Diane Lindstrom (1944-2018)

At the risk of making this seem like a blog of economic history obituaries, I think it is necessary to note the passing of Diane Lindstrom. Here is the obituary from the University of Wisconsin.

Along with Robert Gallman, Lawrence Herbst, Paul Uselding and others Lindstrom challenged the version of American antebellum growth presented in Doug North’s Economic Growth of the United States, 1790-1860. In Economic Growth Doug argued that growth was driven by a combination of cotton exports and interregional trade, in which Southern specialization in cotton generated demand for the products of farmers and manufacturers, driving growth in the rest of the country. Although some new historians of capitalism continue to cite the theory to demonstrate the central role of slavery in American economic development, Lindstrom and others had built a strong case against it by the mid-1970s.

She generated evidence to argue that the South was largely self-sufficient in grain:

Lindstrom, Diane. "Southern Dependence upon Interregional Grain Supplies: A Review of the Trade Flows, 1840-1860." Agricultural History 44, no. 1 (1970): 101-113.

And she went on to build an alternative explanation of growth based on the case of Philadelphia. She showed that the development in Philadelphia was largely driven by the regional market, rather than an inter-regional one:

Lindstrom, Diane L. "Demand, Markets, and Eastern Economic Development: Philadelphia, 1815-1840." Journal of Economic History (1975): 271-273; Lindstrom, Diane. Economic Development in the Philadelphia Region, 1810-1850. Columbia University Press, 1978; and Lindstrom, Diane. "American economic growth before 1840: New evidence and new directions." The Journal of Economic History 39, no. 1 (1979): 289-301.

Subsequent economic historians have expanded on her work. John Majewski, for instance, builds on Lindstrom’s argument by contrasting the case of Philadelphia with Virginia, showing how slavery led to conditions that did not promote strong local demand or support long term growth: A house dividing: Economic development in Pennsylvania and Virginia before the Civil War. Cambridge University Press, 2000.

I did not know her personally, but anyone interested in understanding American economic development needs to know the argument she developed and the evidence that she collected to support it.

By the way, if anyone is surprised that I, a student of Doug’s, am posting this you should know that the third edition of North’s Growth and Welfare in the American Past (coauthored with Terry Anderson and Peter Hill) states that “The spread of the cotton economy in the South and the development of the cotton export trade are elements of a well known story. It now appears, however, that economic historians have overemphasized the pattern of regional interdependence among the South, the West, and the Northeast (page 72)” and cites Lindstrom in the bibliography for that chapter. Doug once told me that the only good thing about getting old was that he knew lots of things that did not work.

John Murray

Sad news. John was both an excellent economic historian and a really nice guy. Below is the text of the email about his death from EH.net. He will be missed by many people and in many ways.

John Murray, Joseph R. Hyde III Professor of Political Economy and Professor of Economics at Rhodes College, passed away on March 27, 2018 in Memphis, TN at the age of 58. 

He was born on April 9, 1959 in Cincinnati, and became the first member of his family to attend college.  He worked at a variety of jobs to pay his tuition, including phlebotomist, house painter, roofer, and ice cream vendor, graduating in 1981 from Oberlin College with a degree in economics.  He later added an M.S. in mathematics from the University of Cincinnati, and the M.A. and Ph.D. in economics from The Ohio State University, where he wrote his dissertation under the tutelage of Rick Steckel.

John taught high school math before pursuing his graduate work in economics.  After finishing at Ohio State, he accepted a position at the University of Toledo, where he remained for 18 years before accepting the Hyde Professorship at Rhodes College in 2011.

He had a lifelong penchant for learning, spending a summer studying the German language in Schwabish Hall in 1984, and summers as an NEH scholar in Munich in 1995 and at Duke in 2013.  He also spent 2009-10 studying Catholic theology and philosophy at the Sacred Heart Major Seminary in Detroit.

Murray was the author of two books and co-editor of a third.  The most recent, The Charleston Orphan House: Children’s Lives in the First Public Orphanage in America, published by the University of Chicago Press in 2013, was the recipient of the George C. Rogers, Jr. Prize, awarded by the South Carolina Historical Society for the best book on South Carolina history.  His first book, Origins of American Health Insurance: A History of Industrial Sickness Funds (Yale University Press, 2007) was named one of ten “Noteworthy Books in Industrial Relations and Labor Economics” in 2008 by the Industrial Relations Section, Princeton University.

He published book chapters, monographs, encyclopedia and handbook contributions, and numerous articles in refereed journals including the Journal of Economic History, Explorations in Economic History, and Demography.  His clear, crisp writing style and ability to explain complicated economic concepts made him a frequent choice to write for the popular press as well.

His research interests were varied.  His most recent work centered on coal mine safety, post bellum African-American labor supply, and families in 19^th century Charleston.  He published extensively in the areas of the history of healthcare and health insurance, religion, and family related issues from education to orphanages, fertility, and marriage, not to mention his work in anthropometrics, labor markets, and literacy.

He was a scholar and a teacher, who believed deeply in the value of a liberal arts education, arguing that “a rigorous education, based on the traditional great books, teaches students great things—compassion for others in the human condition, the value of striving for greatness, the need for self-awareness, and humility in those efforts.”  He won awards for his teaching at Ohio State and Toledo.

He was the director of the Program in Political Economy, a rigorous interdisciplinary major at Rhodes College.  He taught a variety of economic history courses, including courses on demography and economic development, as well as mathematical economics, freshman calculus, introductory statistics, and econometrics. Then on the weekend he donated his time to his local parish, teaching Sunday School.

He was also generous with his time on a professional level, frequently reviewing books, and serving as the Book Review editor for the Journal of Economic History from 2014-16.  He was a member of the editorial board of four journals: Explorations in Economic History (2008-15), the History of Education Quarterly(2016-19), Social Science History (1996-98 and 2006-14), and theJournal of Economic History since 2015.  He served as the Associate Editor of Social Science History from 2001 to 2006.

He was a trustee for the Cliometric Society and served on its Program Committees, and was active in the Social Science History Association, holding numerous positions.  He also served on numerous university committees at both Rhodes College and the University of Toledo.

More than a respected academic and award-winning author, John was a devoted husband and proud father.  As impressive as his professional accomplishments were, his career always came second to his family.  Conversations with John would eventually lead to family, and hearing him talk about them left no doubt about his true passion.

John is survived by his wife Lynn and their twin daughters.

The Annunciation by Henry Ossawa Tanner

If you are in Philadelphia you should go see it at the Philadelphia Museum of Art. Reproductions do not do it justice.

Quick Take on The Mystery of the Kibbutz

While the power was out this weekend, and I was free from electronic distractions, I had a chance to read Ran Abramitzky’s The Mystery of the Kibbutz: Egalitarian Principles in a Capitalist World. The book is a sort of economic history equivalent of good micro-history, or good business history. It tells a particular story in great detail but uses that story to shed light on broader issues. Being an economist, Abramitzky collects and analyses as much data on the kibbutzim (one of the things I learned is the plural of kibbutz) as he can to examine problems of free riding, adverse selection, and brain drain. But the book is built around a very personal story. His grandparents helped to found and fought to protect Kibbutz Negba; his mother grew up there, and he clearly has fond memories of visiting there while he was growing up. His aunt, uncle and brother still live in kibbutzim. He uses the story of the origins, successes, and recent struggles of this and other kibbutzim to address broad questions of equity versus efficiency, and of material versus non-material incentives. There is also an interesting chapter on the history of communes in the United States.

The book is a pleasure to read. And, although kibbutzim are unique, the economic issues that they have faced are not.

What Happened to The Standard of Living During the Gilded Age?

Richard White devotes a chapter of his new book on Reconstruction and the Gilded Age, The Republic for Which It Stands, to declining standards of living during the Gilded Age.

White writes that

“By the most basic standards—life span, infant death rate and bodily stature, which reflected childhood health and nutrition—American life grew worse over the course of the nineteenth century. Although economists have insisted that real wages were rising during most of the Gilded Age, a people who celebrated their progress were, fact, going backwards—growing shorter and dying earlier—until the 1890s.” (page 475)

“The average life expectancy of a white man dropped from the 1790s until the last decade of the nineteenth century. A slight uptick at midcentury proved fleeting, nor was it certain that the smaller rise in 1890 would be permanent.” “What this added up to was that an average white ten-year-old American boy in 1880, born at the beginning of the Gilded Age and living through it, could expect to die at age forty-eight. His height would be 5 feet, 5 inches. He would be shorter and have a briefer life than his Revolutionary forebears.” “Infant mortality worsened in many cities after 1880.” (page 479)

White also notes the difficulty of creating historical statistics but suggests that

“When these statistics all point in a similar direction, they are worth of some attention.”

In general, White bases his interpretation on excellent work done by economic historians. I do, however, want to argue that there is less consensus than he seems to suggest. In other words, the statistics do not all point in a similar direction when it comes to the Gilded Age.

I also want to point out there is a miscalculation in the statement about height. White relies on Costa (2015) for the evidence on height; he includes a version of the graph from Costa (see below) in which one can see that the series hits its lowest point in 1890 at 169.1 cm, which translates to 5 feet six and a half inches. I am sure that I would make many more grievous errors in a 940 page book, but I had already seen the number repeated once as if it were fact.

Nevertheless, the overall picture that White presents of material well being during the Gilded Age is consistent with picture in the graph. Clearly the most noteworthy feature of the graph is the decrease in average height and life expectancy during the nineteenth century. The average height and life expectancy fell relative to colonial ancestors before beginning to rise again in the late nineteenth century. The timing of the movements in the series seem to be consistent with each other.

Source: Costa, Dora L. "Health and the Economy in the United States from 1750 to the Present." Journal of economic literature 53, no. 3 (2015): 503-70.

I want to argue that the evidence of declining living standards in the Gilded Age is not as consistent as White suggests. Estimating life expectancy in the United States during the nineteenth century is extremely difficult and different approaches have produced different estimates. They all suggest that life expectancy fell during the nineteenth century, but they do not all estimate that life expectancy reached its lowest point in the late, as opposed to the mid, nineteenth century.  Estimating average heights is also difficult, and recent work suggests that the series reproduced by White may overestimate the extent of the decline and place the low point too late in the nineteenth century.

 The United States did not have a death registry for the entire country until 1933. Some states and localities registered deaths, but we are left with questions about how representative they are. One innovative approach to the problem has been to use genealogical records (see Fogel 1986).  Beginning in 1850 the Census began to ask about people that had died in the last year, which can then be used to calculate life expectancy. On the numerous shortcomings of both types of data see Hacker (2010).

Source: Hacker 2010

The above figure is from Hacker 2010 and presents four different series of estimates of life expectancy at age 20. Only the Haines series based on census data shows in the late nineteenth century. Both the Pope and Kunze series bottom out in the 1860s.  

  Hacker develops his own estimates based upon Pope and Kunze but adjusted using other sources. Hackers estimates (see below) also suggest that life expectancy reached its lowest point during the 1860s and then began to rise.

Source: Hacker 2010

The mortality rates for several large cities also do not seem consistent with worsening conditions during the Gilded Age. There is a reduced incidence of large spikes in mortality, though there also isn’t a clear trend toward declining mortality rates until late in the 19^th century (See Haines 2001).

The nineteenth century height estimates are based, for the most part, upon a large sample of Union Army soldiers. I say for the most part because late nineteenth century estimates are based upon an extrapolation from Ohio National Guard data. The figure below from Costa and Steckel shows the part of the series that is inferred from the Ohio National Guard data.

Source: Costa and Steckel, Long Term Trends in Health, Welfare, and Economic Growth in the United States

Economic historians have long recognized that there are potential problems with these estimates. The problem is not just that they might be biased, but that the bias might change over time. On the other hand, if shorter than average people became more likely to join the army or the national guard then our estimates might suggest a decrease in average heights that did not occur.

Although the potential for selection bias was known, later research found similar patterns for the antebellum period in a variety of other populations, for instance Ohio prison inmates (Maloney and Carson 2008) and Pennsylvania prison inmates (Carson 2008).

Bodenhorn, Guinane and Mroz (2017) recently argued that sample selection bias is a significant problem in the height data. Ariell Zimran has attempted to match soldiers with their census records and use the information to adjust for selection bias. He concluded that, after adjusting for selection bias, there was still a decrease in average height of about .64 inches between 1832 and 1860.

Matthias Zehetmayer took a different approach. He developed a more comprehensive sample of soldiers. Because his observation extended into the late nineteenth century he did not have to rely on an extrapolation for the years after the Civil War. The graph below compares Zehetmayers estimates with previous estimates. His estimates follow the original until you get to the extrapolation from the Ohio national guard. Zehetmayer finds increases in the 1870s and 1880s rather than a steep decline.

Source: Zehetmayer 2011

There are a lot of evidence pointing to a decline in height, but there is no consensus that about when that decline began to reverse or even if it might be explained by selection bias. Zehetmayer's recent estimates do, however, seem to be consistent with the life expectancy estimates of Pope, Kunze, and Hacker, reaching a low point in the 1860s or 1870s rather than 1890.

I think White was right to emphasize the difficulties involved in creating historical statistics. Like other interpretations of history our knowledge of material well-being in the past has to be derived from the bits and pieces that were left behind, even if they are not ideally suited to the task. Although estimates are very consistent regarding a declining standard of living in the ante-bellum period, they are much less consistent about a decline during the Gilded Age. The most recent estimates of both height and life expectancy seem toward rising standards of living during the late nineteenth century.

Three Revolutions in Economic History

 Here is a link to Gareth Austin’s Inaugural Lecture

"Three Revolutions in Economic History" »

This is his description of the lecture

The lecture discusses what I would describe as three 'revolutions' in the study of economic history since the era of Sir John Clapham, the first holder of the chair of economic history: (1) the cliometric revolution of the 1960s, which applied neoclassical theory and analytical statistics to the economic past; (2) the emergence in the 1950s-80s of the systematic and continuous study of the economic history of the non-Western word, what may be called 'The Other Economic History'; and (3) the attempt, essentially in the present century, reciprocally to integrate the economic history of the West and the Rest, using quantitative and other methods. The final part of the lecture will be devoted to the pitfalls and promise of this endeavour. In practical terms we have a lot still to do to achieve a genuinely global economic history, based on the principle of reciprocal comparison. In doing this, we need to combine the best insights from the cliometric and other traditions of economic history, respecting the different approaches which historians and economists take to determining causality. Economic History needs to re-affirm its position as the intersection set of the disciplines of History and Economics.

Follow up on Capitalism and History

I have seen some interesting responses on twitter to the new Capitalism and History journal that I mentioned yesterday. She is not alone, but I saw Vanessa Ogle’s response first.

I have to admit that I was surprised by the diversity in terms of disciplines and politics and did not notice the lack of diversity on other dimensions. This, however, is not the first time someone has noted that some of the most prominent participants in the New History of Capitalism seem to have problems with race and gender.

Some business history stuff

Here are two recent papers on culture and business history

Naomi Lamoreaux Cultural Change and Business History

Abstract

This paper draws on the literature of experimental economics to suggest a model of cultural change with applications to business history. The model is based on experiments involving the public goods game, in which players are given an initial endowment of money and told that they can keep it or contribute some or all of it to a common fund. The fund earns interest, and, at the conclusion of the game, the total is divided among all the players, regardless of the magnitude of their contributions. In most settings, players initially contribute a significant fraction of their endowment to the fund, but some choose to free ride on others’ investments. If the game is repeated for multiple periods, players observe this free riding and stop putting their money in the fund. If the rules are changed, however, so that free riders can be punished, players will start contributing again and the common fund will grow and provide general benefits. Although this game is typically used to study topics such as tax avoidance and the provision of schools, roads, hospitals, and other similar investments, I argue that cultural practices have many of the features of public goods and that insights from these experiments can be used to explore systematically the dynamics of cultural change.

The Entrepreneurial Culture and the Mysteries of Economic Development by Louis Galambos

Abstract

Culture is easy to study but difficult to specify. This essay attempts to pin down this illusive subject by linking it to entrepreneurship—that is to specific efforts to combine land, labor, capital, and knowledge in the creation of economic activity that has some aspect of novelty. Entrepreneurship is important because of its central role in capitalism. Culture is important because it influences the willingness of individuals to take the risk of exploring possibilities for entrepreneurial ventures even though the most of them will be unsuccessful in the long-run. In search of entrepreneurial culture in America around 1800, this paper examimes immigration, agriculture, commerce, and the beginnings of the Industrial Revolution in the US. These insights are then employed in an examination of the post-WWII efforts of the World Bank—most of which failed—to promote economic growth in nations that had not yet experienced “modernization.”

And here is the flyer for a new journal on Capitalism and History, coming out in 2019. I would love to see a meeting of this advisory board. Although I have been very critical of several people on the list, this looks like it could be a serious attempt to bring together historians and economists working on economic history.