is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

Law and the Economy in a Young Democracy

Author(s):Roy, Tirthankar
Swamy, Anand V.
Reviewer(s):Iyer, Lakshmi

Published by EH.Net (September 2022).

Tirthankar Roy and Anand V. Swamy. Law and the Economy in a Young Democracy. Chicago and London: The University of Chicago Press, 2021. ix + 298 pp. $45 (cloth), ISBN-13: 978-0-226-79900-1.

Reviewed for EH.Net by Lakshmi Iyer, Department of Economics, University of Notre Dame.


This book describes the evolution of the legal framework in India after the country became independent in 1947. The book considers various aspects of the law that are important in shaping economic activity: laws on property rights, credit markets, labor markets, environmental issues, company regulation, and economic globalization. The authors, both eminent economic historians, provide an extremely well-written narrative on the political economy of law over this period, complemented with surveys of more detailed empirical research on specific topics. They provide both a bird’s-eye view of the overall legal structure and detailed discussion of some key legal judgements that set important precedents. I describe below some major contributions and findings of this book.

A key goal of the book is to understand how existing laws have emerged and evolved. The authors describe how much of the legal structure was a continuation of colonial era policies, what changes were implemented in a newly independent India and how subsequent political and social developments, such as the rising political power of disadvantaged sections of society, led to changes in the law. (More details about law in the colonial period are provided in their 2016 book Law and the Economy in Colonial India, also published by The University of Chicago Press).

Their narrative highlights three key factors that shaped legal evolution. The first is the viewpoint of policy makers and legal scholars, who considered poor Indians to be incapable of making good economic decisions. Such a worldview led to laws such as those outlawing agricultural tenancy in many states, since it was presumed that a tenant would automatically be exploited by a landlord. Similarly, forest-dwelling tribal people were restricted in their ability to transfer land to non-tribals. Private moneylenders were widely believed to be “unscrupulous” (p. 58), leading to many regulatory restrictions on their activities. The authors show that such a view was very much present in the colonial period too. This stands in sharp contrast to colonial policy in other places such as Egypt where the British viewed Egyptian peasants as “able to rationally calculate their economic self-interest but unable to comprehend the collective public good” (as Johan Mathew put it an EH.Net Review of Aaron G. Jakes’s Egypt’s Occupation).

Second, a related aspect of this worldview was a strong distrust of markets and private market participants, mainly because of the potential for highly unequal economic outcomes. Many legal restrictions on market activity were enacted in the “public interest,” including interest rate ceilings, restrictions on land transfers and asset redistribution, even when this involved expropriation of private property. Again, this concern with avoiding extreme inequality mirrors the British Raj’s concern with maintaining political stability at all costs. The distrust of markets was paired with a strong belief in the ability of government and social institutions to deliver economic growth, as shown in the state’s extremely strong powers of eminent domain (Chapter 3), the higher interest rates allowed to public or cooperative lending institutions (Chapter 2) and the provision of workfare programs to combat unemployment (Chapter 6).

Third, the authors’ narrative highlights the interplay between the legislative and judicial branches of government. Many legislative initiatives, such as the land redistribution efforts in the 1950s, were successfully challenged in court by landlords. Following this, further legislative changes were implemented that effectively prevented judicial review, culminating in a constitutional amendment whereby the right to property ceased being a fundamental right of Indian citizens. The pattern of events suggests that political actors were usually able to overrule judicial checks in the first four decades after independence.

A striking exception is environmental law, where the Supreme Court of India provided a broad interpretation of the “right to life” provision of Article 21 of the Constitution to include considerations of health and environmental quality (Chapter 5). Through a series of judgements, the Supreme Court and lower courts incorporated principles such as “polluter pays,” the precautionary principle and intergenerational equity into environmental law. It is interesting that unlike the previous case of land reforms, these were not overturned by further legislative action, perhaps because the legislatures shared the view that such action was necessary or because they were afraid of the bad publicity caused by environmental disasters.

Another major contribution of the book is to assess whether the legal framework met the goals of increasing economic growth and reducing poverty and inequality. The authors review many empirical studies on this topic, and conclude that, unfortunately, it did not. In some cases, it was because the legal system was not the binding constraint on growth. This is particularly the case in the pre-1991 period, where the economy was greatly constrained in terms of capital and technology, and in the case of credit markets where the lack of insurance against crop volatility was a major constraint. The book also describes many cases in which the legal provisions themselves had the perverse consequence of reducing economic efficiency. Restrictions on land ownership resulted in a lack of transparency of land records which inhibited productivity-enhancing transfers; outlawing of tenancy made it hard for de facto tenants to use their occupancy rights on land as collateral to obtain credit.

I believe the book would be even better if it had more detail on the structure and incentives of the judiciary itself. It would be interesting to discuss how the fact of having an independent judiciary (unlike, say, China) shaped India’s legal developments. Has the judiciary become more or less independent over time? How do the social identities and/or political affiliations of judges shape the nature of judicial decisions? What can be done to increase the speed of judicial decision making in India?

Overall, the book provides a great overview of post-independence legal developments in India, and their effects on economic activity. It should be required reading for anyone interested in India’s recent economic history.


Lakshmi Iyer is Associate Professor of Economics and Global Affairs at the University of Notre Dame. Her primary research fields are development economics, political economy and economic history, including property rights institutions in India, Vietnam, China, and Myanmar.

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 (September 2022). All EH.Net reviews are archived at

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economic Planning and Policy
Economywide Country Studies and Comparative History
Government, Law and Regulation, Public Finance
Geographic Area(s):Asia
Time Period(s):20th Century: WWII and post-WWII

Karl Brunner and Monetarism

Editor(s):Moser, Thomas
Savioz, Marcel
Reviewer(s):Capie, Forrest

Published by EH.Net (August 2022).

Thomas Moser and Marcel Savioz, eds. Karl Brunner and Monetarism. Cambridge: The MIT Press, 2022. xii + 491 pp. $50 (hardcover), ISBN 978-0262046916.

Reviewed by Forrest Capie, Bayes Business School, City, University of London.


Karl Brunner was a distinguished economist and a leading figure in the Monetarist school of monetary economics. He may or may not have coined the word Monetarist, but he is credited with the first use of the term in a lecture in 1968. His published output in many different forms was prodigious – more than 200 articles and books. Brunner was also an academic entrepreneur. He established what became two leading journals, the Journal of Money, Credit and Banking and the Journal of Monetary Economics. He also established and ran two important seminars, the Carnegie-Rochester Conference in the US and the Konstanz Seminar in Germany, both of which are still in good health today. More than that, in 1973 he co-founded with Allan Meltzer the Shadow Open Market Committee (that provides an alternative assessment and policy recommendations to the Fed’s FOMC) – again, still thriving.

He was first of all a Swiss economist, and his first employment was as an economist in the Swiss National Bank (SNB). On the centenary of his birth in 2016 the SNB established the annual Karl Brunner Distinguished Lecture Series and together with the inaugural lecture held a seminar at which Allan Meltzer, Ernst Baltensperger, Benjamin Friedman, and Charles Plosser presented papers that were in large part tributes to a scholar they clearly revered. These papers and the inaugural lecture by Kenneth Rogoff (on central bank design) make up Part I of this book. Following the seminar, David Laidler and Michel de Vroey suggested to the editors that the proposed publication could and should be broadened with contributors invited to explore Brunner’s work and legacy.

There is an excellent Foreword by the Chairman of the SNB, Thomas Jordan, and an introduction by the editors, Thomas Moser and Marcel Savioz, both of the SNB. The book then has four parts: Part I, ‘A Tribute to Karl Brunner,’ as described above; Part II, ‘The Impact of the Monetary Policy Debate’; Part III, ‘Karl Brunner and Allan Meltzer’s Monetarism’; and Part IV, ‘Today’s Legacy of Karl Brunner’. In all there are 16 contributors from 14 different institutions and seven countries. Not all the contributors would claim to be, or have been, monetarists. It was the range of Brunner’s work that attracted and involved them.

Brunner held that macroeconomic analysis must be based on individual behaviour, that is to say on price theory. He argued that was the core feature of Monetarism: ‘The basic tenet of Monetarism is the reassertion of the relevance of price theory to understand what happens in aggregate economics. Our fundamental point is that price theory is the crucial paradigm – as a matter of fact, the only paradigm – that economists have’ (p.vii). In the mid-1980s when Brunner was asked (in an interview with Arjo Klamer) when he became a monetarist he said he believed it began with his conversations with Armen Alchian in the early 1950s. This is the subject of Pierrick Clerc’s chapter, ‘The Pervasive Influence of Armen Alchian on Karl Brunner’s Monetarism.’ Clerc notes and agrees with the view David Laidler had expressed ten years earlier that Brunner’s ‘version of Monetarism paid more attention to the information problems that lay at the heart of monetary economics than did Friedman’ (p. 321). Laidler’s own chapter here touches on both these questions.

In fact there is quite a lot on the importance of price theory for Brunner’s work in the book. Clerc and Michel de Vroey’s chapter, ‘Brunner versus Friedman: Diverging Aspirations for the Monetarist Project,’ is explicitly on the subject. James Forder’s ‘Karl Brunner’s Monetarist Revolution’ offers a substantial and generally critical section on Friedman’s views on the ‘counter revolution’ and related topics, before contrasting this with Brunner. Additionally, in Part III there is a chapter by Kevin Hoover on Brunner’s philosophy of science.

There is plenty for the monetary historian in Part II. Brunner had a keen interest in history. He edited a splendid volume on the Great Depression. He wrote with Allan Meltzer a long report on the Federal Reserve’s first fifty years, explored among other things by Michael Bordo in ‘Karl Brunner and Allan Meltzer: From Monetary Policy to Monetary History to Monetary Rules’. There is also a very long piece by Edward Nelson on the British monetary policy debate, starting where Brunner first worked on British monetary policy in the early 1950s and continuing to when he was in close contact with Margaret Thatcher in the late 1980s. Jurgen von Hagen provides some history of economic thought as he places Brunner’s views of the 1960s in a long-term perspective. In a separate chapter von Hagen describes the origins and development of the Konstanz Seminar, founded after Brunner became a permanent visiting professor at the University of Konstanz in 1969.

In the final Part, on Brunner’s legacy, there are papers by Alex Cukierman (the permanent-transitory hypothesis), Juan Pablo Nicolini (Brunner’s theory of the money supply), and Stephen Williamson (on Monetarism and New Monetarism). All of these illustrate how Brunner’s ideas have had a lasting impact on the subject. Monetarism has certainly evolved, but New Monetarists are still interested in the fundamental role of money.

This is a large book covering most aspects of Brunner’s work, and it will surely have appeal across a wide readership. The book is a powerful reminder of the range and subtlety of Brunner’s work. It will also serve as a caution to those who have been quick to dismiss Monetarism, and even claim it dead.


Forrest Capie is a former editor of the Economic History Review, and Commissioned Historian of the Bank of England. A recent publication was on the Bank of England’s profits across 300 years in the Financial History Review, 2022.

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 (August 2022). All EH.Net reviews are archived at

Subject(s):Economic Planning and Policy
Financial Markets, Financial Institutions, and Monetary History
History of Economic Thought; Methodology
Macroeconomics and Fluctuations
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

Barriers to Growth: English Economic Development from the Norman Conquest to Industrialisation

Author(s):Jones, Eric L.
Reviewer(s):Bailey, Mark

Published by EH.Net (August 2022).

Eric L. Jones. Barriers to Growth: English Economic Development from the Norman Conquest to Industrialisation. Palgrave Macmillan: Palgrave Studies in Economic History, 2020. xii + 153pp. £79.99 (hardback), ISBN 978-3-030-44273-6.

Reviewed for EH.Net by Mark Bailey, University of East Anglia.


The causes of the Industrial Revolution are one of the great debates in economic history. What were the forces that transformed human society from centuries of low productivity and organic economic activity to sustained growth, increased wealth per head, and technologically adaptive modernity? In this short, stimulating, and highly readable monograph, Eric Jones offers a fresh perspective on the reasons why the Industrial Revolution occurred so quickly and comprehensively in eighteenth- and nineteenth-century Britain. He considers how manifold minor and subtle institutional changes over the previous eight centuries slowly but inexorably eroded the inefficient customs and practices that had acted as obstacles, impediments and barriers to growth: the net result was to diminish the economy’s susceptibility to shocks (such as disease and extreme weather events), to improve the allocation and productivity of its resources, and hence to enhance its receptiveness to immense and widespread changes from the eighteenth century. He is not concerned with synthesising or critiquing the vast debate on the causes of industrialisation, and pays scant attention to other major debates on the earlier Great Divergence (whereby economic development in Europe pulled ahead of Asia) and the Little Divergence (whereby parts of northwest Europe pulled ahead of the rest of the Continent). He does not rehearse the standard explanations for ‘take off’, such as various prime mover models (e.g., the Protestant work ethic, falling interest rates) or the new technical innovations (e.g., steam power, railways), but instead maintains an unerring focus on elucidating the merits of his alternative line of argument with admirable clarity.

Shifting the focus of the debate away from the various engines driving economic growth to consider instead the gradual evaporation of the ‘deadweight costs of old practices and big blockages inch by inch one after the other’ (p. 144) is inspired. The modern mindset tends to associate economic growth with innovations that increase productivity and social product, but here we are asked to contemplate what had prevented growth and, by extension, how the removal of such impediments in turn stimulated growth. By addressing a familiar debate by posing a different question, Jones re-illuminates it with a searing shaft of light. He forces us to consider how, for example, extravagant and unproductive expenditure on the likes of castles and cathedrals had placed a burden on the productive sectors of the medieval economy ‘by tying up capital in structures designed to intimidate’ (p. 13), and how a reduction in that expenditure released capital for more productive purposes.

Jones argues that the slow reform of institutions and the erosion of customary forms of governance resulted in the better allocation of resources, improved technology and materials, and greater societal resilience to shocks. In the centuries before industrialisation, prolonged, varied, and minor institutional changes occurred at a glacial pace to reduce inexorably deadweight expenditure, to shift assets to people more likely to exploit them productively, to eliminate destructive domestic conflict through civil war, and to enable the exploitation of previously un- or under-utilised resources. These processes were not always linear—some intended improvements could end up choking advancement—and their benefits were sometimes inadvertent, although by the nineteenth century the waning of resistance to change, and the speed of institutional change, were startling. In all of this, Jones captures a common-sensical view that institutions evolve more slowly than technology changes, exerting a drag or brake on productivity gains, and their reform could take decades or centuries (p. 61). He is unquestionably correct to point out that prejudice and the want of a decent education meant that the productivity capacity of women and most of the lower orders of society remained low until the modern era.

Jones elucidates his arguments through eight short, sharp case studies of how various impediments to growth were gradually eroded in the pre-modern era. The first section of the book considers the erosion of obstacles, the second section coping with shocks. The chapters deal in turn with (section one) military and ecclesiastical building; the dissolution of the monasteries; civil war; communal farming and underused land; tithes; archaic institutions; obstructive infrastructure; and maladministration. Then section two consider disease; “insults to agriculture”; storms and adverse seasons; floods; and, finally, fire. The book is topped and tailed with an introduction and conclusion. All of the chapters are short, and each one is accessibly and clearly written. Referencing is light, seldom more than a dozen footnotes per chapter, and Jones’ earlier work features prominently among the citations. Quotable and telling lines jump out of the pages. Communal field systems are ‘a device for preserving equality in principle and poverty in practice’ (p. 53), and the voices and zeal of nineteenth-century social reformers ‘relegated the lifestyle of the Regency bucks to dark corners’ (p. 82).

While there is no synthesis or critique of the manifold other theories about and approaches to the causes of the Industrial Revolution, Jones is undoubtedly well informed about them. Nor does he attempt to measure the growth of the English economy over time to identify key phases for his readers, and so Broadberry, et al.’s monumental British Economic Growth 1270 to 1870 (2015) does not warrant a footnote. He is respectful of, but unimpressed by, overarching explanations for the Industrial Revolution based on an identified prime mover. He recognises that they provide a powerful conceptual framework to ‘put inchoate events into some type of order’ (p. 32) and render comprehensible the ‘bewildering surface of manifold events’, while exposing their limitations: taking predetermined abstractions as given, cherry-picking examples that fit the theory while overlooking detailed historical experience that does not, and confusing correlation with causation. Equally, Jones is fully aware that localised history can fail to identify key patterns, or segregate the significant from the insignificant, and can be too susceptible to ad hoc interpretations. So we are offered neither a new prime mover theory nor a fresh empirical study, but an alternative pathway for exploring an old conundrum. To illustrate his approach, Jones mines a succession of local examples from obscure local history journals and publications, and from the disused works of great historians, such as Hoskins, Willan, and Trevelyan. As he states, ‘local evidence sometimes alters one’s mind about relative significance and I do not always discern the world of my ancestors in the abstractions of my profession’ (p. 3).

The drawback with this approach, and with Jones’ predilection for citing his own work in a threadbare system of referencing, is that occasionally—but only occasionally—an important and relevant scholarly contribution is overlooked, an opportunity is missed, or a point is stretched too far. As an example of the latter, Jones states that the transition from wooden to stone bridges awaited the late eighteenth century, and cites lengthy disputes over their upkeep, as examples of obstructive infrastructure (pp. 70-1) in the pre-modern era, yet the work that he cites (Harrison, 2004) actually states that such disputes were not the norm and that most bridges were built of stone by 1700. As an example of the former, a whole chapter is devoted to the theory developed by Leander Heldring, James A. Robinson, and Sebastian Vollmer (2015) that the dissolution of the monasteries in the 1530s created a land market and harnessed the entrepreneurial zeal of the gentry, which combined to remove a dead weight from the economy and catapulted England and Wales to industrial growth. Jones deploys their essay skilfully to illustrate the benefits of his own approach while gently highlighting the limitations of such an overarching monocausal theory constructed by economists with limited grasp of the historical reality and scholarship. Yet the prominent and influential work of Bruce Campbell (2005, 2008) is omitted from the analysis, even though it reveals that the landed estates of religious houses comprised no more than 5% of the arable area of England, over half of which by the 1530s was in the hands of tenants in the form of leases or other forms of tenure. Thus we have a splendid example of economists and early modern historians overlooking important work in medieval history (they are not alone…medieval historians are also guilty of not engaging with economists and early modernists!), which has established that religious houses had direct control of less than 2% of the arable land of England. In which case, how can their dissolution have had such a transformative effect on the land market and the productive capacity of English agriculture, or, indeed, how can their dissolution have removed a significant obstacle to economic growth?

These observations do not detract from Jones’ fundamental argument, they simply underline the need for more careful formulation and exemplification. Jones selects various cogent examples of customary practices that impeded growth—such as tithe payments to the church, which were not removed until a parliamentary act in the nineteenth century—and, following his lead, other economic historians will be stimulated to contribute grist to his mill from their own areas of expertise. One example would be the history of tenures, whose structure evolved significantly between the thirteenth and seventeenth centuries. The peculiar institutional structure of land tenure before the Black Death of 1348-9 meant that the pressure of rising population caused land holdings to splinter, mean holding size to plummet and immiseration to spread, and therefore it acted as a major barrier to the growth of the medieval economy. In the decades after the Black Death this archaic structure was gradually dismantled through the adoption of more contractual and monetarised tenures, and the shift of a higher proportion of land from the seigniorial to the (hands on) peasant sector, both of which enabled more productive use of landed resources in the early modern period.

Another topic worthy of closer scrutiny is the development of the law, which in general receives bad press from Jones. He portrays property law as cumbersome and expensive until the introduction of a comprehensive system of land registration, and depicts the legal system more widely as corrupt, self-serving, protecting the interests of elites, and raising transaction costs for producers (e.g., pp. 36, 56, 138). While the English legal system was certainly neither equitable nor fair, it was better than the alternative. The development of a system of common law from the late twelfth century under the auspices of royal justices and officials, and the permeation of its principles and processes into the operation of many other local tribunals such as manorial and market courts, had profound, far-reaching, and inadvertent consequences in removing barriers to growth. It created a culture of decision-making and dispute resolution based on written proofs, precedents, formal modes of representation, and consistent treatment of similar wrongs. It was hostile to personal discretion and arbitrary judgements in social relations, and—to some extent—held the elite to account. It enabled land to be treated as an asset transferable for money rather than a gift in exchange for services, and its title to be defensible and heritable, therefore creating a liquid asset capable of acting as security for loans. It offered cheap, accessible, independent and (relatively) fair resolution in petty disputes over debt, trespass and breach of contract. In short, the development and spread of a legal system and culture reduced risks and transaction costs in commercial activities, providing a major incentive to the growth of factor and commodity markets. Indeed, Jones himself acknowledges that the presence of an independent legal tradition in Western Europe was a key element in the Little Divergence (p. 89).

This is a stimulating, enlightening, engaging, wise and learned book, packed with common sense and sharp analysis, and characterised by a lucid writing style gloriously free from jargon. Jones is a leading scholar at the top of his game, and provides a new perspective and a framework for analysing economic growth that will advance one of the great debates in economic history.


Mark Bailey is Professor of Late Medieval History, University of East Anglia. He is the author of The Decline of Serfdom in Late Medieval England (2014) and in 2019 was the James Ford Lecturer in British History at the University of Oxford; the Ford Lectures have been published as After the Black Death. Economy, Society and the Law in Fourteenth-Century England (2021).

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 (August 2022). All EH.Net reviews are archived at

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Industry: Manufacturing and Construction
Markets and Institutions
Geographic Area(s):Europe
Time Period(s):General or Comparative

Oceans of Grain: How American Wheat Remade the World

Author(s):Nelson, Scott Reynolds
Reviewer(s):Sharp, Paul

Published by EH.Net (August 2022).

Scott Reynolds Nelson. Oceans of Grain: How American Wheat Remade the World. New York: Basic Books, 2022. 368 pp. $32 (hardback), ISBN 978-1541646469.

Reviewed for EH.Net by Paul Sharp, University of Southern Denmark, CAGE, CEPR


The title of this book is somewhat misleading. When I received it for review, I expected another US-centric account of how America made the world what it is today. I was therefore somewhat surprised to begin reading, and found that a large part concerns Russia, Turkey, and Ukraine. In fact, reading this book while at the same time witnessing the horrors coming out of Ukraine made an impression, as I will come back to at the end of this review. The author, Scott Reynolds Nelson, is the UGA Athletics Association Professor of the Humanities at the University of Georgia. He has won both academic and literary awards for his writing. It is therefore no surprise that this book is an excellent read. Nelson has the historian’s enviable skill (which many of us from the more economics side of economic history could surely learn from) of making serious analysis come to life through vivid descriptions of people and places. You will most likely come out of reading this book far more knowledgeable than when you started, whether or not you believe the central hypothesis.

Nelson presents a bold theory of what made the modern world. Where Jared Diamond saw “Guns, Germs, and Steel”, Nelson sees the perhaps somewhat less sexy trinity of mold, futures contracts, and dynamite. The potato blight, phytophthora infestans, of the 1840s forced open European markets for grain. The American Civil War led to financial innovations in how grain was traded; and dynamite, invented in Germany in 1867, transformed geography as new deep-water ports were created, and canals and railroads connected continents. In other words, policy, finance, and technology created the globalized world. This is not really news to the economic historian, but Nelson puts it within a framework inspired by the Russian Marxist, activist, and grain trader, Alexander Lvovich Parvus (born Israel Lazarevich Gelfand or Helphand). He postulated the role that “invisible lines,” the “Black Paths” of grain trading routes, have played for the making and breaking of empires, which he argued exist to control and extract rents from them. Rosa Luxembourg was to take his “invisible lines” to create a new way of understanding trade which we now call world systems theory. But Parvus’ influence went far beyond theory. He was able to convince Lenin of the power of these lines and that revolution in Russia was possible.

The introduction provides a great summary of Nelson’s hypothesis. His 2012 book A Nation of Deadbeats: An Uncommon History of America’s Financial Disasters (Knopf) explained that financial panics had much to do with drastic changes in commodity prices. Accordingly, the story here starts in Odesa, Ukraine, which he visited in 2011 to research international financial crises. Nelson sees connections between booms and busts in the wheat market for everything from the French Revolution to the Arab Spring. He notes parallels between different settings based on connections to wheat. For example, Ukraine has some of the richest soil in the world, and it was captured by Russia in 1768 under Catherine II. At the same time, he notes, similar expansionism was going on in the Americas. Then, the French Revolution (over the price of bread, of course, as Nelson notes), and the French and Napoleonic Wars led to Odesa becoming a grain-exporting boomtown. European landlords in turn faced Ricardo’s paradox, as rents dropped as food became cheap. The initial response was protectionist barriers to trade, but then a water mold caused the potato harvest to fail, and European trade opened following 1846.

This, Nelson explains, led to century-long contest between Russia and America to feed Europe’s working class. In the 1860s both empires ended serfdom and slavery respectively. America then gained the upper hand, when the Union Army during the Civil War created futures contracts that allowed grain to be bought and sold without the costly and time intensive process of pricing based on samples. This, combined with the transatlantic telegraph, steam shipping, and the new opportunities brought by dynamite, led to what Kevin H. O’Rourke has termed the “Grain Invasion.” European prices fell, and the ships which brought grain returned with migrants to the New World. As European workers in cities became better off, Odesa, and other grain exporting regions, faced ruin, and the combination of the agrarian crisis and the bursting of estate bubbles ushered in what was known as the Great Depression until the 1930s. The powerful agricultural Austro-Hungarian and Ottoman Empires declined. Russia, for its part, responded in 1884 with state-supported railroads and a plan to plant grain in Siberia and Central Asia. This brought in capital from largely French investors, but Russia’s expansionary plans were checked when it lost in war to the Japanese Empire in 1905. Then, in 1914 Russia’s anxiety that Turkey might halt Russian grain shipments on the Black Seas helped start World War I: “a war over nothing less than foreign bread.” Thus, as Parvus, who grew up in Odesa during the 1873 crisis and coined the term “Agrarian Crisis” in 1895, claimed, the paths of grain made and destroyed empires.

Chapter 1 covers an impressive span of time, 10,000-800 BC and explains the origin of the “black paths” that so fascinated Parvus. Ancient oxen trails connected the Ukrainian plains with the Black Sea ports. Geographers and historians have claimed that these paths, and the trading cities known as emporia (themselves the source of the word “empire”) were created by empires, which in turn were defined by their control of trade lines. Folklore, backed up by new archaeological evidence suggests a far more ancient origin. The first wheat “farmers” might have been travelers or traders, who after decades of migration remained at way stations which formed the first settled communities. Empires then emerged based on establishing protection rackets along the pathways, and in a few generations imposed formal imperial rule. Thus, empires imposed a tax on the black paths, but so too did disease, and the rise and fall of both determined the volume of trade. Nelson explains that historically bread was extremely expensive, involving three stages: 1) planting and harvesting; 2) storing and shipping to the bread eaters, in the emporium; and 3) producing flour, mixing with yeast and water, and baking, which took place in the cities. For at least fifty centuries considerable human labor was devoted to the second stage, and empires emerged to engross and centralize it.

Chapter 2 covers 800 BC-AD 1758. Nelson explains how Byzantium enforced a monopoly control of the Bosporus Strait and the Dardanelles. Constantinople rose and fell as the black paths expanded and contracted, but grain emporia were nodes for infection, and the Plague of Justinian in 541 ended the ancient world. With depopulation, important knowledge about the storage of grain was lost, and its rediscovery centuries later was to play an important part for making long distance trade possible. Constantinople became increasingly dependent on Slavic peoples, and as the grain flowed in, Byzantian culture and the Orthodox religion flowed back. In medieval western Europe, which was often cut off from trade with the East after 542, serfdom arose to compensate for the loss of trade, and control of mill and bakery meant control of people. Nelson is brilliant at finding anecdotes to illustrate the centrality of grain for understanding the world. Thus, the word lord comes from an old word meaning loaf-ward, and the word lady from loaf-kneader, although one wonders if similar etymologies exist for the same words in different languages.

The years 541-1100 were the age of robber barons, for example the Hanseatic League. Absolutist states emerged to break their monopoly, and in 1453 the Byzantine Empire, increasingly starved of grain, collapsed and the Turks took over. A long struggle then emerged with Russia, which wanted to take Constantinople to monopolize the Bosporus themselves. Thus “… at its deepest level an empire may be a monopolizer of food along ancient grain pathways that it never fully understands. Empires survive only as long as they control the sources of food needed to feed soldiers and citizens; they fund themselves by taxing those who sell it.” This is further explored in Chapter 3, covering 1760-1844, where it is explained how Catherine II, inspired by the physiocrats, believed that grain exports properly managed could be the source of an empire’s wealth. To this end she transformed serfdom into something more akin to New World slavery, and enacted extensive military and fiscal reforms. She then set about seizing land where wheat could grow, although she never managed to capture Constantinople. But as the Ottoman Empire shrank, in part due to a less sophisticated grain-tax system, European princes tore grain-producing Poland to pieces to appease Catherine. Moreover, as with US expansion, thousands of native peoples were persuaded to ally with Russia in order to dispossess others. Having taken Ukraine, Catherine founded Odessa (renamed in Ukrainian as Odesa) as a free port, and invited in foreigners to farm land as she aimed to feed Europe and thus make Russia rich. Meanwhile the United States, before the Civil War, offered no real competition. The American port cities were not “visionary physiocratic cities” but “simple adjuncts to plantation slave regimes” where landowners blocked foreign imports. However, the French rediscovered Roman techniques of grain storage, allowing for silos and American “elevators”, thus making long-distance trade increasingly feasible. Trade remained protected, however, and to an extreme degree following the Napoleonic Wars.

Chapter 4 provides the first of Nelson’s trinity of explanations. Barriers to trade crumbled with the failure of the potato crop in the 1840s. As trade expanded, bread replaced potatoes and living standards surged, although health often suffered as Europeans preferred highly processed white bread. Thus emerged what Parvus described as the European consumption-accumulation city. Labor and capital accumulated where food was cheapest and the cities with the deepest docks thrived. Prosperity allowed workers to save, freeing up capital for industrialization. Nelson explains, “European industrialization and urbanization had little in the way of European roots. It was fueled by foreign food.” Chapter 5 demonstrates how the conflict between the Russian and Ottoman Empires came to a head with the Crimean War 1853-56 which saw Russia fail to capture Constantinople, in part because France and Britain feared a Russian monopoly on the Black Sea. This was a humiliating defeat, but also left the Ottoman Empire in heavy debt to Britain and France. Serfdom was abolished in Russia in order to expand grain production, leaving former serfs heavily indebted, but with land, and new political structures, the mir and the zemstvo, were implemented to govern these areas.

A different story played out in the United States, where slavery was abolished around the same time, but land was not redistributed, part of the origins of inequality in the US today. At the same time, the US expanded grain production into the interior using Black Sea varieties of wheat, and the Republican Party campaigned against slavery based on a belief in physiocratic expansion, and a desire for incentives to put family laborers onto wheat farms. Migrants purchased land along new railroads whose monopoly power they came to hate. Then in Chapter 6 Nelson gives the second part of his explanation. The Civil War created a necessity for breaking the power of merchants to supply food for the army, and this was done with a novel financial innovation. Bills of exchange were divided into hundreds of enforceable contracts, which would be called futures contracts, obviating the necessity for buying and selling based on a sample. Although in 1863 only the US Army was using this, with the introduction of the Transatlantic telegraph trade became completely reorganized. Ships could take the place of storage facilitates, redirected at port to wherever the grain was needed. America could now compete with Russia.

The final part of Nelson’s trinity is presented in Chapter 7, appropriately entitled “Boom.” Trade costs were again slashed with the invention of dynamite, which allowed railroads to run through mountains, canals, such as the Suez Canal, to link continents, and for the creation of new deep ports. The increased trade came with additional innovations such as grading, specialized insurance, and Hungarian milling techniques. As the price of food plummeted, workers found more time to educate and organize themselves, as Chapter 8 explains. New economic theories, including Marx’s, emerged to calculate the causes and limits of the new agricultural plenty. Much of the remainder of the book explains Parvus’ contribution to socialist theory and his direct influence on the course of events during his life, including the emergence of the Young Turks and the revolutions in Russia. He argued that although cheap grain benefited everyone, the main threat to the world was the alliance between capitalists and empire which would lead to imperialism, and pointless and costly wars. Agricultural empires such as the Ottoman and Austro-Hungarian empires suffered, while other empires gorged on cheap grain and became great powers. The US share of the grain trade declined as increasing shares of its production went to feed its own large cities. New conflicts emerged as others sought to capitalize on the demand from elsewhere, as Turkey again became a key battleground. World War I itself was “a World War over bread” with for example the closing of the Bosporus and Dardanelles Straits a key event. As Russia starved, revolutions eventually toppled the old Tsarist regime, and the Soviet Union, by quickly incorporating grain producing areas in Ukraine for example, took its place.

One is left with the feeling that we should be surprised about the importance of wheat for world history, which the layperson might indeed be. But from the perspective of an economic historian, one cannot really argue that wheat has been underappreciated. My own PhD thesis, from 2009, was entitled “Wheat, Globalization and Economic History,” and my career as a researcher began with reading the great works by Fairlie, Harley, Williamson, O’Rourke, Jacks, Brunt, and of course my own former supervisor, K.G. Persson (some references are given below). Certainly, there are many more I have forgotten to mention. One could argue that Russia’s role in this story is underexplored, with a few notable exceptions such as Goodwin and Grennes (1998), but more and more scholars are working on Russian economic history these days, so this will improve. Other large countries such as China and India take up relatively little space in Nelson’s account, while references to Parvus alone take up half a page in the index. One can of course argue against the somewhat physiocratic idea of the world where everything starts with the soil. In history this might have been truer, but Engel’s Law and technological progress have changed that, present concerns about food supplies notwithstanding. Regarding the first globalization, Nelson explains that economists and contemporaries have emphasized the importance of the elimination of tariffs, the introduction of the gold standard, and steamships. But, he believes, they have missed the ecological and political background: how the potato famine opened trade, dynamite opened ports, and futures markets increased liquidity. This is a powerful and convincing argument, but this is not a quantitative study. The only graph is of imports of wheat and flour into UK, but this only goes back to 1820. Before this, he explains in an appendix, there was a lot of smuggling and the data is underreported, meaning that historians have overstated the role of cotton and understate wheat.

Given my geographical location and research interests I am looking for Scandinavian connections everywhere, and I apologize for that! But it might be mentioned that, although Nelson dedicates the book to his maternal grandmother and explains that his grandparents left Sweden in 1887, the book somewhat neglects Europe outside Russia and Turkey (and indeed the world beyond), despite the obvious point that dynamite was invented in Germany by a Swede. Copenhagen’s role as a major Baltic trading hub is mentioned in passing, but the somewhat famous Danish exception during the backlash against the American grain invasion before the First World War deserves at least a sentence. Sticking to free trade, Denmark imported cheap grain, which helped feed a booming Danish industry in butter, bacon, and eggs, allowing this small country to feed the large industrializing cities of northern England. Danish exports were to play a crucial role in establishing industrialized dairying around the world, including the United States and Russia. Food is after all not only grain, particularly not as countries become richer. On a more trivial note, at one point the Danish ruler of England, King Canute, is described as a “legendary fool,” but as a historical figure he arguably was neither legendary (although the famous story about him might be) nor foolish for trying to demonstrate the limits of his power and in the process getting his feet wet.

Nelson is not afraid of using dramatic language to demonstrate the relevance of his work for the present, for example in chapter 14: “Now, just as ten thousand years ago, producers and consumers are bound together in a common world ecology that viruses, empires, and states have only ridden upon, bits of foam on a vast, invisible deep.” But sometimes he over-eggs the pudding, such as in the conclusion: “Whether to regard empires as symbiotes or parasites depends on one’s perspective. I tend to see empires as parasites, but one could make the argument that imperially sponsored universities… try to prevent starvation… in ways that promote ‘growth’ inside the empire. Physics, biology, chemistry, economics, and history are all, in their way, data-processing systems for empires hoping to keep their subjects – us – alive so that they can rule another day.” I like to believe that knowledge creation has value beyond allowing our present rulers to survive.

In sum, I would certainly recommend reading this book. I learned a great deal, and his thesis is fascinating and provocative. Moreover, it is a highly engaging read. But be prepared to feel somewhat unsettled as well. Nelson chillingly concludes that “modern Russia’s relative weakness as a great power now (in 2021) may still ultimately depend on its separation from Ukraine… Ukraine has always been the greatest prize, as Catherine the Great well knew.” Economists and economic historians are always being asked to provide policy implications of their work these days. Here is one that President Putin seems to have taken to heart.


Brunt, L. (2004). Nature or Nurture? Explaining English Wheat Yields in the Industrial Revolution, c. 1770. Journal of Economic History, 64(1), 193-225.

Fairlie, S. (1969). “The Corn Laws and British Wheat Production, 1829-76.” Economic History Review, 22(1), 88-116.

Goodwin, B. K., & Grennes, T. J. (1998). “Tsarist Russia and the World Wheat Market.” Explorations in Economic History, 35(4), 405-430.

Harley, C. K. (1978). “Western Settlement and the Price of Wheat, 1872–1913.” Journal of Economic History, 38(4), 865-878.

O’Rourke, K. H. (1997). The European Grain Invasion, 1870–1913.” Journal of Economic History, 57(4), 775-801.

O’Rourke, K. H., and Williamson, J. G. (2001). Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy. Cambridge, MA: MIT Press.

Olmstead, A. L., & Rhode, P. W. (2002). “The Red Queen and the Hard Reds: Productivity Growth in American Wheat, 1800–1940.” Journal of Economic History, 62(4), 929-966.

Persson, K. G. (1999). Grain Markets in Europe, 1500–1900: Integration and Deregulation. Cambridge, UK: Cambridge University Press.


Paul Sharp is professor of economics at the University of Southern Denmark, where he heads the Historical Economics and Development Group (HEDG). He is the author, with Karl Gunnar Persson, of An Economic History of Europe: Knowledge, Institutions and Growth, 600 to the Present (Cambridge University Press, 2015) and, with Markus Lampe, of A Land of Milk and Butter: How Elites Created the Modern Danish Dairy Industry (University of Chicago Press, 2018).

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 (August 2022). All EH.Net reviews are archived at

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Economywide Country Studies and Comparative History
International and Domestic Trade and Relations
Geographic Area(s):General, International, or Comparative
North America
Time Period(s):General or Comparative

Central America’s Forgotten History: Revolution, Violence, and the Roots of Migration

Author(s):Chomsky, Aviva
Reviewer(s):Hübner, Jamin Andreas

Published by EH.Net (August 2022).

Aviva Chomsky. Central America’s Forgotten History: Revolution, Violence, and the Roots of Migration. Boston: Beacon Press, 2021. 294 pp. $25.95 (paperback), ISBN: 978-0807056486.

Reviewed by Jamin Andreas Hübner, LCC International University and University of the People.


It is often disturbing how uncritically economic history tends to treat imperialism and colonialism. (I recently described some of these problems in my review of The Economic History of Colonialism; see Capital & Class 46:1). There are, however, new works of social, political, and economic history that don’t make the repeated errors of eurocentrism and instead use primary sources that give voice to the unheard and suppressed. Historian Aviva Chomsky’s Central America’s Forgotten History is one of these books. It explores the true human costs of interventions that are often justified in the name of “economic development.”

The book basically explains why so many people have been and are immigrating to North America from Central America and how American economic interests led to the invasion, occupation, conquering, and violent suppression of peoples and societies in Central America. Importantly, it restores and re-centers the memories of witnesses of these events.

The first section discusses how memory suppression favors certain economic and political goals, and outlines the major markets (coffee, bananas, etc.) and the central role of anti-communist Cold War rhetoric in these American interventions. The second section looks at each place and episode of crisis and economic imperialism (from roughly the late 1800s to 1990s): Guatemala (ch. 4), Nicaragua (ch. 5), El Salvador (ch. 6), and Honduras (ch. 7). Chapter 8 looks at Central American solidarity in the United States. The last section looks at what happened in Central America the last forty years in light of American foreign policy, from the neoliberal program of Ronald Reagan’s administration to the immigration restrictions of Donald Trump’s.

Chomsky highlights the “Good Neighbor Policy” in Guatemala during the 1930s and its connections with the New Deal. “Too much democracy had allowed workers, peasants, and the government to challenge” US corporations; “United Fruit discovered that it was much more profit to do business with a dictator than with a democratic president” (p. 46). Furthermore, with the rise of Soviet communism, “Cold War counterrevolution targeted not only communism but virtually any movement for social change” (p. 46). The military dictator Jorge Ubico “subjected Indians to forced labor,” “provided tax exemption for the United Fruit Company and [invited] the United States to establish its first military base in the country” (p. 48). By the 1950s, most of the country’s exports went to the U.S. When the country elected a reformist (who proposed to outlaw forced labor, redistribute land, and grant rights to peasants), the America CIA orchestrated a violent overthrow of the government in 1953-54, and purged the land of “communists” (anyone who resisted, unionized, or refused to work for private capital). Investors wrote the economic laws; American oil companies wrote laws for drilling, the Bank of America revised the bank code and opened branches in the country and government loans were granted to buy products from General Motors. “For US businesses …the coup brought magnificent windfalls” (p. 76).

Then came big economic shifts. “First came the cotton boom…For peasant farmers, cotton meant eviction…forced recruitment through debt and low wages…child labor,” etc. (p. 54). Then came the “beef boom,” which created few jobs but absorbed massive amounts of land—all while the population exploded in growth. While multinational companies profited, these changes caused mass malnutrition for Guatemalans and economic servitude; “by the early 1980s, all five Central American companies held debts significantly larger than their annual earnings” (pp. 56-57). The people resisted by forming economic cooperatives and latched on to Liberation Theology amidst their Catholic tradition and offered an alternative society. “They established hospitals, health clinics,” training programs, and other essential services that the “free” market failed to produce (p. 83). The U.S. tried to train Guatemalans to invade Cuba on their behalf, but this effort failed miserably. Meanwhile, factories continued to be built for textiles, canned foods, soda pop, shoes, where workers were “surrounded by barbed wire, guarded by armed men and police dogs, and patrolled inside by armed supervisors” (p. 85). When the people rose up in revolt in the late 1970s to 1983, the government enacted scorched-earth violence, massacres, executions, displacement, and genocide of indigenes (pp. 90-94)—and then facilitated a civil war. Although military aid from the US officially ended in 1977, the country has not recovered from such trauma.

In Nicaragua, the US occupied the country for most of the first third of the twentieth century, to ensure that no other country built canals for competing economic trade. In the late 1970s a revolution led by the Sandinistas rose up against the Somoza family dictatorship and gained control (p. 99). Chomsky writes that the Sandinista government, despite armed opposition, got off to an impressive start:

“The gains of the first years of the revolution were close to astonishing. Land reforms transformed the agricultural structure and increase productivity, both in basic grains like corn, beans, and rice, and in exports like sugar and coffee. The population was eating more—significantly more—and imports of basic grains dropped close to zero. Public health campaigns reduced or eradicated malaria, polio, measles, and tetanus, and the infant mortality rate dropped by a third. Hundreds of new schools were built… [the revolution had] extraordinary mobilization, voluntarism, flexibility and optimism.” (p. 105).

Conservatives in the U.S. sought to take Nicaragua back and get its people, institutions, and land working for American capital. Chomsky carefully explains how Reagan fought hard during his Presidency—on behalf of investors, and against Congress and public opinion—to cover up his administration’s illegal war against Nicaragua.

In El Salvador the coffee industry had long exploited workers, much as it had in Nicaragua. American companies moved in during the 1960s. “When the country implemented the first rural minimum wage in 1965, coffee planters responded by simply expelling peasants from their plantations. The cotton, sugar, and cattle revolutions after WWII concentrated more fertile land in the hands of the oligarchy and further squeezed El Salvador’s peasants…” (p. 125). The country suffered decades of civil war, regime change, and constant U.S. intervention.

Honduras was arguably the training ground for these economic programs, and in the 1980s it was literally the training ground for the U.S.-financed contra rebels attempting to overthrow the Sandinistas in Nicaragua. (Thus the nickname “The USS Honduras.”) In addition to special economic zones, neoliberal land reform in the 1990s privatized the real estate market and essentially removed collective and cooperative lands from the people so that private companies could monetize the palm oil market (pp. 156-57). In familiar fashion, a leftist, socialist-oriented President was elected by the people in 2005 and then deposed in 2009 in a coup that Chomsky describes as western- and U.S.-backed. Thereafter, free-market reforms created mass poverty (66%) and doubling of unemployment (p. 161). Foreign investors, however, profited well—which would seem to have been the point.

By the end of the book, it is all too clear why so many people from Central America are moving North, and why Trump’s “shithole countries” remark about some Central American (as well as African) countries actually points to the legacy of American imperialism. It’s also clear why few in America want to remember this legacy.

Central America’s Forgotten History is similar to Naomi Klein’s Shock Doctrine and Jonathan Katz’s Gangsters of Capitalism, both of which look at the devastating effects of American economic interventionism in Central and Latin America. Chomsky gives more attention to the role of the Catholic Church, social repression, and provides a sweeping, lucid narrative summary of this history. Given the effects and sheer scale of these interventions, they deserve recognition not just from political and social historians, but from economic historians as well.


Dr. Jamin Andreas Hübner is a faculty member at the University of the People and LCC International University. He is a scholar of religion and economics, as well as an activist, and organizational leader, and is currently writing a book on cooperative economics.

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 (August 2022). All EH.Net reviews are archived at

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Economywide Country Studies and Comparative History
Military and War
International and Domestic Trade and Relations
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII
21st Century

Ages of American Capitalism: A History of the United States

Author(s):Levy, Jonathan
Reviewer(s):Campbell, Stephen W.

Published by EH.Net (August 2022).

Jonathan Levy. Ages of American Capitalism: A History of the United States. New York: Penguin Random House, 2021. xxviii + 908 pp. $40 (hardback), ISBN 978-0812995015.

Reviewed for EH.Net by Stephen W. Campbell, Department of History, California State Polytechnic University, Pomona.


In this highly ambitious work, historian Jonathan Levy has divided the history of American capitalism into four distinct ages, each with its own book of chapters. The first, the Age of Commerce, was characterized by the expansion of markets across space, the division of labor a la Adam Smith, and the growth of European empires that tragically exploited Native Americans and African American slaves. This was followed by the Age of Capital from roughly the Civil War to the Great Depression in which industrial investment in new equipment and the burning of fossil fuels unlocked greater returns in productivity. Book Three, the Age of Control, witnessed the advent of New Deal capitalism. Labor unions and Big Business maintained an uneasy truce through a politics of income security, high wages and taxes, and regulations on risky investments and capital mobility. Post-1980 America makes up the final book, the Age of Chaos, aptly named for its volatility, having already seen the inflating and bursting of a stock bubble in the 1990s and housing bubble prior to 2007. Here, much of the New Deal order was reversed.

Levy unpacks three interrelated theses throughout this book. Capitalism cannot be reduced to mere production, market exchange, or the profit motive, he argues. It is a process. Multiple factors must come together simultaneously. Investor confidence and its relationship to the credit system loom large for the author and to that point, in his third thesis, Levy argues that the history of capitalism is a never-ending conflict between the short-term propensity to hoard and the long-term inducement to invest (p xxii). The relationship between the two varied at different times. In the Age of Control, policymakers sought to encourage long-term investment in illiquid assets. They operated under the Keynesian assumption that excessive saving among investors – the propensity of hoard and opt for liquid assets during times of uncertainty – stunted aggregate demand, consumption, and employment. Levy holds that starting in the 1980s investors’ demand for liquidity became more speculative (again following Keynes), as their focus became increasingly short-term (p. 587). The newer mindset was to “pull capital from less profitable lines of production and deploy them wherever more immediate profits [could] be made.” (p. 603) Rejecting the assumptions of older economists once associated with the University of Chicago, Levy is critical of the notion that rational investors will benefit the greatest number of people through the free mobility of capital.

New economic paradigms in Levy’s telling are often preceded by political revolutions. Jacksonian Democrats initiated a new era of capitalism that differed from Hamiltonian Federalism; Lincoln Republicans ended slavery and inaugurated the Age of Capital; and Franklin D. Roosevelt’s (FDR’s) landslide election launched the New Deal and departure from the deflationary gold standard. Students of American history will find much of this material familiar, almost as if they are reading a textbook. But Ages of American Capitalism goes beyond the limits of a textbook, for it contains original arguments and figures with citations to some of the latest scholarly literature. Helpful maps, graphs, and images are evident. The dense, complex discussions that may prove challenging at times for undergraduate readers are balanced by interesting details about the lives and business practices of larger-than-life entrepreneurs like Andrew Carnegie and Henry Ford. Levy is also attentive to the way economic realities were reflected in language, literature, film, paintings, photographs, and emotions. His analysis of the conformity and fears embedded in postwar consumerism and suburbia is spot-on.

A book of this length will inevitably raise points of contestation. It is debatable to what extent the anemic economic recovery from the Great Recession fully explains the rise of Trumpism (pp. 737-738), in contrast to the cultural, media-driven, and authoritarian factors highlighted by much of the recent political science literature. Although Levy’s commentary on Andrew Jackson’s Bank War perpetuates some thinly sourced conventional wisdom (p. 111), it is to his credit that he affirms more recent scholarship characterizing the Jacksonians and their Populist Party descendants not as anti-capitalist, democratic heroes but as anti-monopolists who desired equal opportunity in commerce (pp. 298-299). Indeed, there is a level of seriousness, depth, and breadth here that cannot be found in Charles Sellers’s The Market Revolution.

It is impossible in a short review to touch upon every major insight of a lengthy book, but one that emerges repeatedly is the role of investor confidence. Whether it was the unprofitable, government-subsidized railroad boondoggles in the Gilded Age, Enron’s accounting tricks in the 1990s, or Lehman Brothers’ mortgage-backed securities in the early 2000s, success depended less on whether a firm could realize short-term profits by selling tangible assets and more on whether investors had the confidence and expectations that these firms would one day be valuable. The games worked—and indeed, this was a “confidence game” as Levy writes—as long as firms could roll over their debts with access to abundant, cheap credit. But once confidence waned and credit ran dry, disaster could strike. “Over the centuries,” Levy boldly states, “every single crisis there has ever been has been a crisis of confidence.” (p. 128).

Sometimes, large firms learned to politicize “confidence” and “uncertainty” to secure their preferred policy outcomes. During the New Deal era the National Association of Manufacturers and Chamber of Commerce railed against the uncertainty of taxes and regulations by launching a “capital strike,” electing to deliberately withhold employment-generating investment until newly emboldened government agencies backed off. Such tactics continued in the Cold War era. Levy, certainly no determinist, saw a brief window of opportunity for more positive reform from 1945 to 1948 amid a nationwide wave of labor strikes and hopes for full employment and public housing legislation. By 1948, this window had closed. The “Red Scare,” McCarthyism, and the Taft-Hartley Act pushed New Deal liberalism to the right. American workers, unlike their German counterparts, would never claw from the hands of the owners of capital the right to have any input over how a company’s profits and investments would be used.

Today’s Americans may recall a similar lost opportunity in Barack Obama’s first term. Years of low interest rates from the Federal Reserve during the Age of Chaos had fueled asset price inflation, especially in stocks and real estate, delivering most of the gains of GDP to those who owned the most assets; namely, the wealthy. After a historic election victory in 2008 on the heels of the greatest financial crisis in about 80 years, Obama had a mandate to offer a new political economy to address inequality in the way that FDR did. What transpired was mostly a continuation of the Age of Chaos that began with Ronald Reagan (admittedly Obama did not have the enduring and sizable Democratic majorities of FDR’s time). The Fed and Treasury subsidized the financial institutions who helped cause the Great Recession while offering little to no mortgage relief for the average American homeowner. A slow and painful recovery ensued. “What was needed,” according to Levy “was for democratic politics and the state to chart a new direction, a new, viable long-term economic path, by changing the logic of investment.” (p. 717).

Throughout Ages of American Capitalism, Levy warns us not to be nostalgic for bygone eras. We cannot go back to the racism and sexism of the Age of Control. He closes by calling for a new and more imaginative age of democratic politics to break us out of the Age of Chaos. The book he has compiled, years in the making and rigorously researched, is a noteworthy accomplishment.


Stephen W. Campbell is a Lecturer in the Department of History at California State Polytechnic University, Pomona. His first book, The Bank War and the Partisan Press: Newspapers, Financial Institutions, and the Post Office in Jacksonian America, was published by the University Press of Kansas in 2019.

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 (August 2022). All EH.Net reviews are archived at

Subject(s):Business History
Economic Planning and Policy
Economywide Country Studies and Comparative History
Financial Markets, Financial Institutions, and Monetary History
Government, Law and Regulation, Public Finance
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII
21st Century

France and Germany in the South China Sea, c. 1840-1930: Maritime Competition and Imperial Power

Author(s):Becker, Bert
Reviewer(s):Bonin, Hubert

Published by EH.Net (July 2022).

Bert Becker. France and Germany in the South China Sea, c. 1840-1930: Maritime Competition and Imperial Power. Paris: Palgrave-MacMillan (Cambridge Imperial and Post-Colonial Studies), 2021. 484 pp. $149.99 (hardcover), ISBN 978-3-030-52603-0.

Reviewed for EH.Net by Hubert Bonin, Sciences Po Bordeaux and BSE-Bordeaux University.


Bert Becker, a history professor in Hong Kong since 2002, bases his research for this book on the relevant French, Danish, and German archives, particularly those concerning Indochina, especially Vietnam, and Hong Kong. The originality of the book stems from its juxtaposition of the perceptions of various significant stakeholders in the light of their changing geopolitical interests in the face of unfolding events – in particular, the colonization of South Asia and the seizure of concessions in China – as geo-economic competition between the great trading and military powers of Europe, Japan, and America saw a struggle for maritime dominance. In contrast to colonial histories that often provide a historical framework of this process, Becker stresses the role of individual actors who sought to achieve interests often dominated by their commercial objectives.

The original British hegemony – in the form of the China Navigation Company, launched in 1872 by merchant John Swire, and Indochina Steam, established by the trading company Jardine & Matheson in 1881 – faced increasing competition from French and German shipping and commercial companies, notably the Jebsen Shipping Company. The competition ended at the outbreak of the First World War, when German ships on the High Seas were attacked, blockaded, put into receivership, and confiscated, especially after China declared war on Germany and its Central Powers allies in 1917.

Becker offers an alternative view of the history of Indochina, one focused on the German experience. Jebsen Shipping, from its home ports in the Baltic Sea and its bases in Hong Kong, and the trading house Speidel were particularly successful in carving out a niche that saw them participate in the expansion of trade in this region. Their efficiency prompted French merchants to charter Jebsen’s boats for transfers to Hong Kong and for regional tramp shipping. This regional “binational cooperation” contrasted with the anti-German sentiment then prevalent in Paris. With careful precision Becker analyzes how the German government, from Bismarck onward, encouraged this commercial partnership in Asia. On the one hand, in pursuit of a naval base in South Indochina, Germany invaded Kiachow (now Jiaozhou) Bay in 1897 and obtained a long-term lease agreement with China. On the other hand, until the Moroccan crisis of 1905-1906, Germany sought to maintain a balance of influence between itself and France in Asia and Africa.

The book is devoted to weighing such power relations. It first reconstructs the history of maritime flows in Southeast Asia from the 15th to 17th centuries, then the Franco-British breakthrough from the 1840s, the French colonization in Indochina, and the emergence of German merchants in the 1840s. Hong Kong became the platform where they could flourish thanks to their networks of compradores (middlemen) and the branch of the Deutsch-Asiatisch Bank (a subsidiary of Deutsche Bank) that opened in 1900. Their ships developed their Euro-Asian circuits but became specialists in intra-Asian cabotage. In 1909, 735 German ships docked at Hong Kong, well behind the British (4,931) but ahead of the Japanese, Chinese and French (450). Jebsen Shipping did not face the full long-term consequences of World War I because it became a Danish company when northern Schleswig was restored to Denmark in 1920.

The archives allow a reconstruction of the key roles played in Indochinese trade by the entrepreneurs who led the most notable firms, including Auguste Raphaël Marty (1841-1914) and Édouard Jules d’Abbadie (1853-1904) headed Marty & D’Abbadie, an active trading house between Haiphong and Hong Kong; and Denis Frères, originally from Bordeaux, based mainly in Saigon. Surprisingly, the book speaks little of the latter firm, despite devoting a whole chapter to Saigon, which emerged vigorously in 1860-1900. It hosted some dynamic German merchants, such as Speidel (p. 210). It was vital to the development of Chinese commercial capitalism, which saw the rise of steam rice mills (including a Spiedel factory) and a jump in rice exports (365,000 tonnes in 1879, 525,000 in 1883). A chapter is also devoted to port city of Haiphong, which became French Indochina’s principal naval base and a thriving commercial center. Denis Frères settled in Haiphong in 1879-1884. From there rice, silk, tin, tungsten, and oils were exported, while English cotton, opium, and various consumer goods were imported.

Becker constructs a novel and comprehensive history of the internationalization of trade in the South China Sea, led by German and French companies. The 92 German and 86 French ships easily outnumbered the 29 English ships and accounted for nearly three-fourths of the maritime zone’s ships in 1905. Germany’s Speidel was particularly prominent. France’s Marty & D’Abbadie (Marty after 1907) also managed a high volume of river and maritime traffic, after establishing the Tonkin Shipping Company in 1884. The final case study investigates the French Treaty port and enclave of Guang Zhou Wan (now Zhanjiang), between Tonkin, Hainan, and Hong Kong, which had become emblematic of the plans for expansion in Southwest China. But it quickly disappointed its promoters, despite publicity efforts that touted it as a model of urban development.

Becker’s analysis is well documented. Each chapter includes an extensive bibliography and detailed references to archival sources. Although the book is less extensive in its coverage of the 1920s, it describes post-World War I attempts by German companies to regain a foothold in Southeast Asia. At the macro level, this book is a careful and detailed assessment of “open economy growth” based on the development of intensive trade links between Europe and Indochina, which became increasingly French, and Hong Kong. It also explores the commercial and maritime consequences of these Asian ventures. At the micro level, it convincingly emphasizes the role of French and German merchants and companies in this “great powers” competition.


Hubert Bonin ( is a researcher in banking and business history at BSE-Bordeaux University. His recent publications include The Worldwide Legacy of Haute Banque, from 19th to 21st Century (Peter Lang, 2022), edited with Roger Nougaret.

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 (July 2022). All EH.Net reviews are archived at

Subject(s):Business History
Military and War
International and Domestic Trade and Relations
Geographic Area(s):Asia
Time Period(s):19th Century
20th Century: Pre WWII

The Promise and Peril of Credit: What a Forgotten Legend about Jews and Finance Tells us about the Making of European Commercial Society

Author(s):Trivellato, Francesca
Reviewer(s):Wilson, Arthur

Published by EH.Net (July 2022).

Francesca Trivellato. The Promise and Peril of Credit: What a Forgotten Legend about Jews and Finance Tells us about the Making of European Commercial Society. Princeton: Princeton University Press, 2019. xiv + 405 pp. $32.95 (paper), ISBN 978-0691217383.

Reviewed for EH.Net by Arthur Wilson, Finance Department, School of Business, George Washington University.


This book is a gem. Francesca Trivellato has produced a multifaceted exploration of the complex relation between evolving Christian ideas about Jews and the development of modern commercial society.

The book begins with an obscure reference in a once popular but long forgotten compilation of maritime laws, by Etienne Cleirac of Bordeaux. Even so, the author then broadens the discussion to address some of the most foundational debates in the history of economic thought.

“The first (debate) is the question of what constitutes ‘the economy’ as a field of inquiry and what is included in the canon we use to access this field, a concern that has become particularly relevant in light of the impact that the digital revolution on the study of Europe’s past. The second is the relationship between what we might call “practices” and “representations” and the tendency some scholars have had to pit the two against each other. Finally, the third is the perennial question of periodization, which Jewish history and Christian prejudice toward Jews bring into sharp relief, especially when, as I do, we examine a singular but mutable figure, the Jewish usurer, across several historical periods.” (p. 7)

After introducing the bill of exchange in chapter 1, Trivellato returns in the next chapter to that 16th-century merchant manual that recounts the legend that Jews originated Marine Insurance and the Bill of Exchange. Both parts of the legend are false, but the Bill of Exchange side of the story persisted for hundreds of years, evolving over that time to fit the anti-Semitic or philo-Semitic agendas of various commentators. Like facets of a diamond, this evolution provides a panoramic view of European attitudes toward commerce and Jews and what were sometimes thought to be Jewish characteristics.

Emblematic of the second debate, Trivellato shows there was a wide gulf between what was said about Jews and actual documentation of what Jews were or were not doing. Indeed, Christian merchants accused of using questionable practices were accused of Judaizing. No Jews need be present. In the hands of some critics, to be called “a Jew” became shorthand for engaging in devious or dishonest commerce.

Along these lines, Trivellato notes that Cleirac cited an earlier source that makes no mention of Jews. Accordingly, in that source, and in a draft version of his manuscript, he initially attributed the invention of Bills of Exchange to Florentines – Guelfs and Ghibellines. In the published volume, Cleirac attributed the invention to Jews. The change, possibly due to the publisher, is unexplained. (p. 41)

The Bill of Exchange was near the heart of European private finance from as early as the 13th century to well into the early 20th century. It served at least three functions: as a device for remittance, as a device to obtain or extend credit profitably despite usury restrictions, and as a device to speculate on foreign exchange. It was widely used and very controversial.

Part of the controversy was in the many ways bills could be used. Another part of the controversy was in the meaning and scope of usury per se.

Some features of the Bill of Exchange lent themselves to diverse interpretations. Unlike gold or silver coins, Bills were generally created by merchants for merchants, rather than by or for governments. Their utility hinged completely on the trustworthiness of the parties involved. Also, Bills could be used in transactions involving two, three, or four parties, depending on how they were intended to be used. To the uninitiated, Bills of Exchange were mysterious.

If a medieval banker were to openly offer interest on deposits, that would be considered usury. Explicitly charging interest on loans would again be considered usury. The Bill of Exchange allowed a work-around. Medieval merchant bankers could buy bills in one place (shifting purchasing power from A to B), sell them in another (shifting purchasing power from B to A), and make a profit – like making a loan with interest, albeit with exchange rate risk in the mix. Was this usury? While some bill combinations were problematic, individual bills were generally acceptable to the Church.

In fact, usury was not always well defined, as the author discusses in chapter 3. There were at least two difficulties. On the one hand, as Catholic theologians tried to define good and bad finance, it became apparent that subtle distinctions were needed. Depending on the context and author, usury referred to either a suite of bad financial practices, or specifically to charging interest on loans. On the other hand, it was sometimes easier to say that usury was what the Jews were thought to have done.

Current thinking is that the Bill of Exchange evolved gradually from diverse Mediterranean, perhaps Arab origins. For a time, some Italian writers conjectured that it originated in Florence. For authors hostile to Jews, like our Bordeaux-based merchant manual author, Etienne Cleirac, writing in 1647, in “Us et coustumes de la mer…” the notion that the Bill of Exchange was a Jewish invention played into the conceit that it was a device to separate naive Christians from their money. For more sympathetic authors, like Montesquieu nearly a century later, the notion that the Bill of Exchange was a Jewish invention indicated a special genius of Jews for commerce which allowed them to link Europe to the Americas, Asia, and Africa in trade.

Of course, anti-Semitism was not new in Bordeaux in 1647, as discussed in chapter 4. Consider Iberia in 1391. Egged on by a rabble-rousing priest, pogroms in multiple Iberian cities killed many Jews and induced others to run to the nearest church to get baptized to fend off the murderous mobs. Afterwards, despite the obvious duress, the church chose to accept such baptisms of these “New Christians”, sometimes called conversos, expecting them to live life just as the “Old Christians” did, changing much more than just their religion. Within a few years, New Christians were being told to change much of their distinct culture – diet, dress, language, and more, as if Old Christians could not distinguish between liking bagels and being Jewish.

Old Christian concerns that the New Christians were secretly Jewish, and would revert, were widespread. With these forced conversions, many of the earlier restrictions on Jewish commercial activity were no longer binding on New Christians. The blurring of boundaries must have been palpable. One response by Old Christians were the “Purity of Blood” statutes – promulgated in the mid- 15th century to exclude New Christians from certain roles based on their lineage – to restrain this blurring. Later in the 15th century, inquisitions in Spain, and then Portugal were begun – to ferret out relapses among the New Christians. Many such New Christians left Iberia if they could. By 1492 the remaining Jews in Spain were expelled, scattering in all directions, with many fleeing to Portugal. In 1497 the Jews who had fled to Portugal were forcibly baptized.

Perhaps, over time, this scattering may also have facilitated trans-national Sephardic trading networks. In any case, in the mid-16th century the King of France welcomed many of these Portuguese New Christians to southwestern France, where the King promised safety if the New Christians kept up (Christian) appearances. The royal hope was that these New Christians would quicken the merchant activity of Bordeaux, which they presumably did, to the profit of the King. Meanwhile, Calvinist Protestantism in the form of the Huguenots also spread across France, taking root in Bordeaux as well.

Writing in Bordeaux, Catholic Etienne Cleirac would have had a front row seat to the complex religious and political interplay of 16th-century Bordeaux. This was a time of political unrest in France associated with the Huguenots and eventually civil war. This was also a time when old status hierarchies based on nobility or religion were breaking down. Merchants no longer had to be members of guilds. Central government court reforms meant that cases involving nobles acting as merchants would increasingly be considered in merchant courts. Bills of Exchange were equally legally enforceable regardless of the status of plaintiffs or defendants. Finally, after more than a century of living as Christians due to forced conversions, the New Christians were increasingly assimilated – hard to distinguish from Old Christians. Old Christians like Cleirac might have felt increasingly uneasy. How could one avoid trading with those seemingly “devious” Jews if they appear to be Christian? As Trivellato notes:

“Fears that Jews and Christians could become indistinguishable permeated European Christian culture at large during this period. The regime of toleration that prevailed in seventeenth-century Bordeaux heightened rather than quelled fears about the porousness of the boundaries between Jews and Christians. There, more than in any other city of the kingdom, a small but proactive group of New Christian merchants was at once visible and invisible. Whether valued or condemned, their economic activities were not confined to a separate corporate body, with its own place in the hierarchical society of the time. They walked the same docks as other merchants and sat in the same church pews as other Catholics. For Cleirac and his readers, the lack of precise boundaries between Jews and non-Jews mirrored the erosion of age-old divisions between merchants and noblemen at a time when a major restructuring of the legal and social order, and the place of commerce within it, was underway in France.” (p. 84)

Cleirac’s legend of the invention of the Bill of Exchange by Jews was taken up and repeated in the subsequent merchant literature, as documented in chapter 5, until a century later when the hostility (if not the legend) was deflected by a different interpretation, by the philosophe Montesquieu. He accepted the idea that Jews invented the Bill of Exchange but celebrated that invention as a watershed event for commerce as a modernizing and civilizing force in Europe.

Montesquieu was writing at a time when status-based hierarchies were breaking down further. While commerce might be a modernizing force, it did not liberate the Jews. Nor did Montesquieu call for full equality. “Montesquieu never pursued these questions because, as even an admirer of his views on Jews admitted, he was fundamentally not interested in Jews as such, but only to the extent that they provided him startling examples of the relationship between intolerance and proselytism.” (p. 138)

In the period leading up to the French Revolution (chapter 6), both views of commerce and the role of Jews were expressed, with multiple variations. Christian views were often more favorable toward the Sephardic community in Southwestern France and less favorable toward the Ashkenazi in Northeastern France, who were generally less assimilated. While supporters of Montesquieu argued for “doux commerce” to drive tolerance, others continued to focus on usury broadly construed and indeed seemed to blur the distinction between usury (associated with the Ashkenazim) and commerce (associated with the Sephardim).

Trivellato also disputes the conventional wisdom that the “commercial utility” of the French Sephardic community drove or supported emancipation, noting that even supporters generally did not make that argument, arguing instead for removing restrictions that limited Jews’ economic activity, encouraging Jews to participate more in other areas, such as agriculture, and less in commerce. Trivellato notes: “Amid the ‘cacophony of arguments’ marshaled in favor of emancipation, the virtues of commerce were never used as weapons by pro-Jewish advocates.” (p. 157) Indeed, it would seem that the relative assimilation by Sephardim, and the continued hostility toward the Ashkenazim even after the French revolution, as indicated by the “infamous decree” resulting from the Napoleonic “Assembly of Jewish Notables” better explained the path of emancipation.

The legend of the Jewish invention of the Bill of Exchange is most frequently explored in French literature. In chapter 7, Trivellato explores the spread of the legend outside of France, where the legend seemed to have had less purchase. In Britain and the Low Countries, hostility toward Jewish participation in commerce seemed to revolve around financial markets rather than Bills of Exchange. “Overall, the legend met with considerable scepticism in England.” (p. 171) In Central Europe, similar hostility and scepticism were combined even without comparable financial markets. In Italy, writers seemed more inclined to credit Florentines with inventing Bills of Exchange.

In the final chapter, the author explores how the legend and the history influenced some major 19th-century writers on commerce and “modern capitalism” – Sombart, Weber, and Marx. For differing reasons, all three appear to have accepted the 16th century as a decisive turning point in the beginning of modern capitalism. All three were aware of the legend. Marx seemed to see Christians thoroughly adopting supposedly Jewish commercial practices: “The practical Jewish spirit has become the practical spirit of the Christian people,” he wrote – or in other words, all ‘Christians have become Jews,’ not only some of them.” (p. 202) Sombart evidently saw Jews as a driving force of Western capitalism during the Medieval period, only to be superseded by Christian merchants and enterprises. Whereas Sombart overstated the Jewish role in modern capitalism, Weber seemed to minimize it. Medieval historians pointed out that many of the new commercial developments pointed to by Marx, Sombart, and Weber were already seen in the high Middle Ages.

So what can we say about the canon we might use to access “the economy” as a field of study? Certainly, the canon shifts as the focus shifts. Cleirac’s compilation of maritime law and recounting of what became a legend were once foundational. Nowadays, few economic historians who have not read this book would have heard of him. The Bill of Exchange was once central to Western commercial practices. Now it and its history are much less important. Conversely, the so-called digital revolution, which allows access to many more types of documents, calls forth more of an interdisciplinary approach to economic history and the history of economic thought.

Concerning the gulf between “practices” and “representations” of Jewish commercial activity, the practice of defining usury as what Jews were thought to be doing, with little empirical support for what they were actually doing, nor even a clear definition of usury, is a shameful part of history. We can and should do better.

Concerning the issue of periodization, in this context, it seems clear that those who see sharp boundaries over time are overstating the changes as they occur. Medieval attitudes toward Jews and toward commerce persisted well into the “modern” era.

Still, I have a few quibbles. Although the book’s appendices include excellent bibliographies of some other sources, and the endnotes are extensive and generous, a standard bibliography would make that content easier to access. Second, it would be fascinating to learn more about the Franciscan friars who seem to have had an outsized role in defining Christian commerce and Jewish usury (p. 16). Finally, a more extended discussion of how 17th-century Bordeaux fit among the other commercial centers of the era, like Amsterdam or London, would more firmly anchor that setting. Even so, these quibbles are minor.

As I noted above, this book is a gem. I learned a great deal from it. Economic historians, intellectual historians, and cultural historians would all find it valuable, both for general knowledge, and especially for sub-fields like Early Modern Economic History and Religious and Jewish Studies. I recommend it highly.


Arthur Wilson is Associate Professor in the School of Business, George Washington University. His publications include “Put-Call Parity, the Triple Contract, and Approaches to Usury in Medieval Contracting,” with Geetae Kim (Financial History Review, 2015).He thanks Joel Blecher of the George Washington History Department for helpful suggestions.

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 (July 2022). All EH.Net reviews are archived at

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):Europe
Time Period(s):16th Century
17th Century
18th Century

Arts and Minds: How the Royal Society of Arts Changed a Nation

Author(s):Howes, Anton
Reviewer(s):Bud, Robert

Published by EH.Net (July 2022).

Anton Howes. Arts and Minds: How the Royal Society of Arts Changed a Nation. Princeton and Oxford: Princeton University Press, 2021. 387 pp. £28.00 (cloth), ISBN 978-0-691-18264-3.

Reviewed for EH.Net by Robert Bud, Emeritus Keeper, Science Museum in London.


This ambitious volume is both an institutional history and an account of how three industrial revolutions over two centuries have looked from the position of an idiosyncratic but long-lived and occasionally influential London body. The Royal Society of Arts (RSA) was founded as the Society for the Encouragement of Arts, Manufactures and Commerce in London in 1754. The subtitle of this book is “How the Royal Society of Arts Changed a Nation.” It might more appropriately, if less poetically, have been “How the Royal Society of Arts Grappled with Expectations That It Would Change a Nation.” For Arts and Minds is distinctive in its treatment of unsuccessful as well as successful endeavours, and the tensions between the industrial environment and the ambitions of members, entrepreneurs, and enthusiasts — among them the Society’s leadership. Dedicated to extracting the benefits of “progress” for the nation, the RSA has found modernity to be both a constant aspiration and a worrying threat.

The RSA was founded in 1754, on the verge of the first “industrial revolution,” famously centred in the North of England and led by former tradesmen, many of them untutored. Meanwhile, the Society established far away in London was dominated by aristocrats. The first half of Arts and Minds is devoted to their unfamiliar and uneasy view of this turbulent era. The Society’s grandees supported diverse institutional innovations motivated by mercantilist or cameralist visions of the roots of prosperity including the Board of Agriculture and the Royal Institution. Whereas war with France on the one and industrial success in the mass production of cheap textiles and iron typically dominate the histories of late eighteenth-century Britain, this book focuses on the mercantilist competition with the old rival and the search for innovations in luxury items that would minimise the need for imports. For the RSA, the challenge was France’s superiority in the production of fine consumer goods such as lace. Through a focus on institutional history, this book thus develops the historiography of a side of British history all too rarely explored and much needed.

The Society is well known for its encouragement of innovation through prizes and premia at a time when the patent system was living through its dysfunctional infancy. By the 1840s, this policy was seen as a failure and instead the integration of invention (whether patented or not) with art, design and science is increasingly favoured by the society’s leadership. Competition with France is the background too to the treatment of social change and societal renewal in the 1840s and 1850s across three chapters. Howes’ treatment of the rebuilding of the society around a new membership and elite leading to a focus on exhibitions and the role of the society as a vehicle for a completely new group of institutional entrepreneurs such as Henry Cole is at the centre of the book. The careful integration of its treatment of competition with the French, the development of the Society’s own exhibitions, the Great Exhibition and a new leadership is perhaps the highlight of the volume. The chapter on examinations focuses on the important innovations of the 1850s.

The book deals with the era of the industrial revolution of the later nineteenth century and early twentieth century with much less detail than the earlier period. A long-standing but oft-challenged “declinist” tradition suggests that Britain “fell behind” such other countries as Germany, France, and the United States at this time. Britain, her educational system, and much of industry were, however, transformed in an era of newly introduced technologies. Arts and Minds treats the introduction of “technological” examinations in the 1870s in just a few lines and gives little emphasis to the fact that the man encouraging the Society, John Donnelly, was himself responsible for the government’s Department of Science and Art examinations. Like Cole, Donnelly was using the Society to do things that his civil service role would not permit and lay outside the role of the Victorian public sector. The poster-boys of the Second Industrial Revolution, shaping our world for a century from 1870, “electricity”, “telephones”, and “chemicals” have not merited entries in the index. However, the author does point out that the Society was an early British venue for the demonstration of Bell’s telephone, the first British venue for the exhibition of an Edison light bulb, and after the First World War a public message was sent by teleprinter from Paris to the Society’s Great Hall. It is perhaps a shame the meaning of such demonstrations to an elite public has been left for others to explore. The lecture series the RSA sponsored such as the Cantor Lectures (only mentioned by name in a footnote) provided a serious context for the discussion of contemporary industrial issues. The dimension of the late nineteenth and early twentieth-century national change the book does explore in depth is engagement with design and the past. The chapter entitled “A Society against Ugliness” covers a vast territory and sets the RSA’s contribution within the context not just of such prophets as Morris and Ruskin but also within the context of a swiftly thickening network of heritage organisations such as the National Trust.

Above all the treatment of the early twentieth century is taken as an opportunity to deal with the RSA’s own development, whose treatment suggests the neologism “snobbification.” As the “England” brand moved from association with brash materialism, obsession with commerce, and vulgarity to imagery replete with tradition, horse-guards, and etiquette, so the Society revelled in its new-found “Royal” moniker awarded in 1908. Members came to be known as “Fellows” as if this was a learned society.

This emphasis on status is a very nice counterpoint to the treatment of the subsequent rise of a managerial membership. Attention to the shift towards a base in the civil service and large corporations provides a way of moving the narrative to the post-World War II era characterised by talk of a yet further “industrial revolution.” This brings in the role too of a new modernising Prince Consort, Prince Philip. The tensions between elite leadership and the wider society with little interest in being led are explored through the detailed tracking of the failure to initiate a national “Industry Year” in 1986. Although the context of the rapid decline in employment in manufacturing industry over the last decades of the twentieth century is neglected, the book’s highlighting of such moves and, indeed, of Prince Philip’s and the Society’s encouragement of environmental protection is worthwhile.

The last section of the book deals with the rise of the role of the Society’s own Secretary, whose title evolved into that of Director in the late twentieth century. Arts and Minds shows how this was associated with a new radicalism. It takes the example of the “Education for Capability” movement. Certainly, this had its institutional roots in the RSA, but it was rather wider and because this book looks principally at the RSA dimension, much else is missed. The important role of Sir Toby Weaver (1911-2001) is overlooked. (See Burgess 2001). So, typically for this volume, fascinating stories and important developments are brought to the reader’s attention but require further exploration.

Writing a history of the Royal Society of Arts is akin to clearing a weed-ridden garden. The archives themselves are rich, and the history was certainly overrun by more than two and a half centuries of diverse growths. Great efforts are required to see the greatly significant patterns which undoubtedly lurk amidst the diverse undergrowth, and many will be missed. If some progress can be made and the garden is left more beautiful and meaningful than it was found, then good will have been done. Arts and Minds builds on the efforts of previous historian-gardeners to bring order. The earlier official histories of 1913, 1954, and 1998; several doctoral studies; and the work of the William Shipley Group have done much detailed work on the Society’s history, particularly in its early years. (See, for example, Bryden 2019). This book points the way to further integrating the RSA’s experience within the broader economic and social history of several successive eras up to the twenty-first century.


Bryden, David. “Innovation in the Design of Scientific Instruments in the Georgian Era: The Role of the Society of Arts.” WSG Research Paper No. 3. 2019. Internet:

Burgess, Tyrrell. “Sir Toby Weaver” The Guardian. 13 June 2001.


Dr Robert Bud is an Emeritus Keeper at the Science Museum in London and holds honorary positions at the Department of HPS at Cambridge and STS at University College London. He has worked extensively on the history of applied science, including the book Being Modern: The Cultural Impact of Science in the Early Twentieth Century, ed. with Paul Greenhalgh, Frank James, and Morag Shiach (London: UCL Press, 2018).

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 (July 2022). All EH.Net reviews are archived at

Subject(s):Business History
History of Technology, including Technological Change
Industry: Manufacturing and Construction
Markets and Institutions
Geographic Area(s):Europe
Time Period(s):18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Handbook of the History of Money and Currency

Editor(s):Battilossi, Stefano
Cassis, Youssef
Yago, Kazuhiko
Reviewer(s):Connors, Duncan

Published by EH.Net (July 2022).

Stefano Battilossi, Youssef Cassis, and Kazuhiko Yago, eds. Handbook of the History of Money and Currency. Singapore: Springer, 2020. xv + 1,109 pp. $799.99 (cloth), ISBN 978-9811305955.

Reviewed for EH.Net by Duncan Connors, DBA Programme, Otago Business School, University of Otago.


When teaching the history of economic thought, I often ask this question in the first lecture: ‘What is money?’ Invariably the answer is a simplistic, thought-terminating cliché, ‘It’s a means of exchange, of course!’ and the students smile with an all-knowing expression. Needless to state, I do not play nice and during the following hour demonstrate that money, and by association finance and economics, is far more complex, diverse, and multifaceted than an average 18-year-old can possibly comprehend. Such is the condition of modern secondary education; many undergraduates (even postgraduates) lack an appreciation of the history and evolution of finance as an activity. There is, however, an antidote in the form of the Handbook of the History of Money and Currency, a collection of the latest work in the field that has an introductory research role as well as a pedagogical one.

The Handbook can be commended for the high level of synthesis between the many components. Indeed, when forming an academic ‘supergroup,’ the goal has to be more akin to the impeccable harmonies of Crosby, Stills, Nash & Young (CSNY) and not so much the extended solos of Emerson, Lake & Palmer (ELP), whose members travelled to concerts in separate limos and played very long individual solos because, frankly, they did not enjoy one another’s company. This can be seen in many academic collections, which sometimes strike a discordant note as chapters follow their own paths at times divergent from the overall aim of the text. The fascinating synergies found within the Handbook, however, can be witnessed from the very first section on the origins of money, where Michael Hudson, Colin P. Elliot, and Bill Maurer complement one another’s work on the early origins of money, a trend that continues throughout the text, helped in no small part by Stefan Battilossi and Kazuhiko Yago’s comprehensive introduction that by outlines the complementary aspects of each contribution to the Handbook, hence the text is more CSNY than ELP. This approach allows the student or academic using this book as an introduction to monetary history not only to appreciate the chronological evolution of money but also the economic, or perhaps philosophic aspects of the subject.

An example of this comes from choosing to open the text with Michael Hudson’s chapter on the origins of money that started with a joyous debunking of the ‘myth of barter’ (something which again every 18-year-old economics and finance student should be made aware of) that proceeded to demonstrate that debt likely existed before money by using a thought experiment akin to those employed by the late (and much missed) David Graeber at the London School of Economics: how can barter work if grain has not been harvested or livestock cannot travel in 30-degree heat during a Levantine mid-summer? The pragmatic and practical answer is that it cannot and therefore the first lesson about the nature of money itself has been imparted. This is important from both a pedagogical and research perspective as student and academic alike still cling to the notions of barter being utilised by early humans that were put forth by Aristotle and Adam Smith, despite the lack of evidence for such a view. This is a good way to start the text as it outlines the motivation of those trying to create stable and purposeful money over many millennia: to produce an item recognised for its value and remains so over time.

However, as W. Stanley Jevons and Carl Menger pointed out, value is subjective and can be based as much on utility as status, and this fluidity is discussed throughout the text, not just in the final sections dedicated to exchange rates, attempts at integration, central banking, monetary banking and aggregate price shocks (this final section appeared incongruous on first reading but in actualité acts as a fascinating segue into the current ‘crypto’ age) but throughout the text. One notable example of this can be found within the sections dedicated to the development of money in Asia, notably because until relatively recently developments in Asia were barely touched upon by western focused historians of financial and monetary history. Yohei Kakinuma’s chapter on the monetary system in ancient China is a particularly fascinating and welcome addition to the literature. The chapter covers early paper money, the ‘rise and fall’ hypothesis, and the complementary yet completely different currencies – silk, gold, and coin, the use of which depended on circumstances, status and geography. It is reasonable to argue that our understanding of monetary systems is constrained within a western theoretical bias and, consequently, just as recent research has challenged notions of barter used in early societies, the study of ancient Chinese currencies and other monetary developments over many millennia could add to our understanding of the evolution of early money.

This chapter leads onto work by Niv Horesh and Hisashi Takagi on the later period of monetary consolidation within China and Japan that led to currencies, once both nations had opened to trade with the western powers, based upon the Mexican (formerly Spanish) Silver Dollar. Indeed, on this point it could also be argued that the post-Enlightenment era of burgeoning trade and empire led to increased effort to standardise a common metric for currencies, what in geographic or navigational terms would be referred to as a datum: a base mark or reference point from which all measurements are taken. That the Silver Dollar in the late 18th century was a truly international currency and the basis of the US Dollar as well as the Chinese Yuan and Japanese yen (Indeed it was the basis for currencies across Asia) suggests a desire, at both government and commercial levels, for a monetary consistency that transcends time and borders, an important feature of a pre-telegraph and radio era global economy where transactions were drawn out along temporal and geographic lines. These trends are discussed in detail within the sections on exchange rate regimes and monetary integration, with notably fascinating chapters by Peter Kugler and Tobias Straumann on the Bretton Woods system, Catherine Schenk on the Sterling Area, and Anders Ögren on currency unions. The latter chapter is worthy of note for its analytical use of Robert Mundell’s ‘Optimal Currency Area’ to draw historical lessons from the Latin Monetary Union (LMU) of 1865 and the Scandinavian Currency Union (SCU) of 1873 that could be applied to the European Monetary Union and the euro. It should be noted, however, that despite the LMU starting out as a bimetallist system which included silver and gold (until 1878 after Cardinal Giacomo Antonelli, treasurer of the Papal States decided to debase its silver coinage to increase the supply of gold) that ultimately both unions were a response to a burgeoning gold standard in global trade in the mid to late 1800s. This could have been discussed in more detail and linked into the chapter on the Gold Standard by Lawrence H. Officer.

The final section of the text, on aggregate price shocks, was very welcome and, with Richard C. K. Burdekin’s contribution on deflation, very timely. However, monetary history can be described as a series of epochs between repeated crisis and this section could have been more extensive, including work on collapse of Bretton Woods, hyperinflation in Latin America and the post-Soviet sphere or even the global financial crisis that invariably follow the declaration of war (Richard Roberts, the pre-eminent history on the financial crisis of 1914 is sadly no longer with us and I was left wondering what contribution he might have made to this section). Indeed, discussion of such events could have segued well into some of the economic theories and models that were absent in this text. This is a very important point (particularly as we re-enter an age of inflation after COVID-19 and the events in the Ukraine) as reiteration of the circular nature of financial and monetary history could have been more informative to academic and students alike, particularly additional contributions on aggregate price shocks and rapid changes in the value of money over very short time frames.

This book is a welcome addition to the field. The juxtaposition of synthesis with new and orginal thought on the subject is welcome as many similar texts in related disciplines have in the past have been victims either of groupthink or provided a series of fractious contributions that are hard for the reader to reconcile. The editors of the Handbook of the History of Money and Currency, Stefano Battilossi, Youssef Cassis, and Kazuhiko Yago, have created an exceptional resource for both the research community, particularly doctoral students in the field or those working in related disciplines, as well as for those of us who teach the history of economic thought and the development of finance. If there is one criticism which could be levelled at the text, it is that the discussion of economic theories related to the evolution and perceptions of money were touched upon only fleetingly and a wider acknowledgement of meso-level social trends would have been equally welcome. Nevertheless, this is an important and substantial contribution and is a recommended read for all those working within the field of monetary history.


Duncan Connors is Senior Lecturer at the DBA Programme at Otago Business School, University of Otago. His publications include A History of Money, Fourth Edition, with Glyn Davies (University of Wales Press, 2016) and “The Atomic Business: Structures and Strategies,” with Maria del Mar Rubio-Varas and Joseba De la Torre (Business History, 2020).

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 (July 2022). All EH.Net reviews are archived at

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