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A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building

Author(s):Bodenhorn, Howard
Reviewer(s):Moen, Jon

Published by EH.NET (July 1, 2000)

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Howard Bodenhorn, A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building. New York: Cambridge University Press, 2000. xxi + 260 pp. $59.95 (cloth), ISBN: 0-521-66285-0; $22.95 (paper), ISBN: 0-521-66999-5.

Reviewed for EH.NET by Jon Moen, Department of Economics and Finance, University of Mississippi.

Almost all economic historians have read the classic articles by Lance Davis (1965) and Richard Sylla (1969) on the integration and efficiency of postbellum US capital markets. In them we learn that it took quite a while for interest rates to converge and that the National Bank Acts may have introduced some monopolistic elements into banking. If capital market weren’t always efficient after the Civil War, it is tempting to believe that they must have been even worse during antebellum times. Howard Bodenhorn attempts to erase such beliefs with A History of Banking in Antebellum America. I think he is successful, for the most part.

Bodenhorn focuses on how effective the antebellum banking system was at creating credit, linking borrowers and lenders, and moving capital to its most valuable use. He also attempts to address the issue of how critical banks were to economic growth. He finds that banks provided credit to a broad range of businesses, not just to the wealthy. Banks also encouraged capital formation (and saving), capital market deepening and integration, and regional interest rate convergence. He does not try to analyze money creation, the effectiveness of the antebellum system of private banknotes, or the stability of the free-banking system. These issues have been analyzed by Hugh Rockoff (1975) and later by Arthur Rolnick and Warren Weber (1983). They find that things worked pretty well.

In Chapter 2, Bodenhorn provides a survey of regional banking structure, showing, for example, how New England banking differed from banking in the South, where branching was common. Next, he examines the links between economic growth and financial development. Several tables calculate money or credit per capita and provide correlations between these monetary variables and per capita income growth, suggesting that the correlation is not strong. However, regression analysis of the determinants of growth (in the spirit of Robert Barro) shows that the initial level of financial depth was positively related to subsequent economic growth.

The third chapter examines who was supplied with credit by antebellum banks. With an admittedly small sample (n = 4) of banks from New York, Tennessee, Virginia, and South Carolina, Bodenhorn suggests that antebellum banks were willing to lend to small borrowers as well as large ones and that they were motivated to a great extent by the search for profit. They didn’t just lend to their friends.

The next chapter builds on Bodenhorn’s earlier research dealing with the integration of short-term capital markets and the convergence of regional interest rates. The main conclusion is that even if there were regional differences, interest rates moved in close enough harmony to suggest that capital markets had been integrated for much of the antebellum period.

Chapter 5 is useful for the questions it raises in addition to the conclusions it presents. This chapter analyzes how banks developed correspondent relationships to move capital across a large but developing nation. It then presents a brief outline of how legal developments proceeded to make the bill of exchange a more liquid and widely accepted financial instrument. Perhaps the most interesting item in this chapter is Bodenhorn’s discussion of how, after the demise of the Second Bank of the United States in 1836, state banks, private banks, and exchange brokers stepped in to keep the markets for bills of exchange and interbank payments functioning. I got the impression that its demise really did not affect markets much and that the private sector responded quite effectively. This is an issue that could be examined in more detail, as it raises the question of just how important a central bank is.

The Epilogue returns to the role of banks in the growth of the antebellum American economy. The type of evidence presented by Bodenhorn doesn’t really allow for much more than the suggestive answer that banks certainly helped things along, and it also points out that Americans were resourceful in creating a banking system. The discussion prompted me to wonder how large were the social savings from having banks — were they “indispensable?” Were substitutes for banks conceivable or possible, given the legal frameworks in the various states? In other words, would moneylenders that were not banks have appeared? The postbellum South as described in the Epilogue shows what happened when a banking system was decimated, but it also reveals that new institutions — efficient or not — would spring up to take the place of banks. A History of Banking in Antebellum America is an important work and sets the stage for more research on antebellum capital markets.

Jon R. Moen is author of “Clearinghouse Membership and Deposit Contraction during the Panic of 1907,” Journal of Economic History, Vol. 60, no. 1 (March 2000), pp. 145-63.

References:

Lance Davis, “The Investment Market, 1870-1914: The Evolution of a National Market,” Journal of Economic History, Vol. 25, no. 3 (September 1965), pp. 355-99.

Hugh Rockoff, The Free Banking Era: A Re-Examination. New York: Arno Press, 1975.

Arthur Rolnick and Warren Weber, “New Evidence on the Free Banking Era,” American Economic Review, Vol. 73, no. 5 (December 1983), pp. 1080-91.

Richard Sylla, “Federal Policy, Banking Market Structure, and Capital Mobilization in the United States, 1863-1913,” Journal of Economic History, Vol. 39, no. 4 (Dec. 1969), pp. 657-86.

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):North America
Time Period(s):19th Century

Market Education: The Unknown History

Author(s):Coulson, Andrew J.
Reviewer(s):West, Martin

Published by EH.NET (July 1, 2000)

Andrew J. Coulson, Market Education: The Unknown History, New Brunswick,

NJ: Transaction Publishers, 1999, x + 471 pp. $24.95 (paperback),

1-7658-0496-4, $24.95, $54.95 (cloth), 1-56000-408-8.

Reviewed for EH.NET by Martin West, Worcester College, Oxford University.

Each year more evidence is published indicating the persistence of vast

inequalities within the American public education system and the poor overall

performance of its schools relative to those in other countries. Mounting

frustration with the lack of progress towards solving these problems has

produced a broad consensus regarding the urgency of reforming the

administration and governance of public education, while recent economic

expansion has increased the amount of resources available for this task.

Unfortunately, there remains little agreement among scholars and policy-makers

about the direction reform should take.

One of a large number of recent works attempting to provide guidance on this

issue, the book under review is distinguished both by its unique approach and

its challenging conclusions. Andrew Coulson, a former software engineer with

Microsoft Corporation, is currently a Senior Research Associate at the Social

Philosophy and Policy Center at Bowling Green State University. In an attempt

to identify the key characteristics of successful school systems, Coulson has

turned to the history of education, with the hope that the lessons of the past

will provide new insight into the best way forward. The conclusions he draws

will not be encouraging to those who remain convinced that the American public

education system is essentially on the right path, requiring only minor

adjustments. Distinguishing between the ideals of public education and its

practice, Coulson argues that free markets in education have consistently been

more successful in terms of both efficiency and equity than systems funded and

operated exclusively by the government; any hope of substantive improvement

therefore lies in the wholesale abandonment of government and non-profit

schools in favor of private, for-profit alternatives.

Coulson’s use of international historical evidence to analyze contemporary

debates typically driven by ideology is refreshing, and represents a major

contribution to the field of educational policy. The obvious benefit this

strategy offers is the opportunity to compare the performance of a wider

variety of methods of educational provision and governance than is possible

using data from the twentieth century, in which state-provided mass education

has emerged as a universal feature of developed countries. The societies

Coulson has chosen to present as case studies, which range from Ancient Greece

and Rome to contemporary Japan, allow the consideration of a diverse range of

alternatives. As he is ultimately concerned with identifying the common

elements of successful educational systems across different cultures and time

periods, the large amount of variation in the social and economic conditions in

the contexts he has selected is a clear asset. And crucially, given the nature

of his eventual conclusions, Coulson has not avoided addressing those periods,

such as nineteenth-century England and United States, cited in the standard

literature as prominent examples of the success of state education.

The first cases Coulson considers, Athens and Sparta, conveniently offer the

chance to compare two contemporary societies with diametrically opposed models

of school governance. Their educational systems serve throughout the remainder

of the book as extreme examples to which subsequent systems can be compared.

The complete lack of government regulation of education in Athens meant that

anyone could establish a school, setting whatever curriculum he considered

appropriate. The need to attract enough students to remain profitable, however,

forced potential instructors to tailor their offerings to reflect parental

demands and also required that they keep their fees competitive. The success of

Athenian education, as reflected in its impressive literacy rates, economic

prosperity, and immense contribution to the Western cultural tradition, can

thus be attributed to the prudential behavior of its citizens in an open market

for knowledge.

Education in Sparta, in contrast, was entirely the prerogative of the state.

Boys were removed from their families at the age of seven and placed in

state-run boarding facilities in which they received an education designed

exclusively to prepare them for military service. In Coulson’s view, Sparta’s

low levels of literacy, negligible contributions to science, literature, and

art, and eventual economic decline are all directly related to the

ineffectiveness of the state’s totalitarian approach to the socialization of

its young.

Moving forward chronologically, Coulson uses the experience of education in

democratic nations in the nineteenth century to test two prominent claims made

by conventional historians and defenders of state-run schooling: “that

government education helped unite people of diverse backgrounds and thus forged

stronger communities and nations; and that it brought literacy and learning to

a wider segment of the population than would otherwise have been possible” (p.

73). Unsurprisingly, he finds both claims wanting. A brief examination of the

origins of public schools in the United States and France reveals the manner in

which they have been used repeatedly to exclude various religious, ethnic, and

racial minorities. Rather than encouraging social harmony, he claims, state-run

education is a consistent source of social conflict, as parents are forced

either to accept that their children will be taught objectionable ideas or to

force their own views on other people’s children. Meanwhile, the English case

is used to demonstrate that widespread popular literacy was commonly achieved

prior to significant government intervention in education.

The discussion of Victorian England, however, provides a telling example of

Coulson’s disappointing tendency to present oversimplified and partially

misleading accounts of complex chapters in the history of education in order to

support his overall argument concerning the relative efficacy of educational

markets. While correct in his assertion that the exaggerated claims made by

conventional histories of state education are no longer tenable, Coulson fails

to acknowledge that the state may nevertheless have had an important role to

play in the expansion of mass education. He asserts that even the poorest and

least-educated English parents in the pre-compulsory era reliably discharged

their responsibility for their children’s education, a fact used later in the

book to support his contention that modern parents would prove equally

competent if that responsibility were returned to them.

While it is certainly true that “virtually all children were receiving some

schooling” (p. 94), there remained a small but substantial minority in many

regions who had no contact with school at all, a consequence of the lack of a

clear economic return for the acquisition of literacy as well as what the

Newcastle Commission described as the “indifference, thriftlessness, and

recklessness of their parents” (pt. II, p. 57). Furthermore, although the vast

majority of working-class parents were willing to make considerable sacrifices

to provide a basic education for their children, a combination of myopia,

self-interest, and financial necessity meant that the schooling most children

received was irregular and brief, a pattern obviously detrimental to

educational progress (Smelser, p. 257).

As Coulson is eager to point out, reliance on for-profit schooling serves to

tune the supply of education precisely to parental demand. This implies,

however, that if demand for education is sub-optimal, this fact will be

reflected in the quality of the schools that emerge to meet that demand. In the

case of Victorian England, the deficiencies of parental demand were directly

reflected in the nature of the working-class private schools that emerged in

large numbers throughout the nineteenth century, a fact Coulson categorically

denies. Although he acknowledges that conditions in Victorian private schools

were frequently far from ideal, Coulson contends that “what little evidence is

available on the comparative effectiveness of subsidized versus entirely

private schools tends to favor the private schools” (p. 95). This unique claim

is apparently based on evidence compiled by David Mitch in his comprehensive

1992 study of the growth of popular literacy in nineteenth-century England.

Strangely, however, Mitch’s interpretation of his own data is precisely the

opposite, leading him to conclude that the subsidized schools were in fact

modestly more effective in teaching students to read and write. While Mitch’s

reservations about the quality of the data force him to acknowledge that “it

would be rash to dismiss the ability of Mid-Victorian private schools to

transmit literacy”(Mitch, p. 149), it is difficult to understand how they can

be made to support Coulson’s interpretation.

The history of education indeed holds important lessons for contemporary

policy-makers, but I would contend that these lessons are more complex than

Coulson has acknowledged. Educational markets, while offering certain benefits,

are also deeply flawed. And yet there is no guarantee that the political

control of the provision of education will in practice produce superior

results. The ideal balance between political and market control of schooling in

a democratic society is an empirical, rather than ideological issue with a

unique resolution for each particular time period, nation, and level of

education. Restoring the virtues of market competition in education while

minimizing the associated vices is the task currently confronting education

policy-makers around the world. The development of a balanced historical

understanding of the role the state has played relative to the market in

education during various periods has the potential to contribute greatly to

this task.

The strength of Coulson’s sweeping historical survey in this respect is its

acute awareness of the problems associated with the dominance of education by

the state and their implications for the quality of education. He offers

concrete examples of the ways in which these problems, which include

bureaucratic inefficiency, the excessive influence of special interest groups,

and the potential for social conflict have combined to hamper educational

progress. The unfortunate result is the pattern of stagnant or declining

academic performance with which modern societies are so familiar.

Coulson proceeds in the final segment of the book to examine several recent

proposals for reforming American education on the basis of the extent to which

they succeed in restoring what he identifies as the five beneficial

characteristics of educational markets: choice and financial responsibility for

parents, and freedom, competition, and the profit motive for schools. It is in

addressing these contemporary policies that Coulson is at his best. With the

same clear, engaging style that characterizes the entire book, he provides a

thorough analysis of each of the most prominent market-based reforms. His

criteria allow him to account for the modest positive results they have

achieved thus far, but also suggest they are essentially half-measures which

will ultimately fail to achieve the level of success proponents promise. As

Coulson points out, history provides countless examples of states increasing

their control over the provision of education, yet none of the reverse. In

their attempts to restore market dynamics to education, therefore, contemporary

policy-makers are essentially on their own.

Martin West is a graduate student in Economic and Social History at Worcester

College, Oxford. His paper “State Intervention in English Education, 1833-1891:

A Public Goods and Agency Approach” will be published in August as an Oxford

University Discussion Paper in Economic and Social History (available in print

from Nuffield College, Oxford and online at

http://www.nuff.ox.ac.uk/Economics/History/).

References:

“Report of the Commissioners Appointed to Inquire into the State of Popular

Education in England.” Parliamentary Papers, 1861. Vol. 21, pts. I-VI. [2794].

Mitch, David, The Rise of Popular Literacy in Victorian England: The

Influence of Private Choice and Public Policy (Philadelphia, 1992).

Smelser, Neil J., Social Paralysis and Social Change: British Working-Class

Education in the Nineteenth Century (Berkeley, 1991).

Subject(s):Education and Human Resource Development
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Austerity in Britain: Rationing, Controls, and Consumption 1939-1955

Author(s):Zweiniger-Bargielowska, Ina
Reviewer(s):Singleton, John

Published by EH.NET (July 1, 2000)

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Ina Zweiniger-Bargielowska, Austerity in Britain: Rationing, Controls, and Consumption 1939-1955. Oxford and New York: Oxford University Press, 2000. xiii + 286 pp. $65.00 (cloth), ISBN 0-19-820453-1

Reviewed for EH.NET by John Singleton, School of Economics and Finance, Victoria University of Wellington, New Zealand.

Zweiniger-Bargielowska’s readable study of rationing and austerity in mid-twentieth century Britain is a mixture of economic, social, and political history. Her principal conclusion is political rather than economic. British housewives’ disgust after 1945 at the continuation, and indeed intensification, of certain aspects of rationing was successfully exploited by the Conservative Party, and contributed materially to Labour’s defeat at the 1951 general election. In stressing the deep division between Labour and the Conservatives over austerity, Zweiniger-Bargielowska strengthens the case against the popular thesis that postwar British political life was marked by cross-party consensus. Along the way, she provides a thorough account of the rationing mechanism, the intricacies of the black market, and the effects of rationing on the health, welfare, and morale of different groups of the British population.

Rationing, price controls, and subsidies were introduced during World War Two to ensure that supplies of food, clothing, and certain other consumer products were distributed on an equitable basis at fair prices. To a large extent, this policy was successful. Although people grumbled at the monotonous wartime diet of bread, potatoes, and vegetable pies, it was both nutritious and adequate in terms of bulk. In fact, the poor were better fed during the war than they had been in the 1930s. The war and early postwar years witnessed significant improvements in physical health, especially among children in poor urban areas. The consequences, if any, of austerity for mental health are not mentioned.

After the war, most people could not understand why rationing could not at least be relaxed. The world food crisis, balance of payments difficulties, and the need to feed the starving Germans were used by ministers as justifications not only for the retention of controls, but for the introduction of bread rationing which had not been considered necessary during the war itself. Housewives generally bore the brunt of austerity, giving up some of their rations for the sake of their husbands and children. Pets also suffered disproportionately. It was an offence to feed wild birds with breadcrumbs, as well as to give pets food that was fit for human consumption. Men were more tolerant than women of rationing, perhaps because they had more opportunities to buy non-rationed meals at works canteens, and did not have to do the family queuing, shopping, and cooking.

Throughout the 1940s there was a thriving black market. One of the simplest scams was to claim to have lost one’s ration book. Officials suspected that 90 per cent of claims for new ration books were fraudulent but, as it was difficult to prove dishonesty, the authorities usually provided a replacement. Forgers took full advantage of the fact that ration coupons were easier to copy than bank notes. However, the black market in Britain, unlike that in the USA, was not dominated by organized crime. Zweiniger-Bargielowska suggests that administrative procedures were tighter in Britain than in the USA. Britain also lacked the American tradition of organized crime.

Public attitudes towards the black market were ambivalent. People condemned others who engaged in illicit dealing, but saw no reason why they should not occasionally indulge in ‘under the counter’ transactions themselves. My grandfather, who was a stonemason in Lancashire, used to receive fresh meat in partial payment for supplying headstones to farmers. The activities of farmers, who often held food back from official channels, were among the main concerns of the rationing authorities. As Zweiniger-Bargielowska points out, the black market undermined, but did not negate, the egalitarian purpose of rationing.

Zweiniger-Bargielowska does not go into the microeconomics of rationing, although contemporary economists had plenty to say on this theme. Nor, more importantly, does she really tackle the question of whether the austerity of the late 1940s was unavoidable. Would the British economy have collapsed in the late 1940s if meat or butter rations had been increased? Paraphrasing the title of Roy Harrod’s tract on austerity, were these hardships really necessary? On the face of it, it seems unlikely that a few extra rashers of bacon would have led to national disaster, whatever ministers may have said. A more searching analysis of the extensive literature on the economic policies, both internal and external, of the 1945-51 Labour government would have helped Zweiniger-Bargielowska to find an answer to Harrod’s question.

Draconian food rationing was not absolutely essential after the war. Savings could have been made in other areas of the external accounts. For instance, tobacco was prominent in Britain’s imports from the USA at the height of the dollar crisis. This poison was not rationed, apparently because of its morale boosting and revenue raising qualities. Clearly, if less had been spent on importing tobacco, the British would have been able to enjoy a slightly more appetizing diet. There were other highly questionable drains on the balance of payments after 1945, such as the cost of occupying Palestine, Greece, Germany, and those parts of the empire that did not produce a dollar surplus. Certain uncontrolled outward capital flows, for instance to South Africa and Australia in 1947, also put strain on Britain’s capacity to import basic foodstuffs. In other words, rationing was necessary because the government and its supporters preferred to allocate resources to the maintenance of tobacco supplies and Britain’s status as a world power than to the provision of a wider choice of food. Whether or not this ordering of priorities was in the best interests of ordinary people is a matter of opinion.

While comparatively weak on the rationale for the persistence of austerity after 1945, Zweiniger-Bargielowska supplies a wealth of information on the administration of rationing, the struggle against the black market, the effects of rationing on morale, and Churchill’s manipulation of housewives’ frustration with austerity. I strongly recommend this book to anyone interested in British history of the mid-twentieth century.

John Singleton is currently working with Paul Robertson, University of Wollongong, on a study of postwar trade and development policy in Australia and New Zealand, which will be published by Macmillan.

Subject(s):Household, Family and Consumer History
Geographic Area(s):Europe
Time Period(s):20th Century: WWII and post-WWII

Debating Slavery: Economy and Society in the Antebellum American South

Author(s):Smith, Mark M.
Reviewer(s):Irwin, James R.

Published by EH.NET (July 1, 2000)

Mark M. Smith, Debating Slavery: Economy and Society in the Antebellum

American South. Cambridge: Cambridge University Press, 1998. xii + 117 pp.

$39.95 (hardback), 0-521-57158-8; $11.95 (paperback), ISBN: 0-521-57158-8.

Reviewed by James R. Irwin, Department of Economics, Central Michigan

University.

This book is something between a textbook and an interpretative monograph. It

is part of the Economic History Society’s series, “New Studies in Economic and

Social History.” As the back cover explains, “This series provides a concise

and authoritative guide to the current interpretations of key themes in

economic and social history. Each book in the series summarizes the significant

debates and advances in a major field of study. … The books … are intended

for students approaching a topic for the first time, and for their teachers.”

Based on my own experiences as both student and teacher, I must confess that I

am not a fan of this sort of book. I suppose that giving students just a small

taste of the historical feast could whet their appetites and entice them to dig

in heartily. But I suspect that for most students and many teachers, such books

are a substitute for reading and thinking about history. To summarize my

personal bias: if history is a banquet, then books like this are Spam (at best)

or Olestra (at worst). Having acknowledged that bias at the outset, I’ll try to

put it aside and review Debating Slavery on its own terms.

The book has seven chapters, as well as a preface and bibliography. The first

chapter offers an overview of some of the history and historiography of

Southern slavery. The final chapter attempts a synthesis. Each of the middle

five chapters summarizes and discusses an aspect of antebellum southern

society. The book would have been more accurately titled Debating the Slave

South, rather than Debating Slavery. It does not have a narrow focus

on slavery, but instead covers competing views on many of the big issues in the

social and economic history of the Antebellum South. One major field it does

not deal with is “political” history, thus Whigs and Democrats are not in the

index, nor are Potter, Cooper, Thornton, and Barney (to name just a few who

excited students in decades past). Instead, the chapters lay out debates in

social history and economic history. The social history tends to revolve around

Genovese’s work, and the economic history tends to revolve around Fogel and

Engerman’s. Especially with the social history, Smith demonstrates an admirable

command of the vast literature from which he samples.

In many ways, the Preface and Chapter 1 provide a strong introduction to the

book. The Preface might get students thinking about the nature of freedom and

differences between democracy and capitalism. Chapter 1 starts with a useful

overview of the history of the slave South from colonial times to the Civil

War. However, there follows an effort to suggest that most views of the slave

South can be can be assigned to one of two camps. One, which Smith associates

with Genovese and others, sees the South as “a non-capitalist, unprofitable,

and largely inefficient society.” The other, which Smith associates with Fogel

and Engerman, Oakes and others, “argues the opposite.” I think this a misstep,

because two camps cannot contain the rich variety and subtlety in the

scholarship on the antebellum South.

Chapter 2 addresses competing views of slaveowners, with an emphasis on

planters (typically, those with twenty or more slaves). The key issue Smith

tackles here is whether planters were “non-capitalist” (Genovese) or

“capitalist” (Fogel and Engerman, Oakes). Much of the discussion here turns on

competing perspectives on the economics of slavery which are developed more

fully in Chapter 5 and 6. Students would have been better served if those

chapters had come first, introducing students to two key questions: “Was

slavery profitable to planters?” and “How did it affect economic development?”

Then they could learn that everyone now agrees that the answer to first

question is “usually” (subject to geographic and temporal variation), and that

most of us are still arguing about the second. Then students could tackle the

implications of those economic questions for the more slippery questions of

planter mentalite and the nature of southern white society. Thus, before

working on the question of “capitalist or not?” students would know that

slaveowners got rich off of their slaves and that the southern slave economy

did not industrialize. Then they could grapple with the interpretive questions

such as the distinction between “acquisitive” and “capitalistic.”

With the different organization, students would have an easier time figuring

out that Genovese’s fundamental insights are consistent with evidence that

slaves worked hard and masters profited thereby. Paternalism can help us to

understand why the people worked hard. As it is, Smith attributes to Genovese’s

Roll, Jordan, Roll the view of the slave South as “a plantation society

headed by masters anxious to make money from their investment but unable to do

so because of the paternal relationship they had created with their slaves” (p.

22). Each of us is free to read Roll, Jordan, Roll as she/he sees fit;

but I don’t recall that the planter aristocrats described there were “unable to

make money” from their slaves. More generally, I think Smith makes a strategic

mistake by adopting the dichotomy capitalist or not, because although the term

capitalist may be rich in connotation, there is no agreement on what it means.

The very question “capitalist or not?” can easily distract us from the

fascinating similarities and contrasts between the South and North. This is not

to suggest that Smith invented the debate, but to lament that he did not

reformulate it at the start.

Chapter 3 (“Yeoman and nonslaveowners”) follows the convention in southern

social history (since the 1980’s) that treats small-scale slaveowners (with as

many as five slaves) and non-slaveowning farmers as a single class, the

“yeomen.” Faithful to that literature, Smith does not question whether the

distinction between slaveowner and non-slaveowner really was less important

than that between planter and less affluent white farmers; and he does not

attempt to assign them to the two camps identified in Chapter 1. Smith gives

the impression that there is a consensus that the yeomanry had and preserved

aspects of a “traditional, premarket mentality.” I cannot dispute that, but it

will lead me to revisit the literature and see for myself. Finally, Smith

shares a valuable insight when he notes that “much of the work on the southern

yeomen tends to cast the southern planter class in a market-oriented light” (p.

40).

Chapter 4 (“Slaves”) explores various views on slave work and culture. This

chapter returns to the capitalist non-capitalist dichotomy, sometimes usefully.

There is interesting attention to the links between work and culture, and to

variations over time and across space. On my reading, there is surprisingly

little attention to some major issues, for example, the slave family, African

carry-overs, and religion. There is also surprisingly scant attention to the

material conditions of black life (but there is some attention to slave diets

is the chapter that follows). I do not recall any attention to Fogel and

Engerman’s repeated claims that slaves’ material conditions were “better than

what was typically available to free urban laborers at the time” (as Fogel put

it in Without Consent or Contract, New York: Norton, 1989, p. 391). Nor

to the opposing perspective suggested by Steckel’s arresting finding that the

infant mortality rate of antebellum slaves was as ‘dreadfully’ high as in the

poorest urban slums of India in the twentieth century. There is much attention

given to relatively recent scholarship on the “slave’s economy,” fostering the

view that slaves had significant amounts of “time to call their own” when they

could produce goods (of their own) for consumption or sale. Faithful to the

literature, Smith does not dwell on the scanty empirical basis of studies of

the “slave’s economy,” nor on the extent to which masters were simply making

slaves provision themselves. The chapter includes a misleading rendering of an

example from Fogel and Engerman (p. 53). They describe incentive bonuses that

were given to entire families, but Smith’s account implies that such sizable

bonuses were given to individual slaves.

As noted above, Chapter 5 (“The profitability of slavery as a business”) and

Chapter 6 (“The profitability of slavery as a system”) tackle the economics of

slavery. These are not the strongest chapters in the book. Chapter 5 looks at

slavery at the level of the individual farm and plantation. It takes much too

long to come to a conclusion on the profitability issue, and then, it fails to

clarify the consensus that exists: typically, Southern slaveowners made money

off of their slaves (and to be more precise, they could expect to earn about as

much from investing in slaves as in alternative assets). There is too much

attention to long-outdated sections of Genovese’s Political Economy of

Slavery, and virtually no attention (i.e. too little) to key debates

between Fogel and Engerman and their neoclassical critics. Arguably, the single

most important finding of Fogel and Engerman was that a given amount of labor,

capital, and land produced about one-third more income when it was it was

organized in a single slave plantation than when it was organized in a number

of smaller farms (put technically, that the relative efficiency of plantation

slavery was about one-third greater than smaller scale farms). In their view,

the greater efficiency of plantation slavery resulted from the intense,

arduous, and coordinated labor-effort that could be forced from slaves working

in gangs. Other neoclassical economists have disputed these views, with gusto.

The failure to take up this issue leaves a huge gap in the presentation of this

aspect of the economics of slavery. That said, I think that the responsibility

for the gap lies more with economic historians, than with historians; and more

with all of us, than with Smith. Probably Smith’s omission of the issue is

faithful to the history literature, but not to the economic history literature.

Chapter 6 finds Smith on more solid ground. He cites much of the relevant

literature to identify the crucial questions that are still unresolved: why

were industrialization and urbanization so limited in the South compared to the

North? He falters a bit in his discussion of Fogel and Engerman’s evidence of

growth in southern per capita incomes in the period 1840-60. Smith relies on

Ransom to suggest that the numerous non-slaveholders “who were only marginally

involved in cotton” did not experience economic growth (p. 85). Ransom’s

argument implies a major shift in the distribution of southern income in the

period 1840 to 1860; this is an interesting possibility, but currently there is

not much evidence for it. Also, Smith makes a common mistake when he says (p.

85) that world cotton demand “dropped after 1860.” It was the “growth rate of

cotton demand” that dropped (according to Wright). More generally, the chapters

on the economics of slavery would have been better if they had included some

international comparisons, and some attention to the economic consequences of

emancipation.

The last chapter offers a sort of synthesis, identifying points of potential

consensus, and suggesting “New directions” for future research. It offers

perhaps the most contentious claim in the book; Smith states “an important but

rarely articulated truth: the need and the way to reconcile the apparently

competing schools of thought is probably best achieved not through more

empirical research but through greater theoretical consideration” (p. 89).

Coupled with the claim (at the start of the chapter) that “we know an awful lot

about virtually every aspect of slave culture, the southern economy, and

planters’ ideology” (p. 87), a reader might accuse Smith of calling for a

retreat from the archives. More generally, the last chapter may be a problem

for many students. It finds some common ground among competing perspectives,

focussing mostly on Genovese and Oakes. However it draws heavily on Marx and on

Marxian theories which may not be comprehensible to most students.

The bibliography is wide-ranging and interesting to peruse, but referring to it

while reading was inconvenient, because the entries are grouped according to

chapter. Generally, it is a well-crafted work, even if computer spell-checking

is evident at times (e.g. “none the less” (p. 11), Barrington “Hoore” Jr. (p.

112)). An index also is provided, which will help students to zero in on

authors of interest. As is often the case, perusing the index can be

interesting. For example, I was reminded of both the competence of Smith’s

coverage and the inevitability of omissions when I noticed that the index (and

bibliography) includes Cashin, but not Cash.

In closing, I speculate that writing such a book is an unenviable task; it just

invites criticism. First, there are people like me who think it will just

reduce the number of students who actually read and get engaged in southern

history. Second, every other historian of the South will have her/his own take

on most of the many works that are covered, and most will dispute or dismiss

some aspect of the book. On the other hand, most historians don’t get to write

books for Cambridge University Press. And, I suspect the author enjoyed

feasting at the banquet of scholarship that he drew on for Debating

Slavery.

James R. Irwin’s research concerns the economics of slavery and emancipation

in Virginia and the rest of the South, among other things.

Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):19th Century

Wages and Labor Markets in the United States, 1820-1860

Author(s):Margo, Robert A.
Reviewer(s):Rosenbloom, Joshua L.

Published by EH.NET (July 1, 2000)

Robert A. Margo, Wages and Labor Markets in the United States,

1820-1860. Chicago: University of Chicago Press, 2000. xii + 200 pp. $28.00

(cloth), ISBN: 0-226-50507-3.

Reviewed for EH.NET by Joshua L. Rosenbloom, Department of Economics,

University of Kansas.

The antebellum period in the United States has sometimes been described as a

“statistical dark age.” With the publication of this book, however, such a

characterization seems less appropriate. Drawing on two significant bodies of

archival data–the manuscripts of the Censuses of Social Statistics for 1850

and 1860, and payroll records of civilian employees at military installations

throughout the country–Robert A. Margo (Vanderbilt University) constructs new

series of nominal and real wage estimates for the years 1820 through 1860.

Based on both the quantity of evidence Margo has assembled and the care with

which it is used, his series are sure to become the standard sources for

scholars interested in the economic history of this period.

The argument of this compact volume unfolds in a logical and easy to follow

manner. In chapter 2 Margo begins by establishing the need for new antebellum

wage series. Carefully reviewing the existing data, he demonstrates that

despite the efforts of a number of scholars, the commonly accepted wage series

are pieced together from a variety of different sources in a fashion that makes

them potentially unreliable. Moreover, there are troubling discrepancies in the

behavior of the existing series that cannot be resolved without resort to more

data. Having established the need for a new data, he then offers a description

of the data sources that he will use.

The first of Margo’s sources, and the more novel, is the “Reports of Persons

and Articles Hired” that were made by the quartermasters of military

installations. These reports contain over 59,000 monthly wage observations for

civilian workers employed at forts in all parts of the country between 1820 and

1860. It should be noted that this figure is likely to overstate the number of

independent observations in the data set, however, because some individuals may

have been employed for more than one month. Nonetheless these data are a

substantial addition to our stock of knowledge about antebellum labor markets.

One might, of course, be suspicious of how well wages paid by the military

reflect conditions in the civilian economy, but Margo goes to some lengths to

demonstrate that the wages recorded in the “Reports” accurately reflected labor

market conditions in areas surrounding the forts. A second problem, about which

Margo has less to say, is the uneven coverage of the data. This unevenness is

especially pronounced for the frontier regions. In the Midwest, for example, of

9,525 observations, 7,394 are from Kansas, and another 1,180 are from Missouri.

As one might expect from this geographic emphasis, most of the midwestern data

(6,794 observations) come from the 1850s.

The second of Margo’s sources, the Censuses of Social Statistics, are more

familiar to economic historians, and the published returns from these censuses

have been used before. But Margo’s use of the manuscript schedules is novel,

and allows him to exploit considerably more detail than previous scholars,

though at the expense of narrowing the geographic coverage to a set of eight

states for which the manuscripts have survived. In chapter 3 Margo describes

procedures he employs to construct annual wage series, both nominal and real,

for three occupation groups–common laborers, artisans, and white-collar

workers–in four regions. For artisans and common laborers the census of social

statistics data is used to establish benchmark wage levels in 1850 that are

then extrapolated using estimates of year-to-year movements derived from the

military payroll data. Because the census data do not cover white-collar

workers, the level of wages for this group is fixed using the military payroll

data alone. To convert nominal to real wages, Margo uses region-specific

indexes of wholesale prices. To estimate annual movements in wages from the

military payroll data Margo employs a hedonic wage regression framework to

aggregate information from different locations, occupations, and skill levels.

That is, for each region and occupation group, Margo regresses wage

observations on dummy variables for location, indicators of worker skill,

specific occupations, season of the year, and individual years. Implicitly this

approach assumes that within each region, after controlling for fixed effects

of location and other characteristics, wage movements over time at one location

will be the same as those at any other location. This seems at least plausible

for more settled areas in the East, but I am less convinced of the stability of

wage rates within more recently settled areas. For example, one must wonder if

the relationship between wages in Kansas and Missouri and other parts of the

Midwest was the same in the 1830s and 1840s as it was in the 1850s.

The next three chapters make use of the wage series constructed in chapter 3 to

examine a variety of important questions relating to labor market performance

and economic growth in more wide-ranging terms. Chapter 4 examines wage gaps

between farm and non-farm employment. Antebellum economic growth was associated

with the movement of labor out of agriculture and into non-agricultural

employment, and recent research has raised the question of whether this

movement occurred as quickly as would have been optimal, or if frictions

prevented labor from moving to its most efficient uses. Using data from the

census of social statistics, Margo shows that in 1850 wage gaps were small

within counties, and, after adjusting for the cost of living, they were also

small within states. Thus it appears that farm and non-farm labor markets were

relatively tightly integrated.

In chapter 5, Margo turns to the issue of geographic integration, comparing

real wages by occupation group across the Northeast, Midwest, South Atlantic,

and South Central regions of the country. Consistent with the geographic

redistribution of labor from east to west in this period, he finds that wages

in Midwest and South Central regions were persistently higher than they were in

the Northeast and South Atlantic. Although the differentials were initially

quite large between the two northern regions–over seventy-five percent for

artisans and thirty percent for common laborers–there was a clear tendency

toward wage convergence over time. In contrast wage gaps were smaller in the

South, but showed no clear trend. Of particular note, Margo finds evidence that

the North-South wage gap that became prominent after the Civil War had its

origins in the antebellum period.

Margo continues his investigation of market integration in chapter 6 through a

case study of one important episode: the California Gold Rush. Using data on

wages at California forts, he offers a new series of wage estimates for the

period surrounding the discovery of gold, and California’s entry into the

Union. This series clearly captures the sharp spike in wages occasioned by a

massive new resource discovery. But interestingly it also reveals that the Gold

Rush had a lasting effect on the California economy, leaving wage levels in the

state permanently higher than they had been before.

Margo outlines a new interpretation of antebellum labor markets in Chapter 7.

First, the evidence he has assembled indicates that real wages grew at about

one percent per year on average, a rate strikingly close to that of per capita

GDP over the same period. This suggests, as Margo puts it “that economic growth

did ‘trickle down,’ on average, to members of the antebellum working class” (p.

143). While this finding would seem to defuse the pessimists’ case that the

working class did not share in the benefit of antebellum growth, there were

shorter periods during which real wages did decline–especially the late 1830s

and the late 1840s and 1850s. Comparing the dynamics of wages and prices in

these episodes it appears that much of the reason for this is that wages tended

to adjust with a lag to price movements. As Margo notes, these episodes of

declining wages might explain some of the decline in the height of cohorts born

at these times. But since overall real wage levels were rising between the

1820s and 1860s, economic explanations of the antebellum decline in stature

must rely upon channels of influence other than a decline in the standard of

living. Second, as much of the evidence on spatial and sectoral wage

differences indicates, antebellum labor markets appear to have performed quite

well, responding to both sectoral and geographic shifts in demand.

Notwithstanding the limitations of the data, this is an important contribution

to the statistical and quantitative underpinnings of our understanding of the

economic history of the United States. Through extensive archival research and

careful analysis Robert Margo has added significant detail and clarity to our

understanding of the antebellum period.

Joshua L. Rosenbloom is author of “Strikebreaking and the Labor Market in the

United States, 1881-1894,” Journal of Economic History 58 (Mar. 1998),

and “Was There a National Labor Market at the End of the Nineteenth Century?

New Evidence on Earnings in Manufacturing,” Journal of Economic History

56 (Sept. 1996). He is currently working on a project estimating the rate of

economic growth in North America before 1800.

Subject(s):Macroeconomics and Fluctuations
Geographic Area(s):North America
Time Period(s):19th Century

Nonzero: The Logic of Human Destiny

Author(s):Wright, Robert
Reviewer(s):Long, J. Bradford De

Published by EH.NET (July 1, 2000)

Robert Wright, Nonzero: The Logic of Human Destiny. New York: Pantheon

Books, 2000. x + 435 pp. $27.50 (cloth), ISBN: 0-679-44252-9.

Reviewed for EH.NET by J. Bradford De Long, Department of Economics, University

of California-Berkeley.

Back in 1794 the Enlightenment philosophe Marie Jean Antoine Nicolas Caritat,

Marquis de Condorcet wrote his Sketch for a Historical Picture of the

Progress of the Human Mind — the boldest of the eighteenth-century

declarations that humanity had and was destined to see Progress with a capital

P. Condorcet was a powerful and convincing advocate– Malthus wrote his

Essay on Population explicitly against Condorcet. But that was the high

water mark of belief in Progress. By and large the past two centuries have seen

the reaction, and confidence in human Progress — technological, political,

humanistic, and moral — fell out of intellectual favor.

Now comes Robert Wright, previously author of Three Scientists and Their

Gods and The Moral Animal, with an excellent book accompanied by an

enthusiastic blurb by William McNeill. Wright’s purpose is to set out the

gospel of progress anew, this time using the language of game theory as his

principal mode of rhetoric. At its most basic level Wright’s point is that

interactions are positive-sum: there are gains from cooperation. Thus human

cultural evolution has an arrow and a direction: toward greater complexity,

toward higher civilization.

The direction arises at two levels. First, individual humans seek out things

that increase their own powers and capabilities. Cooperation tends to do this,

so people find ways to cooperate. But the most important form of cooperation is

one that is almost impossible to stop: the simple sharing of knowledge. Two

heads are better than one. The denser the population (and the better the means

of communication) the more ideas will be generated, the larger the number of

ideas that turn out to be useful, and the faster will be progress. People are,

Wright argues — in my view correctly — naturally acquisitive in that they

want useful things, and will eagerly copy new technologies they hear about.

Thus Wright sees inventions such as agriculture as inevitable — not as a lucky

accident.

Second, at the level of human societies, the societies that are more powerful

– have better technologies, more effective social arrangements, greater

population densities, and so forth — either swamp their neighbors or force

their neighbors to copy them in order to maintain their autonomy. In Eurasia,

where contact was constant from an early age — as Wright points out, in 200 on

one could travel from Gibraltar to the Yangtze River and cross only three

borders (p. 117) — a good innovation at one end would diffuse all the way to

the other in a matter of centuries. He believes that the wide spread of

religion in agricultural civilizations proves that its productivity-boosting

and division of labor-enhancing effects outweigh its exploitative side (p. 86):

those societies that did not have temples and priests did not flourish.

Wright dismisses gloomy talk of barbarian invasions and the fall of empires by

asserting that one goes from furs-and-swords to linen-and-pens in three

generations: “The Romans weren’t exactly hailed by the Greeks as cultural

equals when they happened on the scene…. Yet they were massively infiltrated

by classical Greek memes, which they then spread across the wider world. In

Horace’s phrase, ‘The Greeks, captive, took the victors captive’. And, anyway,

who were the Greeks to look down on intrusive barbarians? … The early Greeks

had a title of honor, ptoliporthos, that meant ‘sacker of cities’…. But

whether these ‘barbarians’ sack cities, or hover on the periphery and trade …

or ally with them in war or ally against them, one outcome is nearly certain:

win, lose, or draw, the ‘barbarians’ become vehicles for advanced memes…” (p.

131). For what truly matters are the basic technologies of agriculture and

craft, not the products of high civilizations. And even when you do have

significant regression — in the post-Mycenean Dark Age, in the post-Roman Dark

Age, or in the wake of the Mongols – Wright reminds us that “the world makes

backup copies.”

Wright also dismisses gloomy talk of the stagnation of Ming and Qing China, the

fall of the Mughal Empire, and the technological and organizational stasis of

the Ottoman Empire by arguing that the key unit is not Europe vs. Asia but is

instead Eurasia. Sooner or later, Wright argues, some part of Eurasia — it did

not have to be Europe – would have hit upon a superior social and technological

recipe to that of the mid second millennium empires, and when it did the rest

would have copied it. Wright is of the school that holds that China almost

broke through to modernity, writing of how paper and woodblock printing were

used to distribute useful texts — Pictures and Poems on Husbandry and

Weaving, Mathematics for Daily Use, and the Treatise on Citrus

Fruit (p. 159). The recipe that ultimately proved successful — what Wright

calls the economic logic of freedom — was stopped in many places: “indeed, on

balance, in the centuries after the printing press was invented, European

governments grew more despotic” (p. 185). But it only had to succeed once. And

given sufficient cultural variation, sooner or later a breakthrough was

inevitable.

But even if you buy all of Wright’s argument that forms of increasing returns

– non-zero-sum-ness, as Wright calls it — impart an arrow of increasing

complexity and division of labor to human social, cultural, and economic

evolution, this does not necessarily amount to Progress — at least not to

anything we would see as progress in human morality or human happiness. For why

should organizational complexity be Progress? As Wright puts it: “… it would

be hard to argue that there was net moral gain between the hunter-gatherer and

ancient-state phases of cultural evolution. The Egyptians had slaves — which

virtually no known hunter-gatherer societies had — and their soldiers returned

from wars of conquest proudly brandishing the severed penises of their slain

foes” (p. 206).

So in the end Wright is forced to play a game of three-card monte to reach

conclusions that support his belief in Progress. The card labeled “complexity”

must be switched for the card labeled “Progress” without our noticing. In the

industrial core, at the end of the twentieth century, we are inclined to

tolerate this switch — to say that it is obvious that a highly complicated and

productive civilization will have widely-distributed individual wealth, lots of

individual freedom, and soft forms of rule, and that social complexity is

civilization. But back in the middle of the twentieth century this switch could

not have been accomplished at all: “complexity yes,” people would have said,

“but progress no.” And who knows how things will look in a hundred more years?

Marie Jean Antoine Nicolas Caritat, Marquis de Condorcet (1743-1794), was an

aristocrat, a mathematician, an official of the Academy of Sciences, and was a

friend of Voltaire (1694-1778). He strongly supported the revolution of 1789 as

an example of human progress. But the Committee of Public Safety turned on him:

he was arrested, and died in prison before he could be executed.

————————————————————————

*The above review covers only the first two-thirds of the book. At that point

Wright asks the question: “Aren’t organic evolution and human history

sufficiently different to demand separate treatment?”

I think the answer to this question is “yes,” and that the book should stop at

that point. Wright thinks that the answer is “no,” and so the book continues.

He goes on to draw analogies between human cultural evolution toward greater

complexity and biological evolution toward greater complexity.

Wright’s argument that biological evolution has an arrow as well — tends to

produce animals with big brains that think — runs roughly as follows:

Life starts out simple. It then evolves, with variation and with the

conservation and spread of successful variations. Thus evolution generates

increasing diversity, and increasing diversity generates increasing complexity:

it is hard for a one-celled organism to become less complicated (although

viruses have managed), and easy for it to become more complicated.

But wait! Most of your environment is made up of other living creatures. Hence

the environment becomes more complicated over time too. And because the

environment becomes more complicated over time, there is increasing adaptive

value in information acquisition and information processing organs: better eyes

(and ears) and bigger brains. Random evolution creates increasing diversity and

complexity of life. Increasing diversity and complexity of life make for a more

complicated environment. And a more complicated environment generates strong

evolutionary pressure for eyes, hands, and brains.

Maybe his biological argument is right — I’m inclined to think it probably is

– but maybe not. Big eyes and big brains are expensive in terms of energy. Why

not go for bigger teeth or stronger legs? And large complicated animals seem to

be (so far) at a disadvantage in species survival when the asteroids hit.

J. Bradford De Long is a professor of economics at U.C. Berkeley, and is the

author of the forthcoming “America’s Historical Experience with Low Inflation”

(Journal of Money, Credit, and Banking), and the recently published

“Some Speculative Microeconomics for Tomorrow’s Economy” (First Monday)

and “The Triumph[?] of Monetarism” (Journal of Economic Perspectives).

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

Advances in Agricultural Economic History, Vol.1, New Frontiers in Agricultural History

Author(s):Kauffman, Kyle D.
Reviewer(s):Bogue, Allan G.

Published by EH.NET (July 1, 2000)

 

Kyle D. Kauffman, editor, Advances in Agricultural Economic History, Vol. 1, New Frontiers in Agricultural History. Stamford, CT: JAI Press, 2000. xiv + 252 pp. $78.50 (cloth), ISBN 0-7623-0612-2.

Reviewed for EH.Net by Allan G. Bogue, Department of History, University of Wisconsin, Madison.

This book is the first volume in an annual series that is designed, Kyle D. Kauffman explains, to “provide the center stage” for one of the numerous subdisciplines in the “overarching tent of economic history”–the “hybrid field” of agricultural economic history. This, he argues, is a “dynamic field” in which there is a “growing research output” (pp. xiii-xiv).

Eight authors or author teams have contributed to this volume. Each of the chapters relates or overlaps in subject matter or method with at least one other essay. In their lead chapter, Lee A. Craig and Thomas Weiss reconsider “Hours at Work and Total Factor Productivity Growth in Nineteenth-Century U. S. Agriculture,” a subject that is of considerable interest to all those interested in the historical development of American agriculture. Craig and Weiss present new estimates of hours worked by agriculturalists in the nineteenth century United States and evaluate their implications for the calculation of total factor productivity in agriculture. They conclude that “a view of the mid-to late nineteenth century as an era of technological revolution probably cannot be sustained” (p. 23). Rather, they suggest, agricultural development during that period primarily reflected an increase in inputs, particularly of labor. In answering the question “Did the Black-White Income Gap Close during the Late Nineteenth Century?” Anthony Patrick O’Brien confronts analogous analytical problems in estimating the income of black workers during the second half of the nineteenth century. After developing new estimates, primarily for 1860, O’Brien suggests that the improvement in black income between that date and 1860 was substantially less than Robert Higgs argued in his monograph Competition and Coercion: Blacks in the American Economy, 1865-1914. O’Brien’s contribution is also somewhat related to Jay R. Mandle’s concluding chapter of the collection in which he describes “The Social Prologue to the Civil Rights Movements.” Surveying the place of the Afro-American population in the American economy from the slavery era to the 1960s, he maintains that by the latter date, the Afro-American population of the United States, “for the first time … found itself in an environment in which successful political mobilization … had become feasible” (p. 249).

Three authors investigate the Hawaiian sugar industry: Sumner J. La Croix and Price Fishback examined the place of “Migration, Labor Market Dynamics, and Wage Differentials in Hawaii’s Sugar Industry, 1901-1915″ in a long and impressively documented analysis of the efforts of sugar planters to attract workers and the wage rates paid to various ethnic groups. Despite the divergent goals of employers and workers, planters succeeded in maintaining ethnic wage gaps among their workers because they “constantly found new low-wage immigrants to work in the Hawaii market”(p. 66). Allan Dye introduces cross-national comparisons in his chapter “Factor Endowments and Contract Choice: Why Were Sugar Cane Supply Contracts Different in Cuba and Hawaii, 1900-1929?” In the latter country the production units were for the most part plantations drawing most of their cane for processing from fields under their own management whereas outside contractors produced most of the cane processed in the Cuban sugar industry. The contrast between the two national industries, Dye concludes, was explained by the considerable differences in the transaction costs involved in producing and harvesting cane in the two countries and he suggests as well that this cost factor was a universal element in accounting for global variations “in the use of the plantation or contracting out [system] in the twentieth-century cane sugar industry” (p. 167).

Two authors consider aspects of the European wine industry. In his essay, entitled, “Cooperation and Cooperatives in Southern European Wine Production, The Nature of Successful Institutional Innovation 1880-1950,” James Simpson explains that the development of cooperatives in the wine industries of France, Spain and Italy assisted landowners in obtaining labor in an era of declining prices, helped small and medium sized wine producers obtain access to scientific knowledge and expensive technology, and improved growers’ bargaining power in the wine market. Over time the French government came to use the cooperatives in its efforts to regulate the wine industry. Simpson credits the cooperative movement with slowing the exodus of workers from the wine regions and also with enhancing prices without unduly restricting competition.

Francesco L. Galassi entitles the second of these chapters, “Moral Hazard and Asset Specificity in the Renaissance: The Economics of Sharecropping in 1427 Florence,” and asks, why share contracts came to predominate in the tenure and administration of land in Tuscany during the Renaissance era and remained a major institutional arrangement until mass urbanization after World War II “emptied out the countryside” (p. 199)? In answer he argues that demographic growth at the end of the medieval period “intensified cultivation and brought about a redefinition of property rights in land” as the manorial system broke down and urban businessmen increasingly controlled the countryside (p. 178). Intensified agriculture and increased investment in agricultural processes, the potential costs of supervision, enhanced risk, and the need to tie the tenant’s remuneration to the success of the husbandry made share-cropping arrangements attractive to land owners in that era. Although the Black Death reduced population pressures significantly, continuing emphasis on the wheat crop and especially vine culture sustained these tendencies. Galassi successfully tests the hypothesis that “share tenancy was a way of controlling some dimensions of opportunistic behavior [by tenants] with high monitoring costs” by applying logit analysis to wage and rental contract data from the property registration and population census of Florence taken in 1427. He prefers the latter conclusion to the suggestion that the processes described here illustrate path dependency.

Karen Clay and Werner Troesken also discuss land tenure arrangements in their chapter dealing with “Squatting and the Settlement of the United States: New Evidence from Post-Gold Rush California.” Asserting that we are less well informed about the motivation and activities of squatters in California than in the Midwestern region of the United States, these economic historians have assembled data relating to squatting activity on the Spanish and Mexican land grants upon whose validity the American judiciary ruled. Using logit regression the authors conclude that the squatters “were acting in a way that is consistent with profit-maximization” (p. 208).

The contributors to this volume are economists and their work for the most part illustrates tools and approaches current in quantitative economic history. With perhaps only one exception they shed new light on important historical issues. From the standpoint of the discipline, it is particularly encouraging that several of the authors chose to pursue research that involved cross-national comparisons of agricultural development. One hopes that this trend will become increasingly evident in agricultural history because it promises to enhance greatly our understanding of agricultural history both in the United States and abroad.

In sum the essays in this volume promise that the series that it introduces will make an extremely useful contribution to our understanding of agricultural history. Economic historians have already used their special skills to make invaluable contributions to this field and the Advances in Agricultural Economic History series will be a factor in insuring that this trend continues. As a devoted fan of the genre, however, this reviewer hopes that this breed of researcher will always remember that many historians, including some who are interested in agricultural history, do not fully understand econometric methods and that an additional two or three sentences or a short appendix explaining the analytical methods in use or careful definition of terms may considerably increase the potential audience of a piece of research. For example, Thomas Weiss’s publications in his major field of research have been exemplary and the Craig and Weiss essay in this collection is an important one. However, the uninitiated reader will find no clear definition of total factor productivity until that person penetrates the explanatory material of Table 3 on the seventeenth page of the chapter. Care also is required in providing background in text and bibliography. Picking again upon Craig and Weiss, we find that they list among their references Paul David’s elegant and justly famous essay, “The Mechanization of Agriculture in the Antebellum Midwest.” Standing by itself, however, that paper leaves a reader with a much-distorted understanding of the way in which the reaper entered Midwestern grain technology. Alan L. Olmstead’s essential corrective does not appear in the Craig and Weiss bibliography.

In their interesting and ingenious chapter dealing with squatting in California, Clay and Troesken focus upon the economic motivation of California squatters citing various sources in support of their contention that scholars are still uncertain about the motivation of this type of individual, the “new themes” having failed to “tarnish the original vision of the squatter as a valiant yeoman farmer.” Although frequently used by historians the term, yeoman, is less often defined and definition in this case would have been appropriate. Surprisingly too these authors ignore a rather obvious tentative hypothesis. Since it has been shown rather convincingly that Midwestern squatters were profit maximizers and many Californian settlers were Midwesterners or Oregonians with Midwestern roots would it not be reasonable to assume that they carried this same cultural trait to California? In this research also we find the results of logit regression described so parsimoniously as to bewilder the uninitiated.

This plea for an econometric history that makes a better case for itself in the eyes of historians generally should not be viewed as disparagement of the quality or importance of the contributions to this volume. They promise a long and useful life for the new series of which it is a part.

Allan Bogue is the former president of the Economic History Association and the author of books on U.S. frontier money lending, land settlement, and legislative behavior, and, most recently a biography of Frederick Jackson Turner. The University of Nebraska Press is currently publishing his book on dairying in Ontario during the 1920s and 1930s.

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

An Agrarian History of South Asia

Author(s):Ludden, David
Reviewer(s):Frost, Marcia J.

Published by EH.NET (June 1, 2000)

?

David Ludden, An Agrarian History of South Asia. Cambridge: Cambridge University Press, 1999. xiii + 261 pp. $64.95 (cloth), ISBN 0-521-36424-8

Reviewed for EH.NET by Marcia Frost.

David Ludden’s An Agrarian History of South Asia is the fourth volume in The New Cambridge History of India, Part IV: The Evolution of Contemporary South Asia. Ludden is Professor of History and member of the graduate group in South Asia Regional Studies at the University of Pennsylvania, and perhaps the foremost contemporary authority on the historical development of agrarian institutions of the South Asian subcontinent. While his primary inscriptional and documentary research has focused on the southern Indian region of the Tamils, his publications range widely across time, the sub-continent and disciplines to explore the development of societies that have been and largely remain intimately tied to the land.

In this volume Ludden brings together research from historians, economists, anthropologists, geographers, political scientist and, rural sociologists to create “a comprehensive framework” for an understanding of the forces which have created the contemporary “patchwork of agrarian regions” which extend from Afghanistan to Myanmar, and Nepal to Sri Lanka. Although agrarian life in this large geographic area connecting arid west Asia to wet southeast Asia was in the past and continues today to be hugely diverse, Ludden seeks the common experiences that make South Asia a distinct region in world history and agrarian development.

There is little in this volume to satisfy a lust for numerical facts — beyond a few estimates of the expansion of the area under cultivation in the 16th, 19th and 20th centuries there are none. What is here, however, is a rich, dense and wonderfully multi-disciplinary exploration of the evolution of agrarian society from the 3rd millennium BC to the present, and the way in which agrarian history has been perceived by historians, politicians and social reformers. Throughout there is an emphasis on the cultural context of agrarian life. Farming and agricultural institutions have a cultural context that cannot be ignored, and Ludden observes, “Modern mentalities may assign prayer, worship, myth, marriage and pilgrimage to the realm of religion; genetics, hydrology, engineering, medicine, meteorology, astrology, and alchemy to the realm of science; metal working, carpentry, spinning, weaving, and pot making to the realm of manufacturing; and trade, banking, war, herding, migration, politics, poetry, drama, adjudication, administration, and policing each to their separate realms of social activity. But all these are parts of agriculture. They contain essential agricultural activity” [p. 31].

Although the development of the text does in fact follow the historical periodicity to which we are accustomed, the chapter titles do not reveal this, but rather reinforce the importance of words, concepts and territoriality that Ludden explores. Chapter 1, “Agriculture,” begins with a discussion of the historiography of the agrarian experience, and emphasizes that “rulers and farmers, state power and agrarian social forces interact historically and shape one another” [p. 6]. This is a common theme that runs throughout the text, as Ludden traces the increasing role the state, its power and rules exerted on agrarian institutions and development. In the subsection entitled “Seasons,” the fundamental environmental resources and constraints of the subcontinent are described, and themes (which continue throughout the text) of conflict and competition, negotiation and exchange are introduced. In the final two sections of this chapter, “Maps and Landscape,” we read of “interlaced trajectories, networks, circuits, zones and regions of mobility,” and of territories — all repeatedly reappearing throughout the text. Ludden’s agrarian landscape is like a multi-layered GIS map with variables, institutions, peoples, etc. overlapping boundaries in both time and space.

Chapter 2, “Territory,” explores the evolution of agriculture and agrarian institutions from the first evidence of farming ca. 7500 BC through the 13th century AD. These millennia saw the expansion of social — not state — power over the agro-pastoral peoples who spread east and south from the Indus River (in modern day Pakistan) across the Gangetic plains to Bengal/Bangladesh and down the peninsula to its very tip at Kanya Kumari. These centuries were (as were those that followed) ones in which i) cultures met, mixed and competed, ii) land use intensified with new methods of metalworking and assuring water supplies, and new seeds and farming techniques, iii) pastoralists, nomads and forest cultivators were pushed to the margins, up the mountains and into the jungles, away from the routes of trade and conquest that linked more sedentary agrarian territories, and iv) both ritual and war played central roles in the negotiation and exchange that mediated conflict and competition. From the middle of the 1st millennium AD Brahmanical influence increased, kings enforced their religious duty (dharma) by upholding the right of first possession to those who cleared the land, patriarchal authority and social rankings into caste were extended and formed the basis of alliances and transaction networks, and conquest colonization began. In Ludden’s view ca. 550-1250 was the formative period of South Asia’s agrarian history and its agrarian regions. To the north, west and in the high mountains, warrior lineages joined local leaders, pastoralists and hunters “by imitation, alliance, genealogical invention [and] intermarriage” [p. 89] to form Rajput clans whose power was based on martial might and whose dharma did not include the act of farming. In contrast south of the Vindhya Mountains down the peninsula warrior lineages joined with agricultural communities and new castes of dominant warrior-cultivators arose. These broad divisions were reflected in kinship practices, women’s land rights and agrarian alliances that continue to the present.

Chapter 3, “Regions,” focuses on the late medieval, early modern centuries (14th-19th) as agrarian institutions and landscapes evolved towards those we recognize today. As world trade across Eurasia by land and sea became more closely integrated from the 14th century onwards, “new technology, ideas, habits, language, people and needs came into farming communities” [p. 113], agriculture further intensified, and states through their institutions of money and taxation encouraged the cultivation of crops for sale and penetrated more intimately than before into agrarian life. Across the subcontinent i) transportation networks expanded, ii) urbanization (measured by both number and size of towns and cities) speeded up, iii) new and more intrusive accounts of people, production and trade evolved, iv) agrarian taxation was systematized and its burden increased, and v) entitlements to land use and power shifted from social to financial obligations. Under the East India Company discontinuities were introduced: land was no longer the property of its clearer and user, but of the state; hereditary property rights to cultivated land were converted into use rights subject to payment of land taxes; bureaucratic regulation replaced negotiation, exchange and dharma; and caste rank, status, entitlements and income were both codified and threatened. The final chapter, “Modernity,” explores the role of the state in agrarian life and struggles against the state and its interruption of old patterns of agrarian intercourse. The armed rebellions of 1857, the partitions of British India in 1947 and of Pakistan in 1971, the post-independence struggles for regional sovereignty, the social movements for the rights of the marginalized, and the political power of warrior-cultivator descendants are all shown to have historic roots in the agrarian structures and identities formed over the previous centuries.

The rhetoric of historical knowledge, the evolution of agrarian social, political and economic institutions, the interplay of sedentary peoples and those on the move, the tension of conflict and negotiation are all themes which run throughout this book. There are, as the secondary literature allows, discussions of particular regions and regimes, of the intellectual tradition of discourse and policy debates, and of the organization of agrarian life — its farming, manufactures and trade. This is, however, a book that focuses on the forest, not its individual trees; its purpose is to describe and analyze the whole of the agrarian experience of South Asia, not to focus on the particulars of any one or few specific regions. For those wishing to use this text as a reference for specific events or regimes, the index is detailed and exhaustive.

The “Bibliographical Essay” runs 18 pages of citations organized into five sections: intellectual history, approaches to agriculture, long-term history, early modern themes and modern issues. An updated bibliography can be found at Ludden’s homepage http://www.sas.upenn.edu/~dludden. The bibliography includes only English language books, monographs, articles and a few Ph.D. dissertations, and excludes work that has been superseded by more recent scholarship; a number of citations appear as footnotes but not in the bibliographic essay.

This is a fine source for anyone interested in the evolution of South Asia’s agrarian systems and institutions. Its multi-disciplinary approach should be familiar to anyone with knowledge of other predominately agrarian societies, particularly those where religious ideas and practices are intimately interwoven with all aspects of human activity. For those without a knowledge of South Asian geography or political history, however, an historical atlas will be a useful supplement; there are no maps in this volume and little background information on many of the referenced pre-modern regimes.

Marcia Frost, recently returned from a Fulbright research grant in India, is currently working on a project “Coping with Scarcity: Kheda District (Gujarat, India), 1824/5,” and will resume teaching economics in the fall at Grinnell College.

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

The Rise of Capitalism on the Pampas: The Estancias of Buenos Aires, 1785-1870

Author(s):Amaral, Samuel
Reviewer(s):Beatty, Edward

Published by EH.NET (June 1, 2000)

Samuel Amaral, The Rise of Capitalism on the Pampas: The Estancias of Buenos

Aires, 1785-1870. Cambridge: Cambridge University Press, 1998. xviii + 290

pp. $64.95 (cloth), ISBN: 0-521-57248-7.

Reviewed for EH.NET by Edward Beatty, Department of History, Duquesne

University.

The large rural estates of Latin America have long attracted the attention of

historians, placed at the center of debates concerning social inequities,

political influence, and economic growth and development. Whether labeled

haciendas, fazendas, latifundia, or estancias, the large estate has often been

identified with social inequity, coerced labor, productive autarchy and

inefficiency, and technological backwardness. In short, the landed estate of

the eighteenth and nineteenth centuries has been seen as one locus of feudal

persistence in Latin America. Although many studies over the past two decades

have offered a more nuanced and largely revisionist view, only a handful have

provided systematic examinations of the internal dynamics of estate operation.

Samuel Amaral, who teaches history at Northern Illinois University and has

published extensively on Argentine rural and economic history, offers a long

overdue contribution to this subject. The Rise of Capitalism examines

the estancia, the large livestock ranch of the Argentine plains, during the era

of its critical reorientation toward the demand for cattle products generated

in the North Atlantic, circa 1780-1860. The importance of this contribution is

not so much the subject as the approach. Using detailed local sources,

including probate records, estate inventories, managers’ reports, travelers’

accounts, and agricultural surveys, Amaral presents an intensive and compelling

portrait of the internal operation of the Argentine estancia. His conclusions

– and the importance of this work –lie on two levels. First, Amaral shows

that the internal operations of the estancia were market oriented and profit

motivated. Owners and managers responded to market conditions and in their

daily behavior sought consistently to maximize efficiency and profit. Second,

Amaral shows that the estancia developed within an environment where

competitive pressures mattered more than political protection and social

privilege. This is not to say that the political environment did not matter,

for estancias evolved within a particular framework of formal law and informal

custom (and themselves helped alter that institutional context), but that

market-based allocation of the factors of production within the estancia “firm”

mattered more.

While the golden age of economic expansion in the Argentine pampas would not

come until the late nineteenth century, Amaral shows that extensive growth and

profitability were well underway in the first half of the century. The economic

foundations of the estancia lay in their use of land, capital, and labor, and

Amaral presents a systematic examination of each. Land was open and abundant

(chapters 2 & 3), estancias were capitalized largely in the cattle stock

(chapters 3 & 5), and labor consisted of relatively small numbers of slaves

(until after independence) and itinerant temporary free workers — the

Argentine gaucho (chapters 2 & 8). This last issue — labor instability in the

form of large numbers of temporary workers — receives careful treatment.

Neither labor scarcity nor cultural traits explain instability, he argues, but

rather the seasonal pattern of labor demand, patterns created by biological,

climatic, and environmental factors. Amaral is convincing here, although doubt

remains as we are given no view of the broader labor market, of gaucho society,

or of changes in labor’s price. Indeed, Amaral’s narrow focus on quantifiable

data and the dearth of reference to the broader political, social, and cultural

context throughout the book weakens and isolates the contributions that are

made here.

Perhaps the most interesting and important chapters of this work are those

which treat the environment (chapter 6), institutions (chapter 7), and

management (chapter 9). Moving beyond the more conventional issues like factors

of production and market conditions, Amaral shows convincingly that competitive

pressures and market signals mattered greatly, but mattered within a set of

environmental and institutional contexts that largely shaped their evolution.

The physical attributes of the Argentine pampas are well known. Fertile soil, a

broad frontier, and vast expanses of rolling grasslands provided an ideal

environment for grazing Old World cattle, with growing investment activity in

grain agriculture and, later, in sheep. Beyond this context, Amaral focuses on

the thistle, which grew prolifically after cattle disturbed the landscape,

providing a haven for rustlers and a constant aggravation for herders. Vast

“thistleries,” higher than a man’s head, spread across the pampas and shaped

the seasonal rhythm of estancia operations until the expansion of sheep grazing

and agriculture later in the century reduced their scope.

Like thistles, political institutions could also impinge on estancia operations

and productive growth. Both estancieros and the state had an interest in the

specification of property rights on the pampas, including survey and titling

provisions, herding conventions, stocking limits, brand management, the

depredations of wandering cattle, and law enforcement. Amaral shows that

estancieros lobbied for minimum restrictions on the full use of their property

rights (p. 150), but that they also sought increased regulation (or at least

enforcement) of their property rights (p. 147). The combination of wandering

cattle, game hunters, and unfenced lands created externalities against which

estancieros sought to rally protection. The outcome was largely a function of

estanciero’s demands, the physical environment of the pampas, and the limits

imposed on political institutions by the costliness of their enforcement in the

countryside. On most issues, all these worked in the same direction and favored

a competitive environment of private properties. Although this discussion could

use a more systematic comparison of pre-growth (circa 1780) institutional

conditions (including land grants, informal use, title legalization, and

emphyteusis) with the reforms considered in the 1850s and 60s, Amaral provides

an effective model for further work along these lines.

Management decisions were crucial to the estancia’s profitability. Allocating

the factors of production and adjusting to uncertainty required constant

vigilance and some expertise. An estancia’s success, Amaral writes, “was

guaranteed neither by vast tracts of land and large herds nor by the right

political connections. All those elements were necessary, but it was up to the

individual entrepreneur to combine them to make a profit” (p. 208). Indeed,

estancia management explains a central paradox of estancia expansion before

1860: that expansion occurred while the cost of inputs (principally land) was

rising and the price of outputs (principally cattle) was falling. Amaral argues

that estancieros succeeded in using resources more efficiently, allowing

survival, expansion, and profitability in the face of deteriorating relative

prices.

Although this book offers important evidence and insights into the formative

stages of the nineteenth century Argentine estancia, it comes at the price of

wading through pages of detailed evidence — often fascinating in itself but

also often tedious. Each chapter takes a narrative approach to the evidence,

and we get a step-by-step, at times disorderly, account of the author’s

exploration of historical minutia. It takes some effort to locate the

conclusions amidst the details (including over 120 tables and figures!),

although each chapter ends with a nice summation. The style is neither concise

nor always direct, and the historical evidence often stands alone. For

instance, Amaral’s extensive evidence on the relative costs and investments on

owned and non-owned lands (or, better put, on lands characterized by formal and

informal property rights) suggests that property right security affected

investment decisions, yet this important topic receives little direct comment

here (pp. 92ff and elsewhere).

For this reader, however, the price was well worth the effort. The Rise of

Capitalism on the Pampas is the result of intensive research, compelling

detail, sophisticated method, and convincing (if restrained) arguments and

insights. It makes a profound contribution to our understanding of this topic,

although it will not end historians’ debates on most of the subtopics. While

the book should appeal most to economic and Argentine historians, it should

also appeal to those interested in comparative agrarian history and in the role

of institutions in economic history.

Ted Beatty is author of Institutions and Investment: The Political Basis of

Industrialization in Mexico before 1911 (forthcoming from Stanford

University Press) and several articles on nineteenth century Mexican economic

history.

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):19th Century

Economic Change in China, c. 1800-1950

Author(s):Richardson, Philip
Reviewer(s):Ma, Debin

Published by EH.NET (June 1, 2000)

Philip Richardson, Economic Change in China, c. 1800-1950. Cambridge:

Cambridge University Press, 1999. xii + 111 pp. $39.95 (hardback), $12.95

(paper), ISBN 0-521-58396-9 (hardback), 0-521-63571-3 (paper).

Reviewed for EH.NET by Debin Ma, Institute of Economic Research, Hitotsubashi

University, Tokyo, Japan and Department of Economics, University of Missouri,

St. Louis.

In a little over a hundred pages, Philip Richardson’s Economic Change in

China c. 1800-1950 provides a concise and excellent survey of current and

major English language scholarship. The book is part of a publication series

called the New Studies in Economic and Social History by Cambridge University

Press which is “designed to introduce (students and teachers) to fresh topics

and to enable them to keep abreast of recent writing and debates” (p. ii).

Measured by that objective, Richardson’s book fares very well.

The book has set a clear focus: “without seeking to deny the influence of

social, cultural and institutional factors, the focus of the inquiry here lies

with an exploration of economic variables. The concern is with the dynamics of

interplay between continuity and change which facilitated, inhibited and

determined not just the process of change but the emergence of modern features

within the Chinese economy and, perhaps, the development of a modern Chinese

economy” (p. 4).

Organized around this theme, the book first lays out the analytic frameworks

(chapter 1), then supplies a background picture on China’s eighteenth-century

legacy and the early nineteenth-century crisis (chapter 2). The third chapter

presents China’s growth and structural change within a national account

framework for the period between the 1890s and 1933. In the next three

chapters, Richardson individually examines China’s external, industrial and

agricultural sectors from the second half of nineteenth century to the 1950s.

The seventh chapter examines the relationship between the state and the

economy.

Overall, Richardson’s presentation of major hypotheses, theories, and debates

are comprehensive, balanced, lucid and largely accurate. Sources are very well

indicated. The bibliography, organized by topics, carefully numbered and

cross-referenced, is particularly useful. But the most commendable feature of

the book is Richardson’s consistent and able presentation and discussion of

quantitative evidence and economic statistics for almost all the major issues

on national income, agriculture, industry and international trade. This is no

easy task as Chinese statistics are a source of controversy.

As Richardson shows, there are relatively firm statistics indicating that

foreign trade and investment grew enormously in the nineteenth and twentieth

centuries. Industrial output, particularly the modern sector, also exhibited an

impressive growth record during the twentieth century. But these elements were

far from altering the basic structure of the economy dominated by the giant

agricultural sector where traditional technology prevailed and estimates of

per-capita output growth are dubious due to the lack of consistent aggregate

time series data.

Richardson’s final assessment on the nature and magnitude of economic changes

in China in the nineteenth and twentieth centuries being characteristically

well-balanced, remains also somewhat non-conclusive. “The major long-term

influences on the process and extent of economic change were the pressure of

population on the land, the intensification of commercialized market

mechanisms, contact with the outside world and the role of state. By the middle

of the twentieth century those factors had combined and interrelated to produce

an economy which contained significant elements of modernization but not an

economy which can be confirmed with certainty as having achieved the onset of

sustained growth. It was also, in the short term, an economy suffering the

effects of more than a decade of war and economic mismanagement” (p.101).

I believe there is still room for Richardson to push his assessment a little

bit. If modern economic growth may or may not have taken hold in China as whole

(p.99), it had clearly taken root in regions where modern industrial sectors

clustered and agriculture was most commercialized. The regional characteristics

of modern economic growth would give us new insights into the nature of

economic change in China. Furthermore, if we are willing to look beyond the

macroeconomic variables, we also find in the twentieth century the spread of

primary education, the growth of a modern scientific community, the beginning

of agricultural experimental station, and the rise of new industrial and

commercial organizations, as well as monetary and fiscal reform of the 1930s.

(Richardson mentions some of these factors in chapter 7.) These all meant that

China was farther along on the path toward modern economic growth in the 1930s

or 1950 than in 1890 or 1850.

I do have some reservations about Richardson’s assessment of Chinese

agricultural conditions in the 1930s. After giving a fairly objective summary

of the optimists’ and pessimists’ cases in the debate on Chinese rural income

and productivity in the nineteenth and early twentieth centuries, Richardson

leans towards the conclusion: “it is clear that the agrarian economy was in a

state of crisis” and this did not seem like a short-term problem brought on by

the world Great Depression (p. 81-82). This view of the 1930s “agrarian crisis”

(beyond the short term) comes about partly due the lack of historical

comparison in the China field — not necessarily comparing China with Europe,

as was most often done, but rather comparing China in the nineteenth and

twentieth centuries with other East Asian countries such as Japan, Taiwan and

Korea. The relatively reliable data on rice yield per acre in the 1930s shows

that the Chinese level was still about 60-70% of the contemporaneous Japanese

level. This level was also equivalent to the rice yield level prevailing in

early Meiji Japan. Meanwhile, the average farm size in China was comparable to,

if not larger than that in Japan, Taiwan and Korea. Various sources also

clearly indicate that per-capita gross value added of farm output in the 1930s

represented one of the peak levels compared with most of the years in 1952-78

in China. The 1930s per-capita level was only surpassed after

de-collectivization and the diffusion of the household responsibility system in

the 1980s China.

Chinese farmers may have been poor in the 1930s, but they were not much poorer

than those in Japan, Taiwan and Korea in their early stages of development.

Very likely, they were just as well-off as the Chinese farmers in the late

1970s before the launching of the successful agricultural reform. Recognition

of these facts not only puts Richardson’s use of “agrarian crisis” (beyond the

short term) to describe the 1930s Chinese agriculture in serious doubt, but

also motivates us to reevaluate the connection between modern economic growth

and the state of Chinese economy in the pre-Communist era.

Debin Ma is the author of “Modern Silk Road: Global Raw Silk Market:

1850-1930″ Journal of Economic History (1996) and “Chinese Agricultural

Production in the Republican Period” (co-authored with Makino and Luo), in

Chinese Economic Statistics in the Republic Period (in Japanese and

Chinese), published by the Institute of Economic Research, Hitotsubashi

University, Feb. 2000.

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):20th Century: Pre WWII