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African Americans in the Twentieth Century

Thomas N. Maloney, University of Utah

The nineteenth century was a time of radical transformation in the political and legal status of African Americans. Blacks were freed from slavery and began to enjoy greater rights as citizens (though full recognition of their rights remained a long way off). Despite these dramatic developments, many economic and demographic characteristics of African Americans at the end of the nineteenth century were not that different from what they had been in the mid-1800s. Tables 1 and 2 present characteristics of black and white Americans in 1900, as recorded in the Census for that year. (The 1900 Census did not record information on years of schooling or on income, so these important variables are left out of these tables, though they will be examined below.) According to the Census, ninety percent of African Americans still lived in the Southern US in 1900 — roughly the same percentage as lived in the South in 1870. Three-quarters of black households were located in rural places. Only about one-fifth of African American household heads owned their own homes (less than half the percentage among whites). About half of black men and about thirty-five percent of black women who reported an occupation to the Census said that they worked as a farmer or a farm laborer, as opposed to about one-third of white men and about eight percent of white women. Outside of farm work, African American men and women were greatly concentrated in unskilled labor and service jobs. Most black children had not attended school in the year before the Census, and white children were much more likely to have attended. So the members of a typical African American family at the start of the twentieth century lived and worked on a farm in the South and did not own their home. Children in these families were unlikely to be in school even at very young ages.

By 1990 (the most recent Census for which such statistics are available at the time of this writing), the economic conditions of African Americans had changed dramatically (see Tables 1 and 2). They had become much less concentrated in the South, in rural places, and in farming jobs and had entered better blue-collar jobs and the white-collar sector. They were nearly twice as likely to own their own homes at the end of the century as in 1900, and their rates of school attendance at all ages had risen sharply. Even after this century of change, though, African Americans were still relatively disadvantaged in terms of education, labor market success, and home ownership.

Table 1: Characteristics of Households in 1900 and 1990

1900 1990
Black White Black White
A. Region of Residence
South 90.1% 23.5% 53.0% 32.9%
Northeast 3.6% 31.8% 18.9% 20.9%
Midwest 5.8% 38.5% 18.9% 25.3%
West 0.5% 6.2% 9.2% 21.0%
B. Share Rural
75.8% 56.1% 11.9% 25.7%
C. Share of Homes Owner-Occupied
22.1% 49.2% 43.4% 67.3%

Based on household heads in Integrated Public Use Microdata Series Census samples for 1900 and 1990.

Table 2: Characteristics of Individuals in 1900 and 1990

1900 1990
Male Female Male Female
Black White Black White Black White Black White
A. Occupational Distribution
Professional/Technical 1.3% 3.8% 1.6% 10.7% 9.9% 17.2% 16.6% 21.9%
Proprietor/Manager/Official 0.8 6.9 0.2 2.6 6.5 14.7 5.4 10.0
Clerical 0.2 4.0 0.2 5.6 10.7 7.2 29.7 31.9
Sales 0.3 4.2 0.2 4.1 2.9 6.7 4.1 7.3
Craft 4.2 15.9 0 3.1 17.4 20.7 2.3 2.1
Operative 7.3 13.4 1.8 24.5 20.7 14.9 12.4 8.0
Laborer 25.5 14.0 6.5 1.5 12.2 7.2 2.0 1.5
Private Service 2.2 0.4 33.0 33.2 0.1 0 2.0 0.8
Other Service 4.8 2.4 20.6 6.6 18.5 9.0 25.3 15.8
Farmer 30.8 23.9 6.7 6.1 0.2 1.4 0.1 0.4
Farm Laborer 22.7 11.0 29.4 2.0 1.0 1.0 0.4 0.5
B. Percent Attending School by Age
Ages 6 to 13 37.8% 72.2% 41.9% 71.9% 94.5% 95.3% 94.2% 95.5
Ages 14 to 17 26.7 47.9 36.2 51.5 91.1 93.4 92.6 93.5
Ages 18 to 21 6.8 10.4 5.9 8.6 47.7 54.3 52.9 57.1

Based on Integrated Public Use Microdata Series Census samples for 1900 and 1990. Occupational distributions based on individuals aged 18 to 64 with recorded occupation. School attendance in 1900 refers to attendance at any time in the previous year. School attendance in 1990 refers to attendance since February 1 of that year.

These changes in the lives of African Americans did not occur continuously and steadily throughout the twentieth century. Rather, we can divide the century into three distinct eras: (1) the years from 1900 to 1915, prior to large-scale movement out of the South; (2) the years from 1916 to 1964, marked by migration and urbanization, but prior to the most important government efforts to reduce racial inequality; and (3) the years since 1965, characterized by government antidiscrimination efforts but also by economic shifts which have had a great impact on racial inequality and African American economic status.

1900-1915: Continuation of Nineteenth-Century Patterns

As was the case in the 1800s, African American economic life in the early 1900s centered on Southern cotton agriculture. African Americans grew cotton under a variety of contracts and institutional arrangements. Some were laborers hired for a short period for specific tasks. Many were tenant farmers, renting a piece of land and some of their tools and supplies, and paying the rent at the end of the growing season with a portion of their harvest. Records from Southern farms indicate that white and black farm laborers were paid similar wages, and that white and black tenant farmers worked under similar contracts for similar rental rates. Whites in general, however, were much more likely to own land. A similar pattern is found in Southern manufacturing in these years. Among the fairly small number of individuals employed in manufacturing in the South, white and black workers were often paid comparable wages if they worked at the same job for the same company. However, blacks were much less likely to hold better-paying skilled jobs, and they were more likely to work for lower-paying companies.

While the concentration of African Americans in cotton agriculture persisted, Southern black life changed in other ways in the early 1900s. Limitations on the legal rights of African Americans grew more severe in the South in this era. The 1896 Supreme Court decision in the case of Plessy v. Ferguson provided a legal basis for greater explicit segregation in American society. This decision allowed for the provision of separate facilities and services to blacks and whites as long as the facilities and services were equal. Through the early 1900s, many new laws, known as Jim Crow laws, were passed in Southern states creating legally segregated schools, transportation systems, and lodging. The requirement of equality was not generally enforced, however. Perhaps the most important and best-known example of separate and unequal facilities in the South was the system of public education. Through the first decades of the twentieth century, resources were funneled to white schools, raising teacher salaries and per-pupil funding while reducing class size. Black schools experienced no real improvements of this type. The result was a sharp decline in the relative quality of schooling available to African-American children.

1916-1964: Migration and Urbanization

The mid-1910s witnessed the first large-scale movement of African Americans out of the South. The share of African Americans living in the South fell by about four percentage points between 1910 and 1920 (with nearly all of this movement after 1915) and another six points between 1920 and 1930 (see Table 3). What caused this tremendous relocation of African Americans? The worsening political and social conditions in the South, noted above, certainly played a role. But the specific timing of the migration appears to be connected to economic factors. Northern employers in many industries faced strong demand for their products and so had a great need for labor. Their traditional source of cheap labor, European immigrants, dried up in the late 1910s as the coming of World War I interrupted international migration. After the end of the war, new laws limiting immigration to the US would keep the flow of European labor at a low level. Northern employers thus needed a new source of cheap labor, and they turned to Southern blacks. In some cases, employers would send recruiters to the South to find workers and to pay their way North. In addition to this pull from the North, economic events in the South served to push out many African Americans. Destruction of the cotton crop by the boll weevil, an insect that feeds on cotton plants, and poor weather in some places during these years made new opportunities in the North even more attractive.

Table 3: Share of African Americans Residing in the South

Year Share Living in South
1890 90%
1900 90%
1910 89%
1920 85%
1930 79%
1940 77%
1950 68%
1960 60%
1970 53%
1980 53%
1990 53%

Sources: 1890 to 1960: Historical Statistics of the United States, volume 1, pp. 22-23; 1970: Statistical Abstract of the United States, 1973, p. 27; 1980: Statistical Abstract of the United States, 1985, p. 31; 1990: Statistical Abstract of the United States, 1996, p. 31.

Pay was certainly better, and opportunities were wider, in the North. Nonetheless, the region was not entirely welcoming to these migrants. As the black population in the North grew in the 1910s and 1920s, residential segregation grew more pronounced, as did school segregation. In some cases, racial tensions boiled over into deadly violence. The late 1910s were scarred by severe race riots in a number of cities, including East St. Louis (1917) and Chicago (1919).

Access to Jobs in the North

Within the context of this broader turmoil, black migrants did gain entry to new jobs in Northern manufacturing. As in Southern manufacturing, pay differences between blacks and whites working the same job at the same plant were generally small. However, black workers had access to a limited set of jobs and remained heavily concentrated in unskilled laborer positions. Black workers gained admittance to only a limited set of firms, as well. For instance, in the auto industry, the Ford Motor Company hired a tremendous number of black workers, while other auto makers in Detroit typically excluded these workers. Because their alternatives were limited, black workers could be worked very intensely and could also be used in particularly unpleasant and dangerous settings, such as the killing and cutting areas of meat packing plants, foundry departments in auto plants, and blast furnaces in steel plants.

Unions

Through the 1910s and 1920s, relations between black workers and Northern labor unions were often antagonistic. Many unions in the North had explicit rules barring membership by black workers. When faced with a strike (or the threat of a strike), employers often hired in black workers, knowing that these workers were unlikely to become members of the union or to be sympathetic to its goals. Indeed, there is evidence that black workers were used as strike breakers in a great number of labor disputes in the North in the 1910s and 1920s. Beginning in the mid-1930s, African Americans gained greater inclusion in the union movement. By that point, it was clear that black workers were entrenched in manufacturing, and that any broad-based organizing effort would have to include them.

Conditions around 1940

As is apparent in Table 3, black migration slowed in the 1930s, due to the onset of the Great Depression and the resulting high level of unemployment in the North in the 1930s. Beginning in about 1940, preparations for war again created tight labor markets in Northern cities, though, and, as in the late 1910s, African Americans journeyed north to take advantage of new opportunities. In some ways, moving to the North in the 1940s may have appeared less risky than it had during the World War I era. By 1940, there were large black communities in a number of Northern cities. Newspapers produced by these communities circulated in the South, providing information about housing, jobs, and social conditions. Many Southern African Americans now had friends and relatives in the North to help with the transition.

In other ways, though, labor market conditions were less auspicious for black workers in 1940 than they had been during the World War I years. Unemployment remained high in 1940, with about fourteen percent of white workers either unemployed or participating in government work relief programs. Employers hired these unemployed whites before turning to African American labor. Even as labor markets tightened, black workers gained little access to war-related employment. The President issued orders in 1941 that companies doing war-related work had to hire in a non-discriminatory way, and the Fair Employment Practice Committee was created to monitor the hiring practices of these companies. Initially, few resources were devoted to this effort, but in 1943 the government began to enforce fair employment policies more aggressively. These efforts appear to have aided black employment, at least for the duration of the war.

Gains during the 1940s and 1950s

In 1940, the Census Bureau began to collect data on individual incomes, so we can track changes in black income levels and in black/white income ratios in more detail from this date forward. Table 4 provides annual earnings figures for black and white men and women from 1939 (recorded in the 1940 Census) to 1989 (recorded in the 1990 Census). The big gains of the 1940s, both in level of earnings and in the black/white income ratio, are very obvious. Often, we focus on the role of education in producing higher earnings, but the gap between average schooling levels for blacks and whites did not change much in the 1940s (particularly for men), so schooling levels could not have contributed too much to the relative income gains for blacks in the 1940s (see Table 5). Rather, much of the improvement in the black/white pay ratio in this decade simply reflects ongoing migration: blacks were leaving the South, a low-wage region, and entering the North, a high-wage region. Some of the improvement reflects access to new jobs and industries for black workers, due to the tight labor markets and antidiscrimination efforts of the war years.

Table 4: Mean Annual Earnings of Wage and Salary Workers

Aged 20 and Over

Male

Female

Black White Ratio Black White Ratio
1939 $537.45 $1234.41 .44 $331.32 $771.69 .43
1949 1761.06 2984.96 .59 992.35 1781.96 .56
1959 2848.67 5157.65 .55 1412.16 2371.80 .59
1969 5341.64 8442.37 .63 3205.12 3786.45 .85
1979 11404.46 16703.67 .68 7810.66 7893.76 .99
1989 19417.03 28894.69 .67 15319.29 16135.65 .95

Source: Integrated Public Use Microdata Series Census samples for 1940, 1950, 1960, 1970, 1980, and 1990. Includes only those with non-zero earnings who were not in school. All figures are in current (nominal) dollars.

Table 5: Years of School Attended for Individuals 20 and Over

Male

Female

Black White Difference Black White Difference
1940 5.9 9.1 3.2 6.9 10.5 3.6
1950 6.8 9.8 3 7.8 10.8 3
1960 7.9 10.5 2.6 8.8 11.0 2.2
1970 9.4 11.4 2.0 10.3 11.7 1.4
1980 11.2 12.5 1.3 11.8 12.4 0.6

Source: Integrated Public Use Microdata Series Census samples for 1940, 1950, 1960, 1970, and 1980. Based on highest grade attended by wage and salary workers aged 20 and over who had non-zero earnings in the previous year and who were not in school at the time of the census. Comparable figures are not available in the 1990 Census.

Black workers relative incomes were also increased by some general changes in labor demand and supply and in labor market policy in the 1940s. During the war, demand for labor was particularly strong in the blue-collar manufacturing sector. Workers were needed to build tanks, jeeps, and planes, and these jobs did not require a great deal of formal education or skill. In addition, the minimum wage was raised in 1945, and wartime regulations allowed greater pay increases for low-paid workers than for highly-paid workers. After the war, the supply of college-educated workers increased dramatically. The GI Bill, passed in 1944, provided large subsidies to help pay the expenses of World War II veterans who wanted to attend college. This policy helped a generation of men further their education and get a college degree. So strong labor demand, government policies that raised wages at the bottom, and a rising supply of well-educated workers meant that less-educated, less-skilled workers received particularly large wage increases in the 1940s. Because African Americans were concentrated among the less-educated, low-earning workers, these general economic forces were especially helpful to African Americans and served to raise their pay relative to that of whites.

The effect of these broader forces on racial inequality helps to explain the contrast between the 1940s and 1950s evident in Table 4. The black-white pay ratio may have actually fallen a bit for men in the 1950s, and it rose much more slowly in the 1950s than in the 1940s for women. Some of this slowdown in progress reflects weaker labor markets in general, which reduced black access to new jobs. In addition, the general narrowing of the wage distribution that occurred in the 1940s stopped in the 1950s. Less-educated, lower-paid workers were no longer getting particularly large pay increases. As a result, blacks did not gain ground on white workers. It is striking that pay gains for black workers slowed in the 1950s despite a more rapid decline in the black-white schooling gap during these years (Table 5).

Unemployment

On the whole, migration and entry to new industries played a large role in promoting black relative pay increases through the years from World War I to the late 1950s. However, these changes also had some negative effects on black labor market outcomes. As black workers left Southern agriculture, their relative rate of unemployment rose. For the nation as a whole, black and white unemployment rates were about equal as late as 1930. This equality was to a great extent the result of lower rates of unemployment for everyone in the rural South relative to the urban North. Farm owners and sharecroppers tended not to lose their work entirely during weak markets, whereas manufacturing employees might be laid off or fired during downturns. Still, while unemployment was greater for everyone in the urban North, it was disproportionately greater for black workers. Their unemployment rates in Northern cities were much higher than white unemployment rates in the same cities. One result of black migration, then, was a dramatic increase in the ratio of black unemployment to white unemployment. The black/white unemployment ratio rose from about 1 in 1930 (indicating equal unemployment rates for blacks and whites) to about 2 by 1960. The ratio remained at this high level through the end of the twentieth century.

1965-1999: Civil Rights and New Challenges

In the 1960s, black workers again began to experience more rapid increases in relative pay levels (see Table 4). These years also marked a new era in government involvement in the labor market, particularly with regard to racial inequality and discrimination. One of the most far-reaching changes in government policy regarding race actually occurred a bit earlier, in the 1954 Supreme Court decision in the case of Brown v. the Board of Education of Topeka, Kansas. In that case, the Supreme Court ruled that racial segregation of schools was unconstitutional. However, substantial desegregation of Southern schools (and some Northern schools) would not take place until the late 1960s and early 1970s.

School desegregation, therefore, was probably not a primary force in generating the relative pay gains of the 1960s and 1970s. Other anti-discrimination policies enacted in the mid-1960s did play a large role, however. The Civil Rights Act of 1964 outlawed discrimination in a broad set of social arenas. Title VII of this law banned discrimination in hiring, firing, pay, promotion, and working conditions and created the Equal Employment Opportunity Commission to investigate complaints of workplace discrimination. A second policy, Executive Order 11246 (issued by President Johnson in 1965), set up more stringent anti-discrimination rules for businesses working on government contracts. There has been much debate regarding the importance of these policies in promoting better jobs and wages for African Americans. There is now increasing agreement that these policies had positive effects on labor market outcomes for black workers at least through the mid-1970s. Several pieces of evidence point to this conclusion. First, the timing is right. Many indicators of employment and wage gains show marked improvement beginning in 1965, soon after the implementation of these policies. Second, job and wage gains for black workers in the 1960s were, for the first time, concentrated in the South. Enforcement of anti-discrimination policy was targeted on the South in this era. It is also worth noting that rates of black migration out of the South dropped substantially after 1965, perhaps reflecting a sense of greater opportunity there due to these policies. Finally, these gains for black workers occurred simultaneously in many industries and many places, under a variety of labor market conditions. Whatever generated these improvements had to come into effect broadly at one point in time. Federal antidiscrimination policy fits this description.

Return to Stagnation in Relative Income

The years from 1979 to 1989 saw the return of stagnation in black relative incomes. Part of this stagnation may reflect the reversal of the shifts in wage distribution that occurred during the 1940s. In the late 1970s and especially in the 1980s, the US wage distribution grew more unequal. Individuals with less education, particularly those with no college education, saw their pay decline relative to the better-educated. Workers in blue-collar manufacturing jobs were particularly hard hit. The concentration of black workers, especially black men, in these categories meant that their pay suffered relative to that of whites. Another possible factor in the stagnation of black relative pay in the 1980s was weakened enforcement of antidiscrimination policies at this time.

While black relative incomes stagnated on average, black residents of urban centers suffered particular hardships in the 1970s and 1980s. The loss of blue-collar manufacturing jobs was most severe in these areas. For a variety of reasons, including the introduction of new technologies that required larger plants, many firms relocated their production facilities outside of central cities, to suburbs and even more peripheral areas. Central cities increasingly became information-processing and financial centers. Jobs in these industries generally required a college degree or even more education. Despite decades of rising educational levels, African Americans were still barely half as likely as whites to have completed four years of college or more: in 1990, 11.3% of blacks over the age of 25 had four years of college or more, versus 22% of whites. As a result of these developments, many blacks in urban centers found themselves surrounded by jobs for which they were poorly qualified, and at some distance from the types of jobs for which they were qualified, the jobs their parents had moved to the city for in the first place. Their ability to relocate near these blue-collar jobs seems to have been limited both by ongoing discrimination in the housing market and by a lack of resources. Those African Americans with the resources to exit the central city often did so, leaving behind communities marked by extremely high rates of poverty and unemployment.

Over the fifty years from 1939 to 1989, through these episodes of gain and stagnation, the ratio of black mens average annual earnings to white mens average annual earnings rose about 23 points, from .44 to .67. The timing of improvement in the black female/ white female income ratio was similar. However, black women gained much more ground overall: the black-white income ratio for women rose 50 points over these fifty years and stood at .95 in 1989 (down from .99 in 1979). The education gap between black women and white women declined more than the education gap between black and white men, which contributed to the faster pace of improvement in black womens relative earnings. Furthermore, black female workers were more likely to be employed full-time than were white female workers, which raised their annual income. The reverse was true among men: white male workers were somewhat more likely to be employed full time than were black male workers.

Comparable data on annual incomes from the 2000 Census are not available at the time of this writing. Evidence from other labor market surveys suggests that the tight labor markets of the late 1990s may have brought renewed relative pay gains for black workers. Black workers also experienced sharp declines in unemployment during these years, though black unemployment remained about twice as great as white unemployment.

Beyond the Labor Market: Persistent Gaps in Wealth and Health

When we look beyond these basic measures of labor market success, we find more disturbingly large and persistent gaps between African Americans and white Americans. Wealth differences between blacks and whites continue to be very large. In the mid-1990s, black households held only about one-quarter the amount of wealth that white households held, on average. If we leave out equity in ones home and personal possessions and focus on more strictly financial, income-producing assets, black households held only about ten to fifteen percent as much wealth as white households. Big differences in wealth holding remain even if we compare black and white households with similar incomes.

Much of this wealth gap reflects the ongoing effects of the historical patterns described above. When freed from slavery, African Americans held no wealth, and their lower incomes prevented them from accumulating wealth at the rate whites did. African Americans found it particularly difficult to buy homes, traditionally a households most important asset, due to discrimination in real estate markets. Government housing policies in the 1930s and 1940s may have also reduced their rate of home-buying. While the federal government made low interest loans and loan insurance available through the Home Owners Loan Corporation and the Federal Housing Authority, these programs generally could not be used to acquire homes in black or mixed neighborhoods, usually the only neighborhoods in which blacks could buy, because these were considered to be areas of high-risk for loan default. Because wealth is passed on from parents to children, the wealth differences of the mid-twentieth century continue to have an important impact today.

Differences in life expectancy have also proven to be remarkably stubborn. Certainly, black and white mortality patterns are more similar today than they once were. In 1929, the first year for which national figures are available, white life expectancy at birth was 58.6 years and black life expectancy was 46.7 years (for men and women combined). By 2000, white life expectancy had risen to 77.4 years and black life expectancy was 71.8 years. Thus, the black-white gap had fallen from about twelve years to less than six. However, almost all of this reduction in the gap was completed by the early 1960s. In 1961, the black-white gap was 6.5 years. The past forty years have seen very little change in the gap, though life expectancy has risen for both groups.

Some of this remaining difference in life expectancy can be traced to income differences between blacks and whites. Black children face a particularly high risk of accidental death in the home, often due to dangerous conditions in low-quality housing. African Americans of all ages face a high risk of homicide, which is related in part to residence in poor neighborhoods. Among older people, African Americans face high risk of death due to heart disease, and the incidence of heart disease is correlated with income. Still, black-white mortality differences, especially those related to disease, are complex and are not yet fully understood.

Infant mortality is a particularly large and particularly troubling form of health difference between blacks and whites.

In 2000 the white infant mortality rate (5.7 per 1000 live births) was less than half the rate for African Americans (14.0 per 1000). Again, some of this mortality difference is related to the effect of lower incomes on the nutrition, medical care, and living conditions available to African American mothers and newborns. However, the full set of relevant factors is the subject of ongoing research.

Summary and Conclusions

It is undeniable that the economic fortunes of African Americans changed dramatically during the twentieth century. African Americans moved from tremendous concentration in Southern agriculture to much greater diversity in residence and occupation. Over the period in which income can be measured, there are large increases in black incomes in both relative and absolute terms. Schooling differentials between blacks and whites fell sharply, as well. When one looks beyond the starting and ending points, though, more complex realities present themselves. The progress that we observe grew out of periods of tremendous social upheaval, particularly during the world wars. It was shaped in part by conflict between black workers and white workers, and it coincided with growing residential segregation. It was not continuous and gradual. Rather, it was punctuated by periods of rapid gain and periods of stagnation. The rapid gains are attributable to actions on the part of black workers (especially migration), broad economic forces (especially tight labor markets and narrowing of the general wage distribution), and specific antidiscrimination policy initiatives (such as the Fair Employment Practice Committee in the 1940s and Title VII and contract compliance policy in the 1960s). Finally, we should note that this century of progress ended with considerable gaps remaining between African Americans and white Americans in terms of income, unemployment, wealth, and life expectancy.

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Citation: Maloney, Thomas. “African Americans in the Twentieth Century”. EH.Net Encyclopedia, edited by Robert Whaples. January 14, 2002. URL http://eh.net/encyclopedia/african-americans-in-the-twentieth-century/

German Immigration and Servitude in America, 1709-1920

Author(s):Grubb, Farley
Reviewer(s):Wegge, Simone A.

Published by EH.Net (May 2013)

Farley Grubb, German Immigration and Servitude in America, 1709-1920. New York: Routledge, 2011. xxvi + 433 pp. $190 (hardcover), ISBN: 978-0-415-61061-2.

Reviewed for EH.Net by Simone A. Wegge, Department of Economics, CUNY.

In the eighteenth and nineteenth centuries Germans represented the largest non-English speaking group of immigrants in English North America and later what became the United States. Many of them settled in the state of Pennsylvania; by the middle of the eighteenth century those who claimed German ancestry made up over 50 percent of the population of Pennsylvania, and by the first U.S. census in 1790 over half of all Germans in the U.S. could be found living in the Keystone state. Farley Grubb focuses on German immigration to the state of Pennsylvania in this book, discussing what economic factors guided their decisions, what their immigrant experiences were like, and why they resorted to servitude contracts. The book is divided into three parts, the first on German immigration which focuses on the immigrant experience and immigrant characteristics, a second part covering the servitude market and its demise, and a third part which is an epilogue. The heart of the book consists of the first two parts.

Farley Grubb is a researcher?s researcher, or a scholar?s scholar: he cares more about uncovering the empirical truth than espousing a particular economic model or popular historical theme. Grubb is brutally honest about his work, how he came to the data, what they can do and cannot do, and what is old and what is new in this book.? In another life he would make a great Atticus Finch or Detective Columbo. This is part of the reason this book was such a pleasure to read. I felt like I was getting the truth as best as he sees it, pretty or not.

Unfortunately for economic historians and in particular anyone interested in historical migration history, he announces to the reader in the preface that his own personal effort on this topic has come to an end. So this book is both a compilation of most of Grubb?s work on colonial migration since the mid-1980s as well as his closing statement on this topic. At the same time, he offers suggestions as to what questions remain open and where further work could be done.

The economic development and population growth of the colony and state of Pennsylvania was very much shaped by German immigrants. The first population census of the U.S. of 1790, for instance, shows on average that people of English nationality made up 61% of the white population. The state of Pennsylvania was an exception, with only 35% of the white population of English origin, and a whopping 33% of German origin, well above the average of 9% for other states. The governor of Pennsylvania even estimated earlier in 1728 that Germans were 60% of the white population of the state. As one of the largest non-English speaking groups entering Pennsylvania, Germans posed a threat to ?English culture and political control? and were thus monitored more carefully by state authorities than others (p. 6). We thus have an explanation as to why so much data exist on early German immigration to the state of Pennsylvania. Grubb bases his study mostly on the passenger records collected by ships disembarking in Philadelphia in addition to the servant auction records that exist for several years in the eighteenth and nineteenth centuries.

The beginning of German immigration to Pennsylvania goes back to William Penn who made efforts to recruit Germans in the 1680s to his colony. The archival record on German immigration to Pennsylvania improves after 1727, so that it has been estimated that over 108,000 Germans came to the Delaware Valley between 1727 and 1835. Most came in the months of August, September, October and November, as they feared the colonial fevers of the summer, a pattern that is remarkably rigid before 1775. In spite of much literary evidence suggesting high mortality and morbidity rates relative to English immigrants and even slaves, Grubb finds that ship mortality rates in the eighteenth century were under 4%, twice as high as nineteenth century rates and a fraction of slave mortality rates of the time. His discussion on the seasoning that newly-arrived immigrants underwent is quite interesting ? Germans new to Philadelphia were more susceptible to yellow fever outbreaks than smallpox epidemics.

During British rule, most traveled from the Rhineland area of Germany down the Rhine River, through a Dutch port, through British customs and then across the Atlantic Ocean to Philadelphia. This journey could take anywhere from 2 to 8 months. Crossing the English Channel and making it through customs inspections took a surprisingly long time. Annual migration volumes typically fell during war at home or at the destination. Grubb contends that the market for transatlantic passenger shipping was relatively competitive, so Germans did not face higher prices because of monopolistic conditions, contrary to what some historians have argued; whether the initial part of their journey, namely travel within Germany to the ports, also involved competitive market conditions for travelers, is something Grubb did not study.

Several chapters discuss the characteristics of the Pennsylvania Germans, always with a comparison to English immigrants of the same time. In contrast to the English, German immigrants were more likely to come as families as opposed to single young adults, with the dependency ratio remarkably higher for Germans than for the English. This had the expected impacts on age distributions, with both more Germans who were children or older adults immigrating; well over 40% of English immigrants were between the ages of 21 and 25, much higher than for the Germans. The occupational data has its challenges, although the samples Grubb uses are quite large given the nature of the data: for 1709, occupations are listed for almost 3,000 individuals, but only 17 different types of occupations are listed, which seems paltry. This number quadrupled by the end of the century. Still one can make a basic summary: Grubb states that ?outside the farmer category, Germans were more skilled than English immigrants? (p. 101).

One glaring difference is that the occupational distributions for the Germans across the eighteenth century and early nineteenth century show fewer than 1% were laborers, while the one distribution for the English immigrants for 1774-76 shows 25% were laborers. Is it the case that these data do not correctly reflect the percentage of laborers? Or is it the case that even with the institution of servitude, migration was so expensive (especially in the interior of Germany) that German laborers could not afford to leave? If the latter is closer to the truth, this is evidence of positive self-selection in terms of comparing those who left Germany to those who stayed home. Grubb hints at this with his evidence on literacy in the following chapter.

The last three chapters of Part I deal with literacy and education. Immigrants to the colonies tended to be more literate than those in their homelands, which had the additional effect of making for a highly literate colonial population. German immigrants, in spite of Benjamin Franklin?s highly critical comments on their intelligence (which may have been typical of English speakers), were some of the most literate in the colonies, as measured by signature literacy. Over time, however, within the eighteenth century, literacy got worse but then improved again: Grubb cites evidence from other scholars of degeneracy in literacy among many groups in the colonies in the early eighteenth century, which seems to be related to population density and the ability or inability of immigrant parents to transmit literacy to their children.

The second chapter on literacy, Chapter 7 of the book, provides an interesting estimation of illiteracy, controlling carefully for ?life-cycle effects within each generation? as separate from ?secular trends across generations.? Scholars of literacy might want to avail themselves of Grubb?s Figure 7.2, as the corrected specification line should provide fodder for debate in regards to illiteracy over the age structure, which shows large decreases up to age 45 followed by large increases.? Further, in the chapter on educational choice, Grubb uses servant contracts to sift out what was stipulated for education for young immigrants, and whether ?education time? was to be done on an informal basis or a formal basis; this is interesting material, as we have little understanding as to what methods were used in acquiring literacy outside of formal education institutions.

In the second part of the book (Chapters 9 through 18) Grubb focuses on German immigrants to discuss a myriad of issues involving the institution of servitude. A large proportion of immigrants to the American colonies worked as indentured servants in their first years to pay off passage costs. Grubb estimates the incidence of German immigrant servitude to be 44.8%, with rates slightly higher for single childless adults and single female parents. Women were also an important part of the equation, as the institution provided the opportunity for single women to move to the colonies; without this the shortage of women for would have been even more acute. Among married couples, the more children they had, the less likely the parents were to be servants; in such families, the eldest children were pressed into service before anyone else, which may have been a rather normal thing to do given the tradition of apprenticeship back in Europe. Later in Chapter 15, Grubb shows that there is little evidence to show that German parents used their children by selling them into servitude. His sample however, is quite small. Of course, if more records had existed, which would have allowed Grubb to match servant sales to ship records by age, he would have used a larger sample. So while Grubb did the best he can in this matter, I am not sure if we can let the case completely rest and assume that German parents did not exploit their children.

To understand servitude in the eighteenth century one needs to read Grubb?s many chapters on this subject. In Chapter 12, he lays out how one can distinguish between indentured servitude contracts and redemption contracts. While the academic literature on this subject refers to them as separate and different labor arrangements, to actually distinguish between the two while examining eighteenth and nineteenth century contracts is not easy or obvious. Grubb?s Chapter 12 provides a tutorial in this; it is useful to combine one?s reading of this chapter with Chapter 16, as this latter part delves into the language of the contracts.

Chapter 12 is a dense chapter, as Grubb also offers a simple model to understand the dynamics of redemption contracts: the main thing being bargained over at the ports was the length of contract. In Chapter 13, Grubb provides econometric evidence that contract length can be explained by a number of variables, particularly those related to productivity and in the later period by the year of arrival. As Grubb concludes on page 270, ?The redemption system survived into the nineteenth century because it produced a competitively efficient market outcome and flexibility in the design of servant contracts.?

While this statement is not at all astonishing coming from a Chicago-trained economist, what Grubb has to say about settlement patterns is more thought-provoking. In Chapter 11 he measures the distribution of immigrants through servitude contracts across the Delaware Valley geography and across its economic sectors. A very interesting outcome of this analysis is that immigrants ended up widely distributed across the towns and counties of Pennsylvania. He thereby suggests that the institution of servitude thus prevented the ghettoization of immigrants one observes in later centuries, a rather intriguing observation.

One of the more fascinating questions in this literature remains ? why did this institution die? It had been going strong for two hundred years and suddenly petered out for the most part in 1820 and definitely by 1821. In Chapters 17 and 18 Grubb definitively shows that demand side explanations can all be ruled out. Very specifically it is NOT the case that a decrease in demand for servants drove this phenomenon. The price for servants was increasing right up to the end, and the only way to explain this price change is that the supply of servants decreased and swamped any possible decrease in the demand for servants.

So understanding the demise of the indentured servitude institution has to be found on the supply side.? Grubb?s main answer to this is that chain migration effects kicked into high gear, that there were enough previous immigrants who could support and pay for those who wanted to leave Germany. Remittances displacing redemption! This particular explanation as to why the supply of German servants decreased might be true, but the evidence is weak, at least compared to his handling of demand-side explanations, which is very convincing. Grubb?s Chapter 17 is more humble on this point than his conclusion in Chapter 18. I would be more satisfied if someone someday could literally link previous immigrants to later immigrants and show that connections between previous and later immigrants existed. Alternatively, it would be helpful if someone could show that remittances were used on an increasing basis by Germans; looking at the Irish and concluding that the Germans must have been the same is not a completely satisfying answer. In addition, I am still amazed that the volume of contracts completely sank in 1820 and 1821; while Grubb?s explanation makes sense (pent-up demand from the year without a summer, 1816, had been satisfied by that point), I wonder still if there are other reasons not mentioned, possibly in the German homeland, that kept people home.

Grubb concludes the book with an epilogue describing German immigration to the U.S. between 1820 and 1920. These last two chapters provide a roadmap for anyone wishing to delve into this particular subject, as they provide an overall picture of where Germans came from, where they settled, their occupational background and how this changed over time, their literacy rates, etc.?????

Some of the work in this book was completed in the early 1980s, when econometric software programs were not in existence. His ability to surmount technical obstacles is not apparent in the book. Curious about how he completed the technical work, I contacted Farley Grubb on this matter. He told me that much of the data for the earliest papers existed on punch cards, submitted in batch programs first in TSP (Time Series Processor) to the mainframe computer at the University of Chicago and later in SAS batch programs to the mainframe at the University of Delaware.? Grubb explained further how some of the graphs were produce: ?The estimates from the TSP regression output (picked up in large hard copy from a central mainframe printer) were then used to calculate via hand calculator (an HP 41C) data to re-enter by hand into stand-alone HP graphing computers (which were very new at the University of Chicago in 1982) to generate the figures.? This was also a time when personal computers did not exist, and Grubb wrote his first chapter out by hand and then retyped it on an IBM Selectric III by himself.

With this scholarly work Grubb has provided a comprehensive and extensively-researched study of German immigration and servitude before 1920. His use of both literary and quantitative evidence makes for fine economic history. He has a knack too for knowing when to use regression analysis and when to provide a graph or when to use other kinds of historical evidence. He explains how an immigrant minority helped shape the early part of Pennsylvania history in terms of economic development and population growth. Further, their participation in free and servant labor markets most probably staved off the use of slave labor in this state. With this body of work he offers many insights into the servitude market and answers many outstanding issues about this most interesting institution that thrived and evolved over two hundred years and then died suddenly. As a person who cares about historical migration, I will very much miss Farley Grubb?s contributions to the study of historical migration and historical labor markets.

Simone A. Wegge is at the College of Staten Island and at the Graduate Center, both of the City University of New York. Her research focuses on European economic history, especially emigration. Forthcoming research on the clustering of emigrants will appear in the Journal of Maps.

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (May 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Historical Demography, including Migration
Servitude and Slavery
Geographic Area(s):North America
Time Period(s):18th Century
19th Century
20th Century: Pre WWII

Getting It Wrong: How Faulty Monetary Statistics Undermine the Fed, the Financial System, and the Economy

Author(s):Barnett, William A.
Reviewer(s):Ferderer, J. Peter

Published by EH.Net (July 2012)

William A. Barnett, Getting It Wrong: How Faulty Monetary Statistics Undermine the Fed, the Financial System, and the Economy. Cambridge, MA: MIT Press, 2012.? xxxiii + 322 pp. $35 (paperback), ISBN: 978-0-262-51688-4.

Reviewed for EH.Net by J. Peter Ferderer, Department of Economics, Macalester College.

It is widely agreed that excessive risk-taking led to the sub-prime financial crisis and the Great Recession.? Mortgages without down payments, historically high leverage ratios, maturity mismatch, and the list goes on.? What were people thinking?? Was it mass hysteria?? Was it greed gone wild???

In Getting It Wrong, William A. Barnett, the Oswald Distinguished Professor of Macroeconomics at the University of Kansas, places blame squarely on the shoulders of the Federal Reserve Board in Washington, DC.? He argues that the quality of monetary data provided by the Board has been declining for decades at the same time that the need for good data has grown due to the increasing complexity of financial markets and instruments.? Unable to accurately measure the amount of liquidity in the system, the Fed has lurched between overly expansionary policies that fueled bubbles to excessively restrictive ones that have produced unnecessarily deep recessions.? Because the public was left in the dark, they mistakenly attributed the Great Moderation to better monetary policy and misperceived it to be a permanent feature of the macroeconomic landscape.? As a consequence, lenders, borrowers, Wall Street firms and just about everyone did what was rational ? they took on more risk.?

Barnett is well qualified to offer this critique.? He was a staff economist at the Federal Reserve Board between 1973 and 1981 when financial innovation created the ?missing money? problem and Paul Volcker led the great monetarist experiment.? Barnett left the Fed for a series of university professorships in the early 1980s, has made numerous contributions to the literature on monetary aggregation, and is the editor of Macroeconomic Dynamics.

Barnett?s main criticism of the Fed is that it does not utilize state-of-the-art aggregation theory to measure the quantity of monetary services in the economy.? Instead, it relies on simple-sum aggregates that are fundamentally flawed.? For instance, M1 underestimates the amount of monetary services available in the economy because it excludes savings accounts and other near-monies.? In contrast, the broader aggregates ? M2, M3 and L ? overestimate monetary services because they give equal weight to, in the case of M3, currency and CDs.? If apples and cars are given different weights when GDP is calculated, shouldn?t we do the same when measuring the amount of money in the economy?

Barnett originated the Divisia Index in the early 1980s to address this problem.? The Divisia Index weights a monetary asset by its ?user-cost price? measured as the difference between the asset?s own interest rate and the rate earned on the best available pure investment.? Thus currency and checkable deposits, which earn no interest, receive large weights.? Savings accounts, CDs and other instruments, which earn interest as compensation for their illiquidity, receive smaller weights.? One of the central claims of Getting It Wrong is that the velocity of money is stable once money is properly measured using the Divisia Index.? Thus the equation of exchange (MV = PY) can be used to guide monetary policy and stabilize the macroeconomy.?

For Barnett the Board?s data mismanagement does not end with their unwillingness to embrace the Divisia Index.? He describes the practice of publishing data on checking-account deposits after banks ?sweep? funds to money market deposit accounts as an attempt to ?cover up reserve requirement evasion? and a ?scandal? (p. 143).? This practice causes demand deposits to be underreported by 50 percent, ?rendering M1 monetary aggregate data nearly useless? (p. 132).? Also, the Fed tossed the baby out with the bath water in 2006 when it stopped reporting M3, L and their component aggregates.? One of these component assets, repurchase agreements, is the quasi-money created by the shadow banking system and greater transparency here might have reduced risk-taking prior to the sub-prime crisis.

Why has the Federal Reserve Board done such a poor job measuring ?the most fundamental variable over which a central bank does have influence ? money?? (p. 34).? According to Barnett, the public was deliberately kept in the dark so the Fed would be less accountable for its policies. Barnett provides many cloak-and-dagger stories from his years at the Fed to build a case for this hypothesis.? For example, he describes how his superiors at the Board blocked his attempts to communicate about the Divisia Index with Board governors and recounts a case where the FBI was brought in to investigate colleagues for leaking interest rate data that was already publically available.? The Federal Reserve Bank of St. Louis carried the torch by publishing the Divisia Index for years, but Barnett suggests that they stopped doing so as the sub-prime financial crisis began due to political pressure from the Board.???
??????
Barnett provides a valuable service by exposing the Fed?s poor data management.? Moreover, his main policy proposal ? the creation of a Bureau of Financial Statistics along the lines of the Bureau of Labor Statistics ? makes a great deal of sense.? Nevertheless, I am not convinced by his argument that defective monetary data was largely responsible for excessive risk-taking prior to the financial crisis.?

First, it is problematic to argue that increasingly defective monetary data simultaneously caused (i) the Fed to make more policy errors, and (ii) the public to believe that the macroeconomy had become more stable.? These two phenomena can occur at the same time if some third factor caused the business cycle to become less variable, but Barnett is silent on what that might be.? An alternative explanation is that monetary policy did improve and contribute to the Great Moderation, but the stability was ultimately destabilizing because it caused agents to reduce their margins of safety.??????

Second, the public could gauge the stance of monetary policy using the Taylor rule and did not need monetary aggregates, simple-sum or Divisia, to do so.? In the years leading up to the sub-prime crisis the Fed kept the fed funds rate too low for too long.? It presumably did so out of concern that the U.S. would experience a Japanese-like debt deflation after the dot-com bubble burst.? It appears that the public largely ignored the signal sent by the low fed funds rate ? both in terms of what it implied about the stance of policy and the Fed?s willingness to adhere to rules ? and continued to take on more risk. This suggests that other factors like moral hazard or the availability heuristic (probability judgments based on how easily examples come to mind) explain the excessive risk-taking.

Finally, cross-country evidence is inconsistent with the hypothesis that defective central bank data played a pivotal role.? For example, the Bank of England is Barnett?s poster child for proper data management with its longstanding and transparent use of the Divisia monetary aggregates and yet the recession in the United Kingdom has been deeper and longer than that experienced in the United States.???

I agree with Barnett when he demands, in the words of fictional NFL wide receiver Rod Tidwell, that the Fed should ?Show Me the Money!?? Clearly, the benefit-to-cost ratio of publishing better monetary data is very large.? However, it is a stretch to suggest that defective monetary data was the principle cause of the excessive risk-taking leading up to the sub-prime financial crisis.? To better understand this phenomenon we need to step outside of mainstream economic theory, which Barnett defends so admirably, and take seriously the heuristics and biases that characterize human decision making.???

J. Peter Ferderer is currently working on a book which examines the development of the over-the-counter securities markets over the past two centuries.

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (July 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Parasites, Pathogens, and Progress: Diseases and Economic Development

Author(s):McGuire, Robert A.
Coelho, Philip R. P.
Reviewer(s):Murray, John E.

Published by EH.Net (May 2012)

Robert A. McGuire and Philip R. P. Coelho, Parasites, Pathogens, and Progress: Diseases and Economic Development.? Cambridge, MA: MIT Press, 2011. viii + 343 pp. $30 (hardcover), ISBN: 978-0-262-01566-0.

Reviewed for EH.Net by John E. Murray, Department of Economics, Rhodes College.

An old saw proposes that holding a hammer makes everything look like a nail.? When Robert McGuire and Philip Coelho suggest (p. 5) that Jared Diamond?s bestseller (1997) should have been titled Germs, Germs, and Germs, the reader may think that the authors carry not a hammer but a microscope.? Everywhere in this history, germs appear as the critical and virtually only influence on economic development.? By the end the reader better understands microbes in American history, but may still wonder if natural resource endowments, property rights and contract law, accumulating human capital, and flexible markets played a role as well.

Parasites, Pathogens, and Progress synthesizes a considerable literature on infectious disease and U.S. economic history, particularly before 1900.? On the purely economic side, a set of verbal and flowchart models of economic growth stress connections between ever greater population density and increasing infectious disease rates.? These connections, they argue, counterbalance better known Smithian growth models in which increasing density leads to the division of labor and Malthusian anti-growth models in which increasing density leads to food shortages.? Traditionally in neither of these stories do infectious diseases play much of a role.? This book aims to fix that omission.? The authors write (p. 6), ?We do not claim that we are the first to bring parasites and pathogens into the history of humanity and the economy, but we do so with emphasis and conviction that are missing in other histories.?? Here is truth in advertising.? Readers familiar with the work of world historians such as William McNeill, Philip Curtin, or Alfred Crosby, or historians of medicine such as Kenneth Kiple, Todd Savitt, or Margaret Humphreys will find little new here.? The same disease agents, transmission processes, and racial differentials appear in this book as in the works of those historians.? To these factors the authors attribute monocausal explanatory power with iron single-mindedness.

Disease in economic development (or stagnation) is fascinating, and this book brings out much of that inherent interest, but with little subtlety.? Much of the authors? case moves forward without reference to work of previous historians.? Concerning European contact with the New World, they write (p. 33), ?The assumptions that the biological environment is unchanging and that the ecology is exogenous to human actions are spectacularly incorrect.?? But after McNeill?s Plagues and Peoples (1976) and Crosby?s Ecological Imperialism (1986), very few scholars believe in a static global disease environment.? The idea that disease might explain some of a historical episode rather than all of it generally is absent.? Two pages concern the irresistible Antebellum Paradox of declining adult heights and life expectancies in an era of increasing per capita incomes.? Expanding transportation networks integrated local, and then regional, and then national disease pools.? The authors conclude, ?The deteriorating disease environment affected the biological standard of living and, as a result, average heights fell? (p. 53).? Full stop.? But no scholar doubts that disease mattered, and most try to account for its influences.? Despite the strongly worded conclusion, no evidence supports their absolute attribution, nor can the authors rule out the explanatory power of trends in pork production, income distribution, infant mortality, and urbanization.? The publication with the best evidence for the transport-disease connection (Haines, Craig, and Weiss 2003) is not cited in this book.

The bulk of the book is given over to the importance of infectious disease, primarily malaria, in determining that the labor force in the South would be drawn from African slaves rather than bound Europeans or Indians.? The authors cast their story of racial differentials in malaria susceptibility against Kenneth Stampp?s claim in The Peculiar Institution (1956) that Africans, Europeans, and their descendants were equally vulnerable to Plasmodium.? In contrast, write McGuire and Coelho, a sound scientific literature has arisen that attributes differential mortality rates by race to physiological differences such as the presence or absence of sickle cells or the Duffy antigen.? This discussion, in Chapter 6, is clearly presented, even in its technical parts, as well as engaging and informative.? But it is a bit beside the point because the hypothesis of differential malaria susceptibility and its consequences for our history is widely accepted by historians.? As a typical example, Humphreys concluded ten years ago in her Malaria (2001, p. 28; not cited in this book), ?While no simple cause and effect can be directly established, and other diseases such as yellow fever certainly played their part, it can at least be concluded that malaria had a substantial impact on labor and settlement patterns in the American colonies, patterns that would ultimately lead to the Civil War.?

The authors occasionally succumb to the temptation to let inferences from their model replace historical evidence.? Here are two examples.? First, on the transition from temporarily-bound Europeans to permanently-bound Africans:? The authors describe a process of natural selection in favor of relative resistance of white people to cold weather diseases and of black people to hot weather diseases, which more or less accords with the scientific literature.? ?As a result,? they write (p. 100), ?there is (sic) an increase in the migration of European indentured servants? to the northern colonies.? To explain the absence of evidence for this claim, they note (p. 100) that ?reliable data for indentured servants bound for New England are not available.?? They seem unaware that the lack of such data, reliable or otherwise, was due to the tendency of indentured servants to avoid New England in the first place, contrary to the conclusions of the authors? model.? A second example concerns antebellum medical practice.? With no reference to its price, they assert (p. 161) that planters could afford quinine for their slaves, that a sufficient quantity of quinine to stem a malarial episode was cheaper than replacing a slave (almost certainly true), and there they stop.? Did planters actually provide quinine to their slaves?? We know from a standard work, Savitt?s Medicine and Slavery (1981, p. 155; not cited in this book), that in fact quinine was widely used on plantations.? A simple citation to Savitt?s findings would have completed their argument.

Disease has played an important role in American history, and the number of historians who think so are greater than this book seems to assume.? If infectious disease might have been overlooked at some point in the historiography, this book will help gain greater attention for its multifaceted influences.? Still, it would have helped the authors? case if they had contented themselves with nominating parasites and pathogens to join the ranks of relevant subjects for historical study, rather than asserting their near-exclusive primacy.

References:

Crosby, Alfred. Ecological Imperialism: The Biological Expansion of Europe, 900-1900. New York: Cambridge University Press, 1986.

Diamond, Jared. Guns, Germs, and Steel: The Fates of Human Societies. New York: W.W. Norton, 1997.

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

Humphreys, Margaret. Malaria: Poverty, Race, and Public Health in the United States.? Baltimore: Johns Hopkins University Press, 2001.

McNeill, William. Plagues and Peoples. New York: Anchor Press, 1976.

Savitt, Todd L. Medicine and Slavery: The Diseases and Health Care of Blacks in Antebellum Virginia.? Urbana: University of Illinois Press, 1978.

Stampp, Kenneth. The Peculiar Institution: Slavery in the Ante-Bellum South. New York: Vintage Books, 1956.

John E. Murray is Joseph R. Hyde III Professor of Political Economy at Rhodes College in Memphis, Tennessee.? His next book, The Charleston Orphan House: Children?s Lives in the First Public Orphanage in America, will be published by the University of Chicago in early 2013.

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (May 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Servitude and Slavery
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):North America
Time Period(s):17th Century
18th Century
19th Century

Cotton and Race in the Making of America: The Human Costs of Economic Power

Author(s):Dattel, Gene
Reviewer(s):Miller, Melinda

Published by EH.NET (March 2010)

Gene Dattel, Cotton and Race in the Making of America: The Human Costs of Economic Power. Chicago: Ivan Dee, 2009. xiv + 416 pp. $29 (hardcover), ISBN: 978-1-56663-747-3.

Reviewed for EH.NET by Melinda Miller, Department of Economics, U.S. Naval Academy.

Gene Dattel, an independent scholar with a background in the finance industry, weaves together cotton and race into a sweeping narrative of racial oppression and its role in the economic growth of the United States. His central premise is that economic self-interest, and not moral or ethical imperatives, has driven much of American history. Although most of the facts in this book will be familiar, Dattel nicely draws together the literature on the cotton South, financial markets, and northern racism to make the compelling argument that the South?s desire for cotton and northern complicity irrevocably altered American racial history. The book?s narrative is divided into six parts.

In Part One, Dattel uses the Constitutional Convention to illustrate how ?the desire for economic development trumped … almost all else? (p. 5). He persuasively argues that freedom for slaves was sacrificed to commercial interests, order, and security.

Part Two explores cotton?s role in American economic growth from 1787 until 1861. It begins with an analysis of factors influencing the tremendous increase in the supply of and demand for cotton at the beginning of the nineteenth century. The remainder of this part explores the burgeoning cotton industry?s influence on the United States and its expansion throughout the South. Dattel carefully chronicles the business and finance of cotton while demonstrating that, through cotton, slavery touched the world: New York City profited from cotton finance; Britain, France, and New England depended on raw cotton; and the federal government depended on the tariff revenues made possible by cotton’s favorable effect on the balance of trade.

Part Three documents the conditions of blacks in the North before the Civil War. While the northern states had outlawed slavery, their citizens were not welcoming to African-Americans and wished to rid themselves of their black populations. Chapters 8 and 9 provide a detailed analysis of northern laws and document the hostile and racist atmosphere for blacks in the North. Chapter 8 focuses on the original northern colonies, while Chapter 9 discusses the western states. These two chapters can serve as a concise, freestanding compilation of racist laws and attitudes in the North. They could very nicely be incorporated into an economic history class to dispel any misperceptions students have about the history of racial (in)equality in the North.

Part Four focuses on the role of cotton in the Civil War and argues, ?none of this destruction would have occurred if not for cotton? (p. 166). Cotton served as both a bargaining tool and a means of credit for the South. These dual roles were possible largely because Great Britain?s textile industry relied on southern cotton. Chapter 13 delves deeply into the role of cotton in war financing. The Confederacy developed complicated financing schemes, including the famous Erlanger bond, which Dattel praises as both ?prescient and brilliant? (p. 188). Overall, however, the Confederacy bungled financing. The origins of its fundraising problems can be found, Dattel suggests, in the South?s choice to use cotton as a bargaining chip, and not just a fundraiser. Entertaining tales of blockade-runners who moved cotton out of the South and brought guns and supplies to the Confederates dominate chapter 14. There was also a large illicit flow of cotton within the United States. In another example of shameful and prejudiced northern behavior, General Grant blamed the Jewish population of Tennessee for this trade and expelled them from parts of the state. Part Four concludes with a discussion of the future of the freed slaves. For the North, there was a simple answer: containment of the freedmen in the South and in the cotton fields.

Part Five examines the lives of blacks and carpetbaggers from 1860 to 1930. The central argument of this section is that ?the possibilities for black acceptance in these years (1865-1876) have been grossly exaggerated in our history.? During Reconstruction, the lives of freedmen were largely shaped by two forces: the northern hatred of blacks, and the southern desire for cotton. Together, they led to Federal and state government policies that served to firmly anchor blacks to the cotton fields. These included the decision to restrict land acquisition by freedmen, the failure of most civil rights legislation, Supreme Court decisions that reinforced racist policies, and a lack of adequate schooling for freed slaves and their children. While this era also saw an increase in racial violence in the South, the life of northern blacks was so poor that southern blacks were essentially trapped.

Part Six takes on the issue of cotton production after the war, particularly the expansion of cotton and the rise of sharecropping. The state of postwar southern financial markets and the unique financing needs of cotton together served to severely constrain the economic advancement of freedmen. Dattel presents sharecropping as inevitable: ?With cotton production as the goal, sharecropping was a predictable outcome? (p. 331). He presents the tale of Mound Bayou, an all black town in Mississippi, to illustrate this point. Mound Bayou was both owned and controlled by blacks. Despite some initial success, it eventually succumbed to the vagaries of King Cotton and a lack of financial infrastructure and provides us with an ?abject lesson in the futility of black economic hopes after the Civil War? (p. 341). Both part six and cotton?s hold on African-Americans concluded with the rise of the mechanical cotton picker. This technology ended the need for black labor in the cotton fields.

Dattel?s choice to conclude with a technological innovation fits well with one of his underlying themes: history is largely shaped by technology and finance. As Dattel argues in the introduction, ?the slaveholder and the slave before the Civil War, and the plantation owner and the sharecropper afterwards, were all ? each in his own way –pawns in the hands of finance? (p. xi). Shortly thereafter he returns to this general theme when arguing that, ?the cotton boom was a perfect example of how machines and technology control human destiny? (p. 30). Dattel tends to treat both finance and technology as exogenous, and then argues that fates of both African-Americans and the South were ?foreordained? (p. 312) given the financial system and state of technological progress. Although insight can be gained from this approach, I think this ultimately fatalistic viewpoint of the past introduces two weaknesses into Dattel?s analysis. First, despite the repeated emphasis on finance and technology, an important set of questions remains unaddressed. Why did the financial system and technology evolve as they did? Were they, too, foreordained given some initial conditions? Or could government policy have influenced their organization and, ultimately, the status of African-Americans? A second, related issue concerns public policy. Dattel seems to leave little role for government programs, legislation, or institutions to influence the economic status of former slaves and their descendents. Despite a brief mention of current issues facing African-Americans on the closing pages, the potential role of government policy today remains unclear. Could anything mitigate racial disparities today? Or does finance and technology still trump all?

Melinda Miller is an assistant professor of economics at the U.S. Naval Academy. Her research focuses on slavery, emancipation, and racial inequality. She can be reached at mmiller@usna.edu.

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (March 2010). All EH.Net reviews are archived at http://www.eh.net/BookReview.

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

A Man of Salt and Trees: The Life of Joy Morton

Author(s):Ballowe, James
Reviewer(s):Stanger, Howard R.

Published by EH.NET (January 2010)

James Ballowe, A Man of Salt and Trees: The Life of Joy Morton. Dekalb, IL: Northern Illinois University Press, 2009. xv + 302 pp. $29 (hardcover), ISBN: 978-0-87580-398-2.

Reviewed for EH.NET by Howard R. Stanger, Department of Management and Marketing, Canisius College

The life of entrepreneur Joy Morton (1855-1934) was bookended by the Kansas-Nebraska Act and the Great Depression, a span of time during which the United States became a large urban and industrial nation fraught with social, cultural, political, and economic conflicts. Author James Ballowe (Distinguished Professor of English Emeritus, Bradley University) reveals Morton?s personal life to be equally tumultuous. Notwithstanding the many challenges he faced in his life, Morton?s intellect, inner drive, and social connections enabled to him build a diverse business empire.

Born in Detroit to educated and solidly middle-class parents, Julius Sterling Morton and Caroline Joy French, infant Joy was raised in the pioneering town of Nebraska City, Nebraska, where Julius sought journalistic and political opportunities and to make his fortune. During his frequent work-related absences from home, Julius left Caroline to manage the family farm, later called Arbor Lodge. Julius was exacting and expected his four sons to achieve wealth. Although he never realized his own ambitious goals, he left a few important legacies: he founded Arbor Day in 1872 and imbued in Joy a strong work ethic and a love of trees.

Joy had a variety of school and work experiences (farming, working on a railroad survey crew, hauling freight, and clerking in a bank) before he was fifteen. Just shy of sixteen, he enrolled in his great uncle?s school ? Mayhew?s Business College, in Detroit ? where the three-month course gave him ?an idea of business methods and of the value of system in recording business transactions? (p. 34). But family obligations and illness prevented him from starting a business. He also watched the management careers of his younger brothers, Paul (1857-1911) and Mark (1858-1951), take off quickly on the Chicago Burlington & Quincy Railroad. Paul secured for Joy an office position on the railroad in Aurora, Illinois, in 1878, the same year he became engaged to Carrie Lake, a judge?s daughter from Omaha. Two years later, Joy experienced two watershed moments: He got married and entered into partnership with Ezra Wheeler, an established Chicago salt distributor for the Michigan Salt Association, the dominant Midwestern distributor.

After inspecting Wheeler?s books and recognizing opportunities from a growing city and industry (the demand for salt was rising with the nation?s population and the needs of the meatpacking industry), Morton accepted Wheeler?s offer. Joy and Carrie moved to Chicago (next door to Paul and his new wife), but he toggled between Chicago and Nebraska taking care of the family farm, his father?s and his business interests, and keeping the family together after his mother died. Joy also contended with a generally unhappy wife whose degrading physical and mental conditions taxed him until she passed away in 1915, at age 58.

Wheeler?s frequent business trips left Joy in charge of day-to-day operations and enabled him to hone his business skills. In 1885, Wheeler died, leaving Joy in partnership with Mrs. Wheeler for a year after which time he assumed majority ownership in Joy Morton & Co. Joy distributed smaller ownership shares to family members, a common practice in the Morton family. In his early thirties, Morton finally achieved business independence.

Morton built a new home outside Chicago for Carrie and his two children, daughter Jean (1883-1953) and son Sterling (1885-1961), and expanded his salt business, which seemed impervious to business cycles. Financially secure by 1900, Morton consolidated his businesses for both efficiency and family reasons, and began to divest his Nebraska businesses, including the sale of his starch company (run by his brother Carl (1865-1901)) to a larger combine. In 1901 he created the International Salt Company and later, in 1910, owing to the public?s backlash against trusts, changed its name to The Morton Salt Company, whose table salt became one of the nation?s leading consumer brands. He extended minority ownership beyond family, notably to Daniel Peterkin, a trusted executive whom Morton groomed, along with other men from his residential neighborhood.

Now settled in Chicago (he built a country estate twenty-five miles away from Chicago in 1910), Morton eagerly got involved in civic affairs, collaborating with the renowned local architect Daniel Burnham to build a modern office building (1903-04) downtown near Lake Michigan (and built another one in the 1920s with Burnham?s successor.) and to create the famous Plan of Chicago in 1906. His longtime interest in internal improvements led him to serve on federal and state water transportation boards during World War I. He remained active in civic affairs and planning over the next few decades, including helping to select the design of the iconic Tribune Building and the locations for the Chicago Daily News building and the fortress-like Merchandise Mart, both of which became the first buildings to front the Chicago River. During this time he maintained ties to Arbor Lodge, now their country estate, until he deeded it to the state in 1923. At that time the property contained a botanical gardens and natural history museum.

Morton?s personal hardships (early deaths of close family members) were eased in 1917 with the birth of his first grandchild and his marriage to Margaret Gray, his trusted estate manager and partner in creating an arboretum. Since his father introduced him to Frederick Law Olmstead in 1873, Joy had built relationships with well-known landscape architects, botanists, and other experts from which he hired an excellent staff to create and run the Morton Arboretum, a 400-acre preserve (now 1,700), that opened in 1923. Illness and ailments slowed Morton down in the late 1920s and a sudden heart attack felled him on May 10, 1934. Morton?s philanthropy was generous but the arboretum was his carefully planned legacy and tribute to his father, who would have been pleased with Joy?s overall achievements.

In Ballowe?s hands, Morton is a highly sympathetic figure who, despite personal hardships, remained dedicated to his family and business affairs. Sometimes, however, Ballowe makes claims with little supporting evidence. For example, he may be right that Morton ?became recognized as a central figure in the movement that helped transform a nineteenth-century individualist economy into a corporate industrial economy? (p. 148), but he does not explain his role in this process. During the labor unrest and anti-radical hysteria that consumed Chicago in 1886 Morton settled a short strike at his warehouse by granting workers an eight-hour day at a reduced wage. Morton commented on the outcome: ?What fools these mortals be, especially strikers.? Aside from the belittling comment, why did Morton concede shorter hours when most employers did not? And during the 1894 Pullman strike Morton averted labor troubles by ?paying attention to (workers?) … welfare? (p. 124). How so? As was de rigueur, he invited his office staff and their families to his estate for company outings, but not the blue-collar workers. Why not? Did class matter to Morton? Finally, Ballowe mentions the significance of Morton Salt as a brand, but provides little discussion on how it came to be so popular.

These minor limitations, largely attributable to the genre, the author?s background, and the lack of business records, do not detract from this fine biography that Ballowe constructed from a careful study mainly of Morton?s personal and family papers. A man of salt and trees? Yes, and much more.

Howard R. Stanger is Professor of Management and History in the Organizational Studies Area, Department of Management and Marketing, Wehle School of Business, Canisius College. His forthcoming articles include a study on the decline of the Larkin Company (1918-1942) and the labor practices of the Columbus Ohio master printers? association (1887-1987).

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

Economics in Russia: Studies in Intellectual History

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

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 medieval 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 (administrator@eh.net). Published by EH.Net (May 2009). All EH.Net reviews are archived at http://www.eh.net/BookReview.

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

The Race between Education and Technology

Author(s):Goldin, Claudia
Katz, Lawrence F.
Reviewer(s):Lindert, Peter H.

Published by EH.NET (November 2008)

Claudia Goldin and Lawrence F. Katz, The Race between Education and Technology. Cambridge, MA: Harvard University Press, 2008. vii + 488 pp. $40 (hardcover), ISBN: 978-0-674-02867-8.

Reviewed for EH.NET by Peter H. Lindert, Department of Economics, University of California ? Davis.

Claudia Goldin and Lawrence Katz have produced a definitive economic history of American education. This reviewer?s high hopes for their book project have not been disappointed. The final product is tightly reasoned and easy to grasp by anyone who cares about the country?s educational history. Even those who are shy of mathematics can simply slip past the occasional show of regressions and equations, guided by the authors? trouble-free prose. Those of you who have seen several Goldin-Katz papers from this project are assured that the whole is greater than the sum of those parts.

Two featured insights tie the whole book together, with the first of these leading logically to the second. The first insight: It?s home grown education that has mattered, not technology or immigration. That is, contrasting historical movements in American wage inequality are explained mainly by revolutions in education, not by shifts in technology or by waves of immigration. Goldin and Katz make this argument persuasive by wisely choosing to focus on the task of explaining contrasts in wage movements between long periods. Wage inequality, by occupation or by educational level, rose in the late nineteenth century, fell dramatically in the first half of the twentieth, and then rose in most decades of the second half (though not in the 1970s). In any one period, all three of those forces ? home grown education, technology, and immigration ? shared in determining the width of the pay gaps. Similarly, trends in all three shared in the task of explaining trends in the pay gaps. Yet the key insight emerges from contrasting those long trends, a temporal contrast analogous to economists? ?differences in differences? analysis. What made periods of rising inequality different from periods of falling inequality is that the rate of advance in education was stronger in the latter periods. In the title roles, technology has been the steady tortoise, while education has raced like the erratic hare. At times it ran ahead, at times it fell asleep, and now it races to catch up.

The first featured insight introduces their search for the second. How did America achieve those revolutions in education, and what explains their timing? The second insight is that American education had a unique set of egalitarian virtues, which weakened or were subverted later. The six original virtues were public funding, public provision, the separation of church and state, fiscal decentralization, forgiveness of youthful errors, and gender neutrality. Some of these virtues waxed and waned, though not because of any unifying dynamic. Three of them ? public funding, public provision, and secularization ? rose across the middle and late nineteenth century and never retreated, for better and for worse. Two others – forgiveness and gender equality ? have been permanent American strengths, with a couple of wrinkles in the mid-twentieth century. Fiscal decentralization has the most complicated dynamic of all.

The opening part of the book (Introduction and Chapters 1-3) previews everything, especially the first key insight about the technology-education race. Its factual summaries deserve to be worked into our reading lists and lectures. For an overview of the distinctive history of American educational progress across the data-rich twentieth century, see Chapter 1. Chapter 2 fixes our attention on earnings inequality, the dependent variable that dominates the book. Reading lists could well combine this chapter?s summary of wage inequality in the twentieth century with the Piketty-Saez overview of what happened up at the very top of the distribution. Chapter 3 on skill-biased technological change debunks the notion that the computer era is a radical departure, and drives home the point that skills bias has advanced more evenly over the decades than most people think. It ends with the key pivot point that ?It?s not technology,? which turns us toward the second key insight, namely that fluctuations in educational progress play the leading role in explaining inequality movements.

The second part of the book dwells on the unevenness of that progress. This country went through three great waves. In the nineteenth century America?s (and Canada?s) public primary schooling became the envy of the world. Chapter 4 on the ?origins of the virtues? sketches this wave, with definitive coverage of the six egalitarian virtues. Chapters 5 and 6 explain the second great wave, in which America became the world pioneer in public high schools with its own egalitarian emphasis on a wide menu of courses for all. Goldin and Katz show that several economic forces explain why the timing of this grass-roots movement differed across regions. Their quantitative accounting downplays compulsory school laws and child labor laws, which they find had only small, though statistically significant, effects. Rather, the analysis hints at a political economy in which some regions developed high schools faster than others because their political structures were more egalitarian. In the high school wave, as in the earlier primary school wave, the willingness to raise taxes for school unquestionably raised total schooling, and did not just crowd out private schooling.

Chapter 7 on the evolution and current state of America?s private and public colleges and universities is jam-packed with useful information. It belongs on everybody?s reading list in education economics. The main theme here is triumph: The Americans did a better job than any other country at financing higher education, and at making its institutions compete against each other. Only at the end of the twentieth century have other countries caught up in high-education enrollments, though the United States continues to dominate in research.

Two subplots in the twentieth-century advance of higher education relate to gender and to regions. The gender story exposes one of the main wrinkles in the triumph of gender equality in American education. With higher education, as with careers in teaching, women lost ground at one point in the twentieth century, though they overtook males later. Their college education fell behind a bit in the Great Depression of the 1930s, and especially in the postwar quarter-century when the GI Bill did so much for males? higher education. This wrinkle was ironed out in the 1970s, when male graduation rates stagnated and females soon became the majority of college graduates, as they continue to be in this and several other countries.

The regional story includes some reverse crowding out: The Northeast has remained behind in its tax support for higher education because it has always been so well endowed with private universities. That might not have been so remarkable if the overall attendance rate had been higher in the Northeast. Yet Goldin and Katz show us the opposite: Overall attendance remains higher in the vast North and West from Minnesota to the Pacific. In other words, something about the presence of excellent private universities actually lowered college attendance in the Northeast, other things equal. Might this quantity difference have outweighed the quality advantage of private institutions in the Northeast? Did influential ivy alums in northeastern states suppress public higher education enough to hold back regional growth?

In the final part of the book Goldin and Katz return to the race between technology and education in explaining twentieth-century movements in earnings inequality, this time with Chapter 8?s tidy quantitative analysis. The early wage compression and the later wage widening were driven by the supply and demand for the skills tied to educational attainment, with a little help from institutional movements in the power of unions and wartime wage controls. As we were warned in Part 1?s preview, the wage movements were dominated more by swings in the supply of education-related skills than in the demand for them. And on that supply side, the swings in home grown educational attainment were more important than the swings in immigration.

In Chapter 9?s finale on ?How American Can Win the Race for Tomorrow,? the authors tread warily in the minefields of current policy debates. They do not take clear sides in the war over whether extra money will improve education, despite citing Krueger?s evidence that paying for smaller class sizes does seem to help. They also refrain from judging No Child Left Behind, though they note that testing and accountability is an important issue. On local school choice mechanisms, such as vouchers and charter schools, they take a cautious position shared by this reviewer: the evidence is mixed, but school choice ?could improve the situation? for low-income families. The idea of school choice is also supported, of course, by its success in raising the productivity of higher education, covered back in Chapter 7. They also seem to accept the evidence that the country has underinvested in infant education.

Where next for research in the economic history of American education? This is the perfect time to ask, now that Goldin and Katz have achieved closure on so many questions. The view from their shoulders reveals two key areas to explore.

First, who was it that under-invested in education? Did private individuals pass up money lying on the sidewalk, or was it the political process failing to realize high social rates of return that took into account both fiscal effects and knowledge externalities? For the purposes of their book, Goldin and Katz are able to finesse these tough questions. By focusing on contrasts between American epochs, they successfully explain the contrasts in ?returns? in terms of movements in wage ratios that were dramatic enough to drive movements in all definitions of the rate of return on education. Yet we still need to explore the separate levels of the private versus ?social? (private and fiscal only) versus overall rates of return, the last being the one that draws on the recent literature on externalities. Only then can we distinguish private irrationality, or private capital constraints, from a failure of policymakers to capture high societal returns to extra years of education. The new research will have to proceed on different levels for different time periods. For the present day debate, scholars will have to jump the higher econometric hurdles imposed by Heckman, Lochner, and Todd in their rejection of the convenient Mincer return analysis. For earlier periods, it should suffice to make rougher contrasts between the likely private and fiscal returns for different eras and different places.

A related frontier is the political economy of education finance. Who voted for or against taxes for schools, in which states, and why? Goldin and Katz have advanced the political economy agenda with econometric evidence on the determinants of high school and college attendance, and the funding for public state universities. Yet there is much more to be done.

On both these research frontiers, our progress will be accelerated because Goldin and Katz have paved the way.

Peter H. Lindert is Research Professor of Economics at the University of California – Davis. His latest book is Growing Public: Social Spending and Economic Growth since the Eighteenth Century, two volumes, Cambridge University Press, 2004.

Subject(s):Labor and Employment History
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Keynes and His Battles

Author(s):Dostaler, Gilles
Reviewer(s):Hayes, M. G.

Published by EH.NET (August 2008)

Gilles Dostaler, Keynes and His Battles. Cheltenham, UK: Edward Elgar, 2007. vi + 374 pp. $160 (cloth), ISBN: 978-1-85898-266-3.

Reviewed for EH.NET by M. G. Hayes, Homerton College, University of Cambridge.

This book sets out to be a study of Keynes militant, neither a full biography nor a study of his thought alone, let alone merely his economics. Gilles Dostaler (Professor of Economics at Universit? du Qu?bec ? Montreal) argues that the ?common thread throughout Keynes?s kaleidoscopic activities? is a permanent struggle to convince others of the need for radical transformation to preserve a fragile and threatened civilization. He is in no doubt that the study of this extraordinary man has continuing relevance, not only to the historian, but for our own times.

The book addresses Keynes?s war of words along four dimensions: philosophical, political, economic and aesthetic. Keynes?s struggles are identified as respectively against Victorian morality, the imposition of unpayable reparations on Germany, unemployment and the Gold Standard, and to establish the arts as an essential pursuit of a civilized society.

Ethics is the theme of Chapter 2, which includes by way of ?interlude? a detailed account of Bloomsbury. The ?Bloomsberries? are said to have seen themselves as ?architects of a new civilized, rational society, one liberated from moral constraints and devoted to the quest for beauty and truth.? Dostaler sees Keynes in revolt against the Victorian morality of his childhood, under the influence of the liberal moralists Bentham, J. S. Mill and Sidgwick who sought to establish a morality without religion, seizing upon the philosophy of G. E. Moore as a religion without morality, and finally in his mature years coming to recognize the power of tradition and convention in the maintenance of civilization against the forces of unreason.

Continuing the philosophical theme, Chapter 3 reviews Keynes?s struggle in the field of epistemology, tracing his revolt against his father?s positivism, through A Treatise on Probability and his response to Ramsey and Wittgenstein, to his critique of the inappropriate use of statistics and insistence that economics is necessarily a moral, not a natural, science.

Chapter 4 moves from ethics to Keynes?s political vision, emphasizing the significance of an undergraduate prize-winning essay on Burke. Keynes?s complex political position, which defies pigeon-holing but lies somewhere between radical liberalism and moderate socialism, avoids both reaction and revolution in favor of non-violent reform by judicious expedients, towards an ultimate ideal that engages the big questions, what is the economy for and how should we exercise the freedom that results from prosperity? The chapter closes with a second historical interlude to provide the context for Keynes?s own government and political activities. Chapter 5 considers Keynes?s early views on imperialism and pacifism, before reviewing his practical role at the heart of the British government?s external financial negotiations, especially with the United States during World War I and at the reparations conference. The chapter ends by recording the extent to which history bore out Keynes?s analysis in The Economic Consequences of the Peace, the book that made his name.

Chapters 6 through 8 turn to Keynes?s economics and his long campaign to transform both theory and policy. Chapter 6 identifies the central importance of money in Keynes?s thought, including his struggle against the Quantity Theory and to convince Classical economists of the significance of the differences between a real-exchange and a monetary economy, between saving and finance, and between real wages and money-wages. The progression of Keynes?s thought from The Tract to The General Theory reflects a sustained attempt to give expression to the insights of Aristotle, Aquinas and (perhaps) Freud, ultimately in the formal language of liquidity-preference. Chapter 7 considers his related efforts to articulate a theory of employment based on effective demand rather than the cost of labor. The genesis of The General Theory is depicted as a rationalization of long-held intuitions and of policies that were not by any means uniquely Keynes?s, such as public works. Chapter 8 links money and employment by recounting Keynes?s life-long battle, once again in great part with the United States, to civilize the international monetary system.

Chapter 9 reviews some of Keynes?s early philosophical reflections about the nature of beauty before turning to his role as consumer and patron of the arts. Dostaler conveys well Keynes?s Periclean vision of a civilization where art is valued for its own sake, and not as a means. Chapter 10 draws together this portrait of Keynes as a figure of immense stature, greatly respected but only partly understood by friend and foe alike, often wrongly given both credit and blame for the course of subsequent economic history, passionately committed to bringing about a better world by ?judicious expedients,? if sometimes overly sanguine about the relative power of ideas and vested interests.

There are some textual slips (e.g. the eighteenth century doctrine of Aquinas, p. 177; and the reference to GT Book V as Book IV, p. 197). The translation by Niall B. Mann is of high quality and I was seldom conscious that the original (2005) was written in French, despite one or two awkward phrases, although some chapters are more fluent than others. A particular feature is the interweaving of historical events and theoretical development. The bibliography and notes are comprehensive and erudite, and the timetable useful.

It is not clear to me that Bloomsbury entirely fits Dostaler?s thesis, at least in the field of ethics as opposed to aesthetics: he was its patron, to some extent its publisher, and it was part of his private life. To say as much does not detract from its influence on Keynes?s motivation and interests, particularly as an experiment in the Good Life. Yet as a field of public campaign for sexual liberation, etc? ? I am not convinced.

The General Theory is my particular field of interest and I question one or two of Dostaler?s claims. Nevertheless, he wisely sets out to avoid detailed theoretical controversy (p. 5) and on the whole he succeeds. It is unfortunate that he seems to support the idea that The General Theory is (merely) a literary work, as opposed to a scholarly treatise (pp. 196-97); by these criteria, Marshall?s Principles falls into the same category. In my opinion, Dostaler underestimates the continuity between the thought of Marshall and Keynes, both in style and substance.

Compared with Skidelsky?s chronological biography (2003), Dostaler achieves both reasonable depth and concision by following a particular thread, Keynes?s struggle against conventional wisdom, across the various fields of interest (or battle). The result is a satisfying and highly readable book, especially for non-economists and non-British readers approaching Keynes from a wider perspective, and compares favorably with Hession (1984), whose less successful unifying thesis was the relationship between Keynes?s creativity and sexuality. Dostaler?s book is also quite accessible and should be of interest to undergraduates as well as the more specialized reader. I do not detect much new primary material ? not surprising in this well-ploughed field ? but the interpretative exposition is meticulously researched, original and lucid.

References:

Gilles Dostaler, 2005. Keynes et ses combats, Paris: Albin Michel.

Charles H. Hession, 1984. John Maynard Keynes. New York and London: Macmillan.

Robert Skidelsky, 2003. John Maynard Keynes 1883-1946: Economist, Philosopher, Statesman. London: Pan Macmillan.

M. G. (Mark) Hayes is Senior Research Fellow in Economics at Homerton College in the University of Cambridge. His major work on Keynes is The Economics of Keynes: A New Guide to The General Theory, Edward Elgar, 2006. http://www.homerton.cam.ac.uk/teaching/fellows/mark_hayes

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

Female Labour Power: Women Workers’ Influence on Business Practices in the British and American Cotton Industries, 1780-1860

Author(s):Greenlees, Janet
Reviewer(s):Nickless, Pamela J.

Published by EH.NET (June 2008)

Janet Greenlees, Female Labour Power: Women Workers’ Influence on Business Practices in the British and American Cotton Industries, 1780-1860. Aldershot, Hampshire: Ashgate, 2007. xx + 244 pp. ?55/$100 (cloth), ISBN: 978-0-7546-4050-9.

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

Janet Greenlees’ goal in this very fine study is to provide a more complicated and nuanced view of the role of women workers in industry. In particular she seeks to highlight “women’s agency as operatives and workers in the process of industrialization and developing perceptions of women’s work.” Her comparative approach emphasizes the unifying theme of that gender mattered but so did firm location and size. In particular, technological choice was influenced by local variations in transport, natural resources, and cultural as well as economic considerations. The influence of women workers on conditions of work and their experiences as workers varied by locality as well as by country. Although Greenlees does not put it quite this way, it seems to this reader that the variation within country was greater than the variation among “best practice” firms in Britain and the United States.

Chapters 2 through 5 are an analysis of the development of the cotton industry and how women’s roles developed over time. Chapters 6 and 7 look at women’s responses to industrialization and their role in the negotiation of the gendered nature of work. Greenlees uses a variety of sources and types of analysis ? indeed one of the strengths of this book is the variety of secondary sources used in her summary of the work on women and industrialization. So often the work economic historians or social historians is missing or inaccurately represented in the work of the other, but Greenlees has done a wonderful job integrating the analysis of economists and historians in her historiography and throughout the study.

The best and most valuable chapters are those on the choice of business organization and technology by firms. Most readers of this review will be familiar with the development of Lowell’s integrated mills and the interactive role of the availability of female labor and choice of technology. Greenlees uses firm-level data from a variety of firms located throughout New England and the Middle Atlantic area to argue persuasively that this is far too simple a story. Location, firm size and culture and tradition mattered as well. The “gender” of a job varied based on location and firm size as well as over time in both Britain and the United States. Greenlees emphasizes the role of labor market constraints and culture in the assignment of jobs by gender and in the proportions of men and women working in the mills. As might be expected, where men had more lucrative opportunities, women had more job choices available. Yet, local restrictions on women’s work, by trade union rules and/or by manufacturers’ adoption of gendered notions of work and skill, could reduce the numbers of women and the jobs they performed. Local economic and social conditions were key in the choice of organization and technology. Greenlees also emphasizes that firms had different goals ? while all might fit the “profit-maximizing” model from Econ 100 not all firms had the same time-horizon in mind and all were embedded in communities. Over time, as the notion of factory labor was developed and as transportation networks changed, firms’ choices of organization and technique changed. Students of technological change in textiles will find much to chew over in Greenlees’ analysis.

Of interest to students of wage change over time is Chapter 4, “Millwork: Pay, Work and Equity.” Greenlees finds the wage patterns and comparative performance defy easy generalization. Local circumstances loom large in determining men’s and women’s wages and productivity quite overshadowing the international differences. Greenlees finds that firm-level data on wages often contradicts or complicates national wage date from the U.S. Censuses, British Parliamentary Reports or other contemporary observers. Greenlees is careful to point out that, even at the firm level, you cannot always distinguish between women and children, introducing all sorts of problems with data comparisons. This chapter adds detail and nuance to Greenlees previously published work in this field.

The closing chapters on women’s response to industrial work are less satisfying, in part because direct testimony of women workers is scarce. Nevertheless, the same broad theme is well-supported ? local conditions and traditions mattered. Greenlees calls for a broader framework for analyzing the actions of women workers rather than trying to place them only in the context of a women’s labor movement. I found the analysis of the United States less unconvincing, resting as it does on an interpretation of differences between British and American work culture that are overstated.

This is a valuable addition to the literature on the cotton industry, but I fear it will not attract the wider audience it deserves. Too much knowledge of the industry is assumed to make the work appeal to a non-specialist. Some of this could be solved with more detailed explanatory notes for some of the tables. The text also suffers from some bibliographical glitches and typos in footnotes. Since one of the book’s real pluses is Greenlees’ excellent and intriguing historiography, this may make the bibliography less useful. I should add that I might have missed these errors but for the luxury of footnotes at the bottom of the page. In conclusion, I think this is must read for cotton textile scholars and scholars of women’s role in early industry. They will find much to admire and, probably, much with which to argue.

Pamela J. Nickless recently published “Scarlett’s Sisters: Spinsters, Widows, Wives, and Free-Traders in Nineteenth Century North Carolina,” in 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):19th Century