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Islamic Economics: What It Is and How It Developed

M. Umer Chapra, Islamic Research and Training Institute

Islamic economics has been having a revival over the last few decades. However, it is still in a preliminary stage of development. In contrast with this, conventional economics has become a well-developed and sophisticated discipline after going through a long and rigorous process of development over more than a century. Is a new discipline in economics needed? If so, what is Islamic economics, how does it differ from conventional economics, and what contributions has it made over the centuries? This article tries to briefly answer these questions.

It is universally recognized that resources are scarce compared with the claims on them. However, it is also simultaneously recognized by practically all civilizations that the well-being of all human beings needs to be ensured. Given the scarcity of resources, the well-being of all may remain an unrealized dream if the scarce resources are not utilized efficiently and equitably. For this purpose, every society needs to develop an effective strategy, which is consciously or unconsciously conditioned by its worldview. If the worldview is flawed, the strategy may not be able to help the society actualize the well-being of all. Prevailing worldviews may be classified for the sake of ease into two board theoretical constructs (1) secular and materialist, and (2) spiritual and humanitarian.

The Role of the Worldview

Secular and materialist worldviews attach maximum importance to the material aspect of human well-being and tend generally to ignore the importance of the spiritual aspect. They often argue that maximum material well-being can be best realized if individuals are given unhindered freedom to pursue their self-interest and to maximize their want satisfaction in keeping with their own tastes and preferences.[1] In their extreme form they do not recognize any role for Divine guidance in human life and place full trust in the ability of human beings to chalk out a proper strategy with the help of their reason. In such a worldview there is little role for values or government intervention in the efficient and equitable allocation and distribution of resources. When asked about how social interest would be served when everyone has unlimited freedom to pursue his/her self-interest, the reply is that market forces will themselves ensure this because competition will keep self-interest under check.

In contrast with this, religious worldviews give attention to both the material as well as the spiritual aspects of human well-being. They do not necessarily reject the role of reason in human development. They, however, recognize the limitations of reason and wish to complement it by revelation. They do not also reject the need for individual freedom or the role that the serving of self-interest can play in human development They, however, emphasize that both freedom and the pursuit of self-interest need to be toned down by moral values and good governance to ensure that everyone’s well-being is realized and that social harmony and family integrity are not hurt in the process of everyone serving his/her self-interest.

Material and Spiritual Needs

Even though none of the major worldviews prevailing around the world is totally materialist and hedonist, there are, nevertheless, significant differences among them in terms of the emphasis they place on material or spiritual goals and the role of moral values and government intervention in ordering human affairs. While material goals concentrate primarily on goods and services that contribute to physical comfort and well-being, spiritual goals include nearness to God, peace of mind, inner happiness, honesty, justice, mutual care and cooperation, family and social harmony, and the absence of crime and anomie. These may not be quantifiable, but are, nevertheless, crucial for realizing human well-being. Resources being limited, excessive emphasis on the material ingredients of well-being may lead to a neglect of spiritual ingredients. The greater the difference in emphasis, the greater may be the difference in the economic disciplines of these societies. Feyerabend (1993) frankly recognized this in the introduction to the Chinese edition of his thought-provoking book, Against Method, by stating that “First world science is only one science among many; by claiming to be more it ceases to be an instrument of research and turns into a (political) pressure group” (p.3, parentheses are in the original).

The Enlightenment Worldview and Conventional Economics

There is a great deal that is common between the worldviews of most major religions, particularly those of Judaism, Christianity and Islam. This is because, according to Islam, there is a continuity and similarity in the value systems of all Revealed religions to the extent to which the Message has not been lost or distorted over the ages. The Qur’an clearly states that: “Nothing has been said to you [Muhammad] that was not said to the Messengers before you” (Al-Qur’an, 41:43). If conventional economics had continued to develop in the image of the Judeo-Christian worldview, as it did before the Enlightenment Movement of the seventeenth and eighteenth centuries, there may not have been any significant difference between conventional and Islamic economics. However, after the Enlightenment Movement, all intellectual disciplines in Europe became influenced by its secular, value-neutral, materialist and social-Darwinist worldview, even though this did not succeed fully. All economists did not necessarily become materialist or social-Darwinist in their individual lives and many of them continued to be attached to their religious worldviews. Koopmans (1969) has rightly observed that “scratch an economist and you will find a moralist underneath.” Therefore, while theoretically conventional economics adopted the secular and value neutral orientation of the Enlightenment worldview and failed to recognize the role of value judgments and good governance in the efficient and equitable allocation and distribution of resources, in practice this did not take place fully. The pre-Enlightenment tradition never disappeared completely (see Baeck, 1994, p. 11).

There is no doubt that, in spite of its secular and materialist worldview, the market system led to a long period of prosperity in the Western market-oriented economies. However, this unprecedented prosperity did not lead to the elimination of poverty or the fulfillment of everyone’s needs in conformity with the Judeo-Christian value system even in the wealthiest countries. Inequalities of income and wealth have also continued to persist and there has also been a substantial degree of economic instability and unemployment which have added to the miseries of the poor. This indicates that both efficiency and equity have remained elusive in spite of rapid development and phenomenal rise in wealth.

Consequently there has been persistent criticism of economics by a number of well-meaning scholars, including Thomas Carlyle (Past and Present, 1843), John Ruskin (Unto this Last, 1862) and Charles Dickens (Hard Times, 1854-55) in England, and Henry George (Progress and Poverty, 1879) in America. They ridiculed the dominant doctrine of laissez-faire with its emphasis on self-interest. Thomas Carlyle called economics a “dismal science” and rejected the idea that free and uncontrolled private interests will work in harmony and further the public welfare (see Jay and Jay, 1986). Henry George condemned the resulting contrast between wealth and poverty and wrote: “So long as all the increased wealth which modern progress brings goes but to build great fortunes, to increase luxury and make sharper the contrast between the House of Have and the House of Want, progress is not real and cannot be permanent” (1955, p. 10).

In addition to failing to fulfill the basic needs of a large number of people and increasing inequalities of income and wealth, modern economic development has been associated with the disintegration of the family and a failure to bring peace of mind and inner happiness (Easterlin 2001, 1995 and 1974; Oswald, 1997; Blanchflower and Oswald, 2000; Diener and Oshi, 2000; and Kenny, 1999). Due to these problems and others the laissez-faire approach lost ground, particularly after the Great Depression of the 1930s as a result of the Keynesian revolution and the socialist onslaught. However, most observers have concluded that government intervention alone cannot by itself remove all socio-economic ills. It is also necessary to motivate individuals to do what is right and abstain from doing what is wrong. This is where the moral uplift of society can be helpful. Without it, more and more difficult and costly regulations are needed. Nobel-laureate Amartya Sen has, therefore, rightly argued that “the distancing of economics from ethics has impoverished welfare economics and also weakened the basis of a good deal of descriptive and predictive economics” and that economics “can be made more productive by paying greater and more explicit attention to ethical considerations that shaped human behaviour and judgment” (1987, pp. 78-79). Hausman and McPherson also conclude in their survey article “Economics and Contemporary Moral Philosophy” that “An economy that is engaged actively and self-critically with the moral aspects of its subject matter cannot help but be more interesting, more illuminating and, ultimately, more useful than the one that tries not to be” (1993, p. 723).

Islamic Economics – and How It Differs from Conventional Economics

While conventional economics is now in the process of returning to its pre-Enlightenment roots, Islamic economics never got entangled in a secular and materialist worldview. It is based on a religious worldview which strikes at the roots of secularism and value neutrality. To ensure the true well-being of all individuals, irrespective of their sex, age, race, religion or wealth, Islamic economics does not seek to abolish private property, as was done by communism, nor does it prevent individuals from serving their self-interest. It recognizes the role of the market in the efficient allocation of resources, but does not find competition to be sufficient to safeguard social interest. It tries to promote human brotherhood, socio-economic justice and the well-being of all through an integrated role of moral values, market mechanism, families, society, and ‘good governance.’ This is because of the great emphasis in Islam on human brotherhood and socio-economic justice.

The Integrated Role of the Market, Families, Society, and Government

The market is not the only institution where people interact in human society. They also interact in the family, the society and the government and their interaction in all these institutions is closely interrelated. There is no doubt that the serving of self-interest does help raise efficiency in the market place. However, if self-interest is overemphasized and there are no moral restraints on individual behavior, other institutions may not work effectively – families may disintegrate, the society may be uncaring, and the government may be corrupt, partisan, and self-centered. Mutual sacrifice is necessary for keeping the families glued together. Since the human being is the most important input of not only the market, but also of the family, the society and the government, and the family is the source of this input, nothing may work if families disintegrate and are unable to provide loving care to children. This is likely to happen if both the husband and wife try to serve just their own self-interest and are not attuned to the making of sacrifices that the proper care and upbringing of children demands. Lack of willingness to make such sacrifice can lead to a decline in the quality of the human input to all other institutions, including the market, the society and the government. It may also lead to a fall in fertility rates below the replacement level, making it difficult for society not only to sustain its development but also its social security system.

The Role of Moral Values

While conventional economics generally considers the behavior and tastes and preferences of individuals as given, Islamic economics does not do so. It places great emphasis on individual and social reform through moral uplift. This is the purpose for which all God’s messengers, including Abraham, Moses, Jesus, and Muhammad, came to this world. Moral uplift aims at the change in human behavior, tastes and preferences and, thereby, it complements the price mechanism in promoting general well-being. Before even entering the market place and being exposed to the price filter, consumers are expected to pass their claims through the moral filter. This will help filter out conspicuous consumption and all wasteful and unnecessary claims on resources. The price mechanism can then take over and reduce the claims on resources even further to lead to the market equilibrium. The two filters can together make it possible to have optimum economy in the use of resources, which is necessary to satisfy the material as well as spiritual needs of all human beings, to reduce the concentration of wealth in a few hands, and to raise savings, which are needed to promote greater investment and employment. Without complementing the market system with morally-based value judgments, we may end up perpetuating inequities in spite of our good intentions through what Solo calls inaction, non-choice and drifting (Solo, 1981, p. 38)

From the above discussion, one may easily notice the similarities and differences between the two disciplines. While the subject matter of both is the allocation and distribution of resources and both emphasize the fulfillment of material needs, there is an equal emphasis in Islamic economics on the fulfillment of spiritual needs. While both recognize the important role of market mechanism in the allocation and distribution of resources, Islamic economics argues that the market may not by itself be able to fulfill even the material needs of all human beings. This is because it can promote excessive use of scarce resources by the rich at the expense of the poor if there is undue emphasis on the serving of self-interest. Sacrifice is involved in fulfilling our obligations towards others and excessive emphasis on the serving of self-interest does not have the potential of motivating people to make the needed sacrifice. This, however, raises the crucial question of why a rational person would sacrifice his self-interest for the sake of others?

The Importance of the Hereafter

This is where the concepts of the innate goodness of human beings and of the Hereafter come in – concepts which conventional economics ignores but on which Islam and other major religions place a great deal of emphasis. Because of their innate goodness, human beings do not necessarily always try to serve their self-interest. They are also altruistic and are willing to make sacrifices for the well-being of others. In addition, the concept of the Hereafter does not confine self-interest to just this world. It rather extends it beyond this world to life after death. We may be able to serve our self-interest in this world by being selfish, dishonest, uncaring, and negligent of our obligations towards our families, other human beings, animals, and the environment. However, we cannot serve our self-interest in the Hereafter except by fulfilling all these obligations.

Thus, the serving of self-interest receives a long-run perspective in Islam and other religions by taking into account both this world and the next. This serves to provide a motivating mechanism for sacrifice for the well-being of others that conventional economics fails to provide. The innate goodness of human beings along with the long-run perspective given to self-interest has the potential of inducing a person to be not only efficient but also equitable and caring. Consequently, the three crucial concepts of conventional economics – rational economic man, positivism, and laissez-faire – were not able to gain intellectual blessing in their conventional economics sense from any of the outstanding scholars who represent the mainstream of Islamic thought.

Rational Economic Man

While there is hardly anyone opposed to the need for rationality in human behavior, there are differences of opinion in defining rationality (Sen, 1987, pp. 11-14). However, once rationality has been defined in terms of overall individual as well as social well-being, then rational behavior could only be that which helps us realize this goal. Conventional economics does not define rationality in this way. It equates rationality with the serving of self-interest through the maximization of wealth and want satisfaction, The drive of self-interest is considered to be the “moral equivalent of the force of gravity in nature” (Myers, 1983, p. 4). Within this framework society is conceptualized as a mere collection of individuals united through ties of self-interest.

The concept of ‘rational economic man’ in this social-Darwinist, utilitarian, and material sense of serving self–interest could not find a foothold in Islamic economics. ‘Rationality’ in Islamic economics does not get confined to the serving of one’s self-interest in this world alone; it also gets extended to the Hereafter through the faithful compliance with moral values that help rein self-interest to promote social interest. Al-Mawardi (d. 1058) considered it necessary, like all other Muslim scholars, to rein individual tastes and preferences through moral values (1955, pp. 118-20). Ibn Khaldun (d.1406) emphasized that moral orientation helps remove mutual rivalry and envy, strengthens social solidarity, and creates an inclination towards righteousness (n.d., p.158).

Positivism

Similarly, positivism in the conventional economics sense of being “entirely neutral between ends” (Robbins, 1935, p. 240) or “independent of any particular ethical position or normative judgment” (Friedman, 1953) did not find a place in Muslim intellectual thinking. Since all resources at the disposal of human beings are a trust from God, and human beings are accountable before Him, there is no other option but to use them in keeping with the terms of trust. These terms are defined by beliefs and moral values. Human brotherhood, one of the central objectives of Islam, would be a meaningless jargon if it were not reinforced by justice in the allocation and distribution of resources.

Pareto Optimum

Without justice, it would be difficult to realize even development. Muslim scholars have emphasized this throughout history. Development Economics has also started emphasizing its importance, more so in the last few decades.[2] Abu Yusuf (d. 798) argued that: “Rendering justice to those wronged and eradicating injustice, raises tax revenue, accelerates development of the country, and brings blessings in addition to reward in the Hereafter” (1933/34, p. 111: see also pp. 3-17). Al-Mawardi argued that comprehensive justice “inculcates mutual love and affection, obedience to the law, development of the country, expansion of wealth, growth of progeny, and security of the sovereign” (1955, p. 27). Ibn Taymiyyah (d. 1328) emphasized that “justice towards everything and everyone is an imperative for everyone, and injustice is prohibited to everything and everyone. Injustice is absolutely not permissible irrespective of whether it is to a Muslim or a non-Muslim or even to an unjust person” (1961-63, Vol. 18, p. 166).

Justice and the well-being of all may be difficult to realize without a sacrifice on the part of the well-to-do. The concept of Pareto optimum does not, therefore, fit into the paradigm of Islamic economics. This is because Pareto optimum does not recognize any solution as optimum if it requires a sacrifice on the part of a few (rich) for raising the well-being of the many (poor). Such a position is in clear conflict with moral values, the raison d’être of which is the well-being of all. Hence, this concept did not arise in Islamic economics. In fact, Islam makes it a religious obligation of Muslims to make a sacrifice for the poor and the needy, by paying Zakat at the rate of 2.5 percent of their net worth. This is in addition to the taxes that they pay to the governments as in other countries.

The Role of State

Moral values may not be effective if they are not observed by all. They need to be enforced. It is the duty of the state to restrain all socially harmful behavior[3] including injustice, fraud, cheating, transgression against other people’s person, honor and property, and the non-fulfillment of contracts and other obligations through proper upbringing, incentives and deterrents, appropriate regulations, and an effective and impartial judiciary. The Qur’an can only provide norms. It cannot by itself enforce them. The state has to ensure this. That is why the Prophet Muhammad said: “God restrains through the sovereign more than what He restrains through the Qur’an” (cited by al-Mawardi, 1955, p. 121). This emphasis on the role of the state has been reflected in the writings of all leading Muslim scholars throughout history.[4] Al-Mawardi emphasized that an effective government (Sultan Qahir) is indispensable for preventing injustice and wrongdoing (1960, p. 5). Say’s Law could not, therefore, become a meaningful proposition in Islamic economics.

How far is the state expected to go in the fulfillment of its role? What is it that the state is expected to do? This has been spelled out by a number of scholars in the literature on what has come to be termed as “Mirrors for Princes.”[5] None of them visualized regimentation or the owning and operating of a substantial part of the economy by the state. Several classical Muslim scholars, including al-Dimashqi (d. after 1175) and Ibn Khaldun, clearly expressed their disapproval of the state becoming directly involved in the economy (Al-Dimashqi, 1977, pp. 12 and 61; Ibn Khaldun, pp. 281-83). According to Ibn Khaldun, the state should not acquire the character of a monolithic or despotic state resorting to a high degree of regimentation (ibid., p. 188). It should not feel that, because it has authority, it can do anything it likes (ibid, p. 306). It should be welfare-oriented, moderate in its spending, respect the property rights of the people, and avoid onerous taxation (ibid, p. 296). This implies that what these scholars visualized as the role of government is what has now been generally referred to as ‘good governance’.

Some of the Contributions Made by Islamic Economics

The above discussion should not lead one to an impression that the two disciplines are entirely different. One of the reasons for this is that the subject matter of both disciplines is the same, allocation and distribution of scarce resources. Another reason is that all conventional economists have never been value neutral. They have made value judgments in conformity with their beliefs. As indicated earlier, even the paradigm of conventional economics has been changing – the role of good governance has now become well recognized and the injection of a moral dimension has also become emphasized by a number of prominent economists. Moreover, Islamic economists have benefited a great deal from the tools of analysis developed by neoclassical, Keynesian, social, humanistic and institutional economics as well as other social sciences, and will continue to do so in the future.

The Fallacy of the ‘Great Gap’ Theory

A number of economic concepts developed in Islamic economics long before they did in conventional economics. These cover a number of areas including interdisciplinary approach; property rights; division of labor and specialization; the importance of saving and investment for development; the role that both demand and supply play in the determination of prices and the factors that influence demand and supply; the roles of money, exchange, and the market mechanism; characteristics of money, counterfeiting, currency debasement, and Gresham’s law; the development of checks, letters of credit and banking; labor supply and population; the role of the state, justice, peace, and stability in development; and principles of taxation.I t is not possible to provide comprehensive coverage of all the contributions Muslim scholars have made to economics. Only some of their contributions will be highlighted below to remove the concept of the “Great Gap” of “over 500 years” that exists in the history of conventional economic thought as a result of the incorrect conclusion by Joseph Schumpeter in History of Economic Analysis (1954), that the intervening period between the Greeks and the Scholastics was sterile and unproductive.[6] This concept has become well embedded in the conventional economics literature as may be seen from the reference to this even by the Nobel-laureate, Douglass North, in his December 1993 Nobel lecture (1994, p. 365). Consequently, as Todd Lowry has rightly observed, “the character and sophistication of Arabian writings has been ignored” (See his ‘Foreword’ in Ghazanfar, 2003, p. xi).

The reality, however, is that the Muslim civilization, which benefited greatly from the Chinese, Indian, Sassanian and Byzantine civilizations, itself made rich contributions to intellectual activity, including socio-economic thought, during the ‘Great Gap’ period, and thereby played a part in kindling the flame of the European Enlightenment Movement. Even the Scholastics themselves were greatly influenced by the contributions made by Muslim scholars. The names of Ibn Sina (Avicenna, d. 1037), Ibn Rushd (Averroes, d. 1198) and Maimonides (d. 1204, a Jewish philosopher, scientist, and physician who flourished in Muslim Spain) appear on almost every page of the thirteenth-century summa (treatises written by scholastic philosophers) (Pifer, 1978, p. 356).

Multidisciplinary Approach for Development

One of the most important contributions of Islamic economics, in addition to the above paradigm discussion, was the adoption of a multidisciplinary dynamic approach. Muslim scholars did not focus their attention primarily on economic variables. They considered overall human well-being to be the end product of interaction over a long period of time between a number of economic, moral, social, political, demographic and historical factors in such a way that none of them is able to make an optimum contribution without the support of the others. Justice occupied a pivotal place in this whole framework because of its crucial importance in the Islamic worldview There was an acute realization that justice is indispensable for development and that, in the absence of justice, there will be decline and disintegration.

The contributions made by different scholars over the centuries seem to have reached their consummation in Ibn Khaldun’s Maquddimah, which literally means ‘introduction,’ and constitutes the first volume of a seven-volume history, briefly called Kitab al-‘Ibar or the Book of Lessons [of History].[7] Ibn Khaldun lived at a time (1332-1406) when the Muslim civilization was in the process of decline. He wished to see a reversal of this tide, and, as a social scientist, he was well aware that such a reversal could not be envisaged without first drawing lessons (‘ibar) from history to determine the factors that had led the Muslim civilization to bloom out of humble beginnings and to decline thereafter. He was, therefore, not interested in knowing just what happened. He wanted to know the how and why of what happened. He wanted to introduce a cause and effect relationship into the discussion of historical phenomena. The Muqaddimah is the result of this desire. It tries to derive the principles that govern the rise and fall of a ruling dynasty, state (dawlah) or civilization (‘umran).

Since the centre of Ibn Khaldun’s analysis is the human being, he sees the rise and fall of dynasties or civilizations to be closely dependent on the well-being or misery of the people. The well-being of the people is in turn not dependent just on economic variables, as conventional economics has emphasized until recently, but also on the closely interrelated role of moral, psychological, social, economic, political, demographic and historical factors. One of these factors acts as the trigger mechanism. The others may, or may not, react in the same way. If the others do not react in the same direction, then the decay in one sector may not spread to the others and either the decaying sector may be reformed or the decline of the civilization may be much slower. If, however, the other sectors react in the same direction as the trigger mechanism, the decay will gain momentum through an interrelated chain reaction such that it becomes difficult over time to identify the cause from the effect. He, thus, seems to have had a clear vision of how all the different factors operate in an interrelated and dynamic manner over a long period to promote the development or decline of a society.

He did not, thus, adopt the neoclassical economist’s simplification of confining himself to primarily short-term static analysis of only markets by assuming unrealistically that all other factors remain constant. Even in the short-run, everything may be in a state of flux through a chain reaction to the various changes constantly taking place in human society, even though these may be so small as to be imperceptible. Therefore, even though economists may adopt the ceteris paribus assumption for ease of analysis, Ibn Khaldun’s multidisciplinary dynamics can be more helpful in formulating socio-economic policies that help improve the overall performance of a society. Neoclassical economics is unable to do this because, as North has rightly asked, “How can one prescribe policies when one does not understand how economies develop?” He, therefore, considers neoclassical economics to be “an inappropriate tool to analyze and prescribe policies that will induce development” (North, 1994, p. 549).

However, this is not all that Islamic economics has done. Muslim scholars, including Abu Yusuf (d. 798), al-Mawardi (d. 1058), Ibn Hazm (d. 1064), al-Sarakhsi (d. 1090), al-Tusi (d. 1093), al-Ghazali (d. 1111), al-Dimashqi (d. after 1175), Ibn Rushd (d. 1187), Ibn Taymiyyah (d.1328), Ibn al-Ukhuwwah (d. 1329), Ibn al-Qayyim (d. 1350), al-Shatibi (d. 1388), Ibn Khaldun (d. 1406), al-Maqrizi (d. 1442), al-Dawwani (d. 1501), and Shah Waliyullah (d. 1762) made a number of valuable contributions to economic theory. Their insight into some economic concepts was so deep that a number of the theories propounded by them could undoubtedly be considered the forerunners of some more sophisticated modern formulations of these theories.[8]

Division of Labor, Specialization, Trade, Exchange and Money and Banking

A number of scholars emphasized the necessity of division of labor for economic development long before this happened in conventional economics. For example, al-Sarakhsi (d. 1090) said: “the farmer needs the work of the weaver to get clothing for himself, and the weaver needs the work of the farmer to get his food and the cotton from which the cloth is made …, and thus everyone of them helps the other by his work…” (1978, Vol. 30, p. 264). Al-Dimashqi, writing about a century later, elaborates further by saying: “No individual can, because of the shortness of his life span, burden himself with all industries. If he does, he may not be able to master the skills of all of them from the first to the last. Industries are all interdependent. Construction needs the carpenter and the carpenter needs the ironsmith and the ironsmith needs the miner, and all these industries need premises. People are, therefore, necessitated by force of circumstances to be clustered in cities to help each other in fulfilling their mutual needs” (1977, p. 20-21).

Ibn Khaldun ruled out the feasibility or desirability of self-sufficiency, and emphasized the need for division of labor and specialization by indicating that: “It is well-known and well-established that individual human beings are not by themselves capable of satisfying all their individual economic needs. They must all cooperate for this purpose. The needs that can be satisfied by a group of them through mutual cooperation are many times greater than what individuals are capable of satisfying by themselves” (p. 360). In this respect he was perhaps the forerunner of the theory of comparative advantage, the credit for which is generally given in conventional economics to David Ricardo who formulated it in 1817.

The discussion of division of labor and specialization, in turn, led to an emphasis on trade and exchange, the existence of well-regulated and properly functioning markets through their effective regulation and supervision (hisbah), and money as a stable and reliable measure, medium of exchange and store of value. However, because of bimetallism (gold and silver coins circulating together) which then prevailed, and the different supply and demand conditions that the two metals faced, the rate of exchange between the two full-bodied coins fluctuated. This was further complicated by debasement of currencies by governments in the later centuries to tide over their fiscal problems. This had, according to Ibn Taymiyyah (d. 1328) (1961-63, Vol. 29, p. 649), and later on al-Maqrizi (d. 1442) and al-Asadi (d. 1450), the effect of bad coins driving good coins out of circulation (al-Misri, 1981, pp. 54 and 66), a phenomenon which was recognized and referred to in the West in the sixteenth century as Gresham’s Law. Since debasement of currencies is in sheer violation of the Islamic emphasis on honesty and integrity in all measures of value, fraudulent practices in the issue of coins in the fourteenth century and afterwards elicited a great deal of literature on monetary theory and policy. The Muslims, according to Baeck, should, therefore, be considered forerunners and critical incubators of the debasement literature of the fourteenth and fifteenth centuries (Baeck, 1994, p. 114).

To finance their expanding domestic and international trade, the Muslim world also developed a financial system, which was able to mobilize the “entire reservoir of monetary resources of the mediaeval Islamic world” for financing agriculture, crafts, manufacturing and long-distance trade (Udovitch, 1970, pp. 180 and 261). Financiers were known as sarrafs. By the time of Abbasid Caliph al-Muqtadir (908-32), they had started performing most of the basic functions of modern banks (Fischel, 1992). They had their markets, something akin to the Wall Street in New York and Lombard Street in London, and fulfilled all the banking needs of commerce, agriculture and industry (Duri, 1986, p. 898). This promoted the use of checks (sakk) and letters of credit (hawala). The English word check comes from the Arabic term sakk.

Demand and Supply

A number of Muslim scholars seem to have clearly understood the role of both demand and supply in the determination of prices. For example, Ibn Taymiyyah (d. 1328) wrote: “The rise or fall of prices may not necessarily be due to injustice by some people. They may also be due to the shortage of output or the import of commodities in demand. If the demand for a commodity increases and the supply of what is demanded declines, the price rises. If, however, the demand falls and the supply increases, the price falls” (1961-3, Vol. 8, p. 523).

Even before Ibn Taymiyyah, al-Jahiz (d. 869) wrote nearly five centuries earlier that: “Anything available in the market is cheap because of its availability [supply] and dear by its lack of availability if there is need [demand] for it” (1983, p. 13), and that “anything the supply of which increases, becomes cheap except intelligence, which becomes dearer when it increases” (ibid., p. 13).

Ibn Khaldun went even further by emphasizing that both an increase in demand or a fall in supply leads to a rise in prices, while a decline in demand or a rise in supply contributes to a fall in prices (pp. 393 and 396). He believed that while continuation of ‘excessively low’ prices hurts the craftsmen and traders and drives them out of the market, the continuation of ‘excessively high’ prices hurts the consumers. ‘Moderate’ prices in between the two extremes were, therefore, desirable, because they would not only allow the traders a socially-acceptable level of return but also lead to the clearance of the markets by promoting sales and thereby generating a given turnover and prosperity (ibid, p. 398). Nevertheless, low prices were desirable for necessities because they provide relief to the poor who constitute the majority of the population (ibid, p. 398). If one were to use modem terminology, one could say that Ibn Khaldun found a stable price level with a relatively low cost of living to be preferable, from the point of view of both growth and equity in comparison with bouts of inflation and deflation. The former hurts equity while the latter reduces incentive and efficiency. Low prices for necessities should not, however, be attained through the fixing of prices by the state; this destroys the incentive for production (ibid, pp. 279-83).

The factors which determined demand were, according to Ibn Khaldun, income, price level, the size of the population, government spending, the habits and customs of the people, and the general development and prosperity of the society (ibid, pp.398-404). The factors which determined supply were demand (ibid, pp. 400 and 403), order and stability (pp. 306-08), the relative rate of profit (ibid, pp. 395 and 398), the extent of human effort (p. 381), the size of the labor force as well as their knowledge and skill (pp. 363 and 399-400), peace and security (pp. 394-95 and 396), and the technical background and development of the whole society (pp. 399-403). All these constituted important elements of his theory of production. If the price falls and leads to a loss, capital is eroded, the incentive to supply declines, leading to a recession. Trade and crafts also consequently suffer (p. 398).

This is highly significant because the role of both demand and supply in the determination of value was not well understood in the West until the late nineteenth and the early twentieth centuries. Pre-classical English economists like William Petty (1623-87), Richard Cantillon (1680-1734), James Steuart (1712-80), and even Adam Smith (1723-90), the founder of the Classical School, generally stressed only the role of the cost of production, and particularly of labor, in the determination of value. The first use in English writings of the notions of both demand and supply was perhaps in 1767 (Thweatt, 1983). Nevertheless, it was not until the second decade of the nineteenth century that the role of both demand and supply in the determination of market prices began to be fully appreciated (Groenewegen, 1973). While Ibn Khaldun had been way ahead of conventional economists, he probably did not have any idea of demand and supply schedules, elasticities of demand and supply and most important of all, equilibrium price, which plays a crucial role in modern economic discussions.

Public Finance

Taxation

Long before Adam Smith (d. 1790), who is famous, among other things, for his canons of taxation (equality, certainty, convenience of payment, and economy in collection) (see Smith, 1937, pp. 777-79), the development of these canons can be traced in the writings of pre-Islamic as well as Muslim scholars, particularly the need for the tax system to be just and not oppressive. Caliphs Umar (d. 644), Ali (d. 661) and Umar ibn Abd al-Aziz (d. 720), stressed that taxes should be collected with justice and leniency and should not be beyond the ability of the people to bear. Tax collectors should not under any circumstances deprive the people of the necessities of life (Abu Yusuf, 1933/34, pp. 14, 16 and 86). Abu Yusuf, adviser to Caliph Harun al-Rashid (786-809), argued that a just tax system would lead not only to an increase in revenues but also to the development of the country (Abu Yusuf, 1933/34, p. 111; see also pp. 14, 16, 60, 85, 105-19 and 125). Al-Mawardi also argued that the tax system should do justice to both the taxpayer and the treasury – “taking more was iniquitous with respect to the rights of the people, while taking less was unfair with respect to the right of the public treasury” (1960, p. 209; see also pp. 142-56 and 215).[9]

Ibn Khaldun stressed the principles of taxation very forcefully in the Muqaddimah. He quoted from a letter written by Tahir ibn al-Husayn, Caliph al-Ma’mun’s general, advising his son, ‘Abdullah ibn Tahir, Governor of al-Raqqah (Syria): “So distribute [taxes] among all people making them general, not exempting anyone because of his nobility or wealth and not exempting even your own officials or courtiers or followers. And do not levy on anyone a tax which is beyond his capacity to pay” (p. 308).[10] In this particular passage, he stressed the principles of equity and neutrality, while in other places he also stressed the principles of convenience and productivity.

The effect of taxation on incentives and productivity was so clearly visualized by Ibn Khaldun that he seems to have grasped the concept of optimum taxation. He anticipated the gist of the Laffer Curve, nearly six hundred years before Arthur Laffer, in two full chapters of the Muqaddimah.[11] At the end of the first chapter, he concluded that “the most important factor making for business prosperity is to lighten as much as possible the burden of taxation on businessmen, in order to encourage enterprise by ensuring greater profits [after taxes]” (p. 280). This he explained by stating that “when taxes and imposts are light, the people have the incentive to be more active. Business therefore expands, bringing greater satisfaction to the people because of low taxes …, and tax revenues also rise, being the sum total of all assessments” (p. 279). He went on to say that as time passes the needs of the state increase and rates of taxation rise to increase the yield. If this rise is gradual people become accustomed to it, but ultimately there is an adverse impact on incentives. Business activity is discouraged and declines, and so does the yield of taxation (pp. 280-81). A prosperous economy at the beginning of the dynasty, thus, yields higher tax revenue from lower tax rates while a depressed economy at the end of the dynasty, yields smaller tax revenue from higher rates (p. 279). He explained the reasons for this by stating: “Know that acting unjustly with respect to people’s wealth, reduces their will to earn and acquire wealth … and if the will to earn goes, they stop working. The greater the oppression, the greater the effect on their effort to earn … and, if people abstain from earning and stop working, the markets will stagnate and the condition of people will worsen” (pp. 286-87); tax revenues will also decline (p. 362). He, therefore, advocated justice in taxation (p. 308).

Public Expenditure

For Ibn Khaldun the state was also an important factor of production. By its spending it promotes production and by its taxation it discourages production (pp. 279-81). Since the government constitutes the greatest market for goods and services, and is a major source of all development (pp. 286 and 403), a decrease in its spending leads to not only a slackening of business activity and a decline in profits but also a decline in tax revenue (p. 286). The more the government spends, the better it may be for the economy (p. 286).[12] Higher spending enables the government to do the things that are needed to support the population and to ensure law and order and political stability (pp. 306 and 308). Without order and political stability, the producers have no incentive to produce. He stated that “the only reason [for the accelerated development of cities] is that the government is near them and pours its money into them, like the water [of a river] that makes green everything around it, and irrigates the soil adjacent to it, while in the distance everything remains dry” (p. 369).

Ibn Khaldun also analyzed the effect of government expenditure on the economy and is, in this respect, a forerunner of Keynes. He stated: “A decrease in government spending leads to a decline in tax revenues. The reason for this is that the state represents the greatest market for the world and the source of civilization. If the ruler hoards tax revenues, or if these are lost, and he does not spend them as they should be, the amount available with his courtiers and supporters would decrease, as would also the amount that reaches through them to their employees and dependents [the multiplier effect]. Their total spending would, therefore, decline. Since they constitute a significant part of the population and their spending constitutes a substantial part of the market, business will slacken and the profits of businessmen will decline, leading also to a decline in tax revenues … Wealth tends to circulate between the people and the ruler, from him to them and from them to him. Therefore, if the ruler withholds it from spending, the people would become deprived of it” (p. 286).

Economic Mismanagement and Famine

Ibn Khaldun established the causal link between bad government and high grain prices by indicating that in the later stage of the dynasty, when public administration becomes corrupt and inefficient, and resorts to coercion and oppressive taxation, incentive is adversely affected and the farmers refrain from cultivating the land. Grain production and reserves fail to keep pace with the rising population. The absence of reserves causes supply shortages in the event of a famine and leads to price escalation (pp. 301-02).

Al-Maqrizi (d. 1442) who, as muhtasib (market supervisor), had intimate knowledge of the economic conditions during his times, applied Ibn Khaldun’s analysis in his book (1956) to determine the reasons for the economic crisis of Egypt during the period 1403-06. He identified that the political administration had become very weak and corrupt during the Circassian period. Public officials were appointed on the basis of bribery rather than ability.[13] To recover the bribes, officials resorted to oppressive taxation. The incentive to work and produce was adversely affected and output declined. The crisis was further intensified by debasement of the currency through the excessive issue of copper fulus, or fiat money, to cover state budgetary deficits. All these factors joined hands with the famine to lead to a high degree of inflation, misery of the poor, and impoverishment of the country.

Hence, al-Maqrizi laid bare the socio-political determinants of the prevailing ‘system crisis’ by taking into account a number of variables like corruption, bad government policies, and weak administration. All of these together played a role in worsening the impact of the famine, which could otherwise have been handled effectively without a significant adverse impact on the population. This is clearly a forerunner of Sen’s entitlement theory, which holds the economic mismanagement of illegitimate governments to be responsible for the poor people’s misery during famines and other natural disasters (Sen, 1981). What al-Maqrizi wrote of the Circassian Mamluks was also true of the later Ottoman period (See Meyer, 1989).

Stages of Development

Ibn Khaldun stated the stages of development through which every society passes, moving from the primitive Bedouin stage to the rise of village, towns and urban centers with an effective government, development of agriculture, industry and sciences, and the impact of values and environment on this development ( Muqaddimah, pp. 35, 41-44, 87-95, 120-48, 172-76). Walliyullah[14] (d. 1762) later analyzed the development of society through four different stages from primitive existence to a well-developed community with khilafah (morally-based welfare state), which tries to ensure the spiritual as well as material well-being of the people. Like Ibn Khaldun, he considered political authority to be indispensable for human well-being. To be able to serve as a source of well-being for all and not of burden and decay, it must have the characteristics of the khilafah. He applied this analysis in various writings to the conditions prevailing during his life-time. He found that the luxurious life style of the rulers, along with their exhausting military campaigns, the increasing corruption and inefficiency of the civil service, and huge stipends to a vast retinue of unproductive courtiers, led them to the imposition of oppressive taxes on farmers, traders and craftsmen, who constituted the main productive section of the population. These people had, therefore, lost interest in their occupations, output had slowed down, state financial resources had declined, and the country had become impoverished (Waliyullah, 1992, Vol. I, pp. 119-52). Thus, in step with Ibn Khaldun and other Muslim scholars, al-Maqrizi and Waliyullah combined moral, political, social and economic factors to explain the economic phenomena of their times and the rise and fall of their societies.

Muslim Intellectual Decline

Unfortunately, the rich theoretical contribution made by Muslim scholars up until Ibn Khaldun did not get fertilized and irrigated by later scholars to lead to the development of Islamic economics, except by a few isolated scholars like al-Maqrizi, al-Dawwani (d. 1501), and Waliyullah. Their contributions were, however, only in specific areas and did not lead to a further development of Ibn Khaldun’s model of socio-economic and political dynamics. Islamic economics did not, therefore, develop as a separate intellectual discipline in conformity with the Islamic paradigm along the theoretical foundations and method laid down by Ibn Khaldun and his predecessors. It continued to remain an integral part of the social and moral philosophy of Islam.

One may ask here why the rich intellectual contributions made by Muslim scholars did not continue after Ibn Khaldun. The reason may be that, as indicated earlier, Ibn Khaldun lived at a time when the political and socio-economic decline of the Muslim world was underway.[15] He was perhaps “the sole point of light in his quarter of the firmament” (Toynbee, 1935, Vol. 3, p. 321). According to Ibn Khaldun himself, sciences progress only when a society is itself progressing (p. 434). This theory is clearly upheld by Muslim history. Sciences progressed rapidly in the Muslim world for four centuries from the middle of the eighth century to the middle of the twelfth century and continued to do so at a substantially decelerated pace for at least two more centuries, tapering off gradually thereafter (Sarton 1927, Vol. 1 and Book 1 of Vol. 2). Once in a while there did appear a brilliant star on an otherwise unexciting firmament. Economics was no exception. It also continued to be in a state of limbo in the Muslim world. No worthwhile contributions were made after Ibn Khaldun.

The trigger mechanism for this decline was, according to Ibn Khaldun, the failure of political authority to provide good governance. Political illegitimacy, which started after the end of khilafah in 661 gradually led to increased corruption and the use of state resources for private benefit at the neglect of education and other nation-building functions of the state. This gradually triggered the decline of all other sectors of the society and economy.[16]

The rapidly rising Western civilization took over the torch of knowledge from the declining Muslim world and has kept it burning with even greater brightness. All sciences, including the social sciences, have made phenomenal progress. Conventional economics became a separate academic discipline after the publication of Alfred Marshall’s great treatise, Principles of Economics, in 1890 (Schumpeter, 1954, p.21),[17] and has continued to develop since then at a remarkable speed. With such a great achievement to its credit, there is no psychological need to allow the ‘Great Gap’ thesis to persist. It would help promote better understanding of Muslim civilization in the West if textbooks started giving credit to Muslim scholars. They were “the torchbearers of ancient learning during the medieval period” and “it was from them that the Renaissance was sparked and the Enlightenment kindled” (Todd Lowry in his ‘Foreword’ in Ghazanfar, 2003, p. xi). Watt has been frank enough to admit that, “the influence of Islam on Western Christendom is greater than is usually realized” and that, “an important task for Western Europeans, as we move into the era of the one world, is … to acknowledge fully our debt to the Arab and Islamic world” (Watt, 1972, p. 84).

Conventional economics, however, took a wrong turn after the Enlightenment Movement by stripping itself of the moral basis of society emphasized by Aristotelian and Judeo-Christian philosophies. This deprived it of the role that moral values and good governance can play in helping society raise both efficiency and equity in the allocation and distribution of scarce resources needed for promoting the well-being of all. However, this has been changing. The role of good governance has already been recognized and that of moral values is gradually penetrating the economics orthodoxy. Islamic economics is also reviving now after the independence of Muslim countries from foreign domination. It is likely that the two disciplines will converge and become one after a period of time. This will be in keeping with the teachings of the Qur’an, which clearly states that mankind was created as one but became divided as a result of their differences and transgression against each other (10:19, 2:213 and 3: 19). This reunification [globalization, as it is new called], if reinforced by justice and mutual care, should help promote peaceful coexistence and enable mankind to realize the well-being of all, a goal the realization of which we are all anxiously looking forward to.

References

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Allouche, Adel. Mamluk Economics: A Study and Translation of Al-Maqrizi’s Ighathah. Salt Lake City: University of Utah Press, 1994.

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Cline, William R. Potential Effects of Income Redistribution on Economic Growth. New York: Praeger, 1973.

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Diener E., and Shigehiro Oshi. “Money and Happiness: Income and Subjective Well-being.” In Culture and Subjective Well-being, edited by E. Diener and E. Suh. Cambridge, MA: MIT Press, 2000.

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Essid, M. Yassine. A Critique of the Origins of Islamic Economic Thought. Leiden: Brill, 1995.

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[1] This is the liberal version of the secular and materialist worldviews. There is also the totalitarian version which does not have faith in the individuals’ ability to manage private property in a way that would ensure social well-being. Hence its prescription is to curb individual freedom and to transfer all means of production and decision making to a totalitarian state. Since this form of the secular and materialist worldview failed to realize human well-being and has been overthrown practically everywhere, it is not discussed in this paper.

[2] The literature on economic development is full of assertions that improvement in income distribution is in direct conflict with economic growth. For a summary of these views, see Cline, 1973, Chapter 2. This has, however, changed and there is hardly any development economist now who argues that injustice can help promote development.

[3] North has used the term ‘nasty’ for all such behavior. See the chapter “Ideology and Free Rider,” in North, 1981.

[4] Some of these scholars include Abu Yusuf (d. 798), al-Mawardi (d. 1058), Abu Ya’la (d. 1065), Nazam al-Mulk (d.1092), al-Ghazali (d. 1111), Ibn Taymiyyah (d. 1328), Ibn Khaldun (d. 1406), Shah Walliyullah (d. 1762), Jamaluddin al-Afghani (d. 1897), Muhammad ‘Abduh (d. 1905), Muhammad Iqbal (d. 1938), Hasan al-Banna (d. 1949), Sayyid Mawdudi (d. 1979), and Baqir al-Sadr (d. 1980).

[5] Some of these authors include al-Katib (d. 749), Ibn al-Muqaffa (d. 756) al-Nu‘man (d. 974), al-Mawardi (d. 1058), Kai Ka’us (d. 1082), Nizam al-Mulk (d. 1092), al-Ghazali (d. 1111), al-Turtushi (d. 1127). (For details, see Essid, 1995, pp.19-41.)

[6] For the fallacy of the Great Gap thesis, see Mirakhor (1987) and Ghazanfar (2003), particularly the “Foreword” by Todd Lowry and the “Introduction” by Ghazanfar.

[7] The full name of the book (given in the bibliography) may be freely translated as “The Book of Lessons and the Record of Cause and Effect in the History of Arabs, Persians and Berbers and their Powerful Contemporaries.” Several different editions of the Muqaddimah are now available in Arabic. The one I have used is that published in Cairo by al-Maktabah al-Tijarriyah al-Kubra without any indication of the year of publication. It has the advantage of showing all vowel marks, which makes the reading relatively easier. The Muqaddimah was translated into English in three volumes by Franz Rosenthal. Its first edition was published in 1958 and the second edition in 1967. Selections from the Muqaddimah by Charles Issawi were published in 1950 under the title, An Arab Philosophy of History: Selections from the Prolegomena of Ibn Khaldun of Tunis (1332-1406).

A considerable volume of literature is now available on Ibn Khaldun. This includes Spengler, 1964; Boulakia, 1971; Mirakhor, 1987; and Chapra, 2000.

[8] For some of these contributions, see Spengler, 1964; DeSmogyi, 1965; Mirakhor, 1987; Siddiqi, 1992; Essid, 1995; Islahi, 1996; Chapra, 2000; and Ghazanfar, 2003.

[9] For a more detailed discussion of taxation by various Muslim scholars, see the section on “Literature on Mirrors for Princes” in Essid, 1995, pp. 19-41.

[10] This letter is a significant development over the letter of Abu Yusuf to Caliph Harun al-Rashid (1933/34, pp. 3-17). It is more comprehensive and covers a larger number of topics.

[11] These are “On tax revenues and the reason for their being low and high” (pp. 279-80) and “Injustice ruins development” (pp. 286-410).

[12] Bear in mind the fact that this was stated at the time when commodity money, which it is not possible for the government to ‘create,’ was used, and fiduciary money, had not become the rule of the day.

[13] This was during the Slave (Mamluk) Dynasty in Egypt, which is divided into two periods. The first period was that of the Bahri (or Turkish) Mamluks (1250-1382), who have generally received praise in the chronicles of their contemporaries. The second period was that of the Burji Mamluks (Circassians, 1382-1517). This period was beset by a series of severe economic crises. (For details see Allouche, 1994.)

[14] Shah Walliyullah al-Dihlawi, popularly known as Walliyullah, was born in 1703, four years before the death of the Mughal Emperor, Aurangzeb (1658-1707). Aurangzeb’s rule, spanning a period of forty-nine years, was followed by a great deal of political instability – ten different changes in rulers during Walliyullah’s life-span of 59 years – leading ultimately to the weakening and decline of the Mughal Empire.

[15] For a brief account of the general decline and disintegration of the Muslim world during the fourteenth century, see Muhsin Mahdi, 1964, pp. 17-26.

[16] For a discussion of the causes of Muslim decline, see Chapra, 2000, pp. 173-252.

[17] According to Blaug (1985), economics became an academic discipline in the 1880s (p. 3).

Citation: Chapra, M. “Islamic Economics: What It Is and How It Developed”. EH.Net Encyclopedia, edited by Robert Whaples. March 16, 2008. URL http://eh.net/encyclopedia/islamic-economics-what-it-is-and-how-it-developed/

Immigration to the United States

Raymond L. Cohn, Illinois State University (Emeritus)

For good reason, it is often said the United States is a nation of immigrants. Almost every person in the United States is descended from someone who arrived from another country. This article discusses immigration to the United States from colonial times to the present. The focus is on individuals who paid their own way, rather than slaves and indentured servants. Various issues concerning immigration are discussed: (1) the basic data sources available, (2) the variation in the volume over time, (3) the reasons immigration occurred, (4) nativism and U.S. immigration policy, (5) the characteristics of the immigrant stream, (6) the effects on the United States economy, and (7) the experience of immigrants in the U.S. labor market.

For readers who wish to further investigate immigration, the following works listed in the Reference section of this entry are recommended as general histories of immigration to the United States: Hansen (1940); Jones (1960); Walker (1964); Taylor (1971); Miller (1985); Nugent (1992); Erickson (1994); Hatton and Williamson (1998); and Cohn (2009).

The Available Data Sources

The primary source of data on immigration to the United States is the Passenger Lists, though U.S. and state census materials, Congressional reports, and company records also contain material on immigrants. In addition, the Integrated Public Use Microdata Series (IPUMS) web site at the University of Minnesota (http://www.ipums.umn.edu/usa/) contains data samples drawn from a number of federal censuses. Since the samples are of individuals and families, the site is useful in immigration research. A number of the countries from which the immigrants left also kept records about the individuals. Many of these records were originally summarized in Ferenczi (1970). Although records from other countries are useful for some purposes, the U.S. records are generally viewed as more complete, especially for the period before 1870. It is worthy of note that comparisons of the lists between countries often lead to somewhat different results. It is also probable that, during the early years, a few of the U.S. lists were lost or never collected.

Passenger Lists

The U.S. Passenger Lists resulted from an 1819 law requiring every ship carrying passengers that arrived in the United States from a foreign port to file with the port authorities a list of all passengers on the ship. These records are the basis for the vast majority of the historical data on immigration. For example, virtually all of the tables in the chapter on immigration in Carter et. al (2006) are based on these records. The Passenger Lists recorded a great deal of information. Each list indicates the name of the ship, the name of the captain, the port(s) of embarkation, the port of arrival, and the date of arrival. Following this information is a list of the passengers. Each person’s name is listed, along with age, gender, occupation, country of origin, country of destination, and whether or not the person died on the voyage. It is often possible to distinguish family groups since family members were usually grouped together and, to save time, the compilers frequently used ditto marks to indicate the same last name. Various data based on the lists were published in Senate or Congressional Reports at the time. Due to their usefulness in genealogical research, the lists are now widely available on microfilm and are increasingly available on CD-rom. Even a few public libraries in major cities have full or partial collections of these records. Most of the ship lists are also available on-line at various web sites.

The Volume of Immigration

Both the total volume of immigration to the United States and the immigrants’ countries of origins varied substantially over time. Table 1 provides the basic data on total immigrant volume by time period broken down by country or area of origin. The column “Average Yearly Total – All Countries” presents the average yearly total immigration to the United States in the time period given. Immigration rates – the average number of immigrants entering per thousand individuals in the U.S. population – are shown in the next column. The columns headed by country or area names show the percentage of immigrants coming from that place. The time periods in Table 1 have been chosen for illustrative purposes. A few things should be noted concerning the figures in Table 1. First, the estimates for much of the period since 1820 are based on the original Passenger Lists and are subject to the caveats discussed above. The estimates for the period before 1820 are the best currently available but are less precise than those after 1820. Second, though it was legal to import slaves into the United States (or the American colonies) before 1808, the estimates presented exclude slaves. Third, though illegal immigration into the United States has occurred, the figures in Table 1 include only legal immigrants. In 2015, the total number of illegal immigrants in the United States is estimated at around 11 million. These individuals were mostly from Mexico, Central America, and Asia.

Trends over Time

From the data presented in Table 1, it is apparent that the volume of immigration and its rate relative to the U.S. population varied over time. Immigration was relatively small until a noticeable increase occurred in the 1830s and a huge jump in the 1840s. The volume passed 200,000 for the first time in 1847 and the period between 1847 and 1854 saw the highest rate of immigration in U.S. history. From the level reached between 1847 and 1854, volume decreased and increased over time through 1930. For the period from 1847 through 1930, the average yearly volume was 434,000. During these years, immigrant volume peaked between 1900 and 1914, when an average of almost 900,000 immigrants arrived in the United States each year. This period is also second in terms of the rate of immigration relative to the U.S. population. The volume and rate fell to low levels between 1931 and 1946, though by the 1970s the volume had again reached that experienced between 1847 and 1930. The rise in volume continued through the 1980s and 1990s, though the rate per one thousand American residents has remained well below that experienced before 1915. It is notable that since about 1990, the average yearly volume of immigration has surpassed the previous peak experienced between 1900 and 1914. In 2015, reflecting the large volume of immigration, about 15 percent of the U.S. population was foreign-born.

Table 1
Immigration Volume and Rates

Years Average Yearly Total – All Countries Immigration Rates (Per 1000 Population) Percent of Average Yearly Total
Great Britain Ireland Scandinavia and Other NW Europe Germany Central and Eastern Europe Southern Europe Asia Africa Australia and Pacific Islands Mexico Other America
1630‑1700 2,200 —- —- —- —- —- —- —- —- —- —- —- —-
1700-1780 4,325 —- —- —- —- —- —- —- —- —- —- —- —-
1780-1819 9,900 —- —- —- —- —- —- —- —- —- —- —- —-
1820-1831 14,538 1.3 22 45 12 8 0 2 0 0 —- 4 6
1832-1846 71,916 4.3 16 41 9 27 0 1 0 0 —- 1 5
1847-1854 334,506 14.0 13 45 6 32 0 0 1 0 —- 0 3
1855-1864 160,427 5.2 25 28 5 33 0 1 3 0 —- 0 4
1865-1873 327,464 8.4 24 16 10 34 1 1 3 0 0 0 10
1874-1880 260,754 5.6 18 15 14 24 5 3 5 0 0 0 15
1881-1893 525,102 8.9 14 12 16 26 16 8 1 0 0 0 6
1894-1899 276,547 3.9 7 12 12 11 32 22 3 0 0 0 2
1900-1914 891,806 10.2 6 4 7 4 45 26 3 0 0 1 5
1915-1919 234,536 2.3 5 2 8 1 7 21 6 0 1 8 40
1920-1930 412,474 3.6 8 5 8 9 14 16 3 0 0 11 26
1931-1946 50,507 0.4 10 2 9 15 8 12 3 1 1 6 33
1947-1960 252,210 1.5 7 2 6 8 4 10 8 1 1 15 38
1961-1970 332,168 1.7 6 1 4 6 4 13 13 1 1 14 38
1971-1980 449,331 2.1 3 0 1 2 4 8 35 2 1 14 30
1981-1990 733,806 3.1 2 0 1 1 3 2 37 2 1 23 27
1991-2000 909,264 3.4 2 1 1 1 11 2 38 5 1 30 9
2001-2008 1,040,951 4.4 2 0 1 1 9 1 35 7 1 17 27
2009-2015 1,046,459 4.8 1 0 1 1 5 1 40 10 1 14 27

Sources: Years before 1820: Grabbe (1989). 1820-1970: Historical Statistics (1976). Years since 1970: U.S. Immigration and Naturalization Service (various years). Note: Entries with a zero indicate less than one-half of one percent. Entries with dashes indicate no information or no immigrants. 2002-2015: Department of Homeland Security: Office of Immigration Statistics (various years).

Sources of Immigration

The sources of immigration have changed a number of times over the years. In general, four relatively distinct periods can be identified in Table 1. Before 1881, the vast majority of immigrants, almost 86% of the total, arrived from northwest Europe, principally Great Britain, Ireland, Germany, and Scandinavia. During the colonial period, though the data do not allow an accurate breakdown, most immigrants arrived from Britain, with smaller numbers coming from Ireland and Germany. The years between 1881 and 1893 saw a transition in the sources of U.S. immigrants. After 1881, immigrant volume from central, eastern, and southern Europe began to increase rapidly. Between 1894 and 1914, immigrants from southern, central, and eastern Europe accounted for 69% of the total. With the onset of World War I in 1914, the sources of U.S. immigration again changed. From 1915 to the present day, a major source of immigrants to the United States has been the Western Hemisphere, accounting for 46% of the total. In the period between 1915 and 1960, virtually all of the remaining immigrants came from Europe, though no specific part of Europe was dominant. Beginning in the 1960s, immigration from Europe fell off substantially and was replaced by a much larger percentage of immigrants from Asia. Also noteworthy is the rise in immigration from Africa in the twenty-first century. Thus, over the course of U.S. history, the sources of immigration changed from northwestern Europe to southern, central and eastern Europe to the Americas in combination with Europe to the current situation where most immigrants come from the Americas, Asia and Africa.

Duration of Voyage and Method of Travel

Before the 1840s, immigrants arrived on sailing ships. General information on the length of the voyage is unavailable for the colonial and early national periods. By the 1840s, however, the average voyage length for ships from the British Isles was five to six weeks, with those from the European continent taking a week or so longer. In the 1840s, a few steamships began to cross the Atlantic. Over the course of the 1850s, steamships began to account for a larger, though still minority, percentage of immigrant travel. By 1873, virtually all immigrants arrived on steamships (Cohn 2005). As a result, the voyage time fell initially to about two weeks and it continued to decline into the twentieth century. Steamships remained the primary means of travel until after World War II. As a consequence of the boom in airplane travel over the last few decades, most immigrants now arrive via air.

Place of Arrival

Where immigrants landed in the United States varied, especially in the period before the Civil War. During the colonial and early national periods, immigrants arrived not only at New York City but also at a variety of other ports, especially Philadelphia, Boston, New Orleans, and Baltimore. Over time, and especially when most immigrants began arriving via steamship, New York City became the main arrival port. No formal immigration facilities existed at any of the ports until New York City established Castle Garden as its landing depot in 1855. This facility, located at the tip of Manhattan, was replaced in 1892 with Ellis Island, which in turn operated until 1954.

Death Rates during the Voyage

A final aspect to consider is the mortality experienced by the individuals on board the ships. Information taken from the Passenger Lists for the period of the sailing ship between 1820 and 1860 finds a loss rate of one to two percent of the immigrants who boarded (Cohn, 2009). Given the length of the trip and taking into account the ages of the immigrants, this rate represents mortality approximately four times higher than that experienced by non-migrants. Mortality was mainly due to outbreaks of cholera and typhus on some ships, leading to especially high death rates among children and the elderly. There appears to have been little trend over time in mortality or differences in the loss rate by country of origin, though some evidence suggests the loss rate may have differed by port of embarkation. In addition, the best evidence from the colonial period finds a loss rate only slightly higher than that of the antebellum years. In the period after the Civil War, with the change to steamships and the resulting shorter travel time and improved on-board conditions, mortality on the voyages fell, though exactly how much has not been determined.

The Causes of Immigration

Economic historians generally believe no single factor led to immigration. In fact, different studies have tried to explain immigration by emphasizing different factors, with the first important study being done by Thomas (1954). The most recent attempt to comprehensively explain immigration has been by Hatton and Williamson (1998), who focus on the period between 1860 and 1914. Massey (1999) expresses relatively similar views. Hatton and Williamson view immigration from a country during this time as being caused by up to five different factors: (a) the difference in real wages between the country and the United States; (b) the rate of population growth in the country 20 or 30 years before; (c) the degree of industrialization and urbanization in the home country; (d) the volume of previous immigrants from that country or region; and (e) economic and political conditions in the United States. To this list can be added factors not relevant during the 1860 to 1914 period, such as the potato famine, the movement from sail to steam, and the presence or absence of immigration restrictions. Thus, a total of at least eight factors affected immigration.

Causes of Fluctuations in Immigration Levels over Time

As discussed above, the total volume of immigration trended upward until World War I. The initial increase in immigration during the 1830s and 1840s was caused by improvements in shipping, more rapid population growth in Europe, and the potato famine in the latter part of the 1840s, which affected not only Ireland but also much of northwest Europe. As previously noted, the steamship replaced the sailing ship after the Civil War. By substantially reducing the length of the trip and increasing comfort and safety, the steamship encouraged an increase in the volume of immigration. Part of the reason volume increased was that temporary immigration became more likely. In this situation, an individual came to the United States not planning to stay permanently but instead planning to work for a period of time before returning home. All in all, the period from 1865 through 1914, when immigration was not restricted and steamships were dominant, saw an average yearly immigrant volume of almost 529,000. In contrast, average yearly immigration between 1820 and 1860 via sailing ship was only 123,000, and even between 1847 and 1860 was only 266,000.

Another feature of the data in Table 1 is that the yearly volume of immigration fluctuated quite a bit in the period before 1914. The fluctuations are mainly due to changes in economic and political conditions in the United States. Essentially, periods of low volume corresponded with U.S. economic depressions or times of widespread opposition to immigrants. In particular, volume declined during the nativist outbreak in the 1850s and the major depressions of the 1870s and 1890s and the Great Depression of the 1930s. As discussed in the next section, the United States imposed widespread restrictions on immigration beginning in the 1920s. Since then, the volume has been subject to more direct determination by the United States government. Thus, fluctuations in the total volume of immigration over time are due to four of the eight factors discussed in the first paragraph of this section: the potato famine, the movement from sail to steam, economic and political conditions in the United States, and the presence or absence of immigration restrictions.

Factors Influencing Immigration Rates from Particular Countries

The other four factors are primarily used to explain changes in the source countries of immigration. A larger difference in real wages between the country and the United States increased immigration from the country because it meant immigrants had more to gain from the move. Because most immigrants were between 15 and 35 years old, a higher population growth 20 or 30 years earlier meant there were more individuals in the potential immigrant group. In addition, a larger volume of young workers in a country reduced job prospects at home and further encouraged immigration. A greater degree of industrialization and urbanization in the home country typically increased immigration because traditional ties with the land were broken during this period, making laborers in the country more mobile. Finally, the presence of a larger volume of previous immigrants from that country or region encouraged more immigration because potential immigrants now had friends or relatives to stay with who could smooth their transition to living and working in the United States.

Based on these four factors, Hatton and Williamson explain the rise and fall in the volume of immigration from a country to the United States. Immigrant volume initially increased as a consequence of more rapid population growth and industrialization in a country and the existence of a large gap in real wages between the country and the United States. Within a number of years, volume increased further due to the previous immigration that had occurred. Volume remained high until various changes in Europe caused immigration to decline. Population growth slowed. Most of the countries had undergone industrialization. Partly due to the previous immigration, real wages rose at home and became closer to those in the United States. Thus, each source country went through stages where immigration increased, reached a peak, and then declined.

Differences in the timing of these effects then led to changes in the source countries of the immigrants. The countries of northwest Europe were the first to experience rapid population growth and to begin industrializing. By the latter part of the nineteenth century, immigration from these countries was in the stage of decline. At about the same time, countries in central, eastern, and southern Europe were experiencing the beginnings of industrialization and more rapid population growth. This model holds directly only through the 1920s, because U.S. government policy changed. At that point, quotas were established on the number of individuals allowed to immigrate from each country. Even so, many countries, especially those in northwest Europe, had passed the point where a large number of individuals wanted to leave and thus did not fill their quotas. The quotas were binding for many other countries in Europe in which pressures to immigrate were still strong. Even today, the countries providing the majority of immigrants to the United States, those south of the United States and in Asia and Africa, are places where population growth is high, industrialization is breaking traditional ties with the land, and real wage differentials with the United States are large.

Immigration Policy and Nativism

This section summarizes the changes in U.S. immigration policy. Only the most important policy changes are discussed and a number of relatively minor changes have been ignored. Interested readers are referred to Le May (1987) and Briggs (1984) for more complete accounts of U.S. immigration policy.

Few Restrictions before 1882

Immigration into the United States was subject to virtually no legal restrictions before 1882. Essentially, anyone who wanted to enter the United States could and, as discussed earlier, no specified arrival areas existed until 1855. Individuals simply got off the ship and went about their business. Little opposition among U.S. citizens to immigration is apparent until about the 1830s. The growing concern at this time was due to the increasing volume of immigration in both absolute terms and relative to the U.S. population, and the facts that more of the arrivals were Catholic and unskilled. The nativist feeling burst into the open during the 1850s when the Know-Nothing political party achieved a great deal of political success in the 1854 off-year elections. This party did not favor restrictions on the number of immigrants, though they did seek to restrict their ability to quickly become voting citizens. For a short period of time, the Know-Nothings had an important presence in Congress and many state legislatures. With the downturn in immigration in 1855 and the nation’s attention turning more to the slavery issue, their influence receded.

Chinese Exclusion Act

The first restrictive immigration laws were directed against Asian countries. The first law was the Chinese Exclusion Act of 1882. This law essentially prohibited the immigration of Chinese citizens and it stayed in effect until it was removed during World War II. In 1907, Japanese immigration was substantially reduced through a Gentlemen’s Agreement between Japan and the United States. It is noteworthy that the Chinese Exclusion Act also prohibited the immigration of “convicts, lunatics, idiots” and those individuals who might need to be supported by government assistance. The latter provision was used to some extent during periods of high unemployment, though as noted above, immigration fell anyway because of the lack of jobs.

Literacy Test Adopted in 1917

The desire to restrict immigration to the United States grew over the latter part of the nineteenth century. This growth was due partly to the high volume and rate of immigration and partly to the changing national origins of the immigrants; more began arriving from southern, central, and eastern Europe. In 1907, Congress set up the Immigration Commission, chaired by Senator William Dillingham, to investigate immigration. This body issued a famous report, now viewed as flawed, concluding that immigrants from the newer parts of Europe did not assimilate easily and, in general, blaming them for various economic ills. Attempts at restricting immigration were initially made by proposing a law requiring a literacy test for admission to the United States, and such a law was finally passed in 1917. This same law also virtually banned immigration from any country in Asia. Restrictionists were no doubt displeased when the volume of immigration from Europe resumed its former level after World War I in spite of the literacy test. The movement then turned to explicitly limiting the number of arrivals.

1920s: Quota Act and National Origins Act

The Quota Act of 1921 laid the framework for a fundamental change in U.S. immigration policy. It limited the number of immigrants from Europe to a total of about 350,000 per year. National quotas were established in direct proportion to each country’s presence in the U.S. population in 1910. In addition, the act assigned Asian countries quotas near zero. Three years later in 1924, the National Origins Act instituted a requirement that visas be obtained from an American consulate abroad before immigrating, reduced the total European quota to about 165,000, and changed how the quotas were determined. Now, the quotas were established in direct proportion to each country’s presence in the U.S. population in 1890, though this aspect of the act was not fully implemented until 1929. Because relatively few individuals immigrated from southern, central, and eastern Europe before 1890, the effect of the 1924 law was to drastically reduce the number of individuals allowed to immigrate to the United States from these countries. Yet total immigration to the United States remained fairly high until the Great Depression because neither the 1921 nor the 1924 law restricted immigration from the Western Hemisphere. Thus, it was the combination of the outbreak of World War I and the subsequent 1920s restrictions that caused the Western Hemisphere to become a more important source of immigrants to the United States after 1915, though it should be recalled the rate of immigration fell to low levels after 1930.

Immigration and Nationality Act of 1965

The last major change in U.S. immigration policy occurred with the passage of the Immigration and Nationality Act of 1965. This law abolished the quotas based on national origins. Instead, a series of preferences were established to determine who would gain entry. The most important preference was given to relatives of U.S. citizens and permanent resident aliens. By the twenty-first century, about two-thirds of immigrants came through these family channels. Preferences were also given to professionals, scientists, artists, and workers in short supply. The 1965 law kept an overall quota on total immigration for Eastern Hemisphere countries, originally set at 170,000, and no more than 20,000 individuals were allowed to immigrate to the United States from any single country. This law was designed to treat all countries equally. Asian countries were treated the same as any other country, so the virtual prohibition on immigration from Asia disappeared. In addition, for the first time the law also limited the number of immigrants from Western Hemisphere countries, with the original overall quota set at 120,000. It is important to note that neither quota was binding because immediate relatives of U.S. citizens, such as spouses, parents, and minor children, were exempt from the quota. In addition, the United States has admitted large numbers of refugees at different times from Vietnam, Haiti, Cuba, and other countries. Finally, many individuals enter the United States on student visas, enroll in colleges and universities, and eventually get companies to sponsor them for a work visa. Thus, the total number of legal immigrants to the United States since 1965 has always been larger than the combined quotas. This law has led to an increase in the volume of immigration and, by treating all countries the same, has led to Asia recently becoming a more important source of U.S. immigrants.

Though features of the 1965 law have been modified since it was enacted, this law still serves as the basis for U.S. immigration policy today. The most important modifications occurred in 1986 when employer sanctions were adopted for those hiring illegal workers. On the other hand, the same law also gave temporary resident status to individuals who had lived illegally in the United States since before 1982. The latter feature led to very high volumes of legal immigration being recorded in 1989, 1990, and 1991.

The Characteristics of the Immigrants

In this section, various characteristics of the immigrant stream arriving at different points in time are discussed. The following characteristics of immigration are analyzed: gender breakdown, age structure, family vs. individual migration, and occupations listed. Virtually all the information is based on the Passenger Lists, a source discussed above.

Gender and Age

Data are presented in Table 2 on the gender breakdown and age structure of immigration. The gender breakdown and age structure remain fairly consistent in the period before 1930. Generally, about 60% of the immigrants were male. As to age structure, about 20% of immigrants were children, 70% were adults up to age 44, and 10% were older than 44. In most of the period and for most countries, immigrants were typically young single males, young couples, or, especially in the era before the steamship, families. For particular countries, such as Ireland, a large number of the immigrants were single women (Cohn, 1995). The primary exception to this generalization was the 1899-1914 period, when 68% of the immigrants were male and adults under 45 accounted for 82% of the total. This period saw the immigration of a large number of single males who planned to work for a period of months or years and return to their homeland, a development made possible by the steamship shortening the voyage and reducing its cost (Nugent, 1992). The characteristics of the immigrant stream since 1930 have been somewhat different. Males have comprised less than one-half of all immigrants. In addition, the percentage of immigrants over age 45 has increased at the expense of those between the ages of 14 and 44.

Table 2
Immigration by Gender and Age

Percent Males Percent under 14 years Percent 14–44 years Percent 45 years and over
Years
1820-1831 70 19 70 11
1832-1846 62 24 67 10
1847-1854 59 23 67 10
1855-1864 58 19 71 10
1865-1873 62 21 66 13
1873-1880 63 19 69 12
1881-1893 61 20 71 10
1894-1898 57 15 77 8
1899-1914 68 12 82 5
1915-1917 59 16 74 10
1918-1930 56 18 73 9
1931-1946 40 15 67 17
1947-1960 45 21 64 15
1961-1970 45 25 61 14
1971-1980 46 24 61 15
1981-1990 52 18 66 16
1991-2000 51 17 65 18
2001-2008 45 15 64 21
2009-2015 45 15 61 24

Notes: From 1918-1970, the age breakdown is “Under 16” and “16-44.” From 1971 to 1998, the age breakdown is “Under 15” and “15-44.” For 2001-2015, it is again “Under 16” and “16-44.”

Sources: 1820-1970: Historical Statistics (1976). Years since 1970: U.S. Immigration and Naturalization Service (various years). 2002-2015: Department of Homeland Security: Office of Immigration Statistics (various years).

Occupations

Table 3 presents data on the percentage of immigrants who did not report an occupation and the percentage breakdown of those reporting an occupation. The percentage not reporting an occupation declined through 1914. The small percentages between 1894 and 1914 are a reflection of the large number of single males who arrived during this period. As is apparent, the classification scheme for occupations has changed over time. Though there is no perfect way to correlate the occupation categories used in the different time periods, skilled workers comprised about one-fourth of the immigrant stream through 1970. The immigration of farmers was important before the Civil War but declined steadily over time. The percentage of laborers has varied over time, though during some time periods they comprised one-half or more of the immigrants. The highest percentages of laborers occurred during good years for the U.S. economy (1847-54, 1865-73, 1881-93, 1899-1914), because laborers possessed the fewest skills and would have an easier time finding a job when the U.S. economy was strong. Commercial workers, mainly merchants, were an important group of immigrants very early when immigrant volume was low, but their percentage fell substantially over time. Professional workers were always a small part of U.S. immigration until the 1930s. Since 1930, these workers have comprised a larger percentage of immigrants reporting an occupation.

Table 3
Immigration by Occupation

Year Percent with no occup. listed Percent of immigrants with an occupation in each category
Professional Commercial Skilled Farmers Servants Laborers Misc.
1820-1831 61 3 28 30 23 2 14
1832-1846 56 1 12 27 33 2 24
1847-1854 54 0 6 18 33 2 41
1855-1864 53 1 12 23 23 4 37 0
1865-1873 54 1 6 24 18 7 44 1
1873-1880 47 2 4 24 18 8 40 5
1881-1893 49 1 3 20 14 9 51 3
1894-1898 38 1 4 25 12 18 37 3
Professional, technical, and kindred workers Farmers and farm managers Managers, officials, and proprietors, exc. farm Clerical, sales, and kindred workers Craftsmen, foremen, operatives, and kindred workers Private HH workers Service workers, exc. private household Farm laborers and foremen Laborers, exc. farm and mine
1899-1914 26 1 2 3 2 18 15 2 26 33
1915-1919 37 5 4 5 5 21 15 7 11 26
1920-1930 39 4 5 4 7 24 17 6 8 25
1931-1946 59 19 4 15 13 21 13 6 2 7
1947-1960 53 16 5 5 17 31 8 6 3 10
1961-1970 56 23 2 5 17 25 9 7 4 9
1971-1980 59 25 — a 8 12 36 — b 15 5 — c
1981-1990 56 14 — a 8 12 37 — b 22 7 — c
1991-2000 61 17 — a 7 9 23 — b 14 30 — c
2001-2008 76 45 — a — d 14 21 — b 18 5 — c
2009-2015 76 46 — a — d 12 19 — b 19 5 — c

a – included with “Farm laborers and foremen”; b – included with “Service workers, etc.”; c – included with “Craftsmen, etc.”; d – included with “Professional.”

Sources: 1820-1970: Historical Statistics (1976). Years since 1970: U.S. Immigration and Naturalization Service (various years). 2002-2015: Department of Homeland Security: Office of Immigration Statistics (various years). From 1970 through 2001, the INS has provided the following occupational categories: Professional, specialty, and technical (listed above under “Professional”); Executive, administrative, and managerial (listed above under “Managers, etc.”); Sales; Administrative support (these two are combined and listed above under “Clerical, etc.”); Precision production, craft, and repair; Operator, fabricator, and laborer (these two are combined and listed above under “Craftsmen, etc.”); Farming, forestry, and fishing (listed above under “Farm laborers and foremen”); and Service (listed above under “Service workers, etc.). Since 2002, the Department of Homeland Security has combined the Professional and Executive categories.  Note: Entries with a zero indicate less than one-half of one percent. Entries with dashes indicate no information or no immigrants.

Skill Levels

The skill level of the immigrant stream is important because it potentially affects the U.S. labor force, an issue considered in the next section. Before turning to this issue, a number of comments can be made concerning the occupational skill level of the U.S. immigration stream. First, skill levels fell substantially in the period before the Civil War. Between 1820 and 1831, only 39% of the immigrants were farmers, servants, or laborers, the least skilled groups. Though the data are not as complete, immigration during the colonial period was almost certainly at least this skilled. By the 1847-54 period, however, the less-skilled percentage had increased to 76%. Second, the less-skilled percentage did not change dramatically late in the nineteenth century when the source of immigration changed from northwest Europe to other parts of Europe. Comparing 1873-80 with 1899-1914, both periods of high immigration, farmers, servants, and laborers accounted for 66% of the immigrants in the former period and 78% in the latter period. The second figure is, however, similar to that during the 1847-54 period. Third, the restrictions on immigration imposed during the 1920s had a sizable effect on the skill level of the immigrant stream. Between 1930 and 1970, only 31-34% of the immigrants were in the least-skilled group.

Fourth, a deterioration in immigrant skills appears in the numbers in the 1980s and 1990s, and then an improvement appears since 2001. Both changes may be an illusion.. In Table 3 for the 1980s and 1990s, the percentage in the “Professional” category falls while the percentages in the “Service” and “Farm workers” categories rise. These changes are, however, due to the amnesty for illegal immigrants resulting from the 1986 law. The amnesty led to the recorded volume of immigration in 1989, 1990, and 1991 being much higher than typical, and most of the “extra” immigrants recorded their occupation as “Service” or “Farm laborer.” If these years are ignored, then little change occurred in the occupational distribution of the immigrant stream during the 1980s and 1990s. Two caveats, however, should be noted. First, the illegal immigrants can not, of course, be ignored. Second, the skill level of the U.S. labor force was improving over the same period. Thus, relative to the U.S. labor force and including illegal immigration, it is apparent the occupational skill level of the U.S. immigrant stream declined during the 1980s and 1990s.  Turning to the twenty-first century, the percentage of the legal immigrant stream in the highest-skilled category appears to have increased. This conclusion is also not certain because the changes that occurred in how occupations were categorized beginning in 2001 make a straightforward comparison potentially inexact. This uncertainty is increased by the growing percentage of immigrants for which no occupation is reported. It is not clear whether a larger percentage of those arriving actually did not work (recall that a growing percentage of legal immigrants are somewhat older) or if more simply did not list an occupation. Overall, detecting changes in the skill level of the legal immigrant stream since about 1930 is fraught with difficulty.

The Effects of Immigration on the United States Economy

Though immigration has effects on the country from which the immigrants leave, this section only examines the effects on the United States, mainly those occurring over longer periods of time. Over short periods of time, sizeable and potentially negative effects can occur in a specific area when there is a huge influx of immigrants. A large number of arrivals in a short period of time in one city can cause school systems to become overcrowded, housing prices and welfare payments to increase, and jobs to become difficult to obtain. Yet most economists believe the effects of immigration over time are much less harmful than commonly supposed and, in many ways, are beneficial. . The following longer-term issues are discussed: the effects of immigration on the overall wage rate of U.S. workers; the effects on the wages of particular groups of workers, such as those who are unskilled; and the effects on the rate of economic growth, that is, the standard of living, in the United States. Determining the effects of immigration on the United States is complex and virtually none of the conclusions presented here are without controversy.

Immigration’s Impact on Overall Wage Rates

Immigration is popularly thought to lower the overall wage rate in the United States by increasing the supply of individuals looking for jobs. This effect may occur in an area over a fairly short period of time. Over longer time periods, however, wages will only fall if the amounts of other resources don’t change. Wages will not fall if the immigrants bring sufficient amounts of other resources with them, such as capital, or cause the amount of other resources in the economy to increase sufficiently. For example, historically the large-scale immigration from Europe contributed to rapid westward expansion of the United States during most of the nineteenth century. The westward expansion, however, increased the amounts of land and natural resources that were available, factors that almost certainly kept immigration from lowering wage rates. Immigrants also increase the amounts of other resources in the economy through running their own businesses, which both historically and in recent times has occurred at a greater rate among immigrants than native workers. By the beginning of the twentieth century, the westward frontier had been settled. A number of researchers have estimated that immigration did lower wages at this time (Hatton and Williamson, 1998; Goldin, 1994), though others have criticized these findings (Carter and Sutch, 1999). For the recent time period, most studies have found little effect of immigration on the level of wages, though a few have found an effect (Borjas, 1999).

Even if immigration leads to a fall in the wage rate, it does not follow that individual workers are worse off. Workers typically receive income from sources other than their own labor. If wages fall, then many other resource prices in the economy rise. For example, immigration increases the demand for housing and land and existing owners benefit from an increase in the current value of their property. Whether any individual worker is better off or worse off in this case is not easy to determine. It depends on the amounts of other resources each individual possesses.

Immigration’s Impact on Wages of Unskilled Workers

Consider the second issue, the effects of immigration on the wages of unskilled workers. If the immigrants arriving in the country are primarily unskilled, then the larger number of unskilled workers could cause their wage to fall if the overall demand for these workers doesn’t change. A requirement for this effect to occur is that the immigrants be less skilled than the U.S. labor force they enter. As discussed above, during colonial times immigrant volume was small and the immigrants were probably more skilled than the existing U.S. labor force. During the 1830s and 1840s, the volume and rate of immigration increased substantially and the skill level of the immigrant stream fell to approximately match that of the native labor force. Instead of lowering the wages of unskilled workers relative to those of skilled workers, however, the large inflow apparently led to little change in the wages of unskilled workers, while some skilled workers lost and others gained. The explanation for these results is that the larger number of unskilled workers resulting from immigration was a factor in employers adopting new methods of production that used more unskilled labor. As a result of this technological change, the demand for unskilled workers increased so their wage did not decline. As employers adopted these new machines, however, skilled artisans who had previously done many of these jobs, such as iron casting, suffered losses. Other skilled workers, such as many white-collar workers who were not in direct competition with the immigrants, gained. Some evidence exists to support a differential effect on skilled workers during the antebellum period (Williamson and Lindert, 1980; Margo, 2000). After the Civil War, however, the skill level of the immigrant stream was close to that of the native labor force, so immigration probably did not further affect the wage structure through the 1920s (Carter and Sutch, 1999).

Impact since World War II

The lower volume of immigration in the period from 1930 through 1960 meant immigration had little effect on the relative wages of different workers during these years. With the resumption of higher volumes of immigration after 1965, however, and with the immigrants’ skill levels being low through 2000, an effect on relative wages again became possible. In fact, the relative wages of high-school dropouts in the United States deteriorated during the same period, especially after the mid-1970s. Researchers who have studied the question have concluded that immigration accounted for about one-fourth of the wage deterioration experienced by high-school dropouts during the 1980s, though some researchers find a lower effect and others a higher one (Friedberg and Hunt, 1995; Borjas, 1999). Wages are determined by a number of factors other than immigration. In this case, it is thought the changing nature of the economy, such as the widespread use of computers increasing the benefits to education, bears more of the blame for the decline in the relative wages of high-school dropouts.

Economic Benefits from Immigration

Beyond any effect on wages, there are a number of ways in which immigration might improve the overall standard of living in an economy. First, immigrants may engage in inventive or scientific activity, with the result being a gain to everyone. Evidence exists for both the historical and more recent periods that the United States has attracted individuals with an inventive/scientific nature. The United States has always been a leader in these areas. Individuals are more likely to be successful in such an environment than in one where these activities are not as highly valued. Second, immigrants expand the size of markets for various goods, which may lead to lower firms’ average costs due to an increase in firm size. The result would be a decrease in the price of the goods in question. Third, most individuals immigrate between the ages of 15 and 35, so the expenses of their basic schooling are paid abroad. In the past, most immigrants, being of working age, immediately got a job. Thus, immigration increased the percentage of the population in the United States that worked, a factor that raises the average standard of living in a country. Even in more recent times, most immigrants work, though the increased proportion of older individuals in the immigrant stream means the positive effects from this factor may be lower than in the past. Fourth, while immigrants may place a strain on government services in an area, such as the school system, they also pay taxes. Even illegal immigrants directly pay sales taxes on their purchases of goods and indirectly pay property taxes through their rent. Finally, the fact that immigrants are less likely to immigrate to the United States during periods of high unemployment is also beneficial. By reducing the number of people looking for jobs during these periods, this factor increases the likelihood U.S. citizens will be able to find a job.

The Experience of Immigrants in the U.S. Labor Market

This section examines the labor market experiences of immigrants in the United States. The issue of discrimination against immigrants in jobs is investigated along with the issue of the success immigrants experienced over time. Again, the issues are investigated for the historical period of immigration as well as more recent times. Interested readers are directed to Borjas (1999), Ferrie (2000), Carter and Sutch (1999), Hatton and Williamson (1998), and Friedberg and Hunt (1995) for more technical discussions.

Did Immigrants Face Labor Market Discrimination?

Discrimination can take various forms. The first form is wage discrimination, in which a worker of one group is paid a wage lower than an equally productive worker of another group. Empirical tests of this hypothesis generally find this type of discrimination has not existed. At any point in time, immigrants have been paid the same wage for a specific job as a native worker. If immigrants generally received lower wages than native workers, the differences reflected the lower skills of the immigrants. Historically, as discussed above, the skill level of the immigrant stream was similar to that of the native labor force, so wages did not differ much between the two groups. During more recent years, the immigrant stream has been less skilled than the native labor force, leading to the receipt of lower wages by immigrants. A second form of discrimination is in the jobs an immigrant is able to obtain. For example, in 1910, immigrants accounted for over half of the workers in various jobs; examples are miners, apparel workers, workers in steel manufacturing, meat packers, bakers, and tailors. If a reason for the employment concentration was that immigrants were kept out of alternative higher paying jobs, then the immigrants would suffer. This type of discrimination may have occurred against Catholics during the 1840s and 1850s and against the immigrants from central, southern, and eastern Europe after 1890. In both cases, it is possible the immigrants suffered because they could not obtain higher paying jobs. In more recent years, reports of immigrants trained as doctors, say, in their home country but not allowed to easily practice as such in the United States, may represent a similar situation. Yet the open nature of the U.S. schooling system and economy has been such that this effect usually did not impact the fortunes of the immigrants’ children or did so at a much smaller rate.

Wage Growth, Job Mobility, and Wealth Accumulation

Another aspect of how immigrants fared in the U.S. labor market is their experiences over time with respect to wage growth, job mobility, and wealth accumulation. A study done by Ferrie (1999) for immigrants arriving between 1840 and 1850, the period when the inflow of immigrants relative to the U.S. population was the highest, found immigrants from Britain and Germany generally improved their job status over time. By 1860, over 75% of the individuals reporting a low-skilled job on the Passenger Lists had moved up into a higher-skilled job, while fewer than 25% of those reporting a high-skilled job on the Passenger Lists had moved down into a lower-skilled job. Thus, the job mobility for these individuals was high. For immigrants from Ireland, the experience was quite different; the percentage of immigrants moving up was only 40% and the percentage moving down was over 50%. It isn’t clear if the Irish did worse because they had less education and fewer skills or whether the differences were due to some type of discrimination against them in the labor market. As to wealth, all the immigrant groups succeeded in accumulating larger amounts of wealth the longer they were in the United States, though their wealth levels fell short of those enjoyed by natives. Essentially, the evidence indicates antebellum immigrants were quite successful over time in matching their skills to the available jobs in the U.S. economy.

The extent to which immigrants had success over time in the labor market in the period since the Civil War is not clear. Most researchers have thought that immigrants who arrived before 1915 had a difficult time. For example, Hanes (1996) concludes that immigrants, even those from northwest Europe, had slower earnings growth over time than natives, a finding he argues was due to poor assimilation. Hatton and Williamson (1998), on the other hand, criticize these findings on technical grounds and conclude that immigrants assimilated relatively easily into the U.S. labor market. For the period after World War II, Chiswick (1978) argues that immigrants’ wages have increased relative to those of natives the longer the immigrants have been in the United States. Borjas (1999) has criticized Chiswick’s finding by suggesting it is caused by a decline in the skills possessed by the arriving immigrants between the 1950s and the 1990s. Borjas finds that 25- to 34-year-old male immigrants who arrived in the late 1950s had wages 9% lower than comparable native males, but by 1970 had wages 6% higher. In contrast, those arriving in the late 1970s had wages 22% lower at entry. By the late 1990s, their wages were still 12% lower than comparable natives. Overall, the degree of success experienced by immigrants in the U.S. labor market remains an area of controversy.

References

Borjas, George J. Heaven’s Door: Immigration Policy and the American Economy. Princeton: Princeton University Press, 1999.

Briggs, Vernon M., Jr. Immigration and the American Labor Force. Baltimore: Johns Hopkins University Press, 1984.

Carter, Susan B., and Richard Sutch. “Historical Perspectives on the Economic Consequences of Immigration into the United States.” In The Handbook of International Migration: The American Experience, edited by Charles Hirschman, Philip Kasinitz, and Josh DeWind, 319-341. New York: Russell Sage Foundation, 1999

Carter, Susan B., et. al.  Historical Statistics of the United States: Earliest Times to the Present – Millennial Edition. Volume 1: Population. New York: Cambridge University Press, 2006.

Chiswick, Barry R. “The Effect of Americanization on the Earnings of Foreign-Born Men.” Journal of Political Economy 86 (1978): 897-921.

Cohn, Raymond L. “A Comparative Analysis of European Immigrant Streams to the United States during the Early Mass Migration.” Social Science History 19 (1995): 63-89.

Cohn, Raymond L.  “The Transition from Sail to Steam in Immigration to the United States.” Journal of Economic History 65 (2005): 479-495.

Cohn, Raymond L. Mass Migration under Sail: European Immigration to the Antebellum United States. New York: Cambridge University Press, 2009.

Erickson, Charlotte J. Leaving England: Essays on British Emigration in the Nineteenth Century. Ithaca: Cornell University Press, 1994.

Ferenczi, Imre. International Migrations. New York: Arno Press, 1970.

Ferrie, Joseph P. Yankeys Now: Immigrants in the Antebellum United States, 1840-1860. New York: Oxford University Press, 1999.

Friedberg, Rachael M., and Hunt, Jennifer. “The Impact of Immigrants on Host Country Wages, Employment and Growth.” The Journal of Economic Perspectives 9 (1995): 23-44.

Goldin, Claudia. “The Political Economy of Immigration Restrictions in the United States, 1890 to 1921.” In The Regulated Economy: A Historical Approach to Political Economy, edited by Claudia Goldin and Gary D. Libecap, 223-257. Chicago: University of Chicago Press, 1994.

Grabbe, Hans-Jürgen. “European Immigration to the United States in the Early National Period, 1783-1820.” Proceeding of the American Philosophical Society 133 (1989): 190-214.

Hanes, Christopher. “Immigrants’ Relative Rate of Wage Growth in the Late Nineteenth Century.” Explorations in Economic History 33 (1996): 35-64.

Hansen, Marcus L. The Atlantic Migration, 1607-1860. Cambridge, MA.: Harvard University Press, 1940.

Hatton, Timothy J., and Jeffrey G. Williamson. The Age of Mass Migration: Causes and Economic Impact. New York: Oxford University Press, 1998.

Jones, Maldwyn Allen. American Immigration. Chicago: University of Chicago Press, Second Edition, 1960.

Le May, Michael C. From Open Door to Dutch Door: An Analysis of U.S. Immigration Policy Since 1820. New York: Praeger, 1987.

Margo, Robert A. Wages and Labor Markets in the United States, 1820-1860. Chicago: University of Chicago Press, 2000.

Massey, Douglas S. “Why Does Immigration Occur? A Theoretical Synthesis.” In The Handbook of International Migration: The American Experience, edited by Charles Hirschman, Philip Kasinitz, and Josh DeWind, 34-52. New York: Russell Sage Foundation, 1999.

Miller, Kerby A. Emigrants and Exiles: Ireland and the Irish Exodus to North America. Oxford: Oxford University Press, 1985.

Nugent, Walter. Crossings: The Great Transatlantic Migrations, 1870-1914. Bloomington and Indianapolis: Indiana University Press, 1992.

Taylor, Philip. The Distant Magnet. New York: Harper & Row, 1971.

Thomas, Brinley. Migration and Economic Growth: A Study of Great Britain and the Atlantic Economy. Cambridge, U.K.: Cambridge University Press, 1954.

U.S. Department of Commerce. Historical Statistics of the United States. Washington, DC, 1976.

U.S. Immigration and Naturalization Service. Statistical Yearbook of the Immigration and Naturalization Service. Washington, DC: U.S. Government Printing Office, various years.

Walker, Mack. Germany and the Emigration, 1816-1885. Cambridge, MA: Harvard University Press, 1964.

Williamson, Jeffrey G., and Peter H. Lindert, Peter H. American Inequality: A Macroeconomic History. New York: Academic Press, 1980.

Citation: Cohn, Raymond L. “Immigration to the United States”. EH.Net Encyclopedia, edited by Robert Whaples. Revised August 2, 2017. URL http://eh.net/encyclopedia/immigration-to-the-united-states/

Economic History of Hawai’i

Sumner La Croix, University of Hawai’i and East-West Center

The Hawaiian Islands are a chain of 132 islands, shoals, and reefs extending over 1,523 miles in the Northeast Pacific Ocean. Eight islands — Hawai’i, Maui, O’ahu, Kaua’i, Moloka’i, Lana’i, Ni’ihau, and Kaho’olawe — possess 99 percent of the land area (6,435 square miles) and are noted for their volcanic landforms, unique flora and fauna, and diverse climates.

From Polynesian Settlement to Western Contact

The Islands were uninhabited until sometime around 400 AD when Polynesian voyagers sailing double-hulled canoes arrived from the Marquesas Islands (Kirch, 1985, p. 68). Since the settlers had no written language and virtually no contact with the Western world until 1778, our knowledge of Hawai’i’s pre-history comes primarily from archaeological investigations and oral legends. A relatively egalitarian society and subsistence economy were coupled with high population growth rates until about 1100 when continued population growth led to a major expansion of the areas of settlement and cultivation. Perhaps under pressures of increasing resource scarcity, a new, more hierarchical social structure emerged, characterized by chiefs (ali’i) and subservient commoners (maka’ainana). In the two centuries prior to Western contact, there is considerable evidence that ruling chiefs (ali’i nui) competed to extend their lands by conquest and that this led to cycles of expansion and retrenchment.

Captain James Cook’s ships reached Hawai’i in 1778, thereby ending a long period of isolation for the Islands. Captain James King observed in 1779 that Hawaiians were generally “above the middle size” of Europeans, a rough indicator that Hawaiians generally had a diet superior to eighteenth-century Europeans. At contact, Hawaiian social and political institutions were similar to those found in other Polynesian societies. Hawaiians were sharply divided into three main social classes: ali’i (chiefs), maka’ainana (commoners), and kahuna (priests). Oral legends tell us that the Islands were usually divided into six to eight small kingdoms consisting of an island or part of an island, each governed by an ali’i nui (ruling chief). The ali’i nui had extensive rights to all lands and material goods and the ability to confiscate or redistribute material wealth at any time. Redistribution usually occurred only when a new ruling chief took office or when lands were conquered or lost. The ali’i nui gave temporary land grants to ali’i who, in turn, gave temporary land grants to konohiki (managers), who then “contracted” with maka’ainana, the great majority of the populace, to work the lands.

The Hawaiian society and economy has its roots in extended families (‘ohana) working cooperatively on an ahupua’a, a land unit running from the mountains to the sea. Numerous tropical root, tuber, and tree crops were cultivated. Taro, a wetland crop, was cultivated primarily in windward areas, while sweet potatoes and yams, both dryland crops, were cultivated in drier leeward areas. The maka’ainana apparently lived well above subsistence levels, with extensive time available for cultural activities, sports, and games. There were unquestionably periods of hardship, but these times tended to be associated with drought or other causes of poor harvest.

Unification of Hawai’i and Population Decline

The long-prevailing political equilibrium began to disintegrate shortly after the introduction of guns and the spread of new diseases to the Islands. In 1784, the most powerful ali’i nui, Kamehameha, began a war of conquest, and with his superior use of modern weapons and western advisors, he subdued all other chiefdoms, with the exception of Kaua’i, by 1795. Each chief in his ruling coalition received the right to administer large areas of land, consisting of smaller strips on various islands. Sumner La Croix and James Roumasset (1984) have argued that the strip system conveyed durability to the newly unified kingdom (by making it more costly for an ali’i to accumulate a power base on one island) and facilitated monitoring of ali’i production by the new king. In 1810, Kamehameha reached a negotiated settlement with Kaumuali’i, the ruling chief of Kaua’i, which brought the island under his control, thereby bringing the entire island chain under a single monarchy.

Exposure to Western diseases produced a massive decline in the native population of Hawai’i from 1778 through 1900 (Table 1). Estimates of Hawai’i’s population at the time of contact vary wildly, from approximately 110,000 to one million people (Bushnell, 1993; Dye, 1994). The first missionary census in 1831-1832 counted 130,313 people. A substantial portion of the decline can be attributed to a series of epidemics beginning after contact, including measles, influenza, diarrhea, and whooping cough. The introduction of venereal diseases was a factor behind declining crude birth rates. The first accurate census conducted in the Islands revealed a population of 80,641 in 1849. The native Hawaiian population reached its lowest point in 1900 when the U.S. census revealed only 39,656 full or part Hawaiians.

Table 1: Population of Hawai’i

Year

Total Population

Native Hawaiian Population

1778

110,000-1,000,000

110,000-1,000,000

1831-32

130,313

Na

1853

73,137

71,019

1872

56,897

51,531

1890

89,990

40,622

1900

154,001

39,656

1920

255,881

41,750

1940

422,770

64,310

1960

632,772

102,403

1980

964,691

115,500

2000

1,211,537

239,655

Sources: Total population from http://www.hawaii.gov/dbedt/db99/index.html, Table 1.01, Dye (1994), and Bushnell (1993). Native Hawaiian population for 1853-1960 from Schmitt (1977), p. 25. Data from the 2000 census includes people declaring “Native Hawaiian” as their only race or one of two races. See http://factfinder.census.gov/servlet/DTTable?_ts=18242084330 for the 2000 census population.

The Rise and Fall of Sandalwood and Whaling

With the unification of the Islands came the opening of foreign trade. Trade in sandalwood, a wood in demand in China for ornamental uses and burning as incense, began in 1805. The trade was interrupted by the War of 1812 and then flourished from 1816 to the late 1820s before fading away in the 1830s and 1840s (Kuykendall, 1957, I, pp. 86-87). La Croix and Roumasset (1984) have argued that the centralized organization of the sandalwood trade under King Kamehameha provided the king with incentives to harvest sandalwood efficiently. The adoption of a decentralized production system by his successor (Liholiho) led to the sandalwood being treated by ali’i as a common property resource. The reallocation of resources from agricultural production to sandalwood production not only led to rapid exhaustion of the sandalwood resource but also to famine.

As the sandalwood industry declined, Hawai’i became the base for the north-central Pacific whaling trade. The impetus for the new trade was the 1818 discovery of the “Offshore Ground” west of Peru and the 1820 discovery of rich sperm whale grounds off the coast of Japan. The first whaling ship visited the Islands in 1820, and by the late 1820s over 150 whaling ships were stopping in Hawai’i annually. While ship visits declined somewhat during the 1830s, by 1843 over 350 whaling ships annually visited the two major ports of Honolulu and Lahaina. Through the 1850s over 500 whaling ships visited Hawai’i annually. The demise of the Pacific whaling fleet during the U.S. Civil War and the rapid rise of the petroleum industry led to steep declines in the number of ships visiting Hawai’i, and after 1870 only a trickle of ships continued to visit.

Missionaries and Land Tenure

In 1819, King Kamehameha’s successor, Liholiho, abandoned the system of religious practices known as the kapu system and ordered temples (heiau) and images of the gods desecrated and burnt. In April 1820, missionaries from New England arrived and began filling the religious void with conversions to protestant Christianity. Over the next two decades as church attendance became widespread, the missionaries suppressed many traditional Hawaiian cultural practices, operated over 1,000 common schools, and instructed the ali’i in western political economy. The king promulgated a constitution with provisions for a Hawai’i legislature in 1840. It was followed, later in the decade, by laws establishing a cabinet, civil service, and judiciary. Under the 1852 constitution, male citizens received the right to vote in elections for a legislative lower house. Missionaries and other foreigners regularly served in cabinets through the end of the monarchy.

In 1844, the government began a 12-year program, known as the Great Mahele (Division), to dismantle the traditional system of land tenure. King Kauikeaouli gave up his interest in all island lands, retaining ownership only in selected estates. Ali’i had the right to take out fee simple title to lands held at the behest of the king. Maka’ainana had the right to claim fee simple title to small farms (kuleana). At the end of the claiming period, maka’ainana received less than ~40,000 acres of land, while the government (~1.5 million acres), the king (~900,000 acres), and the ali’i (~1.5 million acres) all received substantial shares. Foreigners were initially not allowed to own land in fee simple, but an 1850 law overturned this restriction. By the end of the 19th century, commoners and chiefs had sold, lost, or given up their lands, with foreigners and large estates owning most non-government lands.

Lilikala Kame’eleihiwa (1992) found the origins of the Mahele in the traditional duty of a king to undertake a redistribution of land and the difficulty of such an undertaking during the initial years of missionary influence. By contrast, La Croix and Roumasset (1990) found the origins of the Mahele in the rising value of Hawaii land in sugar cultivation, with fee simple title facilitating investment in the land, irrigation facilities, and processing factories.

Sugar, Immigration, and Population Increase

The first commercially-viable sugar plantation, Ladd and Co., was started on Kaua’i in 1835, and the sugar industry achieved moderate growth through the 1850s. Hawai’i’s sugar exports to California soared during the U.S. Civil War, but the end of hostilities in 1865 also meant the end of the sugar boom. The U.S. tariff on sugar posed a major obstacle to expanding sugar production in Hawai’i during peacetime, as the high tariff, ranging from 20 to 42 percent between 1850 and 1870, limited the extent of profitable sugar cultivation in the islands. Sugar interests helped elect King Kalakaua to the Hawaiian throne over the British-leaning Queen Emma in February 1874, and Kalakaua immediately sought a trade agreement with the United States. The 1876 reciprocity treaty between Hawai’i and the United States allowed duty-free sales of Hawai’i sugar and other selected agricultural products in the United States as well as duty-free sales of most U.S. manufactured goods in Hawai’i. Sugar exports from Hawai’i to the United States soared after the treaty’s promulgation, rising from 21 million pounds in 1876 to 114 million pounds in 1883 to 224.5 million pounds in 1890 (Table 2).

Table 2: Hawai’i Sugar Production (1000 short tons)

Year

Exports

Year

Production

Year

Production

1850

.4

1900

289.5

1950

961

1860

.7

1910

529.9

1960

935.7

1870

9.4

1920

560.4

1970

1162.1

1880

31.8

1930

939.3

1990

819.6

1890

129.9

1940

976.7

1999

367.5

Sources: Data for 1850-1970 are from Schmitt (1977), pp. 418-420. Data for 1990 and 1999 are from http://www.hawaii.gov/dbedt/db99/index.html, Table 22.09. Data for 1850-1880 are exports. Data for 1910-1990 are converted to 96° raw value.

The reciprocity treaty set the tone for Hawai’i’s economy and society over the next 80 years by establishing the sugar industry as the Hawai’i’s leading industry and altering the demographic composition of the Islands via the industry’s labor demands. Rapid expansion of the sugar industry after reciprocity sharply increased its demand for labor: Plantation employment rose from 3,921 in 1872 to 10,243 in 1882 to 20,536 in 1892. The increase in labor demand occurred while the native Hawaiian population continued its precipitous decline, and the Hawai’i government responded to labor shortages by allowing sugar planters to bring in overseas contract laborers bound to serve at fixed wages for 3-5 year periods. The enormous increase in the plantation workforce consisted of first Chinese, then Japanese, then Portuguese contract laborers.

The extensive investment in sugar industry lands and irrigations systems coupled with the rapid influx of overseas contract laborers changed the bargaining positions of Hawai’i and the United States when the reciprocity treaty was due for renegotiation in 1883. La Croix and Christopher Grandy (1997) argued that the profitability of the planters’ new investment was dependent on access to the U.S. market, and this improved the bargaining position of the United States. As a condition for renewal of the treaty, the United States demanded access to Pearl Bay [now Pearl Harbor]. King Kalakaua opposed this demand, and in July 1887, opponents of the government forced the king to accept a new constitution and cabinet. With the election of a new pro-American government in September 1887, the king signed an extension of the reciprocity treaty in October 1887 that granted access rights to Pearl Bay to the United States for the life of the treaty.

Annexation and the Sugar Economy

In 1890, the U.S. Congress enacted the McKinley Tariff, which allowed raw sugar to enter the United States free of duty and established a two-cent per pound bounty for domestic producers. The overall effect of the McKinley Tariff was to completely erase the advantages that the reciprocity treaty had provided to Hawaiian sugar producers over other foreign sugar producers selling in the U.S. market. The value of Hawaiian merchandise exports plunged from $13 million in 1890 to $10 million in 1891 to a low point of $8 million in 1892.

La Croix and Grandy (1997) argued that the McKinley Tariff threatened the wealth of the planters and induced important changes in Hawai’i’s domestic politics. King Kalakaua died in January 1891, and his sister succeeded him. After Queen Lili’uokalani proposed to declare a new constitution in January 1893, a group of U.S. residents, with the incautious assistance of the U.S. Minister and troops from a U.S. warship, overthrew the monarchy. The new government, dominated by the white minority, offered Hawai’i for annexation by the United States from 1893. Annexation was first opposed by U.S. President Cleveland, and then, during U.S. President McKinley’s term, failed to obtain Congressional approval. The advent of the Spanish-American War and the ensuing hostilities in the Philippines raised Hawai’i’s strategic value to the United States, and Hawai’i was annexed by a joint resolution of Congress in July 1898. Hawai’i became a U.S. territory with the passage of the Organic Act on June 14, 1900.

Economic Integration with the United States

In 1900 annexation by the United States eliminated bound labor contracts and freed the existing labor force from their contracts. After annexation, the sugar planters and the Hawaii government recruited workers from Japan, Korea, the Philippines, Spain, Portugal, Puerto Rico, England, Germany, and Russia. The ensuing flood of immigrants swelled the population of the Hawaiian Islands from 109,020 people in 1896 to 232,856 people in 1915. The growth in the plantation labor force was one factor behind the expansion of sugar production from 289,500 short tons in 1900 to 939,300 short tons in 1930. Pineapple production also expanded, from just 2,000 cases of canned fruit in 1903 to 12,808,000 cases in 1931.

La Croix and Price Fishback (2000) established that European and American workers on sugar plantations were paid job-specific wage premiums relative to Asian workers and that the premium paid for unskilled American workers fell by one third between 1901 and 1915 and for European workers by 50 percent or more over the same period. While similar wage gaps disappeared during this period on the U.S. West Coast, Hawai’i plantations were able to maintain a portion of the wage gaps because they constantly found new low-wage immigrants to work in the Hawai’i market. Immigrant workers from Asia failed, however, to climb many rungs up the job ladder on Hawai’i sugar plantations, and this was a major factor behind labor unrest in the sugar industry. Edward Beechert (1985) concluded that large-scale strikes on sugar plantations during 1909 and 1920 improved the welfare of sugar plantation workers but did not lead to recognition of labor unions. Between 1900 and 1941, many sugar workers responded to limited advancement and wage prospects on the sugar plantation by leaving the plantations for jobs in Hawai’i’s growing urban areas.

The rise of the sugar industry and the massive inflow of immigrant workers into Hawaii was accompanied by a decline in the Native Hawaiian population and its overall welfare (La Croix and Rose, 1999). Native Hawaiians and their political representatives argued that government lands should be made available for homesteading to enable Hawaiians to resettle in rural areas and to return to farming occupations. The U.S. Congress enacted legislation in 1921 to reserve specified rural and urban lands for a new Hawaiian Homes Program. La Croix and Louis Rose have argued that the Hawaiian Homes Program has functioned poorly, providing benefits for only a small portion of the Hawaiian population over the course of the twentieth century.

Five firms-Castle & Cooke, Alexander & Baldwin, C. Brewer & Co., Theo. Davies & Co., and American Factors-came to dominate the sugar industry. Originally established to provide financial, labor recruiting, transportation, and marketing services to plantations, they gradually acquired the plantations and also gained control over other vital industries such as banking, insurance, retailing, and shipping. By 1933, their plantations produced 96 percent of the sugar crop. The “Big Five’s” dominance would continue until the rise of the tourism industry and statehood induced U.S. and foreign firms to enter Hawai’i’s markets.

The Great Depression hit Hawai’i hard, as employment in the sugar and pineapple industries declined during the early 1930s. In December 1936, about one-quarter of Hawai’i’s labor force was unemployed. Full recovery would not occur until the military began a buildup in the mid-1930s in reaction to Japan’s occupation of Manchuria. With the Japanese invasion of China in 1937, the number of U.S. military personnel in Hawai’i increased to 48,000 by September 1940.

World War II and its Aftermath

The Japanese attack on the American Pacific Fleet at Pearl Harbor on December 7, 1941 led to a declaration of martial law, a state that continued until October 24, 1944. The war was accompanied by a massive increase in American armed service personnel in Hawai’i, with numbers increasing from 28,000 in 1940 to 378,000 in 1944. The total population increased from 429,000 in 1940 to 858,000 in 1944, thereby substantially increasing the demand for retail, restaurant, and other consumer services. An enormous construction program to house the new personnel was undertaken in 1941 and 1942. The wartime interruption of commercial shipping reduced the tonnage of civilian cargo arriving in Hawai’i by more than 50 percent. Employees working in designated high priority organizations, including sugar plantations, had their jobs and wages frozen in place by General Order 18 which also suspended union activity.

In March 1943, the National Labor Relations Board was allowed to resume operations, and the International Longshoreman’s Union (ILWU) organized 34 of Hawai’i’s 35 sugar plantations, the pineapple plantations, and the longshoremen by November 1945. The passage of the Hawai’i Employment Relations Act in 1945 facilitated union organizing by providing agricultural workers with the same union organizing rights as industrial workers.

After the War, Hawai’i’s economy stagnated, as demobilized armed services personnel left Hawai’i for the U.S. mainland. With the decline in population, real per capita personal income declined at an annual rate of 5.7 percent between 1945 and 1949 (Schmitt, 1976, pp. 148, 167). During this period, Hawai’i’s newly formed unions embarked on a series of disruptive strikes covering West Coast and Hawai’i longshoremen (1946-1949); the sugar industry (1946); and the pineapple industry (1947, 1951). The economy began a nine-year period of moderate expansion in 1949, with the annual growth rate of real personal income averaging 2.3 percent. The expansion of propeller-driven commercial air service sent visitor numbers soaring, from 15,000 in 1946 to 171,367 in 1958, and induced construction of new hotels and other tourism facilities and infrastructure. The onset of the Korean War increased the number of armed service personnel stationed in Hawai’i from 21,000 in 1950 to 50,000 in 1958. Pineapple production and canning also displayed substantial increases over the decade, increasing from 13,697,000 cases in 1949 to 18,613,000 cases in 1956.

Integration and Growth after Statehood

In 1959, Hawai’i became the fiftieth state. The transition from territorial to statehood status was one factor behind the 1958-1973 boom, in which real per capita personal income increased at an annual rate of 4 percent. The most important factor behind the long expansion was the introduction of commercial jet service in 1959, as the jet plane dramatically reduced the money and time costs of traveling to Hawai’i. Also fueled by rapidly rising real incomes in the United States and Japan, the tourism industry would continue its rapid growth through 1990. Visitor arrivals (see Table 3) increased from 171,367 in 1958 to 6,723,531 in 1990. Growth in visitor arrivals was once again accompanied by growth in the construction industry, particularly from 1965 to 1975. The military build-up during the Vietnam War also contributed to the boom by increasing defense expenditures in Hawai’i by 3.9 percent annually from 1958 to 1973 (Schmitt, 1977, pp. 148, 668).

Table 3: Visitor Arrivals to Hawai’i

Year

Visitor Arrivals

Year

Visitor Arrivals

1930

18,651

1970

1,745,904

1940

25,373

1980

3,928,789

1950

46,593

1990

6,723,531

1960

296,249

2000

6,975,866

Source: Hawai’i Tourism Authority, http://www.hawaii.gov/dbedt/monthly/historical-r.xls at Table 5 and http://www.state.hi.us/dbedt/monthly/index2k.html.

From 1973 to 1990, growth in real per capita personal income slowed to 1.1 percent annually. The defense and agriculture sectors stagnated, with most growth generated by the relentless increase in visitor arrivals. Japan’s persistently high rates of economic growth during the 1970s and 1980s spilled over to Hawai’i in the form of huge increases in the numbers of Japanese tourists and in the value of Japanese foreign investment in Hawai’i. At the end of the 1980s, the Hawai’i unemployment rate was just 2-3 percent, employment had been steadily growing since 1983, and prospects looked good for continued expansion of both tourism and the overall economy.

The Malaise of the 1990s

From 1991 to 1998, Hawai’i’s economy was hit by several negative shocks. The 1990-1991 recession in the United States, the closure of California military bases and defense plants, and uncertainty over the safety of air travel during the 1991 Gulf War combined to reduce visitor arrivals from the United States in the early and mid-1990s. Volatile and slow growth in Japan throughout the 1990s led to declines in Japanese visitor arrivals in the late 1990s. The ongoing decline in sugar and pineapple production gathered steam in the 1990s, with only a handful of plantations still in business by 2001. The cumulative impact of these adverse shocks was severe, as real per capita personal income did not change between 1991 and 1998.

The recovery continued through summer 2001 despite a slowing U.S. economy. It came to an abrupt halt with the terrorism attack of September 11, 2001, as domestic and foreign tourism declined sharply.

References

Beechert, Edward D. Working in Hawaii: A Labor History. Honolulu: University of Hawaii Press, 1985.

Bushnell, Andrew F. “The ‘Horror’ Reconsidered: An Evaluation of the Historical Evidence for Population Decline in Hawai’i, 1778-1803.” Pacific Studies 16 (1993): 115-161.

Daws, Gavan. Shoal of Time: A History of the Hawaiian Islands. Honolulu: University of Hawaii Press, 1968.

Dye, Tom. “Population Trends in Hawai’i before 1778.” The Hawaiian Journal of History 28 (1994): 1-20.

Hitch, Thomas Kemper. Islands in Transition: The Past, Present, and Future of Hawaii’s Economy. Honolulu: First Hawaiian Bank, 1992.

Kame’eleihiwa, Lilikala. Native Land and Foreign Desires: Pehea La E Pono Ai? Honolulu: Bishop Museum Press, 1992.

Kirch, Patrick V. Feathered Gods and Fishhooks: An Introduction to Hawaiian Archaeology and Prehistory. Honolulu: University of Hawaii Press, 1985.

Kuykendall, Ralph S. A History of the Hawaiian Kingdom. 3 vols. Honolulu: University of Hawaii Press, 1938-1967.

La Croix, Sumner J., and Price Fishback. “Firm-Specific Evidence on Racial Wage Differentials and Workforce Segregation in Hawaii’s Sugar Industry.” Explorations in Economic History 26 (1989): 403-423.

La Croix, Sumner J., and Price Fishback. “Migration, Labor Market Dynamics, and Wage Differentials in Hawaii’s Sugar Industry.” Advances in Agricultural Economic History 1 (2000): 31-72.

La Croix, Sumner J., and Christopher Grandy. “The Political Instability of Reciprocal Trade and the Overthrow of the Hawaiian Kingdom.” Journal of Economic History 57 (1997): 161-189.

La Croix, Sumner J., and Louis A. Rose. “The Political Economy of the Hawaiian Homelands Program.” In The Other Side of the Frontier: Economic Explorations into Native American History, edited by Linda Barrington. Boulder, Colorado: Westview Press, 1999.

La Croix, Sumner J., and James Roumasset. “An Economic Theory of Political Change in Pre-Missionary Hawaii.” Explorations in Economic History 21 (1984): 151-168.

La Croix, Sumner J., and James Roumasset. “The Evolution of Property Rights in Nineteenth-Century Hawaii.” Journal of Economic History 50 (1990): 829-852.

Morgan, Theodore. Hawaii, A Century of Economic Change: 1778-1876. Cambridge, MA: Harvard University Press, 1948.

Schmitt, Robert C. Historical Statistics of Hawaii. Honolulu: University Press of Hawaii, 1977.

Citation: La Croix, Sumner. “Economic History of Hawai’i”. EH.Net Encyclopedia, edited by Robert Whaples. September 27, 2001. URL http://eh.net/encyclopedia/economic-history-of-hawaii/

The Economic Impact of the Black Death

David Routt, University of Richmond

The Black Death was the largest demographic disaster in European history. From its arrival in Italy in late 1347 through its clockwise movement across the continent to its petering out in the Russian hinterlands in 1353, the magna pestilencia (great pestilence) killed between seventeen and twenty—eight million people. Its gruesome symptoms and deadliness have fixed the Black Death in popular imagination; moreover, uncovering the disease’s cultural, social, and economic impact has engaged generations of scholars. Despite growing understanding of the Black Death’s effects, definitive assessment of its role as historical watershed remains a work in progress.

A Controversy: What Was the Black Death?

In spite of enduring fascination with the Black Death, even the identity of the disease behind the epidemic remains a point of controversy. Aware that fourteenth—century eyewitnesses described a disease more contagious and deadlier than bubonic plague (Yersinia pestis), the bacillus traditionally associated with the Black Death, dissident scholars in the 1970s and 1980s proposed typhus or anthrax or mixes of typhus, anthrax, or bubonic plague as the culprit. The new millennium brought other challenges to the Black Death—bubonic plague link, such as an unknown and probably unidentifiable bacillus, an Ebola—like haemorrhagic fever or, at the pseudoscientific fringes of academia, a disease of interstellar origin.

Proponents of Black Death as bubonic plague have minimized differences between modern bubonic and the fourteenth—century plague through painstaking analysis of the Black Death’s movement and behavior and by hypothesizing that the fourteenth—century plague was a hypervirulent strain of bubonic plague, yet bubonic plague nonetheless. DNA analysis of human remains from known Black Death cemeteries was intended to eliminate doubt but inability to replicate initially positive results has left uncertainty. New analytical tools used and new evidence marshaled in this lively controversy have enriched understanding of the Black Death while underscoring the elusiveness of certitude regarding phenomena many centuries past.

The Rate and Structure of mortality

The Black Death’s socioeconomic impact stemmed, however, from sudden mortality on a staggering scale, regardless of what bacillus caused it. Assessment of the plague’s economic significance begins with determining the rate of mortality for the initial onslaught in 1347—53 and its frequent recurrences for the balance of the Middle Ages, then unraveling how the plague chose victims according to age, sex, affluence, and place.

Imperfect evidence unfortunately hampers knowing precisely who and how many perished. Many of the Black Death’s contemporary observers, living in an epoch of famine and political, military, and spiritual turmoil, described the plague apocalyptically. A chronicler famously closed his narrative with empty membranes should anyone survive to continue it. Others believed as few as one in ten survived. One writer claimed that only fourteen people were spared in London. Although sober eyewitnesses offered more plausible figures, in light of the medieval preference for narrative dramatic force over numerical veracity, chroniclers’ estimates are considered evidence of the Black Death’s battering of the medieval psyche, not an accurate barometer of its demographic toll.

Even non—narrative and presumably dispassionate, systematic evidence — legal and governmental documents, ecclesiastical records, commercial archives — presents challenges. No medieval scribe dragged his quill across parchment for the demographer’s pleasure and convenience. With a paucity of censuses, estimates of population and tracing of demographic trends have often relied on indirect indicators of demographic change (e.g., activity in the land market, levels of rents and wages, size of peasant holdings) or evidence treating only a segment of the population (e.g., assignment of new priests to vacant churches, payments by peasants to take over holdings of the deceased). Even the rare census—like record, like England’s Domesday Book (1086) or the Poll Tax Return (1377), either enumerates only heads of households or excludes slices of the populace or ignores regions or some combination of all these. To compensate for these imperfections, the demographer relies on potentially debatable assumptions about the size of the medieval household, the representativeness of a discrete group of people, the density of settlement in an undocumented region, the level of tax evasion, and so forth.

A bewildering array of estimates for mortality from the plague of 1347—53 is the result. The first outbreak of the Black Death indisputably was the deadliest but the death rate varied widely according to place and social stratum. National estimates of mortality for England, where the evidence is fullest, range from five percent, to 23.6 percent among aristocrats holding land from the king, to forty to forty—five percent of the kingdom’s clergy, to over sixty percent in a recent estimate. The picture for the continent likewise is varied. Regional mortality in Languedoc (France) was forty to fifty percent while sixty to eighty percent of Tuscans (Italy) perished. Urban death rates were mostly higher but no less disparate, e.g., half in Orvieto (Italy), Siena (Italy), and Volterra (Italy), fifty to sixty—six percent in Hamburg (Germany), fifty—eight to sixty—eight percent in Perpignan (France), sixty percent for Barcelona’s (Spain) clerical population, and seventy percent in Bremen (Germany). The Black Death was often highly arbitrary in how it killed in a narrow locale, which no doubt broadened the spectrum of mortality rates. Two of Durham Cathedral Priory’s manors, for instance, had respective death rates of twenty—one and seventy—eighty percent (Shrewsbury, 1970; Russell, 1948; Waugh, 1991; Ziegler, 1969; Benedictow, 2004; Le Roy Ladurie, 1976; Bowsky, 1964; Pounds, 1974; Emery, 1967; Gyug, 1983; Aberth, 1995; Lomas, 1989).

Credible death rates between one quarter and three quarters complicate reaching a Europe—wide figure. Neither a casual and unscientific averaging of available estimates to arrive at a probably misleading composite death rate nor a timid placing of mortality somewhere between one and two thirds is especially illuminating. Scholars confronting the problem’s complexity before venturing estimates once favored one third as a reasonable aggregate death rate. Since the early 1970s demographers have found higher levels of mortality plausible and European mortality of one half is considered defensible, a figure not too distant from less fanciful contemporary observations.

While the Black Death of 1347—53 inflicted demographic carnage, had it been an isolated event European population might have recovered to its former level in a generation or two and its economic impact would have been moderate. The disease’s long—term demographic and socioeconomic legacy arose from it recurrence. When both national and local epidemics are taken into account, England endured thirty plague years between 1351 and 1485, a pattern mirrored on the continent, where Perugia was struck nineteen times and Hamburg, Cologne, and Nuremburg at least ten times each in the fifteenth century. Deadliness of outbreaks declined — perhaps ten to twenty percent in the second plague (pestis secunda) of 1361—2, ten to fifteen percent in the third plague (pestis tertia) of 1369, and as low as five and rarely above ten percent thereafter — and became more localized; however, the Black Death’s persistence ensured that demographic recovery would be slow and socioeconomic consequences deeper. Europe’s population in 1430 may have been fifty to seventy—five percent lower than in 1290 (Cipolla, 1994; Gottfried, 1983).

Enumeration of corpses does not adequately reflect the Black Death’s demographic impact. Who perished was equally significant as how many; in other words, the structure of mortality influenced the time and rate of demographic recovery. The plague’s preference for urbanite over peasant, man over woman, poor over affluent, and, perhaps most significantly, young over mature shaped its demographic toll. Eyewitnesses so universally reported disproportionate death among the young in the plague’s initial recurrence (1361—2) that it became known as the Childen’s Plague (pestis puerorum, mortalité des enfants). If this preference for youth reflected natural resistance to the disease among plague survivors, the Black Death may have ultimately resembled a lower—mortality childhood disease, a reality that magnified both its demographic and psychological impact.

The Black Death pushed Europe into a long—term demographic trough. Notwithstanding anecdotal reports of nearly universal pregnancy of women in the wake of the magna pestilencia, demographic stagnancy characterized the rest of the Middle Ages. Population growth recommenced at different times in different places but rarely earlier than the second half of the fifteenth century and in many places not until c. 1550.

The European Economy on the Cusp of the Black Death

Like the plague’s death toll, its socioeconomic impact resists categorical measurement. The Black Death’s timing made a facile labeling of it as a watershed in European economic history nearly inevitable. It arrived near the close of an ebullient high Middle Ages (c. 1000 to c. 1300) in which urban life reemerged, long—distance commerce revived, business and manufacturing innovated, manorial agriculture matured, and population burgeoned, doubling or tripling. The Black Death simultaneously portended an economically stagnant, depressed late Middle Ages (c. 1300 to c. 1500). However, even if this simplistic and somewhat misleading portrait of the medieval economy is accepted, isolating the Black Death’s economic impact from manifold factors at play is a daunting challenge.

Cognizant of a qualitative difference between the high and late Middle Ages, students of medieval economy have offered varied explanations, some mutually exclusive, others not, some favoring the less dramatic, less visible, yet inexorable factor as an agent of change rather than a catastrophic demographic shift. For some, a cooling climate undercut agricultural productivity, a downturn that rippled throughout the predominantly agrarian economy. For others, exploitative political, social, and economic institutions enriched an idle elite and deprived working society of wherewithal and incentive to be innovative and productive. Yet others associate monetary factors with the fourteenth— and fifteenth—century economic doldrums.

The particular concerns of the twentieth century unsurprisingly induced some scholars to view the medieval economy through a Malthusian lens. In this reconstruction of the Middle Ages, population growth pressed against the society’s ability to feed itself by the mid—thirteenth century. Rising impoverishment and contracting holdings compelled the peasant to cultivate inferior, low—fertility land and to convert pasture to arable production and thereby inevitably reduce numbers of livestock and make manure for fertilizer scarcer. Boosting gross productivity in the immediate term yet driving yields of grain downward in the longer term exacerbated the imbalance between population and food supply; redressing the imbalance became inevitable. This idea’s adherents see signs of demographic correction from the mid—thirteenth century onward, possibly arising in part from marriage practices that reduced fertility. A more potent correction came with subsistence crises. Miserable weather in 1315 destroyed crops and the ensuing Great Famine (1315—22) reduced northern Europe’s population by perhaps ten to fifteen percent. Poor harvests, moreover, bedeviled England and Italy to the eve of the Black Death.

These factors — climate, imperfect institutions, monetary imbalances, overpopulation — diminish the Black Death’s role as a transformative socioeconomic event. In other words, socioeconomic changes already driven by other causes would have occurred anyway, merely more slowly, had the plague never struck Europe. This conviction fosters receptiveness to lower estimates of the Black Death’s deadliness. Recent scrutiny of the Malthusian analysis, especially studies of agriculture in source—rich eastern England, has, however, rehabilitated the Black Death as an agent of socioeconomic change. Growing awareness of the use of “progressive” agricultural techniques and of alternative, non—grain economies less susceptible to a Malthusian population—versus—resources dynamic has undercut the notion of an absolutely overpopulated Europe and has encouraged acceptance of higher rates of mortality from the plague (Campbell, 1983; Bailey, 1989).

The Black Death and the Agrarian Economy

The lion’s share of the Black Death’s effect was felt in the economy’s agricultural sector, unsurprising in a society in which, except in the most urbanized regions, nine of ten people eked out a living from the soil.

A village struck by the plague underwent a profound though brief disordering of the rhythm of daily life. Strong administrative and social structures, the power of custom, and innate human resiliency restored the village’s routine by the following year in most cases: fields were plowed, crops were sown, tended, and harvested, labor services were performed by the peasantry, the village’s lord collected dues from tenants. Behind this seeming normalcy, however, lord and peasant were adjusting to the Black Death’s principal economic consequence: a much smaller agricultural labor pool. Before the plague, rising population had kept wages low and rents and prices high, an economic reality advantageous to the lord in dealing with the peasant and inclining many a peasant to cleave to demeaning yet secure dependent tenure.

As the Black Death swung the balance in the peasant’s favor, the literate elite bemoaned a disintegrating social and economic order. William of Dene, John Langland, John Gower, and others polemically evoked nostalgia for the peasant who knew his place, worked hard, demanded little, and squelched pride while they condemned their present in which land lay unplowed and only an immediate pang of hunger goaded a lazy, disrespectful, grasping peasant to do a moment’s desultory work (Hatcher, 1994).

Moralizing exaggeration aside, the rural worker indeed demanded and received higher payments in cash (nominal wages) in the plague’s aftermath. Wages in England rose from twelve to twenty—eight percent from the 1340s to the 1350s and twenty to forty percent from the 1340s to the 1360s. Immediate hikes were sometimes more drastic. During the plague year (1348—49) at Fornham All Saints (Suffolk), the lord paid the pre—plague rate of 3d. per acre for more half of the hired reaping but the rest cost 5d., an increase of 67 percent. The reaper, moreover, enjoyed more and larger tips in cash and perquisites in kind to supplement the wage. At Cuxham (Oxfordshire), a plowman making 2s. weekly before the plague demanded 3s. in 1349 and 10s. in 1350 (Farmer, 1988; Farmer, 1991; West Suffolk Record Office 3/15.7/2.4; Harvey, 1965).

In some instances, the initial hikes in nominal or cash wages subsided in the years further out from the plague and any benefit they conferred on the wage laborer was for a time undercut by another economic change fostered by the plague. Grave mortality ensured that the European supply of currency in gold and silver increased on a per—capita basis, which in turned unleashed substantial inflation in prices that did not subside in England until the mid—1370s and even later in many places on the continent. The inflation reduced the purchasing power (real wage) of the wage laborer so significantly that, even with higher cash wages, his earnings either bought him no more or often substantially less than before the magna pestilencia (Munro, 2003; Aberth, 2001).

The lord, however, was confronted not only by the roving wage laborer on whom he relied for occasional and labor—intensive seasonal tasks but also by the peasant bound to the soil who exchanged customary labor services, rent, and dues for holding land from the lord. A pool of labor services greatly reduced by the Black Death enabled the servile peasant to bargain for less onerous responsibilities and better conditions. At Tivetshall (Norfolk), vacant holdings deprived its lord of sixty percent of his week—work and all his winnowing services by 1350—51. A fifth of winter and summer week—work and a third of reaping services vanished at Redgrave (Suffolk) in 1349—50 due to the magna pestilencia. If a lord did not make concessions, a peasant often gravitated toward any better circumstance beckoning elsewhere. At Redgrave, for instance, the loss of services in 1349—50 directly due to the plague was followed in 1350—51 by an equally damaging wave of holdings abandoned by surviving tenants. For the medieval peasant, never so tightly bound to the manor as once imagined, the Black Death nonetheless fostered far greater rural mobility. Beyond loss of labor services, the deceased or absentee peasant paid no rent or dues and rendered no fees for use of manorial monopolies such as mills and ovens and the lord’s revenues shrank. The income of English lords contracted by twenty percent from 1347 to 1353 (Norfolk Record Office WAL 1247/288×1; University of Chicago Bacon 335—6; Gottfried, 1983).

Faced with these disorienting circumstances, the lord often ultimately had to decide how or even whether the pre—plague status quo could be reestablished on his estate. Not capitalistic in the sense of maximizing productivity for reinvestment of profits to enjoy yet more lucrative future returns, the medieval lord nonetheless valued stable income sufficient for aristocratic ostentation and consumption. A recalcitrant peasantry, diminished dues and services, and climbing wages undermined the material foundation of the noble lifestyle, jostled the aristocratic sense of proper social hierarchy, and invited a response.

In exceptional circumstances, a lord sometimes kept the peasant bound to the land. Because the nobility in Spanish Catalonia had already tightened control of the peasantry before the Black Death, because underdeveloped commercial agriculture provided the peasantry narrow options, and because the labor—intensive demesne agriculture common elsewhere was largely absent, the Catalan lord through a mix of coercion (physical intimidation, exorbitant fees to purchase freedom) and concession (reduced rents, conversion of servile dues to less humiliating fixed cash payments) kept the Catalan peasant in place. In England and elsewhere on the continent, where labor services were needed to till the demesne, such a conservative approach was less feasible. This, however, did not deter some lords from trying. The lord of Halesowen (Worcestershire) not only commanded the servile tenant to perform the full range of services but also resuscitated labor obligations in abeyance long before the Black Death, tantamount to an unwillingness to acknowledge anything had changed (Freedman, 1991; Razi, 1981).

Europe’s political elite also looked to legal coercion not only to contain rising wages and to limit the peasant’s mobility but also to allay a sense of disquietude and disorientation arising from the Black Death’s buffeting of pre—plague social realities. England’s Ordinance of Laborers (1349) and Statute of Laborers (1351) called for a return to the wages and terms of employment of 1346. Labor legislation was likewise promulgated by the Córtes of Aragon and Castile, the French crown, and cities such as Siena, Orvieto, Pisa, Florence, and Ragusa. The futility of capping wages by legislative fiat is evident in the French crown’s 1351 revision of its 1349 enactment to permit a wage increase of one third. Perhaps only in England, where effective government permitted robust enforcement, did the law slow wage increases for a time (Aberth, 2001; Gottfried, 1983; Hunt and Murray, 1999; Cohn, 2007).

Once knee—jerk conservatism and legislative palliatives failed to revivify pre—plague socioeconomic arrangements, the lord cast about for a modus vivendi in a new world of abundant land and scarce labor. A sober triage of the available sources of labor, whether it was casual wage labor or a manor’s permanent stipendiary staff (famuli) or the dependent peasant, led to revision of managerial policy. The abbot of Saint Edmund’s, for example, focused on reconstitution of the permanent staff (famuli) on his manors. Despite mortality and flight, the abbot by and large achieved his goal by the mid—1350s. While labor legislation may have facilitated this, the abbot’s provision of more frequent and lucrative seasonal rewards, coupled with the payment of grain stipends in more valuable and marketable cereals such as wheat, no doubt helped secure the loyalty of famuli while circumventing statutory limits on higher wages. With this core of labor solidified, the focus turned to preserving the most essential labor services, especially those associated with the labor—intensive harvesting season. Less vital labor services were commuted for cash payments and ad hoc wage labor then hired to fill gaps. The cultivation of the demesne continued, though not on the pre—plague scale.

For a time in fact circumstances helped the lord continue direct management of the demesne. The general inflation of the quarter—century following the plague as well as poor harvests in the 1350s and 1360s boosted grain prices and partially compensated for more expensive labor. This so—called “Indian summer” of demesne agriculture ended quickly in the mid—1370s in England and subsequently on the continent when the post—plague inflation gave way to deflation and abundant harvests drove prices for commodities downward, where they remained, aside from brief intervals of inflation, for the rest of the Middle Ages. Recurrences of the plague, moreover, placed further stress on new managerial policies. For the lord who successfully persuaded new tenants to take over vacant holdings, such as happened at Chevington (Suffolk) by the late 1350s, the pestis secunda of 1361—62 often inflicted a decisive blow: a second recovery at Chevington never materialized (West Suffolk Records Office 3/15.3/2.9—2.23).

Under unremitting pressure, the traditional cultivation of the demesne ceased to be viable for lord after lord: a centuries—old manorial system gradually unraveled and the nature of agriculture was transformed. The lord’s earliest concession to this new reality was curtailment of cultivated acreage, a trend that accelerated with time. The 590.5 acres sown on average at Great Saxham (Suffolk) in the late 1330s was more than halved (288.67 acres) in the 1360s, for instance (West Suffolk Record Office, 3/15.14/1.1, 1.7, 1.8).

Beyond reducing the demesne to a size commensurate with available labor, the lord could explore types of husbandry less labor—intensive than traditional grain agriculture. Greater domestic manufacture of woolen cloth and growing demand for meat enabled many English lords to reduce arable production in favor of sheep—raising, which required far less labor. Livestock husbandry likewise became more significant on the continent. Suitable climate, soil, and markets made grapes, olives, apples, pears, vegetables, hops, hemp, flax, silk, and dye—stuffs attractive alternatives to grain. In hope of selling these cash crops, rural agriculture became more attuned to urban demand and urban businessmen and investors more intimately involved in what and how much of it was grown in the countryside (Gottfried, 1983; Hunt and Murray, 1999).

The lord also looked to reduce losses from demesne acreage no longer under the plow and from the vacant holdings of onetime tenants. Measures adopted to achieve this end initiated a process that gained momentum with each passing year until the face of the countryside was transformed and manorialism was dead. The English landlord, hopeful for a return to the pre—plague regime, initially granted brief terminal leases of four to six years at fixed rates for bits of demesne and for vacant dependent holdings. Leases over time lengthened to ten, twenty, thirty years, or even a lifetime. In France and Italy, the lord often resorted to métayage or mezzadria leasing, a type of sharecropping in which the lord contributed capital (land, seed, tools, plow teams) to the lessee, who did the work and surrendered a fraction of the harvest to the lord.

Disillusioned by growing obstacles to profitable cultivation of the demesne, the lord, especially in the late fourteenth century and the early fifteenth, adopted a more sweeping type of leasing, the placing of the demesne or even the entire manor “at farm” (ad firmam). A “farmer” (firmarius) paid the lord a fixed annual “farm” (firma) for the right to exploit the lord’s property and take whatever profit he could. The distant or unprofitable manor was usually “farmed” first and other manors followed until a lord’s personal management of his property often ceased entirely. The rising popularity of this expedient made direct management of demesne by lord rare by c. 1425. The lord often became a rentier bound to a fixed income. The tenurial transformation was completed when the lord sold to the peasant his right of lordship, a surrender to the peasant of outright possession of his holding for a fixed cash rent and freedom from dues and services. Manorialism, in effect, collapsed and was gone from western and central Europe by 1500.

The landlord’s discomfort ultimately benefited the peasantry. Lower prices for foodstuffs and greater purchasing power from the last quarter of the fourteenth century onward, progressive disintegration of demesnes, and waning customary land tenure enabled the enterprising, ambitious peasant to lease or purchase property and become a substantial landed proprietor. The average size of the peasant holding grew in the late Middle Ages. Due to the peasant’s generally improved standard of living, the century and a half following the magna pestilencia has been labeled a “golden age” in which the most successful peasant became a “yeoman” or “kulak” within the village community. Freed from labor service, holding a fixed copyhold lease, and enjoying greater disposable income, the peasant exploited his land exclusively for his personal benefit and often pursued leisure and some of the finer things in life. Consumption of meat by England’s humbler social strata rose substantially after the Black Death, a shift in consumer tastes that reduced demand for grain and helped make viable the shift toward pastoralism in the countryside. Late medieval sumptuary legislation, intended to keep the humble from dressing above his station and retain the distinction between low— and highborn, attests both to the peasant’s greater income and the desire of the elite to limit disorienting social change (Dyer, 1989; Gottfried, 1983; Hunt and Murray, 1999).

The Black Death, moreover, profoundly altered the contours of settlement in the countryside. Catastrophic loss of population led to abandonment of less attractive fields, contraction of existing settlements, and even wholesale desertion of villages. More than 1300 English villages vanished between 1350 and 1500. French and Dutch villagers abandoned isolated farmsteads and huddled in smaller villages while their Italian counterparts vacated remote settlements and shunned less desirable fields. The German countryside was mottled with abandoned settlements. Two thirds of named villages disappeared in Thuringia, Anhalt, and the eastern Harz mountains, one fifth in southwestern Germany, and one third in the Rhenish palatinate, abandonment far exceeding loss of population and possibly arising from migration from smaller to larger villages (Gottfried, 1983; Pounds, 1974).

The Black Death and the Commercial Economy

As with agriculture, assessment of the Black Death’s impact on the economy’s commercial sector is a complex problem. The vibrancy of the high medieval economy is generally conceded. As the first millennium gave way to the second, urban life revived, trade and manufacturing flourished, merchant and craft gilds emerged, commercial and financial innovations proliferated (e.g., partnerships, maritime insurance, double—entry bookkeeping, fair letters, letters of credit, bills of exchange, loan contracts, merchant banking, etc.). The integration of the high medieval economy reached its zenith c. 1250 to c. 1325 with the rise of large companies with international interests, such as the Bonsignori of Siena and the Buonaccorsi of Florence and the emergence of so—called “super companies” such as the Florentine Bardi, Peruzzi, and Acciaiuoli (Hunt and Murray, 1999).

How to characterize the late medieval economy has been more fraught with controversy, however. Historians a century past, uncomprehending of how their modern world could be rooted in a retrograde economy, imagined an entrepreneurially creative and expansive late medieval economy. Succeeding generations of historians darkened this optimistic portrait and fashioned a late Middle Ages of unmitigated decline, an “age of adversity” in which the economy was placed under the rubric “depression of the late Middle Ages.” The historiographical pendulum now swings away from this interpretation and a more nuanced picture has emerged that gives the Black Death’s impact on commerce its full due but emphasizes the variety of the plague’s impact from merchant to merchant, industry to industry, and city to city. Success or failure was equally possible after the Black Death and the game favored adaptability, creativity, nimbleness, opportunism, and foresight.

Once the magna pestilencia had passed, the city had to cope with a labor supply even more greatly decimated than in the countryside due to a generally higher urban death rate. The city, however, could reverse some of this damage by attracting, as it had for centuries, new workers from the countryside, a phenomenon that deepened the crisis for the manorial lord and contributed to changes in rural settlement. A resurgence of the slave trade occurred in the Mediterranean, especially in Italy, where the female slave from Asia or Africa entered domestic service in the city and the male slave toiled in the countryside. Finding more labor was not, however, a panacea. A peasant or slave performed an unskilled task adequately but could not necessarily replace a skilled laborer. The gross loss of talent due to the plague caused a decline in per capita productivity by skilled labor remediable only by time and training (Hunt and Murray, 1999; Miskimin, 1975).

Another immediate consequence of the Black Death was dislocation of the demand for goods. A suddenly and sharply smaller population ensured a glut of manufactured and trade goods, whose prices plummeted for a time. The businessman who successfully weathered this short—term imbalance in supply and demand then had to reshape his business’ output to fit a declining or at best stagnant pool of potential customers.

The Black Death transformed the structure of demand as well. While the standard of living of the peasant improved, chronically low prices for grain and other agricultural products from the late fourteenth century may have deprived the peasant of the additional income to purchase enough manufactured or trade items to fill the hole in commercial demand. In the city, however, the plague concentrated wealth, often substantial family fortunes, in fewer and often younger hands, a circumstance that, when coupled with lower prices for grain, left greater per capita disposable income. The plague’s psychological impact, moreover, it is believed, influenced how this windfall was used. Pessimism and the specter of death spurred an individualistic pursuit of pleasure, a hedonism that manifested itself in the purchase of luxuries, especially in Italy. Even with a reduced population, the gross volume of luxury goods manufactured and sold rose, a pattern of consumption that endured even after the extra income had been spent within a generation or so after the magna pestilencia.

Like the manorial lord, the affluent urban bourgeois sometimes employed structural impediments to block the ambitious parvenu from joining his ranks and becoming a competitor. A tendency toward limiting the status of gild master to the son or son—in—law of a sitting master, evident in the first half of the fourteenth century, gained further impetus after the Black Death. The need for more journeymen after the plague was conceded in the shortening of terms of apprenticeship, but the newly minted journeyman often discovered that his chance of breaking through the glass ceiling and becoming a master was virtually nil without an entrée through kinship. Women also were banished from gilds as unwanted competition. The urban wage laborer, by and large controlled by the gilds, was denied membership and had no access to urban structures of power, a potent source of frustration. While these measures may have permitted the bourgeois to hold his ground for a time, the winds of change were blowing in the city as well as the countryside and gild monopolies and gild restrictions were fraying by the close of the Middle Ages.

In the new climate created by the Black Death, the individual businessman did retain an advantage: the business judgment and techniques honed during the high Middle Ages. This was crucial in a contracting economy in which gross productivity never attained its high medieval peak and in which the prevailing pattern was boom and bust on a roughly generational basis. A fluctuating economy demanded adaptability and the most successful post—plague businessman not merely weathered bad times but located opportunities within adversity and exploited them. The post—plague entrepreneur’s preference for short—term rather than long—term ventures, once believed a product of a gloomy despondency caused by the plague and exacerbated by endemic violence, decay of traditional institutions, and nearly continuous warfare, is now viewed as a judicious desire to leave open entrepreneurial options, to manage risk effectively, and to take advantage of whatever better opportunity arose. The successful post—plague businessman observed markets closely and responded to them while exercising strict control over his concern, looking for greater efficiency, and trimming costs (Hunt and Murray, 1999).

The fortunes of the textile industry, a trade singularly susceptible to contracting markets and rising wages, best underscores the importance of flexibility. Competition among textile manufacturers, already great even before the Black Death due to excess productive capacity, was magnified when England entered the market for low— and medium—quality woolen cloth after the magna pestilencia and was exporting forty—thousand pieces annually by 1400. The English took advantage of proximity to raw material, wool England itself produced, a pattern increasingly common in late medieval business. When English producers were undeterred by a Flemish embargo on English cloth, the Flemish and Italians, the textile trade’s other principal players, were compelled to adapt in order to compete. Flemish producers that emphasized higher—grade, luxury textiles or that purchased, improved, and resold cheaper English cloth prospered while those that stubbornly competed head—to—head with the English in lower—quality woolens suffered. The Italians not only produced luxury woolens, improved their domestically—produced wool, found sources for wool outside England (Spain), and increased production of linen but also produced silks and cottons, once only imported into Europe from the East (Hunt and Murray, 1999).

The new mentality of the successful post—plague businessman is exemplified by the Florentines Gregorio Dati and Buonaccorso Pitti and especially the celebrated merchant of Prato, Francesco di Marco Datini. The large companies and super companies, some of which failed even before the Black Death, were not well suited to the post—plague commercial economy. Datini’s family business, with its limited geographical ambitions, better exercised control, was more nimble and flexible as opportunities vanished or materialized, and more effectively managed risk, all keys to success. Datini through voluminous correspondence with his business associates, subordinates, and agents and his conspicuously careful and regular accounting grasped the reins of his concern tightly. He insulated himself from undue risk by never committing too heavily to any individual venture, by dividing cargoes among ships or by insuring them, by never lending money to notoriously uncreditworthy princes, and by remaining as apolitical as he could. His energy and drive to complete every business venture likewise served him well and made him an exemplar for commercial success in a challenging era (Origo, 1957; Hunt and Murray, 1999).

The Black Death and Popular Rebellion

The late medieval popular uprising, a phenomenon with undeniable economic ramifications, is often linked with the demographic, cultural, social, and economic reshuffling caused by the Black Death; however, the connection between pestilence and revolt is neither exclusive nor linear. Any single uprising is rarely susceptible to a single—cause analysis and just as rarely was a single socioeconomic interest group the fomenter of disorder. The outbreak of rebellion in the first half of the fourteenth century (e.g., in urban [1302] and maritime [1325—28] Flanders and in English monastic towns [1326—27]) indicates the existence of socioeconomic and political disgruntlement well before the Black Death.

Some explanations for popular uprising, such as the placing of immediate stresses on the populace and the cumulative effect of centuries of oppression by manorial lords, are now largely dismissed. At times of greatest stress —— the Great Famine and the Black Death —— disorder but no large—scale, organized uprising materialized. Manorial oppression likewise is difficult to defend when the peasant in the plague’s aftermath was often enjoying better pay, reduced dues and services, broader opportunities, and a higher standard of living. Detailed study of the participants in the revolts most often labeled “peasant” uprisings has revealed the central involvement and apparent common cause of urban and rural tradesmen and craftsmen, not only manorial serfs.

The Black Death may indeed have made its greatest contribution to popular rebellion by expanding the peasant’s horizons and fueling a sense of grievance at the pace of change, not at its absence. The plague may also have undercut adherence to the notion of a divinely—sanctioned, static social order and buffeted a belief that preservation of manorial socioeconomic arrangements was essential to the survival of all, which in turn may have raised receptiveness to the apocalyptic socially revolutionary message of preachers like England’s John Ball. After the Black Death, change was inevitable and apparent to all.

The reasons for any individual rebellion were complex. Measures in the environs of Paris to check wage hikes caused by the plague doubtless fanned discontent and contributed to the outbreak of the Jacquerie of 1358 but high taxation to finance the Hundred Years’ War, depredation by marauding mercenary bands in the French countryside, and the peasantry’s conviction that the nobility had failed them in war roiled popular discontent. In the related urban revolt led by étienne Marcel (1355—58), tensions arose from the Parisian bourgeoisie’s discontent with the war’s progress, the crown’s imposition of regressive sales and head taxes, and devaluation of currency rather than change attributable to the Black Death.

In the English Peasants’ Rebellion of 1381, continued enforcement of the Statute of Laborers no doubt rankled and perhaps made the peasantry more open to provocative sermonizing but labor legislation had not halted higher wages or improvement in the standard of living for peasant. It seems likely that discontent may have arisen from an unsatisfying pace of improvement of the peasant’s lot. The regressive Poll Taxes of 1380 and 1381 also contributed to the discontent. It is furthermore noteworthy that the rebellion began in relatively affluent eastern England, not in the poorer west or north.

In the Ciompi revolt in Florence (1378—83), restrictive gild regulations and denial of political voice to workers due to the Black Death raised tensions; however, Florence’s war with the papacy and an economic slump in the 1370s resulting in devaluation of the penny in which the worker was paid were equally if not more important in fomenting unrest. Once the value of the penny was restored to its former level in 1383 the rebellion in fact subsided.

In sum, the Black Death played some role in each uprising but, as with many medieval phenomena, it is difficult to gauge its importance relative to other causes. Perhaps the plague’s greatest contribution to unrest lay in its fostering of a shrinking economy that for a time was less able to absorb socioeconomic tensions than had the growing high medieval economy. The rebellions in any event achieved little. Promises made to the rebels were invariably broken and brutal reprisals often followed. The lot of the lower socioeconomic strata was improved incrementally by the larger economic changes already at work. Viewed from this perspective, the Black Death may have had more influence in resolving the worker’s grievances than in spurring revolt.

Conclusion

The European economy at the close of the Middle Ages (c. 1500) differed fundamentally from the pre—plague economy. In the countryside, a freer peasant derived greater material benefit from his toil. Fixed rents if not outright ownership of land had largely displaced customary dues and services and, despite low grain prices, the peasant more readily fed himself and his family from his own land and produced a surplus for the market. Yields improved as reduced population permitted a greater focus on fertile lands and more frequent fallowing, a beneficial phenomenon for the peasant. More pronounced socioeconomic gradations developed among peasants as some, especially more prosperous ones, exploited the changed circumstances, especially the availability of land. The peasant’s gain was the lord’s loss. As the Middle Ages waned, the lord was commonly a pure rentier whose income was subject to the depredations of inflation.

In trade and manufacturing, the relative ease of success during the high Middle Ages gave way to greater competition, which rewarded better business practices and leaner, meaner, and more efficient concerns. Greater sensitivity to the market and the cutting of costs ultimately rewarded the European consumer with a wider range of good at better prices.

In the long term, the demographic restructuring caused by the Black Death perhaps fostered the possibility of new economic growth. The pestilence returned Europe’s population roughly its level c. 1100. As one scholar notes, the Black Death, unlike other catastrophes, destroyed people but not property and the attenuated population was left with the whole of Europe’s resources to exploit, resources far more substantial by 1347 than they had been two and a half centuries earlier, when they had been created from the ground up. In this environment, survivors also benefited from the technological and commercial skills developed during the course of the high Middle Ages. Viewed from another perspective, the Black Death was a cataclysmic event and retrenchment was inevitable, but it ultimately diminished economic impediments and opened new opportunity.

References and Further Reading:

Aberth, John. “The Black Death in the Diocese of Ely: The Evidence of the Bishop’s Register.” Journal of Medieval History 21 (1995): 275—87.

Aberth, John. From the Brink of the Apocalypse: Confronting Famine, War, Plague, and Death in the Later Middle Ages. New York: Routledge, 2001.

Aberth, John. The Black Death: The Great Mortality of 1348—1350, a Brief History with Documents . Boston and New York: Bedford/St. Martin’s, 2005.

Aston, T. H. and C. H. E. Philpin, eds. The Brenner Debate: Agrarian Class Structure and Economic Development in Pre—Industrial Europe. Cambridge: Cambridge University Press, 1985.

Bailey, Mark D. “Demographic Decline in Late Medieval England: Some Thoughts on Recent Research.” Economic History Review 49 (1996): 1—19.

Bailey, Mark D. A Marginal Economy? East Anglian Breckland in the Later Middle Ages. Cambridge: Cambridge University Press, 1989.

Benedictow, Ole J. The Black Death, 1346—1353: The Complete History. Woodbridge, Suffolk: Boydell Press, 2004.

Bleukx, Koenraad. “Was the Black Death (1348—49) a Real Plague Epidemic? England as a Case Study.” In Serta Devota in Memoriam Guillelmi Lourdaux. Pars Posterior: Cultura Medievalis, edited by W. Verbeke, M. Haverals, R. de Keyser, and J. Goossens, 64—113. Leuven: Leuven University Press, 1995.

Blockmans, Willem P. “The Social and Economic Effects of Plague in the Low Countries, 1349—1500.” Revue Belge de Philologie et d’Histoire 58 (1980): 833—63.

Bolton, Jim L. “‘The World Upside Down’: Plague as an Agent of Economic and Social Change.” In The Black Death in England, edited by M. Ormrod and P. Lindley. Stamford: Paul Watkins, 1996.

Bowsky, William M. “The Impact of the Black Death upon Sienese Government and Society.” Speculum 38 (1964): 1—34.

Campbell, Bruce M. S. “Agricultural Progress in Medieval England: Some Evidence from Eastern Norfolk.” Economic History Review 36 (1983): 26—46.

Campbell, Bruce M. S., ed. Before the Black Death: Studies in the ‘Crisis’ of the Early Fourteenth Century. Manchester: Manchester University Press, 1991.

Cipolla, Carlo M. Before the Industrial Revolution: European Society and Economy, 1000—1700, Third edition. New York: Norton, 1994.

Cohn, Samuel K. The Black Death Transformed: Disease and Culture in Early Renaissance Europe. London: Edward Arnold, 2002.

Cohn, Sameul K. “After the Black Death: Labour Legislation and Attitudes toward Labour in Late—Medieval Western Europe.” Economic History Review 60 (2007): 457—85.

Davis, David E. “The Scarcity of Rats and the Black Death.” Journal of Interdisciplinary History 16 (1986): 455—70.

Davis, R. A. “The Effect of the Black Death on the Parish Priests of the Medieval Diocese of Coventry and Lichfield.” Bulletin of the Institute of Historical Research 62 (1989): 85—90.

Drancourt, Michel, Gerard Aboudharam, Michel Signoli, Olivier Detour, and Didier Raoult. “Detection of 400—Year—Old Yersinia Pestis DNA in Human Dental Pulp: An Approach to the Diagnosis of Ancient Septicemia.” Proceedings of the National Academy of the United States 95 (1998): 12637—40.

Dyer, Christopher. Standards of Living in the Middle Ages: Social Change in England, c. 1200—1520. Cambridge: Cambridge University Press, 1989.

Emery, Richard W. “The Black Death of 1348 in Perpignan.” Speculum 42 (1967): 611—23.

Farmer, David L. “Prices and Wages.” In The Agrarian History of England and Wales, Vol. II, edited H. E. Hallam, 715—817. Cambridge: Cambridge University Press, 1988.

Farmer, D. L. “Prices and Wages, 1350—1500.” In The Agrarian History of England and Wales, Vol. III, edited E. Miller, 431—94. Cambridge: Cambridge University Press, 1991.

Flinn, Michael W. “Plague in Europe and the Mediterranean Countries.” Journal of European Economic History 8 (1979): 131—48.

Freedman, Paul. The Origins of Peasant Servitude in Medieval Catalonia. New York: Cambridge University Press, 1991.

Gottfried, Robert. The Black Death: Natural and Human Disaster in Medieval Europe. New York: Free Press, 1983.

Gyug, Richard. “The Effects and Extent of the Black Death of 1348: New Evidence for Clerical Mortality in Barcelona.” Mediæval Studies 45 (1983): 385—98.

Harvey, Barbara F. “The Population Trend in England between 1300 and 1348.” Transactions of the Royal Historical Society 4th ser. 16 (1966): 23—42.

Harvey, P. D. A. A Medieval Oxfordshire Village: Cuxham, 1240—1400. London: Oxford University Press, 1965.

Hatcher, John. “England in the Aftermath of the Black Death.” Past and Present 144 (1994): 3—35.

Hatcher, John and Mark Bailey. Modelling the Middle Ages: The History and Theory of England’s Economic Development. Oxford: Oxford University Press, 2001.

Hatcher, John. Plague, Population, and the English Economy 1348—1530. London and Basingstoke: MacMillan Press Ltd., 1977.

Herlihy, David. The Black Death and the Transformation of the West, edited by S. K. Cohn. Cambridge and London: Cambridge University Press, 1997.

Horrox, Rosemary, transl. and ed. The Black Death. Manchester: Manchester University Press, 1994.

Hunt, Edwin S.and James M. Murray. A History of Business in Medieval Europe, 1200—1550. Cambridge: Cambridge University Press, 1999.

Jordan, William C. The Great Famine: Northern Europe in the Early Fourteenth Century. Princeton: Princeton University Press, 1996.

Lehfeldt, Elizabeth, ed. The Black Death. Boston: Houghton and Mifflin, 2005.

Lerner, Robert E. The Age of Adversity: The Fourteenth Century. Ithaca: Cornell University Press, 1968.

Le Roy Ladurie, Emmanuel. The Peasants of Languedoc, transl. J. Day. Urbana: University of Illinois Press, 1976.

Lomas, Richard A. “The Black Death in County Durham.” Journal of Medieval History 15 (1989): 127—40.

McNeill, William H. Plagues and Peoples. Garden City, New York: Anchor Books, 1976.

Miskimin, Harry A. The Economy of the Early Renaissance, 1300—1460. Cambridge: Cambridge University Press, 1975.

Morris, Christopher “The Plague in Britain.” Historical Journal 14 (1971): 205—15.

Munro, John H. “The Symbiosis of Towns and Textiles: Urban Institutions and the Changing Fortunes of Cloth Manufacturing in the Low Countries and England, 1270—1570.” Journal of Early Modern History 3 (1999): 1—74.

Munro, John H. “Wage—Stickiness, Monetary Changes, and the Real Incomes in Late—Medieval England and the Low Countries, 1300—1500: Did Money Matter?” Research in Economic History 21 (2003): 185—297.

Origo. Iris The Merchant of Prato: Francesco di Marco Datini, 1335—1410. Boston: David R. Godine, 1957, 1986.

Platt, Colin. King Death: The Black Death and its Aftermath in Late—Medieval England. Toronto: University of Toronto Press, 1996.

Poos, Lawrence R. A Rural Society after the Black Death: Essex 1350—1575. Cambridge: Cambridge University Press, 1991.

Postan, Michael M. The Medieval Economy and Society: An Economic History of Britain in the Middle Ages. Harmondswworth, Middlesex: Penguin, 1975.

Pounds, Norman J. D. An Economic History of Europe. London: Longman, 1974.

Raoult, Didier, Gerard Aboudharam, Eric Crubézy, Georges Larrouy, Bertrand Ludes, and Michel Drancourt. “Molecular Identification by ‘Suicide PCR’ of Yersinia Pestis as the Agent of Medieval Black Death.” Proceedings of the National Academy of Sciences of the United States of America 97 (7 Nov. 2000): 12800—3.

Razi, Zvi “Family, Land, and the Village Community in Later Medieval England.” Past and Present 93 (1981): 3—36.

Russell, Josiah C. British Medieval Population. Albuquerque: University of New Mexico Press, 1948.

Scott, Susan and Christopher J. Duncan. Return of the Black Death: The World’s Deadliest Serial Killer. Chicester, West Sussex and Hoboken, NJ: Wiley, 2004.

Shrewsbury, John F. D. A History of Bubonic Plague in the British Isles. Cambridge: Cambridge University Press, 1970.

Twigg, Graham The Black Death: A Biological Reappraisal. London: Batsford Academic and Educational, 1984.

Waugh, Scott L. England in the Reign of Edward III. Cambridge: Cambridge University Press, 1991.

Ziegler, Philip. The Black Death. London: Penguin, 1969, 1987.

Citation: Routt, David. “The Economic Impact of the Black Death”. EH.Net Encyclopedia, edited by Robert Whaples. July 20, 2008. URL http://eh.net/encyclopedia/the-economic-impact-of-the-black-death/

Historical Anthropometrics

Timothy Cuff, Westminster College

Historical anthropometrics is the study of patterns in human body size and their correlates over time. While social researchers, public health specialists and physical anthropologists have long utilized anthropometric measures as indicators of well-being, only within the past three decades have historians begun to use such data extensively. Adult stature is a cumulative indicator of net nutritional status over the growth years, and thus reflects command over food and access to healthful surroundings. Since expenditures for these items comprised such a high percentage of family income for historical communities, mean stature can be used to examine changes in a population’s economic circumstances over time and to compare the well-being of different groups with similar genetic height potential. Anthropometric measures are available for portions of many national populations as far back as the early 1700s. While these data often serve as complements to standard economic indicators, in some cases they provide the only means of assessing historical economic well-being, as “conventional” measures such as per capita GDP, wage and price indices, and income inequality measures have been notoriously spotty and problematic to develop. Anthropometric-based research findings to date have contributed to the scholarly debates over mortality trends, the nature of slavery, and the outcomes of industrialization and economic development. Height has been the primary indicator utilized to date. Other indicators include height-standardized weight indices, birth weight, and age at menarche. Potentially even more important, historical anthropometrics broadens the understanding of “well-being” beyond the one dimensional “ruler” of income, providing another lens through which the quality of historical life can be viewed.

This article:

  • provides a brief background of the field including a history of human body measurement and analysis and a description of the biological foundations for historical anthropometrics,
  • describes the current state of the field (along with methodological issues) and future directions, and
  • provides a selective bibliography.

Anthropometrics: Historical and Bio-Medical Background

The Evolution of Body Measurement and Analysis in Context

The measurement and description of the human form in the West date back to the artists of classical civilizations, but the rationale for systematic, large-scale body measurement and record keeping emerged out of the needs of early modern military organizations. By the mid-eighteenth century height commonly provided a means of classifying men into and of identifying them within military units and the procedures for measuring individuals entering military service were well established. The military’s need to identify recruits has provided most historical measurements of young men.

Scientific curiosity in the eighteenth century also spurred development of the first textbooks on human growth, although they were more concerned with growth patterns throughout life than with stature differences across groups or over time. In the nineteenth century class differences in height were easily observable in England. The moral outrage generated by the “tiny children” (Charles Dickens’ “Oliver Twists”) along with the view that medicine had a preventive as well as a curative function, meant that anthropometry was directed primarily at the poor, especially children toiling in the factories of English and French industrial cities. Later, fear in Britain over the “degeneration” of its men and their potential as an effective fighting force provided motivation for large-scale anthropometric surveys, as did efforts evolving out of the child-welfare movement. The early-twentieth century saw the establishment of a series of longitudinal population surveys (which follow individuals as they age) in North America and in Europe. In some cases this work was directed toward the generation of growth standards, while other efforts evaluated social-class differences among children. Such studies can be seen as transitional steps between contemporary and historical anthropometrics. Since the 1950s, anthropometry has been utilized for a variety of purposes in both the developed and underdeveloped world. Population groups have been measured in order to refine growth standards, to monitor the nutritional status of individuals and populations during famines and political disturbances, and to evaluate the effectiveness of economic development programs.

Anthropometric studies today can be classified as one of three types. Auxologists perform basic research, collecting body measurements over the human life cycle to further detail standards of physical development for twenty-first century populations. The second focus, a continuation of nineteenth century work, documents the living standards of children often supporting regulatory legislation or government aid policies. The third direction is historical anthropometrics. Economists, historians, and anthropologists specializing in this field seek to assess, in physical terms, the well-being of previous societies and the factors which influenced it.

Human Growth and Development: The Biological Foundations of Historical Anthropometrics

While historical anthropometric research is a relatively recent development, an extensive body of medical literature relating nutrition and epidemiological conditions to physical growth provides a strong theoretical underpinning. Bio-medical literature, along with the World Health Organization, describes mean stature as one of the best measures of overall health conditions within a society.

Final attained height and height by age both result from a complex interaction of genetic endowment and environmental effects. At the level of the individual, genetics is a strong but not exclusive influence on the determination of final height and of growth patterns. Genetics is most important when net nutrition is optimal. However, when evaluating differences among groups of people in sub-optimal nutritional circumstances environmental influences predominate.

The same nutritional regime can result in different final stature for particular individuals, because of genetic variation in the ability to continue growing in the face of adverse nutritional circumstances, epidemiological environments, or work requirements. However, the genetic height potential of most Europeans, Africans, and North Americans of European or African ancestry is comparable; i.e., under equivalent environmental circumstances the groups have achieved nearly identical mean adult stature. For example, in many parts of rural Africa, mean adult heights today are similar to those of Africans of 150 years ago, while well-fed urban Africans attain final heights similar to current-day Europeans and North Americans of European descent. Differences in nutritional status do result in wide variation in adult height even within populations of the same genetic make-up. For example, individuals from higher socio-economic classes tend to be taller than their lower class counterparts whether in impoverished third-world countries or in the developed nations.

Height is the most commonly utilized, but not the only, anthropometric indicator of nutritional status. The growth profile is another. Environmental conditions, while affecting the timing of growth (the ages at which accelerations and decelerations in growth rates occur), do not affect the overall pattern (the sequence in which growth/maturation events occur). The body seems to be self-stabilizing, postponing growth until caloric levels will support it and maintaining genetically programmed body proportions more rigidly than size potential. While final adult height and length of the growth period are not absolutely linked, populations which stop growing earlier usually, although not universally, end up being taller. Age at menarche, birth weight, and weight-for-height are also useful. Age at menarche (i.e. the first occurrence of menstruation) is not a measure of physical size, but of sexual maturation. Menarche generally occurs earlier among well-nourished women. Average menarcheal age in the developed West is about 13 years, while in the middle of the nineteenth century it was between 15 and 16 years among European women. Areas which have not experienced nutritional improvement over the past century have not witnessed decreases in the age at menarche. Infant birth weight, an indicator of long-term maternal nutritional status, is influenced by the mother’s diet, work intensity, quality of health care, maternal size and the number of children she has delivered, as well as the mother’s health practices. The level of economic inequality and social class status are also correlated with birth weight variation, although these variables reflect some of the factors noted above. However, because the mother’s diet and health status are such strong influences on birth weight, it provides another useful means of monitoring women’s well-being. Height-for-weight indices, particularly the body mass index (BMI), have seen some use by anthropometric historians. Contemporary bio-medical research which links BMI levels and mortality risk hints at the promise which this measure might hold for historians. However, the limited availability of weight measurements before the mid-nineteenth century will limit the studies which can be produced.

Improvements in net nutritional status, both across wide segments of the population in developed countries and within urban areas of less-developed countries (LDCs), are generally accepted as the most salient influence on growth patterns and final stature. The widely experienced improvement in net nutrition which was apparent in most of the developed world across most of the twentieth century and more recently in the “modern” sector of some LDCs has lead to a secular trend, the unidirectional trend toward greater stature and faster maturation. Before the twentieth century, height cycling without a distinct direction was the dominant historical pattern. (Two other sources of stature increase have been hypothesized but have garnered little support among the medical community: the increased practice of infantile smallpox vaccination and heterosis (hybrid vigor), i.e. varietal cross-breeding within a species which produces offspring who are larger or stronger than either parent.)

The Definition and Determination of Nutritional Status

“Nutritional status” is a term critical to an understanding of anthropometrics. It encompasses more than simply diet, i.e. the intake of calories and nutrients, and is thus distinct from the more common term “nutrition.” While nutrition refers to the quantity and quality of food inputs to the human biological system, it makes no reference to the amounts needed for healthy functioning resulting from nutrient demand placed on the individual. Nutritional status, or synonymously “net nutrition,” refers to the summing up of nutrient input and demand on those nutrients. While work intensity is the most obvious demand, it is just one of many. Energy is required to resist infection. Pregnancy adds caloric and nutrient demands, as does breast-feeding. Calories expended in any of these fashions are available neither for basal metabolism, nor for growth. The difference between nutrition and nutritional status/net nutrition is important for anthropometrics, because it is the latter, not the former, for which auxological measurements are a proxy.

Human biologists and medical scientists generally agree that within genetically similar populations net nutrition is the primary determinant of adult physical stature. Height, as Bielicki notes, is “socially induced variation.” Figure 1 indicates the numerous channels of influence on the final adult stature of any individual. Anthropometric indicators reflect the relative ease or difficulty of acquiring sufficient nutrients to provide for growth in excess of the immediate needs of the body. Nutritional status and physical stature clearly are composite measures of well-being linked to economic processes. However, the link is mediated through a variety of social circumstances, some volitional, others not. Hence, anthropometric historians must evaluate each situation within its own economic, cultural, and historical context.

In earlier societies, and in some less developed countries today, access to nutrients was determined primarily by control of arable land. As markets for food developed and urban living became predominant, for increasing percentages of the population, access to nutrients depended upon the ability to purchase food, i.e. on real income. Additionally, food allocation within the family is not determined by markets but by intra-household bargaining as well as by tastes and custom. For example, in some cultures households distribute food resources so as to ensure nutritional adequacy for those family members engaged in income or resource-generating activity in order to maximize earning power. The handful of studies which include historical anthropometric data for women reveal that stature trends by gender do not always move in concert. Rather, in periods of declining nutritional status, women often exhibited a reduction in stature levels before such changes appeared among males. This is somewhat paradoxical because biologists generally argue that women’s growth trajectories are more resistant to a diminution in nutritional status than are those of men. Though too little historical research has been done on this issue to speak with certainty, the pattern might imply that, in periods of nutritional stress, women bore the initial brunt of deprivation.

Other cultural practices, including the high status accorded to the use of certain foods, such as white flour, polished rice, tea or coffee may promote greater consumption of nutritionally less valuable foods among those able to afford them. This would tend to reduce the resultant stature differences by income. Access to nutrients also depends upon other individual choices. A small landholder might decide to market much of his farm’s high-value, high-protein meat and dairy products, reducing his family’s consumption of these nutritious food products in order to maximize money income. However, while material welfare would increase, biological welfare, knowingly or unknowingly, would decline.

Disease-exposure variation occurs as a result of some factors under the individual’s control and other factors which are determined at the societal level. Pathogen prevalence and potency and the level of community sanitation are critical factors which are not directly affected by individual decision making. However, housing and occupation are often individually chosen and do help to determine the extent of disease exposure. Once transportation improvements allow housing segregation based on socio-economic status to occur within large urban areas, residence location can become an important influence. However, prior to such, for example in mid-nineteenth century United States, urban childhood mortality levels were more influenced by the number of children in a family than by parental occupation or socio-economic status. The close proximity of the homes of the wealthy and the poor seems to have created a common level of exposure to infectious agents and equally poor sanitary conditions for children of all economic classes.

Work intensity, another factor determining nutritional status, is a function of the age at which youth enter the labor force, educational attainment, the physical exertion needed in a chosen occupation, and the level of technology. There are obvious feedback effects from current nutritional status to future nutritional status. A low level of nutritional status today might hinder full-time labor-force participation, and result in low incomes, poor housing, and substandard food consumption in subsequent periods as well, thereby reinforcing the cycle of nutritional inadequacy.

Historical Anthropometrics

Early Developments in the Field

Le Roy Ladurie’s studies of nineteenth-century French soldiers published in the late 1960s and early 1970s are recognized as the first works in the spirit of modern historical anthropometrics. He documented that stature among French recruits varied with their socio-economic characteristics. In the U.S., the research was carried forward in the late 1970s, much based on nineteenth-century records of U.S. slaves transported from the upper to the lower South. Studies of Caribbean slaves followed.

In the 1980s numerous anthropometric works were generated in connection with a National Bureau of Economic Research (NBER) directed study of American and European mortality trends from 1650 to the present, coordinated by Robert W. Fogel. Motivated in great part by the desire to evaluate Thomas McKeown’s hypothesis that improvements in nutrition were the critical component in mortality declines in the seventeenth through the nineteenth centuries, the project has lead to the creation of numerous large anthropometric data bases. These have been the starting point for the analysis of trends in physical stature and net nutritional status on both sides of the Atlantic. While most historical anthropometric studies published in the U.S. during the early and mid-1980s were either outgrowths of the NBER project or were conducted by students of Robert Fogel, such as Richard Steckel and John Komlos, mortality trends were no longer the sole focus of historical anthropometrics. Anthropometric statistics were used to analyze the effect of industrialization on the populations experiencing it, as well as the characteristics of slavery in the United States. The data sources were primarily military records or documents relating to slaves. As the 1980s became the 1990s the geographic range of stature studies moved beyond Europe and North American to include Asia, Australia, and Africa. Other data sources were utilized. These included records from schools and utopian communities, certificates of freedom for manumitted slaves, voter registration cards, newspaper advertisements for runaway slaves and indentured servants, insurance applications, and a variety of prison inmate records. The number of anthropometric historians also expanded considerably.

Findings to Date

Major achievements to date in historical anthropometrics include 1) the determination of the main outlines of the trend in physical stature in Europe and North America between the eighteenth and twentieth centuries, and 2) the emergence of several well-supported, although still debated, hypotheses pertaining to the relationship between height and the economic and social developments which accompanied modern economic growth in these centuries.

Historical research on human height has indicated how much healthier the New World environment was compared to that of Europe. Europeans who immigrated to North America, on average, obtained a net nutritional status far better than that which was possible for them to attain in their place of birth. Eighteenth century North Americans attained mean heights not achieved by Europeans until the twentieth century. The combination of lower population density, lower levels of income inequality, and greater food resources bestowed a great benefit upon those growing up in North America. This advantage is evident not only in adult heights but also in the earlier timing of the adolescent growth spurt, as well as the earlier attainment of final height.

Table 1
Mean Heights of Adult Males (in inches)

Table 1
Mean Heights of Adult Males (in inches)–>

North America Europe
European Ancestry African Ancestry Hungary England Sweden
1775 – 1783 1861 – 1865 1943 – 1944 1811 – 1861 1943 – 1944 1813 – 1835 1816 – 1821 1843 – 1886
68.1 68.5 68.1 67.0 67.9 64.2 65.8 66.3

Sources: U.S. whites, 1775-1783: Kenneth L. Sokoloff and Georgia C. Villaflor, “The Early Achievement of Modern Stature in America,” Social Science History 6 (1982): 453-481. U.S. whites, 1861-65: Robert Margo and Richard Steckel, “Heights of Native-Born Whites during the Antebellum Period,” Journal of Economic History 43 (1983): 167-174. U.S. whites and blacks, 1943-44: Bernard D. Karpinos, “Height and Weight of Selective Service Registrants Processed for Military Service during World War II,” Human Biology 40 (1958): 292-321, Table 5. U.S. blacks, 1811-1861: Robert Margo and Richard Steckel, “The Height of American Slaves: New Evidence on Slave Nutrition and Health,” Social Science History 6 (1982): 516-538, Table 1. Hungary: John Komlos. Nutrition and Economic Development in the Eighteenth Century Habsburg Monarchy, Princeton: Princeton University Press, 1989, Table 2.1, 57. Britain: Roderick Floud, Kenneth Wachter, and Annabel Gregory, Height, Health, and History: Nutritional Status in the United Kingdom, 1750-1980, Cambridge: Cambridge University Press, 1990, Table 4.1, 148. Sweden: Lars G. Sandberg and Richard Steckel, “Overpopulation and Malnutrition Rediscovered: Hard Times in 19th-Century Sweden,” Explorations in Economic History 25 (1988): 1-19, Table 2, 7.

Note: Dates refer to dates of measurement.

Stature Cycles in Europe and America

The early finding that there was not a unidirectional upward trend in stature since the 1700s startled researchers, whose expectations were based on recent experience. Extrapolating backward, Floud, Wachter, and Gregory note that such surprise was misplaced, for if the twentieth century’s rate of height increase had been occurring for several centuries, medieval Europeans would have been dwarfs or midgets. Instead, in Europe cycles in height were evident. Though smaller in amplitude than in Europe, stature cycling was a feature of the American experience, as well. At the time of the American Revolution, the Civil War, and World War II, the mean height of adult, native-born white males was a fraction over 68 inches (Table 1), but there was some variation in between these periods with a small decline in the years before the Civil War and perhaps another one from 1860 into the 1880s. Just before the turn of the twentieth century, mean stature began its relatively uninterrupted increase which continues to the present day. These findings are based primarily on military records drawn from the early national army, Civil War forces, West Point Cadets, and the Ohio National Guard, although other data sets show similar trends. The free black population seems to have experienced a downturn in physical stature very similar to that of whites in the pre-Civil War period. However, an exception to the antebellum diminution in nutritional status has been found among slave men.

Per Capita Income and Height

In addition to the cycling in height, anthropometric historians have documented that the intuitively anticipated positive correlation between mean height and per capita income holds at the national level in the twentieth century. Steckel has shown that, in cross-national comparison, the correlation between height and per capita income is as high as .84 to .90. However, since per capita income is highly correlated with a series of other variables that also affect height, the exact pathway through which income affects height is not fully clear. Among the factors which help to explain the variation are better diet, medicine, improvements in sanitary infrastructure, longer schooling, more sedentary life, and better housing. Intense work regimes and psycho-social stress, both of which affect growth negatively, might also be mitigated by greater per capita income. However, prior to the twentieth century the relationship between height and income was not monotonic. U.S. troops during the American Revolution were nearly as tall as U.S. soldiers sent to Europe and Japan in the 1940s, despite the fact that per capita income in the earlier period was substantially below that in the latter. Similarly, while per capita income in the U.S. in the late 1770s was below that of the British, the American troops had a height advantage of several inches over their British counterparts in the War of Independence.

Height and Income Inequality

The level of income inequality also has a powerful influence on mean heights. Steckel’s analysis of data for the twentieth century indicates that a 0.1 decrease in the Gini coefficient (indicating greater income equality) is associated with a gain in mean stature of about 3.7 cm (1.5 inches). In societies with great inequality, increases in per capita income have little effect on average stature if the gains accrue primarily to the wealthier segments of the society. Conversely, even without changes in average national per capita income, a reduction in inequality can have similar positive impact upon the stature and health of those at the lower rungs of the income ladder.

The high level of social inequality at the onset of modern economic growth in England is exemplified by the substantial disparity between the height of students of the Sandhurst Royal Military Academy, an elite institution, and the Marine Society, a home for destitute boys in London. The difference in mean height at age fourteen exceeded three inches in favor of the gentry. In some years the gap was even greater. Komlos has documented similar findings elsewhere: regardless of location, boys from “prestigious military schools in England, France, and Germany were much taller than the population at large.” A similar pattern existed in the nineteenth-century U.S. However, the social gap in the U.S. was miniscule compared to that prevailing in the Old World. Stature also varied by occupational groups. In eighteenth and nineteenth century Europe and North America, white collar and professional workers tended to be significantly taller than laborers and unskilled workers. However, farmers, being close to the source of nutrients and with fewer interactions with urban disease pools, tended to be the tallest, though their advantage disappeared by the twentieth century.

Regional and Rural-Urban Differences

Floud, Wachter, and Gregory have shown that, in early nineteenth century Britain, regional variation in stature dwarfed occupational differences. In 1815, Scotsmen, rural and urban, as well as the Irish, were about one-half an inch taller than the non-London urban English of the day. The rural English were slightly shorter, on average, than Englishmen born in small and medium sized towns. Londoners, however, had a mean height almost one-third of an inch less than other urban dwellers in England and more than three-quarters of an inch below the Irish or the Scots. A similar pattern held among convicts transported to New South Wales, Australia, except that the stature of the rural English was well above the average for all other English transported convicts. Floud, Wachter, and Gregory show a trend of convergence in height among these groups after 1800. The tendency for low population density rural areas in the nineteenth century to be home to the tallest individuals was apparent from the Habsburg Monarchy to Scotland, and in the remote northern regions of late nineteenth-century Sweden and Japan as well. In colonial America the rural-urban gradient did not exist. As cities grew, the rural born began to display a stature advantage over their urban brethren. This divergence persisted into the nineteenth century, and disappeared in the early twentieth century, when the urban-born gained a height advantage.

The Early-Industrial-Growth and Antebellum Puzzles

These patterns of stature variation have been put into a framework in both the European and the American contexts. Respectively they are known as the “early-industrial-growth puzzle” and the “Antebellum puzzle.” The commonality which has been identified is that in the early stages of industrialization and/or market integration, even with rising per capita incomes, the biological well-being of the populations undergoing such change does not, necessarily, improve immediately. Rather, for at least some portions of the population, biological well-being declined during this period of economic growth. Explanations for these paradoxes (or puzzles) are still being investigated and include: rising income inequality, the greater spread of disease through more thoroughly developed transportation and marketing systems and urban growth, the rising real price of food as population growth outstripped the agricultural system’s ability to provide, and the choice of farmers to market rather than consume high value/high protein crops.

Slave Heights

Research on slave heights has provided important insight into the living standards of these bound laborers. Large differences in stature have been documented between slaves on the North American mainland and those in the Caribbean. Adult mainland slaves, both women and men, were approximately two inches taller than those in the West Indies throughout the eighteenth and nineteenth centuries. Steckel argues that the growth pattern and infant mortality rates of U.S. slave children indicate that they were moderately to severely malnourished, with mean heights for four to nine year olds below the second percentile of modern growth standards and with mortality rates twice those estimated for the entire United States population. Although below the fifth percentile throughout childhood, as adults these slaves were relatively tall by nineteenth-century standards, reaching about the twenty-fifth percentile of today’s height distribution, taller than most European populations of the time.

Height’s Correlation with Other Biological Indicators

The evaluation of McKeown’s hypothesis that much of the modern decline in mortality rates could be traced to improvements in nutrition (food intake) was one of the early rationales for the modern study of historical stature. Subsequent work has presented evidence for the parallel cycling of height and life expectancy in the United States during the nineteenth century. The relationship between the body-mass index, morbidity, and mortality risk within historical populations has also been documented. Along a similar line, Sandberg and Steckel’s data on Sweden have pointed out the parallel nature of stature trends and childhood mortality rates in the mid-nineteenth century.

Economic and social history are not the only two fields which have felt historical anthropometrics’ impact. North American slave height-by-age profiles developed by Steckel have been used by auxologists to exemplify the range of possible growth patterns among humans. Based on findings within the biological sciences, historical studies of stature have come full circle and are providing those same sciences with new data on human physical potential.

Methodological Issues

Accuracy problems in military-based data sets arise predominantly from carelessness of the measurer or from intentional misreporting of data rather than from lack of orthodox practice. Inadequate concern for accuracy can most often be noticed in heaping (height observations rounded to whole feet, six inch increments, or even numbered inches) and lack of fractional measurements. These “rounding” errors tend to be self-canceling. Of greater concern is intentional misreporting of either height or age, because minimum stature and age restrictions were often applied to military recruits. Young men, eager to discover the “romance” of military life or receive the bounty which sometimes accompanied enlistment, were not impervious to slight fabrication of their age. Recruiting officers, hoping to meet their assigned quotas quickly, might have been tempted to round measurements up to the minimum height requirement. Hence, it is not uncommon to find height and age heaping at either the age or stature minima.

For anthropometric historians, the issue of the representativeness of the population under study is similar to that for any social historian, but several specific caveats are appropriate when considering military samples. In time of peace military recruits tend to be less representative of the general population than are wartime armies. The military, with fewer demands for personnel, can be more selective, often instituting more stringent height minima, and occasionally maxima, for recruits. Such policies, as well as the self-interested behaviors noted above, require those who would use military data sets to evaluate and potentially adjust the data to account for the observations missing due to either left or right tail truncation. A series of techniques to account for such difficulties in the data have been developed, although there is still debate over the most appropriate technique. Other data sets also exhibit selectivity biases, although of different natures. Prison registers clearly do not provide a random sample of the population. The filter, however, is not based on size or desire for “exciting” work – rather on the propensity for criminal activity and on the enforcement mechanism of the judicial system. The representativeness of anthropometric samples can also be affected by previous selection by the Grim Reaper. Within Afro-Caribbean slave populations in Trinidad, death rates were significantly higher for shorter individuals (at all ages) than for the taller ones. The result is that a select group of more robust and taller individuals remained alive for eventual measurement.

One difficulty faced by anthropometric historians is the association of this research, more imagined than real, with previous misuses of body measurement. Nineteenth century American phrenologists used skull shape and size as a means of determining intelligence and as a way of justifying the enslavement of African-Americans. The Bertillon approach to evaluating prison inmates included the measurement and classification of lips, ears, feet, nose, and limbs in an effort to discern a genetic or racial basis for criminality. The Nazis attempted to breed the perfect race by eliminating what they perceived to be physically “inferior” peoples. Each, appropriately, has made many squeamish in regard to the use of body measurements as an index of social development. Further, while the biological research which supports historical anthropometrics is scientifically well founded and fully justifies the approach, care must be exercised to ensure that the impression is not given that researchers either are searching for, or promoting, an “aristocracy of the tall.” Being tall is not necessarily better in all circumstances, although recent work does indicate a series of social and economic advantages do accrue to the tall. However, for populations enduring an on-going sub-optimal net nutritional regime, an increase in mean height does signify improvement in the net nutritional level, and thus the general level of physical well-being. Untangling the factors responsible for change in this social indicator is complicated and height is not a complete proxy for the quality of life. However, it does provide a valuable means of assessing biological well-being in the past and the influence of social and economic developments on health.

Future Directions

Historical anthropometrics is maturing. Over the past several years a series of state-of-the-field articles and anthologies of critical works have been written or compiled. Each summarizes past accomplishments, consolidates isolated findings into more generalized conclusions, and/or points out the next steps for researchers. In 2004, the editors of Social Science History devoted an entire volume to anthropometric history, drawing upon both current work and remembrances of many of the field’s early and prominent researchers, including an integrative essay by Komlos and Baten. Anthropometric history now has its own journal, as John Komlos, who has literally established a center for historical anthropometrics in Munich, created Economics and Biology, “devoted to the exploration of the effect of socio-economic processes on human beings as biological organisms.” Early issues highlight the wide geographic, temporal, and conceptual range of historical anthropometric studies. Another project which shows the great range of current effort is Richard Steckel’s work with anthropologists to characterize very long term patterns in the movement of mean human height. Already this collaboration has produced, The Backbone of History: Health and Nutrition in the Western Hemisphere, a compilation of essays documenting the biological well-being of New World populations beginning in 5000 B.C. using anthropological evidence. Its findings, consistent with those of some other recent anthropological studies, indicate a decline in health status for members of Western Hemisphere cultures in the pre-Columbian period as these societies began the transition from economies based on hunting and gathering to ones relying more heavily on settled agriculture. Steckel has been working to expand this approach to Europe via a collaborative and interdisciplinary project funded in part by the U.S. National Science Foundation, titled, “A History of Health in Europe from the Late Paleolithic Era to the Present.”

Yet even with these impressive steps, continued work, similar to early efforts in the field, is still needed. Expansion of the number and type of samples are important steps in the confirmation and consolidation of early results. One of the field’s on-going frustrations is that, except for slave records, few data sets contain physical measurements for large numbers of females. To date, female slaves and ex-slaves, some late nineteenth century U.S. college women, along with transported female convicts are the primary sources of female historical stature. Generalizations of research findings to entire populations are hindered by the small amount of data on females and the knowledge, from that data which are extant, that stature trends for the two sexes do not mimic each other. Similarly, upper class samples of either sex are not common. Future efforts should be directed at locating samples which contain data on these two understudied groups.

As Riley noted, the problem which anthropometric historians seek to resolve is not the identification of likely influences on stature. The biological sciences have provided that theoretical framework. The task at hand is to determine the relative weight of the various influences or, in Fogel’s terms, to perform “an accounting exercise of particularly complicated nature, which involves measuring not only the direct effect of particular factors but also their indirect effects and their interactions with other factors.”

More localized studies, with sample sizes adequate statistical analysis, are needed. These will allow the determination of the social, economic, and demographic factors most closely associated with human height variation. Other key areas of future investigation include the functional consequences of differences in biological well-being proxied by height, including differences in labor productivity and life expectancy. Even with the strides that have been made, in some corners, skepticism remains about the approach. To combat this, researchers must be careful to stress repeatedly what anthropometric indicators proxy, what their limits are, and how knowledge of anthropometric trends can appropriately influence our understanding of economic and social history as well as inform social policy. The field promises many future insights into the nature of and influences on historical human well-being and thus clues about how human well-being, the focus of economics generally, can be more fully and more widely advanced.

Selected Bibliography

Survey/Overview Publications

Engerman, Stanley. “The Standard of Living Debate in International Perspective: Measures and Indicators.” In Health and Welfare during Industrialization, edited by Richard H. Steckel and Roderick Floud, 17-46. Chicago: University of Chicago Press, 1997.

Floud, Roderick, and Bernard Harris. “Health, Height, and Welfare: Britain 1700-1980.” In Health and Welfare during Industrialization, edited by Richard H. Steckel and Roderick Floud, 91-126. Chicago: University of Chicago Press, 1997.

Floud, Roderick, Kenneth Wachter, and Annabelle Gregory. “The Heights of Europeans since 1750: A New Source for European Economic History.” In Stature, Living Standards, and Economic Development: Essays in Anthropometric History, edited by John Komlos, 10-24. Chicago: University of Chicago Press, 1994.

Floud, Roderick, Kenneth Wachter, and Annabelle Gregory. Height, Health, and History: Nutritional Status in the United Kingdom, 1750-1980. Cambridge: Cambridge University Press, 1990.

Fogel, Robert W. “Nutrition and the Decline in Mortality since 1700: Some Preliminary Findings.” In Long-Term Factors in American Economic Growth, edited by Stanley Engerman and Robert Gallman, 439-527. Chicago: University of Chicago Press, 1987.

Haines, Michael R. “Growing Incomes, Shrinking People – Can Economic Development Be Hazardous to Your Health? Historical Evidence for the United States, England, and the Netherlands in the Nineteenth Century.” Social Science History 28 (2004): 249-70.

Haines, Michael R., Lee A. Craig, and Thomas Weiss. “The Short and the Dead: Nutrition, Mortality, and the ‘Antebellum Puzzle’ in the United States.” Journal of Economic History 63 (June 2003): 382-413.

Harris, Bernard. “Health, Height, History: An Overview of Recent Developments in Anthropometric History.” Social History of Medicine 7 (1994): 297-320.

Harris, Bernard. “The Height of Schoolchildren in Britain, 1900-1950.” In Stature, Living Standards and Economic Development: Essays in Anthropometric History, edited by John Komlos, 25-38. Chicago: University of Chicago Press, 1998.

Komlos, John, and Jörg Baten. The Biological Standard of Living in Comparative Perspectives: Proceedings of a Conference Held in Munich, January 18-23, 1997. Stuttgart: Franz Steiner Verlag, 1999.

Komlos, John, and Jörg Baten. “Looking Backward and Looking Forward: Anthropometric Research and the Development of Social Science History.” Social Science History 28 (2004): 191-210.

Komlos, John, and Timothy Cuff. Classics of Anthropometric History: A Selected Anthology, St. Katharinen, Germany: Scripta Mercaturae, 1998.

Komlos, John. “Anthropometric History: What Is It?” Magazine of History (Spring 1992): 3-5.

Komlos, John. Stature, Living Standards, and Economic Development: Essays in Anthropometric History. Chicago: University of Chicago Press, 1994.

Komlos, John. The Biological Standard of Living in Europe and America 1700-1900: Studies in Anthropometric History. Aldershot: Variorum Press, 1995.

Komlos, John. The Biological Standard of Living on Three Continents: Further Essays in Anthropometric History. Boulder: Westview Press, 1995.

Steckel, Richard H., and J.C. Rose. The Backbone of History: Health and Nutrition in the Western Hemisphere. New York: Cambridge University Press, 2002.

Steckel, Richard H., and Roderick Floud. Health and Welfare during Industrialization. Chicago: University of Chicago Press, 1997.

Steckel, Richard. “Height, Living Standards, and History.” Historical Methods 24 (1991): 183-87.

Steckel, Richard. “Stature and Living Standards in the United States.” In American Economic Growth and Standards of Living before the Civil War, edited by Robert E. Gallman and John J. Wallis, 265-310. Chicago: University of Chicago Press, 1992.

Steckel, Richard. “Stature and the Standard of Living.” Journal of Economic Literature 33 (1995): 1903-40.

Steckel, Richard. “A History of the Standard of Living in the United States.” In EH.Net Encyclopedia, edited by Robert Whaples, http://www.eh.net/encyclopedia/contents/steckel.standard.living.us.php

Seminal Articles in Historical Anthropometrics

Aron, Jean-Paul, Paul Dumont, and Emmanuel Le Roy Ladurie. Anthropologie du Conscrit Francais. Paris: Mouton, 1972.

Eltis, David. “Nutritional Trends in Africa and the Americas: Heights of Africans, 1819-1839.” Journal of Interdisciplinary History 12 (1982): 453-75.

Engerman, Stanley. “The Height of U.S. Slaves.” Local Population Studies 16 (1976): 45-50.

Floud, Roderick and Kenneth Wachter. “Poverty and Physical Stature, Evidence on the Standard of Living of London Boys 1770-1870.” Social Science History 6 (1982): 422-52.

Fogel, Robert W. “Physical Growth as a Measure of the Economic Well-being of Populations: The Eighteenth and Nineteenth Centuries.” In Human Growth: A Comprehensive Treatise, second edition, volume 3, edited by F. Falkner and J.M. Tanner, 263-281. New York: Plenum, 1986.

Fogel, Robert W., Stanley Engerman, Roderick Floud, Gerald Friedman, Robert Margo, Kenneth Sokoloff, Richard Steckel, James Trussell, Georgia Villaflor and Kenneth Wachter. “Secular Changes in American and British Stature and Nutrition.” Journal of Interdisciplinary History 14 (1983): 445-81.

Fogel, Robert W., Stanley L. Engerman, and James Trussell. “Exploring the Uses of Data on Height: The Analysis of Long-Term Trends in Nutrition, Labor Welfare, and Labor Productivity.” Social Science History 6 (1982): 401-21.

Friedman, Gerald C. “The Heights of Slaves in Trinidad.” Social Science History 6 (1982): 482-515.

Higman, Barry W. “Growth in Afro-Caribbean Slave Populations.” American Journal of Physical Anthropology 50 (1979): 373-85.

Komlos, John. “The Height and Weight of West Point Cadets: Dietary Change in Antebellum America.” Journal of Economic History 47 (1987): 897-927.

Le Roy Ladurie, Emmanuel, N. Bernageau, and Y. Pasquet. “Le Conscrit et l’ordinateur: Perspectives de recherches sur les Archives Militaries du XIXieme siecle Francais.” Studi Storici 10 (1969): 260-308.

Le Roy Ladurie, Emmanuel. “The Conscripts of 1868: A Study of the Correlation between Geographical Mobility, Delinquency and Physical Stature and Other Aspects of the Situation of the Young Frenchmen Called to Do Military Service That Year.” In The Territory of the Historian. Translated by Ben and Sian Reynolds. Chicago: University of Chicago Press, 1979.

Margo, Robert and Richard Steckel. “Heights of Native Born Whites during the Antebellum Period.” Journal of Economic History 43 (1983): 167-74.

Margo, Robert and Richard Steckel. “The Height of American Slaves: New Evidence on Slave Nutrition and Health.” Social Science History 6 (1982): 516-38.

Steckel, Richard. “Height and per Capita Income.” Historical Methods 16 (1983): 1-7.

Steckel, Richard. “Slave Height Profiles from Coastwise Manifests.” Explorations in Economic History 16 (1979): 363-80.

Articles Addressing Methodological Issues

Heintel, Markus, Lars Sandberg and Richard Steckel. “Swedish Historical Heights Revisited: New Estimation Techniques and Results.” In The Biological Standard of Living in Comparative Perspective, edited by John Komlos and Jörg Baten, 449-58. Stuttgart: Franz Steiner, 1998.

Komlos, John, and Joo Han Kim. “Estimating Trends in Historical Heights.” Historical Methods 23 (1900): 116-20.

Riley, James C. “Height, Nutrition, and Mortality Risk Reconsidered.” Journal of Interdisciplinary History 24 (1994): 465-92.

Steckel, Richard. “Percentiles of Modern Height: Standards for Use in Historical Research.’ Historical Methods 29 (1996): 157-66.

Wachter, Kenneth, and James Trussell. “Estimating Historical Heights.” Journal of the American Statistical Association 77 (1982): 279-303.

Wachter, Kenneth. “Graphical Estimation of Military Heights.” Historical Methods 14 (1981): 31-42.

Publications Providing Bio-Medical Background for Historical Anthropometrics

Bielecki, T. “Physical Growth as a Measure of the Economic Well-being of Populations: The Twentieth Century.” In Human Growth, second edition, volume 3, edited by F. Falkner and J.M. Tanner, 283-305. New York: Plenum, 1986.

Bogin, Barry. Patterns of Human Growth. Cambridge: Cambridge University Press, 1988.

Eveleth, Phyllis B. “Population Differences in Growth: Environmental and Genetic Factors.” In Human Growth: A Comprehensive Treatise, second edition, volume 3, edited by F. Falkner and J.M. Tanner, 221-39. New York: Plenum, 1986.

Eveleth, Phyllis B. and James M. Tanner. Worldwide Variation in Human Growth. Cambridge: Cambridge University Press, 1976.

Tanner, James M. “Growth as a Target-Seeking Function: Catch-up and Catch-down Growth in Man.” In Human Growth: A Comprehensive Treatise, second edition, volume 1, edited by F. Falkner and J.M. Tanner, 167-80. New York: Plenum, 1986.

Tanner, James M. “The Potential of Auxological Data for Monitoring Economic and Social Well-Being.” Social Science History 6 (1982): 571-81.

Tanner, James M. A History of the Study of Human Growth. Cambridge: Cambridge University Press, 1981.

World Health Organization. “Use and Interpretation of Anthropometric Indicators of Nutritional Status.” Bulletin of the World Health Organization 64 (1986): 929-41.

Predecessors to Historical Anthropometrics

Bowles, G. T. New Types of Old Americans at Harvard and at Eastern Women’s Colleges. Cambridge, MA: Harvard University Press, 1952.

Damon, Albert. “Secular Trend in Height and Weight within Old American Families at Harvard, 1870-1965.” American Journal of Physical Anthropology 29 (1968): 45-50.

Damon, Albert. “Stature Increase among Italian-Americans: Environmental, Genetic, or Both?” American Journal of Physical Anthropology 23 (1965) 401-08.

Gould, Benjamin A. Investigations in the Military and Anthropological Statistics of American Soldiers. New York: Hurd and Houghton [for the U.S. Sanitary Commission], 1869.

Karpinos, Bernard D. “Height and Weight of Selective Service Registrants Processed for Military Service during World War II.” Human Biology 40 (1958): 292-321.

Publications Focused on Nonstature-Based Anthropometric Measures

Brudevoll, J.E., K. Liestol, and L. Walloe. “Menarcheal Age in Oslo during the Last 140 Years.” Annals of Human Biology 6 (1979): 407-16.

Cuff, Timothy. “The Body Mass Index Values of Nineteenth Century West Point Cadets: A Theoretical Application of Waaler’s Curves to a Historical Population.” Historical Methods 26 (1993): 171-83.

Komlos, John. “The Age at Menarche in Vienna.” Historical Methods 22 (1989): 158-63.

James M. Tanner. “Trend towards Earlier Menarche in London, Oslo, Copenhagen, the Netherlands, and Hungary.” Nature 243 (1973): 95-96.

Trussell, James, and Richard Steckel. “The Age of Slaves at Menarche and Their First Birth.” Journal of Interdisciplinary History 8 (1978): 477-505.

Waaler, Hans Th. “Height, Weight, and Mortality: The Norwegian Experience.” Acta Medica Scandinavica, supplement 679, 1984.

Ward, W. Peter, and Patricia C. Ward. “Infant Birth Weight and Nutrition in Industrializing Montreal.” American Historical Review 89 (1984): 324-45.

Ward, W. Peter. Birth Weight and Economic Growth: Women’s Living Standards in the Industrializing West. Chicago: University of Chicago Press, 1993.

Articles with a Non-western Geographic Focus

Cameron, Noel. “Physical Growth in a Transitional Economy: The Aftermath of South African Apartheid.” Economic and Human Biology 1 (2003): 29-42.

Eltis, David. ‘Welfare Trends among the Yoruba in the Early Nineteenth Century: The Anthropometric Evidence.” Journal of Economic History 50 (1990): 521-40.

Greulich, W.W. “Some Secular Changes in the Growth of American-born and Native Japanese Children.” American Journal of Physical Anthropology 45 (1976): 553-68.

Morgan, Stephen. “Biological Indicators of Change in the Standard of Living in China during the Twentieth Century.” In The Biological Standard of Living in Comparative Perspective, edited by John Komlos and Jörg Baten, 7-34. Struttart: Franz Steiner, 1998.

Nicholas, Stephen, Robert Gregory, and Sue Kimberley. “The Welfare of Indigenous and White Australians, 1890-1955.” In The Biological Standard of Living in Comparative Perspective, edited by John Komlos and Jörg Baten, 35-54. Stuttgart: Franz Steiner: 1998.

Salvatore, Ricardo D. “Stature, Nutrition, and Regional Convergence: The Argentine Northwest in the First Half of the Twentieth Century.” Social Science History 28 (2004): 297-324.

Shay, Ted. “The Level of Living in Japan, 1885-1938: New Evidence.’ In The Biological Standard of Living on Three Continents: Further Explorations in Anthropometric History, edited by John Komlos, 173-201. Boulder: Westview Press, 1995.

Articles with a North American Focus

Craig, Lee, and Thomas Weiss. “Nutritional Status and Agriculture Surpluses in antebellum United States.” In The Biological Standard of Living in Comparative Perspective, edited by John Komlos and Jörg Baten, 190-207. Stuttgart: Franz Steiner, 1998.

Komlos, John, and Peter Coclanis, “On the ‘Puzzling’ Antebellum Cycle of the Biological Standard of Living: The Case of Georgia,” Explorations in Economic History 34 (1997): 433-59.

Komlos, John. “Shrinking in a Growing Economy? The Mystery of Physical Stature during the Industrial Revolution,” Journal of Economic History 58 (1998): 779-802.

Komlos, John. “Toward an Anthropometric History of African-Americans: The Case of the Free Blacks in Antebellum Maryland.” In Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, edited by Claudia Goldin and Hugh Rockoff, 267-329. Chicago: University of Chicago Press, 1992.

Murray, John. “Standards of the Present for People of the Past: Height, Weight, and Mortality among Men of Amherst College, 1834-1949.” Journal of Economic History 57 (1997): 585-606.

Murray, John. “Stature among Members of a Nineteenth Century American Shaker Commune.” Annals of Human Biology 20 (1993): 121-29.

Steckel, Richard. “A Peculiar Population: The Nutrition, Health, and Mortality of American Slaves from Childhood to Maturity.” Journal of Economic History 46 (1986): 721-41.

Steckel, Richard. “Health and Nutrition in the American Midwest: Evidence from the Height of Ohio National Guardsmen, 1850-1910.” In Stature, Living Standards, and Economic Development: Essays in Anthropometric History, edited by John Komlos, 153-70. Chicago: University of Chicago Press, 1994.

Steckel, Richard. “The Health and Mortality of Women and Children.” Journal of Economic History 48 (1988): 333-45.

Steegmann, A. Theodore Jr. “18th Century British Military Stature: Growth Cessation, Selective Recruiting, Secular Trends, Nutrition at Birth, Cold and Occupation.” Human Biology 57 (1985): 77-95.

Articles with a European Focus

Baten, Jörg. “Economic Development and the Distribution of Nutritional Resources in Bavaria, 1797-1839.” Journal of Income Distribution 9 (2000): 89-106.

Baten, Jörg. “Climate, Grain production, and Nutritional Status in Southern Germany during the XVIIIth Century.” Journal of European Economic History 30 (2001): 9-47.

Baten, Jörg and John Murray “Heights of Men and Women in the Nineteenth-century Bavaria: Economic, Nutritional, and Disease Influences.” Explorations in Economic History 37 (2000): 351-69.

Komlos, John. “Stature and Nutrition in the Habsburg Monarchy: The Standard of Living and Economic Development in the Eighteenth Century.” American Historical Review 90 (1985): 1149-61.

Komlos, John. “The Nutritional Status of French Students.” Journal of Interdisciplinary History 24 (1994): 493-508.

Komlos, John. “The Secular Trend in the Biological Standard of Living in the United Kingdom, 1730-1860.” Economic History Review 46 (1993): 115-44.

Nicholas, Stephen and Deborah Oxley. “The Living Standards of Women during the Industrial Revolution, 1795-1820.” Economic History Review 46 (1993): 723-49.

Nicholas, Stephen and Richard Steckel. “Heights and Living Standards of English Workers during the Early Years of Industrialization, 1770-1815.” Journal of Economic History 51 (1991): 937-57.

Oxley, Deborah. “Living Standards of Women in Prefamine Ireland.” Social Science History 28 (2004): 271-95.

Riggs, Paul. “The Standard of Living in Scotland, 1800-1850.” In Stature, Living Standards, and Economic Development: Essays in Anthropometric History, edited by John Komlos, 60-75. Chicago: University of Chicago Press: 1994.

Sandberg, Lars G. “Soldier, Soldier, What Made You Grow So Tall? A Study of Height, Health and Nutrition in Sweden, 1720-1881.” Economy and History 23 (1980): 91-105.

Steckel, Richard H. “New Light on the ‘Dark Ages’: The Remarkably Tall Stature of Northern European Men during the Medieval Era.” Social Science History 28 (2004): 211-30.

Citation: Cuff, Timothy. “Historical Anthropometrics”. EH.Net Encyclopedia, edited by Robert Whaples. August 29, 2004. URL http://eh.net/encyclopedia/historical-anthropometrics/

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The Economy of Ancient Greece

Darel Tai Engen, California State University – San Marcos

Introduction 1

The ancient Greek economy is somewhat of an enigma. Given the remoteness of ancient Greek civilization, the evidence is minimal and difficulties of interpretation abound. Ancient Greek civilization flourished from around 776 to 30 B.C. in what are called the Archaic (776-480), Classical (480-323), and Hellenistic (323-30) periods.2 During this time, Greek civilization was very different from our own in a variety of ways. In the Archaic and Classical periods, Greece was not unified but was comprised of hundreds of small, independent poleis or “city-states.” During the Hellenistic period, Greek civilization spread into the Near East and large kingdoms became the norm. Throughout these periods of ancient Greek civilization, the level of technology was nothing like it is today and values developed that shaped the economy in unique ways. Thus, despite over a century of investigation, scholars are still debating the nature of the ancient Greek economy.

Moreover, the evidence is insufficient to employ all but the most basic quantitative methods of modern economic analysis and has forced scholars to employ other more qualitative methods of investigation. This brief article, therefore, will not include any of the statistics, tables, charts, or graphs that normally accompany economic studies. Rather, it will attempt to set out the types of evidence available for studying the ancient Greek economy, to describe briefly the long-running debate about the ancient Greek economy and the most widely accepted model of it, and then to present a basic view of the various sectors of the ancient Greek economy during the three major phases of its history. In addition, reference will be made to some recent scholarly trends in the field.

Sources of Evidence

Although the ancient Greeks achieved a high degree of sophistication in their political, philosophical, and literary analyses and have, therefore, left us with a significant amount of evidence concerning these matters, few Greeks attempted what we would call sophisticated economic analysis. Nonetheless, the ancient Greeks did engage in economic activity. They produced and exchanged goods both in local and long distance trade and had monetary systems to facilitate their exchanges. These activities have left behind material remains and are described in various contexts scattered throughout the extant writings of the ancient Greeks.

Most of our evidence for the ancient Greek economy concerns Athens in the Classical period and includes literary works, such as legal speeches, philosophical dialogues and treatises, historical narratives, and dramas and other poetic writings. Demosthenes, Lysias, Isokrates, and other Attic Orators have left us with numerous speeches, several of which concern economic matters, usually within the context of a lawsuit. But although these speeches illuminate some aspects of ancient Greek contracts, loans, trade, and other economic activity, one must analyze them with care on account of the biases and distortions inherent in legal speeches.

Philosophical works, especially those of Xenophon, Plato, and Aristotle, provide us with an insight into how the ancient Greeks perceived and analyzed economic matters. We learn about the place of economic activities within the Greek city-state, value system, and social and political institutions. One drawback of such evidence, however, is that the authors of these works were without exception members of the elite, and their political perspective and disdain for day-to-day economic activity should not necessarily be taken to represent the views of all or even the majority of ancient Greeks.

The ancient Greek historians concerned themselves primarily with politics and warfare. But within these contexts, one can find bits of information here and there about public finance and other economic matters. Thucydides, for example, does takes care to describe the financial resources of Athens during the Peloponnesian War.

Poems and dramas also contain evidence concerning the ancient Greek economy. One can find random references to trade, manufacturing, the status of businessmen, and other economic matters. Of course, one must be careful to account for genre and audience in addition to the personal perspective of the author when using such sources for information about the economy. The plays of Aristophanes, for example, make many references to economic activities, but such references are often characterized by stereotyping and exaggeration for comedic purposes.

One of the most extensive collections of economic documents is the papyri from Greek-controlled Egypt during the Hellenistic period. The Ptolemaic dynasty that ruled Egypt developed an extensive bureaucracy to oversee numerous economic activities and like all bureaucracies, they kept detailed records of their administration. Thus, the papyri include information about such things as taxes, government-controlled lands and labor, and the unique numismatic policies of the Ptolemies.

Epigraphic evidence comes in the form of stone inscriptions from public and private institutions. Boundary markers placed on land used as security for loans, called horoi, were often inscribed with the terms of the loans. States such as Athens inscribed honorary decrees for those who had done outstanding services for the state, including economic ones. States also inscribed accounts for public building projects and leases of public lands or mines. In addition, religious sanctuaries frequently inscribed accounts of monies and other assets, such as produce, land, and buildings, under their control. Although accounts tend to be free of human biases, honorary decrees are much more complex and the historian must be careful to consider the perspective of their issuing institutions when interpreting them.

Archaeological evidence is free of some of the representational complexities of the literary and epigraphic evidence. Pottery finds can tell us about pottery manufacture and trade. The vase types indicate the goods they contained, such as olive oil, wine, or grain. The distribution of finds of ancient pottery can, therefore, tell us the extent of trade in various goods. Finds of hoarded coins are also invaluable for the information they reveal about the volume of coins minted by a given state at a given time and the extent to which a state’s coinage was distributed geographically. But such archaeological evidence is not without its drawbacks as well. The same “muteness” that frees such evidence from human biases also makes it incapable of telling us who traded the goods, why they were traded, how they were traded, how much they cost, and how many middlemen they went through before reaching their find spots. Furthermore, it is always dangerous to attempt to extrapolate broad conclusions about the economy from a small number of finds, since we can never be sure if those finds are representative of larger phenomena or merely exceptional cases that archaeologists happened to stumble upon.

Some of the most spectacular and informative finds in recent years have been made under the waters of the Mediterranean, Aegean, and Black Seas by what is known as marine (or nautical) archaeology. Ancient shipwrecks containing goods for trade have opened new doors to the study of ancient Greek merchant vessels, manufacturing, and trade. Although the field is relatively new, it has already yielded much new data and promises great things for the future.

The Debate about the Ancient Greek Economy

As stated above, the ancient Greek economy has been the subject of a long-running debate that continues to this day. Briefly stated, the debate began in the late nineteenth century and revolved around the issue of whether the economy was “primitive” or “modern.” These were a poor choice of terms with which to conceptualize the ancient Greek economy and are to a great extent responsible for the intractability of the debate. These terms are clearly normative in character so that essentially the argument was about whether the ancient Greek economy was like our “modern” economy, which was never carefully defined, but apparently assumed to be a free enterprise, capitalistic one with interconnected price-making markets. In addition, confusion arose over whether the ancient Greek economy was like a modern economy in quantity (scale) or quality (its organizing principles). Lastly, such terms clearly attempt to characterize the ancient Greek economy as a whole and do not distinguish differences among regions or city-states of Greece, time periods, or sectors of the economy (agriculture, banking, long distance trade, etc.).

Seeing extensive trade and use of money in Greece from the fifth century B.C. onward, the modernists extrapolated the existence of a market economy in Classical Greece. On the other hand, seeing traditional Greek social and political values that disdained the productive, impersonal, and industrial nature of modern market economies, the primitivists downplayed the existence of extensive trade and the use of money in the economy. Neither primitivists nor modernists could conceive of the existence of extensive trade and the use of money unless the ancient Greek economy was organized according to market principles. Moreover, neither side in the debate could call activities “economic” unless such activities were productive and aimed at growth.

Historical methods were also a factor in the debate. Traditional ancient historians who relied on philology and archaeology tended to side with the modernist interpretation, whereas historians who employed new methods drawn from sociology and anthropology tended to hold to the primitivist view. For example, Michael Rostovtzeff assembled a wealth of archaeological data to argue that the scale of the ancient Greek economy in the Hellenistic period was so great that it could not be considered primitive. On the other hand, Johannes Hasebroek used sociological methods developed by Max Weber to argue that the ancient Greek citizen was a homo politicus (“political man”) and not a homo economicus (“economic man”) – he disdained economic activities and subordinated them to traditional political interests.

A turning point in the debate came with the work of Karl Polanyi who drew on anthropological methods to argue that economies need not be organized according to the independent and self-regulating institutions of a market system. He distinguished between “substantivist” and “formalist” economic analysis. The latter, which is typical of economic analysis today, is appropriate only for market economies. Market economies operate independently of non-economic institutions and their most characteristic feature is that prices are set according to an aggregate derived from the impersonal forces of supply and demand among a group of interconnected markets. But material goods may be produced, exchanged, and valued by means other than market institutions. Such means may be tied to non-economic social and political institutions, including gift exchange or state-controlled redistribution and price-setting. Hence, other tools of analysis, namely “substantivist” economics, must be employed to understand them. Polanyi concluded that ancient Greece did not have a developed market system until the Hellenistic period. Before that time, the economy of ancient Greece did not comprise an independent sphere of institutions, but rather was “embedded” in other social and political institutions. Thus, Polanyi opened the door through which scholars could begin to examine the ancient Greek economy free from the normative parameters originally imposed on the debate. Unfortunately, the grip of the old parameters has been very strong and the debate has never completely freed itself from their influence.

The Finley Model and Its Aftermath

At present the most widely accepted model of the ancient Greek economy is that which was first set forth by Moses Finley in 1973. This view owes much to the Weber-Hasebroek-Polanyi line of analysis and holds that the ancient Greek economy was fundamentally different from the market economy that predominates in most of the world today. Not only was the ancient Greek economy much smaller in scale than economies today, it also differed greatly in quality.

Although the ancient Greek word oikonomia is the root of our modern English word “economy,” the two words are not synonymous. Whereas today “economy” refers to a distinct sphere of human interactions involving the production, distribution, and consumption of goods and services, oikonomia meant “household management,” a familial activity that was subsumed or “embedded” in traditional social and political institutions. True, the Greeks produced and consumed goods, engaged in various forms of exchanges including long-distance trade, and developed monetary systems employing coinage, but they did not see such activities as being part of a distinct institution which we call the “economy.”

According to Finley’s model, the subordination of economic activities to social and political ones was a byproduct of a Greek value system that emphasized the wellbeing of the community over that of the individual. Economic activity was necessary in this system only in so far as the individual male citizen had to provide sustenance for himself and his family. This could be accomplished simply by farming a small plot of land. Beyond that, the male citizen was expected to devote himself to the wellbeing of the community by participating in the public religious, political, and military life of the polis.

On the other hand, ancient Greek values held in low esteem economic activities that were not subordinated to the traditional activities of managing the family farm and obtaining goods for necessary consumption. So-called banausic work, which included manufacturing, business, and trade (which were not tied to the land and the family farm), and what we would call “capitalism” (investing money to make more money) were considered to be incompatible with active participation in the affairs of the polis and even as unnatural and morally corrupting. A life on the land, farming to produce only so much as was needed for consumption and leaving enough leisure time for active participation in the public life of the polis, was the social ideal. Production and exchange were to be undertaken only for personal need, to help out friends, or to benefit the community as a whole. Such activities were not to be undertaken simply to make a profit and certainly not to obtain capital for future investment and economic growth.

Given the limits put on economic activity by traditional values and the absence of a modern conception of the economy, agriculture comprised the bulk of production and exchange. Most production, therefore, was carried out in the countryside and cities were net consumers rather than producers, living off the surplus of the countryside. With limited technology and no understanding of economies of scale, cities were not hubs of industry, and manufacturing existed only on a small scale. Cities were mainly places for people to live as well as religious and governmental centers. Their contribution to the economy was only to demand the surplus produce of the countryside, manufacture limited amounts of goods, and provide market places and ports of trade for the exchange of goods.

Since the bulk of economic wealth was produced from the land and banausic occupations were not esteemed, the elite of ancient Greek society were landowners who consequently dominated politics, even in democratic poleis like Athens. Such men had little interest in manufacturing, business, and trade and, like their society as a whole, did not consider the economy as a distinct sphere separate from social and political concerns. Thus, their official policies with regard to the economy were much different from that of modern states.

Modern states undertake policies with specifically economic goals, desiring in particular to make their national economy more productive, to expand or grow, thereby increasing the per capita wealth of the state. Ancient Greek city-states, on the other hand, had an interest and involvement in what we would call economic activities (trade, minting coins, production, etc.) that, like oikonomia on the household level, were consumptive in nature and fulfilled traditional social and political needs, not strictly economic ones.

Finley’s model also holds that there was neither a “market mentality” nor interconnected markets that could operate according to impersonal price-setting market mechanisms. Individual city-states certainly had “market places” (agorai), but such markets existed largely in isolation with minimal connections among them. Thus, prices were set according to local conditions and personal relationships rather than in accordance with the impersonal forces of supply and demand. This was so in part because of the Greek socio-political emphasis on self-sufficiency (autarkeia), but also because the physical environment and industry of the eastern Mediterranean tended to produce similar goods, so that there were few items that a city-state needed which could not be obtained from within its own boundaries.

Moreover, according to Finley’s model, the interests of Greek city-states in trade were likewise limited by traditional political concerns to the consumptive goals of ensuring the import of adequate supplies of “material wants,” such as food at reasonable prices for their citizens, and revenue which could be obtained from taxes on trade. The former goal could be fulfilled by making laws that required or provided incentives for traders to bring grain into the city. Laws such as these were merely extensions of traditional political policies, like conquest and plunder, but in which a less violent form of acquisition would now be undertaken. But though the means had changed, the ends were still political; there was no interest in the economy per se. The same holds true for the traditional need of city-states for revenue to pay for public projects, such as temple building and road maintenance. Here again, old and often violent methods of obtaining revenue were augmented through such things as taxes on trade.

Finley’s model has had a great impact on those who study the ancient Greek economy and is still widely accepted today. But although the general picture it presents of the ancient Greek economy has not been superceded, the model is not without flaws. It was inevitable that Finley would overstate his model, since it attempted to encompass the general character of the ancient Greek economy as a whole. Thus, the model makes little distinction between different regions or city-states of Greece, even though it is clear that the economies of Athens and Sparta, for example, were quite different in many respects. Finley also treats the various sectors of the economy (agriculture, labor, manufacturing, long-distance trade, banking, etc.) as if they were all governed equally in accordance with the general tenets of the model, despite the fact that, for example, there were significant differences between the values that applied in the landed economy and those that prevailed in overseas trade. Lastly, Finley’s model is synchronic and hardly acknowledges changes in both the quantity and the quality of the economy over time.

Some close examinations of the various sectors of the ancient Greek economy in different places and at different times have supported Finley’s model in its general outlines. But they have been matched by just as many studies that have revealed exceptions to the model. Thus, one recent trend in the scholarship has been to try to revise the Finley model in light of focused studies of particular sectors of the economy at specific times and places. Another trend has been simply to ignore the Finley model and bypass the old debate altogether by examining the ancient Greek economy in ways that make them irrelevant. Basically, given the quantity and the quality of the available evidence, our attempts to understand the ancient Greek economy are greatly affected by the perspective from which we approach it. We can choose to try to characterize the entire ancient Greek economy in general, to see the forest as it were, and debate whether it was more or less similar to our own. Or we can focus in on the trees and undertake narrow studies of particular sectors of the ancient Greek economy at specific times and places. Both approaches are useful and not necessarily mutually exclusive.

The Archaic Period

Finley’s model holds most true for the Archaic period (c. 776-480 B.C.) of ancient Greek history. Archaeological evidence and literary references from such works as the epic poems of Homer (the Iliad and the Odyssey), the Works and Days of Hesiod, and the works of the lyric poets attest to an economy that was generally small in scale and centered on household production and consumption. This is not surprising, since it was during the Archaic period that Greek civilization was re-emerging from a “Dark Age” of upheaval and forming its basic social, legal, political, and economic institutions. The fundamental political unit, the polis or independent city-state, appears at this time as do non-monarchal governments allowing for at least some degree of political participation among a broad swath of citizens.

For the most part, governments did not actively involve themselves in economic matters, except during the occasional political upheavals between “haves” and “have-nots” in which land might be confiscated from the few and redistributed to the many. Despite the fact that much of the Greek mainland is mountainous and the rivers generally small, there was enough fertile land and winter rainfall so that agriculture could account for the bulk of economic production, as it would in all civilizations before the modern industrial era. But unlike the large kingdoms of the Near East, Greece had a free-enterprise economy and most land was privately owned. Agriculture was carried out primarily on small family farms, though the Homeric epics indicate that there were also some larger estates controlled by the elite and worked with the help of free landless thetes whose labor would be needed especially at harvest time. Slaves existed, but not in such large numbers as to make the economy and society dependent on them.

As the populations of cities were fairly small, crafts and manufacturing were largely carried out within households for internal consumption. Both literary accounts and material remains, however, indicate that there was a certain amount of specialization. Artisans are referred to in the Homeric epics and the level of craftsmanship seen on items, such as metal work and painted pottery, was not likely to have been accomplished by non-specialists. Nevertheless, without large-scale manufacturing, safety from brigands on land and pirates at sea, and a monetary system employing coinage (until late in the sixth century), markets were necessarily small, devoted to local products, and certainly not interconnected into a price-setting market economy. Trade was limited mostly to local exchanges between the countryside and the urban center of city-states. Farmers might load up their surplus goods on a small ship to sell them in a neighboring city, as Hesiod attests, but long-distance sea-borne trade was devoted almost exclusively to luxury items, such as precious metals, jewelry, and finely-painted pottery. Moreover, gift exchanges in accordance with social traditions were as prominent if not more so than impersonal exchanges for profit. In general, those who engaged in banausic occupations on more than a part-time basis and sought profit from such activities were looked down on and did not hold positions of prestige in society or government.

Nevertheless, it cannot be denied that the scale of the Greek economy grew during the Archaic period and if not per capita, at least in proportion to the clear growth in population. Population increases and the desire for more land were the primary impetuses for a colonizing movement that established Greek poleis throughout the Mediterranean and Black Sea regions during this period. These new city-states put more land under cultivation, thereby providing the agriculture necessary to sustain the growing population. Moreover, archaeological evidence for the dispersal of Greek products (particularly pottery) over a wide area indicate that trade and manufacturing had also expanded greatly since the Dark Age. It is probably no coincidence that the end of the Archaic period witnessed for the first time a divergence between the designs of merchant vessels and warships, a distinction that would become permanent. Also, after the invention of coinage in Asia Minor in the early sixth century B.C., even though various other forms of money and barter continued to be employed throughout the course of ancient Greek history, the Greeks were quick to adopt coinage and it became the predominant means of exchange from the end of the sixth century onward. The aforementioned economic trends are traced in an important recent book by David Tandy, who argues that they had a fundamental impact on the development of the social and political organization and values of the Archaic polis.

Key Economic Sectors of the Classical Period

During the Classical period of ancient Greek history (480-323 B.C.), continued increases in population as well as political developments influenced various sectors of the economy to the extent that one can see a growing number of deviations from the Finley model. Evidence concerning the economy also becomes more abundant and informative. Thus, a more detailed description of the economy during the Classical period is possible and more attention to the distinctions between its various sectors is also desirable.

In light of the cautionary statements made earlier in this article about overgeneralization, it is important to note that great variation existed among the regions and city-states of the ancient Greek world, especially during the Classical period. Athens and Sparta are famous examples of two almost polar opposites in their social and political organizations and this is no less true with regard to their economic institutions. Given, however, the fact that Athens is the best documented and most studied place in ancient Greek history, the various sectors of the ancient Greek economy during the Classical period will be discussed primarily as they existed in Athens, despite the fact that it was in many ways exceptional. Significant variations from the Athenian example will be noted, however, as will some recent trends in scholarship.

Public and Private Economic Sectors

It is first necessary to distinguish between the public and private sectors of the economy. Throughout most of ancient Greek history before the Hellenistic period, a free enterprise economy with private property and limited government intervention predominated. This places Greece in sharp contrast to most other ancient civilizations, in which governmental or religious institutions tended to dominate the economy. The main economic concerns of the governments of the Greek city-states were to maintain harmony within the private economy (make laws, adjudicate disputes, and protect private property rights), make sure that food was available to their citizenries at reasonable prices, and obtain revenue from economic activities (through taxes) to pay for government expenses.

Athens had numerous laws to protect private property rights and had officials and law courts to enforce them. In addition, there were officials who oversaw such things as weights, measures, and coinage to make sure that people were not cheated in the market place. Athens also had laws to ensure an adequate supply of grain for its citizens, such as a law against the export of grain and laws to encourage traders to import grain. Athens even had agreements with other states in which the latter gave favorable treatment to traders bound for Athens with grain.

On the other hand, Athens did not tax its citizens directly except in cases of state emergencies (eisphorai) and in requiring the wealthiest citizens to perform public services (liturgies). Most taxes were indirect: market taxes, port taxes, import-export taxes, and taxes on foreigners who took up long-term residence in Athens. Taxes were collected by companies of private tax farmers who bid on contracts issued by the state. In addition to taxes, Athens obtained revenue from leases of publicly owned lands and mines. Revenue was necessary for various government expenditures, including administrative costs, public festivals, and maintenance of widows and orphans of soldiers who died in battle as well as building ships’ hulls for the navy, walls for the city, and temples for the gods. Such state expenditures could have a significant impact on the economy, as is clear from the large quantities of money and labor that appear in the inscribed accounts of the building projects on the Athenian acropolis.

Although the Finley model is right in many respects with regard to the limited interest and involvement of the state in the economy, one recent trend has been to show through carefully focused examinations of specific phenomena that Finley pressed his case too far. For example, Finley drew too sharp a distinction between the interests of non-citizen (and, therefore, non-landowning) traders and the landed citizens who dominated Athenian government. It is true that the latter might not have exactly the same economic interests as the former, but the interests of the two were nevertheless complementary, for how could Athens get the grain imports it required without making it in the interest of traders to bring it to Athens?. Moreover, it has been argued that the policies of Athens with regard to its coinage betray a state interest in the export of at least one locally produced commodity (namely silver), something completely discounted by the Finley model.

But again, Finley was probably right to argue that during the Archaic and Classical periods the vast majority of economic activity was left untouched by government and carried out by private individuals. On the other hand, by the Classical period a self-sufficient household economy was an ideal that was becoming increasingly difficult to maintain as the various sectors of economic activity became more specialized, more impersonal, and more profit oriented as well.

Land

As in the Archaic period, the most important economic sector was still tied to the land and the majority of agriculture continued to be carried out on the subsistence level by numerous small family farms, even though the distribution of land among the population was far from equal. Primary crops were grains, mostly barley but also some wheat, which were usually sown on a two-year fallowing cycle. Olives and grapes were also widely produced throughout Greece on land unsuitable for grains. Animal husbandry focused on sheep and goats, which could be moved from their winter lowland pasturage to the moister and cooler mountainous regions during the hot summer months. Cattle, horses, and donkeys, though less numerous, were also significant. While usually sufficient to support the population of ancient Greece, unpredictable rainfall made agriculture precarious and there is much evidence for periodic crop failures, shortages, and famines. Consequently, competition for fertile land was a hallmark of Greek history and the cause of much social and political strife within and between city-states.

One recent trend in the study of ancient Greek agriculture is the use of ethnoarchaeology, which attempts to understand the ancient economy through comparative data from better-documented modern peasant economies. In general, studies employing this method have supported the prevailing view of subsistence agriculture in ancient Greece. But caution is necessary, since there have been changes in the physical environment of and settlement patterns in Greece over time that can skew comparative analyses. Ethnoarchaeology has also been used to show that Greek farmers in both ancient and modern times have had to be flexible in their responses to wide variations in local topographical and climatic conditions and, thus, varied their crops and fallowing regimes to a significant degree. Rational exploitation of fluctuations in production brought on by such variations might have been the means by which some farmers were able to obtain enough wealth to rise above their peers and become members of a landed elite and this might point to a productive mentality at odds with the Finley model.

Metals were another important landed resource of Greece and so mining occupied an important place in the economy. Ancient Greeks typically used bronze and iron tools and weapons. There is little evidence that copper, the principal metal in bronze, was ever mined in abundance on mainland Greece. It had to be imported from the island of Cyprus, where it existed in large quantities, and other more distant regions. Tin, the other metal in bronze, was also rare in Greece and had to be imported from as far away as Britain. Iron is relatively plentiful throughout Greece and there is archaeological evidence of iron mining; however, literary references to it are few and so we know little about the process.

Precious metals were used in jewelry, art, and coinage. Athens had an abundance of silver and we know much about its mining industry from surviving inscriptions of government mine leases to private entrepreneurs. The mines were extremely productive, providing Athens with an income of 200 talents per year for twelve years from 338 B.C. onward. One talent was the equivalent of around nine year’s worth of wages for single skilled laborer working five days a week, 52 weeks a year, according to the wage rates we know from 377 B.C. Though productive in silver, ancient Greece was not as rich in gold, which was found primarily in Thrace and on the islands of Thasos and Siphnos.

Recent scholarship continues to focus on the silver mines of Athens, drawing not only on the inscribed mine leases, but also on extensive archaeological investigation of the mines themselves. They tend to indicate that, contrary to the Finley model, mining in Athens was specialized enough and extensive enough to constitute an “industry” in the modern sense of the word and one geared toward growth. In a study of mine-leasing records Kirsty Shipton has shown that the elite of Athens preferred mines leases, with their potential for greater profits, to land leases. Thus, the traditional preference of the elite for the consumptive acquisition of land and disdain for productive investments for profit postulated by the Finley model might be a characteristic feature of the ancient Greek world as a whole, but it does not entirely hold for Athens in the Classical period.

Stone for building and sculpture was another valuable natural resource of Greece. Limestone was available in abundance and fine marble could be found in Athens on the slopes of Mount Pentelikos and on the island of Paros. The former was used in building the Parthenon and the other structures of the Athenian acropolis while the latter was often used for the most famous ancient Greek free-standing and relief sculptures.

Labor

It is notoriously difficult to estimate the population of Athens or any other Greek city-state in ancient times. Generally accepted figures for Athens at the height of its power and prosperity in 431 B.C., though, are in the range of approximately 305,000 people, of which perhaps 160,000 were citizens (40,000 male, 40,000 female, 80,000 children), 25,000 were free resident foreigners (metics), and 120,000 were slaves. Athens was the largest polis and the populations of most city-states were probably much smaller. Citizens, metics, and slaves all performed labor in the economy. In addition, many city-states included forms of dependent labor somewhere in between slave and free.

As stated above, much of the agriculture of ancient Greece was carried out by small farmers who were exclusively free citizens, since non-citizens were barred from owning land. But although being a farmer was the social ideal, good land was scarce in Greece and it is estimated that in Athens about a quarter of the male citizens did not own land and had to take up other occupations for their livelihoods. Such occupations existed in the manufacturing, service, retail, and trade sectors. These “business” occupations were not only socially disesteemed, but they also tended to be small scale. Wage earning was very much looked down upon, since working for another person was thought of as an impingement on freedom and akin to slavery. Thus, free men doing the same work side by side with metics and slaves on the Acropolis building projects earned the same wages. Yet wages appear to have been adequate to make a living. In Athens the typical wage for a skilled laborer was one drachma per day at the end of the fifth century and two and a half drachmai in 377. In the fifth century a Greek soldier on campaign received a ration of 1 choinix of wheat per day. The price of wheat in Athens at the end of the fifth century was 3 drachmai per medimnos. There are 48 choinices in a medimnos. Thus, one drachma could buy enough food for 16 days for one person, four days for a family of four.

One thing that made up for the limited number of free citizens who were willing or had to become businessmen or wage earners was the existence of metics, foreign-born, free non-citizens who took up residence in a city-state. It is estimated that Athens had about 25,000 metics at its height and since they were barred from owning land, they engaged in banausic occupations that tended to be looked down upon by the free citizenry. The economic opportunities afforded by such occupations in Athens and other port cities where they were particularly abundant must have been significant. They attracted metics despite the fact that metics had to pay a special poll tax and serve in the military even though they could not own land or participate in politics and had to have a citizen represent them in legal matters. This is confirmed by the numerous metics in Athens who became wealthy and whose names we know, such as the bankers Pasion and Phormion and the shield-maker Cephalus, the father of the orator, Lysias.

Foreign-born, free non-citizen transients known as xenoi also played an important role in the ancient Greek economy, since it is apparent that many, though certainly not all, those who carried out long-distance trade were such men. Like metics, they too were subject to special taxes, but few rights.

Slaves comprised an undeniably large part of the labor force of ancient Greece. In fact, it is fair to say, as Finley did, that ancient Greece was a “slave dependent society.” There were so many slaves; they were so essential to the economy; and they became so thoroughly embedded into the every day life and values of the society that without slavery, ancient Greek civilization could not have existed in the manner it did. In Classical Athens it has been estimated that there were around 120,000 slaves. Thus, slaves comprised over a third of the total population and outnumbered adult male citizens by three to one.

The slaves of Athens were chattel, that is the private property of their owners, and had few, if any, rights. The demand for them was high as they performed almost every kind of work imaginable from agricultural labor to mining labor to shop assistants to domestic labor even to serving as the police force and secretaries for the government in Athens. About the only thing slaves did not normally do was military service, except in emergencies, when they did that too.

Slaves were supplied by a variety of sources. Many were war captives. Some were enslaved for failure to pay debts, though this was outlawed in Athens in the early sixth century B.C. Some were foundlings, abandoned children rescued and reared in return for their labor as slaves. Of course, the children of slaves would also be slaves. In addition, there was an extensive and regular slave trade that trafficked in people who had become slaves by all the means mentioned previously.

In part because of the diverse means by which slaves were supplied, there was no particular race that was singled out for enslavement. Anyone could become a slave if unfortunate enough, including Greeks. It does appear, however, that a large percentage of slaves in Greece originated in the Black Sea and Danubian regions. In most cases they were probably captives from internecine tribal wars and sold to slave traders who shipped them to various parts of the Greek world.

The treatment of chattel slaves varied, depending on the whims of individual slave owners and the types of jobs done by the slaves. Slaves who worked in the silver mines of Athens, for example, worked in dangerous conditions in large numbers (as many as 10,000 at a time) and had virtually no contact with their owners that could result in human bonds of affection (they were usually leased out). On the other hand, slaves who worked in households assisting the matron of the family in her household tasks were probably treated much better as a rule. Their labor was less strenuous and since they worked in close proximity with their owners’ families, at least some human bonds of affection were likely to form between them and their owners. Some slaves even lived on their own and ran their owners’ businesses largely unsupervised.

One aspect of ancient Greek slavery that is often cited as evidence for it being more “humane” than other slavery regimes is manumission. There is enough evidence for slaves being freed to make us believe that manumission was not uncommon and many slaves could probably hope for freedom, even if most of them never actually obtained it. But manumission was quite self-serving for slave owners, since it made slaves much less likely to risk rebellion in the hope that they might some day be given their freedom. As it turns out, there were only two noteworthy large-scale rebellions of chattel slaves in the history of ancient Greece. Moreover, inscriptions from the religious sanctuary of Delphi from the Hellenistic period show that slaves almost always had to compensate their owners for their freedom, either in the form of cash or some other valuable commodity, like their own children, who would also be slaves of the master and eventually replace their aging parents with young labor. So it is a dubious matter to say that the manumission of slaves is a testament to the humanity of ancient Greek slavery. Individual slaves might benefit, but the practice allowed the institution of slavery to flourish throughout Greek history.

When slaves were freed, they did not become citizens, but rather metics. Yet even though they still could not possess the full rights and privileges of citizens, they could prosper economically, just as other metics could. In Athens the prominent and wealthy metic banker, Pasion, for example, was originally a slave who assisted his masters Antisthenes and Archestratus. By the terms of his will, Pasion in turn manumitted his own slave assistant, Phormion, and not only left him his bank, but also stipulated that Phormion marry his widow and manage the inheritance of his son, Apollodorus.

In addition to chattel slavery, there were other forms of dependent labor in the ancient Greek world. One famous example is helotry, known principally from the city-state of Sparta. The helots of Sparta were agricultural serfs, indigenous peoples conquered by the Spartans and forced to work their former lands for their Spartan overlords. They were not the private property of the individual Spartans, who were allotted the former lands of the helots, and could not be bought or sold. But their mobility was completely restricted; they had very few rights; they had to turn over a large percentage of their produce to their Spartan overlords; and they were routinely terrorized as a matter Spartan state policy. The one drawback for the Spartans of using helot labor, though, was that the helots, living still on their former homeland and having a sense of ethnic unity, were prone to revolt and did so on several occasions at great cost both to themselves and to the Spartans.

With the exception of Sparta and a few other city-states, women in ancient Greece, free citizens or otherwise, could not control land. They could own it in name only and were not allowed to dispose of it as they saw fit, but were legally obliged to yield control of it to a male representative. Since land was the chief source of wealth in the ancient Greek economy, the inability to control it severely constrained the economic role of women. The ideal was for women to get married, have children, raise them, and carry out the indoor tasks of the household, such as cooking and textile production.

Of course, not all women could live up to such an ideal at all times. Women undoubtedly helped outdoors on the farm during harvest time. Those of poorer families might by necessity have to sell in the market place what little surplus produce their households could generate or perform service-oriented jobs for others for wages. Female metics and slaves did similar work and also comprised the majority of the prostitutes of Athens, which was a legal profession. Prostitutes, though, ranged from lowly brothel workers to high-class call girls, the latter of which, such as Aspasia, sometimes obtained prominence in Athenian society.

Despite their disdain for certain types of work and their dependence on slave labor, most Greeks had to work hard to make a living. Yet they did not develop a “work ethic” and did not consider work to be ennobling, but simply necessary. Hence, if one could afford a slave to do one’s work, then one bought a slave. The availability of cheap slaves was a major factor in Greek attitudes toward labor and may also explain why there were no labor unions in Greece. For how could wage-earners pressure their employers for better conditions or wages when the latter could always replace them with slaves if necessary?

Manufacturing

Slavery also affected manufacturing in ancient Greece. It is often said that technology and industrial organization stagnated in ancient Greece because the availability of cheap slave labor obviated any imminent need to improve them. If one wanted to produce more, one merely bought a few more slaves. Thus, most manufactured products were literally hand-made with simple tools. There were no assembly lines and no big factories. The largest manufacturing establishment we know of was a shield factory owned by the metic, Cephalus, the father of the orator, Lysias, which employed 120 slaves. Most manufacturing was carried out in small shops or within households. Hence, in comparison with agriculture, manufacturing comprised a small part of the ancient Greek economy.

Nevertheless, documentary and archaeological evidence attests to a wide variety of manufactured items and some in large quantities. Among the most extensively manufactured products was clay pottery, the remains of which archaeologists have found scattered throughout the Mediterranean world. The wheel-made pots took many shapes appropriate for their contents and use, which ranged from hydria for water to amphorae for olive oil and wine to pithoi for grain to aryballoi for perfume to kylikes for drinking cups. Finely painted vases were also manufactured for decorative and ritual purposes. The finest, most numerous, and widely dispersed of these were made in Corinth, Aegina, Athens, and Rhodes.

Literary accounts as well as scenes from painted vases make it clear that the ancient Greeks left textile production largely to women. The principal material they worked with was wool, but linen from flax was also common. Textiles were used in turn in the manufacture of clothing. Again, women were largely responsible for this and it was done primarily within the household. Textiles were often dyed, the most desirable dye being a reddish purple color derived from aquatic murex snails. These had to be harvested, mashed into a jelly, and then boiled to extract the dye.

Although the trees of Greece were for the most part not particularly good for woodworking materials and especially not for large-scale building, the Greeks did use wood extensively and, therefore, had to import good timber from places like Macedonia, the Black Sea region, and Asia Minor. Given the countless islands of Greece, it is not surprising that shipbuilding was an important sector of manufacturing. Vessels were needed for commercial as well as military uses. In Athens the state obtained the necessary timber for the ships (and oars) of its navy, but it contracted with carpenters who worked under the supervision of state officials to craft the timber into the warships that were so vital for Athenian power in the Classical period.

Buildings ranged from private houses to monumental stone temples. The former tended to be rather humble, made of unbaked mud brick laid on a stone foundation and covered by a thatched or tiled roof. On the other hand, the great temples of ancient Greece required much organization, many resources, and incredible technical skill. As is evidenced by the extant accounts for the construction of the buildings of the Athenian acropolis, the work was normally contracted out in small units to private individuals who either worked alone or in charge of others to do anything from quarrying marble to transporting wooden beams to sculpting facades. The degree of specialization varied. In some cases we see contractors carrying out a variety of tasks, whereas in others we see them specializing in only one.

Metal crafts were highly specialized. The Greeks smelted iron, but only in wrought form. They were unable to achieve furnace temperatures high enough to make pig iron and did not have the technical know-how to add carbon to the smelting process with enough precision to make steel with any consistency. Blacksmiths crafted body armor, shields, spears, swords, farm implements, and household utensils. Bronze casting reached the level of fine art in Classical Greece. Sculptors used the lost-wax method, in which they first made a clay model of a statue, then covered the model with a layer of wax, which they then covered again with another layer of clay. Small openings were left in the outer clay covering, into which molten bronze was poured. The hot molten bronze melted the wax, which then flowed out another opening in the outer clay covering. After the bronze cooled the outer clay covering was broken off, leaving the cast bronze.

It is clear that in the Classical period in Athens there was much specialization in manufacturing and that the quantity of goods was far greater than that which could have been produced in a purely “household economy.” At the same time, however, the scale and organization of manufacturing was a far cry from those of industrialized civilizations of recent centuries.

Markets and Prices

According to the Finley model, there was no network of interconnected markets to form a price-setting market economy in the ancient Greek world. Although this is true for the most part, like other aspects of the Finley model, the case is overstated. There do, for example, appear to be connections between markets for some commodities, such as grain and probably precious metals as well. In the case of grain, it can be shown that supply and demand over long-distances did have an impact on prices and traders sought to take advantage of the lag-time between price adjustments in order to make a profit. Obviously, though, this is nothing like the modern world in which the price of crude oil changes instantly worldwide in reaction to a change in supply from one of the major producers. For the most part in ancient Greece, prices were set in accordance with local conditions, personal relationships, and haggling.

Government price-fixing was limited. Although there is evidence that Athens, for example, fixed the retail price of bread in proportion to the wholesale price of grain, there is no evidence that it fixed the price of the latter. Even in times of severe grain shortages, Athens was content to allow traders bringing grain to Athens to charge the going rate. In such cases, the state alleviated the crises for its citizens by paying the going rate for the grain and then reselling it to its citizenry at a lower price.

Despite the general absence of interconnected markets, however, there were market places. Each city-state had at least one market place (agora) in the heart of city and a port market (emporion) as well, if it had a good harbor. The agora was a place of much activity, serving not only as a center of economic exchange, but also as a political, religious, and social center. In the agora one could find law courts, offices for public officials, and coin mints as well as shrines and temples. In fact, agorai were considered sacred places to the degree that they were marked off with boundary stones across which no one who had the stain of religious pollution could cross. Within the agora economic activities were segregated by types of goods, services, and labor so that there were specific places where one could regularly find the fishmongers, blacksmiths, money changers, and so on.

Ancient Greek city-states regulated the economic activities that took place in their markets to a certain degree. Public officials oversaw weights, measures, scales, and coinage to limit and resolve disputes in exchanges as well as to ensure state interests. For example, Athens employed a publicly owned slave to check coins and guard against counterfeiters. In this way, Athens protected the integrity of its own coinage as well as the interests of buyers and sellers. The state ensured the affordability of key goods, such as bread, by fixing its retail prices relative to the wholesale price of grain. Various activities in the market place were also taxed by the state. Port and transit taxes affected exchanges in emporia like the Piraeus of Athens and xenoi had to pay a special tax for engaging in transactions in the agora.

Trade

Local trade between countryside and urban center and on the retail level within cities continued largely as it had in the Archaic period. But rather than producers transporting and selling their surplus goods directly in city markets, specialized retailers (kapeloi) who profited as middlemen between producers and consumers became more the norm. Local trade goods could be probably transported over short distances on land. But long-distance trade over land was difficult and time consuming, given the mountainous topography of Greece and the fact that the fragmented city-states of Greece never built an extensive system of paved roads that tied them together in the manner of the Roman Empire. Most “roads” between cities were single track and suitable only for pack animals, though there were some on which wheeled carts could be pulled by oxen, donkeys, or mules.

Long-distance trade was primarily done by merchant ships over the waters of the Aegean, Mediterranean, and Black Seas. Evidence from the Attic Orators indicates that during the Classical period overseas trade developed into a specialized and important sector of the economy. Trade was carried out by private individuals and not organized by the state. A typical trading venture involved a non-citizen trader (emporos) who either owned his own ship or rented space on a ship owned by another (naukleros). In most cases described by the orators, the traders typically borrowed money from a citizen lender to finance the venture. There is some dispute among scholars whether such loans constituted productive borrowing on the part of the traders or were just a type of insurance, because the loans would only have to be repaid if the ship and cargo reached their contracted destinations. From the perspective of the lenders, the loans were certainly productive, since they charged interest at a rate much higher than that which applied to loans on the security of land, anywhere from 12 to 30%.

Marine archaeology has recently increased our knowledge of merchant vessels and their cargoes tenfold by the discovery of several ancient shipwrecks. The ships appear to have been generally small by modern standards. In 1968 the well-preserved wreck of a merchant ship from c. 300 B.C. was found off the coast of Kyrenia in Cyprus. Being only 35 feet long and 15 feet wide with a capacity of 30 tons, it is probably the kind of merchant vessel that made short hauls and kept within sight of the coastline. But other shipwrecks as well as evidence from the Attic Orators seem to indicate that the typical capacity of merchant vessels that traveled over long distances on the open sea was some 80 tons.

Many of the goods traded throughout ancient Greek history were luxury goods, manufactured items, such as jewelry and finely painted vases, as well as specialty agricultural products like fine wine and honey. Necessities were also traded, however, for without long-distance trade, many Greek cities would not have been able to obtain metals, timber, wine, and slaves. One of the most extensively traded necessity items was grain, which came to Athens typically from the Black Sea region, Thrace, and Egypt. According to the orator, Demosthenes, Athens imported some 400,000 medimnoi (approximately 4,800,000 liters) of grain per year in the late fourth century from the Crimean kingdom of the Bosporus alone.

Chiefly because of the need for certain imports, such as grain and timber, and for revenue drawn from taxes on trade, many cities did have an interest and involvement in overseas trade. Athens in particular made laws that prohibited the export of grain produced in Athens and required that loans on trading ventures be for cargoes of grain and that ships bringing grain into the Piraeus sell one-third of it on the spot and the remaining two-thirds in Athens. Athens also instituted special courts to expedite the adjudication of disputes involving traders, granted honors and privileges to anyone who performed extraordinary services relating to trade for the city, and made agreements with other states to obtain favorable conditions for those bringing grain to Athens.

In all the aforementioned examples Athens’ chief interest was to supply itself with imported grain so that its citizenry could obtain food at reasonable prices. Athens was not particularly concerned with helping traders and enhancing their profits per se or in obtaining a trade surplus or to protect home produced goods against imported foreign ones. To this extent, then, the Finley model holds true, even if it is clear that the Athenian state recognized that its interests were complementary with those of foreign traders and, thus, had to help them in order to help itself.

Moreover, it does appear that Athens had some concern about its home produced products as well, at least in the case of silver. Xenophon, an Athenian writer from the fourth century, noted that Athens could always be assured of traders bringing their goods into Athens, because traders knew they could always get a valuable trade commodity, namely silver in the form of Athenian coinage, in exchange. To ensure the demand for its silver, Athens took great care to maintain the reputation of its coinage for high quality and to associate that reputation with a familiar design that went unchanged for several centuries. Such a policy attests to a state interest in production and exports, at least in this sector of the economy.

Athens was also motivated to encourage trade to obtain revenue from taxes. Both transient and resident foreigner traders had to pay poll taxes in Athens that citizens did not. Athens also had various port, transit, and market taxes that would benefit by increased trade, including a two percent tax on all imports and exports.

Money and Banking

With few exceptions (Sparta being the most famous), the Greeks of the Classical period had a thoroughly monetized economy employing coinage whose value was based on precious metals, principally silver. The value of the coinage was commensurate to the value of the precious metal it contained with a small mark-up, since the value of the metal was guaranteed by its issuing state. The tie of the Greek monetary system to the supply of precious metals limited the ability of governments to influence their economies through the manipulation of their money supplies. However, we do know of cases when states debased their coinages for such purposes.

Ancient Greek coins are similar in appearance to modern ones. But like other manufactured products in ancient Greece, they were made by hand. A blank metal circular “flan” was placed on an obverse die that rested on an anvil and then was struck with a hammer bearing a reverse die. The nature of the process naturally produced coins in which the image was often poorly centered on the flan. Nevertheless, the issuing authority, usually a government, was clear as the designs or “types” of the coins expressed an image symbolic of the issuing authority and were often augmented by a “legend” of letters that spelled out an abbreviation of the issuing authority’s name.

Coinage was issued in a variety of denominations and weight standards by various city-states. The chief weight standards of the Classical period were the Attic, Aeginetan, Euboiic, and Corinthian. The basis of the Attic standard was the silver tetradrachm of 17.2 grams, which retained the design of the head of Athena on the obverse and her symbolic owl on the reverse throughout the Classical period. It was the most widely circulated coinage during this time and appears in large numbers of hoards found throughout the Greek world and beyond. This was due not only to the far reach of Athenian trade, but also to Athenian imperialism. Athens used its coinage to pay for its military operations abroad and even issued the “Standards Decree,” which for a few decades of the fifth century required the many cities of the Aegean Sea under its control to discontinue their local types and use only Athenian coinage. The local coinage had to be turned in, melted down, and re-struck as Athenian coinage for a fee. Unlike that of Athens, most city-states’ coinages circulated only locally. When such local issues were taken abroad, they were probably treated as bullion, as can be inferred from test-cuts often found on them.

A recent debate among scholars concerns the degree to which coinage was an economic or a political phenomenon in the ancient Greek world. Finley’s model, of course, holds that coinage had strictly political functions. Finley believed that coinage was merely a tool designed to reinforce and project a city-state’s civic identity. States minted coins not to facilitate economic transactions among their citizens, but merely for state purposes so that, for example, it had a convenient medium through which to collect taxes or make state expenditures. Athens’ “Standards Decree” was not undertaken for economic gain, but for political purposes to facilitate tribute payments and to show Athens’ subjects who was boss.

But here again Finley goes too far. Although the type of a Greek coin certainly expressed political symbols and could, therefore, serve as a political tool, such symbolism was largely lost on people who used the coins in places like Egypt, the Levant, Asia Minor, and Mesopotamia, where hoards of Greek coins have been found in abundance. The fact that they could use the coins independently of their original political context (and for what else besides economic purposes then?) is a good reason to believe that the Greeks could do so as well. Moreover, as Henry Kim has recently argued, the minting of large quantities of small-denomination coinage from the outset in Greece shows that the state did have a concern for the wide use of coinage at the micro-level by common people in day-to-day economic exchanges, not just for large-scale public and political purposes.

Nevertheless, one of the most active areas of research on ancient Greek money and coinage today concerns its representational nature and place within sectors other than the economy, including religion, society, and politics. Both Leslie Kurke and Sitta von Reden have argued that the advent of a monetized economy employing coinage need not have undermined traditional values or led to a disembedding of the economy. Rather, the symbolic aspect of coinage could be manipulated to reinforce traditional social and religious practices that were non-economic in the modern sense. In her analysis of the poetry of Pindar, for example, Kurke argues that the poet re-embedded money within traditional social values, thereby allowing the landed aristocratic elite to embrace money and its potential for de-personalizing social interactions without discarding the old social ties and values that bolstered their privileged place in society. Although von Reden believes that the use of coinage arose within an embedded economic context and, therefore, did not have to be re-embedded, she has argued that coinage and other forms of money did not have an intrinsically economic use or meaning in ancient Greece, but rather multiple meanings that were determined by the context within which they were used, which could be social, religious, or political as well as economic.

Given that the ancient Greeks did have a monetized economy, it is not surprising that they also developed banking and credit institutions. It is generally agreed that at the very least, bankers, who were metics as a rule (note Pasion and Phormion above), performed various functions from money-changing to securing deposits in cash and other assets. The question whether bankers lent out money deposited by others at interest, however, is the subject of some debate. Paul Millett, a student of Finley, not surprisingly argues in his book, Lending and Borrowing in Ancient Athens, that bankers did not loan out other peoples money for interest and he formulates a model in which lending and borrowing were predominantly done for consumptive purposes and, therefore, thoroughly embedded in traditional social relations. In contrast, Edward Cohen’s book, Athenian Economy and Society: A Banking Perspective, employs a close philological analysis of the evidence in his assertion that productive lending and borrowing, divorced from concerns for personal relationships, were common in Classical Athens and that bankers did indeed lend out deposited money at interest. Although Millett may be right that much of the lending and borrowing in Athens was for consumptive purposes, particularly those secured by landed property, it is hard to deny that the evidence of productive lending and borrowing from banking practices, numerous maritime loans, and even temple loans in the Classical period constitute something more than just exceptions to the rule.

Economic Changes during the Hellenistic Period

In large part owing to the Near Eastern conquests of Alexander the Great, but also because of social and economic changes that had already been occurring during the Classical period, the economy of the Hellenistic period (323-30 B.C.) grew immensely in scale. The Finley model is probably right in general to hold that the essentially consumptive nature of the economy in the traditional Greek homelands changed little during this time. But it is clear that there were significant innovations in some places and sectors on account of the collision and fusion of Greek notions of the economy with those of the newly won lands of the Near East. Thus, we see greatly increased government control over the economy, as evidenced most strikingly in the surviving papyrus records of the Greek Ptolemaic dynasty that ruled Egypt.

A large percentage of the land and, therefore, agriculture, was controlled by the Greek royal dynasties that ran the Hellenistic kingdoms. Peasants whose status lay somewhere between slave and free not only worked the king’s lands, but were also often required to labor on other royal projects. The Ptolemies of Egypt dominated agriculture to such an extent that they instituted an official planting schedule for various crops and even loaned out the tools used by farmers on state-owned lands. Almost all produce from these estates was turned over to the government and redistributed for sale to the population. Some crown lands, however, were assigned to government officials or soldiers and though technically still the property of the state, they often came to be treated as de facto private property.

The Ptolemaic state also involved itself in various manufacturing processes, such as olive oil production. Not only were the olives cultivated on state-controlled lands by peasant labor, but the oil was extracted by contracted labor and sold at the retail level by licensed dealers at fixed prices. However, the state probably had no intention to improve efficiency or to provide better quality olive oil at lower prices to its citizens. The Ptolemies instituted a tax on imported olive oil of 50 percent that was essentially a protective tariff. The goal of the government seems to have been to protect the profits of its state-run business.

Yet for all its interference in the economy, the Ptolemaic government did not assemble a state merchant fleet and instead contracted with private traders to transport grain to and from public granaries. It also left it up to private traders to import the few goods that Egypt needed from abroad, including various metals, timber, horses, and elephants, all of which were essential for the Ptolemies’ standing mercenary army and fleet. But although the Ptolemies also exported wheat and papyrus, for the most part, the economy of Egypt was a closed one. Unlike the other Hellenistic kingdoms, Egypt minted coins on a lighter standard than the Attic one universalized by Alexander the Great. Moreover, in 285, the Ptolemies barred the use of foreign coins in Egypt and required them to be turned in to government officials, melted down, and re-minted as Egyptian coinage for a fee. Although Egypt controlled gold mines in Nubia, it did not produce silver and had chronic shortages of silver coins for daily transactions. Thus, many exchanges were performed in kind rather than in cash, even though value was always expressed in cash equivalents.

Despite its chronic shortages of silver coins and its closed coinage system, Egypt still had a coin-based economy largely because of Alexander the Great, who flooded the economies of the eastern Mediterranean with coins and monetized some places in the Near East for the first time. Along with coinage, Greek banking practices also made their way into these areas. Thus, the general scale of economic activities increased as large kingdoms of the Near East and the Greek mainland and islands became more interconnected. Although this was offset to some degree by political instability and warfare during the Hellenistic period, in general we do see economic activity on a larger scale and increased specialization as some places, such as Tyre and Sidon in Phoenicia, became renowned for particular products, in this case purple dye and glassware respectively. Moreover, thousands of amphorae whose handles were stamped with names of issuing magistrates have been found that, if nothing else, reveal a very high volume of pottery production and may also allow scholars some day to reconstruct in more detail other aspects of the economy, such as agricultural production, land tenure, and trade patterns.

The Hellenistic period is known for its technological innovation and some new technologies did have an impact on the economy. Archimedes’ screw-like pump was used to remove water from mines and to improve irrigation for agriculture. In addition, new varieties of wheat and the increased use of iron ploughs improved yield while better grape and olive presses facilitated wine and oil production. Unfortunately, some of the most impressive technological innovations of the Hellenistic period, such as Heron’s steam engine, were never applied in any significant way. Thus, most production continued to be low tech and labor intensive.

All in all, then, although the scale of the economy increased during the Hellenistic period, consumption still seems to have been the primary goal. Technology was not applied as much as it might have been to increase production. States were much more involved in economic affairs, both in controlling production and in collecting taxes on countless items and activities, but mostly just to extract as much revenue from them as possible. The revenue was spent in turn in royal benefactions (euergetism), but mostly only for ostentatious display that threw money into non-productive sink holes.

Conclusion

The foregoing survey shows that the Finley model provides a reasonable, if simplified, general picture of the ancient Greek economy. Overall, the ancient Greek economy was very different from our own. It was much smaller in scale and differed in quality as well, since it generally lacked the productive growth mentality and the interconnected markets that are so characteristic of most of the world economy today. With regard to the details, however, recent studies are showing that the Finley model does at least need to be revised. As more research is done, it may even be necessary to replace the Finley model altogether in favor of one that fits the evidence better. In the meantime, though, we can still use Finley’s model as a basic description while being careful to acknowledge the contradictory evidence provided by recent studies and continuing to investigate the various sectors of the ancient Greek economy at various times and places.

Select Annotated Bibliography

The bibliography on the ancient Greek economy is enormous and it would be counterproductive to list all works here. Therefore, I list only a selection of the essential primary and secondary works, preferring more recent works in English for the sake of students. Further and more specialized works may be found within the bibliographies of the works listed below.

Primary Sources

Literary Works

Many of the literary works listed below are available in the Loeb Classical Library and Penguin Classics series in English translations.

Aristotle, Politics (particularly 1.1258b37-1.1259a5)

In his study of the polis, Aristotle devotes this section to modes of acquisition and criticizes what we would call “capitalism.”

[Aristotle], Oikonomikos (Economics – “household management”)

Book 2 shows how states obtain revenues. The methods are largely coercive, not productive, such as cornering the market in grain during a famine, debasing coinage, etc.

Demosthenes and [Demosthenes], speeches

Especially useful are several speeches for lawsuits involving economic matters.

Hesiod, Works and Days

A poem containing advice and attitudes about farming in the early Archaic period, c 700 B.C.

Homer, Iliad and Odyssey

Two great epic poems with much information about economic practices at the outset of the Archaic period, c. 800-750 B.C.

Isokrates, speeches (especially Trapezitikos and On the Peace)

On the Peace argues for economic activity rather than warfare as a means of obtaining revenues for the state. Trapezitikos concerns a lawsuit involving trade and banking.

Lysias, speeches (especially On the Grain Retailers)

Plato, Republic and Laws

These two dialogues concern the organization of the polis. Although the Republic represents the ideal city-state and the Laws presents a more realistic picture, both betray an elitist disdain for non-landed economic activities.

Xenophon, Oikonomikos (Economics – “household management”) and Poroi (Revenues)

Two extended essays on household management and the means by which the state may obtain more revenues, respectively. The latter is one of the most important documents concerning state interests in trade and mining.

[Xenophon] “The Old Oligarch” (or “Constitution of the Athenians”)

This is an anonymous mid-fifth-century B.C. political pamphlet that argues that the life-blood of Athenian democracy is the economic exploitation of the so-called “allies” of Athens.

Collections of Primary Sources: Documentary, Epigraphic, and Material

Burstein, S.M. The Hellenistic Age from the Battle of Ipsos to the Death of Kleopatra VII. Cambridge: Cambridge University Press, 1985.

A collection of documents, including inscriptions, translated into English.

Fornara, C.W. From Archaic Times to the End of the Peloponnesian War, second edition. Cambridge: Cambridge University Press, 1983.

A collection of documents, including inscriptions, translated into English.

Harding, P. From the End of the Peloponnesian War to the Battle of Ipsus. Cambridge: Cambridge University Press, 1985.

A collection of documents, including inscriptions, translated into English.

Meijer, F. and O. van Nijf. Trade, Transport, and Society in the Ancient World. New York and London: Routledge, 1992.

A sourcebook of documents translated into English.

Thompson, M., O. Mørkholm, and C.M. Kraay, editors. An Inventory of Greek Coin Hoards. New York: American Numismatic Society, 1973.

Essential listing of all discovered hoards of ancient Greek coins up to 1973.

Wiedemann, T. Greek and Roman Slavery. Baltimore: Johns Hopkins University Press, 1981.

Excellent collection of documents on Greek and Roman slavery translated into English.

Secondary Sources

General Works and Surveys

Austin, M.M. and P. Vidal-Naquet. Economic and Social History of Ancient Greece. Berkeley: University of California Press, 1977.

Provides both a survey of the subject and excerpts from the primary sources of evidence. It adheres to the Finley model in general.

Austin, M.M. 1988. “Greek Trade, Industry, and Labor.” In Civilization of the Ancient Mediterranean: Greece and Rome, volume 2, edited by M. Grant and R. Kitzinger, 723-51. New York: Scribner’s.

Often insightful overview of the ancient Greek economy primarily from the Finley perspective.

Cambridge Ancient History (CAH), second edition. Several volumes. Cambridge: Cambridge University Press.

The standard encyclopedia of ancient history with entries on various subjects, including the ancient Greek economy at different periods, by leading scholars.

Finley, M. I. The Ancient Economy, second edition. Berkeley: University of California Press. 1985. (Now available in an “Updated Edition” with a foreword by Ian Morris. Berkeley: University of California Press, 1999.)

The most influential book on the subject since its initial publication in 1973. It takes a synchronic approach to the Greek and Roman economies and argues that they cannot be analyzed or understood in terms appropriate for modern economic analysis. In general, the ancient Greek economy was “embedded” in “non-economic” social and political values and institutions. Heavily influenced by Weber, Hasebroek, and Polanyi.

Hasebroek, J. Trade and Politics in Ancient Greece. Translated by L.M. Fraser and D.C. MacGregor. Reprint. London, 1933. (Originally published as Staat und Handel im alten Griechenland [Tübingen, 1928].)

A classic that greatly influenced Finley.

Hopper, R.J. Trade and Industry in Classical Greece. London: Thames and Hudson, 1979.

Survey of various aspects of the ancient Greek economy in the Classical period.

Humphreys, S.C. “Economy and Society in Classical Athens.” Annali della Scuola Normale Superiore di Pisa 39 (1970):1-26.

An important survey that also argues for focused studies on individual sectors of the ancient Greek economy at particular times and places.

Lowry, S.T. “Recent Literature on Ancient Greek Economic Thought.” Journal of Economic Literature 17 (1979): 65-86.

Michell, H. The Economics of Ancient Greece, second edition. Cambridge: W. Heffer, 1963.

Slightly dated, but useful survey.

Morris, Ian. “The Ancient Economy Twenty Years after The Ancient Economy.” Classical Philology 89 (1994): 351-366.

Excellent survey of new approaches to the study of the ancient Greek and Roman economies since Finley, to whose model the author is generally sympathetic.

Oxford Classical Dictionary (OCD), third revised edition, edited by S. Hornblower and A. Spawforth. Oxford: Oxford University Press, 2003.

Includes brief entries by leading scholars on various aspects of the ancient Greek economy.

Pearson, H.W. “The Secular Debate on Economic Primitivism.” In Trade and Market in the Early Empires, edited by K. Polanyi, C.M. Arensberg, and H.W. Pearson, 3-11. Glencoe, IL: Free Press, 1957.

A concise statement of the influential ideas of Karl Polyani about the ancient Greek economy.

Rostovtzeff, M. The Social and Economic History of the Hellenistic World. Oxford: Oxford University Press, 1941.

Monumental “modernist” approach to a wealth of archaeological evidence about the economy during the Hellenistic period.

Samuel, A.E. From Athens to Alexandria: Hellenism and Social Goals in Ptolemaic Egypt. Lovanii, 1983.

A good survey with an important discussion of ancient Greek attitudes toward economic growth.

Starr, C.G. The Economic and Social Growth of Early Greece, 800-500 B.C. Oxford: Oxford University Press, 1977.

Modernist survey.

Weber, M. Economy and Society. Translated by E. Fischoff et al. Edited by G. Roth and C.

Wittich. Berkeley: University of California Press, 1968. (Originally published as Wirtschaft und Gesellschaft [Tübingen, 1956].)

A classic that greatly influenced Hasebroek and Finley.

Collections

Archibald, Z.H., J. Davies, and G. Oliver. Hellenistic Economies. London: Routledge, 2001.

Collection of articles that take the study of the economy in the Hellenistic period beyond Rostovtzeff.

Cartledge, P., E.E. Cohen, and L. Foxhall. Money, Labour, and Land: Approaches to the Economies of Ancient Greece. London: Routledge, 2002.

Finley, M.I. Economy and Society in Ancient Greece. Edited by B.D. Shaw and R.P. Saller. New York: Viking, 1982.

Garnsey, P. Non-Slave Labour in the Graeco-Roman World. Cambridge: Cambridge Philological Society, 1980.

Garnsey, P., K. Hopkins, and C.R. Whittaker. Trade in the Ancient Economy. Berkeley: University of California Press, 1983.

A collection of articles along Finley lines.

Mattingly, D.J. and J. Salmon. Economies beyond Agriculture in the Classical World. London: Routledge, 2001.

A collection of articles that focuses on the non-agrarian sectors of the ancient Greek and Roman economies with a mind to revising the Finley model.

Meadows, A. and K. Shipton. Money and Its Uses in the Ancient Greek World. Oxford: Oxford University Press, 2001.

A collection of articles on the use of money and coinage in ancient Greece.

Parkins, H. and C. Smith. Trade, Traders, and the Ancient City. London: Routledge, 1998.

Scheidel, W. and S. von Reden. The Ancient Economy. London: Routledge, 2002.

An excellent collection of some of the most important articles on the ancient Greek and Roman economy from the last 30 years with a helpful introduction, notes, and glossary. Especially useful is their “Guide to Further Reading,” pp. 272-278.

Specialized Works

Brock, R. “The Labour of Women in Classical Athens.” Classical Quarterly 44 (1994): 336-346.

Burke, E.M. “The Economy of Athens in the Classical Era: Some Adjustments to the Primitivist Model.” Transactions of the American Philological Association 122 (1992): 199-226.

A good argument that attempts to adjust the Finley model.

Carradice, I. and M. Price. Coinage in the Greek World. London: Seaby, 1988.

A brief, accessible survey.

Cohen, E. E. Athenian Economy and Society: A Banking Perspective. Princeton: Princeton University Press, 1992.

A close philological study of the evidence for banking practices in Classical Athens that argues for a disembedded economy with productive credit transactions.

Engen, D.T. Athenian Trade Policy, 415-307 B.C.: Honors and Privileges for Trade-Related Services. Ph.D. dissertation, UCLA, 1996. (This dissertation is currently being revised for publication as a book tentatively entitled, Honor and Profit: Athenian Trade Policy, 415-307 B.C.E.)

Examines Athenian state honors for those performing services relating to trade and argues for a revision of some aspects of the Finley model.

Engen, D.T. “Trade, Traders, and the Economy of Athens in the Fourth Century B.C.E.” In Prehistory and History: Ethnicity, Class, and Political Economy, edited by David W. Tandy, 179-202. Montreal: Black Rose, 2001.

Argues for the diversity of those responsible for trade involving Classical Athens.

Engen, D.T. “Ancient Greenbacks: Athenian Owls, the Law of Nikophon, and the Ancient Greek Economy.” Historia, forthcoming(a).

Argues that the numismatic policies of Athens may indicate a state interest in exports.

­­­­­Engen, D.T. “Seeing the Forest for the Trees of the Ancient Economy.” Ancient History Bulletin, forthcoming(b).

A review article of Meadows and Shipton, 2001, and Scheidel and von Reden, 2002, that argues for the mutual compatibility of broad and detailed studies of the ancient Greek and Roman economies.

Finley, M.I. The World of Odysseus, revised edition. Harmondsworth: Penguin, 1965.

A brief and highly readable survey of the early Archaic period.

Fisher, N.R.E. Slavery in Classical Greece. London: Bristol Classical Press, 1993.

A brief survey.

Garlan, Y. Slavery in Ancient Greece, revised edition. Ithaca: Cornell University Press, 1988.

The standard survey of slavery in ancient Greece.

Garnsey, P. Famine and Food Supply in the Greco-Roman World. Cambridge: Cambridge University Press, 1988.

Examines private and public strategies to ensure food supplies.

Isager, S. and J.E. Skydsgaard. Ancient Greek Agriculture: An Introduction. London: Routledge, 1992.

Kim, H.S. “Archaic Coinage as Evidence for the Use of Money.” In Money and Its Uses in the Ancient Greek World, edited by A. Meadows and K. Shipton, 7-21. Oxford: Oxford University Press, 2001.

Argues that the existence of large quantities of small-denomination coins from the earliest of coinage in ancient Greece is evidence of the economic use of coinage.

Kraay, C.M. Archaic and Classical Greek Coins. Berkeley: University of California Press, 1976.

Long the standard survey of ancient Greek coinage.

Kurke, L. The Traffic in Praise: Pindar and the Poetics of Social Economy. Ithaca: Cornell University Press, 1991.

Takes the new cultural history approach to analyzing the poetry of Pindar and how it represents money within the social and political value system of ancient Greece.

Kurke, L. Coins, Bodies, Games, and Gold: The Politics of Meaning in Archaic Greece, 1999. Princeton: Princeton University Press.

Millett, P. Lending and Borrowing in Ancient Athens. Cambridge: Cambridge University Press, 1991.

Reinforces the Finley model by arguing that lending and borrowing was primarily for consumptive purposes and embedded among traditional communal values in Athens.

Osborne, R. Classical Landscape with Figures: The Ancient Greek City and Its Countryside. London: George Philip, 1987.

Explores rural production and exchange within political and religious contexts.

Sallares, R. The Ecology of the Ancient Greek World. London: Duckworth, 1991.

Interdisciplinary analysis of a massive amount of information on a wide variety of aspects of the ecology of ancient Greece.

Schaps, David M. The Invention of Coinage and the Monetization of Ancient Greece. Ann Arbor: University of Michigan Press, 2004.

Shipton, K. “Money and the Elite in Classical Athens.” In Money and Its Uses in the Ancient Greek World, edited by A. Meadows and K. Shipton, 129-44. Oxford: Oxford University Press, 2001.

Argues that the elite of Athens preferred leasing high-profit silver mines to public land.

Tandy, D. Warriors into Traders: The Power of the Market in Early Greece. Berkeley: University of California Press, 1997.

Traces developments in the economy of the Archaic period and argues that they had an important impact in the formation of the basic social and political institutions of the polis.

Von Reden, S. Exchange in Ancient Greece. London: Duckworth. 1995.

Employs the methods of new cultural history to argue that exchange in ancient Greece was thoroughly embedded in non-economic social, religious, and political institutions and practices.

Von Reden, S. “Money, Law, and Exchange: Coinage in the Greek Polis.” Journal of Hellenic Studies 107 (1997): 154-176.

A cultural historical study of the representational uses of coinage in the social, political, and economic life of ancient Greece at the advent of the use of coinage.

White, K.D. Greek and Roman Technology. London: Thames and Hudson, 1984.

1 Portions of this article have or will appear in other forms in Engen, 1996, Engen, 2001, Engen, Forthcoming(a), and Engen, Forthcoming(b).

2 This article will not discuss the preceding Mycenaean period (c. 1700-1100 B.C.) and “Dark Age” (c. 1100-776 B.C.E.). During the Mycenaean period, the ancient Greeks had primarily a Near Eastern style palace-controlled, redistributive economy, but this crumbled on account of violent disruptions and population movements, leaving Greece largely in the “dark” and the economy depressed for most of the next 300 years.

Citation: Engen, Darel. “The Economy of Ancient Greece”. EH.Net Encyclopedia, edited by Robert Whaples. July 31, 2004. URL http://eh.net/encyclopedia/the-economy-of-ancient-greece/

Money in the Medieval English Economy: 973-1489

Author(s):Bolton, Jim
Reviewer(s):Munro, John

Published by EH.Net (June 2013)

Jim Bolton, Money in the Medieval English Economy: 973-1489.? Manchester: Manchester University Press, 2012.? xv + 317 pp.? $35 (paperback), ISBN: 978-0-7190-5040-4.

Reviewed for EH.Net by John Munro, Department of Economics, University of Toronto.

Embracing a most impressive range of research, cogently organized, penetrating in its analysis of all aspects of the medieval English economy related to money, and elegant in its prose, Bolton?s Money in the Medieval English Economy: 973-1489 is one of the most important books published in English medieval economic history during the past two decades.? Indeed, I do not know of any other comparable and equally comprehensive study of English medieval monetary history. The book is cast into two unequal parts.? Part I (pp. 3-86) is theoretical, beginning with the Fisher Identity and the relationships between money, population, and prices in the medieval economy, followed by uniformly excellent chapters on the roles of money in a developing market economy: in terms of? bullion supplies, coinage, and credit instruments.? The longer Part II (pp.? 87-309), analyses the changes in coinage and other forms of money, and then in more detail the changing roles of money in the actual economy, sector by sector, over three distinct eras: 973-1158, 1158-1351, and 1351-1489.
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This section thus begins with the monetary reforms of Edgar of Mercia, first to be crowned and remain king of England, in 973; and it ends with Henry VII?s issue of the first gold sovereign coin, representing the value of one pound sterling, in October 1489 (the shilling came later).? A far more logical end-point would have been the onset of Henry VIII?s Great Debasement in 1542-44, as in Martin Allen?s recent, magisterial Mints and Money in Medieval England (2012), to which Bolton acknowledges his great indebtedness. Manchester University Press?s severe space limitations evidently prevented Bolton from extending his study beyond 1489, and also from including his 25-page bibliography, now available only online (URL on p.? 310).
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Beyond the general objectives just outlined, Bolton?s book has two other major goals.? The first is achieved with great success: to prove, in chapters 6 and 7, that England did not acquire a fully-developed money economy until the era from 1158 to 1351, i.e., up to the onset of the Black Death.? In his fully justifiable view, a money economy essentially meant a well-functioning market economy, one that required not only a considerable expansion in the circulating coinage but also rapid population growth and the concomitant development of towns and villages with urban and regional fairs, the establishment of effective forms of royal taxation, the development of the requisite commercial, financial and legal institutions, especially those needed for various forms of credit; and for the latter, the spread of both literacy and numeracy.? He demonstrates that, while population growth from 1086 (Domesday Book) to 1300 at least doubled and may have tripled (from 2.0/2.5 million to 5.0/6.0 million), the money supply expanded by 27 to 40 fold: from ?25,000/?37,500 to more than ?1.0 million ? most of that from the 1220s, though attributing the major increases in coinage to the Central European silver mining booms of ca. 1160 to ca. 1230.? He cites Mayhew?s estimates (2004) that per capita GDP rose from ?0.18 in 1086 to ?0.78 in 1300 (and to ?1.52 in 1470: Table 9.2, p. 295). Depending on sources,? methodology, and population estimates, he contends that per capita supplies of silver coin rose from 3.2d/6.0d in 1042-1066 to 65.5d/101.3d in 1310 (Table 2.2, pp. 25-27).? Thereafter, the introduction of gold coinages (from 1343-51) created significant problems for both our estimates of money supplies and the well-being of the English domestic economy, especially since the English government consistently and seriously overvalued gold to the severe detriment of silver coinage supplies (in effect, England exported silver to acquire gold), given that silver coin was the chief mechanism for transacting domestic trade, wages, and other such payments.
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That problem, however, leads us to his second goal, for which he is much less successful: to refute the current ?monetarist? views that later fourteenth- and fifteenth-century England experienced severe monetary scarcities (whether seen in terms of stocks or flows), most especially in silver coin supplies.? A disclaimer is in order: I am evidently one of those so-called monetarists under attack.? The tenor of the book becomes most evident in his statement (p. 75) that: ?It [the money supply] was not the sole determining factor [of price levels] as monetarist historians argue.?? I do not know of anyone who now does so.? That negative viewpoint may be deduced from his lengthy discussion, in his opening chapter, of the well-known and much abused Fisher Identity: M.V = P.T.? Thus, if one accepts the view that changes in V (velocity) and T (volume of transactions) cancel each other out, one might deduce that the price level P ? usually measured by the Consumer Price Index (CPI) ? is directly and proportionately a function of changes in M.?? But, even if some historians still use this antiquated formula, few if any economists do so, preferring? the modernized version in the form M.V = P.y (the occasionally-used equation M.V = GNP is unacceptable as an analytical tool). In this version, y, representing real net national income (or output), thus replaces the completely unmeasurable T; and V thus becomes the income velocity of high-powered money (however defined). Most economists now prefer even more to use the Cambridge ?cash balances? approach, with a demand-for-money equation: M = k.P.y, in which M, P, and y remain the same, while k represents that proportion of national income that the public collectively chooses to hold in non-earning real cash balances, according to determinants of liquidity preference, so that k is often sensitive to changes in interest rates.? Mathematically k is the reciprocal of V.

As may be deduced from either (revised) formula, an expansion in M may have been offset by some decline in V (with a lesser need to economize on coin use) and thus by some increase in k, and also by an increase in y:? especially if an increased M led to a decline in interest rates (with no changes in liquidity preference) and to a greater stimulus for investment and trade, so that P would have risen less than proportionately, if at all.? But the converse was not necessarily true, for the various forces contracting monetary stocks may also have constricted monetary flows: i.e., also reducing V and thereby increasing k.? These revised formulae clearly demonstrate that any analysis of changes in the price levels requires a detailed understanding of changes in both money stocks and money flows (especially liquidity preferences) but also changes in the real economy, as represented by y:? i.e., changes in population, technology, economic organizations, real capital investments, etc.? In my recent publications involving coinage debasements, I have sought to prove that in late-medieval and early-modern Europe, increases in M never resulted in proportional increases in the price level, even during Henry VIII?s Great Debasement (Munro 2011, 2012a, 2012b). None of this constitutes the supposed ?monetarism? that Bolton portrays, except to indicate that ?money matters? (a proposition that Bolton admittedly never denies).
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Bolton?s specific goal, in the final two chapters, 8 and 9, is to prove that increases in the supply and use of various credit instruments fully offset the two supposed ?bullion famines?: those from ca. 1375 to ca. 1420 and from ca. 1440 to ca. 1480.? Indeed, his focus on the expanding role of credit allows him fully to accept the nature and extent of these two ?bullion famines? as portrayed by so-called ?monetarists,? in contrast to the published views of the current group of ?anti-monetarist? historians (such as Sussman 1990, 1993, 1995, 1998, 2003).? He thus accepts the three prevailing theses to explain that coinage scarcity: a severe decline in outputs of European silver and gold mines; the disruptions in the trans-Saharan African gold trade to the Mediterranean; and increased bullion outflows to the East, particularly for purchases of Asian spices and other luxury goods.? But this third thesis seems inconsistent with his view that late-medieval England always enjoyed a surplus in its balance of payments with the continent. I myself am far from convinced that any payments deficit with the East, so chronic from Roman times, became proportionately worse during the later-Middle Ages, especially because the specific evidence adduced in favor of this thesis (from Ashtor 1971, 1983) comes from the 1490s, when the Central European mining boom, having commenced in the 1460s (peaking in the 1530s) was supplying vast new quantities of silver to promote increased Venetian trade with the Levant (Munro 2003a).? The more significant of these factors, therefore, may have been the reduction in European inflows of African gold, from the 1370s: a trade that the Portuguese later sought to restore, from the 1440s, and with considerable success from the 1470s.
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What Bolton neglects to consider as a major factor in these ?bullion famines? is changes in Cambridge k (and thus in V): i.e., an increased liquidity preference in the form of hoarding ? not by burying precious metals in the ground but by converting them into plate and jewelry, readily changeable back to coin, in times of war-induced taxation.? The one (other) historian who has given such emphasis to changes in liquidity preference and hoarding (?thesaurisation?), as a reaction to general economic pessimism and risk aversion in times of chronic plague, other forms of depopulation, economic contraction and periodic depressions, is Peter Spufford (1988); but Spufford still places greater emphasis on the roles of the European mining slump and bullion outflows to the East.

Bolton obviously does not wish to entertain the Spufford thesis ? which necessarily implies a decrease in the income velocity of money ? because he seeks to show that an increased use of credit fully offset the bullion famines by increasing either V or M or both.? In this debate, on the role of credit, his chief opponent is Pamela Nightingale (1990, 1997, 2004, 2010), and indeed the two have continued this debate is recent issues of the British Numismatic Journal (2011, 2013).? I continue to support Nightingale.? That might seem obvious for one accused of being a ?monetarist,? so that readers of this review must judge for themselves by a careful examination of their respective publications (and the others cited here).? In my view, Bolton fails to refute or contradict Nightingale?s two major propositions.? The first, and most important, is that the supply of credit remained essentially a function of the coined money supply, because most (if not all) credit transactions depended on the use of coin, and especially on the creditor?s confidence of being fully repaid in coin:? so that credit generally expanded with increases in the coined money supply and conversely contracted with any decline in the supply or circulation of coined money, often disproportionately.? On this important issue, Nightingale receives full support from many other monetary historians: Peter Spufford (1988), Nicholas Mayhew (1974, 1987, 1995, 2004), Reinhold Mueller (1984: for Italy), Frank Spooner (1972: for France), and most recently (if less strongly) Chris Briggs (for England: 2008, 2009).? Nightingale?s? second proposition, also endorsed by most of these historians, is that the wide variety of credit instruments used in late-medieval England were not yet negotiable, and thus, while affecting velocity (V), they did could not and did not add to the money supply (M) ? though the differences between the two may here be moot.? To be sure, many of these credit instruments were, and long had been, assignable ? transferable to third parties.? But as Eric Kerridge (1988) ? whom Bolton cites for other purposes ? long ago stressed: ?transferability is not negotiability,? a point that Michael Postan had also earlier made (1928, 1930), despite Bolton?s assertions to the contrary. The fully developed legal institutions required for secure negotiability of commercial bills, in protecting the full rights of assignees and bearers to claim and enforce payment on redemption, were first established in the Habsburg Netherlands by imperial legislation enacted in 1537 and 1541, as Herman Van der Wee has clearly demonstrated (1963, 1967, 1975, 2000),? Not until the early seventeenth century do we find comparable full-fledged English acceptance of negotiability and no national legislation until the Promissory Notes Act of 3 & 4 Anne c. 8 (1704).
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Equally essential for full negotiability was the legal acceptance of discounting, a problem related to the issue of usury, given short shrift not only by Bolton but also by Nightingale and most other financial historians (except, notably, De Roover 1967, also in Kirschner 1974).? To be sure, we may fairly assume that many medieval creditors did disguise interest in a loan by increasing the amount stipulated for repayment; but disguising such implicit interest was far more difficult to achieve in discounting (selling a bill for less than face value before redemption).? As Van der Wee has also demonstrated for the Habsburg Netherlands, discounting, along with multiple transfers by endorsement, spread only after an imperial ordinance, issued in October 1540, explicitly permitted interest payments on commercial loans up to 12%.? He also demonstrated that nominal interest rates in the Netherlands dropped sharply in this era, by almost half: from 20.5% in 1511-15 to 11.0% in 1566-70; real rates dropped even further with the inflation of the Price Revolution.? Similarly, according Norman Jones (1989), an even sharper fall in English interest rates on commercial bills took place after Elizabeth I, in 1571, restored her father?s abortive statute (1545) permitting interest payments up to 10%: from about 30% in the 1560s to 10% by 1600, with further declines in the seventeenth century, to about 5% (see also Homer and Sylla 1997, pp. 89-143; Munro 2012c).? Bolton has also not taken account of the significantly increased restrictions on the use of credit in fifteenth century England, from both anti-usury and bullionist legislation, and also the prevailing social attitudes that remained deeply imbedded until the early Stuart era. As Lawrence Stone (1965) so aptly commented on Elizabethan England: ?Money will never become freely or cheaply available in a society which nourishes a strong moral prejudice against the taking of any interest at all. ? If usury on any terms, however reasonable, is thought to be a discreditable business, men will tend to shun it, and the few who practise it will demand a high return for being generally regarded as moral lepers.?
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If we were to accept, instead, Bolton?s contentions that an increased use of credit fully offset the coined money scarcity evident in the two bullion famines, then we would then be hard pressed to explain the sharp deflation of these two periods.? Bolton evidently sees no need to do so, for his book, most surprisingly, contains no tables or graphs on the price level (CPI); he provides only one price graph, on relative prices for just wheat and oxen, from 1160 to 1350 (p. 183).? Demographic decline cannot itself explain the periods of deflation (apart from its possible impact on V).? For note that the Black Death (1348-49), quickly reducing population by about 40%, was followed by three decades of rampant inflation: when the Phelps Brown and Hopkins CPI (1451-75 = 100) rose from a quinquennial mean of 85.53 in 1341-45 to one of 136.40 in 1366-70, falling slightly to 127.35 in 1371-75.? Thereafter, the CPI fell to a low of 103.70 in 1421-25, for an overall decline of 23.94%, despite the 16.67% silver debasement of 1411-12.? Rising thereafter to a peak of 124.22 in 1436-40, the CPI fell by 25.40 % during the second ?bullion famine?: to a nadir of 92.667 in 1476-80, again despite the 20.0% silver debasement of 1464.? Recent alternative historical consumer prices indexes ? those by Robert Allen (2001) and Gregory Clark (2004, 2007), neither cited by Bolton ? show the same patterns of inflation and deflation demonstrated in the older Phelps Brown and Hopkins Composite Price index (1956, 1981: revised by Munro).
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Bolton consequently does not take full account of the negative economic consequences of deflation.? If all relative prices had moved together in tandem, with proportional changes, then neither deflation nor inflation would matter. But price changes have never done so, especially factor prices in relation to commodity prices.? In general, deflation raises the burden of factor costs for borrowers and entrepreneurs, while inflation reduces that cost burden.? The most familiar such phenomenon is downward nominal-wage stickiness ? so widespread throughout Western Europe, unaffected by demographic factors, and persistent in England itself until 1920 (Smith 1776/1937; Phelps Brown and Hopkins 1955/1981; Munro 2003b).? But nominal interest rates and land rents were generally also sticky in this era, especially when defined by contracts, though for much shorter periods.? Thus all these real factor costs rose, at least in the short run, with the fall in the Consumer Price Index. If creditors were more reluctant to lend in times of monetary scarcity and depression, for fear of non-payment, debtors were also reluctant to borrow more in facing prospects of higher real costs in payments of both interest and the principal.? For both creditors and debtors that reluctance, in especially the mid fifteenth century, may have been due as much to the adverse circumstances of the commercial depressions that accompanied that bullion ?famine? and deflation (Hatcher 1996; Nightingale 1997; Bois 2000).
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A final problem, and one that pervades much of the book, concerns the proper distinctions between bullion, coinage, and moneys-of-account, and the closely related problem of coin debasements.? Bolton ought to have followed the model set forth long ago by Sir Albert Feavearyear (1931/1963), whose absence from the bibliography is astonishing.? By this model, silver and gold coins, bearing the official stamp of the ruler, generally circulate by tale (official face value), commanding an agio or premium over bullion.? That agio represents the sum of the minting costs of brassage (for the mint-master) and seigniorage (a tax for the ruler), added to the mint?s bullion price; but also, for the public, it represents their savings on transaction costs in not having to weigh the coins and assay their proper fineness.? As Douglass North (1984, 1985) has demonstrated, transaction costs are always subject to considerable scale economies: thus they are a major burden in small-scale, low-valued silver transactions in retail trade and wage payments, but far less so in very large volume, high-valued transactions, especially those involving gold in wholesale and foreign trade and major debt transactions.? Bolton is very ambiguous on whether coins circulated by weight or by tale, ignoring the scale economies of transactions, but seemingly supporting the former view (despite his evidence presented on pp. 120-21).?
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An increased tendency for coins to be accepted only by weight, in higher-valued transactions, arose when the quality of the circulating coinage inevitably deteriorated over the years and decades following a general recoinage: when its silver contents diminished through normal wear and tear, but especially when? the coinage became more and more corrupted by the nefarious practices of clipping, ?sweating? and counterfeiting ? none of which would? have been profitable had coins earlier circulated by weight. Such deterioration, the loss of public confidence, and growing refusals to accept coins by tale meant that all coins lost their former agio, with four consequences.? First, merchants, still accepting coins by tale, sought compensation for perceived silver losses by raising their prices; second, good, higher-weight coins were culled and hoarded or exported, often in exchange for foreign counterfeits (Gresham?s Law); and third, bullion ceased to flow to the mints, so that the king lost? his seigniorage revenues.? Fourth, the king consequently had no alternative but to debase his coinage to bring it in alignment with the current depreciated circulation, thereby restoring the agio and resuming the flow of bullion to the mints.? In Feavearyear?s view, this purely defensive reaction to coinage deterioration explains all English silver debasements before Henry VIII?s Great Debasement of 1542-52: in particular, the 10.00% silver reduction of 1351; the 16.66% reduction of 1411/12; the 20.00% reduction of 1464; and the 11.11% reduction of 1526 ? so that fine silver content of the penny fell from 1.332 g in 1279 to just 0.639 g in 1526.? Henry VIII?s Great Debasement was undertaken, however, for purely fiscal motives (as had long been the continental pattern): to augment seigniorage revenues. But the evidence on seigniorage rate changes indicates that such fiscal motives had also prevailed in Edward IV?s silver and gold debasements of 1464-65 (Munro 2011).
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None of this analysis or any credible explanation for debasement can be readily found in Bolton, who even denies that English kings debased their coinages before the Great Debasement, on the overly literal grounds that the sterling silver fineness (92.5%) was always maintained (except for the 1336 issue of 10 dwt halfpence = 83.33% silver halfpence).? Almost all monetary historians define debasement instead as the reduction of the quantity of fine silver or gold in the money-of-account unit (pence, pound). That was achieved by a diminution in fineness (adding more base metal), and/or by a reduction in weight ? but also, for gold coins, by an increase in their official exchange rates.? Thus Edward IV?s initial debasement of gold in August 1464 was achieved by increasing the value of the traditional, physically-unchanged gold noble, from 6s 8d to 8s 4d.? In this respect, I also regret the absence, for a book on money in the medieval economy, of tables on English mint outputs (except for one graph on the Calais mint), in both pounds sterling and kilograms of fine metals, with related details on specific coinage issues in terms of weight, fineness, and mint charges ? though much of that information can be found in both Christopher Challis (1992) and Martin Allen (2011, 2012). ???
Other readers may, however, place much less emphasis on the issues raised in this review; and some, suspecting an unwarranted ?monetarist? bias in this review, may well support Bolton?s views, especially on the role of credit in the late-medieval economy.? Indeed, I must stress the significant contributions that Bolton has made in this field, especially those based on his ongoing research on the Borromei bankers (Milan), and the roles of other Italian merchant-banking firms in both English foreign and domestic trade, i.e. in London. As I indicated at the outset of the review, this book is one of the most important published in English economic history in the past two decades, and one in which the virtues well outweigh the defects.? I recommend that you buy it; if so, get the online bibliography now, before it disappears from the web.

References:

Allen, Martin (2011), ?Silver Production and the Money Supply in England and Wales, 1086 – c. 1500,? Economic History Review, 64: 114-31.
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Allen, Martin (2012), Mints and Money in Medieval England. Cambridge and New York: Cambridge University Press.
??? ???
Allen, Robert (2001), ?The Great Divergence in European Wages and Prices from the Middle Ages to the First World War,? Explorations in Economic History, 38: 411-47.

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Bois, Guy (2000), La grande d?pression m?di?vale: XIVe – XVe si?cles: le pr?c?dent d?une crise syst?mique. Paris: Presses Universitaires de France.

Bolton, James (2011), ?Was There a ?Crisis of Credit? in Fifteenth-Century England?? British Numismatic Journal, 81: 146-64.

Briggs, Chris (2008), ?The Availability of Credit in the English Countryside, 1400-1480,? Agricultural History Review, 56: 1-24.

Briggs, Chris (2009), Credit and Village Society in Fourteenth-Century England. Oxford and New York: Oxford University Press.

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Feavearyear, Albert (1931/1963), The Pound Sterling: A History of English Money, 2nd rev. edn. by E. V. Morgan. Oxford: Clarendon Press, 1963.

Hatcher, John (1996), ?The Great Slump of the Mid-Fifteenth Century,? in Progress and Problems in Medieval England, ed. Richard Britnell and John Hatcher.? Cambridge and New York: Cambridge University Press, pp. 237-72.

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Jones, Norman (1989), God and the Moneylenders: Usury and Law in Early Modern England.? Oxford: Basil Blackwell.

Kerridge, Eric (1988), Trade and Banking in Early Modern England. Manchester, Manchester University Press.

Kirshner, Raymond (1974), ed., Business, Banking, and Economic Thought in Late Medieval and Early Modern Europe: Selected Studies of Raymond de Roover. Chicago, University of Chicago Press.

Mayhew, Nicholas (1974), ?Numismatic Evidence and Falling Prices in the Fourteenth Century,? Economic History Review, 2nd ser., 27:? 1-15.

Mayhew, Nicholas (1987), ?Money and Prices in England from Henry II to Edward III,? Agricultural History Review, 35: 121-32.

Mayhew, Nicholas (1995), ?Population, Money Supply, and the Velocity of Circulation in England, 1300-1700,? Economic History Review, 48: 238-57.

Mayhew, Nicholas (2004), ?Coinage and Money in England, 1086 – 1500,? in Medieval Money Matters, ed. Diana Wood. Oxford: Oxbow Books, pp. 72-86.

Mueller, Reinhold (1984), ??Chome l’ucciello di passegio?: la demande saisonni?re des esp?ces et le march? des changes ? Venise au moyen ?ge,? in ?tudes d’histoire mon?taire, XIIe-XIXe si?cles, ed. John Day.? Lille: Presses universitaires de Lille, pp. 195-220.

Munro, John (2003a), ?The Monetary Origins of the ?Price Revolution?:? South German Silver Mining, Merchant-Banking, and Venetian Commerce, 1470-1540,? in Global Connections and Monetary History, 1470-1800, ed. Dennis Flynn, Arturo Gir?ldez, and Richard von Glahn.? Aldershot and Brookfield, Vt: Ashgate Publishing, pp. 1-34.

Munro, John (2003b), ?Wage-Stickiness, Monetary Changes, and Real Incomes in Late-Medieval England and the Low Countries, 1300-1500:? Did Money Matter?? Research in Economic History, 21: 185-297.

Munro, John (2011), ?The Coinages and Monetary Policies of Henry VIII (r. 1509-47),? in The Collected Works of Erasmus: The Correspondence of Erasmus, Vol. 14:? Letters 1926 to 2081, A.D. 1528, trans. Charles Fantazzi and ed. James Estes.? Toronto: University of Toronto Press, pp. 423-76.

Munro, John (2012a), ?The Technology and Economics of Coinage Debasements in Medieval and Early Modern Europe: with Special Reference to the Low Countries and England,? in Money in the Pre-Industrial World: Bullion, Debasements and Coin Substitutes, ed. John Munro, Financial History Series no. 20. London: Pickering & Chatto Ltd., pp. 15-32, 185-89 (endnotes).

Munro, John (2012b), ?Coinage Debasements in Burgundian Flanders, 1384-1482: Monetary or Fiscal Policies?? in Comparative Perspectives on History and Historians: Essays in Memory of Bryce Lyon (1920-2007), ed. David Nicholas, James Murray, and Bernard Bacharach.? Medieval Institute Publications, University of Western Michigan: Kalamazoo, pp. 314-60.

Munro, John (2012c), ?Usury, Calvinism and Credit in Protestant England: From the Sixteenth Century to the Industrial Revolution,? in Religione e istituzioni religiose nell?economia europea, 1000 -1800/ Religion and Religious Institutions in the European Economy, 1000 -1800, ed. Francesco Ammannati. Florence: Firenze University Press, pp. 155-84.
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Munro, John, The Phelps Brown and Hopkins ?Basket of Consumables? Commodity Price Series and Craftsmen?s Wage Series, 1265-1700: Revised by John Munro, available online in Excel, at www.economics.utoronto.ca/munro5/ResearchData.html.

Nightingale, Pamela (1990), ?Monetary Contraction and Mercantile Credit in Later Medieval England,? Economic History Review, 43: 560-75.

Nightingale, Pamela (1997), ?England and the European Depression of the Mid-Fifteenth Century,? Journal of European Economic History, 26: 631-56.

Nightingale, Pamela (2004), ?Money and Credit in the Economy of Late Medieval England,? in Medieval Money Matters, ed. Diana Wood.? Oxford: Oxbow Books, pp. 51-71.

Nightingale, Pamela (2010), ?Gold, Credit, and Mortality:? Distinguishing Deflationary Pressures on the Late Medieval English Economy,? Economic History Review, 63: 1081-1104.

Nightingale, Pamela (2013), ?A Crisis of Credit in the Fifteenth Century – Or of Historical Interpretation?? British Numismatic Journal, 83 (forthcoming).

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North, Douglass (1985), ?Transaction Costs in History,? Journal of European Economic History, 14: 557-76.

Phelps Brown, E.H., and Hopkins, Sheila V. (1955), ?Seven Centuries of Building Wages,? Economica, 22 (87): 195-206; reprinted Phelps Brown and Hopkins (1981), A Perspective of Wages and Prices. London: Methuen, pp. 1-12

Phelps Brown, E. Henry; and Hopkins, Sheila V. (1956), ?Seven Centuries of the Prices of Consumables, Compared with Builders? Wage Rates,? Economica, 23 (92): 296-314: reprinted in Phelps Brown and Hopkins (1981), A Perspective of Wages and Prices.? London:? Methuen, pp. 13-39 (with price indexes not in the original).

Postan, Michael (1928), ?Credit in Medieval Trade,? Economic History Review, 1st ser., 1 (1928), 234-61, reprinted in Michael Postan (1973), Medieval Trade and Finance.? Cambridge: Cambridge University Press, pp. 1?27.

Postan, Michael (1930), ?Private Financial Instruments in Medieval England,? Vierteljahrschrift f?r Sozial- und Wirtschaftsgeschichte, 22 (1930), reprinted in Michael Postan (1973), Medieval Trade, pp. 28-64.

Smith, Adam (1776), An Inquiry into the Nature and Causes of the Wealth of Nations, ed. with introduction and notes by Edwin Cannan (1937), New York: Modern Library.

Spufford, Peter (1988), Money and Its Use in Medieval Europe, Cambridge: Cambridge University Press, pp. 339-62.

Spooner, Frank (1972), The International Economy and Monetary Movements in France, 1493-1725. Cambridge, MA: Harvard University Press.

Stone, Lawrence (1965), The Crisis of the Aristocracy, 1558-1641, Oxford: Clarendon Press; reissued 1979, with some corrections.

Sussman, Nathan (1990), ?Missing Bullion or Missing Documents: A Revision and Reappraisal of French Minting Statistics: 1385-1415,? Journal of European Economic History, 19:147 -62.

Sussman, Nathan (1995), ?Minting Trends in France and the Bullion Famine Hypothesis: Regional Evidence (1384-1415),? in Fra spezio e tempo: studi in onore di Luigi de Rosa, ed. I. Zili. Naples: Edizione scientifiche Italiane.

Sussman, Nathan (1998), ?The Late Medieval Bullion Famine Reconsidered,? Journal of Economic History, 58: 126-54.

Sussman, Nathan, and Zeria, Joseph (2003), ?Commodity Money Inflation: Theory and Evidence from France in 1350-1430,? Journal of Monetary Economics, 50: 1769-93.

Van der Wee, Herman (1967), ?Anvers et les innovations de la technique financi?re aux XVIe et XVIIe si?cles,? Annales: E.S.C., 22: 1067-89, republished as ?Antwerp and the New Financial Methods of the 16th and 17th Centuries,? in Van der Wee, Herman (1993), The Low Countries in the Early Modern World , trans. by Lizabeth Fackelman, Variorum Series: Aldershot, pp. 145-66.

Van der Wee, Herman (1975), ?Monetary, Credit, and Banking Systems,? in The Cambridge Economic History of Europe, Vol. V: The Economic Organization of Early Modern Europe, ed. E. E. Rich and Charles Wilson.? Cambridge: Cambridge University Press, pp. 290-393.

Van der Wee, Herman (2000), ?European Banking in the Middle Ages and Early Modern Period (476-1789),? in A History of European Banking, 2nd edn., ed. Herman Van der Wee and G. Kurgan-Van Hentenrijk,? Antwerp: Mercator, pp. 152-80.

John Munro is Professor Emeritus of Economics at the University of Toronto, specializing in the economic history of the late-medieval Low Countries and England, with a focus on money and textiles.? His recent publications in monetary history (2011 – 2012) are listed in the bibliography above; he has also recently published:? ?The Rise, Expansion, and Decline of the Italian Wool-Based Cloth Industries, 1100 -1730:? A Study in International Competition, Transaction Costs, and Comparative Advantage,? Studies in Medieval and Renaissance History, 3rd series, 9 (2012), 45-207.

Copyright (c) 2013 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 (administrator@eh.net). Published by EH.Net (June 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):Europe
Time Period(s):Medieval

The Chosen Few: How Education Shaped Jewish History, 70-1492

Author(s):Botticini, Maristella
Eckstein, Zvi
Reviewer(s):Chiswick, Carmel U.

Published by EH.Net (January 2013)

Maristella Botticini and Zvi Eckstein, The Chosen Few: How Education Shaped Jewish History, 70-1492.? Princeton, NJ: Princeton University Press, 2012.? xvii + 323 pp.? $39.50 (hardcover) ISBN: 978-0-691-14487-0.

Reviewed for EH.Net by Carmel U. Chiswick, Department of Economics, George Washington University.

The Chosen Few by Maristella Botticini (Bocconi University) and Zvi Eckstein (Tel Aviv University) reminds us ? for those who need reminding ? how Cliometrics can transform our understanding of historical events. They examine Jewish history from an economic perspective with results that are both innovative and insightful.?

The book is structured around a skeleton of straightforward economic theory, fleshed out with data ? quantitative and qualitative ? obtained from an extraordinary array of documentary evidence.? The historical period covered is a few decades short of 1,500 years, requiring us to step back and look through a very broad lens, yet the proof offers details on everyday economic life and on the timing of events.? The economic model is simple but not simplistic, presented elegantly without bells and whistles, sophisticated but accessible to a general reader.? (Technical language is wisely confined to appendices that spell out the model mathematically and present details on statistics that are new or controversial.)? And the overall result is a new perspective that will change forever the way we understand the economic history of Jews over a broad spectrum of time and space.

The economic model developed by Botticini and Eckstein uses a human capital approach to look at the way investments in religious education interact with occupational choice and earnings.? At the beginning of their story, approximately in the first century, Judaism was in transition from a religion centered on the Temple in Jerusalem to a synagogue-based religion that could be observed anywhere that Jews lived.? Part of this transition required that every Jewish male learn to read from the Torah, making basic literacy a part of religious training that began at the age of 5 or 6 and encouraging further study for those so inclined.? This meant that even ordinary Jewish men (and sometimes women) could read, and perhaps write, at a time when literacy was rare among the common people.?

Botticini and Eckstein develop a model placing Jewish literacy within its economic context.? When urbanization and commercialization raised the demand for occupations where reading and writing was an advantage, the religious training of Jews gave them a comparative advantage.? This meant that investments in Jewish religious education earned a reward in the marketplace as long as Jews moved into those occupations, which of course they did.? In contrast, when urban and commercial economies declined, Jewish religious training lost its economic advantage.? This deceptively simple model is the framework for understanding the economic incentives not only for Jewish occupational clustering but also for the strength of Jewish attachment to Judaism.

At the beginning of their story, in the year 70, Botticini and Eckstein estimate a population of some 5 million Jews (about the size of today?s American Jewish population), half of whom lived in the Land of Israel under Roman rule and the rest in various places in Mesopotamia, Persia, Egypt, Asia Minor and the Balkans.? Within the next century the Jewish population dropped by nearly half, and by the year 650 there were only one million Jews living mostly in Mesopotamia and Persia.? Throughout this period most Jews, like most non-Jews, were farmers, a fact that Botticini and Eckstein document in some detail. War and famine, including the exile that dispersed Jews after the Romans destroyed Jerusalem, explain no more than half of this decline, which was considerably greater than the general population decline during this period.? As long as Jews remained farmers, however, the literacy requirement provided benefits only in the religious sphere but not in the secular economy.? Many farmers responded by not investing in their children?s Jewish education, and most of their descendants assimilated into the surrounding (often Christian) populations.? Those who remained Jews would have been a self-selected group of people with either strong preferences for religious Judaism or a high ability for reading and writing.

The second part of their period, approximately from 750 to 1150, uses the same model to explain why Jews (most of whom still lived in Persia and Mesopotamia) shifted from rural to urban occupations, from a community of farmers to one of craftsmen and merchants.? Under the Muslim Caliphates cities grew, trade thrived, and the demand for occupations benefitting from literacy grew accordingly.? Literacy skills Jews acquired as part of their religious education transferred readily to these urban occupations and were rewarded with high earnings, generating an income effect that supported a Golden Age of Jewish culture.? Those Jews who remained as farmers were self-selected for persons who invested little in religious education and eventually assimilated into the general (Muslim) population.

Botticini and Eckstein look at demographic trends during this period of prosperity and cultural flowering, observing that the Jewish population not only grew in size but dispersed to cities all along the trading routes from India to Iberia, from Yemen to Europe.? They are at pains to show that these migrations were not motivated by push factors like discrimination or expulsion, but rather by the pull of new opportunities for urban craftsmen and merchants.? In most places the Jewish community concentrated in large cities, but in Europe ? where the cities were too small to support much activity in high-level urban occupations ? the Jewish communities were smaller and scattered more widely in many towns.? The Mongol invasions of the thirteenth century destroyed the cities of the Middle East, devastated its commerce, and dramatically reduced demand for urban occupations throughout the region.? Jewish religious education no longer yielded secular benefits in the impoverished Muslim economy, and the number of Jews declined as they assimilated into the surrounding population to avoid costly investments in religious human capital.

The Golden Age of Jewish culture in the Muslim world created a spiritual and intellectual legacy on which European Jewry could build.? In particular, the Talmud and Responsa literature (correspondence ruling on religious observance in everyday business and family matters) discussed the application of ancient (biblical) rules to contemporary activities.? This literature took Jewish religious studies well beyond basic literacy to develop literary sophistication and hone decision-making skills.? After the Mongol invasions destroyed the Muslim commercial economy, Europe became the new center of Jewish learning that nurtured these skills.? During the fourteenth century Spain had the most sophisticated economy in Europe and Spanish Jewry flourished in both religious culture and secular occupations.

Wherever they lived, Jewish communities maintained an active correspondence with each other on religious matters, creating networks that benefitted commercial activities as well.? These networks meant that urban Jews living in capital-scarce countries could borrow from Jews in more prosperous communities.? After the Mongol invasions, when European economies began to expand in the fourteenth and fifteenth centuries, imperfect capital markets created arbitrage opportunities that made money lending an especially profitable business.? Botticini and Eckstein argue convincingly that Jewish trading networks, mercantile experience, and universal literacy gave European Jews a comparative advantage in a very profitable profession for which few non-Jews had the relevant skills.? They thus argue that religiously-motivated education (creating literacy and decision-making skills transferable to secular occupations) and religiously-motivated correspondence networks explain why money-lending had become the dominant occupation of European Jews by the fifteenth century.?

Botticini and Eckstein?s simple yet sophisticated human capital analysis provides new insights into Jewish history for the fourteen centuries covered in this book.? In the last chapter of The Chosen Few they promise us a new book carrying the analysis forward for the next 500 years, from 1492 to the present.? Judging from the economic success of modern Jews, 80 percent of whom now live in the United States or Israel, their model suggests strong complementarity between skills developed by a Jewish religious education and those associated with business management and scientific investigation.?

Intentional or not, The Chosen Few follows an expositional style that suggests this very hypothesis.? Like the Talmud, each topic is introduced by a statement of fact (evidence) followed by questions about what those facts mean and how to explain them.? They then consider a number of opinions (hypotheses), including their own, and discuss the pros and cons of each with respect to internal consistency and historical evidence.? This methodology yields a very convincing Cliometric analysis that we can expect to inform all future economic histories of the Jews between 70 and 1492.

Carmel U. Chiswick is Research Professor of Economics, George Washington University, and Professor Emerita, University of Illinois at Chicago.? She has published widely on the economics of religion, especially on Jews, and much of her work on this subject is collected in C. Chiswick, The Economics of American Judaism (Routledge, 2008).

Copyright (c) 2013 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 (administrator@eh.net). Published by EH.Net (January 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Education and Human Resource Development
Geographic Area(s):Europe
Middle East
Time Period(s):Ancient
Medieval

The Children of Eve: Population and Well-being in History

Author(s):Cain, Louis P.
Paterson, Donald G.
Reviewer(s):Logan, Trevon D.

Published by EH.Net (December 2012)

Louis P. Cain and Donald G. Paterson, The Children of Eve: Population and Well-being in History. Malden, MA: Wiley-Blackwell, 2012. xix + 391 pp. $60 (paperback), ISBN: 978-1-4443-3690-0.

Reviewed for EH.Net by Trevon D. Logan, Department of Economics, Ohio State University.

Louis Cain of Loyola University Chicago and Donald Paterson of the University of British Columbia have an ambitious agenda, to tell the population and health histories of the world in one volume.? Along the way they cover a great deal of health, medicine, economics and anthropology in describing how homo sapiens managed to grow in number, average size, and longevity over the last several thousand years.? Cain and Paterson are not attempting to tell the population history of the world, but rather the economic demography of human populations.? In other words, the goal is not simply to present the trends in population but to provide an economic interpretation for them.? This makes the book much more ambitious than its predecessor, Livi-Bacci?s Concise History of World Population, since it still aimed at an audience which was assumed to know little about either population history or economics.?

The book begins with a short section on ?Initial Conditions,? which describes the beginning of the species, how populations are measured, and the demographic transition.? This is where the ?Eve? of the book?s title comes from, the mitochondrial DNA remnants which link back to one common female.? The book makes little use of genetics, however, and moves quickly to the establishment of agriculture, the basics of Malthusian theory, and the beginnings of population counts.? The next chapter covers the demographic transition, and this is where its economic focus first shows up.? Cain and Paterson put the demographic transition into firmly economic territory.? They describe not only trends in birth and death rates but also national income, inequality, female labor force participation and dependency ratios.? Along the way the authors carefully define terms such as endemic, social benefits, GDP, and other terminology in specialized boxes.
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The second part of the book is the heart of the text.? Mortality, fertility, long-distance and regional migration each receive their own chapters.? The chapter on mortality begins with the present causes of death and works backwards, covering mortality due to wars, infant mortality, and the basics of life expectancy calculations.? After briefly covering some of the basics of seasonality (which could be greatly enhanced by linking the discussion more closely to cause of death), the chapter concludes with the basics of the mortality transition.? The fertility chapter has a similar structure, beginning with a fairly long list of terminology (fecundity, nuptiality, doubling times, and the like).? Then Cain and Paterson move to the choices involved in fertility, and the economics comes through more clearly.? The authors cover the constraints on fertility mainly through marriage, which is appropriate given the historical focus.? As with the chapter on mortality, they conclude with a brief review of the crude birth rate and a more general discussion of the decline in fertility.

The chapters on migration are split between long distance and short distance.? I think this ordering is a bit odd since humans first moved short distances, as the authors note earlier in the text.? The long-distance migration chapter begins by looking at nativity and then forced migrations.? The largest section is devoted to the movement from Europe to the Americas in the Age of Mass Migration.? The authors then move to a discussion of remittances, an issue that has been underdeveloped in population history.? The chapter also has a very nice section which gives broad overviews of the diasporas of the Irish, Jews, and Chinese.? What is missing from the chapter is a model of migration that would justify the discussion of immigration restrictions that follows.? I was hoping for the development of a model which would link migration to wages and show how stakeholders may face different incentives to oppose immigration depending on whether they are substitutes or complements to the immigrants.? The regional immigration chapter begins by focusing on the westward movement in the United States and the black migration of the early twentieth century.? It then moves to a discussion of urbanization in history and provides case studies of Scotland-England and Canada-U.S.? One thing missing from this discussion is a role for economics is explaining chain migration or the role of social networks in migration more generally.? Also, given the focus on the species overall, the lack of a discussion of general migration patterns and the earliest migrations is a worrisome omission.

The last section of the book looks at related economic issues.? It beings with the changing family and discusses marriage, divorce, and child labor.? The chapter on wealth introduces the concept of morbidity and disability, then moves to nutrition and human physiology and includes a welcome section on human living spaces, which are usually neglected in historical inquiry.? The chapter on macroeconomic effects seems somewhat out of place. It describes intergenerational constraints, the labor-leisure tradeoff, household time use, and human capital.? What is lacking is a link between these factors and the population issues at play.? The book would have been greatly enhanced if it had started with some of these ideas.? The penultimate chapter describes catastrophes.? This includes a description of famines, plagues, HIV and the influenza pandemic. As with the chapter on macroeconomic effects, it is difficult to see why the discussion in its own chapter was necessary.? The material could have been covered in the mortality chapter.
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Overall, this book is a worthy successor to earlier population histories.? It updates much of what we know and integrates those insights into a decidedly economic framework.? Its key strengths are the ability to present a range of demographic and economic concepts and to use the sweep of history to provide some interpretation and illustration.? In the end, a lay reader comes away with a fairly sophisticated understanding of population processes and how they have played out in human history.? The drawback is that the scope of the book is far from global, and a reader could be left with the false impression that the trends described for northwest Europe are truly generalizable.? Some are, and others are not.? Then again, considering every nuance is beyond the stated intent of the authors, but for researchers the nuances are what keep us excited. This book is an excellent reminder of what first motivated this demographer?s interest in population issues.? As such, it should serve as a very useful, entertaining, and clear introduction to population and its relationship to human welfare and economic choices.?

Trevon D. Logan is an Associate Professor of Economics at Ohio State University and a Faculty Research Fellow at the National Bureau of Economic Research. Recent publications include ?Economies of Scale in the Household: Puzzles and Patterns from the American Past,? Economic Inquiry (2011); ?The Transformation of Hunger: Demand for Calories Past and Present,? Journal of Economic History (2009); and ?Health, Human Capital, and African American Migration before 1910? Explorations in Economic History (2009).

Copyright (c) 2012 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 (administrator@eh.net). Published by EH.Net (December 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Historical Demography, including Migration
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Philanthropy in America: A History

Author(s):Zunz, Olivier
Reviewer(s):Frey, Donald E.

Published by EH.Net (January 2012)

Olivier Zunz, Philanthropy in America: A History. Princeton, NJ: Princeton University Press, 2011.? x + 381 pp. $30 (hardcover), ISBN: 978-0 691-12836-8.
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Reviewed for EH.Net by Donald E. Frey, Department of Economics, Wake Forest University (retired).

Olivier Zunz starts his history in the late 1800s, focusing on big foundations along with the ?mass philanthropy? of the middle class. A recurring theme is the enduring difficulty in defining the boundaries between government and philanthropy.?

The story that Zunz chooses to tell, though not comprehensive, is fascinating; and he tells it well. Chapter 1 recounts emerging dissatisfaction with traditional ?charity? in the late 1800s. But the real story is the forming of the first great foundations, which grandly and vaguely aimed for ?the improvement of mankind? (p. 8). This challenged legal doctrine that had defined charitable purposes very narrowly. Early foundations chose two major emphases: advancing science, which implied reshaping higher education; and improving the status of African-Americans in the U.S. South.
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The second chapter moves to popular ?mass philanthropy,? which was born in fighting diseases, such as TB (as early as 1908). World War I stimulated mass giving as patriotism provided a new motive. About this time, forerunners of the United Way emerged to consolidate charitable appeals and apply business-like, calculating methods to fundraising.
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Chapter 3 introduces the earliest difficulties of differentiating the roles of government and the roles of philanthropy. The issue was related to defining tax incentives for charitable giving. The chapter is too rich in detail to recount here.

Chapter 4 gives major attention to the career of Herbert Hoover, who found many ways to use private resources to solve public problems. However, his efforts to provide Depression relief only with private philanthropy were futile. Conversely, the New Deal mobilized government and tried to minimize the mixing of government and private activities. Zunz only lightly mentions the related ethical questions: Is disaster aid a fundamental human right, mandating government response to victims?? Or, is there no right to aid (exempting government and leaving victims to hope for charity)?? Apparently, this is still an open issue: in 2011 the U.S. House majority leader proposed denying federal aid to victims of Hurricane Irene. (The proposal was that disaster aid could be eliminated for budget-balancing purposes. Those who opposed the proposal presumably viewed aid as a right, and therefore not to be comprised so readily.)

Chapter 5 relates how, during and after World War II, ?philanthropic programs more than once became entangled in the ideological battles that pitted Washington against the Kremlin? (p. 137). The boundary between government and philanthropy blurred once again.? American charitable organizations operated in occupied areas, distributing publicly-funded supplies as aid, but also to influence opinion. And, post-war, American foundations waged cultural war against communism, supplemented by the CIA?s ?philanthropic organizations? (p. 151), which ultimately cast suspicion on all American foundations overseas. The same patterns played out in less developed countries although some private development groups exerted their independence from Cold War goals.?
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This chapter also discusses post-war private American aid to the state of Israel. When President Eisenhower distanced American policy and financial aid from support for Israel, the American Jewish community made up the difference, and more. Fundraising was accompanied by public-relations campaigns portraying Israel as the sole American ally in the Mideast; this prevailed and ultimately forced a change in U.S. policies. All this ?ventured beyond the humanitarian and economic incentives that had up-to-now bounded the partnership between philanthropy and government? (p. 168).
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Chapter 6 considers domestic philanthropy after World War II, when older foundations lapsed into a quiet period of seeking a new vision for their billions. The biggest development was the rise of conservative religious foundations and mass fundraising by evangelical organizations. Zunz concludes that ?the postwar effort to build a more Christian America thus rested on the convergence of big money and mass giving? (p. 199).
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Chapter 7 tells how major liberal foundations found a fresh focus in the civil rights movement of the 1960s. This raised the ire of Southern conservatives in Congress, who set out to limit foundations. They generally failed, but Congressional scrutiny did create tighter limits on political activism by foundations; and it did produce a requirement for foundations to spend at a rate exceeding five percent of their worth annually.? The era of civil rights activity also reversed the New Deal?s divorce of government and philanthropy.
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Chapter 8 relates how, by the 1970s, much government spending on social programs was directed through non-profit groups, some of which came to rely on government contracts for a large portion of their budgets. This created a number of knotty problems for the voluntary sector. How to maintain independence of action while taking government funding? How much can religious agencies mix religion with government-funded services in fulfilling contracts?? And so on. Again, defining boundaries between government and the non-profit sector is crucial.
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The chapter also discusses a series of Supreme Court decisions loosening restrictions on political advocacy by tax-exempt organizations.? This occurred because ?in violation of the tax laws, conservative philanthropies went on funding the political agenda that was transforming America [post-Reagan], and again, the Supreme Court supported them. The court implemented a significant relaxing of the lobbying rules? (p. 259).
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Chapter 9 focuses on recent international developments as non-government organizations wrested a measure of independence from governments ? starting with famine relief where donor governments responded in disjointed ways and recipient governments were corrupt. Foundations also began underwriting the work of indigenous non-government organizations, such as the micro-finance Grameen Bank. The Gates Foundation now routinely bypasses governments in the interest of taking more effective action, unencumbered by political constraints.
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Zunz concludes by deeming modern American philanthropy to be ?a product of the large organizational revolution that American managerial and financial capitalism orchestrated in the last century and a half? (p. 294). One can only hope Zunz does not view capitalism as the only factor in the emergence of American philanthropy.
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Overall, this is a book I would highly recommend, for what it does undertake. But I caution about its blind spots. First, had Zunz started his story earlier, he would not have ignored other factors that shaped philanthropy besides capitalism. Historians have written, without hyperbole, of the American Protestant ?benevolent empire? of the early 1800s, a loose term for religiously inspired organizations that started scores of colleges, supported anti-slavery organizations, advocated temperance, converted the un-churched frontier, operated Sunday schools (the only education for many), created a huge publishing industry for moral uplift, and launched a large foreign-missions effort, among other efforts. For their part, Roman Catholics created major educational and social service networks to serve their large urban, immigrant communities. This was all done before Zunz starts his story and clearly shaped American philanthropy. The Methodist admonition to ?earn all you can, save all you can, give all you can? surely influenced more Americans than Carnegie?s ?Gospel of Wealth? ever did. Yet, by the time Zunz picks up the story, religion is more a minor player than the lead actor. The na?ve reader might conclude from Zunz?s book that philanthropy sprang full-grown from rich entrepreneurs, who started foundations for no reason other than that they could.
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Even in the period his book does cover, Zunz ignores some significant topics, such as university endowments, many of which rival the largest foundations. And, university endowments present problems worth discussing, as when investment returns are largely reinvested rather than used to support the teaching and research goals of the universities. Another extended discussion that is missing is about the overall level of giving by Americans ? for it is important to a balanced picture of mass philanthropy. Finally, the rise of volunteering as an increasingly integral part of American philanthropy deserves more coverage. (Who can forget the images of Jimmy Carter working on Habitat projects?)
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Most of these criticisms could have been rendered moot simply by selecting a more modest title for the book ? one that accurately reflects its primary focus on foundations and big-time ?mass? philanthropy, and which is limited to a certain time frame. Within the limits of Zunz?s actual topic, this book merits high praise.

Donald E. Frey is the author of America?s Economic Moralists: A History of Rival Ethics and Economics (SUNY Press, 2009).

Copyright (c) 2012 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 (administrator@eh.net). Published by EH.Net (January 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Education and Human Resource Development
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII