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Lawyering for the Railroad: Business, Law, and Power in the South

Author(s):Thomas, William G.
Reviewer(s):Childs, William R.

Published by EH.NET (May 2000)

William G. Thomas. Lawyering for the Railroad: Business, Law, and Power in

the South. Baton Rouge: Louisiana State University Press, 1999. xxii + 318

pp. Maps, photographs, notes, Note on Manuscript Sources, bibliography, and

index. $47.50 (cloth) ISBN 0-8071-2367-6; $24.95 (paper) ISBN 0-8071-2504-0.

Reviewed for H-Business and EH.NET by William R. Childs, childs.1@osu.edu,

Department of History, Ohio State University.

A Flawed Attempt to Synthesize Business, Legal, and Regional History

Focused on a topic which historians have not investigated in any depth–the

role of lawyers in the evolution of the railways in the South–this is a book

that scholars of business, the South, and the law should consult. But there are

problems with the book: It is not well-conceived or written and too often it is

not always clear in the footnotes what sources sustain the author’s assertions.

The major strength of the book lies in the sources that William G. Thomas

uncovered, particularly records of over 40 railway legal departments. He

supplemented these organizational records with another 20 manuscript sources,

mostly the papers of individuals, but also including the voluminous Baker &

Botts History Collection, which chronicles the important history of the

Houston, Texas, law firm. His short “Note on Manuscript Sources” furnishes a

concise overview and helpful comments on the significance of some of the

sources. Nonetheless, the manner in which Thomas conveys the results of his

research is disappointing.

Perhaps the problem lies in Thomas’s effort to meet too many purposes in

writing the book. Thomas, who studied at the University of Virginia, where he

is now director of the Virginia Center for Digital History, is interested in

lawyers (his family has many) and their work, in the South as a region, and in

how “monopoly power worked” (xi). He attempted an

“interactive” approach to the law and society in which “law and legal processes

both shape and derive from social and economic change” (xiiin1).

He also tried to write a social history of Southern lawyers, as well as a

business history of railroading from the perspective of the legal department.

So, he wanted to synthesize business, legal, and social history in a regional

setting, an endeavor that requires not only expertise in each field but also

facility in composition. Had Thomas been more careful in writing introductions

and conclusions to each chapter–helping the reader keep clear the many threads

of his complicated tale–he might have accomplished many of these goals.

Instead, anecdotes are not always clearly related to the larger themes;

repetition of evidence appears without reason; and themes (such as federalism)

are introduced and dropped without adequate development in the text or notes.

And, as those of us who have worked in Southern history understand only too

well, trying to generalize across the region holds numerous traps. While in

many ways southern, Texas,

for example, does not always fit the general economic and political patterns

found in the rest of the Old Confederacy; yet, much of Thomas’s key evidence

comes from Texas.

The book generally follows a chronological approach over nine chapters.

When railroads first appeared, Thomas argues, they hired local lawyers to help

in establishing rights-of-ways and to work with construction aspects of the

business. Once the railways were up and running, the need for a permanent legal

department emerged. In chapters 3, 4, and 5, he attempts to show how the growth

of railways changed the nature of legal departments

(they became more hierarchical and bureaucratic) and how litigation,

particularly personal injury lawsuits, evolved. Growth also forced railway

lawyers into the role of lobbyist in the state legislatures, and eventually in

congress. Thomas spends a lot of time focusing on personal injury litigation

(almost to the exclusion of the important work of regulation).

He indicates that tensions emerged as corporate managers attempted to demand

total loyalty from the hired hands; local lawyers had to weigh the balance

between the steady assignments associated with the interstate railroad legal

department and the negative impact that work would have on the rest of their

local practices.

In chapter 6, “Progressive Reform and the Railroads,” Thomas argues that the

consolidation movement in railroading at the turn of the century prompted many

Southerners to oppose the “monopoly” power of the railways.

The 1890s and first decade of the 20th century were busy times for railway

lawyer-lobbyists as they attempted to undermine legislative controls before

they were enacted and, if failing that, after they were enacted. Several

anecdotes indicate that the lawyers and the corporate managers sometimes took a

cost-benefit approach in deciding whether to fight legislation and complaints

from customers; sometimes it made more economic sense to clean up a work yard

in order to reduce the number of potential personal injury suits. Beyond the

anecdotes, however, Thomas does not indicate to what extent lawyers became

involved in the management decisions of the railways.

Meanwhile, lawyers began to engage in their own profession-specific

associational activities. They used this associational power to prepare for

appeals in the Federal court system and to lobby against bills in Congress,

but there remained tension among the members, for they often met one another as

adversaries in personal injury suits.

Chapters 7 and 8 continue the story of southern railway lawyers interacting in

the national arena. Chapter 7 is notable for its confusing narrative on

delaying tactics (see pp. 218-219 and the citations in 219n42, where Thomas

confuses state and national delay tactics). In Chapter 8, Thomas discusses the

liability issue as it relates to the Federal arena. Congressional legislation

in 1906 and 1908 prompted railway legal departments to move liability cases to

Federal courts in order to avoid more onerous state laws. The several pages at

the end of this chapter on the conflicts between state and Federal regulation

add nothing to what scholars already know on this subject. In fact, Thomas is

not very sure footed on the evolution of the regulation of railways. To cite

one example, he claims that Munn v.

Illinois (1877) was reversed in 1890 (p. 170) and does not seem to

understand that the U.S. Supreme Court waxed and waned on the issue of state

versus Federal regulation of railways before and after Munn nor that

Munn was more important for what it said about government regulation of

business than it was for state-Federal jurisdiction. Chapter 9, “The Changed

Law Business,” repeats too much information from earlier chapters,

yet fairly well summarizes the author’s overall argument. Still, Thomas relies

too heavily here on Texas (and on Baker & Botts) and Virginia to make the

generalizations that he does about the entire region.

While Thomas ignores for the most part the role of lawyers in the development

of regulation, he does include helpful insights on a few key topics, including:

analysis of the free pass, which dominated much of the politics of railroading

at the turn of the century (I learned a lot from this; see especially pp.

92-96, 178-181); a useful overview of the railways’ attempts to sidestep Jim

Crow laws (219-225); and, interesting anecdotes on particular train wreck cases

(Chapters 3 and 4 especially).

Thomas occasionally alludes to the lawyers’ attempts to settle cases out of

court, but, as with much else in the book, he does not elaborate on this

important insight. In short, specialists interested in these topics should

consult the book. Other readers might benefit from reading Chapter 9 and the

Conclusion.

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

Comparative Public Policy: Patterns of Post-war Transformation

Author(s):Castles, Francis G.
Reviewer(s):Couch, Jim F.

Published by EH.NET (May 1, 2000)

Francis G. Castles, Comparative Public Policy: Patterns of Post-war

Transformation. Cheltenham, UK and Northampton, MA: Edward Elgar, 1998. xi

+ 352 pp. $30 (cloth), ISBN: 1-85898-816-0.

Reviewed for EH.NET by Jim F. Couch, Department of Economics, University of

North Alabama.

Professor Francis G. Castles of the Research School of Social Sciences,

Australian National University, has undertaken quite a task in his latest work

– that of explaining the growth of government. Castles investigates twenty-one

advanced countries that are all long-term members of the Organization for

Economic Cooperation and Development (OECD), which enables the author to obtain

standardized data. Data are from three periods — 1960, 1975, and the early

1990s.

The pace of governmental growth among nations during this time was uneven.

Measuring “national trajectories of public expenditure growth in terms of their

changing share in GDP” between 1960 and 1995, “seven countries — Denmark,

Finland, Greece, Japan, Portugal, Sweden, and Switzerland-had experienced

growth of government in excess of 100 percent, whilst, at the other end of the

distribution, in the USA, outlays had grown by only 22 percent and, in the

United Kingdom, by only 35 percent” (p. 100).

Castles begins his analysis of the growth of government with World War II,

arguing that the war reshaped society. “Wartime experience had accustomed

governments to a more interventionist role, so that the task of running a

welfare state, which had seemed beyond most governments in the 1930s, now

seemed almost routine” (p. 28).

Next he investigates characteristics of the nations including their economies,

their societies, and their political systems and offers explanations for why

these characteristics may be related to public policy development. Castles

explores a wide variety of possible explanatory variables including voter

turnout, Catholicism, trade union membership, international trade, and the

seats held by left leaning and right leaning politicians. He provides a summary

of the independent variables (pages 106-108) and the justification for their

inclusion in the model.

Quantifying these variables, however, sometimes proves to be difficult. For

example, Castles calls World War II “the single most important precursor of

post-war outcomes” and defines a war impact variable ranging from 0 to 3 to

capture the severity of the wartime experience. While the extent of wartime

damage is certainly important, a scale with four values is unfortunately

arbitrary.

Also included is the age of the population because “countries with a larger

proportion of old people are likely to have had higher levels of government

expenditures” (p. 107). Castles notes that researchers suggest that large

numbers of elderly people can form a powerful interest group that is able to

engage in successful rent-seeking. Thus, as the population grows older, seniors

can demand more services from government and the welfare state will grow.

Castles ignores Olson’s (1965) Logic of Collective Action which asserts

an optimal group size for cooperative action. Larger groups do not necessarily

have greater political clout. Richard McKenzie empirically tests this

proposition in his paper “The Retreat of the Elderly Welfare State” (Center for

the Study of American Business, Washington University in St. Louis, Publication

Number 102, December 1990). McKenzie finds that as the number of seniors in the

U.S. has grown expenditures have declined.

Castles rather abruptly changes directions in the later chapters of the book by

exploring the sources of cross-national variation in male and female labor

force participation, in unemployment rates, in home ownership, and in fertility

and divorce rates.

Returning to his original theme, he explains that readers hoping for a single

explanatory key to the growth of the welfare state will come away disappointed.

Instead, “the causes and consequences of the policy actions of the state differ

widely from one policy area to another and within particular areas over time”

(p. 300). However, he does identify some surprising relationships. For example,

economic development had a smaller than expected role in the growth of the

welfare state. Overall, Castles’ work is accessible and provides much data

regarding public policy after World War II.

Jim F. Couch is an Associate Professor of Economics at the University of North

Alabama. His book, The Political Economy of the New Deal (Edward Elgar,

1998) co-authored with William F. Shughart, describes the political forces that

shaped much of the New Deal.

Subject(s):Government, Law and Regulation, Public Finance
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

Global Civil Society: Dimensions of the Nonprofit Sector

Author(s):Salamon, Lester M.
Anheier, Helmut K.
List, Regina
Toepler, S. Stefan
Reviewer(s):Goldin, Milton

Published by EH.NET (March 2000)

Salamon, Lester M., Helmut K. Anheier, Regina List, Stefan Toepler, S.

Wojciech Sokolowski and Associates. Global Civil Society: Dimensions of the

Nonprofit Sector. Baltimore, MD: Johns Hopkins Comparative Nonprofit Sector

Project, 1999. Price (paper) $34.95. ISBN 1-886333-42-4.

Reviewed for H-Business and EH.NET by Milton Goldin

National Coalition of Independent Scholars (NCIS)

The Global Associational Revolution

“…a veritable ‘global associational revolution’ appears to be underway, a

massive upsurge of organized private, voluntary activity in literally every

corner of the world. Prompted in part by growing doubts about the capability of

the state to cope on its own with the social welfare,

developmental, and environmental problems that face nations today, this growth

of civil society organizations has been stimulated as well by the

communications revolution….” (p. 4)

If these statements appear to be exaggerations–after all, how often do you

think of nonprofits in connection with revolutions?–brace yourself before

reading this book. Dr. Salamon and his co-authors will positively jolt you with

their conclusions based on data from 22 nations including Israel,

Japan, the United States, five countries in Eastern Europe, and five countries

in Latin America. All data relate to 1995.

Consider the following:

- “Even excluding religious congregations, the nonprofit sector…is a $1.1

trillion industry that employs close to 19 million full-time equivalent paid

workers. Nonprofit expenditures in these [22] countries…average 4.6 percent

of the gross domestic product, and nonprofit employment is nearly 5 percent of

all nonagricultural employment,” (p. 8)

- “… if the nonprofit sector in these countries were a separate national

economy, it would be the eighth largest economy in the world, ahead of Brazil,

Russia, Canada, and Spain.” (p. 9)

- “Nonprofit employment in the eight countries for which time-series data were

available grew by an average of 24 percent, or more than 4 percent a year,

between 1990 and 1995

. By comparison, overall employment in these same countries grew during this

same period by a considerably slower 8 percent, or less than 2 percent a year,”

(p. 29)

- “…the growth in nonprofit employment evident in these figures has been made

possible

not chiefly by a surge in private philanthropy or public-sector support, but by

a substantial increase in fee income,” (p. 31)

- “…the relative size of the nonprofit sector varies greatly among countries,

from a high of 12.6 percent of total nonagricultural employment in the

Netherlands to a low of less than 1 percent of total employment in Mexico. The

overall 22-country average, however, was close to 5 percent.

This means that the U.S., at 7.8 percent without religious worship, lies

substantially above the global average. However, it falls below three Western

European countries the Netherlands (12.6 percent), Ireland (11.5 percent), and

Belgium (10.5 percent), as well as Israel (9.2 percent). (pp.

265-266)

Despite the awesome data, Salamon writes in

his Preface that we are nowhere near having enough information to fully grasp

what is happening in America or elsewhere vis-a-vis nonprofits. For those of us

who closely follow the philanthropic literature, this is surely no

exaggeration: The IRS isn’t even certain how many private foundations or

nonprofits exist. Nor is lack of data the extent of the problem. Salamon and

his associates at the Johns Hopkins Comparative Nonprofit Sector Project which

manages the research rightly seek in the long term not only to describe the

“basic scale,

structure, and revenue bases” of nonprofits around the world but hope, in later

volumes, to account “for the differences that exist” between nonprofits in

various countries, “the factors [that] seem to encourage or retard

their development,” and, finally (and perhaps most important of all), to

answer the questions, “what difference…these entities seem to make? What are

their special contributions?” (p. xvii)

The more philosophical among us might have preferred that Salamon and his

associates begin with a volume responding to the questions about economic

benefits that justify nonprofits and what expectations we should entertain for

their future. The purpose would be not only to provide intellectual

satisfaction but because of the gigantic transfer of wealth currently

underway, in America, from the World War II generation and baby boomers to

foundations and other tax shelters.

But to return to the present volume, someone somewhere once said there are no

specialists, only vested interests. When Salamon writes, “Traditionally,

the United States has been considered the seedbed of nonprofit activity,”

and then proceeds to write that Alexis de Tocqueville, “a keen 19th century

observer of American institutional life, aptly considered voluntary

associations a uniquely democratic response to solving social problems. . .”

(p. 261), you have to wonder exactly which vested interests de Tocqueville

thought were being served. But had de Tocqueville attempted to address this, he

would have come across immediate, knotty problems, including how,

exactly, to define “nonprofit” or “charity” or “philanthropy” in an American

context.

Definition is no easier 150 years after de Tocqueville’s visit. Annual salaries

of some nonprofit executives now exceed $1 million; this suggests that

nonprofit is not non- profit for them. Benjamin Franklin, the patron saint of

American philanthropy, thought charity (meaning welfare) should be the business

of churches and never of government. To him, philanthropy meant community

advancement, and community advancement must be the business of all citizens. To

put the matter bluntly, successful entrepreneurs could only do well if they did

some local good, but finding shelter for the homeless was not the kind of good

in which they should be involved.

As Global Civil Society

makes clear, one of the most remarkable aspects

of post-industrial philanthropy is the degree to which systems in various

countries throughout the world have come to resemble each other.

In Western Europe, “On average, three-fourths of all nonprofit employees…work

in education, health or social service organizations. This reflects the

historic role that the Catholic and Protestant churches have long played in the

education and social service field.” (p. 16). In America, “…almost half of

all nonprofit employment…is in the health field. This is more than twice as

high as the global average of 19.6%….” (p. 269) (On the other hand, it should

be pointed out, as Salamon does, that “one

out of every five nonprofit employees in the United States works in the

educational field. This is proportionally well below the all-country average

and also falls below the developed country average. The principal reason for

this is that the tradition of

separation of church and state in the U.S. has limited the growth of public

funding of religiously affiliated education institutions in the country….”)

(p. 270)

But in America, as in the other 22 countries during the past two decades,

financing nonprofits has had less and less to do with philanthropic giving and

more and more to do with fees paid for services by governments. In this

connection, Catholic Charities of America receives some 62 percent of its

annual $1.9 billion operating income from eight national agencies as well as

local and state governments, to provide home care for the elderly,

battered-women’s shelters, foster care, and other essential services.[1]

Global Civil Society was published at a time when the American economy

flourished

as no one had ever imagined it could. But not in Washington or in any other

world capital were those officials concerned with welfare policy over- curious

about what might happen if the global economy falters and a depression

threatens. Hopefully, a succeeding volume in this series will include a “What

If” chapter. We badly need thinking in this area.

[1] David Van Bema, “Can Charity Fill the Gap?” Time (December 4, 1995),

pp. 44-46, 53.

Subject(s):Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

Production Efficiency in Domesday England, 1086

Author(s):McDonald, John
Reviewer(s):Botticini, Maristella

Published by EH.NET (March 2000)

John McDonald, Production Efficiency in Domesday England, 1086. London

and New York: Routledge, 1998, xiv + 240 pp. $85 (cloth), ISBN:

0-415-16187-8.

Reviewed for EH.NET by Maristella Botticini, Department of Economics,

Boston University.

On the cover page of John McDonald’s Production Efficiency in Domesday

England, 1086 it might be appropriate to include a warning label: “Reading

this book may have fatal consequences for certain scholars.” The reason is

simple: it takes a lot of energy and passion for a medievalist to keep reading

the book after page

14 when the author starts employing high-tech economic models (chapters 2 and

3) and fancy regressions (chapters 4). On the other hand, patient medievalists

(and other scholars as well) will be rewarded by learning that scholars have

been basically wrong

in arguing that English estates were run inefficiently by Norman conquerors.

According to McDonald (Professor of Economics at Flinders University of South

Australia) these estates were run at similar efficiency levels to comparable

production units in more modern economies, such as farms in the postbellum

U.S. South, farms in contemporary California, and surface coalmines in the U.S

(p. 137).

After a clear and insightful introductory chapter that describes the main

features of the English economy at the

time of the Norman conquest,

elucidates the data of the Domesday Book, and outlines the main themes of the

book, the reader enters with chapters 2 and 3 into a “jungle” of technical

models that explain the techniques used by the author to measure production

efficiency in agriculture. The core of the book is in chapters 4 and 6 where

McDonald applies these techniques to a sample of estates surveyed in the

Domesday Book (those of Essex lay estates).

The book addresses important questions such as: Which ten ants-in-chief ran

efficient estates? How was productivity affected by soil type, the size of the

estate, the tenancy agreement, the institutional framework of the time and the

proximity of a market center? Which inputs made the major contribution to the

net value of output? Did slaves make a greater contribution to the manorial

lord’s net income than peasants? What was the effect of feudal and manorial

systems, which discouraged mobility of inputs, on the system of production,

input productivities and total output produced? Given technology and the

institutional framework, were estates run efficiently?

Multivariate regression analysis carried out in chapter 4 indicates that

efficiency depended on the spatial location of the farm (in which hundred the

farm was located), but was not affected by the type of soil and proximity to

urban economies. Larger farms tended to be more efficient suggesting that

economies of scale were at work. Efficiency was influenced by whether an estate

was held in demesne by the

tenant-in-chief (estates being held in demesne tended to be more efficient) and

who the tenant-in-chief was. Estates with relatively more grazing were more

efficient than estates with relatively more arable or mixed farming. The

existence of some ancillary resources on the farm (beehives, mills, or

saltpans) seems to have made estates less efficient, whereas fisheries and

vineyards do not seem to have had any effect. Overall, English estates were run

efficiently by Norman conquerors. Yet the restrictions

and rigidities imposed by feudal and manorial systems had a negative impact on

agricultural efficiency (pp. 140-143).

While I highly recommend this book to both economists and historians, I think

it is worthwhile to stress some weaknesses. The first issue is why the author

does not compare medieval English agriculture to English agriculture in later

centuries. This would have been even more interesting than comparing Domesday

England to contemporary California farms or U. S.

surface coalmines. We could learn, for example, how the demise of the feudal

and manorial systems of production affected agricultural production in England,

or how the development of more important and significant urban centers

(compared to Maldon and Colchester in 1086) influenced agricultural

efficiency. Second, given that it is not always clear whether the annual value

of an estate included ancillary resources, one wonders if this can make the

comparisons of the efficiency of various estates meaningless. The author

dismisses the argument by arguing that the existence of ancillary resources

would have had opposite effects and that therefore their overall impact on

efficiency was probably minimal. But what about other incomes from feudal

rights that could have entered into the annual values of estates?

Another critical point is the organization of the book. The technical chapters

2 and 3 should have gone into large appendices. Those who know the frontier

technique are bored by reading these chapters; those who do not have the

knowledge to understand these chapters can be really discouraged from reading

the

book. A further minor criticism is of technical nature and has to do with the

multivariate regressions. The question is why the author does not include fixed

or random effects to

account for variables that do not vary across a tenant-in-chief or whoever was

running the farm. His abilities, experience, and other unobservable variables

could have affected the way he ran his estates.

The book requires a lot of patience and passion

for high-tech economy history. If one is willing to persevere and arrive at the

end of the book,

the effort is rewarded. Someone else can apply the same frontier technique to

Norfolk and Suffolk, for which, together with Essex, the Domesday Book provides

the most detailed information, and check whether McDonald’s findings still hold

for these counties. More importantly, someone can do the same exercise on

English agriculture for later periods and tell us whether and how the demise of

the feudal system affected agricultural efficiency.

Maristella Botticini’s research focuses on marriage markets, dowries,

intergenerational transfers, credit markets and Jewish lenders, and agrarian

contracts in medieval and Renaissance Tuscany. Her recent work includes “A

Tale of ‘Benevolent’ Governments: Private Credit Markets,

Public Finance, and the Role of Jewish Lenders in Medieval and Renaissance

Italy,” Journal of Economic History 60 (March 2000): 164-89 and “A

Loveless Economy? Intergenerational Altruism and the

Marriage Market in a Tuscan Town, 1415-1436,” Journal of Economic

History 59 (March 1999):

104-21.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Geographic Area(s):Europe
Time Period(s):Medieval

The Japanese Conspiracy: The Oahu Sugar Strike of 1920

Author(s):Duus, Masayo Umezawa
Reviewer(s):Beechert, Edward D.

Published by EH.NET (February 2000)

Masayo Umezawa Duus, The Japanese Conspiracy: The Oahu Sugar Strike of

1920. (Translated by Beth Cory and adapted by Peter Duus.) Berkeley:

University of California Press, 1999. xiii + 375pp. $55 (cloth),

0-520-20484-0: $18.95 (paper), 0-520-20485-9.

Reviewed for EH.NET by Edward D.

Beechert, Professor Emeritus of Labor History, University of Hawaii.

In early 1920 in Hawaii, Japanese sugar cane workers, who made up nearly half

of the work force on Hawaiian sugar plantations, struck for a wage increase.

Although the strikers eventually capitulated, the Hawaiian territorial

government cracked down on the strike leaders, bringing them to trial for

conspiracy to dynamite the house of a plantation official.

Afterward, to end dependence on Japanese immigrant labor,

the planters lobbied in Washington to lift restrictions on the immigration of

Chinese workers. Instead, the clash helped secure that passage of the

Immigration Act of 1924 (often called Japanese Exclusion Act). Originally

published in Japan in 1991, Masay o Umezawa Duus’s narrative of these events

presents a complex picture of the Oahu sugar strike tailored to the Japanese

audience. (In fact, the book won the Oya Prize and the Sincho Gakugei Prize,

the two most distinguished nonfiction prizes in Japan.) The author tries to

remedy a limited knowledge in Japan regarding Hawaii in 1920 by surrounding

the details of the strike and its aftermath with a variety of details and

material not immediately relevant to Hawaii, such as comments on the

Sacco-Vanzetti case to

illustrate the fear of radicals then prevalent.

Using newspaper sources, Japanese Foreign Office correspondence and reports and

Hawaii court records, Duus gives a detailed, blow-by-blow account of the

strike, the dynamite case which occurred after the strike, and the trial of

fifteen of the alleged conspirators. This narrative leads to the conclusion,

which examines the 1924 Immigration Act sponsored by Senator Hiram Johnson of

California. The bill added Japanese to the excluded category — now all

Asians were excluded and lower quotas were put in place for southern and

eastern Europeans. The legislation reflected the views of residents of the

Pacific coast states and was bitterly resented in Japan.

The “conspiracy” of the title stems from the news paper and sugar planters’

propaganda developed to fight the strike and the campaign to persuade Congress

to admit Chinese workers on an indenture contract to counter the perceived

dominance of Japanese workers. Hawaiian planters had been searching for the

proverbial ideal worker — cheap, docile and plentiful since 1850. Hawaiians,

Chinese, Portuguese, Japanese, eastern Europeans,

Puerto Ricans, African-Americans, poor white Americans, and Filipinos made up

the list of trials; each in turn had been found

to be unreliable,

expensive, truculent and generally unworthy. Each new group in turn was praised

as the “final solution’ to Hawaii’s “Labor Question.”

While Duus’s narrative is interesting and somewhat informative, the

conspiratorial approach results in

a misleading picture. Despite the erratic documentation, the author presents

an interesting and useful picture of the important event from a Japanese

perspective. The intense focus on actions of Japanese workers tends to obscure

the Hawaiian elements of

the situation. There is considerable confusion in the story about the events of

the Kingdom of Hawaii, its overthrow and the establishment of the Republic of

Hawaii and its subsequent annexation. Thus, chapter one is good in showing the

flow of ideas between Japan and the United States but is weak on Hawaiian

details. There is no recognition of the fact that Japanese men had been barred

from emigrating to Hawaii since 1906 and that a large percentage of the

plantation workers were born in Hawaii. The lack

of knowledge of the labor movement results in a telescoping of the labor

structure. The American Federation of Labor is described as the “largest union”

(p. 23). In an attempt to set the scene, the author describes the IWW on the

mainland as being identified as “bomb throwers,” drawing on the Haymarket

affair. A meeting at Waialua Plantation in 1913 is described as a

“meeting of white telephone operators from the mainland urging the Japanese to

join the IWW” (p. 44). A Hawaiian Sugar Producers Association (HSPA)

transcript of the IWW meeting describes one A. V. Roe, a telegraph operator,

addressing the Portuguese Camp workers at Waialuas (Beechert,

Working in Hawaii, p. 153). Lurid descriptions of the Filipino workers

being imported to Hawaii are based

on stereotypical newspaper accounts. The author seems unaware that the

Hawaiian sugar industry was desperately seeking a new supply of labor. Cut off

from Japan in 1906 and barred from China as a source, the Philippines was the

sole remaining source of cheap labor. The industry had tried to meet U.S.

objections to Asian labor by importing a variety of Europeans. The high cost

and the refusal of these to submit to the conditions of sugar employment led to

the elaborate scheme to import indentured Chinese

workers. The Hawaii Emergency Labor Commission,

formed in 1921, launched a massive campaign to persuade Congress to grant an

exemption to the Chinese Exclusion Act of 1882.

The Japanese sugar workers’ strike of 1920 had its origins in World War I

inflation. As early as 1917, the Young Men’s Association of Hawaii, a Buddhist

organization, began to hold meetings on the issue of the cost of living and the

wage scale. Made up largely of young men born in Hawaii,

these workers communicated through the Buddhist organization. Beginning in

Hilo in 1919, the Young Men’s Association issued demands for a higher wage.

“Within ten weeks organization ran like a cane fire through the four major

islands.” (John E. Reinecke: Feigned Necessity: Hawaii’s Attempt to Import

Chinese Contract Labor, 1921-1923, 1979, pp. 98-99) The HSPA issued a

warning in early 1917 to its managers that wage demands of Japanese

organizations could lead to trouble. Nowhere in the text is there any awareness

of this development. The younger workers, recalling the results of the 1909

strike, were determined not to allow the Honolulu Japanese business and

intellectual community to dominate the issue. Plantation unions, based on the

AF of L model were set up through 1919-1920.

Local leaders formed an executive committee. As negotiations broke down,

the need for planning resulted in the appointment of spokesmen. The book

focuses on these spokesmen to the exclusion of the local leadership. The

emphasis is placed on the propaganda generated by the

Hawaiian Sugar Planters Association and the two main Honolulu newspapers. The

Honolulu Advertiser was hysterical in its denunciation of the strike as

a plot by Japan “to take over Hawaii” as an outpost of Japan. No evidence is

cited,

nor is there any explanation of how such an action could occur without U.S.

response. The lack of citation throughout lends an air of popular journalism to

the book. Conversations are laid out at length, thoughts and mindsets are

described in vivid terms, all without documentation. Then at other points, the

author is lavish in documentation, as in the blow-by-blow account of the

dynamite conspiracy trial.

The problem of translation and “adaptation” is evident in a number of ways.

The leading defense attorney is misidentified. William B. Lymer is

consistently cited as Lymar. J. Edgar Hoover is listed as the Director of the

Federal Bureau of Investigation in 1920. The Bureau of Investigation,

the predecessor of the FBI, produced a report in 1921 describing the strike as

“a weapon in Japan’s strategy to take over Hawaii.” The Bureau cited the

Japanese Federation of Labor as an example of the frightening unity and

teamwork of the Japanese (pp. 220-221). The author correctly doubts that the

Japanese translator at the trial had

a sufficient command of English to produce intelligible translations for the

all-English speaking jurors. At one point prosecutor Heen is described as

objecting to a witness’ testimony on the grounds of “hospitality” rather than

hostility (p. 210). Numerous errors of Hawaiian sugar industry detail detract

from the authority of the narrative. For example, Waikiki is described as an

“uninhabited swamp”

until developed by Gov. McCarthy (p. 234). Likewise, people in Hawaii are

incorrectly described as being unable to afford white sugar because of the

high prices prevalent in 1920-1922.

The work concludes with a detailed examination of Hiram Johnson’s immigration

bill in 1923-1924 and the efforts of the Hawaii Emergency Labor Commission to

deflect the exclusion of Japanese. The chapter is entitled

“The Japanese Exclusion Act.” For a Japanese audience, the focus makes sense.

The desperate efforts of the Commission to win an exemption for Chinese

workers, the opposition of organized labor and the widespread anti-Asian

sentiment of the Pacific Coast were too much for the limited political

influence of the Hawaiian planters. However, the book does considerable

violence to an understanding of the basic issues. Although the author quotes

extensively from Reinecke’s

Feigned Necessity, the clear focus of Reinecke’s work on the labor

aspects of the situation is lost. A large part of Duus’s effort is taken up in

a minute examination of the spokesman for the Japanese Federation of Labor,

Noboru Tsutsumi. This obscures

the fact that the Federation was organized by plantation unions,

coming together only at the executive board level. Inexperience and poor

communication complicated and hindered their efforts. Despite this, the local

unions raised significant amounts of money. The fact that a majority of

Hawaii’s plantations continued production unabated and had a loss sharing

agreement through the HSPA and their insurance policy, the workers faced a

difficult barrier. The industry made extensive changes in their organization

as a result of the strike. The HSPA emerged as the dominant factor in

plantation policy, shifting the center of power from the managers to the

agency. An extensive social welfare program was initiated to alleviate some of

the worst features of plantation life. In that sense, the strike succeeded,

despite the appearance of defeat.

Edward D. Beechert is the author several books and articles on Hawaiian labor

history including Working in Hawaii-: A Labor History (1986);

“Mechanization and the Plantation Labor Supply” in S. Eakin and J. Tarver:

One World, One Institution: The Plantation (1989): and Honolulu:

Crossroads of the Pacific (1991). He is the editor (with Brij Lal and

Douglas Munro) of Plantation Workers: Resistance and Accommodation (

1993).

Subject(s):Labor and Employment History
Geographic Area(s):Asia
Time Period(s):20th Century: Pre WWII

Learning by Doing in Markets, Firms, and Countries

Author(s):Lamoreaux, Naomi R.
Raff, Daniel M. G.
Temin, Peter
Reviewer(s):Gemery, Henry A.

Published by EH.NET (February 2000)

Naomi R. Lamoreaux, Daniel M.G. Raff, and Peter Temin, editors, Learning by

Doing in Markets, Firms, and Countries. Chicago: University of Chicago

Press (National Bureau of

Economic Research Conference Report), 1999. vii +

347 pp. $65.00 (cloth), ISBN: 0-226-46832-1; $22.50 (paper), ISBN:

0-226-46834-8

Reviewed for EH.NET by Henry A. Gemery, Department of Economics, Colby College.

The “learning by doing” in the title of this NBER volume has little to do with

the classic case of the Horndal effect or with the productivity effects of

learning associated with the long production runs of aircraft or ship

construction. Instead, this volume deals with “scaled-up” learning by doing

concepts with an analytical reach that extends to a number of forms of

organizational learning and, in Gavin Wright’s concluding chapter, to learning

as a “national network phenomenon” (p. 296). The volume, drawn from an

interdisciplinary conference of business and economic historians,

is premised on the notion that information – its acquisition and use –

“effectively determines whether firms, industry groups, and even nations will

succeed or fail” (p. 15). Thus the learning examined in these studies falls

within that broad compass.

The first two essays examine how firms learn of the technological frontier and,

as well, learn how to appropriate best-practice technologies for competitive

advantage. In “Inventors, Firms, and the Market for Technology in the late

Nineteenth and Early Twentieth Centuries,” Naomi R. Lamoreaux and Kenneth L.

Sokoloff utilize patent data to develop a quantitative picture of the market

for technology. That market, they conclude, was well developed and thus

allowed firms to keep track of technological advances via intermediaries in the

market (patent agents and solicitors) or by direct contact with inventors. By

the beginning of the twentieth century,

however, firms increasingly attempted to move inventive activity within the

firm and that in turn required further learning on the part of the firm,

e.g., in minimizing employee turnover and insuring that patents received by

employees were assigned to the firm. The following essay by Steven W.

Usselman examines exactly this form of learning by American railroads and

their “internalization of discovery” (p. 63). Railroad managers from early in

the nineteenth century saw technical innovation in their industry as stemming

largely from “the efforts of ordinary

mechanics and engineers, not through discrete acts of patentable invention” (p.

63). Since railroads saw firm-specific knowledge as critical to the innovation

process, they not only attempted to internalize inventions but also attempted

to buffer the impact of external technical developments by forming railroad

associations and patent pools that insured patents would be cross-licensed to

the member firms. In a detailed and perceptive comment on the Usselman paper,

Jeremy Atack notes that such “… collusion stilled the winds of ‘creative

destruction’ that jeopardized the value of existing investment” (p. 101).

Forms of collusion or, more neutrally, institutionalized forms of information

interchange, were not confined to railroads. Avoiding the cartel label and yet

still providing interfirm coordination on pricing represents another form of

organization learning. In “The Sugar Institute Learns to Organize Information

Exchange,” David Genesove and Wallace P.

Mullin study a “technologically stagnant industry” (p. 106), U.S. sugar

refining from 1928 to 1936, where the learning question shifts away from

production technology to organizational innovation in interfirm information

sharing. The Institute did learn to organize and collect data while insuring

members’ confidentiality, thus allowing for “increases in the correlation of

firm decisions” (p. 133) as price and sugar stock data became available to all

members of the Institute. Not incidentally, the availability of common

information also precluded secret

price concessions.

A Supreme Court decision ended this particular form of organizational learning.

Kazuhiro Mishina’s paper on “Learning by New Experiences: Revisiting the Flying

Fortress Learning Curve” is the only paper in the volume that approaches

learning in its familiar learning curve form and the only one to draw on

econometrics in its analysis. The magnitude of the productivity increase in

Boeing’s B17 production from 1941 to 1944 was huge: the direct labor hours per

airframe dropped from 142,83 7 to 15,316, falling to nearly a tenth of the time

required at the beginning of the production run. What accounted for a

productivity increase of that size? Mishina rejects “the learning-by-doing

hypothesis that holds direct workers or engineers as the learning agent” (p.

175). Instead he finds the answer in the reduction in through-put time and “the

operating know-how that enabled it” (p. 175). No direct econometric test of

that conclusion is possible and the absence of learning taking place by direct

labor and engineers appears improbable. Not surprisingly then, Ross Thomson,

in his comment raises the question of whether the learning involved might have

been a cumulative process in which output growth, productivity growth, and

prior learning interacted.

The next two essays are intensive examinations of organizational

decision-making/learning. David Hounshell focuses on one critical meeting of

the Ford Motor Company Executive Committee on December 2, 1949. This is the

“Whiz Kid” era at Ford and Hounshell sees the meeting as defining a turning

point in Ford’s strategic course since the meeting reversed Ford’s strategy of

a decentralization of production. Hounshell asks how such a reversal came

about, explores several hypotheses, but concludes he can do no more than

speculate on the mechanisms that might have accounted for the Executive

Committee’s about-face on strategy.

Daniel M.G. Raff and Peter Temin’s essay also examines strategy decisions

within a firm, in this case two marketing decisions made by

Sears, one in the 1920s and a second in the 1980s. At the earlier date,

retailing channels were expanded from mail order operations to own retail

stores; in the latter case, financial services were added to the product array

in its retail stores. Again, as with Ford, the question is how these decisions

were made and whether they relied on the firm’s learning of its corporate

strengths and accurate perceptions of its competitive advantages in evolving

markets. Differences in leadership capability in the two eras were, in Raff

and Temin’s view, the critical variable at work. Leadership in the 1920s

focused on an attractive market that could be tapped by

“exploiting [the] firm’s existing competitive strength” (p 246). The 1980s

leadership failed in both learning the market and in recognizing Sears’

competitive strengths.

Perhaps of most interest methodologically is Leslie Hannah’s test of whether

the “lump of corporate capability” (p. 257) presumably possessed by the giant

corporations of 1912 grew or declined by 1995. Survivability to the 1995 date

is the first test, but Hannah also poses a second: among the survivors, how did

a given firm’s growth in market equity capitalization compare with a

price-deflated market index? Using those tests, Hannah notes that

“disappearance or decline was nearly three times more likely among the giants

than growth” (p. 271). Observing that high incidence of corporate decline and

failure, he turns to a consideration of what types of

“corporate architectures” and strategies

allowed large firms to “retain their position, continue to add value, and

expand their capabilities” (p.

270).

In the final essay, Gavin Wright questions whether learning should be equated

solely with changes in total factor productivity. Rather, when looking at the

learning associated American economic growth in the nineteenth century, the

learning “was substantially a national network phenomena” (p. 296). As such,

“collective national learning may reside just as much in the discovery,

expansion, and accumulation of the factors of production as in their

productivity” (p. 296). To develop his point, he examines the U.S. mineral

industry, “one of the earliest and largest American technological networks,”

(p. 307) and the development of chemical engineering as it changed the way in

which chemical knowledge was acquired.

A collection of learning-by-doing studies as diverse as these serve to expand

definitions of the forms of learning. Can one measure the learning taking place

or generalize from the case studies, as Leslie Hannah and the editors attempt

to do? The answer would appear to be: with considerable difficulty. The problem

lies not only with the diverse definitions of learning employed, but also with

the difficulty of devising any empirical measures of the learning taking

place. Once one moves beyond the patent data of Lamoreaux and Sokoloff or the

production data of Mishina, measurement is elusive. One test would appear to

be success in the marketplace,

perhaps indicated by firm size and survivors hip – a measure that Hannah

attempts to make explicit. Market success may be an appropriate measure, if the

firm’s organizational capability, its use of patented technologies, or its

“ability to collect and use information effectively”

(p. 15) represent the major forms of learning occurring and can be linked to

market outcomes. However, as Bruce Kogut points out in his comment on Hannah’s

paper, there are more variables involved. “… a firm’s duration is contingent

on the evolution of its broader competitive and institutional landscape. This

broader landscape consists of firms, workers (sometimes organized in unions),

governments, political interests, research centers,

suppliers and buyers, idea merchants, and, of course, mechanisms of financial

intermediation and corporate governance” (p. 289). With that array of

variables at work, it may be that business and economic historians will not be

able to move significantly beyond case studies in examining these larger forms

of organizational and national learning. Or, as Leslie Hannah resignedly puts

it for the large corporation case: “To date, … we have made great strides in

storytelling, but a clearer, surer recipe for sustained success for large

corporations has remained elusive” (p. 270).

Henry A. Gemery is the author of “The Microeconomic Bases of Short-Run

Learning Curves: Destroyer Production in World War II,” (with Jan Hogendorn) in

Geoffrey Mills and Hugh Rockoff, editors, The Sinews of War:

Essays on the Economic History of World War II, Ames:

Iowa State University Press, 1993.

Subject(s):History of Technology, including Technological Change
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Domestic Goods: The Material, the Moral, and the Economic in the Postwar Years

Author(s):Parr, Joy
Reviewer(s):Brush, Pippa

Published by EH.NET (February, 2000)

Joy Parr. Domestic Goods: The Material, the Moral, and the Economic in the

Postwar Years. Toronto/Buffalo/London: University of Toronto Press, 1999.

x + 368 pp. Appendices, notes, illustration credits, and index. ISBN

0-8020-7947-4

(paper), $21.95; ISBN 0802040977 (cloth), $60.00

Reviewed for H-Business and EH.NET by Pippa Brush, pmbrush@ucalgary.ca,

Calgary Institute for the Humanities, University of Calgary

“Getting and Spending…”

Joy Parr, in the introduction, describes her

book Domestic Goods as “an archeology of the material, moral, and

economic choices and constraints which formed Canadian commodity culture in the

two decades after the Second World War” (p.17). The title proclaims Parr’s

focus: she constructs her study

around the choices Canadian consumers made with regard to the furniture and

household appliances they bought – or chose not to buy, as in the case of

automatic washing machines [1] – in the decades of increased prosperity and

stability that followed the

austerity made necessary by the events of the war years. Her description of the

book’s project points to its methodological framework: Parr carefully and

painstakingly brings to light often-overlooked interrelationships between

female homemakers and male

designers and manufacturers, and places those complex and often contestatory

relationships within the context of governmental economic policies and the

postwar process of rebuilding the nation and securing its future stability. In

doing so, she offers a detailed and nuanced critique of Canadian material

culture from the end of the Second World War to the early 1960’s, and makes an

interesting and readable contribution to scholarship across a range of

disciplines and interests.

Parr’s project necessitates

the integration of a wide range of material and ideas but she ties her

discussion together through a series of questions which she presents early in

the introduction. While the list is rather too long to quote here, but includes

questions such as those that follow:

How much does contemporary

technology constrain how goods are made? […] How much can citizens talk back

to manufacturers and the state about domestic

goods? What can and do citizens do when, by gender, class, or nationality, they

have little influence over the shape of the material world in which they must

live? […] If householders are moved to practice what might be described as a

briskly accommodating resistance in their daily lives among goods, what makes

this resistance plausible and necessary? (pp.3-4)

The questions themselves are not simple and do not allow for any easy answers –

and Parr does not offer any. Rather, she leaves the questions with the reader

and asks him or her to reflect on them while reading. Even in the conclusion,

Parr does not attempt to answer the questions directly but points, instead, to

the complexity of the history she has presented and the implications it can

have, when carefully considered, for choices and practices today. Questions of

the material and moral, of consumption and resistance, of pleasure and

prudence, are brought together in the essays that follow Parr’s excellent and

engaging introduction, and they remain at the heart of the book – as well as

being questions that deserve further critical attention in other contexts.

Parr’s attempt to outline a specifically Canadian history of consumption for

the two decades following the Second World War presents an account that differs

from the two existing and contradictory accounts that have, she points

out, dominated and influenced understandings and readings of the patterns of

consumption in Canada. First, there has been a tendency to assume that Canada

was part of a North American picture that has “read postwar standards and

practices off the Marshall

Plan intentions for the entire North Atlantic, and […] naturalize[d] these

hortatory American norms as the intrinsic qualities of ‘consumer society'” (p.

11). Second,

there is the account that positions Canada within a colonial context,

conceiving of Canadian consumption as “‘characteristically more subdued,'”

to quote, as Parr does, British geographers Peter Jackson and Nigel Thrift,

and casting Canadians as “the most earnest and cautious among the ex-colonials”

(p. 267). Parr charts a middle path between the two, pointing out the

specificities both of the Canadian experience within the larger context of

North America and of the colonial legacy of Britain. Parr retains her focus on

the Canadian experience while still understanding and incorporating the

influences of Britain – for example, during the foreign exchange crisis of the

late 1940s – and of the United States with its dominant mass production and

very different government policies on consumption and the acquisition of

household appliances. But

she moves beyond these competing narratives of international influence to

address representations of Canadian society and behavior. At the same time she

acknowledges a tendency towards “prudence and responsibility” in the Canadian

buying public, she insists that her book is also “about sensual delights, the

pleasures of using tools well suited to the task, and about building and

defining in a time when options might have seemed few and foreclosed” (p. 267).

This is a tricky balance and Parr, for the most part,

manages to maintain it both skillfully and convincingly.

The two decades following the Second World War were characterized, Parr

suggests, by political and economic concerns with shoring up heavy industry and

building strong export markets in order to rebuild the Canadian economy after

the changes wrought by the war. Deliberate decisions to focus on building a

strong national community, with investment in the welfare state and a

commitment to income redistribution, as well as to delay the gratification of

already deferred individual wants through limits on the production of household

goods and appliances, meant that the experience of Canadians in the postwar

years was very different to the experience of Americans whose government

actively encouraged consumerism. As Parr makes clear in her chapter on the

wartime economy, “[American] government propaganda” promised that “postwar

homes would be stocked with ‘all things material in a brave new world of

worldly goods'” (p.31); Canadian government policy, on the other hand,

“focused on private but social welfare spending as the means of averting

postwar calamity” (p.31). It was concern for future stability that guided the

Canadian political economy,

and Parr does a good job both of placing that in relation to the more

optimistic stance adopted south of the border and of suggesting how the

contrasting policies worked in relation to each other.

In Canada, debates in design and manufacturing circles over questions of

modernism and international aesthetics stood in uneasy relation to consumer

demand for stability and political concerns with reinforcing a distinct

Canadian nationalism. The National Industrial Design Committee (NIDC) took a

very different approach to questions of design, function, and manufacture from

either the Canadian Association of Consumers (CAC) or the Housewives’

Consumer Association (HCA), and Parr uses these differences of opinion and

priority between the NIDC and the CAC at several points in the book to

illustrate the frequent conflicts that arose between designers and consumers,

between style and function. Parr usefully makes explicit the gendered nature of

the histories of design, manufacturing, and consumption as she locates the

history of consumption as a history primarily of

women as consumers, in contrast to the male-dominated fields of design and

manufacturing.

Parr’s book is divided into three sections, each taking as its primary focus a

different aspect of the production, consumption, and representation of material

culture: “the first focus[es] most upon economic policy, the second upon

industrial design, and the third on household technology”

(p.10). She describes the book’s organization within those sections as “a

series of relatively distinct, chronologically ordered

essays,” and goes on to point out that each of the chapters “builds in

sequence, one on another”

(p.3).

Chapters One through Five are devoted to the Canadian government’s political

and economic policies, beginning during the war and continuing into the postwar

years of the 1940s, 1950s, and early 1960s. Parr reflects on consumer

organizations, on the role of government, on the failure of liberal economic

policymakers to acknowledge the “irrational” nature of the Canadian economy in

those years, and on other related issues including attitudes to consumer

credit and saving. In Chapter Two, which is for me perhaps the strongest

chapter of the book, she explores the differences between two exhibitions of

modern style and design that took place at the Toronto

Art Gallery and the Royal Ontario Museum in 1945 and 1946. Parr uses those two

exhibitions to open up her discussion of what “modern” was taken to mean in

relation to the design, manufacture, and consumption of household appliances

and furniture in postwar Canada.

Chapters Six, Seven, and Eight address questions of design and consumption,

with the focus again on modernism and the accommodations necessary to introduce

a modern or a so-called international style to Canadian women more concerned

with comfort and durability than with design principles. In Chapter Eight, she

moves on to discuss how Canadian women effectively remade the objects they

bought for their homes, and how their choices were often made without reference

to the criteria assumed to be appropriate or desirable by designers and

manufacturers.

Chapters Nine, Ten, and Eleven present a series of tightly focused case studies

of women’s purchase decisions: Parr looks at buying a stove, a washing machine,

and a refrigerator in the early 1950s,

late 1950s, and early 1960s respectively. Each one presents an interesting and

useful case study but Parr could, I think, have spent a little less time

reiterating some of the broader ideas already well established in the earlier

chapters and focused more fully on issues specific to the decisions and

appliances in question: for example, the idea that designers and consumers

rarely agreed on what constituted a desirable product is one with which the

reader is already very familiar and of which s/he needs,

by the final section,

only a passing reminder..

The strength of Parr’s study undoubtedly lies in her ability to locate the

decisions of daily life (for example, the decision to purchase a specific kind

of washing machine) within a larger political and economic context without

losing the specificity of the experience itself. She deals with an enormous

range of material, from government policies and economic theory to sales

literature to interviews with individual women, and always maintains a coherent

and instructive narrative. In doing so, she constructs a detailed and

thoughtful history of everyday choices and practices, as well as of larger

questions of political economy, large-scale industrial production, the

aesthetics of design, and the role of gender in the acts of manufacture and

consumption. That it is located in the specificity of a Canadian context, while

taking careful account of different international influences and comparisons,

only adds to its usefulness, as the careful study of the local

helps illuminate our understanding of the global.

Parr succeeds in locating Domestic Goods within the context of existing

scholarship on the related histories of design, manufacturing, and consumerism.

In the introduction, she sets up her study in relation to other work and draws

from a variety of fields to construct her own reading of the complex

intersections between political economy, modernist aesthetics, manufacturing,

governmental organizations, and perhaps most importantly the lived experiences

of individuals and families. In her own words, Parr “puts studies of material

culture into unaccustomed company,

and therefore challenges certain disciplinary conventions” (p.3). In doing so,

she has produced an important text that has implications across a variety of

disciplines and sub-disciplines. Parr has also produced a work that challenges

us all to reconsider our own patterns of consumption and engagement with the

market economy in light of the questions she poses in her introduction, and to

work

on grounds of “reasoned and resisting hope”

to challenge the unquestioned supremacy of the market in the construction of

the world in which we now live (p.270).

Footnotes

[1] In Chapter Ten, Parr explores the fact that Canadian consumers were

noticeably

slower than American consumers to accept automatic washing machines. They

preferred, instead, the wringer machines that were considered outdated in the

United States. Parr explains this through “the traits of the Canadian

manufacturing system, the intricacies of Canadian plumbing, and the ethics of

Canadian consumer culture” (p.16).

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

Who’s Who in Economics (Third Edition)

Author(s):Blaug, Mark
Reviewer(s):Whaples, Robert

Published by EH.NET (February 2000)

Mark Blaug, editor, Who’s Who in Economics (Third Edition). Cheltenham,

UK and Northampton, MA: Edward Elgar, 1999. xx + 1237 pp. $350.00 (cloth),

ISBN: 1-85898-886-1.

Reviewed for EH.NET by Robert Whaples, Department of Economics, Wake Forest

University.

“I have learned a great deal about our profession from editing this book and I

cannot help feeling that even a casual reading of some of the pages will convey

a vivid sense of the amazing scope and spread of interests among practicing

economists” (p. vii), writes Mark Blaug in the preface to the third edition of

this valuable reference book. Taking up Blaug’s challenge, I sat down to

browse.

The volume includes short sketches on over 1000 living and 500 deceased

economists. The alphabetically listed entries contain data on date and place of

birth, current and past posts, degrees, offices and honors,

editorial positions, principal fields of interest, publications and principal

contributions. Most of the entries for the deceased economists were written by

Blaug and have been carried over from earlier editions. The

entries on living economists rely on information provided by entrants

themselves. Some entries cover about a page and a half. Most are shorter.

The principal decision made by the editor was who to include and who to leave

out. Following the procedure used in the second edition, Blaug has adopted a

thoroughly objective method for choosing the living economists in this volume.

Those included come from a list of the 1082 most frequently cited economists

publishing in about 200 economics journals over the years 1984 to 1996. After

all, “citations are the coinage of reward in academia”

(p. viii). This selection mechanism is a strength of the work, but also, as

Blaug acknowledges, potentially a weakness, since it overlooks those whose

contributions lie elsewhere.

Such an inviting book. Whose entry should be read first? Pondering this

question, I read the multiple prefaces and noted the appendices, which organize

the entries by principal field of interest, country of residence and country of

birth. Finally, I

decided that I would begin with Edwin Gay,

whom Arthur Cole once called “the first real American economic historian.”

Gay (1867-1946) was the first president of the Economic History Association and

a president of the American Economic Association. He was

known for his research on enclosures and was the dissertation advisor to a raft

of notable economic historians (including at least four who became presidents

of the EHA). Unfortunately, I was disappointed to learn that Who’s Who in

Economics has no entry for Edwin Gay. In fact, only three of the first

eighteen presidents of the EHA (Harold Innis, Herbert Heaton, and Alexander

Gerschenkron) have entries. Perhaps this entire generation of economic

historians fell through the cracks because they were not quite well enough

known to make the deceased economists’ list and not eligible for the

widely-cited living economists’ list either. Checking the other end of the

list-the more recent presidents of the EHA-I was disappointed again. Many of

the recent presidents of the EHA are missing as well. These include Richard

Sutch and Gavin Wright, whose papers and books appear so frequently on course

American Economic History course syllabi that they merited inclusion in

Historical Perspectives on the American Economy: Selected Readings

(1995, edited by Dianne Betts and myself).

One should not overstate the omissions, however. Who’s Who includes

biographies of about one-third of EHA’s presidents (including North,

Cameron, Landes, Fogel, Easterlin, Engerman, Davi d, Abramovitz, Morris,

Williamson, Temin, McCloskey, and Goldin). It also contains entries for

Adelman, Aldcroft, Bordo, Deane, Decanio, Feinstein, Finegan, Fishlow,

Ford, Furtado, Gallaway, Genovese, Habakkuk, Hannah, Harley, Heston,

Kindleberger, Lal, Langlois, Lazonick, Leff, Lindert, Maddison, Mayer,

Mayhew, Meyer, Mokyr, Officer, Pincus, Pomfret, Rosovsky, Rostow, Schwartz,

Sowell, Wrigley, and, I’m sure, a few others with substantial interests in

economic history whom I have overlooked. Four economic historians

(Calomiris, Chandler, Eichengreen, and Hatton) would have been included but

failed to reply to the editor. Moreover, the entries on the most widely-cited

economic historians are generally very informative, especially when the

entrant’s response extends to a page or more, as in the case of Richard

Easterlin, Jeffrey Williamson or Claudia Goldin.

Still, one should not understate the omissions either. There is clearly a need

for a reference work that performs the same function as Who’s Who in

Economics, but focuses on economic historians, especially those of past

generations, like Edwin Gay, who are in danger of being forgotten. Such a

resource would be considerably strengthened if it were searchable and available

online.

Thumbing through the

entries in Who’s Who in Economics does give a unique insight into the

concerns and findings of the world’s leading economists,

so I’ll close with some wise and/or provocative words, that may be of special

interest to economic historians. (I stumbled across these while browsing and

note that these comments are somewhat atypical in comparison to the fact-filled

entries submitted by most.)

Martin Bronfenbrenner (1914-94) who had considerable interests in economic

history (especially the development of Japan) and the history of economic

thought, wrote the following concerning his own “principal contributions.”

“My principal apology for the shallowness of my footprints on the sands of

time, professionally speaking, is that I never intended to become a

professional economist. Rather I am a perpetual student flitting between

fields,

sufficiently pessimistic about the real world to accept Academia as the best

available refuge therefrom, but regretting my failure to get started in

economic journalism. I maintain that there is no such thing as a pure

economist. Economics is adulterated on one side by the keeping up of facts,

statutes and court decisions, and on the other side by applied mathematicians

and computerologists ‘all dressed up with no place to go’. I

spent the first half of my forty academic years as a ‘what does it all mean?’

theorist among the factmongers and the second half as a historian among

computer-jockeys simulating ‘obfuscation functions” (pp. 161-62).

Michael Lovell, who teaches at Wesley an University, has published broadly

beginning with work on the role of the Bank of England as a lender of last

resort in the eighteenth century and moving to topics including the

methodological problems of pre-testing bias, seasonal adjustment and data

mining; the determinants of inventory investment; rational expectations;

teenage unemployment; the effects of an endogenous money supply on the business

cycle and forced saving; product differentiation; spending on public education,

the production of economic literature and the rate of depreciation of journal

articles; and the use of citations to predict the selection of Nobel Laureates

and rank journals, articles and departments.

He closes his entry by noting, “I believe that the range of topics reflects in

large measure the inquiring nature of the students whom I have been privileged

to teach but from whom I have learned more than I have taught.”

Robert Whaples is Associate Director of EH.NET and author of “A Quantitative

History of the Journal of Economic History and the Cliometric Revolution,”

Journal of Economic History, June, 1991.

Subject(s):Development of the Economic History Discipline: Historiography; Sources and Methods
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Money and the Nation State: The Financial Revolution, Government and the World Monetary System

Author(s):Dowd, Kevin
Timberlake, Richard H. Jr
Reviewer(s):Bodenhorn, Howard

Published by EH.NET (November 1999)

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Kevin Dowd and Richard H. Timberlake, Jr., editors, Money and the Nation State: The Financial Revolution, Government and the World Monetary System. New Brunswick, NJ and London: Transaction Publishers for the Independent Institute, 1998. vii + 453 pp. $39.95 (cloth), ISBN 1-56000-302-2; $24.95 (paper), 1-56000-930-6 (paper).

Reviewed for EH.NET by Howard Bodenhorn, Department of Economics, Lafayette University.

Kevin Dowd (Sheffield Hallam University) and Richard Timberlake (University of Georgia emeritus) bring together 13 essays, an introduction by the editors, and a foreword by Merton Miller, recipient of the 1990 Nobel Memorial Prize in Economic Science, all unified by an Austrian methodology. These authors believe that information and knowledge are dispersed so that centralized decision makers cannot possess the omniscience to effectively coordinate economic activity. True coordination or “catallaxy,” to employ Hayek’s preferred term, occurs through the operation of the invisible hand. While the Austrian approach is familiar enough to many, its application to monetary systems may not be. This book thus represents an important contribution because it “provides the essential framework for those willing to return to first principles in thinking about the role of monetary arrangements in economic life” (p. viii).

Money and the Nation State is divided into three sections. The first containing five chapters describing how the world abandoned a naturally evolving monetary arrangement (gold standard) for a government-controlled monopoly system. David Glasner (Chapter 1) walks us through the state’s involvement in money from ancient Lydia through Britain’s disastrous return to gold in 1925. Frank van Dun (Chapter 2) argues that money fell under state control through incremental expansion of the boundaries of sovereignty. Whatever becomes identified with the public interest or the common good quickly becomes a legitimate governmental activity.

Chapters 3 through 5 provide real insight into the mind of Austrian monetary analysts. Timberlake (Chapter 5 ), for example, reiterates Mises’s assertion that a gold standard acts as “an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs within the same class with political constitutions and bills of rights” (p. 179). Similarly, after detailing the gold standard, Britain’s interwar monetary machinations, Bretton Woods, and post-1973 developments, Leland Yeager (Chapter 3) concludes that all were “palliative policies of the usual variety; ” they were not “genuine commitment[s] by governments and central banks to currencies of stable purchasing power” (p. 101). Murray Rothbard (Chapter 4) summarizes by noting that these events ultimately plunged the world into a “chaos of fiat money, competing devaluations, exchange controls, and warring monetary and trade blocs, accompanied by a network of protectionist restrictions” (p. 155). All this seems like a lot to blame on modern monetary arrangements, and it is easy for critics to portray these writers as paranoid, conspiracy theorists, but a lot of what they have to say rings true and each makes a compelling case for his interpretation.

Section II includes four chapters that discuss the effects, intended and not, of central banks and modern monetary arrangements. Thomas Cargill (Chapter 6) recites a list of statutory changes in financial regulations in the post-Bretton Woods era. He argues that deregulation, while sometimes disruptive, was practically inevitable given the rapid advances in telecommunications and computer technologies, which opened the floodgates of financial innovation. Genie Short and Kenneth Robinson (Chapter 7) make the now familiar argument that financial safety nets, such as deposit insurance, generate moral hazard problems , which have the perverse effect of magnifying rather than eliminating financial instability. Alan Reynolds’ (Chapter 8) assessment of the International Monetary Fund’s activities is as unceasingly critical as any I have seen. He argues that the IMF doctors, like doctors of old, invariably prescribe the same wrong cure (the financial equivalent of purging and leeches) regardless of the patients’ illnesses. It is not surprising, then, that the IMF’s success stories are few and do not offset the devastation typically left in its wake.

Robert Keleher’s contribution (Chapter 9) on global economic integration provides a nice conclusion to the section. He posits that there are two broad approaches to increased integration: (1) a Keynes-gone-global approach; or (2) a classical Austrian-Hayekian approach. The former begins from the premise that governments can effectively coordinate economic activity, only now it needs to do so in an international setting. This implies a need for super-national organizations like the IMF, the World Bank, and the World Trade Organization because sovereign countries rarely relinquish control over domestic policy instruments even though most create international externalities. The latter, or Hayekian, approach suggests that coordination should occur at the micro level. Countries should not attempt coordinated monetary and fiscal policies aimed at manipulating the macroeconomy. Instead, they should eliminate tariffs, quotas, and other restrictions on the free movement of labor, capital, and commodities. Moreover, they should adopt consistent rules for such things as bankruptcies, intellectual property, and contracts. Consistent accounting and disclosure rules, too, would eliminate one level of uncertainty and promote cross-country economic harmonization.

The third section of Money and the Nation State contains four chapters that outline proposals for financial reform. Richard Burdekin, Jilleen Westbrook, and Thomas Willet (Chapter 10) provide a public choice analysis of several central bank reform proposals and conclude that central bank independence is critical. Kevin Dowd (Chapter 11) provides a blistering critique of European monetary union. While supporters of union have argued that the benefits of a common currency outweigh its costs, little supporting evidence has been provided. The move toward union, it seems, is more political than economic and is driven by French fears of German hegemony on the continent (p. 355).

Lawrence H. White (Chapter 12) reconstructs, in a modern context, Hayek’s 1937 proposals for optimal monetary arrangements. One proposal was for universal free banking; the other for an apolitical transnational central bank. Finally, Steve Hanke and Kurt Schuler (Chapter 13) offer a spirited defense of currency boards, which issue notes convertible into a reserve asset, usually a foreign currency, on demand at a fixed exchange rate. Currency boards do not accept deposits; they do not act as lenders of last resort; they do not guarantee commercial bank deposits ; they do not interfere in commercial bank portfolios, or engage in a host of other regulatory functions. Consequently, currency boards do not suffer from the moral hazard problems inherent in central bank and deposit insurance structures and are compatible with stable free banking systems.

Current debates on financial reform pit those with few shared ideological premises against one another. One side of the debate argues that rapid changes in telecommunications and computers, along with increased globalization and a quickening pace of financial innovation require greater regulatory efforts to deal with the developing complexities. The other side argues that recent and future innovations have and will occur too quickly and be so significant that no regulatory mechanism will keep up with them, much less reign them in. Moreover, many innovations develop to circumvent existing regulations. The latter camp, inspired by the Austrian approach to markets, argues that only market-driven discipline will be an effective promoter of financial stability. The contributors to this volume all begin from Austrian premises and trace the implication of those premises for modern monetary arrangements. Most show that intervention leads to sub-optimal economic outcomes, and many argue that it leads to usurpation of economic and political rights. In some cases, the point is overstated, but in some of the more reflective sections, the message is clear and powerful.

Marx and Engels argued in the Communist Manifesto that one of the preconditions for communism was centralization of credit in the hands of the state, by means of a central bank with an exclusive monopoly. While none of the contributors to this volume could convincingly argue that Marx and Engel’s precondition has been realized in any western-style economy, most would argue that central banking, by its very nature, entails the “fatal conceit” of central planning, one of the defining elements of socialism. Something to think about the next time you buy your morning coffee with a Federal Reserve note or, perhaps, your stored-value card.

Howard Bodenhorn is author of A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building due from Cambridge University Press in January, 2000.

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Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Global Export of Capital from Great Britain, 1865-1914: A Statistical Survey

Author(s):Stone, Irving
Reviewer(s):Edelstein, Michael

Published by EH.NET

(November 1999)

Irving Stone, The Global Export of Capital from Great Britain, 1865-1914:

A Statistical Survey. New York: St. Martin’s Press, 1999. xii + 430 pp.

$75.00 (hardback). ISBN: 0-312-21845-1.

Reviewed for EH.NET by Michael Edelstein, Department of Economics, Queens

College and the Graduate School, City University of New York.

This volume makes available one of the most important data sets for nineteenth-

and early twentieth-century world economic history-the annual money calls for

overseas securities issued in Great Britain, aggregated and cross-tabulated by

receiving country, sector of borrower, and type of security. This new data set

provides significant new quantitative information regarding the financial

development, national capital formation, industrial development, and balance

of payments for the principal capital importers of this era. Displayed in

sixty-seven tables,

the production of these data combine the successive efforts of Leland Jenks,

Matthew Simon and

the present author, Irving Stone, Professor of Finance at Baruch College, City

University of New York.

To date, students of the massive long-term capital outflow from Great Britain

in the late-nineteenth and early-twentieth century have had to rely on a

diverse and incomplete set of sources. Building on the work started in the

1930s by Leland Jenks, Matthew Simon published in the late 1960s the first

comprehensive annual time series of British new issue calls for overseas

securities, 1865-1914. Specifically, Simon supplied annual time series for (a)

the total of British money calls for overseas securities,

with breakdowns by (b) continent, (c) political status (independent vs.

British Empire), (d) climate and ethnic group (regions of recent settlement

, tropics, others), (e) sector of issuer (social overhead,

extractive, manufacturing), and (f) type of issuer (private, mixed,

government). Before his untimely death in 1967, the only national annual time

series to emerge from Simon’s research efforts was

a brief study of British new issues on behalf of long-term Canadian borrowers.

The value of Simon’s contribution rested on his efforts to surmount important

analytical and data problems. In particular, Simon decided to collect data on

money calls, whenever they occurred, not the nominal totals announced at the

date of first issue. Thus, he produced time series that were consistent with

the flow-of-funds methodology. Second, although the principal source of British

new issue data, The Investors’ Monthly

Manual, was thoroughly mined, the IMM was subject to reporting

errors and incomplete coverage. By consulting a much wider set of periodical

and other sources, Simon and his assistant, Harvey Segal, were able to correct

and substantially augment Jenks’

s original efforts. Third, he offered a more comprehensive treatment of

conversions, including only the “export conversions,” the conversions that

involved new money called for overseas borrowers.

The situation improved dramatically when Lance E. Davis and Robert A.

Huttenback (hereafter D&H) published Mammon and the Pursuit of Empire: The

Political Economy of British Imperialism, 1860-1912 (New York, 1986).

Starting with many of the same primary sources as Jenks and Simon, D&H produced

a new data set

covering both home and overseas new issues in Great Britain, 1865-1914.

Their tables displayed the total capital called up, as well as the book’s

principal political divisions (home, empire,

foreign), the empire (responsible governments, dependent colonies, India),

and each of these divisions by private vs. government issuers. D&H also

presented breakdowns by industry and type of government issuer, and industry

and continent. The advantage of the D&H data over the Jenks-Simon data was

their parallel construction of home and overseas new issue data.

They were also able to revise and correct the Jenks-Simon first pass at the

primary sources. Finally, the D&H data were grouped so that questions of

political economy and empire might be raised. Notably, D&H

presented this data in five-year periods, 1860-1864, 1865-1869, …. ,

1905-1909,

1910-1914. While quinquenial totals and averages are a good means to present

longer term trends, the absence of annual data meant it was not possible

to investigate longer

term trends with other statistical methods or shorter term (e.g., business

cycle) fluctuations, a fundamental characteristic of home and overseas new

issue behavior. Perhaps just as importantly, the D&H volume did not present

data by country.

The significant contribution of the statistical compendia under review here is

to present annual, country-specific money call data for the twenty-five

principal borrowing nations. Furthermore, the data are broken down by industry,

political status, climate and ethnic group, type of issuer, and type of

security. In an introductory essay Stone provides essential information on the

data sources and an excellent summary of the main patterns of money calls for

overseas borrowers. An appendix reprints Simon’s description of the key

analytical decisions that guided the data collection and aggregation procedures

employed by both Simon and Stone.

Note that the Jenks-Simon-Stone primary data sources have weaknesses-weaknesses

which Stone discusses in his highly useful survey of the rate and direction of

money raised for overseas borrowers. First, these data do not estimate the

amount of direct investment through retained earnings. Thus, only part of

overseas long-term financing is covered by the Jenks-Simon-Stone estimate s.

While this was not a major source of overseas funding for railroads and

utilities, it was not a trivial source of funding for foreign investment

businesses engaged in manufacturing, distribution,

finance, and other service sectors. Second, while these

data are an excellent estimate of monies raised from issuing securities, these

data do not give a precise estimate of the net value transferred abroad. Some

of the money raised stayed in Britain with vendors or the London accounts of

the borrowers. To date, in nearly all cases where independent balance of

payment data exist, the older Simon money call times series demonstrate similar

patterns in level and timing with estimates of net capital outflows derived

from the balance of payment data. Only research

with these new comprehensive Stone estimates will settle the extent of this

weakness.

It is my belief that many economic and financial historians of the late

nineteenth and early twentieth century will find this volume highly useful.

Historians of each

nation now have comprehensive, consistent, and comparative data on the

character and extent of long-term international finance raised in Great

Britain. It is also my strongly felt belief that with so much information on so

many nations, this statistical survey will probably disappear from libraries

very quickly unless reference librarians are alerted and told to place it in

their non-circulating reference collection.

Michael Edelstein is author of Overseas Investment in the Age of High

Imperialism. The

United Kingdom, 1850-1914 (New York, 1982) and “Foreign Investment and

Accumulation, 1860-1914,” in R. C. Floud and D.N. McCloskey

(eds.), The Economic History of Britain since 1700. Vol. 2: 1860-1939,

Second Edition (Cambridge, 1994).

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII