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Politics and Property Rights: The Closing of the Open Range in the Postbellum South

Author(s):Kantor, Shawn Everett
Reviewer(s):Halcoussis, Dennis

EH.NET BOOK REVIEW

Published by EH.NET (August 1998)

Shawn Everett Kantor, Politics and Property Rights: The Closing of the Open Range in the Postbellum South. Chicago, University of Chicago Press, 1998. x + 187 pp. $18.00 (paper), ISBN 0-226-42377-8

Reviewed for EH.NET by Dennis Halcoussis, Department of Economics, California State University, Northridge.

Shawn Kantor, an economist at the University of Arizona, provides us with an in-depth look at the closure of the open range in postbellum Georgia. At first glance, one might think this detailed study of two Georgia counties would only be of interest to those studying the history of Southern agriculture, but Kantor covers a lot of interesting territory in less than 200 pages. Kantor considers the closing of the range as a means to study changes in institutions, and unlike some journal articles addressing the subject, the book format allows Kantor to study the transition from all possible angles, rather than just testing one particular hypothesis. This makes it easier for the reader to focus on the “big picture.” Kantor looks at the transition by discussing institutions, the economics and ideology of property rights, the politics of postbellum Georgia, and the effect of closing the range on the development of Southern agriculture.

Some economic historians have felt that after the civil war, institutions in the South were stagnant. Kantor puts forth a different point of view, studying the transition in Georgia from a fence law to a stock law regime. A fence law regime means there are open ranges, those who own animals can let them run freely, and those growing crops must build fences to keep the animals out. A stock law regime means a closed range, those with animals must fence them in to keep them off of others’ land. Previous writers thought the choice between these two regimes was a class issue. The stock law would minimize fencing costs, but it could hurt those who might end up paying more wealthy farmers for the right to let their cattle graze. However, the fence law (open range) caused an overinvestment in animals, since one didn’t have to pay the cost of feeding them, and those growing crops had to bear the cost of building fences. Kantor uses regression analysis to estimate the discounted value of net expected profitability from enacting stock laws (closed range) in Georgia, and finds that although some counties would suffer, overall the state would gain. From 1880 to 1900, farm property values increased by an estimated 30.6% in counties that enacted the stock laws compared to those that did not.

The most efficient institutions may not prevail because of politics. In Chapter 3, Kantor looks at Jackson and Carroll counties. Both voted down stock laws in the 1880s, even though each county’s income would have increased by passing the law. Using regression analysis, Kantor provides evidence that stock laws were defeated in these two counties because they were not in the financial interest of a majority of voters, although each county would have benefited in the aggregate. The minority who would gain could not “buy out” enough of the majority who would lose, because any such contract would have been poorly enforced. Thus, the stock law was defeated in these two counties even though aggregate income would have increased.

The regressions in this chapter also provide strong evidence to support Kantor’s contention that the voting was not divided along simple class lines. Other scholars have assumed that wealthy farmers favored closing the range, and the poor wanted to keep open ranges. However, wealthy farmers might want to keep the range open if they owned a lot of livestock, and poorer farmers without much livestock would favor a closed range. Kantor’s point is that voting behavior can not be predicted by the size of the farm alone.

In Chapter 4, Kantor discusses how the contract problem discussed in Chapter 3 was resolved. A new provision was added to proposed stock laws, whereby tenants would be guaranteed rights to pasture their animals on their landlord’s property. This “bribe” was often sufficient to win over enough votes to pass the stock law. In some cases, the stock law was forced on a region by the state legislature, rather than by county (or even militia dis trict) election. Kantor found that in these cases, yeoman farmers who did not benefit from the new pasture clause were able to block the stock law, and owners of larger farms would appeal to the state legislature to get the stock law through.

In discussing the politics of property rights, Kantor looks at three hypothesis of voting behavior as applied to Georgia legislators: capture theory (legislators voted to further the interests of the most wealthy landholders), political self-interest (they voted to maximize the probability of re-election) and economic self-interest (they voted for laws that would maximize their wealth from their “regular” profession; many of the legislators were farmers themselves). Using logit regressions with the vote for or against a stock law as a dependent variable, Kantor finds the empirical evidence most strongly supports the political self-interest hypothesis, with the economic self-interest hypothesis “coming in second.”

Next, an interesting but tangential question is addressed: Were game laws restricting hunting and fishing on unfenced property established for the purpose of conservation or for “social control”–to force blacks to work on farms, instead of “living off the land?” Laws restricting hunting on the unenclosed land of one’s neighbors were in effect for 22 counties, so it seems like the laws were for conservation. Labor was mobile, so the law would have to apply to the whole state if landowners wanted to make it more effective for controlling black labor. Kantor runs regressions concerning the characteristics of counties that passed such laws, and finds evidence to support the hypothesis that the laws were passed for conservation purposes, and to strengthen private property rights, not to control black labor. In fact, counties with more tenant-farmers were less likely to pass laws restricting access to hunting and fishing areas because these laws might cause the tenants to leave the area.

In the last chapter, Kantor explores the possibility of a connection between the stock law controversy and support for Southern Populism, and does not find a clear conclusion. Kantor realizes that expanding the sample to include more than two counties would lead to more definitive results.

By following a multi-faceted approach, Kantor has given us an insightful look at how institutions change, and how the closed range affected the development of southern agriculture. I look forward to incorporating the lessons of this book into my lectures.

Dennis Halcoussis Depart ment of Economics California State University- Northridge

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Subject(s):Agriculture, Natural Resources, and Extractive Industries
Geographic Area(s):North America
Time Period(s):19th Century

Socializing Capital: The Rise of the Large Industrial Corporation in America

Author(s):Roy, William G.
Reviewer(s):Levenstein, Margaret

H-NET BOOK REVIEW Published by H-Business@eh-net.muohio.edu (August, 1998)

William G. Roy. Socializing Capital: The Rise of the Large Industrial Corporation in America. Princeton, N.J.: Princeton University Press, 1997. xv + 338 pp. Figures, tables, notes, bibliography, and index. $35.00 (cloth), ISBN 0-69-104353- 1.

Reviewed for H-Business by Margaret Levenstein , University of Michigan

This book is extraordinarily ambitious and wide-ranging in its treatment of a very significant topic. At times Roy focuses specifically on the merger wave of the 1890s during which many large firms turned to public capital markets to facilitate mergers. But much of the book, and, from my perspective, the most interesting parts, take a much longer term view, examining changes in property rights and the use of those rights by railroads and then manufacturing firms over the course of the century. Most of the central points of the book I think are correct and many of Roy’s methodological points provide useful correctives to tendencies in business and economic hi story. There were sections of the book that I found insightful bordering on brilliant. There were also sections of the book that I thought were unconvincing, and others that were simply wrong.

The central points of the book can be summarized as follows :

1. The large, widely-held manufacturing corporation is a social creation, not a natural entity.

2. The corporation as it exists today is historically contingent and developed from pre-existing forms. In particular, it evolved from the public corporation, used by the state to accomplish public purposes and was given special privileges (monopoly, eminent domain, limited liability) in order to do so. The happenstance convergence of the economic crisis of 1837, the emergence of the railroad, and the po wer of the “anti-monopoly, anti-state” version of Jacksonian anti-corporatism privatized and democratized the corporation. Thus the corporate form retained many of its privileges (limited liability, alienability of ownership) but made those privileges available to all through general incorporation laws. In doing so, the corporation lost its public purpose and its public accountability (as well as its claim to monopoly).

3. There existed historical alternatives. Manufacturing could have continued to be conducted in firms that were not corporations. The corporate form could have retained its public purpose and its public accountability. The state could have remained a more active economic player in its own right — owning railroads or banks or manufacturing as today the state owns highways. It could have developed a stronger regulatory apparatus, developing the capability to administer public enterprises and assure that those who received the privilege of incorporation fulfilled a public responsibility. In other words, the boundaries between public and private could have been drawn quite differently in many dimensions.

4. Manufacturing firms followed the incorporation practices of railroads because that was required by investment banking firms to get access to large pools of capital, not because the corporate form was demanded by manufacturers to coordinate increasingly complex, large-scale, high-throughput technology.

5. Manufacturing firms (the “trusts”) turned to New Jersey’s incorporation law in order to legalize collusive activities, not to coordinate increasingly complex, large- scale, high-throughput technology.

6. The corporation was privatized – lost its public use and public accountability – and the corporation was socialized – its securities widely owned but no longer controlled by owners – not because this organizational form was the most “efficient” way to organize manufacturing production. Rather, manufacturing firms embrace and continuing use of the corporate form was the result of a “logic of power.”

Roy uses several methods to make his case. He first presents a theoretical argument that a “social logic based on institutional arrangements, including power” (p. 6) is more useful for understanding the dimensions and dynamics of the economy than is an analysis based on “the logic of efficiency.” The latter position he identifies with Chandler, and much of the book is cast as a polemic against Chandler. While I am very sympathetic to his historicizing and “de-naturalizing” of the corporation, I thought this framing of the issue was largely counter- productive. His presentation of Chandler sometimes bordered on caricature. Chandler’s point is not that managers are concerned only with efficiency or that clever managers always pi ck the most efficient organizational design. His point is that it was only in firms where managers made choices that gave the firm a competitive advantage that the firm survived. But Roy ignores the role of competition. He argues that “efficiency theorists” are functionalists, simply providing an ex post rationalization of whatever happened to emerge. While he is certainly correct that some business history is functionalist, and neo-classical economic historians are apt to fall back on “best of all possible worlds” descriptions of whatever institutions exist, the competitive model does provide a story of why it is that we should think that those that survive are different from those that didn’t; their survival is taken as an indication that they are better at competing. Thus it would have been useful to explain how power influenced who survived the competitive process and how power determined the rules of the competitive process. That is, it would have been useful to explain why the firms that survive the competitive process are not necessarily the most efficient. Instead, for the most part, Roy simply ignores competition as a significant force in capitalist economies, arguing that “the social arrangement that governed American industry could only vaguely be described as a market. American businessmen have always been aware that they share common interests at least as much as they compete over conflicting interests” (pp. 176-7). Roy is absolutely correct that American businessmen have often cooperated. But that does not mean that there is no market; it means that those who have been able to cooperate, and better yet, dominate cooperative agreements, are the firms that have survived and prospered. I would dispense with the word “efficiency” altogether. A more useful question is whether firms survived because they were good at inventing new, lower cost technology, good at getting workers to work harder, good at getting tax breaks from local governments, good at increasing demand for their product, good at getting access to others’ property through eminent domain, good at getting cheap capital because of connections to investment bankers. Whether or not any of these particular attributes improves efficiency or is a Good Thing for society as a whole (as if there is such a thing) is an altogether separate question.

Roy then turns to an econometric test of the “power” and “efficiency” explanations. He asks which industries were more likely to adopt the corporate form during the 1890s merger wave (which he measures by their use of publicly-traded securities, thus excluding incorporated firms that were not traded on public exchanges). He finds that average size of the firm and capital intensity are significantly and positively related to an industry’s use of publicly-traded securities. He also finds that labor productivity was negatively related to the use of such securities and that industry growth rates were insignificant. He concludes from this that Chandler and “the efficiency theorists” are wrong. Size matters even when controlling for other things. Labor productivity is lower in “incorporated” industries, so it must not be that incorporation makes firms more efficient. There are several problems with this analysis: he looks only at the 1890s and therefore conflates where the merger wave took place with where the corporate form endured. He groups “Chandlerian” causes of incorporation (growth and capital intensity) with effects (i.e. labor productivity); perhaps the negative relations hip between productivity and incorporation reflects the need for organizational change in low-productivity industries? His unit of analysis is the industry, which groups together large and small firms, and he treats large industries and small industries equivalently. Are we surprised that there are no large firms in the hammock or lapidary works industries despite a faster rate of growth than electrical machinery (p. 30)? Chapter two, which presents this econometric analysis, should be skipped entirely by anyone who has read Naomi Lamoreaux’s The Great Merger Movement (and if you haven’t read it you should). Lamoreaux presents a much more convincing and complete econometric rejection of the Chandlerian contention that the merger wave of the 1890s was motivated by the need for vertical coordination of inherently high-throughput technology. Save your time for the more edifying chapters to come.

In Chapters 3 and 6, Roy compares the history of public enterprise, the legal rights of corporations, and the emerging dominance of “socialized capital” in three states: New Jersey, Pennsylvania, and Ohio. He examines the evolution of the corporation from a tool used by states to encourage economic development and raise revenues to its emergence as a private agent, available to all through general incorporation statutes with no public responsibility or accountability. Roy argues that the differences in the experience of public investment during the canal and early railroad period, as well as the political interpretations placed on that experience, determined the rules under which corporations operated in each state at the end of the century. New Jersey had the most limited experience with public corporations, both quantitatively and qualitatively. It participated as an investor in the Camden and Amboy, and was able to keeps its taxes low as a result, but the railroad controlled the state rather than the other way around. Pennsylvania had both mixed corporations in which it invested and public corporations. Ohio had the most activist policy, both the most successful- the Ohio canal system developed the region and integrated it into the national economy – and the most spectacular failure when logrolling resulted in the expansion of public subsidization of canals and railroads and nearly bankrupted the state. Roy examines the implications of these different experiences for three aspects of corporate law: the permissibility of corporations owning other corporations, the powers of boards of directors (relative to shareholders), and the extent of limited liability. Roy finds that in all three aspects of corporate law, the experience with public and mixed corporations during the canal era shaped state attitudes such that New Jersey’s corporate law was the most “privatized,” allowing corporations broad flexibility in owning other corporations, giving power to corporate boards, and extending unlimited liability through both a general incorporation statute and special charters. Ohioans were at the other end of the spectrum, suspicious of the corporate form, retaining double liability and strictly limiting the activities of corporations to those for which they were chartered. Roy finds that these differences in corporate law led to differences in the importance of corporate capital in the three states. While some of this difference in corporate capital obviously reflects capital mobility – corporations with operations elsewhere chartered in New Jersey to take advantage of its lax laws – Roy’s fundamental point is that business in Ohio was simply less likely to be organized within a corporation. Thus, he suggests, economic activity need not have taken place within the socialized corporation, or at least not within a corporation with no social responsibility . Where the state legislature was unwilling to confer such generous benefits on the corporation, businesses made do with other forms of organization.

This empirical conclusion supports Roy’s argument that there were actually two distinct political responses to the canal crisis within the Jacksonian anti-corporate movement. One demanded more accountability on the part of the quasi-public corporation (i.e. more government) while the other demanded privatization (less government). Roy makes the interesting argument that the privatization ideology won out because it was self-fulfilling. Suspicion of the state led to weak oversight. With no oversight, projects were corrupt or failed; that failure was then interpreted as the failure of public investment (p. 74). But it is not clear from his comparison of the three states that strong state oversight was ever really in consideration. As he shows elsewhere in the book, the choices considered were either democratization of access to corporate privileges through general incorporation statutes or limitation of those privileges by statutes such as Ohio’s requiring double liability and strictly limiting the activities of corporations to those for which they were chartered.

Here and elsewhere, Roy compares the choices made in the United States to those made in France where a strong and competent state apparatus was created. This comparative perspective, though presented more casually than those between the U.S. states, is often very helpful. Unlike the U. S. case where states competed with one another and were, therefore, forced into a prisoner’s dilemma race to the bottom in terms of the social responsibilities of private actors, France was able to chart a very different course. Whether the “strong state ” approach was one that could ever have emerged in the United States will, of course, be debated by many. But that is not Roy’s point. The point is that there is nothing natural or inevitable about the present configuration of rights and responsibilities that constitute the corporation.

Chapters 4 and 5 examine the way that the railroad and investment banking influenced the construction of the corporation. Many of the generalizations he makes in his history of the railroads will not sit well with most economic and business historians. One could read these chapters and think that the railroads were a failure, both privately and publicly. For the most part, neither was the case. And the reader might understandably be confused when he presents Rockefeller’s demand for railroad rebates as an example of how the railroads exercised power. But try to ignore that and focus on the his fundamental point. The financing of railroads was not simply corrupt, or political, or determined by power games among the major players (though all that was certainly the case). The development of institutions to finance railroads determined the set of institutions that industrial corporations could choose from when they needed to finance growth and short term operations. The structure of those inherited institutions favored concentrated over unconcentrated industries, favored incorporation and management-owner separation, perhaps favored some technologies, organizations of work, and regions over others. This point is important and profound. The evidence he gives in its support is not always well organized to make his point. But the challenge that he lays out is clear. The observed choices of corporations are not necessarily the optimal ones in a global sense. They are the choices corporations made given the incentives created by institutions created for a different purpose and as part of deeply politicized process.

Chapters 7 and 8 return to the merger movement of the 1890s. He correctly argues that it is wrong to see this period as one of a shift from a competitive market to an administered or monopolized one. U.S. firms had been cooperating to control prices in many industries throughout the nineteenth century. In fact, he argues, it is only with the emerging dominance of a “free market” ideology that the state makes the strong distinction, now taken for granted in anti-trust law, between contracts promoting trade and those in restraint of trade. Others will argue that there was a long-standing tradition in common law not to enforce contracts in restraint of trade. But there is also a long-standing tradition of allowing quasi- public organizations, such as guilds and corporations, to engage in behavior that we would today think of as monopolistic. Roy perhaps takes this argument too far when he says, “If governments did not enforce contracts between buyers and sellers, markets would collapse by the same sort of opportunism that wrecked the pools” (p. 190). While the current state of the economy in Russia reflects the underlying truth of this statement, we should also recognize that there is not the same inherent incentive to deviate from a mutually beneficial contract to exchange that there is with a contract to restrict output or fix prices. It is true that the state creates and enforces markets, but there is a difference between a self-enforcing contract and one that is inherently a prisoners’ dilemma.

This chapter includes a very interesting section examining the interaction between the first use of the New Jersey incorporation statute and the terms of the statute. He not only shows that the writing of the statute was the result of a complex political process. He also shows that the way that it was used differed substantially even from the purposes of the first corporations for which it was written.

In these chapters he presents the histories of particular industries, arguing that their use of the corporate form cannot be explained by changes in their technology (i.e. by managerial demand). The histories of the sugar and tobacco industries, familiar to business historians, are re-told in a new light. Rather, he argues, the desire for monopoly control and the expectation of financiers that the corporate form would be used, led firms to incorporate. He also makes the interesting argument that the merger wave of the 1890s changed the expectations of investors so that “when a group of entrepreneurs wanted to establish a large-scale industrial enterprise, henceforth the standard procedure would be to mobilize the resources of the corporate institutions by recruiting investment bankers, brokerage houses, and the investment press in order to attract sufficient capital” p. 254. Prior to the 1890s it was deemed acceptable for Andrew Carnegie to operate his steel business as a limited partnership; after the merger wave of the 1890s investors perceived non- corporate firms as higher risk. Trying to operate outside the corporate sphere was now a more costly choice, but only because the prior history had changed investors’ (and investment bankers’ in particular) ideas about how business had to be organized.

The comparison of the three states is intended to suggest that there were various paths that the development of the corporation could have taken. But sin ce the corporation is now firmly ensconced in all three a more overarching point is that competition between the three states limited the power of any individual state to determine the structure of the corporation. The three states are also relatively similar in terms of their level of economic development, industrialization, and integration into the national economy. A slightly different story might have been told, and Roy’s argument made stronger, if he had looked at states that were less developed and continued to have more active state economic development policies throughout the century, including state investment in banks, railroads, and corporations. Did those states making post bellum public investments in corporations demand public accountability? Or had the prevailing ideology of the private corporation so come to dominate by the second half of the century that even where there was substantial and direct state investment the corporation was seen as an autonomous and privately responsible agent?

Roy makes several important methodological points that economic and business historians should heed. First, he emphasizes that actors can exercise power without power being the motivation for their actions. Individuals and groups exercise power when their actions determine the choice set or the constraints faced by others. I think this broad definition of power is very useful and would help economic and business historians to understand and analyze political movements, from late 19th century populism to late 20th century resistance to free trade. But defined this broadly we also have to recognize that the exercise of power is not inherently a bad thing. For example, in a capitalist economy with strong patent protection technological innovation gives the innovator power. Users of older technologies cannot simply continue to operate as they have in the past. This is the creative destruction that Schumpeter celebrated- and it is really does destroy something that someone values. That’s why the technocratic distinction between efficiency and distribution that economists cling to is silly. Any policy choice that has a significant impact on the “efficiency” of the economy will also have distributional consequences. That doesn’t mean that we don’t want technological change. Much of the time we probably do. But this perspective forces us to acknowledge that there are social decisions to be made, not simply private actors doing whatever they please, and that those social decisions require tradeoffs. Second, this book will serve as an enormously useful corrective to the tendency among economists studying the firm, property rights, and institutions generally (a growing trend that is very healthy in and of itself) to follow Oliver Williamson’s “In the beginning, there were markets” approach. Roy argues forcefully, and correctly, that both the market and the firm are social constructions. That does not mean that they are arbitrary or unreal. It means that their structure and their existence are the result of past political decisions and the outcome of social and political conflict. This is also a useful corrective to an approach that conflates the notion of the existence of a market with “rational” behavior by individuals. The existence of a market changes how rational individuals behave. Competitive pressure forces rational individuals to calculate more, and it increases the weight of monetary factors in those calculations relative to very real concerns for community and the quality of human inter action. Economic historians recognize this effect of the market on individual behavior when they can cast it in a positive light (see Sokoloff’s 1992 work on the spread of markets and the rate of patenting, for example), but tend to downplay it otherwise (see Rothenberg 1992, for example).

Third, Roy makes an interesting case for an interplay between contingency and determinacy in the book. He argues for contingency in order to make the case that there is nothing natural or inevitable about the current institution of the corporation. The current configuration of rights and responsibilities that constitute the corporation is the result of highly contingent events in the past. But he does not accept the standard version of path dependence and raises questions that I have long thought were problematic with that approach. He makes clear that while the current construction of the corporation is contingent and path dependent in the sense that it would and could have been different if different events had occurred at key turning points (particularly during the 1830s canal crises), he does not see this as simply the result of chance. The key events were themselves the result of who had power at the time. This approach opens up a whole line of fruitful research in this area. Why was it that the response to the canal crisis was privatization rather than increased regulation? Why was it that some state constitutions were modified to limit direct involvement in economic activity and others weren’t? These were explicitly political decisions that had long term economic ramifications. Understanding the political forces behind these decisions would be very useful. Roy also makes the point, applicable quite generally to the path dependence approach, that what matters is not simply the cost of shifting from one path to another (e.g. from one keyboard to another) but who bears that cost. If those who have the power to make the decisions about whether to switch paths do not bear the costs, then the switch will appear “costless” (see McGuire, Granovetter, and Schwartz, forthcoming).

In making the argument for the contingency of the corporation Roy plays down some forces – powerful forces I am sure he would agree – that led to its current incarnation. On a mundane level he downplays competition among states allowed by the federal structure that led to a spiraling down of public responsibilities for private actors. But on a more basic level, the transformation of assets from things that natural individuals own, use, and are responsible for, to capital personified in the corporation, responsible no longer to the state and barely to its nominal owners, seems to me not a happenstance, contingent event. The corporation gives agency to capital. It’s not for nothing that we call it a capitalist economy.

Finally, Roy’s “de-naturalizing” of the corporation is a giant step forward for business history. So is his problematizing of the boundaries between private and public, the economy and the state, and the rejection of the dichotomy of an “interventionist state” and a “natural market.” As Roy makes clear, the state creates the market, so it is meaningless to talk of it intervening in it. That language simply serves to de-legitimize some actions of the state relative to others. Finally, acknowledging that there are social choices to be made that influence how the economy will function in the future is important, and not simply for academics. Post-cold war ideology presents the corporation not only as natural but all- powerful. It is good to remind people that they can, through social and political action, make choices about how such social creations operate.

Bibliography

Lamoreaux, Naomi R. The Great Merger Movement in American Business, 1895-1904. Cambridge, England: Cambridge University Press, 1985.

McGuire, Patrick, Mark Granovetter, and Michael Schwartz. Forthcoming. The Social Construction of Industry: Human Agency in the Development, Diffusion, and Institutionalization of the Electric Utility Industry. New York, N.Y. and Cambridge, England: Cambridge University Press.

Rothenberg, Winifred (1992). From Market Places to a Market Economy: The Transformation of Rural Massachusetts . Chicago, Ill.: University of Chicago Press.

Sokoloff, Kenneth (1992). “Invention, Innovation, and Manufacturing Productivity Growth in the Antebellum Northeast” in Robert Gallman and John Wallis American Economic Growth and Standards of Living before the Civil War (Chicago, Ill.: University of Chicago Press), pp. 345-378 .

Williamson, Oliver E. (1985). The Economic Institutions of Capitalism. New York, N.Y.: The Free Press.

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Subject(s):Markets and Institutions
Geographic Area(s):North America
Time Period(s):19th Century

The Vanishing Irish: Households, Migration, and the Rural Economy in Ireland, 1850-1914

Author(s):Guinnane, Timothy W.
Reviewer(s):Gemery, Henry A.

Published by EH.NET (August 1998)

Timothy W. Guinnane, The Vanishing Irish: Households, Migration, and the Rural Economy in Ireland, 1850-1914. Princeton, NJ: Princeton University Press, 1997. ix + 335 pp. $39.95 (cloth), ISBN: 0-691-04307-8.

Reviewed for EH.NET by H.A. Gemery, Department of Economics, Colby College.

Over the post-Famine years from 1841 to the eve of World War I, the Irish population fell from 8.2 million to 4.1 million–a complete reversal of the rapid population growth of the pre-Famine era. By 1881 nearly 40% of the Irish-born were living elsewhere. As late as 1911, with slowing emigration, 33% resided elsewhere (p. 104). In studying the why and how of this de-population, Timothy Guinnane (Yale University) examines, at the rural, household level, the decision-making giving rise to major features of that demographic experience: “the rarity of marriage, large families, …. extensive emigration” (p. 7). None of these features alone, Guinnane argues, were unique to Ireland, but the three in combination were.

Before examining why young Irish people made the decisions about marriage, childbearing, and emigration they did, Guinnane undertakes a survey of the Irish rural economy, the role of the state as well as the “several church,” and the demographic patterns of the post-Famine era. After that survey, there follows a detailed examination of household decision-making and it is here that the full range, subtlety, and depth of analysis come into play. The empirical data available are limited and imperfect. As Guinnane ruefully admits, the empirical circumstance is somewhat similar to the drunk-under-the-lamppost anecdote–searching where the light is best. The specific example of this is the “somewhat unusual procedure of going backward in historical time,” i.e. using manuscript census samples from 1901 and 1911 together with tax valuation data to infer individual behavior and decision-making for much earlier, empirically darker, decades (p. 133). However, such data in combination with less detailed, published census material and demographic work done by O Grada, Connell, and others, provide the basis for Guinnane’s attempt to “visualize the [economic and demographic] decisions as people of the day saw them” (p. 17). Thus, Guinnane aims for what he notes (quoting Hammel) as “culturally smart microeconomics” (ibid).

The first step in analysis is with “Households and the Generations,” an examination of the household structures characterizing rural Ireland, the patterns of impartible and partible inheritance, farm size, and the evidence against primogeniture. Guinnane finds a large number of extended family households (“the real Irish departure from the nuclear-family model” p. 142) where an efficiency logic militated against primogeniture, and where increasing emigrant opportunities changed notions of intra-family equality to one of “giving one son a solid farm and the others a chance at good life elsewhere” (p.164). In support of that logic, Guinnane finds that few farms were subdivided in the post-Famine period and the average holding increased, suggesting that amalgamation of holdings became more common.

The analysis then turns to “Coming of Age” and “The Decline of Marriage” where Guinnane finds a Malthusian model of nuptiality (a trade-off between personal consumption and marriage/family) largely a failure. Three grounds are cited: many of the never-married were heads of prosperous households, many remaining in Ireland and remaining unmarried could have emigrated to “a decent life overseas,” and rising rural incomes in the 1851-1911 period were directly at odds with the Malthusian preventative check of increasing poverty (p. 227). Other causal hypotheses, demographic, cultural, and religious are also rejected. Neither a sex imbalance argument nor the role of Catholicism in serving as a brake on marriage are perceived as plausible. Post-Famine emigrant flows were surprisingly evenly balanced across the sexes; thus leaving the remaining home population with a balanced sex ratio as well. A “marriage squeeze” was then, in Guinnane’s judgement, an unlikely occurrence. The Catholicism argument encounters “a simple empirical weakness,” i.e. marital status differences between Catholics and Protestants in Ireland were minor, and overwhelmingly Catholic areas abroad, like the Quebec Province of Canada, did not exhibit high celibacy. Rather, the causes of the rise in permanent celibacy in Ireland are found in economic circumstance: land tenancies made more secure and valuable by the Land Acts, and in the development of a poor relief system with, late in the period, an old age pension system as well. The former meant a rise in the value of an eventual succession to an Irish tenancy relative to the value of emigration. The latter provided a security that substituted, to a degree, for the necessity of family and children. Thus, Guinnane develops “a perspective on marriage” that is quite “Becker-like” in pointing to the altered costs and benefits of marriage and the rise of “marriage substitutes” (p. 238). The outcome, in the Irish case, was a weakened incentive to marry coupled with a rising attractiveness of emigration. By 1911 then, cohort celibacy rates (for ages 45-54) of 25% appeared (Table 4.1).

While celibacy rose, marital fertility remained comparatively high, though Guinnane notes that “recent studies … produce stronger evidence for the beginnings of a fertility transition in Ireland by 1911” (p. 255). An index of marital fertility (referenced to 1000 for a population with uncontrolled fertility) falls from 868 in 1840 to 769 in 1911 (p. 249). More refined measures of fertility such as cohort parity analysis indicate a beginning adoption of fertility control measures, though fertility remained high by European standards of a fertility transition. Guinnane observes: “The Irish fertility transition consisted, it seems, of couples reducing their families from seven to nine children down to four to six, a number very high by contemporary European standards but demonstrating fertility control nonetheless” (p. 259).

If there is an understated dimension to this nicely-detailed demographic history, it lies with the primacy of emigration in determining the magnitude of the Irish population decline. That point is more evident in Cormac O Grada’s chapter on the same period, “Population and Emigration, 1850-1939” in his Ireland: A New Economic History, 1780-1939 (1994). In all decades from 1861 to 1926, the net external migration rate dominates the population change rate with its negative impact being nearly double the positive contribution of natural increase (O Grada, Table 9.6). In Guinnane’s analysis, emigration and the emigration decision are never absent–its empirical dimensions (though aggregate population ion change is never decomposed into its components), the coming of age and leaving home, the impact of emigration decisions on nuptiality and fertility. Indeed, a fair portion of the chapter defining the demographic setting is given over to emigration with discussions of migrants’ characteristics and chain migration. Yet, for all that, the decision to leave seems less well defined than are others. That is, perhaps inevitably, a result of the inability to bring empirical evidence to bear directly on mig ration decisions. Unlike the case with two of the major contributions of the work–the empirical base given to discussions of nuptiality and marital fertility–the micro-evidence on migration may be beyond reach.

In this work, as in Guinnane’s earlier a articles on economic-demographic interrelations in Ireland, the case is made for “a more careful integration of microeconomic analysis and institutional detail” (p. 276). It is that sort of careful integration that makes The Vanishing Irish a major contribution to both economic and demographic history.

H.A. Gemery Department of Economics Colby College

Hank Gemery has written articles and monographs on trans-Atlantic migration in periods from the colonial era through the twentieth century.

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Subject(s):Historical Demography, including Migration
Time Period(s):16th Century

And Still They Come: Immigrants and American Society, 1920 to the 1990s

Author(s):Barkan, Elliott
Reviewer(s):Suzuki, Masao

EH.NET BOOK REVIEW

Published by EH.NET (August 1998)

Elliott Robert Barkan, And Still They Come: Immigrants and American Society, 1920 to the 1990s. Wheeling, Illinois: Harlan Davidson, 1996. xi + 262 pp. Illustrations, bibliographical essay, index. $12.95 (paper), ISBN: 0-88295-928-X.

Reviewed for EH.NET by Masao Suzuki, Department of Economics, Mills College. . Immigration to the United States has boomed over the last 30 years, as increasing movements of goods, capital, and people across borders have coincided with more liberal U.S. immigration laws. Record numbers of immigrants (although still below levels of 100 years ago as a percentage of the population) combined with a new economic landscape have also raised popular misgivings about immigration. Elliot Robert Barkan, professor of history and ethnic studies at California State University, San Bernardino, wrote And Still They Come as a history of immigrants and their children in the context of social and economic changes such as the Great Depression, post-World War II suburbanization, and recent globalization. The book extends from the 1920s, which saw the enactment of legislation restricting immigration, through piecemeal liberalization in the post-World War II period, to the recent period of mass immigration and rising nativism.

Barkan begins with the passage of the restrictive Immigration Act of 1924 and how immigrants faced hostility, both in the economic boom of the 1920s, as well as the Depression of the 1930s–the most severe being the deportation and repatriation of more than a half a million Mexicans and their American-born children during the 1930s. World War II and the ensuing cold war began the erosion of the discriminatory immigration and naturalization laws as our country began to open its doors to war brides and refugees, and as the laws excluding Asians and barring them from citizenship were repealed.

The second half of And Still They Come continues with the legislative changes in U.S. immigration law from 1965 to 1990, and discusses the characteristics of recent immigrants, their lives in the United States, and the recent debates about the costs and benefits of immigration. The book ends with a large appendix of tables with data on immigration from the 1920s to the present, and a bibliographic essay covering scholarly works on immigration and immigrants.

And Still They Come exhibits both strengths and weaknesses from its effort to survey the sweep of 20th-century U.S. immigration history. One of its strong points is its emphasis on the diversity of the immigrant experience (including diversity and differences among immigrants from the same country) and its sympathetic presentation of their lives in the United States. Reading the chapter on ethnic adaptation brought back my own memories of hearing Spanish, Chinese, and Tagalog (Filipino) as often as English in a crowded California mall, and seeing a Sikh teenager with his unshorn hair bound in a topknot dressed in an urban style with oversized high-tops, baggy pants and a wool shirt.

Histories of late 19th and early 20th century immigration often stress the largely male composition of the last wave of mass migration, but rarely does one see comments on the fact that most immigrants today are women. And Still They Come does not neglect this aspect of twentieth century immigration, pointing out that this trend can be seen as early as 1926. Barkan’s book also makes a strong effort to integrate the experiences of Asians, Latinos, and other immigrants of color within an overall appraisal of the immigrant experience.

These strengths notwithstanding, there are also a number of shortcomings to the book. One major problem with Barkan’s book is that it begins with the restrictive immigration legislation of the 1920s, skipping over the mass immigration of the turn of the century and the growing nativism. In particular, the lack of an overview of earlier immigration and restriction makes it hard to answer the excellent question of his last chapter entitled “The 1990s: New Directions or Full Circle?” While Barkan’s book is a sequel to Alan Kraut’s The Huddled Masses: The Immigrant in American Society, 1880-1921 (1982), an introductory chapter would be very helpful and make And Still They Come much more useful as an introduction to 20th-century immigration to the United States.

The broad sweep of the book leads to uneven coverage. For example, even though Asian immigrants are prominent throughout the book, the bibliographic essay fails to mention Yuji Ichioka’s The Issei (The Free Press, 1988), which is not only a definitive text on early Japanese immigrants to the U.S., but also is one of the few histories that draws extensively on Japanese-language records. While the bibliographic essay is informative, it is organized by topic and not explicitly connected to the text. The statistical data is contained in the appendix whereas integrating the data tables into the main text would give them more impact.

Another shortcoming is that And Still They Come at times goes too far in the direction of an ethnic history. For example there is a discussion of the ethnic revival among Americans in the 1970s and 1980s which, while interesting, mainly involved the grandchildren of immigrants. This leads the book to try to cover even more ground than it can reasonably do.

Last, but certainly not least, I felt that And Still They Come could have drawn more on studies of immigration by economists. While issues of immigrant entrepreneurship and current debates about the impact of immigrants on government finance and the labor market are addressed, other questions are not. One important issue is the concern of George Borjas and others that the skills composition of immigrants has declined relative to native-born Americans. This issue would fit well into the Barkan’s historical concerns, since this was also an issue that led to a literacy requirement for immigrants in 1917. (Coincidentally, the literacy requirement was promoted by the Immigration Restriction League, founded by recent graduates of Harvard University, where Borjas now teaches.) This shortcoming also shows up in Barkan’s bibliographical essay section on Immigration and Economic Issues, which mentions relatively few works by economists.

Masao Suzuki Department of Economics Mills College

Masao Suzuki is author of “Success Story? Japanese Immigrant Economic Achievement and Return Migration, 1920-1930,” Journal of Economic History, Vol. 55, No. 4 (Dec. 1995): 889-901.

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Subject(s):Historical Demography, including Migration
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

The Whiskey Trade of the Northwestern Plains: A Multidisciplinary Study

Author(s):Kennedy, Margaret A.
Reviewer(s):Swearingin, Steven D.

Published by H-Business@eh.net and EH.Net (July, 1998)

Margaret A. Kennedy. The Whiskey Trade of the Northwestern Plains: A Multidisciplinary Study. American University Studies, Series IX; History, 0740-0462, vol. 171. New York: Peter Lang, 1997. x + 181 pp. Illustrations, maps, bibliographical references, and index. $39.95 (cloth), ISBN 0-8204-2596-6.

Reviewed for H-Business and EH.Net by Steven D. Swearingin, Southern Illinois University (Carbondale)

Historical archaeologist Margaret A. Kennedy’s The Whiskey Trade of the Northwestern Plains is a short multidisciplinary study which explores the final boom phase of the Indian trade economy on North America’s northwestern plains. It focuses on the buffalo robe sector of the fur trade industry, with special emphasis upon “whiskey trade” activities in the Upper Saskatchewan River region of Western Canada–just over the Montana border–from 1865 to 1875. Her narrative highlights social aspects and material culture by interrogating archaeological, documentary and oral history records from Euramerican and Amerindian cultures. Kennedy proclaims her study to be an attempt, “among other things, to portray the different attitudes and perceptions held by the numerous and distinct parties who were directly involved or affected by the trade” (p. xviii). The resulting study provides an interesting historical overview of an ephemeral frontier economy precariously balanced between Euramerican settlement and Amerindian independence.

Kennedy divides her study into five primary chapters: four with discipline-dominated foci (history, ethnology or archaeology); one, a comparative methodology assessment. Each of the first four chapters represents a historical overview covering the entire period via the perspective of a particular disciplinary approach. As one might expect, this choice of organization results in a repetitive, somewhat disjointed collection of narratives. Professor Kennedy’s “hope that by presenting and comparing the different perspectives…a more richly textured mosaic…will emerge” (p. xviii) appears to override any interest in encouraging multidisciplinary readability. A better narrative flow could have been achieved by integrating all of the pertinent data into one comprehensive narrative (as partially evinced in her adept treatment of the chapter on material culture) and concluding with a comparative methodological analysis. What this work successfully provides is a fact-filled historical sketch of the Indian trade on the northwestern plains from the mid-1820’s through the extermination of the last great buffalo herd in 1882. It is an informative regional overview of a cross-cultural socioeconomic system in which Amerindian (mixed-blood) participants produce furs, robes, hides and meat to exchange for weapons, blankets, clothing, tools, accouterments and whiskey peddled by Euramerican frontier merchants who offer access to the world market. Additionally, Kennedy explains the special role of the “commercial-capitalist” economy in providing independent trader, commercial meat hunter and industrial robe processing services. In the process she touches on virtually all major events impacting this world.

An emphasis on factual presentation at the expense of historical analysis does, however, detract from the historiographic value of this work. There is no apparent concern with investigating, or at least attempting to explain, many of the relationships between significant presented facts. For example, Kennedy identifies the U.S. financial panic of 1873, fur market sales slump of 1874, spiraling inflation in trading post robe prices from 1874 through 1875, and auction house price crash in the summer of 1874 (p. 42). No explanation is offered for the divergence between market demand for buffalo robes and prices paid in the field. Extermination of various buffalo herds, including the last great northern herd in 1882, is also delineated at some length (p. 43-44), as is the failure of buffalo robe prices to recover between 1875 and 1882 (p. 42). No causal interpretation is attempted to account for the permanent depression in field purchase prices through the end of this trade: did the industry’s change from field (native) to industrial (urban) tanning play any part?

Equally troubling is Professor Kennedy’s underlying inference that chronic alcohol abuse amongst northwestern plains tribes of this era serves as the cause for their social and political degeneration. Historical records present consistently clear indications that alcoholism amongst independent Amerindian peoples initially stems from internal causes; both individual and group desires to escape cultural restrictions and responsibilities.

Perhaps the most interesting aspect of this book is its ability to juxtapose highly dissimilar economic systems (i.e., nomadic hunting, mercantile capitalism, industrial capitalism), demonstrate their fleeting state of mutualism, and outline the eventual usurpation of each as our present economic system develops. Particularly enlightening is Kennedy’s portrayal of the role played by the U.S. Civil War in stimulating American industrialization, facilitating the eventual undermining of Great Britain’s economic dominance on–and the Hudson’s Bay Company’s profits from–the North American frontier, and fueling an accelerated frontier settlement and urbanization pattern. Although poor editing and a superficial index detract from overall presentation, The Whiskey Trade of the Northwestern Plains is a useful historical overview of the Indian trade among the northwestern plains Indians. Extensive use of primary sources and archaeological studies make this book notable; its bibliography and footnotes form a valuable tool for those interested in more in-depth study. Margaret A. Kennedy’s archaeological illumination on trading post sites during the boom period in alcohol trafficking helps to clarify our understanding of this volatile business environment and represents a meaningful contribution to the historiography on the Indian trade.

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Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):19th Century

Sick, Not Dead: The Health of British Workingmen During the Mortality Decline

Author(s):Riley, James C.
Reviewer(s):Emery, J. C. Herbert

EH.NET BOOK REVIEW

Published by EH.NET (July 1998)

James C. Riley, Sick, Not Dead: The Health of British Workingmen during the Mortality Decline. Baltimore: Johns Hopkins University Press, 1997. xvii +342 pp. $58.00 (cloth), ISBN: 0-8018-5411-3.

Reviewed for EH.Net by Herb Emery, Department of Economics, University of Calgary.

With Sick, Not Dead, James Riley has written an ambitious book on the important subject of trends in the health status of nineteenth-century British workingmen. The first part of Riley’s book provides an extensive description of friendly societies in England, the primary sources of sickness and health insurance for British Workingmen in the nineteenth and early twentieth centuries. Riley also examines the extent to which friendly society members had access to medical services at a relatively low cost due to the control friendly societies had over the medical marketplace. The more important contribution of this book, however, is that suggested by its title and the subject of the second part of the book. Riley challenges the belief of many scholars that the documented decline in British mortality in the nineteenth century reflected that British workingmen were also healthier. Living longer and healthier clearly indicates a rising standard of living. In contrast, Riley’s examinations of sickness benefit claim statistics compiled by the Ancient Order of Foresters (AOF) demonstrate that the decline in mortality was not necessarily an indicator of improved health. Foresters it seems, lived longer, were sick less often, but were sicker for longer periods of time. Riley also uses the Forester claims statistics to show clear regional patterns of sickness in Britain which were stable over the period 1870 to 1910. Thus, Riley shows that it is difficult to make conclusions about health status of workingmen on a national level. If the AOF sick benefit claims statistics are representative of the health status of the British working class, then Riley has contributed an important insight into the health and standard of living of nineteenth century British workingmen.

Riley’s primary finding of a surviving but sicker British population after 1870 requires that the observed increase in sickness time in AOF Courts was due to changing health conditions of workingmen, all else equal, and was not merely an artifact of compositional changes in AOF Court memberships. Observed sickness time in AOF Courts could have increased over time because the health of workingmen was changing, or because more of the membership was older with higher sickness risk, or because members with higher sickness and injury risk occupations represented more of the membership. Other potential explanations for changing observed sickness patterns could be changes in the AOF’s rules for claiming benefits, or changing attitudes of members towards claiming sick benefits. Riley addresses, and dismisses, each of these possibilities for the observed increase in AOF sickness time claimed with the exception of changes in workingmen’s health. Essentially, the conclusion that patterns of health were changing is the explanation attached to an otherwise unexplained increase in sick time claimed over time. The reader must decide if Riley has adequately explained away (or, in his regressions, controlled for) alternative explanations for the increase in the length of time per year that Foresters claimed sick benefits.

Riley is extremely careful in letting the reader know the importance of purging the sickness benefit claim statistics of effects due to aging members to identify the underlying trend in health status of British workingmen. Riley shows that as an individual aged, his length of sickness spell increased exponentially. He does not observe each individual member’s age, but he does observe the average age of the members who are generating the claim statistics. As Riley points out, while the average age of the members is a good measure of central tendency in the claims statistics, he still needs to control for the dispersion of ages in a given membership. To see why this is the case, consider two Courts each with memberships with an average age of 30 years. All members of both Courts face identical age-specific sickness risks. In membership A, all members are 30 years old. In membership B, one-third of the members are age 20, one-third of the members are age 30 and one-third are age 40. Even with the same average age, membership B with more “older” members will generate higher observed sick claims since the increase in claims from a 40-year-old member compared to a 30-year-old member is larger than reduction in claims from a 20-year-old member compared to a 30-year-old member. Riley identifies the rate of initiations into court membership and the number of years a court had been operating as key factors influencing age clustering (or conversely, age dispersion) in the membership. Initiations brought younger members into AOF Courts and tended to slow down the aging of the membership. He includes the initiation rate (new members to existing members) and the years since the AOF Court was formed in his regressions. Riley regresses the sickness time variable on these controls and still finds an increase in sickness time claimed over time.

The question remains whether the increase in sickness time that Riley identifies is a true trend in unobserved health status or just a biased residual effect resulting from the imperfect proxy variables for controlling for the increases in sickness due to an aging membership. There is good reason to suspect it is the latter since Riley is silent on quits/secessions from Court memberships in his discussions on controlling for age in his sickness time regressions. Riley points out that when quits/secessions occurred, they “typically occurred within a few years of joining” when members were in their 20s or 30s. Thus, where initiations reduced the average age of the membership by bringing in younger members, quits or secessions accelerated the aging of the Court membership. In other words, the net of initiations and secessions is the relevant factor for controlling for the aging of Court memberships since both influence the number of members at younger ages in the membership. In the absence of controls for secessions, Riley’s maintained assumption for interpreting the trend increase in AOF sickness time claimed is that membership was a lifetime status for joiners. Unfortunately, Riley does not convey much information about the extent to which membership in a friendly society was a lifetime status for initiates. The reader will learn that Forester secession rates were higher than those of the Oddfellows in Britain but Riley does not tell the reader what Oddfellow secession rates were. Readers will not get a sense from this book how big an omission from the analysis this potentially is. While not directly comparable to the British orders, in the Independent Order of Odd Fellows in North America, the average length of membership was only around 5 years and only one quarter of members remained in the membership for 25 years. Only a minority of members did not secede from membership. Thus, one explanation for Riley’s measured trend in sickness time after 1870 is that as the number of initiations into AOF Courts slowed, the aging effect of secessions became important. Riley’s controls for aging, which only account for the rate of initiation, understate the true extent of aging in the membership. This bias arising from the exclusion of secession rates would appear as an otherwise unexplained, or residual, trend increase in sickness time claimed over time.

A frustrating element of this book is that the reader does not really know who belonged to the AOF. Riley asserts that the members were drawn from the working class, and that the AOF membership was similar to the Oddfellows membership which he shows was representative of the British population in terms of occupational distribution. Riley provides no direct evidence in support of this assertion. This shortcoming of the book is important for understanding whose health patterns we are learning about. It is critical for interpreting Riley’s analysis of regional sickness patterns since the analysis requires that the Foresters shared the circumstances and characteristics of the communities in which they lived. Riley operationalizes this point in Chapter 9 asserting that “earlier parts of this book show that AOF members as a whole closely resembled the central ranks of the working population in Britain, which implies that they did so also in most local communities” (p. 243). On the next page, however, Riley notes that for Britain as a whole, the Foresters represented 7.3 percent the male population in 1891 but for individual counties, this proportion varied from a low of 0.7 percent of the male population to a high of 20 percent. This variation seems hard to reconcile with the assumption that AOF memberships were everywhere equally representative of the local population. That AOF memberships were not always representative of the county population may explain Riley’s finding that coal mining and mining trades, occupations known to have high sickness and accident risks, were not statistically significant factors for explaining AOF sickness time or mortality. Riley’s does not entertain the possibility that the AOF dealt with high-risk occupations like coal mining by discouraging the participation of miners in the organization. If that was the case, miners were not in the AOF Courts, hence the claims statistics are not affected by the amount of mining employment in the county in which the AOF Court is located. The presence of miners would have affected the ratio of AOF members to the county population. Riley could have examined this possibility with his data by examining the correlations between the ratio of AOF members to county population and the importance of mining employment in the county.

Finally, a large focus of the early chapters of the book concerns the relationship between friendly societies and doctors. Riley documents the extent of access to doctors enjoyed by friendly society members and the extent of control over the medical market place enjoyed by the consumers. Riley has done an excellent job synthesizing various sources on this issue and providing original evidence from Forester Court minute books. Readers should be cautious however, in how they interpret sickness risks faced by workingmen from this discussion and in how they interpret what friendly societies were doing. Riley’s focus on access to direct medical care through friendly society membership obscures the more important cost of sickness and injury in the nineteenth century, lost earnings. Friendly societies like the AOF may have provided access to physicians for members and have discussed the nature of care, but the income replacement benefit was clearly more important in terms Court finances. The nineteenth-century actuarial investigations of sickness were motivated by concerns about the sustainability of the income replacement sick benefit, not concerns over revenues to finance medical care. While it is interesting to know how the fraternal medical economy worked in the nineteenth century, it is a puzzling focus for an analysis of friendly societies that were more concerned with insuring men against the loss of income due to illness or accident.

In the end, Riley has provided a book that is a substantial improvement over many of the books written on British friendly societies. He provides fresh information and updates a literature that has not seen a great deal of activity for some time. Even though I have my doubts about the usefulness of friendly society sickness claim statistics for studying the health of workingmen, it is interesting to see the patterns that emerge from the data. For any scholars considering a project similar to this one, Riley’s book should be considered the point of departure.

Herb Emery Department of Economics University of Calgary

Herb Emery has co-authored (with George Emery) the forthcoming book (1999) A Young Man’s Benefit: The Independent Order of Odd Fellows and Sickness Insurance in the United States and Canada (McGill-Queen’s University Press ).

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Subject(s):Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):Europe
Time Period(s):19th Century

The Female Economy: The Millinery and Dressmaking Trades, 1860-1930

Author(s):Gamber, Wendy
Reviewer(s):Nickless, Pamela

EH.NET BOOK REVIEW

Published by EH.NET (July 1998)

Wendy Gamber, The Female Economy: The Millinery and Dressmaking Trades, 1860-1930. Urbana: University of Illinois Press, 1997. 320 pp. $39.95 (cloth); $16.95 (paper), ISBN: 0-252-02298-X (cloth); 0-252-06601-4 (paper).

Reviewed for EH.NET by Pamela Nickless, Department of Economics, University of North Carolina- Asheville.

This is an important work about a portion of the nineteenth century economy that was dominated by skilled, relatively well-paid women workers and entrepreneurs. If this description doesn’t fit your image of the work world for women a hundred years ago, may I suggest this book? Professor Gamber in this careful and subtly nuanced study makes a strong case for the importance of the millinery and dressmaking trades in the work world of nineteenth-century women. She also clearly describes the impact of the mass-production of hats and women’s clothing on women’s employment and business opportunities.

The Female Economy is divided into two sections: Part One describes the “female economy” of proprietors, workers and consumers from 1860 to 1910 while Part Two analyzes the transformation in production from 1860 to 1930. In 1860, women of almost all social classes purchased clothing from milliners and dressmakers: goods were made to order usually in a small shop with a female entrepreneur. By 1930, women of almost all social classes purchased factory-made clothing from a department store; both factory and store usually owned and operated by men. The 1930s garment workers were largely unskilled while the milliners and dressmakers of the 1860s were semi-skilled and highly skilled workers. While historians have explored the impact of this “democratization” of fashion on American culture, little work has been done on the women who made the custom goods that were replaced by the off-the-rack garment.

Although the dress-making and millinery trades have been richly represented in American and English literature, the non-fiction voices of these workers are hard to find. In Part One, Professor Gamber presents the results of her painstaking gathering of data from business directories, city directories, the manuscript census, the R.G. Dun and Co. records and a myriad of other sources including the letters and diaries of middle and upper class customers, Progressive Era consumer and workers-aid organizations and the few extant memoirs of milliners and dressmakers. Most of the data are from Boston and the study never ventures far from the Northeast. The intensive study of Boston and the rich data set that Gamber has collected is one of the finest aspects of this work. She is able to flesh out the portraits of some female entrepreneurs by locating them in more than one source. The Dun and Co. records are a particularly rich source of personal information (closely resembling gossip) on the business women and their families. One of the most fascinating portions of the book uses the records of Boston’s Protective Committee; this committee intervened on behalf of women workers in the larger dress-making establishments. Here in one fell swoop, we have workers, female employers and their customers (members of the committee) all involved. Gamber relates the ironic plight of the woman entrepreneur with a poor Dun and Co. credit rating whose customers conspire to “trustee” their own orders until she pays her workers with money she doesn’t have because her customers won’t pay their bills in a timely manner.

It is difficult to summarize Gamber’s portrait of this female economy. A few tidbits may surprise the reader: millinery and dressmaking were “…the fourth most important occupational category for women in 1870; only domestic servants, agricultural laborers, and seamstresses were more numerous.” In 1900, dressmaking still ranked third while millinery was fourteenth (p. 7). Most proprietors of retail establishments were single women (“man milliner” was an epithet) and in Boston, a quarter were over thirty years old. Gamber also finds strong evidence of the working class origins of many of the “Madams” and, she argues, dressmaking and millinery was one of the few paths to independence for the working class daughter. Although this seems a very female world, men controlled access to credit and in the case of customers, husbands often decided when and which bills would be honored. Millinery and dressmaking was a risky business and few women became wealthy but many did manage to maintain a “precarious independence.”

In Part Two, Gamber explains in more detail the millinery and dressmaking shop; how work was done, how skills were acquired and how a worker might rise from apprentice to shop owner. She describes the transmission of skills and how a young woman, with hard work and luck, might learn a craft and own her own small shop. In the late nineteenth century, the development of systems of drafting and eventually pre-printed patterns sought to eliminate the importance of training and trade secrets and “..challenge the dressmaker’s most precious skill: her monopoly over cutting” (p. 138). This development would not only convince many would-be dressmakers that they had no need for training, it also paved the way for standardized sizes. (Fashion would, of course, also play a role as fitted bodices fell out of favor in the early twentieth century.) The proponents of “scientific” dress-cutting techniques were scathing in their denigration of the standard practices of dressmakers which usually involved numerous fittings. Now a simple machine (usually the work of a masculine mind) could eliminate the need for tiresome fittings and the work could be done, it was claimed, by any housewife with some skill at sewing. While these machines and drafting methods no doubt did not deliver all they promised, they mark the beginning of the erosion of the necessity of a dressmaker for the well-dressed woman. The development of the department store and the availability of factory-made dresses (altered in the store for the up-scale customer) in the early twentieth century completed the transformation of dressmaking. The product had, of course, been subtly altered: no one today would expect their clothing to fit as well as clothing made by a dressmaker or tailor.

A similar process takes place in the early twentieth century in the millinery trade. Milliners had, unlike dressmakers, generally kept stock on hand and thus had to deal with wholesalers. The largely male world of wholesaling had accommodated women entrepreneurs of “small means,” but beginning around 1900, wholesalers began to “rationalize” their business. Business practices which had emphasized a personal relationship between retailer and wholesaler now gave way to more business-like behavior. This emphasis on what we would probably call the bottom line made the wholesalers generally impatient with small shops that were often late to pay or returned unsold goods–most of these small shops were of course run by women. These women were now seen as “unbusiness-like,” undesirable customers. This combined with the development of factory-made hat forms (also sold by the wholesalers) spelled the end to the custom-made hat.

I would be remiss if I neglected to mention the final consumer’s role in this process: all of this ready-made stuff was cheaper. Instead of having one or two good dresses and one new hat a year, a woman of modest means could afford more if the dresses and hats were either entirely or mostly factory-made. Gamber is careful to note the complex interaction among consumers, retailers, wholesalers and producers in this process of transforming an industry.

In this portion of the work Gamber does a superb job using millinery trade journals and the publications of the proponents of “scientific” dress-cutting techniques to substantiate her story of de-skilling and de-feminizing millinery and dressmaking. Indeed her use of multiple sources makes her story a rich and complex one. This book is must reading for any student of nineteenth and early twentieth century labor history. The only minor criticism I would make is that Professor Gamber has a tendency to push her sources a little too far. Can we really know that the dressmakers and milliners took pride in their work, that they considered themselves artisans? I want to believe that the impoverished milliner with one employee and a business that lasted only two or three years had hopes and aspirations of grander things and that for a brief time she was able to create and live an independent life that she valued but I’m not convinced. This is a minor quibble about a truly outstanding piece of scholarship. We should be grateful to Professor Gamber for uncovering this female economy and suggesting so many other tantalizing avenues for future research.

Pamela J. Nickless Department of Economics University of North Carolina at Asheville

Professor Nickless is Professor of Economics and Director of Women’s Studies at the University of North Carolina at Asheville. She is currently involved in a study of nineteenth-century Southern business women, many of whom were dressmakers and milliners. She has recently published on the role of women in the Shaker communities and on pedagogy, including an article published on EH.NET with Akira Motomura.

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Subject(s):Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):19th Century

Titan: The Life of John D. Rockefeller, Sr.

Author(s):Chernow, Ron
Reviewer(s):Goldin, Milton

Published by H-Business@eh.net and EH.Net (June, 1998)

Ron Chernow. Titan: The Life of John D. Rockefeller, Sr. New York: Random House, 1998. xxii + 749 pp. Photographs, notes, bibliography, and index. $30.00 (cloth), ISBN 0-679-43808-4. Reviewed for H-Business and EH.Net by Milton Goldin , National Coalition of Independent Scholars (NCIS)

Ron Chernow did much of his research for Titan at the Rockefeller Archive Center in Pocantico Hills, Sleepy Hollow, New York, earlier the home of John D. Rockefeller, Jr. and his second wife, Martha Baird. Just beyond the elegant staircase in the entrance hall is a portrait of John D. seated before his rolltop desk. The richest man in the world (he pulled ahead of Andrew Carnegie sometime during the early 1900s) gazes not so much at you as through you. And the symbolism of the rolltop desk, with its dozens of drawers into which papers can be filed, hidden, quickly retrieved, quickly refilled, and quickly rehidden, should not go unnoticed. The overall impression is of a man without illusions, organized and purposeful, a man fully in control of himself and events.

The problem is that, like almost everything else about John D.’s extraordinary life, this impression is simultaneously accurate and inaccurate. As Chernow makes clear, John D. was a titan with remarkable needs and equally remarkable abilities to mask his real self. For nearly every characteristic of his that we know to be true, there is another, countervailing characteristic that we also know to be true.

Chernow tells us that John D.’s philanthropic gifts financed theoretical (and many practical) bases of modern health care in America. Yet, when he became ill, Rockefeller frequently relied on folk remedies, such as smoking mullein leaves in a pipe. He insisted that “the best men must be had” as faculty members for the University of Chicago, which came into existence thanks largely to his munificence. But Chernow notes that “To some extent, Rockefeller sent out conflicting messages and was partly to blame for [President William Rainey] Harper’s profligacy. It was Rockefeller, after all, who urged Harper to pay top dollar for America’s best academic minds.” And it was also Rockefeller, a true believer in capitalist enterprise, who fumed because Harper sought to earn as much as he could from other assignments while he headed the university. “It was an odd situation,” comments Chernow, with “the world’s richest man chastising a biblical scholar for unseemly materialism”(p. 318).

John D., Jr. had to dissuade his father from ringing the family compound in (then) Tarrytown, New York, with barbed wire. Yet, throughout his life, John D. happily joined fellow Baptists–black or white, it made little difference to him–to prepare for Judgement Day. And, like the ordinary true believer he claimed to be, he swept Cleveland’s Erie Street Baptist Mission (which became the Euclid Avenue Baptist Church) without complaint. “Even in later years, when huge swarms of people congregated at the church door to glimpse the world’s richest man, he would still clasp people’s hands and bask in the glow of familial warmth,” writes Chernow (p. 53).

But John D.’s humility never prevented him from driving competitors into poverty or caused him to worry about the fates of their wives and children. Chernow describes 1872, two years after Standard Oil was incorporated, as the “annus mirabilis” of the titan’s life: “The year revealed both his finest and most problematic qualities as a businessman: his visionary leadership, his courageous persistence, his capacity to think in strategic terms, but also his lust for domination, his messianic self-righteousness, and his contempt for those shortsighted mortals who made the mistake of standing in his way” (p. 133).

In his search for the essential John D.–that is, to identify the characteristics that took precedence over other characteristics–Chernow acknowledges his intellectual debt to Allan Nevins, the first writer to attempt a biography of the titan reasonably free of the categorical judgements of muckrakers, who were determined that the evil John D. must predominate in the public mind. Nevins’s two-volume Study in Power: John D. Rockefeller: Industrialist and Philanthropist was published in 1953. Dozens of books about the Rockefeller family, with sections on John D., appeared after Nevin’s; but Chernow notes that no full biographies followed, except for David Freeman Hawke’s monograph-length John D.: The Founding Father of the Rockefellers (1980).

A major reason for this situation was that the Rockefeller family would not permit files to be opened. Given John D.’s appalling reputation during his lifetime (made worse by writers during the Great Depression) and Chernow’s access to the closed files, Titan was awaited with great anticipation. What would the author tell us that was new, how would he reinterpret what was already known, and, most important, to what extent could he reveal the essential John D. Rockefeller?

Briefly put, Titan is more a filling out of a portrait than it is revelations on the nature of John D. We have long known, for example, about the convoluted relationship between John D.’s father, William, “Big Bill,” and his mother, Eliza Davison. But the full extent of Big Bill’s unsavory behavior–he was a mountebank hustler of “cancer cures” and a womanizer and bigamist who literally brought a mistress into his home and sequentially impregnated both his wife and his mistress–has never been drawn more clearly. Eliza, a devoutly religious woman, accepted the burdens of their life together without complaint. Chernow concludes, “Bill had been her sole chance, her crazily squandered bid to escape from rural tedium, and the misbegotten marriage left both her and her eldest son [John D.] with a lifelong suspicion of volatile people and rash actions” (p. 59).

Chernow leaves no doubt, however, it was from his father that John D. inherited his sheer love of money. (“After he had made his gargantuan fortune, he said admiringly of his father, `He made a practice of never carrying less than $1000, and he kept it in his pocket'”[p. 24].) From his mother came not only his deep religious beliefs but his sincere reverence for women. (To his great credit, John D. endowed a college for black women in Georgia, when neither blacks nor women were generally considered worthy of receiving any education, let alone a higher education. Chernow describes the creation of Spelman College with praiseworthy conciseness and comprehension on pages 240-42.)

“Of all the lessons John absorbed from his father, perhaps none surpassed in importance that of keeping meticulous accounts,” Chernow adds (p. 25). But from neither parent did he evidently inherit his incredible determination not only to always know exactly what was happening in his business but to plan strategically on the basis of state-of-the-art information. The titan had to know to the last pipe, to the last oil storage tank at each of his refineries, to the last Standard Oil tanker at sea, to the last penny in Standard Oil’s Accounts Receivable, and to the last of whatever else he could think of in his business, where everything was, how the item or person served his purposes, and their exact value. Chernow tells us that John D. even calculated the exact number of chews it took–ten–to properly masticate food; family and dinner guests who allocated fewer chews when taking nourishment simply had to await his completion of the task.

From the beginning of his career, when he worked as a bookkeeper, John D. liked everything about business (he originally took on the job because Big Bill would not provide money for him to attend college: “About to enter into his second [and bigamous] marriage, Bill must have been drastically scaling back on first-family expenditures, albeit without disclosing the reason for the sudden urgency,”[43]). He liked making entries in ledgers, he liked “all the method and system of the office,” he delighted in negotiating secret rebate agreements, and he positively reveled in consolidating control over the oil business. His mother had taught him that “willful waste makes woeful want,” and he could not bear to waste a minute on any task, no matter how much he might have enjoyed it. Blotting his signature took valuable time and energy, so he hired a man to blot for him.

Such super-activity led to nervous disorders. Chernow writes, “Starting in early 1889, Rockefeller had complained continually of fatigue and depression. For several decades, he had expended superhuman energy in the creation of Standard Oil, mastering myriad details; all the while, pressure had built steadily beneath the surface repose…” (p. 319). And yet he died just two years short of a hundred.

Chernow deals at length with the “myriad details” of how and why Standard Oil came into existence and how John D. managed the corporation. In broad outline, his observations do not tell us a great deal more than does Daniel Yergin’s The Prize, published in 1991. But how Chernow’s particulars not only fill out the picture but disprove Nevins’s claim that Rockefeller’s fortune was an “historical accident!”

To illustrate how Rockefeller would make informed gambles–but gambles, nonetheless–Chernow describes the way John D. used the disastrous June 1893 stock market crash to finally consolidate his empire: “As the [Pittsburgh] Mellons emerged as a worrisome threat in the export market, Rockefeller feared they might strike an alliance with the French Rothschilds. In August 1895, having borrowed heavily against Pittsburgh real estate to build their budding oil empire, the Mellons were forced to sell their Crescent Pipe Line Company and other properties to Standard–a huge windfall that yielded 14,000 acres and 135 producing wells. It now seemed that Standard Oil owned the entire industry, lock, stock, and barrel” (p. 335). But had the market recovered earlier or had the Mellons held out longer, John D., along with his competitors, might have found themselves overextended.

Chernow makes clear that John D.’s philanthropic giving was as strategic as his business activities. As a lowly-paid bookkeeper, he had purchased an inexpensive ledger to record how every cent of his salary was spent, including a regular dime to charity. For the most part, before he moved his family to the Tarrytown compound, he gave as he earned, secretly. He liked to sit in church, scan the congregation for needy but deserving brethren, and place cash in deserving hands.

But whether the gift was a dime or in the millions, he had to be persuaded that his charity would do some good. He wanted results, not just to give handouts, and he sought the best counsel he could obtain on giving money from Frederick Taylor Gates, a former Baptist minister who became a member of his staff. Gates had to convince him in detail of the advisability of what would come to be called “scientific philanthropy.” And what sold John D. was that this systematic approach to giving would accomplish a nationwide and even worldwide reordering of mankind’s current status.

At Gates’s urging, Rockefeller’s first major gift went to establish a Baptist institution of higher learning, the University of Chicago. Grateful students celebrated his generosity by singing, “John D. Rockefeller, wonderful man is he/Gives all his spare change to the U. of C.” But the University did not receive the bulk of his gifts; the bulk went to a startling variety of causes ranging from Spelman College to public-private partnerships in the South, to massive health care initiatives.

Meanwhile, Congress, like the majority of newspaper editors and reporters, distrusted him. In 1890, the Sherman Antitrust Act became law, and for five years, until the Standard Oil trust was dissolved, Washington hounded him. What Washington and the editors clearly missed, however, was that “Rockefeller was a unique hybrid in American business: both the instinctive, first-generation entrepreneur who founds a company and the analytic second-generation manager who extends and develops it. He wasn’t the sort of rugged, self-made mogul who quickly becomes irrelevant to his own organization. For that reason, his career anticipates the managerial capitalism of the twentieth century” (pp. 227-8).

John D. spent his last days worshiping among blacks (he was the only white congregant) of the Union Baptist Church in Ormond Beach, Florida. The day before he died, he paid off the mortgage of the Euclid Avenue Baptist Church. His body was interred in Cleveland, where he began his career and where even a glimpse of the building in which he began as a bookkeeper moved him deeply.

At the family compound, John D. had had a flag unfurled to mark various anniversaries in his life. Today, no one remembers the anniversaries, and nearly all his great-grandchildren and great-great-grandchildren have moved away. Chernow notes that “Although Junior moved into Kykuit [John D.’s home at the compound] after Rockefeller’s death, he knew that his father was inimitable, and so he decided to retain the Jr. after his name. As he was often heard to say in later years, ‘There was only one John D. Rockefeller'” (p. 676).

Subject(s):Business History
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

The Blues: A History of the Blue Cross and Blue Shield System

Author(s):Cunningham III, Robert
Cunningham Jr., Robert M.
Reviewer(s):Gordon, Colin

EH.NET BOOK REVIEW Published by H-Business@eh.net and EH.Net (June 1998)

Robert Cunningham III and Robert M. Cunningham Jr. The Blues: A History of the Blue Cross and Blue Shield System. Dekalb: Northern Illinois University Press, 1997. xii + 311 pp. Tables, illustrations, notes, bibliography, and index. $36.00 (cloth), ISBN 0-87580-224-9.

Reviewed for H-Business by Colin Gordon , University of Iowa

The American health care system is an elaborate and chaotic and shifting compromise among doctors, employers, and insurers. As the providers of care, doctors have historically guarded their terrain, alternately portraying themselves as embattled entrepreneurs or selfless professionals, against the onslaught of “third parties,” especially insurers, organized patients, and the state. As the principal consumers of health care in the private welfare state of the postwar era, some employers have juggled their responsibility for employment-based benefits with the increasingly expansive (and expensive) scope of collectively-bargained health provision, the inflationary bias of third party billing, the periodic threat of state intervention, and the determination of other employers to avoid such burdens altogether. As the fiscal and actuarial intermediary between providers and consumers, commercial insurers have played both sides–sometimes (in their negotiations with providers and hospitals) the cost-conscious consumer, sometimes (in their role as HMOs) the parsimonious provider.

In all of this, a number of interests play (or have played) lesser roles. Between the early 1940s and the late 1960s, organized labor bargained a meager policy of wage replacement into an expansive package of service benefits for workers and dependents alike. Over the same era, the state mopped up around the failures of private provision, mostly by financing hospital construction and picking up some of the bad risks with Medicare and Medicaid. And hospitals, increasingly dependent on insurers and the state, played an increasingly passive political role. Perhaps most interestingly and importantly, two massive and intertwined nonprofit institutions–the Blue Cross (hospital insurance) and Blue Shield (physician insurance) Plans–straddled all of these interests to emerge as the principal intermediary between federal health programs and their clients, the nation=92s largest managed care network, and an important insurer in their own right.

For this reason alone, scholars should welcome the publication of The Blues, which pulls together a number of studies of local plans, the valuable but dated scholarship of Louis Reed (1947) and Odin Anderson (1975), and proprietary access to the Plans=92 archives. The early chapters are not terribly original and recount (somewhat woodenly) the early history of prepayment plans and the ways in which the Blues emerged as a middle ground between fee-for-service individualism and state regulation. Through these chapters, the authors persistently celebrate the innovations of the Blues=92 “pioneers,” while casting thinly-veiled aspersions at the extremists to the left (advocating national health insurance) and right (opposing all prepayment and contract practice).

While the middle chapters on the 1940s and 1950s continue to wander and wonder in the footsteps of leading Blues executives, they are valuable for the ways in which they connect the often arcane details of actuarial projection and hospital remuneration to the piecemeal construction of a private welfare state. In their largely futile effort to hold to the principal of “community rating,” the Blues underscored the persistent irony of private health insurance–that it was ultimately an exercise in avoiding risk rather than spreading it. In their increasingly elaborate brokering of the demands of hospitals, employers, and patients, the Blues underscored the limits of private health insurance–which quickly became obsessed with shuffling costs among the covered population and their employers and indifferent to the goal of expanding coverage.

Both the Blues, and this account, hit their stride with the consideration, passage, and administration of Medicare and Medicaid. Through these years, the Blues reacted in much the same way that leading managed care concerns would react during the debate over the Clinton Plan three decades later: vested interests in the private health care market by the 1950s, the Blues were leery that state intervention “would let the camel=92s nose [national health insurance] a little further into the tent” but also poised to administer any new federal program. In the ensuing debate, the Blues juggled the concerns of their various allies–the doctors, the hospitals, and organized labor–and traded politically on their unique experience with insuring the elderly. Indeed the Blues quickly took the administrative lead after 1965, effectively “capturing” a program they had resisted, questioned, and shaped in the decade preceding its passage. For the Part “A” hospitalization program, Blue Cross emerged as the designated intermediary in thirty-one states representing almost 90 percent of participating hospital beds; under the Part “B” medical insurance program, thirty-three of forty-nine designated carriers (covering about 60 percent of beneficiaries) were Blue Shield Plans.

The Blues closes with three chapters covering, in turn, the 1970s, the 1980s, and the early 1990s. The script for these decades is relatively familiar, and the authors place Blue Cross and Blue Shield at the center of a maelstrom of health care inflation, rapid technological change, fiscally-anxious federal programs, cost-conscious employers, and increasingly beleaguered consumers and workers. At times, this vantage point is quite valuable, given the close attention which the Blues necessarily paid to the deepening actuarial and inflationary crisis. At times, the Blues seem more like the Rosencrantz and Guildenstern of a much larger drama, and of which we only get the occasional glimpse.

This is a valuable book, although it is also something of a disappointment. The chronological sweep (virtually all of the twentieth century) is important, but each important episode has been recounted more effectively elsewhere. The relentless (and often celebratory) focus on the Blues lacks the critical consideration of a wider array of interests woven so well by Paul Starr and the leading historians (Rashi Fein, Theodore Marmor, Anne and Herman Somers) of Medicare. And, even on its own terms, The Blues often misses the ambiguities and contradictions of a system (captured nicely by David Rothman[1] and by Rosemary Stevens=92 fine introduction to this volume) which was both a pointedly private alternative to national health insurance and a quasi-public surrogate for the state. More broadly, this is a narrowly institutional account which never broaches the “big” questions about the peculiar trajectory of the American welfare state. Why did national health insurance falter in the United States while a national pension and unemployment system succeeded? What was the logic and implication of organizing private and public social provision around the “family wage” assumptions of social insurance? How did race and racism shape both the formative years of private and public health policies and the backlash against public programs which began in the late 1960s? In what ways did a shifting compromise of private interests–insurers, labor, employers, doctors, hospitals–shape private and public patterns of health provision? And why–in this account and in the larger logic of the American welfare state–are those on the receiving end considered beneficiaries or clients or dependents or consumers, but never citizens?

Note

[1]. David Rothman, “The Public Presentation of Blue Cross, 1935-1965,” Journal of Health Politics, Policy, and Law 16:4 (Winter 1991), 671-693.

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

Guns, Germs and Steel: The Fates of Human Societies

Author(s):Diamond, Jared
Reviewer(s):Mokyr, Joel

EH.NET BOOK REVIEW

Published by EH.NET (May 1998)

Jared Diamond, Guns, Germs and Steel: The Fates of Human Societies. New York: W. W. Norton, 1997. 480 pp. $27.50 (cloth), ISBN: 0-393-31755-2.

Reviewed for EH.NET by Joel Mokyr, Departments of Economics and History, Northwestern University.

Jared Diamond is a physiologist and evolutionary biologist with a passion for archaeology and linguistics. That, by itself, should seem to make him irrelevant to economic history. Yet his widely read and admired recent book, honored last month with a Pulitzer Prize, is one of the more important contributions to long-term economic history and is simply mandatory to anyone who purports to engage Big Questions in the area of long-term global history. He starts off his account with what he calls “Yali’s question.” Yali is a New Guinea notable, who one day poses to the author the question why white people have so much ‘cargo’ (western manufactured goods desired by New Guineans), but New Guinea produces no cargo that Westerners are interested in.

Indeed, the question of questions. Diamond joins such heavyweights in economic history as Eric Jones, Douglass North, Nathan Rosenberg, and recently David Landes in asking why “we” are so rich and “they” are so poor. Is it institutions? Culture? Technology? Religion? Diamond does not reject any of these answers altogether, but instead formulates models in which they become endogenous variables. The real exogenous variable, when all is said and done, is geography. Diamond, to put it bluntly, is a geographical determinist. The shape and location of continents, flora, fauna, microbes, water, climate, topography, all are truly exogenous to history. The rest is endogenous.

Geography has of course a terrible reputation. David Landes, in Wealth and Poverty of Nations (New York, 1998) starts off by recounting how geography departments were closed around the country without a tear, and notes that “no other discipline has been so depreciated and disparaged.” Simple models that submit that “Britain had an Industrial Revolution because it had coal” have long been abandoned. Yet before we dismiss this as another simplistic model, we have to face the fact that Diamond knows his stuff inside out, to the point where any thought of using the adjective “crude” (traditionally preceding “determinist”) evaporates as we turn the pages. Diamond fires off a barrage of facts and observations based on half a dozen disciplines most economic historians this side of Eric Jones are unschooled in: archaeology, botany, linguistics, anthropology among them. The story he tells is one of a trajectory in which the world’s population bifurcated for geographical reasons. Once on different paths, Africa, America, and “Eurasia” diverged more and more through positive feedback effects, in which geography fed into technology, technology fed into power structures and culture, feeding back into technology and growth until we got a world of Western economic hegemony. Such “autocatalytic” models which view economic history as a disequilibrium process once were shunned by the neoclassical cliometric orthodoxy. Today, thanks to the efforts of scholars as diverse as Douglass North and Paul David, we are getting used to them, and the intellectual gains are substantial.

What, then, are the geographical factors that Diamond thinks determined the course of economic history? Above all, it is that human wealth and success depends on interaction with the environment. Economic history in his view is a game against nature, not primarily a social process. Production– especially in agriculture– depends on the geographical hand we have been dealt. Yet Diamond’s emphasis is not on soil fertility and minerals as in the writings of most geographers, but on the ability of homo sapiens to domesticate plants and animals. His view is that all societies and cultures have approximately similar abilities to manipulate nature, but the raw materials with which they had to work were different. Diamond points out in his witty prose that domestic animals are much like Tolstoy’s view of happy marriages: all happy marriages are the same, each unhappy marriage is different in its own way. Domesticable animals are all domesticable in the same way, but recalcitrant animals are all different. To exploit large animals for food, energy, or other services, domesticable wild animals need to exist, a condition that did not obtain in Precolumbian America (where the arrival of homo sapiens 13,000 years ago had led apparently to their extinction). But even if they existed, they needed to satisfy some conditions such as being able to breed in captivity, safe for children and other living beings, and so on. He argues, with great conviction, that the hippos and giraffes of Africa, the jaguars of the Amazon, and the kangaroos of Australia did not meet those conditions. The domesticated llamas, turkeys, and dogs of America could not pull it off either. Eurasia, on the other hand, was lucky enough to have had the wild animals from which our cows, sheep, horses and chickens could be bred. This gave the Europeans huge advantages, not only in terms of the development of technology (e.g. mixed farming and wheeled transport) but also in providing them eventually with immunity against infectious diseases caused by the proximity of these animals. When they then established sudden contact with non-Europeans, the “Plagues and Peoples” effect simply overwhelmed the unprepared victims.

A similar and perhaps less well-known effect occurred with respect to domesticable plants. Eurasia was simply lucky in that its environment provided a much larger stock of plants that lent themselves to domestication, and plants that had better quality in terms of the nutrients supplied, resistance to disease, ease of cultivation and so on. Botanical wealth, constrained by the local flora, determined agriculture, agriculture determined everything else, says Diamond. Eurasia won because the supply of wild plants that provided the gene pool for domesticated crops was larger, richer, and better. If you feel that this is a bit simplistic, read his chapters on “How to Make an Almond” and “Apples and Indians.” It is a serious, informed, and well-thought out argument, and if in the end we are not wholly convinced, thinking of how to refute Diamond will make us wiser and better informed.

Diamond’s argument makes serious use of counterfactuals, to the point of wondering in the last chapter what would have happened if a German truck driver in 1930 would have hit his brakes a second later and killed Hitler in a head-on collision. But in the chapters on agriculture his imagination abandons him. How much of the performance of non-Europeans was really constrained by their environment and how much their own making? In Diamond’s view, the answer is “all and nothing.” Yet one can imagine crops that were manipulated and selected to produce crops that are as unimaginable to us as poodles and sweet corn would have seemed 10,000 years ago. Take one example: among the disadvantages that the indigenous plants of what is now the Eastern U.S. suffered from is a lack of founder crops. Yet he does concede that some of them on the surface could have done nicely, such as a flower named sumpweed, “a nutritionist’s ultimate dream” with 32 percent protein. Sumpweed, Diamond explains, did not make it to the rank of corn, potatoes, and rye because it causes hayfever, does not smell good, and handling it can cause skin irritation (p. 151). Are we really sure that these vices could not have been bred out of them? After all, all domesticated plants had originally undesirable characteristics, but through deliberate and lucky selection mechanisms they eventually got over them. Wheat, rye, and maize, which feed much of the world’s population, all had humble beginnings. Diamond points out that much of our ability to improve plants depended on whether certain characteristics were the result of epistatic effects, that is, caused by more than one gene. People could select for a particular trait as long as it was caused by one of very few genes; if it was controlled by many genes, breeding specimens that displayed the traits would be unlikely to fix it in the population. But apart from a few examples, Diamond does not persuade us that this lay at the heart of the geographically challenged societies.

A somewhat similar problem exists with Diamond’s view of technology. In a chapter cleverly named “Necessity’s Mother” he notes the many links between geographical constraints and technical options. Why would a society produce wheels if it had no horses or oxen to pull them? Wheelbarrows and rickshaws might have been an option, but maybe draft animals came first. Not all questions can be answered that way: some indigenous populations in America might have built seaworthy ships, or managed to develop some technology we cannot imagine today. If they did not, is this because they tried but failed, or because they never tried?

Yet Diamond points out two elements that suggest that links between geography and technological progress may be significant. One is that geography constrains mobility of knowledge. Assume, somewhat implausibly, that the idea of a wheelbarrow only occurred to one person in history, but that it spread to people seeing their neighbors use. If this happened in Central Asia, it may well have reached China, France and Yemen in a few centuries, but before 1500 it would never get to America or Australia. Agricultural technology, he notes, also diffuses easier from East to West than from North to South, as changing longitude has a stronger effect on climate and seasonality than changing latitude– giving Eurasia an advantage over America and Africa. Furthermore, Diamond resurrects the late Julian Simon’s argument that technological success depends on population density and the ability of a society to produce a surplus beyond subsistence, so that there are resources available for thinking and experimenting. Maximum population density was largely a function of the ability of the environment to feed the population. Writing, for instance, required large and dense settlements with complex hierarchical institutions, much different from hunting and gathering tribes.

The notion that much economic history is a game against nature, in which people form certain views about its regularities and use these to manipulate them to improve material conditions is a powerful one. Diamond’s insight is that nature differs from place to place and that certain environments are easier to manipulate than others. The economic historian must add two qualifications to this. One is that environments can be manipulated or abandoned. While Diamond describes in detail pre-historic population movements (which he deduces from linguistic evidence), he does not realize that he tells the story of regions, not necessarily of people who always had the option to move to a more generous and flexible area. Secondly, it could be argued that much technology emerges precisely because the environment is not generous and requires hard work and ingenuity. What is the partial derivative of technological creativity with respect to initial geographical endowment? In the final analysis, this is still unknown.

The book is full of other clever arguments about writing, language, path dependence and so on. It is brimming with wisdom and knowledge, and it is the kind of knowledge economic historian have always loved and admired. If you teach economic history, any kind of economic history, go read this book. Or else you are taking a serious risk that a clever undergraduate who has read it will ask you a question you don’t know the answer to. Nothing worse is imaginable, short of organizing a world conference and canceling at the last moment.

Joel Mokyr Departments of Economics and History Northwestern University

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

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Subject(s):History of Technology, including Technological Change
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative