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The Historian’s Wizard of Oz: Reading L. Frank Baum’s Classic as a Political and Monetary Allegory

Author(s):Dighe, Ranjit S.
Reviewer(s):Sullivan, Timothy E.

Published by EH.NET (January 2003)

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Ranjit S. Dighe, editor, The Historian’s Wizard of Oz: Reading L. Frank Baum’s Classic as a Political and Monetary Allegory. Westport, CT: Praeger, 2002. xi + 149 pp. $59.95 (hardcover), ISBN: 0-275-97418-9; $21.95 (paperback), ISBN: 0-275-97419-7.

Reviewed for EH.NET by Timothy E. Sullivan, Department of Economics, Towson University.

L. Frank Baum’s The Wonderful Wizard of Oz published more than a century ago is a celebrated and much-loved classic of children’s literature but as is the case with many fables it appeals to a wide audience and the precise meaning and intent of the story depends on how it is interpreted. It can be read purely as a delightfully entertaining fairy tale, full of whimsical characters and an enchanted adventure. It can, and has, also been interpreted as an allegory of the political, economic and social adventures of the late-nineteenth and early-twentieth centuries. The interesting thing of course, and what makes this such an enduring story, is that there are plausible and contrary interpretations of the fable’s characters and their adventures. Reading it as a pro-populist metaphor for the economic effect of bimetallism and the expansion of the nation’s money supply along with the empowerment of western farmers and industrial laborers seems apparent enough. On the other hand, others have interpreted it as an anti-populist metaphor, or as a parable about Progressivism, or as an allegory of the perils of imperialism and the direction of American foreign policy in the late nineteenth century. Although these interpretations, as well as assorted pro and anti-feminist interpretations that others have attributed to the characters and their adventures, help to make this fable much richer and thus much more interesting than being merely a simple, albeit fantastic child’s fairy-tale, The Wonderful Wizard of Oz succeeds as a work of fiction not simply because it is entertaining but rather because it engages its readers. Any writer who succeeds in not only entertaining his or her audience but then gets them to imagine things they hadn’t imagined before or even surprises them with questions of how one thing might be related to another thing has accomplished something wonderful indeed. Baum’s story remains a classic because it continues to entertain and surprise a wide audience of readers; whatever was intended when it was originally penned.

Dighe (Economics, State University of New York at Oswego) has put together a very useful and engaging book that introduces and explains the context under which Baum’s book was written and provides some of the basis for the economic and political interpretations that have emerged over the years. Throughout the work, he has synthesized his own interpretations with the work of other scholars and thus not only makes the contributions of others (such as, Hugh Rockoff and Henry Littlefield) more accessible but also provides a more meaningful comparison of alternative perspectives on Baum’s intent and likely meaning. There are a few introductory chapters that outline the basic issues of the American monetary system and the Populist movement of the late nineteenth century but the central part of this work is an annotated reprinting of Baum’s Wonderful Wizard of Oz as published in 1900. Another practical feature of the book is found in an appendix that reprints the text of William Jennings Bryan’s “Cross of Gold” Speech that was delivered to the Democratic National Convention in July 1896. Dighe’s annotations make this a useful and entertaining book and will, I think, provide functional and amusing information for almost anyone who reads it. In fact, this is the kind of book that I hope reaches a wide audience since it helps to make economics and economic issues more accessible and demonstrates that impassioned debate over economic policy is much older and more pervasive than is commonly believed by some undergraduates. It is not only a concise and thoughtful study of an interesting work of American literature but more importantly it clarifies economic topics and the potential effect of alternative economic policies. Indeed the most compelling characteristic of Dighe’s book is that it demonstrates the usefulness and even the fun of using a familiar work of literature to explain economic events and policies. Speaking from personal experience in the classroom, I have invariably found that undergraduates actually enjoy and benefit from classroom discussions about the Wizard of Oz and its alternative interpretations. As a teaching tool, it encourages students to relate a seemingly simple but familiar story to events and topics that usually seem distant and unfamiliar. And I have to admit that I am looking forward to building on this discussion again next semester since I now have a few additional interpretations and questions to pose to my students after having read Dighe’s handy and thoughtful book.

Since classic works often seem to be those books that people discuss the meaning and significance of without having taken the time to actually read them, this convenient book accomplishes two valuable and worthy objectives. Reprinting the original text clearly makes Baum’s words more accessible, and the author’s annotations ought to encourage a lively and informative discussion of alternative, plausible though opposing interpretations. Baum’s intentions when he created the Wizard of Oz are probably beside the point to a fable that has become part of American culture. Deliberate or not, the fable spun by Baum has taken on a life of its own. Even a cursory Internet search reveals that there are thousands upon thousands of web sites related to Baum’s characters and the possible significance of what is on its surface just a child’s fairy-tale. America’s fascination with Baum can also be judged by the observation that one full-length biography of Baum (Katharine M. Rogers, L. Frank Baum: Creator of Oz, St. Martin’s Press, 2002) has recently been published and another (by Michael Patrick Hearn) is apparently in the works. The fact that The Wonderful Wizard of Oz can be read for pure delight by a child or alternatively can become part of a scholarly debate over the events and significance of economic and public policy is a testimony to the power of words and the importance of metaphors to understanding complex relationships. For students and teachers, for novice and seasoned scholars alike, I heartily recommend Dighe’s interesting and entertaining book.

Timothy Sullivan is Associate Professor of Economics at Towson University; his research interests lie in nineteenth century American industrialization and twentieth century urbanization.

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

Class Theory and History: Capitalism and Communism in the USSR

Author(s):Resnick, Stephen A.
Wolff, Richard D.
Reviewer(s):Harrison, Mark

Published by EH.NET (January 2003)

Stephen A. Resnick and Richard D. Wolff, Class Theory and History:

Capitalism and Communism in the USSR. New York and London: Routledge, 2002.

xix + 353 pp. $85 (hardback), ISBN: 0-415-93317-X; $24.95 (paperback), ISBN:

0-415-93318-8.

Reviewed for EH.NET by Mark Harrison, Department of Economics, University of

Warwick.

This book has twin objectives. Parts I and II (“Communism” and “State

Capitalism”) lay out the authors’ theory of political economy and social

relations. Part III, which is more than half the book in length, then applies

the framework to “The Rise and Fall of the USSR.”

The book offers three main outcomes. First, at the core of Resnick and Wolff’s

understanding of what drives any society are the mechanisms and channels by

which it appropriates and distributes the surplus product. This, they argue,

follows the Marxian tradition. From here, they criticize a number of

alternative existing approaches, some that claim to be Marxian and some that do

not. The alternatives, they believe, place too much emphasis on the

distribution of power and not enough on the distribution of resources. The

problem that they find with starting from the distribution of power is that you

can’t pin it down empirically; when you look closely at the facts power turns

out always to be diffused through society. Instead, they prefer to try to pin

down how the surplus product is appropriated and distributed.

Second, Resnick and Wolff categorize various mechanisms for appropriating and

distributing the surplus product; most important from the point of view of the

book are “ancient,” feudal, capitalist, socialist, and communist mechanisms.

They use this framework to classify various kinds of institutions that existed

in Russia and the Soviet Union before 1917, during the 1920s, the 1930s, the

postwar period, and after the Soviet collapse.

Third, while properly impressed by the sheer variety and intermingling of

institutions of different kinds in all their phases of development, the authors

conclude that the dominant mode of production in Russia and the Soviet Union

throughout the twentieth century was capitalist: plain capitalist before 1917

and after 1991, and state-capitalist in between. Thus while political power

certainly changed hands during the Bolshevik Revolution and when the Soviet

Union fell, one way and then another, the basic mode of production did not

change and so less changed in an underlying sense than might appear at first

sight.

Does Soviet history truly bear out the authors’ theory? I must say yes, but in

a sense for which they may not thank me: in my view the theory is trivial. The

authors correctly wish to avoid the traps of determinism, and specifically

those of the economic kind. Many Marxists of earlier generations based

deterministic predictions on economic trends of one kind or another that

eventually came to nought. Instead of determinism Resnick and Wolff offer the

Althusserian concept of “overdetermination”: “all aspects of society condition

and shape one another” (p. 9). The result is that anything can lead to

anything, or not, as the case may be (p. 78). Consequently no predictions are

possible since anything or nothing can happen. A theory that is consistent with

anything happening clearly cannot be refuted from history; in Resnick and

Wolff’s hands the purpose of historical analysis is only to illustrate the

theory, not to subject it to any potentially damaging test.

Thus the book contains many statements that look substantial at first sight and

then seem to dissolve into word play. For example the authors state that the

“history of Russia was shaped, in part, by the specific and ever-changing class

positions occupied and negotiated by its people” (p. 146). Does “in part” mean

a lot or a little? Why doesn’t history shape class as well as class shaping

history? Is the influence of class on history greater than the influence of

history on class? How can we tell, and what difference does it make?

The authors’ criticism of power-based analysis seems to me to be somewhat lazy.

They view political power as a quicksilver that is always everywhere at once in

society, and therefore nowhere in particular. On Russia before the revolution

they write approvingly (p. 162) of the idea that “the czarist state was less

controlling than controlled by Russian society.” On the 1930s (p. 119) they

criticize the idea that Stalin held a “monopoly on power” or brought about a

“revolution from above”; here they refer to the recent “revisionist” historical

literature that shows how there was also a “revolution ‘from below’ in the

precise sense of all sorts of powers wielded by diverse groups of workers,

intellectuals, planners, managers, and others — powers with which Stalin had

to contend and compromise.” In a trivial sense this must be true: political

power is never unlimited. But in a narrower sense it is simply false. While

Stalin generally took decisions rationally, that is to say, taking into account

the opinions and information provided by others, the research of R.W. Davies,

Oleg Khlevniuk, and others has shown clearly that from 1932 onwards Stalin

ceased to have to persuade or compromise with others to reach a decision and

his decisions, once issued, were never challenged. While the political power of

Stalin’s successors was less untrammeled, general secretaries after Stalin

continued to retain extraordinary personal prerogatives, for example, over the

allocation of resources to the “military-industrial complex.”

Perhaps Resnick and Wolff have a fair point in the following sense: some kinds

of power matter more than others, and what they would like us to focus on is

the power to appropriate and distribute resources. The Soviet surplus product

was produced in state enterprises, but where exactly was it appropriated and

distributed? Their answer (p. 166) is that this happened in Vesenkha, the

“Supreme Council of National Economy,” established in 1923 to administer state

industry and “soon reorganised as the Council of Ministers.” Its leaders were

the “first receivers and distributors of the surpluses produced by industrial

laborers” and “functioned similarly to a centralized board of directors of a

private capitalist industrial combine.” There is a factual error: Vesenkha was

a ministry and its successor organization was not the Council of People’s

Commissars (from 1946 Ministers) which had existed from the first days of the

October Revolution, but separate ministries of heavy and light industry and

logging established in 1932. Setting that aside, the authors are still wrong:

the most important decisions about the Soviet surplus product, those that fixed

the annual budgets for investment and defense, were always taken at the very

vertex of the system by the general secretary in the Politburo with no more

than a handful of senior Politburo. Moreover this was no “board of directors”

that, in the worst run of capitalist enterprises, must ultimately account for

its decisions to the shareholders, the markets, or the courts.

The evidence base of the work is remarkable for its breadth, yet still

deficient. I will give two examples. First, Resnick and Wolff claim that the

burdens of taxation on “the desperately poor mass of individuals” had Tsarist

society on the edge of revolt, and this resulted in a growing reliance on

deficit finance in the “last decades” (pp. 160-61). I know of no serious

historical support for the former claim and the latter is plain wrong. From the

1880s onwards, if we exclude the years of the war with Japan, which was

financed by borrowing on orthodox tax-smoothing grounds, the reliance of the

state budget on loans declined steadily. Similarly in relation to the 1920s

Resnick and Wolff suggest that adverse terms of trade on the rural-urban market

deprived farmers of “sufficient revenues to secure their conditions of

existence,” an absurd exaggeration and misunderstanding of the true state of

affairs.

Second, Resnick and Wolff devote major efforts to trying to track changes in

the “appropriation and distribution” of the Soviet surplus product that

resulted from Soviet price policies in the 1920s and collectivization in the

1930s, but they are apparently ignorant of the monograph on this topic

published by A.A. Barsov in 1966, which led to a major controversy among

western economists and historians, notably James R. Millar, Michael Ellman, and

Alec Nove.

As a reader, despite being reasonably familiar with the historical literature

about the Russian and Soviet economies and also with the concepts of classical

Marxian political economy, I found this book very heavy going. On its own this

cannot be a criticism: when my first year students complain that they have to

work hard to learn new concepts I just tell them that’s why they’re at

university. In the present case the book would benefit from more of the

attributes of a good textbook such as definitions that are highlighted and

cross-referenced. My patience was especially taxed by the attempts to

mathematize various kinds of budget constraints, given in the form of equations

yet “the word ‘equation’ does not signal any necessity that … revenues equal

expenditures (p. 179n); the symbolization features many weird acronyms and

subscripts that have no obvious intrinsic meaning and are not indexed anywhere.

These are things that a good editor should have rooted out.

In summary this is a well-intentioned, complex work that is hard to do justice

in a short review, but even summary justice must make an attempt at balance.

The plaudits on the book’s back cover describe it as “path breaking” …

“Whether one agrees or disagrees … no future work … will be able to ignore

the sheer creative verve and intellectual rigor with which [the authors] lay

out their arguments.” While this reviewer is impressed by the efforts put in by

the writers and required of the reader, the path that has been opened seems to

lead nowhere; the rigor is superficial and the verve is not enough.

Mark Harrison is professor of economics at the University of Warwick and

honorary senior research fellow of the Centre for Russian and East European

Studies, University of Birmingham. He is the author of a number of books and

articles on Soviet economic history including most recently “Coercion,

Compliance, and the Collapse of the Soviet Command Economy,” Economic

History Review, 55(3), 2002, pp. 397-433.

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

Poverty from the Wealth of Nations: Integration and Polarization in the Global Economy since 1760

Author(s):Alam, M. Shahid
Reviewer(s):Eng, Pierre van der

Published by EH.NET (January 2003)

M. Shahid Alam, Poverty from the Wealth of Nations: Integration and

Polarization in the Global Economy since 1760. Basingstoke: Palgrave, 2000.

xv + 215 pp.$69.95 (hardcover), ISBN: 0-312-23018-4.

Reviewed for EH.NET by Pierre van der Eng, School of Business and Information

Management, Australian National University.

This book basically seeks to answer a question that has confounded many

authors: Why did the West become so much richer than the rest? Where David

Landes took more than 500 pages to address this question, M. Shahid Alam,

Professor of Economics at Northeastern University in Boston (USA), requires

just 180 pages of text. Of course it is possible to give a brief answer if you

keep it simple. Alam’s answer is simple: today’s less-developed countries

suffered from a lack of autonomy as a consequence of European imperialism since

the mid-eighteenth century. As colonies and dependencies, they were not allowed

to map out their own future, invest in education and infrastructure, and —

more importantly — use trade barriers to pursue import-substituting industrial

policies on which to base their further industrialization and development.

There are some nuances, but that’s basically it.

How does Alam arrive at this conclusion? Not by meticulously dissecting the

economic history of less-developed countries and the processes of colonization,

but by raking over some of the existing literature and by cranking

cross-country panel data in chapter 6 that seems to be the meat in this slender

publication.

The author is so taken by his thesis that every chapter, including the preface,

restates it at some stage in some form. For instance, the introductory chapter

is not a preamble to the issue that will be investigated and the hypotheses

that are to be tested, but is a summary of the rest of the book. Without having

read the substantiation in other chapters, a reader who expects an introduction

may find it hard to understand why Alam churns out one sweeping statement after

another, without substantiation or explanation. For instance: “…lagging

countries which were free [i.e., not colonized] and chose to resist the logic

of international integration — to save, shore up and modernize manufactures,

enterprises and skills — continued to industrialize, to grow and to narrow

their economic distance behind the advanced countries” (p. 5). It is unclear

which countries are meant, or whether any concrete examples actually fit this

typification. Perhaps Japan does, but does Mexico or Afghanistan?

Chapter 2 may be of interest to economic historians, because it surveys the

available literature on the history of global disparities in income and living

standards. For instance, Shahid Alam compares historical estimates of GDP per

capita provided by Bairoch and Maddison. Largely by accepting Bairoch’s

estimates, he establishes that around 1760 per capita incomes in Western Europe

and the rest of the world were broadly comparable and that disparities have

increased since. The author omits a probing of the sources that led Bairoch and

Maddison to arrive at different estimates for the early nineteenth century. Had

he done this, he may not have accepted Bairoch’s estimates for the early period

so readily.

Chapter 3 is an historical overview of the views of economists on international

trade and investment. The bad guys are Smith and Ricardo and ‘orthodox

economists’ who propagated the concept of comparative advantage, and the

benefits of free trade as ideology rather than science, oblivious of the

“growing polarization between advanced and lagging countries” (p. 66). The good

guys include List, Myrdal and Wallerstein who “identify with the interests of

the lagging countries” (p. 66).

Chapter 4 presents a taxonomy of sovereignty, outlining the characteristics of

his categories of sovereign countries, dependencies, quasi-colonies and

colonies. A curious twist is that the author prefers to leave countries such as

Australia and Canada (but not South Africa, which is characterized as a

‘sovereign country’) out of the taxonomy and out of the story, even though they

used to be colonies. His argument is that some colonies, and also the lagging

countries of Europe and South America, escaped this downside of colonization

because of what Alam considers as their racial and cultural affinities with

Western Europe. Hence, due to the racism that was rife in Western countries,

only countries without racial/cultural affinities were colonized and exploited.

Chapter 5 shoehorns countries and regions with lagging economies into this

classification: peripheral European countries and South America are sovereign;

dependencies are in Central America; Africa and Asia are (quasi) colonies. The

chapter provides dates to gauge the length of time since countries were

subjugated in some form by Western countries. It then hones in on the

suggestion that becoming a dependency or colony reduced the sovereignty of

using tariff policies and therefore protection of manufacturing industry.

Chapter 6 uses these categories, the length of colonization and other variables

to crank the cross-country panel data and statistically substantiate the thesis

with which the reader is by now already very familiar. Controlling for a range

of variables, the chapter demonstrates that a lower degree of sovereignty did

enhance the economic integration of a country into the world economy (measured

with the trade/GDP ratio) but not the levels of manufacturing industry

(measured with the share of manufacturing in GDP) and human capital formation

(measured with adult literacy rates and average years of schooling) in 1960 and

1980 or economic growth in general since 1870 (based on Maddison’s data). Alam

even concludes that switching the status of colonies to sovereign countries

would have increased their annual growth rates by 1.59 percentage points (p.

158).

Chapter 7 is not a conclusion but an epilogue. The author compares two phases

of industrialization (1760-1950s and since the 1950s) to argue that the

conspiracy of the West continues. Most of the chapter is a repeat of earlier

chapters, but new are sweeping statements suggesting that since the 1980s

Western countries, led by the United States and assisted by the IMF, World Bank

and OECD, have crafted a new imperialism based on the ‘Washington consensus’ to

delay the process of manufacturing development in lagging countries and to

capture the markets and investment opportunities there.

Alam describes himself as a crusader against ‘Eurocentrist’ explanations of

underdevelopment. A b?te noire is David Landes, who is dismissed as “the chief

defender of the Eurocentric faith” (p. xiii). In a twisted way, Alam seems to

be more Eurocentric than Landes. Unlike Landes, he makes no serious effort to

understand the past development problems of any less-developed country in

particular. Moreover, his book assumes that only Western Europe engaged in

colonialist pursuits. It says nothing about colonization by non-Western

European countries, for instance Russia’s colonization of Siberia and Central

Asia, Japan’s colonization of Korea, Taiwan and Manchuria, or China’s

colonization of Mongolia and Tibet.

The tone of the book is defensive. It seems that Alam’s crusade has been

fraught with difficulties, because the academic world does not subscribe to his

views and analysis. In the preface of the book, the author’s recounts his

struggle to expose that “the social sciences” have justified and perpetuated

“Western hegemony” in understanding underdevelopment (p. xii). It mentions the

author’s efforts in getting his papers, on which this book draws, published in

peer-reviewed established academic journals. He suggests that his views and

analysis were not accepted, presumably by the ‘orthodox economists’ who

determine editorial policies of journals. After receiving refusal after

refusal, he tried instead to get book publishers interested: “Predictably, they

offered a warmer welcome” (p. xi). At US$70 for a slender booklet, that may not

be surprising.

A major problem with the book is that Alam does not make an effort to write

history. His only discussion of historical developments serves the purpose of

establishing the date when colonization started or ended. The complex processes

of colonization and the economic histories of countries are simply reduced to a

few dummy variables that represent the time since independence until 1960 or

1980. A selected number of variables in those two years is assumed to represent

the outcomes of earlier decennia of colonization. They ignore that colonization

was largely a pre-World War II phenomenon, and that ex-colonies since felt the

economic impacts of World War II and independence wars, and, worse, the

consequences of poor economic management since independence, often exactly

because they tried to implement what the author perceives as the successful

strategy towards sustained economic growth: inward-looking, import-substituting

industrialization.

Consequently, implicit in Alam’s analysis are various assumptions that are not

probed in any depth. For instance, the author implicitly assumes that, before

they were colonized, countries inhabited by non-European races were all heading

for industrialization, education, and economic growth, had it not been for the

West European colonization drive. This of course assumes that nation states

existed, which had enlightened national governments that were imbued with the

will and ability to further economic development through the kind of industrial

policies pursued by, say post-Tokugawa Japan. The book does not contain any

hint of counterfactual analysis to make this seem plausible. Of course, that

would have been a difficult task, as it requires detailed knowledge of the

areas that became colonized countries.

Still, the issue could have been addressed by contrasting the development

record of countries that never fell under colonial rule — such as Ethiopia,

Afghanistan, Nepal or China — with that of countries that did. In fact, Alam

could for that purpose have drawn on existing literature. For instance, Lloyd

Reynolds’ (1983, 1985) extensive survey of the problems of underdevelopment

based on detailed scrutiny of secondary literature for individual countries

addressed this issue. Surprisingly, Reynolds’ work is entirely missing in the

references of Alam’s book. Why? Perhaps because Reynolds (1983, p. 957)

answered his question ‘Would these areas have developed faster before 1950 if

they had been completely independent countries rather than colonies?’ as

follows: ‘There is no magic in independence.’

Anyone interested in simple explanations for economic underdevelopment will

like this book. It offers some new nuances, but basically confirms the view

that the West is to blame for the problems of underdevelopment in the world.

Anyone interested in a more profound understanding of such problems will find

this a frustrating book. It ignores the wide range of factors that play a role

in a holistic explanation of underdevelopment in the past and present: low

rates of capital formation, high population growth, low agricultural

productivity, low formation of domestic markets due to poor infrastructure

development, poor or rigid financial systems, internal political turmoil etc.

Except as variables in the regression, the book largely ignores the

idiosyncrasies of individual less-developed countries.

References:

Landes, David (1998) The Wealth and Poverty of Nations: Why Some Are So Rich

and Some So Poor. New York: W.W. Norton.

Reynolds, L.G. (1983) “The Spread of Economic Growth to the Third World:

1850-1980,” Journal of Economic Literature, 21 (3), pp. 941-980.

Reynolds, L.G. (1985) Economic Growth in the Third World, 1850-1980. New

Haven: Yale University Press.

Pierre van der Eng is Senior Lecturer at the Australian National University

and is currently visiting professor at Seikei University in Tokyo. Research

interests include various aspects of the economic history of Southeast Asia, in

particular Indonesia. Recent publications include “Food for Growth: Trends in

Indonesia’s Food Supply, 1880-1995,” Journal of Interdisciplinary

History (2000); “Indonesia’s Growth Performance in the Twentieth-Century”

in Angus Maddison et al. (editors) The Asian Economies in the Twentieth

Century (London: Edward Elgar, 2002); and “Bridging a Gap: A Reconstruction

of Population Patterns in Indonesia, 1930-1961,” Asian Studies Review

(2002).

Subject(s):Economic Development, Growth, and Aggregate Productivity
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

Valuing Cultural Heritage: Applying Environmental Valuation Techniques to Historic Buildings, Monuments and Artifacts

Author(s):Navrud, Ståle
Ready, Richard C.
Reviewer(s):Whitehead, John C.

Published by EH.NET (January 2003)

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St?le Navrud and Richard C. Ready, editors, Valuing Cultural Heritage: Applying Environmental Valuation Techniques to Historic Buildings, Monuments and Artifacts. Cheltenham, UK: Edward Elgar, 2002. xi + 280 pp. $90 (hardcover), ISBN: 1-84064-079-0.

Reviewed for EH.NET by John C. Whitehead, Department of Economics and Finance, University of North Carolina at Wilmington.

In Valuing Cultural Heritage, St?le Navrud and Richard C. Ready address a topic growing in importance as economic development threatens many of the world’s cultural and historical treasures — the assignment of economic values to cultural and historical resources. The assignment of values is not straightforward since many cultural and historical resources are difficult to allocate by the market mechanism. The assignment of values is critical, however. When compared with the economic value of economic development, cultural and historic resource market values often appear lacking. The greatest contribution of this book is that these values will not be overlooked.

Market economies have generally proved to be capable of allocating goods, services, and other resources in an efficient manner. One exception is public goods — those goods that are nonrival and nonexcludable in consumption, providing little incentive for consumers and firms to develop a market. Examples of these goods include national defense, environmental quality, and cultural and historical resources. In such cases, most economists acknowledge that markets fail to allocate resources efficiently and the role for government is to provide the public goods for society through taxation and public programs. The problem becomes determining the correct amount of the public goods to provide for society.

One analytical method used to determine the correct amount of public goods to provide is benefit-cost analysis. If the benefits of the public good exceed their costs then the government should provide the good. In order to conduct benefit cost analysis of cultural and historical resources estimates of benefits and costs are needed. This is not a problem on the cost side. Maintenance and administrative cost estimates are readily available. There is a problem with estimating the benefits of cultural and historical resources. What is the economic value of historical resources like Stonehenge that provide enjoyment and wonder to visitors and non-visitors alike?

So called “non-market valuation methods” have been developed to answer questions such as these. Navrud and Ready review these and offer guidance on their applicability to cultural and historical resources. For example, the hedonic price method is typically used to value air quality by measuring the difference in housing prices based on differences in housing characteristics. Since people prefer clean air, housing prices in cleaner air neighborhoods are higher. The benefits of clean air are measured by the price differences. If people prefer to live nearby to historical and cultural resources, land and housing prices will rise and the value of historical and cultural resources can be determined.

The travel cost method is typically used to measure the value of trips to recreation sites and changes in their quality. Fishing sites with higher water quality tend to produce more fish. Anglers will travel farther and more often to these higher quality sites. The differences in the travel expenditures are used to place monetary values on the sites and their qualities. If travelers go to cultural and historic sites the economic value of the trips can be determined. If the number of trips changes due to changes in the site’s cultural resource characteristics, then the value of the characteristics can be determined.

In the case of cultural and historical resources much of the economic value accrues to those who enjoy the resources vicariously. For many of these resources, people do not tend to choose to live near them or make frequent trips to visit them. There are limitations to the usage of the hedonic price method and the travel cost method to value these goods. A third methodology is more appropriate.

The contingent valuation method has been used for over thirty years to assign monetary values to resources previously viewed as having only intrinsic value. The contingent valuation method involves asking survey respondents what they are willing to pay for changes in allocations of public goods. There have been over a thousand applications of the contingent valuation method, mostly in the field of environmental (e.g., air quality) and natural resource (e.g., fishing quality) economics. The contingent valuation method can be used to place monetary values on resources for those who use the resources (i.e., visitors) and those who use the resources vicariously through conversations with friends, books, television programs, and other media.

During the past ten years there have been a small but growing number of contingent valuation applications to cultural and historical resources. Studies have considered the economic value of preservation of historic buildings, monuments, museums, cultural artifacts and other resources that are, perhaps, not efficiently allocated by markets. Most of the researchers conducting these path-breaking studies have chapters in the book.

Navrud and Ready introduce a number of studies applying the methods and assigning values to cultural and historical resources. Almost all of these studies use the contingent valuation method. The editors end the book with a chapter reviewing the existing studies, less than forty to date, covering the range of cultural and historical resource values. They describe some gaps in the literature and provide some suggestions for future research.

The bulk of the book is a chapter-by-chapter march through previously unpublished applications of non-market valuation methods to cultural and historical resources. The resources considered include Stonehenge and historic buildings such as cathedrals, castles, monasteries, and theaters in Europe, historic monuments in Washington DC, cultural artifacts such as aboriginal rock paintings and Roman imperial remains, museums, and the Fes Medina in Morocco.

Many of the applications are high quality using state-of-the art survey methods, visual aids, survey questions that are designed to elicit “true willingness to pay” without excessive bias, appropriate statistical methods, and examinations of the validity and reliability of the willingness to pay statements. On the other hand, some of the applications are deficient in one or more of these characteristics. In some cases there are serious deficiencies that a na?ve reader will, unfortunately, overlook.

The book is most useful to those who are (1) interested in the cultural and historical resource policy analysis, (2) interested in conducting a study to measure the economic values of culture, and (3) unfamiliar with valuation methods. Those in category (1) will find the book essential as an introduction to a new and growing area in their field. Experienced contingent valuation researchers who are in category (2) will find the book to be important background reading. Those in categories (2) and (3) will find the book essential but should not rely on it as a primer on how to conduct valuation studies.

John Whitehead’s research includes the contingent valuation of cultural amenities provided by historic buildings and shipwrecks, and sports teams, stadiums, and arenas.

Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Poverty, Wealth, Dictatorship, Democracy: Resource Scarcity and the Origins of Dictatorship

Author(s):Barkstrom, Jack
Reviewer(s):Baofu, Peter

Published by EH.NET (January 2003)

Jack Barkstrom, Poverty, Wealth, Dictatorship, Democracy: Resource Scarcity

and the Origins of Dictatorship. Golden, CO: Pericles Press, 2002. v + 535

pp. $21.95 (paperback), ISBN: 0-9610224-0-x.

Reviewed for EH.NET by Peter Baofu, Political Science, Eastern New Mexico

University.

Introduction:

This book would have been much strengthened if the author had a solid scholarly

background. The author, Jack Barkstrom, who is licensed as a CPA (with a

master’s degree in accounting from the University of Colorado) and an attorney

(with a law degree from the University of Kansas), shows no deep understanding

of the literature in, say, economic theory, political theory, and social theory

— an understanding that would be vital in proving that, in his words, “the

amount of resources which a country has determines whether it will become a

democracy or a dictatorship” (p. 1).

The book’s scholarship is disappointing from both a historical-descriptive and

a theoretical perspective. In the end, the book is not a scholarly piece of

work and essentially degenerates into an ideological glorification of “the

market forces” to create “resource abundance” for “free society.”

From the Historical-Descriptive Perspective:

The book has its own strengths in providing a rather detailed account of the

descriptive history of dictatorships and democracies with seven case studies —

Athens, Sparta, and Rome in ancient times; and Revolutionary France, Nazi

Germany, the USSR, and the United States in modern and contemporary times.

Whether or not the descriptive account in the book is historically accurate is

relatively less important than the more serious problem of shallow scholarship,

in a three-fold way.

First, each chapter of the book is so heavily dependent on only a few sources

(e.g., the works by William Doyle and Simon Schama in Chapter 7, those by

Richard Pipes in Chapter 10, or those by Roy Medvedev and W. Bruce Lincoln in

Chapter 12) that one cannot help but wonder if the book is well-balanced in its

viewpoints.

Second, another consequence of this excessive scholarly dependency on a few

sources is the lack of originality in its historical description. While

Barkstrom does a good job in summarizing what previous scholars have written on

the subject, it is not clear what exactly he himself has contributed to the

historical scholarship (other than repetitively making the provocative claim as

stated above).

Finally, the historical account tends to be detailed and descriptive (but often

very disorganized and unsystematic), and it is often not clear how the myriad

factual data are even relevant to the larger thesis. It is all so easy to get

lost in the messy world of one historical description after another, with

little scholarly explanatory analysis.

But this is not the end of the matter.

From the Theoretical Perspective:

An even more serious problem lies at the theoretical level. After all, how

exactly can one prove the claim that resource scarcity (or conversely, resource

abundance) determines the origins of dictatorship (or conversely, democracy)?

The claim is of course as much interesting as provocative. Unfortunately,

Barkstrom provides no in-depth scholarly analysis of the literature in, say,

economic theory, political theory, or even social theory. The entire book is

almost exclusively devoted to its seemingly endless historical description, and

the only section which shows some sign of theoretical analysis is in the first

three short chapters (and there are twenty-four short chapters in total); even

here, Barkstrom shows no in-depth understanding of the literature as mentioned,

since both the analysis and the sources cited often have little to do with the

theoretical debate in question. Perhaps a good way to show this lack of

theoretical understanding is to reveal its five major (illustrative but not

exhaustive) weaknesses at the theoretical level.

First, if resource availability (be it about scarcity or abundance) is the

determining factor of a political system, what then are the origins of its

scarcity (unto dictatorship) or abundance (unto democracy)? Or in a different

parlance, what are the origins of the poverty, and wealth, of nations? The book

provides no answer to this important question. For instance, in the case of the

alleged resource abundance in the U.S., Barkstrom has this to say: “Production

figures provide the primary evidence. Yet, the market itself may serve as

additional evidence of resource abundance. For markets to exist, there must be

some minimal level of resources available. For markets to thrive, there must be

a correspondingly greater pool of resource available”(p. 455). The answer is

simply disappointing, with each chapter often providing ad hoc explanations

like this to account for a country in question which possesses either resource

abundance or resource scarcity.

Second, what is the underlying linkage between resource scarcity (or

conversely, abundance) and repression in dictatorship (or conversely, freedom

in democracy)? Barkstrom’s answer is to appeal to the resource mechanism of

scarcity leading to societal violence (or even the mere threat of it) due to

“the failure of delivery” at the group level (i.e., economic collapse) and “the

failure of participation” at the individual level (i.e., unemployment), with

subsequent governmental repression (pp. 34-35). But this is question-begging,

since it only raises two even more complicated questions of (a) what exactly

the underlying linkage between the two failures and societal violence is and

(b) why some governments respond with repression and others do not. Barkstrom’s

answer, again, is disappointing, with no apparent understanding of the massive

literature in, say, social theory and political theory. For instance, social

theorists have long debated the very issue of whether or not, and to what

extent, frustration (deprivation) leads to social aggression (violence). And

political scientists have no clear consensus on why some governments are

inherently more violent than others and when they can be predicted to behave

so. When hard pressed, Barkstrom only offers this apologetic reply: “Drawing

conclusions about a direct link between repression and violence then is

difficult for several reasons…. What these…suggest is, not so much that the

theory is wrong, but rather that it is difficult to prove” (p. 31). Who in his

clear mind could accept this kind of answer as persuasive, let alone

convincing?

Third, Barkstrom narrowly defines the term “violence” in the physical sense, to

the effect that it favorably portrays liberal democracy as less repressive

(“free society”), without including non-physical forms of repression pervasive

in democratic regimes. The works by Foucault on normalization of power and

Chomsky on the manufacturing of consent in democratic societies are two good

cases in point.

Fourth, even worse, the author tries to downgrade the long history of

repression (both physical and non-physical) against minorities and the lower

class in a liberal democracy like the United States as “glaring exceptions”

(e.g., the enslavement of Africans, the encampment of Japanese-Americans during

WWII, the Civil War, the almost complete extermination of Native Indians, the

systemic discrimination against women, and the inhumane laissez-faire treatment

of the lower class) (p. 435). He even goes so far as to unwarrantedly claim

that “the United States has been a country free of violence”(p. 434). His

ideological bias is obvious enough.

And finally, Barkstrom fails to exercise any good command of economic theory,

often at the superficial level. For instance, in his simplistic explanation of

“unemployment in terms of the impact of resource costs on market demand” (which

is crucial in a major way to understand his superficial idea of resource

scarcity and its impact), by contrast to his questionable interpretation of the

conventional “growth theory” which suggests that “unemployment is a ‘function’

of the business cycle, i.e., is caused by it” (p. 41), Barkstrom shows no

understanding of the complexity and sophistication of different growth

theories, numerous exogenous and endogenous business cycle theories, and, for

that matter, various types of unemployment in relation to different

macroeconomic policies — all of which have been worked out over the years by

many professional economists.

Conclusion:

All things considered, this book is not a scholarly piece of work and,

worse, becomes explicitly ideological in glorifying the magic of “the market

forces” in creating “resource abundance” for “free society,” as Barkstrom even

concludes in the end that “the future is likely to be dominated by the

market…. Market forces have an existence of their own, … resistant to

change” (p. 489).

The book is often so descriptive in historical account and so superficial in

theoretical understanding that it fails to prove in any persuasive (let alone

convincing) way the central thesis of the book, that is, whether or not, and to

what extent, “the amount of resources which a country has determines whether it

will become a democracy or a dictatorship.” This book should have been written

by someone else who possesses solid scholarly qualifications and, in the end,

constitutes a good example of the tragedy of shallow scholarship driven by an

ideological bent.

Dr. Peter Baofu is the author of The Future of Capitalism and Democracy

(University Press of America, 2002) and the two-volume work of The Future of

Human Civilization (The Edwin Mellen Press, 2000). He has served as an

associate professor in the Department of International Affairs at the Eastern

Mediterranean University (Northern Cyprus), as a visiting professor of

international relations at Bocconi University (Milan, Italy), and as an

instructor in economics and statistics at USDA Graduate School.

Subject(s):Education and Human Resource Development
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Ancient Economy

Author(s):Scheidel, Walter
Von Reden, Sitta
Reviewer(s):Silver, Morris

Published by EH.NET (January 2003)

?

Walter Scheidel and Sitta von Reden, editors, The Ancient Economy. Edinburgh: Edinburgh University Press, 2002. xxi + 282 pp. ?16.99 (paperback), ISBN: 0-7486-1321-8; ?45 (hardback), ISBN: 0-7486-1322-6.

Reviewed for EH.NET by Morris Silver, Professor Emeritus, Department of Economics, City College of the City University of New York.

In 1973, the classical scholar Moses Finley (1973, 1985, 1999) unveiled a view of the economic underpinnings of ancient economies in which markets and economic motivations played little if any role. Status and civic ideology governed the allocation of scarce resources. Hence, the application of economic theory to the ancient economy was at best a futile exercise and at worst a source of grave misunderstandings. By “ancient economy” Finley had in mind only the economy of classical civilization — i.e., of the Graeco-Roman area beginning roughly in the earlier first millennium BC. However, Finley’s perspective found completion and generalization in the works of the economic historian Karl Polanyi (1981).1 Polanyi argued forcefully that the ancient Near East did not know markets and, like Finley, he was implacably opposed to the application of economic theory to ancient economic life. Thus was formed a new orthodoxy. Suggestions in the literature of ancient market behavior or economic motivation might simply be ignored or dismissed in a condescending manner as mere “anachronism.” The latter criticism was found devastating by Greek and Roman scholars.

The world of scholarship is rarely completely static, however. Scholars came forward with new evidence and new interpretations pointing to a significant role for markets. In their “Introduction” Scheidel and von Reden* explain that “Critics question the real-life impact of elite mentality and identify apparent tensions between the historical record and the model that was meant to make sense of it. They tend to emphasize the considerable scale of economic activities (above all trade) and, make a case for significant economic growth in the Roman imperial period when political and fiscal unification boosted market exchanges.” (p. 3)

This, it may be added, represents only the tip of the critical iceberg. Thus, the study of the ancient economy became an “academic battleground.”2 As a result of this battle the influence of the Finley/Polanyi orthodoxy has unquestionably waned.3 At present the study of the ancient economy might be compared to a minefield, full of perils for the unsuspecting scholar.

Thus it is most encouraging to learn from the publisher’s website that the Greek and Roman scholars involved in the publication of The Ancient Economy aim to move the debate beyond “partisan controversies.”4 Scheidel and von Reden seem to second the call for studies moving the debate beyond the Finley/Polanyi agenda and benefiting from “the conceptual and analytical repertoire of modern economics” (pp. 3-4). Obviously, a new synthesis is badly needed even if, to begin with, it is confined to the Greek and Roman periods.

Concerning the realities of the volume, it is certainly not reassuring that in the lead article (originally published in 1998), Greek specialist Paul Cartledge (p. 15) takes as a given Finley’s view that “the categories of neoclassical economic analysis” have “no useful application to ‘the ancient economy’.” Cartledge goes on to consider how we should “set about formulating usable and useful models.”5 We search his contribution vainly for the citation of even one example in which the predictions of economic theory are falsified by economic events in the Graeco-Roman economy. No synthesis, no new evidence and no usable new model can be detected here!

Turning to the closing (previously unpublished) article, as is my wont in collections of this kind, Roman specialist Richard Saller (p. 253) agrees with Finley that modern economic theory is inappropriate for antiquity because of an “incomparability in economic organization.”5 The problem, Saller suggests, is the absence in antiquity of integrated markets: * Had the markets been fully integrated, there should not have been desperate grain shortages in individual cities, at the same time as other cities were well supplied. * In such cases hungry urban dwellers did not depend solely on higher market prices to draw larger supplies from elsewhere in the [Roman] Empire. but resorted to imperial intervention. * In an integrated market, this sort of supervision would have been superfluous because pricing would have drawn grain to areas in need (p. 254 with n. 2).

Understandably, not being imbued with the trained suspicions of the modern economist, it does not occur to Saller that imperial “supervision” and not the absence of “fully integrated markets” kept the grain away from hungry cities! The classic example is provided by a serious famine at Antioch in AD 362/3. Despite the enlightened protests of Libanius and others, Emperor Julian had responded to rising grain prices caused by a severe and prolonged drought with an edict of maximum prices and the sale of imported grain at prices below the market-clearing level. These well-meant but counterproductive measures served mainly to misallocate the available stock of grain (see Downey 1951: 315-19; de Jonge 1948). They also operated to discourage large landowners (and other speculators) from storing grain.7 The problem here was not transport costs/fragmented markets but a much more significant problem: failure to understand the economic facts of life.8

The remainder of Saller’s contribution includes some cautionary observations on the scale of Roman economic growth. The ancients did of course accumulate material and human capital and they introduced important technical innovations. Clearly, the industrial era’s increased reliance on scientific knowledge and its increased range and variety of fixed capital goods have steeply accelerated the rate of technical progress and material growth. It must not be overlooked, however, that dramatic improvements in living standards are attainable through improvements in economic organization. The evidence demonstrates that ancient civilizations experienced lengthy periods of market activity and prosperity, including even affluence, interspersed with periods of pervasive economic regulation by the state and, ultimately, economic retrogression. There can be no doubt, for example, that something very important happened to Roman living standards between Romulus and Remus and Diocletian!

Perhaps there is more evidence of a move beyond partisan controversy towards a new synthesis in some of the contributions positioned between Cartledge and Saller. I proceed selectively and begin with a useful, previously published article by historian Reger because of its possible bearing on the question of integrated markets raised by Saller. Reger compares time-series of prices for a number of imported commodities (oil, perfume, papyrus, pitch). The price data are taken from priestly inscriptions on the island of Delos dating to the Hellenistic period in the third and second centuries BC. The prices of the various commodities display markedly different patterns. This finding is understood by Scheidel and von Reden (pp. 133-34) to undermine the view that the Hellenistic market was integrated (Reger 145). The assumption underlying this conclusion seems to be that economic integration requires prices to be determined by “general economic trends” and/or “broader interregional developments” meaning, apparently, that all prices must change in the same direction. Have Scheidel and von Reden identified price inflation/deflation with economic integration? Obviously, integration across spatially distant markets is quite consistent with an unchanged general level of prices combined with pronounced changes in relative prices — i.e., perfume rises in price, oil prices decline. Indeed, such changes are commonplace in the contemporary economy and in no way indicate an absence of integrated markets.

The beginning of a trend toward synthesis can indeed be seen in the (previously published) contribution by the French historian Andreau. I especially appreciated his suggestion that “To contrast, term by term, everything pre-industrial with everything modern, and endlessly to scour antiquity for all possible and imaginable signs of archaism, results in a very reductionist view of history. Besides, whether deliberate or not, such an approach has the effect of providing present-day institutions and situations with an intellectual justification which they do not always merit, and of strengthening our reassuring (but illusory) impression that they are eternal, or at least immortal, since we have now entered modernity.” (p. 35)9

While there is room for disagreement, Andreau’s article merits close and respectful attention.

A (previously published) article by archaeologist Halstead also is helpful. He sees “famine-brokering” as a partial answer to “what is arguably the most important problem in the ancient economy ‘how did rich Greeks and Romans in classical antiquity acquire their wealth?'” (p. 68) Selling stored grain on the market in periods of exceptionally high prices “may well hold the key to the original emergence of a rich minority, given that current ancient historical orthodoxy seems…to have ruled out all the obvious alternatives” (p. 69) (emphasis added). Of course, the “obvious alternatives” for becoming wealthy would be reinstated in any new synthesis! Thus, archaeologist Hitchner (p. 76) in his discussion of growth in the olive oil industry in the Roman provinces of North Africa observes “the proliferation of small farms with one or two presses often in close proximity to oileries, and frequently on agricultural marginal lands…. That is, the decision to construct a large stone lever press… particularly when much more modest means of extracting oil for subsistence needs were available, implies that surplus oil production was the ultimate objective of the small farm occupants. Although the capital for these presses is likely, in many instances, to have come from the owners of the nearby oilieries interested in the oleocultural development of marginal lands in or around their estates, we may also see in these arrangements an effort by the farms’ occupants, whether independent small-holders, free tenants or even slaves, to better their lot.” (emphasis added)

Let it be noted that Hitchner published these words in 1993 when proponents of the idea that members of the ancient public might become rich by means of productive activity were still likely to risk being derided as “anachronistic.”10 With respect to the sources of Athenian wealth in the fourth century BC Osborne (pp. 128-30) tentatively raises the possibilities, “against firmly held modern convictions,” that manufacture was of some importance and that agriculture was actually profitable.

The Ancient Economy, much to my surprise, actually does include a number of contributions (Andreau, Halstead, Hitchner plus the “Introduction”) that move the discussion beyond partisan controversy toward a new synthesis. The volume has the additional merit of bringing together in one place valuable previously published articles by Hopkins, Panella/Tchernia, and Rathbone. On the other hand, the articles by Saller and, especially, Cartledge cling to the Finley/Polanyi orthodoxy. Their strategic placement in the book, first and last chapters, betrays a serious tension in the conception of the editors. To conclude, this is a collection that scholars of the ancient world should be pleased to have in their libraries.

I do have one strong complaint. The editors (p. 4) note that “It goes without saying that it is impossible for a collection of this kind to cover all the bases.” Agreed, but why in a volume devoted to economic history do we find classicists, historians, archaeologists and even a philosopher but not a single contribution by a professional economist? The omission is glaring and revealing.

Notes:

*About the Editors: Walter Scheidel, formerly Moses and Mary Finley Research Fellow of Darwin College, Cambridge, currently teaches Ancient History at the University of Chicago; Sitta von Reden is Senior Lecturer in Classics and Ancient History at the University of Bristol.

1. I have relied upon Polanyi’s posthumously published manuscript entitled The Livelihood of Man (1981). The editor of this volume, Harry W. Pearson, has included material on Polanyi’s life and has contributed a useful introduction citing Polanyi’s major publications and placing his thought in perspective.

2. The “Suggestions for further Reading” include recent contributions on both sides of the controversy.

3. Interestingly, as their empirical base deteriorated some scholars loyal to this “primitivist/substantivist” school began to denigrate the use of empirical evidence and, more and more, to stress the importance of “erudite models” (see note 6 below). Indeed, even Finley (1985: 182) in “Further Thoughts,” appealed to historical and anthropological/sociological “models” as opposed to “the continual evocation of individual ‘facts’.”

4. http://www.eup.ed.ac.uk/cgi/odbic.exe?input=NewWeb/Books/2175.htm

5. In modern economic models are conceptual structures capable of being manipulated to make predictions, which may be tested against empirical evidence. For Finley/Polanyi scholars, however, a model is “a heuristic device for organizing data into an intelligible whole” (Stager 2001: 625) As Finley (1985: 182) explained in “Further Thoughts,” “models” are “valuable in obscuring incidental detail and in allowing fundamental aspects of reality to appear.” “Model” serves as an objective-sounding name for a priori positions that are employed to sift, shape, interpret or avoid the evidence.

6. With two exceptions the articles included in The Ancient Economy were originally published elsewhere. The editors contribute an introduction and chapter commentaries. With one exception the contributions are authored by classicists, historians and archaeologists. The exception is a reprinted contribution by philosopher Scott Meikle who, while critical of modern economic theory, is quite adept at manipulating the Marxist categories of “use value” and “exchange value.”

7. Halstead (p. 69) notes that the Roman writer Varro advised landowners to store grain in order to take advantage of high market prices in times of famine.

8.Readers interested in market integration in the Roman world might consult Temin (2001).

9. One might consider in the light of Andreau’s remarks Douglass North’s (1991: 98) pursuit of the “Holy Grail” of a once-and-for-all incremental evolution of efficient institutions.

10. Hitchner (pp. 80-81) was well aware of the professional risk he was taking in citing empirical evidence for significant growth in the Roman economy.

References:

Downey, Glanville (1951). “The Economic Crisis at Antioch under Julian the Apostate.” In P.R. Coleman-Norton (editor), Studies in Roman Economic and Social History. Princeton, N.J.: Princeton University Press, 312- 21.

Finley, Moses (1973, 1985, 1999). The Ancient Economy. Berkeley: University of California Press.

de Jonge, P. (1948). “Scarcity of Corn and Corn Prices in Ammianus Marcellinus.” Mnemosyne, 1, 238-45.

North, Douglass C. (1991). “Institutions.” Journal of Economic Perspectives, 5, 97-112.

Polanyi, Karl (1981). The Livelihood of Man. Harry W. Pearson (editor). New York: Academic.

Stager. Lawrence E. (2001). “Port Power in the Early and the Middle Bronze Age: The Organization of Maritime Trade and Hinterland Production.” In Samuel R. Wolff (editor), Studies in the Archaeology of Israel and Neighboring Lands. Chicago: Oriental Institute, 625-38.

Temin, Peter (2001), “A Market Economy in the Early Roman Empire.” Journal of Roman Studies, 91, 169-81.

Suggestions for Further Reading:

Bleiberg, Edward (1995). “The Economy of Ancient Egypt.” In Jack M. Sasson, John Baines, Gary Beckman, and Karen S. Rubinson (editors), Civilizations of the Ancient Near East, Vol. III. New York: Scribner’s Sons, 1373-85.

Cartledge, Paul, Edward E. Cohen, and Lin Foxhall (editors) (2002). Money, Labour and Land: Approaches to the Economies of Ancient Greece. London: Routledge.

Castle, Edward W (1992). “Shipping and Trade in Ramesside Egypt.” Journal of the Economic and Social History of the Orient, 35, 239-77.

Cohen, Edward E. (1992). Athenian Economy and Society: A Banking Perspective. Princeton, N.J.: Princeton University Press.

Dercksen, Jan Gerrit (editor) (1999). Trade and Finance in Ancient Mesopotamia. Leiden: Nederlands Historisch-Archaeologisch Instituut te Instanbul.

Donlan, Walter (forthcoming). “Homer and Hesiod on Commerce and Trade”. In Rollinger and Ulf (editors), Commerce and Monetary Systems in the Ancient World.

Engels, Donald (1990). Roman Corinth: An Alternative Model for the Classical City. Chicago: University of Chicago Press.

Figueira, Thomas J. (1984). “Karl Polanyi and Ancient Greek Trade: The Port of Trade.” Ancient World, 10, 15-30.

Greene, Kevin (2000). “Technological Innovation and Economic Progress in the Ancient World: M.I. Finley Re-considered.” Economic History Review, 53, 29-59.

Hudson, Michael and Baruch A. Levine (editors) (1999). Urbanization and Land Ownership in the Ancient Near East. Cambridge, Massachusetts: Peabody Museum of Archaeology and Ethnology, Harvard University.

Hudson, Michael and Marc Van De Mieroop (editors) (2002). Debt and Economic Renewal in the Ancient Near East. Bethesda, Maryland: CDL Press.

Mattingly, David .J. (1988). “Oil for Export? A Comparison of Libyan, Spanish, and Tunisian Olive Oil Production in the Roman Empire.” Journal of Roman Archaeology, 1, 33-56.

Mattingly, David J., David Stone, Lea Sterling and Nejib Ben Lazreg (2001). “Leptimus (Tunisia): A ‘Producer’ City?.” In David J. Mattingly and John Salmon (editors), Economies Beyond Agriculture in the Classical World. London: Routledge, 66-89.

Menu, Bernadette (2001a). “Economy: Overview.” In Redford (editor), The Oxford Encyclopedia of Ancient Egypt. Vol. 1, 422-6.

Menu, Bernadette (2001b). “Economy: Private Sector”. In Redford (editor), The Oxford Encyclopedia of Ancient Egypt. Vol. 1, 430-3.

Millett, Paul (1991). Lending and Borrowing in Ancient Athens. Cambridge: Cambridge University Press.

Olivier, Jean-Pierre (1987). “Des Extraits De Contrats De Vente D’Esclaves Dans Les Tablettes De Knossos.” In John T. Killen, Jos? L. Melena, and Jean-Pierre Olivier (editors), Studies in Mycenaean and Classical Greek. Salamanca: Universidad de Salamanca, 479-98.

Purcell, Nicholas (1990). “Mobility and the Polis.” In Oswyn Murray and Simon Price (editors), The Greek City from Homer to Alexander. Oxford: Oxford University Press, 29-58.

Redford, Donald B. (editor) (2001). The Oxford Encyclopedia of Ancient Egypt. 3 volumes. Oxford: Oxford University Press.

Rollinger, Robert and Christoph Ulf (editors) (forthcoming). Commerce and Monetary Systems in the Ancient World (5th International MELAMMU Conference, Innsbruck Oct. 3rd-8th 2002).

Silver, Morris (1995). Economic Structures of Antiquity. Westport, Connecticut: Greenwood Press.

Silver, Morris (forthcoming). “Modern Ancients”. In Rollinger and Ulf (editors), Commerce and Monetary Systems in the Ancient World.

Morris Silver is Professor Emeritus of Economics in the City College of the City University of New York. His most recent publications about ancient economies are Taking Ancient Mythology Economically (Leiden: Brill, 1992) and Economic Structures of Antiquity (Westport, Connecticut: Greenwood Press, 1995). “Modern Ancients” is forthcoming in Rollinger and Ulf (editors), Commerce and Monetary Systems in the Ancient World , Fifth Annual Melammu Conference 2002. Professor Silver maintains a website on “Ancient Economies” at http://sondmor.tripod.com/index-html.

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):Ancient

World War II and the Scramble for Labour in Colonial Zimbabwe, 1939-1948

Author(s):Johnson, David
Reviewer(s):Jones, Laird

Published by EH.NET (December 2002)

David Johnson, World War II and the Scramble for Labour in Colonial

Zimbabwe, 1939-1948. Harare: University of Zimbabwe Publications, 2000. iv

+ 179 pp. ISBN: 0-908307-85-3.

Reviewed for EH.NET by Laird Jones, Lock Haven University of Pennsylvania.

At first glance, David Johnson’s monograph on Zimbabwean labor during the

Second World War appears unlikely to interest the general economic history

reader. It is a rather slim volume with a seemingly over-focused title. Turning

the pages, however, it is soon apparent that the author has attempted a much

broader project. Interpreting the war years as a crucial watershed, Johnson

seeks to connect two major bodies of research in modern African history: the

development of an early colonial economy and labor regime, and the rise of

postwar political and labor activism. Far from being narrowly focused, his

study weaves together a number of labor-related themes, from farm work to

industry, and policy to protest.

What is most refreshing about the book is that it examines Zimbabwean labor

history outside the shadow of the South African literature, making comparisons

and drawing upon theses developed elsewhere in colonial Africa. In particular,

the author cites Walter Rodney on the war as a watershed, Fred Cooper on the

war and workers, and Bruce Berman and John Lonsdale on settler politics and the

colonial state. Of course, Johnson does make reference to scholarship on

Zimbabwe and South Africa, but the broader perspective is both informative and

more appealing to a wider audience.

The argument begins strongly. The introduction asserts, “the war was a pivotal

moment in the relationship between capital and labor in Zimbabwe, then Southern

Rhodesia. Under the guise of support for the British war effort,

undercapitalized settler producers — who were unable to attract an adequate

supply of labor through a dependence on market forces — used their political

power to influence the state to coerce Africans into wage employment in order

to take advantage of unprecedented opportunities presented by the expansion of

internal and external markets.” Moreover, the author connects these efforts to

postwar labor unrest and later mass nationalism. He cautions, “settler

prosperity and the economic development on which it was built were not without

contradictions. The expansion of the war and post-war years … greatly

increased the social basis for Africans to challenge their economic and

political subordination.”

The first chapter clearly establishes that military service was not a

significant Southern Rhodesian contribution to the allied war effort. Africans

generally dreaded it. Nor did white settlers volunteer in great numbers. Even

the Southern Rhodesian government did not encourage mass enlistments. Instead,

it pursued a strategy of training small, highly skilled combat units. In part,

Johnson argues, this official reticence stemmed from longstanding fears of

armed rebellion. No settler-dominated legislature wished to see large numbers

of Africans under arms, whatever the circumstances. But in greater part,

Johnson maintains, reluctance to raise a larger fighting force stemmed from the

desire of settler farmers, would-be manufactures and mine operators to

capitalize on the war economy, and for this they required African laborers, not

African soldiers.

Chapter two outlines the wartime stimulus to the Southern African economy, and

settler efforts to cash in, which Johnson terms, “the lucrativeness of

loyalty.” The Southern Rhodesian government, for example, hosted a number of

British flight training facilities. Construction of these bases proved a

windfall for settler contractors, as did provisioning the influx of military

personnel for local merchants. More important, wartime demand revived the

mining industries and gave company owners greater leverage to lobby for higher

mineral prices. The agricultural sector expanded too and in Zimbabwe none saw

their situation more improved than tobacco planters. Finally, wartime shortages

of imported European consumer goods proved an impetus to secondary

industrialization in many Southern African cities.

The key variable in the wartime economic boom, the author argues in chapter

three, was African labor. Since the official repeal of corv?e labor in the

1920s, settler employers had faced a dwindling supply of local workers. Many

young people simply found cash crop agriculture on the Reserves more

remunerative than wage labor on settler farms or in the mines. For nearly two

decades the situation failed to become acute, because during the Depression

there was sharply reduced demand, and worker shortfalls were made up with low

wage migrants from less prosperous neighboring colonies. It was the war,

Johnson points out, which brought the matter to a head. In settler agriculture,

mining and industry there was sharply increased demand for workers, and at the

same time, several neighboring colonies severely restricted the outflow of

migrants, ostensibly to aid their own war efforts. Rather than relying on

market forces, however, Southern Rhodesian employers attempted other options —

professional recruiting organizations, appeals to more distant labor pools, and

increased demands on their remaining work force. Settler farmers had long

lobbied the Southern Rhodesian government to reimpose forced labor, and

following the failure of the 1941-42 maize harvest finally pushed through the

Compulsory Labor Act.

Forced labor, in the midst of a war against authoritarianism, was a dicey

matter. The author presents considerable evidence in chapter four that

conscription was most unpopular in the Reserves. Further, he suggests that even

the colonial state was contradicted in this effort. Certainly, elected

officials sought to reward settler employers. However, conscription quotas

placed on African chiefs or headmen in the Reserves undermined the legitimacy

of the colonial regime on the ground. And a return to forced labor risked

criticism from anti-colonial and labor activists in Europe. Therefore,

officials justified the scheme as essential to the war effort and organized it

accordingly. Young people were formed into large units, and worked in gangs,

traveling from one job site to the next. Some might be engaged in military

construction, others in roadwork, and many in agricultural fieldwork.

These four chapters contain several noteworthy assertions. First, the author

documents that settlers maneuvered within the context of the war to gain

political and economic advantage. The point has certainly been made previously

for Eastern and Southern African in the case of the First World War, but less

for the Second. This contention also provides better context for postwar

politics, at least for settler efforts to set legislative agendas and to impose

reactionary forms of control on African populations. Second, Johnson points out

that settler enterprises exploited forced labor long after the literature

suggests. Moreover, they did so during a crucial recovery, which some argue was

a take-off period for large-scale, settler agriculture. Whereas others have

attributed this belated settler success to better access to extension services

or transport, new hybrid seed types, mechanization or political control over

para-statal marketing boards, the author reintroduces the question of primitive

accumulation and returns African labor to center stage. This contention too has

great bearing on the postwar situation as well as on the present, but

unfortunately these connections are not developed.

The argument becomes clouded in chapter five, which outlines the postwar repeal

of compulsory labor, as well as employer initiatives to organize state-related

recruiting entities to make up shortfalls. Most failed, the author argues,

since during the immediate postwar period there was relative prosperity in the

Reserves, and few young people were willing to seek low wage agricultural

employment. Moreover, those in need of work headed to urban areas or undertook

clandestine migration to South Africa. Thus, the author places European settler

and African peasant agriculture in competition, a common theme in the Southern

African literature, and implies that in the postwar period, from a labor

standpoint, it was settler agriculture that suffered. Unfortunately, while

these are interesting observations, supported in some instances by documentary

evidence, they seem difficult to sustain without considerable further research.

How could settler agriculture expand throughout the period in the wake of an

apparent worker shortage? Did “external” migrant labor again come to play a key

role? What about other factors besides labor? Likewise, “peasant” agriculture

has largely been considered to be in commercial decline after the war.

Certainly there were belts of prosperity close to urban food markets or

transportation routes. But in more isolated areas, those that had for years

been exploited as labor pools, had conditions really improved to the point that

few people would take occasional farm work?

The sixth and final chapter jumps to the urban areas to outline postwar African

political and labor activism. It is a rather abrupt transition in that the

preceding chapters deal largely with settler farmer politics and rural labor.

At several points the author does state that wartime conditions led to an

expansion in mining and stimulated secondary industrialization, but beyond

these generalizations, he provides little information on actual conditions in

mines, factories or transportation facilities. The policy connections are also

difficult to discern. Did wartime compulsory labor policy play any role in

sparking postwar urban protests? Were there rural-urban linkages? Were there

other wartime urban or industrial policies that factored into postwar unrest?

Unfortunately, the book ends abruptly and the author offers no conclusions.

David Johnson’s initial study constitutes a promising beginning to a massive

topic. It provides some important analyses, on wartime politics and forced

labor in particular. The data on clandestine migration to South Africa also is

original and impressive. However, given the book’s limited length, its

contributions are not thoroughly developed. In the future, the author needs to

flesh out his thesis with further research on rural-urban linkages in labor

activism or political protest, on the impact of urban wartime policies, and

perhaps on the process of secondary industrialization.

Laird Jones teaches African and World History at Lock Haven University. His

research is in late modern East African urban and economic history. He is

currently working on a project about consumer imports.

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

How Economics Forgot History: The Problem of Historical Specificity in Social Science

Author(s):Hodgson, Geoffrey M.
Reviewer(s):Reiss, Julian

Published by EH.NET (December 2002)

Geoffrey M. Hodgson, How Economics Forgot History: The Problem of Historical

Specificity in Social Science. London and New York: Routledge, 2001. xix +

422 pp. $120 (hardcover), ISBN: 0-415-25716-6; $36.95 (paperback), ISBN:

0-415-25717-4.

Reviewed for EH.NET by Julian Reiss, Centre for Philosophy of Natural and

Social Science, London School of Economics.

I tremendously enjoyed reading this book. Geoffrey Hodgson (Research Professor

in Business Studies at the University of Hertfordshire) tells a fascinating

tale of how economics and social science more generally became abstract and

formalistic sciences with little interest in historical and institutional

particularities and he develops the beginnings of an account of how the

perceived shortcomings may be ameliorated. Throughout, Hodgson’s aim is twofold

— which is apparent already in the title. How Economics Forgot History

refers to a historical narrative about how economics has been transformed from

a science of concrete historical and institutional fact to a science of

universal and abstract truths about human choice. The Problem of Historical

Specificity, by contrast, is a methodological concern. Its question is the

range of applicability of economic generalizations, or how “universal” the laws

of economics really are.

The historical narrative traces the development of economics (and, in part, of

sociology) from Karl Marx to contemporary neoclassical theory along the stages

of the older German Historical School and their British counterpart, Alfred

Marshall and his debate with British historicists, Carl Menger and the

Methodenstreit, the younger Historical School of Gustav Schmoller,

Werner Sombart and Max Weber, institutionalism in America, Talcott Parsons’s

sociology, Lionel Robbins’s methodological ideas and Keynes’s General

Theory. But the history is a very focused one. It highlights only events,

ideas and theories relevant to Hodgson’s methodological concern: the problem of

historical specificity.

So what exactly is that problem? Hodgson does not quite define it but rather

tells us that “[i]t first acknowledges that there are different types of

socio-economic system, in historical time and geographic space. The problem of

historical specificity addresses the limits of explanatory unification in

social science: substantially different socio-economic phenomena may require

theories that are in some respects different” (p. 23).

In other words, the concern is whether theories in the social sciences can be

general theories of human nature (or indeed even encompassing non-human animals

and inanimate complex systems) or whether they have to pay attention to the

details of concrete circumstances such as history, geography, culture,

institutional set up and so on. In Hodgson’s view, a satisfactory economic

methodology must imply an answer to that question.

Hodgson’s own methodology attempts to strike a balance between a strict

empiricism and a strict rationalism. He criticizes empiricism for its failure

to realize the need for a prior conceptual framework and something like a

principle of the uniformity of nature in order to make sense of observational

data. On the other hand, methodologists who incline toward what we might call

economic rationalism (my term, not Hodgson’s) fail to realize that economic

laws are valid often only in specific circumstances or for specific

socio-economic systems because they base their theories on a priori

considerations about human nature. What we need instead is a methodology that

(against empiricism) uses some ahistorical (i.e. truly universal) and

transhistorical (i.e. pertaining to more than one socio-economic system)

concepts and principles and combines this (against rationalism) with a quest

for concepts and principles whose domain of applicability differs from case to

case and may comprise only a single socio-economic system.

Hodgson’s narrative, as a consequence, is a search for answers to the issue of

which concepts and principles can be regarded as a- or transhistorical and

which are more closely tied to a particular system. Marx, for example, regarded

history as a sequence of stages that are constituted by their characteristic

production relations. He thus noted the problem but also failed to solve it in

a satisfactory way: “The problem is not that Marx uses transhistorical or

ahistorical categories but that he gave no methodological guidance on their

importance, or on the means of choosing or establishing them” (p. 51). The

older Historical School made the mistake of laying too much stress on fact

gathering at the expense of general concepts and principles while Carl Menger

neglected specific fact. Schmoller got many things right but even he “did not

show in detail how [institutional and cultural] factors affected the outcomes.

For all his concern with causal explanation, Schmoller did not paint an

adequate picture of how an explanatory theory could be built, or of how its

core concepts could be right” (p. 115). Similarly Veblen’s historical and

institutional framework is commended but “[a]lthough he developed some key

ideas that would have helped to open a richer theoretical approach, he failed

to deploy them in the service of such a sustained project” (p. 150). Finally,

Talcott Parsons and Lionel Robbins are presented as the gravediggers of the

interest in the problem of historical specificity and creators of the

ahistorical vision of social science that formed the consensus of much of the

twentieth century.

In the methodological part of the book, Hodgson attempts to develop a response

to the challenge that Marx, historicism and institutionalism left with us, and

which has been ignored by more recent work in social science. His response

consists essentially in relegating concepts and principles to the right level

of abstraction, five of which he distinguishes (Table 21.2, pp. 326-27).

Certain concepts and principles pertain to all “open, evolving and

complex systems.” At this level, theorizing is informed by evolutionary theory,

general systems theory and complexity theory. At the second level, concerning

all human societies, human instincts and psychology as well as general

anthropological principles govern theorizing. The usual laws of supply and

demand come into play at the third level concerning only “civilized and complex

human societies” while the fourth and fifth levels differentiate between kinds

of socio-economic system. This very general framework can be applied to

concrete cases using the various principles that Hodgson introduces, such as

the Principle of Dominance (concerning what kind of institution

dominates a specific system), the Principle of Prominence (concerning

whether a certain institution is very common in a system) and the

Principle of Impurity, which says that any system will host more institutions

than the dominant one (e.g. though market relations are dominant in capitalist

systems, non-market institutions such as the family persist).

Hodgson’s view of what is the fundamental methodological problem in social

science and his response are highly original and insightful. But in my view, he

himself falls prey to a number of methodological flaws and omissions. To begin

with, I think Hodgson is right when he says that a pure empiricism is an

incoherent position. We do not learn much from sense data alone. But this does

not imply that there are any concepts or principles that are a priori in

the strict sense, i.e. prior to all experience. A tenable form of empiricism

can hold that while any particular inquiry may require some sort of background

knowledge, this background knowledge is itself neither infallible nor innate.

While we surely need a conceptual framework in order to make sense of

observations, the conceptual framework itself can, at a different stage of the

inquiry, be subject to revision in the light of new experience. Similarly,

while we need some kind of inductive principle to learn from experience, the

exact formulation of that principle can itself be extracted from what has been

successful in the past.

Therefore, I think that Hodgson concedes too much to the rationalist (or

theorist). This concession is relevant to his own theoretical framework. Much

of it is informed by very general theory-schemes such as general systems

theory, complexity theory and, in particular, evolutionary theory. There is of

course nothing wrong with borrowing analogies from these schemas. But Hodgson

seems to treat these as givens rather than hypotheses. Maybe the analogue of

natural selection is an important causal factor in economic phenomena, too. But

maybe it is not. Hodgson’s methodology has no built-in mechanism which weeds

out false hypotheses of this kind.

A related but different criticism is that Hodgson is a realist (or

essentialist) about concepts. Concepts, according to him, “carve reality at its

joints” (p. 315) and represent “what is essential to, and enduring in, an

entity — ignoring the accidental and superficial” (p. 287). On the basis of

this theory, for instance, Gary Becker’s neoclassical analysis of family

relations is criticized. Since it is in the nature of market phenomena

(the kind of phenomena to which neoclassical analysis was tailored) that

property rights are exchanged, and no such exchange takes place in the family,

Becker’s analysis must fail. But whereas I grant that Becker’s theory is

untenable, this is not because he gets the nature of market phenomena or the

nature of the family wrong. Indeed, it is possible that certain cases of

marriage and certain cases of prostitution are sufficiently alike that for

certain kinds of inquiry we may treat them as the same. We use concepts to

classify phenomena. It is now more or less generally accepted that there is no

one unique way of doing so. Each classification is more or less suitable for

the particular inquiry at hand. Thus, concepts have no real essence.

Finally, we may ask how useful Hodgson’s own response to the problem of

historical specificity is. Imagine, I am a monetary economist and concerned

with the quantity theory of money. Reading the present book, I learn from him

that institutions and historical and geographical circumstances matter —

sometimes at least. So I set out to test the theory for US post-war data. Are

my findings projectable to other countries or times? In Hodgson’s schema,

“effects of supply and demand on prices” are at the third level of abstraction,

that is, applicable to all civilized human societies. But surely one will want

to say that certain institutional facts about the monetary constitution will

affect the money-prices relation. But which ones? Is whether or not the gold

standard prevails relevant? Is the presence of e-banking? Do cultural

differences play a role? The point is that while Hodgson rightly alerts us that

economic laws hold only on account of a particular socio-economic structure, he

does not solve the problem of historical specificity. He does not tell us to

which degree and in what respects two socio-economic systems must resemble each

other for some economic law to hold in both systems. And I think there is a

good reason for this failure: there is no solution at the general level. All we

can say at the general level is that differences may matter but which ones

really do matter is an empirical question.

To summarize, Hodgson has done a great job in drawing attention to the fact

that economic laws are true only on account of particular arrangements of

institutional and cultural facts. He has written an exciting history of how

this matter has been treated in the economic literature from Marx to the

present day. Furthermore, he has presented us with elements of an analytical

framework that helps us to determine which kinds of institutions and cultural

facts may matter for which kinds of inquiry. In my view, his own methodological

framework cannot solve his original problem and it suffers from a slight bias

towards apriorism. Nonetheless, this book is greatly stimulating and I can

highly recommend it to anyone interested in economic history and methodology.

Julian Reiss is a Senior Researcher at the Centre for Philosophy of Natural

and Social Science, London School of Economics. Recent works include “Causal

Inference in the Abstract or Seven Myths About Thought Experiments,”

Causality: Metaphysics and Methods Technical Reports CTR 03/02, London

School of Economics and “Natural Economic Quantities and their Measurement,”

(2001) Journal of Economic Methodology 8:2, 287-311.

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

International Organizations and the Analysis of Economic Policy, 1919-1950

Author(s):Endres, Anthony M.
Fleming, Grant A.
Reviewer(s):Moggridge, D. E.

Published by EH.NET (December 2002)

Anthony M. Endres and Grant A. Fleming, International Organizations and the

Analysis of Economic Policy, 1919-1950. New York: Cambridge University

Press, 2002. xiv + 290 pp. $65 (hardcover), ISBN: 521-79267-3.

Reviewed for EH.NET by D.E. Moggridge, Department of Economics, University of

Toronto.

The purpose of this book is to explore the intellectual contributions of

economists who worked in or were consultants to important international

organizations between 1919 and 1950. The organizations in question are the

International Labour Organization, the Economic and Financial Section of the

League of Nations, the Bank for International Settlements and, after 1945, some

parts of the United Nations. In looking at these, the authors are concerned to

address five questions: “what was distinctive, innovative and significant in a

doctrinal history sense about research”; “what policy questions stimulated the

research undertaken and what policy position flowed from the research”; “what

intellectual influences acted on that research”; how did the research relate to

prevailing orthodoxies and changes therein; and “what limitations can be

identified in the economics as practised … in these organizations” (pp. 7-8).

The book proceeds by topic: business cycles, monetary policy, public investment

policy, trade policy, social economics, international finance and the full

employment movement of the late 1940s. However its coverage is occasionally

unexpectedly narrow: its discussion of late 1940s Keynesianism does not extend

to national accounting, presumably because the individuals concerned, one of

whom received a Nobel Prize in Economics for his work, were called “statistical

experts” and thus not considered economists.

Despite the authors’ claims for broad institutional coverage, their most

serious archival research centers on the International Labour Organization,

with the Economic and Financial Section receiving less attention and the Bank

for International Settlements receiving none. (All references to thinking in

that institution are to its published Annual Reports, despite the

availability of Per Jacobbson’s diary in the Library of the University of

Basle.) The restriction of their archival research to Geneva also means that

they ignore other possible relevant sources such as J.B. Condliffe’s papers and

diary at Berkeley, Alexander Loveday’s papers at Nuffield College, Oxford and

Gottfried Haberler’s papers at the Hoover Institution.

The patchiness in the archival research in the case of the League shows up most

clearly in the discussions of its business cycle research program. It has been

known for some years that Dennis Robertson had substantial correspondence with

Alexander Loveday (the Director of the Economic, Financial and Transit Section)

as well as Gottfried Haberler, and Jan Tinbergen (see Mizen, Moggridge and

Presley 1997). Indeed, it was Robertson who was first offered the job that

eventuated in Haberler’s Prosperity and Depression and it was Robertson

who was hired by Loveday as a consultant and adviser to Tinbergen, with the

result that one of the League-sponsored conferences devoted to Tinbergen’s work

was held in Trinity College, Cambridge in July 1938. Yet in the relevant

chapter Robertson does not make anything other than a cameo appearance at a

League meeting to discuss Tinbergen in September 1937 until he reviewed in 1945

the Report of the League’s Delegation on Economic Depressions (for which, at

Loveday’s request, he wrote a minimum program of action back in 1938).

As I have noted, the ILO archives seem to have been more thoroughly mined than

the League’s with the result that the chapters on monetary policy, public works

and social economics are devoted to the views of its experts. The exposition of

ILO views and their evolution is clear and well done. If there are any

difficulties it is placing these views in context, especially in relation to

the evolving ideas on monetary policy and of one particular economist, J.M.

Keynes. Here the problem is that the authors misread A Treatise on

Money, with its special case for public works, despite their quoting

secondary literature that should have reminded them that they were doing so

rather than, as they think, the opposite (p. 76). As a result the place of the

ILO is understated. On the Keynes front, there is also a problem as to the

relation of later editions of Prosperity and Depression to Keynes’s

views: the fact that Keynes favorably reviewed the second edition seems to have

eluded the authors. They also are in some difficulty with the work of J.R.

Bellerby at the ILO whose originality is understated because the authors are

unclear as to his formal training and possible intellectual influences, where a

reading of his Who’s Who entry might have helped.

The study is more successful in the area of trade policy, where the authors

demonstrate that the League’s economists did carve out a distinctive position,

and discussing Ragnar Nurkse’s International Currency Experience (1944)

and Course and Control of Inflation (1946). However, the discussion of

International Currency Experience is distinctive compared to other

chapters in the study in that it is less related to contemporary developments

of the 1940s than to the literature of the 1970s to 1990s. Perhaps, as a

result, it is misleading on the original Bretton Woods attitudes to freedom of

capital movements. The handling of the “full employment movement” of the later

1940s is more successful in retaining its links to contemporary discussions.

In the end the authors find that economists in international organizations were

generally cautious, guarded and tentative in their policy analysis. They also

suggest that in the 1920s in particular the macroeconomic and monetary analyses

of economists in international organizations were more a reflection of

contemporary orthodoxy than later, although there was some return to the 1920s

situation in 1940s. In between, perhaps because of disagreements within the

profession, in macroeconomic matters economists in international organizations

could be much more eclectic in staking out distinctive positions. In trade and

international monetary affairs, the League’s economists successfully staked out

distinctive positions, perhaps because in both cases the League was on the

sidelines rather than at the center of contemporary policy discussions. The

overall record of contributions is substantial. We are indebted to the authors

for highlighting it.

Reference: Paul Mizen, Don Moggridge, and John Presley (1995), “The Papers of

Dennis Robertson: The Discovery of Unexpected Riches,” History of Political

Economy 29 (Winter 1997), 573-92.

D.E. Moggridge is Professor of Economics at the University of Toronto. In the

past he has edited the papers of John Maynard Keynes, James Meade and Lionel

Robbins. He is currently engaged in preparing an edition of Dennis Robertson’s

professional correspondence for the Royal Economic Society and in writing an

intellectual biography of Harry Johnson.

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

America’s First Veterans and the Revolutionary War Pensions

Author(s):Teipe, Emily J.
Reviewer(s):Short, Joanna

Published by EH.NET (December 2002)

?

Emily J. Teipe, America’s First Veterans and the Revolutionary War Pensions. Lewiston, NY: Edwin Mellen Press, 2002. vi + 245 pp. $109.95 (cloth), ISBN: 0-7734-7100-6.

Reviewed for EH.NET by Joanna Short, Department of Economics, Augustana College.

In America’s First Veterans Emily J. Teipe explores the pension program for veterans of the Revolutionary War. As the first federal pension program in the U.S., the Revolutionary War pension program set an important precedent in the development of military and civil service pensions. Teipe, chair of the history department at Fullerton College, focuses on how well society regarded and rewarded the men who won American independence. The author mines data from pension applications to see if receipt of a pension conferred benefits substantial enough to affect living standards. Were veterans honored and adequately rewarded for their sacrifice? Or were they treated with indifference and disdain?

Throughout the book, Teipe argues that Revolutionary War veterans were not held in particularly high regard. Although the Continental Congress was quick to provide pensions to soldiers disabled in the war, service pensions were a much more contentious issue. Congress first offered service pensions to officers in 1781, in order to prevent mass desertion. General Washington lobbied tirelessly for the pension, which promised half-pay for life to officers who served to the end of the war. In 1783, the officers astutely recognized that Congress could not afford to pay the pension annuities, given the precarious state of the federal budget. A group of officers at the Newburgh Garrison in New York refused to disband (in effect, threatening a coup) until they were paid. General Washington again brokered a deal — the officers received full pay for five years, paid in a commutation bond. Many officers eventually sold the bond at a steep discount.

In lobbying for their own service pensions, enlisted men faced a series of obstacles. Chief among them was the widespread view that a pension was a giveaway, or patronage. Veterans’ advocates avoided using the word ‘pension,’ instead they emphasized that veterans were only seeking back pay. The government had stopped issuing pay to soldiers in 1777, as the value of the Continental was rapidly declining. So, veterans could legitimately claim that they had not received the pay that had been promised them. Revolutionary War veterans also made up a very small proportion of the electorate, so they were not able to organize a powerful lobby. Officers formed a secret and elitist group called the Order of the Society of the Cincinnati. Membership was open to officers only, and membership was passed on in hereditary succession. Because of these membership requirements, most viewed the veterans’ group with suspicion.

With the support of veteran presidents, such as Monroe and Jackson, Congress finally passed pension legislation for indigent veterans in 1818, and service pensions for all veterans in 1832. Thus, a non-indigent veteran could receive a pension for military service, but only if he survived forty-nine years after the close of the war. Widows who were married before or during the war could receive a pension beginning in 1836. Because of the long delay between the end of the war and the development of indigent and service pensions, it is clear that few veterans were able to take advantage of the pensions. Among veterans receiving a pension, Teipe finds that the average age at receipt was sixty-seven, and half of veterans received a pension for five years or less. In addition, Teipe uncovers evidence that many applicants were rejected because of missing discharge papers, service questions, or other problems. Widows were also frequently rejected if they could not provide proof of the marriage date. The women who did benefit from widows’ pensions were young women who married older veterans. These women frequently survived long enough to benefit from later pension liberalization, which eventually granted pensions to women who married veterans long after the close of the war.

The strength of America’s First Veterans is its treatment of women who received pensions, either as veterans or as widows. Many women served in the Revolutionary War as camp followers. These women provided cooking, laundering, and nursing services in return for rations. A few women served as paid couriers, nurses, or soldiers. Two women received veteran pensions for their role in the conflict. Margaret Corbin was wounded after taking the place of her husband, who was killed in the artillery line. Corbin could be the woman canonized as ‘Molly Pitcher’ (the nickname originates not from bringing drinking water for troops, but for proficiency at swabbing down the cannons). Deborah Sampson disguised herself as a man in order to participate in a combat role. Both women received pensions in part through impressive male sponsorship. Corbin benefited from the lobbying efforts of her superior officers. Sampson was aided by her acquaintance with Paul Revere. In addition to bringing Sampson’s service to the attention of Congress, Revere took pains to emphasize that Sampson had reformed her cross-dressing ways, and performed her roles as a wife and mother admirably.

Although the America’s First Veterans stands out for its attention to women veterans and widows, the book also has a few weaknesses. In the nit-picking category, the book suffers from sloppy editing, particularly with regard to punctuation. This reviewer found ten misuses of the apostrophe alone. In the more profound category, there are several points where the author makes claims based only on small amounts of data. For example, on the large number of rejected applications for pension, “(These are) clear examples of a bureaucracy which would use any excuse to refuse a pension since they were intent on issuing as few payment certificates as possible.” It is not clear why individual clerks or pension commissioners would have had this motivation, unless they were expressly directed to do so. No further evidence is presented to indicate that pension commissioners were pressured to reject a lot of applicants.

Also, on the desperate financial situations of many of the applicants, and the small pensions that some eventually won, “it is inconceivable how an individual or family could have benefited or improved their circumstances.” There is no mention here of the selection bias. Many of the applicants in the sample applied for indigent pensions. Therefore, the sample is heavily weighted toward the poorest veterans, who had an incentive to exaggerate their circumstances to make their case for a pension stronger. Teipe’s assertion that no one benefited from receiving a small pension seems based on the assumption that the elderly recipients were supporting several dependents. However, at this time, most elderly men moved in with children, so the veterans themselves were dependents. A pension could have at least provided a welcome contribution toward the veteran’s support.

Teipe concludes that society did not place a high value on the men who won American independence, since Revolutionary War pensions provided small benefits long after the close of the war. However, providing pensions is only one way society can honor its veterans. The public perception of pensions, along with the state of the federal budget may have made honoring veterans through pensions a policy that was ahead of its time. Nonetheless, the Revolutionary War pension program provided the precedent for the more generous public pensions to come.

Joanna Short is Assistant Professor of Economics at Augustana College. Her research interests include the role of Confederate veteran pension programs on retirement in the South, and the evolution of savings strategies in nineteenth-century America.

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