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Energy and Civilization: A History

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

Published by EH.Net (August 2017)

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

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

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

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

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

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

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

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

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

The Chinese Market Economy, 1000-1500

Author(s):Liu, William Guanglin
Reviewer(s):Pomeranz, Kenneth

Published by EH.Net (June 2017)

William Guanglin Liu, The Chinese Market Economy, 1000-1500. Albany, NY: State University of New York Press, 2015.  xviii + 374 pp., $30 (paperback), ISBN: 978-1-4384-5568-6.

Reviewed for EH.Net by Kenneth Pomeranz, Department of Economics, University of Chicago.

William Guanglin Liu has written a valuable book on a big, important, topic: the general trajectory of the Chinese economy from roughly 1000-1650.  (The title says 1500, but the argument goes beyond that date.) The research is excellent, and the author comes up with some original and inventive ways to use his data.  At times, however, it frames its arguments in overly stark forms, and makes claims that go beyond what it can prove.  But despite these concerns, this is a book well worth reading, which will stimulate very useful debate on fundamental questions of Chinese economic history.

As a first approximation, Liu’s theses are hard to argue with.  The author shows that China experienced very impressive growth during the Song dynasty (ca. 960-1279), a period in which there was also a striking expansion of the role of markets in Chinese society.  He also show that the policies of Zhu Yuanzhang (r. 1368-1398), founder of the Ming Dynasty (1368-1644) dealt a major blow to China’s economy by trying to resurrect an idealized world of largely autarkic and demonetized villages.  It took a long time for China to recover from this: in contrast to many scholars who think that by 1500 China had returned to a market economy generating at least a Song level of prosperity, Liu argues that this did not happen until at least 1600, and quite likely not even then.  Moving beyond China, Liu then suggests that this historical case shows the centrality of market institutions for stimulating economic growth, beginning at a very low level of development.

The first three of these points — the marketization and relative prosperity of Song times, and the damaging effects of early Ming policies — are broadly accepted.  The first controversy concerns matters of degree: how prosperous? How marketized?  How big and lasting a blow did the early Ming inflict?  A second set of controversies centers on causation, and thus on the role of other factors.  For instance, Liu says very little about the many technological innovations during the Song — including the invention of gunpowder, the magnetic compass, paper money, and the importation (from Southeast Asia) of early-ripening rice — except to note that some of the most important innovations did not diffuse rapidly.  Some others would assign those innovations (and some that began in the Tang, such as printing) a good deal of credit for the growth that occurred in the Song, and continued into the Yuan (1279-1368) in some parts of the empire. While we will never have the data necessary to arrive at a precise allocation of growth to different factors, there is still room for further productive discussion about relative weights. Likewise, it is possible to show that the Mongol conquests of the mid-thirteenth century had a devastating impact in some places (especially North China and Sichuan), and very little elsewhere (the Middle and Lower Yangzi Valley, and in the far south); the relative weight of those different regional stories is still unsettled, and matters greatly in whether Liu is justified in placing an overwhelming emphasis on early Ming anti-market policies in explaining an apparent stagnation or decline in living standards between the eleventh and sixteenth centuries.

One of the book’s contributions is to concentrate in one place the arguments for transformational change concentrated in the Song period, and followed by a later reversal: a once popular view (e.g. Elvin 1973) that has lately given way to a tale of more gradual progress across several centuries (Smith and Von Glahn 2003).  Making the best of flawed data, Liu estimates population growth of 0.92% per year between 980 and 1109, a remarkable rate for a pre-modern society.  And drawing on a large body of secondary scholarship, he points to considerable evidence for changes in agriculture — capital deepening, especially in the form of massive investments in irrigation, and increasing use of oxen – which should, logically, have raised agricultural yields significantly, allowing a population that had more than tripled to eat as well or better than its forebears.

Unfortunately, however, we lack much good data on actual yields in the Song.  Liu notes that Dwight Perkins’ well-known estimates are (like most others for this period) inferences from agricultural rents, and that much of the land in question was land used to support schools; he further argues that school land was often rented out at below-market rates, depressing these inferred yields, and that the land which families donated to schools was often their least fertile property, anyway.  Meanwhile several of Perkins’ later data points come from agricultural handbooks, and probably represent optimal results.  Thus Liu argues, the impression of slow but steady growth across centuries that emerges from Perkins’ highly influential work may well be a statistical illusion. He prefers the older idea of a Song boom followed by little progress in subsequent dynasties.   Building on work by Zhou Shengchan, Liu tries to work backwards from data on population and average food consumption to estimate thirteenth century yields in the Lower Yangzi region; the results vary considerably among prefectures, but are generally near the high end of our range of estimates for any period before the arrival of modern farm inputs.  They would therefore leave little room for continued growth in the Yuan, Ming, or even Qing.

If verified, this would be a very important finding, but I have my doubts.  In part, my doubts come from personal experience, as adopting a similar methodology for estimating eighteenth century output of various crops led to extremely high estimates.[1]  There are also technical problems with some of this data (particularly in Table 7.8), though probably not big enough to change the results dramatically.[2]   The most we can say with strong confidence, I think, is that some Song farmers achieved yields near the pre-modern maximum, and more and more of their neighbors caught up over time — though whether this happened over decades or centuries remains very uncertain.

For most non-food items, we simply lack the data to generate serious estimates of per capita consumption in Song times; and while anecdotal evidence of rising consumption exists, Liu prefers not to rely on it.  Instead, he relies on an estimate of real wages for unskilled workers to show that living standards in the Song were as high as they ever got in China prior to the twentieth century.  Because we have not found for China any very long series of wages for privately-hired workers in a relatively standardized occupation in a particular place — like the long runs of wages for construction workers on European cathedrals and colleges, for instance — Liu constructs a long-run series of military wages, for which data are comparatively rich; and because we lack data for enough commodities to construct a long-run price index, he uses grain prices as the denominator for his series.  The resulting series peaks at its very beginning (in 1004) and fluctuates wildly while declining overall for the next roughly 170 years. It is then relatively stable until another steep drop in the early Ming, and recovers slightly in the late Ming before declining again in the early Qing (Figure E-1).

Liu has done us a considerable service by piecing this data series together, but as a proxy for the living standards of ordinary people it must be taken with a very large grain of salt.  Governments did not engage soldiers through a true labor market, nor did the institutional setting of military recruitment or the conditions of being a soldier (aside from the wage) remain constant over time.  Moreover, even if we had a reliable private sector wage series, it would not necessarily follow that this was a reliable basis for estimating popular living standards, much less per capita GDP, as Liu argues (p. 133).  Wage earners were never more than 15 percent of the labor force in late imperial China, and most farmers either owned their own land or had a relatively secure tenancy (especially in Qing times).  Consequently, they earned far more than unskilled laborers did — perhaps three times as much on average, according to preliminary estimates I have made for the eighteenth century (and for the early twentieth, where the data are better). (Among other things, this is confirmed by the fact that tenants and smallholders could support families, while unskilled laborers could rarely afford to marry. And for GDP per capita, we would also have to average in the earnings of well-to-do families.  Last but not least, if the ratio between wages and average farm earnings changed over time — as it might well have, given a gradual strengthening of tenant usufruct rights over the course of the late empire — even a much better wage series might not tell us what we want to know about general living standards.

But if Liu does not prove his most ambitious claims, he does succeed in proving many of his smaller empirical claims.  In particular, the evidence for relative prosperity in the Song and a sharp decline in the early Ming seems too much to explain away, even if one can raise doubts about each individual measurement.  The money supply contracted very sharply in early Ming times, followed by the introduction of government notes (for state payments) that soon became almost worthless; customs receipts (and presumably long-distance trade declined; and the wage decline between ca. 1050 and ca. 1400 is too big to be explained entirely by data problems.  A separate estimate, later in the book, suggests that per capita income in North China might have fallen by as much as half between 1121 (on the eve of the Song loss of the North) and 1420, though output per capita seems to have remained stable in the Yangzi Delta.  Liu also makes a strong case that Song people were freer than their early Ming counterparts, and perhaps even less unequal economically (though Song writing shows so much worry about inequality that one is tempted to believe there was fire behind so much smoke).

This brings us to the problem of explaining these differences.  Liu provides a straightforward answer: Song reliance on the market worked while the early suppression of it backfired.  Moreover, this represents a timeless truth, most recently vindicated by the sharp contrast between the Maoist and post-Maoist periods.  Here. I think, Liu lets his argument outrun his evidence, focusing too exclusively on one broad-brush contrast.

It would be hard to deny that the increased influence of market principles in the Song stimulated growth: above all, probably, the agricultural growth of the south, which required significant investment (especially for water management) that would surely have been more modest had earlier dynasties’ restrictions of private landowning remained in force; and given the surpluses that southern agriculture soon generate, and the relatively easy transportation that its rivers offered, impressive commercial and urban growth soon followed.  Since the coastline south of the Yangzi also has far more good sites for ports than the coastline north of the Yangzi, the southward shift of China’s economic center of gravity was also propitious for foreign trade, which boomed under both the Song and the (Mongol) Yuan.

Even in the south, however, the state provided essential infrastructure (though its role declined over time), and often played a very active role in foreign trade. In the north, meanwhile, both the enormous system of canals built by the Song government and the huge concentration of demand in the capital region were crucial, both for consumer markets and the growth of a precocious iron industry stimulated by unprecedented levels of military spending.   A variety of inventions also must have contributed something to the robust growth of the Song period.

Nor, I think, would many people deny that the early Ming attempt to return to local autarky had serious and lasting negative consequences. But we should bear in mind that the North, where Liu’s decline in estimated output between 1121 and 1420 was concentrated, suffered a number of  major shocks in this period, all of which bypassed or fell much more lightly on the south (except for Sichuan). These included conquests by three sets of northern invaders (including, most devastatingly, the Mongols); the prolonged turmoil that toppled the Mongols and brought the Ming to power; a civil war between supporters of two Ming heirs; and repeated, enormous, Yellow River floods, including two that dramatically shifted the river’s course (out of six such incidents in the last 4,000 years) and made it impossible to rebuild the Song-era canal system.   Ming policies certainly did great damage, too, but the relative size of these setbacks needs more detailed analysis before we can accept Liu’s almost exclusive emphasis on the Ming founder’s anti-market policies.

I would also caution against lumping all the parts of Ming anti-commercialism under the heading “command economy,” and comparing it to an ideal type of “market economy,” as Liu often does (e.g. pp. 1, 4-12, 134-136, 197, 199).  No pre-modern state could maintain the vigorous intervention needed to run a true command economy for long.  The Ming may have been more effective than most, but their massive redistribution of property and forced migration was over by about 1425, with land and labor again being exchanged in private markets;[3] the system of artisan conscription unraveled during the fifteenth century; foreign trade outside the official tribute system gradually returned; and so on.  This did not mark the end of Ming anti-commercialism as an attitude, or of its effects: among other problems, the dynasty never tried to provide the money supply that the private economy needed, saddling its subjects with costs that lingered for centuries.[4]   But even if this failure was originally part of an aggressive state’s attempt at command economy, it soon evolved into something else: the failure of a relatively weak state to undertake even those interventions that could have benefited both itself and the private economy.  The succeeding Qing dynasty (1644-1912) certainly had no dream of a command economy, and often (though not always) sought to encourage markets;  and the state’s share of GDP may have slipped as low as 2 percent, compared to at least 10 percent and perhaps as much as 20 percent at the peak of Song military-fiscalism.[5]  Yet the Qing provided the most stable bronze currency — the money used for most everyday transactions — China had ever known, while uncoined silver provided a reasonably adequate currency for big transactions; and it mobilized impressive resources for various physiocratic projects, from water control to grain price stabilization to promotion of best practices in agriculture and handicrafts. (That it spent much less, proportionately, on its military than the Song or Ming had facilitated this combination of low extraction and significant services.[6])  And for about a century and a half, they presided over impressive demographic and economic growth, Interestingly,  three prominent economic historians — Loren Brandt, Debin Ma, and Thomas Rawski, none of them remotely anti-market — have argued that the principal reason why Qing economic development was not even better was that the government was too minimalist: that a small government spread across a vast area was unable to prevent all sorts of local actors — from bandits to local elites employing private enforcers to rogue government clerks — from interfering with local markets and property rights.[7]  Such interference was clearly a problem in the late Ming as well, though it is not precisely measurable in either period.  It does, however, remind us that a simple contrast between “market economy” and “command economy” does not give us enough tools to understand the different relationships between state and market in imperial China, or anywhere else.

Nonetheless, the book does an impressive job of demonstrating how much dynamism the marketizing economy of the Song generated, and how much of those gains had been lost by the mid-Ming, at least in certain regions.  The author’s efforts to quantify trends that many others have been content to describe qualitatively are impressive; this is a book where the appendices are often as thought-provoking as the text.  The results are not as revolutionary or dispositive as the book sometimes suggests, but they will stimulate productive debates for years to come.

Notes:

1. Lacking data on the acreage devoted to non-grain crops in certain areas, I decided to estimate how much land must have been devoted to non-grain crops, relying on generally accepted numbers for population, grain consumption, and imports, and then multiply the acreage left over by conservative estimates of yields for the non-grain crops.  The results came out so high that I cut them in every way I could think of — including, in one case, arbitrarily reducing the estimate of non-grain acreage by half. The results I came up with were still at the high end of the existing range of estimates, or in some cases significantly beyond it.  I am not ready to toss out those estimates completely, and would be happy to see this approach vindicated; but I am inclined to be cautious here, especially since Liu has not made the same efforts to depress his results as I did.

2. The conversions from Zhou’s numbers, which mostly use Yuan dynasty measurements, is complicated. Trying to reproduce his results for one prefecture after an email exchange with me, Prof. Liu got a figure about 1 percent lower.

3. A rare set of household-level records, for instance, shows a family with modest landholdings in Huizhou engaged in no less than 18 land purchases or sales between 1391 (not long after the Ming came to power) and 1432.  See Von Glahn 2016: 291-293.

4. Von Glahn 1996 and Kuroda 2000 suggest that this was finally addressed with moderate success in the Qing.

5. Perkins 1967: 492; Wang 1973: 133 for the Qing; Golas 1988: 93-94 comes up with 24 percent for the Song, but admits that this seems unlikely.  Hartwell 1988: 79-80 suggests a bit over 10 percent.

6. On military spending compare Hartmann 2013: 29 with Zhou 2000: 36-38.

7. Brandt Ma and Rawski 2014: 60, 76, and 79.

References:

Brandt, Loren, Debin Ma and Thomas Rawski. 2014.  “From Divergence to Convergence: Reevaluating the History behind China’s Long Economic Boom,” Journal of Economic Literature 52(1):45-123.

Elvin, Mark. 1973.  The Pattern of the Chinese Past.  Stanford: Stanford University Press.

Goals, Peter, 1988. “The Sung Economy: How Big?”  Bulletin of Sung-Yuan Studies 20: 89-94.

Hartmann, Charles. 2013.  “Sung Government and Politics,” in John Chafee and Dennis Twitchett, eds., The Cambridge History of China, Volume V Part 2: Sung China, 960-1279 (Cambridge: Cambridge University Press):19-133.

Hartwell, Robert. 1988. The Imperial Treasuries: Finance and Power in Song China,” Bulletin of Sung-Yuan Studies 20: 18-89

Kuroda Akinobu. 2000. “Another Monetary Economy: The Case of Traditional China,” in A.J. H. Latham and Heita Kawakatsu, eds, Asia-Pacific Dynamism, 1500-2000 (London: Routledge): 187-198.

Perkins, Dwight. 1967. “Government as an Obstacle to Industrialization: The Case of Nineteenth-Century China,” Journal of Economic History 27 (4): 478–92

Perkins, Dwight. 1969. Agricultural Development in China, 1368-1968.  Chicago: Aldine Publishing.

Smith, Paul, and Richard Von Glahn, eds., 2003. The Song-Yuan-Ming Transition in Chinese History.  Cambridge:  Harvard Asia Center.

Von Glahn, Richard. 1996.  Fountain of Fortune: Money and Monetary Policy in China, 1000-1700.  Berkeley: University of California Press.

Von Glahn, Richard. 2016.  The Economic History of China: From Antiquity to the Nineteenth Century.  Cambridge: Cambridge University Press.

Wang Yeh-chien. 1973. Land Taxation in Imperial China, 1750-1911.  Cambridge, MA: Harvard University Press.

Zhou Yumin. 2000.  Wan Qing caizheng yu shehui bianqian (Late Qing Fiscal Administration and Social Change).   Shanghai: Shanghai renmin chubanshe.

Kenneth Pomeranz is University Professor of History at the University of Chicago.  His best known book is The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, 2000).  His most recent publication is “The Data We Have vs. the Data We Want: A Comment on the State of the Divergence Debate,” Pt. I and Pt II New Economics Papers (June 8, 2017) https://nephist.wordpress.com/2017/06/06/the-data-we-have-vs-the-data-we-need-a-comment-on-the-state-of-the-divergence-debate-part-ii/. Forthcoming publications include “Water, Energy, and Politics: Chinese Industrial Revolutions in Global Environmental Perspective,” in Gareth Austin, ed., Economic Development and Environmental History in the Anthropocene (forthcoming, 2017: Bloomsbury Academic).

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

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

Military Entrepreneurs and the Spanish Contractor State in the Eighteenth Century

Author(s):Sánchez, Rafael Torres
Reviewer(s):Agudo, David González

Rafael Torres Sánchez, Military Entrepreneurs and the Spanish Contractor State in the Eighteenth Century. Oxford: Oxford University Press, 2016. xxii + 297 pp. $100 (hardcover), ISBN: 978-0-19-878411-1.

Reviewed for EH.Net by David González Agudo, Vancouver School of Economics, University of British Columbia.

Rafael Torres Sánchez, professor of Economic History at the University of Navarra, has tackled an interesting topic that fits well in the current state-building debate: the relationship between military entrepreneurs and the Spanish monarchy in the eighteenth century. This well-known scholar of war, states and economic development tries to determine whether the Spanish mobilization of military resources helped improve the country’s economy or hindered it. The so-called “second contractor state interpretation” addresses military entrepreneurs’ effectiveness in pushing the state to “go further” (p. 8) in the production and distribution of markets.

Torres Sánchez approaches the issue from four different perspectives: 1) He first dives into eighteenth-century Spain’s military supply policy, whose priority was never the development of a supply method (direct administration or contract with private entrepreneurs), but the procurement of supply itself by means of pragmatic decisions. 2) In the second section, the author uses signed contracts, correspondence, and notarial protocols to look at the negotiation processes within the Spanish army and navy victualing, where the state saw no problem switching back and forth from administración (direct administration) to asiento (contract with private entrepreneurs). 3) Focusing on the navy, Torres Sánchez aims at determining whether or not a “fiscal-naval” state existed in Spain, as it happened in England. To do so, he analyses how Spain’s military entrepreneurs participated in the development of the world’s second biggest fleet. 4) The last section assesses the Spanish contractor state’s efficiency in an urgent and particular military action, the Minorca expedition of 1781-1782.

The book tells a twofold story. On one hand, the Spanish military supply system of the eighteenth century was apparently successful, giving way to the involvement of private entrepreneurs. This permitted a mutual collaboration between the state and Spanish businesspeople. Both parts, sharing mercantilist beliefs, benefited from their relation and somehow contributed to reinforce the national production of military provisions. The state did so through investment policies in shipbuilding, as well as in textile and iron-and-steel factories. The contractors played their part in it by purchasing most of supplies within the country and its territories. Torres Sánchez underlines the consequent emergence of several opportunities for Spain’s economic development: an improvement in the geographical integration, with a greater domestic and colonial circulation; a more effective redistribution of income, offering more opportunities than ever to local sectors and areas; and a strengthening of the business elites that brought about new prospects.

On the other hand, Torres Sánchez argues that the relationship between the state and military entrepreneurs was risky and unsteady. This mutual reliance, materialized in privileges and monopolies, ended up shutting out other potential businessmen and production systems that otherwise would have been beneficial for the whole economy. The state was not interested in constructing a competitive market for its military entrepreneurs, who became increasingly conditioned by the government’s finances. How this came about is shown through the case of several Spanish financiers, traders and companies such as Francisco Medinueta (chapter 4), or the Cinco Gremios Mayores of Madrid (chapter 5). This impeded the state from advancing in the production and distribution of markets. Unlike Britain, the Spanish Bourbons preferred to trust a business elite rather than exerting an administrative control of the military entrepreneurs. This leads the author to describe the “strange paradox” of the Spanish eighteenth century (p. 111): in the first half the government applied absolutist policies that encouraged a gradual development of monopolistic entrepreneurs; in the second half, as a free-trade stage was taking shape, the crown again resorted to anticompetitive measures.

We have, in sum, an excellent book that provides good Spanish “victuals” for thought and that contributes very substantially to the understanding of the link between warfare and modern state construction. Torres Sánchez sagely highlights the constant rivalry between European countries as the driving force behind the connection between the emergence of modern states and the growth of military activity. Historical competition between states in Europe is precisely one of the reasons argued nowadays by some economic historians to answer the basic questions on the Great Divergence debate: “why Europe conquered the world” (Hoffman, 2015), or “why the Industrial Revolution did not happen in China” (Mokyr, 2017). According to Joel Mokyr, fragmentation and competition within the European continent led to a “cultural change” that sparkled the Industrial Revolution. Philip Hoffman highlights the role of the rapid development of gunpowder technology and the military sector in the establishment of European colonial empires and industrialization. Embedding Torres Sánchez’s work in this recent discussion would be highly desirable.

References:

Philip Hoffman, Why Did Europe Conquer the World? Princeton, Princeton University Press, 2015.

Joel Mokyr, A Culture of Growth: The Origins of the Modern Economy, Princeton, Princeton University Press, 2017.

David González Agudo is a Postdoctoral Fellow at the Vancouver School of Economics, University of British Columbia. His main area of research is economic history, with a focus on the reconstruction of economic and demographic variables in early modern Spain. He is author of “Housing and the Cost of Living in Early Modern Toledo” (2014), with Mauricio Drelichman, in Explorations in Economic History.

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

Subject(s):Government, Law and Regulation, Public Finance
Military and War
Geographic Area(s):Europe
Time Period(s):18th Century

History by Numbers: An Introduction to Quantitative Approaches

Author(s):Hudson, Pat
Ishizu, Mina
Reviewer(s):Roberts, Evan

Published by EH.Net (May 2017)

Pat Hudson and Mina Ishizu, History by Numbers: An Introduction to Quantitative Approaches (second edition).  London: Bloomsbury, 2017. xx + 339 pp. $35 (paperback), ISBN: 978-1-84966-537-7.

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

For a field on the wane (see the discussion in Historically Speaking in 2010) quantitative history has a good stock of textbooks, but the flow of new entrants is slow. The revised edition of History by Numbers — originally solo-authored by Pat Hudson in 2000 and now co-authored with Mina Ishizu in its 2017 second edition — would make an excellent textbook for an upper division undergraduate history class. Anyone wishing to extend their students and themselves could add Charles Feinstein and Mark Thomas’s Making History Count for a more advanced undergraduate or graduate-level class in quantitative history. Of course, this supposes there is sufficient demand among history students to enroll in such a class, a critical question I return to later in the review.

The presumed audience for History by Numbers is history rather than economics students. Chapter 1 situates quantitative history within the discipline of history, while Chapter 2 discusses the nineteenth-century statistical movements in Britain and the epistemology of quantitative reasoning. Economics students would benefit from reading these chapters, yet they fit more squarely within the design of a history course and curriculum. The remainder of the book takes students and their instructors through a standard sequence of data management, exploration and analysis, written with the presumption that students begin with only a memory of high school mathematics. The exploratory data analysis chapters focus on graphical methods, and how to characterize the distribution of a single variable. Examples in all the chapters come from the published literature, but with a hand on the scale for modern British economic and social history. British universities have been more successful than their North American peers in maintaining quantitative work within history departments, so the choice of examples reflects the state of the field.

The chapter on time series and indices is particularly strong, with clear worked explanations of how to construct indices and the art of choosing the right base period. There is a very good explanation of cyclical fluctuations and seasonality, and how to work with this form of data correctly. The graphics and the text complement each other especially well here. Regression and correlation is then covered in one chapter, integrating both time series and cross-sectional data. For an introductory course this is appropriate, and the separation of cross section and time series approaches can await students in a subsequent course, where Feinstein and Thomas’s more advanced text separates these issues. Sampling and significance testing in Chapter 7 wrap up the purely statistical chapters, with more worked examples from published research. Chapter 8 outlines how economic historians put statistical methods to work in building models and testing theories, putting cliometrics in perspective for history students. It is not until Chapter 9 that we get to the foundational work of doing History by Numbers: getting numbers from manuscripts into the computer. Again, the authors do well in putting recent developments in creating quantitative data into historical perspective for a generation of students who have grown up in an era where important tools of quantitative history: digital cameras, laptops, databases, geographic information systems, and fuzzy matching of text are ubiquitous in their daily lives.

History by Numbers would make an excellent textbook for a course introducing students to quantitative methods in the context of historical examples, particularly for instructors who would integrate that introduction with a history of the British industrial revolution. A more general and topically eclectic course on quantitative history could also use this book as a core text with very little modification, as it discusses research on topics ranging from violence in nineteenth-century New Zealand to the wolfram market in World War II Spain. Two sections of discussion questions integrate the worked statistical examples in the text with substantive historical and economic questions, and could be used as the basis for labs or tutorials.

Alternatively, instructors might use History by Numbers as their secret guide to teaching statistics to history students without assigning it as a text (I apologize to the authors for the significant reduction in their royalties this implies). Indeed, this was how I used the previous edition of the book; as a script for teaching statistics to history students in a social history class using entirely American data. With IPUMS, EH.Net, and Historical Statistics of the United States it is not hard to find data that can be used to teach all the statistical concepts introduced in History by Numbers. Bearing in mind that book authors face harder constraints on length than online book reviewers whose words come cheap, there are some omissions in an otherwise quite comprehensive survey of modern quantitative history. There could be greater discussion of longitudinal data from cohort studies which are mentioned just briefly at the end of the text. Moreover, in an otherwise diverse set of articles for discussion I was surprised to see none from the strong Scandinavian quantitative history tradition (largely written in English these days).

Overall then there is much to recommend in History by Numbers for instructors whose goal is to teach statistics using relatively clean data from already digitized sources. Working with small clean datasets allows students to focus on learning statistics, statistical software, and gaining confidence in making statistical inferences. The next step in students’ development, directly suggested by Chapter 9, is writing an Honors or senior thesis using methods from the book, and available sources tailored to student and instructor interest.  This supposes that students have been motivated to first take a course guided by History by Numbers. Yet, as the authors note quantitative history has not grown since the first edition was published.

Perhaps we are doing it wrong, and need to rethink how we introduce students to quantitative history. The same arguments apply mutatis mutandis to introducing students to quantification in other undergraduate social science programs such as sociology, political science, and anthropology. In all of these disciplines a meaningful fraction of students approach quantitative methods with some anxiety. In the same spirit as Joshua Angrist and Jörn-Steffen Pischke (2017) recommend changing the traditional sequence of introductory econometrics courses to reflect changes in empirical econometric practice, quantitative historians should also introduce students to their practices “by example rather than abstraction.”

For historians and their kin in economics and sociology departments, teaching by example means beginning with primary sources. It is now straightforward to lead with the sources, to begin where students are found, a little shy of quantification but probably willing to enroll in a class that offers an introduction to research methods and an immersion in primary sources. Leading with immersion in primary sources meets the modal student closer to their interests, and can be a powerful recruitment tool for a class, compared to others built around textbooks and reading. Tools for transcribing data can now be easily built using Google tools, or the Zooniverse Project Builder (https://www.zooniverse.org/lab).  Such a course could also be pitched to students as “digital history.” The fashion for attracting students with “digital” may wane in the future, but the pedagogical underpinnings of beginning with collaborative digitization of sources (quantifiable sources!) are sound.

When students get their hands metaphorically dirty with the sources, see that their small sample of sources differs internally, and differs from their classmates’ sample of sources, the motivation to investigate questions statistically comes more organically.  They can then learn statistics with data they have created. Fitting data collection and analysis into one semester requires compressing analysis somewhat, the omission depending on the manuscripts and data at hand. If the data are cross sectional surveys, for example, index numbers may be omitted. My experience has been that beginning with the manuscript sources, creating a small dataset, and then analyzing it, leads to the greatest engagement from students who initially lack confidence in quantitative methods. Such an approach punts some of the statistics taught in History by Numbers to later semesters, but with the benefit of having engaged more students in quantification than a course framed explicitly as quantitative history.

Thus, the conclusion that History by Numbers is an excellent text for an upper division class is premised on the existence of a sophomore course that introduces students to quantitative methods quietly, and maybe just a little surreptitiously. Call it digital history, call it social history or historical sociology, whatever topic you think will attract students at your institution, and ideally the students will be so far into the course that they won’t realize they’re learning statistics until you’ve shown them they can do it. As Hudson and Ishizu emphasize many students have more of an aptitude for the common-sense tools of statistics than they realize. In short, while I can recommend History by Numbers to social and economic historians, I also recommend that we think carefully and creatively about how our curricular sequences can bring more students into quantitative history courses.

References:

Joshua D. Angrist and Jörn-Steffen Pischke. 2017. “Undergraduate Econometrics Instruction: Through Our Classes, Darkly,” Journal of Economic Perspectives 31(2): 125-44.

Charles H. Feinstein and Mark Thomas. 2002. Making History Count: A Primer in Quantitative Methods for Historians. New York: Cambridge University Press.

Robert Whaples. 2010. “Is Economic History a Neglected Field of Study?” Historically Speaking 11(2): 17-20.

Evan Roberts is Assistant Professor of Sociology and Population Studies at the University of Minnesota. His best enrolling quantitative methods class went by the title “Living, Working and Dying in Chicago.” Recent publications include “Family Structure and Childhood Anthropometry in Saint Paul, Minnesota in 1918” (with John Robert Warren), History of the Family.

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

Subject(s):Development of the Economic History Discipline: Historiography; Sources and Methods

Slavery’s Capitalism: A New History of American Economic Development

Editor(s):Beckert, Sven
Rockman, Seth
Reviewer(s):Wright, Gavin

Published by EH.Net (March 2017)

Sven Beckert and Seth Rockman, editors, Slavery’s Capitalism: A New History of American Economic Development.  Philadelphia: University of Pennsylvania Press, 2016.  viii + 406 pp. $40 (cloth), ISBN: 978-0-8122-4841-8.

Reviewed for EH.Net by Gavin Wright, Department of Economics, Stanford University.

In case any economic historian has been asleep or on Mars for the past three years, you may want to know that the economics-of-slavery culture wars have broken out again.  Though only a pale shadow of the dust-up we had back in the 1970s, the aggressive assertions of the “new history of capitalism” regarding the centrality of slavery for U.S. economic development, and critiques of this work by economic historians, have generated much commotion in academic circles, including numerous review articles and a lengthy survey in The Chronicle of Higher Education (December 8, 2016). The present volume is a manifesto of sorts for the slavery wing of the NHC insurgency, originating in a conference at Brown University (co-sponsored by Harvard) in 2011.

The claims of the editors for the new history of capitalism and slavery are not modest.  The opening sentence of the Introduction reads: “During the eighty years between the American Revolution and the Civil War, slavery was indispensable to the economic development of the United States” (p. 1).  They acknowledge that “the argument is more easily asserted than substantiated” (p. 3), but this cautionary note does not deter them from announcing the “impossibility of understanding the nation’s spectacular pattern of economic development without situating slavery front and center” (p. 27).  The publisher’s summary of the book (presumably approved by the editors) deploys even more extravagant language, declaring that the book “identifies slavery as the primary force driving key innovations in entrepreneurship, finance, accounting, management, and political economy,” “the originating catalyst for the Industrial Revolution and modern capitalism” (University of Pennsylvania Press web site).

Having thus allowed the editors to dig their own rhetorical graves, let me urge economic history readers not to overreact to the bluster and bombast.  After decades of untouchability, the new interest in economic aspects of slavery on the part of younger scholars is a good thing, an opportunity for cross-disciplinary learning and cooperation.  Scholars from different disciplines will inevitably differ in their framing of the issues, their choice of language and styles of historical writing, but there is no deep reason here for an ideological Great Divergence regarding slavery.  Suffice it to say here that virtually none of the claims in the preceding paragraph are supported in any substantial way by the research presented in the volume. But most of the writers do not seem committed to this agenda anyway.  It is unfortunate that historians pursuing original inquiries on slavery-related topics have been persuaded to present their work as apparent disciples of a militant insurgency.  But there is no intellectual gain in recasting this historical project as a team sport.

Putting the editors’ introduction aside, only the chapter by Edward E. Baptist stands out for tendentious claims in support of a preconceived agenda.  Here Baptist is somewhat defensive, his book having been roundly criticized by Alan Olmstead and Paul Rhode for inventing the term “pushing system,” neglecting improvements in cotton varieties, and misusing historical sources, including the WPA slave narratives.  But this does not stop Baptist from adding a few more half-baked morsels to his mélange.  Among many candidates, most irksome to this reviewer is this one: “The three million white people in the cotton states were per capita the richest people in the United States, and probably the richest group of people of that size in the world” (p. 36). A footnote cites James Huston’s Calculating the Value of the Union (the whole book) and p. 87 of Robert Fogel’s Without Consent or Contract.  The statement gets the population wrong, conflates wealth with income, ignores the widening gap between slave owners and non-owners, and aggregates real and slave property.  To be sure, the value of slave property was very real to the owners. The essential point is that the South was the wealthiest region in the nation when slave values are included, but the poorest when they are not.  (See Gavin Wright, Slavery and American Economic Development, p. 60.)  This deficiency, coupled with the failure to invest in education and infrastructure — not the purported decline in plantation productivity (p. 43) — explains the emergence of southern economic backwardness when slavery was abolished.

Because the Baptist debate is ongoing, it will not be pursued further here.  Following my own injunction to accentuate the positive, let me recommend the chapters by Caitlin Rosenthal on accounting practices on slave plantations; by Daina Ramey Berry on attitudes toward life and death in the shadow of slave markets; by Calvin Schermerhorn on the entwining of financial and mercantile interests in the coastwise slave trade; by Craig Steven Wilder on the role of slavery in financing Catholic colleges in the Age of Revolution; by Alfred L. Brophy on “proslavery instrumentalism” in legal thought; and by Andrew Shankman on Matthew Carey’s embrace of slavery in formulating his Whig political economy for the nation.  Independent scholar Bonnie Martin has performed extraordinary labor compiling records on slave mortgages from county deed books, and here she adds 10,000 additional loans to her previous collection (Journal of Southern History, November 2010).  One hopes that these data will at some point be put to use by economic historians.  Here, unfortunately, Martin struggles to draw interesting conclusions from her evidence.  She suggests that “an image of capitalistic sophistication … runs counter to the traditional assumptions about the economy of the South,” (p. 119) appending a footnote including no less than three books by the current reviewer.  Since none of these books advance any claims about the “lack of sophistication in the southern economy” — quite the contrary — one can only conclude that the author is grasping for straws.

Let me call particular attention to the chapters by Daniel B. Rood and by John Majewski, which should be read conjointly.  Rood writes about the slave-using wheat farms of Virginia, building on his earlier article on that topic (Journal of American History, June 2014).  The particular focus here is the invention of the reaper by Cyrus McCormick on his father’s wheat farm in the Shenandoah Valley.  The reaper’s Virginia origins are well-known to economic historians, but Rood asks us to see this “quintessentially American machine as a Creole artifact, a tropical technology, and, more than anything, a product of Atlantic slavery” (p. 87).   According to Rood’s account, pressure to mechanize came from a premium on speed in marketing, which arose as planters sought the patronage of new mills in Richmond, producing flour for the Brazilian market.  Rood is persuasive in describing the “pools of expertise and the plantation laboratory” (p. 94) in Virginia, including the contribution of skilled slaves.  (Oddly, there is no citation to Charles Dew’s Bond of Iron [1994], which discusses Virginia’s skilled slave machinists in considerable detail.)  What he does not come to grips with is the fact that the reaper did not diffuse rapidly in Virginia, which McCormick largely abandoned after 1845, moving into what he knew to be a more promising market for mechanical implements in the Midwest.  Obed Hussey, McCormick’s arch-rival in mechanical reaping, had been there all along.

Majewski, the only card-carrying economic historian in the group, also shows the compatibility between slavery and a “thriving, diversified economy,” (p. 279) focusing on what he calls the Limestone South, a fertile alfisol area encompassing Kentucky’s Bluegrass region, Virginia’s Shenandoah Valley, and Tennessee’s Nashville Basin.  According to Majewski, the decisive feature differentiating the Limestone South from the free states was the absence of support for public schools, a consequence of slaveholders’ stranglehold on state politics.  Majewski argues that this stark difference in access to educational opportunity helps to explain northern opposition to the expansion of slavery.  He quotes Abraham Lincoln: “Free Labor insists on universal education,” but evidently the first step toward this goal was to keep large slaveholders out.

The book’s broad characterization of slave owners as calculating, acquisitive, financially sophisticated and linked to international networks, is not one that economic historians will be inclined to object to, in large part because we have been arguing along similar lines for decades.  The striking divergence between slave and free states, on the other hand, in the geography of settlement, population growth, urbanization, schooling, and politics (a partial list) cries out for more intensive study by historians of all types.  With only occasional exceptions, that major topic is largely missing from the volume under review.  One thing seems certain: calling one region or the other “capitalist” will not contribute much to historical understanding.

Gavin Wright is William Robertson Coe Professor of American Economic History Emeritus at Stanford University. His book, Sharing the Prize: The Economics of the Civil Rights Revolution in the American South, will be issued in paperback by Harvard University Press in the Fall of 2017.

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

Subject(s):Servitude and Slavery
Geographic Area(s):North America
Time Period(s):19th Century

The Great Transition: Climate, Disease and Society in the Late-Medieval World

Author(s):Campbell, Bruce
Reviewer(s):Jones, Eric

Published by EH.Net (February 2017)

Bruce Campbell, The Great Transition: Climate, Disease and Society in the Late-Medieval World.  Cambridge: Cambridge University Press, 2016.  xxiv + 463 pp. $35 (paperback), ISBN: 978-0-521-14443-8.

Reviewed for EH.Net by Eric Jones, La Trobe University.

The cathedral that stands unfinished in Siena marks how abruptly the expansion of the High Middle Ages was brought to a halt, although maybe the failure to complete it during the recovery that began in the fifteenth century is more surprising.  Until the fourteenth century the expansion had been remarkable, with population doubling or trebling since the late eleventh century, cities multiplying, international trade routes linking up, and cultural output soaring, with a thirteen-fold increase in the annual output of manuscripts for example.  The climate was benign and the burden of disease modest.  What could go wrong?  Bruce Campbell’s 400 tightly-packed pages tell us about what might be termed the Great Disruption.

He is chiefly interested in climatic and biological forces, and the cascade of political, economic and social woes that arose in the “Perfect Storm” when they all seemed to go wrong at once.  Much of Eurasia was afflicted by the same malign, “quasi-autonomous,” turn of events.  The book concentrates heavily on England, which is better documented than other countries, but stretches across Europe to the Middle East and Asia as far as China.  It takes in the irruption of the Mongols and the cramping of options for the Vikings of the North Atlantic; indeed it takes in everywhere and every phenomenon.  Ingenious proxies are introduced.  The text is backed up by an extraordinary array of attractively drawn graphs and bar diagrams, although I have qualms about the unstated implication that all sources are equally reliable.  The reader is usually obliged to take the underlying numbers on trust.  Occasionally models are cited incautiously and objections to them scouted, for instance where falling interest rates are assumed to have determined capital investment in peasant farming.  Similarly, the costs and benefits of political fragmentation are dealt with a little ambiguously.

Medieval economic history is nevertheless more valuably expounded in the long central stretches of this volume than anywhere else.  In principle it is standard stuff, but here it is impressively digested, made sharper and brought right up to date by its use of advanced scientific findings about influences on the climate and human and animal health.  Over fifty years ago the Hampshire County Archivist told me that she had some sleepless nights after cutting her finger on a parchment of the Plague Year.  Well she might. Yet it is only this minute, so to speak, that DNA from the dental pulp of exhumed skeletons has confirmed what the disease organism really was.

The Perfect Storm of climate and disease was a gigantic shock but it was still an asymmetric one.  In the long term not quite everything did go wrong.  The Black Death, Campbell states, worked to England’s advantage by relieving the burden of poverty and facilitating structural reform.  This is a thesis of growth by disaster, a sort of neutron bomb that counteracted the morcellement produced by intense demand for land: a considerable proportion of capital-in-land was not exactly untouched but was at least reusable.  Extra-somatic sources of technical knowledge also survived.

The achievements of description and analysis in this hefty volume are incontestable and we should move on to consider its interesting method or rather scope.  There are lessons here for economic historians to ponder.  To my mind, Campbell overstates his case by presenting the book as the first to integrate physical and biological processes into historical narrative and its originality as a study of so much of the globe.  He rather sweeps most predecessors aside.  What is new is the extent to which his work rests on an upsurge of research by his contemporaries, something he does admit, just as he acknowledges the impetus from research on global warming.  The Great Transition marks the shift into a world of ample funding (not merely in the United States but now in Europe too), of the compiling of vast new sources of data, of enormous international chains of scholars, and of the arrival in economic history, natural science-like, of publications with very long lists of contributors.

Economic historians will henceforth be obliged to treat as normal the use of scientific articles, scientific data and wholly unfamiliar proxies.  Tree-ring counts are a recognizable tool but here we run out to something as indirect as a nine-fold increase in the purchase of sealing wax by the English Chancery in just forty years of the thirteenth century.  And what of a “precipitation index based on the band widths of a speleothem from Cnoc nan Uamh Cave, A.D. 900-1500” or the citation of articles like one entitled, ‘Antarctic Last Millennium 10BE Stack and Solar Irradiance Reconstruction”?  How will colleagues in general history or economics react to innumerable unfamiliar terms such as these?

Campbell was educated as a geographer and it shows — in the best possible sense, in that he is totally aware of the physical, climatic and biological worlds and open-minded enough to scour them for ideas and evidence.  But, as he says, he learned the hard way how resistant historians can be to venturing off what they believe to be piste.  I was myself admonished by a famous cultural historian not to use the simile of tectonic plates grinding “because historians will not understand what you mean.”  The scholarly world may be advancing beyond such obtuseness but the acceptance in general narratives of integrated natural science and history will still come slowly.  Nor are economists likely to greet with glee what might be called “deep environmental history.”  There is no gainsaying the fact that many prefer building a priori models to slow-motion wrestling with ground evidence from the natural world.

Both Marxist and neo-classical interpretations of the past are accordingly dismissed in this book but without fully stating the objections.  Campbell simply replaces them with a bold set of very complicated social, political and ecological interactions.  Nevertheless he swallows whole the fashionable neoclassical-style assertions that labor-saving inventions and innovations were induced by low interest rates and dear labor.  Because something was logical does not mean it actually happened for that reason.  Barely a word here about the human and cultural circumstances involved in the response, though there is something about the providential emergence of institutions to capture the rents from expanding commerce during the High Middle Ages.  Yet these issues can be taken forward by others and they are, in the vulgar phrase, “pimples on a side of beef” compared with the stupendous effort in charting the course of medieval economic history that this book represents.

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

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

Subject(s):Economywide Country Studies and Comparative History
Historical Geography
Geographic Area(s):General, International, or Comparative
Asia
Europe
Time Period(s):Medieval

A History of the Global Economy: 1500 to the Present

Editor(s):Baten, Joerg
Reviewer(s):La Croix, Sumner

Published by EH.Net (January 2017)

Joerg Baten, editor, A History of the Global Economy: 1500 to the Present.  Cambridge:  Cambridge University Press, 2016.  xiv + 369 pp. $40 (paperback), ISBN: 978-1-107-50718-0.

Reviewed for EH.Net by Sumner La Croix, Department of Economics, University of Hawaii-Manoa.

In the past two years, there has been a boomlet in global economic histories targeted to a variety of audiences.  They include a handbook oriented towards academics and graduate students (Francesco Boldizzoni and Pat Hudson, editors, Routledge Handbook of Global Economic History (2016)) and two books more oriented to undergraduates and a general audience (Robert Allen, Global Economic History: A Very Short Introduction (2015) and Larry Neal and Rondo Cameron, A Concise Economic History of the World: From Paleolithic Times to the Present, fifth edition (2015)). A new addition to this field is A History of the Global Economy, a collection of 32 essays edited by Joerg Baten (University of Tübingen), which provides a sweeping introduction to the history of the global economy from 1500.  The volume was commissioned by the International Economic History Association and the editor states that his aim is to organize a “non-Eurocentric history” that presents “economic history in a balanced way.”  The volume is anchored by essays on ten regions that each have “circa 500 million inhabitants today,” although it might have been useful to split the Southeast-Asia-Australia-New Zealand region into two parts given the disparate development paths of economies in Southeast Asia and Australasia.  The regional essays are supplemented by “interlinking notes” that summarize critical debates among economic historians and “take a global perspective” on “core indicators” of development and growth and “highlight notes” that consider particularly interesting puzzles and topics. Senior scholars specializing in each region have written the ten anchor essays, while some of the most distinguished economic historians (e.g., Jeffrey Williamson and Steven Broadberry) were recruited to write some of the interlinking and highlight notes.

Anchor chapters are by Jan Luiten van Zanden (North-western Europe), Joerg Baten (Southern, eastern, and central Europe), Price Fishback (United States and Canada), Luis Bértola and José Antonio Ocampo (Latin America), Osamu Saito (Japan), Debin Ma (China), Rima Ghanem and Joerg Baten (Middle East, North Africa, and Central Asia), Tirthankar Roy (South Asia), Martin Shanahan (Southeast Asia and Australia/New Zealand), and Gareth Austin (Sub-Saharan Africa).  Each author makes a sustained effort to incorporate four measures of the “core dimensions of development” into their analysis: Gross domestic product per capita, height as an indicator of health and the quality of nutrition, basic numeracy as an indicator of education, and the Polity IV index as an indicator of democracy.  Baten argues that while these measures are not available for all regions and times, they are sufficiently available to allow the reader to compare the welfare of populations across regions over at least some of the four dimensions.  The core dimensions of development are presented in each chapter via a unified set of figures and maps.  Another common set of nicely-conceived maps is used to identify directions and compositions of trade flows within and across regions, centers of economic activity in each region, and specialization in production within regions.

One of the strengths of this book is that the text is kept to a manageable length of 355 pages, but this also means that some important topics receive sparse coverage.  For example, the chapter on North-western Europe devotes no space to cataloging major inventions of the industrial revolution while devoting considerable space to more general interpretations of its origins.  Not much space is devoted in any of the chapters to national or international macroeconomic policy.  Instead the emphasis is placed on broader demographic trends, market integration and international trade, and institutional change.  The chapter on Japan is lucid and informative on the 1500-1868 period, but then provides just two pages of analysis for the 1868-2010 period.  This is unfortunate, as a more complete discussion of Japan’s rapid pre-World War II development, its post-war economic miracle, and subsequent stagnation over the 1990-2010 period would surely have been of great interest to many readers.  The effects of war receive little attention except in the U.S./Canada essay.  All that aside, some of the missing topics are filled in by the ten highlight notes and the twelve interlinking notes.  Examples of topics covered by the notes include brain drain from India, the Sputnik shock, the natural resource curse in Latin America, trade and poverty in the third world, women in global economic history, Alfred Chandler’s insights into business history, state finances in civil wars, and Japanese industry during the Second World War.

In sum, Joerg Baten has brought together some of the best people in the field of economic history, and they have written a great set of essays that is surprising unified by the questions they consider as well as by the use of core indications of development and a unified set of maps and figures.  The book is particularly noteworthy for its avoidance of economic jargon and its clear writing.  Authors avoid extensive citation of sources in the text, keep footnotes to a minimum, and provide a brief list of references for each chapter. Students in an introductory or upper-division course in global economic history could easily digest its contents while specialists in economic history could also benefit from reading this volume, as its regional syntheses incorporate the larger literature on regional and economic growth that has emerged in the last 25 years.

Sumner La Croix is the author (with Alan Dye) of “The Political Economy of Land Privatization in Argentina and Australia, 1810-1850,” Journal of Economic History 73(4), 2013.

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

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):General, International, or Comparative
Time Period(s):16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

The Information Nexus: Global Capitalism from the Renaissance to the Present

Author(s):Marks, Steven G.
Reviewer(s):Dudley, Leonard

Published by EH.Net (September 2016)

Steven G. Marks, The Information Nexus: Global Capitalism from the Renaissance to the Present. New York: Cambridge University Press, 2016.  xiv + 250 pp. $28 (paperback), ISBN: 978-1-107-51963-3.

Reviewed for EH.Net by Leonard Dudley, Economics Department, Université de Montréal.

In this disruptive study, Clemson University historian Steven Marks redefines capitalism by breathing new life into concepts recycled from nineteenth-century German sociology. In 1877 a young German philosopher, Ferdinand Tönnies, published Community and Civil Society, a book based on his habilitation thesis. Tönnies contrasted two types of social structure, each of which he had come to know during the preceding years of dramatic and often violent change in German society.  The Gemeinschaft, or community, was an “organic” society like that of the small town in an agricultural region of northern Germany where he had grown up. Here relationships were “natural,” governed by the proximity of family, neighbors and friends. In contrast, the Gesellschaft, or civil society, was the “mechanical” industrial society like that of the cities he had come to know as a student living in different regions of Germany. Whereas relationships in the Gemeinschaft were governed by familiarity and custom, those in the capitalist Gesellschaft were determined by markets and prices.

In The Information Nexus, Steven Marks presents a very similar dichotomy between two types of society. In pre-capitalist societies of medieval Europe or China, he argues, while there were local markets and long-distance trade, the flow of information was limited either by technology or government policy. The first true capitalist economies appeared in the Dutch Republic and England/Great Britain in the seventeenth and eighteenth centuries, where unrestricted publication permitted the rapid circulation of information among a literate population. Although Marks criticizes the “reductionist” approach of the German sociologists (p. 53), Tönnies too distinguished capitalist from non-capitalist economies by the nature of their information technologies. Tönnies’s Gemeinschaft is bound together by oral communication — “the general use of a shared language” — whereas at the initial core of his Gesellschaft lie two of Gutenberg’s offspring, printed debt instruments and newspapers.

The Information Nexus is divided into two sections, each of which is composed of three self-standing essays. In the Part I, Marks presents a review and critique of previous studies of capitalism. Chapter 1 describes the origin of the word capitalism itself. Writing in 1850, French socialist Louis Blanc defined it as the appropriation of capital by the few, whereas in 1911 for German social scientist Werner Sombart, capitalism was control by the Jews. In Chapter 2, Marks proceeds to a description of changes in the meaning of the term capitalism in the United States over the twentieth century. From 1917 onward, capitalism came to represent the American political and economic system in contrast to the communism of Russia or the Soviet Union. In Chapter 3, the author then criticizes previous studies, arguing that features often identified with capitalism — the protection of property, the presence of a monetized commercial economy and production based on the division of labor — are all to be found in many pre-capitalist societies.

In the Part II, Marks offers his own definition of the concept of capitalism. The reader learns in Chapter 4 that the essence of capitalism in the early-modern period was the “free flow of information about capital markets and business opportunities” (p. 100).  Although there were precedents in the Renaissance Italian city states, as mentioned, the crucial development came in seventeenth-century United Provinces and England. In Chapter 5, the story then jumps to the Second Industrial Revolution in the United States. After 1850, in rapid succession, Marks explains, the railroad, the telegraph, the telephone, the typewriter, the large-circulation newspaper and radio made possible the mass market in what became world’s largest economy. Finally, in Chapter 6, Marx turns to current trends in the global economy. He recognizes that automation and globalization present challenges for the rich world. However, the digital revolution holds great promise for emerging economies — provided that their governments permit the “clear signaling of rules and prices.” China, he asserts, despite its rapid economic growth, is having difficulty in switching from imitation to innovation, in part because “government intrusion … raises transaction costs and hampers the flow of information” (p. 227).  Marks concludes that capitalism is essentially “informationism” — an “intensification of information gathering” (p. 234).  Its presence in Europe and its offshoots along with its absence elsewhere account for the “great divergence” between the West and the rest over the past 400 years.

The Information Nexus is a remarkable study, not only for the power of its message, but also for the clarity of its prose and for the vast field of research compressed into its 250 pages. However, I suggest three additions that would help to complete Marks’s story of the rise of capitalism. A first point is the role of language. It is hard to imagine the efficient functioning of financial markets without the standardization of the vernacular — first written and then spoken — as described by Milroy (1994) for the case of England.

A second point concerns cooperation. Although Marks emphasizes price competition, it required a high willingness to cooperate in order for capitalist markets to function efficiently. Paradoxically, it was the intense military tournament between emerging nation states in Europe described by Philip T. Hoffman (2015) that seems to have provided the incentive for the citizens of each state to work together to improve their nation’s position. David Hounshell (1984), for example, has described how the collaboration between the French and American governments and their private entrepreneurs led to the development of interchangeable parts during the eighteenth and early nineteenth centuries.

A final issue is innovation. Ultimately it was the unprecedented divergence in innovation rates between capitalist and non-capitalist societies that led to dominance of the West. Marks mentions the Industrial Revolution only briefly, and fails to discuss the unprecedented burst of technological creativity between 1700 and 1850 described by Mokyr (1990).

As the late William McNeill (1963, p. 567) observed, “the career of Western civilization since 1500 appears a vast explosion, far greater than any comparable phenomenon in the past both in geographic range and in social depth.” Steven Marks’s study of the role of information flows in the creation of this capitalist Gesellschaft definitely merits a place on history bookshelves, whether real or virtual.

References:

Philip T. Hoffman, Why Did Europe Conquer the World? Princeton: Princeton University Press, 2015.

David Hounshell, From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States. Baltimore: Johns Hopkins University Press, 1985.

William McNeill, The Rise of the West: A History of the Human Community. Chicago: University of Chicago Press, 1963.

James Milroy, “The Notion of ‘Standard Language’ and its Applicability to the Study of Early Modern English Pronunciation,” in Dieter Stein and Ingrid Tieken-Boon van Ostade, eds., Towards a Standard English, 1600-1800. Berlin: Mouton de Gruyter, 1994, 19-30.

Joel Mokyr, The Lever of Riches: Technological Creativity and Economic Progress. Oxford: Oxford University Press, 1990.

Ferdinand Tönnies, Community and Civil Society. Cambridge: Cambridge University Press, 2001 (original 1887).

Leonard Dudley, Honorary Professor and Lecturer, Economics Department, Université de Montréal, leonard.dudley@umontreal.ca, is the author of Mothers of Innovation: How Expanding Social Networks Gave Birth to the Industrial Revolution (Cambridge Scholars, 2012) and “Language Standardization and the Industrial Revolution,” Oxford Economic Papers (forthcoming).

Copyright (c) 2016 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (September 2016). All EH.Net reviews are archived at http://eh.net/book-reviews/

Subject(s):Economywide Country Studies and Comparative History
History of Technology, including Technological Change
Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Institutions and Small Settler Economies: A Comparative Study of New Zealand and Uruguay, 1870−2008

Author(s):Schlueter, Andre
Reviewer(s):Bértola, Luis

Published by EH.Net (August 2016)

Andre Schlueter, Institutions and Small Settler Economies: A Comparative Study of New Zealand and Uruguay, 1870−2008.  New York: Palgrave MacMillan, 2014. xvi + 290 pp. $115 (hardcover), ISBN: 978-1-137-44828-6.

Reviewed for EH.Net by Luis Bértola, Department of Economic and Social History, Universidad de la República (Uruguay).

The aim of the book, based on a doctoral dissertation, is to test whether the social order approach developed by North, Wallis and Weingast (NWW) (2009), fits the particular development of two small settler societies, New Zealand and Uruguay, which otherwise were not considered in the referred authors’ work.

The book presents the problem in chapter 1, discusses the research strategy in chapter 2 and discusses three different periods in chapters 3-5 (“The Golden Age of the Two Settler Economies” up to the 1920s; “The Great Divergence between New Zealand and Uruguay,” the period 1930-1970; and “Decades of Stop and Go” since the 1970s). Chapter 6 concludes and adds some references to later research on social orders in a somewhat confusing way. This discussion should be placed in the introduction, or in chapter 2.

The book attempts to provide further answers to the question “Why the West?,” considering that “the transfer of institutions from the European core to overseas colonies before the industrial revolution facilitates a natural experiment concerning the impact of initial institutional frameworks on long-term economic development.” New Zealand represents the British institutional framework, and Uruguay the Spanish.

The research strategy, presented in the second chapter is as follows. As North, Wallis and Weingast’s verbal model “needs to be applied more consistently in order to remedy its perceived disadvantages in comparison with other more formal theories” (p. 45), the author summarizes a set of key hypotheses with the help of which ideal types are constructed. The historical cases are then read in the light of these ideal types searching for similarities and anomalies.  The stories must find the stylized causality: beliefs → institutions → organizations → policies → outcomes.

The analysis is performed at two levels, both in a comparative way. First, and for the general propositions to hold, New Zealand should show higher and more stable growth rates and levels of per capita income than Uruguay. The former should also show a more sophisticated institutional framework and higher degrees of national organized violence than the latter. These aspects are studied in the following chapters with use of macroeconomic data and different proxies for institutional quality and violence.

While the first level of analysis is somewhat descriptive of the main features of both societies, the second level presents the historical narrative in order to find the causality between organizations, policies and outcomes. The narrative tries to identify the three doorstep conditions for the transition from Limited Access Society to an Open Access one:  1) the rule of law for elites; 2) perpetual forms of public and private elite organizations, including the state itself; and 3) consolidated political control of the military.

Schlueter concludes that, in broad terms, the general approach is valid. However, he finds some anomalies that seem to contradict some hypotheses. For instance, New Zealand achieved some features that should allow for the transition to the Open Access Order much later than expected, and, her relative economic decline after the 1960s is not something to expect. Thus, the author proposes making some adjustments and addenda to the discussed approach. “The reasons for the deviations of both settler societies from their theoretical ideal types lay within and outside of their national borders. NWW’s framework needs further amendments to account for local adaptations to inherited social structures, that is, a theoretically idealized British heritage, as well as for complex influences of exogenous powers on the rules of the game, its players, and their interaction” (pp. 203-05).

The book is well-written and interesting. The author makes an important effort to understand the history of these two countries. He is, however, open to criticism on several details of his interpretation. My main criticism is two-fold, or even contradictory. In the first place, he misses the opportunity to criticize at least two aspects of the NWW approach. One the one hand, he ignores problems in NWW´s approach to international relations and the formal and informal institutions at that level. In NWW´s approach, external forces act only at time zero, establishing the local institutional environment that later reproduces itself, while the international sphere almost completely disappears from the analysis, even when it experiences radical changes. On the other hand, the book is missing a more critical discussion of the deterministic way in which causal relations are considered and a more serious evaluation of alternative explanations. An example is the use of contract-intensive money as a proxy for institutional stability. At least in the case of Uruguay, this proxy does not explain economic stagnation, but is the result of it. This is just an example of the need for a more in-depth discussion of causal relations, which are presented in a very deterministic way. Nevertheless, my second criticism goes in the other direction; I want to make a defense of NWW. It seems somewhat unfair to 1) criticize these authors for being vague and imprecise, 2) reduce their approach to a set of testable hypothesis, and 3) show that the facts do not completely fit the testable hypothesis. From my point of view, NWW had very good reasons for not being too precise. And this is because they have tried to understand real historical processes. Their courageous attempt to construct a comprehensive conceptual framework, even if subject to many criticisms, requires a flexible approach that tries to explain a wide variety of particular developments. Maybe the right question to ask is how these authors would have tried to explain these anomalies.

Reference:

Douglass C. North, John J. Wallis and Barry Weingast (2009), Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, New York: Cambridge University Press.
Luis Bértola is the author of “An Overview of the Economic History of Uruguay since the 1870s” in the EH.Net Encyclopedia of Economic and Business History at https://eh.net/encyclopedia/bertola-uruguay-final/.
Copyright (c) 2016 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 2016). All EH.Net reviews are archived at http://eh.net/book-reviews/

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Geographic Area(s):Australia/New Zealand, incl. Pacific Islands
Latin America, incl. Mexico and the Caribbean
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War

Author(s):Gordon, Robert J.
Reviewer(s):Margo, Robert A.

Published by EH.Net (July 2016)

Robert J. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War.  Princeton, NJ: Princeton University Press, 2016. vii + 762 pp. $40 (cloth), ISBN: 978-0-691-14772-7.

Reviewed for EH.Net by Robert A. Margo, Department of Economics, Boston University.

This is the age of blockbuster books in economics. By any metric, Robert Gordon’s new tome qualifies.  It tackles a grand subject, the productivity slowdown, by placing the slowdown in the context of the historical evolution of the American standard of living.  Gordon, who is the Stanley G. Harris Professor in the Social Sciences at Northwestern University, needs no introduction, having long been one of the most famous macroeconomists on planet Earth.

The Rise and Fall of American Growth is divided into three parts.  Part One (chapters 2-9) examines various components of the standard of living, in levels and changes from 1870 to 1940.  Part Two (chapters 10-15) does the same from 1940 to the present, maintaining the same relative order of topics (e.g. transportation appears after housing in both parts).  Part Three (chapters 16-18) provides explanations and offers predictions up through 2040.  There are brief interludes (“Entre’acte”) between parts, a Postscript, and a detailed Data Appendix.

Chapter 1 is an overview of the focus, approach, and structure of the book.  Gordon’s focus is on the standard of living of American households from 1870 to the present.  The approach is both quantitative — familiar to economists — and qualitative — familiar to historians.  As already noted, the organization is symmetric — Part One considers the pre-World War II period, and Part Two, the post-war.  The fundamental point of the book is that that some post-1970 slowdown in growth was inevitable, because so much of what was revolutionary about technology in the first half of the twentieth century was revolutionary only once.

Chapter 2 draws a bleak picture of the standard of living ca. 1870, the dawn of Robert Gordon’s modern America.  From the standpoint of a household in 2016, conditions of life in 1870 would appear to be revolting.  The diet was terrible and monotonous to boot; homemade clothing was ill-fitting and crudely made; transportation was dependent principally on the horse, which generated phenomenal amounts of waste; indoor plumbing was all but non-existent; rural Americans lived their lives largely in isolation of the wider world.  In Gordon’s view, much of this is missing from conventional real GNP estimates.  Chapter 3 continues the initial story, focusing on changes in food and clothing consumption.  Gordon contends there was not much change in underlying quality but he argues that, by the 1920s, consumers were paying lower prices for food — having shifted to lower-priced sources (chain stores as opposed to country merchants) — and that most clothing was store-bought rather than homemade.

Chapter 4 studies housing quality.  As with other consumer goods, housing also improved sharply in quality from 1870 to 1940.  Gordon argues that much farm housing was poor in quality, while new urban housing was typically larger and more durably built.  Indoor plumbing, appliances and, ultimately, electrification dramatically enhanced the quality of life while people were indoors.  As elsewhere in the book, reference is made to hedonic estimates of the value of these improvements as revealed in higher rents. Chapter 5 details improvements in transportation between 1870 and 1940. These are grouped into three categories.  The first is improvement in inter-city and inter-regional transportation in rail.  This occurs chiefly through improvements in the density of lines and in the speed of transit. The second is intra-city which occurred with the adoption of the electric streetcar.  The third, and most important arguably, is the internal combustion engine and its use in the automobile (and bus).  Gordon especially highlights improvements in the quality of automobiles, noting that the car is not reflected in standard price indices until the middle of the Great Depression.

Chapter 6 details advances in communication from 1870 to 1940.  By current standards, the relevant changes — the telegraph, telephone, the phonograph, and the radio — might not seem like much but from the point of view of a household in 1870, these technologies enabled Americans to dramatically reduce their isolation.  As Gordon points out, one could phone a neighbor to see if she had a cup of sugar rather than visit in person, or listen to Enrico Caruso’s voice on the phonograph if it were not possible to hear him in concert.  The radio brought millions of Americans into the national conversation, whether it was to hear one of Franklin Roosevelt’s fireside chats or listen to a baseball game.  Chapter 7 discusses improvements in health and mortality from 1870 to 1940 which, according to Gordon, were unprecedented.  After summarizing these, he turns to causes, chief among which are improved urban sanitation, clean water, and uncontaminated milk.   Gordon also highlights improvements in medical knowledge, particularly the diffusion (and understanding) of the germ theory of disease.  Chapter 8 studies changes in the quality of work from 1870 to 1940.  These changes were wholly for the better, according to Gordon.  Work became less dangerous, more interesting, and more rewarding in terms of real wages.  Most importantly, there was less working per se, as weekly hours fell, freeing up time for leisure activity.  There was a marked reduction in child labor, as children spent more of their time in school, particularly at older ages in high school.   This was also the period leading up, as Claudia Goldin has told us, to the “Quiet Revolution” in the labor force participation of married women, which was to increase substantially after World War II. Credit and insurance, private and social, is the topic of Chapter 9.  The ability to better smooth consumption and also insure against calamity are certainly improvements in living standards that are not captured by standard GNP price deflators.  Initially the shift of households from rural to urban areas arguably coincided with a decrease in consumer credit but by the 1920s credit was on the rise due to several innovations previously documented by economic historians such as Martha Olney.   Households were also better able to obtain insurance of various types (e.g. life, fire, automobile); in particular, loans against life insurance were frequently used as a source for a down payment on a house or car.  Government contributed by expanding social insurance and other programs that helped reduced systemic risks.

Chapter 10 begins the second part of the book, which focuses on the period from 1940 to the present.  As noted, the topic order of Part Two is the same as Part One, so Chapter 10 focuses on food, clothing, and shelter.  Gordon considers the changes in quality in these dimensions of the standard of living to be less monumental than as occurred before World War II.  For example, frozen food became a ubiquitous option after World War II but this change is far less important than the pre-1940 improvement in the milk supply.  Quantitatively, perhaps the most important change was a reduction in relative food prices which, predictably, led to increase in the quantity demanded.  Calories jumped, and so did obesity and many related health problems.  For clothing, the chief difference is in the diversity of styles and, as with food, a sharp reduction in relative price holding quality constant.  In Chapter 11 Gordon notes that automobiles continued to improve in quality after World War II, mostly in terms of amenities and gas mileage; and their usefulness as transportation improved with the building of the interstate highway system.  Gordon is less sanguine about air transportation, arguing that quality of the travel experience deteriorated after deregulation which was not offset by reductions in relative prices.  For housing, the major changes was suburbanization and a concomitant increase in square footage.  The early postwar period witnessed some sharp improvements in the quality of basic household appliances, and somewhat later, the widespread diffusion of air conditioning and microwaves.

Chapter 12 focuses on media and entertainment post-1940.  Certain older forms of entertainment gave way to television, the initial benefits of which were followed by steady improvements in the quality of transmission and reception.  Similarly, there were sharp improvements in the various platforms for listening to music, with substantial advances in recording technology and delivery — the 78 gave way to the LP to the CD to music streaming and YouTube.  The technology to deliver entertainment also delivered the news in ever greater quantity (quality is in the eye of the beholder, I suppose).  Americans today are connected almost immediately to every part of the world, a level of communications unthinkable a century ago.  A surprisingly brief Chapter 13, recounts the history of the modern computer.  There is no way to tell this history without emphasizing just how unprecedented the improvements have been, from the very first post-war computers to today’s laptops and supercomputers.  Moore’s Law, understandably, takes center stage, followed by the Internet and e-commerce.   Gordon has a few negative things to say about the worldwide web, but the main act — why haven’t computers led a revolution in productivity — is saved for later in the book.

Chapter 14 continues the story of health improvements to the present day.  As everyone knows, the U.S. health care system changed markedly after World War II, in terms of delivery of services, organization, and payment schemes.  Great advances were made in cardiovascular care and treatment of infectious disease through the use of antibiotics.   There were also advances in cancer treatment, mostly achieved by the 1970s; the subsequent “war” on cancer has not been as successful.  Most of the benefits were achieved through diffusion of public health and expansion of health knowledge in the general public (e.g. the harmful effects of smoking).  Since 1970 the health care system has shifted to more expensive, capital intensive treatments primarily provided in hospitals that have led to an inexorable growth in medical care’s share of GNP, increases that most scholars agree exceed any improvements in health outcomes.  The chapter concludes with a mixed assessment of Obamacare.  Chapter 15, on the labor force, is also rather short for its subject matter.  Gordon recounts the major changes in the structure and composition of work since World War II.  Again, it is a familiar tale — improved working conditions due to the shift towards the service sector and “indoor” jobs; rising labor force participation for married women; rising educational attainment, at least until recently; and the retirement revolution.  Your faithful reviewer gets a shout-out in a brief discussion of the “Great Compression” of the 1940s; my collaborator in that work, Claudia Goldin (and her collaborator, Lawrence Katz) gets much more attention for her scholarly contributions on the subject matter of Chapter 15, understandably so.

Part Three addresses explanations for the time series pattern in the standard of living.  Chapter 16 focuses on the first half of the twentieth century, which experienced a marked jump in total factor productivity (TFP) growth and the standard of living.  Gordon considers several explanations, dismissing two prominent ones — education and urbanization — right out of the gate.   In paeans to Paul David and Alex Field, he argues that the speed-up in TFP growth can be attributed to the eventual diffusion of key inventions of the “Second” industrial revolution, such as electricity; to the New Deal; and, finally, to World War II.  Chapters 17 and 18 tackle the disappointing performance of TFP growth and the standard of living in the last several decades of U.S. economic history.  Despite remarkable accomplishments in science and technology the impact on average living standards has been small, compared with the 1920-70 period.  Rising inequality since 1970, which can be tied in part to skill-biased technical change, has made matters worse, as did the Great Recession.  While Gordon is not all doom and gloom, he definitely falls on the pessimist side of the optimist-pessimist spectrum — his prediction for labor productivity growth over the 2015-40 period is 1.2 percent per year, a full third lower than the observed rate of growth from 1970 to 2014.

I think it is next to impossible to write a blockbuster economics book without it being a mixed bag in some way or other.  Gordon’s is no exception.  On the plus side, the book is well written, and one can only be in awe of Gordon’s mastery of the factual history of the American standard of living.  We all know macroeconomists who dabble in the past.  Gordon is no dabbler.  One can find interesting ideas for future (professional-level) research in every chapter — graduate students in search of topics for second year or job market papers, take note.  Many previous reviewers have chided Gordon for his pessimistic assessment of future prospects.  Of course, no one knows the future, and that includes Gordon.  It is certainly possible that he will be wrong about productivity growth over the next quarter-century — but I for one will be surprised if his prediction is off by, say, an order of magnitude.

I am less sanguine about the mixed qualitative-quantitative method of the book.  I gave up reading the history-of-technology-as-written-by-historians-of-technology a long time ago because it was just one-damn-invention-after-another.  At the end of a typical article recounting the history of improvements in, say, food processing, I was supposed to conclude that no amount of money would get me to travel back in the past before said improvements took place — except I never did reach this conclusion, knowing it to be fundamentally wrong.  Despite references to hedonic estimation, TFP, and the like, in the end Gordon’s book reads very much like conventional history of technology.  More than a half century ago Robert Fogel showed how one could quantify the social savings of a particular invention, thereby truly advancing scholarly knowledge of the treatment effects. Yet Railroads and American Economic Growth is not even cited in Gordon’s bibliography, let alone discussed in the text.  If one’s focus is the aggregate, I suppose a Fogelian approach is impossible — there are too many inventions, and (presumably) an adding-up problem to boot.  What exactly, though, do we learn from going back and forth between quantitative TFP and qualitative one-damn-invention-after-another? I’m not sure.  There’s the rub, or rather, the tradeoff.

Criticisms aside, if you are into economics blockbusters, The Rise and Fall of American Growth belongs on your bookshelf, next to Piketty and the like.  Just be sure it is a heavy-duty bookshelf.

Robert A. Margo’s Economic History Association presidential address, “Obama, Katrina, and the Persistence of Racial Inequality,” was published in the Journal of Economic History in June 2016.

Copyright (c) 2016 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 2016). All EH.Net reviews are archived at http://eh.net/book-reviews/

Subject(s):Economic Development, Growth, and Aggregate Productivity
History of Technology, including Technological Change
Household, Family and Consumer History
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII