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Oceans of Grain: How American Wheat Remade the World

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

Published by EH.Net (August 2022).

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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


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

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (August 2022). All EH.Net reviews are archived at

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

How the World Became Rich: The Historical Origins of Economic Growth

Author(s):Koyama, Mark
Rubin, Jared
Reviewer(s):Mokyr, Joel

Published by EH.Net (July 2022).

Mark Koyama and Jared Rubin. How the World Became Rich: The Historical Origins of Economic Growth. Cambridge, UK: Polity Press. x + 259 pp. $24.95 (paperback), ISBN 978-1509540235.

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


Full disclosure: this reviewer’s name appears on the back cover of this book having written an endorsement, known as a blurb. Given that in the 40 words of an endorsement one can say very little, this book merits a more detailed discussion.

Any scholar teaching economic history and wishing for an up-to-date survey of a large and important literature will find it useful to read this book to bone up on the recent research listed in the long and encompassing list of references. Furthermore, they should seriously consider having their students read it for their class. The book is a wide-ranging yet remarkably complete and accessible survey of the Great Enrichment, the emergence of modern and prosperous economies that provide us with a material standard of living that our ancestors could not have dreamed of. How and why modern economic growth occurred when and where it did, and how economists have tried to understand this phenomenon, is the theme of this book. It is written by two of the finest young senior scholars in our field, both with important contributions to the subject matter of this book.

Many of the issues this book raises are highly contentious in our profession, and for good reason: these are hard questions on which learned scholars can disagree and interpret the evidence in different ways. How much did institutions really matter? What was the role of culture in economic growth? Was geography destiny? What was the role of craft guilds in the economic development of early modern Europe? How to think about the role of imperialism and slavery in the Industrial Revolution and the subsequent growth of industrial powers? Were high wages good or bad for technological progress? Was war a positive factor in economic growth? Was the European Marriage Pattern a positive factor in the economic development of the Continent?

The ecumenical and balanced approach the authors take to these questions is much like the Rabbi in a famous Jewish story. According to the legend, a rabbi is holding court in front of a large audience of his pupils. A husband and wife appear before the rabbi, to discuss their troubled domestic life. First the husband gets to lay out his case, and he lists all the sins and vices of his wife. The Rabbi listens carefully and pronounces his verdict: the husband is in the right. Then his pupils appeal to him: you should hear the wife’s case as well. The Rabbi consents and listens to the woman lays out her powerful case against her lazy and violent husband. He then announces his second verdict: the wife is in the right. His best pupil protests: but Rabbi, how can they both be in the right? The Rabbi listens and pronounces: the pupil is right too.

Rubin and Koyama present balanced and fair surveys of made in the literature, but they are reluctant to take strong positions. Such an ecumenical approach sets them apart from Clark’s Farewell to Alms and McCloskey’s Bourgeois Dignity, where the authors take up similar issues but in a much stronger opinionated mode. That thoughtful and measured approach of the survey, its elegant and crystal-clear style, and the authors’ impressive knowledge of a large and complex literature make this book nothing short of ideal for teaching advanced courses on global economic history to economics students.

It is especially refreshing to see a book such as this that pays explicit attention to institutions and culture, two themes that until not so long ago were taboo in our field but now seem to play increasingly central roles. The book contains full chapters on each, and while the discussion is naturally far from exhaustive, the authors do an excellent job summarizing some of the best work in these areas. What remains, of course, unsolved is why different nations develop different institutions and how and why such institutions change over time and how exactly cultural beliefs help determine the institutions that society ends up with.

The one issue on which the book takes a relatively strong position is on the issue of European imperialism and the importance of slavery and the slave trade to the Industrial Revolution and the origins of Western technological leadership (chapter 6). In recent years the “new history of capitalism,” in its zeal to blame the West and Capitalism for all the ills of the world, has argued that the West grew rich largely at the expense of the Africans and Asians whom Europeans mercilessly enslaved, sold, and exploited. As more sophisticated and economically literate scholarship has shown, the famous thesis by Eric Williams and recent proponents (e.g., Berg and Hudson, 2021) that somehow the Industrial Revolution depended on European imperialism and the Atlantic slave trade cannot be seriously defended. While Atlantic ports have been shown to have been crucial for subsequent economic development (Acemoglu, Johnson and Robinson, 2005), the exact causal chains are still unclear, and Koyama and Rubin stress sensibly that without institutional support for technological progress, without a rule of law and constraints on the executive, and without a comparatively inclusive society, no amount of colonialism and oppression of non-Europeans would have triggered modern economic growth.

The insight that economists have brought to this literature is that economic growth is fundamentally a positive-sum game: on a global level, the economic success of the West did not — on average — impoverish the Rest. In the long haul it made the entire world much richer than before — just not quite as rich as Europe and its offshoots (with some major exceptions such as Japan and Singapore). The causality is more complex. Whatever it was that made Europe learn to control energy and materials as well as run their economic systems better, also allowed them to manipulate and exploit Asians and Africans. But if anything was causal here, it was not that Imperialism caused the Industrial Revolution but the reverse: as Daniel Headrick in his classic work on the topic (1981) showed decades ago, what made western Imperialism possible above all was better technology (see also Hoffman, 2015).

Moreover, it is striking how poorly the historical fit between Imperialism of any kind and economic growth really is. The Roman Empire was the mother of all predatory empires, yet it did not industrialize and experienced only limited technological change. Eighteenth century China and Russia both added enormous stretches of land to their realms, with no noticeable effects on economic growth. The British Industrial Revolution coincided with the loss of the North American thirteen colonies. While Britain was a successful commercial and maritime nation, the Smithian gains from trade with its Empire — as Deirdre McCloskey (2010) has persuasively argued — were by themselves never enough to trigger the Industrial Revolution, much less create the Great Enrichment. In per capita terms, one of the largest colonial empires was the Dutch one in the East Indies, yet it did not help the Dutch industrialize until late in the nineteenth century. Belgium initiated its lamentable adventure in the Congo only after it had industrialized. Perhaps most strikingly, the European imperial venture collapsed after World War II, yet those were exactly the years during which economic growth in Europe was most rapid — with the exception of Russia (which maintained its colonial empire until 1991). In short, Koyama and Rubin conclude that colonialism and the slave trade “played a large role in the making of modern world” (a suitably vague statement) but that evidence is “mixed” on whether it was responsible for the world becoming rich (a polite pronouncement of a Scottish verdict: not proven).

Where the book truly shines is pointing out why the Great Enrichment was relatively late in coming and why the pre-1750 world — with a few exceptions — remained poor. The authors admirably survey the consensus that has emerged on the subject. Three major factors held the economies back. First, as neo-Malthusians such as Galor and Clark have maintained, before 1750 population growth in many cases wiped out the fruits of productivity growth, such as they were. Second, predators of various kinds and extractive institutions (North-Wallis-Weingast’s “natural state”) not only pillaged and plundered the riches of the few places that had been economically successful, they extinguished incentives to invest and innovate. Finally, until institutions had been established to govern and control the accumulation and dissemination of useful knowledge, the opportunities for sustained technological progress remained too limited. As the authors point out in admirable detail, the Industrial Revolution meant that these three brakes on economic progress slowly dissolved to create the Great Enrichment, first in a few economies in the West, then in more and more places around the world.

At the end of the day, as the authors sum up in chapter 11, in 2022 “the world is rich.” Almost anywhere one lives in this world, material life is in all likelihood better that it was a century, let alone a millennium, ago. A rising tide lifted most ships on the planet, but rather unequally, and while global poverty and famine are a fraction of what they were in 1800, they are still with us — mostly because of incompetent or tyrannical governance. What is perhaps worth noting, however, is that while technology keeps advancing, with novel breakthroughs opening new horizons in material sciences, molecular genetics, energy physics, and much more, there seems to be little if any long-term progress in the institutions that underlay the economic miracles of the past two centuries. Not only do countries with weak institutions such as Russia seem to lack the capability to adopt more inclusive and open governance, but even in nations long committed to the Enlightenment visions of freedom, human rights, and democracy, the institutions that helped make us rich seem ever more fragile. The conflict between ever-more powerful technology and the brittle polities that deploy it may be the greatest challenge to our future.


Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2005. “The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth.” The American Economic Review 95 (2005), pp. 546-579.

Berg, Maxine, and Pat Hudson. 2021. “Slavery, Atlantic Trade and Skills: a Response to Mokyr’s ‘Holy Land of Industrialism’” Journal of the British Academy, Vol. 9, pp. 259–281.

Clark, Gregory. 2007. A Farewell to Alms. Princeton, NJ: Princeton University Press.

Galor, Oded. 2011. Unified Growth Theory. Princeton, NJ: Princeton University Press.

Headrick, Daniel R. 1981. The Tools of Empire. New York: Oxford University Press.

Hoffman, Philip T. 2015. Why Did Europe Conquer the World? Princeton, NJ: Princeton University Press.

McCloskey, Deirdre. 2010. Bourgeois Dignity: Why Economics Can’t Explain the Modern World. Chicago: University of Chicago Press.

North, Douglass C., John Joseph Wallis, and Barry Weingast. 2009. Violence and Social Orders. Cambridge: Cambridge University Press.


Joel Mokyr is the Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History at Northwestern University, and Sackler Professor, (by special appointment) at the Eitan Berglas School of Economics, Tel Aviv University. His most recent book is A Culture of Growth (Princeton University Press, 2017).

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2022). All EH.Net reviews are archived at

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Servitude and Slavery
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Economy of Medieval Wales, 1067-1536

Author(s):Stevens, Matthew Frank
Reviewer(s):Burnette, Joyce

Published by EH.NET (January 2022).

Matthew Frank Stevens. The Economy of Medieval Wales, 1067-1536. University of Wales Press, 2019. xiv + 149 pp. £24.99 (paperback). ISBN 978-1786834843.

Reviewed for EH.Net by Joyce Burnette, Department of Economics, Wabash College.


This is a book of economic history. We don’t learn about politics or individual people; we do learn about the organization of production, immigration, and the growth of towns. The book is not a micro-history that examines new evidence on a very specific time and place. Nor is it a quantitative history that analyzes data. It is rather a historical survey providing an overview of how the Welsh economy changed over 500 years. While some primary sources are used, the book is primarily a synthesis of the secondary literature. We sometimes learn the evidence for particular conclusions, but the focus is more on the story than on the evidence. The book is brief and entirely readable; I found it both informative and enjoyable. There are some Welsh terms to learn, but these are all explained.

Stevens argues that we cannot simply apply English history to Wales. Yet the most important factor in the economic history of Wales is its relationship with England. Stevens argues that English conquest and immigration, along with Welsh geography, were the main factors shaping Welsh economic history during this period.

The book has three main parts: a literature review, a story of how the Welsh economy changed over time, and an analysis of what explains the observed changes. The introduction is a historiographical essay and provides a useful map of the literature for someone like me who is not an expert on Welsh history. The introduction also makes the case that Wales has been neglected in economic histories of Britain and thus needs its own.

The longest of the three parts (Chapters 1–3) tells a chronological story of how the economy of Wales changed between 1067 and 1536. The story told is one of expansion followed by decline. Before 1300 the population grew. English immigrants took over settlements in the lowlands with the best arable land, pushing the Welsh into upland farms. Towns and trade developed during this period. In the eleventh century trading towns were too vulnerable to attack to by warlords to be viable, but by 1300 there were 100 towns, and about 20 percent of the population was urban. Cardiff, with nearly 2000 people, was the largest town. Part of the urban population specialized in the production of cloth or leather goods. With towns came increased trade, and increased use of money. With trade, upland pastoral farms became more viable, because more valuable animal products could be exchanged for grain. The period of expansion also saw the building of castles, bridges, and fulling mills. Free peasants gradually replaced unfree peasants, though certain labor duties persisted. Stevens notes that the growth during this period was “externally driven” by English immigration.

Around 1300, when the Welsh population reached a maximum, the lowland population density in Wales was almost as high as in England, though wealth per capita was significantly lower. After 1300 famine and plague reduced population, and migration reversed as Welsh people emigrated to England. The labor shortage caused by the Black Death pushed lords to give up cultivating demesne lands themselves and lease the land. Wages increased about 50 percent, but wage labor was not common. The Glyndwr rebellion of 1400 also contributed to the decline; 40 towns suffered attacks and some were burned. Trade also suffered from the English response to the rebellion, which included the confiscation of goods and limits on the ability of the Welsh to purchasing property or congregate in one place.

The fourth chapter examines which historical model we should use to understand Welsh economic history. The chapter considers three models from European history: the demographic model, the Marxist model, and the commercialization model. None of these are deemed sufficient for understanding Welsh history. While population did grow between 1067 and 1300, this growth was not endogenous. Population growth resulted not from the expansion of the population into unused land, but from English immigration. The development of markets and towns were also driven by external (English) forces. Stevens also rejects the Marxist story of class struggle. Welsh history was not a class struggle between serfs and lords, since even before the Black Death most peasants were free. Defining the class struggle as one between Welsh peasants and English lords is not satisfactory because it ignores English peasants and Welsh burgesses. Stevens likes the commercialization model somewhat better, noting that does a fairly good job of describing Welsh urban history, at least before 1400.

Instead of adopting a model developed elsewhere, the book provides three themes to organize our understanding of Welsh economic history: conquest by England, ethnic differences between the English and the Welsh, and geography. The English introduced monetization and urbanization, and generally altered every economic institution. The Welsh were treated differently from the English. In addition, physical geography shaped Welsh history. With only about 14 percent of Wales croppable, settlement and trade were constrained. As a reader, I would have liked to see these themes highlighted earlier in the book, rather than at the very end.


Joyce Burnette is Professor of Economics and John H. Schroeder Interdisciplinary Chair in Economics at Wabash College. Her publications include Gender, Work and Wages in Industrial Revolution Britain (Cambridge University Press, 2008) and “Why We Shouldn’t Measure Women’s Labor Force Participation in Pre-Industrial Countries” (Economic History of Developing Regions, forthcoming).

Copyright (c) 2022 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (January 2022). All EH.Net reviews are archived at

Subject(s):Economywide Country Studies and Comparative History
Historical Demography, including Migration
Historical Geography
Geographic Area(s):Europe
Time Period(s):Medieval

World War II and Southeast Asia: Economy and Society under Japanese Occupation

Author(s):Huff, Gregg
Reviewer(s):Dick, Howard

Published by EH.Net (September 2021)

Gregg Huff, World War II and Southeast Asia: Economy and Society under Japanese Occupation. Cambridge: Cambridge University Press, 2020.  xxx + 523 pp. £90 (hardcover), ISBN: 978-1-107-09933-3.

Reviewed for EH.Net by Howard Dick, Faculty of Business and Economics, University of Melbourne.


Notwithstanding a library of books on the military conflict in Southeast Asia between December 1941 and August 1945, little has been written on the welfare of the civilian population during the three and a half years of Japanese Occupation, despite the massive economic and social dislocation. Most of what has been written deals with the situation in one country or colony. Although Japan perceived of Southeast Asia as a region, it seldom comes into focus.

This masterful work of scholarship by Gregg Huff (Oxford University) tackles the problem head-on by asking the big questions, forensically collating the data and, if not quite able to transcend the limitations of national records and localized impacts, putting forward a plausible synthesis. It immediately becomes an essential reference for any research on the twentieth-century history of Southeast Asia.

It is not a book to be read as narrative, at least not beyond the Introduction and the next two chapters with overviews of wartime strategy and civilian administration. The following seven chapters cover Finance; National Product and Trade; Transport, Utilities and Industrialization; Shortages, Substitutes and Rationing; Food and Famine (rural); Food and Living Standards (urban); and Labor. In each case the data are collated by nation, then aggregated to a sub-regional and regional level. There is also a very detailed chronology, a comprehensive bibliography, and a good index.

In essence, Japan invaded Southeast Asia to secure strategic commodities (oil, bauxite, tin, rubber, etc.) needed to sustain the war against China that had been ebbing and flowing since mid-1937. The conquest was swift and probably cost less than 10,000 Japanese lives. Ironically, the loss of shipping to Allied submarines meant that commodity flows from Southeast Asia soon slowed to a trickle and the economic benefits to Japan evaporated while the costs of military occupation rose from an initial 6 percent of Japan’s GDP to 16 percent by 1944.

Arguably Southeast Asia received no benefit beyond the destruction of colonial empires. Loss of shipping and the consequent shortage of fuel also meant that this globalized and trade-specialized region was suddenly reduced to autarky and with catastrophic effect, especially on food supply and distribution. No figure more starkly encapsulates the scale of the deprivation than Huff’s conservative estimate of around 4.5 million civilian deaths, 50 percent more than the 3 million military and civilian deaths suffered by Japan itself. The actual number of deaths in Southeast Asia could have been as high as 6 million. Records fail. Of that 4.5 million, 3.4 million were attributable to the 1944 drought famine in Java and Vietnam. At least another 0.4 million were casualties of forced labor (romusha), more than 0.5 million died in the Philippines through war, hard labor and famine, and a mid-point estimate of 23,000 is attributed to the terrible sook ching atrocity in Singapore. The value of Huff’s research lies not just in such summary tabulations but also in the three-dimensional matrix of effects by sub-region, industry and rural/urban areas.

Although Southeast Asia gradually reintegrated with the global economy, the long-run effects of the Occupation were pernicious. Agriculture reverted towards a subsistence mode with more reliance on inferior crops, notably maize and cassava. Vaunted industrialization efforts through ad hoc import substitution were very modest compared with the destruction of capital through war, removal, and cannibalization and established no sound basis for development. Except for railways and small sail and motorized craft, transport systems collapsed. Roads were not maintained and petrol-driven vehicles gave way to bicycles and pedicabs. To escape rural famine, people crowded into cities, where ramshackle housing and black markets proliferated. By the late 1950s Japan was rapidly reviving its industrial economy, not so most of Southeast Asia. Indonesia, Indo-China and Burma would stagnate for much longer.

The book’s longish Epilogue and Conclusion weighs the long-term consequences of the Occupation and explores the counterfactual of what might have happened had Japan not gone to war but peacefully extended its influence in Southeast Asia. Was the Japanese Occupation a turning point or, as Huff prefers, “a catalyst for accelerating change”? The political watershed is clear. From an economic perspective, Huff argues that the Occupation merely interrupted the natural order of integration with the world economy. Perhaps, but the post-war mode of integration differed markedly from pre-war colonial bilateralism and was much more oriented towards Japan and East Asia.

This synthesis raises a bigger question that Huff does not address and is really for others to ponder. If the Occupation were to be summarized in one word, it would be “trauma.” Apart from the obvious political dislocation, the terrible deprivation among civilian populations caused not only millions of deaths but also, as Huff documents, widespread malnutrition and misery. As we now better understand from genetics, malnutrition and trauma damage not only the living but also two generations as yet unborn. Entwining with the physical, genetic, mental and psychological effects are the revolutionary impacts of the destruction of political institutions (peace and order) and the erosion of social norms (including a new tolerance of black markets). Mass trauma makes subsequent trauma more likely. In Indonesia the Japanese Occupation was followed by four years of revolutionary war, then civil war and the anti-communist bloodbath. Vietnam remained a war zone until 1975. Burma still is a war zone. In Indonesia in the 1970s, the elderly looked back on the colonial era with mixed feelings as a “normal time” (zaman normal), a phrase that resonates in our current time of COVID with existential longing for a “new normal.”

Huff opens a pathway to a more imaginative perspective on twentieth-century Southeast Asia that should transcend the arbitrary boundary between politics and economics. People seek stability and freedoms (politics) together with material comforts and prosperity (economics). It is academics who struggle with complexity beyond their accustomed disciplinary constraints.


Howard Dick is the author of Surabaya, City of Work: A Twentieth Century Socioeconomic History (Ohio University Press, 2002), with P.J. Rimmer of The City in Southeast Asia Press (NUS Press, 2009) and Cities, Transport and Communications: The Integration of Southeast Asia since 1850 (Palgrave, 2003), and with V. Houben, J. Th. Lindblad and Thee Kian Wie of The Emergence of a National Economy: An Economic History of Indonesia, 1800-2000 (University of Hawaii Press, 2002).

Copyright (c) 2021 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (September 2021). All EH.Net reviews are archived at

Subject(s):Military and War
Geographic Area(s):Asia
Time Period(s):20th Century: WWII and post-WWII

How Innovation Works: And Why It Flourishes in Freedom

Author(s):Ridley, Matt
Reviewer(s):Coelho, Philip

Published by EH.Net (August 2020)

Matt Ridley, How Innovation Works: And Why It Flourishes in Freedom. New York: Harper Collins, 2020. 406 pp. $30 (cloth), ISBN: 978-0-06-291659-4.

Reviewed for EH.Net by Philip Coelho, Department of Economics, Ball State University.



Matt Ridley, the author of The Rational Optimist, has written another excellent book; he is an imaginative thinker and a writer of clarity. This book is very worthwhile reading; still (like any project) it is not perfect. In this review, I will try to convey what he has done and point out where I have difficulties. The book’s 12 chapters explain the histories of innovation in various economic sectors. Chapter one is devoted to energy, Two to public health, et cetera. In the Introduction, Ridley explains why and what he is doing, and what he expects to accomplish; he defines innovation as: “like evolution … a process of … discovering ways of rearranging the world … that happen to be useful. The resulting entities are the opposite of entropy: they are more ordered, less random, than their ingredients were before” (p. 2). This is a very useful, non-didactic definition; it avoids semantic arguments (whether a person was or was not an entrepreneur, and what do entrepreneurs do) that bedevil business histories. The author is borrowing from his training as an evolutionary biologist by incorporating its analytics into a history of innovation. Ridley forthrightly states that he is not attempting to explain why, when or where innovation occurred, but “telling stories” about people turning inventions into “useful innovations [that] teach us, by the examples of their successes and failures, how it happened” (p. 7).

Chapter 1, “Energy” is illustrative of his methodology. Starting in the eighteenth century Ridley examines innovations in the production of energy from non-animal sources. The basic theme, reiterated throughout the book, is that innovation is an evolutionary process; it is accretive, not the product of lonely geniuses huddled and isolated in workshops. He puts forth three candidates (Denis Papin, Thomas Savery and Thomas Newcomen) as putative innovators (“Notice I do not call him an inventor; the difference is crucial” (p.15)) of the first successful steam engine. Ridley’s distinction is crucial; it identifies an inventor as a person who first conceptualizes a process and defines innovators as the people who make the invention economically useful. In the case of steam power, Hero of Alexandria employed rudimentary steam powered devices in the first century AD; still there were people using steam power centuries before Hero, so the case for identifying the person who first conceptualized steam power is, at best, quixotic. Still steam power was not economically useful before the developments that occurred in the eighteenth century. Then a series of innovators made steam power economic; it could be employed to produce goods and services in less costly ways than had been available previously. In 1698 Thomas Savery was granted a patent for an invention for the “raising of water by the impellent force of fire” (p. 18). This introduces another theme that Ridley returns to throughout his book: that patents are more than somewhat arbitrarily rewarded and they, more often than not, impede innovation. People who used the Newcomen engine had to pay royalties to the holders of the Savery patent no matter how much they had modified it. Similarly, Ridley argues that the Watt patents were obstacles in the way of improving the efficiency of the Watt steam engine.

There is a tension between the effects that patent protection laws have in stimulating innovation and the rent-seeking obstacles to innovations that patents provide. Ridley is firmly in the camp that argues that current patent laws discourage more innovations than they promote. If you throw in copyright laws — which in theory and in practice, (e.g. the film Bambi) can be almost perpetually protected — then I am in complete agreement with Ridley. This is an economic issue: as they are currently structured, do patent protection and copyright laws promote or impede innovation? The economic basis for granting “intellectual property” a favored place in the law and in public debate should be reconsidered.

In the “Energy” chapter, Ridley reprints a plea from an 1819 edition of the magazine The Chemist asking for funds to build a monument to Watt: “He is distinguished from other public benefactors, by never having made, or pretended to make it his object to benefit the public . . . This unpretending man in reality conferred more benefit on the world than all those who for centuries have made it their especial business to look after the public welfare” (p. 26). This is a great quote and it echoes the famous “invisible hand” passage from Adam Smith’s The Wealth of Nations, yet I have not been able to track down Ridley’s source. This is typical; he is rather cavalier about sourcing. There are no footnotes, nor page citations. Each chapter has its own section in “Sources and further reading section” (pp. 375-388). But if you are trying to find a particular reference be prepared to spend some time and be frustrated. After spending 40 minutes with various search engines, I failed to find either Ridley’s source for the quotation from The Chemist or the original. In another great passage in chapter 3 (“Transport”) — where he questions the wisdom of the (self-anointed?) scientific establishment — Ridley quotes an article in the Scientific American from 1906 doubting the veracity of the Wright brothers’ claim to heavier than air flight: “If such sensational and tremendously important experiments are being conducted … is it possible to believe that the enterprising American reporter … would not have ascertained all about them … long ago?” (pp. 100-01). Well the answer to that question is yes, it is possible to believe the high Pooh-bahs of the American scientific establishment were ignorant of what the Wright brothers were doing in 1906, let alone in 1903 at Kitty Hawk. I was successful in tracking down that quotation (Scientific American 1906, vol. 94: 40), it only took 20 minutes and access to a major university’s library and search engines.

Yet Ridley does not fare so well in chapter 6 (“Communication and Computing”) where he quotes Thomas Watson of IBM in 1943 as saying that “there is a world market for maybe five computers” (p. 203). It is a nice story, but it is either totally or heavily fabricated. The only quote from Watson in the public record (appropriately from Geek History: that mentions five computers is from an IBM’s stockholders meeting, which says: “We believe the statement that you attribute to Thomas Watson is a misunderstanding of remarks made at IBM’s annual stockholders meeting on April 28, 1953. In referring specifically and only to the IBM 701 Electronic Data Processing Machine — which had been introduced the year before as the company’s first production computer designed for scientific calculations — Thomas Watson, Jr., told stockholders that ‘IBM had developed a paper plan for such a machine and took this paper plan across the country to some 20 concerns that we thought could use such a machine. I would like to tell you that the machine rents for between $12,000 and $18,000 a month, so it was not the type of thing that could be sold from place to place. But, as a result of our trip, on which we expected to get orders for five machines, we came home with orders for 18.’” The problem is that Ridley’s work is replete with wonderful anecdotes. I have no doubt that the vast majority are accurate, but detailed citations are valuable in both verifying and falsifying historical interpretations.

Another deficiency is that Ridley’s knowledge of the literature in economic history is incomplete; he attributes the growth of the American automobile industry to Henry Ford who “revolutionized the industry after 1908” (p. 92). This statement is both incorrect and contradictory to his hypothesis that innovations and economic changes are evolutionary, not revolutionary. Robert Thomas (1969) explains just what Ford did in the era of the Model T Ford. In 1908 both: “Buick and Ford introduced into the $1,000 price class for the first time automobiles of standard design [engines in the front, French type body work, steering wheel, etc.]. These designs, the Buick Model 10 and the Ford Model T, were similar to cars being sold in the $1,500-$2,000 price class” (Thomas p. 150). What Henry Ford did that made him different from competing producers is to make virtually identical cars year after year while simultaneously lowering prices. The automobile was changing rapidly during those years (selective transmissions replacing planetary transmissions, self-starters, increased horsepower, etc.) yet the Model T remained unchanged. By 1914 the Model T was selling approximately 45% of new cars sold in the U.S., yet it was receiving only 25% of the revenue from new car sales (Thomas, p. 153). What Ford did was to produce outdated cars whose primary competitors were used cars, not new cars. Essentially Henry Ford made a fortune by producing technologically obsolete vehicles at attractive prices. As the technology of the automobile advanced, Ford could not maintain his price/marketing strategy because many (most?) of the used cars for sale in 1920 had more desirable features than the 1920 Model T. At prices that Ford could profitably sell cars, consumers preferred the typical used vehicle to the 1920 Model T. The growth of the used car market forced Ford to change strategies; subsequently the Ford company followed the industry practice of annual model changes and improvements with constant or increasing prices.

Ridley’s deficiencies aside, the insights he provides in the various chapters ((2) Public Health, (3) Transport, (4) Food, (5) Low-Technology Innovation, (6) Communications and Computing, (7) Prehistoric Innovation, (8) Innovation’s Essentials, (9) The Economics of Innovation, (10) Fakes, Frauds, Fads, and Failures, (11) Resistance to Innovation, and (12) An Innovation Famine) are very perceptive and an educational delight. Ridley frustrates any who wish to replicate his analysis without undo effort, still every chapter has multiple non-obvious insights. Focusing on a few insights does not do justice to the book, yet it must be done otherwise the review would be too burdensome to read.

A theme that Ridley repeatedly emphasizes is the conservatism of government and the establishment in reaction to innovation. Patent and copyright law as obstacles to innovation have already been mentioned, but we should not forget our own sacred cows, the intelligentsia and academia. As a graduate student in the 1960s, I remember the future Nobel Prize winner, Douglass C. North, echoing the received wisdom of the time that no more aid or development projects should be directed towards countries (particularly India and Pakistan) because they were “basket cases,” that were too overpopulated and whose only fate was starvation and death for the many. Ridley (p. 134) suggests that this opinion had its genesis in the foreign services and development agencies. If that is the case, Paul Ehrlich’s Population Bomb (1968) is not entirely his responsibility. Nevertheless, it is risible that so many academics could have been so wrong about the near-term future of food production in the late 1960s through the mid-70s. In the same vein, government agencies in India tried to suppress the introduction of the hybrid wheats that were among the first products of the Green Revolution: “Indian bureaucrats were adamant that Mexican wheats should not even be allowed in the country, let alone encouraged. The biologists warned of devastation and disease if the wheats failed. The social scientists warned of ‘irreversible social tensions’ and riots if the wheats succeeded — and caused some farmers to make more money than others” (p. 133)

Ridley devotes an entire chapter to a history of the suppression of novelty. Things that were suppressed include coffee, margarine, genetically modified organisms, herbicides, and cellular telephony. Methods of suppression include diktats, regulations, patents, copyrights, legislation, commissions, and litigation. Every change affects someone negatively; if a change can be halted or delayed the costs of the change can be eliminated or reduced. Ridley relates how “land-use” (zoning) planning has reduced the population of San Jose during the Silicon Valley boom. Another, more completely examined example is that of the European Commission, which in 2014 mandated that energy efficiency (a “good” thing to the Commissioners, not so good for energy producers) of vacuum cleaners be tested in the absence of dust or debris. It so happens that the Dyson Cyclone vacuum cleaner is much more energy efficient than vacuum cleaners with bags because the bag cleaners operated less efficiently as the bags got filled with dust and debris. The (German) manufacturers of bagged cleaners had lobbied the Commission effectively. Dyson appealed the regulations through the courts and in November of 2018 he was vindicated. Still the delay cost Dyson sales and increased those of the makers of bagged cleaners. We may not have much reason to lament a billionaire’s decreased sales, but we should deplore the erroneous information produced by public agencies that deluded consumers.

There are many cases of innovations that Ridley examines that are worthy of full-scale economic analyses. Two that particularly intrigue me are the examples of corrugated roofing and bed-nets with insecticide embedded in them. We see corrugated roofing throughout in poor, tropical countries; I typically had given them no thought other than this is how the poor live in the tropics until this book. Corrugated roofs were a substantial improvement over other types of roofing for warehouses and industrial spaces in nineteenth century Britain. In poor countries today in the tropics they are symptomatic of improved living conditions; the alternatives to tin roofs are organic (straw, mud, and wood) that are more costly (including upkeep), less effective, a haven for insects and rodents, and not very useful for channeling rain for storage or irrigation. It would be nice to know the cost/benefit analysis comparing corrugated roofing to the alternatives and what something as innocuous as roofing does.

Bed-netting infused with insecticide is an interesting story. The bed nets were treated with insecticides to see how prophylactic they were in preventing malaria carrying mosquitoes from infecting people. Since the bed nets rarely escaped holes and tears, the people conducting the study kept it going even when the bed-nets were severely damaged. The researchers found that torn bed-nets retain a substantial amount of efficacy and are still effective in reducing the mosquito-borne transmission of malaria with bed-nets accounting for approximately “70 per cent of the six million lives saved worldwide [from death by malaria]” (p. 75).

There are other examples galore; if you have an interest in innovation, how it evolves, and how and why it is obstructed, then you should read this book. I recommend it highly. True it has difficulties — the lack of adequate citations and an index that is somewhat haphazard. Still I urge you to read it; I would recommend buying the e-copy for two reasons: 1) on most e-books you can do a word search and that reduces the importance of an index; and 2) the hard-bound (cloth) copy that I purchased is nearly falling apart after one (close) reading. The binding of this book does no credit to its publisher.


Robert Paul Thomas, “The Automobile Industry and Its Tycoon,” Explorations in Entrepreneurial History, ser.2:6:2 (1969: Winter).


Copyright (c) 2020 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (August 2020). All EH.Net reviews are archived at

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

The Economics of the Second World War: Seventy-Five Years On

Editor(s):Broadberry, Stephen
Harrison, Mark
Reviewer(s):Sahari, Aaro

Published by EH.Net (August 2020)

Stephen Broadberry and Mark Harrison, editors, The Economics of the Second World War: Seventy-Five Years On. London: CEPR Press, 2020. vii + 122 pp. free ebook, ISBN: 978-1-912179-31-2.

Reviewed for EH.Net by Aaro Sahari, Department of Philosophy, History and Arts, University of Helsinki.


The Economics of the Second World War is a concise overview on the economic history of the Second World War, or the “greatest conflict of an era of mass warfare” as editors Stephen Broadberry (Professor of Economic History, Oxford University) and Mark Harrison (Emeritus Professor, University of Warwick) define it. The book is divided into three sections and consists of sixteen short chapters written by a group of experienced historians of twentieth century economic, military and technology history. First, the origins of the war are discussed from European perspectives. Second, the conduct of war is analyzed. Third, the consequences of the conflict are examined. All chapters summarize earlier research findings. The book is a continuation to a 2019 work on the First World War by the same editors and also available from CEPR Press.

The first part, “Preparations for War,” re-evaluates the struggling German economy, Hitler’s rise to power, the Soviet economy and war preparations, and British economic management during the war. The role of the Great Depression in the NSDAP’s rise to power is a staple of historical literature but concrete economic evidence has been scarce. In the first chapter Hans-Joachim Voth (University of Zurich) presents recent econometric analyses on the linkages between the 1931 German banking crisis, failure of the Danat bank, regional historical antisemitism, and Nazi propaganda. The second chapter by Richard Overy (University of Exeter) continues on to re-evaluate the making of Germany’s war economy. Overy dismisses the myth of a blitzkrieg economy in favor of a transition onto war footing from 1936 onwards. The third chapter, by editor Mark Harrison, focuses on USSR before the war. Stalin’s Soviet Union was a warfare state in the 1930s, and the welfare of the people was sacrificed in favor of military development. Only this singular, brutal focus on external threats prepared USSR for the 1941 invasion. The last article on prewar developments, by editor Stephen Broadberry, analyses the fiscal and financial management of war in the UK. Together these four chapters point out the significance of the Great War in directing national economic policies of these three countries toward the Second World War.

In the second part, “Conduct of the War,” the discussion of war economics opens up to include United States, Japan, and various neutral and occupied countries. Eight articles provide a kaleidoscopic view of the Second World War using individual cases to highlight essential economic phenomena in the conduct of and survival in this global crisis. First, Phillips Payson O’Brien (University of St. Andrews) re-evaluates the vast literature on how the war was won through logistics, material attrition, and costly, novel military technologies in the air and at sea. David Edgerton (King’s College London) then reminds that a national economy isn’t a sufficient unit of study in the age globalization. The UK economy was better integrated to global trade networks than the German one, and thus more capable of shifting to a war-centric model. Price Fishback (University of Arizona) challenges the notion that the war raised the United States, “the arsenal of democracy,” out of depression. Long-term economic analysis provides quantitative proof that centrally directed war spending not only differs significantly from normal economic activities but also fails to explain changes in U.S. domestic economy. Mark Harrison (University of Warwick) uses economist Mancur Olson’s postwar research activities to analyze the impact of strategic bombing in the war to argue that supply-chain disruptions had limited, often indirect effects. Then, Tetsuji Okazaki (University of Tokyo) discusses the essential role of supplier networks in Japan’s wartime production of airplanes and the impact of extending production to new, inexperienced suppliers.

The last three articles in part II delve into the wider economic phenomena of the war. Hein Klemann (Erasmus University) revisits the strain of the German war effort on occupied European countries. He notes that poorer East European countries suffered more from the occupation than West European countries, and that the Nazi policy of “Germany first” led to production inefficiencies in all occupied territories. Eric Golson’s (University of Surrey) article on neutral countries’ economic activities is an essential, if unduly short, part of the overall story. Legal neutrality was typically maintained through economic concessions to offset military weakness. Finally, Alan Bollard (Victoria University) summarizes the essential role of economists to the war effort in key belligerent countries.

In the final part of the book, “Consequences of the War,” big societal phenomena are investigated. Cormac Ó Gráda (University College Dublin) summarizes the many, horrendous famines of the Second World War from a macro perspective. Walter Scheidel (Stanford University) discusses the impact of the war on lowering economic inequality globally and in leading to more equal economic regimes thereafter. Tamás Vonyó (Bocconi University) compares the role of population loss and migration patterns in East Germany, Eastern Europe and USSR to contextualize significant differences in postwar economic recovery. Finally, Pauline Grosjean (University of New South Wales) discusses differences in the societal impact of war – from institutional growth and increased resiliency to conflict traps and persistent public mistrust in institutions. These four articles provide a necessary social framework for the economic analysis of the Second World War.

The Economics of the Second World War provides a quick and convenient introduction into the topic of war and economy in the twentieth century. The book is a well written throughout, if a bit too short. Most of the discussed phenomena would have benefited from a more thorough examination. Fortunately, all authors have provided well curated lists of further reading for the inquisitive reader. A few omissions remain from the overall story. Essential trade networks remain abstract without a description of the logistics of war. Also, an economic foray into the global impact of the Second World War would have contextualized the articles well. Still, as it is The Economics of the Second World War provides a useful primer into the economic history of a complex, global conflict.


Aaro Sahari defended his PhD on Finnish industrial technopolitics (1918–1954) in 2018. He is a member of the editorial council for the Finnish Journal for the History of Technology — Tekniikan Waiheita — and the Finnish National Council for the History of Science and Technology. Sahari currently works on technology professionals’ tacit knowledge strategies and generational narratives.

Copyright (c) 2020 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (August 2020). All EH.Net reviews are archived at

Subject(s):Military and War
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire

Author(s):Dalrymple, William
Reviewer(s):Tabarrok, Alex

Published by EH.Net (November 2019)

William Dalrymple, The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire. London: Bloomsbury Publishing, 2019. 528 pp. £27 (hardcover), ISBN: 978-1635573954.

Reviewed for EH.Net by Alex Tabarrok, Department of Economics, George Mason University.

In The Anarchy, historian William Dalrymple recounts the remarkable rise of the East India Company from its founding in 1599 to 1803 when it commanded an army twice the size of the British Army and ruled over the Indian subcontinent. It’s an amazing story and Dalrymple tells it with verve and style drawing, as in his previous books, on underused Indian, Persian and French sources. Dalrymple has a wonderful eye for detail. After the Company’s charter is approved in 1600 the merchant adventures scout for ships to undertake the India voyage: “They have been to Deptford to ‘view severall shippes,’ one of which, the May Flowre, was later famous for a voyage heading in the opposite direction” (p. 10).

So how was a humble group of British merchants able to take over one of the great empires of history? The answer is found in the title. The Anarchy refers not to the period of British rule but to the period before that time. Under Aurangzeb, the fanatic and ruthless Mughal emperor (1658-1707), the empire grew to its largest geographic extent but only because of decades of continuous warfare and attendant taxing, pillaging, famine, misery and mass death. It was a classic case of the eventual fall of a great power through military over-extension. At Aurangzeb’s death in 1707, a power struggle ensued but none could command. “Mughal succession disputes and a string of weak and powerless emperors exacerbated the sense of imperial crisis: three emperors were murdered (one was, in addition, first blinded with a hot needle); the mother of one ruler was strangled and the father of another forced off a precipice on his elephant. In the worst year of all, 1719, four different Emperors occupied the Peacock Throne in rapid succession. According to the Mughal historian Khair ud-Din Illahabadi … ‘Disorder and corruption no longer sought to hide themselves and the once peaceful realm of India became a lair of Anarchy’” (pp. 31-32).

Seeing the chaos at the top, local rulers stopped paying tribute and tried to establish their own power bases. The result was more warfare and a decline in trade as banditry made it unsafe to travel. The Empire appeared ripe to fall. “Delhi in 1737 had around 2 million inhabitants. Larger than London and Paris combined, it was still the most prosperous and magnificent city between Ottoman Istanbul and Imperial Edo (Tokyo). As the Empire fell apart around it, it hung like an overripe mango, huge and inviting, yet clearly in decay, ready to fall and disintegrate” (pp. 36-37).

In 1739 the mango was plucked by the Persian warlord Nader Shah. Using the latest military technology, horse-mounted cannon, Shah devastated a much larger force of Mughal troops and “managed to capture the Emperor himself by the simple ruse of inviting him to dinner, then refusing to let him leave.” In Delhi, Nader Shah massacred a hundred thousand people and then, after 57 days of pillaging and plundering, left with two hundred years’ worth of Mughal treasure carried on “700 elephants, 4,000 camels and 12,000 horses carrying wagons all laden with gold, silver and precious stones” (p. 44).

At this time, the East India Company would have probably preferred a stable India but through a series of unforeseen events it gained in relative power as the rest of India crumbled. With the decline of the Mughals, the biggest military power in India was the Marathas and they attacked Bengal, the richest Indian province, looting, plundering, raping and killing as many as 400,000 civilians. Fearing the Maratha hordes, Bengalis fled to the only safe area in the region, the company stronghold in Calcutta. “What was a nightmare for Bengal turned out to be a major opportunity for the Company. Against artillery and cities defended by the trained musketeers of the European powers, the Maratha cavalry was ineffective. Calcutta in particular was protected by a deep defensive ditch especially dug by the Company to keep the Maratha cavalry at bay, and displaced Bengalis now poured over it into the town that they believed offered better protection than any other in the region, more than tripling the size of Calcutta in a decade. … But it was not just the protection of a fortification that was the attraction. Already Calcutta had become a haven of private enterprise, drawing in not just Bengali textile merchants and moneylenders, but also Parsis, Gujaratis and Marwari entrepreneurs and business houses who found it a safe and sheltered environment in which to make their fortunes” (pp. 73-74). In an early example of what might be called a “charter city,” English commercial law also attracted entrepreneurs to Calcutta. The “city’s legal system and the availability of a framework of English commercial law and formal commercial contracts, enforceable by the state, all contributed to making it increasingly the destination of choice for merchants and bankers from across Asia” (p. 74).

The Company benefited by another unforeseen circumstance, Siraj ud-Daula, the Nawab (ruler) of Bengal, was a psychotic rapist who got his kicks from sinking ferry boats in the Ganges and watching the travelers drown. Siraj was uniformly hated by everyone who knew him. “Not one of the many sources for the period — Persian, Bengali, Mughal, French, Dutch or English — has a good word to say about Siraj” (p. 82). Despite his flaws, Siraj might have stayed in power had he not made the fatal mistake of striking his banker. The Jagat Seth bankers took their revenge when Siraj ud-Daula came into conflict with the Company under Robert Clive. Conspiring with Clive, the Seths arranged for the Nawab’s general to abandon him and thus the Battle of Plassey was won and the stage set for the East India Company. Many further battles and adventures would ensue before the British were firmly ensconced by 1803 but the general outline of the story remained the same. The EIC prospered due to a combination of luck, disarray among the Company’s rivals and good financing.

The Mughal emperor Shah Alam, for example, had been forced to flee Delhi leaving it to be ruled by a succession of Persian, Afghani and Maratha warlords. But after wandering across eastern India for many years, he regathered his army, retook Delhi and almost restored Mughal power. At a key moment, however, he invited into the Red Fort with open arms his “adopted” son, Ghulam Qadir. Ghulam was the actual son of Zabita Khan who had been defeated by Shah Alam sixteen years earlier. Ghulam, at that time a young boy, had been taken hostage by Shah Alam and raised like a son, albeit a son whom Alam probably used as a catamite. Expecting gratitude, Shah Alam instead found Ghulam driven mad. Ghulam took over the Red Fort and cut out the eyes of the Mughal emperor, immediately calling for a painter to immortalize the event.

As late as 1803, the Marathas too might have defeated the British but rivalry between Tukoji Holkar and Daulat Rao Scindia prevented an alliance. “Here Wellesley’s masterstroke was to send Holkar a captured letter from Scindia in which the latter plotted with Peshwa Baji Rao to overthrow Holkar … ‘After the war is over, we shall both wreak our full vengeance upon him.’ … After receiving this, Holkar, who had just made the first two days march towards Scindia, turned back and firmly declined to join the coalition” (p. 367).

Overlaid on top of luck and disorder, was the simple fact that the Company paid its bills. Indeed, the Company paid its sepoys (Indian troops) considerably more than did any of its rivals and it paid them on time. It was able to do so because Indian bankers and moneylenders trusted the Company. “In the end it was this access to unlimited reserves of credit, partly through stable flows of land revenues, and partly through collaboration of Indian moneylenders and financiers, that in this period finally gave the Company its edge over their Indian rivals. It was no longer superior European military technology, nor powers of administration that made the difference. It was the ability to mobilize and transfer massive financial resources that enabled the Company to put the largest and best-trained army in the eastern world into the field” (p. 329).

Dalrymple has written a history with only the occasional implicit analysis. He seems particularly incensed at “corporate violence” and in a (mercifully short) final chapter alludes to Exxon and the United Fruit Company. It is an interesting question to ask: How might the actions of these corporate raiders have differed from those of a state? It’s not clear, for example, that the EIC was any worse than the average Indian ruler and surely these stationary bandits were better than roving bandits like Nader Shah. (See Mancur Olson 1993 on the distinction.) The EIC may have looted India but economic historian Tirthankar Roy (2012, p. 215) explains that: “Much of the money that Clive and his henchmen looted from India came from the treasury of the nawab. The Indian princes, ‘walking jeweler’s shops’ as an American merchant called them, spent more money on pearls and diamonds than on infrastructural developments or welfare measures for the poor. If the Company transferred taxpayers’ money from the pockets of an Indian nobleman to its own pockets, the transfer might have bankrupted pearl merchants and reduced the number of people in the harem, but would make little difference to the ordinary Indian.”

Moreover, although it began as a private-firm, the EIC became so regulated by Parliament that Hejeebu (2016) concludes, “After 1773, little of the Company’s commercial ethos survived in India.” Certainly, by the time the brothers Wellesley were making their final push for territorial acquisition, the company directors back in London were pulling out their hair and begging for fewer expensive wars and more trading profits.

Although short on analysis, economic historians and readers will find in The Anarchy a page-turning history of the rise of the East India Company with plenty of raw material to enjoy and to think about.


Santhi Hejeebu. 2016. “The Colonial Transition and the Decline of the East India Company, c. 1746-1784.” In A New Economic History of Colonial India, edited by Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy, and Anand V. Swamy. Routledge.

Mancur Olson. 1993. “Dictatorship, Democracy, and Development.” American Political Science Review 87 (3): 567–76.

Tirthankar Roy. 2012. The East India Company: The World’s Most Powerful Corporation. Penguin Books India.

Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University. He is the author (with Shruti Rajagopalan) of “Premature Imitation and India’s Flailing State,” The Independent Review (Fall 2019).

Copyright (c) 2019 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (November 2019). All EH.Net reviews are archived at

Subject(s):Business History
Economywide Country Studies and Comparative History
Military and War
Geographic Area(s):Asia
Time Period(s):17th Century
18th Century
19th Century

The Industrialisation of Soviet Russia Volume 7: The Soviet Economy and the Approach of War, 1937-1939

Author(s):Davies, R.W.
Harrison, Mark
Khlevniuk, Oleg
Wheatcroft, Stephen G.
Reviewer(s):Gregg, Amanda G.

Published by EH.Net (July 2019)

R.W. Davies, Mark Harrison, Oleg Khlevniuk, and Stephen G. Wheatcroft, The Industrialisation of Soviet Russia Volume 7: The Soviet Economy and the Approach of War, 1937-1939. London: Palgrave Macmillan, 2018. xxvii + 439 pp. $110 (hardcover). ISBN: 978-1-137-36237-7.

Reviewed for EH.Net by Amanda G. Gregg, Department of Economics, Middlebury College.

It is my pleasure to review this final volume in the seven-volume series The Industrialisation of Soviet Russia, which began with the first volume published in 1980 by R.W. Davies. The series provides a detailed account of the Soviet economy under Stalin from 1929 to 1939, a period that spans from the collectivization of agriculture to Germany’s invasion of Poland.

This final volume concentrates on the years 1937-39, and the story opens darkly with the nomenklatura purge of the older generation of political and economic officials and the mass purge that repressed a broad class of “anti-Soviet” elements. The authors’ extensive primary source work and perspective as economic historians are especially appreciated here, as the book contains a lesser-emphasized account of the disordering effect of the purges on planning and performance, arguing that “the nomenklatura purges were an important factor in the deterioration of economic performance in industry, transport, and construction” (p. 19-20). Though 1937 was largely a year of economic disorder, there was a stroke of luck in an unexpectedly good harvest, though disorder in managing the influx of grain led much of the grain to remain with collective farmers, spurring fears a resurgence of a private sector trading agricultural goods. The book goes on to describe the 1937 and 1939 censuses, the much-delayed Third Five-Year Plan, and finally, the book concludes with the buildup to the Second World War, though the development of the defense industry runs like a leitmotif through the narrative.

In particular, the chapters describing the suppressed 1937 population census and the “corrected” 1939 census include some great storytelling. The 1937 census produced a population total for the Soviet Union that far lower than acceptable estimates, partly a long-run consequence of the famines of the early 1930s. I suspect most economic historians will be stirred by the authors’ account of the ensuing “collision between demographic expertise and political authority” (p. ix).

Particularly useful to historians of this period, this volume includes snapshot chapters for each year summarizing the state of the GULAG economy, industrial growth, defense, internal trade, and external trade, with additional entries as appropriate for a given year. These chapters would be a convenient reference on the state of the economy for scholars writing on the period.

I doubt anyone has ever composed the kind of blow-by-blow economic history of these years that the authors have assembled here. The book’s impressive array of primary source material includes archival citations from the Communist Party archives (RGASPI), the State Archive of the Russian Federation (GARF), and the Russian State Archive of the Economy (RGAE) to provide a detailed account of each economic moment. In addition, the authors employ an encyclopedic secondary source bibliography.

For the most part, chapters begin with parsimonious big-picture analysis in the introduction but then allow the facts and events to speak for themselves. However, the final chapter (“The Soviet Economy: The Late 1930s in Historical Perspective”) serves as a narrative essay to collect lessons learned from this and previous volumes. The authors here address a very big question: What lessons should economists, historians, and policymakers learn from the large-scale economic planning undertaken by Stalin? Allen (2003) has argued that Russia could have never industrialized without Stalinist collectivization and forced industrialization. But the authors of this volume are more measured, reminding us that although “the Soviet economy of the 1930s shows plenty of structural change,” (p. 341) along with a movement “from farm to factory,” there was “a counter-movement from farms, factories, and offices to resettlement, to the labour camp, and to the mass grave” (p. 342).

On this point, the authors here walk a fine line: though Soviet planning achieved great transformation in the 1930s, such advances were achieved by “a coercive state in the name of a party that cast down as many as it raised up, while denying all of them any significant voice in the process” (p. 342). However, the authors are careful to note that oppression itself was not the objective. Instead, “changes of this nature that came about were typically improvised in support of a greater goal,” “to build the military and industrial capabilities of the Soviet state, making it secure and powerful at home and abroad” (p. 343).

Finally, the book includes a fifty-page appendix of data tables that will be of great use to scholars of this period. Anyone interested in these years of Soviet history might find a useful quantitative nugget in these pages. Data tables document repressions by the NKVD, including arrests by social background and numbers held in GULAG camps and colonies; capital investment and planning; industrial performance; transportation; agricultural planning and production; public finance; foreign trade; population; and comparisons of Soviet and Western estimates.

In my view the book’s main contributions are twofold: the economic historian’s analytic eye and the incredible detail contributed by the authors’ careful examination of primary sources. I suspect that some of the book’s fine-grained detail on industrial production and agricultural yields will be beyond the scope of most readers’ interests. The less specialized reader might have hoped for more of a narrative and a little help keeping track of the extensive cast of characters. Though, some of the confusing constant personnel rotation makes its own point about this period.

This series, and this volume in particular, is essential reading for scholars with an academic interest in the Soviet Union in the 1930s, particularly economic historians interested in planning, the buildup to the Second World War, and Soviet statistics. For the more general economic history reader, I would especially recommend the chapters on the 1937 and 1939 censuses and their account of the economic effects of the 1937-38 purges, which I think could be excerpted quite well.


Allen, Robert C. From Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution. Princeton, NJ: Princeton University Press, 2003.

Amanda Gregg is an Assistant Professor of Economics at Middlebury College. She has studied industrialization, commercial law, and finance in late Imperial Russia. She is currently working on a project on Imperial Russian corporate dynamics with Steven Nafziger, a comparative finance project with Caroline Fohlin, and several papers describing ownership, labor, and organization in Russian factories.

Copyright (c) 2019 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (July 2019). All EH.Net reviews are archived at

Subject(s):Economic Planning and Policy
Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII

The Political History of American Food Aid: An Uneasy Benevolence

Author(s):Riley, Barry
Reviewer(s):Barrett, Christopher B.

Published by EH.Net (June 2018)

Barry Riley, The Political History of American Food Aid: An Uneasy Benevolence. New York: Oxford University Press, 2017. xxvii + 562 pp. $50 (hardcover), ISBN: 978-019-02-2887-3.

Reviewed for EH.Net by Christopher B. Barrett, School of Applied Economics and Management, Cornell University.

International food aid has long attracted attention from policymakers and scholars far out of proportion to its scale in the global economy. Concessional food shipments have always comprised a small share of international flows of food and a negligible increment of global food production and consumption. Yet a Google Scholar search on “food aid” and “economics” returns more than one million results. Since at least T.W. Schultz more than half a century ago, economists have written about food aid’s direct effects on the economic and nutritional well-being of recipients and, even more, on its indirect effects on outcomes as diverse as food markets and prices, agricultural producer incentives in donor and recipient countries, international trade flows, and conflict in recipient countries. In recent years, special attention has been paid to the political economy of food aid and to the distributional and efficiency effects of statutory restrictions placed on food aid donations by legislatures, especially by the United States Congress since the U.S. has long been, by far, the world’s largest food aid donor. The complex political processes behind those restrictions, however, indeed the motivations and machinations behind the very existence and scale of international food aid donations, has remained a bit of a black box.

Barry Riley has done a remarkable job filling that void. This new volume offers the definitive political history of U.S. food aid. Riley brings impeccable credentials to the task. Now retired after a long and distinguished career with various food aid agencies of the U.S. government and the World Bank, he wrote the volume while a Visiting Scholar at Stanford University. At a time when economists too commonly grab a secondary data set and quickly write about a complex topic without taking time to master essential policy details, Riley’s work stands out as firmly rooted in an immersive understanding of the topic’s finest details. And this comprehensive historical account is meticulously sourced with primary documents from government records, media accounts of the day, and even personal letters.

Riley lucidly explains how and why the U.S. became the world’s primary food aid donor. He tells the story of the constant tension between the humanitarian impulse to assist those imperiled by natural disasters or war and the conservative instinct to resist foreign entanglements and fiscal commitments beyond the nation’s borders. He skillfully explains the time-varying electoral pressures faced by elected officials confronted by agricultural and maritime interests seeking assistance in lean times and reaching for profits opportunistically. He documents both the cynical and the idealistic geopolitical aims various nineteenth and twentieth century U.S. politicians had in deploying American farm surpluses around the world. The central role of key leaders — especially Herbert Hoover, Lyndon Johnson, and Henry Kissinger — in bending others to their will comes through clearly. The case-specific drivers and outcomes of food aid donations are especially nicely illustrated in two chapters that go into particular depth on a single country: Chapter 13’s explanation of the Johnson administration’s management of food aid to India in the 1960s and Chapter 19’s analysis of the Reagan administration’s handling of the mid-1980s famine in Ethiopia.

Riley begins with late eighteenth-century Congressional debates when the framers of the Constitution and their colleagues were struggling to interpret what limits, if any, the new nation’s founding charter imposed on the federal government using scarce tax revenues to shower largesse on foreign populations. Those debates resumed periodically in response to a variety of foreign disasters of various sorts. Into the early years of the twentieth century, American food aid was episodic and modest in volume and impacts.

Riley then focuses attention on the first half of the twentieth century, when the ravages of two World Wars and the Great Depression, combined with rapid technological change in American agriculture, created a perfect storm of U.S. commodity surpluses, extended periods of depressed global demand, and acute humanitarian need. This period put the existential questions surrounding U.S. food aid to rest. Programs became permanent and expansive. That period begat the Agricultural Adjustment Acts of 1933 and 1938, which launched large-scale farm support programs that insinuated the federal government into commodity markets. This laid the foundation for 1954’s passage of the Agricultural Trade Development and Assistance Act, Public Law 480, which created the main U.S. food aid programs ever since. The program’s renaming in the Food for Peace Act of 1966 signaled the growing use of food aid as a foreign policy tool under the Kennedy, Johnson, Nixon, Ford, Carter, and Reagan administrations. The aims varied with the political leanings of the U.S. government of the day: to foster economic development and relieve world hunger, to reward foreign allies and punish those regimes that strayed too near the Soviet orbit, to advance human rights, or to promote American exports. Both Democratic and Republican administrations, however, proved overconfident in food aid’s ability to bend the world to American will.

As food aid’s ineffectiveness as a foreign policy tool and as the fiscal imperative of extracting the U.S. government from the business of propping up grain prices as a buyer of last resort both became clear, the scale of U.S. food aid relative to commercial exports and the domestic food economy has steadily declined since the 1970s. The dominant voices in recent food aid debates have thus been the international development and humanitarian organizations, as well as the agribusinesses — mainly processors, not farmers — and maritime interests that profit from Congressionally-imposed statutory restrictions on commodity and ocean freight procurement. In the twenty-first century, both Democratic and Republican administrations have consistently advocated for reforms to enhance the efficiency and timeliness of increasingly scarce humanitarian food aid. But the complex political economy that begat a permanent and briefly-generous U.S. food aid program now complicates the Congressional politics of reform. Without understanding the political history of U.S. food aid, it’s hard to make sense of the current policy debate.

In twenty-five years of studying food aid, I have probably read the vast majority of published studies on the topic. Rarely have I learned so much as from Riley’s impressive and beautifully written history. This volume is an indispensable reference for anyone studying or writing about U.S. food aid programs. U.S. food aid policy has always reflected a shifting balance among a range of objectives. Thus it has always been deeply political. The complexities of U.S. Congressional authorization and appropriations processes often make it difficult to identify the drivers of policy decisions. Thanks to Barry Riley’s lucid historical account, it is far easier for contemporary policy analysts to appreciate the history dependence of current economic policy.

Christopher B. Barrett is the Stephen B. and Janice G. Ashley Professor of Applied Economics at Cornell University. He has written extensively on the economics of food aid and food assistance programs and is co-author (with Daniel G. Maxwell) of Food Aid after Fifty Years: Recasting Its Role and co-editor (with Julia Steets and Andrea Binder) of Uniting on Food Assistance: The Case for Transatlantic Cooperation.

Copyright (c) 2018 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2018). All EH.Net reviews are archived at

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Government, Law and Regulation, Public Finance
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII

Other People’s Money: How Banking Worked in the Early American Republic

Author(s):Murphy, Sharon Ann
Reviewer(s):Goodspeed, Tyler Beck

Published by EH.Net (January 2018)

Sharon Ann Murphy, Other People’s Money: How Banking Worked in the Early American Republic. Baltimore: Johns Hopkins University Press, 2017. xii + 192 pp. $20 (paperback), ISBN: 978-1-421-42175-9.

Reviewed for EH.Net by Tyler Beck Goodspeed, Council of Economic Advisers.


Covering, when all is said and done, over half a millennium of American monetary history in a readable, introductory text of under two hundred pages is no mean feat. Doing so while also satisfying specialists in a relatively niche field and period of financial history is an especially daunting task. In Other People’s Money: How Banking Worked in the Early American Republic, Sharon Ann Murphy (Department of History, Providence College) has managed to achieve both.

The Bank War between Jackson and Biddle — perhaps, as Murphy notes, many students’ only encounter with antebellum American banking — provides an appropriate opening to Murphy’s account, introducing the principal cast of characters and illustrating the extent to which issues of money and banking permeated early American society, as well as the gravity with which ordinary Americans accordingly considered monetary matters.

Having thus set the stage, Murphy then proceeds through a packed “how it worked” series. Starting with the arrival of Columbus, in chapter 1, “How Money Worked,” she races through commodity money, fiat money, inflation, debt, and financing the American Revolution, contextualizing the economic concepts within the specific historical setting. In chapter 2, “How Banks Worked,” Murphy similarly catalogs the various sources of credit in colonial America, the assets and liabilities — particularly private bank notes — of colonial and antebellum banks, the incentives to incorporate, and the (First) Bank of the United States.

In chapter 3, “How Panics Worked,” we are then provided an account of the causes and dynamics of banking panics of the antebellum period that is both concise and consistent with the latest academic research. We here learn also of bimetallism, the Second Bank of the United States, and both public and private responses to panics, including public liability insurance, free banking, and clearinghouses. Chapter 4, “Experiments in Money and Banking,” expands on some of these topics, describing in greater depth the motivations and public discourse behind the movement toward both free banking and regulation, acute anxieties about fractional reserve banking generally, as well as the growing diversity of formal banking institutions. The chapter culminates with a succinct but accurate discussion of the Panic of 1857, including mention of the role of bank branching in mitigating the severity of the crisis.

Finally, and, for this reader, most interestingly, chapter 5 offers a brief but again academically sound overview of the fiscal challenges faced by the Union and Confederate governments in financing the Civil War, and how responses to those challenges intertwined with money and banking. This is perhaps the most data-intensive of the chapters, though quantitative evidence is seamlessly woven into a predominantly qualitative account. The chapter concludes with a short summary of the contours of American banking in the wake of the Civil War and, in particular, the National Bank Act.

It is important to be clear what this book is, and what it is not. It is an excellent introduction to how money and banking worked, not only in the early American republic, but in the post-Civil War national banking era as well. As such, it will likely offer a valuable companion for students of American economic and financial history, and even of early American political history, as well as informed lay-readers. It is not, and does not purport to be, an academic monograph intended for research historians or economic historians. Accordingly, footnotes are kept to a minimum, which makes for a smoother read, though at the cost of ability to investigate further. Murphy does, however, provide an extensive summary of suggested further reading, which will again be helpful for undergraduate and graduate students just beginning to explore the subject.

On the whole, Murphy has written what this financial historian considers a sound and reliable introductory or companion text to early American banking that is both engaging and easy-to-read, and at the same time broadly consistent with recent economic research on the topics covered. While students of economic and financial history generally would likely find it a useful text, my sense is that it might be of particular use to those more on the history side of economic history, than on the economic side of economic history.

My one idiosyncratic lament, which in any event may lie outside the scope of the book, is that I felt myself yearning for a more provocative embedded theme. As Murphy correctly notes throughout, many of the issues of, for example, note issuance and deposit insurance and branching and regulation may seem banal to the contemporary reader, but were intensely debated at the time. While the author addresses the political nature of these issues and responses to them, a stronger sense of the political contingency of the development of American banking would, I think, plant important questions in students’ minds. The path to 1913, or 1933, or, for that matter, 2008, was not at all linear, and a better sense of the alternative possible histories of American banking, and what may or may not have amplified the relative fragility of American banking system, would have been welcome.

Regardless, it is a fine text, made all the better by a fitting nod to Supreme Court Justice Louis Brandeis’ 1914 book by the same title, and a fascinating epilogue on the changing faces of the $20 bill.

Tyler Beck Goodspeed is a Senior Economist at the Council of Economic Advisers. He recently published Legislating Instability: Adam Smith, Free Banking, and the Financial Crisis of 1772, and Famine and Finance: Credit and the Great Famine of Ireland.

Copyright (c) 2018 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (January 2018). All EH.Net reviews are archived at

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):North America
Time Period(s):18th Century
19th Century