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Peaceful Surrender: The Depopulation of Rural Spain in the Twentieth Century

Author(s):Collantes, Fernando
Pinilla, Vicente
Reviewer(s):Rosés, Joan R.

Published by EH.Net (June 2012)

Fernando Collantes and Vicente Pinilla, Peaceful Surrender: The Depopulation of Rural Spain in the Twentieth Century. Newcastle-upon-Tyne: Cambridge Scholars Publishing, 2011.? viii + 202 pp. $60 (hardcover), ISBN: 978-1-4438-2838-3.

Reviewed for EH.Net by Joan R. Ros?s, Department of Economic History and Institutions, Universidad Carlos III.

Not only military history is written by the victors, but also economic and business history. Academic books and articles are mainly devoted to the histories of successful firms, industries, regions and countries. The losers receive much less attention than winners and sometimes are condemned for their reluctance toward economic development and resistance to the adoption of innovations. In sharp contrast, the authors of this book, Fernando Collantes and Vicente Pinilla from the University of Zaragoza, have published many contributions about one of the main losers of modern development: rural areas. It is an empirical regularity that, as a country develops, the countryside loses ground in comparison to cities, in terms of both population and relative income.

This well-written book examines the dramatic process of rural depopulation that took place in Spain during the twentieth century, particularly after the 1950. The aim of the authors is not censoring rural inhabitants for their inaction or indolence but explaining how they have been able to cope with the enormous economic and social changes that accompanied the process of rural depopulation. The book is divided into three main parts. The first provides theoretical, historical and comparative context for rural depopulation. Part two examines the causes for this process. Part three analyzes what happened with rural areas after the depopulation.

As Collantes and Pinilla persuasively argue, there were several forces behind rural depopulation, which often resulted in disparate experiences and outcomes. Urbanization and industrialization were the underlining prime movers of the process of rural change. This is easy to observe since urbanization and industrialization had an obvious parallel in the release of labor from the countryside. Demographic developments also had, nonetheless, their role in rural depopulation. In countries with low demographic dynamism, like the majority of European economies during the twentieth century, massive migrations from the countryside led to an absolute decrease in the amount of rural inhabitants. On the other hand, in countries with substantial natural rates of growth, such as many of today?s developing countries, the movements of labor from rural to urban locations were counterbalanced by birth rates, which implied that rural locations did not depopulate despite their release of labor. To complicate the picture, agrarian economic progress had no clear-cut consequences for rural population. When Smithian economic change takes place (that is, economic growth was based on increasing trade and specialization) rural population doesn?t necessarily decrease as an economy develops (this could be the case of Western Europe?s countryside during the Industrious Revolution).? However, when Schumpeterian innovations are implemented in agriculture (particularly the massive adoption of labor-saving innovations like tractors and threshers), the outcome is a decrease of the agrarian workforce and the subsequent release of labor. Finally, access to new consumption bundles (education, cultural amenities, health services and so on) also had a role in the allocation of population between urban and rural locations. So, rural locations with easy access to these amenities could maintain their inhabitants or attract former urbanites looking for a new lifestyle.??

In the rest of the book, the authors analyze the Spanish experience with rural depopulation in the light of this general framework. Rural depopulation arrived later in Spain than in other Western European countries due to the lack of ?pull? from Spanish industrial centers and the relative productivity improvements of Spanish agriculture prior to 1950. In other words, the income gap between rural and urban locations was not large enough to provoke a rural exodus. The situation was dramatically altered after 1950. Spanish agriculture began to adopt labor-saving technologies which dramatically reduced the workforce required to maintain production. Furthermore, a simultaneous expansion of many non-farm activities in rural areas was unable to cope with the increasing amount of underemployed agrarian workers. As a consequence, a massive rural exodus took place. Despite these economic transformations, and the subsequent substantial improvements in living conditions of rural inhabitants, a large ?rural penalty? persisted. Rural inhabitants had less income, infrastructure and services than urbanites. Therefore, many rural locations were unable to attract former urbanites and became (and will remain) practically uninhabited.??

There are many reasons to praise this volume. First, the book considers a topic practically untouched in economic history. Needless to say that urbanization and industrialization have received more attention by economic historians specializing in the twentieth century than rural communities and their (mis)fortunes. Second, Collantes and Pinilla do not identify rural population with agrarian activities but consider other non-agricultural activities in the countryside. Reluctance of the countryside to complete depopulation is more related to the development of these new activities than the subsistence of farming, which rapidly declined during the twentieth century. For example, in 1991, only one fourth of the rural employed population in Spain was still engaged in agriculture (p. 124). The failure to understand the diversified nature of rural economies hampers the relevance of many analyses of the European countryside which mechanically associate rural areas with farming. Third, the authors consider several facets of the process including what they label the ?rural penalty?; that is, the opportunity cost of living in the countryside instead of cities. As they forcefully argue, the ?rural penalty? is not only composed of income differences but also of the differences in labor opportunities and amenities among cities and the countryside. Interestingly, as the economy urbanized, the ?rural penalty? grew since services and jobs left the countryside and tended to cluster in the most densely populated locations. And, finally, the book has an underlining comparative narrative. The Spanish experience is not seen in isolation but is considered within a more ample framework. This makes their conclusions relevant not only for Spain?s economic historians but also for all researchers interested in studying the long-run development of rural societies.
?

Joan R. Ros?s (jroses@clio.uc3m.es) is Associate Professor and Director in the Department of Economic History and Institutions of Universidad Carlos III in Madrid, Spain.? He has recently published several papers related to Spanish regional development and the performance of factor markets. His most recent article on the topic (with Juan Carmona) appeared in the European Review of Economic History (?Land Markets and Agrarian Backwardness (Spain, 1904-1934),? February, 2012).

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (June 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economywide Country Studies and Comparative History
Urban and Regional History
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

Famous Figures and Diagrams in Economics

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

Published by EH.Net (December 2011)

Mark Blaug and Peter Lloyd, editors, Famous Figures and Diagrams in Economics.? Cheltenham, UK: Edward Elgar, 2010. xvii + 468 pp. ?112.50 (hardcover), ISBN: 978-1-84844-160-6.

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

As Avinash Dixit puts it, ?The only correct answer to the question whether economics is a science or an art is ?Both?? (p. 327). And perhaps our best ?art? is didactic ? the useful, but creative graphs and diagrams that we use in our articles, textbooks and classrooms. Mark Blaug (Professor Emeritus at the University of London and the University of Buckingham) and Peter Lloyd (Professor Emeritus at the University of Melbourne) have enlisted a stellar international cast of contributors to provide an account of the role and history of about sixty figures and diagrams used in economic analysis.? ?We have selected figures that have been prominent in the history of economic analysis and that are, with a few exceptions, still found in contemporary textbooks and research? (p. 1). If you use these diagrams in your research or teaching, you may learn a lot from this pithy collection.

The editors? introduction makes a compelling case that economists have shown great ingenuity in devising figures and diagrams.? While the use of these geometric diagrams ?as a device for discovery and proof has declined in recent decades? (p. 7), their effectiveness as an expository device ? especially in the classroom ? has endured.? Many of us reflexively think in terms of these diagrams, so it?s worthwhile to consider their origins and delve deeper into their assumptions and nuances.?

The volume includes 58 chapters in seven subsections ? ?Basic Tools of Demand and Supply Curve Analysis? (such as Marshall?s supply and demand graph, indifference curves and isoquants, substitution and income effects, and Engel Curves); ?Welfare Economics? (including the Harberger triangle, taxation of external costs, monopoly and price discrimination, duopoly reaction curves, and monopolistic competition); ?Special Markets and Topics? (including location theory, cobweb diagrams, and reswitching and reversing in capital theory); ?Basic Tools of General Equilibrium Analysis? (including the Edgeworth box, production possibilities frontier, and factor price frontier); ?Open Economies? (including the offer curve, the Stolper-Samuelson box; the Lerner diagram, and the four-quadrant diagram for the two-sector Heckscher-Ohlin model); ?Macroeconomic Analysis and Stabilisation? (including the IS-LM diagram, the aggregate demand aggregate supply diagram, the Phillips curve, and the Beveridge curve); and ?Growth, Income Distribution and Other Topics? (including the Solow-Swan growth model diagram, Lorenz curve, and Kuznets curve).

Among the chapters that should be singled out as worth reading are two by Yew-Kwang Ng (on the Harberger triangle and on the taxation of external costs) and especially Richard Lipsey?s on the AS-AD diagram, which will profit almost everyone who teaches an introductory macroeconomics course by reminding them about the foundations of this tool, which many textbook writers fail to convey.?

The volume has a bit of a nostalgic feeling in places.? The chapter on kinked demand curves concludes that ?despite its weaknesses, the KDC concept survives, at least in undergraduate texts in microeconomic theory? (p. 157).? I used to jokingly tell students that they should tear out and crumple up the textbook page or pages discussing kinked demand curves, but (alas?) they have disappeared from the textbooks I use.? Marc Nerlove?s chapter on cobweb diagram opens by saying ?Mordecai Ezekiel?s 1938 paper made ?The Cobweb Theorem? and his famous diagram well-known to every student of economics? (p. 184) ? surely this is not true of recent cohorts ? and concludes that ?the cobweb theorem is fatally flawed as a theory of agricultural price movements; it has little empirical relevance, nor is it supported by any empirical evidence? (p. 188).? Like the kinked demand curve, I suspect that part of the reason the cobweb diagram hung on in textbooks for so long is that getting students to work through it was simply good mental exercise for them ? even if the model had little bearing on reality. Textbooks? recent turn toward integrating both the latest news and the profession?s explosion of empirical research findings seems to have crowded out both the kinked demand curve and the cobweb model.? I see this as progress.??

Although the book is a terrific success, I spotted several errors in the diagrams themselves that the publisher needs to correct.? Figure 10.3 mislabels the horizontal axis as KL, when it should be K/L.? Figure 16.1 features an upward-sloping marginal revenue curve and a downward-sloping marginal cost curve.? In Figure 36.1 the contract curve fails to go through the origin in the lower-left corner.? Figure 50.4 is imprecisely drawn.? The AD1, SRAS1 and LRAS curves are supposed to meet at a unique point, but they don?t ? and the Phillips curve in the bottom panel slightly misses the mark too. Finally, despite explaining that ?these conditions imply that the Lorenz curve is represented in a unit square? (p. 432), Figure 57.1 (like almost every textbook illustration of the Lorenz curve) isn?t a unit square.

Robert Whaples is the editor, with Randall Parker, of The Handbook of Modern Economic History (Routledge, forthcoming).

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (December 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Manors and Markets: Economy and Society in the Low Countries, 500-1600

Author(s):van Bavel, Bas
Reviewer(s):McCants, Anne E.C.

Published by EH.NET (June 2011)

Bas van Bavel, Manors and Markets: Economy and Society in the Low Countries, 500-1600.? New York: Oxford University Press, 2010.? xiv + 492 pp. $140 (hardcover), ISBN: 978-0-19-927866-4.

Reviewed for EH.Net by Anne E.C. McCants, Department of History, Massachusetts Institute of Technology.

The search for the medieval origins of European economic growth over the long run has become something of a growth industry in recent years.? For example, since 2008 the field of economic history has witnessed the publication of major book-length contributions from Jack Goldstone, Jan Luiten van Zanden, Paolo Palanima, and Timur Kuran, all of which argue strongly that there are readily identifiable causal linkages that extend in a meaningful way from at least the High Middle Ages (or even earlier) to present realities.[1]? For anyone familiar with an earlier instantiation of medieval economic history this trend may be unexpected.? It wasn?t long ago that the medieval economy was interesting only in so far as it was quaint (serfs and their lords eking out a living in the autarkic wilderness of the manorial economy); or worse, as it was brutal (the Middle Ages as the quintessential locus of the Four Horsemen of the Apocalypse: Conquest, War, Famine and Death).? Or if one?s tastes were not quite so dramatic there was always the longue duree of the Annales School, in which a relatively stable world of European peasants ran more or less seamlessly from late antiquity to the eighteenth century.? Admittedly, the greatest spokespersons of this view were Early Modernists, but the Medievalists were never far behind.? Indeed, it wasn?t always easy to tell them apart, given that they depicted a world of little change other than the cyclical fluctuations in the climate and the ebb and flow of population within its fairly narrow neo-Malthusian bounds.? None of this suggested the likely emergence of a historiography in which modern economic growth (of the kind defined by Simon Kuznets in the middle of the twentieth century and countless followers since) could be attributed back to conditions that prevailed in the years around or even before 1000.

This is not to say that the modern, industrial world as something sui generis has disappeared from recent scholarship; not at all.? Yet another group of important books of recent vintage seeking to explain the extraordinary economic achievement of Western Europe in the last two and a half centuries either passes over the question of medieval origins,[2] or in one prominent case counters it explicitly.[3]?? Jan de Vries finds his explanation for the modern transformation rooted in the new, consumerist, decision making strategies of households in the sixteenth and later centuries, while Deirdre McCloskey turns instead to the new ethical attachments, and the rhetoric by which they were expressed, of a commercial and middle class culture, more or less about the same time period.? Joel Mokyr turns his attention just a bit later to the eighteenth century proper when Enlightenment ideas loom large for both the development of new methods for organizing economic activities and in the tools and techniques employed in production, that is to say technological change in the broadest sense of that term.? For all of these arguments, newness is the important point; what may or may not have happened in the Middle Ages is hardly decisive.? In Greg Clark?s analysis, it is completely irrelevant.? Any economic breakthrough that may have occurred prior to 1800 would have been so quickly dissipated in a Malthusian population response that according to Clark there is no discernible change in living standards prior to the end of the eighteenth century.? Indeed, this position requires what this reader sees as the ironic claim that the only way to increase welfare before the advent of the modern world was for human suffering to increase; i.e. when other people die, you could then benefit.? In any event, all trends break at 1800, much as they did in the older historiography that separated the medieval economy from what came later in every fundamental way.

This is a long introductory discussion that references a lot of books other than the one under review, for which I crave the reader?s indulgence.? In fact, Bas van Bavel?s Manors and Markets: Economy and Society in the Low Countries, 500-1600, is at least as important for what it contributes to the emerging literature on the medieval origins of modern European economic growth, as it is for its direct contribution to the more narrowly circumscribed economic history of the Low Countries.? I should add, however, that it does indeed offer a significant contribution to the latter.? It is rich in detail, documenting the substantial regional variation that existed there (shockingly so given the relatively small area overall), and the shifting locus of the most advanced areas across the thousand years covered by his survey.? The Meuse Valley figures prominently in the Carolingian period, followed by the flowering of urban and industrial inland Flanders during the High Middle Ages, and finally by mercantile and maritime Holland, and its coastal cities in particular, in a sixteenth century he still characterizes as the Late Middle Ages.? Van Bavel?s range of topics includes everything from soil types, hydrological projects, choice of grains between spelt, wheat, and rye, forms of lordship, technological innovations in agriculture and industry, labor contracting arrangements, the standard of living, biometric and material evidence from the archeological record, legal rights to land, the power of political authorities, the emergence of communes and guilds, processes of urbanization, the minting of coins, the location of trade routes and the products traded along them, disease, social unrest, household structure, and of course, the making of cloth.? This list is even so not comprehensive, but it conveys the right idea.? For any economic activity that took place in the medieval Low Countries, van Bavel?s book will be the go-to source for a long time to come.? This is especially helpful as much of the monographic work on which he relies for his own source material is written in languages not readily accessible to a global scholarly audience.?

As wonderfully rich as all this is, most readers of this review are likely to find the broader argument about the powerful continuities between the distant past and the present the most provocative aspect of van Bavel?s work.? Broadly speaking, his argument rests on three components.? First, he postulates that what he calls the ?socio-institutional organization of the economy,? more specifically ?the rules that govern exchange,? is the most productive explanation for economic development (p. 4).? Second, he argues that these factors can vary considerably across even relatively small areas.? Finally, he asserts that the socio-institutional characteristics of a community demonstrate remarkable persistence over the very long run.? Despite the seemingly logical intuition that beneficial institutions ought to be readily adopted by at least close neighbors, this seems not to have been in fact the case.? Instead, van Bavel finds evidence of substantial variation in the response of even micro-regions to similar economic opportunities and changes in climate or population, depending on the socio-institutional framework with which they began.? The attentive reader will of course worry about the problem of origins, but in this case much of the land in question was reclaimed from the sea or swamp over the long Middle Ages, so van Bavel can often build his case from the moment of the original period of settlement.? In the final analysis he finds in the medieval history of the Low Countries ?a clear demonstration of how great the degree of socio-institutional path dependency and long-term continuity in regional structures was? (p. 396).

It is his close attention to the remarkable complexity of regional variation that leads him to reject many of the other commonly proffered explanations for long term economic fluctuations found in the broader economic history literature.? So while he acknowledges the importance of technological change, climate shifts, and population movements for the specific experiences of economic actors, he is not willing to grant them explanatory power for economic development.? He argues that they are too blunt an instrument for parsing the remarkable geographic variation in outcome already witnessed in the Middle Ages.? For example he says of climate and demography that ?these factors often vary little over wide areas, whereas economic and social developments within these areas may differ widely? (p. 3).? Likewise with arguments about commercialization, which he admits seem especially attractive in discussing the history of the Low Countries, characterized as it was from an early date by large cities and unusually intensive trade networks.? All of these factors, ?climatic, geographical, demographic, and political,? had their impact of course, but those effects were ?directed? by the differing socio-institutional factors ?in divergent directions? (p. 387).? Not surprisingly, given this perspective, he also upends the more typical narrative about urbanization as a factor in economic development.? Instead of seeing urbanization as a cause of economic growth, he argues it was more likely the other way around.? Economic growth, especially as it concerned the agricultural sector, was the necessary precursor of rapid urban growth (p. 384).

What then were the critical socio-institutional factors to which we can attribute the largely successful economic development of the Low Countries, at least as measured by the standards of a wider medieval Europe?? The answer to this question is not always entirely clear.? But it seems safe to say that van Bavel gives particular pride of place to two factors:? ?a relatively efficient system of exchange combined with social balance? (p. 405).? His definition of an efficient system of exchange is straightforward enough.? It includes unhindered regional interaction, the presence of open and flexible markets, and the early disappearance of non-economic coercion (p. 11).?? But his understanding of what might constitute social balance is more elusive.? The closest he comes to a concrete definition is to say that social balance occurs directly when ?independent actors and their associations played an important social and economic role,? and indirectly when those actors have ?influence on the authorities? (p. 408).? The Low Countries were blessed with this ?social balance? on account of ?the large degree of freedom for ordinary people? that occurred quite early in their history (p. 409).?

In the final analysis then, we have a story about the medieval period that resonates closely with our understanding of what makes a modern economy work best: relatively unrestricted and autonomous individuals, with access to efficient and well integrated markets, whose worst instincts are held in check by social institutions that promote balance.? No wonder their world proved to be such a good predictor of ours — their world was essentially ours, just on a smaller scale.? Some readers might be daunted by the level of detail that van Bavel dives into in order to substantiate his most important fact: the incredible complexity and variety of micro-regional differences in social institutions in the medieval Low Countries.? But for those who persevere to the end of this long book, his is a happy, and persuasive, tale indeed.

Notes:
1. Jack Goldstone, Why Europe? The Rise of the West in World History 1500-1850, McGraw-Hill: 2008; Jan Luiten van Zanden, The Long Road to the Industrial Revolution: The European Economy in a Global Perspective, 1000-1800, Brill: 2009; Paolo Malanima, Pre-Modern European Economy: One Thousand Years (10th-19th Centuries), Brill: 2009; and Timur Kuran, The Long Divergence: How Islamic Law Held Back the Middle East, Princeton University Press: 2010.
2. See for example, Deirdre McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World, University of Chicago Press: 2010; Jan de Vries, The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present, Cambridge University Press: 2008; or Joel Mokyr, The Enlightened Economy: An Economic History of Britain, 1700-1850, Yale University Press: 2010.
3. Gregory Clark, A Farewell to Alms: A Brief Economic History of the World, Princeton University Press: 2008.

Anne E.C. McCants teaches medieval and early modern economic history at the Massachusetts Institute of Technology.? Her research interests in the Low Countries have ranged from historical demography to the role of social welfare institutions and the rise of consumer culture.? She is currently working on a project to explore the financial underpinnings of Gothic cathedral construction in the High Middle Ages.

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (June 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Markets and Institutions
Geographic Area(s):Europe
Time Period(s):Medieval
16th Century
17th Century

Modernizing a Slave Economy: The Economic Vision of the Confederate Nation

Author(s):Majewski, John
Reviewer(s):Delfino, Susanna

Published by EH.Net (March 2011)

John Majewski, Modernizing a Slave Economy: The Economic Vision of the Confederate Nation. Chapel Hill: University of North Carolina Press, 2009. xiii + 240 pp. $40 (hardcover), ISBN: 978-0-8078-3251-6.

Reviewed for EH.Net by Susanna Delfino, Department of European Research, University of Genoa, Italy.

?A Modern Economy without Modernization? — A Southern Paradox

Scholarship of the past few decades has amply documented that, from the late 1700s, capitalist-oriented entrepreneurial and business forces were at work in the southern states, and that their strength and visibility increased during the first half of the following century. Defining the contours of a univocal southern economic vision in the antebellum era has, however, proved extremely challenging, exposing all the ambiguities and inconsistencies immanent in the thinking of elite southerners, from political economists to politicians, from planters to manufacturers, and to businessmen in general. Even the staunchest agrarians, in fact, did not fail to appreciate the desirability of an albeit moderate industrial development. The seeming contradictions, which stemmed from their effort to reconcile economic development — including industrialization — with the preservation and protection of the institution of slavery, resulted in the shaping of a distinctively southern idea of economic modernity which rejected the tenets of modernization as commonly understood in the North and Europe as well by the mid-nineteenth century.[1]??? ??? ????????

John Majewski?s Modernizing a Slave Economy focuses on Virginia and South Carolina to explore the implications of such inconsistencies in the shaping of the secessionists ideology and, ultimately, in accounting for the failure of the Confederate experiment. Whereas a traditional historiography had identified the principles inspiring secession in the defense of thoroughly agrarian values, minimal government, and laissez-faire, Majewski shows that the secessionist ideology comprised instead visions of industrial expansion and economic independence that ought to be achieved largely through government activism. As a result, Majewski argues, the experience of a centralized and highly bureaucratic Confederate nation was not ?a radical disjuncture but a natural outgrowth of southern attitudes established during the antebellum period? (p. 7).

To demonstrate his thesis, Majewski adopts multiple and intertwined perspectives: from the environmental, to the economic, and to the political. Such an approach provides him with a broad compass of sensibilities that make the analysis well articulated and sophisticated at every turn.
The environmental argument constitutes the core around which Majewski?s analysis unfolds. Through it, he illustrates the distance separating reality from imagination in the economic vision of white southerners, as well as in northern perceptions and representations of the South?s economy. By showing that the extremely widespread use of shifting — as opposed to continuous — cultivation was determined by the highly acidic composition of much of the South?s soil, he both refutes the cultural explanation upheld by northerners to account for the seemingly backward state of southern agriculture and pinpoints the objective limits to regional economic development. In fact, by leaving vast stretches of land unimproved, shifting cultivation resulted in low population density. This, in turn, generated negative effects on the extent and depth of markets and on transportation costs: two essential factors for the development and expansion of the manufacturing sector. Slavery, of course, aggravated the situation but, as the case of Maryland well illustrates, was not the primary cause for either shifting cultivation or the South?s difficulties in triggering a self-sustaining process of industrial development. While only a relatively small number of enlightened southerners fully understood the real nature of the problem with southern agriculture, most believed that it could be solved through a vast reform program. However, because of the complexity and scope of the actions needed, this could only be pursued through the support of state governments. Investment was needed in the fields of research and education, and in the funding of local agricultural societies that might introduce farmers to a correct use of fertilizers and to the advantages of crop rotation. Steps forward were made during the last few antebellum decades, but the results obtained did not match the efforts lavished by agricultural reformers. Majewski rightly ascribes those meager results to the relatively low short-term return that the southern state governments anticipated from massive investment in agriculture as opposed to more ?visible? undertakings, such as railroad building, in the face of both intrastate and interstate rivalries.

The connection Majewski identifies between agricultural reformism, pleas for state intervention in the economy, and secessionism is crucial to his thesis that social conservatism and economic development coexisted in the secessionists? vision of an independent southern nation. Political independence, in fact, was only an empty word if not accompanied by certain economic requisites — a manufacturing base to free themselves from northern dependence, and the establishment of direct trade links with Europe. Toward the achievement of these goals, the modernization of agriculture was central. As Majewski effectively contends, the strong focus secessionists placed on agriculture has been wrongly understood as revealing their adhesion to a traditional, outmoded vision of the South?s future. Quite the contrary, it conveyed their awareness that the quest for southern political independence implied economic diversification, including industrialization. In their envisioning of an independent southern Confederacy, secessionists were, however, caught in the straits of a number of more or less apparent inconsistencies. For example, they criticized the activist government and the gospel of modernization embraced by northerners while at the same time placing these very assumptions at the core of their southern nationalism.

As Majewski points out, the advocacy of state-promoted economic policies dated back to the antebellum era. The example of railroads is revealing in this regard. Heavy spending in railroad construction by the southern state governments — and eminently by those of Virginia and South Carolina — stemmed from the belief that this sort of intervention could make up for the structural problems impairing a ?natural? development of the South?s economy. Due to the sparseness and scantiness of the population, the building of railroads could not be sustained — as in the North — by local communities; but if the lines were built thanks to massive public investment, their beneficial effects would reverberate on the economy as a whole, stimulating the growth of commerce and manufacturing, opening new prospects for international trade, and uniting the several parts of the South. Such a course of action, however, ?produced a boom in railroad construction without revolutionizing the southern economy,? thus failing ?to correct the region?s fundamental economic problems? (p. 104).

In their desire to reconcile the creation of a modern economy with the protection of slavery, secessionists made gross mistakes in evaluation. Their quite simplistic understanding of economic interest, for example, led them to believe that the Confederacy would have won both international and internal support, even from the slaves themselves. Reality would prove completely different. This is not, however, the only paradox that Majewski identifies in his analysis of the political economy embraced by secessionists in their envisioning of the future of an independent southern nation, vis-?-vis the region?s economic and social conditions. Advocacy of free trade had traditionally been one of the mainstays of southern economic thought within the national fold. However, an independent South required both a free trade international policy and an albeit moderate protectionist one, to shield its infant industry from northern and foreign competition. Confederate nationalism was therefore based on mixed ideas of economic liberalism and state regulation. Ultimately, the vast array of either domestic and international issues the Confederate government had to cope with often required measures of opposite sign, resulting in the adoption of contradictory and therefore largely ineffective policies that contributed to the collapse of the Confederate nation.

Secessionists emerge from the pages of Modernizing a Slave Economy in a completely new light as opposed to previous interpretations: modern men with a vision, rather than backward-looking traditionalists. Throughout the book, slavery comes forward as the core problem in determining the ambivalence and incongruities steeped in southern economic thought. Majewski?s work demonstrates, once and for all, that the defense of slavery was not deemed incompatible with the quest for economic modernity by even the most conservative members of the southern elites. More generally, it reiterates the need to definitely abandon rigid, dichotomous understandings of the economic, cultural, and political assumptions underlying unionism and secessionism, respectively. Modernizing a Slave Economy confirms that love for the Union and secessionism; unionism and the defense of slavery; secessionism and the envisioning of an economically modern South could and did coexist in the minds of antebellum and Civil War white southerners.?

This book is absolutely original in its placing the consequences of shifting cultivation at the basis of the South?s failure to achieve higher standards of economic modernization in the late antebellum decades. Through this example, and in contrast with previous interpretations, it effectively downplays the pre-eminence of the cultural factor in accounting for the South?s relative failure in catching up with the North in terms of industrial development before the Civil War.[2] Culture did matter, of course, but its impact was most revealed by the inconsistencies immanent in southern thought, which concurred to define the traits of a southern paradox still difficult to grasp in its complexity and entirety. By suggesting a different kind of continuity between antebellum and Civil War southern political economy as compared with traditional interpretations, John Majewski opens important directions in historical investigation and sets a new standard in the scholarly debate. The scope and complexity of the subject indeed deserve further research toward an increasingly sophisticated understanding of southern history in the slave era.

Notes:
1. In his monumental work on the South?s intellectual life, Michael O?Brien discusses the economic thought of southerners, illustrating its traits of ambivalence and modernity as well. He shows that not even the most conservative among them failed to acknowledge that the encouragement of manufacturing was central to the South?s future. Michael O?Brien, Conjectures of Order: Intellectual Life and the American South, 1810-1860, 2 vols. (Chapel Hill, NC: University of North Carolina Press, 2004).? I have also argued for a fundamental convergence of opinion among southern political economists and political thinkers on the subject of manufacturing. Susanna Delfino, La fabbrica dei sogni: dilemmi economici nel sud degli Stati Uniti tra l?et? della Rivoluzione e la crisi di met? Ottocento (Milano: Selene Edizioni, 2008).

2. The argument that the cultural factor was the main constraint to southern industrial development is set forth by Fred Bateman and Thomas Weiss, A Deplorable Scarcity: The Failure of Industrialization in the Slave Economy (Chapel Hill, NC: University of North Carolina Press, 1981).

Susanna Delfino is the author of La fabbrica dei sogni: dilemmi economici nel sud degli Stati Uniti tra l?et? della Rivoluzione e la crisi di met? Ottocento (Milano: Selene Edizioni, 2008).

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (March 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Economic Development, Growth, and Aggregate Productivity
Economic Planning and Policy
Geographic Area(s):North America
Time Period(s):19th Century

Doing Well and Doing Good: Ross & Glendining ? Scottish Enterprise in New Zealand

Author(s):Jones, Stephen R.H.
Reviewer(s):Roberts, Evan

Published by EH.NET (October 2010)

Stephen R.H. Jones, Doing Well and Doing Good: Ross & Glendining ? Scottish Enterprise in New Zealand. Dunedin, New Zealand: Otago University Press, 2010. 422 pp. $50NZD (paperback), ISBN: 978-1-877372-74-2.

Reviewed for EH.Net by Evan Roberts, Department of History, University of Minnesota.

Stephen Jones — now a research fellow at the University of Dundee, but formerly Director of the Centre for Business History at the University of Auckland — has written a well-researched history of what was once the largest manufacturer in New Zealand. Of course, ?in New Zealand? is a significant qualification to ?largest manufacturer? since establishment size in New Zealand manufacturing was low. At the peak in 1945, Ross & Glendining employed approximately 2500 people in its factories, and no single factory had more than a thousand employees (p. 324). Ross & Glendining produced clothing, shoes, and sundry woolen products exclusively for the New Zealand domestic market, after beginning life as an importer and distributor of foreign textiles. Since few readers of this review will have ever heard of the company, foreign interest in the book has to be motivated by something more academic than familiarity with the firm. Happily there is more to learn from this book than its specific and remote subject might suggest.

More general interest in this book is merited because of the clarity of its discussion of some common business and economic problems: managing and motivating dispersed employees, vertical integration (and disintegration) as a business strategy, and succession from the first generation of a tightly managed family firm to a limited liability company in the second generation. By highlighting these economic issues and discussing them for a couple of pages when they arise, Doing Well & Doing Good overcomes some of the limitations of the ?case study? or ?firm biography? genre. Jones is able to step back and be more critical, in part, because the firm failed. Writing more than forty years after Ross & Glendining was split up in 1966, Jones owes no one any favors in his account.??

The eponymous firm founded by John Ross and Robert Glendining — both Scottish migrants to New Zealand — began as a drapery importing and distribution firm during the New Zealand gold rush of the early 1860s in the Otago province. The parable that the riches to be found on nineteenth century gold fields were from provisioning rather than prospecting holds true in New Zealand too. Ross & Glendining was founded in Dunedin, the major center for Scottish migrants in New Zealand, and at the time the largest city in the country.? Being the closest city to the Otago goldfields and having a natural sheltered deep-water port contributed to Dunedin?s status as the largest city in the 1860s. Jones shows that the Dunedin headquarters were at first an advantage to the firm. After the Otago gold rush ended, being based in Dunedin was, at least, no barrier to success through the end of the nineteenth century. Dunedin, however, is the southern-most of New Zealand’s major cities. Being on the way to the gold fields gave it an early locational advantage. As gold declined in importance, and the center of New Zealand’s population and economy moved northward, by the early twentieth century Dunedin was clearly the [relative] laggard of New Zealand’s major cities. Although Ross & Glendining had opened its own manufacturing plants in the late 1880s, more than 90% of the firm?s profits between 1900 and 1914 came from warehousing and distribution of local and imported textile products (p. 227). Jones shows clearly how the import and distribution business was tied to where population and income were growing. The firm had to be on the ground in many different places far from the company?s headquarters.

Ross & Glendining faced a microeconomic problem: motivating and monitoring employees who worked hundreds of miles from the firm?s founders, owners and managers. Jones gives a clear exposition of how the well-known principal-agent problem works in practice (pp. 69-71, 142-43). Clearly grounded in theory, yet tractable to the general reader, Jones makes the story of Ross & Glendining?s employee-management problems relevant to a wider audience of economic and business historians than the title and subject of the book would suggest.

After the Otago gold rush ended in 1863 it was clear to the firm?s founders that profits could not keep growing by merely servicing the rush of migrants to the area. The search for alternative profit centers led Ross & Glendining into a range of vertical integration (and then disintegration) strategies over the firm?s life. The first of these was the establishment in the late 1870s of their own manufacturing plant, the Roslyn mill near Dunedin. The Roslyn mill remained part of the company to the end in the 1960s, and in the late nineteenth century with just under a thousand employees it was New Zealand’s largest single factory. A much less successful investment was the purchase of a large sheep farm (or ?station? to use the New Zealand parlance) in the Otago highlands in 1878. While profitable, Lauder Station demanded a disproportionate share of the owners? time, and required them to develop yet another set of skills beyond what they were already doing. When the reforming Liberal government came to power in 1890 with the intention of ?busting up? the great estates, the prospect of any capital gain from selling the station diminished too. Ross & Glendining held onto the station until 1909, but had been trying to exit without losing too much money since the turn of the century.

Again, the virtue of Doing Well & Doing Good is that it makes clear how an economic concept, in this instance vertical integration, works in practice. Jones shows how the firm repeatedly struggled with how to price the output of constituent parts of the business when transferring goods between each other. A perennial problem was how to price the output of the Roslyn Mills for sale to the warehouses that Ross & Glendining operated around New Zealand. Ross & Glendining did not want to give their own goods an unfair advantage by transferring the goods at cost, so that the warehouses would continue to sell a wide range of imported goods. Being seen as selling primarily ?inferior? New Zealand-made products would be a disadvantage in competition against other textile distribution companies. (One might note here that although parts of Ross & Glendining were in the fashion business, this history rarely touches on the colorful, fashionable side of the story. This is resolutely a history of balance sheets.) Jones suggests in his understated way that internal pricing was an issue the firm never properly resolved.

Controlled by its founders for decades, it was not until 1900 that the firm became a joint stock limited liability company. Yet even after the transition John Ross and Robert Glendining — assisted by their accountant in Dunedin, Charles Hercus — remained tightly in control of the firm. The change in structure was largely nominal, and not substantive. John Ross remained central to the firm?s management until 1922. Robert Glendining retreated from active involvement in the firm as he became senile before his death in 1917. Despite the transition to a limited liability company, on John Ross?s death the firm?s management passed largely to Ross and Glendining?s children. While the firm remained nominally profitable through the Depression, and was boosted by government spending on uniforms in World War II, the rate of return on capital fell steadily. Manufacturing became even more central to the firm when the first Labour government, elected in 1935, imposed strict import controls. As a long-established firm Ross & Glendining was able to obtain import licenses relatively easily. Jones downplays the costs of the import-licensing regime to the firm, and the wider economic distortions they caused. A fillip to demand in the Korean War again boosted Ross & Glendining, but the long-term problems of poor management remained. Jones tells the story of the firm?s decline as one of the second generation being poorer managers than their fathers. Again, Jones makes clear in the particulars a familiar issue in business history, the difficulties faced by a family firm in displacing poorly performing managers who have their surname on the letterhead.

The relevance of this book to a wider audience comes from its effective illustration of common economic and business issues: designing contracts for a dispersed workforce, pricing goods for internal sale, and making the transition from family ownership and control to a joint stock company employing managers who can be fired. Jones makes relatively few explicit connections to the economic history of New Zealand. What can a single firm tell us about a whole economy? Jones shows how Ross & Glendining grew prodigiously in line with growing incomes for the whole New Zealand economy. On the eve of World War I per-capita incomes in New Zealand were among the highest in the world. Operating in a business sensitive to consumer incomes, Ross & Glendining rode the wave of extensive and then intensive growth in the New Zealand economy before World War I. From the 1920s though, the oft-told story of New Zealand’s economy is of decline relative to its peers in North America, western Europe and ?across the ditch? in Australia. Since at least the 1960s there has been a debate in New Zealand about how to make the economy less reliant on simply exporting untransformed agricultural products. For half a century New Zealand has been trying to do better than being good at transforming grass into butter or wool. The importance of ?staples theory? and the ?external balance constraint? in New Zealand economic debate will ring familiar in other countries.? On the face of it the history of Ross & Glendining, an importing company that manufactured for the domestic market only, may seem irrelevant to that debate.? Yet Ross & Glendining tried to create value by manufacturing woolens in New Zealand, rather than shipping textiles abroad. What Doing Well & Doing Good illuminates is the struggle of New Zealand firms to adopt practices and structures that survive the individual management talents of founders, and allow them to add more value. Recent research suggests that the quality of management in New Zealand firms lags compared to management in comparable countries. Poor management acts as a brake on firms growing beyond their family origins. Ross & Glendining was one of the largest firms in the country, but it did well enough with an outdated organizational structure and management dominated by the reprobate children of the founders, that it did not restructure, and was unable to respond to changing conditions in the early 1960s. The eminent New Zealand historian Keith Sinclair suggested in 1950 that New Zealand history required a ?generation of pedants? because there was so much of New Zealand’s history that lay untold by historians. This is still largely true of the country?s business history. Stephen Jones has mined the archival gold of Ross & Glendining?s records to tell its story. He does well and does good himself by going beyond the specific history of this one firm and speaking to larger issues in business and economic history.

Evan Roberts is Assistant Professor of History at the University of Minnesota, and lectured in History at Victoria University of Wellington (New Zealand) from 2007-2010. He has written about the business history of New Zealand (?Don?t Sell Things, Sell Effects,? Business History Review, 77(2): 265-290), and is currently researching living standards in New Zealand since the nineteenth century. Forthcoming work from this project includes Kris Inwood, Les Oxley and Evan Roberts, ?Physical Stature in Nineteenth Century New Zealand: A Preliminary Interpretation? in the Australian Economic History Review.

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (October 2010). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Business History
Geographic Area(s):Australia/New Zealand, incl. Pacific Islands
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

When Sugar Ruled: Economy and Society in Northwestern Argentina, Tucum?n, 1876-1916

Author(s):Juarez-Dappe, Patricia
Reviewer(s):Johnson, Lyman L.

Published by EH.NET (October 2010)

Patricia Juarez-Dappe, When Sugar Ruled: Economy and Society in Northwestern Argentina, Tucum?n, 1876-1916. Athens: Ohio University Press, 2010. xiii + 233 pp. $32 (paperback), ISBN: 978-0-89680-274-2.

Reviewed for EH.Net by Lyman L. Johnson, Professor of History, University of North Carolina — Charlotte.

This book is a useful contribution to the history of Argentina during the era of economic? expansion that had been initiated by national integration and institution building in the decades following 1861. Patricia Juarez-Dappe, Associate Professor of History at California State University, Northridge, provides a well-researched survey of four decades of growth in Tucum?n driven by the rapid expansion of its sugar industry. Historians and economists with limited knowledge of Argentine history might wonder why this case deserves focused attention given the already-large literature devoted to the impressive expansion of the national economy in this period. Juarez-Dappe shows that while Tucum?n tracked the fast-rising arc of Argentine economic growth, imitating in many details the national experience, the character and legacy of the province’s expansion diverged in crucial ways from national experience.

Once potential profits from sugar production were demonstrated by early innovators, landowners moved from tobacco and other long-established crops to sugar and investors provided the capital to develop large and efficient refineries. Profits rose dramatically as new technologies, especially railroads and steam engines, increased efficiency and contributed to economies of scale in Tucum?n. As the industry expanded, estate managers and refinery owners attracted laborers from surrounding provinces and then enforced the discipline required by the rhythms of the sugar cycle with the support of a pliant provincial government. The prodigious wealth produced in the countryside as this process matured allowed the province’s modernizing government to transform its tax regime and harvest revenues that paid for the delivery of expanded and improved education, medical services and hygiene as well as to remake San Miguel, the provincial capital, as a modern city.?

While Argentina’s remarkable economic growth in this period was driven by profits from a rapidly expanding agricultural sector, Tucum?n’s prosperity during the sugar era was fundamentally unlike that of the still more profitable provinces of the Argentine littoral. Those regions grew rich from the profitable export of wheat, beef, mutton and other products to Europe. Tucum?n’s sugar producers, on the other hand, depended almost entirely on the national market. Given Argentina’s fast-rising population and accumulating wealth, price equilibrium and profitability could be sustained during the first stages of the modernization of sugar production in Tucum?n despite dramatically increased production. As a result, the province’s planters and refiners enjoyed many advantages relative to those in other Western Hemisphere sugar-producing nations who were forced to accept ever-lower prices in the increasingly competitive export markets of the Atlantic Basin.

Over time falling international prices and increased Atlantic market integration meant that this advantage could not be sustained permanently. Ultimately, the prosperity of Tucum?n’s sugar sector would come to depend on the willingness of the Argentine national government to protect it from foreign competition. Wealth transfers from the households of Buenos Aires and other littoral cities to the farmers, agricultural laborers and refiners of Tucum?n and other provinces were managed by national political leaders to service their own electoral ambitions. Once profits and market stability came to depend on political deals and electoral alliances, rather than price competitiveness, Tucuman’s sugar sector entered a dark cul-de-sac that offered little potential for continued modernization or for the stimulation of other sectors of the provincial economy. While the sugar industry’s growing reliance on protection is acknowledged by the author, she does not engage this topic in depth. If the story had been pursued beyond 1916, these issues would have been forced to the center of the discussion.

The author is more interested in the process of modernization and consolidation of the provincial sugar industry and describes this process in a thorough and convincing way, providing the reader with a rich array of detail drawn from her intensive excavation of archival resources. In addition to samples drawn from national censuses, the records of the provincial statistical office, and civil and criminal records, Juarez-Dappe uses notary records to great effect. These rich sources are seldom consulted by national era economic historians, although they are routinely used in systematic ways by colonial historians with excellent results. In addition, to these archival sources, Juarez-Dappe has thoroughly surveyed the secondary literature, supplanting earlier works of synthesis with her fresh account.?

The result is a dense descriptive narrative of Tucum?n’s sugar industry that ranges widely to include changing patterns of land use, the introduction of new technologies, and the fast-changing relations between sugar growers and the owners of refineries. The author also provides a very useful examination of the provincial labor regime, examining in turn migration, work, housing, and labor discipline. This broad survey is organized topically, allowing the reader to follow changes in, say, land use or technology across time. This same organization limits the author’s ability to analyze the specific effects of changing market conditions or altered political and fiscal policies on the allocation of land, labor, technology, and capital across the period. Despite this limitation, Juarez-Dappe has provided a comprehensive and highly readable introduction to this topic.

Lyman L. Johnson is Professor of History at the University of North Carolina at Charlotte. His recent books include Workshop of Revolution: Plebeian Buenos Aires and the Atlantic World, 1776-1810 (forthcoming Duke University Press); Aftershocks: Earthquakes and Popular Politics in Latin America (edited with J?rgen Buchenau); and Death, Dismemberment, and Memory. He has served as president of the Conference on Latin American History. ljohnson@uncc.edu???? ??? ??????????

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (October 2010). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Economywide Country Studies and Comparative History
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):19th Century
20th Century: Pre WWII

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies

Author(s):Stein, Judith
Reviewer(s):Hall, Joshua C.

Published by EH.NET (August 2010)

Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance in the Seventies. New Haven, CT: Yale University Press, 2010. xvi + 367 pp. $32.50 (hardcover), ISBN: 978-0-300-11818-6.

Reviewed for EH.NET by Joshua C. Hall, Department of Economics, Beloit College.

?

According to the preface of Pivotal Decade, historian Judith Stein decided to start writing the book after learning ?that the 1970s was the only decade other than the 1930s wherein Americans ended up poorer than they began? (p. xi). Curious about the source of this fact, I flipped to the back expecting to see a citation to The Statistical Abstract of the United States or perhaps some secondary source. Instead the endnote provided only further detail about the claim, namely that earnings for nonagricultural workers fell by nearly 13 percent during the decade. While this is true when real money earnings are adjusted for unemployment (see, for example, Lebergott 1993), it is in large part a product of the endpoints, given that 1980 was during a recession and 1970 was not. My dissatisfaction with this small point is symptomatic of my perspective on the entire volume, namely that it is long on information but short on analysis.

This is not to say that the raison d??tre of the book is bad. In fact, I applaud Stein for pushing back against purely cultural and political explanations of changes in economic policy that came out of the 1970s (see, for example, Schulman 2001). Exploring the reasons for the decline in Keynesian-style economic policy in the United States is an interesting idea for a book, given the wide variety of possible reasons and weights that can be given to factors such as ideas and ideology. For example, what role, if any, did the breaking up the neoclassical synthesis within the economics profession have on economic policy? ?Unfortunately, Stein?s in-the-moment style of writing does not provide much insight into that question.

Pivotal Decade is divided into eleven chapters, each of which focuses on a particular theme and period of time, although when necessary Stein backtracks in later chapters in order to fill in the necessary background information. The first chapter (?The Great Compression?) and the last chapter (?Age of Inequality?) bookend Stein?s thesis, which is that the 1970s is when the United States transitioned from an ?age of compression? to an ?age of inequality? as a result of changes in underlying economic principles that guided economic decision-making. The title of the first chapter comes from the famous Goldin and Margo (1992) article explaining the compression of the wage structure in the United States during the post-World War II period. While Goldin and Margo attribute the great compression to several factors, including increases in the supply of educated labor, high demand for unskilled labor, and strong unions and minimum wage laws, Stein makes clear that she thinks it is the result of Keynesianism. ?The Keynesian idea that the state could promote employment fostered policies that produced the Great Compression,? she writes on page 3. Here Stein engages a bit in comparative analysis by showing how Keynesian policies pervaded Europe and Japan as well.

Chapters 2 through 9 fill in the story of the politics and economics of the 1970s. Chapter 2 on ?Affluence Challenged and Restored,? for example, deals with the election of Richard Nixon in 1968 and his general continuation of Keynesian policies (except perhaps for the decision to float exchange rates). Stein praises Nixon on page 50 for his wage and price controls that caused inflation to fall to 3.2 percent and argues that the ?president?s actions … rejuvenated the politics of the affluent society [Keynesian liberalism] for at least another election.?

I found Chapter 3 on the 1972 presidential election to be the most interesting chapter in the book. Stein details several very important electoral changes that had occurred within the Democratic Party prior to the 1972 election of which I was previously unaware. For example, prior to the 1972 election, state parties controlled between two-thirds to four-fifths of all delegates. Beginning with the 1972 election, however, state central committees were only allowed to appoint ten percent of the delegates. The entire section on the post-1968 Democratic Party reforms (pp. 51-57) is really interesting and seems to me to be quite useful in explaining the nominations of both George McGovern and Jimmy Carter.

Chapters 4 and 5 explain the rise of OPEC and its effect on U.S. trade policy as well as domestic politics. A considerable amount of Chapter 4 is of the ?here is what happened? variety, while Chapter 5 deals with domestic policy battles over how to deal with higher oil and food prices during the 1973 to 1976 period. In Chapter 6, Stein discusses the battle over the 1976 presidential nominations in both major parties and the eventual election victory of Carter. This chapter is a great example of where I feel the book could have benefitted from a little more theory, as an understanding of the literature on political business cycles (Heckelman 2001) would have provided a better framework with which to understand the role of the economy in the 1976 election.

The remaining chapters before the conclusion deal with the conditions under which Keynesian economic policy began to lose favor in the United States from 1977 through 1980. Chapter 7 discusses its decline in international affairs, Chapter 8 is about domestic affairs, and Chapter 9 revolves around the economics and politics of the 1979 oil crisis. While these chapters are good at describing what was going on at the time, they really do not help the reader to sort out why certain ideas won out. One of my biggest frustrations with the book became apparent at this point when I noticed that Stein continually discusses the most important issue of the day — inflation and unemployment — but never once mentions the mental model underlying some policymakers? views of macroeconomic policy at the time, the Phillips Curve. ?For a book on changes in economic policy during the 1970s to not mention the Phillips Curve seems to me to be an unpardonable sin.

Chapter 10 discusses Paul Volcker?s raising of interest rates in 1979 and the surprise with which this caught the Carter administration. Here the author is focused almost exclusively in the very short-run. For example, she continually criticizes the Volcker Fed for the economy of 1979 and 1980 without any consideration of the long-run effects of their anti-inflationary stance. ?The president was disappointed that Volcker?s monetarism did not reduce inflation. And, as many predicted, the domestic economy lost out? (p. 227). She goes on to note on page 236, ?If monetarism had been graded at the end of 1980, it would have received an F.? Perhaps one reason for Stein?s negativity is that she does not believe that high inflation is bad for long-term growth (p. 282). Finally, Chapter 11 concludes by talking about what Stein calls the ?age of inequality? that has existed since Reagan first took office and that has persisted through both Republican and Democrat administrations.

I cannot recommend Pivotal Decade for three main reasons. First, the level of analysis never gets beyond describing what happened and what arguments people involved might have made for a policy. That is not analysis, it is journalism. Second, to the extent that the author uses the economic literature, she does not use it in a manner that tries to convince the reader who is not already predisposed to her argument. For example, nowhere in the chapter ?The End of Equality? does she use the work of Picketty and Saez (2003), who she briefly cites in an endnote in Chapter 1. In addition, beyond facts about rising CEO compensation, she doesn?t really present any data that things were getting less equal (which the work of Picketty and Saez and others suggest is the case). Third, the failure to even mention the Phillips Curve or to grapple with the fact that the failure of simplistic Keynesian models to explain stagflation created a vacuum that generated entirely new schools of macroeconomic thought — such as New Classical and New Keynesianism — is such a glaring omission that it makes it hard to take seriously anything else in the volume.

References:

Claudia Goldin and Robert Margo, ?The Great Compression: The Wage Structure in the United States at Mid-Century,? Quarterly Journal of Economics 107 (1992): 1-34.

Jac Heckelman. ?Historical Political Business Cycles in the United States,? EH.Net Encyclopedia, edited by Robert Whaples. August 14, 2001. URL http://eh.net/encyclopedia/article/heckelman.political.business.cycles

Thomas Piketty and Emmanuel Saez. ?Income Inequality in the United States, 1913-98,? Quarterly Journal of Economics 118 (2003): 1-39.

Stanley Lebergott, ?Wages and Working Conditions,? in David Henderson, editor, The Fortune Encyclopedia of Economics. New York: Warner Books, 1993: 503-07.

Bruce Schulman, The Seventies: The Great Shift in American Culture, Society, and Politics. New York: Simon and Schuster, 2001.

?

Joshua C. Hall is an assistant professor of economics at Beloit College and, most recently, the co-author of the Economic Freedom of the World: 2010 Annual Report.

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (August 2010). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Planning and Policy
Economywide Country Studies and Comparative History
Macroeconomics and Fluctuations
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Sweet Tyranny: Migrant Labor, Industrial Agriculture, and Imperial Politics

Author(s):Mapes, Kathleen
Reviewer(s):Allen, Samuel

Published by EH.NET (January 2010)

Kathleen Mapes, Sweet Tyranny: Migrant Labor, Industrial Agriculture, and Imperial Politics. Urbana: University of Illinois Press, 2009. xi + 307 pp. $30 (paper), ISBN: 978-0-252-07667-1.

Reviewed for EH.NET by Samuel Allen, Department of Economics and Business, Virginia Military Institute.

Kathleen Mapes? carefully researched account of the American sugar beet industry in the first half of the twentieth century provides a thorough and vivid look at the myriad interest groups impacted by political and economic changes. The story is sweet ? not in any simple or soothing sense, but rather the sweetness derives from the complexity of flavors that Mapes deftly unwraps one layer at a time. Like many American agricultural conundrums, those facing the sugar beet industry at the turn of the last century were complicated because there were many simultaneous puzzles to solve. Prior to reading Mapes? work one might be inclined to think of the sugar beet industry as a plain, unsophisticated root crop. However, Mapes? telling story reveals the interconnected pressures of international trade, relations with Cuba, American imperialism in Puerto Rico and the Philippines, racism, and migrant and child labor. She meticulously merges together the stories of these groups, to provide a comprehensive synthesis for the actions and government policies that ultimately determined the fate of the fledgling domestic sugar beet.

Much of the story takes place in Michigan where Mapes depicts rural townspeople anxious to coax plant owners to their towns in hopes that a local sugar beet refinery would boost land values, employment, and economic growth generally. Farmers, too, were eager to contract with plant owners to ensure the viability of their farms. Meanwhile plant owners and the ?beet lobby? cautiously weighed-in on national issues with aspirations of garnering U.S. government support and avoiding the full competitive brunt of cane sugar producing locales in tropical climates ? including U.S. territories. The ?boosterism? exhibited by rural communities in Michigan and throughout the Midwest led to an explosion of sugar beet factories, growing tenfold between 1892 and 1906. This created new demand for work in the fields that was largely met by immigrant laborers.

The book is divided into 9 chapters, and in each Mapes delves deeper into the relations of the critical interest groups. Following the initial chapter on rural industrialization and imperial politics, the remaining chapters explain the unique qualities of contracts for growing sugar beet; as well as the realities of migrant families and child labor and the changing nature of stereotypical Midwestern family farms into ones where race and class take on new levels of importance.

The story is prophetic in many ways. For example, the actions of rural Americans reveal a serious disconnect between their expectations (and the prospects of a sugar factory in a given town) and the national debate on tariffs and protectionism. Essentially this serves as a reminder that the weather in Michigan was (predictably) somewhere else a few days earlier, and forecasting proactively is vital.

The owners of sugar beet refineries contracted with farmers to grow sugar beets. The especially stringent nature of these contracts ? which specified exact tracts of land to be planted with specific seeds provided by the plant owners at set dates ? resulted in considerable turmoil. Some farmers felt unfairly treated and initially threatened not to grow any beets. By banding together, they had significant bargaining power. Perhaps because the new refining plants represented an enormous capital investment relative to other agricultural processors of the day, their owners relented to these early demands from farmers and paid them more. Yet, Mapes explains how subsequent negotiations concluded much differently. They were anything but straightforward.

As Mapes shifts her attention to the workers it is apparent that the sugar beet industry demonstrates key properties of the U.S.?s transition from a nation with family farms to one of industrialized agriculture. Here the changing technology (capital intensive sugar beet refineries) and the changing workforce (through the growing importance of migrant labor) combined to meet the growing product demand (for sugar). Mapes astutely recognizes the people and institutions facilitating these changes ? which often used racist language as a plea for ?civilized? outcomes ? have lasting impacts on the demographic and industrial make-up of the country. Economists and development scholars would be wise to keep these lessons in mind.

Next, Mapes highlights the changes to the industry during World War I. The war-time inflation led to greater tension between farmers and plant owners; however, it also heightened the interest of those in Washington, DC. Despite higher war-time profits in the industry, the greater profits did not improve relations.

Finally, Mapes devotes the last few chapters to the debates about immigrants, migrant labor, and child labor. Again the relevance of these issues is widespread in the sugar beet industry. In her epilogue, Mapes concludes with a brief account of the ongoing political prowess of the sugar industry and more importantly an overview of why the issues of free trade, protectionism, globalism, family farming, and the polarized nature of the political process in these areas are so fundamental to the direction of our nation. Mapes hammers home these points in a concise and compelling manner.

Mapes? copious notes refer to citations at the end of the book so as to minimize the disruption to the flow. While ideal for a general reader, it would be significantly more useful for other historians if the references from the notes section were also included in the book?s index.

Overall, this book weaves together with amazing detail the threads from a vast array of relevant economic, social, and cultural realms. Outcomes were frequently bitter, and the tyranny of the politically powerful within U.S. institutions is quite apparent, but it would be hard to imagine that Mapes omitted any of this story?s sweet complexity.

Samuel Allen?s research in economic history pertains to workers? compensation insurance, labor laws, and working conditions in the United States, primarily during the early twentieth century. A recent paper is ?Lifting the Curse of Dimensionality: Measures of the Labor Legislation Climate in the States during the Progressive Era,? published in 2009 in Labor History. Allen teaches economics at the Virginia Military Institute in Lexington, Virginia.

Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

The Political Economy of Argentina in the Twentieth Century

Author(s):Conde, Roberto Cortés C
Reviewer(s):Fritscher, André Martínez Fr

Published by EH.NET (July 2009)

Roberto Cort?s Conde, The Political Economy of Argentina in the Twentieth Century. New York: Cambridge University Press, 2009. xi + 388 pp. $85 (hardcover), ISBN: 978-0-521-88232-3.

Reviewed for EH.NET by Andr? Mart?nez Fritscher, Department of Economics, Boston University.

Most of the world’s wealthy nations have been so since the nineteenth century. However, while Argentina enjoyed standards of living similar to the most developed countries during the second half of the nineteenth century, this South American country has reversed its fortune and fallen behind over the course of the twentieth century. Currently Argentina has a GDP per capita closer to other Latin American countries than the group of the developed countries to which it belonged a century ago. In his new book Roberto Cort?s Conde, a professor of Economics at the University of San Andr?s, describes in detail the evolution of Argentina’s economy in the twentieth century. The exceptionality of the Argentinean experience has been a fertile ground on which to explore relevant questions within the literature of economic growth. Why was Argentina unable to grow in the twentieth century at the same pace as countries with similar economic characteristics and endowments, such as Australia and Canada? Is the very poor Argentinean economic performance explained by exogenous shocks or domestic policies? What was the institutional framework in which the economic policies were instituted? Cort?s Conde?s narrative addresses the last two questions in particular, arguing that domestic choices and a weak government explain Argentina’s economic fall.

The book is organized chronologically in six chapters; each covering a different phase of the Argentinean economy from 1880 to 1989. Chapter 1 addresses the period during which Argentina experienced the fastest growth rates around the world in the pre-World War I era (the GDP per capita growth rate was 6.6%, twice as high as the rates of many developed countries). The export of agricultural goods drove this impressive and sustained economic performance, as Argentina is endowed with extensive and very productive portions of land. The profitability of this sector attracted foreign capital for railroads and industries. Moreover, Argentina was host to millions of European immigrants, who were tempted by the high wages. Chapter 2 discusses the economic transformation that Argentina underwent from World War I to the Great Depression. Like many other countries, Argentina entered into a recession following the commencement of hostilities as international flows of goods, capital and labor declined. Additionally, the introduction of universal male suffrage in 1912 changed the balance of power in Argentina. Cort?s Conde argues that higher democratization increased the role of the government in the economy as it intervened more actively in the determination of prices and wages. Now economic policy was put under pressure from different interest groups. Chapter 3 is a detailed description of the exchange and monetary policies in the 1930s. After abandoning the gold standard, the devaluation of the peso increased the competitiveness of Argentinean exports and protected domestic production. The strategy of growth was based on import substitution in which tariffs and quotas for final goods were raised. This period was also marked by the use of exchange margins to finance government activities and the foundation of the Central Bank.

Chapter 4 describes the main economic policies and events during Juan Per?n?s government. Argentina’s inward growth strategy not only remained during Peronism but the period was also characterized by direct public intervention through subsidies and state ownership of certain key industries. In addition, Per?n used subsidies, price controls, and monetary, exchange and trade policies to increase capital formation and real wages and to ensure full employment. The economic policy thus set up a complex and persistent network of interests, manipulated the incentives of the agents and furthermore, inefficiently allocated the factors, hindering long term growth. Chapter 5 provides a description of the period between Peron’s two terms as President (1955-1973), during which political and social instability affected economic performance. This period was characterized by innumerable military coups, reflecting the Army?s fear of Per?n?s return and communism. Any attempt to change the economic model was blocked by interest groups (e.g. land owners, entrepreneurs, unions). As a consequence Argentina underwent a process of decapitalization, macroeconomic instability and limited productivity gains. The sixth chapter analyzes the economic and political conditions that led Argentina to experience negative growth in the period from 1974 to 1989. Despite several orthodox and non-orthodox attempts, civil and military governments failed to put the economy on track. In sum, the seventies and eighties were a continuation of the institutional, political and economic problems inherited from previous periods.

The book is an excellent resource for those who wish to learn about the Argentinean economy and its main limitations during the twentieth century and it is highly recommended for any course on the economic history of Latin America. One of Cort?s Conde?s principal contributions is his fabulous effort to compile historical data and create a narrative of the evolution of the main variables. Do not expect, however, any empirical analysis that would corroborate his main points, although the data he gathers may be an important source for future empirical work. Cort?s Conde proposes that the economic failure of the Argentinean economy is due to a variety of factors and choices accumulated across time. But the initial institutional framework in which the decision making process occurred remains unclear. For instance, the reader may wish to see a discussion of whether the quality of institutions by the end of the nineteenth century was better than the quality of institutions in the next century. Moreover, it would have been enlightening to contrast the Australian and Canadian experiences with that of Argentina. What did they do right compared to Argentina? How were the interest groups held in check during the twentieth century? Would it not be the case that, since the nineteenth century, both countries had better institutions than Argentina, which would have allowed them to overcome the international shocks of the first half of the twentieth century? Furthermore, a brief discussion of why Latin American countries with similar institutions and development strategies could grow faster would help clarify Argentina’s particular situation. Finally, the potential reader would like to know a little bit more about hypotheses, proposed by other authors, concerning Argentina’s economic failure, and how they differ from the one proposed by Cort?s Conde. Although the book aptly describes the changes in economic policies and their consequences, an analytical framework explaining the winners, the losers, and the players’ sources of bargaining power would have been very useful.

Andr? Mart?nez Fritscher recently completed his Ph.D. at Boston University and will be joining Banco de M?xico as a research economist in the fall. His work focuses on the public finances and regional development in Latin American at the turn of the twentieth century.

Copyright (c) 2009 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (July 2009). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):20th Century: WWII and post-WWII

Migration and Inequality in Germany, 1870-1913

Author(s):Grant, Oliver
Reviewer(s):Wegge, Simone A.

Published by EH.NET (April 2009)

Oliver Grant, Migration and Inequality in Germany, 1870-1913. Oxford: Oxford University Press, 2005. vii + 406 pp. $199.50 (cloth), ISBN: 0-19-927656-0.

Reviewed for EH.NET by Simone A. Wegge, Department of Economics, College of Staten Island ? City University of New York.

In this impressive work, Grant explores the economic transition that Germany underwent during its period of industrialization. The Kehrite School, inspired by a doctoral thesis Eckart Kehr published in 1930, has argued that prior to 1914 Germany did not make necessary and important social changes that would have modernized German democratic society and made government more accountable and accessible to non-elites, the vast majority of the German population.

Here, Grant presents an alternative view, namely that Germany was not that different or special in the challenges it faced in moving from an agricultural economy to a more industrial one. The country faced many of the typical problems that a developing country goes through when industrializing, including a surplus of labor, shifting demographics, a migrant population, and changing land tenure systems. Throughout the book, the author applies the Lewis model of labor surplus from development economics and finds again and again that it is very suitable for describing the evolution of the German economy and specifically how internal migration can fit in a stage-of-growth story.

While Grant?s main objective is to counter the Kehrite view and convince the reader that Germany faced ?normal? problems over which its politicians had little control, the largest part of the book, eight of the ten chapters, is not about political history but instead about how agriculture, industry, income inequality, and demographics changed over the course of four decades or so. Only the first and last chapters deal specifically with the sociopolitical economy of Germany. As such, the first and last chapters seem somewhat divorced from the middle eight chapters.

Grant?s work provides an explanation as to how the migration decisions of many Germans were related to the economic transformations taking place in the German economy. As the German economy expanded in the late nineteenth and early twentieth centuries, many workers had to make adjustments in leaving declining businesses and occupations and taking up better-paid ones in other parts of Germany or the world. By 1895 German emigration had decreased substantially from its heyday, and more Germans could find employment somewhere at home.

At the outset of Migration and Inequality, Grant suggests that Germany be considered among the group of late-stage developers like Russia, Italy and Spain, all of which adopted British technology. However, by 1890 Germany had a GDP per capita that was substantially larger than that of all three of these countries (Crafts, 1984, 440, Table 1). Using a Chernery-Syrquin framework, Crafts considers Germany to have industrialized later than Britain and Belgium but around the same time as France and well ahead of Italy, Russia and Spain (Crafts, 1984, 448-9). A bit more consideration of such findings would have been helpful.

In Chapter 3 Grant presents some of his main results on internal migration as it was affected by an economy on the path to industrialization. Here he provides a picture of who moved in and who moved out, and how the long-distance migration flows were related differentially to agriculture, industry and especially railroad building. He uses a number of sources, most of which are aggregated statistics previously published, but his key results in this chapter are based mostly on one city, Berlin. I would have preferred that he had examined more cities. He could at least have framed the results in light of other recent works on internal German migration such as Hochstadt (1999) on D?sseldorf and Jackson (1997) on the Ruhr Valley, a hotbed of industrial activity at this time. Both works are listed in the bibliography, but more effort towards placing his findings in the context of these works would have made this an even more valuable study.

Grant?s work also places a large emphasis on internal migration and less so on Germans who left for overseas destinations. Migration is analyzed at a macro and not at the micro level. This approach misses insights on selection patterns that could be gained from looking at how migrants differed from non-migrants. Of course, migration history is an enormous subject, and no single book on migration history can be all things to all scholars.

Chapter 4 expands on this work by describing what important variables influenced internal migration. Agricultural areas lost more than urban areas, as a significant amount of the internal migration consisted of classic rural-urban moves. Further, people were more likely to leave places with lots of large farms, a close proximity to cities and high rates of productivity growth in agriculture. Grant tackles demographic issues in Chapter 5. All sorts of demographic variables differed by region, with the upshot that after 1870, population growth was higher in the east than in the south: although both regions experienced sizable emigration flows the east still lost more people than the south, partly due to a much higher percentage of women who never married in the south.

With a heavy emphasis on eastern Germany, Chapters 6 and 7 discuss the popular view of nineteenth-century social scientists that there was something backward about the prevalence of large estates and a property-less agricultural labor force in the east when peasants in the rest of Germany tended to own their own holdings. Grant argues that higher wages in the urban centers convinced many young people in the east to abandon their parents? way of life, which prompted estate owners to seek seasonal laborers from Poland. Wages were low in the east partly because landowners had a substitute labor force.

Grant finds other evidence that migration in the decades after 1870 represented a release of surplus labor from conditions of underemployment, as the Lewis model predicts. Regions of high productivity growth in the agricultural sector were correlated with higher migration rates: as farmers became more productive they needed fewer workers. At the same time though, the product mix changed, towards more labor?intensive activities like root crops (sugar beets) and livestock. With suspected widespread underemployment across Germany many in agricultural areas could still be employed, and in the east a cheap seasonal labor force was available for such crops.

Grant also argues that in the 1870s and 1880s migration was more likely to take place from communities with high population densities, which validates the prediction of the Lewis Model he presents in Chapter 1. This result should be considered with some caution, as it is based on a regression with basically just one right-hand-side variable, population density. What else could be driving migration rates?

In Chapter 8, Grant finally discusses the process of industrialization in more detail, focusing on capital markets and Germany?s changing terms of trade as related to exports. ?Inequality,? part of what is promised by the book?s title, is finally tackled in Chapter 9, where Grant calculates Gini coefficients from Prussian tax statistics. Inequality was never that high in Germany but ironically it was higher in the urban sector than in the rural sector. Grant finds evidence for a Kuznets Curve and argues that his findings fit within the perspectives of Kuznets, Lewis and Weber.

Grant covers a lot of ground in his book. There are dozens and dozens of different tables and regression estimates spread throughout this work. Like a good detective he has dusted off many existing studies and sources of data from government and journal publications, many published more than a century ago and many of which have undergone little sophisticated treatment. By using modern statistical and regression analysis he sheds new light on these previously published sources. In fact there are so many tables and maps, I wish he had devoted a few pages to listing them in an organized fashion. He also goes out of his way to make this work user-friendly by placing most of the econometric results in the appendices and explaining their economic and social significance in the main body of each chapter. This feature makes the book very accessible to a variety of social and economic historians.

While he refers to long-standing debates stemming from the scholarship of Max Weber, Eckart Kehr and Kuznets, there could be more reference to the debates that economic historians are currently engaged in. As I mentioned above, comparison with Crafts? work would have been desirable. Using the insights of recent studies on internal migration within Germany would also have been helpful. Further, while Grant spends time comparing land ownership institutions between Britain and Germany, it would have been intriguing to know more about his thoughts on Britain?s own experience with a surplus of labor. Contrasting his findings with those of Baines (1985) would have been interesting, and perhaps this may provide Grant with an idea for further work.

In spite of these quibbles, Grant lays down piece by piece the argument that between 1870 and 1913, Germany was going through economic adjustment problems, and that these should be considered as a normal part of most industrialization processes, both historical and contemporary. This is the thesis of the book. Importantly, he argues that the Kehrite School, which viewed Germany as deeply flawed, has overlooked relevant economic realities and focused too much on internal political problems. Without trade, for instance, Germany could not have industrialized, as self-sufficiency would have entailed a higher agricultural labor force and allowed fewer for the factories. Here Germany needed food imports, which it supported with a moderate level of protection. Even the Kaiser acknowledged this.

Grant thus comes to reject the Kehrite School view that Germany suffered from internal socioeconomic flaws and could not make adequate political progress. Instead, he states on page 354 that ?the path to democracy was getting easier, not more difficult.? He goes further to conclude that ?The events of 1914 represented a derailment …? He thus provides his own particular views on the Sonderweg debate in German history, which attempts to trace the political-economic origins of the Nazi catastrophe. Luckily for him, his book ends in 1913. If we are to accept Grant?s view and reject the Kerite perspective that German sociopolitical evolution was misguided, we need a roadmap that takes us through World War I and further ? food for thought for future research.

For those interested in a case study of long-term economic development and transition, Grant provides a very interesting example in the form of Germany in the late nineteenth century. Germany industrialized inordinately quickly and came to dominate Europe not only economically but obviously politically in the twentieth century. Economic historians need to understand this particular case and compare it to others. Grant succeeds admirably in showing that it is relevant that we characterize historical processes accurately, both to understand the past and to examine carefully how socioeconomic evolution affects later periods. Lastly, Grant has provided a work that reminds economists and others of what insights they can gain on economic growth and political history by examining economic history.

References:

Baines, Dudley. Migration in a Mature Economy: Emigration and Internal Migration in England and Wales, 1861-1900. Cambridge: Cambridge University Press, 1985.

Crafts, N. F. R. 1984. ?Patterns of Development in Nineteenth Century Europe.? Oxford Economic Papers 36 (3): 438-58.

Hochstadt, Steve. Mobility and Modernity: Migration in Germany, 1820-1989. Ann Arbor: University of Michigan Press, 1999.

Kehr, Eckart. Battleship Building and Party Politics in Germany 1894-1901: A Cross-Section of the Political, Social, and Ideological Preconditions of German Imperialism. Chicago: University of Chicago Press, 1973.

Kehr, Eckart (ed. by Gordon A. Craig). Economic Interest, Militarism, and Foreign Policy: Essays on German History. Berkeley: University of California Press, 1977.

Jackson, James H. Jr. Migration and Urbanization in the Ruhr Valley, 1821-1914. Atlantic Highlands, N.J.: Humanities Press, 1997.

Simone A. Wegge is an associate professor of economics at the College of Staten Island and at the Graduate Center, both of the City University of New York. Her research focuses on European and German economic history, especially emigration. Her most recent paper is titled ?Network Strategies of Nineteenth-Century Hesse-Cassel Emigrants.? History of the Family 13 (3): 296-314.

Subject(s):Industry: Manufacturing and Construction
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII