Welcome to The Long Run

On behalf of the Economic History Society (EHS), it is a pleasure to welcome you to The Long Run, the EHS blog.

This blog aims to encourage discussion of economic and social history, broadly defined. We live in a time of major social and economic change, and research in social science is showing more and more that a historical and long-term approach to current issues is the key to understanding our times.

We welcome any contribution or suggestion – please contact us at ehs.thelongrun@gmail.com


Legacies of inequality: the case of Brazil

by Evan Wigton-Jones (University of California, Riverside)

The Rio Team. In Kidder, D.P., Brazil and the Brazilians : portrayed in historical and descriptive sketches, Philadelphia 1857. Available at https://archive.org/details/brazilbrazilians00kidd


 Recent years have witnessed a renewed interest in issues of economic inequality. This research offers a contribution to this discussion by analysing the effects of inequality within Brazil.

Firstly, it shows that the climate is a key determinant of long-run inequality in Brazilian context. It uses data from a national census conducted in 1920 to show that warmer regions with high rainfall were characterised by plantation economies, with a wealthy agricultural elite and a large underclass of poor labourers. In contrast, cooler and drier areas were conducive to smaller family farms, and hence resulted in a more equitable society.

The study then uses information from the 2000 census to show that this local inequality has persisted for generations: areas that were historically unequal in 1920 are generally unequal today as well.

Finally, the research shows that greater long-term inequality inhibits regional development. It also shows evidence that inequality affects local governance, as municipal spending on health, education and welfare is significantly lower in more economically unequal areas.

To show the climate’s influence on local inequality, the study created an index that quantifies the relative suitability of land for plantation agricultural production. The metric is based on the temperature and precipitation requirements of different crops that are uniquely plantation or smallholder in their method of production. For example, sugarcane has historically been produced on large plantations, while wheat was often cultivated on small farms.

The research then shows that localities with a favourable climate for plantation agriculture contained a more unequal distribution of land. To measure the concentration of land ownership, it calculates a Gini index – a standard measure of inequality that ranges from 0 (perfect equality) to 100 (one individual holds all land).

As Brazil’s economy was predominantly agrarian in 1920, this distribution of land is a good proxy for that of income and wealth. The research combines this with data on municipal spending in the 1920s to show that local governments with higher land inequality spent less on education, health, public goods and public electricity. For example, a one unit increase in the Gini index is associated with a .76 percentage point decline in such spending.

The effects of this inequality have ramifications for contemporary socio-economic welfare in Brazil. Not only has local inequality persisted throughout the twentieth century, but it has also hindered present-day municipal development. Here it measures local development using the municipal-level human development index (HDI) – a metric that accounts for education, public health and income – for the year 2000.

It shows that historically unequal areas score much lower on the HDI: a one unit increase in 1920 land inequality is associated with a reduction of .38 points in this index (which, like the Gini index, is measured on a scale from 0 to 100, with a higher score indicating greater development).

Furthermore, the legacies of historical inequality are still manifest in contemporary local governance: a one unit increase in historical inequality is associated with a .49 percentage point decrease in municipal-level welfare spending for the year 2000.

These findings suggest several important conclusions:

  • First, the environment may play an important role in determining inequality and long-term development, even within countries.
  • Second, economic disparities can persist for generations.
  • Lastly, inequality can have a corrosive effect on welfare and governance, even at a local level.

It should be noted, however, that this study has focused on inequality within Brazil. The extent to which these findings can be generalised to other settings requires further study.

Bodies as commodities: the medieval trade in Christian saints’ relics

by Elizabeth Wiedenheft (University of Nottingham)



There has long been a tension in Christianity between economic concerns and providing a way to commune with the sacred. Nowhere was this more apparent in medieval Europe than with the bodies of holy persons (saints’ relics).

These bodies provided pilgrims with a focus, allowing them to direct their devotion to heaven by praying over the relics. But these bodies were not only sacred objects: they were also bought and sold for profit by enterprising merchants and monks who created vast trading networks throughout Western Europe to exchange them.

Because they were human bodies, relics held a special position in the medieval economy. Their value was based in part on their connection to the spirit that had once inhabited the body, or the personality of the saint. But because they were objects (and often highly mobile objects too), relics were commoditised by medieval society – traded, bought and sold for profit by the communities that held them.

This research seeks to improve our understanding of the exchange of Christian relics in France, Belgium and England in the period between 800 and 1200. It uses medieval hagiographies (accounts of saints’ lives) to show that saints’ bodies were moved frequently in medieval Europe.

Monks used existing trade routes and networks to move these relics. They also used merchant connections to maximise the speed of the acquisition, which consequently allowed them to promote their new relics quickly and efficiently. While they did not have a strict monetary value, relics did have value that was based on their usefulness in performing miracles and as a tool to acquire and manage the church’s property.

The research uses the exchange of relics as social tools in return for land and social power to illustrate their value to the Church. When a community acquired an extremely valuable set of relics (such as St Cuthbert in Durham, St Aethelthryth at Ely, St Edmund at Bury St Edmunds or St Thomas Becket at Canterbury), they promoted their new acquisition by touring the relics throughout the region, moving them into sumptuous reliquaries (highly decorated boxes or statues that held the relics) or tombs, and by inviting ecclesiastical and secular dignitaries to watch these movements.

Over time, the relics could become inextricably tied to the place that held them, rendering them useless outside of that society. If that happened, the relics became ‘inalienable’, or could not be traded or exchanged for other items because they could not effectively be valued by the other society.

This research, therefore, argues that relics are best understood as ‘inalienable commodities’, or economic objects that could be traded but which were only valuable in a specific location.

Looking at the economic status of relics in studies such as this gives us valuable insights into the rise of markets in the era before the modern industrial and consumer economy. The medieval economy was not entirely based on a monetary system of exchange, but it was diverse and the objects that circulated within that economy were conceived of by their contemporaries in a myriad of ways.

Research into the status of relics, how they were exchanged, and the economic benefits accrued through their acquisition can have some bearing on modern conceptions of the worth of the human body, as well as the tension between creating capital and promoting the sacred in modern Christianity.

Historical Indian Banking M&A Motivations: Political or Economic?

by Tehreem Husain (The Express Tribune)

British India 10 Rupees by Reserve Bank of India for Government of Pakistan. From Wiki Commons.


Over the past few decades rapid strides of financial globalization of capital markets, technological advancement and financial innovation gave rise to an environment supporting large M&A activity arose globally (Smith & Walter, 2002). Market driven business mergers has been an integral part of the commercial and financial history of advanced economies but has only gained recent momentum in the case of emerging markets (Gourlay, Ravishankar & Jones, 2006). This blog delves into an important historical episode of banking merger, perhaps the first ever, in British India where the Presidency banks of Bengal, Bombay and Madras merged into the Imperial Bank of India in 1921. It aims to determine the motivations behind the merger episode which set foundations for a central banking institution in British India.

Banking Merger Episode in British India

In recent times, the financial industry has been witness to major restructuring which amongst other causative factors includes episodes of M&A activity. Merger episodes are not just a recent phenomenon and have existed throughout history. Before discussing the specific merger episode in British India, it is illustrative to shed light on the business of banking in India. Formalized banking commenced in British India with the English agency houses in Calcutta and Bombay which served as bankers to the English East India Company. Up till 1876, the Presidency banks of Bengal, Bombay and Madras established in 1800, 1840 and 1843 respectively, were ‘quasi-public institutions’ managing government balances and being responsible for note circulation. From 1876, they became purely private concerns but still maintained close contact with the government (Rau, 1922).

They provided support to the government during the Great War but towards the end of the Great War, the directors of the Presidency Banks entered into negotiations amongst themselves and later with the government of India for their merger. A Government of India Finance Department Note No.230 of 1919 presented to Edwin Montagu, Secretary of State for India presented a proposal for the amalgamation of the Presidency Banks quoting an increase in capital, increase in branches and improvements in the future management of the rupee debt of India as key advantages from the merger. The Presidency Banks were merged into the Imperial Bank of India in 1921.

 Merger Motivations

 It is important to delve into some of the factors that led to the merger of the Presidency Banks. Historically and more so in today’s dynamic economy, financial corporations and otherwise have undergone restructuring their businesses in order to remain competitive. Norley (2008) defined restructuring as reorganizing the legal, ownership, operational or other structures of a company for the purpose of making it more profitable and better organized for its needs. This restructuring entails activities ranging from mergers and acquisitions to divestitures and spin-offs to reorganization under the protection of national bankruptcy laws (DePamphilis, 2017). In the context of M&A a merger represents the absorption of one company by another whereas an acquisition is the purchase of some portion of one company by another. Mergers occur due to various reasons. Firstly, they generate synergies between the acquirer and the target, which increases the value of the firm (Hitt et al, 2001). Mergers allows firms to capture synergies and improve efficiencies in order to survive economic contractions (Tarsalewska, 2015). Increasing market share, achieving economies of scale and scope, increasing profits and diversification of risk are other motivations behind mergers (Ntuli, 2017).

One other important motivation for merger is due to considerations of economic efficiency (Lin, 2013). Achieving economic efficiency is also a key motivation behind merger motivations in public sector organizations. Mergers can eliminate duplicated responsibilities, utilize synergies and obtain more resource efficiency (Grossman et al., 2012).

It is with this background in mind that the recognized international rating system ‘CAMELS’ was used on the Presidency Banks and the Imperial Bank of India to make sense of whether the inherent financial performance of the banks led to their merger. Individual balance sheets and profit and loss accounts for the three Presidency Banks and the Imperial Bank of India were used for the analysis. Dissecting the ‘CAMELS’ acronym, reveals that the system rates financial institutions based on their capital adequacy, asset quality, management, earnings, liquidity and sensitivity. Working with limited data, financial indicators over a two-decade period from Dec 1910 to Dec 1930 are analysed to make sense of how banks performed on each of these metrics. This approach is not exhaustive but is indicative nonetheless.

Analysing the financial performance of the Presidency banks and the Imperial Bank of India during the time period reveals the following.

  • To determine capital adequacy, the capital to assets ratio was used. In the post-merger episode, the Imperial bank of India witnessed an average capital to assets of 10.7 percent relative to an average of 5.5 percent for the Presidency Banks. This exhibits that through merger, Imperial Bank of India was well capitalized and capital adequacy ratio was improved. Post financial crisis of 2007, the Basel Committee of Banking Supervision has also introduced the leverage ratio to judge capital adequacy. The deposits to equity ratio was used as an indicator to determine the amount of leverage that is used to finance the banks’ assets. The Imperial Bank of India has exhibited a relatively stable leverage position since its inception marking an average of 15.1 percent. This is in contrast to the Bank of Bombay which faced high leverage during the Great War reaching almost 31 percent in December 1917. Keeping all other factors constant, higher leverage ratios indicate higher bank riskiness.
  • In order to judge of asset quality, the investment to total assets ratio is used which focuses on the proportion of total assets that are being invested by banks to protect itself from the risk of non-performing assets (Paul, 2017). Data shows that the merger resulted in an improvement in asset quality based on this indicator. The Imperial Bank of India performed significantly well in comparison to the Presidency Banks. It maintained an average of almost 20 percent from its inception till 1930, compared to an average of 15.5 percent of all three Presidency banks.
  • In terms of profitability, the return on assets and return on equity have been calculated. The ratios measure how profitable are the banks relative to their assets and the net income returned as a percentage of shareholders equity respectively. Both ratios exhibit great fluctuation and variability for the Imperial Bank of India but were on the upward trend for the Presidency Banks. A case in point is the return on equity which stood at an average of 13.4 percent for the Presidency banks compared to 10.1 percent for the Imperial Bank of India. This indicates that the merger did not create additional revenues that could accrue to shareholders as increased equity.
  • In measuring liquidity, the deposits to assets ratio is used. Data shows that through the Presidency banks faced issues on the liquidity front. The ratio, remained within the recommended band of 80 to 90 percent for the Imperial Bank of India whilst touching 78 percent for the Bank of Bengal in December 1919. This shows that the merger resulted in an improved liquidity position for the Imperial Bank of India.

This blog attempts to analyse the merger episode using modern CAMELS indicators. Some of the financial indicators employed have presented a persuasive case for merger as the Bank of Bombay and Madras did not exhibit sound financial fundamentals during the early part of the twentieth century. There was also substantial evidence that the Presidency banks should be merged due to administrative reasons. The financial crisis in British India during 1913-18 were attributed partly due to the exigencies imposed by the Great War and the absence of a financial regulatory body as discussed here. Future research can explore these questions in greater detail.

The merger led to greater ‘financialization’ of British India as the Imperial Bank of India pursued a vigorous policy of opening new branches, specifically in areas where banking facilities did not exist. This can be evidenced from the fact that from 70 branches in 1920, the bank had 202 branches by 1928 (Singh, 1965).

The above discussion primarily employs technical reasons to argue a case for the merger of the Presidency Banks. It would also be quite instructive to explore the political climate at the formation of the Imperial Bank of India and the incentives of the governments both in Britain and in India in doing so.

Slavery in medieval England: broad continuation between the 12th and 17th centuries

by Judith Spicksley (University of York)

Slavery in England had apparently been replaced by serfdom in the twelfth century, yet writers in the sixteenth and seventeenth centuries continue to use terms such as ‘slave’, ‘serf’, and ‘villein’ interchangeably. This research seeks to make sense of this historical conundrum.

Reeve and serfs in feudal England, c. 1310. From Wikimedia Commons <http://www.wikiwand.com/en/Serfdom&gt;

Historians of medieval England have suggested that slavery had disappeared by the twelfth century. Explanations include the growth of a new notion of chivalric behaviour, and the liberalising effects of an expanding Christianity, in which enslavement of fellow Christians became unthinkable.

But most emphasis has been placed on the effects of economic development, through a combination of technological change, demographic expansion, market growth and a shift in the nature of agricultural production.

In the view of many commentators, serfdom – the system of unfree labour associated with the manorial system – replaced slavery as the main method of restricting the freedom of the individual. Slaves were of unfree status, but serfs, who were given access to land in return for providing a varied mix of labour, goods and cash – were of unfree tenure.

The term ‘serfdom’ has wide application across a range of European manorial systems, but in England, it is usually referred to as ‘villeinage’, since this was the name of the common law institution that developed in the twelfth century.

While there has been considerable debate about the causes of slavery’s decline, there has been much less disagreement about its timing. More recent research has suggested that domestic slaves – mostly women – were retained and underwent something of a revival in southern Mediterranean towns in the later medieval period. There are also examples of young women who were kidnapped and sold as prostitutes in England.

This research suggests that for a number of reasons, we have missed the broader continuation of slavery between the twelfth and seventeenth centuries. In part this is because it did decline, but it also became less visible.

On the one hand, the economic roles undertaken by slaves were no different from those done by individuals who were free. On the other hand, the institution of villeinage used a new language to define itself: the unfree were villeins, bondmen and nativi, and were not identified as ‘slaves’.

It is also clear that there was an overlap between unfree status and unfree tenure that has not yet been adequately investigated. Later histories have been heavily influenced both by the transatlantic slave trade, which provided an unforgettable image of the ‘slave’, and by the emergence of two major theoretical approaches: classical economic theory; and the Marxian materialist dialectic.

Together these factors have been instrumental in bringing about a reluctance to translate the Latin word servus as ‘slave’ in the legal texts, literature and documentary evidence of late medieval England, and give preference instead to the language of villeinage.

Slavery may have changed its appearance in the late medieval period, but in law, little had changed. Those of unfree status still owned nothing, could devise nothing and were at the will of their lords; moreover, their children inherited their unfree status.

PRE-REFORMATION ROOTS OF THE PROTESTANT ETHIC: Evidence of a nine centuries old belief in the virtues of hard work stimulating economic growth

Cistercians at work in a detail from the Life of St. Bernard of Clairvaux, illustrated by Jörg Breu the Elder (1500). From Wikimedia Commons <https://en.wikipedia.org/wiki/Cistercians&gt;

Max Weber’s well-known conception of the ‘Protestant ethic’ was not uniquely Protestant: according to this research published in the September 2017 issue of the Economic Journal, Protestant beliefs in the virtues of hard work and thrift have pre-Reformation roots.

The Order of Cistercians – a Catholic order that spread across Europe 900 years ago – did exactly what the Protestant Reformation is supposed to have done four centuries later: the Order stimulated economic growth by instigating an improved work ethic in local populations.

What’s more, the impact of this work ethic survives today: people living in parts of Europe that were home to Cistercian monasteries more than 500 years ago tend to regard hard work and thrift as more important compared with people living in regions that were not home to Cistercians in the past.

The researchers begin their analysis with an event that has recently been commemorated in several countries across Europe. Exactly 500 years ago, Martin Luther allegedly nailed 95 theses to the door of the Castle Church in Wittenberg, and thereby established Protestantism.

Whether the emergence of Protestantism had enduring consequences has long been debated by social scientists. One of the most influential sociologists, Max Weber, famously argued that the Protestant Reformation was instrumental in facilitating the rise of capitalism in Western Europe.

In contrast to Catholicism, Weber said, Protestantism commends the virtues of hard work and thrift. These values, which he referred to as the Protestant ethic, laid the foundation for the eventual rise of modern capitalism.

But was Weber right? The new study suggests that Weber was right in stressing the importance of a cultural appreciation of hard work and thrift, but quite likely wrong in tracing the origins of these values to the Protestant Reformation.

The researchers use a theoretical model to demonstrate how a small group of people with a relatively strong work ethic – the Cistercians – could plausibly have improved the average work ethic of an entire population within the span of 500 years.

The researchers then test the theory statistically using historical county data from England, where the Cistercians arrived in the twelfth century. England is of particular interest as it has high quality historical data and because, centuries later, it became the epicentre of the Industrial Revolution.

The researchers document that English counties with more Cistercian monasteries experienced faster population growth – a leading measure of economic growth in pre-modern times. The data reveal that this is not simply because the monks were good at choosing locations that would have prospered regardless.

The researchers even detect an impact on economic growth centuries after the king closed down all the monasteries and seized their wealth on the eve of the Protestant Reformation. Thus, the legacy of the monks cannot simply be the wealth that they left behind.

Instead, the monks seem to have left an imprint on the cultural values of the population. To document this, the researchers combine historical data on the location of Cistercian monasteries with a contemporary dataset on the cultural values of individuals across Europe.

They find that people living in regions in Europe that were home to Cistercian monasteries more than 500 years ago reveal different cultural values than those living in other regions. In particular, these individuals tend to regard hard work and thrift as more important compared with people living in regions that were not home to Cistercians in the past.

This study is not the first to question Max Weber’s influential hypothesis. While the majority of statistical analyses show that Protestant regions are more prosperous than others, the reason for this may not be the Protestant ethic as emphasised by Weber.

For example, a study by the economists Sascha Becker and Ludger Woessman demonstrates that Protestant regions of Prussia prospered more than others because of the improved schooling that followed from the instructions of Martin Luther, who encouraged Christians to learn to read so that they could study the Bible.


‘Pre-Reformation Roots of the Protestant Ethic’ by Thomas Barnebeck Andersen, Jeanet Bentzen, Carl-Johan Dalgaard and Paul Sharp is published in the September 2017 issue of the Economic Journal.

Thomas Barnebeck Andersen and Paul Richard Sharp are at the University of Southern Denmark. Jeanet Sinding Bentzen and Carl-Johan Dalgaard are at the University of Copenhagen.


ORIGINS OF BRITAIN’S HOUSING CRISIS: ‘Stop-go’ policy and the covert restriction of private residential house-building

by Peter Scott and James T. Walker (Henley Business School at the University of Reading)

University of the West of England, The History of Council Housing. Copyright of Bristol Record Office

‘Stop-go’ aggregate demand management policy represents one of the most distinctive, and controversial, aspects of British macroeconomic policy during the post-war ‘long boom’. This was, in turn, linked to an over-riding priority among an influential section of policy-makers in the Treasury and the Bank of England to restore sterling as a ‘strong’ currency (second only to the dollar) and to re-establish the City of London as a major financial and trading centre, despite heavy war-time debts and low currency reserves.

This policy is often viewed as having had damaging impacts on major sectors of the British economy – especially the manufacture of cars, white goods and other consumer durables, which were deliberately depressed in order to support sterling and thereby facilitate the growth of Britain’s financial sector.

This research explores an important but neglected impact of ‘stop-go’ policy: restrictions on house-building. This has been overlooked in the general stop-go literature, largely because the policy was mainly undertaken covertly, without public announcement or parliamentary discussion.

In addition to publicly announced restrictions on public sector house-building – by restricting local authority borrowing and raising interest rates on that borrowing – the government covertly depressed private house purchases and mortgage lending by restricting house mortgage funds to well below market clearing levels.

The Treasury used a combination of informal pressure and, less frequently, formal requests, to get the building societies’ cartel (the Building Societies Association) to set their interest rates at levels that forced them to ration mortgage lending in order to maintain acceptable reserves. Officials particularly valued this instrument of stop-go policy owing to its effectiveness and its ‘invisibility’ (mortgage lending restriction was not publicly announced and was not generally even subject to cabinet discussion).

Meanwhile political pressure for action to increase house-building and home ownership (especially in the run-up to national elections) led to a perverse situation whereby government was sometimes simultaneously boosting demand for house purchases and covertly restricting the supply of mortgages – feeding into a growing house price spiral that has become an enduring characteristic of the British housing market.

This study shows that the application of stop-go policy to mortgage lending for most of the period between the mid-1950s and the late 1970s had a major cumulative impact on the British economy: depressing the long-term rate of capital formation in housing; creating inflationary expectations for house purchasers; having negative impacts on living standards (especially for lower-income families); and damaging the growth, productivity, and capacity of the house-building sector and the building society movement.

Democracy and taxation in Greece: a long history of rural favouritism

by Pantelis Kammas (University of Ioannina) and Vassilis Sarantides (University of Sheffield)


Some of the basic characteristics of the current tax system in Greece seem to have deep historical roots. One is the amazingly low tax burden that has fallen on the incomes of the agricultural population throughout the history of the Greek state.

This is because governing authorities always keep an eye on the welfare of the politically powerful group of peasants and farmers to gain support. Another deep-rooted characteristic is significant reliance on indirect versus direct taxes, which can be attributed to analogous political economy reasons.

The main concern of the governing authorities in the agrarian new-born Greek state of the nineteenth century was the legitimisation of their authority. On this basis, a number of economic benefits through tax (and other) policies were provided to the rural population that became politically powerful after 1864, the date that voting rights were granted to all adult males.

In that way, authorities aimed to ensure a minimum level of social consensus and to convince the citizens of the young Greek state that the public demands of the war of Independence – ‘social justice’, ‘democracy’ and ‘equality of political rights’ – would be satisfied.

This research highlights the importance of economic development in the relationship between democracy and taxation, focusing mainly in the case of Greece during the nineteenth and early twentieth century. Notably, Greece established universal male suffrage in 1864 while it was still a developing, pure agrarian economy with 76% of the population in the agricultural sector.

In contrast with Greece, other democratic European countries had significantly narrower agricultural sectors in the nineteenth century – the majority of them at a level below 40% of the total working population.

Building on a unique tax dataset that contains 13 different tax categories of the newborn Greek state during the period 1833-1933, the results conclude that the extension of the voting franchise in 1864 did not affect the size of the government – but it did change the structure of taxation in favour of the rural population.

Universal male suffrage was accompanied by a long-run reduction in the percentage of rural (for example, taxes on land) to total taxes by 8.25%. This reduction was balanced by increases in indirect taxes – mostly custom and excises duties – leaving the overall level of taxation constant over time.

The research interprets these empirical findings in terms of a political economy motivation. In particular, the Greek governments changed the composition of taxation, reducing rural taxes to satisfy the large majority of the electorate who were poor peasants and farmers.

In turn, the findings for Greece are compared with that for a sample of 12 West European countries that were substantially more developed on democratisation.

The analysis suggests that in more industrialised European economies, democratisation revealed the political preferences of a more urbanised electorate – mostly consisting of workers and middle class capitalists – leading to a different pattern of ‘reshapement’ of the tax system.

This is consistent with the theoretical priors that the level of development, and the consequent structure of the economy, will result in a differentiated effect of democratisation on fiscal policy.


Five hundred years of French economic stagnation: from Philippe Le Bel to the Revolution, 1280-1789

by Leonardo Ridolfi (IMT School for Advanced Studies Lucca)

In 2008, output per capita in France amounted to around $22,000 dollars per year. After the Second World War, in 1950, annual average income per capita reached $5,000 dollars, while in 1820, at the beginning of the first official national statistics, GDP per capita averaged $1,100 (Maddison, 2010). Nevertheless, precise knowledge of economic growth in France stops when we get back as far as 1820; before this date, the quantitative reconstruction of economic development is shrouded in mystery.

That mystery lies in the difficulty of uncovering sufficient resource material, devising adequate measures of economic performance in the past, and ultimately interpreting the complexity of the dynamics involved. These dynamics stretch far beyond just the mere economic sphere and concern the way a society is itself organised and structured. Nevertheless, several questions spring to mind.

What was the level of material living standards between the thirteenth and the late eighteenth century, from the early stages of state formation to the French Revolution? How did per capita incomes evolve over time? And were French workers richer or poorer than their European counterparts during the pre-industrial period?

This research provides answers to these questions by estimating the first long-run series of output per capita for France from 1280 to 1789.

The study reveals one important conclusion: the dominant pattern was stagnation in levels of output per capita. For the first time indeed, these estimates document quantitatively and in the aggregate what was previously known only qualitatively or for some regions by the classic works of French historiography (Goubert, 1960; Le Roy Ladurie, 1966): the French economy was an inherently stagnating growthless system, a ‘société immobile’, which at the beginning of the eighteenth century was not much different than five centuries earlier.

At the time of the death of King Philip the Fair in 1314, France was a leading economy in Europe and output per capita averaged $900 per year. Almost five centuries later, this threshold was largely unchanged, but the France of King Louis XVI now belonged to the group of the least developed countries in Western Europe. In the 1780s, per capita income was slightly above $1,000, about half the level registered in England and the Low Countries.

Nevertheless, stagnation was not the same as stability. The French economy was highly volatile and experienced multiple peaks and troughs. In addition, these results reject the argument that there was no long-run improvement in living standards before the Industrial Revolution, demonstrating that GDP per capita rose more than 30% between the 1280s and the 1780s.

Yet most of the rise was explained by a single episode of economic growth that took place prior to the Black Death between the 1280s and the 1340s and which shifted the trajectory of growth onto a higher path.

Overall, these estimates suggest that the evolution of the French economy can be suitably interpreted as an intermediate case between the successful example of England and the Low Countries and the declining patterns of Italy and Spain. Being neither a southern country nor a northern one, the growth experience of France seems to reflect this geographical heterogeneity.



Goubert, Pierre (1960) École pratique des hautes etudes, Laboratoire cartographique, Beauvais et le Beauvaisis de 1600 à 1730: contribution a l’histoire sociale de la France du 17e siècle, Sevpen.

Ladurie, Emmanuel Le Roy (1966) Les paysans de Languedoc Vol. 1. Mouton.

Maddison, Angus (2010) Historical Statistics of the World Economy: 1-2008 AD, Paris.

Business before industrialization: Are there lessons to learn?

by Judy Stephenson (Wadham College, University of Oxford) and Oscar Gelderblom (University of Utrecht)


Screen Shot 2017-09-06 at 21.48.21
Bruegel the Elder (1565), Corn Harvest (August)

Business organization is mostly absent from economic history debate about the rise of economic growth, but it was not always so  

As a new protectionist era in political economy dawns, it would be fair to ask what scholarship business and policy can draw on to understand how trade flourished before twentieth century institutions promoted globalization. Yet, pre-industrial business organization, once a central concern in scholarly debates about the rise of capitalism, and the West, currently plays only a marginal role in research on long-run economic development. Once a central pillar of economic history, the subject is almost absent from the recent global meta-narratives of divergence and growth in economic history. Since 2013 Oscar Gelderblom (Utrecht) and Francesca Trivellato (Yale) have been reviving interest, exploring finance and organization in early modern business thanks to a grant from the Netherlands Organization of Scientif Research (NWO).

“our survey suggests that a strong theoretical foundation and rich empirical data exist on the basis of which we can develop a comparative business history of the preindustrial world.”

In May they convened the last in a series of workshops ‘the Funding of Early Modern Business’, in Utrecht, bringing together speakers from around the globe to look specifically at means and methods of funding and finance in a comparative sense.

The old literature on western business focused, for the largest part, on the large chartered and state backed organizations of colonialism, possibly to the detriment of our understanding of domestic and regional business practice. The cases under discussion at the workshop were geographically and methodologically varied – but mostly they stressed the latter. Susanna Martinez Rodriguez (Murcia) examined the cases of Spain’s Sociedad de Responsibiliadad Limitata in the early twentieth century, highlighting the attractiveness of the hybrid legal form for small business. Claire Lemercier (CNRS Paris) showed the use of courts and the legal system by trading businesses in 19th century Paris were a last recourse for the complex credit arrangements of urban trading. A large number of trading women used the courts and this raises the question of whether this represents a larger number of women in business than expected, or whether other means were less accessible to them. Siyuan Zhao (Shanghai) showed the vast records available to the researcher of Chinese business forms in the 19 century. His case showed that production households operated with advanced subcontracting networks of finance. As the first day ended conversation among participants and discussants – including Phillip Hoffman, Craig Muldrew, Heidi Deneweth and Joost Jonker focused on contracts, enforcement, and the varied ways in which early modern businesses responded to costs and risk.

Meng Zhang (UCLA) delighted participants with meticulous research showing that small farmers and plot owners in 18th-century Southwestern China securitised timber production and land shareholdings with complex contracts risk mitigation among small agricultural operators that allocated future output and allowed division of land and produce. Her work challenges current narratives of China in the 18th century. Judy Stephenson described the significant credit networks of seventeenth century building contractors in London. The structure and process of the contract for works enabled the crown and city to finance major infrastructure development after the Great Fire. Pierre Gervaise showed that French merchants in the southwest were opportunist in using their de facto monopolies on supply of goods to Bordeaux to price gouge. His amusing and detailed archival sources give the opportunity for new analysis of French supply chains and transaction costs.

Thomas Safley needed no introduction to this audience. His work on fifteenth and sixteenth century Southern German family networks is well established, but here he demonstrated that norms and collective action institutions in southern Germany were distinctive. Mauro Carboni traced the development of the limited partnership to 15th century Bologna and described the contract stipulations made as the time of partnership formation.

One of the key areas that Gelderblom & Trivellato highlighted as of particular interest was that of women in business in the early modern period. Hannah Barker used her wide research in women and family business to discuss the high number of trading businesses in mid-19th century Manchester run by women, and make the point that existing accounts of welfare and output do not take women’s businesses into account. The area is one with active research.

The overall picture gained from the workshop was of the remarkable organization flexibility of early modern business co-ordination, most particularly y in relation to credit. Almost all cases showed businesses moderating and contracting the rights and involvement of creditors in varied ways non-financial ways. Almost all cases indicated that contracts entered into determined outcomes to the same or greater degree as the structure of the enterprise.

Gelderblom & Trivellato have come to the end of the project but will continue to forge research links and networks on early modern business. Their work so far shows clearly that research into domestic and regional businesses before 1870 will bear fruit for historians, and very probably business leaders too.

The Travelling Kingdom during Medieval Period in England, France and the Holy Roman Empire: An Economic Interpretation

by Daniel Gottal (University of Bayreuth)

Holy Roman Emperor Frederick Barbarossa on his Third Crusade

 Noblemen, knights and kings had always been on tour in Medieval Period. Weather on campaign, pilgrimage or on itinerant court – mobility was unexpected high to this specific aristocratic peer group. When capital cities had not emerged yet, the king as the political centre was on continuously travelling through his kingdom. This travelling kingdom had a political and an often missed out economic dimension.

At a time without newspapers, television or other mass media, dealing ‘oral contracts’ in personal relationships with his vessels, was essential. In the 13th century written documentation re-emerged and contributed to a slowdown of the royal itinerant court. Hence travelling kingdom was part of most mediaeval societies to a specific point of their cultural and institutional evolution.

The first modest beginnings originated from Merovingian dynasty on ox carts. Centuries later, Italian campaigns since Charles the Great (742-814) till the Ottonian dynasty, had a specific itinerant court character with their long stays in the three Italian capital cities: Pavia, Ravenna and Rome. Henry II (973-1024) – starting after his crowning in 1002 – bethinks on these older traditions and established the travelling kingdom in the Holy Roman Empire for centuries. Until the mid of the 15th century under Frederick III (1415-1493), where Late Middle Ages, Early Renaissance and Early Modern Period overlapped, the travelling kingdom survived, until it fossilised at the end of the century.

Besides of the fragility of the political system solely relying on personal relationships, the travelling kingdom had also an economic dimension. At the time food was rare in Europe in the Middle Ages and the king did not travel alone. He was accompanied by his royal court, including nobility, knights, bodyguards, and servants. This entourage could make up thousands of people. Because the transportation facilities were poor, the agricultural resources to provide the itinerant court food and shelter were scarce. Thus there was economic pressure for travelling around.

Unsurprising, that more frequented routes and stops were highly correlated with the most prosperous regions in Europe. In the Holy Roman Empire regional focus was on Franconia, Bavaria, Swabia and along the Rhine, the Franco-German border. The king and the king’s follower’s hostage were an enormous economic burden for cities and monastics they visited. Royal accommodation, the servitia regis, was an expensive duty for all his vassals. The average visit lasted three days but could be as long as two weeks. As prestigious as the king’s hostage might have been for a city, from a budgetary perspective his hoosts were relieved when he left for his next destination.

In contrast to continental Europe, England was once more special. A travelling kingdom was not common under Norman regimen. Power was less challenged than on the continent and Westminster early emerged as capital city. But John Lackland (1167-1216), king and heir to the throne after the death of his elder brother Richard the Lionheart (1157-1199), had done longer travels to secure his power, as well as his brother did before. But the tradition of a travelling kingdom was much more common to the north of the island, to the Scottish, than to the English.

Meanwhile, in the transition from the High to the Late Middle Ages the duty for king’s hostage was replaced by a financial grant – in France, Flanders and Bourgogne. Records from the French droit de gîte revealed, that most cities from 1223 to 1225 payed something in between 100 and 200 pound sterling silver a year. The combined income for the French crown was 3,000 pound sterling silver a year, covering 1% of Louis VIII of France (1187-1226) total expenses. The cities and monastics made a good deal in transforming the servitude into money. Fixing the amount via privilege, unadjusted by high inflation in the Late Middle Ages, the financial grant completely vanished over time – as well as the travelling kingdom.