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Time on the Cross: The Economics of American Negro Slavery

Author(s):Fogel, Robert William
Engerman, Stanley L.
Reviewer(s):Weiss, Thomas

Project 2001: Significant Works in Economic History

Robert William Fogel and Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery. Boston: Little, Brown and Company, 1974. xviii + 286 pp.

Review Essay by Thomas Weiss, Department of Economics, University of Kansas.

“It takes a licking, but keeps on ticking.” John Cameron Swayze

It is a rare monograph in economic history that gets reviewed in magazines and newspapers such as Newsweek, Time, The Atlantic Monthly, The New York Times, The Wall Street Journal and The Washington Post among others; or whose authors appear on television talk shows. Robert Fogel and Stanley Engerman’s Time on the Cross was one such book — perhaps the only one.

Perhaps equally rare is the book that could have withstood the onslaught of unrelenting, withering criticism directed at Time on the Cross. The book was described as “simply shot through with egregious errors” (David, et al, 1976, p.339). It was “vulnerable not only to attack — but to dismissal.” Some thought the book should be consigned “to the outermost ring of the scholar’s hell, obscurity” (Haskell, 1975, p. 35). Richard Sutch could only conclude that “Time on the Cross is a failure” (1975, p. 339).

Yet here it stands among those books that still attract attention, a classic in the field. And it was recognized as such by many at the time, especially in the first wave of reviews. Peter Passell, for example, said, “If a more important book about American history has been published in the last decade, I don’t know about it” (1974, p. 4). Even after the first barrage of criticism appeared, Gary Walton ventured to say that “Time on the Cross was destined to become a classic” (1975, p. 333).

Time on the Cross was not the run of the mill book; neither was it that rare book which on its own would have drawn the attention it did. Of course, the subject matter of slavery was of great interest and would have generated a fair amount of attention; the ‘cliometric’ methodology was still somewhat new and would have elicited some additional interest; and the combination of the two, the application of quantitative methods to a morally-laden topic, would have sparked some controversy. Its popularity, however, went way beyond that, in part because the book was written and produced so as to attract an abnormally great amount of attention. As is well-known, the results and interpretation were published in one volume written for the general educated reader, and was not laden with footnotes and technical jargon. That volume, subtitled The Economics of American Negro Slavery, was described on the jacket cover as “a sweeping reexamination of the economic foundations of American Negro slavery.” The text continued in that bold and provocative style. As indicated above, it got the attention it sought. And, it was a topic of conversation at faculty cocktail parties where economic theorists would seek out economic historians and solicit their opinion: what do economic historians make of the book? Did Fogel and Engerman really argue that slavery was profitable? It became clear quickly that most of them had read the reviews and not the book, but still for a brief moment they had noticed what was going on in the field.

All the painstaking details of scholarship were relegated to a second volume, subtitled Evidence and Methods, so that anyone interested in ‘checking the facts’ or the methods of estimation had to go through a process of cross-referencing. That cross-referencing could be done only after one made sense of the condensed presentation in volume II, which itself relied on extensive cross-referencing. Consider the following simple example from Volume II that supports five pages of textual presentation in volume I regarding the decrease in the slave population of cities.

“3.9 (pp. 99-102). figures 30 and 31 are computed from data in Goldin [146; cf. 148]. See 6.6. for a summary of her findings.” (vol. II, p. 87).

Scholars, as you can imagine, were all too eager to plow through that material. And rightly so, for another bold claim of the book was that it would demonstrate the value and superiority of applying mathematical and statistical techniques to history. This was not only a red flag waved in front of the traditional historians, it got the attention of cliometricians as well. Anyone who has attended a cliometrics conference knows how thoroughly the audience combs through the technical details, no matter what the topic. Imagine when the topic is as popular and controversial as slavery.

The book was intended to do more than just straighten out the traditional interpretation of the economics of slavery. It aimed to “strike down the view that black Americans were without culture, without achievement, and without development for their first two hundred and fifty years on American soil” (p. 258). According to Fogel and Engerman this view derived from the traditional interpretation of the economics of slavery, beginning with the debate between the critics and defenders of slavery and continuing through the writings of historians, most especially U.B. Phillips and Stanley Elkins. Fogel and Engerman argued further that even those historians, such as Richard Hofstadter and Kenneth Stampp, who questioned one or more aspects of the traditional view did not do away with the myth of the inferiority of slave labor (pp. 227-31).

The traditional interpretation of the economics of slavery is obviously long and complex, as was brought out by Stampp in his critique of the book. That complexity has influenced the subsequent writings of Fogel and Engerman but in Time on the Cross they summarized it in five main propositions. “1, …slavery was generally an unprofitable investment …; 2, … slavery was economically moribund; 3, … slave labor, and agricultural production based on slave labor, was economically inefficient; 4, … slavery caused the economy of the South to stagnate, or at least retarded its growth …; 5, … slavery provided extremely harsh material conditions of life for the typical slave” (p. 226).

Their chief conclusions were also neatly summarized in a list of 10 “principal corrections of the traditional characterization of the slave economy” (pp. 4-6).

1. Slavery was not a system irrationally kept in existence by owners who failed to perceive or were indifferent to their best economic interests. The purchase of a slave was generally a highly profitable investment which yielded rates of return that compared favorably with the most outstanding investment opportunities in manufacturing.

2. The slave system was not economically moribund on the eve of the Civil War. There is no evidence that economic forces alone would have soon brought slavery to an end without the necessity of a war or other form of political intervention. Quite the contrary; as the Civil War approached, slavery as an economic system was never stronger and the trend was toward even further entrenchment.

3. Slaveowners were not becoming pessimistic about the future of their system during the decade that preceded the Civil War. The rise of the secessionist movement coincided with a wave of optimism. On the eve of the Civil War, slaveholders anticipated an era of unprecedented prosperity.

4. Slave agriculture was not inefficient compared with free agriculture. Economies of large-scale operation, effective management, and intensive utilization of labor and capital made southern slave agriculture 35 percent more efficient than the northern system of family farming.

5. The typical slave field hand was not lazy, inept, and unproductive. On average he was harder-working and more efficient than his white counterpart.

6. The course of slavery in the cities does not prove that slavery was incompatible with an industrial system or that slaves were unable to cope with an industrial regimen. Slaves employed in industry compared favorably with free workers in diligence and efficiency. Far from declining, the demand for slaves was actually increasing more rapidly in urban areas than in the countryside.

7. The belief that slave-breeding, sexual exploitation, and promiscuity destroyed the black family is a myth. The family was the basic unit of social organization under slavery. It was to the economic interest of planters to encourage the stability of slave families and most of them did so. Most slave sales were either of whole families or of individuals who were at an age when it would have been normal for them to have left the family.

8. The material (not psychological) conditions of the lives of slaves compared favorably with those of free industrial workers. This is not to say that they were good by modern standards. It merely emphasizes the hard lot of all workers, free or slave, during the first half of the nineteenth century.

9. Slaves were exploited in the sense that part of the income which they produced was expropriated by their owners. However, the rate of expropriation was much lower than has generally been presumed. Over the course of his lifetime, the typical slave field hand received about 90 percent of the income he produced.

10. Far from stagnating, the economy of the antebellum South grew quite rapidly. Between 1840 and 1860, per capita income increased more rapidly in the south than in the rest of the nation. By 1860 the south attained a level of per capita income which was high by the standards of the time. Indeed, a country as advanced as Italy did not achieve the same level of per capita income until the eve of World War II.

Several of these, such as the matter of the profitability and viability of slavery or the growth of demand for slaves in cities, were already well-known conclusions at the time and were the product of other researchers (Conrad and Meyer, Stampp, Yasuba, and Goldin, among others). Fogel and Engerman may have added a bit to these sorts of issues, but their role was more that of making such results more widely known among the general public and integrating that information into their bold, new vision of the way the slave system functioned.

Other revisionist claims were provocative. Could slave agriculture possibly be more efficient than free? Was the family the basic unit of social organization under slavery? Was the material condition of slaves as favorable as that of free industrial workers? Was the rate of exploitation or expropriation really that small? Did southern per capita income increase faster than that in the rest of the nation? The slave-based, monocultural agricultural system of the South was Douglass North’s archetypal example of an economy that was not going to be successful. Did he get it all wrong?

What followed was an avalanche of criticism. Criticism may be putting it mildly; the book and the authors were lambasted from every direction. There was an outpouring of research, papers, special journal issues, edited volumes, monographs, conference sessions, and indeed an entire conference — the Rochester Conference: “Time on the Cross: A First Appraisal.” There is no question this was a seminal work, if by that one means it was responsible for bringing forth further work. In this case it did so in abundance. In addition to the work by those who questioned many aspects of Time on the Cross, there was the continuing work by Fogel and Engerman and their students, much of which ultimately appeared in Without Consent or Contract: Evidence and Methods, and Without Consent or Contract: Technical Papers (2 vols.). A re-interpretation of all this work culminated in Fogel’s Without Consent or Contract: The Rise and Fall of American Slavery (which appeared in print long before all the supporting material).

Much of the criticism, at least that which materialized in the first wave, was brought together in two edited volumes: a special issue of Explorations in Economic History (October 1975) and Reckoning With Slavery (David, et al, 1976); and a single authored work Slavery and the Numbers Game (Gutman, 1975). In most cases, the articles in these volumes were also published in journals, usually in a more technical style. The Journal of Economic History, for example, had published a long review essay written by Paul David and Peter Temin, which became part of Reckoning With Slavery. Subsequently the American Economic Review published an important exchange between David and Temin (1979) and Fogel and Engerman (1977 and 1980) regarding the relative efficiency of slave agriculture.

Scholars argued about everything — including what the traditional characterization of slavery was. Sutch produced a monograph questioning almost every aspect of the material treatment of slaves; Gavin Wright criticized the argument that the long run prospects of slavery were good; David and Temin, and others examined the efficiency calculation; Richard Vedder and others questioned the definition and measurement of exploitation; Herbert Gutman examined the arguments about the Protestant work ethic and family values among other things. And as expected, Fogel and Engerman, and their students, published articles that defended their findings.

Not everyone agreed on which of the conclusions was most startling, or which was more in error. On the one hand, Richard Sutch saw the “authors’ claim that the physical and psychological well-being of American slaves was much greater than previously believed” as the lightning rod that attracted so much attention to the book (1975, p. 335). Thomas Haskell argued that the ‘book’s central argument, [was] the claim that slaves were more efficient workers than free men.” (1975, p. 36). In a sense it was the conjunction of interrelated claims, or what critics saw as the whole house of cards, that made for so much controversy.

By itself, for example, the finding that farms using slave labor were estimated to have been more efficient than farms using free workers might not have been controversial. It may have been surprising, but that was in part because no one had thought to look before. If that were an isolated finding, only those who worry about the details of estimating production functions would have cared. But it was not an isolated piece of information, it was part of a different view of the slave regime — the centerpiece of it according to Haskell (1975, p.36). In the Fogel-Engerman scheme the efficiency of southern agriculture was the joint product of shrewd capitalistic planters and hard-working slaves. The innovative, and highly controversial point, was that slaves worked hard because they were rewarded for doing so, not because they were driven to it. Critics pointed out that there was little evidence on rewards; to a large extent this was inferred from the economic outcomes, and from the evidence on the slaves’ material standard of living and the hierarchy of occupations in which they were employed, and from the evidence that whipping did not appear to be widely used to motivate the slaves.

Of course, slaves were motivated by a combination of the stick and the carrot. Fogel and Engerman may have exaggerated the role of the carrot, but a more lenient view is that they were attempting to shift the balance towards well-motivated economic behavior and a more reasonable treatment of slaves. In their summary of the traditional view they argued that Kenneth Stampp had come “remarkably close to discovering the true nature of the slave system…” but had overestimated the use of cruelty.” In Fogel and Engerman’s view, force was necessary, and, although it “could, and often did, lead to cruelty” there was less of it than Stampp believed. Planters, being capitalistic businessmen “used force for exactly the same purpose as they used positive incentives — to achieve the largest product at the lowest cost. Like everything else, they strove to use force not cruelly, but optimally” (p. 232).

In the opinion of Fogel and Engerman, it was the traditional view in which slaves were lazy and not well motivated that gave rise to the false stereotype of black labor that still plagues blacks today (p. 215). In their revised view slaves were hard working; slave labor was of superior quality. Indeed, this helps explain why large slave plantations were much more efficient than free southern farms. “This advantage was not due to some special way in which land or machinery was used, but to the special quality of plantation labor” (p. 209). Ordinary slaves were “… imbued like their masters with a Protestant ethic” (p. 231). They could not exercise that work ethic in whichever direction they wished, but within the confines of the slave system they could, and to a large extent did, strive hard. This revised view, as you can see, shifts attention away from the effect of slavery on the conditions and behavior of blacks today, and puts it back on the conditions of black life that took place after the Civil War (p. 260). And one can imagine this revised view would have bearing on the question of black reparations.

Critics addressed as well the question of the proper role of quantitative methods in history. Could cliometrics make a contribution to our understanding of history in general and slavery in particular? Or is it the case that some of the issues related to slavery are not amenable to quantification or economic analysis?

One calculation from Time on the Cross, for example, that got a lot of attention, perhaps more than any other, was the attempt to measure the extent to which slaves were whipped. It may seem like this point was belabored by critics, but it was an important piece of information in the Fogel-Engerman edifice. Whipping was an example of the methods used to socialize and motivate slaves; the less important these incentives of the ‘stick’ variety, the more believable would be the argument about the incentive effect of carrots. According to Fogel and Engerman, whipping was not common; there were only “an average of 0.7 whippings per hand per year.” The quantification alone was an affront to some, while the interpretation bothered many more. The criticism of this one point suggests the extent to which scholars were examining the book’s methodology. Gutman (1975) took the matter up in great detail, pointing out that their argument rested on evidence from a single plantation and one not likely to be representative of the plantation economy. Moreover, they were careless in their use of those limited statistics; they used an “inaccurate count of the number of whippings, [a] greatly exaggerated estimate of the number of hands, and their erroneous measurement of the length of time covered,” to arrive at their estimate. Gutman argues that it is more relevant to ask how often the whip was used, and using the same evidence calculated that “A slave — on average — was whipped every 4.56 days.” Moreover, the precision as to the number of whippings is not as important as the impact, and that depended on the external effects of whipping. Slaves who witnessed the whipping may have altered their behavior.

Historians were all too eager to think that cliometric techniques had led Fogel and Engerman to what historians saw as outlandish conclusions. Perhaps for this reason, cliometricians felt some duty to defend the cliometric methodology and came down harder on the authors, questioning the quality of Fogel and Engerman’s data, analysis and interpretation. Sutch’s work on the material treatment of slaves, was a detailed attempt to replicate the results of Fogel and Engerman and he “found so many errors of computation or citation, data so selective or weak, and the presentation of the results so distorted that I have been forced to conclude that Time on the Cross is a failure” (1975, p. 339) But it was not a failure of the cliometric methodology; “the fault must lie with the authors.” In Sutch’s view, “quantitative methods can help in producing a more accurate and complete portrayal of slavery” (1975, p. 429).

Somehow Time on the Cross has survived all this firepower. Its conclusions are not all intact, but neither have they been completely dismantled. Despite all the criticisms of the calculation of the relative efficiency of southern agriculture, for example, the leading cliometrics textbook says “The bottom line of the debate is that Fogel and Engerman’s measure of relative efficiency seems to be robust, although many scholars remain troubled by quite how to interpret the estimates. [And] The sources of productivity differences remain a mystery” (Atack and Passell, 1994, p. 316). And although slaves are not seen as having been imbued with the Protestant work ethic, there is little question that they were motivated in part by positive incentives and not just by force and cruelty.

The material conditions of slaves were not as good as Fogel and Engerman made them out to be, but they were better than many had imagined. Fogel and Engerman in effect forced others to confront the issue and look more carefully at the variation in treatment across space, time and size of slave holding. Much research was produced as a result of this, and much of it was produced by students of, and under the direction of, Fogel and Engerman. Thomas Haskell thought that Time on the Cross would probably survive in part because “there were dozens of graduate research assistants who are now fiercely loyal to their company and its product” (1975, p. 39). He envisioned that these assistants would work to shore up the various parts of the structure laid out in the book, and it is unlikely he imagined the sort of work on the stature and nutrition of slaves that was carried out by Richard Steckel, Robert Margo and others. That evidence, the quantitative sort that Fogel and Engerman desired and paid attention to, ran heavily against Time on the Cross, and has clearly influenced Fogel and Engerman’s views. According to Time on the Cross, “Slave health care was at its best for pregnant women. ‘Pregnant women,’ wrote one planter, ‘ must be treated with great tenderness, worked near home and lightly” (p.122). In the “Afterword” of the re-issued Norton edition of the book they put it this way: “It now appears that children rather than adults were the principal victims of malnutrition. [and] Much of the new story turns on the overwork of pregnant women” (1989, p. 285). In Without Consent or Contract, Fogel puts it this way “Masters were not generally guilty of working field hands to death, but they were guilty of so overworking pregnant women that infant death rates were pushed to extraordinary levels” (p. 153).

And despite the pronouncements by some historians that the book was a “flash in the pan, a bold but now discredited work” (Kolchin, 1992, p. 492), it remains in publication and on the reading lists in economics as well as history courses. Of course one cannot tell from the reading list what use is made of the book in each course, and it may be that historians use it as an example of methodology that should not be tried. Nevertheless, it is still in use and still being paid attention to. Moreover, many economic historians, in both economics and history departments, agree with the major conclusions put forth by Fogel and Engerman. Robert Whaples (1995) surveyed members of the Economic History Association in order to find out where there is consensus on a broad range of issues, and included four hypotheses taken straight out of Time on the Cross. As one might expect, two of the propositions that were not very controversial in 1974 — those having to do with the profitability and viability of slavery — were still uncontroversial and agreed to by nearly 100 percent of both economists and historians. More surprising is that most economists and historians accept Fogel and Engerman’s proposition that slave agriculture was efficient compared with free labor. Some of those who agreed did so with unspecified provisos, but only 28 percent of economists and 35 percent of historians disagreed. Their proposition about the material standard of living has not fared as well, 58 percent of historians and 42 percent of economists disagreed with the proposition that the material condition of slaves compared favorably with those of free industrial workers. This, I would think should not be too surprising in light of the work cited above on the treatment of slave children and pregnant women. Many of Fogel and Engerman’s students might have disagreed with this claim, and even Fogel and Engerman have backed off somewhat on this claim (1989, p. 285).

Clearly the book had an impact. At the time it seemed that the attention of the field was devoted entirely to this subject; Fogel and Engerman must have been consumed by it. Its impact, however, even if not all of its conclusions, was longer lasting. It led to a large volume of subsequent research, the compilation of data sets, and helped as well to foster new areas of work, such as that on stature and the standard of living. Whether its conclusions are right or wrong, it is a book that has not been ignored.

References Cited:

Jeremy Atack and Peter Passel. A New Economic View of American History, second edition. New York and London: W.W. Norton, 1994.

Alfred Conrad and John Meyer. “The Economics of Slavery in the Antebellum South.” Journal of Political Economy 66 (1958): 95-130.

Paul David, et al, editors. Reckoning With Slavery: Critical Essays in the Quantitative History of American Negro Slavery. New York: Oxford University Press, 1976.

Paul David and Peter Temin. “Slavery: The Progressive Institution?” Journal of Economic History 34, no. 3 (1974): 739-83.

Paul David and Peter Temin. “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South: A Comment.” American Economic Review 69 (1979): 213-18.

Robert Fogel. Without Consent or Contract: The Rise and Fall of American Slavery. New York: W.W. Norton, 1989.

Robert Fogel, et al. Without Consent or Contract: Evidence and Methods. New York: W.W. Norton, 1992.

Robert Fogel, et al. Without Consent or Contract: Technical Papers. New York: W.W. Norton, 1992.

Robert Fogel and Stanley Engerman. Time on the Cross: The Economics of American Negro Slavery. Boston: Little, Brown and Company, 1974.

Robert Fogel and Stanley Engerman. Time on the Cross: Evidence and Methods. Boston: Little, Brown and Company, 1974.

Robert Fogel and Stanley Engerman. “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South.” American Economic Review 67 (1977): 672-90.

Robert Fogel and Stanley Engerman. Time on the Cross: The Economics of American Negro Slavery. New York: W.W. Norton, 1989.

Robert Fogel and Stanley Engerman. “Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South: A Reply.” American Economic Review 70 (1980): 672-90.

Claudia Goldin. “The Economics of Urban Slavery: 1820 to 1860,” Ph.D. dissertation, University of Chicago, 1972, subsequently published as Urban Slavery in the American South, 1820-1860: A Quantitative History. Chicago: University of Chicago Press, 1976.

Herbert Gutman. Slavery and the Numbers Game: A Critique of Time on the Cross. Urbana: University of Illinois Press, 1975.

Thomas Haskell. “The True and Tragical History of ‘Time on the Cross.’ The New York Review of Books (October, 1975): 33-39.

Peter Kolchin. “More Time on the Cross? An Evaluation of Robert William Fogel’s Without Consent or Contract.” Journal of Southern History LVIII, no. 3 (1992): 491-502.

Robert Margo and Richard Steckel. “Height, Health, and Nutrition: Analysis of Evidence for U.S. Slaves” Social Science History 6 (1982): 516-58

Peter Passel. “An Economic Analysis of that Peculiarly Economic Institution.” New York Times Book Review (April 28, 1974): 4.

Kenneth Stampp. The Peculiar Institution: Slavery in the Antebellum South. New York: Alfred Knopf, 1956.

Richard. Steckel. “A Peculiar Population: The Nutrition, Health, and Mortality of American Slaves from Childhood to Maturity.” Journal of Economic History 46 (1986a): 721-41.

Richard. Steckel. “Birth Weights and Infant Mortality among American Slaves.” Explorations in Economic History 23 (1986b): 173-98.

Richard Sutch. “The Treatment Received by American Slaves.” Explorations in Economic History 12 (1975): 335-438.

Richard Vedder. “The Slave Exploitation (Expropriation) Rate.” Explorations in Economic History 12 (1975): 453-58.

Gary Walton. “A Symposium on Time on the Cross.” Explorations in Economic History 12 (1975): 333-34.

Robert Whaples. “Where Is There Consensus Among American Economic Historians?” Journal of Economic History, 55 (1995): 139-147.

Gavin Wright. “Slavery and the Cotton Boom.” Explorations in Economic History 12 (1975): 439-52.

Tom Weiss teaches economics at the University of Kansas and is a research associate of the National Bureau of Economic Research. He is a former editor of the Journal of Economic History, and is currently the Executive Director of the Economic History Association. His current research is a collaborative project on economic development in colonial North America being carried out with Joshua Rosenbloom and Peter Mancall.

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

Understanding the Private-Public Divide: Markets, Governments, and Time Horizons

Author(s):Offer, Avner
Reviewer(s):Chick, Martin

Published by EH.Net (December 2022).

Avner Offer. Understanding the Private-Public Divide: Markets, Governments, and Time Horizons. Cambridge: Cambridge University Press, 2022. xiv + 227 pp. £19.99 (paperback), ISBN 978-1108791663.

Reviewed for EH.Net by Martin Chick, University of Edinburgh.


This book has its origins in the Ellen MacArthur Lectures which Avner Offer gave in Cambridge in 2018. The ideas developed in those four lectures are further elaborated here in seven main chapters, whose titles are: patient capital; corruption and integrity; plutocratic blowback; creating humans; exit from work; housing and democracy; and climate change and time horizons. Together they present a complexity of ideas concerning the economic and political conceptualisation of past, present, and future, written in an accessible style and with such a wealth of supporting evidence as to make this book of immense interest both for teaching and research.

The core concern of the book is the temporal boundaries of markets, in particular the private-public sector divide. As Offer writes: ‘the private-public divide runs across the future, not the present. It is a time horizon that lies a few years hence. Running up to that boundary is the playground of market competition. Beyond it is terrain which business prefers not to enter on its own’ (p. xi). Longer, if any, returns on investments in health, education, science, universities, nuclear power, and the mitigation of climate change are just some of the examples cited as areas in which private investors enter with caution. In an inversion of the typical neoliberal advocacy, Offer argues that when private investors do enter these fields, they seek the protection of the state. Particular ire is reserved for those instances when private interests enter markets better suited to the time horizon of the state, and where private financial gains are made while public purpose is obscured. One such is social security, with Rose and Milton Friedman, and Martin Feldstein being criticised for encouraging future pensioners to look to financial equity investment as a source of future higher returns. With the pursuit of such higher returns came higher fees. In the USA in 1999, social security administrative expenses amounting to 0.5 percent of benefit payments, were about one-fifth of the management charges on a private pension account (p. 113). As in the USA, so too in the UK. Offer estimates that in the first decade of personal pension accounts, the average charge ratio was at least 43 percent (p. 105) It was not simply a matter of costs and fees, but also that the equity return approach misstated the fundamental purpose of a social security, risk-pooling income-replacement scheme, this being better reflected in a pensions scheme on a Pay As You Go basis linked to the fundamental growth of GDP.

A dark side to this book concerns corruption. Here there is continuity with Offer’s earlier work, The Challenge of Affluence, in which with the removal of institutional constraints and structures to eating, many individuals struggled to control their appetite and to balance immediate gratification against delayed reward. In this new book, the lessening of government constraints and structures, however seemingly bureaucratic and stuffy, widened the scope for corruption. The chapter on corruption and integrity would make an invaluable central reading for classes on the development of government over the past two centuries. Similarly, the wealth of evidence and discussion in the chapter on the housing market and policies over the past two hundred years would make it a valuable reading for classes in this area.

Ultimately what the book seeks to explain is the persistent presence and size of government. As economies have grown, governments have grown faster. The fourfold increase in the size of the economies of Europe and the United States between 1913 and 1980 was trumped by the increase in public expenditure from around one-tenth of GDP to anywhere between 25 and 50 percent. In the U.K., the recent pandemic has had a wartime ‘ratchet effect’ on public expenditure which as a share of GDP rose from 40 percent immediately before the pandemic, to 53 percent during it, and has now settled back to 45 percent in what we hope is the post-Covid period. Economic history suggests that once ratcheted up during a crisis, public expenditure’s new higher share of GDP does not fall back to its pre-crisis level. Not only does this have implications for the structure of tax systems, with a further likely shift towards indirect taxation including an increasing interest in taxing wealth, but it also raises the central question of what should, and should not, be financed by public expenditure. The experience with the Private Finance Initiative in the U.K. suggests that allowing private companies to aggregate into their required rate of return all their estimated risks of financing, constructing, and maintaining new schools and hospitals for an agreed future is very costly, especially when compared with the rates at which government could borrow in the manipulated monetary conditions following the financial crisis of 2008. Why governments did not take that opportunity to raise money with low-interest, long-duration debt to build assets such as social housing on which the rental returns were higher than the cost of borrowing remains puzzling. The answer probably lies in the politically convenient assumptions made about the relative importance of reducing the national debt/GDP ratio so as not to encumber the future. Not that economists are free of such assumptions. The use made by economists of the social discount rate in assessing the response to climate change also makes its own assumptions about the stability of the entire ecological system. Not only do the time horizons involved in climate mitigation schemes make arguments over the discount rate little short of cute at times, but as Offer underlines they contrast with the relative inattention to the implications of an empirical extrapolation of observed changes in temperature to date. Thought-provoking to the end, Offer has written a highly stimulating, readable book of immense intellectual use to the study of the past and to the present’s consideration of its approach to the future.


Martin Chick is Professor of Economic History at the University of Edinburgh. His most recent book is Changing Times: Economics, Policies and Resource Allocation in Britain since 1951 (Oxford University Press, 2020). He is currently researching the development and use of property rights in, on, and under the seas since 1945.

Copyright (c) 2022 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 ( Published by EH.Net (December 2022). All EH.Net reviews are archived at

Subject(s):Economic Planning and Policy
Financial Markets, Financial Institutions, and Monetary History
Government, Law and Regulation, Public Finance
Geographic Area(s):General, International, or Comparative
North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII
21st Century

The Gypsy Economist: The Life and Times of Colin Clark

Author(s):Millmow, Alex
Reviewer(s):Darnell, Adrian

Published by EH.Net (April 2022).

Alex Millmow. The Gypsy Economist: The Life and Times of Colin Clark. Singapore: Palgrave Macmillan Press, 2021. xx + 396 pp. $119.99 (hardback), ISBN: 978-981-33-6945-0.

Reviewed for EH.Net by Adrian Darnell, Retired Professor of Economics, Durham University.


Colin Grant Clark was born in 1905; he was educated at Winchester College and Brasenose College, Oxford, from where he graduated in Chemistry in 1928. His interest in statistics and economics was born of studying statistics in his curriculum and having attended some of Lionel Robbins’ lectures extra curricula. Clark’s interest in economics was furthered at the Oxford Labour Club and then within the University Adam Smith Society, to which Clark’s greatest contributions were to illuminate theoretical discussions with voluminous statistics designed to bring the conversations ‘down to earth.’ Robbins introduced Clark to Hugh Dalton and later William Beveridge, for whom he worked as a research assistant at the London School of Economics in 1928–29; he then worked with Allyn Young and in 1929 left London for Liverpool, where he worked for Alexander Carr-Saunders. During this time he ran unsuccessful parliamentary campaigns as a Labour candidate in North Dorset (1929), and later at Liverpool Wavertree (1931) and South Norfolk (1935).

In 1930 he was (to his surprise, apparently) appointed as research assistant to the newly convened National Economic Advisory Council (NEAC). However, when Clark was invited by Ramsey MacDonald (an avowed protectionist) to write a case for protectionism Clark (who favoured devaluation and expansion of the domestic economy) chose to resign in 1931 rather than compromise his principles. Keynes, a member of the NEAC, having been impressed by Clark’s command of data, then secured him a lectureship in statistics at Cambridge.

In 1937 Clark accepted a position with the Queensland government and stayed in Australia in various government roles, all of which afforded him the opportunity to pursue his own research. In 1951 he took secondment to the Food and Agriculture Organization in Rome, and then to Chicago (1952), before taking the Directorship of the Agricultural Economics Research Institute at Oxford (1952–69). He returned to Australia in 1969 as the Director of the Institute of Economic Progress at Monash (1969–78) and finally he was a Research Consultant to the Department of Economics at the University of Queensland until his death in Brisbane in 1989. Today Clark is, perhaps, best known for his work on national income and development economics.

This biography is a most illuminating account of Clark and his work, the man and his times, and provides a comprehensive assessment of his many economic contributions. The picture painted is of a most stimulating and heterodox thinker, a man who had no formal training in economics or economic methodology, and a man who revelled in being annoying!

Clark was a prolific writer of books and academic and newspaper articles and a broadcaster whose work appears to have attracted both praise and criticism, not always in equal measure. The source of much criticism had two sources: his lack of training in the subject and a suspect methodology were often evident; and his later work, especially after his conversion to Roman Catholicism in 1940, seemed to some to rely (often implicitly) upon Catholic thought, as distinct from economic thought and evidence.

Clark’s methodological approach was clearly influenced by his chemistry studies, and his ‘scientific’ economics stressed ‘the careful systemisation of all observable facts, the framing of hypotheses from these facts, predictions of fresh conclusions on the basis of these hypotheses, and the testing of these conclusions against further observable facts’ (1940, p. vii). He expressly prioritised observation over theory: he praised Australian economists for their ‘respect for observed facts in preference to long chains of theoretical reasoning’ (1940, p. ix), but his lack of a theoretical framework and an overreliance on (not always robust) data was criticised. Clark believed ‘many of the laws of economics could be deduced from comparative observations rather than from an a priori position’ (p. 43), did not recognise that observations are always seen through a particular window of theory, and expressly relegated economic theory. His approach relied heavily on the quality of statistics, and his early work on national income sought, successfully, to provide good data. The National Income 1924-31 was a major work, developing the earlier work of Bowley and Stamp (1927); he brought quantitative flesh to Keynesian concepts and, for the first time, distinguished between national income and national product.

This work was well received but, like almost all his work it seems, it attracted criticism in at least equal measure. There is a recurring theme to the reception he generated: he was regularly criticised for sloppiness, poor methodology, and allowing unstated principles (notably Catholic principles) to influence his analysis. One example must suffice. Clark’s (1967) Population Growth and Land Use was described as ‘a source of pleasure, information and challenge’ (Spengler, 1968, p. 228, in Millmow p. 279) but the book’s controversy stemmed from the level of scholarship on the one hand and his views on birth control on the other. Davis (1968, p. 133) observed that ‘the tools of scholarship are casually handled with frequent omission of authors, dates or titles, occasional misspellings, ambiguous labelling of charts and tables, use of derived figures and unexplained inconsistencies, disregard of contrary arguments and evidence’ and concluded that ‘Clark’s reputation and his skill with words and numbers give his argument a halo of credibility that may mislead the untrained eye’ (in Millmow, p. 284). Davis further suggested that Clark had ‘massaged his data to fit his thesis.’

Clark was nominated several times for the Nobel prize yet was never successful (p. 7). Millmow, I think, has more than adequately answered the question ‘why not?’. Clark’s work lacked a firm theoretical foundation and he ‘took delight in entertaining perverse views’ (p. 4). He was never appointed a full professor of economics and chose not to pursue his pioneering early work on National Income Accounting, moving on to write in less prosaic areas of economics. That Clark was well known for holding and promulgating unorthodox views may also have been a factor, especially as Millmow’s biography leads the reader to conclude that he deliberately sought to annoy.

Two examples may suffice. First, in 1962, speaking to the theme of the problems of growth in the Australian economy he drew upon his ideas of the last 20 years and asserted that it took ‘Australia a long time to learn’, that Australia had foolishly ‘set out to manufacture everything’, ascribed Australia’s ‘mediocre growth’ to protectionism, low levels of education, low growth of the labour force, developing industry at the expense of agriculture, and especially an ‘aversion to competition’ and a dependency on ‘government to put things right’ (pp. 309-10). One discussant (Crawford, 1962, p. 30) observed ‘we have been given a typical Colin Clark production . . . bristling with comment calculated to irritate, very revealing of his own prejudices on many subjects, it is nonetheless full of shrewd insights and worthwhile provocations’ [my emphasis]. Not only were his comments designed to irritate, but this was typical.

As a second example, Clark spoke in a debate on abortion law reform in Sydney in 1972. On the other side of the debate was Germaine Greer. Clark remarked to Greer, “I don’t know what to call you: Miss Greer or Mrs?” to which she replied, “Call me Doctor” (cited in Wyndham, 2012, p. 359).

Here we have a splendid biography. Clark, the idiosyncratic polymath shines from every page, but the title is troubling. While Arnold’s The Scholar Gypsy may well have been Clark’s favourite poem (p. 11), since that poem’s subject is an Oxford scholar who gives up his academic life to join a band of Gypsies, absorbing their customs and seeking the source of their wisdom, the picture of Colin Clark painted by Millmow doesn’t quite fit. Clark never gave up academe and nor does he seem to have sought to absorb others’ customs nor seek their sources of wisdom: on the contrary, he comes across as more interested in having others absorb his ways of thinking and understand his wisdom.


Bowley, Arthur L., and Josiah Stamp. The National Income 1924. Oxford: Clarendon Press, 1927.

Clark, Colin G. The National Income 1924-31. London: Macmillan, 1932.

Clark, Colin G. The Conditions of Economic Progress. London: Macmillan, 1940.

Clark, Colin G. Population Growth and Land Use. London: Macmillan, 1967.

Crawford, John Grenfell. ‘Discussion.’ In John Wilkes (ed.), Economic Growth in Australia. Sydney: Angus & Robertson, 1962.

Davis, Kingsley. ‘Colin Clark and the benefits of an increase in population.’ Scientific American 218(4): 133-138 (1968).

Spengler, Joseph, J. ‘Review of Population Growth and Land Use by C. Clark.’ Annals of the American Academy of Political and Social Science 380: 228 (1968).

Wyndham, Diana. Norman Haire and the Study of Sex. Sydney: Sydney University Press, 2012.


Adrian Darnell is Retired Professor of Economics at Durham University. He has published extensively on econometrics and its history.

Copyright (c) 2022 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 ( Published by EH.Net (April 2022). All EH.Net reviews are archived at

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

Bagehot: The Life and Times of the Greatest Victorian

Author(s):Grant, James
Reviewer(s):Mehrling, Perry

Published by EH.Net (November 2019)

James Grant, Bagehot: The Life and Times of the Greatest Victorian. New York: W.W. Norton, 2019. xxxi + 318 pp. $29 (hardcover), ISBN: 978-0-393-6091-6.

Reviewed for EH.Net by Perry Mehrling, Pardee School of Global Studies, Boston University.

James Grant views Bagehot (1826-1877) fundamentally as a financial journalist, indeed a master of the “near-literature of high journalism” (p. 293), which is to say someone much like himself. His evident deep admiration rests fundamentally on appreciation of Bagehot’s distinctive writing style, and also of his astonishing productivity as editor of The Economist. It takes one to know one.

But Grant writes also as a confessed libertarian deeply distressed by the use that has been made of Bagehot’s Principle, which recommended central banks in a crisis to lend freely at a high rate, by successive generations of central bankers and specifically by Ben Bernanke during the financial crisis of 2007-09. How could Bagehot, a conservative banker in his bones, and a political liberal committed to free trade and the gold standard, have lent his authority to the disastrous doctrine that birthed too-big-to fail? “If an archaeological seeker of the origins of the socialization of risk in high finance wants to find clues, let him or her begin with an excavation of Lombard Street” (p. 268). Bagehot’s advocacy for lender of last resort was of course controversial in his own day. Grant makes clear that on this matter he sides with Bagehot’s antagonists — George Norman, Thomson Hankey, Lord Overstone — rather than with Bagehot himself.

It was not Bagehot’s only lapse of judgement. In his commentary on the American civil war, Bagehot famously supported the South rather than the North, and wrote disparagingly of President Lincoln, although he was quick to change sides once the North surprisingly prevailed. Grant chalks that earlier misjudgment up to class bias, and goes on to suggest that misjudgment on lender of last resort may have similarly stemmed from the distorting effect of self-interest, since Bagehot was a stockholder in Stuckey’s Bank. So long as the Bank of England was willing to hold reserves for the rest of the banking system and to lend them freely in times of stress, banks like Stuckey’s could safely hold less reserves themselves and also run higher leverage on any given capital base, so generating greater profits and paying out higher dividends.

As biography, this book is a ripping read, painting a vivid picture of the man warts and all, not hiding his lifelong misogyny and “scorn for those he considered lesser beings” (p. 229), situating him not only in his time (“age of discussion”) but also among his contemporaries, many of whom are brought alive in brief biographical sketches. Like Bagehot himself, Grant is a compelling writer, and also an empathetic storyteller, and he has quite a story to tell.

Born the son of Watson Bagehot, a partner in Stuckey’s Bank, Walter Bagehot was from the beginning a brilliant student. Study of law shaped his intellect, but did not ultimately enable him to avoid following in his father’s footsteps as a country banker. Resigning himself to fate, he apparently resolved to use the spare time afforded by his profession to pursue authorial ambition, initially literary. These writings brought him to the attention of James Wilson, editor of The Economist, and that’s where the financial journalism began, most significantly with a three-part series criticizing the 1844 Bank Charter Act, signed simply “A Banker.” Marrying Wilson’s eldest daughter Eliza, Bagehot in effect joined the firm, and upon Wilson’s premature death in 1860 took over as editor himself, again resigning himself to apparent fate.

In subsequent years, Bagehot earned his living as a country banker and earned renown with his pen, but the biggest disappointment of his life was his repeated failure as a politician. A close and trusted advisor of the Liberal leader William Gladstone, Bagehot nonetheless never managed to win his own place in the House of Commons, though not for lack of trying. Indeed Grant goes so far as to paint Bagehot’s masterwork The English Constitution (1867) as a kind of campaign document, establishing “Bagehot’s reputation as the keenest political, social, and financial observer of his day” (p. 185). Finally accepting political failure, Bagehot turned his attention instead to economics, starting with Lombard Street in 1873. But this venture was cut short by his premature death in 1877, yielding only a collection of essays Economic Studies (1880) published posthumously by his friends. Thus Bagehot never managed to win a place in the pantheon of economists either. He would of course become famous for the Principle that bears his name, but for Grant that is more a mark of shame than of pride. Better to celebrate his brilliant financial journalism.

It’s a nice story but for me, sometime monetary historian as I am, the biggest weakness is the failure to place Bagehot properly within the history of economic thought. We hear how Bagehot cut his eyeteeth at The Economist on critique of the Bank Charter Act of 1844, which divided the Bank of England into an Issue Department that issued notes against gold, and a Banking Department that discounted bills and made advances. But we hear nothing much about the raging economic debate that surrounded that Act, a debate that pitted the so-called Currency School against the Banking School. Pretty clearly, Bagehot weighs in on the Banking School side, insofar as he insists on the credit character of bank notes, and the importance of bank deposits as close money substitutes. But there is no mention of the classic Banking School texts of Thomas Tooke (1844) and John Fullarton (1845), both of which famously emphasized the supposed self-regulating mechanism of flux and reflux, whereby a credit currency expands and contracts to meet the needs of trade. It’s an important omission because, against this historical background, Bagehot’s contribution to economics seems more considerable than Grant admits. Simply put, Bagehot more than anyone else was responsible for separating the Banking School from the doctrine of laissez-faire. As Bagehot himself put it in Lombard Street: “Money will not manage itself, and Lombard Street has a great deal of money to manage.”

Grant misses this because of course it is exactly what he finds most objectionable about Bagehot. Just so, he quotes the passage just cited (p. 272) but makes clear that he sides with the “more far-sighted” Hankey who, in his stolid Principles of Banking, anticipates the eventual bad consequences of deviation from strict laissez-faire. “A century and a half after Bagehot and Hankey stopped quarrelling, it is the great author’s obscure, rhetorically overmatched adversary whose foresight shines brighter” (p. 281). Bagehot did not originate the idea of lender of last resort. “He did, however, popularize and legitimize the proposition, controversial at the time but now taken as revealed truth, that a central bank owed a public duty to private persons dealing with large sums of money … a special obligation to the citizens who present themselves as borrowers and lenders, investors and speculators” (xiv, xvi).

Here, I’m sorry to say, Grant’s libertarian blinders lead him seriously astray as a biographer. For Grant, “the underlying question was one of political philosophy” (p. 32). Not so for Bagehot, practical banker as he was. Indeed, I would suggest that for Bagehot the problem of managing Lombard Street was nothing more than the problem of managing Stuckey’s Bank writ large. The central bank is, after all, a bank, albeit at a higher level in the system.

In Bagehot’s day, the basic banking business was the discounting of 90 day commercial bills, earning the spread between the yield on those bills and the cost of funds, a rate of zero for bank notes (Stuckey’s notes as well as Bank of England notes) but positive for bank deposits (Stuckey’s as well as the Bank of England’s). In good times commercial bills are self-liquidating, bringing a regular flow of cash into the bank as repayment which is available to meet any deposit withdrawal or note redemption. Occasional default can be absorbed in bank capital, and cash flow disruption can be absorbed from reserve holdings and rediscount with other banks, ultimately with the Bank of England. The secret of safe banking is therefore to confine bank assets to these self-liquidating commercial bills, eschewing especially long term mortgage credits which not only lock up funds during the term of the mortgage but also have no natural source of liquidation even at maturity, short of selling the underlying referenced property. Discount houses that stray into speculative lending, as did Overend Gurney, get their comeuppance in times of tight money when they find themselves unable to meet their cash flow commitments from their illiquid asset holdings.

The problem however comes not so much from the failure of a single overextended firm but from the generalized scramble for cash that can follow. That’s where lender of last resort comes in. So long as the problem is merely an internal drain, which is to say domestic customers demanding notes rather than deposits, Bank of England notes rather than Stuckey’s notes, and even gold rather than Bank of England notes, the problem is inherently manageable. It’s really just a balance sheet operation, and once the panic subsides holders of zero-yielding gold and notes can be expected gladly to replace emergency central bank lending at a more reasonable but positive yield. The problem is harder in the case of an external drain, when foreign customers not only demand gold but also take it out of the country. If a high discount rate fails to stem that tide, then suspension of convertibility becomes inevitable. Those left holding notes just have to wait for resumption, or sell their notes for whatever the market will bear, so realizing a loss.

Grant’s account largely avoids engagement with these dynamics of panic, which threaten good banks as well as bad banks. His mantra throughout the book is Hankey’s mantra, “A good banker had no need of a central bank and a bad banker had no claim on a central bank” (p. 164), and he imagines that were it not for the artificially imposed monopoly of the Bank of England, reserves would be decentralized with each bank taking care of its own needs. But Bagehot’s whole point is precisely that, in a crisis, even good bankers may have need of a central bank. (Indeed, even good central bankers may have need of suspension of convertibility.) Confining bank assets to purportedly self-liquidating bills does no good when market disruption prevents your borrowers from paying you. It is just not true that commercial bills “automatically” liquidate, as Grant asserts (p. xxv). Would that it were.

But Bagehot was about a lot more than just lender of last resort. Although a conservative traditional banker himself, he realized that in his time it was becoming increasingly impossible to confine the social role of banking merely to the discount of commercial bills. Longer term finance was crucial for the capital development of the nation, and England was quite rightly following the innovation of France in this respect. That genie was not going back into the bottle, however much conservative bankers of yesteryear might deplore it, and the real question was therefore how best to adapt to it. In this context, Bagehot’s Principle, which urged free lending against securities that would be good in normal times, can be seen not so much as a radical expansion of central bank responsibility but rather as a conservative banker’s reassertion of the central position of traditional banking in the brave new world of capital finance that was emerging. If banks know that they can always take commercial bills to the central bank for discount, maybe they will make sure to hold an adequate supply of such bills in reserve, and so avoid excessive exposure to illiquid mortgages that are not eligible for discount.

Even more, Bagehot realized that London was emerging as the center of a global trading system that extended far beyond national boundaries. That is the clear subtext of the essays collected in Universal Money (1869) and The Depreciation of Silver (1877). London’s bill market was becoming the essential infrastructure not only for Britain’s domestic trade but also for its international trade, and indeed even for the trade of third nations with each other. De facto, the Bank of England was thus emerging not only as central bank of England, but also central bank of the world. This was another genie not going back into the bottle, and again the real question was how best to adapt to it. In this context as well, we might see Bagehot’s Principle as conservative counsel, an attempt to draw a sharp distinction between assets that are eligible for discount and those that are ineligible, with the idea that subsequent management of the discount rate might prove sufficient lever to manage gold inflows and outflows, thus warding off challenges to convertibility.

These two facts, the rising importance of capital markets and the globalization of commerce, were central subjects of Bagehot’s writing for The Economist over the years. And Bagehot wrote not merely as an observer of current trends, but more importantly as an economist, working to fit the emerging new monetary and financial facts into the fabric of economic science as he knew it. Grant tells us that Bagehot had become familiar with the principle authors of English Political Economy as early as his undergraduate days at University College London (p. 32), and that he was “tapped” for membership in the Political Economy Club as early as May 1864 (p. 154), but he seems not to appreciate the importance of these biographical facts. “He was not a theorist, but a user of theories and a critic of theorists” (p. 287). This seems ungenerous to a fault.

Indeed, when Bagehot died, he was at work on a three volume treatise, the bits and pieces of which were gathered together by his friends and published posthumously as Economic Studies (1880), the first two essays of which were subsequently published separately in a special student edition The Postulates of English Political Economy (1885) with an introduction by Alfred Marshall. In these essays, even more than in his writings for The Economist, we see Bagehot writing not so much as a financial journalist but rather as a classical economist, building on Adam Smith, David Ricardo, and Robert Malthus. (He was apparently unaware of the neoclassical turn that was just then getting started in economics in the works of Jevons and Menger, soon to be consolidated in Alfred Marshall’s Principles of Economics (1890).) And he was writing as one who understands the machinery of money as the very foundation of the system of commerce that the classical economists were trying to understand, a system born in England but expanding during his lifetime across the face of the world.

A central postulate of the classical worldview, according to Bagehot, was the transferability of both labor and capital from one employment to another in search of higher return. From this point of view, so he argues, the operations of the money market are key, because those operations are the fundamental mechanism through which capital moves. Here, to my mind, is a theoretical contribution of the first order, albeit more in embryo than fully realized.

Readers of Grant will miss all of this, and not even know that they are missing it. If you can only read one additional source, my recommendation would be R.S. Sayers’ essay “Bagehot as an Economist” (1978), which treats these points and others as well, in more detail than is possible within the confines of a short review. Readers already familiar with Sayers will know that his own work quite explicitly built on foundations laid by Bagehot (as Sayers 1957), as indeed does the work of many others in the rich intellectual tradition of British central banking that stretches up to the present day. Apparently it takes one to know one.


Bagehot, Walter. 1880. Economic Studies. London: Longmans, Green.

Bagehot, Walter. 1885. The Postulates of English Political Economy. London: Longmans, Green.

Fullarton, John. 1845. On the Regulation of Currencies. London: J. Murray.

Sayers, R. S. 1957. Central Banking after Bagehot. London: Oxford University Press.

Sayers, R. S. 1978. “Bagehot as an Economist.” Pages 27-43 in St. John-Stevas (1978, Vol. IX).

St. John-Stevas, Norman. 1978. The Collected Works of Walter Bagehot. The Economic Essays, Vol. IX-XI. London: The Economist.

Tooke, Thomas. 1844. An Inquiry into the Currency Principle. London: Longman, Brown, Greene, and Longmans.

Perry Mehrling’s MOOC on Coursera tries to do for the twenty-first century New York money market what Bagehot’s Lombard Street did for the nineteenth century London money market, namely to make its operations and its importance visible to the general public:

Copyright (c) 2019 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 ( Published by EH.Net (November 2019). All EH.Net reviews are archived at

Subject(s):Financial Markets, Financial Institutions, and Monetary History
History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):19th Century

Central Banks at a Crossroads: What Can We Learn from History?

Editor(s):Bordo, Michael D.
Eitrheim, Øyvind
Flandreau, Marc
Qvigstad, Jan F.
Reviewer(s):Richardson, Gary

Published by EH.Net (July 2018)

Michael D. Bordo, Øyvind Eitrheim, Marc Flandreau and Jan F. Qvigstad, editors, Central Banks at a Crossroads: What Can We Learn from History? New York: Cambridge University Press, 2016. xix + 697 pages. $155 (hardback), ISBN: 978-1-107-14966-3.

Reviewed for EH.Net by Gary Richardson, Department of Economics, University of California – Irvine.

This volume presents the results of a multi-team, multi-disciplinary research project that was inspired by the bicentennial of the Norges Bank, the Norwegian Central Bank. In the summer of 2012, the editors commissioned a broad range of research from fourteen teams of coauthors. The researchers included renowned international academics as well as policymaking experts. Representatives of all teams presented initial drafts of their research at a conference in Geneva in April 2013 at the Graduate Institute of International and Development Studies. After receiving comments and revising, the authors presented again in June 2014 at a Norges Bank conference titled Of the Uses of Central Banks: Lessons from History. The authors revised their papers once again, to accommodate comments by discussants and editors, and submitted final drafts for publication the following March.

The volume (and the research program which it encapsulates) asks broad questions about the past, present, and future of central banks. Why did the evolve? Will they continue to evolve in the future? What functions do they serve today? How are they structured as institutions? Why are central banks in developing nations so similar? In what ways do they differ? How are they structured as institutions? What are their roles in the international monetary system and among domestic political institutions? What lessons does history have for current and future practitioners of central banking and what does current practice reveal about central banks’ history and evolution?

The book divides the chapters into four groups. The first group provides historical perspectives on the central bank as an institution. This group includes five chapters.

• Chapter 2. “The Descent of Central Banks (1400-1815)” by William Roberds and François R. Velde.
• Chapter 3. “Central Bank Credibility: An Historical and Quantitative Exploration” by Michael D. Bordo and Pierre L. Siklos.
• Chapter 4. “The Coevolution of Money Markets and Monetary Policy, 1815-2008” by Clemens Jobst and Stefano Ugolini.
• Chapter 5. “Central Bank Independence in Small Open Economies” by Forrest Capie, Geoffrey Wood, and Juan Castañeda.
• Chapter 6. “Fighting the Last War: Economists on the Lender of Last Resort” by Richard S. Grossman and Hugh Rockoff.

The second group examines central banks as part of the international monetary system. This group includes four chapters.

• Chapter 7. “A Century and a Half of Central Banks, International Reserves and International Currencies” by Barry Eichengreen and Marc Flandreau.
• Chapter 8. “Central Banks and the Stability of the International Monetary Regime” by Catherine Schenk and Tobias Straumann.
• Chapter 9. “The International Monetary and Financial System: A Capital Account Historical Perspective” by Claudio Borio, Harold James and Hyun Song Shin.
• Chapter 10. “Central Banking: Perspectives from Emerging Economies” by Menzie D. Chinn.

The third group examines central banks as part of a system of regulatory, monetary, and fiscal institutions within a nation. A focus is delineating central banks from other institutions and describing central banks’ powers and limitations. This group contains three chapters.

• Chapter 11. “The Evolution of the Financial Stability Mandate from its Origins to the Present Day” by Gianni Toniolo and Eugene N. White.
• Chapter 12. “Bubbles and Central Banks: Historical Perspectives” by Markus K. Brunnermeier and Isabel Schnabel.
• Chapter 13. “Central Banks and Payment Systems: The Evolving Trade-off between Cost and Risk” by Charles Kahn, Stephen Quinn and Will Roberds.

The fourth group describes central banks from a practical perspective. It contains two papers that describe what central banks do well, what they do poorly, and how their successes and failures lead to gradual changes in central banks’ structure and mission.

• Chapter 14. “Central Bank Evolution: Lessons Learnt from the Sub-prime Crisis” by C. A. E. Goodhart.
• Chapter 15. “The Evolution of Central Banks: A Practitioner’s Perspective” by Andrew G. Haldane and Jan F. Qvigstad.

The introductory chapter provides a clear and comprehensive summary of the chapters. You can read the introduction for free on the Cambridge University Press web site, so I will not summarize that material here. But, I will encourage you to read it. The introduction does a great job of discussing the big questions that still need to be answered about central banks. It explains that the basic story of central banks is to worry about monetary stability in normal times and about financial stability during crises. It also describes their evolution over the long term, hundreds of years, and explains that central banks’ structure and functions have co-evolved along with the structure of the economy.

The quality of the remaining chapters is uniformly high. Researchers interested in the history of central banks may be interested in the entire book. Specialists may want to focus on individual chapters. In my undergraduate course on the history of the Federal Reserve, I now assign portions of Chapters 2 and 4, which examine the evolution of central banking around the world from the fifteenth through the nineteenth centuries; Chapter 7, which discusses the structure of the international financial system and international currencies; Chapter 11, which discusses central banks’ role as a financial supervisor; and Chapter 13, which discusses central banks and payment systems. I have incorporated ideas and visuals from those chapters and several others into my courses’ power point presentations. An example comes from Chapter 15, which does a good job of discussing the dual long-run objectives of central banks, monetary and financial stability. The chapter highlights the interaction between the two, the value of policy independence in pursuing both, and the challenges that arise as the economy evolves and policy-makers struggle to find the right long-run balance and tradeoffs between their multiple objectives. Chapter 15 illustrates these issues with the history of the Bank of England and the Norges Bank. I teach a course on the history of the Federal Reserve, so I have taken ideas from this chapter and use them to frame material about the Fed which I present in my class.

I expect this volume will have lasting value because of the quality of its chapters. The chapters cover a broad range of topics, time, and geography, but return to consistent themes. The chapters are well written and suitable for a broad audience including researchers at universities and central banks but also policymakers and undergraduates who are interested in the topic.
Gary Richardson is the author of “Monetary Intervention Mitigated Banking Panics during the Great Depression: Quasi-Experimental Evidence from a Federal Reserve
District Border, 1929-1933,” Journal of Political Economy (2009). He was the editor for the Federal Reserve’s historical website, which can be found at

Copyright (c) 2018 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 ( Published by EH.Net (July 2018). All EH.Net reviews are archived at

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Economy of England at the Time of the Norman Conquest

John McDonald, Flinders University, Adelaide, Australia

The Domesday Survey of 1086 provides high quality and detailed information on the inputs, outputs and tax assessments of most English estates. This article describes how the data have been used to reconstruct the eleventh-century Domesday economy. By exploiting modern economic theory and statistical methods the reconstruction has led to a radically different assessment of the way in which the Domesday economy and fiscal system were organized. It appears that tax assessments were based on a capacity to pay principle subject to politically expedient concessions and we can discover who received lenient assessments and why. Penetrating questions can be asked about the economy. We can compare the efficiency of Domesday agricultural production with the efficiency of more modern economies, measure the productivity of inputs and assess the impact of feudalism and manorialism on economic activity. The emerging picture of a reasonably well organized economy and fair tax system contrasts with the assessment of earlier historians who saw the Normans as capable military and civil administrators but regarded the economy as haphazardly run and tax assessments as “artificial” or arbitrary. The next section describes the Survey, the contemporary institutional arrangements and the main features of Domesday agricultural production. Some key findings on the Domesday economy and tax system are then briefly discussed.

Domesday England and the Domesday Survey

William the Conqueror invaded England from France in 1066 and carried out the Domesday Survey twenty years later. By 1086, Norman rule had been largely consolidated, although only after rebellion and civil dissent had been harshly put down. The Conquest was achieved by an elite, and, although the Normans brought new institutions and practices, these were superimposed on the existing order. Most of the Anglo-Saxon aristocracy were eliminated, the lands of over 4,000 English lords passing to less than 200 Norman barons, with much of the land held by just a handful of magnates.

William ruled vigorously through the Great Council. England was divided into shires, or counties, which were subdivided into hundreds. There was a sophisticated and long established shire administration. The sheriff was the king’s agent in the county, royal orders could be transmitted through the county and hundred courts, and an effective taxation collection system was in place.

England was a feudal state. All land belonged to the king. He appointed tenants-in-chief, both lay and ecclesiastical, who usually held land in return for providing a quota of fully equipped knights. The tenants-in-chief might then grant the land to sub-tenants in return for rents or services, or work the estate themselves through a bailiff. Although the Survey records 112 boroughs, agriculture was the predominant economic activity, with stock rearing of greater importance in the south-west and arable farming more important in the east and midlands. Manorialism was a pervasive influence, although it existed in most parts of England in a modified form. On the manor the peasants worked the lord’s demesne in return for protection, housing, and the use of plots of land to cultivate their own crops. They were tied to the lord and the manor and provided a resident workforce. The demesne was also worked by slaves who were fed and housed by the lord.

The Domesday Survey was commissioned on Christmas day, 1085, and it is generally thought that work on summarizing the Survey was terminated with the death of William in September 1087. The task was facilitated by the availability of Anglo-Saxon hidage (tax) lists. The counties of England were grouped into (probably) seven circuits. Each circuit was visited by a team of commissioners, bishops, lawyers and lay barons who had no material interests in the area. The commissioners were responsible for circulating a list of questions to land holders, for subjecting the responses to a review in the county court by the hundred juries, often consisting of half Englishmen and half Frenchmen, and for supervising the compilation of county and circuit returns. The circuit returns were then sent to the Exchequer in Winchester where they were summarized, edited and compiled into Great Domesday Book.

Unlike modern surveys, individual questionnaire responses were not treated confidentially but became public knowledge, being verified in the courts by landholders with local knowledge. In such circumstances, the opportunities for giving false or misleading evidence were limited.

Domesday Book consists of two volumes, Great (or Exchequer) Domesday and Little Domesday. Little Domesday is a detailed original survey circuit return of circuit VII, Essex, Norfolk and Suffolk. Great Domesday is a summarized version of the other circuit returns sent to the King’s treasury in Winchester. (It is thought that the death of William occurred before Essex and East Anglia could be included in Great Domesday.) The two volumes contain information on the net incomes or outputs (referred to as the annual values), tax assessments and resources of most manors in England in 1086, some information for 1066, and sometimes also for an intermediate year. The information was used to revise tax assessments and document the feudal structure, “who held what, and owed what, to whom.”


The Domesday tax assessments relate to a non-feudal tax, the geld, thought to be levied annually by the end of William’s reign. The tax can be traced back to the danegeld, and, although originally a land tax, by Norman times, it was more broadly based and a significant impost on landholders.

There is an extensive literature on the Norman tax system, much of it influenced by Round (1895), who considered the assessments to be “artificial,” in the sense that they were imposed from above via the county and hundred with little or no consideration of the capacity of an individual estate to pay the tax. Round largely based his argument on an unsystematic and subjective review of the distribution of the assessments across estates, vills and the hundreds of counties.

In (1985a) and (1986, Ch. 4), Graeme Snooks and I argued that, contrary to Round’s hypothesis, the tax assessments were based on a capacity to pay principle, subject to some politically expedient tax concessions. Similar tax systems operate in most modern societies and reflect an attempt to collect revenue in a politically acceptable way. We found empirical support for the hypothesis, using statistical methods. We showed, for example, that for Essex lay estates about 65 percent of variation in the tax assessments could be attributed to variations in manorial net incomes or manorial resources, two alternative ways of measuring capacity to pay. Similar results were obtained for other counties. Capacity to pay explains from 64 to 89 percent of variation in individual estate assessment data for the counties of Buckinghamshire, Cambridgeshire, Essex and Wiltshire, and from 72 to 81 percent for aggregate data for 29 counties (see McDonald and Snooks, 1987a). The estimated tax relationships capture the main features of the tax system.

Capacity to pay explains most variation in tax assessments, but some variation remains. Who and which estates were treated favorably? And what factors were associated with lenient taxation? These issues were investigated in McDonald (1998) where frontier methods were used to derive a measure of how favorable the tax assessments were for each Essex lay estate. (The frontier methods, also known as “data envelopment analysis,” use the tax and income observations to trace out an outer bound, or frontier, for the tax relationship.) Estates, tenants-in-chief and local areas (hundreds) of the county with lenient assessments were identified, and statistical methods used to discover factors associated with favorable assessments. Some significant factors were the tenant-in-chief holding the estate (assessments tended to be less beneficial for the tenants-in-chief holding a large number of estates in Essex), the hundred location (some hundreds receiving more favorable treatment than others), proximity to an urban center (estates remote from the urban centers being more favorably treated), economic size of the estate (larger estates being less favorably treated) and tenure (estates held as sub-tenancies having more lenient assessments). The results suggest a similarity with more modern tax systems, with some groups and activities receiving minor concessions and the administrative process inducing some unevenness in the assessments. Although many details of the tax system have been lost in the mists of time, careful analysis of the Survey data has enabled us to rediscover its main features.


Since Victorian times historians have used Domesday Book to study the political, institutional and social structures and the geography of Domesday England. However, the early scholars tended to draw away from economic issues. They were unable to perceive that systematic economic relationships were present in the Domesday economy, and, in contrast to their view that the Normans displayed considerable ability in civil administration and military matters, economic production was regarded as poorly organized (see McDonald and Snooks, 1985a, 1985b and 1986, especially Ch 3). One explanation why the Domesday scholars were unable to discover consistent relationships in the economy lies in the empirical method they adopted. Rather than examining the data as a whole using statistical techniques, conclusions were drawn by generalizing from a few (often atypical) cases. It is not surprising that no consistent pattern was evident when data were restricted to a few unusual observations. It would also appear that the researchers often did not have a firm grasp of economic theory (for example, seemingly being perplexed that the same annual value, that is, net output, could be generated by estates with different input mixes, see McDonald and Snooks, 1986, Ch. 3).

In McDonald and Snooks (1986), using modern economic and statistical methods, Graeme Snooks and I reanalyzed manorial production relationships. The study shows that strong relationships existed linking estate net output to inputs. We estimated manorial production functions which indicate many interesting characteristics of Domesday production: returns to scale were close to constant, oxen plough teams and meadowland were prized inputs in production but horses contributed little, and villans, bordars and slaves (the less free workers) contributed far more than freemen and sokemen ( the more free) to the estate’s net output. The evidence suggested that in many ways Domesday landholders operated in a manner similar to modern entrepreneurs. Unresolved by this research was the question of how similar was the pattern of medieval and modern economic activity. In particular, how well organized was estate production?

Clearly, in an absolute sense Domesday estate production was inefficient. With modern technology, using, for example, motorized tractors, output could have been increased many-fold. A more interesting question is: Given the contemporary technology and institutions, how efficient was production?

In McDonald (1998) frontier methods were used to measure best practice, given the economic environment. We then measured how far, on average, estate production was below the best practice frontier. Providing some estates were effectively organized, so that best practice was good practice, this will be a useful measure. If many estates were run haphazardly and ineffectively, average efficiency will be low and efficiency dispersion measures large. Comparisons with average efficiency levels in similar production situations will give an indication of whether Domesday average efficiency was unusually low.

A large number of efficiency studies have been reported in the literature. Three case studies with characteristics similar to Domesday production are Hall’s (1975) study of agriculture after the Civil War in the American South, Hall and LeVeen’s (1978) analysis of small Californian farms and Byrnes, Färe, Grosskopf and Lovell’s (1988) study of American surface coalmines. For all three studies the individual establishment is the production unit, the economic activity is unsophisticated primary production and similar frontier methods are used to measure efficiency.

The comparison studies suggest that efficiency levels varied less across Domesday estates than they did among postbellum Southern farms and small Californian farms in the 1970s (and were very similar for Domesday estates and US surface coalmines). Certainly, the average Domesday estate efficiency level does not appear to be unusually low when compared with average efficiency levels in similar production situations.

In McDonald (1998) estate efficiency measures are also used to examine details of production on individual estates and statistical methods employed to find factors associated with efficiency. Some of these include the estate’s tenant-in-chief (some tenants-in-chief displayed more entrepreneurial flair than others), the size of the estate (larger estates, using inputs in different proportions to smaller estates, tended to be more efficient) and the kind of agriculture undertaken (estates specialized in grazing were more efficient).

Largely through the influences of feudalism and manorialism, Domesday agriculture suffered from poorly developed factor markets and considerable immobility of inputs. Although there were exceptions to the rule, as a first approximation, manorial production can be characterized in terms of estates worked by a residential labor force using the resources, which were available on the estate.

Input productivity depends on the mix of inputs used in production, and with estates endowed with widely different resource mixes, one might expect that input productivities would vary greatly across estates. The frontier analysis generates input productivity measures (shadow prices), and these confirm this expectation — indeed on many estates some inputs made very little contribution to production. The frontier analysis also allows us to estimate the economic cost of input rigidity induced by the feudal and manorial arrangements. The calculation indicates that if inputs had been mobile among estates an increase in total net output of 40.1 percent would have been possible. This potential loss in output is considerable. The frontier analysis indicates the loss in total net output resulting from estates not being fully efficient was 51.0 percent. The loss in output due to input rigidities is smaller, but of a similar order of magnitude.

Domesday Book is indeed a rich data source. It is remarkable that so much can be discovered about the English economy almost one thousand years ago.

Further reading

Background information on Domesday England is contained in McDonald and Snooks (1986, Ch. 1 and 2; 1985a, 1985b, 1987a and 1987b) and McDonald (1998). For more comprehensive accounts of the history of the period see Brown (1984), Clanchy (1983), Loyn (1962), (1965), (1983), Stenton (1943), and Stenton (1951). Other useful references include Ballard (1906), Darby (1952), (1977), Galbraith (1961), Hollister (1965), Lennard (1959), Maitland (1897), Miller and Hatcher (1978), Postan (1966), (1972), Round (1895), (1903), the articles in Williams (1987) and references cited in McDonald and Snooks (1986). The Survey is discussed in McDonald and Snooks (1986, sec. 2.2), the references cited there, and the articles in Williams (1987). The Domesday and modern surveys are compared in McDonald and Snooks (1985c).
The reconstruction of the Domesday economy is described in McDonald and Snooks (1986). Part 1 contains information on the basic tax and production relationships and Part 2 describes the methods used to estimate the relationships. The tax and production frontier analysis and efficiency comparisons are described in McDonald (1998). The book also explains the frontier methodology. A series of articles describe features of the research to different audiences: McDonald and Snooks (1985a, 1985b, 1987a, 1987b), economic historians; McDonald (2000), economists; McDonald (1997), management scientists; McDonald (2002), accounting historians (who recognize that Domesday Book possesses many attributes of an accounting record); and McDonald and Snooks (1985c), statisticians. Others who have made important contributions to our understanding of the Domesday economy include Miller and Hatcher (1978), Harvey (1983) and the contributors to the volumes edited by Aston (1987), Holt (1987), Hallam (1988) and Britnell and Campbell (1995).


Aston, T.H., editor. Landlords, Peasants and Politics in Medieval England. Cambridge: Cambridge University Press, 1987.
Ballard, Adolphus. The Domesday Inquest. London: Methuen, 1906.
Brittnell, Richard H. and Bruce M.S. Campbell, editors. A Commercialising Economy: England 1086 to c. 1300. Manchester: Manchester University Press, 1995.
Brown, R. Allen. The Normans. Woodbridge: Boydell Press, 1984.
Byrnes, P., R. Färe, S. Grosskopf and C.A. K. Lovell. “The Effect of Unions on Productivity: U.S. Surface Mining of Coal.” Management Science 34 (1988): 1037-53.
Clanchy, M.T. England and Its Rulers, 1066-1272. Glasgow: Fontana, 1983.
Darby, H.C. The Domesday Geography of Eastern England. Reprinted 1971. Cambridge: Cambridge University Press, 1952.
Darby, H.C. Domesday England. Reprinted 1979. Cambridge: Cambridge University Press, 1977.
Darby, H.C. and I.S. Maxwell, editor. The Domesday Geography of Northern England. Cambridge: Cambridge University Press, 1962.
Galbraith, V.H. The Making of Domesday Book. Oxford: Clarendon Press,1961.
Hall, A. R. “The Efficiency of Post-Bellum Southern Agriculture.” Ann Arbor, MI: University Microfilms International, 1975.
Hall, B. F. and E. P. LeVeen. “Farm Size and Economic Efficiency: The Case of California.” American Journal of Agricultural Economics 60 (1978): 589-600.
Hallam, H.E. Rural England, 1066-1348. Brighton: Fontana, 1981.
Hallam, H.E., editor. The Agrarian History of England and Wales, II: 1042-1350. Cambridge: Cambridge University Press, 1988.
Harvey, S.P.J. “The Extent and Profitability of Demesne Agriculture in the Latter Eleventh Century.” In Social Relations and Ideas: Essays in Honour of R.H. Hilton, edited by T.H. Ashton et al. Cambridge, Cambridge University Press, 1983.
Hollister, C.W. The Military Organisation of Norman England. Oxford: Clarendon Press. 1965.
Holt, J. C., editor. Domesday Studies. Woodbridge: Boydell Press, 1987.
Langdon, J. “The Economics of Horses and Oxen in Medieval England.” Agricultural History Review 30 (1982): 31-40.
Lennard, R. Rural England 1086-1135: A Study of Social and Agrarian Conditions. Oxford: Clarendon Press, 1959.
Loyn, R. Anglo-Saxon England and the Norman Conquest. Reprinted 1981. London: Longman, 1962.
Loyn, R. The Norman Conquest. Reprinted 1981. London: Longman, 1965.
Loyn, R. The Governance of Anglo-Saxon England, 500-1087. London: Edward Arnold, 1983.
McDonald, John. “Manorial Efficiency in Domesday England.” Journal of Productivity Analysis 8 (1997): 199-213.
McDonald, John. Production Efficiency in Domesday England. London: Routledge, 1998.
McDonald, John. “Domesday Economy: An Analysis of the English Economy Early in the Second Millennium.” National Institute Economic Review 172 (2000): 105-114.
McDonald, John. “Tax Fairness in Eleventh Century England.” Accounting Historians Journal 29 (2002): 173-193.
McDonald, John. and G. D. Snooks. “Were the Tax Assessments of Domesday England Artificial? The Case of Essex.” Economic History Review 38 (1985a): 353-373.
McDonald, John. and G. D. Snooks. “The Determinants of Manorial Income in Domesday England: Evidence from Essex.” Journal of Economic History 45 (1985b): 541-556.
McDonald, John. and G. D. Snooks. “Statistical Analysis of Domesday Book (1086).” Journal of the Royal Statistical Society, Series A 148 (1985c): 147-160.
McDonald, John. and G. D. Snooks. Domesday Economy: A New Approach to Anglo-Norman History. Oxford: Clarendon Press, 1986.
McDonald, John. and G. D. Snooks. “The Suitability of Domesday Book for Cliometric Analysis.” Economic History Review 40 (1987a): 252-261.
McDonald, John. and G. D. Snooks. “The Economics of Domesday England.” In
A. Williams, editor, Domesday Book Studies. London: Alecto Historical Editions, 1987.
Maitland, Frederic William. Domesday Book and Beyond. Reprinted 1921, Cambridge: Cambridge University Press, 1897.
Miller, Edward, and John Hatcher. Medieval England: Rural Society and Economic Change 1086-1348. London: Longman, 1978.
Morris, J., general editor. Domesday Book: A Survey of the Counties of England. Chichester: Phillimore, 1975.
Postan, M. M. Medieval Agrarian Society in Its Prime, The Cambridge Economic History of Europe. Vol. 1, M. M. Postan, editor. Cambridge: Cambridge University Press, 1966.
Postan, M. M. The Medieval Economy and Society: An Economic History of Britain in the Middle Ages. London: Weidenfeld & Nicolson, 1972.
Raftis, J. A. The Estates of Ramsey Abbey: A Study in Economic Growth and Organisation. Toronto: Pontifical Institute of Medieval Studies, 1957.
Round, John Horace. Feudal England: Historical Studies on the Eleventh and Twelfth Centuries. Reprinted 1964. London: Allen & Unwin, 1895.
Round, John Horace. “Essex Survey.” In VCH Essex. Vol. 1, reprinted 1977. London: Dawson, 1903.
Snooks, G. D. “The Dynamic Role of the Market in the Anglo-Saxon Economy and Beyond, 1086-1300.” In A Commercialising Economy: England 1086 to c. 1300, edited by R. H. Brittnell and M. S. Campbell. Manchester: Manchester University Press, 1995.
Stenton, D. M. English Society in the Middle Ages. Reprinted 1983. Harmondsworth: Penguin, 1951.
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Citation: McDonald, John. “Economy of England at the Time of the Norman Conquest”. EH.Net Encyclopedia, edited by Robert Whaples. September 9, 2004. URL

Europe and the Maritime World: A Twentieth Century History

Author(s):Miller, Michael B.
Reviewer(s):Sicotte, Richard

Published by EH.Net (June 2013)

Michael B. Miller, Europe and the Maritime World: A Twentieth Century History. New York: Cambridge University Press, 2012. xvi + 435 pp. $99 (hardcover), ISBN: 978-1-107-02455-7.

Reviewed for EH.Net by Richard Sicotte, Department of Economics, University of Vermont.

In Europe and the Maritime World, Michael Miller describes the process of globalization in the twentieth century through the prism of maritime history.? Miller, professor of history at the University of Miami, organizes his study into two parts.? In the first part, entitled ?Networks,? the author describes the interrelationships of shipping, ports, trading companies, commodity trades, commercial and transport intermediaries and business culture, as they existed in the world up to around 1960.? The network of networks that Miller describes comprised nothing less than the world ocean-borne trading and transport system.? The second part of his book, entitled ?Exchanges,? depicts the evolution of this system from World War I to the present day.? In this part, Miller?s focus is on the ?exchanges? between ?maritime history and the larger currents of the twentieth century.?? The four chapters cover World War I, the interwar period, World War II and reconstruction, and the period from the 1960s to the present.? The scope of the book, therefore, is very wide.? Indeed, the author states that Europe and the Maritime World is ?better understood as an investigation into how the modern world has worked.?

Miller argues persuasively that the ?commercial maritime world? helped to shape the modern world?s organization of consumption and production.? The inclusion of ?Europe? in the title is appropriate.? Much of the book discusses the activities of European individuals and firms, although the geographic scope of their activities is worldwide.? Dutch, German, Belgian, French and British firms predominate, which is justified, Miller argues, on the basis that Europeans were the principle builders and operators of the global trading and transport system up to 1960.? This is not to give the impression that the system evolved out of some coordinated European plan.? Indeed, Miller?s descriptions succeed in conveying how the competitive and cooperative decisions of millions of people over a century developed this system.? It is just simply that European shipping, trading and logistical firms were the major players, particularly in trans-oceanic transport.? In some fascinating descriptions of Asian commerce, Miller describes how through competitive advantage, network relationships and colonialism, Europeans also came to integrate themselves into and influence the shape of local feeder networks there as well.

One of the many strengths of this volume is its encyclopedic display of maritime and commercial history.? The book is a virtual one-stop shop for valuable information and citations on seemingly every topic in those already very broad areas. Among the many topics that I found especially strong were Miller?s discussions of ship agents, freight forwarders, the cruise industry, oil shipping and trade, and the European-based business culture that supported the network linkages.? Perhaps most importantly, Miller provides a sense of how the individual network industries interact with one another.? Through the labor market, competition, collusion, mergers and acquisitions, individual employees and firms move across and interact with counterparts in other parts of the commercial and transport system.

Miller argues that the shock of World War I was a body blow to the system, but also one that created opportunities for the creation of new linkages and the rise of alternative centers of influence, especially in the Americas and Asia.? During the interwar years, Miller is careful to juxtapose the contraction of world trade in goods and immigration to the United States with the expansion of tourism, migration elsewhere, the creation of some new important commercial relationships, and the qualitative deepening of the system in other respects.? Indeed, Miller believes that the view held by many economic historians that the interwar years were a period of de-globalization is deeply misplaced.? He argues that view is conditioned by the influence of a social scientific approach that puts metrics of market integration at the center of the definition of globalization.? Miller takes issue with that perspective, and believes that an alternative historical approach that emphasizes what he calls ?global connectedness? is more fruitful.? His goal is to tell the tale of globalization as a ?story of progressions and mutations [rather] than one of interruptions and new beginnings.?? The last two chapters of the book, in that regard, are excellent depictions of the evolution of the world commercial system since World War II.? Through his descriptions of ports, entrepreneurs, firms and industries, the reader gets a nice sense of the tumultuous interplay between air transport, containerization, de-colonization, world economic growth and the maritime trading system.? I would have liked to read more about the evolving intermodal relationships between rail, trucking and shipping, but it seems absurd to criticize the book for not doing more when its scope is already so wide.

Miller?s narrative history is founded on a truly impressive command of an incredible variety of subject matters.? The author has read extremely widely, combed many archives, and interviewed numerous individuals in a number of countries.? The bibliography is outstanding and will be extremely useful as a starting point for research on any number of industries or themes touching on globalization during the twentieth century.? There are seven informative tables, but the book is not a go-to source for quantitative data.? There are a number of evocative photographs that are well chosen and complement the narrative wonderfully.? I am confident that this book will be an indispensable source and inspiration for future work on globalization, especially as it relates to international maritime history.

Richard Sicotte has published several articles on ocean shipping, and is currently investigating price discrimination and cartel organization in the ocean shipping industry.

Copyright (c) 2013 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 ( Published by EH.Net (June 2013). All EH.Net reviews are archived at

Subject(s):International and Domestic Trade and Relations
Transport and Distribution, Energy, and Other Services
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

On Trans-Saharan Trails: Islamic Law, Trade Networks, and Cross-Cultural Exchange in Nineteenth-Century Western Africa

Author(s):Lydon, Ghislaine
Reviewer(s):Daddi Addoun, Yacine

Published by EH.NET (February 2011)

Ghislaine Lydon, On Trans-Saharan Trails: Islamic Law, Trade Networks, and Cross-Cultural Exchange in Nineteenth-Century Western Africa. New York: Cambridge University Press, 2009. xxviii + 468 pp. $95 (hardcover), ISBN: 978-0-521-88724-3.

Reviewed for EH.Net by Yacine Daddi Addoun, Harriet Tubman Institute for Research on the Global Migrations of African Peoples, York University.

In a period when the Sahara is mentioned only in relation to terrorism, it is a breath of fresh air to read Ghislaine Lydon’s On Trans-Saharan Trails. The author uses the unfortunate succession of deaths, between 1848 and 1850, of four W?d N?n network traders, who were operating between the two shores of the Sahara, to illustrate and test the strengths and weaknesses of what she terms the ?paper economy of faith?: the complex relationships between literacy, the corpus of Islamic law, its clerks, and trade. This study of trans-Saharan long-distance exchange economy can be studied thanks to numerous private collections and archives holding all kinds of commercial contracts, correspondence between traders, as well as judicial opinions deeply rooted in the M?lik? school of law. The author visited no less than 35 private collections in four countries: Mauritania, Mali, Morocco, and Libya, demonstrating the span of her research, a trans-Saharan enterprise in itself. In addition, Lydon collected more than 200 oral interviews, in a conscious effort to complement information available in written documents, especially colonial archives, and to seek for explanation of legal, judicial, and social concepts and practices, names of merchandise, and location of places — using at least six languages. This book is in fact a manifesto for the centrality of orality, even in a context studying ?paper economy.? The result is a well-informed study that shows a trans-Saharan trade network at work.

The book is an attempt to bridge the gap between North Africa and sub-Saharan Africa. It succeeds in establishing the place of the Sahara desert in the center of events and not just as a mere space of passage, and its inhabitants as active agents in the transformation of this region as a whole. The first two chapters focus on the longue dur?e. They lay out the transformations and introduction of new elements (camels, Islam, Arabs) that made this space an important node of commerce and communication. These chapters also contain a much-appreciated presentation of primary and secondary sources. Lydon is quite exhaustive in presenting works on trans-Saharan networks. She, however, leaves out Pierre-Philipe Rey and his disciples, such as Faouzia Belhachemi and Olivier Meunier[1] — important scholars who have tried to ?bridge the African divide.? The two subsequent chapters concentrate mainly on nineteenth-century developments. While the third chapter is a general overview putting the developments of market centers and their shift within the general framework of jihads, the fourth chapter concentrates more on the W?d N?n network, and its components, mainly Guelmim, Tikna and Awl?d B? Siba?. The author highlights the heterogeneous nature of the trade network because it was composed of Jews and Muslims, but also because it was ethnically diverse, including Berbers and Arabs. In common, they shared a certain kind of cosmopolitanism and transnational identity. The remaining chapters concentrate more specifically on trade and issues relating to paper economy. An important contribution of Lydon’s study is the emphasis on the role of women as agents on their own rights. Women not only contributed to the social reproduction of the network (which other historians have already acknowledged), but they also held the shore-side institutions and acted as immobile caravanning partners, besides supervising domestic and enslaved workers. Lydon stresses the role of some women in financing caravans and acting as shareholders. Indeed, others, such as the M?sna women of Tish?t, participated in caravans as traders and cross-cultural brokers. Lydon highlights the Muslim and patriarchal institutional weight on women in a way to appreciate their active role even further. As a female historian in a conservative society, Lydon had the unique opportunity to interview women (at least 60) and thus is able to bring out their voices as active participants in the trans-Saharan trade and counteract the androcentric paradigm that is prevalent especially in the history of African Islamic societies.

Lydon takes us into the details of trans-Saharan trade including contracts, currencies, and weights and measures in a well written book, accessible to non-specialist. In chapter six she brings out what I think is her major contribution in the historiography. By exploring the dialectics between commerce and literacy, she demonstrates how written contracts ordered by the Qur??n were instrumental in the development and consolidation of the trans-Saharan trade. Paradoxically, at the same time, those written contracts, even when authenticated by witnesses, were invalid as evidence in courts, in case of a conflict where the witnesses were far away or dead. The author considers this fact, as well as the absence of legal personality in Islam along with inheritance laws, as the causes for lack of capital accumulation over generations and thus the underdevelopment of the Muslim world. This argument expands our knowledge about the limits of Islamic economic practices and the ways traders tried to circumvent them by creating their own set of practices and rules. In chapter seven she illustrates this issue through a meticulous examination of a complex inheritance case triggered by the death of the four network traders mentioned above. She also highlights, through Shaykh b. Brah?m al-Khal?l, who had to resolve the case, how network structure could be so heavy that it forced out some of its best members. In an interesting competition between legal service providers over who were liable to pronounce a judgment on the case, it turned out that in conflict situations there was not always good-faith and certainly not much faith in the ?paper economy of faith.?

I am not sure, however, to what extent the invalidity of contracts in courts was widespread in practice. Even if M?lik was accredited to this opinion, Ibn al-Qayyim al-Jawziyya, states that it was rather an exception.[2] Also, the author acknowledges that she is writing about the fringes of Islamic world, in the sense that she deals with a space where no centralized state existed. So it is not clear to what extent this constraint on development can be generalized. Arguably, Lydon has a major argument that deserves to be investigated further.

On Trans-Saharan Trails is a great addition to African history, Islamic legal history, and the history of trade networks and diasporas. Lydon gives us a refined and nuanced analysis of the theory and practice of long-distance trade. It is an exceptionally well researched and crafted book and cannot be ignored by anyone interested in these topics. Lydon raises important questions and any future study on the trans-Saharan trade networks, and financial transaction in Islam will have to consider her contribution.

1. Maxime Haubert and Pierre-Philippe Rey, Les soci?t?s civiles face au March?: Le changement social dans le monde postcolonial (Paris: Karthala, 2000); Olivier Meunier, Les routes de l’islam: Anthropologie politique de l’islamisation de l’Afrique de l’ouest en g?n?ral et du pays Hawsa en particulier du VIII? au XIX? si?cle (Paris: L’Harmattan, 1997), Faouzia Belhachemi, ?Anthropologie ?conomique et historique des Touareg du Hoggar,? Doctoral dissertation, Universit? de Paris VIII Vincennes, 1992.

2. Ab? ?Abd Allah Mu?ammad b. Ab? Bakr b. Ayy?b, Ibn al-Qayyim al-Jawziyya (751-691 H.), Al-?uruq al-?ukmiyya f? ‘l-siy?sa ‘l-shar?iyya, (Jaddah: D?r al-Faw?’id, 2007), 544-560.

Yacine Daddi Addoun is a post-doctoral fellow at the Harriet Tubman Institute for Research on the Global Migrations of African Peoples, at York University, Toronto, Canada. He is interested in the history of slavery and its abolition in Algeria, the Maghrib and the Muslim world. His latest publication is ?`So that God Free the Former Master from Hell Fire:’ Salvation through Manumission in Nineteenth-century Ottoman Algeria,? in Ana Lucia Araujo, Mariana P. Candido and Paul E. Lovejoy, Crossing Memories: Slavery and African Diaspora (Trenton, NJ: Africa World Press, 2011), 237-260.

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

Subject(s):Government, Law and Regulation, Public Finance
International and Domestic Trade and Relations
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):Africa
Middle East
Time Period(s):19th Century

Tracks Across Continents, Paths through History: The Economic Dynamics of Standardization in Railway Gauge

Author(s):Puffert, Douglas J.
Reviewer(s):Bogart, Dan

Published by EH.NET (October 2010)

Douglas J. Puffert, Tracks Across Continents, Paths through History: The Economic Dynamics of Standardization in Railway Gauge. Chicago: Chicago University Press, 2009. xii + 360 pp.? ISBN-13: 978-0-226-68509-0, ISBN-10:0-226-68509-8.

Reviewed for EH.NET by Dan Bogart, Department of Economics, University of California, Irvine.

Debates about the significance of path dependence have erupted periodically in the economic history literature over the past two decades. The notion that early technological choices can result in lock-in and potentially inefficiencies has evoked strong reactions. Many are familiar with Paul David?s arguments concerning the QWERTY keyboard and the response by Stan Liebowitz and Stephen Margolis. The latter argued that market participants generally have perfect foresight and thus there were ample opportunities to avoid inefficient technological lock-in through advertising, ownership control, and other contractual measures. The concept of path dependence has since spread into the arena of institutions and social norms, although often it is not subjected to rigorous economic and historical analysis.

Douglass Puffert of King?s College, New York, advances the literature on path dependence through a fascinating new book on the dynamics of standardization in railway gauges. Railway gauges offer an excellent case study. Differing widths of railway track make it impossible or costly to exchange rolling stock like locomotives and wagons. Therefore neighboring railway operators can realize network integration benefits from adopting the same gauge. Inefficiency can arise in this setting for two reasons.? First, regional gauges can become the standard implying higher costs of inter-regional trade. Second, early choices can result in the adoption of a gauge standard which turns out to be inferior because it implies higher operating costs.?

Puffert?s book has two main parts: (1) a historical narrative on gauge selection and conversion and (2) an analytical framework for studying gauge choice and economic efficiency. The narrative is impressive in terms of its geographic coverage. Every region of the world is discussed. Britain and the U.S. are given more extensive treatment in part because gauge diversity was a more substantial issue in these two countries.? The historical narrative suggests three key periods. The first lasted from the 1800s to the 1840s and is best described as a period of initial experimentation. Several gauge widths were tried but it was not clear which was superior. Most governments and investors followed the advice of engineers who preferred certain gauges because of their experience. The most influential was George Stephenson, who used the 4 ft. 8.5 in. (1435 mm) gauge in constructing the Manchester and Liverpool railway during the 1820s. Stephenson?s gauge became the most common width among early railways, but others were tried ranging from 3 ft. 10 in. to 5 ft.? Interestingly it does not appear that Stephenson favored this width because of its advantages in steam locomotion.? 4 ft. 8.5 in. was apparently the gauge that Stephenson used in constructing mining tramways drawn by horses.?

The second period from the 1840s to the 1870s witnessed expanding diversity into broad gauges. By this time several prominent engineers advocated gauges ranging from 5 ft. to 7 ft. on the grounds that operating costs would be lower than the Stephenson gauge, especially on high volume routes. Gauge width became a contentious issue and spawned several pamphlets and government inquiries.? Through innumerable quotes, Puffert demonstrates that historical actors were aware of the potential losses from gauge diversity, but these were not sufficient to ensure standardization. Broad gauge regional networks emerged in places like the U.S. South or they became the basis for new networks as in Russia and India. In some cases idiosyncratic factors were at work in the expansion of broad gauges, but more generally it appears that broad gauge advocates were convinced that the savings from wider gauges outweighed the costs.? As it turns out the savings proved to be illusory and the costs associated with breaks of gauge mounted with time. By the 1870s many broad gauge networks were converted to the Stephenson gauge.

The third period lasting from the 1870s through the 1920s witnessed the expansion of narrow gauges from 2 ft. to 4 ft. The poor financial performance of many Stephenson and broad gauge railways gave rise to the view that costs might be lowered through the use of narrow gauges. Narrow gauges were built alongside broader gauge networks and were often government owned. Narrow gauges also became the standard on emerging networks in Asia and Africa. In Japan there was regret associated with the adoption of narrow gauges as traffic volumes grew. However, the adoption of narrow gauges appears to have been crucial in the expansion of railways to mountainous and other low traffic volume areas.

Puffert?s narrative convincingly dispels the extreme version of the Liebowitz and Margolis critique which argues that market participants had perfect foresight. On the other hand, it does suggest historical actors understood the role of positive feedbacks and tried to manipulate gauge adoption in an effort to lock-in their preferred standard. The degree to which gauge selection was efficient is a lingering question throughout the book.? Puffert does not take a stand on the relative efficiency of different gauges, but an argument is made that diversity entailed large costs.

Towards the end of the book, Puffert provides a model of gauge choice which yields outcomes that are then evaluated according to efficiency criteria. The model assumes emergent railways occupy cells on a lattice. Their objective function includes an idiosyncratic preference for one of two gauges and a network integration benefit that depends on past gauge choices of neighboring railways.? The model also includes as a second stage, the choice to convert to a new gauge given the structure that was adopted in the first stage. The model nicely illustrates how diversity can emerge because of early choices and how standardization can later emerge depending on network integration benefits and conversion costs. However, the model is not calibrated to investigate counter-factual histories of gauge adoption in specific countries. In my view, imposing some assumptions on network structure would yield insights. For example, early U.S. railways were built east-west to link the interior to the coast. Perhaps the inefficiency of gauges would be smaller in such a setting if east-west links all shared the same gauge.? Second, the model could be extended to allow for time-varying network integration benefits. Interregional trade tended to increase with time and thus it might have been efficient for a railway to adopt a variant gauge if its idiosyncratic preference was sufficiently strong compared to the discounted present value of future network integration gains.? In short, the efficiency of gauge selection remains an open issue. Readers might wonder whether additional insights could be gained from an estimation of a structural model along the lines outlined by Puffert.? More broadly, Puffert?s book should serve as a model for rigorous examination of path dependence.

Dan Bogart (Associate Professor, Economics Department, UC Irvine) has recently written ?A Global Perspective on Railway Inefficiency and the Rise of State Ownership, 1880-1912,? Explorations in Economic History (April 2010), as well as a work in progress on State Ownership, Regulation, and Railway Performance in India co-authored with Latika Chaudhary.

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

Subject(s):Transport and Distribution, Energy, and Other Services
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century
20th Century: Pre WWII

The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times

Author(s):Landes, David S.
Mokyr, Joel
Baumol, William J.
Reviewer(s):Blackford, Mansel G.

Published by EH.NET (May 2010)

David S. Landes, Joel Mokyr and William J. Baumol , editors, The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times. Princeton: Princeton University Press, 2010. xv + 566 pp. $49.50 (hardcover), ISBN: 978-0-691-14370-5.

Reviewed for EH.NET by Mansel G. Blackford, Department of History, Ohio State University.


The second volume published in the Ewing Marion Kauffman Foundation?s Series on Innovation and Entrepreneurship, this collection of eighteen essays explores entrepreneurship, innovation, and economic development in parts of the world from ancient times to the present.? This work, states William J. Baumol, an economist at New York University and one of the study?s editors, was designed to test three basic hypotheses: 1) ?that the practical utilization of inventions? and accompanying economic growth would be lower without the work of entrepreneurs; 2) that ?entrepreneurial activities are not always productive?;? and 3) that ?the direction taken by entrepreneurial activity depends heavily, at any particular time and in any particular society, on the prevailing institutional arrangements? (p. ix).? David Landes, another editor and an economic historian at Harvard University, argues further that ?the countries and regions that have done best are precisely those that have taken advantage of the opportunities offered by active trade and entrepreneurial freedom.?? Those areas, Landes claims, have been mainly in the West, with ?China and the Arabic Middle East? offering ?pungent case studies? of ?resistance to innovation?(p. 2) — surely an outdated assertion.? The essays comprising this volume bear out Baumol?s hypotheses, but not the statements made by Landes.[1]

Six essays investigate preindustrial entrepreneurship and innovation.? Michael Hudson explores the development of entrepreneurship and business enterprises in ancient Mesopotamia (3500-1200 BC), where the association of businesses with public temples and palaces led to a commercial take off.? Many of the business practices first created in Mesopotamia — the use of money, uniform weights and measures, price systems, interest charges, and profit-sharing — Hudson shows, then spread to the Mediterranean world, only to collapse in Roman times.? In an essay on the Neo-Babylonian Empire (626-539 BC), Cornelia Welch looks at family entrepreneurship in agriculture and trade.? Particularly valuable is her case study of the Egibi family, which left an archive of 2,000 cuneiform tablets spanning five generations.? ?The Egibi family represents,? she concludes, ?an outstanding example of Schumpeter?s idea that the main entrepreneurial opportunities for profit or quasi-rent lie in creating new business opportunities.?? The Egibi family had ?far-flung operations? based on a ?marketing plan that integrated agricultural production, tax payments, and the shipment of crops to cities along Babylon?s canal system? (p. 53).? Timur Kuran claims that Islam first spurred entrepreneurship and economic development in the Middle East by creating ?institutions well suited to personal exchange,? but later ?became a source of retardation with the transition to impersonal exchange.?? Islamic institutions, Kuran finds, ?supported small-scale entrepreneurship,? but ?inhibited larger-scale entrepreneurship? (p. 63).? James Murray suggests that the European Middle Ages ?deserve a special place in the history of entrepreneurship,? for by 1500 merchants ?came to direct many of society?s ?productive forces?? (p. 88).? John Munro then examines the ideas of Max Weber and Richard Tawney, about economic development.? He finds that the alterations in mindsets and institutions that Tawney claimed were needed as precursors to industrialization in Great Britain occurred in 1640-1740, not, as Tawney posited, a century earlier.? Oscar Gelderblom defines entrepreneurs broadly as ?not just merchants involved in long-distance trade, but also shipmasters, fishermen, millwrights, farmers, artisans, and shopkeepers,? in arguing for the importance of entrepreneurial actions as the sources of economic development in the Dutch Republic between 1580 and 1650 (p. 156).

Eight essays probe entrepreneurship in Western Europe and the United States during industrial and post-industrial times.? Joel Mokyr, the third editor of this volume and a faculty member in history and economics at Northwestern University and Tel Aviv University, argues for the importance of institutions, especially informal ones such as codes of conduct, as stimuli for entrepreneurship in industrializing Great Britain.? In two jointly authored essays, Mark Casson and Andrew Godley debunk the idea that entrepreneurial failure retarded British economic development in the late-nineteenth and twentieth centuries — a well-worn topic.? They find that entrepreneurs rationally shifted their attentions from manufacturing to infrastructural projects and other undertakings (such as finance) in Great Britain and abroad, in which they were very successful.? Ulrich Wengenroth surveys the ?tortured? history of entrepreneurship in Germany from the early 1800s to the present, emphasizing the roles institutions (including educational ones) played in creating opportunities for innovation.? Pulling no punches, he also looks at anti-Semitism and the unbalanced nature of Germany?s economy, which he concludes became over-industrialized and lacking in service businesses.? Turning to France, Michael Hau presents a picture of varying regional developments and changing roles taken by the national government, concluding that after declining in importance for several decades after World War II ?entrepreneurs have greatly gained in power? in the present day (p. 323).? Louis Cain examines entrepreneurship in the antebellum United States, first exploring innovations in law, finance, and transportation that allowed entrepreneurship to flourish and then describing the processes of industrialization and the diffusion of products to American markets.? Discussing the United States between 1865 and 1920, Naomi Lamoreaux stresses the importance of institutions, including federal and state governments, and big businesses, which encouraged entrepreneurship.? In a particularly wide-ranging essay, Margaret Graham offers a nuanced picture of American entrepreneurship after 1920, looking at the varied roles played by people in companies of all sizes and in many sectors of the economy.

Three essays and a short conclusion complete the volume.? Susan Wolcott examines supplies of financial credit, especially ?informal? types, available to entrepreneurs in Colonial India.? She addresses issues about economic growth in India from the 1700s to the present, emphasizing the importance of family and ethnic networks defined, in part, by caste distinctions.? Wolcott concludes that, while such networks and the informal credit they commanded initially aided economic development, they ultimately limited business development — a finding similar to Kuran?s conclusions about the Islamic Middle East.? Wellington Chan looks at entrepreneurship and innovation in China from the late 1800s, emphasizing continuities in stressing the roles personal relationships and networks have played for business people throughout Chinese history.? ?Chinese entrepreneurship,? Chan concludes, ?has always been an inherent part of Chinese history and tradition? (p. 495).? Seiichiro Yonekura and Hiroshi Shimazu find entrepreneurship at the core of the development of zaibatsu in Japan before World War II and present accounts of the development of Mitsui and Mitsubishi, unfortunately ignoring the significant roles small and medium size business played in Japan?s economic development.? Finally, Baumol and Robert Strom (a director of the Kauffman Foundation) offer short concluding remarks underlining the importance of cultural developments and institutions for the evolution of entrepreneurship and innovation over time.

Anyone interested in entrepreneurship, innovation, and economic development will find much to ponder in this work, and extensive multilingual notes and bibliographies at the end of each essay will lead readers to additional sources.? However, even such an extensive volume as this one has limitations.? The focus is clearly on Western Europe and the United States.? Only a few essays examine developments in Asia and the Middle East, and none look at entrepreneurship in Latin America or Africa.? Then too, most of the essays approach entrepreneurship and innovation from the vantage points of economics and economic history.? The substantial contributions of business historians — Harold Livesay, Thomas McCraw, and William Lazonick, among many others, come to mind — are largely ignored.[2]? Moreover, the authors of the essays follow no commonly agreed-upon definition of entrepreneurship, making cross-national comparisons difficult.? Most of the authors bow in the direction of Joseph Schumpeter, but essentially fail to adopt a common approach.? I was disappointed that little effort was expended by the editors or authors to reach comparisons across boundaries of time or space.? For the most part, this study consists of fairly traditional national studies. ?Ironically for a book about innovation, this volume contains little in the way of conceptual breakthroughs.? The authors might well have explored more fully innovative business networks and industrial districts that often spread across national lines, especially in modern times.[3].? Even with these caveats, however, I think these essays deserve close consideration, as much for the questions they raise as for the answers they give about innovation and entrepreneurship.


1. On innovation in China, see for example, William T. Rowe, China?s Last Empire: The Great Qing (Cambridge, 2009); and Peter Zarrow, China in War and Revolution, 1895-1949 (London, 2005).? Landes? main source on Islamic developments is Bernard Lewis, _What Went Wrong? The Clash between Islam and Modernity in the Middle East_ (Oxford, 2002), a one-sided study.

2. Harold Livesay, American Made: Shapers of the American Economy (New York, 2007); William Lazonick, ?Business History and Economic Development,? in Geoffrey Jones and Jonathan Zeitlin, eds., The Oxford Handbook of Business History (Oxford, 2007), 67-95; and Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, MA, 2007).

3. See, for example, Louis Galambos and Jane Eliot Sewell, Networks of Innovation: Vaccine Development at Merck, Sharpe & Dohme, and Mulford, 1895-1995 (Cambridge, 1995); and Charles Sabel and Jonathan Zeitlin, eds., World of Possibilities: Flexibility and Mass Production in Western Industrialization (Cambridge, 1995).


Mansel G. Blackford is a business historian at Ohio State University and, most recently, is the author of The Rise of Modern Business: Great Britain, the United States, Germany, Japan, and China Chapel Hill, 2008 (third edition).

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