Tuesday, February 24, 2015

The rise and fall of economic history

Peter Temin describes the rise and fall of economic history at MIT in the History of Political Economy and an un-gated version here.  Temin also talks about the costs of not having actual economic historians, even if you do have people who write about history.

MIT isn’t the only place to experience a rise and fall of economic history. My grad school  (for my econ Ph. D.) has pretty much completely turned its back on economic history. When I was there we had Douglass North, John Nye, and, for the last year or so, Sukoo Kim. There was a well-attended history lunch every week. Doug retired. John went to George Mason. Soks is still there, but my understanding is that he is not very involved in the economics department. History is not listed as a field for graduate students. The economists that replaced the economic historians have demonstrated the potential problems associated with model makers using the past without consideration for the historians concerns with context and source criticism. Boldrin and Levine use the example of James Watt to argue against patents. On the actual influence of Watt’s patent see Selgin and Turner “Strong Steam, Weak Patents” JLE 2011 or Bottomley’s British Patent system During the Industrial Revolution.

 My wife’s grad school also moved away from economic history. While she was doing her graduate work at Illinois they had Jeremy Atack, Larry Neal, Lee Alston, and Charles Calomiris. Now, if they have an economic historian, I don’t know who it is.

Fortunately, it is also possible to name departments where economic history is either on the rise or holding its position, with multiple economic historians and consistent production of good Ph. D. students. UC Davis, Yale, Vanderbilt, George Mason, and Northwestern are some of the schools that come to mind. My apologies to the other good schools I did not mention.

Sunday, February 22, 2015


Juan Sanchez of the St. Louis Fed looks at recent bankruptcies and concludes that

"BAPCPA clearly had an impact on the number of bankruptcies being filed. However, the exact impact may not be known for some time, since the recession hit right after the BAPCPA was implemented."

I agree that it is going to be difficult to determine the impact of BAPCPA (Bankruptcy Abuse and Consumer Protection Act) . Consumer bankruptcy is usually the end of a series of events: debt, default, and non-bankruptcy collection. There are a many things besides the bankruptcy law that play a role in the process.

Also from the St Louis Fed is this discussion of a symposium on the balance sheets of American families.

Friday, February 20, 2015

The Gold Standard

Here is my favorite gold standard political cartoon from an 1896 Harper's Weekly.

The cartoon shows godlbugs as widows, orphans and veterans. In other words, people living on fixed incomes. It reflects the view that the primary benefit of a gold standard was to place a constraint on the money supply.

However, from the St Louis Fed on U.S. economic performance under the gold standard from the St. Louis Fed: "the historical evidence indicates that neither a gold standard nor the absence of a central bank guarantees economic or financial stability."

Thursday, February 19, 2015

The end of capitalism?

Jeremy Rifkin says the end of capitalism is coming. In the meantime, he will tell you about it for only $20,000 to $40,000.

History of Capitalism at the Legatum Institute

The Legatum Institute has a program on the History of Capitalism.

They are sponsoring a series of lectures, which are available online.

This one is Nicholas Crafts explaining why England was first to industrialize.

Wednesday, February 18, 2015

Bailyn, Wood and American History

I was a bit surprised when Wood suggested that historians had not liked the Barbarous Years. I quickly looked at the reviews in AHR and JAH. They weren’t really too negative.    Archer thought that the book was “a marvelous accomplishment and a testament to Bailyn’s standing as one of our finest historians.” Pulsipher declared that it was the “kind of book that the word “magisterial” was made for.”


I’m not sure to what extent Bailyn is regarded as an economic historian, but his early work appeared in the Journal of Economic History and Explorations in Entrepreneurial History as well as The New England Merchants in the Seventeenth Century .

Here is some more recent work on New England merchants and credit by David Flynn and Jeremy Schwartz

Monday, February 16, 2015

Economic Growth

This last week I have been reading Sven Beckert’s Empire of Cotton and Sheilagh Ogilvie and A.W. Carus Institutions and Economic Growth in Historical Perspective. Both deal with the relationship between institutions and economic growth.

Beckert’s book reminds me of the old saying that “There is much here that is new and much that is interesting. Unfortunately, that which is new is not interesting, and that which is interesting is not new.” The interesting parts are the discussions of the industrial revolution (mostly Robert Allen’s theory), the role of force in promoting trade (Findlay and O’Rourke, and others, have made this argument); the capitalist nature of slavery (Conrad and Meyer and Fogel and Engerman said this a long time ago). What’s new is the argument that cotton, slavery and empire were not just important parts of economic history, they are the key to how the west got rich and capitalism was born. The book falls into the popular “________ that changed the World” category, where you insert whatever it is you are writing about into the blank. It places too much emphasis on one part of the economy: cotton. This is particularly true for the United States. We see many references to the importance of cotton as an export, but we never see any information about how important exports were to U.S. growth. The problem is that economic historians for more than half a century have been moving away from simple monocausal arguments about economic growth.  Beckert declares that slavery was the first big business, not railroads. But the new history of capitalism is on no firmer ground making slavery the driving force behind economic growth than Rostow’s non-communist manifesto was in making railroads the driving force. The only difference is that much of the evidence about railroads the importance of railroads was developed after Rostow wrote.

Of course, one can make the argument that “Plunder may not have directly fueled the Industrial Revolution, but mercantilism and imperialism were an important part of the context within which it originated, expanding markets and ensuring the supply of raw materials.” (Findlay and O’Rourke, xx) But Findlay and O’Rourke already made this argument in Power and Plenty.

Sheilagh Ogilvie and A.W. Carus Institutions and Economic Growth in Historical Perspective is at the opposite extreme. For them the devil is in the details. One of their key points is that it is not really productive to consider the influence of one institution in isolation; particular institutions can only be understood within the broader institutional framework that they are a part of. Beckert should have given more consideration to this point because the most obvious problem with his argument is that the institutions at the center of his story (slavery, expropriation, and the use of force to control trade) have existed for a long time. They did not lead to modern economic growth. If Ogilvie and Carus are right understanding modern economic growth might be hard work.

Thursday, February 5, 2015

Pioneer Girl

I ordered a copy of Laura Ingalls Wilder's Pioneer Girl: The Annotated Autobiography several months ago, but I just got it last week. The University of South Dakota Press underestimated the demand by a pretty wide margin. I did not read the any of Wilder's books until I was an adult and read them to my kids.  I loved all the detail about life on the Great Plains in the nineteenth century. I remember great descriptions of things like how to build a log cabin and what the brake man did on a train.


Tuesday, February 3, 2015

Financial History

John Turner on Financial History and Financial Economics

Sean Kenny and Anders Ogren on Corporate Governance of Regulation : Unlimited and Limited Banks Compared in the 1907 Crisis (the paper examines Swedish banks in the 1907 crisis)
It is nice to see some international perspective on 1907. In addition, the paper examines some of the same questions regarding regulation of financial institutions as my recent paper on trust companies in the Panic of 1907.