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E.W. Scripps and the Business of Newspapers

Author(s):Baldasty, Gerald J.
Reviewer(s):Reed, Barbara Straus

Published by EH.NET (August, 1999)

Gerald J. Baldasty. E.W. Scripps and the Business of Newspapers.

History of Communication Series. Urbana: University of Illinois Press,

1999. 272 pp. $42.50 (cloth), ISBN 0-2520-2255-6; $16.95 (paper) ISBN

0-2520-6750

Reviewed for H-Business and EH.NET by Barbara Straus Reed, Department of

Journalism, Rutgers University.

E. W. Scripps and the Business of Newspapers is an exciting, new

offering in both paper and cloth from the University of Illinois Press.

Gerald J. Baldasty has succeeded in explaining the creation of the

first newspaper chain in America, developed by Edward Willis Scripps at the

end of the last century. Baldasty has used primary material and has made good

use of the correspondence on deposit at Ohio University, Athens. In addition,

he has included a con tent analysis of Scripps’s newspapers covering subject

matter, news sources, photos and illustrations, column inches of print and

photographs, editorial subjects, and articles’

datelines.

Baldasty, author of The Commercialization of The News in the 19th

Century (University of Wisconsin Press, 1997), places the work of Scripps

in relation to his competitors, William Randolph Hearst and Joseph Pulitzer.

They shared some journalistic values and ran successful corporations. Pulitzer

pioneered newspaper con tent, and his papers reflected a deep commitment to

public service: his crusades against corruption, fraud, and injustices of urban

life are legendary. Hearst copied many Pulitzer innovations and developed the

entertainment aspect of the paper. He openly

staged news events, investigated murders, and ran bizarre news–no matter what

the financial cost to him. Scripps’s legacy was the development of the business

side of the modern American newspaper. He concentrated on performance goals,

long-range planning

,

circulation methods, and revenue sources, among other areas. He created a

central management that made his newspapers economically efficient entities. He

embraced issues and concerns of the working class, shunning close ties to

advertising and business.

His string of papers–small,

cheap, limited in size and quality–formed a chain that became the envy of his

rivals.

The purpose of the book is to explicate Scripps’s career in American journalism

from the early 1870’s through his retirement in 1908 and,

ultimately, his death. During that time, he established or bought more than 40

newspapers, began a telegraphic news service, and created an illustrated news

feature syndicate. Baldasty’s book focuses on three business strategies Scripps

used to build his

chain: low cost, market segmentation, and vertical integration. Also, the book

describes Scripps’s efforts to free his papers from advertising and business

influences. Then too, Baldasty describes Scripps’s management structure,

used to coordinate and control his journalistic empire.

Scripps came to the newspaper business during a time of great change. He

eschewed direct competition and instead sought to serve new readers instead of

competing for established ones. In his opinion, most newspapers either

ignored or were hostile to the working class. His news stressed labor issues

and was directed to a less-educated audience.

He also practiced strict economy and his low-cost strategy meant that his

start-up costs ran well below the industry average, because of keeping staffs

small, salaries modest, and offices Spartan. His newspapers sold for just a

penny, whether home delivery or street sales,

at a time when others sold for two cents for home delivery and five cents on

the street. Moreover, Scripps avoided eastern cities because of higher costs

than in the middle-west and west.

His vertical integration strategy was represented by a telegraphic news service

he set up and a feature syndicate that distributed illustrations and soft news

for all papers in the chain. He centralized control and intensely supervised

his papers. He was opposed to running much advertising, as he kept his papers

independent of the rich and powerful so he could reach and represent working

class readers.

Scripps’s contribution to

American journalism was the key role he played in becoming a modern publisher,

building the first national newspaper chain, and recognizing the difficult

problems for mass media in using advertisers. Scripps’s business methods

influenced news gathering and distribution. His highly profitable chain

overwhelmed his competition, was accessible to readers, and established the

model that has dominated 20th century newspaper ownership. His prescient use

of marketing applied to the

newspaper industry contributed

to the business success of his newspapers and influenced the nature of news.

Baldasty has presented a very well-organized and easily understood analysis.

His work is extremely well documented.

Born on a farm in 1854, Scripps joined his older half-brother James in

developing a newspaper, characterized by independence in politics,

selling at a cheap price, being half the size of other papers of the time, and

aimed at the working class. Scripps became circulation manager, organized

newspaper routes, supervised newsboys who made deliveries, and developed an

ability to judge others. His two half-brothers backed him financially in his

effort to launch the Cleveland press in 1878. Scripps practiced extraordinary

economic measures: his business was cash-only; he demanded immediate payment

from advertisers and readers; and he carefully kept track of spending. These

daily practices resulted in a 15-17 hours-per-day job. His major goal in

establishing newspapers in Cleveland, Cincinnati, and St. Louis was not to

accomplish a great good but to succeed with a business entity.

At age 33, he succeeded in becoming president of the family business and as

president accomplished the creation of an efficient, centralized newspaper

company; he accomplished modernization of

newspaper plants and establishment of a news bureau and advertising office.

However, he learned how to produce low-cost newspapers for the working class

from his brother James during 17 years.

He then retreated from the newspaper business to develop anextraordinary

estate called Miramar, outside San Diego. At Miramar he had a private gymnasium

with inside pool, an aviary, and a sprawling ranch house with plain American

oak furniture. He owned a yacht, like Hearst and Pulitzer, but his style of

living was simple, compared to Hearst. He left the work of his newspaper

properties to a new partner,

Milton McRae, urging him simply to make money. The Cleveland and Cincinnati

newspapers, both highly profitable, formed the nucleus of his empire. He

developed and

purchased newspapers on the west coast as well,

in San Diego, Los Angeles, and San Francisco. The central office kept tabs on

each newspaper holding and evaluated performance in keeping with the policies

of E. W. He tolerated no dissent and fired those who tried. By the turn of the

century, he returned to full-time newspaper work and extended his empire up

the California coast into Oregon, Washington, Colorado, Utah, Nevada, Texas,

Oklahoma, Iowa, Indiana, and Tennessee.

Scripps used three criteria for

choosing places to begin newspapering:

could a paper strengthen his chain’s news-gathering ability, especially with

the telegraph news service? Could the papers assist other Scripps papers in

gathering regional news? Could the paper be started cheaply,

al ways a penny per day, aimed at workers? Scripps recognized that he needed a

population approaching 40,000 competing newspapers that were partisan,

expensive, influenced by business, and hostile or indifferent to labor. Scripps

had good scouts who prepared

detailed market analyses on different cities.

His telegraph news service became central to both clients and contributors,

helping to defray costs while providing news for other Scripps publications.

His focus on publishing for the working class reflected his business strategy

in segmenting the market and producing something at low cost. Scripps

capitalized on his readers’ great desire for fast-breaking news of local events

as well as national and world news. Eventually Scripps’s newspaper chain

stretched from Portland,

Oregon, to New York City with the acquisition of the telegram in 1927.

Scripps frequently developed newspapers for the purpose of sharing regional

news so that news from cities with a Scripps paper appeared in other Scripps

papers and constituted about half the telegraphic news used by the chain.

Nevertheless, expansion slowed because of limited capital and lack of

personnel. His purchase of more ranch property near Miramar ate into his supply

of capital, and he could not find a sufficient supply of men ready to start a

newspaper for him. However, he was more successful than any of his

contemporaries in initiating and purchasing newspapers. Most saw soaring

profits and he succeeded because he was careful and methodical.

The frugal entrepreneur controlled costs by ordering used presses, cheap

offices, poor-quality newsprint, and poorly-paid staff. His business ran as a

cash-only operation. He was able to preserve capital, limit operating costs,

reduce dependence on advertisers, and keep

his papers for the working class. Yet, his papers carried limited local news,

reported by small staffs, and produced on worn-out presses with old type. The

papers were not attractive and were hard to read. His penny-pinching methods

even included using pa per front and back for reporters’ copy. He controlled

costs with limited start-up capital,

relying on shared news and features and engravings for illustrations.

Scripps bragged that he could begin a newspaper anywhere in America using

merely one reporter

and one editor because of his news service.

Syndicated material accounted for 25 to 35 percent of each issue and even up to

half or three-quarters at times. Baldasty supports this assertion with a formal

content analysis of four Scripps papers created between 1903 and 1906. He

found that syndicated material constituted an average of 62 percent of

non-advertising content! He made reporters pay for their own car fare, purchase

their own lead pencils, and even banned the purchase of toilet paper so staff

members should use old newspapers.

He also admonished his business managers to buy used twine. In addition,

Scripps importantly kept distribution costs low by concentrating circulation in

the city rather than the country. He recognized that urban populations

could mean focused news gathering and cheaper distribution than suburbs or

rural areas. To avoid office expense, no records were kept of subscribers; only

newspaper carriers knew who the customers were. His economizing became a

hallmark of his career in editing and publishing. He kept his newspapers cheap

to remain true to his goal of having independent working class newspapers. He

monitored every expense. The central office created incentives for employees to

obey rules and policies and abide by surveillance systems that checked up on

them.

Company policy meant not printing Scripps’s name on the masthead. He wanted to

share markets with upscale rivals but sought to drive out labor-oriented

publications. He saw Hearst as his chief competitor and even kil led a Chicago

publication to avoid battling Hearst. He avoided all publicity, as well as any

kind of advertising. He saw the importance of attending to the working class,

publishing news about labor: strikes,

wages, hours, political organizing. Even editorial cartoons portrayed the

difficulties of Mr. and Mrs. Common People. His papers exposed trusts and

monopolies, supported collective bargaining and strikes,

supported government regulation of food and transportation industries,

and government ownership

of water and electric utilities. They advocated power for the common people by

direct election of public office and through initiative, referendum, and

recall. Workers went out of their way to support Scripps publications; they

were the only publications peaking for labor. His syndicate brought popular

cartoon characters with whom the working class could identify. He had his

newspapers devote more space to coverage of leisure and entertainment rather

than government, politics, courts, and business. News a bout plays and sports

appealed to readers; he did not avoid politics but limited its coverage.

Scripps carried a great deal of news of interest to women, as women were more

loyal customers than men. His paper sponsored contests to attract women and

printed short stories geared towards women. It is important to note that

Scripps papers offered content to working class women, about how to run a

household on a limited income, for example. At the turn of the century, Scripps

publications reported that more than 20 percent of American women worked

outside the home; few if any received adequate wages. His papers attacked job

discrimination and advocated equal pay for equal work.

Scripps wanted his newspapers to please readers, so he urged editors to make

copy

short, easy to read, and in simple language; to entertain with jokes and

cartoons, to make news interesting and easy to understand, and to use

illustrations and features lavishly. Scripps newspapers had shorter articles,

more vivid headlines, and more ty pes of non-traditional content to reach

working class readers.

Scripps died in 1926. He had only a public school education. He advocated

independence in journalism, urging that the press serve as the foundation of

democracy to provide information vital to an enlightened electorate. He felt

the press fell short in becoming a tool of the elite and ignoring or opposing

the needs of the masses. A press dominated by the few, representing the

interests of the few, was not a press able to bring the needs of democracy.

Scripps’s cause was to prove that newspapers could be owned and run by people

who were not millionaires and with not much advertising. He defined news

through the eyes of labor, and did not support political or business elites.

Scripps tried to emphasize circulation over advertising revenues and his

newspapers,

once established, limited the amount and size of advertisements accepted. He

wanted to be supported by many small businesses rather than rely on large ones.

The bottom line was that Scripps wanted to make money. He was a successful

entrepreneur through careful money management and controlling costs. Scripps

tried to create newspapers for an audience heretofore ignored. He recognized

the dangers of being dependent on advertising,

but as a result his papers were smaller, cheaper, and poorer. His papers

lacked the resources to cover local news well and his competitors provided

nearly three times more local news. He emphasized cost-cutting over quality and

judged his editors by their ability to generate profits rather than produce

quality news. His idea of central management and having papers benefit from

common resources such as features can be seen today in other newspaper chains.

He was an astute businessman and put into practice methods of

newspaper operation that have endured.

Baldasty’s analysis is crisp, well thought out and executed. He has made a

tremendous contribution by his astute insights and thorough research.

His is a significant contribution to the literature of journalism history.

Subject(s):Business History
Geographic Area(s):North America
Time Period(s):19th Century

Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century

Author(s):Thorp, Rosemary
Reviewer(s):Taylor, Alan M.

Published by EH.NET (August 1999)

Rosemary Thorp, Progress, Poverty and Exclusion: An Economic History of

Latin America in the 20th Century. Washington D.C.: Inter-American

Development Bank, 1998. xiii + 369 pp. $24.95 (paper), ISBN: 1-886938-35-0

Reviewed for EH.NET by Alan M. Taylor, Department of Economics, University of

California at Davis.

A book that aims to survey the entire twentieth-century economic history of

Latin America is indeed a massive endeavor. In pursuing such a goal Rosemary

Thorp wisely assembled a large and talented team to help her. As her

acknowledgements make clear, without this team approach the book would not have

happened, since such an undertaking would be an almost prohibitively time

consuming effort for a scholar working alone, requiring many years of work to

cover the several countries, varieties of experience,

and the range of economic analysis–from macro to micro, intern al and

external, short and long run, and so on. Thorp was fortunate to secure

considerable logistical and resource support from the Inter-American

Development Bank for this worthy project. From that starting point she was able

to commission a group of scholar-consultants, each expert in different topics

or knowledgeable about particular countries, and from their background papers

and supporting work she sought to weave an overarching narrative. In this

aspect, the project’s design is reminiscent of, say,

the annual World Bank reports, where commissioned background work is blended

into the final product.

Beyond their acknowledgement in this book, some of the supporting actors also

get an opportunity to have their full say in a series of three

“companion volumes” published by Macmillan Press and St. Antony’s College,

Oxford, the latter being Thorp’s home base. It seems unfair to review the main

book that builds so heavily on this supporting material without giving a brief

plug for the entire cast. The titles of the three supporting volumes are:

The Export Age: Latin American Economies in the Late Nineteenth and Early

Twentieth Centuries (edited by Cardenas, Ocampo and Thorp); Latin

America in the 1930s (edited by Thorp, a second edition of her 1984

volume); and Industrialization and the State in Latin America:

The Black Legend of the Post War Years (edited by Cardenas, Ocampo and

Thorp). All three will also appear in Spanish translation published by Fondo de

Cultura Economica.

These three background

volumes–which were unfortunately not available to this reviewer–provide the

foundations for the main text. This design should prove helpful in expanding

access to the subject. Those new to the subject or those seeking a quick

overview can peruse the ma in volume. The very curious, the specialists, and

the pedants can delve in the background studies. Bundling the background papers

together in this way follows another design style that has been applied to the

history of the region –I am thinking here of

the Cambridge History of Latin America, edited by Bethell (who is also

an author in this project.)

Thus, by careful design and packaging, Thorp, the IDB, and the supporting cast

have delivered a set of diverse and complementary products that arrive in

what can only be described as a gaping hole in the marketplace. The project

might, even then, be somewhat ahead of its time. A thorough economic history of

Latin America in the twentieth century is a major task whose completion will

depend on the complete

assessment of the empirical record of development in each country. In turn,

that task will require basic data and archival work in each country to actually

construct the empirical record itself, since in many places the holes in our

knowledge are deep and the fragmentary and frail nature of the data sources

still troubling. Finally, once good data are in hand, the evaluation of the

historical record will call for the application of modern quantitative

econometric methods, insights from economic theory, and cutting-edge

institutional analysis.

Those working in Latin American economic history know that progress in all

these dimensions is uneven, varying by country, time period, and the particular

area of study. Such caveats should be borne in mind, especially since current

research on the New Economic History of Latin America is being produced at a

fast rate by an ever-growing group of scholars and their findings are

challenging many interpretations.

A serious criticism I have concerns access to the data

for the study. This is the first such long-run database of its kind, and its

construction was overseen by someone with impeccable credentials: Andre Hofman

of ECLA

(CEPAL), formerly of the Groningen group, who is personally responsible for

recent pioneering estimates of GDP and capital stocks in the major economies

of the region. Notwithstanding the preceding caveats about the quality and

comprehensiveness of historical data in the region, the data specialists for

this project distinguished themselves and did us all a great service by

piecing together so many series and benchmarks in a series of comparative data

tables for so many countries. The statistical appendix is massive and will be

the kind of data mine that future researchers will want to dig around in. Too

bad, then, that the proposed fourth companion volume which would have presented

the full database and sources has been abandoned. Still worse, an even more

efficient and simple solution to the problem of how to disseminate this data

and facilitate its use has also been ignored thus far–namely, putting it all

up on a website. I think this is a great shame. At a cost of only a small

fraction of the resources devoted to this project by the IDB (and the European

Union and others) I guess that it

would take competent web specialists only a few hours to clean and upload these

files onto a server. Then we could all enjoy the use of the data and the

project would deliver even greater benefits to the academic community. I hope

Thorp, Hofman, the IDB,

or some other folks can work out a way to do this soon.

If I have any other quibbles, they are more minor. Of course, a survey volume

can only scratch the surface and at certain points one would wish for more. Yet

I cannot help but feel that in certain places the book gets a little off track

and the use of space might have been more productive. The problem is evident to

me even in the title. Why not just Progress and Poverty? The final tag

“exclusion” is hinted at in various places, but I am still not

sure that the topic was either as fully worked out as it should be, nor whether

it is a topic best left to other studies, being too far outside the scope of

the present work. The issue is methodological. The introduction concludes on an

almost apologetic

note that statistical categorization and analysis might obfuscate the

importance of “ordinary people” for the nonspecialist reader, but then stoutly

defends our turf in noting that economic history cannot be told via “individual

cases.” Still,

having made

the argument for economic historical methodology, the author thinks it

necessary to switch at times to a historian’s methodology and include a handful

of two-page narrative “boxes” where stories of particular people are told (a

poor woman from rural Peru, an Argentine scientist –a range of experience). I

don’t question the importance of historical methodology in general, nor

case-study history in particular, but I do wonder what it adds here to what, on

most every other page, is by and large a macroeconomic history. The

conjunction of the two methodologies adds another layer of complexity to the

study. There is already so much else for the reader to follow in dimensions

temporal, spatial, in economic categories and concepts, and so on. In other

places

, there are brief paragraphs or sections touching on the “exclusion” theme–the

power of elites or the position of women–but these also appear to be an

appendage,

and do not fit in smoothly with the analytic content of the narrative and its

main thrust.

I do not mean to say that “exclusion” isn’t an important issue in Latin

America–in history or today–but only to question how well it fits into the

scheme of this book.

Having quibbled with some aspects of the project, let me still affirm that it

is a welcome addition to the bookshelf. As a reference work, this book and its

companion volumes will be some of the first places many of us go to seek an

answer to a question outside our particular specialization or country of

interest. If one needs to get the

basic facts straight concerning rates of economic growth, investment, the

pattern of trade, and other macroeconomic features of development, the many

statistical tables and (very-elegantly executed) figures will prove invaluable.

For an introductory account that signposts events during pivotal

episodes–such as the Great Depression, the import-substitution era, the debt

crisis, and the recent reform phase–the main text will serve as a good guide.

For some in-depth accounts by leading scholars on what they think is the

state-of-the-art in the field, the companion volumes–though I have not yet

seen them–have the potential to be very useful. In short, an ambitious

project, a productive outcome.

Alan M. Taylor is co-editor (with John H. Coatsworth) of

Latin America and the World Economy Since 1800 (Cambridge: Harvard

University Press, 1999).

His latest published article (with Gerardo della Paolera) is “Economic Recovery

from the Argentine Great Depression: Institutions, Expectations,

and the Change of

Macroeconomic Regime” (Journal of Economic History 59,

no. 3, September 1999, forthcoming).

Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):General or Comparative

Copper for America: The United States Copper Industry from Colonial Times to the 1990s

Author(s):Hyde, Charles K.
Reviewer(s):Burt, Roger

Published by EH.NET (August

, 1999)

Charles K. Hyde. Copper for America: The United States Copper Industry from

Colonial Times to the 1990s Tucson: University of Arizona Press,

1998. xvii + 267 pp. Tables, maps, notes, and index. $40 (cloth), ISBN

0-8165-1817 3.

Reviewed for H-Business and EH.NET by Roger Burt, School of Historical,

Political and Sociological Studies, University of Exeter.

Much Needed and Overdue

For too long, mining has been the lost relation of American economic history–

rarely featured in its principal journals and hardly noticed in most

textbooks. This is largely because there have been few general/national

histories of the industry to set the parameters of the subject. In this volume,

Hyde begins to fill that vacuum. It is not a research monograph, but rather a

synthesis of the wide-ranging secondary material that has accumulated on this

subject during recent years. That material has been produced largely on a

regional basis, principally by western historians, and Hyde adopts a similar

regional structure for the book. It starts with a much-needed review of the

early foundations of the industry in the northern east-coast states and

Tennessee, and goes on to follow the western progression of the industry

through Michigan,

to Montana

, Arizona and elsewhere in the West. The story is at first one of rapid

expansion and growth, projecting America into world leadership in the industry

by the last decades of the nineteenth century, but then of gradual and

continuous contraction and decline in the face of increasing overseas

competition. The last two chapters of the book deal with these twentieth

century developments in the industry and also provide an overview of the role

of U.S. multinational mining companies in developing new mines in Africa,

South America and elsewhere.

Throughout the book, the author’s approach is very much that of the

entrepreneurial or business historian, looking at the processes of expansion

and contraction in terms of the promoters, investors and corporate enterprises

that managed them. This is not its only context–the notorious labor problems

that beset many of the mining districts in the years around the turn of the

century also receive careful attention as do many other aspects of the

industry’s economic and social development – but is a central theme and will

particularly recommend the book to a business history audience.

At a general level, the book makes an extremely important and strategic

contribution. Although there is now an extensive literature on the

history of the non-ferrous metals industries, it is all rather specialized and

localized and there have been very few attempts at this kind of national

overview. Hyde has given the subject exactly what it needs to project it onto a

wider stage and it is

to be hoped that others will attempt similar studies of other sectors of the

industry. Since they all share so much that is common in terms of technology,

labor,

managerial expertise, finance, etc. this might also result in a much-needed

single study of the sector as a whole.

However, at a more detailed level, there are several slightly puzzling and

troubling problems with the book. Firstly, on working through it,

there is really relatively little attention given to the declared aims,

set out in the introduction, to compare and contrast the character and

development of the three principal copper mining districts, and to integrate

changes at the regional level with changes in the national and global copper

industries. Similarly, the suggestion in the introduction that the book might

consider the interesting question of whether managerial short-sightedness and

incompetence contributed to the industry’s decline, never really materializes,

notwithstanding the presentation of a range of evidence to support such a

discussion. It remains very closely focused throughout on the narrative of

regional business history. Secondly, for a book that is essentially a synthesis

of existing work, the sources are sometimes limited, closely drawn and perhaps

a little dated.

For example, having referred in the Preface to Larry Langton’s Cradle to

Grave (Oxford, 1991)–undoubtedly the most important general work on the

Michigan industry to appear in recent years–no reference is made to it in the

footnotes to the chapters dealing with that region. It is almost as though

what we have here was conceived and constructed in separate parts at a

considerably earlier date and only recently assembled into the current whole.

But all of these are minor quibbles on what, overall, is re ally a very

excellent and worthwhile piece of work. In particular, it will fulfill the

strategic function of bringing more closely together the historians of mining

and smelting with the mainstream of business history, to the considerable

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Geographic Area(s):North America
Time Period(s):General or Comparative

Yankeys Now: Immigrants in the Antebellum U.S.,1840-1860

Author(s):Ferrie, Joseph P.
Reviewer(s):Steckel, Richard H.

Published by EH.NET (August 1999)

Joseph P. Ferrie, Yankeys Now: Immigrants in the Antebellum U.S.,

1840-1860. New York: Oxford University Press, 1999. xii + 223 pp. $49.95

(cloth), ISBN: 0-19-510934-1

Reviewed for EH.NET by Richard H. Steckel, Department of Economics, Ohio State

University.

Immigration and mobility are fundamental features of American history.

Trans-Atlantic migration, western settlement, urbanization, and social fluidity

all played an important role in shaping the United States. Unlike the situation

in many European countries, however, the records for studying these phenomena

are rather thin. Governments in the United States never maintained population

registers, and systematic registrations of births and deaths were not well

underway until the turn of the twentieth century.

Census manuscript schedules have been widely used to glimpse families at a

point in time, but it has been difficult for historians to trace and to assess

the significance of what is known to be a central feature of the past and an

important aspect

of the present.

In Yankeys Now Joseph Ferrie breaks considerable new ground in the study

of mid-nineteenth century immigration and its aftermath. He brings prodigious

new longitudinal data to the kitchen, which he artfully seasons with other

historical

sources and skillfully prepares with econometric analysis. Demographic,

economic and social historians will feast at this table for years to come.

The quantitative center piece of Yankeys Now is a sample of 2,595

European emigrants who were listed on

ship arrival records in the port of New York between 1840 and 1850. All were

male family heads or unaccompanied males, of whom 1,456 were located in the

1850 census, 1,647 were located in the 1860 census, and 508 were found in both

censuses. For comparison purposes Ferrie also linked a sample of 4,271

native-born Americans and 667 emigrants in the 1850 and 1860 censuses.

Forward linkage in the census was achieved by electronic searches though the

names of millions of household heads that were assembled by Mormons to assist

in genealogical research. It is doubtful that a linkage project of this scale

could have been done readily more than a decade ago, when computers were

smaller and software was less developed. Ferrie devises reasonable procedures

for determining a match, limiting searches of common names, and testing for

representativeness. The percentage of men on ship lists found in either census

was about 10.6 per cent, which may seem low,

but significant losses are created by underenumeration in the

census,

mortality, return migration, errors in the indexes, and common names.

The passenger ship lists provide ethnicity and occupation, and linkage with the

censuses of 1850 and 1860 also gives county of residence, occupation and wealth

(real estate only in 1850). These longitudinal data are used to study

geographic, occupational, and wealth mobility.

Although households had many geographic options, Ferrie reports that most chose

to remain nearby. The poor were more likely to remain in New York City,

but other groups often selected urban life as well, with 45 percent of the

British, 60 percent of the Irish, and 41 percent of the Germans settling in

cities or towns of the Northeast. Somewhat more than one-half of the immigrants

settled in New York, Pennsylvania or Ohio, and the Germans were the only group

who gravitated to the west in large numbers.

The German migrants to the west chose cities about half the time,

establishing large communities in Milwaukee, St. Louis, and Cincinnati.

The book is most

informative in tracking economic change. All immigrant groups experienced some

occupational mobility from farmer or unskilled to white collar or skilled, most

of which was concentrated within a few years of arrival. Literate British and

Germans were the

most successful,

especially if they located in a rapidly growing area of the Northeast or the

South. Ferrie suggests that the low upward mobility of the Irish may have

resulted from labor market discrimination or from lack of readily transferable

general

labor market skills.

Study of wealth ownership shows, however, that the Irish caught up to the

Germans and the British by 1860, after controlling for changes in occupation

and location. The relative economic position of all immigrants improved with

length of time spent in the country. In 1850 they possessed only one-fifth the

average wealth of the native born, but by 1860 the share had risen to one-half.

Ferrie suggests that with time immigrants were better able to match their

skills with opportunities the American economy had to offer.

Scholars

have criticized community based studies of social and economic mobility for

their possible biases in analyzing only those who persisted.

After controlling for age, literacy and other characteristics, Ferrie reports

that the upper groups (white collar, skilled, and farmers) of natives and

immigrants who moved were somewhat more likely to lose occupational status. The

unskilled who left did no worse than those who remained behind. Community based

studies therefore

underestimate the extent of upward and downward mobility.

If immigration had a substantial effect on natives, one would expect to notice

the results during the high immigration rates of the mid-nineteenth century.

Ferrie analyzes this impact using a mover/stayer framework in which the

choices are urban places in the Northeast, rural places in the Northeast, and

locations outside the Northeast. Estimates of this model indicate that

immigration lowered the incomes of skilled workers, but in contrast to other

studies, the unskilled apparently benefited.

As a reviewer and potential user of the book in the classroom, I have a minor

complaint: the lines in several figures, especially 3.1, lack contrast. They

are difficult to follow in the original and will be indecipherable if

reproduced on overheads. But this is nit picking in a book that gives us such

novel and important results through extraordinary effort and ingenuity.

Generations of students will compare this book against all others in the field

of immigration history.

Richard Steckel is co-editor (with Roderick Floud) of Health and Welfare

during Industrialization (Chicago, 1997) and (with Michael Haines) of A

Population History of North America, forthcoming.

Subject(s):Historical Demography, including Migration
Geographic Area(s):North America
Time Period(s):19th Century

The Economy of Obligation: The Culture of Credit and Social Relations in Early Modern England

Author(s):Muldrew, Craig
Reviewer(s):McCants, Anne E. C.

Published by EH.NET (August 1999)

Craig Muldrew, The Economy of Obligation: The Culture of Credit and Social

Relations in Early Modern England. New York: St. Martin’s Press, 1998. xii

+ 453 pp. $69.95 (cloth), ISBN: 0-312-21565

-7.

Reviewed for EH.NET by Anne E. C. McCants, Department of History,

Massachusetts Institute of Technology.

The economic history profession has recently witnessed a resurgence of interest

in the cultural underpinnings of past economies. Prominent examples, to name

just a few, can be found in Peter Temin’s Presidential Address to the Economic

History Association in 1996, in the sweeping argument of David Landes’ The

Wealth and Poverty of Nations and of most direct relevance to the

work in question here, Deirdre McCloskey’s Presidential Address to the EHA in

1997. Muldrew’s book then makes a timely appearance, given its dedication to a

reconstruction of the “culture of credit” as it existed in England between the

sixteenth and eighteenth centuries.

Craig Muldrew (Department of History and Civilization, European University

Institute–Florence) takes as his broad subject both the material realities of

the early modern English marketplace, and the cultural milieu in which those

realities manifested themselves. Thus, he investigates probate inventories,

shop account books, household expenditure diaries and civic tax schedules, as

well as the court records of debt litigation, family correspondence, personal

diaries, sectarian sermons, and a large prescriptive literature written for

the middling householder and small tradesman. The intellectual reach of his

sources even extends to the natural law theorists of the seventeenth century,

such as Thomas Hobbes,

Richard Hooker and Gerard de Malynes to name just the most famous. In this

literature he finds, as did Max Weber and countless others after him, an almost

excessive attention paid to the themes of diligence and frugality.

But contra Weber, Muldrew does not see this primarily as evidence for the

profit motive of capitalism in its early manifestations. Rather he argues that

all this advice was fundamentally about the preservation of reputation in a

society where credit was the key to market participation, and thus wealth. It

should be further noted that the word credit for Muldrew means more the

“social communication and circulating judgement about the value of other

members of communities” than it does our more typically modern usage as a

financial sum or a claim on assets (p. 2). Thus, early modern marketplace

exchanges dependent on credit were typically solidified only after hours of

negotiation in a local tavern, over drinks and in front of witnesses. In this

insistence on the communicative (even persuasive)

aspects of the marketplace, Muldrew’s work strongly reinforces the argument

made by McCloskey that economic historians can only ignore social variables

(which McCloskey sometimes short-hands as “sweet talk”) at their peril.

The first part of the book will be the most familiar

territory for economic historians. For it is here that Muldrew makes most use

of quantitative techniques to answer a number of important questions of fact,

as it were.

He begins with an effort to reconstruct the sheer magnitude of market

transactions in early modern England, and to date with some precision the

impressive rise in marketing during the sixteenth century, from what was

already an arguably “commercial” medieval England. He attributes the economic

boom of the decades after 1550 to the expansion

of marketing stimulated by the demand generated by the demographic expansion

then underway. In fact, on the basis of a limited number of probate

inventories,

a handful of account books, and a more voluminous court record, he argues that

this was England’

s “most intensely concentrated period of economic growth before the late

eighteenth century” (pp. 20-21); and moreover, that the late sixteenth century

was not the period of absolute immiseration that it would appear to have been

on the basis of the Phelps-Brown and Hopkins real wage index. Relative poverty

may indeed have been on the rise, but he claims that at least the poor

households which were inventoried lived about as well. if not better, than

their fifteenth century peasant equivalents

(p. 32).

This latter claim is a very strong one, and probably needs much more evidence

before we disregard the implications of the real wage series entirely.

Nonetheless, much of the argument is compelling, despite the fact that it rests

only on indirect types of

evidence (admittedly from several different types of sources). What these

strong claims should really do is stimulate the profession to dig anew for yet

more data which can either confirm or refute his revisionist position,

particularly as it pertains tot he lower end of the economic spectrum.

The sixteenth century is not the only place, however, where Muldrew takes on

one of the sacred tenets of the historiography of the English economy.

Part of his project also challenges the long accepted figures for the size of

the English economy at the end of the seventeenth century as devised by the

contemporary political arithmaticians Gregory King, William Petty and Charles

Davenant. Muldrew argues that their figures, designed as they were to evaluate

the taxable

and thus cash portion of the economy, grossly underestimate the scale of all

marketing in England, dependent as most of that was on the extension of local

(oral) credit. Muldrew’s estimate for total national consumption in the latter

part of the seventeenth century

(146,000,000 pounds) is over three times greater than King’s contemporary

estimate of total household income (p 90). While this calculation depends

critically on the representatives of only seventeen household account books

from a period of

over a century and across the social scale, it does have the significant

advantage of including purchases made on credit. If Muldrew’s calculations can

be confirmed by further research (preferably with a much larger data base than

his seventeen account books), they will force us to fundamentally rethink the

magnitude of the economic transition from the early modern to the industrial

period. This could prove to be additional evidence of the significance of the

so-called “industrious revolution” of the early modern period.

This however is not Muldrew’s main agenda, but merely a by-product of his work

for other purposes. The real agenda here is to demonstrate, given the extreme

scarcity of metal coinage throughout this period, the intense reliance that

commerce of this magnitude placed by necessity on mechanisms of informal

credit.

Even more importantly, Muldrew stresses the implications of such widespread and

interlocking networks of credit for the exacerbation of tensions between the

households of consumers and producers,

which were, of course, merely the same households wearing their various many

hats. With the initial mid-sixteenth century boom, these tensions played

themselves out in an explosion of debt litigation and an outpouring of moral

literature on the perils of the prodigal (that is the indebted)

life. With time, adjustments were made to the legal system and new forms for

public credit were established which allowed credit to “become less dependent

on individual morality” (p. 329). Marketing could not only continue at its new

high level, but even expand, without the security of the social fabric being

irreparably damaged.

This is a fascinating book and one which I highly recommend. It moves

comfortably between the quantification of material life in early modern

England, and the way that life was understood by contemporaries. Historians of

the economy, and historians of ideas will both find much in this book to

stimulate further research in their respective fields. Finally, it offers a

potent

reminder that the now dominant utilitarian understanding of economic behavior

as essentially individualistic and fundamentally competitive, is not always an

appropriate model for studies of even strongly market-centered economies. Trust

(and trustworthine4ss), and by extension,

cooperative behavior, were essential to the generation of wealth by households

in early modern England. Thus it is that Daniel Defoe could write as late even

as 1726 that “He that gives no trust, and takes no trust, either by wholes ale

or by retail … is not yet born, or if there ever were any such, they are all

dead” (quoted on p. 95).

Anne E. C. McCants is the author of Civic Charity in a Golden Age: Orphan

Care in Early Modern Amsterdam (University of Illinois Press, 1997).

References:

David S. Landes, The Wealth and Poverty of Nations: Why Are Some So Rich and

Others So Poor?. New York: W.W. Norton, 1998.

Deirdre N. McCloskey, “Bourgeois Virtue and the History of P and S,”

Journal of Economic History, June 1998, 58 (2

): 297-317.

Peter Temin, “Is It Kosher to Talk about Culture?” Journal of Economic

History, June 1997, 57 (2): 267-87.

Subject(s):Markets and Institutions
Geographic Area(s):Europe
Time Period(s):18th Century

The Free Standing Company in the World Economy, 1830-1996

Author(s):Wilkins, Mira
Schroter, Harm
Reviewer(s):Boyce, Gordon

Published by EH.NET (July 1999)

Mira Wilkins and Harm Schroter (eds). The Free Standing Company in the

World Economy, 1830-1996. Oxford: Oxford University Press, 1998. xxi + 480

pp. Tables, maps, notes, bibliography, and index. $95.00 (cloth). ISBN

0-19-829032-2.

Reviewed for H-Business and

EH.NET by Gordon Boyce, School of Economics and Finance, Victoria University of

Wellington.

The Free Standing Company: Theory and Evidence

In 1988, Mira Wilkins published what proved to be a provocative paper that

identified an

apparently distinctive form of multinational organization,

the Free Standing Company (FSC).[1] Whereas, the “classic” U.S.-style

multinational enterprise, the subject of Wilkins’ earlier work, represented an

across border extension of managerial and organizational capabilities

internalized within a hierarchical structure, the FSC was a much different

species first associated with British direct foreign investment. The FSC had no

foundation in an established business based in the U.K., it had a very small

head office at home, it raised equity from domestic investors and committed

these funds overseas in sectors characterized by relatively unsophisticated

technology. While the “classic” integrated multinational firm appeared in

technologically advanced industries to transfer production expertise,

managerial know-how, or brand identities overseas, the FSC focused on single

function operations mainly in mining, infrastructure, or plantation projects.

Wilkins found that many FSCs were short-lived-they proliferated especially

between 1880 and 1914-either because they were financial shams or because they

lacked the managerial capability to survive and prosper. Although the FSC

differed markedly from hierarchical multinationals, it did support direct

foreign investment as opposed to the passive portfolio type of investment that

made up most of Britain’s overseas commitments. The FSC proved to be something

of a misnomer,

however, since they were usually affiliated with clusters of enterprises that

provided through

contractual as opposed to hierarchical devices a range of supporting services,

including, management, distribution,

transport, and procurement. In some cases, FSCs were adjuncts to merchant

groups and overseas business networks.

The present volume, which Wilkins edited with Harm Schoter, consists of a

series of theoretical, empirical, and statistical papers presented at the

Eleventh International Economic History Congress held in Milan in 1994.

This is not, however, a typical collection of conference

proceedings.

Instead, the authors have substantially revised their findings in light of

criticisms offered at the meetings and have taken up issues debated by the

other participants. The result is a very lively volume that reflects the

divergent opinions

and viewpoints of eighteen leading scholars in the field of multinational

business. It really is a hard volume to put down once one picks it up.

The Free Standing Company consists of four sections. The first consists of a

masterful introduction to the subject and the issues by Wilkins, followed by

two papers by Mark Casson and J-F. Hennart who debate the main theoretical

points, and concluded with a skeptical assessment by T.A.B.

Corley. The second part presents six empirical studies of countries and geo

graphic regions that were hosts to FSCs. P. Hertner examines Italy, N.

Gurushina

probes the Russian experience, and S. Chapman investigates India and the Far

East. R. Miller explore FSCs on the West Coast of South America, R. Liehr and

M. E. Torres Bautist a cover Mexico, and T.

Szmrecsanyi looks at the Brazilian sugar industry. The third section considers

countries from which FSCs originated. B. Gales and K. Sluyterman evaluate the

Dutch evidence, while Harm Schoter examines Belgium, Germany,

and Switzerla nd. Geoff Jones considers British banks as FSCs, W.J. Hausman and

J.L. Neufeld assess U.S. overseas investments in utilities, and G.

Marchildon writes on Canadian FSCs in the same sector. In the final section,

Wilkins returns with an overview of the issues debated, an assessment of the

usefulness of the FSC concept, and a list of suggestions to guide the direction

of future work in this field.

Wilkins proposes that the FSC provides an idea of analytical and heuristic

value. It has led to quantitative reassessment of the size of direct foreign

investment relative to portfolio flows and attempted to compare the extent of

FSC investment with that undertaken by the integrated U.S.-style firms.

Clearly, the FSC is a slippery concept: the papers reveal the problem of

accurately determining national origins and the ways in which it challenges

institutional theory. What is particularly fascinating in this regard is the

way the FSC acted as an intermediate mode, or contractual device, for arranging

various types

of agreements between a network at home with another network operating abroad.

With small, “lean” headquarters, the FSC as an instrument for exerting control

over offshore business is the subject of debate. Here, it may be useful to

consider different gradients and distinct types of influence projected by both

the head office and the overseas unit. The specific nature of those assets

(other than capital)

that FSCs transferred abroad is another focal point for searching discussion.

Linked to these issues is consideration of the sectors FSCs invested in: what

was their competitive advantage as co-ordinating instruments? In this regard,

the characteristics of their home and host countries are important as is the

broader social and political context they operated in. The relationship

between FSCs and the clusters of enterprises that supported them is another

fascinating area, and a number of chapters identify promising approaches for

future work. Finally, the reasons for the decline–but not the complete

disappearance–of these firms raises questions about institutional durability

in

the face of environmental change.

The range of concerns raised by the concept attests to its value and must

attract a wide readership to this volume. Those interested in institutional

economics will find the theoretical chapters and the case studies particularly

stimulating. The book will be useful to scholars of multinational enterprises

of all types, international business, and, of course, business and economic

history. The volume will also serve as a teaching tool for showing advanced

students how leading authorities develop questions and refine their methods of

inquiry while they grapple with the implications of a new concept. Finally,

The Free Standing Company

provides a

model for anyone intending to arrange for the publication of conference

proceedings in a way that closely integrates individual contributions, provides

complementary perspectives on a central topic, and preserves the true spirit of

scholarly inquiry.

1.

Mira Wilkins, “The Free-Standing Company, 1870-1914: An Important Type of

British Foreign Direct Investment,” Economic History Review 41, no. 2

(1988): 259-282.

Subject(s):Business History
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Economics of World War II: Six Great Powers in International Comparison

Author(s):Harrison, Mark
Reviewer(s):Mills, Geofrey T.

Published by EH.NET (July 1999)

Mark Harrison, editor, The Economics of World War II: Six Great Powers in

International Comparison. Cambridge, UK; Cambridge University Press, 1998.

xiii + 307 pp. $49.95 (cloth), ISBN: 0-521-620465.

Reviewed for EH.NET by Geofrey T. Mills, College of Business, University of

Northern Iowa.

Scholars and students of World War II will find this collection of essays an

extremely useful addition to their libraries. The essays cover the six major

antagonists of the war: Germany, Japan, Italy, the Soviet Union, the UK and

the US. The editor succeeds in achieving a major goal of the book which is to

“provide a text of statistical reference for students and researchers

interested in international and comparative economic history,

the history of WWII, the history of economic policy, and comparative economic

systems.” While this is an ambitious goal, these essays provide insight into

these issues, and, where possible, answers to important questions.

Mark Harris on has organized this book around three key questions. What

contribution did economies make to war preparedness and to winning or losing

the war? What was the effect of wartime experiences on post war fortunes? Did

those who won the war then lose the peace? Given these questions, economic

growth as effected by military mobilization becomes a central theme of the

book. In general all six authors devote space not only to the economics of the

war economy, but also to the periods before the war, and to the consequences

of World War II on long-run economic fortunes.

In the introduction, Harrison provides an extensive overview of the book.

This essay is essentially an extended quantitative discussion of the economic

and military elements of the war. In essence

, this section outlines the stark economic realities of conducting an extended

large scale war and concludes that a major reason, if not the prime reason, the

allies were victorious was due to their overwhelming advantage in the material

and logistic aspects of the conflict. Harrison also penned the article on the

Soviet economy. This piece is an impressive statistical analysis of the Soviet

war effort and its impact on post-war growth. Harrison does not conclude that

the collapse of the Soviet economy in

the 1980’s was a result of its success against Germany, but he does indicate

that success in World War II entrenched an inefficient production system and

extended credibility to a generation of leaders positively associated with the

defense industry.

The

result may well have been a first world military set upon a third world

economic system, and this arrangement could not be sustained indefinitely.

Hugh Rockoff’s article on the United States fills a gap in the literature on

the World War II years, especially the 1939-1943 period. Rockoff concentrates,

not unexpectedly, on the conversion from civilian consumption to war production

and the trade-offs necessary in this transition. Compared to the other

countries detailed in this volume, the US was afforded

the most leisurely approach to rearming as its frontiers were not threatened.

While he looks at a large array of statistics Rockoff tends to focus his

analysis on a total factor productivity model, and concludes that no single

factor accounts for the rise in output. Success came from an across-the-board

effort to mobilize resources. One major contribution which Rockoff offers has

to do with the source of America’s post-war prosperity.

He concludes that while war economics certainly played some role in post-WWII

growth, the most likely explanation for the prosperity was a change in the

macroeconomic regime. The Great Depression and World War II effectively

converted the economics profession to a Keynesian viewpoint whereby the

government was seen as a positive force in the economic affairs of the nation.

He concludes that the most long lasting legacy of the war was this Keynesian

viewpoint which reshaped the intellectual and institutional operations of

macroeconomics and relied upon monetary and fiscal policy tools for the

prevention of inflation and unemployment.

Stephen Broadberry and Peter Howlett offer an essay on the UK entitled

“Victory at all Costs.” The title is indicative of the economic effort which

Britain bent to the war effort. Their analysis indicates the huge scale of

mobilization which the Brits undertook–some 55.3% of GDP of 1943.

This section takes into consideration all aspects of the British economy and is

refreshing in its completeness and attention to close economic analysis. They

conclude that, not unsurprisingly, the war effort in Britain was dominated by a

Keynesian outlook, one which placed great faith in government controls.

One of the main virtues of this volume is its attention, in a single location,

to the totalitarian states. The essays on Germany by Werner Abelshauser;

Italy, by Vera Zamagni; Japan, by Akira Hara; and Russia, by Harrison, all

stand in stark contrast to those on the US and UK. The articles on Japan and

Italy are especially welcome because material on these countries is relatively

unavailable in English, and the comparative approach here makes these essays

both significant and enlightening. All four of these pieces deal with the

problems of managing a huge war effort with a totalitarian mechanism.

Decision making was in the hands of a small set of people, but there was,

in all cases, a surprisingly large amount of input. Hara points out that the

Japanese had an especially difficult time managing their far flung empire with

limited natural resources. And especially interesting in all cases is the

respective discussion of the long run impact of the war given the mass levels

of destruction, occupation and/or defeat which the war wrought on these

countries.

Harrison has put together an extremely useful book

on comparative economic history. The six essays are all very well done, and all

conclude with sections outlining the impact of the war on post-war growth. This

book adds to our understanding of war economics and the shape of the world

economy in the second half of the twentieth century.

Geofrey Mills is author (with Hugh Rockoff) of The Sinews of War: Essays on

the Economic History of World War II (Ames, IA: Iowa State University

Press, 1993) plus other articles and essays involving war economics.

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

The Encyclopedia of Native American Economic History

Author(s):Johansen, Bruce E.
Reviewer(s):Wishart, David M.

EH.NET BOOK REVIEW

Bruce E. Johansen, editor, The Encyclopedia of Native American Economic

History. Westport, CT: Greenwood Press, 1999. xvii + 301 pp. $85, ISBN:

0-313-3062300.

Reviewed for EH.NET by David M. Wishart, Department of Economics,

Wittenberg University.

Compiling any sort

of volume on Native Americans with “Encyclopedia” in the title is a daunting

task given the diversity of Native American cultures and experiences. Johansen

is the Robert T. Reilly Professor of Communication and Native American Studies

at the University of Nebraska at Omaha and would seem to be a good choice for

editing a work such as this one. He has written extensively about topics

related to Native Americans over the last two decades including five books

(three co-authored), one of them titled The Encyclopedia of Native American

Biography (New York:

Henry Holt, 1997). Contributors to The Encyclopedia of Native American

Economic History include Donald Grinde, Jr., Fred Leroy, Barbara A. Mann,

Jerry Stubben, and Michael Tate. Grinde, Mann, and Tate a re historians,

Stubben is a professor of political science, and Leroy is chairman of the Ponca

Tribe of Nebraska. Unfortunately, there are no economists among the

contributors and it shows in the product. If good economic history consists of

a combination

of history and economic theory on every page, as McCloskey has suggested, then

this book falls short of the mark by quite a distance.

The absence of any attempt at an analytical treatment of the economic history

of Native Americans is glaring. One could

convincingly argue that the title of the book should be simply The

Encyclopedia of Native American History. The history that is presented is

as much social, political,

military, environmental, demographic, and epidemiological as it is economic.

Certainly, the types of history covered in this volume represent important

lines of inquiry for students of Native American history and economic history.

But a proper synthesis of economic theory, quantitative analysis, and Native

American history remains to be presented.

Johansen’s volume begins

with the all-too-short entry (four pages) “Agriculture, Native American” and

continues through the alphabet with just

under two hundred entries contained in 300 pages including a bibliography and

index. Each entry is followed by a list of several references. This approach

could work. However, with few exceptions, the entries are too short to offer

anything but a cursory introduction to the topic discussed.

In many cases, important works are left out of the list of references. For

example, R. Douglas Hurt’s excellent book, Indian Agriculture in America:

Prehistory to Present (Lawrence, KS: University Press of Kansas, 1987), is

absent from the first entry on agriculture. Theda Perdue’s work, Slavery and

the Evolution of Cherokee Society: 1540-1866 (Knoxville: University of

Tennessee Press, 1979), is missing for the Cherokee economy entry. The Slavery

and Native Americans entry contains no reference to the enslavement of African

Americans by Native Americans in the southeastern United States,

surely an important issue in the economic history of Native Americans. No

mention is made of Mary Young’s classic volume, Redskins, Ruffleshirts and

Rednecks: Indian Allotments in Alabama and Mississippi, 1830-1860 (Norman,

OK:

University of Oklahoma Press, 1961), in the history of land allotments to

Native Americans that is presented.

These criticisms aside, some of the entries are quite good. For example,

the Haudenosaunee (Iroquois) economy receives more detailed treatment over 15

pages and comes the closest of any of the entries in the book to representing

an analytical approach to Native American economic history. The entry stresses

gendered production in its explanation of Iroquois women’s

agriculture and men’s forest husbandry. The view presented is that gendered

production should not be interpreted as stemming from male domination, but

rather from a theory of cosmic balance, the “principle of the Twins,” that

undergirds Iroquois institutions. This essay is especially engaging because it

provides an explanation of Native American economic behavior in the context of

Native American institutions. Judging from contemporary reports, the Iroquois

institutions were highly successful at organizing the production of substantial

surpluses of food to support prosperous and powerful communities.

The gambling entry provides considerable information on an important

contemporary economic topic in Native American society. With the exception of

the Akwesasne Mohawks of St. Regis in Upstate New York, where violence erupted

between supporters and opponents of gambling, the portrayal of gambling

operations on Native American reservations is largely positive.

Communities previously mired in poverty have seen astounding increases in their

incomes as a result of casino gambling. The operations are typically

associated with significant expansion of employment opportunities.

Despite the wide diversity of experience among Native American people,

commonality exists, so there is, understandably,

considerable overlap in the topics discussed in many of the entries. For

example, all communities had first contact experiences with whites. Typically,

these first contacts involved trade, which for an economic historian, sets the

stage for consideration

of attitudes toward exchange among Native Americans and Europeans. Exchange

was usually followed by the introduction of disease to Native Americans and

warfare between Native American and European communities, again setting up an

opportunity for an economic historian to consider the impact of huge losses of

human capital and land on Native Americans. Succumbing to the depredations of

disease and warfare, most Native Americans have more recently accepted removal

to reservation lands followed by attempts at rebuilding their cultures often

with the involvement of the federal government. Here, the challenge for

economic historians is to describe the political economy of interaction between

Native Americans and the federal government.

Rather than attempt to

present an introduction to Native American economic history via an

encyclopedia, it may be more fruitful to pursue an approach that emphasizes

these common experiences. A fuller, more coherent presentation of Native

American economic institutions and their performance prior to and after

contact with Europeans would be possible with the discussion arranged around

economic processes such as exchange, gains and losses of human and physical

capital, and the political economy of relations between Native Americans and

the federal government.

While Johansen’s volume fails to fully satisfy the need for an economic history

of Native Americans, it does bring together a wide array of accounts and

sources that will no doubt be a part of future work in the field. In

doing so, this book will prove useful to many students of Native American

economic history.

David M. Wishart Department of Economics Wittenberg University

Wishart is currently at work on a paper that compares Cherokee and white

agriculture during the antebellum period in Georgia and Alabama. His article,

“Could the Cherokee Have Survived in the Southeast?” appears in

The Other Side of the Frontier: Economic Explorations into Native American

History, edited by Linda Barrington (Boulder, CO: Westview P ress, 1999).

David M. Wishart should not be confused with David J. Wishart, who also writes

on topics related to Native American history.

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

Secret Origins of Modern Microeconomics: Dupuit and the Engineers

Author(s):Ekelund Jr., Robert B.
Hebert, Robert F.
Reviewer(s):Boumans, Marcel

Published by EH.NET (July 1999)

Robert B. Ekelund, Jr. and Robert F. Hebert. Secret Origins of Modern Microeconomics: Dupuit and the Engineers. Chicago: University of Chicago Press, 1999. xvi + 468 pp. $40.00 (cloth). ISBN: 0-226-19999-1.

Reviewed for EH.NET by Marcel Boumans, Department of Economics, University of Amsterdam.

Appropriated Origins of Microeconomics

Secrets should be divulged and not belong to a few only. Therefore, right from the start the secret of the origin of modern microeconomics is given away by presenting it as the main thesis of this book, namely that “Microeconomics as we now know it was developed first and foremost by engineers rather than economists, and that its origins were French rather than British” (p. xi). So right from the beginning we know where we are and this book is seemingly set up to prove this claim. That is a pity, because it puts this book into a historiographically questionable framework: Whig history with the phrasing that belongs to it. “French econo-engineers, and a few kindred ‘foreigners’ who were drawn into their orbit, were not merely forerunners of neoclassical microeconomics: they were its inventors” (p. 11). The next phrase is an even better example of this framework: “[T]he theory of utility and demand emerged like a chrysalis from the empirical cocoon of more than four decades of engineers’ practical attempts to calculate and understand value” (pp. 75-6).

This is a pity, because this historiographical strait jacket hinders us from seeing the real value of this work: Robert Ekelund and Robert Hebert convincingly argue that the intellectual tradition of microeconomic inquiry can be traced back to the works of the members of the Corps des Ingenieurs des Ponts et Chausses (French corps of state civil engineers), most notably Jules Dupuit (1804-66). This is a rich book that discloses materials that before were inaccessible to historians of economics. They were inaccessible for two reasons: First, most of the French works discussed by Ekelund and Hebert have not been translated, which is certainly a handicap in a discipline whose language is predominantly English. The second reason is that materials mainly belong to the engineering literature, which is not the usual place to look for the origins of economics. This latter attitude has changed among current historians of economics, thanks to contributions like those of Ekelund and Hebert.

The analysis of the French engineering literature (chapters 3-12) is preceded by a very informative chapter on French educational institutions, before and after the French Revolution, which explains partly why in France the contributions of the engineers were neglected by economists. The history of the French econo-engineering starts with an overview of benefit-cost studies from the seventeenth century onwards. Then it is shown how Say’s value theory, specifically demand theory, was perceived by the engineers. Of importance was the discussion of whether and how (marginal) utility should be incorporated in the demand analysis. Next the authors give an exposition of (mainly) Dupuit’s treatment of competition, monopoly, duopoly and costs-based pricing. Next comes an examination of Dupuit’s analysis of price discrimination. The remaining chapters discuss the issues of spatial economics, the empirical studies of the engineers, and Dupuit’s views on property and policy. Altogether these chapters give a clear exposition of the economic problems that French ponts engineers faced in era of major changes in the French infrastructure. If you want to, you can already recognize elements of the later microeconomics. But why should these works of the French engineers only have value in relation to modern microeconomics? On the contrary, this book shows how engineers dealing with their daily and earthly problems came to ingenious solutions that are very instructive to modern economists. For too long they were neglected in the history of economics. Ekelund and Hebert’s tribute to their work remedies this shortcoming.

(Robert B. Ekelund, Jr., is the Edward K. and Catherine L. Lowder Eminent Scholar at Auburn University. Robert F. Hebert is the Russell Foundation Professor of Entrepreneurial Studies and professor of economics at Auburn University.)

Marcel Boumans is Lecturer in History and Methodology of Economics at the University of Amsterdam in The Netherlands. His current work involves models and measurement in economics.

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Subject(s):Development of the Economic History Discipline: Historiography; Sources and Methods
Geographic Area(s):Europe
Time Period(s):19th Century

Studies in the Economic History of the Pacific Rim

Author(s):Miller, Sally M.
Latham, A.J.H.
Flynn, Dennis O.
Reviewer(s):Croix, Sumner La

Published by EH.NET

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Sally M. Miller, A.J.H. Latham, and Dennis O. Flynn, editors, Studies in the Economic History of the Pacific Rim. Routledge Studies in the Growth Economies of Asia. London and New York: Routledge , 1998. 253 pp. $90 (cloth), ISBN 0-415-114819-7.

Reviewed for EH.NET by Sumner La Croix, Department of Economics, University of Hawaii and Barnard College.

In the introduction to this volume, Dennis Flynn and Arturo Giraldez write that they searched “for books and articles which might provide an overview of over four centuries of Pacific Rim interchange. For years scholars around the world have given the same answer: no long-term overview of the Pacific Rim exists in any language.” Since the failure by economic historians “to acknowledge an over 420-year trade relationship covering one third of the globe’s surface seemed like a glaring omission,” the editors and the University of the Pacific decided to sponsor “the world’s first conference on Pacific Rim History” in May 1994 (p. 3). The 14 papers in this edited volume are drawn from the papers presented at that conference.

In his essay “No Empty Ocean”, Paul D’Arcy sets the tone for the volume by observing that few scholars “have attempted to construct an image of the Pacific Ocean as a coherent entity in the way that Fernand Braudel has for the Mediterranean or K.N. Chaudhuri has for the Indian Ocean” (p. 21). Anthony Reid has, however, made a notable start for a corner of the Pacific with his excellent two-volume (1988, 1993) study of trade and growth in Southeast Asia from 1450 to 1680. D’Arcy’s observation raises, however, an important question for this volume: Is building a coherent image of the “Pacific Rim” a more quixotic enterprise than those undertaken by Braudel or Chaudhuri?

These are some reasons to think so, at least prior to World War II. First, the Pacific Ocean is surely a good organizing principle for a geographic region, but economies that are part of a geographic region may not be part of the same economic region unless they are linked by significant trade, investment, or migratory flows. Yet many economies in the Pacific Rim have for long periods engaged in little foreign trade or traded only with their proximate neighbors. Japan’s government heavily restricted foreign trade during the Tokugawa period until Admiral Perry’s black ships opened Japanese ports in the 1850s. Korea had similar trade policies until Japanese military pressure along the lines of the American model forced open foreign trade in the 1870s. Before western contact in 1778, Hawaii had no regular trade with other Pacific cultures due to its geographic isolation in the North Pacific and risky maritime technologies for sailing to distant countries.

Second, several essays in this volume highlight the important diffusion of ideas, technologies, flora, fauna, and disease that brought Asia-Pacific societies into contact with one another. Until the 1760s this diffusion was often the result of sporadic or accidental contacts rather than the result of ongoing trade, investment, or migratory flows. Although these spillovers linked many societies within the Pacific Ocean in a path-dependent fashion, the lack of regular contacts often precluded the specialization, trade, and deeper cultural exchanges that serve to link societies into a larger regional economy, polity, and culture.

Third, scholarly work on trade in the Pacific Ocean can only be productive if it is founded upon historical or archaeological records of trade. A.J.H. Latham’s essay, “The Reconstruction of Hong Kong Nineteenth-Century Pacific Trade Statistics”, provides a good example of the careful research needed to construct fundamental data series. Latham’s essay highlights the under-use of colonial records for Indonesia, the Philippines, Vietnam, and Burma. The extensive efforts undertaken to document colonial data in Indonesia cry out to be undertaken for other colonial regimes. [See the 15-volume Changing Economy of Indonesia series.] While several major research projects dedicated to building historical data on critical economic variables in East and Southeast Asia are now underway, such efforts need to be much higher on the research agendas for historians and economic historians studying Pacific Rim trade.

With the lofty aim of producing a history of trade in the Pacific Rim over the last 400 years, the volume opens with eight “overview” essays summarizing various aspects of the interaction between Pacific Rim economies. Essays by Paul D’Arcy (“No Empty Ocean: Trade and Interaction across the Pacific Ocean to the Middle of the Eighteenth Century”), Lionel Frost (“Coming Full Circle: A Long-Term Perspective on the Pacific Rim”), David Chappell (“Peripheralizing the Center: An Historical Overview of Pacific Island Micro-States”), John McNeill (“From Magellan to MITI: Pacific Rim Economies and Pacific Island Ecologies Since 1521”), Arthur P. Dudden (“The American Pacific: Where the West Was Also Won”), Annick Foucrier (“The French Presence in the Pacific Ocean and California, 1700-1850”), and Douglas Daigle (“Environmental Impacts of the Pacific Rim Timber Trade: An Overview”) raise, however, questions about the intended audience for the book. While these essays provide competent, brief surveys of the existing literatures, they break little new ground and, due to their brevity and enormous scope, are not sufficiently exhaustive or critical to focus other economic historians and historians on vital research questions at the frontier of these fields. Instead, the essays seem directed to a more general readership requiring only a brief introduction to each topic.

The other seven essays are more narrowly focused on country-specific industries and institutions significantly related to international trade. Karen Clay’s creative essay (“Trade, Institutions, and Law: The Experience of Mexican California”) nicely applies Avner Greif’s theory of merchant coalitions to California merchants engaged in international trade. Tsu-yu Chen (“The Development of the Coal Mining Industry in Taiwan during the Japanese Colonial Occupation”) assembles output and export data covering Taiwan’s coal mining industry but only begins the task of relating industry behavior to Japanese government policies on energy in the 1920s and 1930s. Frank King (“British Overseas Banking on the Pacific Rim, 1830-1870”) provides a detailed essay on the development of British banking in Asia and briefly discusses how the banking institutions facilitated regional trade. David St. Clair (“California Quicksilver in the Pacific Rim Economy, 1850-90”) provides an interesting analysis of U.S. exports of quicksilver to China. And R. Bin Wong”s suggestive essay (“Chinese Views of the Money Supply and Foreign Trade, 1400-1850”) contrasts Chinese attitudes towards amassing large sums of bullion with Western attitudes and in the process raises more questions than the very brief treatment can answer.

The editors rightly suggest (p. 17) that understanding the powerful influence of China on Asia-Pacific trade should be a central focus of future research. For more than a century after 1571 China imported 50 tons of silver annually from Spanish colonies in the Americas, thereby providing ongoing linkages between China, the Americas, and Europe (if not between China and other Pacific Rim economies). The sheer magnitude of China’s silver imports reinforces new research on China’s living standards. Ken Pomeranz (1997) has recently argued that 18th century living standards in the lower Yangtze reg ion of China were roughly comparable to those observed in England and the Low Countries. With its high per capita income and high population, China’s trade with other Asia-Pacific societies is central to any discussion of Pacific Rim trade between 1500 and 1850 and needs much more careful examination by scholars.

The essays in this volume provide the interested reader with brief overviews of trade between various Asia-Pacific economies, but, as the editors acknowledge, “most of the work [on this topic] remains to be done” (p. 17). A core research agenda focused on careful assembly of fundamental data on Asia-Pacific economies from under-exploited archival and archeological sources is the key to future progress.

References

Pomeranz, Kenneth (1997), “Rethinking 18th Century China: A High Standard of Living and its Implications,” Unpublished paper, University of California, Irvine.

Reid, Anthony (1988, 1993), Southeast Asia in the Age of Commerce, 1450-1680. 2 vols. New Haven: Yale University Press.

Sumner La Croix’s research focuses on the economic history and development of Asia and the Pacific Islands. He is currently the Alena Wels Hirschorn Visiting Professor at Barnard College.

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Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Time Period(s):General or Comparative