Institute of Advanced Study, Waseda University.

 
In The Singularity of Western Innovation, Leonard Dudley of Université de Montréal seeks to identify a cause of “Western innovation,” the term that encompasses the industrial revolution of the nineteenth century and the military revolution of the twentieth century. For Dudley, a primary cause is what he calls the “language nexus,” or the degree to which the main vernacular of a society was standardized in the preceding centuries. He argues that language standardization was far more advanced in Western Europe before 1800 than in contemporaneous eastern empires of Turkey, India, and China. Europe’s cultural precocity eventually led to key inventions in the modern era, including the steam engine, telegraph, electricity, and submarines. Given that these emerged from select Western states, namely Britain, France, and the United States as a British offshoot, the substantive question that is explored in the book is: what enabled these countries to lead in innovation? Addressing this puzzle is important to economic history, because it helps understand why it was Western Europe that economically “took off” first and not other world regions.

Dudley sets out to investigate this question in fourteen chapters that are organized in three sections. Each chapter clearly identifies a thesis and discusses it in a schematic fashion: on each topic, the European (mostly English) experience comes first as the benchmark case, followed by the brief comparison of the Ottoman, Indian, and Chinese cases. After the introductory chapter, Part I traces the extent to which vernaculars were developed in each society in Chapters 2 through 5. Chapter 2 lays out the foundation of language development by examining the dynastic cycle of the seventeenth century. It points out that while the eastern empires continued to suffer from the dynastic cycle — the pattern of the rise and fall of empires through financial instability, internal rebellion or external attack, and regime replacement — this cycle ceased in England as the power of the Parliament grew stronger relative to that of monarchy. This transformation ultimately gave England stability not only in finance but also in daily lives among ordinary citizens, giving an impetus for trust and cooperation in the subsequent centuries.

Chapter 3 discusses the adoption of print technology. In Europe, the metal movable type, invented by Johannes Gutenberg circa 1450, became the standard tool until the twentieth century. Non-European empires had a distinct experience with print. Although Jews brought Gutenberg presses to the Ottoman domain by the end of the fifteenth century, Istanbul banned private printing in Turkish or Arabic until 1726 (private printing in other languages was allowed). The main rationale for the ban is that the Ottomans relied upon oral communications by religious leaders to broadcast and maintain political authority. Printing presses would leave written records and political adversaries might take advantage of any inconsistency between those records and oral transmission to challenge the authority. In India, it was westerners who led the development of vernacular printing to understand local languages (and aid the business for firms such as the East India Company). It seems that the Mughals preferred hand-written materials to printed forms, and only in the late eighteenth century did vernacular print start by the initiative of an Englishman. China was the birthplace of movable type in the eleventh century, but woodblock printing, a more labor-intensive form, became standard until the late nineteenth century.

Chapter 4 describes literacy rates in the seventeenth century whose variation across the cases comes partly from the availability of the printing press and the size of the book market. Dudley argues in Chapter 5 that another factor that affected literacy was the extent to which the main vernacular of a society was standardized prior to industrialization. He uses the first publication date of a monolingual dictionary to measure language standardization. According to this definition, English was codified by 1658 and French, by 1680. Only in the twentieth century were Hindi, Turkish, and Mandarin Chinese standardized (in 1929, 1932, and 1937, respectively). The difference in the timing of standardization played a critical role, because a standardized language would reduce transaction costs and make collaboration easier in the age of urbanization, automation, and mass production.

The rest of the book discusses the consequences of pre-modern language rationalization for innovations in industrial and military technology, drawing examples from the West. Part 2 describes industrialization. Following an overview of each state’s ability to raise revenue reliably (Chapter 6), steam engines (Chapter 7), machine tools (Chapter 8), and rifles (Chapter 9) are examined. Part 3 focuses on the military dimensions: Chapter 10 goes over geopolitics at the turn of the nineteenth century. Chapter 11 discusses steam ships; Chapter 12, major conflicts between European and Asian powers; and Chapter 13, Europe’s overwhelming force of rifled firearms over Asian rivals. The concluding chapter compares the conventional model of geopolitical competition on Europe’s rise to the language hypothesis explored in the book.

One important contribution that Dudley’s book makes is his insight that language standardization is never a “natural” outcome. One reason, I suspect, is that it is hard to imagine how the uniform use of a language can have a direct and positive impact on the desired outcome for political and economic actors — be it greater revenue or greater trade. The monograph makes it clear that few, if any, pre-modern leaders put priority on investing in language standardization, as seen in the case of the Mughal Empire. There was also wide variation in such incentive within Europe, because countries such as Spain, the Netherlands, Germany, and Italy did not quickly follow the examples of Britain and France. Given the high fixed costs required to standardize a vernacular, what provides an incentive for language standardization? This question does not receive sufficient attention in the monograph. Future research could examine it to provide a fuller conceptual framework and offer an empirical test of the role of culture in understanding the process of economic development.

Dudley is right to underscore the importance of considering cultural dimensions when one seeks to address big questions such as “Why did Europe — or a specific subregion of it — industrialize first?” Here “culture” refers to a broad term that captures patterns of behavior with regard to actors’ choices of technology, codified rules, and policies, which conventional institutionalist arguments have difficulty explaining. For example, the Chinese relied on woodblock printing (a labor-intensive technology) even though a superior technology, movable-type print (a capital-intensive technology), was available. Their choice may in part be based on their shared preference for time-consuming but cheap labor over an efficient yet expensive technology. Future work can build on Dudley’s insight to shed greater light on the origins of European industrialization.

 
Yu Sasaki is an Assistant Professor at the Waseda Institute of Advanced Study in Waseda University, Tokyo. His recent publications include “Publishing Nations: Technology Acquisition and Language Standardization for European Ethnic Groups,” Journal of Economic History, December 2017. He is currently working on how cultural consolidation within states affects political and economic development on the state level, drawing from early-modern Europe.

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

Subject(s):History of Technology, including Technological Change
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):General, International, or Comparative
Time Period(s):Medieval
16th Century
17th Century
18th Century
19th Century

Commerce and Politics in Hume’s History of England

Author(s):Wei, Jia
Reviewer(s):Berdell, John

Published by EH.Net (October 2017)

Jia Wei, Commerce and Politics in Hume’s History of England. Woodbridge, UK: Boydell and Brewer, 2017. xi + 209 pp. $99 (hardback), ISBN: 978-1-78327-187-0.

Reviewed for EH.Net by John Berdell, Department of Economics, DePaul University.

 
Janet Wei brings David Hume’s accomplishments as a historian out of the shadows in this important investigation of Hume’s History of England. It is often remarked that Hume appeared in library card catalogue as “David Hume, the historian.” Also that he considered himself to be living in a time and place uniquely interested in history. (Hence, his purported aspiration to fill the vacant “post of honor” reserved for history in the English Parnassus.) According to Wei, Hume’s unique contribution to eighteenth century historiography lies in the interplay between his Scottish background and his cosmopolitan understanding of the emergence of commercial society across Europe. Wei finds it telling that unlike so many Scots historians of the time, Hume was not drawn to adumbrate a stages account of history, but rather to develop narratives that maintained a lively understanding of the role of chance and unforeseen events in human affairs. She underlines the fact that Hume’s history is so often paradoxical and ironic. This is part of Hume’s contribution to eighteenth century historiography, but Wei places great weight on the “innovative fabric of causation” that binds together Hume’s intertwined narratives of the rise of English liberty and commerce. Hume’s distinctive political economy informs his historical narrative of England’s emergence as a trading nation and it becomes intertwined with a narrative of the shifting balance between authority and liberty that originates in his political science.

Wei divides her book into two unequal parts. The first considers Hume’s historical account of England’s national character, or what Montesquieu called its “spirit.” The analysis centers on the interactions between the rise of English commerce and English liberty — and more particularly the proposition that for Hume the English state was largely the result of “a particular approach to colonial trade.” The second part focuses on public finance and the preservation of English liberty. Wei’s conclusion finds Hume increasingly pessimistic about that preservation because, rightly understood, England’s liberty rested upon a delicate balance between liberty and authority, which was increasingly destabilized by the fiscal demands of Britain’s empire.

Readers of Hume’s Essays will be familiar with his proposition that foreign commerce stimulated the economic development of England, indeed all of early modern Europe. Adam Smith popularized Hume’s thesis when he asserted that “For a pair of diamond buckles perhaps, or for something as frivolous and useless, they exchanged the maintenance, or what is the same thing, the price of the maintenance of a thousand men for a year, and with it the whole weight and authority which it could give them.” Wei shows us that what this gained in rhetorical flourish it lost in historical detail. While the growth of foreign commerce was essential to the erosion of noble power, the deliberate policy and legislation of Henry VII, amplified by the depredations of the War of the Roses, are central to Hume’s account of the formation of a centralized system of justice. Hume is shown to reject Harrington’s view that Henry was mistaken in his efforts to deliberately weaken noble power. Wei also emphasizes the fact that for Hume the growth of foreign trade was the product of considerably more deliberation and policy than the simple influx of luxuries found in his Essays. Hume approved of Henry VII’s and Elizabeth’s imposition of duties on foreign merchants and successfully encouraging English merchants and navigation to take their place. Although the contrast to Smith is not emphasized, Hume’s account of how foreign trade contributed to English liberty importantly includes the growth of its navy, and hence its ability to defend itself against its continental rivals. This was drawn from the strength of its colonial trade. These are not observations that sit easily with stale portrayals of Hume as the first great anti-mercantilist. There are innumerable interesting subthemes running through the first part of this book, but the central thesis must surely be Hume’s relentless attempt to undermine the Whig ideology that England’s freedoms had an ancient Saxon origin, while simultaneously undermining the Tory view that kings ruled by divine right. Contrary to the Tory view, it was commerce that slowly transformed feudal anarchy, and the jurisdiction of nobles, into a powerful Tudor monarchal absolutism. Contrary to the Whig view Parliament actively contributed to Tudor power since Tudor monarchs were the only feeble source of civil liberties in that dark age. All this would change under the Stuarts as the continued growth of commerce emboldened Parliament to rein in monarchal power, and to provide civil liberties an independent and more secure footing in an independent legal establishment.

The second part of the book focuses on the role of public finance in determining the balance between Parliament and monarch — between Hume’s great principles of liberty and authority. The balance hung upon control over tax revenues and the need to fund the navy. Here Wei makes good use of a burgeoning literature (from D.P. O’Brien among others) that puts Britain’s public finances, and imperial aspirations into European context. Istvan Hont, who tragically could only supervise the early phases of this thesis, has emphasized the fact that Hume was acutely aware of the instability lurking in England’s delicate political balance. Wei provides considerable new detail to Hont’s thesis by following the twists and turns of Hume’s account of English political “opinion,” and the increasingly uncompromising republican and monarchical “spirits.” Along the way she makes a short but powerful case that Hume should be seen as a supporter of unlimited religious toleration — rather than as an advocate for an established church as is usually taught. Her concluding thoughts on Hume’s increasing conservativism regarding the prospects for England’s public liberty should be contrasted with other accounts, such as those of Andrew Sabl and David Wootton, as Hume’s politics are notoriously difficult to situate on a anything resembling a liberal-conservative spectrum. When Hume was unable to simultaneously undermine both of the prominent party ideologies of his day, he would alternately adopt their positions: all in an effort to force his readers to think things through for themselves. Wei’s careful identification of Hume’s contributions to historiography certainly contributes a great deal to our understanding of how and why he did so.

References:

Sabl, A. (2012). Hume’s Politics: Coordination and Crisis in the History of England. Princeton,
Princeton University Press.

Wootton, D. (1993). David Hume, “The Historian.” The Cambridge Companion to Hume. Edited by D. Norton. Cambridge: 281-312.

 

John Berdell is the author of International Trade and Economic Growth in Open Economies: The Classical Dynamics of Hume, Smith, Ricardo and Malthus (Edward Elgar, 2002) and articles on Cantillon, Hume, Smith and most recently John Law: “The Structure and Stability of John Law’s early Land Bank Proposals,” forthcoming, Oeconomia.

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

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):18th Century

Rethinking Canadian Economic Growth and Development since 1900: The Quebec Case

Author(s):Geloso, Vincent
Reviewer(s):Emery, Herb

Published by EH.Net (October 2017)

Vincent Geloso, Rethinking Canadian Economic Growth and Development since 1900: The Quebec Case. New York: Palgrave Macmillan, 2017. xxi + 212 pp. $129 (hardcover), ISBN: 978-3-319-49949-9.

Reviewed for EH.Net by Herb Emery, Department of Economics, University of New Brunswick.

 

Vincent Geloso, Post-Doctoral Fellow at Texas Tech University, adds to the literature arguing against historical narratives that Quebec’s economic development and modernization only started after 1960 with the Quiet Revolution. For Quebec, the fifteen years after World War II, dubbed “La Grande Noirceur” or “the Great Darkness,” is associated with the Maurice Duplessis’s Union Nationale government supported by the Catholic Church and Anglophone business, prone to corruption, suppression of civil liberties and labor unions, and defense of traditional values and rural interests. While historians have acknowledged that the postwar economy of Quebec had strong growth, and elements of modernization like rural electrification, Duplessis is also considered to have been a leader that held modernization and the development of a secular, multi-cultural state back by at least a decade. Overall, the goal of the author is to spur a reconsideration of “La Grand Noirceur” as “The Great Catch Up” and to recast the leadership of Duplessis in a positive light. Perhaps more controversial, the author seeks to bolster that case that the Quiet Revolution was at best a continuation of an evolution and may have actually been a drag on growth.

Geloso contributes new evidence in support of a revisionist argument as to Duplessis’s legacy. He shows that after decades of no convergence between Quebec and Ontario, during Duplessis’ leadership from 1945 to 1960, Quebec’s economy boomed and incomes converged with those of Ontario, Canada’s leading provincial economy. He seeks to make a case that during the “The Great Darkness” the conditions for future growth, notably through the increased educational attainment of francophones, were sowed. The author describes how the forces underlying the Quiet Revolution, including the declining role of the church and populist, rural attitudes which resisted modernization, were underway well before the 1960s. In contrast, the era from 1960 to 1976 exhibited no break from the trend set from 1945 to 1960, and during the Quiet Revolution convergence with Ontario slowed to a halt and the gap with the rest of Canada has remained more or less constant since.

Geloso’s revisionist view of the Duplessis period is based on the convergence of Quebec’s income with that of Ontario rather than on absolute gains in income which occurred before and after the Duplessis period. Did Duplessis have anything to do with the income convergence of the 1950s? It could be that Quebec’s gains happened in spite of Duplessis as the author argues that Quebec’s later gains occurred in spite of the Quiet Revolution. Quebec’s economic gains during the time of Duplessis were not unique to Quebec and the lack of comparative work is a major shortcoming of the book. Economic modernization similar to what Geloso describes for Quebec was also underway in Alberta, Saskatchewan and New Brunswick under three ideologically different governments. All balanced their books like Quebec, all invested in rural electrification and other massive resource projects. Unlike those provinces, however, Quebec would have had a much greater boost following World War II because of the location of wartime industry favoring Quebec. Mary Mackinnon and Daniel Parent have shown that linguistic and economic assimilation of francophones in New England accelerated after World War II suggesting that the developments Geloso describes for Quebec francophones were not specific to Quebec.

Equating success with convergence with Ontario is curious. Relative incomes across Canada’s provinces have shown remarkable stability since at least 1870. That suggests that income differentials across provinces are equilibrium differentials perhaps reflecting differing industrial/sectoral compositions of the provincial economies. This perspective would have been clearer if the author had drawn on Alan Green’s (1971) Gross Value Added estimates with information on sectoral employment and incomes. John McCallum’s (1979) “Unequal Beginnings” posits that Quebec and Ontario had differing processes of industrialization due to differences between the productivity of agriculture in the two provinces. Quebec had low wages that attracted low value added manufacturing based on external capital while Ontario had internal sources of capital, high wages and high value added manufacturing. These differences could explain why Quebec had a lower level of income than Ontario and convergence could reflect changes in the industrial make up of Quebec, perhaps due to the wartime industries of World War II.

It may be that the importance of the Quiet Revolution was not about growth and modernization of the Quebec economy, but about the distribution of income and wealth towards Francophones which accompanied the majority population’s increasing economic power. Duplessis benefited from Anglophone business and external capital to develop resource industries. He used the Church employing priests and nuns at low wages for schooling and hospitals to keep taxes low. But, as the Canadian welfare state grew through the 1960s, spurred by federal government cost sharing in areas like health care, an increasingly educated Francophone population emerged as a middle class wanting jobs which the low paid priests and nuns held. The relative slowdown, if not decline, of Quebec’s gains against Ontario after 1976 must be related to the rise of Quebec nationalism and sovereignty referendum. The political uncertainty of the times resulted in capital and Anglophone business elites moving to Ontario which while reducing incomes in the province, shifted economic control to Francophones. There is not much in the book about this pivotal political development which would seem to be an obvious starting point for understanding post-1970s growth in Quebec.

Given Geloso’s work, one could interpret the Quiet Revolution as a rejection of growth as the top priority for Quebec’s society for a balance between growth and the redistributive goals that the Duplessis era had failed to address. Quebec may have failed to gain economically against Ontario after 1960, but the Francophone majority gained a greater share of the wealth that the province did produce.

 

Herb Emery is the Vaughan Chair in Regional Economics at the University of New Brunswick. He is co-author (with Ron Kneebone) of “Socialists, Populists, Resources, and the Divergent Development of Alberta and Saskatchewan,” Canadian Public Policy/Analyse de politiques 34 (4): 419-440 (2008).

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

Subject(s):Economic Development, Growth, and Aggregate Productivity
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Routledge Handbook of Global Economic History

Editor(s):Boldizzoni, Francesco
Hudson, Pat
Reviewer(s):Mitch, David

Published by EH.Net (September 2017)

Francesco Boldizzoni and Pat Hudson, editors, Routledge Handbook of Global Economic History. New York: Routledge, 2016. xv + 471 pp. $240 (cloth), ISBN: 978-1-138-83803-1.

Reviewed for EH.Net by David Mitch, Department of Economics, University of Maryland, Baltimore County.
Francesco Boldizzoni (University of Turin) and Pat Hudson (Professor Emeritus, Cardiff University) have compiled a fascinating collection of 24 historiographical surveys on the economic history of countries and regions from six out of seven continents of the world bookended by their introductory essay (“Global Economic History: Toward an Interpretive Turn”) and their concluding essay (“Culture, Power, and Contestation: Multiple Roads from the Past to the Present”). Antarctica is presumably excluded due both to the absence of indigenous economic historians and the paucity of scholarly literature on the region. (See however, Bjorn L. Basberg, “Perspectives on the Economic History of the Antarctic Region,” International Journal of Maritime History (December 2006): 285-304.) The focus of each of these essays is on the historiography or alternatively history of economic history including the institutional setting for the practice of economic history for the geographical area under consideration rather than a survey of economic history as such. For twenty of the essays, the geographical entity considered is the nation state. The other four essays include Huri Islamoglu’s survey of what she calls “Middle Eurasia,” Luis Bertola and Javier Rodriguez Weber’s survey of Latin America, Ayedoji Olukoju’s survey of West Africa and Patrick Manning’s survey of Africa as a whole

A central defining feature of the volume is that in selecting authors for these pieces, the editors are explicit about their preference for indigenous economic historians. Boldizzoni and Hudson offer the following definition of an indigenous economic historian (p. 9): “Whenever possible historians who were trained and/or had based their career within their indigenous culture were favoured.” They offer the following justification for this principle of selection: “A distinctive contribution of the chapters therefore comes from their privileged access to sources. This is an aspect overlooked by global historians who have got accustomed to interpretations based upon cherry-picked secondary materials and upon inadequate, partial and delayed translations. We are not suggesting that indigenous scholars are inevitably more qualified than others to interpret their native cultures although we do accept, other things equal, that they have the opportunity to be better informed and that indigenous and external perspectives are likely to differ.” By my rough and ready reckoning, only two of the contributors clearly do not meet the indigenous criteria, Patrick Manning, the author of the Africa survey mentioned already, and Prasannan Parthasarathi who completed his Ph.D. at Harvard and has been in the History Department at Boston College since 1998. At any rate, the overwhelming majority of the authors in the volume would seem to meet the indigenous criteria as just described.

An important consequence of this for the surveys is that less attention than might otherwise occur is accorded to work by foreign scholars on the relevant territorial unit and, it would appear as a consequence, by cliometricians. The extent of inclusion of foreign and/or cliometric scholarship actually varies considerably across these pieces. Some chapters give no mention whatever to work by cliometricians or foreign scholars while others do so quite extensively. Thus both Naomi Lamoreaux’s chapter on the U.S. and that of Inaki Iriarte-Goni on Spain do give extensive coverage to cliometric work.

At first blush, it struck me that many of the chapters were thus wildly imbalanced by their lack of coverage of recent cliometric contributions or of major works by non-indigenous non-cliometric historians. Having heard, this past April, Bishnu Gupta deliver what I considered a tour de force Tawney Lecture featuring recent cliometric contributions to the economic history of India at the annual Economic History Society conference and having recently read Richard von Glahn’s magisterial The Economic History of China as well as having a sense of the considerable impact of Kenneth Pomeranz’s The Great Divergence, I found it quite jarring to read the chapters on India and China and to find minimal mention of cliometric or foreign scholarship in either — including no mention of the contributions of Gupta, Pomeranz, or von Glahn. The chapter by Parthasrathi on India does mention the scholarship of Eric Stokes and Indian expat Amartya Sen, and Li Bozhong’s chapter on China does cite John Fairbanks and Angus Maddison. I do not find it obvious that any advantage associated with better access to primary sources or superior language skills should so fully outweigh other advantages associated with historical, social science and quantitative training in leading global academic centers as to either fully exclude or at least minimize the contributions of such perspectives.

It was only after I read Li Bozhong’s chapter on China that the case for economic history as done by indigenous scholars became compelling to me, although Boldizzoni and Hudson in their introduction indeed refer to an “interpretive turn” in history in which the perspective of the participant becomes central. Li makes the case that there is a 2000-year tradition of a genre that has been termed Shi Huo studies or food and money/commerce studies (p. 293-94). While not organized in terms of more modern concepts of economic history, these treatises did provide records and descriptions of “economic activities, events, and institutions” (p. 295). While this literature established a long tradition of Chinese antecedents for economic history, Li acknowledges that economic history in China was not indigenous but was introduced from the modern West in the first half of the twentieth century. However, he argues that the field developed in China in response to the distinctively Chinese self doubts of the time and an indigenous Chinese desire “to understand what was wrong with traditional Chinese society and economy and their failure to make China a ‘modern nation’” (p. 296). Similar arguments arise for the emergence of economic history in the Soviet Union and in Latin America in the early twentieth century and in South Africa in the mid-twentieth century. Indeed some of the most poignant passages in the volume are those by Leonid Borodkin and Li relating how Soviet and Chinese economic historians lost their lives — not to mention their career positions — for advocating approaches to economic history that were viewed by those in authority as not adhering to an orthodox line. Kaoru Sugihara in his chapter on Japan similarly relates how scholarly participants in debates in 1930s were subject to arrest and torture by the Special Thought Police (p. 316). The influence of political economy concerns broadly defined is also emphasized in Bill Freund’s chapter on South Africa.

Rather than seeing economic history as a field involving standard practices that have simply diffused from more advanced to less advanced societies of the world, the alternative view is that even if influenced by what at the time seem more advanced societies, the particular mix of issues and approaches to addressing them by economic historians develop indigenously. Thus the case for economic history in a given geographic area being practiced by indigenous scholars seems to me more one of awareness and responsiveness to distinctively local issues rather than readier access to primary sources. And the issue is less whether indigenous is intellectually superior to foreign but that in developing an intellectual history of the field, greater awareness of indigenous influences and driving factors gives an important advantage over either foreigner or practitioner of universal cliometric methods in providing an account of indigenous developments. Furthermore, it is useful to have accounts of how economic history has emerged in indigenous circumstances over and above whatever contributions to the economic history of a given geographical area have been made by foreigners. It is precisely in providing a compilation of such accounts that the contribution of this volume lies.

And despite my initial reservations, I do find this a quite worthwhile and successful volume. The scholarship in each of the chapters is excellent and the editors are to be saluted for their efforts in recruiting such strong scholars from all corners of the globe. Those with serious interests in economic history will want to consult this volume and at a minimum request it for their library’s reference collection.

However, some further limitations of the volume do warrant comment. First, the nation state emphasis at points becomes awkward insofar as relevant geographic units for coverage do not fall into current nation state categories and this may explain some of the exceptions to it. Thus, it seems odd that the chapters on the Czech Republic by Antonie Dolezalova, Slovakia by Roman Holec, and Hungary by Gyorgy Kover make only minimal reference to the extensive literature on the economic history of the Austro-Hungarian Empire and indeed no chapter is included on Austria. The compelling chapter on Middle Eurasia by Huri Islamoglu seems to acknowledge that much is lost by an exclusive focus either on nation states such as Turkey or Iran or empires such as the Ottoman. She alludes to the value of a civilizational perspective in doing economic history in mentioning the neglect of the work of Marshall Hodgson as a scholar of Islamicate civilization as a whole. And the Latin American and African chapters alternate between country foci and continent wide or regional foci presumably reflecting the larger vistas one can obtain from a more regional or continental perspective than just considering an individual nation state.

Second, an apparent follow-on consequence of the nation state focus is a focus on the modern period since roughly the onset of the British industrial revolution from the mid-eighteenth century. So no coverage is given the literature on pre-eighteenth century economic history. This makes sense if the emphasis is on indigenous present-centered issues. But one misses the issue of how awareness of ancient, medieval and early modern roots can inform more contemporary historical analysis.

Third, while overtly aiming at overcoming disciplinary boundaries, the emphasis is on the economic history tradition. Karl Marx figures prominently and to a lesser extent Max Weber. Many of the chapters refer to the work of Fernand Braudel and the Annales School as well as the work of Immanuel Wallerstein. However, associated traditions in other social sciences seeking to integrate the economic with more general dimensions, including political science and sociology, are given minimal attention. For example, the major intellectual tradition of historical sociology reflected in the work of such prominent scholars as Charles Tilly and Michael Mann is hardly integrated into the accounts at all. No consideration is given to larger social science influences through organizations such as the Social Science History Association in the U.S. or the European Social Science History Conference. However, informative coverage is provided in the Dutch chapter by Ulbe Bosma on the origins and influence of the International Institute of Social History, based in Amsterdam and a key sponsor of the ESSHC.

Returning to the greater sensitivity of indigenous scholars to local issues raises the question of the general versus the particular in economic history. As both social science and history, there is presumably a case to be made for the presence of both. One place where this tension arises but is not considered as fully as it could have been in this volume concerns the extent to which economic historians should take up issues which have significance for the present within which they are working. This is what Claudia Goldin has called “Exploring the Present through the Past.” (See Claudia Goldin, “Exploring the Present through the Past: Career and Family across the Last Century,” American Economic Review 87, no. 2 (1997): 396-399.)

And this is a factor has had an influence on cliometric work in U.S. economic history. Thus one factor contributing to the intensity of the debate over slavery among U.S. economic historians in the late 1960s and early 1970s was concerns about racial unrest in American cities at this time. Major strands of research have developed since on issues concerning black economic progress in the advent of the Civil Rights movement and Great Society programs and on the impact of urban renewal and housing policies in the U.S. Similarly, another major strand of research focusing on the role of gender in the economy can be seen as reflecting increasing contemporary concerns with this issue. Yet the concern can arise that this infuses a presentism and whigishness into economic history with a neglect of perspectives of historical actors or longer-term general issues.

Given their preference for indigenous scholarship and a desire to avoid privileging occidental, metropole approaches, Boldizzoni and Hudson appear to have hoisted themselves by their own petard with regard to the organization of chapters in the volume. The area coverage essays is grouped into four parts. It starts with a lead section on “Anglo-American Traditions,” which includes chapters on Britain, the U.S., Canada, and Australia. Then it proceeds to “West European Roots and Responses” (which includes chapters on Germany, France, Italy, Sweden, Spain, and the Low Countries). Part III is a “Turning to the East,” which is actually the second world of former Soviet Bloc countries including not only the Russian Federation but also Poland, the Czech Republic, Slovakia, and Hungary. Finally, Part IV ends with “The Wider World,” which consists of an undifferentiated set of ten chapters but proceeding from Asia to Latin America and ending with three chapters on African regions. No explanation is provided for this sequencing but what is conveyed — even if unintentionally through this grouping and ordering — is a sense of hierarchy and diffusion from more enlightened Anglo-American regions down to more backward eastern European and then Asian and Latin American regions with African regions at the very bottom. However, many of the indigenous issues regarding national identity in economic history come through especially forcefully in the African and Latin American cases as well as those in Asia. Given the indigenous theme of the volume, highlighting more fully these latter cases at the outset would seem to be warranted.

Finally, it should be noted that an important contribution of the volume’s chapters is to consider the infrastructure supporting research and teaching in economic history — including not just the academic location of faculty and research positions in economic history but also the presence of government statistical agencies in collecting the data that can be seen as foundational for economic history research. In their concluding assessment, Boldizzoni and Hudson do make useful observations on the mix of demand- and supply-side factors including the role of government and foundation support for economic history. While there is much more that could be done in generalizing these findings, the material assembled in these essays provide an important foundation for considering the role of infrastructure in supporting the development of economic history research.

I hope these comments convey some of the respects in which this volume is both stimulating and provocative. I have not attempted to convey the full richness of its various essays. While not systematically a handbook in the sense of comprehensively surveying a gamut of methodological issues, the variety of levels of analysis and approaches taken by contributors does provide a quite valuable overview of the approaches that can be taken to the history of economic history. Not many readers perhaps will end up reading the volume cover to cover. Nevertheless, the contrasting assessments even within given geographic areas make browsing through the volume intriguing. For example, Inaki Iriarte-Goni’s and Sandra Kuntz Ficker’s upbeat assessments for Spain and Mexico respectively regarding the vibrant blending of various historical methodologies for the economic historiography of their countries present striking contrasts with Boldizzoni’s depiction of a field in decline for the case of Italy or Luiz Felipe de Alencastro’s portrait of involuted tendencies in the case of Brazilian economic history. Even cliometrically inclined scholars could potentially benefit from reading about the perspectives of those who remain resistant to their methodologies.

 
David Mitch is Professor of Economics at the University of Maryland, Baltimore County. He is the author of “Economic History in Departments of Economics: The Case of the University of Chicago 1892 to the Present,” Social Science History (2011) and “A Year of Transition: Faculty Recruiting at Chicago in 1946,” Journal of Political Economy  December (2016)

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

Subject(s):Development of the Economic History Discipline: Historiography; Sources and Methods
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Widows in European Economy and Society, 1600-1920

Author(s):Moring, Beatrice
Wall, Richard
Reviewer(s):Burnette, Joyce

Published by EH.Net (August 2017)

Beatrice Moring and Richard Wall, Widows in European Economy and Society, 1600-1920. Woodbridge, UK: Boydell Press, 2017. xiii + 327 pp. $120 (hardback), ISBN: 978-1-78327-177-1.

Reviewed for EH.Net by Joyce Burnette, Department of Economics, Wabash College.
While many books have been written on the role of women in economic history, few have focused on widows. Consistently ten to fifteen percent of adult women are widows. Moring (University of Helsinki) and Wall (University of Essex) examine widows, and encourage us to reassess our assumptions about them. The argument of the book is that the typical widow was not lonely and destitute, unable to find a man willing to marry her, but was in fact economically active and living with family. The book focuses on three main themes: poverty, property, and demography.

The book includes a wide variety of data. There are 67 tables in the main text, and an additional 17 tables in the appendices, presenting averages and percentages that describe the lives of widows. Sources include poor law, tax and court records, probate inventories, wills and censuses. Most of the primary data are from Britain and the Nordic countries, since Moring specializes in Finland and Scandinavia, and Wall specializes in Britain. The authors do a good job of supplementing their own research with secondary material from other countries, to provide comparisons across Europe. For example, the authors discuss what portion of property the widow had a right to inherit in France, Germany, Spain, and Italy as well as Britain and the Nordic countries, and they compare co-residence with children in Britain, Germany, Norway, France, and Italy.

While there certainly were poor widows, the typical widow was not poor. Poverty was slightly higher among widows than among men, but widowhood did not necessarily make a woman poor. Only a small minority of widows (less than 20 percent) were on poor relief, and those that were received only a minority of their household support from poor relief payments. Widows were not idle, but their earnings were low. In Britain widows on poor relief earned about two-fifths of their household earnings from their own work. Poor relief provided only about one-fifth of household income, and the remainder came from the earnings of their children. The authors note that poor relief was never meant to provide a widow’s entire income: “the intention was to augment the economy of the widow, not to support her” (p. 37). Often widows were not given money or food, but inputs that enabled them to be productive. For example, a Scandinavian widow received the “use of the field and potato patch she has been using until now. She can keep a cow and five adult sheep in the summer on the village grazing grounds” (p. 41).

Many widows had substantial assets. In most countries the widow was legally entitled to somewhere between one-third and one-half of the estate. Widows often inherited the family house. Many widows were wealthy enough to pay taxes; across Europe between 4 and 25 percent of taxpayers were women. While widows had on average fewer assets than men, the typical widow was not destitute. Nordic inventories suggest that the average widow held about half as much property at her death as her husband had at his death, a reduction which makes sense because children had a right to half of the property. Often the farm was not split, but the widow owned only part of the farm, and part was owned by her children.

In many parts of Europe, widows might have a “retirement contract” which gave ownership of the land to the son, but specified that the widow be given food, lodging, and other goods such as firewood, until her death. In Finland about one-fifth of widows lived under such contracts, and in parts of France up to 60 percent of couples had such contracts. Sometimes the contracts were quite specific, specifying the amount and quality of specific grains. The contracts were written so that even if the son were to lose the land to creditors, the new owner would still have to support the widow.

Most widows were economically productive. Inventories of widows’ property include goods that demonstrate economic activity, such as fishing boats, shoemaking tools, and shop merchandise. Most guilds allowed women to continue in their husbands’ trade, and typically around ten percent of urban traders were widows. Even widows living under “retirement contracts” received goods suggesting that they remained economically active. For example, a Scandinavian widow received “A quarter of the cowshed and the old stables for a barn, the right to use half the hayloft and half the storage shed” (p. 136), rights which would not have been particularly useful if she were not engaged in animal husbandry. Another widow received “a cabbage patch 5 yards long and 3 yards wide and the space to sow flaxen in suitable soil” (p. 137), which suggests not only gardening but also textile production.

Since census records are not sufficient to answer questions such as the typical length of widowhood, the authors use a technique called micro-simulation to estimate the age distribution of widows and the average duration of widowhood from known demographic data. The typical widow entered that state around age 50, and remained a widow approximately 18 years. About twelve percent had no children at the time they were widowed. The European Marriage Pattern of northern Europe is said to be characterized by nuclear families and limited inter-generational cooperation. Moring and Wall question this claim, noting that the majority of widows lived with their children in both northern and southern Europe.

This book leaves us with a picture of widows as active and empowered rather than lonely and dependent. Men were more likely to remarry than women, but we should not necessarily interpret this as a sign of the widow’s weakness; perhaps women enjoyed the autonomy that came with widowhood and did not wish to remarry.

 
Joyce Burnette is currently working on examining the gender gap and peer effects among Swedish workers c. 1900 and absenteeism among nineteenth-century U.S. workers.

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

Subject(s):Business History
Household, Family and Consumer History
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):Europe
Time Period(s):17th Century
18th Century
19th Century
20th Century: Pre WWII

Law and the Economy in Colonial India

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

Published by EH.Net (August 2017)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Energy and Civilization: A History

Author(s):Smil, Vaclav
Reviewer(s):Jones, Eric

Published by EH.Net (August 2017)

Vaclav Smil, Energy and Civilization: A History. Cambridge, MA: MIT Press, 2017. x + 552 pp. $40 (cloth), ISBN: 978-0-262-03577-4.

Reviewed for EH.Net by Eric Jones, La Trobe University.
The arrival of an encyclopedic tome of 550 pages, crammed with graphs, calculations, bar diagrams and the interruption of plentiful “boxes,” so giving every appearance of being a textbook, does not usually fill the breast of a reviewer with joy. Fortunately reading this volume turns out to be a pleasure. Vaclav Smil came to notice in 1984 with The Bad Earth, an early account of China’s environmental degradation, and has since written prolifically on topics concerning energy. He is described as an “incorrigible inter-disciplinarian,” a stance that helps him compare and calibrate sources over the widest possible range. His latest book is a greatly expanded version of an earlier volume and may be taken as a summary of his life’s work. It is immensely valuable for reference as well as for calm, decisive commentaries on the state of knowledge, besides on what is actually or potentially computable about uses of energy worldwide and throughout the very long term.

What Smil concludes about the early modern period provides some of the most insightful passages among a vast number of offerings. The immense stretches of time when most humans remained either hunter-gatherers or toiling peasants can, of course, be approached along an energy perspective. Interpretations of these tedious periods by many authors nevertheless tend to lean on mere assumptions about motive and on various anthropological analogies that are sometimes plausible but commonly arbitrary. They typically amount to pronouncements about indifference to accumulation (readily but unconvincingly supported by material poverty) and chronic aversion to physical labor. Nor is Smil impressed by assertions about the labor supposedly required to erect the great monuments of the past, such as the Great Pyramid, and demonstrates how exaggerated they often are. Better documented detail is available once 1850 is passed, when the Western world took up fossil fuels on a grand scale and soon became a fossil fuel civilization. From that date he pays even closer attention to the energy implications of inventions in sphere after sphere after sphere. He offers a new and informative slant on many of these developments. In principle all this is, however, familiar ground.

Smil’s work on early modern times accordingly stands out between these epochs. What one might call the early modern prologue was remarkably progressive compared with many previous centuries. Smil shows just how much human labor could produce with no more than sweat, levers, treadmills, animals, wind power and water power, and how gradual advances were being made in the diffusion and productivity of these every day methods. His “box” on the raising of Alexander’s column at St Petersburg in 1832 is especially impressive, notwithstanding the facts that foreign architects were employed and that the Monument to the Great Fire of London constructed in the 1670s is taller still. Far earlier than any of this the Romans had made strides in exploiting the power afforded by people and nature. Yet from our distant viewpoint the most interesting fact may be how gradually best practice had spread. The tapping of ostensibly straightforward sources of energy continued for a long time — very long. Water wheels, Smil says, were the most significant energy foundation of Western industrialization. Even allowing for the telescoping effect of hindsight, the ancient world had experienced phases of rapid advance that were not matched for a considerable spell. The later Western world, taken as a whole, was often slow by contrast but at least its gains tended to be cumulative. Permissible loads drawn by French horses in the mid-nineteenth century were about four times the Roman limit. But can we say that reaching this point had been achieved at a reasonable pace?

Agreed, pace depends to some extent on where one stands. Even in the modern period, best practice could diffuse with what to our eyes seems a marked sluggishness. From 1745 the English introduced a fantail to turn the sails of windmills automatically into the wind. Their neighbors, the Dutch, who owned the most windmills in Europe, did not take up this device until the early nineteenth century. For all such blemishes on attainable advance, and despite most labor in England and Wales remaining craft work in 1850, energy output had nevertheless risen fifteen-fold in two hundred years. Was that fast or slow? Either way it meant that industrialization as conventionally defined piggybacked on economic changes already springing up with some frequency. Studies of energy use show that the period leading to modernity was complete by the mid-nineteenth century and by any reasonable measure things changed rapidly thereafter.

Studies of individual subjects might perhaps be thought somewhat like single-issue politics, with the distortions it entails. However Smil explicitly avoids the trap of explaining world economic history in terms of energy alone. Although per capita GDP and energy supply are linked more closely than many elements in socio-economic life, they can be decoupled and a determining role for energy is repeatedly frustrated by political and other choices. Energy use is after all an input, though doubtless one with beneficial outputs, but distributional considerations often alter the expected results. The population response that development economists once thought likely to neutralize any income gained from slow technical advances may have been deflected because elites commandeered a lion’s share of the gains. Smil insists on the need to get the balance right between energy imperatives and a multitude of non-energy factors. He rejects tempting comparisons across sectors, such as the uncannily similar energy use by sailing ships and drainage windmills during the United Provinces’ Golden Age, pointing out that no volume of peat dug would have made possible the voyages to the East Indies. Certainly there were too many overlaps in types of exploitation at any one period to separate history into energy eras. There is long experience and a maturity of judgment in this book that inspire much confidence.

 
Eric Jones, Emeritus Professor, La Trobe University, and former Professorial Fellow, Melbourne Business School, is the author of Locating the Industrial Revolution: Inducement and Response (World Scientific, 2010), The Fabric of Society and How It Creates Wealth (Arley Hall Press, 2013) [with Charles Foster], Cultures Merging: A Historical and Economic Critique of Culture (Princeton, 2016, paperback) and Middle Ridgeway and its Environment (Wessex Books, 2016) [with Patrick Dillon].

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

Subject(s):History of Technology, including Technological Change
Transport and Distribution, Energy, and Other Services
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Forging the Bee Line Railroad, 1848-1889: The Rise and Fall of the Hoosier Partisans and Cleveland Clique

Author(s):Olson, Arthur Andrew
Reviewer(s):Brown, John Howard

Published by EH.Net (August 2017)

Arthur Andrew Olson, III, Forging the Bee Line Railroad, 1848-1889: The Rise and Fall of the Hoosier Partisans and Cleveland Clique. Kent, OH: Kent State University Press, 2016. xxix + 228 pp. $45 (cloth), ISBN: 978-1-60635-282-3.

Reviewed for EH.Net by John Howard Brown, Department of Economics, Georgia Southern University.
The history of early railroads in the United States represents a puzzle of bewildering complexity. The historian confronts a mélange of ever shifting acronyms and a confused trail of restrictive charters, capitalizations and recapitalizations, insolvencies, lawsuits, and operating leases effectively transferring control from the nominal owners to other firms.

The motives for initiating railway development were often parochial. For instance, the rail line that is the topic of this book attempted to secure the economic centrality of Indianapolis within the state of Indiana. These autarkic yearnings were frustrated by underdeveloped condition of the American Midwest during the first half of the nineteenth century. The capital-intensive character of railways insured that capital, and ultimately the control, of these roads would be eastern. The subtitle of this book captures only the first phase of this eastward migration.

The titular Bee Line was initially a pair of roads. The first, chartered in Indiana, the Indianapolis and Bellefontaine, ran east to the Ohio line. The other, the Bellefontaine and Indiana proceeded west to the Indiana border. They met at the town of Union, which functioned as a break-bulk point. (These joints in a transportation system require a change of vehicles. In this case, breaking bulk was required since the roads operated on different gauges.)

The Ohio railroad had a further connection northeast to the Cleveland, Columbus, and Cincinnati railroad, connecting the three Ohio metropolises. The economic logic of network transportation industries impels improving network connectivity by eliminating break-bulk points and adding nodes to the network. For this reason, the controlling interests of the CC&C Railroad sought to assert control over the Bee Line and its extensions westward to St. Louis, the keystone of central Mississippi River commerce. This imperative created the conflict between the Indiana particularists, seeking to retain local control, and the Cleveland financiers.

As is the case in military affairs, victory most often is achieved by those with the largest battalions. Since the so-called Cleveland clique had greater access to capital, they ultimately triumphed. Ironically, in the post-Civil War financial climate, the winners found themselves similarly out-gunned by a combination of eastern and European capital. Ultimately the CC&R with the addition of St. Louis, became known as the Big Four, controlled by William Vanderbilt.

The author presents this convoluted history adequately, although greater organizational clarity would have been a boon. The text is particularly good at illustrating the predatory aspects of Gilded Age capitalism. These arose from the inescapable conflict between the agents charged with the day-to-day management of these large scale enterprises and the capital-supplying principals.

The author aids the reader with brief biographical sketches of the many participants in the drama. In addition, there is a table of the hodgepodge of acronyms scattered across the pages. A timeline of significant events in the history of the Bee Line and flow charts outlining the history of consolidations are also included.

There are two final noteworthy features. The first, of greatest interest to railroad enthusiasts, is the abundant images of railroads and particularly locomotives. The feature of more general interest is the numerous maps, some specifically commissioned for this project. These maps highlight the routes and natural connections among the various participants.

In general, I believe this book is of greater interest to railroad “buffs” than to professional historians of transportation or economic historians. Indeed, the author appears to be such a railroad enthusiast who pursued this project as a retirement activity. Apparently, it was submitted as a M.A. thesis at Kent State University. Consequently, it is adequately documented and the actual historical text, as opposed to the addenda outlined previously, is brief enough for relatively quick reading.
John Howard Brown is an Associate Professor of Economics at Georgia Southern University. He discovered to his surprise after receiving his doctorate that he had become a transportation economist. He has researched and written about the economic history of transportation both recent (airline deregulation) and long past (railroad regulation).

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

Subject(s):Business History
Transport and Distribution, Energy, and Other Services
Geographic Area(s):North America
Time Period(s):19th Century

All the Facts: A History of Information in the United States since 1870

Author(s):Cortada, James W.
Reviewer(s):Haupert, Michael

Published by EH.Net (August 2017)

James W. Cortada, All the Facts: A History of Information in the United States since 1870. New York: Oxford University Press, 2016. xix + 636 pp. $99 (hardcover), ISBN: 978-0-19-046067-9.

Reviewed for EH.Net by Michael Haupert, Department of Economics, University of Wisconsin-La Crosse.

 

“Big data” is all the rage these days. How to capture it, store it, analyze it, visualize it, and exploit it. But from whence do all these data originate, who compiles it, and how did it all begin? James Cortada takes on the Herculean task of writing not just about data, big or small, but the history of information in the United States. Information is a big topic, and big data is just one small part of it, garnering nine mentions in 600+ pages. Cortada rises to that challenge, covering just about everything you could conceive of regarding as information, and much you probably never thought of.

The central theme around which he builds his story is that information is a commodity, and its exchange is a function of literacy and education. Individual chapters deal with the various producers and consumers of information. The theme and organization make sense, and the approach works. But because the topic is so vast, there is no way that the breadth can be matched by the depth of the coverage. And Cortada does not disappoint when it comes to breadth. It’s all here. Sometimes a single sentence (the NBER, more on that later), sometimes a whole chapter (the internet). But no attempt is made to formulate an overall theory, or even address a specific one. Instead, he has chosen to touch on everything in an almost dizzying array of topics. By just scratching the surface, Cortada has uncovered a whole lot of what could prove to be fertile ground for future researchers. For example, where do we draw the boundary between efficiency and privacy? Is information a public or private good? And what about “alternative facts?” How do we differentiate between correct and incorrect information? Positive and normative information? Facts and beliefs? How has technology altered the balance between these, and at what cost? The general conclusion Cortada comes to is that information was and is “ubiquitous, pervasive, and integral in American life” (p 460). The specifics remain for future researchers to explore.

One could nitpick about the lack of coverage of one topic or another. For example, there is but a single sentence mentioning the creation of the NBER (p. 113) and no mention of the role of Edwin Gay, Wesley Mitchell, or Simon Kuznets, all of whom are widely recognized for their contributions to what economic historians would consider a very important source of information. But there is really so much included that it wouldn’t be fair to complain about what little is not.

Ultimately, this is the story of the growing importance of facts and their influence on the growth and development of the United Sates. The book consists of eleven chapters and an introduction laid out chronologically by topic. Chapters 1 and 3-5 cover the period from 1870 until World War II. Chapters 6-9 cover the remainder of the twentieth century. Each of these chapters covers a topic related to the role of business, government, and academia in the provision and consumption of data, and the impact of the ever-increasing amount of information on consumers. Chapter 2 covers the roots of early uses of information in America going back to the seventeenth century. The introduction is a general overview covering the definition of information (“a collection of facts in sufficient amounts to describe a situation, thing, place, person, or event” (p. 2)), how it relates to knowledge and skills, how information is used, by whom, and from whence it came. Chapter 10 addresses the internet and modern uses of information, and chapter 11, titled “How Americans Used Information to Shape Their Society,” serves as a conclusion. There are interesting sidebars throughout, including “What Farmers Had to Know by 1870” (p. 68), “Cooking Information the Betty Crocker Way” (p. 381), and “Roadside Signs along Route 66” (p. 408).

There are 92 pages of footnotes, but no bibliography. Instead, there is a bibliographic essay covering 35 pages. What it provides in thoroughness it lacks in usefulness. In this format it is difficult to track authors or topics, and even a single reference may require much page turning to find the complete citation. This is a disappointment because it makes it more difficult to use references to guide further research. The author himself would likely classify this as an information “restrainer” (p. 17).

Typical of the flow of the book is chapter five, “How Citizens Became Dependent on Information, 1870-1945,” in which Cortada argues that “one can see the influx and use of information in private lives by observing happenings in the kitchen, in childrearing, and in keeping home safe and socially appealing” (p. 192). He convincingly demonstrates how households were deluged with massive quantities of information, much of which involved cooking, cleaning, childrearing, and health. But one example he offers up — the tale of the National Association of Ice Industries (NAII) — raises a troubling issue at the same time. The NAII established the Household Refrigeration Bureau, whose mission it was to distribute “practical and accurate information on the application of refrigeration principles and appliances in the home” (p. 195). Through more than a dozen mass-distributed pamphlets published in the 1920s and 1930s, housewives were told that refrigeration was essential to preserve children’s health by protecting against food spoilage. But the NAII was hardly the only self-interested source of household information. On a variety of topics “experts” confused parents as they “debated different points of view in publications to which mothers and fathers had access. There were waves of advice” (p. 392). Or was it propaganda? And how well have we been able to differentiate between the two? Cortada gives Americans high marks in their ability to filter information, reasoning that “since so much information survived and people built upon it in the second half of the twentieth century, we can conclude Americans had learned to use it” (p. 413). If only we could be so sure.

Cortada concludes that “information has contributed to the overall success of the American economy since at least the 1870s” (p. 480). He makes no effort to measure or even verify that statement, which is typical of the broad view with which he has approached his subject. It is very much a big picture strategy: observe and comment. He thoroughly covers the topic of information, yet barely touches it at the same time. It is just too big to handle. He raises many interesting issues, but does not deal with any of them in detail. His book serves as a fascinating, exhaustive, and wide-ranging introduction to the concept of information. He made me think, and he has laid bare some fertile soil for future researchers to exploit.
Mike Haupert is co-editor (with Claude Diebolt) of the Handbook of Cliometrics (Springer, 2016), which will be will be available in an expanded second edition in 2019.

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

Subject(s):Business History
Education and Human Resource Development
Government, Law and Regulation, Public Finance
Household, Family and Consumer History
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII