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Capital Intentions: Female Proprietors in San Francisco, 1850-1920

Author(s):Sparks, Edith
Reviewer(s):Nickless, Pamela J.

Published by EH.NET (March 2007)

Edith Sparks, Capital Intentions: Female Proprietors in San Francisco, 1850-1920. Chapel Hill: University of North Carolina Press, 2006. xv + 329 pp. $20 (paperback), ISBN: 0-8078-5775-0.

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

In all likelihood, everyone reading this book review is the customer of a small proprietor. Particularly in largish cities, small proprietors abound ? coffee carts, lunch carts, neighborhood groceries, alteration shops, nail shops, hairdressers and barbers. Edith Sparks’ Capital Intentions: Female Proprietors on San Francisco, 1850-1920 begins her story by reminding us of the small businesses serving our daily needs. As she points out, when we notice the women, men and families who run these small, often tiny, businesses it is as human interest stories not as businesspeople. It is her contention that female proprietors in San Francisco’s past were also quite common and overlooked.

Sparks’ work joins a growing body of literature on nineteenth and early twentieth century businesswomen. Like Gamber, Lewis and others [1], she uses the R. G. Dun and Company records, city directories, the published census and newspapers to seek out information on women running businesses. She has also laboriously collected information from the Bankruptcy Case Files for northern California for 96 businesswomen who declared bankruptcy. The information from these records includes a wealth of details including information about creditors, inventories, amount of debt and occasionally testimony from court cases. Anyone who has worked with archival data that is not indexed will appreciate the amount of time and frustration involved. Consequently, the best part of this work is the chapters on women as financial managers and women whose businesses failed.

Sparks frames her analysis with the assertion that women proprietors had “capital intentions.” By this she means that while females in business were usually providing services that were within the domestic sphere, they had made a commercial decision in choosing what services or goods to offer. They intended to profit and they intended to provide a marketable commodity. For most women, this was a good or service that was “domestic” in nature. San Francisco in the early days suffered a lack of women. Indeed, the gender imbalance in population was pronounced for most of this period. (The male/female ratio was 158/100 in 1860, declining to 117/100 in 1900.) This gave women an edge in the hospitality industry where a woman providing food or shelter was often seen as superior. Women in San Francisco would continue to work in this sector in proportions larger than other U. S. cities.

The text is organized thematically. The first chapter is an overview of San Francisco female proprietors. Using census data from six other U.S. cities, Sparks argues that San Francisco was unique in some respects such as the ethnic make-up of women proprietors. In other respects, such as the concentration of women in jobs considered feminine, the city was similar. Like other cities, the number of female (and male) small proprietors declined in the late nineteenth and early twentieth centuries. Sparks finds that in San Francisco the new opportunities for women in clerical work as well as the competition from name-brands and large retailers explain this decline.

Each succeeding chapter looks at an element of women’s businesses: why women went into business, how women went into business, how they attracted customers and finally, women as financial managers and women who failed. The thematic approach is at first distracting, each chapter seems to repeat gold rush stories, but the last three chapters are quite good and make use of a small database effectively.

In particular, Sparks has collected information from the R. G. Dun and Company records on a comparable group of San Francisco businessmen and is able to compare women and men. She finds that the experiences of men and women who ran small businesses were not all that different. Her discussion is interesting and nuanced bringing into sharp relief what is one of the core problems in studying women (or men) who run small enterprises.[2] To put it simply, what do we mean by being “in business?” Is the owner of a tiny enterprise using entirely her own labor and her own money “in business?” What is the distinction between self-employment and running a business? Are both terms too grand for women who are working every waking hour at sewing (or baking or cleaning or performing any of the myriad tasks of their business)? Many of the women and men Sparks examines were in business because it was the only way they could earn a living. Particularly for women with domestic responsibilities, a small business that could be run at home (or in the case of a boarding house is home) had obvious attractions. Without other opportunities and access to education and training, a business may be a last resort.

The bankruptcy records, where Sparks’s data are for women only, also highlight the problems for small business owners where illness, fire, recession or earthquake could bring down the house of cards. The bankruptcy records cover the years 1872-1920 (not inclusive) and the experience of the female proprietors seems to echo that of their male counterparts. Nothing is as certain as failure for small businesses. When combined with the Dun records, it seems clear that both men and women who failed often tried again. Sparks argues that some persevered out of gumption or tenacity; others simply had no alternative but to try again. The bankruptcy records also highlight the challenges women faced as the financial management of a business became more complex. It is likely that with the exception of some ethnic groups women were less educated than men in financial matters.

This is a fine study and a nice addition to the continuing work on female proprietors. The bankruptcy records provide the first substantive information on women as financial managers and Sparks’s use of the Dun records to study both women and men in San Francisco is intriguing. I wish she had collected a more inclusive sample of San Francisco businessmen but time is short and the Dun records do not readily lend themselves to scientific sampling. I also found myself wondering if we could learn about the typical by studying the atypical bankrupt business. But with female proprietors the variety is so great; it is hard to know what is typical. In short, those who are interested in the history of small business in the U.S. should read this book.


1. See Wendy Gamber, The Female Economy: The Millinery and Dressmaking Trades, 1860-1930 (University of Illinois Press, 1997) and Susan Ingalls Lewis, “Women in the Market Place: Female Entrepreneurship, Business Patterns, and Working Families in Mid-Nineteenth Century Albany, New York, 1830-1885,” Ph.D dissertation, SUNY Binghamton, 2002.

2. On this point see Susan Ingalls Lewis, “Business or Labor? Blurred Boundaries in the Careers of Self-Employed Needlewomen in Mid-Nineteenth-Century Albany” in Famine and Fashion: Needlewomen in the Nineteenth Century, edited by Beth Harris, (Ashgate, 2005).

Pamela J. Nickless recently published “Scarlett’s Sisters: Spinsters, Widows, Wives, and Free-Traders in Nineteenth Century North Carolina,” Famine and Fashion: Needlewomen in the Nineteenth Century, edited by Beth Harris (Ashgate, 2005) and has recently started a study on nineteenth-century female proprietors in Charleston, SC.

Subject(s):Markets and Institutions
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

The Popularization of Malthus in Early Nineteenth-Century England: Martineau, Cobbett and the Pauper Press

Author(s):Huzel, James P.
Reviewer(s):Levy, David M.

Published by EH.NET (March 2007)

James P. Huzel, The Popularization of Malthus in Early Nineteenth-Century England: Martineau, Cobbett and the Pauper Press. Aldershot, UK: Ashgate, 2006. xv + 266 pp. $100 (hardcover), ISBN: 0-7546-5427-3.

Reviewed for EH.NET by David M. Levy, Department of Economics, George Mason University and Sandra J. Peart, Department of Economics, Baldwin-Wallace College.


James Huzel characterizes his research reported in this marvelous book as a continuation of that found in two reevaluations of T. R. Malthus’s ideas, Donald Winch’s Poverty and Riches (1996) and Samuel Hollander’s The Economics of Thomas Robert Malthus (1997). While Winch locates Malthus’s arguments in the larger intellectual discussion and Hollander tackles of question of Malthus’s coherence as an economic theorist, Huzel explores the popular controversy over Malthus and that most malthusian act of legislation, the 1834 New Poor Law which conditioned poor relief with sumptuary controls.

Huzel argues that Malthus is the moving spirit in replacing the “moral economy” with the market economy. If the Old Poor Law, which conferred a right to public assistance in cases of distress, is the paradigm of the moral economy, then the New Poor Law is one of policy visualized as exchange (Levy and Peart, 2005). Huzel, conscious of the need to guard against interested misrepresentations, as well as some of Malthus’s self-inflicted infelicities ? is moral restraint possible? ? begins by providing an overview of Malthus’s thought and influence. He pays a good deal of attention to Malthus’s development over the editions of Population and Political Economy. The chapter titles suggest what each of them contains: Harriet Martineau: The Female Malthusian?; Cobbett against the Parson; The Radical Working Class Press against the Malthusian Crew. Pages 197-218 of the “Radical Working Class” chapter focus on the pro-contraceptive movement, in particular, Francis Place and John Stuart Mill.

Huzel’s book will help the reader shake off the bane of all careful Malthusian scholarship ? the interpretation that reads “natural selection” back into Malthus by taking choice out of the marriage decision (Peart and Levy 2005a; Levy and Peart, 2006). Huzel calls attention (pp. 212-13) to a revealing paragraph that Malthus added to the 1817 edition in which he considers how the system of equality proposed by Robert Owen would affect the age of marriage. In a system of equality, everyone’s children are supported by everyone else. When people realize, as they will, that this creates an unsupportable increase in population they will come to realize that the assignment of individual responsibility is preferable. We quote the entire paragraph:

Let us suppose that in a system of equality, in spite of the best exertions to procure more food, the population is pressing hard against the limits of subsistence, and all are becoming very poor. It is evidently necessary under these circumstances, in order to prevent the society from starving, that the rate at which the population increases should be retarded. But who are the persons that are to exercise the restraint thus called for, and either to marry late or not at all? It does not seem to be a necessary consequence of a system of equality that all the human passions should be at once extinguished by it; but if not, those who might wish to marry would feel it hard that they should be among the number forced to restrain their inclinations. As all would be equal, and in similar circumstances, there would be no reason whatever why one individual should think himself obliged to practise the duty of restraint more than another. The thing however must be done, with any hope of avoiding universal misery; and in a state of equality, the necessary restraint could only be effected by some general law. But how is this law to be supported, and how are the violations of it to be punished? Is the man who marries early to be pointed at with the finger of scorn? is he to be whipped at the cart’s tail? is he to be confined for years in a prison? is he to have his children exposed? Are not all direct punishments for an offence of this kind shocking and unnatural to the last degree? And yet, if it be absolutely necessary, in order to prevent the most overwhelming wretchedness, that there should be some restraint on the tendency to early marriages, when the resources of the country are only sufficient to support a slow rate of increase, can the most fertile imagination conceive one at once so natural, so just, so consonant to the laws of God and to the best laws framed by the most enlightened men, as that each individual should be responsible for the maintenance of his own children; that is, that he should be subjected to the natural inconveniences and difficulties arising from the indulgence of his inclinations, and to no other whatever? (1826, III III ? 16 One of the nicest features of Huzel’s book is that he emphasizes the extraordinarily personal nature of the attacks on those who followed Malthus. For instance, Harriet Martineau’s contemporary critics made her out to be masculine (pp. 78-89). Huzel asks: why her and not Jane Marcet, a Malthusian of a decade earlier? His answer is that Martineau’s deep radicalism, her support of the New Poor Law, her anti-slavery, her anti-monopoly positions all threatened many dimensions of hierarchy. Three decades later, another opponent of hierarchy, John Stuart Mill (who plays a minor role in Huzel’s account) was shown in feminine attire by his opponents (Peart and Levy, 2007).

Market Economics v. Moral Economy

Huzel’s prefatory comments about the replacement of the moral economy by the market economy deserve further exploration. As economists we know a good deal about the market economy. Consider marriage. In the Wealth of Nations Adam Smith explains how higher wages in America encourage earlier marriage in American than in Europe (1776, I 8 ? 23). In the next sentence he remarks that: “A young widow with four or five young children, who, among the middling or inferior ranks of people in Europe, would have so little chance for a second husband, is there frequently courted as a sort of fortune.” Early marriages leads to large families and to a population growing at a rate which doubles every twenty-years (1776, I 8 ? 23). What makes Smith’s economics of population so remarkable is that it is purely a matter of contracting agents who accept the responsibility for supporting their children.

A moral economy seems to be linked instead by non-contractual obligations. This is certainly how the moral economy is defended by William Cobbett (Huzel, pp. 126-49). The imperative that Smith evades but Malthus confronts is that marriage supports chastity, i.e., sexual relationship inside and only inside marriage (Levy, 1978 and 1999). Individuals who follow moral imperatives in spite of material interest, e.g., marrying early to preserve chastity, create an obligation on the part of society for support in case of distress.

We propose to focus on the attacks on two of Huzel’s subjects, Martineau and Place, published in the 1830s in Fraser’s Magazine for Town and Country. Fraser’s is remembered both as the first important Victorian periodical to publish portraits of literary celebrities (Bates 1874, 1883; Houghton 1972, p. 305; Fisher, 2006) and as the periodical most associated with the literary, “progressive conservative,” opposition to political economy (Thrall, 1934, pp. 147-58). “Progressive conservatism” catches the fact that the debate between market economy and moral economy is not carried out along a single dimension. The greatest of “progressive conservative” thinkers, Thomas Carlyle, who had been associated with Fraser’s from its first issue in February 1830, chose to publish his defense of slavery, “Occasional Discourse on the Negro Question,” in the December 1849 issue. Carlyle exemplified the tendency to slide between justifying following moral imperatives and justifying following the commands of superiors (Peart and Levy, 2005).

Fraser’s does not get much attention in Huzel’s book. He discusses the Fraser’s review of Martineau’s Malthusian novel briefly (p. 76), but passes over the Daniel Maclise portrait of Martineau accompanied by William Maginn’s abuse at Martineau (Maginn and Maclise, 1833; Bates, 1874, pp. 114-16; Bates, 1883, pp. 206-12). Consider a controversy between market economists and moral economists, those who hold exchange as central against those who take obligation to as central. How will the dispute be conducted? From the point of view of the market economists, the moralist economists are not doing their calculations incorrectly. Controversy is largely a matter of reworking arguments in different words. From the point of view of the moral economists, because the market economists are denying all but contractual obligations, there is something wrong with them. Bad calculations on one side; bad people on the other side. Considerations of scarcity are critical in the Malthusian debates (Waterman, 1991). Scarcity is a fact for market economists, it is a failing for the moral economists because it is seen as evidence that someone wants what they should not want.

How do you show that people are bad? Gossip, caricature. That brings us back to Fraser’s. Malthus’s recommendation to deal with scarcity by delaying marriage until one could reasonably expect to support the consequent children, the “preventive check,” was the center of things. The 1832 review of Harriet Martineau’s novels, attributed to Fraser’s editor William Maginn, reflected the radicalism of the proposal to delay marriage:

Morality and marriage must ever subsist in a state in correlative proportions. To decrease the prevalence of marriage is to increase the prevalence of immorality. This the whole experience of mankind informs us. …. But we will allow the existence, to a limited extent, of this falsely-called “moral restraint,” in London; ? and there we immediately find its necessary concomitant; to wit, about 30,000 prostitutes (1832, p. 413).

The review closed scandalized by the fact that a young woman wrote against marriage.

A Maclise portrait of Martineau appeared the next year. Words attributed to Maginn which accompany Maclise’s portrait claim that by looking at her picture, one can see why she is a Malthusian.

doubtless, one of the first works the literary antiquary of future centuries will consult must be Fraser’s Magazine, by the delineation of her countenance, figure, posture, and occupation, which will be found on the opposite plate. He will readily agree with us, after proper inspection, that it no great wonder that the lady should be pro-Malthusian; and that not even the Irish beau, suggested to her by a Tory songster, is likely to attempt the seduction of the fair philosopher from the doctrines of no-population (Maginn and Maclise, 1833, p.576; Bates, 1874, p. 114).

Scholars who have studied the Maclise image suggest that Martineau is rendered masculine in the picture (Fisher, 2006, pp. 120-23). Other evidence of a masculinization of Martineau is given by Huzel (pp. 74-78).


The attack on Martineau is so ugly that it puzzles latter-day friends of Fraser’s. Thrall (1934, p. 311) calls this “one of the most contemptible attacks in the magazine.” Earlier, Bates (1883, p. 211) uses “ungallant” defending Fraser’s only relative to the Quarterly’s “coarse and ungenerous” allegation that Martineau proposed contraception. That is a lie (Huzel, p. 75).

Ugly needs to seen in context. Malthus and Martineau accepted the religious universe which carried the imperatives that underlay the moral economy. Francis Place did not. This is how Maginn’s commentary in Fraser’s on the Maclise portrait of Place begins:

The hero was found, we believe, in a dust-pan, upon the steps of a house in St. James’s Place, about sixty years back, by an honest Charlie. Who forthwith conveyed him to the next workhouse, where (for those were unenlightened times) the little stranger was kindly take care of. He was christened Francis, that being the surname of his wet-nurse; while, in lieu of patronymie, they gave him Place, as a memorial of the locality where he had been discovered. Such were the bulrushes out of which Westminster drew the future Moses of the Preventive Check, — a philosophical decalogue well worthy to supersede the first, which it so boldly contracts in the absurd article about murder.

The Mount Sinai of the new lawgiver …. Place has erected his grand Mill-dam, for the salutary purpose of asserting this same tide … (Maginn 1836, p. 427).


Houghton’s judgment in the Wellesley Index is that save for the clever contraceptive reference to a certain J (J.S.?) Mill, this is a tissue of lies (Houghton, 1972, p. 306). He is puzzled ? “an anti-Semitic slur?” ? since the references to the Hebrew Scriptures are rather unsubtle but Place was not Jewish.

Huzel (p. 87) asks why the gender attacks on Martineau and not on Jane Marcet? One answer is that the New Poor Law was a viable threat to the moral economy. If Malthus is the arch-enemy of the moral economy, then it is important that the idea behind the New Poor Law can be found in the first edition of Malthus’s Population:

Lastly, for cases of extreme distress, county workhouses might be established, supported by rates upon the whole kingdom, and free for persons of all counties, and indeed of all nations. The fare should be hard, and those that were able obliged to work. It would be desirable that they should not be considered as comfortable asylums in all difficulties; but merely as places where severe distress might find some alleviation. A part of these houses might be separated, or others built for a most beneficial purpose, which has not been infrequently taken notice of, that of providing a place, where any person, whether native or foreigner, might do a day’s work at all times and receive the market price for it. Many cases would undoubtedly be left for the exertion of individual benevolence (1798, 5 ? 25).

Nassau Senior’s study of international experience verified this early intuition.

But in all the countries which we have been considering, except the Canton de Berne and perhaps Denmark, the great object of pauper legislation, that of rendering the situation of the pauper less agreeable than that of the independent labourer, has been effectually attained (Senior, 1835, 88).


Huzel’s valuable study brings to light with enormous care the early nineteenth century disputes between adherents of the moral economy and the market economy. When we reflect upon the present debates about the global economy, markets and culture, we may ask whether we have ever settled the issues. We suspect not.


Bates, William. [1874]. A Gallery of Illustrious Literary Characters (1830-1838) Drawn by the Late Daniel Maclise, R.A. and Accompanied by Notices Chiefly by the Late William Maginn, LL.D. London: Chatto and Windus.

Bates, William. 1883. The Maclise Portrait-Gallery of “Illustrious Literary Characters” with Memoirs Biographical, Critical, Bibliographical & Anecdotal Illustrative of the Literature of the Former Half of the Present Century. London: Chatto and Windus.

Fisher, Judith L. 2006. “‘In the Present Famine of Anything Substantial’: Fraser’s ‘Portraits’ and the Construction of Literary Celebrity; or, ‘Personality, Personality Is the Appetite of the Age.'” Victorian Periodicals Review 39: 97-135.

Houghton, Walter E. 1972. “Fraser’s Magazine for Town and Country: 1830-1882.” The Wellesley Index to Victorian Periodicals. Toronto: University of Toronto Press, pp. 303-521.

Levy, David M. 1978. “Some Normative Aspects of the Malthusian Controversy.” History of Political Economy 10: 271-85.

Levy, David M. 1999. “Christianity or Malthusianism: The Invisibility of a Successful Radicalism.” Historical Reflections/R?flexions Historiques 25: 61-93.

Levy, David M. and Sandra J. Peart. 2005 “The Theory of Economic Policy in British Classical Political Economy: A Sympathetic Reading.” History of Political Economy 37 Supplement: The Role of Government in the History of Economic Thought (2005): 120-42.

Levy, David M. and Sandra J. Peart. 2006. “Charles Kingsley and the Theological Interpretation of Natural Selection.” Journal of Bioeconomics. 8: 197-218.

Malthus, T. R. 1798. An Essay on the Principle of Population as It Affects the Future Improvement of Society, with Remarks on the Speculations of Mr. Godwin, M. Condorcet, and Other Writers. London: J. Johnson.

Malthus, T. R. 1826. An Essay on the Principle of Population: A View of its Past and Present Effects on Human Happiness; with an Inquiry into Our Prospects Respecting the Future Removal or Mitigation of the Evils which It Occasions. London: John Murray. Sixth edition.

[Maginn, William.] 1832. “National Economy. No. III. Miss Martineau’s Cousin Marshall ? The Preventive Check.” Fraser’s Magazine for Town and Country 6: 403-13.

[Maginn, William and Daniel Maclise] 1833. “Gallery of Literary Character. No. 42. Miss Harriet Martineau.” Fraser’s Magazine for Town and Country 8: 576.

[Maginn, William and Daniel Maclise.] 1836. “Gallery of Literary Character. No. 71. Mr. Francis Place, Esq.” Fraser’s Magazine for Town and Country 13:427.

Peart, Sandra J. and David M. Levy. 2005a. “Happiness, Progress and ‘the Vanity of the Philosopher.”

Peart, Sandra J. and David M. Levy. 2005b. The “Vanity of the Philosopher”: From Equality to Hierarchy in Post-Classical Economics. Ann Arbor: University of Michigan Press.

Peart, Sandra J. and David M. Levy. 2007. “Economics in Cartoons.” Presented at the History of Economics Society / Allied Social Sciences Association. Chicago.

Senior, Nassau W. 1835. Statement of the Provision of the Poor. London: B. Fellows.

Smith, Adam. 1776. An Inquiry into the Nature and Cause of the Wealth of Nations. London: Methuen and Co., Ltd., ed. Edwin Cannan, 1904. Fifth edition.

Thrall, Miriam M. H. 1934. Rebellious Fraser’s, Nol Yorkes Magazine in the Days of Maginn, Thackeray and Carlyle. New York: Columbia University Press.

Waterman, A. M. C. 1991. Revolution, Economics and Religion: Christian Political Economy 1798-1833. Cambridge: Cambridge University Press.

Sandra Peart is Professor of Economics at Baldwin-Wallace College, President-Elect of the History of Economics Society and Co-Director of the Summer Institute for the Preservation of the History of Economic Thought. In August, she will become Dean of the Jepson School of Leadership at the University of Richmond.

David Levy is Professor of Economics and Research Associate of the Center for Study of Public Choice at George Mason University. He is Co-Director of the Summer Institute for the Preservation of the History of Economic Thought and a member of the History of Economics Society Executive.

Their “Vanity of the Philosopher”: From Equality to Hierarchy in Post-Classical Economics was named a Choice Outstanding Academic Title this January. Their next book will be on the Economist in Cartoons.

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):19th Century

Economics in Russia: Studies in Intellectual History.

Author(s):Barnett, Vincent
Zweynert, Joachim
Reviewer(s):Samuels, Warren J.

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Published by EH.NET (May 2009)

Vincent Barnett and Joachim Zweynert, editors, Economics in Russia: Studies in Intellectual History. Burlington, VT: Ashgate, 2008. xviii + 198 pp. $100 (hardcover), ISBN: 978-0-7546-6149-8

Reviewed for EH.NET by Warren J. Samuels, Department of Economics, Michigan State University.


This collection of neatly-defined and well-structured interpretive essays illustrates how written histories of economic thought can vary depending on several distinctions.? One distinction concerns whose thought a historian includes.? One can concentrate, following Mark Blaug, on what is understood to be economic theory, pursued by largely academic, professional economists, or, following Joseph Dorfman, also include non-academic, non-professional people.? A second distinction concerns the mutual impacts of the two mentalities on each other.? A third distinction has to do with the homogeneity or heterogeneity of each mentality.? A fourth distinction concerns the relation of the economic system, with its distinctive economic practice and system of social control, to the two mentalities.? No one of the resulting stories is necessarily correct, but one interpretation can be more accurate than another, though more than one interpretation can often relate to a particular situation.?

Accordingly, Russian economic thought of Muscovy in the sixteenth and seventeenth centuries oscillated between the doctrines of mercantilism and those of the Middle Ages.?? The ideas of some authors remained subordinated to religious, legal and political discourses, especially the vast fusion of state and church which tended to strictly limit the range of independent thinking.? Nonetheless, the principal topics were the system of land ownership, money and trade — with written texts dominated by religious discourse and political practice influenced by mercantilist concepts.

The eighteenth century manifested the conflict between the radical economic reforms of Peter the Great and Catherine II, on the one hand, and the continuing medieval social structure, on the other.? Liberal rhetoric was silenced by autocratic claims for enforcement of absolute power.? Later thinkers and statesmen helped to develop the system of finance and banking, unintentionally, one supposes, establishing some of the institutional foundations of the initial Russian industrial economy of the late nineteenth century.? Writers combined liberal ideas with a Hamiltonian state promoting economic modernization.? The targets were given by practice and the government.

Academic research and teaching was initially institutionalized in the early nineteenth century.? The teaching of political economy commenced in 1804; the first textbook in political economy published in Russia (written in French, six volumes, a compilation of Smith, Turgot, Say, et alia) appeared in 1815; and the first chair was established in 1819.? Some later academicians sought to articulate the ethical foundations of economics, some of them arriving at socialism, including Christian socialism.? Several essays serve to suggest that economics cannot be formulated independently of the concrete conditions of time and space, though that does not prevent differences of interpretation and formulation by scholars in any given time and place.? The point obviously applies to normative economics but also to positive economics.? But the story is more complex and lengthier.? Selig Perlman lectured that Marxism was (more or less surreptitiously) taught in the schools before 1917.? One school of interpreters argued that until the 1890s Russian economists largely followed, even imitated, Western economists.? Socialist ideas gained popularity first and foremost not economists among but the educated public.? In 1917 the October Revolution replaced one system of social control of belief and practice with another.? In 1927 the Communist Party line ostensibly changed from world revolution to socialism in one country coupled with praise for those early economists who had been close to Marxism and denigrated the Western non-Marxist imitators.? Within three years, the Soviet Union adopted collectivization, planning and industrialization. After 1991, Soviet economics was denigrated in favor of both pre-Soviet and especially, eventually, Western mainstream economics.? More recently, criticism of both the handling of transition to a market economy and the increasing influence of Western mainstream economics (imitation or transfer?) has emerged, along with discussion of a ?Russian school of economics.??

That is the overall account which emerges from the thirteen chapters written by twelve authors.? Each essay attempts to interpret the work of key individuals, issues or concepts of particular periods.?

Chapter 1, authored by the co-editors, is a nice six-page introduction and summary.? It is preceded by a very useful four-page ?timeline? of the major events of Russian history.?

Chapter 2, written by Danila Raskov, examines economic thought in Muscovy.?

Chapter 3 discusses the Russian version of the Enlightenment (Leonid Shirokorad).

Chapter 4 examines the ideas and contributions to institutional innovation of three reformers of the monetary system in the early nineteenth century (Alla Sheptun).?

Chapter 5 interprets what amounts to conflicts between different assertions of a ?natural order,? between rationalism and empiricism, between one or more conceptual models of the economy and one or more efforts at identifying the ?actual? economy, between German idealism and French rationalism, and between liberalism, socialism, the ideas of Friedrich List, German historicism, and conservative romanticism (Joachim Zweynert).?

Chapter 6 takes up the pursuit of an ?ethical? basis for political economy, namely, socialism, by Mikhail Tugan-Baranovsky, and Christian socialism, by Sergei Bulgakov (Natalia Makasheva).?

Noting that the co-editors distinguish at this point between the pre- and post-1917 periods and the corresponding chapters, I move on to chapter 7, which deals with the ideas and status of A. V. Chayanov, but which also misses the opportunity to compare and contrast Chayanov and N. D. Kondratiev as agricultural economists (William Coleman and Anna Taitslin).?

Chapter 8 examines Russian ?migr? economists in the U.S., and, to a lesser extent, in Europe.? It helps explain the predominance of mathematical and statistical approaches to economics taken by those who escaped Hitler and Stalin which, along with the ideas and formulations of Austrian-school economists, eventually had a marked transformative impact on the mainstream of U.S. economics.? Among the Austrian-School ?migr?s were Ludwig von Mises, Joseph Schumpeter, Gottfried Haberler, and Fritz Machlup.? Among the Russian ?migr?s were Simon Kuznets, Jacob Marschak, and W. W. Leontief (Vincent Barnett).?

Chapter 9 presents the lives and work of two Russian economists exiled in 1922, Boris Brutzkus and Sergei Prokopovich, the former a Russian Jew and economic liberal, the latter from a noble family but transformed by his investigation of West Siberian villages during the great famines of 1891-92.? The two men were later among the first students of the Soviet economy although having different careers and ideas as well as origins (Shuichi Kojima).?

Chapter 10 is on the debate in the U.S.S.R. during 1941-53 on the law of value, interpreted by the chapter?s author, Michael Kaser, to have been a serious blow to economics in the U.S.S.R., one administered by Stalin.? During 1956-1958, however, it began to be clear that ?a significant stage in the transition of Soviet economics from Marx to Marshall was complete? (p. 154).? The emergence of a relativist value theory (demand and supply theory of price) and the eclipse of an absolutist single-valued value theory (labor theory or marginal utility theory of value) came about for both political and economic reasons in both worlds.? In Europe and the United States, price theory came to be seen as both more empirically meaningful and more ideologically, i.e., politically, useful; in Russia during the period covered by Kaser, labor (the labor theory of value) was increasingly seen among economists as inadequate for planning purposes and was increasingly adversely but, writes Kaser (p. 151), not arbitrarily affected by political context.?

Chapter 11 identifies the years after Stalin?s death as, in effect, an amalgam of elements (Pekka Sutela).? It was a period of scientism, of varieties of Soviet economics, and of stages of economic reform.? The stages were: decentralization, market pricing, and incomplete transition to commodity and labor markets. The central topics of reform discussions were on enterprise self-management, and impersonal owners such as pension funds.? Not surprisingly, the authorities continued to be sensitive to anything resembling private property.

In the two-page chapter 12 the co-editors observe, first, ?that the progress of economic ideas in Russia was (and still is) inextricably connected to matters of economic policy and also to issues of governmental control? (p. 187).? They also urge recognition that ?recent developments in Russia … [include] a tendency [as in the past] toward the ?state capture? of key branches of the economy, increasing restrictions on political liberty, and a low conviction rate regarding serious crimes against persons critical of the Russian government such as journalists.? Even if no cases, so far, have been reported of economists being subject to direct political pressure, it does not take much imagination to conceive of such a case in the near future? (pp. 187-188).? The co-editors conclude with two points:? they do not believe that the mix of Western and native Russian ideas constitutes ?the existence of a ?Russian school? of economic thinking? (p. 188) in the same sense as is meant by such terms as ?Austrian school,?? ?Cambridge school,? or ?Chicago school.?? Second, they call attention to how little the economics of Marx, Engels and Lenin have been mentioned within this volume.? ?Russian economics had a long and distinguished history before 1917? and ?[Marx] was by no means a dominant figure in pre-revolutionary Russian political economy? (p. 188).

?_Economics in Russia_ can be recommended as a nicely designed and executed collection of essays which provides insight into a history of economic thought in some respects different from that of the West and in other respects rather similar.

The co-editors correctly point to the centrality of the issue of ?precisely what developmental path the country should take.?? They also note ?the extensive presence of ideology in the history of Russian economic thought? and (correctly) reject the argument that it is due to the features of a ?Russian character.? They suggest that in Russia the issue of development path has been heatedly controversial since the time of Peter the Great and claim that that ?might explain (in part) why economics was more strongly politicized [in Russia] than it was in many Western countries? (p. 2).??

The view that controversy over development path explains the greater politicization of economics would likely be shared by many, perhaps most, historians of economic thought.? The matter of development path is indeed a central issue of economic policy.? It did not, however, arise in Russia with Peter the Great.? The controversy between mercantilism and medievalism, in which mercantilism was the initial stage of capitalism, was about development path and preceded Peter the Great.

The key question, however, is whether differences in degree of politicization have existed, to be explained by controversy over development path.? I do not want to overdo the point but the question of degree of politicization is not only important in itself but it casts light on how decision making on and interpretation of economic policy should be handled by the historian of economic thought.

There has been no conclusive difference in degree of politicization; any such perception is a function of one?s normative selective prior assumptions. The question of development path has not been unique to Russia.? It has been, for example, central to policy debate in the United States.? I cite the conflict between Pilgrim religious fundamentalism and money-making (trade) as rival ways of life that arose in (more accurately, was brought from England to) the Massachusetts Bay Colony in the early- and mid-seventeenth century.? The conflict continues to this day, in more complex forms and in different circumstances, most notably in presidential elections and the on-going formation of and conflict between secularism and religious fundamentalism.? One was not more politicized than the other.? Even if one or the other supporting group claims more than they actually want, expect or are willing to settle for, the approach to development path is at least expressed in terms of different discourses, each of which is political, whatever their content .

My view is based on several considerations, including:? (1) Acceptance of the underlying fact and importance of the legal foundations of the economy, and through it the normative elements in economic policy and the choice of the incidents of the development path.? Such acceptance only minimally relies on evidence founded on ideological doctrine.? It especially reflects my perception of universal pragmatic practice. (2) Such pragmatism not only accurately describes the United States (and, of course, elsewhere) but has been facilitated, protected, encouraged and, more subtly, taught by the First Amendment?s rejection of an establishment of religion and its protection of the freedom of speech and of the press, and the rights of the people peaceably to assemble and to petition the Government for a redress of grievances, as well as through the use of various other clauses of the Constitution in the ?protection of property.? (I use that trope even though in other circumstances I would insist that property is property because it is protected and not that property is protected because it is property.) Pragmatism also accurately describes the jurisprudential processes through which the meaning of the Constitutional clauses and concepts themselves, e.g., property, are worked out.? (3) The relatively greater heavy-handedness of the state in Russia has been either more salient or more selectively perceived than in the United States, which may reflect either ?reality? or the greater effectiveness of relatively light-handed social control in the latter country or the relatively small percentages of its population which thinks seriously of the federal government, state government, local government, indeed all government, as fundamentally infringing on their freedom.? (By ?seriously,? I intend to be understood to mean something different from electoral and comparable rhetoric, but not necessarily requiring the ?litmus test? of an immediate willingness if not desire to resort to armed force in open rebellion.)? (4) The multiple meanings of ?politicization? is another factor.? It has been used to signify the introduction of politics (itself multiply defined) into areas of life in which it hitherto has been absent, to refer to institutions that are political (meaning having to do with decision making, or the exercise of power) by their very nature and/or to suggest that a decision has not been made on the respective merits of the relevant alternatives but in order to insinuate considerations of political-party advantage into the process. (5) Another factor is the eclipse or obfuscation of other possible paths by the success of the path actually ?chosen? and followed, perhaps as if that path was inevitable, say, due to the absolute nature of things.

It has been only (!) two to three hundred years since the eighteenth century, in which the values and policies of the Enlightenment first prospered, in which naturalism made major explicit inroads on supernaturalism, and in which society and its institutions were relatively widely seen to be a matter of policy and neither the natural nor the supernatural order of things.? Ideological and normative propositions, typically having a complex relation to power, are operative in the making and conduct of policy and the social reproduction or alteration of socioeconomic structure.? As for politicization, I know of no conclusive way in which a mediaeval or feudal structure and its world view can be conclusively shown to be more, or less, politicized than a mercantilist, capitalist or socialist/communist system. A change in power structure may (or may not) lead to a change of ideology that is typically more important than a change in power structure generated by a change in ideology.? My key point is that no one ideology is more politicized than another.

Consider, for example, the interpretations of the United States made in the 1930s and in 2009.? Franklin Delano Roosevelt and John Maynard Keynes were seen by many as socialists and antagonistic to capitalism whereas others saw the innovations of the New Deal as saving capitalism for the capitalists, or whomever.? The amply evident present-day situation pits President Barack Obama against the Republicans of the House of Representatives.? I suggest the following as a possibility — the Republicans understand that the President?s program is geared to support business (investment) in part through bail-outs, etc., helping selected types of business rather than supporting households, especially lower- and middle-class families.? The flow of spending can work, or not work, in different ways.? Consider that consumption spending, even if financed by home bailouts of some sort, may lead to an increase in the expected rate of profit of businesses and a fall in liquidity preference by various groups, including those engaged in real or portfolio investment, or increase the distraction of the working class from recognizing or even speculating that it is capitalism that President Obama is saving while more or less increasing the possibility of upward mobility by the children and grandchildren of the masses, which is what President Obama seems at least to desire. (The reader will recall that in their concluding chapter, Barnett and Zweynert note a tendency in Russia ?toward the ?state capture? of key branches of the economy? (p. 187). It would be ironic if the bailout and stimulus packages (notice the play of metaphors) (and, to a lesser but not insignificant degree, the imposition of moral and/or legal constraints on the remuneration of corporate executives) that have become (as of April 2009) the centerpiece of the Obama administration?s anti-depression policy represented an area of Galbraithian (or other) convergence between U.S. capitalism and Russian post-Soviet organization; and possibly even more ironic if the packages represented the capture of business(es) by government in place of or in addition to business capture of government agencies and branches.)

Assume the foregoing is a meaningful account.? Joseph Schumpeter pointed out the irony of a European labor party successful at the polls yet, instead of being able to introduce socialism (whatever that might have meant to them), they became the managers of a continuing, if somewhat revised, capitalism.? In the dialectic of politics it is sometimes, perhaps often, the continuing task of each party both to abet and to limit the other, for example, in Moscovy. Performing that task transcends the vagaries of ideological perception.

If investment increases (say. due to an increase in the expected rate of profit generated by a newly optimistic psychology), income will tend to increase, as will also consumption.? The reverse will also likely happen, i.e., a story of shocks coupled with either positive or negative multipliers.? One point is the multiplier account.? Another point is that, ceteris paribus, income can change as a result of a policy-induced change in either consumption (working, through the expected rate of profit, on investment) or investment (working, through the marginal propensity to save, on consumption). Each sequence is accompanied by its heroic account.? One group of voters applauds one; another resonates with the other. Those who invoke a one-sided view of the two processes narrow the possibilities permitted by economic theory.? But neither view is more ideological or more politicized than the other.? The same applies to tax versus subsidy externality policies.

Religious people who are successful in life in their own mind, may tend to dispose of their discretionary income in a trade-expanding way; similarly, people engaged in trade who are successful may act in a religion-enhancing way.? Neither practice is more ideological or more politicized than the other.

Apropos, therefore, of this and other books, on the Russia of Moscovy, policy might have reflected Eastern Orthodoxy or mercantilism or both, but be interpreted as the opposite.? I submit, first, that any story told about the different pieces of Russian history, like that of the U.S., could stress one side or the other, yet the evidence remain incapable of conclusive affirmation of either side.? I submit, second, that neither Eastern Orthodoxy nor mercantilism is more ideological or more politicized than the other.? I submit, third, that any one-sided choice of a story is a function of sentiment or ideological position coupled with a desire to have a seemingly absolute account whose value is more important for influencing present-day policy than for interpreting the past.? I should not be understood as attributing such to the motives of either the editors or the other authors, but to the logical situation of interpretation.? There is no one complete, true history; there are interpretations.

One reader of a draft of this review suggested that by the time that the questions of politicization and of controversy over development path were largely and practically ?solved? in the Western countries, they were still on the agenda in Russia.? I believe that they have neither ever been solved nor off the agenda in the Western countries.? To that reader politicization means the entry of policy and ideology into practical solution policies and into economic theory; that it is impossible to either estimate the degree of politicization or eliminate it; and that its degree and meaning depend on political and legal arrangements, hierarchical system of power and so on.? This reader also feels that no history of economic thought can be the ?true? story, only a story bearing signs of their time, place and the views of the people who were engaged in doing economics.? This reader also believes that intellectual history cannot be reduced to one or two problems, however important they might be: intellectual history is a multi-stream process.

Another reader of the draft identifies as a missing issue differences in state attempts to control intellectual discourse.? The actions can take different forms:? the termination or intimidation of professors who challenge the dominant political ?line? or ?consensus,? government funding of economic research with a pronounced bias favoring ?mainstream? research where ?mainstream? reflects both professional orthodoxy and the economic system around which orthodoxy and the national economy is built, and so on.

All of which suggests that the work of contemporary historians of economic thought is richer and less presumptuous than the work of earlier generations.? The history of economic thought is itself a vast interpretive field with numerous opportunities for interpretation.?


Warren J. Samuels is Professor of Economics, Emeritus at Michigan State University.? He is the founding editor of _Research in the History of Economic Thought and Methodology_. His book of essays on the use of the concept of the invisible hand is in the initial stage of the production process.

Copyright (c) 2009 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (May 2009). All EH.Net reviews are archived at

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII

American Treasure and the Price Revolution in Spain, 1501-1650

Author(s):Hamilton, Earl J.
Reviewer(s):Munro, John

Classic Reviews in Economic History

Earl J. Hamilton, American Treasure and the Price Revolution in Spain, 1501-1650. Cambridge, MA: Harvard University Press, 1934. xii + 428 pp.

Review Essay by John Munro, Department of Economics, University of Toronto.

Hamilton and the Price Revolution: A Revindication of His Tarnished Reputation and of a Modified Quantity Theory

Hamilton and the Quantity Theory Explanation of Inflation

As Duke University’s website for the “Earl J. Hamilton Papers on the Economic History of Spain, 1351-1830” so aptly states: Hamilton “helped to pioneer the field of quantitative economic history during a career that spanned 50 years.”[1]   Certainly his most important publication in this field is the 1934 monograph that is the subject of this “classic review.”  It provided the first set of concrete, reliable annual data on both the imports of gold and silver bullion from Spain’s American colonies — principally from what is now Bolivia (Vice Royalty of Peru) and Mexico (New Spain) — from 1503 to 1660 (when bullion registration and thus the accounts cease); and on prices (including wages) in Spain (Old and New Castile, Andalusia, Valencia), for the 150 year period from 1501 to 1650.[2]  His object was to validate the Quantity Theory of Money: in seeking to demonstrate that the influx of American silver was chiefly, if not entirely, responsible for the inflation of much of the Price Revolution era, from ca.  1520 to ca. 1650: but, principally only for the specific period of ca. 1540 to ca. 1600.  Many economic historians (myself included, regrettably) have misunderstood Hamilton on this point, concerning both the origins and conclusion of the Price Revolution.  Of course the Quantity Theory of Money, even in its more refined modern guise, is no longer a fashionable tool in economic history; and thus only a minority of us today espouse a basically monetary explanation for the European Price Revolution (ca. 1515/20-1650) — though no such explanation can be purely monetary.[3]

If inflations had been frequent in European economic history, from the twelfth century to the present, the Price Revolution was unique in the persistence and duration of inflation over a period of at least 130 years.[4]  Furthermore, if commodity money — i.e., gold and especially silver specie — was not the sole monetary factor that explains the Price Revolution that commodity money certainly played a relatively much greater role than it did in the subsequent inflations (of much shorter duration) from the mid-eighteenth century to the present.  The role of specie, and specifically Spanish-American silver, in “causing” the Price Revolution was a commonplace in Classical Economics and Hamilton cites Adam Smith’s statement in _The Wealth of Nations_ (p. 191) that “the discovery of abundant mines of America seems to have been the sole cause of this diminution in the value of silver in proportion to that of corn [grain].”[5]

 The Comparative Roles of Spanish-American Silver and Coinage Debasements: The Bodin Thesis

According to Hamilton (p. 283) — and indeed to most authorities to this very day — the very first scholar to make this quantity-theory link between the influx of American “treasure” and the Price Revolution was the renowned French philosopher Jean Bodin, in his 1568 response to a 1566 treatise by the royal councilor Jean Cherruyt de Malestroit on the explanations for the then quite evident rise in French prices over the previous several decades.  Malestroit had contended that coinage debasements were the chief culprit — as indeed they most certainly had been in the periodic inflations of the fourteenth and fifteenth centuries.[6] Bodin responded by dismissing those arguments and by contending that the growing influx of silver from the Spanish Americas was the primary cause of that inflation.[7]

Hamilton (in chapter 13) was therefore astounded to find, after voluminous and meticulous research in many Spanish treatises, letters, and other relevant documents, that no Spanish writer of the sixteenth century had voiced similar opinions, all evidently ignorant of Bodin’s views.  Hamilton, however, had neglected to find (as Marjorie Grice-Hutchinson did, much later) one such Spanish treatise, produced in 1556 — i.e., twelve years before Bodin — in which Azpilcueta Navarra, a cleric of the Salamanca School, noted that:  “even in Spain, in times when money was scarcer, saleable goods and labor were given for very much less than after the discovery of the Indies, which flooded the country with gold and silver.”[8]

Hamilton also erred, if forgivably so, in two other respects.  First, in utilizing what were then, and in many cases still are, imperfect price indexes for many countries — France, England, Germany, Italy (but not for the Low Countries) — Hamilton (1934, pp. 205-10) concluded that the rise in the general level of prices during the Price Revolution was the greatest in Spain.  In fact, more recent research, based on the Phelps Brown and Hopkins (1956) Composite Price Index for England and the Van der Wee (1975) Composite Price Index (hereafter: CPI) for Brabant, in the southern Low Countries,  reveals the opposite to be true.  If we adopt a common base of 1501-10 = 100, in comparing the behavior of the price levels in Spain, England, and Brabant, for the period 1511-1650, we find that the Hamilton’s CPI for Spain rose from a quinquennial mean of 98.98 in 1511-15 to one of 343.36 in 1646-50 (for silver-based prices only: a 3.47 fold rise); in southern England, the CPI rose from a quinquennial mean of 103.08 in 1511-15 to one of 697.54 (a 6.77 fold rise); and in Brabant, the CPI rose from a quinquennial mean of 114.80 in 1511-15 to one of 845.07 (a 7.36 fold rise).[9] Both the Phelps Brown and Hopkins and the Van der Wee price indexes are, it must be noted, weighted, with roughly the same weights (80 percent foodstuffs in the former and 74 percent in the latter).  Hamilton, while fully admitting that “only index numbers weighted according to the expenditures of the average family accurately measure changes in the cost of living,” was forced to use a simple unweighted arithmetic mean (or equally weighted for all commodities), for he was unable to find any household expenditure budgets or any other reliable guides to produce such a weighted index.[10]

Undoubtedly, however, the principal if not the only explanation for the differences between the three sets of price indexes — to explain why the Spanish rose the least and the Brabantine the most — is the one offered by Malestroit: namely, coinage debasements.  Spain, unlike almost all other European countries of this era, underwent no debasements of the gold and silver coinages (none from 1497 to 1686),[11] but in 1599 the new Spanish king Philip III (1598-1621) did introduce a purely copper “vellon” coinage, a topic that requires a separate and very necessary analysis.  The England of Henry VIII (1509-1547) is famous — or infamous — for his “Great Debasement.”  He had begun modestly in 1526, by debasing Edward IV’s silver coinage by 11.11% (reducing its weight and silver contents from 0.719 to 0.639 grams of fine silver); but in 1542, he debased the silver by another 23.14% (to 0.491 grams of fine silver).  When the Great Debasement had reached its nadir under his successor (Northumberland, regent for Edward VI), in June 1553, the fine silver contents of the penny had been reduced (in both weight and fineness) to just 0.108 grams of fine silver: an overall reduction in the silver content of 83.1% from the 1526 coinage.  In November 1560, Elizabeth restored the silver coinage to traditional sterling fineness (92.5% fine silver) and much of the weight: so that the penny now contained 0.480 grams of fine silver (i.e., 75.1% of the silver in the 1526 coinage).  The English silver coinage remained untouched until July 1601, when its weight and fine silver contents were reduced by a modest 3.23%.  Thereafter the English silver coinage remained untouched until 1817 (when the silver contents were reduced by another 6.06%).  Thus for the entire period of the Price Revolution, from ca. 1520 to 1650, the English silver coinage lost 35.5% of its silver contents.[12] In the southern Low Countries (including Brabant), the silver coinage was debased — in both fineness and weight — a total of twelve times from 1521 to 1644: from 0.33 grams to 0.17 grams of fine silver in the penny, for an overall loss of 48.5%.[13]

 A New Form of Debasement: The New “Fractional” Copper or _Vellon_ Coinages in Spain and Elsewhere

In terms of the general theme of coinage debasement, a very major difference between Spain and these other two countries, from 1599, was the issue of a purely copper coinage called _vellon_, to which Hamilton devotes two major chapters.[14]  Virtually all countries in late medieval and early modern Europe issued a series of petty or low-denomination “fractional” coins — in various fractions of the penny, chiefly to enable the populace to buy such low-priced commodities as bread and beer (or wine).  But in all later-medieval countries the issues of the petty, fractional coinage almost always accounted for a very small proportion of total mint outputs (well under 5% of the aggregate value in Flanders).[15] They were commonly known as _monnaie noire_ (_zwart geld_ in Flemish): i.e., black money, because they contained so much copper, a base metal.  Indeed all coins– both silver and gold — always required at least some copper content as a hardening agent, so that the coins did not suffer too much erosion or breakage in circulation.

The term “debasement” is in fact derived from the fact that the most common mechanism for reducing the silver contents of a coin had been to replace it with more and more copper, a great temptation for so many princes who often derived substantial seigniorage revenues from the increased mint outputs that debasements induced (in both reminting current coin and in attracting bullion from abroad).  In this respect, England was an exception — apart from the era of the Great Debasement (1542-1553) — for its government virtually always maintained sterling silver fineness (92.5% silver, 7.5% copper), and reduced the silver contents for all denominations equally, by reducing the size and weight of the coin.  In continental Europe, the extent of the debasement, whether by fineness or by weight, or by both together, did vary by the denomination (to compensate for the greater labor costs in minting the greater number of lower-valued coins); but the petty “black money” coins — also known (in French) as _billon_, linguistically related to _vellon_, always contained some silver, and always suffered the same or roughly similar proportional reduction of silver as other denominations during debasements until 1543.  In that year, the government of the Habsburg Netherlands was the first to break that link: in issuing Europe’s first all-copper coin.  France followed suit with an all copper _denier_ (1 d tournois) in 1577; but England did not do so until 1672.[16]

Hamilton gives the erroneous impression that Spain (i.e., Castile) was the first to do so, in issuing an all copper _vellon_ coin in 1599.  Previously, Spanish kings (at least from 1471) had issued a largely copper fractional coinage called _blancas_ , with a nominal money-of-account value of 0.5 maravedí, but with a very small amount of silver — to convince the public that it was indeed precious-metal “money.”  The _blanca_ issued in 1471 had a silver fineness of 10 grains or 3.47% (weighing 1.107g).[17] In 1497, that fineness was reduced to 7 grains (2.43% fine); in 1552, to 5.5 grains (1.909% fine); in 1566, to 4 grains (1.39% fine).  In 1597, Philip II (1556-1598) had agreed to the issue of a maravedí coin itself, with, however, only 1 grain of silver (0.34% fine), weighing 1.576g.; but whether any were issued is not clear.[18]

Hamilton commends Philip II on his resolute stance on the issue _vellon_ coinages: for, in “believing that it could be maintained at parity only by limitation of its quantity to that required for change and petty transactions, he was exceedingly careful to restrict the supply.”[19] That is a very prescient comment, in almost exactly stating the principle of maintaining a sound system of fractional or petty coinage that Carlo Cipolla (1956) later enunciated,[20] in turn inspiring the recent monograph on this subject by Sargent and Velde (2002).[21] But neither of them gave Hamilton (1934) any credit for this fundamentally important observation, one whose great importance Hamilton deduced from the subsequent, seventeenth-century history of copper coinages in Spain.

Thus, as indicated earlier, in the year following the accession of the aforementioned Philip III, 1599, the government issued Spain’s first purely copper coin (minted at 140 per copper _marc_ of 230.047 g), and from 1602 at 280 per marc: i.e., reducing the weight by half from 1.643 g to 0.8216 g).[22] Certainly some of the ensuing inflation in seventeenth-century Spain, with a widening gap between nominal and silver-based prices, ranging from 4.0 percent in 1620 to 104.2 percent in 1650, has to be explained by such issues of a purely copper coinage.  Indeed, in Hamilton’s very pronounced view, the principal cause of inflation in the first half of the seventeenth century lay in such _vellon_ issues — more of a culprit than the continuing influx of Spanish American silver.[23]

If, however, we use Hamilton’s own CPI based on the actual nominal prices produced with the circulation of the _vellon_ copper coinage, from 1599-1600, we find that this index rose only 4.61 fold from the quinquennial mean of 1511-15 (98.98) to the mean of 1646-50 (457.07) — again well less than the overall rise of the English and Brabant composite price indexes.  Nevertheless, the differences between the silver-based and vellon-based price indexes in Spain for the first half of the seventeenth century are significant.  For the former (silver), the CPI rose from a mean of 320.98 in 1596-1600 to one of 343.36 in 1646-50, an overall rise of just 6.97%.  For the latter (vellon-based) index, the CPI rose to 457.09 in 1646-50, for a very substantial overall rise of 41.41%.  What certainly did now differentiate Spain from the other two, and indeed almost all other European countries in this period, is that in all the latter countries the purely copper petty coinage formed such a very much smaller, indeed minuscule, proportion of the total coined money supply.[24]

 The Evidence on Spanish-American Silver Mining and Silver Imports into Seville to 1600

What this discussion of the _vellon_ coinage makes crystal clear is that Hamilton did not attribute all of the inflation of the Price Revolution era to the “abundant mines of the Americas.”  Nevertheless many economic historians, after carefully examining Hamilton’s data on prices and imports of Spanish American bullion, noted — as Hamilton himself clearly demonstrated — that the Price Revolution had begun as early as the quinquennium 1516-20, long before, decades before, any significant amounts of Spanish American silver had reached Seville.  Virtually none was imported in the 1520s; and an annual mean of only 5,090.8 kg in 1531-35.[25]   The really substantial imports took place only after by far the two most important silver mines were brought into production: those of Potosi in “Peru” (modern-day Bolivia) in 1545, and Zacatecas, in Mexico, the following year, 1546.  From that quinquennium of 1546-50, mean annual silver imports into Seville rose from 18,698.8 kg to 273,704.5 kg in the quinquennium of 1591-95, marking the peak of the silver imports.  Between these two quinquennia, the total mined silver outputs of Potosi and Zacatecas (unknown to Hamilton) rose from an annual mean of 64,848.9 kg to one of 219,457.4 kg (indicating that silver was coming from other sources than just these two mines).[26] Even then, their production began to boom only with the application of the mercury amalgamation process (which Hamilton barely mentioned — only on p. 16), greatly aided by abundant local supplies of mercury — at Zacatecas, from about 1554-57, and at Potosi, from 1572.[27]

 The Alternative Explanation for the Price Revolution: Population Growth

If all this evidence does indeed prove that the influx of Spanish silver was certainly not the initial cause of the European Price Revolution, surely the data should indicate that the subsequent influx of that silver, especially from the 1550s, very likely did play a significant role in fueling an ongoing inflation. But so many of the anti-monetarist historians leapt to an alternative — and in my view — false conclusion that population growth was the initial and the prime-mover in “causing” the Price Revolution.[28] My objections to this demographic-oriented thesis are two-fold.

In the first place, the now available evidence on demographic recovery and growth in England and the southern Low Countries (Brabant) does not at all correspond to the statistical evidence on inflation during the early phase of the Price Revolution — in the early sixteenth century. For England the best estimate of population in the early 1520s, when the Price Revolution was already underway, is 2.25 or 2.30 million, about half of the most conservative estimate for England’s population in 1300: about 4.5 million — an estimate still rejected by the majority of medieval economic historians, who prefer the more traditional estimate of 6.0 million.[29] If England in the early 1520s was obviously still very unpopulated, compared to its late-medieval peak, and if its population had just begun to recover, how could any such renewed growth, from such a very low level, have so immediately sparked inflation: how could it have caused a rise in the CPI (Phelps Brown and Hopkins) from a quinquennial mean of 96.70 (1451-75 = 100) in 1496-1500 to one of 146.05 in 1521-25?

We find a similar demographic situation in Brabant.  From the 1437 census to the 1496 census, the number of registered households fell from 92,738 to just 75,343: a fall of 18.76 percent.[30] If we further assume that a fall in population also involved a decline in the average family or household size, the demographic decline would have been much greater than these data indicate.  According to Herman Van der Wee (1963), Brabant, like England, did not commence its demographic recovery until the early sixteenth century; and his estimated average annual rate of population growth from 1496 to 1526 was 0.96%.[31]  For this same period, Van der Wee’s CPI for Brabant shows a rise from 115.35 in 1496-1500 (again 1451-75 = 100) to one of 179.94 in 1521-25.  How can any such renewed population growth explain that inflation?

In the second place, the arguments and analyses supplied involve faulty economics: an erroneous transfer of micro-economic analysis to macro-economics.  One can well argue, for early-modern western Europe, that the effect of sustained population growth for the agrarian sector, with necessary additions of “marginal lands” that were generally inferior in fertility and more distant from markets, and without a widespread diffusion of technological changes to offset diminishing returns in this sector, inevitably led to sharply rising marginal costs.  That in turn resulted in price increases for grains and other agricultural commodities (including timber) that were greater than those for non-agrarian and especially industrial commodities, certainly in both England and the southern Low Countries during the course of the sixteenth and first half of the seventeenth century.[32]  But that basically micro-economic model concerning individual, relative commodity prices is, however, very different from a macro-economic model contending that population growth by itself led to an overall increase in the level of prices — i.e., in the CPI.

We should remember that, almost 35 years ago, Donald McCloskey (1972), in a review of Ramsey (1971), responded to these demographic-oriented explanations of the Price Revolution by contending that, if both monetary variables (M and V) were held constant, then population growth (if translated into an increased T or y, in MV = Py) should have led to a fall in P, in the CPI.  Nevertheless, there is some validity to the argument that population growth and changes in the demographic structures may have influenced the role of another monetary factor in the Price Revolution: namely changes in the income velocity of money, to be discussed as a separate topic later in this review.

 Hamilton’s Explanations for the Origins of the Price Revolution before the Influx of Spanish Treasure: The Roles of Gold, South German Silver Mining, and Changes in Credit

How then did Hamilton — and how do we — explain the origins of the Spanish and indeed European-wide Price Revolution,  in the early sixteenth century, i.e., for the period well before any significant influxes of American silver, and also before there was any significant population growth (at least in England and the Low Countries).  Was Hamilton that ignorant of the implications of his own data?  Certainly not.  On p. 299, in his chapter XIII entitled “Why Prices Rose,” he stated that: “the gold imports from the Antilles significantly influenced Andalusian and New Castilian prices even in the first two decades of the sixteenth century,” without, however, elaborating that point any further.[33]  More important are his observations on p. 301, where he explicitly moderates his emphasis on the role of Spanish-American treasure imports, in stating that:  “Only at the beginning of  the sixteenth century, when, as has been shown, colonial demand, credit expansion, and the increased output of German silver made themselves felt, and at the end of the century, when a devastating epidemic, and an over issue of vellon coinage took place, did other factors play important roles in the price upheaval [i.e., the Price Revolution].”  Indeed, in his own view, the paramount role of the influxes of Spanish-American bullion apply to only, at most, 65 years of the 130 years of the Price Revolution era, i.e., to just half the era — from ca. 1535 to 1600, though the evidence for that role seems to be more clear for just the half-century 1550-1600.

It is most regrettable that Hamilton himself failed to elaborate the role of any these factors, principally monetary, in producing inflation in early-sixteenth century Spain.  Had he done so, surely he would have been spared the subsequent and really unfair criticism that he was offering a simplistic monocausal explanation of the Price Revolution, and one in the form of a very crude Quantity Theory of Money.  The most important of “initial causes” that Hamilton lists was surely the question of “German silver,” or more specifically, the South-German and Central European silver-copper mining boom from about the 1460s to the 1540s.  Where he derived his information is not clear, but from other footnotes it was presumably from the publications of two much earlier German economic historians, Adolf Soetbeer and Georg Wiebe.  The latter was, in fact, the first to write a major monograph on the Price Revolution (_Geschichte der Preisrevolution des XVI.  und XVII.  Jahrhunderts_), and he seems to have coined (so to speak) the term.[34]  The former, though a pioneer in trying to quantity both European and world supplies of precious metals, providing a significant influence on Wiebe,  produced seriously defective data on German mining outputs in the later fifteenth and sixteenth centuries, greatly underestimating total outputs, as  John Nef demonstrated in a seminal article published in 1941, subsequently elaborated in Nef (1952).[35] In Nef’s view, this South German mining boom may have quintupled Europe’s supply of silver by the 1530s, and thus before any major influx of Spanish-American silver.[36]

Since then a number of economic historians, me included, have published their research on this South German-Central European silver-copper mining boom.[37] These mountainous regions contained immensely rich ores bearing these two metals, which, however were largely inaccessible for two reasons: first, there was no known method of separating the two metals in smelting the argentiferous-cupric ores; and second, the ever-present danger of flooding in the regions containing these ore bodies made mined extraction very difficult and costly.  In my view, the very serious deflation that Europe experienced during the second of the so-called “bullion famines,” from the 1440s to the 1460s, provided the profit incentive for the necessary technological changes to resolve these two problems.  Consider that since virtually all of Europe’s money-of-account pricing system was based on, tied to, the silver coinage, deflation (low prices) _ipso facto_ meant a corresponding rise in the real value of silver, gram per gram (just as inflation means a fall in the real value of silver, per gram).  The solutions lay in innovations in both mechanical engineering and chemical engineering.  The first was the development of water-powered or horse-powered piston vacuum pumps (along with slanted drainage adits in the mountain sides) to resolve the water-flooding problem.  The second was the so-called _Saigerhütten_ process by which lead was added to the ore-bodies in smelting (also using hydraulic machinery and the new blast furnaces) — during the smelting process the lead combined with the silver to precipitate the copper, and the silver-lead amalgam was then resmelted to remove the lead.

Both processes were certainly in operation by the 1460s; and by my very conservative estimates, certainly incomplete, the combined outputs of mines in Saxony, Thuringia, Bohemia, Slovakia, Hungary, and the Tyrol rose from a quinquennial mean of 12,973.4 kg in 1471-75 (when adequate output data can first be utilized) to a peak production in 1536-40 (thus later than Nef’s estimates), with a quinquennial mean output of 55,703.8 kg — a  4.29-fold increase overall (i.e.. 329.36% increase) — close enough to Nef’s five-fold estimate, given the likely lacunae in the data.[38]  Consider that this output, for the late 1530s, was not exceeded by Spanish-American silver influxes until a quarter of a century later, in 1561-65, when, thanks to the recently applied mercury amalgamation process, a quinquennial mean import of 83,373.92 kg reached Seville (compared to a mean import of just 27,145.03 in 1556-60).[39]

But where did all this Central European silver go?  Historically, from the mid-fourteenth century, most of the German silver-mining outputs had been sent to Venice, whose merchants re-exported most of that silver to the Levant, in exchange for Syrian cotton and Asian spices and other luxury goods.  Two separate factors helped to reverse the direction of that flow, down the Rhine, to Antwerp and the Brabant Fairs.  The first was Burgundian monetary policy: debasements in 1466-67, which, besides attracting silver in itself, reversed a half-century long pro-gold mint policy to a pro-silver policy, offering a relative value for silver (in gold and in goods) higher than anywhere else in Europe.[40] Thus the combined Flemish and Brabantine mint outputs, measured in kilograms of fine silver rose from nil (0) in 1461-65 to 9,341.50 kg in 1476-80 — though much of that was recycled silver coin and bullion in quite severe debasements.  But in 1496-1500, after the debasements had ceased, the mean annual output in that quinquennium was 4,872.96 kg; and in 1536-40, at the peak of the mining boom (and, again, before any substantial Spanish-American imports) the mean output was 5,364.99 kg.[41]

The second factor in altering the silver flows was increasingly severe disruptions in Venice’s Levant trade with the now major Ottoman conquests in the Balkans and the eastern Mediterranean, from the 1460s (and especially from the mid-1480s) culminating (if not ending) with the Turkish conquest of the Mamluk Levant (i.e., Egypt, Palestine, Syria) itself in 1517 (along with conquests in Arabia and the western Indian Ocean). While we have no data on silver flows, we do have data for the joint-product of the Central European mining boom — copper, a very important export as well to the Levant.  In 1491-95, 32.13% of the Central European mined copper outputs went to Venice, but only 5.22% went to Antwerp; by 1511-15, the situation was almost totally reversed: only 3.64% of the mined copper went to Venice, while 58.36% was sent to Antwerp.  May we conjecture that there was a related shift in the flows of silver?  By the 1530s, the copper flows to Venice, which now had more peaceful relations with the Turks, had risen to 11.07%, but 53.88% of the copper was still being sent to the Antwerp Fairs.[42]  Of course, by this time the Portuguese, having made Antwerp the European staple for their recently acquired Indian Ocean spice trade (1501), were shipping significant (if unmeasurable) quantities of both copper and silver to the East Indies.  Then in 1549, the Portuguese moved their staple to Seville, to gain access to the now growing imports of Spanish-American silver.

 The Early Sixteenth-century “Financial Revolutions”: In Private and Public Credit

The other monetary factor that Hamilton mentioned — but never discussed — to help explain the rise of prices in early sixteenth-century Spain was the role of credit.  Indeed, as Herman Van der Wee (1963, 1967, 1977, 2000) and others have now demonstrated, the Spanish Habsburg Netherlands experienced a veritable financial revolution involving both negotiability and organized markets for public debt instruments.  As for the first, the lack of legal and institutional mechanisms to make medieval credit instruments fully negotiable had hindered their ability to counteract frequent deflationary forces; and at best, such credit instruments (such as the bill of exchange) could act only to increase — or decrease — the income velocity of money.[43] The first of two major institutional barriers was the refusal of courts to recognize the legal rights of the “bearer” to collect the full proceeds of a commercial bill on its stipulated redemption date: i.e., the financial and legally enforceable rights of those who had purchased or otherwise licitly acquired a commercial bill from the designated payee before that redemption date.  Indeed, most medieval courts were reluctant to recognize the validity of any “holograph” bill: those that not been officially notarized and registered with civic authorities.  The second barrier was the Church’s usury doctrine: for, any sale and transfer  of a credit instrument to a third party before the stipulated redemption date would obviously have had to be at some rate of discount — and that would have revealed an implicit interest payment in the transaction. Thus this financial revolution, in the realm of private credit, in the Low Countries involved the role of urban law courts (law-merchant courts), beginning with Antwerp in 1507, then most of other Netherlander towns, in guaranteeing such rights of third parties to whom these bills were sold or transferred.  Finally, in the years 1539-1543, the Estates General of the Habsburg Netherlands firmly established, with national legislation, all of the legal requirements for full-fledged negotiability (as opposed to mere transferability) of all credit instruments: to protect the rights of third parties in transferable bills, so that bills obligatory and bills of exchange could circulate from hand to hand, amongst merchants, in commercial and financial transactions.  One of the important acts of the Estates-General, in 1543 — possibly reflecting the growing influence of Calvinism — boldly rejected the long-held usury doctrine by legalizing the payment of interest, up to a maximum of 12% (so that anything above that was now “usury”).[44]  England’s Protestant Parliament, under Henry VIII, followed suit two years later, in 1545, though with a legal maximum interest of 10%.[45] That provision thereby permitted the openly public discounting of commercial credit instruments, though this financial innovation was slow to spread, until accompanied, by the end of the sixteenth century, with the much more common device of written endorsements.[46]

The other major component of the early-sixteenth century “financial revolution” lay in public finance, principally in the Spanish Habsburg Netherlands, France, much of Imperial Germany, and Spain itself — in the now growing shift from interest-bearing government loans to the sale of annuities, generally known as _rentes_ or _renten_ or (in Spain) _juros_, especially after several fifteenth-century papal bulls had firmly established, once and for all, that they were not loans (a _mutuum_, in both Roman and canon law), and thus not subject to the usury ban.[47] Those who bought such _rentes_ or annuities from local, territorial, or national governments purchased an annual stream of income, either for a lifetime, or in perpetuity; and the purchaser could reclaim his capital only by finding some third party to purchase from him the _rente_ and the attached annuity income.  That, therefore, also required both the full legal and institutional establishment of negotiability, with now organized financial markets.

In 1531, Antwerp, now indisputably the commercial and financial capital of at least northern Europe, provided such an institution with the establishment of its financial exchange, commonly known as the _beurse_ (the “purse” — copied by Amsterdam in 1608, and London in 1695, in its Stock Exchange).  Thanks to the role of the South German merchant-bankers — the Fuggers, Welsers, Höchstetters, Herwarts, Imhofs, and Tuchers — the Antwerp _beurse_ played a major role in the international marketing of such government securities, during the rest of the sixteenth century, in particular the Spanish _juros_, whose issue expanded from 3.586 million ducats (_escudos_ of 375 maravedís) in 1516 to 80.040 million ducats in 1598, at the death of Philip II — a 22.4-fold increase.  Most these perpetual and fully negotiable _juros_ were held abroad.[48] According to Herman Van der Wee (1977), this sixteenth-century “age of the Fuggers and [then] of the Genoese [merchant-bankers, who replaced the Germans] was one of spectacular growth in public finances.”[49] Finally, it is important to note the relationship between changes in money stocks and issues of credit.  For, as Frank Spooner (1972) observed (and documented in his study of European money and prices in the sixteenth century), even anticipated arrivals of Spanish treasure fleets would induce these South German and Genoese merchant-bankers to expand credit issues by some multiples of the perceived bullion values.[50]

 The Debate about Changes in the Income Velocity of Money (or Cambridge “k”)

The combined effect of this “revolution” in both private and public finance was to increase both the effective supply of money — in so far as these negotiable credit instruments circulated widely,  as though they were paper money — and also, and even more so, the income velocity of money.  This latter concept brings up two very important issues, one involving Hamilton’s book itself, in particular his interpretation of the causes of the Price Revolution.  Most postwar (World War II) economic historians, myself included (up to now, in writing this review), have unfairly regarded Hamilton’s thesis as a very crude, simplistic version of the Quantity Theory of Money.  That was based on a careless reading (mea culpa!) of pp. 301-03 in his Chapter XIII on “Why Prices Rose,” wherein he stated, first, in explaining the purpose his Chart 20,[51] that:

The extremely close correlation between the increase in the volume of [Spanish-American] treasure imports and the advance of commodity prices throughout the sixteenth century, particularly from 1535 on, demonstrates beyond question that the “abundant mines of America” [i.e., Adam Smith’s description] were the principal cause of the Price Revolution in Spain.

We should note, first, that the “close correlation” is only a visual image from the graph, for he never computed any mathematical correlations (few did in that prewar era).  Second, Ingrid Hammarström was perfectly correct in noting that Hamilton’s correlation between the _annual_ values of treasure imports (gold and silver in pesos of 450 marevedis) and the composite price index is not in accordance with the quantity theory, which seeks to establish a relationship between aggregates: i.e., the total accumulated stock of money (M) and the price level (P).[52]  But that would have been an impossible task for Hamilton.  For, if he had added up the annual increments from bullion exports in order to arrive at some estimate of accumulated bullion stocks, he would have had to deduct from that estimate the annual outflows of bullion, for which there are absolutely no data.  Furthermore, estimates of net (remaining) bullion stocks are not the same as estimates of the coined money stock; and the coined money stock does not represent the total supply of money.[53]

Third, concerning Hamilton’s views on the Quantity Theory itself, his important monetary qualifications concerning the early sixteenth century and first half of the seventeenth century have already been noted.  We should now note his further and very important qualification (p. 301), as follows: “The reader should bear in mind that a graphic verification of that crude form of the quantity theory of money which takes no account of the velocity of circulation is not the purpose of Chart 20.”  He did not, however, discuss this issue any further; and it is notable that his bibliography does not list Irving Fisher’s classic 1911 monograph, which had thoroughly analyzed his own concepts of the Transactions Velocity of Money.[54]

Most economics students are familiar with Fisher’s Equation of Exchange, to explain the Quantity Theory of Money in a much better fashion than nineteenth-century Classical Economists had done: namely, MV = PT.   If many continue to debate the definition of M, as high-powered money, and of P — i.e., on how to construct a valid weighted CPI — the most troublesome aspect is the completely amorphous and unmeasurable “T” — as the aggregate volume of total transactions in the economy in a given year.  Many have replaced T with Q: the total volume of goods and services produced each year.  But the best substitute for T is “y” (lower case Y: a version attributed to Milton Friedman) — i.e., a deflated measure of Keynesian Y, as the Net National Product = Net National Income (by definition).[55]

The variable “V” thus becomes the income velocity of money (rather than Fisher’s Transactions Velocity) — of the unit of money in the creation of the net national income in the course of a year.   It is obviously derived mathematically by this equation: V = Py/M (and Py of course equals the current nominal value of NNI).  Almost entirely eschewed by students (my students, at least), but much preferred by most economists, is the Cambridge Cash Balances equation: whose modernized form would similarly be M = kPy, in which Cambridge “k” represents that share of the value of Net National Income that the public chooses to hold in real cash balances, i.e., in high-powered money (a straight tautology, as is the Fisher Equation).  We should be reminded that both V and k are mathematically linked reciprocals in that: V = 1/k and thus k = 1/V.  Keynesian economists would logically (and I think, rightly) contend that _ceteris paribus_ an increase in the supply of money should lead to a reduction in V and thus to an increase in Cambridge “k.”  If V represents the extent to which society collectively seeks to economize on the use of money, the necessity to do so would diminish if the money supply rises (indeed, to create an “excess”).  But this result and concept is all the more clear in the Cambridge Cash Balances approach.  For the opportunity cost of “k” — of holding cash balances — is to forgo the potential income from its alternative use, i.e., by investing those funds.  If we assume that the Liquidity Preference Schedule is (in the short run) fixed — in terms of the transactions, precautionary, and speculative motives for holding money — then a rightward shift of the Money Supply schedule along the fixed or stationary LP schedule should have led to a fall in the real rate of interest, and thus in the opportunity cost of holding cash balances.  And if that were so, then “k” should rise (exactly reflecting the fall in V).

 What makes this theory so interesting for the interpretation of the causes of at least  the subsequent inflations of the Price Revolution — say from the 1550s or 1560s — is that several very prominent economic historians have argued that  an equally or even more powerful force for inflation was a continuing rise in V, the income velocity of money (i.e., and thus to a fall in “k”): in particular, Harry Miskimin (1975), Jack Goldstone (1984, 1991a, 1991b), and Peter Lindert (1985).  Furthermore, all three have related this role of “V” to structural changes in the economy brought about by population growth.  Their theories are too complex to be discussed here, but the most intriguing, in summary, is Goldstone’s thesis.  He contended, in referring to sixteenth-century England, that its population growth was accompanied by a highly disproportionate growth in urbanization, a rapid and extensive development of commercialized agriculture, urban markets, and an explosive growth in the use of credit instruments.  In such a situation, with a rapid growth “in occupationally specialized linked networks, the potential velocity of circulation of coins grows as the square of the size of the network.”  Lindert’s somewhat simpler view is that demographic growth was also accompanied by a two-fold set of changes: (1) changes in relative prices — in the aforementioned steep rise in agricultural prices, rising not only above industrial prices, but above nominal wages, thus creating severe household budget constraints; and (2) in pyramidal age structures, and thus with changes in dependency ratios (between adult producers and dependent children) that necessitated both dishoarding and a rapid reduction in Cambridge “k” ( = rise in V).

Those arguments and the apparent contradiction with traditional Keynesian theory on the relationships between M and V (or Cambridge “k”) intrigued and inspired Nicholas Mayhew (1995), a renowned British medieval and early-modern monetary historian, to investigate these propositions over a much longer period of time: from 1300 to 1700.[56]  He found that in all periods of monetary expansion during these four centuries, the Keynesian interpretation of changes in V or “k” held true, with one singular anomalous exception: the sixteenth and early seventeenth-century Price Revolution.  That anomaly may (or may not) be explained by the various arguments set forth by Miskimin, Goldstone, and Lindert.

The Debates about the Spanish and European Distributions of Spanish American “Treasure” and the Monetary Approach to the Balance of Payments Theorem

We may now return to Hamilton’s own considerations about the complex relationships between the influx of Spanish-American silver and its distribution in terms of various factors influencing (at least implicitly) the “V” and “y” variables, in turn influencing changes in P (the CPI).  He contends first (pp. 301-02) that “the increase in the world stock of precious metals during the sixteenth century was probably more than twice — possibly as much as four times — as great as the advance of prices” in Spain.  He speculates, first, that some proportion of this influx was hoarded or converted, not just by the Church, in ecclesiastical artifacts, but also by the Spanish nobility (thus leading to a rise in “k”), while a significantly increasing proportion was exported in trade with Asia, though mentioning only the role of the English East India Company (from 1600), surprisingly ignoring the even more prominent contemporary role of the Dutch, and the much earlier role of the Portuguese (from 1501, though the latter used  principally South German silver).  We now estimate that of the total value of European purchases made in Asia in late-medieval and early modern eras, about 65-70 percent were paid for in bullion and thus only 25-30 percent from the sale of European merchandise in Asia.[57]  Finally, Hamilton also fairly speculated that “the enhanced production and exchange of goods which accompanied the growth of population, the substitution of monetary payments for produce rents [in kind] … and the shift from wages wholly or partially in kind to monetary remunerations for services, and the decrease of barter tended to counteract the rapid augmentation of gold and silver money:”  i.e., a combination of interacting factors that affected both Cambridge “k” and Friedman’s “y.”  Clearly Hamilton was no simplistic proponent of a crude Quantity Theory of Money.

From my own studies of monetary and price history over the past four decades, I offer these observations, in terms of the modernized version of Fisher’s Equation of Exchange, for the history of European prices from ca. 1100 to 1914.   An increase in M virtually always resulted in some degree of inflation, but one that was usually offset by some reduction in V (increase in “ k”) and by some increase in y, especially if and when lower interest rates promoted increased investment.[58]  Thus the inflationary consequences of increasing the money supply are historically indeterminate, though usually the price rise was, for these reasons, less than proportional to the increase in the monetary stock, except when excessively severe debasements created a veritable “flight from coinage,” when coined money was exchanged for durable goods (i.e., another instance in which an increase in M was accompanied by an increase in V).[59]

One of the major issues related to this debate about the Price Revolution is the extent to which the Spanish-American silver that flowed into Spain soon flowed out to other parts of Europe (i.e., apart from the aggregate European bullion exports to Asia and Russia).  There is little mystery in explaining how that outflow took place.  Spain, under both Charles V (I of Spain) and Philip II, ruled a vast, far-flung empire: including not only the American colonies and the Philippines, but also the entire Low Countries, and major parts of Germany and Italy, and then Portugal and its colonies from 1580 to 1640.  Maintaining and defending such a vast empire inevitably led to war, almost continuous war, with Spain’s neighbors, especially France.  Then, in 1568, most of  the Low Countries (Habsburg Netherlands) revolted against Spanish rule, a revolt that (despite a truce from 1609 to 1621) merged into the Thirty Years War (1618-48), finally resolved by the Treaty of Westphalia.  As Hamilton himself suggests (but without offering any corroborative evidence — nor can I), vast quantities of silver (and gold) thus undoubtedly flowed from Spain into the various military theaters, in payment for wages, munitions, supplies, and diplomacy, while the German and then Genoese bankers presumably received considerable quantities of bullion (or goods so purchased) in repayment of loans.[60]  Other factors that Hamilton suggested were: adverse trade balances, or simply expanding imports, especially from Italy and the Low Countries (with an increased marginal propensity to import); and operations of divergent bimetallic mint ratios.  What role piracy and smuggling actually played in this international diffusion of precious metals cannot be ascertained.[61]

But Outhwaite (1969, 1982), in analyzing the monetary factors that might explain the Price Revolution in Tudor and early Stuart England, asserted (again with no evidence) that: “Spanish silver … appears to have played little or no part before 1630 and a very limited one thereafter.”[62]  That statement, however, is simply untrue.  For, as Challis (1975) has demonstrated, four of the five extant “Melting Books,” tabulating the sources of bullion for London’s Tower Mint, between 1561 and 1599, indicate that Spanish silver accounted for proportions of total bullion coined that ranged from a low of 75.0% (1561-62) to a high of 86.3% (1584-85).  The “melting books” also indicate that almost all of the remaining foreign silver bullion brought to the Tower Mint came from the Spanish Habsburg Low Counties (the southern Netherlands, which the Spanish had quickly reconquered).[63]  Furthermore, if we ignore the mint outputs during the Great Debasement (1542-1553) and during the Elizabethan Recoinage (1561-63), we find that the quantity of silver bullion coined in the English mints rose from a quinquennial mean of 1,089.012 kg in 1511-15 (at the onset of the Price Revolution) to a peak of 18,653.36 kg in 1591-95, after almost four decades of stable money: a 17.13 fold increase.  Over this same period, the proportion of the total value of the aggregate mint outputs accounted for by silver rose from 12.32% to 90.35% — and (apart from the Great Debasement era) without any significant change in the official bimetallic ratio.[64]

Those economists who favor the Monetary Approach to the Balance of Payments Theorem in explaining inflation as an international phenomenon would contend that we do not have to explain any specific bullion flows between individual countries, and certainly not in terms of a Hume-Turgot price-specie flow mechanism.[65]  In essence, this theorem states that world bullion stocks (up to 1914, with a wholesale shift to fiat money) determine the overall world price level; and that individual countries, through international arbitrage and  the “law of one price,” undergo the necessary adjustments in establishing a commensurate domestic price level and the requisite money supply (in part determined by changes in private and public credit) — not just through international trade in goods and services, but especially in capital flows (exchanging assets for money) at existing exchange rates, without specifically related bullion flows.

Nevertheless, in the specific case of sixteenth century England, we are naturally led to ask:  where did all this silver come from; and why did England shift from a gold-based to a silver-based economy during this century?   More specifically, if Nicholas Mayhew (1995) is reasonably close in his estimates of England’s Y = Gross National Income (Table I, p. 244), from 1300 to 1700, as measured in the silver-based sterling money-of-account, that it rose from about  £3.5 million pounds sterling in 1470 (with a population of 2.3 million) to £40.88 million pound sterling in 1670 (a population of 5.0 million) — an 11.68-fold increase — then we again may ask this fundamental question.   Where did all these extra pounds sterling come from in maintaining that latter level of national income?   Did they come from an increase in the stock of silver coinages, and/or from a vast increase in the income velocity of money?  Indeed that monetary shift from gold to silver may have had some influence on the presumed increase in the income velocity of money since the lower-valued silver coins had a far greater turnover in circulation than did the very high-valued gold coins.[66]

 Statistical Measurements of the Impact of Increased Silver Supplies: Bimetallic Ratios and Inflation

There are two other statistical measures to indicate the economic impact within Europe itself of the  influx of South German and then Spanish American silver during the Price Revolution era, i.e., until the 1650s.  The first is the bimetallic ratio.  In England, despite the previously cited evidence on its relative stability in the sixteenth-century, by 1660, the official mint ratio had risen to 14.485:1 (from the low of 10.333:1 in 1464).[67]  In Spain, the official bimetallic ratio had risen from 10.11:1 in 1497 to 15.45:1 in 1650; and in Amsterdam, the gold:silver mint ratio had risen from 11.21 in 1600 to 13.93:1 in 1640 to 14.56:1 in 1650.[68]  These ratios indicate that silver had become relatively that much cheaper than gold from the early sixteenth to mid-seventeenth century; and also that, despite very significant European exports of silver to the Levant and to South Asia and Indonesia in the seventeenth century, Europe still remained awash with silver.[69]  At the same time, it is also a valid conjecture that the greatest impact of the influx of Spanish American silver (and gold) in this era was to permit a very great expansion in European trade with Asia, indeed inaugurating a new era of globalization.

The second important indicator of the change in the relative value of silver is the rise in the price level:  i.e., of inflation itself.  As noted earlier, the English CPI experienced a 6.77-fold from 1511-15 to 1646-50, at the very peak of the Price Revolution; and the Brabant CPI experienced a 7.36-fold rise over the very same period (expressed in annual means per quinquennium).[70] Since these price indexes are expressed in terms of silver-based moneys-of-account, that necessarily meant that silver, gram per gram, had become that much cheaper in relation to tradable goods (as represented in the CPI) — though, as noted earlier, the variations in the rates of change in these CPI are partly explained by differences in their respective coinage debasements.

A Comparison of the Data on Spanish-American Mining Outputs and Bullion Imports (into Seville)

Finally, how accurate are Hamilton’s data on the Spanish-American bullion imports?   We can best gauge that accuracy by comparing the aggregate amount of fine silver bullion entering Seville with the now known data on the Spanish-American silver-mining outputs, for the years for which we have data for both of these variables: from 1551 to 1660.[71]  One will recall that the Potosi mines were opened only in 1545; and those of Zacatecas in 1546; and recall, furthermore, that production at both began to boom only with the subsequent application of the mercury amalgamation process (not fully applied until the 1570s).  The comparative results are surprisingly close.  In that 110-year period permitting this comparison, total imports of fine silver, according to Hamilton, amounted to 16,886,815.3 kg; and the combined outputs from the Potosi and Zacatecas mines was very close to that figure: 17,057,938.2 kg.[72]  It is also worth noting that the outputs from the Spanish-American mines and the silver imports both peak in the same quinquennium: 1591-95, when the annual mean mined silver output was 219,457.4 kg and the annual mean silver import was 272,704.5 kg.  By 1626-30, the mean annual mined output had fallen 18.7% to 178,490.0 kg and the mean annual import had fallen even further, by 24.7%, to 206,045.26 kg (both sets of data indicate that the silver imports for these years were not based just on these two mines).  Thereafter, the fall in imports is much more precipitous: declining by 86.4%, to an annual mean import of just 27,965.33 kg in the final quinquennium of recorded import data, in 1656-60.  The combined mined output of the Potosi and Zacatecas mines also fell during this very same period, but not by as much: declining by 27.1%, with a mean output of 130,084.23 kg in 1656-60: i.e., a mean output that was 4.65 times more than the mean silver imports into Seville in that quinquennium.

The decline in the Spanish-American mining outputs of silver can be largely attributed to the expected rate of diminishing returns in a natural-resource industry without further technological changes.  The differences between the two sets of data, on output and imports, were actually suggested by Hamilton himself (even though he lacked any knowledge of the Spanish-American production figures for this era): a higher proportion of the silver was being retained in the Spanish Americas for colonial economic development, and also for export (from Acapulco, in Mexico) across the Pacific to the Philippines and China, principally for the silk trades.  Indeed, as TePaske (1983) subsequently demonstrated, the share of pubic revenues of the Viceroyalty of Peru retained for domestic development rose from 40.8% in 1591-1600 to a peak of 98.9% in 1681-90.  We have no comparable statistics for the much less wealthy Mexico (in New Spain); but TePaske also supplies data on its silver exports to the Philippines. Those exports rose from an annual mean of 1,191.2 kg in 1591-1600 (4.8% of Mexican total silver outputs) to a peak of 9,388.2 kg in 1631-40 (29.6% of the total silver outputs).  Though declining somewhat thereafter, such exports then recovered to 4,990.0 kg in 1681-90 (29.0% of the total silver outputs).[73]

 The Morineau Challenge to Hamilton’s Data: Speculations on Post-1660 Bullion Imports and Deflation

Hamilton’s research on Spanish-American bullion imports into Seville ceased with the year, 1660, because that latter date marked “the termination of compulsory registration of treasure” at Seville.[74] Subsequently, the French economic historian Michel Morineau (1968, 1985) sought to remedy the post-1660 lacuna of bullion import data by extrapolating statistics from Dutch gazettes and newspapers.  In doing so, contended that Spanish-American bullion imports strongly revived after the 1660s, a view that most historians have uncritically accepted.[75]  But his two publications on this issue present a number of serious problems.  First, there is the problem of comparing Spanish apples (actual data on bullion imports) with Dutch oranges (newspaper reports, many being speculations).  Second, the statistics in the two publications differ strongly from each other.  Third, except for one difficult-to-decipher semi-logarithmic graph, they do not provide specific data that allow us to distinguish clearly between gold and silver imports, either by weight or value.[76]  Fourth, the statistics on bullion imports are vastly larger in kilograms of metal than those recorded for Spanish American mining outputs, and also differ radically in the trends recorded for the Spanish-American mining output data.[77]

Nevertheless, these Spanish American mining output data do indicate some considerable recovery in production in the later seventeenth century.  Thus,  while the output of the Potosi mines continued to fall in the later seventeenth century (to a mean of 56,884.9 kg in 1696-1700, and to one of just 30,990.86 kg in 1711-15), those at Zacatecas recovered from the low of 26,373.4 kg in 1656-60 to more than double, reaching an unprecedented peak of 64,139.87 kg in 1676-80.  Then, shortly after, a new and very important Mexican silver mine was developed at Sombrerete, producing an annual mean output of 30,492.83 kg in 1681-85.  Thus the aggregate (known) Spanish-American mining output rose from a low 101,533.96 kg in 1661-65 (mean annual output) to a high of 143,212.93 kg in 1686-90: a 1.41-fold increase.[78]

Whatever are the actual figures for the imports of Spanish-American silver between the 1660s and the 1690s, we are in fact better informed about the export of precious metals, primarily silver, by the two East India Companies: in those four decades, the two companies exported a total of 1,3345,342.0 kg of fine silver to Asia.[79]  An indication of some relative West European scarcity of coined silver money, from the 1660s to the 1690s, can be found in the Consumer Price Indexes for both England and Brabant.  In England, the quinquennial mean CPI (1451-75=100) fell from the Price Revolution peak of 734.39 in 1646-50 to a low of 547.58 in 1686-90: a fairly dramatic fall of 25.43%.  By that time, however, the London Goldsmiths’ development of deposit and transfer banking, with fully negotiable promissory notes and rudimentary paper bank notes, was providing a financial remedy for any such monetary scarcity — as did the subsequent vast imports of gold from Brazil.[80] Similarly, in Brabant, the quinquennial mean CPI (1451-75=100) fell from the aforementioned peak of 1015.138 in 1646-50 to a low of 652.217 — an even greater fall of 35.8% — similarly in 1686-90.  In Spain (New Castile), the deflation commenced somewhat later, according to Hamilton (1947), who, for this period, used a CPI whose base is 1671-80=100.  From a quinquennial mean peak of 103.5 in 1676-80 (perhaps reflecting the ongoing vellon inflation), the CPI fell to a low 59.0 in 1686-90 (an even more drastic fall of 43.0%): i.e., the very same period for deflationary nadir experienced in both England and Brabant.

These data are presented in Hamilton’s third major monograph (1947), which appeared thirteen years later, shortly after World War II, covering the period 1651-1800: in Table 5, p. 119.  In between these two, Hamilton (1936), published his second monograph: covering the period 1351-1500 (but excluding Castile)  One might thus be encouraged to believe that, thanks to Hamilton, we should possess a continuous “Spanish” price index from 1351-1800.  Alas, that is not the case, for Hamilton kept shifting his price-index base for each half century over this period, without providing any overlapping price indexes or even similar sets of prices (in the maravedís money-of-account) to permit (without exhaustive labor) the compilation of such a continuous price index.[81]  That, perhaps, is my most serious criticism of Hamilton’s scholarship in these three volumes (though not of his journal articles), even if he has provided an enormous wealth of price data for a large number of commodities over these four and one-half centuries (and also voluminous wage data).[82]

 Supplementary Criticisms of Hamilton’s Data on Gold and Silver Imports

One of the criticisms leveled against Morineau’s monetary data — that they do not allow us to distinguish between the influxes of gold and silver — can also be made, in part, against Hamilton’s 1934 monograph. The actual registrations of Spanish American bullion imports into Seville, from 1503 to 1660, were by the aggregate value of both gold and silver, in money-of-account pesos that were worth 450 marevedis, each of which represented 42.29 grams pure silver (for the entire period concerned, in which, as noted earlier, no silver debasements took place).  Those amounts, for both public and private bullion imports, are recorded in Table 1 (p. 34), in quinquennial means.  His Table 2 (p. 40) provides his estimates — or speculations — of the percentage distribution of gold and silver imports, by decade, but by weight alone: indicating that from the 1530s to the 1550s, about 86% was in silver, and thereafter, to 1660, from 97% to 99% of the total was consistently always in silver.[83]  His table 3 (p. 42) provides his estimate of total decennial imports of silver and gold in grams.  What is lacking, however, is the distribution by value, in money-of-account terms, whether in maravedís, pesos, or ducats (worth 375 maravedís).  Since these money-of-account values remained unchanged from 1497 to 1598, and with only a few changes in gold thereafter (to 1686), Hamilton should have calculated these values as well, utilizing as well his Table 4 gold:silver bimetallic ratios (p. 71).  Perhaps this is a task that I should undertake — but not now, for this review.  A more challenging task to be explored is to analyze the impact of gold inflows, especially of Brazilian gold from the 1690s, on prices that are expressed almost everywhere in Europe in terms of a silver-based money of account (e.g., the pound sterling).  Obviously one important consequence of increased gold inflows was the liberation of silver to be employed elsewhere in the economy: i.e., effectively to increase the supply of silver for the economy.

At the same time, we should realize that the typical dichotomy of the role of the two metals, so often given in economic history literature — that gold was the medium of international trade while silver was the medium of domestic trade — is historically false, especially when we view Europe’s commercial relations with the Baltic, Russia, the Levant, and most of Asia.[84]


EH.Net’s Classic Reviews Selection Committee was certainly justified in selecting Hamilton’s _American Treasure and the Price Revolution in Spain, 1501-1650_ as one of the “classics” of economic history produced in the twentieth century; and Duke University’s website (see note 1) was also fully justified in declaring that Hamilton was one of the pioneers of quantitative economy history.  In his preface, Hamilton noted (p. xii) that he and his wife spent 30,750 hours in collecting and processing this vast amount of quantitative data on Spanish bullion imports and prices and wages, “entirely from manuscript material,” with another 12,500 hours of labor rendered by hired research assistants — all of this work, about three million computations, done without electronic calculators, let alone computers.  Who today would even contemplate undertaking such an enormous task without powerful modern computers and a bevy or research assistants?  For this task, this truly pioneering task, Hamilton deserves full praise.

How much praise does he deserve for the goals that he pursued?  In his introduction he expressed his hope that all these data “may afford a partial verification of the quantity theory and also throw new light upon the related question of the connection between prices and the supply of precious metals;” but he also stated (pp. 4-5) that “the last lesson concerning the quantity theory has not been drawn from this phenomenon; nor is the final word likely to be spoken before greater knowledge of the history of banking and the contemporary influence of credit on prices becomes available.”

As I have sought to demonstrate in this review, necessarily with very detailed evidence, Hamilton did achieve this more modestly defined goal, certainly as well as any pioneering economic historian could have been expected to achieve in the 1930s.  Of course, a contemporary economic historian, utilizing the vast amount of research conducted on these questions in the past seventy years, and using much more sophisticated techniques of economic analysis and econometrics would have produced a very different book — but possibly one lacking Hamilton’s own insights.  Given the current disfavor into which even the more refined, modern version of the Quantity Theory has fallen, the major goal of this review has been to demonstrate at least a qualified validity of this approach to understanding inflations and deflations, and the Price Revolution in particular.  Thus the complementary goal has been to rescue Hamilton’s reputation, given in particular his frequent use of infelicitous phrases, such as the statement that “American gold and silver precipitated the Price Revolution,” which Hamilton himself demonstrated was clearly not the truth.  Finally, given the enormous importance of the Price Revolution — a truly unique historical experience — in shaping the economy and society of early-modern Europe, and in establishing a more truly global economy, I have also sought to supply data unavailable to Hamilton in demonstrating how and why the behavior of prices during the Price Revolution era was related to the complex combination of changes in the money supplies (including credit), changes in the income velocity of money, and changes in national incomes; and also to explain why (as Hamilton did not) inflation in the Price Revolution era was an international (or at least a European-wide) phenomenon.

 A Biographical Note on Hamilton:[85]

Earl Jefferson Hamilton (1899-1989), born in Houlka, Mississippi, received his B.S. (Honors) from Mississippi State University in 1920; his M.A., from the University of Texas in 1924; and his Ph.D., from Harvard University in 1929.  He was an Assistant Professor of Economics at Duke University from 1927 to 1929, and then Professor of Economics there until 1944, when he became Professor of Economics at Northwestern (to 1947), and finally Professor Economics at the University of Chicago, until retiring in 1967.  He was also the editor of the _Journal of Political Economy_ from 1948 to 1954; and he served as President of the Economic History Association in 1951-52.




  1. URL: See also the University of Chicago Library, Special Collections Research Center, Guide to the Earl J. Hamilton Papers:

And also on EH.Net:

  1. The prices for individual commodities for each year, from 1501 to 1650, are given in Hamilton (1934), Appendices III-V, pp. 319-58; wages, in Appendix VII, pp. 393-402.


  1. For my publications on the Price Revolution, see Munro (1991, 1994a, 1998, 2003a, 2003b, 2004, and 2007 forthcoming). The non-monetary variable is “y,” in the modernized version of the Fisher Identity: MV. = Py; and in the Cambridge Cash Balances equation: M = kPy. It is also the deflated or “real” Keynesian Y = NNI = NNP.


  1. See my online review online review:, 24 February 1999, of Fischer (1996).


  1. Smith (1776/1937), pp. 191-92. Hamilton might have better cited Smith’s passage on p. 34: “The discovery of the mines of American diminished the value of gold and silver in Europe” (i.e. as expressed in silver-based money-of-account prices); and also other similar passage on pp. 198, 236, 241, and 415-16.


  1. See Spufford (1988), chapter 13, “The Scourge of Debasement,” pp. 289-318; Munro (1973); and the various studies in Munro (1992).


  1. Both published in Le Branchu (1934) and Moore (1946).


  1. Grice-Hutchinson (1952), Appendix III, p. 95.


  1. For Spain: Hamilton (1934), Appendix VIII, p. 403; for Brabant, Van der Wee (1975), pp. 413-47; for southern England: Phelps Brown and Hopkins (1956, 1981). Using the Phelps Brown worksheets, now housed in the Archives of the British Library for Political and Economic Sciences (LSE), I have corrected many of their statistical data.


  1. By constructing various hypothetical “trial” budgets, Hamilton (1934, pp. 273-79) hypothesized that his unweighted index numbers may have underestimated rises in the cost of living by perhaps as much as ten percent in the later sixteenth century, but by perhaps only two percent in the first half of the seventeenth century. See also Hamilton (1947), pp. 113-14, where he more explicitly states: “The contemporaneous account books have failed to yield an inductive basis for weighting the index numbers of commodity prices, and it seemed unlikely that any system of arbitrary weights would give me more accurate results than simple indices. A detailed comparison of unweighted and crudely-weighted index numbers for New Castile in 1651-1700 tended to confirm this hypothesis.”


  1. From 1497 to 1686, the Spanish crown consistently minted (with one exceptional, minor deviation in 1642-43) two silver coins at 93.06 percent fineness: the _Real_, with 3.195g pure silver (67 cut from an alloyed marc of 230.0465 g., with a silver fineness of 11 _dineros_ and 4 grains = 93.056%) and a nominal money-of-account value of 34 maravedís (375 to the ducat money of account; 350 to the peso money of account). In fact, it differed from the earlier _Real_ , struck from 1471, only in its money-account-value, having been raised from 31 to 34 maravedís. Also struck from 1497 was the heavy-weight Real known as the “piece of eight” (real de a ocho), with just over eight times as much fine silver, 25.997 g, and a value of 272 maravedís. In 1686, it was subjected to a very minor weight reduction that reduced its fine silver content to 25.919 g.  The American dollar can trace its descent from this Spanish coin.  Hamilton (1934), chapter III, pp. 46-72; Hamilton (1947), chapter II, pp. 9-35; Ulloa (1975); Motomura (1994, 1997); Munro (2004a), Vol. 4, pp. 174-84.


  1. See Challis (1971, 1978, 1989, 1992a, 1992b); Gould (1970).


  1. Van der Wee (1963), Vol. I, pp. 126-29.


  1. Hamilton (1934): Chapter IV: “Vellon Inflation in Castile, 1598-1650,” pp. 73-103; and Chapter X: “Prices under Vellon Inflation, 1601-1650,” pp. 211-21.


  1. Munro (1988), pp. 387-423: especially for the debasement formula. In medieval and early-modern Flanders the silver penny _groot_ was divided into 24 _mijten_ or _mites_, almost entirely copper in composition.


  1. Spooner (1972), Appendix A, p. 332; Challis (1992a), pp. 365-78; Challis (1992b), p. 689.


  1. The silver fineness was based on theoretical purity of 12 _dineros_, with 24 grains each, and thus a total of 288 grains. The weight was defined as the number cut from an alloyed marc of 230.0465 grams. See n. 11 above.


  1. Hamilton (1934), pp. 49-64.


  1. Hamilton (1934), p. 74.


  1. Cipolla (1956). He states (p. 27): “Every elementary textbook of economics gives the standard formula for maintaining a sound system of fractional money: [1] to issue on government account small coins having a commodity value lower than their monetary value; [2] to limit the quantity of these small coins in circulation; [3] to provide convertibility with unit money. … Simple as this formula may seem, it took centuries to work out.  In England, it was not applied until 1816, and in the United States it was not accepted before 1853.” Cipolla (p. 29) cites a seventeenth-century Italian treatise, by Geminiano Montanari (a mathematics professor at Padua), who had stated that: “it is not necessary for a prince to strike petty coins having a metallic content equal to their face value, provided [that] he does not strike more of them than is sufficient for the use of his people, sooner striking too few than striking too many.”


  1. Sargent and Velde (2002). The title of their book is adapted from the title of chapter 3 in Carlo Cipolla’s book (cited in the previous note): “The Big Problems of the Petty Coins,” pp. 27-37. Sargent and Velde do cite my article on “Deflation and the Petty Coinage Problem” (in n. 15 above), in which I supplied statistical evidence from the Flemish mint accounts, from 1334 to 1484 that the Flemish counts and the Burgundian dukes who succeeded them were always careful to restrict the supply of the petty, copper-based coinages, which rarely accounted for more than 2% of mint outputs by value, during this entire era.


  1. Hamilton (1934), p. 75. A marc of copper was worth 34 maravedís.


  1. On the _vellon_ based inflation in seventeenth-century Spain, see Sargent and Velde (2002), chapter 14, pp. 230-53; Motomura (1994), pp. 104-27; Motomura (1997), pp. 331-67; Spooner (1972), pp. 41-53 (and for western Europe in general).


  1. See n. 15 above.


  1. See Munro (2003a): Table 1.2, pp. 4-5: extrapolated from data in Hamilton (1934), Table 1, p. 34, Table 2, p. 40, Table 3, p. 42; and Hamilton (1929a), pp. 436-72.


  1. These mining output data do not come from Hamilton, but rather from these following sources: Bakewell (1975), pp. 68-103; Bakewell (1984), pp. 105-51; Garner (1987), pp. 405-30; and Cross (1983), pp. 397-422. The only Spanish-American mining data available to Hamilton was Haring (1915), pp. 433-79, which he cited, but did not use.


  1. Spooner (1972), p. 36.


  1. See in particular Outhwaite (1982), especially pp. 39-57; and also the introduction and many of the essays in Ramsay (1971), in particular Hammarström (1957) and Brenner (1961). See also the rather hostile review of this collection by McCloskey (1972), pp. 1332-35. Brenner makes the fundamental error in not treating the Fisher Identity in aggregate terms, and thus talking about a relative (i.e., per capita) diminution in Q (= T, or “y”) that presumably resulted from population growth.  Many of the authors engage in another error, one scorned by Anna Jacobson Schwartz (1974), who, in a review of Spooner (1972), p.  253, comments that: “the author subscribes to a familiar fallacy, namely that a monetary explanation to be valid requires that all prices move in unison.”  On this very common error, see Munro (2003c); and n. 58 below.


  1. For those favoring the lower bound estimate for 1300 (4.0 to 4.5 million), see Campbell, Galloway, Keene and Murphy (1993); Campbell (2005); Nightingale (1996); Nightingale (1997); Nightingale (2005); Russell (1966); and Harvey (1966). For those favoring the upper-bound estimate (6.0 to 7.0 million), see Postan (1950); Hatcher (1977); Hallam (1988); Mayhew (1995); and Dyer (1989). For population estimates in the early sixteenth century, see Cornwall (1970); and Campbell (1981).


30.Cuvelier (1912), vol. I, 432-33, 446-47, 462-77, 484-87; and also pp. cxxxv, clxxvii-viii, and ccxxiii-xviii.


  1. Van der Wee (1963), Vol. I: Appendix 49/1, p. 546. In comparison, the average annual rate of population decline from 1480 to 1496 was -0.81%.


  1. There is yet another explanation why agrarian prices rose more than did most industrial prices: a household budget constraint, when agricultural prices and the CPI rose more than did money wages, as was almost always the case in the sixteenth century. Thus the share of disposable income spent on foodstuffs (and fuels) would have necessarily reduced the share of such income to be spent on other commodities, and thus the relative demand for most other industrial products. At the same time, most labor-intensive industries, with elastic supply schedules, could have readily hired more labor to expand output without experiencing significant rises in marginal costs, when wages were rising so much less than most commodity prices.  See my online 2006 Working Paper: “Real Wages and the ‘Malthusian Problem’ in Antwerp and South-Eastern England, 1400-1700: A Regional Comparison of Levels and Trends in Real Wages for Building Craftsmen.”


  1. Mean annual imports of fine gold rose from 517.24 kg in 1503-05 to 865.93 kg in 1526-30. See n. 25 above, and also Hamilton (1934), p. 45, on the role of gold. For somewhat different figures, but in decennial means, see TePaske (1998).  His estimates of decennial mean New World gold outputs (per year) are 1,209.8 kg in 1501-10 and 1,071.1 kg in 1511-20.  Hamilton, however, made no mention of the much more important Portuguese imports of West African gold: about 17 metric tons, from Sao Jorge da Mina, from about 1460 to 1520 (when other sources of gold, in Africa and Brazil, became more important.  See Wilks (1993).


  1. Adolf Soetbeer (1879); and Wiebe (1995), especially pp. 253-321. See the tables on German silver production from 1493 to 1700, on pp. 265 and 267, based on Soetbeer.


  1. Nef (1941, 1952).


  1. Nef (1941) estimates that aggregate European silver mining outputs in the peak decade 1526-1535 (in his view) ranged between 84,200 kg to 91,200 kg per year.


  1. See my own publications in n. 3, above; and also Munro (2007b). See also Hatcher (1996) and Nightingale (1997).


  1. See Munro (2003a), Table 1.3, p. 8; and Munro (2007b). By far the most important of the new mines was Joachimsthal in Bohemia (from 1516), which reached its peak production in 1531-35, with a quinquennial mean production of 16,554.81 kg of fine silver.


  1. See Munro (2003a), Table 1.2, pp. 4-5, based in part on Hamilton (1934).


  1. The ratio was altered from 11.98:1 to 10.83:1 (June 1466), while in England, it was altered in the opposite direction, to become pro-gold: from 10.33:1 to 11.16:1. See Munro (1973), pp. 155-80, 198-211, Tables C-K; and Munro (1983), Table 10, pp. 150-52; Van der Wee (1963), Vol. I, pp. 126-28, Table XV; Vol. II, pp. 80-101.


  1. See Munro (2003a), Table 1.4, pp. 12-13.


  1. See Munro (2003a), Table 1.7, p. 26, based on Van der Wee (1963), Vol. I, Appendix 44, pp. 522-23.


  1. See Munro (1979, 1992); Spufford (1988), pp. 240-66.


  1. See Van der Wee (1967, 1977, 2000); Munro (1979, 1991b, 2000, 2003d).


  1. See Statutes 37 Henrici VIII, c. 9 of 1545, permitting interest up to 10%; repealed by 5-6 Edwardi VI, c. 20 in 1552, which was in turn repealed in 1571 by 13 Elizabeth I, c. 8, which thus restored 37 Hen. VIII, c. 9, in _Statutes of the Realm_, vol. III, p. 996; and IV.i, pp. 155 and 542, respectively.


  1. See Van der Wee (1967, 1977, 2000), and other sources cited in notes 43 and 44.


  1. See Munro (2003d); Tracy (1985, 1994, 2003).


  1. Van der Wee (1977), pp. 373-76, Table 28. See also Usher (1943), Table 7, p. 169, using older data, which shows a rise in the Spanish funded debt from 4.320 million ducats in 1515 to one of 76.540 million ducats in 1598; and also Spooner (1972), pp. 56-57: “Wherever data [on public borrowing] are available they show that the expansion was certainly spectacular”: in Rome, France, the Low Countries, Germany. In Antwerp, Charles V’s loans rose from about £1.0 million groot Flemish in the 1520s to about £7.0 million in 1557 (on the eve of the Spanish royal bankruptcy). In Genoa, the issue of civic bonds rose from 193,185 _luoghi_ in 1509 to about 500,000 _luoghi_ in 1560 (p.  66).


  1. Van der Wee (1977), pp. 375-76; and see the other sources cited in n. 44 above.


  1. Spooner (1972), pp. 4, 54-55, stating that: “The structure of credit was, in effect, supported by progressive increases in the stocks of precious metals.” Very similar observations have been made in Nightingale (1990), Mueller (1984), Spufford (1988), p. 347: commenting that “when money [coined specie] is freely available, credit is also; when money is scarce, so is credit.”


  1. The title of Hamilton’s Chart 20 (p. 301) is “Total Quinquennial Treasure Imports and Composite Index Numbers of Commodity Prices.”


  1. Hammarström (1957). Her other criticisms of Hamilton’s scholarship strike me as being unfounded and thus unfair.


  1. Many, many years ago, one of my graduate students did run regressions involving both annual values of treasure imports and estimates of residual Spanish stocks of bullion, and achieved better results (high R-squared and better t-statistics) with the latter regressions.


  1. See I. Fisher (1911). The only reference in Hamilton (1934, p. 5, n.6) or in his other publications, to this famous economist is I. Fisher (1927), on index numbers.


  1. For various reasons, too complex to discuss here, I prefer to use the Gross National Product – as many economic historians, in fact do, in the absence of reliable figures for Net National Product.


  1. Mayhew (1995), p. 240, states that: “My own investigation of velocity in the medieval period up to 1300 also suggests that in periods of growth in terms of money, prices, and economic activity, velocity may be expected to fall rather than rise. … It will be argued here [in this article] that velocity does not rise with increasing urbanization and monetization. Indeed, the increasing use of money usually seems to require an enlarged money supply which will actually permit a reduction in velocity rather than an increase.” His intriguing and exceptionally important article makes some very heroic assumptions about the levels of NNI and of M (the money supply) over this long period, not all of which will earn general consent.


  1. See n. 79 below, and also Munro (2007b).


  1. See Gould (1964): who contended that inflation itself promoted capital investment during the Price Revolution era by cheapening the cost of previously borrowed capital: i.e., the relative cost of annual interest payments and repayment of the principal. Gould, however, was one of the critics of the Hamilton thesis; and also one of those who promoted the fallacy that the validity of a monetary interpretation would require that all prices move in unison (p. 251). See Schwartz (1974) in n. 28 above.


  1. The period of England’s “Great Debasement,” 1542 – 1553, was however, surprisingly, not one such example — nor can any be cited in English monetary history (in contrast to medieval French monetary history). As noted earlier, during the “Great Debasement,” the English penny lost 83.1% of it silver content. The formula for relating a debasement to the potential rise in prices (or the rise in the money-of-account price of silver) is: [ (1 / (1 – x) ] – 1, in which x represents the percentage reduction of fine silver in the penny coin and in the linked money-of-account (sterling). By this formula, prices should have risen by 491.72%; but they did not.  The Phelps Brown and Hopkins (1956) CPI rose from a quinquennial mean of 152.33 in 1536-40 to one of 315.85 in 1556-60: an increase of only 107.34%. See also Gould (1970) and Challis (1971, 1978, 1989, 1992a, 1992b).


  1. For shipments of Spanish silver to pay Charles V’s bankers in Antwerp and Genoa, see Spooner (1972), pp. 22-24.


  1. See Hamilton, pp. 44-45: but the analysis and evidence is very thin. On p. 19, he states more explicitly that “In view of the popular misconceptions concerning the amounts of treasure taken by the English, French, and Dutch, one who works with the records is impressed by the paucity rather than the plethora of the specie that fell prey to foreign powers.” See also Hamilton (1929a), pp. 436-72.


  1. Outhwaite (1982), pp. 31, 36. He is referring to the Anglo-Spanish trade treaty of 1630.


  1. Challis (1975). One other account, for June to December 1567 is incomplete, and does not provide the amount of bullion coined, though indicating that Spanish silver may have accounted for only 7.4% of such bullion. Surprisingly, this seminal article is not mentioned in Outhwaite’s second edition of 1982, referring only to Challis (1978).  See also Challis (1984).


  1. The bimetallic ratio in 1526-42 was 11.16:1, as it had been from 1465; in 1600, the bimetallic ratio was 11.10:1. For the mint data, see Challis (1978, 1989, 1992a, 1992b).


  1. See Flynn (1978), D. Fisher (1989), Frenkel and Johnson (1976), McCloskey and Zecher (1976), and Floyd (1985).


  1. In the sixteenth century, apart from the Great Debasement period (1542-1553), gold coins varied in official value from the sovereign worth 20s or £1 (=240d) to the half crown, worth 2s 6 (=30d). The silver coins varied from the farthing (0.25d) to the groat (4d). On this very point about varying circulation velocities on the coinages, see Spooner (1972), p. 74.


  1. My own calculations of the official bimetallic mint ratios indicate a rise from 12.109 in 1604 to 13.363 in 1612 to 13.348 in 1623 to 14.485 in 1660 to 15.210 in 1718 (remaining at this level until 1815). Based on data supplied in Challis (1992b), pp. 673-98.


  1. Hamilton (1934), Table 4, p. 71.


  1. The Dutch East India Company’s exports of fine silver rose from an annual mean 6,959.7 kg in 1600-09 to a mean of 11,563.7 kg in 1660-69. Gaastra (1983), pp. 447-76, especially Appendix 5, p. 475. Spooner (1972), pp. 76-77 and Chart 11, has estimated that Venetian silver exports to the Levant in 1610-14 amounted to 6% of the total Spanish-American silver bullion imports into Seville during those years.


  1. See note 9 above for the statistics (for a base of 1501-10), and the sources used to compute the three sets of CPI. If we use the Phelps Brown and Hopkins base (1451-75=100), instead of the earlier base for 1501-10 (to include Spanish prices), we find that the English weighted CPI rose from an annual mean of 108.52 in 1511-15 to one of 734.19, at the peak of the Price Revolution, in 1646-50: an overall rise of 6.77 fold. Similarly, in Brabant, the Van der Wee CPI rose from an annual mean of 137.904 in 1511-15 to one of 1015.14 in 1646-50, also the peak of the Price Revolution in Brabant: an overall rise of 7.36 fold.


  1. See note 74, below, for the termination date.


  1. See Munro (2003a), Table 1.2, pp. 4-5: and the sources cited in notes 24 and 25 above. In the period 1521 to 1550, total silver imports into Seville amounted to just 263,915.8 kg. During the period from 1551 to 1660, a total of 122,902.24 kg of gold was also imported.


  1. TePaske (1983), Tables 2-5, pp. 442-45.


  1. Hamilton (1934), p. 11, note 1. Most economic historians have wrongly assumed that Hamilton was forced to end his research on bullion imports with the outbreak of the Spanish Civil War in 1936 — an argument obviously refuted his earlier articles of 1928, 1929a, in which bullion import data cease in 1660.


  1. Morineau (1968), p. 196; Morineau (1985), especially Table 83, p. 578; Figure 38, p. 579; Table 84, pp. 580-83; Figure 39, p. 585.


  1. Morineau (1985): except for the semi-logarithmic graph, Figure 39, on silver imports and exports, which is very difficult to decipher; and it certainly does not allow to attribute actual values to the small-scale bar chart lines. His Figure 37, p. 563, with imports in millions of pesos, also has estimations for the period 1630-56, not indicated as such in the other tables and graphs.


77.The title of his 1986 monograph, _Incroyables gazettes et fabuleux métaux_ seems, in retrospect, to be ironic.  In Morineau (1968), the data presented on p. 196, evidently for the total value of bullion imports in each quinquennium, even when divided by 5, to produce annual means, exceed the data on mined outputs from a minimum of 12.12-fold  to a maximum of 41.07-fold.  In Morineau (1984), Table 83, p. 578, presents decennial means of bullion imports, expressed as equivalent amounts of silver, that, for the period from 1660 to 1700, range from being 3.653 times to 18.684 times greater than the recorded aggregate mined outputs of Spanish-American silver.  (See also his bar-graph, Figure 37, on p. 563, displaying in five-year periods — totals or annual means? — the values of “treasure” imports, expressed in millions of piastres or pesos: those of 272 maravedís or 450 maravedís?)  Hamilton (1929a, 1934) indicated that, in the seventeenth century, up to the cessation of recorded data, in 1660, almost all the imports were in the form of silver.  The great boom in Brazilian gold exports did not really begin until 1700.  See TePaske (1998), pp. 21-32.


  1. See the sources in notes 25 and 26 above. The Sombrerete mining outputs, however, began to fall sharply from the 1680s, reaching a low (quinquennial mean) of 3,957.14 kg in 1716-20. Subsequently, by the mid eighteenth century, Mexico experienced another and very major silver-mining boom: See Brading (1970), Garner (1987).


  1. Gaastra (1983), Appendix 5, p. 475; Chaudhuri (1968), pp. 497-98. We have no data on the Dutch Company’s exports of merchandise, but we do for the English East India Company. Between 1660 and 1700, it exported a total of 645,486.0 kg of silver (worth £5,795.793.65) and 21,552.0 kg of gold (worth £2,788.035.34), and a total value of £2,593.114.00 in merchandise.   Thus gold and silver “treasure” accounted for 76.80% of total exports to Asia, and merchandise for 23.20%.  Of the total value of bullion exports, silver accounted for 67.52% and gold for 32.48% of the total value.  (For the long period of 1660-1720, silver accounted from 81.35% and gold for 18.65% of the total values of bullion exports).  In the English East India Company’s early history, however, from 1601 to 1624, it exported a total of £753,336 in precious metals (‘treasure’) and £351,236 in merchandise, for an aggregate export value of £1,104,572, so that precious metals then accounted for a somewhat lower percentage of the total value: 68.20%.  Chaudhuri 1963), p. 24.


  1. See TePaske (1998), tables, pp. 21-32.


  1. Fortunately, for the book under review (Hamilton 1934), he did provide an Appendix (number VIII, pp. 403-04) for “The Composite Index Numbers of Silver Prices, 1501-1650.”


  1. My most serious criticism — and one voiced by many other economic historians — is the one concerning his concept of “profit-inflation,” in Hamilton (1929b). His thesis was warmly endorsed by John Maynard Keynes (1930), the following year, Vol. II, pp. 152–63, especially pp. 154-55: “But it is the teaching of this Treatise that the wealth of nations is enriched, not during Income Inflations but during Profit Inflations — at times, that is to say, when prices are running away from costs.” Keynes in fact really coined this term (so to speak).  Subsequently Hamilton published two more articles on this theme — in 1942, and 1952.  The latter was his Presidential Address to the Twelfth Annual Meeting of the Economic History Association.  Since this concept does not appear in the book under review, it would be unfair to criticize this thesis, here, even if space did permit it.  But I have posted on my web site an unpublished Working Paper, entitled “Prices, Wages, and Prospects for ‘Profit Inflation’ in England, Brabant, and Spain, 1501-1670:  A Comparative Analysis”:  It should be noted, however, that Hamilton (1934) did devote his chapter XII, pp. 262-82, to “Wages: Money and Real” and his Appendix VII (pp.  393-402) is devoted to “Money Wages.”  But space limitations have prevented me from discussing this aspect of his monograph.


  1. He warns the reader (p. 40) “that these are estimates based on partial information, into which the determination of arbitrary assumptions of correlations have entered, not exact compilations of complete data.”


  1. See notes 79 and 80 above.


  1. See note 1.




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Phelps Brown (1956), E.H., and Sheila V. Hopkins, “Seven Centuries of the Prices of Consumables, Compared with Builders’ Wage Rates,” _Economica_, 23:92 (November 1956), 296-314; reprinted, with additional appendices, in E.H. Phelps Brown and Sheila V. Hopkins, _A Perspective of Wages and Prices_ (London, 1981).

Postan (1950), Michael, “Some Economic Evidence of Declining Population in the Later Middle Ages,” _Economic History Review_, 2nd ser. 2 (1950), 130-67; reprinted in Michael Postan, _Essays on Medieval Agriculture and General Problems of the Medieval Economy _(Cambridge, 1973), 186-213 (with the revised title of “Some Agrarian Evidence of Declining Population in the Later Middle Ages.”)

Ramsay (1971), Peter H., ed., _The Price-Revolution in Sixteenth-Century England_ (London: Methuen and Co., 1971).

Russell (1966), J.C., “The Pre-Plague Population of England,” _Journal of British Studies_, 5 (1966), 1-21.

Sargent (2002), Thomas, and François Velde, _The Big Problem of Small Change_ (Princeton: Princeton University Press, 2002),

Schwartz (1974), Anna Jacobson, “Review of Spooner’s _International Economy and Monetary Movements in France_,” _Journal of European Economic History_, 3: 1 (Spring 1974), 253.

Smith (1776/1937), Adam, _An Inquiry into the Nature and Causes of the Wealth of Nations_, [1776], ed. with an introduction by Edwin Cannan (New York: The Modern Library, 1937)

Soetbeer (1879), Adolf,  _Edelmetall-Produktion und Werthverhältniss zwischen Gold und Silber seit der Entdeckung Amerika’s bis zur Gegenwart_ (Gotha, 1879).

Spooner (1972), Frank, _The International Economy and Monetary Movements in France, 1493-1725_ (Paris, 1956; Cambridge, MA:  Harvard University Press, 1972, for the English edition).

Spufford (1988), Peter, _Money and Its Use in Medieval Europe_ (Cambridge, 1988).

TePaske (1983), John Jay, “New World Silver, Castile and the Philippines, 1590-1800,” in John F. Richards, ed., _Precious Metals in the Later Medieval and Early Modern Worlds_ (Durham: Carolina Academic Press, 1983), 425-46.

TePaske (1998), John Jay, “New World Gold Production in Hemispheric and Global Perspective, 1492 – 1810,”  in Clara Nuñez, ed., _Monetary History in Global Perspective, 1500-1808_, Papers presented to Session B-6 of the Twelfth International Economic History Congress (Seville, 1998), 21-32.

Tracy (1985), James D., _A Financial Revolution in the Habsburg Netherlands: Renten and Renteniers in the County of Holland, 1515-1565_ (Berkeley-London, 1985).

Tracy (1994),  James D., “Taxation and State Debt,”  in Thomas Brady, Heiko Oberman, and James Tracy, eds., _Handbook of European History, 1500-1600: Late Middle Ages, Renaissance and Reformation_, 2 vols. (Leiden, 1994-95), vol. I: _Structures and Assertions_, 563-88.

Tracy (2003), James D., “On the Dual Origins of Long-Term Debt in Medieval Europe,” in Karel Davids, Marc Boone, and V. Janssens, eds., _Urban Public Debts, Urban Governments, and the Market for Annuities in Western Europe, 14th-18th Centuries_ (Turnhout: Brepols, 2003), 13-26

Ulloa (1975), Modesto, “Castilian Seigniorage and Coinage in the Reign of Philip II,” _Journal of European Economic History_, 4 (1975), 459-80.

Usher (1943), Abbott Payson, _The Early History of Deposit Banking in Mediterranean Europe_, Vol. I: _The Structure and Functions of the Early Credit System: Banking in Catalonia: 1240-1723_, Harvard Economic Studies, Vol. 75 (Cambridge, Mass., 1943; reissued New York, 1967).

Van der Wee (1963), Hermann, _Growth of the Antwerp Market and the European Economy, 14th to 16th Centuries_, 3 Vols. (The Hague, 1963).

Van der Wee (1967), Herman, “Anvers et les innovations de la technique financière aux XVIe et XVIIe siècles,” _Annales: Economies, Sociétés, Civilisations_, 22 (1967): 1067-89; republished as “Antwerp and the New Financial Methods of the 16th and 17th Centuries,” in Herman Van der Wee, _The Low Countries in the Early Modern World_, translated by Lisabeth Fackelman (London, Variorium, 1993), 145-66.

Van der Wee (1975), Herman, ‘Prijzen en lonen als ontwikkelingsvariabelen:  Een vergelijkend onderzoek tussen Engeland en de Zuidelijke Nederlanden, 1400-1700,’ in _Album aangeboden aan Charles Verlinden ter gelegenheid van zijn dertig jaar professoraat_ (Wetteren: Universum,  1975), 413-470;  reissued in English translation (without the tables) as “Prices and Wages as Development Variables: A Comparison Between England and the Southern Netherlands, 1400-1700,” _Acta Historiae Neerlandicae_, 10 (1978), 58-78; republished in Herman Van der Wee, _The Low Countries in the Early Modern World_ , trans. by Lizabeth Fackelman (Cambridge and New York: Cambridge University Press, 1993), 223-41

Van der Wee (1977), Herman, “Monetary, Credit, and Banking Systems,” in E.E. Rich and Charles Wilson. eds., _Cambridge Economic History of Europe_, vol. V: _The Economic Organization of Early Modern Europe_, (Cambridge: Cambridge University Press, 1977), 322-32.

Van der Wee (2000), Herman, “European Banking in the Middle Ages and Early Modern Period (476-1789),” in Herman Van der Wee and Ginette Kurgan-Van Hentenryk, eds., _A History of European Banking_, 2nd ed. (Antwerp, 2000), 152-80.

Wiebe (1895), Georg, _Geschichte der Preisrevolution des XVI. und XVII. Jahrhunderts_, Staats- und Socialwissensschaftliche Beiträge no. 2 (Leipzig: Dunder and Humblot, 1895).

Wilks (1993), Ivor, “Wangara, Akan, and the Portuguese in the Fifteenth and Sixteenth Centuries,” in Ivor Wilks, ed., _Forests of Gold: Essays on the Akan and the Kingdom of Asante_ (Athens, Ohio, 1993), 1-39.

John Munro is Professor Emeritus of Economics at the University of Toronto, where he has taught since 1968, and where, despite mandatory retirement, he continues to teach a full course load in European economic history, both medieval and modern (to 1914).  His publications, in medieval and early modern economic history, are in two fields: (1) money, prices, and wages; and (2) textiles (including labor history and thus wages), which have predominated in his recent years of published output.  In the first field, his recent publications include “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 (2003) and “The Medieval Origins of the Financial Revolution: Usury, Rentes, and Negotiability,” _The International History Review_, 25:3 (September 2003). Forthcoming is the entry on “The Price Revolution,” in Steven N. Durlauf and Lawrence  E. Blume, eds., _The New Palgrave Dictionary of Economics_, second edition.

Copyright (c) 2007 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 (; Telephone: 513-529-2229). Published by EH.Net (January 2007). All EH.Net reviews are archived at

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):17th Century

Britain and Ireland, 1050-1530: Economy and Society

Author(s):Britnell, Richard
Reviewer(s):Langdon, John

Published by EH.NET (December 2006)

Richard Britnell, Britain and Ireland, 1050-1530: Economy and Society. Oxford: Oxford University Press, 2004. xvi + 562 pp. $45 (paperback), ISBN: 0-19-873145-0.

Reviewed for EH.NET by John Langdon, Department of History and Classics, University of Alberta.

Richard Britnell, emeritus professor of history, University of Durham, has produced a superb textbook covering the economy of the British Isles from 1050 to 1530. It has a simple but effective organization. After a short introduction, the book starts with four preliminary chapters. The first of these involves basic physical matters such as the climate and topography of the islands; the second deals mostly with religious and ethnic divisions over the islands; the third with the nature of power relations between the various classes; and the fourth with the basic economic contours over the entire period, including a discussion of the various models which seek to explain them. Thereafter, the bulk of the book is divided into two time periods. The first stretches from 1050 to 1300 and, despite having a thinner evidentiary base, clearly evokes a time of overall economic expansion. The second period, richer in documentation, presents a much more complicated story of economic stagnation and decline with at best fitful recovery towards the end of the period in the early sixteenth century, perhaps not surprising since the later middle ages was punctuated by the disasters of the Great Famine of 1315-18 and the Black Death starting in 1348, not to mention the monumental conflict between the crowns of England and France known as the Hundred Years War. Each of these chronologically-based sections is comprised of ten chapters outlining various aspects of the urban and agrarian economy, including settlement, mercantile activity, the relationship between lords and tenants, government action, and the management revolution of land and resources that occurred over the twelfth and thirteenth century in particular. The book concludes with a survey of the economic and social situation in the British Isles in 1530, comparing it with that which existed in 1050, and how the economy of the British Isles is to be judged within its European context at the start of the sixteenth century.

What makes this book so valuable, even though it is more narrowly economic than other recent surveys of a similar sort (such as Christopher Dyer’s excellent Making a Living in the Middle Ages (2002)), is its comprehensiveness and sure-footed approach throughout. Consonant with the book’s length, Britnell covers virtually every important issue dealing with the medieval economy and society of the British Isles. Its strengths are not only that it very effectively synthesizes a mass of secondary literature, but that it also highlights the author’s own contributions to the field, particularly in the chapters dealing with “procedural routines and literacy.” Altogether, the book is likely to be the standard work on the topic for many years to come.

It does have one major limitation. Inevitably, given the overwhelming preponderance of English evidence compared to that for the rest of the British Isles, the comments about Scotland, Wales and Ireland, sizable as they are, often seem like add-ons rather than providing an integrated view of the economy of the islands as a whole. Perhaps this is an inevitable consequence of having an expert whose work is primarily in English history to write this book. Britnell certainly tries mightily to overcome this Anglo-centric view, but the study still seems somewhat unbalanced in favor of England. In this regard, to provide something closer to a truly integrated view might require someone whose primary expertise lies in one of the other parts of the British Isles, as has been shown recently in volumes dealing with other topics in the medieval period (one can point here to the late R.R. Davies’s Domination and Conquest (1990) and The First English Empire (2000), which furnished a truly pan-British Isles view of medieval power relations and ethnic identities).

Even with this qualification, the book remains a tour de force of intelligent assessment and penetrating insight. Britnell is not content simply to provide a survey of existing knowledge, checking his personal opinion at the door, so to speak, but — with suitable circumspection — often supplies his own take on things. He certainly goes well beyond the traditional view that the performance of the medieval economy was determined mostly by the balance between population and resources and makes a cogent argument for seeing things like investment and employment opportunities as playing a much stronger role than formerly indicated in the literature (see especially Chapter 4 and pp. 310-15). He also takes what many might feel is an overly pessimistic view of the impact of war on medieval economies, expressed on many occasions in the book (esp. pp. 322-25 and 453-55). Certainly, one might be able to say that over the long run of the later middle ages war had a deleterious effect on economic development of the islands (one surprisingly lightly considered area in the book along these lines were largely internal conflicts like the Wars of the Roses), but there were times when war might have buoyed up the economy, particularly during the 1350s and 1360s when ransoms and other generally favorable outcomes of the Hundred Years War for the English might have provided important countervailing tendencies to the impact of the plague. As with virtually everything else in this book, however, the reader might in places question a particular point of view, but still has to give it immense respect.

Finally, as with all important books, Britnell leaves the reader with the excitement of major things yet to be divulged. Perhaps the most crucial of these is what happened to the economy as it entered the upswing of the sixteenth century. In this sense, the endpoint of the study, for all that it makes sense in marking off the medieval from the early modern period, is strikingly ambiguous. As Britnell says, “there was no very well-defined divide between slow recovery from the major economic recessions of the fifteenth century and a subsequent period of more rapid development” (p. 501). A better understanding of the mechanisms through which the British economy emerged from its sluggishness of the later middle ages is thus becoming more urgent in the field. It may be, as Britnell indicates in an excellent comparison of the performance of the British Isles versus the Continent at the time (pp. 521-22), that the islands eventually coat-tailed on more vigorous activity originating elsewhere. The essential question remains, though, as to who in the British Isles were most directly responsible, as individuals or groups, in translating these more favorable circumstances into new and sustained economic growth.

John Langdon is Professor of British Medieval History in the Department of History and Classics at the University of Alberta, Edmonton, Canada. Two of his more substantial publications in recent years are Mills in the Medieval Economy: England, 1300-1540 (Oxford University Press, 2004) and [with James Masschaele] “Commercial Activity and Population Growth in Medieval England,” Past and Present (Feb., 2006).

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

Ecology, Colonialism, and Cattle: Central India in the Nineteenth Century

Author(s):Satya, Laxman D.
Reviewer(s):Gilmartin, David

Published by EH.NET (August 2006)

Laxman D. Satya, Ecology, Colonialism, and Cattle: Central India in the Nineteenth Century. New Delhi: Oxford University Press, 2004. x + 204 pp. Rs. 545 (cloth), ISBN: 0-19-566875-8.

Reviewed for EH.NET by David Gilmartin, Department of History, North Carolina State University.

This is a book about the ecological impact of British colonialism in Berar, in central India. Laxman D. Satya, who is a professor of history at Lock Haven University, is forceful in presenting the book’s central thesis, namely that British rule brought ecological disaster to this region in the second half of the nineteenth century. Though the book’s central focus is on cattle, the book is a sweeping denunciation of colonial rule that is cast in terms far broader than the history of cattle. “The environmental degradation brought about by the colonial state led to the ecological crisis that spelled doom for cattle in Berar,” he writes. But this was not a fate peculiar to cattle.

The basic argument is straightforward. The beginning of Berar’s degradation began with the introduction of cotton cultivation on a large scale in the 1850s and 1860s, encouraged by Berar’s fertile black soil. As a commercial crop linked to British colonial networks of production, cotton cultivation soon pushed out food grains, and led to the rapid extension of agriculture over previously open access lands in the region. “Wastelands” were occupied and “large areas of prime grazing lands and pastures hitherto available to cattle and people were forcefully put to plough.” This produced numerous effects. Deforestation led to decreases in rainfall. Water scarcity became a perennial problem as commercialization undermined earlier communal forms of water management, even as the colonial state took no active role in new irrigation investment or development. Problems of shrinking pasturage were exacerbated by British revenue policies. “Every act of the government,” Satya writes, “was designed to derive maximum profits at minimum cost to the state.” The result was an ecological crisis that produced accelerating effects in the last decades of the century, culminating in the “devastating” famine of 1899-1900. However much the British (and others) have sought to blame this famine on “natural” causes, the root cause, for Satya, lay not in the vicissitudes of nature, but in the ongoing, ecologically destructive policies of the British themselves.

This is the framework that Satya uses for analyzing the history of cattle in Berar. Their decline in these conditions was relentless and inescapable. Though Berar had at one time been known for its distinctive breeds of cattle, and for cattle fairs that attracted cattle traders from far-flung regions, by the beginning of the twentieth century, the condition of its cattle, both in terms of numbers and well-being, was deplorable. Using numerous statistical tables, the author shows an ongoing decline in the available pasturage for cattle, a decline in their numbers, and a cattle population increasingly subject to disease. Though this situation was in large part due to the general environmental deterioration of the province, it was also a product of the particular “anti-cattle ideology” of the British, who wanted to restrict the importance of mobile cattle in Berar in the interest of focusing on the extension of agriculture and settlement. Even as signs of increasing cattle mortality and deterioration increased, the British thus did little to counter it. This was evident, for example, in the British veterinary establishment in Berar, which was, as Satya notes, tiny and wholly inadequate. And even when the British did act in the name of controlling cattle disease, they did so using methods of quarantine and segregation that only reflected, in Satya’s words, the “authoritarian, patriarchal, and patronizing nature of the officials and the state.”

Given the relatively limited scholarly attention that has been focused on the history of cattle under the Raj, Satya’s detailed attention to the history of cattle in one region of colonial India is an important contribution to the historical literature. The book is based on careful research in government documents and provides us with a window on the dynamics of cattle keeping in the province. The chief weakness of the book lies in the single-mindedness of Satya’s commitment to proving, at every turn, that the colonial state was wholly responsible for Berar’s ecological disaster. To say this is neither to attack nor defend this thesis. There is plenty of solid evidence adduced to support his conclusions, even as there are instances in which he seems to push the evidence into contradictory corners. Rather, it is to suggest that there are a range of questions about the history of cattle in Berar that are either ignored or marginalized in the interests of sustaining this narrative of events. The very structure of his argument tends to lead him into presenting the colonial state as a monolithic entity and the people (and cattle) of Berar as a largely undifferentiated collection of victims. We get little analysis, for example, of the roles of power relations among the people of Berar and of the ways that these relations may have shaped (or been shaped by) control over cattle. Nor do we get much of an analysis of the ways that different groups of people went about trying to adapt to the significant changes that were taking place. Though there are occasional references to “resistance,” we in fact get little sense of how such resistance among cattle owners may have developed or been expressed. None of this is to detract from the book’s accomplishments. Yet, for all its careful research, this book succeeds more as a moral critique of colonialism than as a history of the changing place of cattle in Berar society, no doubt reflecting the author’s intent.

David Gilmartin is Professor of History at North Carolina State University. He has written on Muslim politics in the Punjab and on cattle-lifting in north India, and is currently completing a history of irrigation in the Indus basin in the British colonial period.

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

The Business of Captivity: Elmira and Its Civil War Prison

Author(s):Gray, Michael P.
Reviewer(s):Nickless, Pamela

Published by EH.NET (June 2005)

Michael P. Gray, The Business of Captivity: Elmira and Its Civil War Prison. Kent, OH: Kent State University Press, 2001. xv + 228 pp. $35 (cloth), ISBN: 0-87338-708-2.

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

I’m sure most of the readers of this review know the name Andersonville — the notorious Confederate prison. Although approximately one-quarter the size, the death rate at the Union prison at Elmira, New York rivaled that of Andersonville. Of the twelve thousand Confederate prisoners sentenced to Elmira, almost one quarter would die in captivity. Elmira Prison operated from April 1864 to July 1865 and prisoners suffered from poor planning, poor organization, and a terrible winter followed by one of the worst spring floods in Elmira’s history. Elmira grew from a town of less than 9,000 in 1860 to a city of 12,000 by 1864. The prison and the military base that preceded it and co-existed with it until war’s end changed the town and provided its citizens with wartime employment in the prison and provisioning both soldiers and prisoners.

This book is based on Michael Gray’s doctoral dissertation completed at Kent State University and is a well-written narrative history of Elmira Prison. The story of the prison and the military organization that built and operated the camp is a complex one but the story is told clearly and well. The best chapters are the ones that deal with camp organization and society, which evolved as prisoners sought to supplement their inadequate diet and clothing through entrepreneurial activities. Prisoners with some education or skill were able to increase their chances of survival by either acquiring prison jobs (as clerks or accountants) or by making goods (mostly jewelry) to sell outside the prison walls. Gray’s explanation of the licensing of sutlers to sell goods to prisoners and the role of guards and other prison personnel in providing a conduit for prisoners’ handicraft sales is very interesting and clearly presented. Not all the inmates left prison ragged and emaciated, a few left with money jingling in their pockets and Gray’s analysis of the social order of inmates is intriguing.

The story of the men who ran the camp, their problems with provisioning the prisoners, their frustration with bureaucracy and at times their concern with costs over prisoner welfare is also well told and interesting. The role of the camp’s surgeon, Eugene F. Sanger, was particularly interesting — Gray appears to have solved a minor mystery about why Sanger left the camp in December and his subsequent career. Sanger repeatedly had asked to leave Elmira and complained that he “…could not be held responsible for a large medical department with over a 1000 patients without power, authority, or influence.” But he was held responsible for the high death rate and bungled care by both former prisoners and later historians who labeled him the Scourge of Elmira. In a letter defending his record at Elmira after the war, he blamed “… the inevitable red-tapeism and routine of army regulations …” for his difficulty in dealing with the problems of Elmira. Gray’s story of the horror that was Elmira is one not so much of deliberate mistreatment of prisoners but of bungling and endless bureaucracy that delayed crucial activities that ranged from constructing appropriate drainage to distributing clothing. (The delay in getting adequate clothing to the prisoners in a brutal winter was particularly appalling and both sides participated in the bungling — clothing provided by the Confederacy could not be distributed except by (captured and paroled) Confederate officers and a delay of several weeks ensued until three Confederate officers finally arrived in Elmira.)

Gray’s book will be of interest to those who study Civil War prisons or who are interested in the war generally. Economic historians will find it a frustrating book since it does not deliver on its promise to examine the economic impact of the prison and military base on Elmira. There are two reasons for this — the first is that the book ends rather abruptly with the end of the war and the closing of the prison. One is left with the impression that Elmira grew and prospered because of the war, but what happened next? What was the transition to a peacetime economy like for Elmira? Did the experience of the war represent only a gigantic misallocation of resources or was some infrastructure or pool of skilled workers or capital created that benefited Elmira during Reconstruction?

Gray also seems unaware of the problem with inflation during the war. The price index for the Union rose from 100 in 1861 to 175 by 1864. (See Roger Ransom, “The Economics of the Civil War,” EH.NET Encyclopedia.) Gray reports lots of prices and costs but not one is corrected for changes in the price level. Since the camp only operated for a period in which the price level did not change dramatically (April 1864 to July 1865, this is not a problem for the story of the camp. But it is a problem if you want to know about the economic impact of the war on the surrounding countryside. For example, the $375 rent paid William Foster for the use of his land seems to have been the same from 1861 to 1865. If so, Foster was certainly not profiting from the war. In 1865 dollars, the rent would have to be $669 to equal the purchasing power of $375 in 1861. (It would also to be useful to know what one could buy with 15 cents in 1864, other than a turn on the observation tower built by a local entrepreneur to profit from those willing to pay to watch Confederate prisoners.) Comparisons with the costs of other prison camps are also problematic. Gray has presented a wealth of price data but it is not useful in its current context.

Professor Nickless is the Director of Interdisciplinary Studies at the University of North Carolina at Asheville. Her most recent work is on the impact of the Civil War on North Carolina businesspersons. It is forthcoming in an anthology from Ashgate edited by Beth Harris and titled Famine and Fashion.

Subject(s):Government, Law and Regulation, Public Finance
Geographic Area(s):North America
Time Period(s):19th Century

A Social History of Soviet Trade: Trade Policy, Retail Practices, and Consumption, 1917-53

Author(s):Hessler, Julie
Reviewer(s):Lazarev, Valery

Published by EH.NET (January 2005)

Julie Hessler, A Social History of Soviet Trade: Trade Policy, Retail Practices, and Consumption, 1917-53. Princeton: Princeton University Press, 2004. xvi + 366 pp. $39.50 (hardcover), ISBN: 0-691-11492-7

Reviewed for EH.NET by Valery Lazarev, Department of Economics, University of Houston.

Trade is as central to the history of market economies, especially in the early stages of their making, as supply and demand to economic theory. The opposite is true with respect to administrative-command economies. Government decision-making is the natural starting point of research in Soviet economic history, while trade, which seems to be merely a technical issue on the margin of planned allocation, is last on the subject list. This perception, which dominated for decades, meant that we knew more about black markets in the USSR than about the operation of legal trade establishments. The only exception was the NEP period, 1921-28, when legal markets had the broadest extent. Post-1991 studies that benefit from direct access to the recently-opened archives have shown that Soviet reality was far from the stereotype of “scientific” central planning; that it was a complex mixture of administrative controls and markets regulated and/or tolerated by the government; that interaction and conflict of private interests were determining economic outcomes even under Stalin’s brutal dictatorship. It is no surprise that trade has been moving upwards on the list of research priorities, with a number of studies focusing on certain aspects of trade and provision of consumer goods (the works by Elena Osokina, and R.W. Davies and Oleg Khlevniuk, for example). This new book by Julie Hessler goes further in this direction by offering the first comprehensive study of trade in the USSR from the revolution of 1917 to the death of Stalin in 1953.

The subject of the book is retail trade in consumer goods, following the Soviet definition of trade (torgovlia) that excluded both transactions between enterprises and international trade. As the subtitle Trade Policy, Retail Practices, and Consumption suggests, the book covers both the supply side of consumer goods market — the operation of the retail trade industry and the changes in its regulatory environment — and its demand side — consumer behavior and patterns of consumption. The former subject is treated most extensively, especially trade policy transformations over the three decades. A traditional discussion of decision-making by the top authorities is nicely augmented by excursions into the behavior of local bureaucracies based on rarely-used materials from regional archives.

Discussion of the operation of the retail trade industry is deficient in some aspects. One would expect to find more on the daily routine of a trade establishment; the distribution of decision-making rights within the hierarchy of trade administration; bargaining between producers and sellers (or wholesalers and retailers); retail industry human resources (wages, turnover, education, party membership); managerial incentives; and the extent of employee crime. The latter would be a reasonable expectation given that the author gained access to court cases. The author focuses instead on the notion of “cultured trade” — the government’s attempts to introduce “modern consumerism” — which, she argues, was Stalin’s preference. This focus does not seem justified. In an economy that fluctuated between “normal” shortage and outright famine, calls for making stores clean, salesmen polite, and customers scrupulous were hypocritical. In fact, the author shows that the effects of promoting “cultured trade” did not go far beyond “study trips” to the U.S. and attempts at cloning Macy’s stores in Moscow and a few other large Russian cities where a majority of the Soviet elite resided. A strong side of the “retailing practices” component of the book is the extensive discussion of private trade after its official abolition in the early 1903s. I believe the findings on the extent of private trade in the USSR during WWII and in its aftermath, the forms and scale of involvement of urban and rural workers in small-scale retail operations, and the relative weight of private trade as a source of goods for a working family are the most valuable contributions of the book.

The coverage of the “demand side” — consumption patterns and consumer behavior — is based predominantly on the data of budget surveys, performed by the Soviet statistical agency from the 1920s on, and is rather sketchy. Although the author is aware of the limitations of her data, she does little to corroborate the evidence using production and retail sales volume data. Instead she rushes to conclusions, based on a few aggregate numbers, such as that the consumption inequality was decreasing in the mid-1930s, that the consumption gap between white-collar and blue-collar workers nearly closed by the early 1950s, and even that the waves of repressions were triggered by increasing shortages of consumer goods, cotton cloth in particular. Given the presentation of limited evidence, these statements are utterly speculative. Much of the consumption behavior is discussed within the abovementioned concept of “cultured trade.” The final conclusion with respect to the effects of the transition to state-owned trade in the 1930s is vague and inconsistent. This transition did not “introduce modern consumerism” into Russia (as was allegedly intended) but “democratized it, by making it available to citizens from the popular classes — but only if they lived in the big cities or had connections or happened by some miracle to be in the right place at the right time” (p. 246). That is quite a democratization! It would be more accurate to say that the Stalinist transformation did not eliminate (or even diminish?) stratification of consumption, but replaced money and prices as the main instruments of allocation with rationing, queuing, and networking.

I would certainly prefer to find a more systematic presentation of the data. Ten short tables in the book serve only illustrative purposes. The author mentions in the introduction that this is due to space limitations and directs the reader to her web site for extra longitudinal data and source notes that are helpful indeed. It is not clear however why this compact and important information was omitted. There is still more material that could be incorporated into the text. For example, the author mentions that she created a unique database from credit reports of private traders from the 1920s. However, no analysis is presented, even descriptive. Only a few pieces of information from these reports are cited. I believe the book would have also benefited from closer integration with recent literature on Soviet economic history that has produced a wealth of quantitative and institutional data for the period studied in the book.

Valery Lazarev is assistant professor of economics at the University of Houston. His recent publications include The Economics of Forced Labor: The Soviet Gulag (co-editor and contributor) and articles in the Economic History Review, the Journal of Comparative Economics, and Comparative Economic Studies.

Subject(s):Markets and Institutions
Geographic Area(s):Europe
Time Period(s):20th Century: WWII and post-WWII

The Years of Hunger: Soviet Agriculture, 1931-1933

Author(s):Wheatcroft, R. W. Davies and Stephen G.
Reviewer(s):Tauger, Mark B.

Published by EH.NET (November 2004)

R. W. Davies and Stephen G. Wheatcroft, The Years of Hunger: Soviet Agriculture, 1931-1933. New York: Palgrave Macmillan, 2004. xvii + 555 pp. $90 (cloth), ISBN: 0-333-31107-8.

Reviewed for EH.NET by Mark B. Tauger, Department of History, West Virginia University.

Popular media and most historians for decades have described the great famine that struck most of the USSR in the early 1930s as “man-made,” very often even a “genocide” that Stalin perpetrated intentionally against Ukrainians and sometimes other national groups to destroy them as nations. The most famous exposition of this view is the book Harvest of Sorrow, now almost two decades old, by the prolific (and problematic) historian Robert Conquest, but this perspective can be found in History Channel documentaries on Stalin, many textbooks of Soviet history, Western and even World Civilization, and many writings on Stalinism, on the history of famines, and on genocide.

This perspective, however, is wrong. The famine that took place was not limited to Ukraine or even to rural areas of the USSR, it was not fundamentally or exclusively man-made, and it was far from the intention of Stalin and others in the Soviet leadership to create such as disaster. A small but growing literature relying on new archival documents and a critical approach to other sources has shown the flaws in the “genocide” or “intentionalist” interpretation of the famine and has developed an alternative interpretation. The book under review, The Years of Hunger, by Robert Davies and Stephen Wheatcroft, is the latest and largest of these revisionist interpretations. It presents more evidence than any previous study documenting the intentions of Soviet leaders and the character of the agrarian and agricultural crises of these years.

This book is the fifth and latest in the series on Soviet history that Edward Carr began in the 1950s (and that ultimately ran to 17 volumes) and that Robert Davies (who collaborated with Carr in the later volumes of his series) continued in the 1980s. Like those studies, its format is chronological and narrative, but unlike most of the previous volumes this one relies very extensively on new archival and published archival sources. In the present volume, Davies and Wheatcroft pick up in the middle of the story that Davies began in volumes one and two (The Socialist Offensive: The Collectivization of Soviet Agriculture, 1929-1930 and The Soviet Collective Farm, 1929-1930), with chapters on the second campaigns of collectivization and dekulakization in 1930-1931. These campaigns were linked: the main means of collectivization was dekulakization, the removal from villages of allegedly “well-off” exploiting peasants and others who opposed too openly the program of collectivization, and officials considered dekulakization necessary to enable collective farms to work. These campaigns involved much less violence than the first such campaigns in early 1930, but also were more “successful”: more than 60 percent of peasant families were in collective farms by late summer 1931, a plateau not surpassed for three years.

The authors then narrate the cycle of agricultural policies and performance: sowing and harvest plans and actual work in 1931, the campaign to procure grain and other crops from the villages after the harvest, and the same cycles in 1932 and 1933. They describe how officials repeatedly projected unrealistically optimistic plans for plowing, crop sowing, and harvests, and how agricultural and peasant realities frustrated these plans to varying degrees, and how officials responded to these realities, in particular years. In 1931 the leadership projected the largest increase in sowings up to that time, and this plan was mostly fulfilled, but a severe drought in spring and summer reduced or destroyed much of the potential harvest, reflected in steadily declining estimates of the harvest on the part of government statistical personnel and increasing reports of starving villagers. Nonetheless, the regime projected high procurements and attempted to impose them, with the result that more regions of the country were left without food, causing millions of peasants, especially from Ukraine and Kazakhstan, to flee their homes seeking food and work. Similar conditions caused massive labor turnover in factories during this period, which Davies discusses in the preceding volume in the series (Crisis and Progress in the Soviet Economy). Meanwhile the government (exercising the foreign trade monopoly it had instituted in the early 1920s) exported some four million tons of grain to pay for massive imports of machinery, including tractors.

Agricultural planning and work in 1932 took place under much worse conditions than in 1931, with significant shortages and starvation in many regions. The authors narrate the high-level disputes and decision-making that led to emergency distributions of seed and food to shortage areas, the May laws of 1932 that legalized private trade (after three years of uncertain status), and in general a relaxation of policies. Farmers did not fulfill the sowing plans, however, and the harvest decreased even relative to that of 1931 by a complex mix of natural disasters and mismanagement. While official projections of the harvest dropped substantially, however, Soviet leaders refused to believe that another catastrophe like 1931 had occurred, and pressed forward with only a moderately reduced procurement plan. Implementing this plan, however, brought a tremendous struggle between regime and peasants, simultaneous with a disastrous decline in food supplies for the towns, and widespread theft and attempted theft at all stages of distribution. In response, Stalin wrote a law issued on 7 August that imposed death penalties or 10-year exile for theft of “socialist property.” The authors provide valuable detail about the alteration of harshness and moderation at different levels and in different periods in enforcement of this decree.

By the beginning of 1933, the procurement plan had not been fulfilled, and authorities at all levels received continuous reports documenting a massive famine, widespread deaths from starvation, and desperate demands from officials at all levels for food allotments from diminishing reserves. Peasants and workers around the country fled their homes seeking food and survival, and the authorities issued several additional laws attempting to prevent this movement, including the reestablishment of an internal passport system, harsh penalties for workers who left their jobs without authorization, and apprehension and return to their homes of peasants from the southern grain regions, most severely struck by famine. It was in this context of great economic crisis that the regime again undertook to plan and guide farm work. This time they lowered their targets, provided extensive albeit insufficient relief in food, seed, and forage, and dispatched more than 20,000 industrial workers, all Communist Party members, to eliminate opposition in the collective farms and mobilized them for the year’s work. The result, however, despite the horrible conditions, was a very successful harvest in 1933 that ended the famine in most regions.

The book then goes on to present capsule narratives of specific aspects of agricultural production and particular sectors. So production of crops besides grain, including potatoes, sugar beets, and fiber crops generally followed the same pattern as grain, and thus were directly or indirectly affected by the famine. Livestock breeding underwent a “disaster” because of losses from the process of collectivization, from crop failures that reduced forage, from mismanagement in the farms, from high procurements, and finally from the famine itself, as peasants slaughtered animals (ignoring laws prohibiting it) to survive. The worst region of the livestock crisis was Kazakhstan, where Soviet collectivization policies aimed initially to settle in villages the majority nomadic population (a policy similar to that employed in some colonial countries and in some developing countries since independence). In the face of a searing famine in the region and the flight (to China) or death of more than one-third of the population, the regime in 1933 relaxed its policies, but the effects of the famine were not overcome for years.

The authors also examine the two main socialist sectors. The state farms (sovkhozy), which were large, ideally mechanized specialized farms that held more than 10 percent of the sown area, had tremendous difficulties in these years after limited success in 1929-1930. In 1931-1932 these farms suffered catastrophic declines in production, from causes that included natural disaster, mismanagement, and shortages of equipment and supplies because of the overall Soviet economic crisis of the time. From 1933 on, the sovkhozy began a recovery, facilitated by the government’s transfer of land from these farms to land-short collectives. On the collective farms (kolkhozy) the authors examine in some detail labor organization and remuneration, which were difficult managerial problems to solve in these almost unprecedented institutions. The regime in these years moved from a network of varied farms following diverse policies to a system in which the main organizational structures and remuneration procedures were prescribed from central government agencies with the intent of insuring the proper mix of incentives and obligations.

The final chapter examines the 1931-1933 famine in comparison to the two most noted recent famines in Russian history, those of 1891 and 1918-1922. The authors describe how these earlier famines resulted from natural disaster and (in 1918-21) the difficulties the Bolshevik government had in moving food from villages to towns through requisitions. They then analyze the 1931-1933 crisis in three categories: the urban food crisis of 1928-1933; the famine in Kazakhstan; and the rural famine of 1932-1933. They discuss different estimates of mortality, questioning the highest estimates but acknowledging the uncertainties in the population data. They estimate that mortality from the famine was in the range of four to six million deaths.

This chapter concludes with their explanation of the causes of the famine. They argue on the basis of the available data on food production and mortality that this was a famine caused by shortage, or “food availability decline” [FAD], in which “entitlements” or distribution factors played a contributory role (p. 417, using the terms employed by Amartya Sen). They emphasize, however, that the crisis of which the famine was the culmination began with the economic disruption caused by the massive investments of the first five-year plan and the simultaneous food supply difficulties of 1927-1929, the so-called “grain crisis.” By means of the first five-year plan and collectivization, Soviet leaders intended clearly to increase food production, but two years of natural disasters and agricultural disruption lowered harvests drastically and forced the government to ration food in insufficient quantities to all but the limited groups whom the authorities considered absolutely necessary to supply.

The authors attribute the small harvests in the crisis years to four factors. The intense sowing plans that demanded increased areas under crops disrupted the crop rotations left from the 1920s and thereby brought soil exhaustion. Draft forces declined, despite the import, production, and provision to agriculture of increasing numbers of tractors, because lack of forage (from both procurements and crop failures) and collectivization (which facilitated the spread of epizootics) brought massive deaths of horses. This draft situation in turn, combined with disaffection of the peasants, brought a decline in cultivation quality. Finally, exceptionally bad weather caused serious declines in output independently of all the other factors.

They conclude the main text with a brief summary of their discussion of the Soviet government’s confused and ambivalent responses to the famine. The authorities overestimated harvests and tried to impose high procurement quotas, but they also reduced those quotas when difficulties developed, and returned procured grain to villages for food and seed; they decided in the face of crisis to feed the cities as well as possible, but they also made significant efforts to support agricultural recovery, though this failed for millions of people. In response to intentionalist arguments (citing Conquest), they conclude that Soviet leaders, even if their actions contributed to the famine crisis, found it unexpected and extremely undesirable. They connect the famine crisis in larger terms to the Russian past, to the earlier agrarian crises, but most of all to the decision to industrialize at “breakneck speed” (p. 441). The book concludes with an appendix on grain harvest data, and 49 tables on farm production, food distribution, population, and certain other topics.

With its extensive use and intensive examination of archival and published sources on high-level policy discussion and decisions in this crisis, including the formerly secret records of the Politburo (the special files or osobie papki) and the now published correspondence of Stalin with some of his top lieutenants like Kaganovich and Molotov, this study decisively refutes intentionalist explanations of the 1931-1933 famine. None of these sources contain any evidence indicating that Stalin or his officials intended or wanted to create a genocidal famine to suppress Ukrainian nationalism or any other such objective. The decisions that these officials made, such as the impositions and then reductions of procurement quotas, or the lowering of rations for certain sectors of the population, represented short term, desperate, and often mistaken responses to the developing emergencies of these years, and not components of an overarching destructive intent. Even the underlying fact of the overly rapid industrialization program and the disruptions it caused reflected not destructive but constructive aims, even if the implementation of these plans by ill-educated fanatics in various state agencies had disastrous consequences. This study, therefore, documents that great Soviet famine of 1931-1933 was a complex economic event first of all, rooted in environmental conditions as well as in Soviet policies.

Given this, however, and given the enormous amount of work that went into this study, like all of Davies’ previous work, nonetheless the authors make a number of important problematic assertions and leave certain crucial issues unresolved. I will focus on two of these.

First, the authors assert at the end of their chapter on the collective farms (p. 397) that because the kolkhozy transferred a large part of their produce to the state, these farms represented a throwback to serfdom, with the state as the serf owner. This point actually does not support the connection they make between the kolkhoz system and serfdom, in particular because they also document the fact, which has been clear from other sources as well, that ordinarily peasants received a significant share of their food supplies from the crops they grew on the collective farms’ fields, in addition to the crops they grew on their “private plots.” Under serfdom, the peasants received only the food they grew on their own lands; what they produced on the demesne lands went to the pomeshchiki (the Russian noble landlord), with the exception of famines when pomeshchiki by Russian law were expected to share some of the reserves with the peasants. One of the main points of this book (and of previous studies) is that the procurements took most or all of kolkhoz grain reserves in 1931 and 1932 because of the crop failures of those years, and did not represent the usual pattern: in all other years farms had substantial portions of their crops left over after procurements for their own use, as in 1933. It makes more sense economically and institutionally to interpret the high procurement quotas as combining elements of taxation and rent rather than exclusively as atavisms.

Furthermore, in the same section the authors show that the farms had significant incomes from their sales of crops and other products, even at the low state purchase prices as well as on the free market legalized in 1932, which they used to pay the peasant-members for their work, and to purchase new equipment and supplies, albeit in very limited amounts in 1931-1932. Under serfdom, peasants were not paid for their produce on demesne. Even given the situation in these crisis years, the kolkhozy were not recreated serf villages, but can be better understood as semi-autonomous production units highly subsidized by the government. The authors also document the significant movement of peasants from the farms by “otkhod,” labor migration, a process that was one of the objectives of collectivization and that the regime encouraged and relied on for industrial labor. The government did attempt to control this movement by means of the internal passport system, but that system was not imposed until 1933, in response to the famine crisis, and as earlier research has shown, the passport system restrained peasant movement, both temporary and permanent, from villages to towns very little.

Further, serfdom in early modern Russia was part of a whole complex of controls over the population that had the goal of limiting not only the geographical but also the economic and social mobility of almost the entire population, rural and urban, as for example in the elaborate regulations of the 1649 law code. The Soviet system of the 1930s, by contrast, was oriented toward social mobility, promoting and educating workers and peasants to responsible posts. For example, no Russian peasant ever came close to becoming a Russian emperor before 1917, but under the Soviet regime four men of peasant origin came to rule that country: Stalin, Khrushchev, Brezhnev, and Gorbachev. Many other former peasants and workers moved up to high positions; while some tragically ended up victims of the great Communist witch hunts of the 1930s to the 1950s, most did not, and held positions that they would never have attained under the servile system. Even those who stayed in the farms in many cases attained technical knowledge and skills (despite the influence of Lysenko) and used it to bring about a significant increase in farm production in the 1950s to 1970s. To describe the kolkhoz as a revival of serfdom as Davies and Wheatcroft do here is a substantial distortion of historical fact.

Second, the book still does not satisfactorily explain why the famine took place when it did and especially why it ended. The authors’ chapters on agriculture and procurements in 1933, which was of course the crucial agricultural year because this was when the famine basically ended, are substantially shorter than those on 1931 and 1932 and have a certain “rushed” quality. Davies and Wheatcroft identify several objective factors to which they attribute the declines in food production in 1931-1933 that in great part caused the famine. Most of those factors that they identify for 1932, however, still prevailed or were even worse in 1933. The decline in livestock numbers and draft forces, for example, continued into 1933 and possibly 1934 (depending on how one calculates the value of a tractor); the disorder in crop rotation was not overcome even by the reduced sowing plans of 1933, or for some years thereafter. Most important, famine conditions were much worse. The authors cite a few sources claiming that peasants somehow knew in 1933 that they had to work hard (p. 238), but they also acknowledge in another context that at least some peasants worked hard in 1932 as well (p. 418). In any case, all evidence about peasants’ resistance is anecdotal and can be shown not to be representative of their views and actions generally (see my article “Soviet Peasants and Collectivization: Resistance and Adaptation”). Without any doubt, however, working conditions for peasants in 1933, because of the more severe famine conditions, were much worse in 1933 than in 1932.

Given these inconsistencies, there remains one factor in explaining the cause of the small harvest of 1932 that can account for the improved harvest in 1933, and that is the complex of environmental factors in 1932. As I documented in a recent publication, the USSR experienced an unusual environmental disaster in 1932: extremely wet and humid weather that gave rise to severe plant disease infestations, especially rust. Ukraine had double or triple the normal rainfall in 1932. Both the weather conditions and the rust spread from Eastern Europe, as plant pathologists at the time documented. Soviet plant pathologists in particular estimated that rust and other fungal diseases reduced the potential harvest in 1932 by almost nine million tons, which is the largest documented harvest loss from any single cause in Soviet history (Natural Disaster and Human Action, p. 19). One Soviet source did estimate higher rust losses in 1933 than 1932 for two provinces in the Central Blackearth Region, which is a small region of the country (approximately 5 percent of the total sown area). Davies and Wheatcroft cite this and imply that it applied to the rest of the country (p. 131-132 fn. 137), but that source does not document larger losses from rust in 1933 anywhere else. Further, the exceptional weather and agricultural conditions of 1932 did not generally recur in 1933. Consequently I would still argue, against Davies and Wheatcroft, that the weather and infestations of 1932 were the most important causes of the small harvest in 1932 and the larger one in 1933. I would also like to point out for the record here that the criticism they make (p. 444-445) of my harvest data is invalid and represents an unjustified statistical manipulation of what are in fact the only genuine harvest data for 1932 (see “The 1932 Harvest”).

And this leads to my main complaint about their work. It is true that this volume represents considerable work on their part. But it is also true that several other scholars, including the present reviewer, reached the same or similar conclusions that they reached, using some of the same sources and arguments that they did, years before them, and Davies and Wheatcroft were familiar with this earlier work. In my publications I also cited several other publications of other scholars and observers that reached or suggested similar conclusions. Yet they do not acknowledge anywhere in this book that their conclusions agree with those of earlier work. When they cite such earlier work, they almost always criticize it on some small point but never acknowledge that work’s contribution to the argument they are making. The fact that they reached conclusions similar to other sources does not absolve them of the responsibility of acknowledging their agreement with previous scholarship.

In making this complaint, however, I do not seek to minimize the enormous contribution that this study makes. The Years of Hunger represents a major step toward a more complete and unbiased understanding of this catastrophic event in Soviet and world history. While it adds conclusive evidence to refute intentionalist interpretations of the famine, however, it still leaves us with fundamental uncertainties about why the famine happened and why it ended when and in the way it did.


Robert Conquest, The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine, Oxford University Press 1986.

R. W. Davies, The Industrialization of Soviet Russia: v. 1: The Socialist Offensive: The Collectivization of Soviet Agriculture, 1929-1930, Harvard University Press 1980. v. 2: The Soviet Collective Farm, 1929-1930, Harvard University Press, 1980. v. 3: The Soviet Economy in Turmoil, 1929-1930, Macmillan 1989 (revised edition 1998). v. 4: Crisis and Progress in the Soviet Economy, Macmillan 1996.

Mark Tauger, “Soviet Peasants and Collectivization: Resistance and Adaptation,” Journal of Peasant Studies 31 no. 3-4, April-July 2004.

Mark Tauger, “Natural Disaster and Human Action in the Soviet Famine of 1931-1933,” Carl Beck Papers in Russian and East European Studies, no. 1506, 2001.

Mark Tauger, “The 1932 Harvest and the Famine of 1933,” Slavic Review 50 no. 1, Spring 1990.

Mark Tauger has published several articles and short monographs on the 1931-1933 famine and other famines in Soviet history, Soviet agriculture, and recently on Amartya Sen’s theories and the Bengal famine of 1943 (Journal of Peasant Studies 31 no. 1, October 2003)

Subject(s):Economic Planning and Policy
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII

The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World

Author(s):Fogel, Robert William
Reviewer(s):Gráda, Cormac Ó Gr
Gr, Cormac Ó G

Published by EH.NET (October 2004)

Robert William Fogel, The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World. Cambridge: Cambridge University Press, 2004. xx + 191 pp. $70 (hardback), ISBN: 0-521-80878-2; $23.99 (paperback), ISBN: 0-521-00488-8.

Reviewed for EH.NET by Cormac ? Gr?da, Department of Economics, University College, Dublin.

Nobel laureate Robert Fogel dedicates his latest monograph to Sir Tony Wrigley and records his debt to the late Simon Kuznets (his “principal teacher in graduate school”) in the preface, and for good reason. Although Fogel is the prophet of the Cliometric Revolution, this short — 111 pages of text — and brilliant book owes somewhat more to quantitative economic history in the Kuznetsian tradition than to cliometrics per se. Fundamentally it is about measuring human welfare-related indices such as calorific intake, human stature and related anthropometric indices, life expectancy, a more comprehensive measure of consumption than GDP (which Fogel dubs “expanded consumption”), and body mass index (BMI) of past and present populations, and then spelling out the dramatic implications of such measurements for our understanding of both the past and prospects for the future.

Other important influences on the findings reported here — which are the product of over two decades of research — include Hans Waaler (epidemiologist), Thomas McKeown (medical historian), and Nevin Scrimshaw (nutritionist). That none of these scholars was (or is) an economist or an economic historian is a measure of Fogel’s interdisciplinary leanings. In a paper in a Norwegian journal that owes its fame (fully-deserved) to Fogel, Waaler used a large Norwegian dataset to highlight the U-shaped relationship between mortality and body mass index (BMI) and the reverse J-shaped relationship between mortality and adult height. McKeown argued, controversially and tenaciously, that better nutrition rather than medicine was responsible for pre-1950 improvements in life expectancy. Scrimshaw is best known for stressing the synergistic link between poverty and nutrition: since in the past illness and malnutrition constrained productivity, people were poor because they were poor. Over the past few centuries, however, advances in health, productivity, and technology have fed off one another, producing a virtuous circle of unprecedented improvements in human welfare. Fogel fleshes out these insights, and measures their implications for human welfare in the past, present, and future. In the process, he invokes a dazzling combination of anthropometric, nutritional, and demographic research findings, many due to his own work or those of his immediate collaborators and students.

Forget those fables about “the roast beef of Olde Englande” and their equivalents elsewhere: here (and in earlier work) Fogel confirms that for most of human history life for the masses was indeed “nasty, brutish, and short.” In pre-industrial Europe, although famine was less murderous than sometimes claimed, malnutrition was endemic even in relatively advanced economies (Fogel 1994). Malnutrition presumably constrained fecundity and marital fertility (a point not spelled out). While Fogel dates the take-off into modern economic growth conventionally, his findings and their emphasis on “technophysio evolution” (a product of the interaction between technological and physiological progress) single out the advances made in the late nineteenth and twentieth centuries. A key point is that before then health insults in infancy and early childhood impacted significantly on life expectancy and morbidity in middle age. Improvements in public health technology in the late nineteenth and early twentieth centuries — mainly through improved water and milk quality, better hygiene, and improvements in obstetric and neo-natal health care — greatly reduced such insults in the developed world, with consequent beneficial impact on chronic diseases and life chances of the middle-aged and elderly today. During the twentieth century the average number of “chronic conditions” (these are listed on p. 31) per U.S. sexagenarian fell by over two-thirds. These changes also increased both average birth weights and average adult heights. The singularity of the past century is made plain in Figure 2.1 (which will already be familiar to many readers), its reverse L-shape describing secular population growth.

As Escape from Hunger explains, biomedical and economic measures of welfare and distribution do not always tally. A well-known example concerns the antebellum U.S. where wage data indicate considerable variation by region and occupation, but significant growth everywhere in the antebellum period (Margo 2000: Tables 3A-9 to 3A-11). The mean adult height and life expectancy of population cohorts born in that era fell, however (p. 17). The case of living standards in Britain during the Industrial Revolution is analogous (1790-1860). Here Fogel reminds us that while wage data support a cheerful view of the impact of early industrialization on British workers, anthropometric research argues for a more pessimistic stance. Building on and refining earlier findings by Jeff Williamson, Fogel notes that if one takes account of the rise in mortality in the industrializing towns of Britain before the mid-nineteenth century, half or so of the supposed rise in real wages turns out to have been “spurious’ (pp. 35, 133). In the twentieth century, anthropometric, demographic, and economic measures all rose exponentially. However, the significant increase in human welfare due to the rise in life expectancy during the twentieth century is not captured by national accounts.

The second adjustment concerns leisure. A key finding (already reported in Fogel 2000) is that in the U.S. the consumption of leisure accounted for over two-thirds of what Fogel dubs “expanded consumption” today, up from less than one-fifth in 1875 (pp. 88-89). This is due to a combination of shorter hours at work and increased life expectancy. The story is the same for other post-industrial economies. The staggering share of leisure stems from valuing it in terms of other consumption foregone. That share is set to rise, as are those of education and, as already noted, healthcare. Fogel also makes a Veblenesque distinction between “earnwork” and “volwork,” or between work that one needs to do to earn a living, and work that is purely voluntary, even if it carries a financial return. The ratio of the former to the latter was over four-to-one in the U.S. in 1880; it is about two-to-three today, and is set to fall to one-to-three by 2040 (pp. 70-71).

Some of us study the past for its own sake; more of us are eager to invoke the past for the light it throws on the present; but here Fogel invokes the past to forecast the future. He predicts that the proportion of income devoted to healthcare is set to rise, particularly in developing economies. In the U.S. healthcare is set to cost a staggering 21 per cent of GDP by 2040 (p. 89). This is less because of Baumol’s Law than because improvements in costly health technology are likely to continue and because the demand for healthcare is highly income-elastic.

In the end, although Africa and AIDS temper its predictions and policy recommendations, this is an optimistic book from one of the dismal science’s masters. Fogel’s concern for the poor and the sick — both in developed and undeveloped nations — is patent throughout, and he clearly prefers less global inequality to more. Hence his proposals for the reform of medicare in the First World, and his pleas for more funding for R&D on diseases such as HIV/AIDS and for the prevention and treatment of such diseases in the Third World. Meanwhile, in OECD economies the demand for consumer durables such as cars and TVs has nearly reached saturation point. However, Fogel believes that improvements in food and health technologies are likely to increase human life expectancy — and therefore potential output — considerably, even in the developed world, in the twenty-first century. The predicted gap between the demand for and potential supply of goods implies, controversially, that the days of Stefan Burenstam Linder’s Harried Leisure Class (1971) — constrained by time to stint on the material and physic pleasures available to it — are numbered. If Fogel is right, then one of humanity’s challenges in the twenty-first century will be “earthly self-realization,” that is, how to make the most of the leisure time available to it.

The book contains a useful, albeit short glossary of technical terms (e.g. basal metabolism, BMI, income elasticity), but the definitions of terms devised by Fogel himself (e.g. technophysio evolution, volwork, Waaler surface) are always found in the text. There are brief biographies of some of the researchers mentioned (pp. 151-54). Escape from Hunger is without a doubt one of Fogel’s masterworks. Written in an accessible style, it is ideal for use in higher-level undergraduate and graduate courses. One small gripe: was this the right place for ten pages of Tables A2 and A3 (pp. 116-25) describing the data underlying the “Waaler surface” in the frontispiece?


Robert W. Fogel, 1994. “Economic Growth, Population Theory and Physiology: The Bearing of Long-term Processes on Economic Policy,” American Economic Review, 84(3): 369-95.

Robert W. Fogel, 2000. The Fourth Great Awakening and the Future of Egalitarianism, Chicago: University of Chicago Press.

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

Cormac ? Gr?da teaches at University College Dublin. His last monograph was Black ’47 and Beyond (Princeton, 1999). He has almost completed Jewish Ireland in the Age of Joyce: A Social Science History, and is working on Famine: A Short History.

Subject(s):Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII