The Newer History of Capitalism

Robert Wright has a blog post about Why the History of Capitalism Subfield Got Slavery (and Almost Everything Else) so Terribly Wrong His argument is that because history departments abandoned economic and business history, there was no one with expertise in these subjects to guide new scholars when interest in economic issues re-emerged. The evidence that history departments largely abandoned economic and business history is irrefutable, and I certainly wish that they would pursue his remedy of hiring some highly qualified economic and business historians. However, I am not entirely persuaded by his argument. I am not persuaded because I think that the problems he points to arose more from the failure to follow traditional standards of historical research than lack of knowledge in economics. In addition, at least some recent scholars working in “the history of capitalism” subfield seem to have found ways to deal with lack of expertise within history departments.

The problem with the work of people like Baptist and Levy is less the bad economics than the bad history. It is true that Baptist is arrogantly ignorant of economics, but it is not clear that the problem of Baptist’s misrepresentation of the historiography of slavery would have been resolved by a little more knowledge of economics. One only needs access to google to discover that his claim that before him most economists and historians believed that slavery was inefficient was false. His procedure for estimating the economic importance of slave produced cotton is nonsense, but the biggest problem is that he made up the numbers that he used. Even if he had paid attention in Principles of Macroeconomics and used something resembling national income accounting, his calculations still would have produced crap because he think it is okay to just make up evidence rather than deriving it from historical sources. Yes, Baptist does not understand the meaning of the term productivity, but the bigger problem is that he misrepresents the sources that he claims to be using to explain productivity growth. He claims that slaves used the term “pushing system” but it is not in the narrative that he cites or any other source that anyone has presented. He re-wrote the story of the whipping machine from Henry Clay’s narrative to make it fit his argument. Narratives that he relies upon generally paint a much different picture of picking than Baptist. Baptist argues that enslaved people under the force of harsher and harsher pushing were forced to develop techniques to pick more quickly. To explain productivity increases in the antebellum period these techniques can’t be unique to individuals they need to be passed on and further developed. In contrast, slave narratives frequently emphasize inherent dexterity and the age at which one starts picking as determinants of speed; there is no mention of innovations in picking techniques being handed down. Here is a recent post that has links to other posts about the numerous problems in Baptist’s work and here is the post about his rewriting of the story of the whipping machine.

Similarly, Levy’s sloppiness with sources seems to be the cause of his confusion about economics rather than the other way around. Suggesting that modern use of the term risk (and in fact risk itself) only dates to the mid-nineteenth century is a failure historical scholarship not economics. Using George Perkins as his source on the Panic of 1907 without any recognition that many people regarded Perkins as one of the people who had perpetuated the Panic is a failure of historical research not business or economic knowledge. Making Veblen’s work the focus of a paper and then repeatedly cite them incorrectly is less a problem arising from his lack knowledge of economics (most economists don’t know anything about Veblen) than it is a problem arising from his sloppy handling of his sources. Knowing a little more about economics is not going to help someone who does not read carefully enough to know that Veblen was writing about pecuniary magnates not pecuniary magnets. In other words, I do wish that Baptist and Levy and others had tried to learn a bit more about economic and business history before deciding to write about it, but their bad economics is not nearly as much a problem as their bad history.

Here are links to post describing my concerns about Levy’s work about risk and capital.

Economists might still disagree with them, but I don’t think they would express as much hostility toward them if these historians of capitalism had they displayed the skills generally associated with historical training: accurate historiography, and careful and faithful use of their sources.

The good news is that in the last year or so I have read good books by historians, examining subjects that probably fit into the history of capitalism subfield. A partial list of these books would include Noam Maggor’s Brahmin Capitalism, Anne Fleming’s City of Debtors: A Century of Fringe Finance, Josh Lauer Creditworthy, Caitlin Rosenthal Accounting for Slavery, Daina Ramey Berry The Price of Their Pound of Flesh. I’m pretty sure from interaction on twitter that Maggor and Rosenthal identify with “the history of capitalism” label, and Lauer’s book was published in Columbia Studies in the History of U.S. Capitalism series. I did not see in these books the problems that I identified in the earlier history of capitalism. None of these is economic history the way it is typically written by economists now, but the authors appeared to take advantage of the work of people in other disciplines, including economics. Most mentioned at least one economist economic historian in their acknowledgments, Caitlin Rosenthal and Daina Ramey Berry both thank several economists. Even if experts in the field are not in your department, they are out there, and there is a good chance they are willing to help. Keri Leigh Merritt is another example of a historian working on economics related issues who has gone out of her way to interact with economists.  

In short, I am optimistic about the ability of historians who want to write about economic and business history. I wish I was as optimistic about the future of their ability to get good jobs

P.S. Wright also suggests that the work of people like Baptist is driven in part by a desire to provide support for reparations. Actually, it is probably more accurate to say that Wright is suggesting they want to make a show of supporting reparations.

“The general gist of their story is that slavery made America rich so its government ought to make restitution to the descendants of slaves.”

I have to say I have never understood why reparations would need to be justified by a showing of the amount of benefit derived from slavery. In general, the law compensates people for the damage done to injured not the benefit to the injurer.