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Health and Welfare During the Industrial Revolution

Author(s):Steckel, Richard
Floud, Roderick
Reviewer(s):Craig, Lee A.

EH.NET BOOK REVIEW

Published by EH.NET (January 1998)

Richard Steckel and Roderick Floud, editors, Health and Welfare during Industrialization. National Bureau of Economic Research Policy Report. Chicago: University of Chicago Press, 1997. ix + 465 pp. $72.00 (cloth), ISBN: 0-226-77156-3.

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

One of the oldest and most persistent debates in economic history concerns the “standard of living” during the “Industrial Revolution”. Indeed, it is one of the few debates that both ante-date the Cliometric Revolution and has survived it more or less in tact; furthermore, the meaning of the terms themselves is not immune from controversy. In the past two decades a growing body of research focusing on biological indicators of Homo sapiens’ well being- a biological standard of living, if you will – since the eighteenth century has emerged. Two pioneers of that research, Richard Steckel and Roderick Floud, have put together a collection of essays entitled Health and Welfare during Industrialization, and as these things go in academic publishing it is probably as close as one can get to one-stop shopping on the subject.

The volume begins with an editors’ introduction to the various biological measures employed in the essays, and for the uninitiated this is a good place to start. That piece is followed by an excellent essay by Stan Engerman, who reviews the conceptual and practical issues involved in defining and measuring the “standard of living”. Depending on one’s pain threshold, one might recommend the essay to colleagues who uncritically employ components of the national income and product accounts in time series analysis.

The body of the volume contains nine essays covering various indicators, biological and otherwise, of well-being among eight countries: The United States (Dora Costa and Steckel), Britain (Floud and Bernard Harris) and the United Kingdom (Paul Johnson and Stephen Nicholas), Sweden (Lars G. Sandberg and Steckel), France (David Weir), Japan (Gail Honda), Germany (Sophia Twarog), the Netherlands (J.W. Drukker and Vincent Tassenaar), and Australia (Greg Whitwell, Christine de Souza, and Nicholas). The biological indicators, which are calculated for one or more countries, include mortality rates, life expectancy, and the body mass index (BMI), but perhaps the most useful measure, because of the information it conveys and because of its considerable availability over time and space, is human stature.

As the first industrial country, Great Britain is a particularly interesting case. While the British were tall by European standards in 1800, from the late eighteenth century to the middle of the nineteenth century the trend in average height was downward, suggesting a biological counterpart to the Kuznets’ curve. At least some groups in the United States, Australia, and Germany also experienced declines in mean stature. Although the timing and explanations vary dramatically across countries, they each correspond roughly with a period that might arguably be labeled as one of “industrialization”. Interestingly, Human Development Indices (HDI) series for Britain, the United States, and Germany do not show the same pronounced downturns as the heights. Since HDI generally includes some combination of literacy, per capita output, and life expectancy, this finding suggests some divergence between these measures and stature.

The other countries studied do not reveal the same trend in heights however, the way in which they avoided the externalities associated with industrialization varies from country to country. In France, for example, Weir argues that the relatively slow pace of urbanization and an increase in parents’ investment in their children’s health contributed to the steady rise in stature. In the Netherlands, Sweden, and Japan a combination of slow urbanization, high literacy, and late industrialization- that is after the germ theory of disease had motivated improvements in public health- ameliorated the externalities experienced by the early industrializers.

The volume concludes with a very useful summary by the editors. Specifically, Steckel and Floud compare levels and trends of five “socioeconomic indicators” (per capita GNP, stature, life expectancy, literacy, urbanization) between c. 1800 and c. 1950 for the eight countries analyzed in the other essays. Although some of the figures are, to put it generously, the product of creative calculations, the authors are careful to qualify their conclusions accordingly.

When offering an overall review of the essays in this volume it is difficult to separate them from the broader research agenda from which they were generated. I would say the essays (and the agenda) offer at least two major contributions and raise a set of related questions. The first contribution is simply that they offer more data. The second is that they offer a different approach to the standard of living question. While the former may not be controversial, the latter surely is, and there are those who might not welcome a new approach, or at least not this particular approach. Since Marshall, the principles of economics have rested on the foundation of individual optimization based on relative prices and subject to an income constraint. In these essay one must ask, What is being optimized? What are the relative prices? What is the income constraint? Of course the anthropometricians only need to address these questions if they see their research as a product of those principles. A sense of that need will no doubt vary from researcher to researcher, and to be sure, neo-classical control of the field is not carved in stone. One might argue that the anthropometricians have stated their case, and the intellectual marketplace will decide if that case is to become part of the canon. It is worth noting that in the introduction Steckel and Floud address these issues indirectly by referring to related neo-classical research in the health and development fields.

Whatever one’s views on the relative weights of the contributions versus the questions, it is safe to say that henceforth no one will be able to claim cliometric literacy or write knowingly on the “standard of living debate” without reference to the issues addressed in and raised by this volume. In that sense we are all anthropometricians now.

Lee A. Craig Department of Economics North Carolina State University

Lee Craig is Associate Professor of Economics at North Carolina State University. His paper, “Nutritional Status and Agricultural Surpluses in the Antebellum United States,” with Tom Weiss, is forthcoming in Studies on the Biological Standard of Living in Comparative Perspective, J. Komlos and J. Baten, editors, Stuttgart, Franz Steiner Verlag.

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Subject(s):Income and Wealth
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century

BFGoodrich: Tradition and Transformation, 1870-1995

Author(s):Kerr, K. Austin
Blackford, Mansel G.
Reviewer(s):Simons, Kenneth L.

EH-NET BOOK REVIEW

Published by H-Business@eh.net (December, 1997)

Mansel G. Blackford and K. Austin Kerr. BFGoodrich: Tradition and Transformation, 1870-1995. Columbus: Ohio State University Press, 1996. x + 507 pp. Tables, photographs, appendices, notes, and index. $30.00 (cloth), ISBN 0-8142-0696-4; unreleased (paper), ISBN 0-8142- 0697-2.

Reviewed for H-Business by Kenneth L. Simons, Royal Holloway, University of London

Insights from an American Industrial Experience

Blackford and Kerr’s history of B.F. Goodrich traces the development of the company as it produced a changing range of products from 1870 to 1995. Through this history, the authors provide insights into several universal themes about industrial competition and organization of American manufacturers in the 1900s. Blackford and Kerr make no attempt to generalize conclusions beyond the experiences of Goodrich, but merely provide scholarly descriptions of the company’s history in a way that addresses the universal themes. In American manufacture of automobile tires, B.F. Goodrich became the first producer when in 1896 it filled an order from the Winton Automobile Company of Cleveland. As automobile production expanded, Goodrich was well-placed to stay a leader in this profitable new market by branching out from bicycle tires and other rubber products into automobile tires. The company licensed key tire patents and helped set up the Clincher Tire Association and its system of production quotas. Yet the quotas spurred manufacturers with low allocated sales to develop alternative technologies. Worse, Goodrich management lagged in tire plant investment and improvement. By 1916, competitor company Goodyear surpassed Goodrich with a 21% market share in automobile tires, and Firestone too surpassed Goodrich by the mid-1920s. Although Goodrich hung on among the industry’s “big four”, its relative inattention to manufacturing meant that, from the 1920s on, high costs often plagued profits in the company’s tire operations. After World War II, despite sporadic major investments in tire manufacturing, profits remained elusive. In 1988, Goodrich sold its tire interests.

The company had other products to rely on, some in lucrative growth markets. After tires, a second key product was polyvinyl chloride, PVC. In experiments to improve the bonding between metal and rubber, company scientist Waldo Semon in 1926-1927 stumbled on a means to turn the polymer of vinyl chloride into a flexible, jellylike plastic. Managers did little to commercialize plasticized PVC until the late 1930s. World War II highlighted PVC’s advantages, as the military funded rapid construction of production facilities. A key initial use was the coating of electrical wires and cables. By around the end of the war, Goodrich apparently had a capacity to produce annually over 10 million pounds of PVC. By 1966, Goodrich’s output reached 260 million pounds, and by 1971, 456 million pounds. Other firms also produced PVC, including Union Carbide by 1941, but through 1955 the firms involved reaped high profits through “unspoken agreements to maintain prices” (p. 236). Goodrich did not attempt to bar competitors from the market using patents; in any case alternative patents could easily be gained via minor chemical variations. In 1955, Dow Chemical began selling a key raw material that previously had to be produced as part of the PVC manufacturing process. Entry of new producers yielded twenty manufacturers by 1958, and prices plummeted. The easy flood of PVC profits ceased, although Goodrich managed to maintain less striking profits by pioneering new uses for PVC and by developing the industry’s lowest- cost production facilities. Nonetheless, PVC as a commodity chemical became less attractive as a continuing line of business, and Goodrich sold most of its PVC operations in 1993.

Such juggling of product markets was typical for Goodrich, which began its existence in 1870 as a diversified rubber producer. By 1902 it produced rubber items such as bicycle tires, tubes and hoses, molded goods, druggist sundries, golf balls, and conveyor belts. >From its work on chemical additives (to make rubber longer-lasting and quicker to produce), synthetic rubber, and new means to use rubber, the company developed a range of chemical products that led to the formation in 1942 of a separate chemical division, and its reorganization as a wholly owned subsidiary in 1945. Provision of airplane tires, brakes, and other equipment beginning in 1909 led to a small aeronautics department in 1917, and eventually to an aerospace division. In addition to expanding internally, the company purchased firms in strategically related markets or with strategically key technologies. Especially from the 1970s on, executives used divestitures and acquisitions to reshape the company. In the 1980s and 1990s, Goodrich shed its mature markets, notably rubber products and PVC, in favor of two high-growth areas involving materials science: specialty chemicals and aerospace. The authors trace Goodrich’s growing pains, organizational change and continuity, and managerial strategy as the company mutated through different markets over time.

Other themes that recur at various points throughout the book include price collusion and antitrust investigation, reasons for and consequences of laboratory research, difficulties in capturing the monetary returns to important product improvements and patents, strategies in developing distribution networks, influence of personalities on corporate strategy and change, labor unions and strikes, and the thwarting of takeover attempts. These themes may not be addressed as deeply as many readers would like, and clearer thesis statements about them, and comparisons with typical American industrial experience, might have helped the authors focus their information gathering and presentation. However, the authors perhaps can be forgiven these weaknesses, since desirable information may be difficult or impossible to obtain. Moreover, the Goodrich story often provides thought-provoking insights on these themes. A startling insight of this sort is the role of US firms’ infighting over the new radial tire technology in contributing to those firms’ loss of market share to Michelin and other foreign competitors. When Goodrich realized through European subsidiaries that Michelin’s radial tire was an important advance, Goodrich developed its own version of the radial. However, its major competitors Goodyear and Firestone were not ready to produce radials. Goodyear characterized radials as being problematic and promoted its own “bias/belted” tires to customers, thus slowing development of radial sales in the US; moreover, major automakers would not install radials as original equipment on cars unless at least two large manufacturers could supply them. As a result the US manufacturers held back from investments in radials. Also, Goodrich blocked attempts by Goodyear to purchase firms in Holland and New Zealand that would have given radial technologies to Goodyear; again US tire makers’ move into radials was slowed. Earlier investments in radials could have helped defend against international competition by radial makers that eventually cut deeply into US firms’ sales.

One issue that is little addressed is the relative importance of in- house engineering work versus the purchase of equipment in lowering firms’ manufacturing costs. Blackford and Kerr portray Goodrich’s profitability troubles in automobile tires as resulting, seemingly most importantly, from its laggardliness in improving manufacturing processes. This portrayal seems reasonable given others’ findings on the subject [1]. However, the authors come across as implying that lowering costs was mainly a matter of purchasing new equipment, and they do not analyze the relative proportion of in-house engineering work required for cost reduction. (They do mention a specific case, converting tire building machines for radial tires, in which in-house conversion of equipment seems to have been less appropriate than purchasing new equipment. Nonetheless, this does not demonstrate that in-house engineering work was the less promising approach at other times or for other aspects of the manufacturing process, and it stills leaves open the question of engineering costs required to learn about and install equipment from suppliers.) Hard evidence about the size and activities of production engineering and related workforces is difficult to come by, so the contribution to cost reduction of equipment purchases versus in-house engineering remains an open question in economic and historical research.

The book is organized not by themes of this sort, but by chapters corresponding to historical eras, with subdivisions into a lengthy string of product categories. This layout is more prolonged than many readers will care to bear. Fortunately, the subheadings and index provide a means to investigate product markets and some key themes by reading selected chapters. And to their credit, the authors manage to write most of the subsections in a way that invites interest. In occasional instances, ambiguities make readers uncertain about what to believe (e.g., how specifically might Goodrich’s 1954 acquisition, the Sponge Rubber Company, have begun “to fail in the face of management controls imposed from Akron”, p. 225; in what manner did Goodrich’s 1971 divestitures of various rubber products and of its subsidiary Motor Freight cost “about $10 million”, p. 301). But such ambiguities are rare, a tribute to the care with which the book was written.

The research throughout appears scholarly and unbiased. Blackford and Kerr enjoyed full access to Goodrich’s company archive, record books from executive meetings, and other sources. Of course, they also draw on relevant books, trade journals, archives, and interviews. BFGoodrich funded their research, and the company’s chairman and CEO John Ong commented on drafts at the authors’ request, but Ong stressed to them that “the decision about what to say in the book was [the authors’], and [the authors’] alone” (p. ix). Publication via Ohio State University Press apparently was a mandate of the project.

Blackford and Kerr’s BFGoodrich is likely to interest not only persons concerned with BFGoodrich, and not only business historians, but also academics concerned with industrial organization economics, corporate strategy, and organizational studies, plus management practitioners more broadly. It could provide an interesting catalyst for discussion if used as a course text. More importantly, it is a catalyst for all readers to reflect on important themes of industrial experience.

Note: 1. For a general overview of factors affecting competition in US tire manufacturing, see French [1991]. Excellent early studies of labor productivity improvements in US tire manufacturing, and their correlation with the installation of new equipment, are by Gaffey [1940] and Stern [1933]. Regarding the nature of technological changes taking place in the tire industry’s manufacturing processes, and their relation to firms’ profits and survival, see especially Warner [1966] and Klepper and Simons [1997].

References: French, Michael J. The U.S. Tire Industry. Boston: Twayne Publishers, 1991. Gaffey, John D. The Productivity of Labor in the Rubber Tire Manufacturing Industry. New York: Columbia University Press, 1940. Klepper, Steven, and Kenneth L. Simons. “Technological Extinctions of Industrial Firms: An Enquiry into their Nature and Causes.” Industrial and Corporate Change, vol. 6 no. 2, 1997, pp. 379-460. Stern, Boris. Labor Productivity in the Automobile Tire Industry. Bureau of Labor Statistics Bulletin 585, Washington, D.C., US Government Printing Office, 1933. Warner, Stanley L. Innovation and Research in the Automobile Tire and Tire-Supporting Industries. PhD dissertation, Harvard University, 1966.

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Subject(s):Business History
Geographic Area(s):North America
Time Period(s):General or Comparative

Reforming Financial Systems: Historical Implications for Policy

Author(s):Caprio, Gerald Jr.
Vittas, Dimitri
Reviewer(s):Haupert, Michael

EH.NET BOOK REVIEW

Published by EH.NET (December 1997)

Gerald Caprio, Jr. and Dimitri Vittas, editors, Reforming Financial Systems: Historical Implications for Policy. New York: Cambridge University Press, 1997. $49.95 (hardback). 222 pp. Index, bibliography. ISBN: 0-521-58115-X.

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

Reforming Financial Systems is a volume of collected papers presented at a 1994 seminar entitled “Financial History: Lessons of the Past for Reformers of the Present.” The essays in this volume address a number of interesting questions that have long challenged financial historians. Any student of financial history will find at least one essay of interest in this volume.

The essays are contributed by leading scholars in the field, and the topics cover a wide geographical and historical canvas, encompassing a variety of financial systems and topics. They range from broad, historical overviews, such as the Forrest Capie piece on the evolution of central banking, to the more specific, such as Randall Kroszner’s discussion of free banking in Scotland as a model for emerging economies. All of the essays are fairly brief, thus they are not in-depth studies of the topic which they address, but they do serve as nice overviews of various topics, and all include useful bibliographies from which an interested reader can proceed. As a result, the book would serve well as a supplementary textbook in a financial history course.

The essays can be divided into three categories: general topics in banking, country-specific examples of financial institutions, and comparative studies. The first category includes the aforementioned Capie essay and one by Anthony Saunders and Berry Wilson on contingent liability banking. The second includes the Kroszner essay, Frank Packer’s historical overview of the prewar Japanese banking system, Sam Williamson’s study of the development of industrial pensions in twentieth century America, a case study of the U.S. securities market by Richard Sylla, and an historical overview of deposit insurance in the U.S. by Eugene White. The final category includes comparative studies of bank regulation in Canada and the U.S. by Michael Bordo, thrifts in the U.S. and Europe by Dimitri Vittas, and a look at universal banking in Germany and the U.S. by Charles Calomiris.

In their introductory chapter, the authors nicely synthesize the lessons to be learned from each of the essays. While covering a diverse selection of topics and geographical regions, they do have a common theme. They stress two general lessons for contemporary government authorities and financial reformers: diversification and proper incentives. Regulators and overseers need to insure in some way that financial institutions diversify their risks. As the editors correctly note, most banks- and banking systems- encounter solvency problems because they fail to diversify. While it seems rather obvious to students of financial history, officials focusing on short-run performance can overlook this important fact.

The essays in this volume illustrate the numerous methods of ensuring diversification that have been employed throughout history, ranging from competitive banking to unlimited liability to branch banking to holdings of international assets. What works in one banking environment will not necessarily work as well in another, a truism as far as historians are concerned, but a point not always appreciated by contemporary policy-makers. The point emphasized by the authors in this volume is that while the options are diverse, the lesson is straightforward: diversify.

Creating incentive systems that will induce proper behavior by bankers as well as depositors, is the second general lesson extolled in these essays. Again, a wide variety of incentive systems have been employed throughout history. This seems to indicate that just about anything can work- as long as it is properly employed. However, a word of caution to contemporary policy-makers is provided by the editors when they point out that “the temptation to draw lessons from history can be overdone. Sometimes history does not teach clear lessons, or stated differently, one has to be extremely careful in applying the so-called lessons . . . a better acquaintance with history is a necessary ingredient in this endeavor” (p. 3).

Each essay is followed by a transcript of the discussion that followed each paper presentation. I did not find these discussion summaries particularly enlightening. The transcripts are poor substitutes for actual participation in the discussion, and do not add much to the papers they follow. This, however, is a minor quibble, since you can always skip them. I think their main value is to serve as a memory jog to those who were at the conference, but did not take notes during the discussions.

Perhaps the most important and enduring lesson these authors offer contemporary policy-makers is that reform takes time. This advice is directed specifically to central bankers by Forrest Capie in his essay on the evolution of central banks, but as this collection of essays illustrates, anything worthwhile seems to be worth waiting for. It is an important lesson for government officials who are often guilty of focusing on short-run results for political reasons to the detriment of the long-run stability of the financial system.

This volume is sure to please financial historians no matter what their specialty. In addition, it should appeal to scholars of contemporary monetary regimes, especially those focusing on developing financial institutions. Finally, it should be required reading for all government officials involved with the regulation of financial institutions.

Michael Haupert Department of Economics University of Wisconsin- La Crosse

Mike Haupert’s research interests are financial history. He has published articles on the American free banking era, and currently is studying the history of financing municipal baseball stadiums.

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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

Escape from the Market: Negotiating Work in Lancashire

Author(s):Huberman, Michael
Reviewer(s):Wolcott, Susan

EH.NET BOOK REVIEW Published by EH.NET (December 1997)

Michael Huberman. Escape from the Market: Negotiating Work in Lancashire. New York: Cambridge University Press, 1996. xviii + 222 pp. $54.95 (cloth), ISBN: 0-521-56151-5.

Reviewed for EH.Net by Susan Wolcott, Department of Economics, Temple University and American University.

In Escape From the Market, Michael Huberman argues that even in the years before 1850 the textile labor market of Lancashire was not a spot market, but instead was characterized by a measure of worker autonomy. He brings together a great deal of the recent economic literature on labor markets and combines it with recent work on the social history of the Lancashire textile industry, much of it his own. The book is a useful summary of Huberman’s articles in this area.

Huberman has made many important contributions. The first is new data. These include output figures for one of the largest fine spinning firms in Lancashire, M’Connell and Kennedy; disaggregated British yarn production data; and refined and more complete measures of short-time working in the 1840s which illustrate that this practice was widespread at an earlier point in time than is commonly believed. What I found most intriguing about his analysis is the distinctions he draws between the labor markets in the coarse and fine spinning sections of the industry, and the somewhat overlapping categories of rural and urban. The “negotiating work” of the subtitle and the labor empowerment it implies refer primarily to the fine spinning sections, or what he calls the “primary sector”. He argues that in the coarse or “secondary” sector wages remained low and flexible because skill levels and management’s capital investments were low (at least until 1850, when the self-mover was more widely adopted). Labor’s disadvantageous bargaining position in the sector was further eroded because coarse spinning was predominantly located in the rural areas where the family was the work unit and management had an essentially captive labor market, thus harking back to the work of Gavin Wright on Southern US textile labor markets. Huberman also discusses the origins of the Lancashire lists- documents drawn up by labor and management which specified the payments required by yarn, machine and cotton type. These lists have an infamous history as an impediment to technological change. But this literature treats the lists as an exogenous factor. To my knowledge no one before Huberman has tried to consider the reasons for their creation.

Though the book touches on many issues affecting the Lancashire labor market in the first half of the 19th century, Huberman’s main theme appears to be that because of collective action by the male workers in fine spinning, management was forced to adopt a “fair management” strategy in the 1830s. The actions which brought management to their knees were the 1829 strike in the fine spinning sections, and the ability of workers to retaliate for “unfair” management actions by slowing down production. According to Huberman, such slowdowns were possible in the fine spinning sections because of the introduction of new technology (e.g. longer mules) with unknown maximum capabilities. To elicit maximum effort, management adopted a strategy of “fairness”. As described by Huberman, this strategy involved high and stable wages, and stable employment. To keep employment stable, management adjusted labor input through the use of short- time rather than layoffs, and when layoffs were necessary, applied seniority rules.

Huberman, however, goes further than the data support in ascribing market control to labor. Alternative explanations are dismissed or ignored. This is less of a problem when he is considering overt labor strategies of control. The power labor exhibited in the strike of 1829 is unambiguous, and labor’s role in the adoption of the lists marks another strong element in Huberman’s analysis. The problems lie more in Huberman’s attempts to infer evidence of labor’s day-to-day workplace control from the data.

One example of such a problem is Huberman’s attempt to show that management adopted stable wages in response to demand shocks after 1830. His theoretical analysis of this issue is sound. He argues that if managers have undertaken some type of implicit contract with workers then management would try to mitigate the variance of the wage over the course of the business cycle. Because they were not lowering wages, and consequently prices, in response to negative demand shocks, output would fall. Thus, in downturns, quantity would tend to vary more and prices less in the presence of such contracts than in their absence. In the empirical section, I expected him to stress differences in relative price and quantity variation in the fine spinning section- where he believes these contracts were adopted in the 1830s- and the coarse spinning sections- where he argues they did not exist until the end of his period (the sample stretches from 1822 to 1852). Indeed, the (1991) Explorations in Economic History article from which this section is drawn sets out a formal model contrasting wage and output variations in the fine and coarse sectors. But he does not find cross-sectoral differences. The relative price and quantity variations in the two sectors were virtually identical. In all sectors, throughout the time period, prices vary less than quantity in the “bad”, or below trend growth years, and in “good”, or above trend years, prices vary more than quantity. This Huberman takes as evidence of wage smoothing and so of “the fair wage policy”. Why? This result is not implied by the model he relies on. Further, it is a pattern seen across all periods, and all sectors, when his analysis would suggest that the “fair wage policy” was only extant in fine spinning, and then only in the post-1830 period.

On the whole, I did not find Huberman’s arguments concerning the adoption of “fair” wages and “fair management practices” convincing. But anyone must be convinced by his work that labor had at least some bargaining power over employers if for no other reason than workers could present a credible strike threat. Huberman also demonstrates that management was reluctant to layoff workers if for no other reason than a fear of losing trained labor. Huberman is successful in showing that the neoclassical paradigm of perfectly flexible labor markets was as inappropriate to early 19th century labor markets as it is to those of the late 20th century. Susan Wolcott Department of Economics Temple University and Department of Economics American University Susan Wolcott is author of “The Perils of Lifetime Employment Systems,” Journal of Economic History, June 1994 and “Did Imperial Policies Doom the Indian Textile Industry,” Research in Economic History (forthcoming).

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Subject(s):Labor and Employment History
Geographic Area(s):Europe
Time Period(s):19th Century

Making Health Work: Human Growth in Modern Japan

Author(s):Mosk, Carl
Reviewer(s):Kimura, Mitsuhiko

EH.NET BOOK REVIEW

Published by EH.NET (October 1997)

Carl Mosk, Making Health Work: Human Growth in Modern Japan. Berkeley: University of California Press, 1996. xv + 156 pp. $45.00 (cloth), ISBN: 0520083156.

Reviewed for EH.NET by Mitsuhiko Kimura, Department of Economics, Kobe University.

Anthropometric study is flourishing in economic history today. In this book Carl Mosk makes a solid contribution to that growing literature.

Mosk (Professor of Economics at the University of Victoria) begins by collecting and analyzing a set of anthropometric data for modern Japan (from the Tokugawa era to the mid-twentieth century). He examines height, weight and other related variables such as a composite index of these two (the body mass index) on the one hand and nutritional intake, public health and medicine, and labor input on the other. The second half of the book discusses Japanese economic history using the findings above. It is divided into three chapters on, first, the Tokugawa legacy, then the balanced economic growth between 1880 and 1920 and finally the unbalanced economic growth between 1920 and 1940.

The statistical data that Mosk has collected are not new; indeed, they are easily available and, except for the composite index, have been used commonly by researchers. But Mosk analyzes them in depth, thus clarifying social and economic factors affecting Japanese anthropometry since the Meiji era. This is a major contribution of this book. However, the main concern of Mosk in this book is not statistical analysis. Mosk’s goal is to develop a theory about Japanese economic history from a perspective of causes and effects of population quality represented by anthropometric characteristics.

Readers will find that Mosk has a wide and up-to-date knowledge of the literature on Japanese economic history and provides a good summary of it. This will help students who wish to have a quick review of the development of commodity and labor markets conditioned by the economic and social institutions of the Tokugawa regime and also patterns of agricultural and industrial growth, features of regional differentials, and government policies concerning modernization after the Meiji Restoration.

Mosk analyses secular improvements in net nutritional intake in terms of supply factors and demand factors in population quality. The former includes medical technology while the latter is “voiced through markets and social movements designed to assert the importance of the community over the market through the call for health-enhancing entitlements” (p. 59). Here “entitlements,” a term borrowed from A. K. Sen, means the legal right to resources that secure the quality of the human body- such as foodstuffs and public health. Using this conceptual framework Mosk puts more emphasis on demand factors than supply factors in explaining changes in population quality in modern Japan. This is an interesting thesis, but it seems to me that this theory needs elaboration because when Mosk talks about the supply of and the demand for population quality what he really means is sometimes ambiguous. For instance, he says that “the decline in fertility [during the Tokugawa era] tended to improve population quality on the supply side…[a]nd on the demand side the same households who by limiting supply enhanced quality also demanded greater work capacity and capabilities from their offspring” (p. 77). This statement will confuse many readers. In any event “supply of population quality” decided by households is a notion that is not readily understandable.

All in all, this book provides good material for Western students who are interested in Japanese economic history since the Tokugawa era and those who wish to gather anthropometric data for pre-war Japan or conduct cross-country studies in this field.

Mitsuhiko Kimura Department of Economics Kobe University

Mitsuhiko Kimura is Professor of Economics at Kobe University, Japan, specializing in the history of economic growth in Korea and Japan. He is currently working on understanding the causes of the economic disaster in North Korea from a long-term perspective.

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Subject(s):Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):Asia
Time Period(s):General or Comparative

Growth Triumphant: The Twenty-first Century in Historical Perspective

Author(s):Easterlin, Richard A.
Reviewer(s):Costa, Dora L.

EH.NET BOOK REVIEW

Published by EH.NET (August 1997)

Richard A. Easterlin, Growth Triumphant: The Twenty-first Century in Historical Perspective. Ann Arbor, MI: The University of Michigan Press, 1996. Pp. xiv + 200. $37.50 (cloth), ISBN: 0472106945.

Reviewed for EH.NET by Dora Costa, Department of Economics, MIT.

In this masterful synthesis, Richard Easterlin (Department of Economics, University of Southern California) draws on the disciplines of economic history, demography, sociology, political science, psychology, and the history of science to present an integrated explanation of the origins of modern economic growth and of the mortality revolution. His emphasis is on long-term factors and on similarities across nations. His book should be easily accessible to non-specialists and will give them a sense of why economic history can inform our understanding of the future.

Richard Easterlin convincingly argues that technological change underlies both modern economic growth and the morality revolution. Underlying this technological change is a set of procedures and attitudes that include reliance on experiments and observed facts. In the case of modern economic growth, this technological change should not necessarily be equated with industrialization, but rather is simply the introduction of new technology, including agricultural, in the economy. This technological change has produced certain commonalities in development, including the gradual acceleration in real per capita income growth, urbanization, and the growth of a white collar work force.

According to Easterlin, modern economic growth began before the modern rise in life expectancy because technological change in the physical sciences preceded technological change in health and medicine, simply because the conceptual state of the physical sciences was far more advanced. Easterlin argues that although modern economic growth may have increased resistance to disease (for example, by increasing food intake), it also increased exposure to disease. In contrast, in developing nations the mortality revolution has often preceded economic growth both because we know how to control disease (e.g. sewage and clean water) and because the necessary public health investments are inexpensive. Because urbanization created demand for public municipal services, he views the rise of government as a direct consequence of technological change.

Once mortality, particularly childhood mortality, fell, Easterlin argues that we moved from a society of high to low fertility. At first the increase in the number of surviving children caused fertility to fall after families realized that they could achieve their target number of children with fewer births, then the target number of children fell as children became more expensive thanks to advances in education, urbanization, and the introduction of new goods. The population explosion of developing countries should, therefore, slowly reverse.

Easterlin presents a very optimistic picture of the future, arguing that modern economic growth will spread to all countries of the world and neither declining population growth nor an aging population will lead to economic stagnation. We have the technology and many of the preconditions for economic growth, such as institutions for the accumulation of physical and human capital and the mobility of labor and capital, are already present in developing countries. In an example of the sort of long-run perspective that the book is best at, Easterlin shows that even the aging of the baby boomers will not produce a dependency burden that is high by historic standards.

Within this optimistic scenario, he sees two causes for concern. One is that the spread of economic growth shifts the balance of power to newer, more populous developing countries that do not share our commitment to democracy and human rights and this may produce political as well as military clashes. The other is that income cannot buy happiness and that despite previously unimaginable levels of affluence, material concerns are as pressing as ever. According to Easterlin technology will always produce new goods that we will want and, because people measure happiness in relative terms, they will forever be stuck on a hedonic treadmill.

It is this last point, “the triumph of material wants over humanity” that I found controversial and whenever there is controversy, the drawbacks of a synthesis become readily apparent. The reader wants to know more, wants further breakdowns of the data. Easterlin cites surveys that show that people in both the United States and abroad are no happier than they were twenty years ago despite increases in per capita income. He also cites surveys that show that personal income, family, and health are individuals’ primary concerns in all countries surveyed. But, what about recent polls showing that 48 percent of U.S. workers had either cut back on hours of work, declined a promotion, reduced their commitments, lowered their material expectations, or moved to a place with a quieter life during the preceding five years? What about the tremendous decline in market hours of work, whether measured in terms of weekly hours, increased vacation time or sick leave, or increasing number of years spent in retirement? As wages have risen so has the opportunity cost of these hours. The history of modern economic growth is not just one of increasing numbers of consumer goods, but also one of increasing hours of leisure. These hours of leisure have enabled more and more individuals to achieve some kind of self-realization. There will always be individuals who will not know what to do with their free time or spend it in ways we disapprove of, such as watching television. But, what of the individuals who work in order to be rock climbers or who teach classes in order to do research? I am not surprised that when surveyed individuals state that they would like more money (more is always better than less), but the question that we must ask is whether they are willing to trade off time that could be spent with family members or in enjoyable pursuits for more material goods and how this trade-off has changed over time.

Dora L. Costa Department of Economics Massachusetts Institute of Technology

Dora Costa is author of a forthcoming (1998) book, The Evolution of Retirement: An American Economic History, 1880-1990.

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

Farm and Factory: Workers in the Midwest, 1880-1990

Author(s):Nelson, Daniel
Reviewer(s):Sundstrom, William A.

EH.NET BOOK REVIEW

Published by EH.NET (August 1997)

Daniel Nelson, Farm and Factory: Workers in the Midwest, 1880-1990. Bloomington, IN: Indiana University Press, 1995. 258 pp. Includes tables, bibliographical references, and index. $29.95 (cloth), ISBN: 0-253-32883-7.

Reviewed for EH.Net by William A. Sundstrom, Department of Economics, Santa Clara University.

Daniel Nelson’s latest book delivers both more and less than it promises. On the plus side, the book is actually more general than the title would suggest, providing a useful survey of much of the literature on twentieth-century American labor history. Although many of the book’s examples are drawn from midwestern industries and cities, much of the literature cited is not geographically specific. In this sense, the book is a worthy sequel to the author’s Managers and Workers (University of Wisconsin Press, 1975), updating, extending, and broadening that book’s coverage. The greatest virtue of Nelson’s work in the past has been his attention to both the management and labor sides of the employment relationship, as well as the political context of industrial relations. Farm and Factory shares these virtues, synthesizing a wide range of secondary sources from labor, social, and economic history. The book contains less original historical research than many of Nelson’s previous efforts, although it makes extensive use of his own work on such topics as company unions and rubber workers.

On the minus side, Nelson (Department of History, University of Akron) never makes a compelling case for the distinctiveness of the Midwest’s labor history, which would justify the book’s regional focus. Admittedly the region’s industrial composition was unlike that of other regions, with its unusual mix of agriculture and heavy industry. But Nelson claims that these quintessential midwestern sectors had relatively little influence on each others’ labor history. Thus it might be argued that the evolution of the institutions and politics of labor in the Midwest was largely shaped by industry rather than location. Contrast this implication of Nelson’s book with Gavin Wright’s Old South, New South, (Basic Books, 1986) another book about a regional labor market during the twentieth century. In it, Wright depicts a southern labor market that was truly unique in its institutions and development, in large part because of its isolation.

This is not to deny that Nelson has identified some aspects of the midwestern labor experience that had a unique regional character. The socialist and farm-labor political coalitions associated with such names as Robert LaFollette, for example, appear to have been a homegrown midwestern phenomenon; but at the same time, Nelson notes that such coalitions were short-lived and had little lasting influence. Nelson also notes that union density was higher than average in the Midwest, which became the crucible of the twentieth-century industrial union movement. Again, however, it is not clear whether this was the product of some peculiarly midwestern predisposition toward unionism or merely an accidental consequence of the region’s industrial structure. Such a question could be sorted out with careful comparative analysis, contrasting the industrial union movements in the Midwest and, say, the Middle Atlantic regions for similar industries. But Nelson’s book provides very little in the way of comparative research.

Farm and Factory is arranged in sections chronologically. The first period covered, 1880-1900, sets the stage. In 1880, about half of midwestern workers were engaged in farming, and farm employment increased in numbers over the next two decades. At the same time, the period witnessed a dramatic increase in the relative importance of industry. Because the demand for agricultural labor continued to grow, the industrial labor market depended largely on immigrant workers for its supply, rather than rural-urban migrants. The immigrant character of industrial employment was not, of course, unique to the Midwest at this time.

The book’s first chapter, on farming, includes the first installment of what was for me one of the book’s most fascinating recurring themes: the nature and evolution of women’s work. Nelson’s book demonstrates how much scholarship over the past two decades has been devoted to the area of women’s labor history. In the case of farming, Nelson describes the gender division of labor, how it differed across different farm products, and how by the second half of the century the increased complexity of the farming business (and perhaps the increased educational attainment of farm women) resulted in many farm wives assuming the role of business manager. Later in the book he examines the feminization of clerical work, and the postwar growth of women’s labor- force participation.

Nelson’s attention to clerical and service-sector labor is welcome, given the traditional emphasis of labor history on industrial work, but after a promising discussion of office work near the turn of the century in Chapter 3, the remainder of the book devotes only a handful of pages to the service sector and clerical or white-collar employment. No doubt this lacuna reflects shortcomings in the secondary literature that Nelson draws upon, as well as Nelson’s view that the character of office work was subject to less dramatic technological and institutional changes over the course of the century. Be that as it may, “farms and factories” are indeed the book’s central focus; the rest of the midwestern labor market is treated as a residual category that soaked up a growing share of the work force as employment in agriculture and industry shrank relatively and, eventually, absolutely.

Nelson’s history of labor and labor management in the mass production industries of the Midwest is fairly conventional. He highlights the role of the federal government in creating a political and legal environment that facilitated the rise of industrial unionism: the protective legislation of the NRA and NLRA and the subsequent wartime boost given to unionism by war production demand and government intervention. Nelson’s narrative of the sit-down strikes, the escalation of hostility between labor and capital during the thirties, and the rivalry between the AFL and CIO also suggests the importance of historical contingency in creating the system of labor relations that would persist over the decades that followed.

The book’s final chapters describe the brief postwar “golden age” of economic prosperity and relatively stable industrial relations between Big Business and Big Labor. Nelson provides a multifaceted picture of the demise of this golden age. Economic change was clearly one challenge: competition from lower-cost regions and foreign producers placed pressure on the region’s bread-and-butter manufacturing industries. To this conventional deindustrialization story Nelson adds another critical factor in the demise of union influence in the Midwest: rising racial tensions as the Great Migration brought large numbers of black workers into northern cities. The generally progressive stance on racial issues of the CIO unions alienated a large portion of the rank and file during the tumultuous sixties, with the consequence that “[r]ace, more than any other issue, undermined the unions’ carefully nurtured influence outside the workplace” (p. 187).

In his concluding chapter, Nelson traces the roots of the Midwest’s woes during the 1970s and 80s to various “institutional constraints” put into place beginning in the 1930s, which served to reduce the regional economy’s flexibility and innovativeness. “By the 1970s midwestern workers faced the worst of both worlds: some producers had become obsolete, while others continued to innovate in traditional ways (mechanizing operations, for example) that limited employment opportunities” (p. 203). This claim is provocative, and echoes some of the criticisms of U.S. institutional rigidities to be found in the work of authors like Sabel and Piore or Lazonick. But Nelson provides only the sketchiest defense of this view. Is it not possible that the Midwest was just a victim of bad luck, its economy more dependent on Rust Belt industries than other regional economies for largely unavoidable historical reasons? To shore up his claim of institutional failure, Nelson would have to show what other regions did differently to avoid the Midwest’s difficulties. Again, the absence of a comparative approach precludes his doing this.

In sum, Farm and Factory would serve as a solid textbook in twentieth century U.S. labor history, in spite of its regional focus. The coverage of union and nonunion developments, the evolution of personnel management, the role of politics and government, and nontraditional sectors and workers (including women and minorities) is, to my knowledge, unavailable anywhere else. This breadth of coverage, of course, comes at the cost of diminished depth. One particularly misses a compelling account of how the Midwest’s sad economic fate at the end of the century was the product of the region-specific historical evolution of its labor institutions and politics.

William A. Sundstrom Department of Economics Santa Clara University

William A. Sundstrom is Associate Professor of Economics at Santa Clara University. He is the author of numerous articles on the history of U.S. labor markets, including, most recently, “The Racial Unemployment Gap in Long-Run Perspective” (with Robert W. Fairlie), American Economic Review Papers and Proceedings (May 1997).

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Subject(s):Labor and Employment History
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Emigration from Europe, 1815-1930

Author(s):Baines, Dudley
Reviewer(s):Wegge, Simone A.

EH.NET BOOK REVIEW

Published by EH.NET (August 1997)

Dudley Baines, Emigration from Europe 1815-1930. New York: Cambridge University Press, 1995. 84 pp. $10.95 (paper), ISBN: 0 521 55783 6; $34.95 (cloth), ISBN: 0 521 55270 2.

Reviewed for EH.NET by Simone A. Wegge, Department of Economics and Business, Lake Forest College.

This book is part of the series commissioned by the Economic History Society entitled New Studies in Economic and Social History. As such, the author’s intent is to summarize the literature on nineteenth-century European emigration, covering both key findings and current debates, as well as unresolved questions. Professor Baines meets this objective in admirable fashion, always communicating his ideas on migration in a well thought-out manner and making them easily accessible to both historians and economists. Baines knows the data and the issues, but even more importantly what we do not know and what we cannot answer at present. Baines (Department of Economic History, London School of Economics) focuses most of his discussion on understanding the motivations of emigrants but also touches on issues related to immigration, such as the effects of labor inflows on economies of the destination countries, or the assimilation of migrants in their adopted homelands.

In the first few chapters, Baines lays out the main questions of the literature. Chief on Baines’ list is the issue of how to model and ultimately explain emigration behavior. Throughout the book Baines makes use of two models of migration to discuss emigrant behavior, the standard Heckscher-Ohlin model in international economics that explains factor mobility, and a “core-periphery” model from development economics, which states that as more advanced core countries further industrialize their demand for unskilled labor or unskilled migrants increases. Baines raises a very interesting question in his discussion of migration models: can one explain emigration with a single elegant model? Unfortunately not, as the author appropriately points out, “…one problem has been the ability of different models to obtain different but statistically significant results about the same group of emigrants” (p. 20). Baines blames this on a lack of proper data as well as the use of inappropriate models.

A heavier dose of micro models could have been added to the presentation of the material. Oded Stark’s work on the microeconomics of migration comes to mind, particularly his emphasis on risk-avoidance, family decision models, and relative-deprivation as motivation for mobility. Still, Baines encourages readers to view migration more generally as an economic decision at the individual level: whether an individual decides to emigrate or not depends on how he perceives his economic options at home and abroad. Migration models at the individual level also help us to understand how emigrants are self-selected. The historical evidence shows that emigrants are self-selected on the basis of occupation, gender, and most importantly, on the basis of youth.

Further, Baines believes that the role of information is crucial to understanding the individual decisions of emigrants. What sorts of information did emigrants have about the various destination countries, and how did they view their prospects? All very difficult, if not impossible, questions to answer. Some of this we may be able to glean from emigrant letter studies. Emigrant letters, used to study the issue of information and motivation and ultimately chain migration, however, cannot be viewed as an unbiased source. Baines notes one of these biases, that some letters may have been written with the intent of encouraging the recipients to emigrate (p. 32). There are, however, additional biases. For example, emigrants only wrote home when there was someone to write to, thus leading the examiner of letters to uncover chains and perhaps over-emphasize the influence of chain effects on emigration behavior.

These sorts of observations buttress the author’s preference for studies of migration at the lowest level of analysis possible. Emigration rates, for instance, certainly vary by country but they also vary at the intra-country level as the author discusses in Chapter 4. Here Baines, as in his other writings, advocates breaking down the country emigration rates by region and preferably by village if they are to be understood properly. Baines refers to chain migration for a possible explanation, but may too hastily claim that regions with sustained traditions of high emigration rates were places where chain migration mattered the most (p. 28). I suggest that the reader defer to future research.

In contrast to the variance in rates, nations experienced both high and low points in the rate of emigration at similar points in time. Baines argues that there were enough differences between countries, and thus we must base this on the cyclical nature of the destination countries’ economies. The reader should note that the evidence for this (Brinley Thomas’ Migration and Economic Growth, Cambridge, 1973) is mostly for the decades after 1870. Here, Baines supports his argument on an examination of possible factors in European nations that might contribute to emigration, including high population growth rates, a fixed supply of land, political discrimination, and so forth. This exercise, he argues, does not help us to understand why more Europeans did not leave. Therefore, we should look at the various peculiarities facing potential emigrants in their hour of decision. Wage and unemployment rates are discussed, but according to the author future mileage might be gained by getting a hand on internal and return migration, as well as using cross-sectional rather than time series data. Baines should stress that we also need more studies of those who stayed.

Return migration is briefly considered in Chapter 5. Why did more people not return to their homelands? Indeed, more emigrants did return in the post-1860 era of cheaper transport. A more complete answer has to do with emigrants’ ages, the degree to which emigrants were economically connected with their family and community back in the homeland, and whether they were male. The percentage of men among the returnees was higher than among the emigrants (p. 36).

Emigration changed in other important ways over the nineteenth century, as Baines notes in Chapter 6. Early migrations tended to be composed of many families, while later migrations contained more single individuals. This is as of yet not completely understood, but Baines suspects that the decline in transport costs had the effect of making emigration decisions less final and more attractive to individuals who planned to return within a short period. But more simply, the drop in the real price of passage made emigration also more possible for a larger segment (younger) of the European population.

Baines discusses how industrialization over the nineteenth century made a difference for emigrants in Chapter 8. Many economists might think that little or no economic growth will induce high emigration rates, as the cases of Ireland and Italy demonstrate. But we also have England, which experienced heavy economic growth and high rates of emigration, making for a contrasting case study. Baines draws on the Scandinavian literature and his own work on Britain to expand this into a discussion on stage migration and internal migration. He argues that stage-migration is more important for Scandinavia than for England (p. 53).

Cross-country comparisons and almost two centuries of immigration experience provide a fertile backdrop in Chapter 9 for a discussion on the economic effects of immigration. In an environment where resources were abundant and laborers scarce, most destination countries did not experience a reduction in the rate of income growth over the historical period of analysis. When labor markets were affected, unskilled workers in industries with few economies of scale bore the brunt of wage declines, while “immigration allowed other workers to be upwardly displaced … into sectors that did have increasing returns” (p. 55). Hence, economies of scale, the ability of destination countries to increase investment, and the degree of segmentation of labor markets all played a part in determining whether immigrants were welcomed or disdained.

For the scholars and students wishing a concisely worded statement on the economic history of emigration, this is the book to read. Baines has a deep and thorough understanding of emigration and addresses many of the interesting and relevant questions in the literature. His intimate knowledge of the primary sources underlying emigration studies is well apparent in his advice to the reader about the biases and the quality of existing historical sources of migration data. Typical of other studies in this series, the bibliography contains short descriptions for many of the works cited, making for a helpful reference guide. Finally, those familiar with Baines’ other writings on emigration, in particular his book on British emigration, Migration in a Mature Economy (Cambridge, 1985), may wish that this little book had been quite a bit longer and contained even more of his insights into nineteenth century European emigration.

Simone A. Wegge Department of Economics and Business Lake Forest College

Simone Wegge is author of a dissertation entitled “Migration Decisions in Mid Nineteenth-Century Germany,” completed in May 1997.

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Subject(s):Historical Demography, including Migration
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century

Everyday Things in Premodern Japan: The Hidden Legacy of Material Culture

Author(s):Hanley, Susan B.
Reviewer(s):Honda, Gail

EH.NET BOOK REVIEW

Published by EH.NET (July 1997)

Susan B. Hanley. Everyday Things in Premodern Japan: The Hidden Legacy of Material Culture. Berkeley: University of California Press, 1997. xiv + 213 pp. $35.00 (cloth), ISBN: 0-520-20470-0.

Reviewed for EH.Net by Gail Honda, Department of Sociology, University of Chicago.

What do the objects which surround us–the food we eat, the clothes we wear, the homes we live in–tell us about how well we are living? How are they indicative of our health and physical well-being? Can we gauge our progress as a society by observing and analyzing the material world around us?

Susan B. Hanley, in her latest book on Tokugawa (1600-1868) Japan, culls a dazzling array of material evidence to argue that the level of physical well-being of the Japanese rose throughout the Tokugawa period, and that life in Tokugawa Japan was healthful relative to that in industrialized Europe. This high level of physical well-being, which existed on the eve of Japan’s industrial revolution (1868-1945), gave rise to a robust and literate labor force which enabled the Japanese to build a powerful industrial nation. Moreover, she argues, what we have come to know as everyday “traditional” Japanese material life, which was cultivated during the 250 years of the Tokugawa period, persisted through the middle of the twentieth century, and provided a foundation of stability which eased the often turbulent transition in government, the economy, and social structure.

With the discerning eye of a master novelist, and an equally engaging literary style, Hanley, Professor of Japanese Studies and History at the University of Washington, takes the reader on a tour of everyday life in Tokugawa Japan, all the while analyzing the objects of consideration and carefully piecing them together in her cogently honed argument. One can almost smell the rough-hewn walls and bare earthen floors of the early Tokugawa one-room commoner homes as she describes their cool, dark interiors and central gathering area for cooking and heating. By the end of the Tokugawa period, she writes, the typical commoner home had several rooms, raised foundations, wooden or tatami (rush mat) floors, and sliding paper doors which enabled the residents to open the interior to the sunshine and warm breezes of the outdoors. All of these changes, Hanley argues, led to a more healthful living environment which raised the level of physical well-being of the Japanese.

She defines the level of physical well-being as “the standard of living [defined as per capita income] plus ‘quality factors’ that can be positive or negative. . .Examples of quality factors are the quality and level of nutrition, incidence of disease, level of general health, number of children per family, the percentage of dependent persons, the size and quality of housing, the kind of heat available, and the many other aspects of life that affect our physical well being” (pp. 10-11). Hanley then analyzes the quality factors by examining what she calls material culture, or “physical objects that people use or consume in their everyday lives, most of which are either made or else natural objects put to specific use by people. . . [She] concentrate[s] on what are considered the basics: food, clothing, and shelter, and concomitant aspects such as hygiene and sanitation. The artifacts of daily life reveal use of resources, the level of technology, how people cooked, what kind of houses they lived in, and levels of comfort, sanitation, and health–in short, how people lived” (p. 12).

Specifically, Hanley finds that Tokugawa Japan’s material culture gave rise to many positive quality factors which elevated the the Japanese people’s physical well-being to a level higher than the standard of living alone would indicate. To cite a few examples of quality factors from the many intriguing ones she presents: the daily 1900-calorie Tokugawa diet of grains, vegetables, and soybean products was probably not only adequate for the body stature of people at the time (army recruits had an average height of 5’4″ in the late-nineteenth century), but was comparable to the late-nineteenth century English commoner diet of bread, porridge, biscuits, vegetables, milk, cheese, and lard. With regard to personal hygiene, Hanley points out that regular bathing was not an important part of Western culture until the nineteenth century, whereas in Japan accounts of public baths and references to bathing regulations indicate that bathing was a widespread custom by the eighteenth century. The Tokugawa water supply and sewage system were also quite healthful relative to systems in Europe because of the custom of collecting urine and night soil for fertilizer. Rather than allow human waste to collect in cesspools where excrement could seep into the subsoil, or to be flushed into rivers which fed into the drinking water supply, as was commonly done in the West, the Japanese assiduously collected, then bought and sold human waste and thereby avoided the problem of water supply contamination. As a result of many of these positive quality factors, life expectancy in Tokugawa Japan, Hanley demonstrates, was similar to that of nineteenth century Europe.

Thus, Hanley’s book is a valuable contribution to the literature in economic history, Japanese history, and historical demography in four primary ways: first, it offers plausible reasons and solid evidence for Japan’s success in industrializing beginning in the late nineteenth century; second, it stimulates cross-cultural comparisons by presenting evidence which can be reasonably compared across countries; third, it provides insight into and information on the everyday life of Japanese commoners during the Tokugawa period; and fourth, it discusses life expectancy, fertility control, and family structure, all important gauges of the level of physical well-being in Tokugawa Japan. Thoroughly researched and highly readable, Everyday Things in Premodern Japan will not only be widely used as a reference book, but will surely be savored by many whose interest will be held from cover to cover.

Gail Honda Department of Sociology University of Chicago

Gail Honda is author of “Differential Structure, Differential Health: Industrialization in Japan 1868-1940,” in the forthcoming book, Health and Welfare during Industrialization (University of Chicago Press), edited by Richard Steckel and Roderick Floud. In August 1997, she will move to the Department of History at the University of Hawaii where she will teach Japanese history and continue her research on economic development and health.

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

Small Firms in the Japanese Economy

Author(s):Whittaker, D. H.
Reviewer(s):Blackford, Mansel G.

EH.NET BOOK REVIEW

Published by H-BUSINESS (July 1997)

D. H. Whittaker, Small firms in the Japanese Economy. Cambridge and New York: Cambridge University Press, 1997. xii + 238 pp. ISBN: 0-521-58152-4

Reviewed for EH.Net by Mansel G. Blackford, Department of History, The Ohio State University. (blackford.1@osu.edu)

This densely packed volume is a very valuable contribution to our growing, but still limited, knowledge of small manufacturing firms in Japan. Whittaker examines the historical evolution and recent operations of small manufacturers in the Ota Ward of Tokyo, one of Japan’s leading industrial districts. Throughout his account Whittaker compares the companies of Ota Ward to the development of small manufacturers elsewhere in Japan; and in his penultimate chapter Whittaker, a Lecturer in Japanese Studies and Senior Tutor at the University of Cambridge, offers a revealing comparison of what has taken place in the Ota Ward to the development of small manufacturers in Birmingham, the United Kingdom.

In his first three chapters Whittaker presents a broad overview of how Japanese policymakers have looked upon small manufacturers, the formation of industrial districts in Japan, and the historical contribution of small industrial firms to Japan’s economic ascent. Whittaker succinctly relates the development of small industrial firms from the time of the Meiji Restoration of 1868 into the post-World-War-II period, carefully delineating fluctuations in that development to the growth of larger manufacturing firms. His balanced account calls into question facile assumptions sometimes made about the development of a dual economy in Japan. Small industrialists, Whittaker observes, have remained very important in recent decades. The world of small and medium-sized firms or SMEs (those employing no more than 300 workers), he asserts, is “every bit as representative of modern Japan as that of large firms” (p. 3). SMEs, Whittaker points out, accounted for just under three-quarters of Japan’s manufacturing employment and over half of its industrial output in 1993. Nor are most SMEs simply subcontractors for larger firms; in fact, over 40 percent do not subcontract at all. Instead, most SMEs have been, and remain, Whittaker shows, independent enterprises horizontally linked in industrial districts (Whittaker looks especially at the historical evolution of such districts in Gunma and Nagano Prefectures). Even so, governmental officials, Whittaker notes, long denigrated SMEs as archaic holdovers from feudal times, only very recently coming to see them as possible engines of economic growth.

Following his overview, Whittaker turns to a close examination of small firms (those with fewer than seventy employees, and usually with no more than twenty) and medium-sized companies (those with seventy to eighty employees) in machine industries (metal products, machinery making and equipment, transportation equipment, electrical machinery, and precision equipment) in Tokyo’s Ota Ward. Whittaker derived information about the firms from a wide variety of surveys, reports, articles, and his own interviews with the owners and workers in twenty of the businesses (he conducted the interviews between 1989 and 1995, visiting most of the businesses at least twice, once at the height of Japan’s “bubble” boom and once during the recession following its collapse). What emerges is a compelling picture of small manufacturing companies in present-day Japan and, in addition, useful insights into fundamental changes occurring in Japan’s economy. Whittaker takes a topical approach to his subject, devoting separate chapters to discrete issues.

Chapter 4 surveys the industrial development of Ota Ward, an area of fifty-four square kilometers in which 40,000 businesses employed 350,000 people in the early 1990s. From modest beginnings in the Meiji era, Ota Ward became one of Japan’s leading industrial districts during the interwar years and then especially after World War II. As large firms moved out of the ward in search of more land and workers in the 1970s and 1980s, small firms became even more important than they had earlier been. The number of factories in the ward peaked at 9,190 in 1983, declining to 7,160 a decade later. Most of these were small: only one-tenth had more than twenty employees in 1990, down from one-third thirty years earlier. Despite recent problems (dealt with in a later chapter), Ota Ward remains, Whittaker concludes, a viable entity: “The combination of flexibility and specialization within individual firms (as well as across firms) has in turn endowed the district with a flexibility, durability, and adaptability, as well as an upgrading dynamic” (p. 74).

Chapters 5 and 6 look at ties linking Ota Ward’s small industrialists with larger manufacturers in vertical subcontracting arrangements and, even more importantly, varied horizontal webs connecting the ward’s small companies to each other. Subcontracting, Whittaker shows, entails more than the exploitation of small firms by large ones. To be sure, elements of exploitation exist, but in many cases “the line between cooperation and coercion may be a fine one” (p. 90). Becoming increasing significant in the 1990s are horizontal ties–often very informal connections–of all sorts between Ota Ward’s small industrialists, creating some sense of community among them. One of the great strengths of this book is how Whittaker carefully explores those ties, a major contribution to an understanding of how work flows from firm to firm in industrial districts. Chapters 5 and 6 will be of special value for scholars interested in the dynamics of industrial district development. Upon reading them, I was struck by some similarities to the development of industrial districts in the United States, as described by Philip Scranton.

Chapters 7 and 8, by contrast, peer inside the small industrial firms to understand their internal dynamics. Whittaker is able to uncover the motivations of the founders of the small manufacturing firms, finding “a type of individualism at odds with the normal groupist image of Japanese society and industry” and a type of entrepreneurship that “is not of a swashbuckling, high-risk-high-return nature” but, is, rather, “craft or productionist” oriented (p. 127). Here, I was reminded very much of James Soltow’s findings about machinery makers and metal workers in New England. Innovative and skilled, the founders of Ota’s small industrial firms and their workers–many of whom went on to start their own firms–are, Whittaker finds, a dying breed. As these founders retire, few members of the current generation are taking over the helms of the small manufacturers. Disliking the long hours and hard work, the sons and daughters are turning to other pursuits, (as are the offspring of employees in the firms for similar reasons), leading to more small business closures than start-ups, and bringing into question the future of small industrial firms in Ota Ward and elsewhere in Japan.

In Chapter 9 Whittaker discusses the impacts of national and regional governmental policies upon Ota’s businesses and the involvement of the businesses in formulating those policies. He concludes that on balance “government support for SMEs is significant,” especially in the realm of financing, but that “the primary reason for the survival and upgrading of small firms in Ota and in Japan has been their own efforts” (p. 165).

Chapter 10 presents a comparative look at the development and present-day activities of small industrial firms in Birmingham. While small businesses in Birmingham and Ota Ward were similar in some ways, they shared different fates, with Birmingham’s “fall being spectacular” (p. 182). Misguided government policies, an unwillingness of workers to change their ways, mergers creating inefficient big businesses, and excessive competition among small firms are the salient factors cited by Whittaker for Birmingham’s industrial decline.

In Chapter 11 Whittaker directly addresses the issue of whether or not small industrial firms can be a prime source of economic revival in present-day Japan. Whittaker is no cheer leader for small business. In a balanced analysis, he concludes that both large and small companies will continue to play important roles in the future: “For better or for worse, large companies and their offspring will remain key players in Japan’s economy in the foreseeable future, even if their contribution to economic growth is muted. Rather than wishing them away, an important question will be what types of relationships can small, entrepreneurial firms forge with them” (p. 212).

Both scholars and policymakers can profit from reading this book. Historians, political scientists, and economists will benefit from this detailed look at the evolution and present-day operations of one of Japan’s leading industrial districts. Whittaker’s account is the most valuable analysis of small business in Japan currently available in English, complementing and going beyond David Friedman’s analysis of Sakaki and providing both more depth and breadth than Penelope Franck’s survey of small business development across the nation. Policymakers will learn a great deal about the effectiveness and lack of effectiveness of the Japanese government’s efforts to nurture small business development. In short, Small firms in the Japanese Economy is a sophisticated account which I hope will find a large audience.

Mansel G. Blackford Department of History The Ohio State University

Mansel Blackford is the author of A History of Small Business in America (New York: Twayne Publishers, 1991); and The Rise of Modern Business in Great Britain, the United States and Japan (Chapel Hill: University of North Carolina Press, 1988, second edition in preparation).

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