Social mobility and inequality in the Republic of Venice, 1400-1700

by Guido Alfani (Bocconi University, Milan, Dondena Centre and IGIER)



The Wharf, Looking toward the Doge’s Palace, 1700s, by Luca Carlevaris. Available at Wikimedia Commons.

Recent research in economic history has unearthed previously unknown facts about the long-term trends in inequality. We now have, for at least some areas of Europe, continuous time series of key inequality indicators from around 1300.

These new data are changing the way in which we perceive economic inequality not only in the past, but even today – as a key lesson from history is that economic inequality (especially but not only of wealth) has a marked tendency for increasing over time, and only catastrophes on the scale of the Black Death or the World Wars managed to bring it down, albeit temporarily (see Figure 1).

The new historical evidence is also relevant to the debate about the long-term determinants of inequality growth. This seems to be independent, to a large degree at least, from economic growth. Other factors seem to have played a crucial role, including institutional factors and in particular (in the early modern period) the rise of the fiscal-military state.

These recent acquisitions, however, raise many questions about the actual impact on society of distributive dynamics. My current project funded by the European Research Council – SMITE: Social Mobility and Inequality across Italy and Europe 1300-1800 – is exploring at least some key aspects of the social impact and significance of inequality change.

In this context, particular attention is being paid to the case of the Republic of Venice, which is the object of the study to be presented at the Economic History Society’s 2019  annual conference. In the Republic of Venice, as seemingly was common throughout Europe, economic inequality tended to grow monotonically from the fifteenth century until the end of the early modern period (which is also the end of the Republic of Venice as a specific political entity).

Generally speaking, this inequality growth could not simply be considered the consequence of economic growth, as it also covered phases of economic stagnation. Indeed, the Italian domains of the Republic of Venice transitioned, over the period 1500-1900, from being one of the richest and most advanced areas of Western Europe, to being one of the poorest. Partly as a consequence of this, it is very unlikely that during the period, and especially from 1600 on, inequality growth could have taken place in a context of easy upward social mobility.

Our research aims to measure rates of socio-economic mobility in different periods, based on a range of case studies, including the large and very important city of Verona. Our results so far confirm that during the early modern period inequality growth came to be increasingly associated with more difficult upward socio-economic mobility.

This provides useful hints about the nature and the causes of inequality growth in pre-industrial Europe. We pay particular attention to the role played by state taxation in consolidating the relative position of the richest, while compromising the ambitions of upward mobility of other socio-economic groups. Our study is also one of the very first attempts at reconstructing household-level measures of social mobility for the pre-industrial period by means of extensive record linkage of the available sources and by using the standard methods of mobility studies.

The picture that we reconstruct suggests that from around 1600 or 1650, the Italian domains of the Republic of Venice were characterised at the same time by economic stagnation, growth in economic inequality, and low (and worsening) rates of social-economic mobility. This picture corresponds quite closely to the situation being faced by Italy and by other parts of southern Europe since the onset of the Great Recession in 2008 – which is definitely not a very encouraging scenario.


Alfani Chart 2

Source: Alfani, The top rich in Europe in the long run of history, Vox 15 January 2017

The Greek public debt restructuring of 2018 through the lens of history

by Olga Christodoulaki


The Residence of the Bank of Greece at the corner of the Streets Ionos Dragoumi and Tsimiski, Thessaloniki. Available at Wikimedia Commons.

In June 2018, relief was granted to Greece for the official sovereign debt by its Eurozone counterparts. But in spite of this recent agreement and a reduction by more than 50% in the face value of the debt held privately in March 2012, the sustainability of Greek public debt is still questioned and the uncertainty associated with this might easily impair economic growth.

This is not the first episode of Greek public debt restructuring, as I will discuss in research to be presented at the Economic History Society’s 2019 annual conference. In 1898, five years after a Greek government default, a debt compromise was achieved, providing for the restructuring of both internal and external sovereign debt. The cornerstone of this readjustment plan was the creation of a viable long-term plan for the servicing of public debt, which had reached nearly 230% of GDP by then.

Interest rate payments to bondholders of Greek external loans issued before the 1893 default were linked to specific public revenue streams earmarked exclusively for the service of these loans. These revenues assigned for the repayment of public debt were administered by the International Financial Commission and represented, in 1903 for example, approximately 46% of the total revenue of the Greek government.

Consequently, as Figure 1 shows, the yield paid to bondholders fluctuated from year to year within a band depending on the volume of those revenues; its floor being the minimum rate defined by the debt restructuring agreement and its ceiling the original coupon rate of the loan.

In addition, special attention was paid during the preparation of this debt readjustment plan to protect and indeed strengthen the National Bank, the central bank in Greece at the time. Domestic public debt denominated both in gold and drachmae and mainly held by the National Bank, was also restructured so as to strengthen its financial position.


My study argues that the provisions of the debt readjustment plan of 1898 – which it should be stressed have been completely ignored by research until now – should be taken into account in order to comprehend fully the improvement in the creditworthiness of the Greek government and consequently the terms of borrowing before the outbreak of the First World War.

The public debt readjustment arrangement of 1898 marked the beginning of a period of high capital inflows to the country including Greek diaspora capital and remittances. Moreover, it facilitated a carefully orchestrated return of the Greek government to the private markets in 1902. It is worth noting, however, that Greece did not avoid a further default in the early 1930s when the world economy collapsed.

The recent public debt relief granted to Greece by its Eurozone counterparts echoes the late nineteenth century restructuring of public debt agreement but lacks the credibility that the latter engendered. This time, the long-term sustainability of public debt depends on the commitment of the Greek government to achieve constant primary surpluses, every year, beginning from 2018 for two generations and also on privatisation proceeds.

This is a commitment that has been received with caution since it is neither a serious policy goal nor particularly realistic if history is anything to go by.

Sources of market disintegration in eighteenth century China

by Markus Eberhardt (School of Economics, University of Nottingham)


Altar Frontal (China (for European market)), 18th century. Available at Wikimedia Commons.

One of the seminal questions in world and Chinese economic history is why China, in contrast to Western Europe, failed to industrialise during the nineteenth century, leading to differential development paths commonly referred to as the Great Divergence.

Social and economic historians have tried to tackle this issue by identifying potential sufficient conditions for industrialisation. One candidate condition has been the degree of national or sub-national market integration within Asia and Western Europe on the eve of industrialisation. A long-held view maintained that Western Europe was characterised by integrated markets, which had taken root because of state-supported property rights institutions. China, in contrast, despite her unified political system, was said to have failed in creating a unified national market.

This hypothesis of differential levels of market integration has been seriously challenged more recently, most notably in the work of Kenneth Pomeranz (2000), who concluded that factor and product markets in late eighteenth century Western Europe were ‘probably further from perfect competition… than those in most of China.’

Shiue and Keller (2007) carried out a formal cross-continental comparison of rice markets in Southern China during 1742-95 with wheat markets in Europe in the eighteenth and nineteenth centuries, providing the first econometric evidence for Pomeranz’s conjecture of equivalent goods market integration in both regions.

Much of the subsequent research has adopted the conclusion that ‘in the late eighteenth century… long-distance [grain] trade in China operated more efficiently than in [continental] Europe’ (von Glahn, 2016).

In related work (Bernhofen et al, 2016) we use a number of alternative empirical methods (including the cointegration analysis employed by Shiue and Keller, 2007) along with higher frequency grain price data for China and Western Europe to provide consistent evidence for a substantial decline in Chinese market integration over time: by 1800, China’s grain markets were fragmented, including in the economically most advanced regions (Jiangnan).

Our empirical implementations account for general equilibrium effects widely acknowledged to have distorted earlier investigations of market integration using price data.

In our new study, to be to be presented at the Economic History Society’s 2019 annual conference, I and my co-authors (Daniel Bernhofen, Jianan Li and Stephen Morgan) bring together arguments for such an early decline in Qing grain market integration from the rich economic and social history literatures.

We use our estimates for market integration to test empirically one prominent factor: we investigate the role played by the unprecedented population growth and internal migration during the eighteenth century and its economic, social, political and environmental implications.

In studies of early modern Europe, population growth was found to go hand in hand with market expansion and increased integration. In China, population growth and its uneven regional distribution not merely limited the surplus grain available for trade, but exerted severe pressure on an inherently instable water control system pitting farming against flood prevention and the waterway transportation of goods, creating increasingly insurmountable challenges for water engineering.

In combination with rigid fiscal rules, population growth constrained the ability of the Qing state to govern this vast empire effectively. Local officials reacted to rising population pressure with ‘grain protectionism’, leading to temporary political borders, which further hampered the functioning of the market.

The narrative we develop is not that of a standard ‘Malthusian trap’, where an acceleration in pre-modern agricultural growth is followed by population growth that dilutes per capita resources and thus keeps the economy in a ‘low level equilibrium trap’. Instead, we describe an escalating ‘span of control’ problem, increasing the pressure on a small bureaucracy in the periphery as well as the core of the empire, caused by a rigid and underfunded state apparatus.


Figure: Population density growth and internal migration

Conf China Map



We plot the annualised population density growth rates (in percent) between 1776 and 1820 for 211 prefectures. Black solid lines indicate provincial borders. The dashed line marks the early eighteenth century ‘frontier’ between developed and developing areas of Qing China (Myers and Wang, 2002). Arrows indicate major internal migration flows (stylised representation) during the eighteenth century. The two Northern migration strands actually extend beyond Qing China proper into Xinjiang and Manchuria.



Population density data are taken from Cao (2000), information on eighteenth century migration flows from Eliott (2009: 147), Entenmann (1980: 41f), Ho (1959: 139ff), Lee and Feng (1999: 118), Mann-Jones and Kuhn (1978: 109f, 132), Myers and Wang (2002: Map 9), shapefiles from CHGIS version 6 (2016).

De-industrialisation: a case study of Dundee, 1951-2001 – and its broad implications

by Jim Tomlinson (Economic and Social History, University of Glasgow)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.


Caird Hall and City Square, Dundee (composite)
Dundee City Square and Caird Hall in summer 2014. Available at Wikimedia Commons.

The huge loss of industrial employment – ‘de-industrialisation’ – has been one of the most important economic and social changes in Britain since the Second World War. But its timing, causes and effects are often misunderstood.

My study of Dundee, a typical post-industrial city, enables us to examine this process and to demonstrate important aspects of the process relevant to the whole country. The key messages, which I will present at the Economic History Society’s 2019 annual conference, are as follows:

  • De-industrialisation in Britain began in the 1950s: since then, the proportion of industrial jobs has shrunk from over 50% to around 15%, with the fall in manufacturing jobs even more dramatic.
  • De-industrialisation was greatly accelerated by the ‘Thatcherite’ policies of the 1980s, but the process began long before that date.
  • In particular, the ‘old staple’ industries, such as textiles, coal and the railways, lost more workers in the 1950s and 1960s than in the 1980s.
  • De-industrialisation was not mainly caused by the recent phase of ‘globalisation’.
  • The most important causes were technological change and shifts in patterns of consumption.
  • De-industrialisation doesn’t mean ‘we don’t make anything any more’; the trend in industrial output was upwards until the 1970s and roughly flat since then, but higher productivity means it takes far fewer workers to produces this output.
  • Most job losses arose from either long, slow attrition of employment levels in existing firms, or the slow growth of new jobs, not from dramatic, large-scale closures.
  • De-industrialisation matters especially because it has polarised the labour market much more into ‘lovely and lousy’ jobs; ‘lovely’ jobs are well-paid and relatively secure; ‘lousy’ jobs poorly paid and precarious.
  • The number of ‘lovely’ jobs, such as professionals, administrators, managers and technicians, has increased across all sectors of the economy, including industry.
  • The number of ‘lovely’ jobs has been particularly increased by the expansion of public sector employment, especially in health and education, and the numbers in these areas have barely been affected by recent austerity (unlike employment in local authorities).
  • Public sector ‘outsourcing’ has increased the polarisation of the labour market, as many of the outsourced jobs have been the low-skilled ones where public employment previously provided some protection against the impact of weak bargaining power.
  • ‘Lovely’ jobs commonly require significant educational qualifications, and average educational achievement has shot up in the period of de-industrialisation, especially in universities. Universities in turn have been a significant source of expansion of ‘lovely’ jobs.
  • The disadvantages of low educational attainment have been magnified by de-industrialisation, which makes access to ‘lovely’ jobs almost entirely reliant on high levels of attainment.
  • The transition from the dominance of industry has pushed many people out of the labour market, something that is evident not only in unemployment but also in much higher levels of long-term sickness and disability.


As a result of this transition, there has been a large increase in self-employment, much of which is poorly paid.

Income inequality in times of war and revolution: the city of Moscow in 1916

by Elizaveta Blagodeteleva (National Research University Higher School of Economics)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.


Voznesenskaya Square, 1900s. Available at Wikimedia Commons.

In autumn of 1916, a big scandal roiled the Moscow public: local landlords petitioned the municipal government for the permission to raise rents, which was prohibited by the military administration a year before amid the escalating refugee crisis. Newspapers fumed at the selfishness of the rich, who not only avoided serving their country at the battlefield but exploited wartime hardships to get even richer. Health inspectors, lessees and workers of the largest industrial plants publicly raised their objections to the proposal.

Although the concerted effort of the city landlords to increase revenue eventually failed, the public outrage persisted. The occasional evidence of huge war profits and rumours about the luxurious life of industrialists and rentiers stoked anger among the urbanites, who struggled to make ends meet under the increasing pressure of galloping inflation and food shortages. The rent scandal highlighted the growing animosity towards the rich that the Bolsheviks would later channel into fully-fledged class warfare.

In 1916, Moscow residents sincerely believed that the gap between the wealthy and the rest of the population was enormous and it kept widening at an alarming pace. But did their beliefs match reality? In other words, how unequal was urban society in Russia in the last year of the old regime? To answer this question, a student of social and economic inequality would usually refer to income tax records. Unfortunately, there are very few of them in case of imperial Russia.

The Russian authorities had been extremely wary of income taxation up until the beginning of the Great War, when the national political mobilisation elevated the issue of the personal responsibility of each and every subject of the tsar. As a result, the state legislature passed an income tax in the spring of 1916. Its political objectives overwhelmed fiscal practicalities as lawmakers wanted it to bring the state closer to the ‘pockets’ and ‘hearts’ of the people. The progressivity of the new tax was supposed to ensure the levelling of the great fortunes and make the body politic more cohesive.

Since tax collection began in March 1917 and continued through the period of an intense power struggle and regime change, surviving records are patchy. Neither the tsar’s local treasures nor early Soviet fiscal authorities left comprehensive accounts of the sums collected in 1917. Nevertheless, Moscow archives have preserved some tax rolls that document the personal incomes for the year 1916, reported by taxpayers and then ascertained by tax collectors in the first half of 1917.

The records allow a tentative reconstruction of the level of income inequality in the city. Given that the adult population of Moscow amounted to 1.1 million in the spring of 1917, the estimates show that the wealthiest 1% and 5% must have received and then reported about 45.9% and 58.8% of their total income. With the Gini coefficient standing at 0.75, those shares display an extremely high level of income inequality among the city residents in 1916. A huge gap between the rich and the others not only felt real but was real.

Stealing for the market: the illegitimacy of enslavement in the early modern Atlantic world

by Judith Spicksley (Wilberforce Institute, University of Hull)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.



Slaves on the West Coast of Africa, c.1833 (oil on canvas)
The Slave Trade (Slaves on the West Coast of Africa), by Auguste-François Biard, 1840. Available at Wikimedia Commons. 

Slavery was understood to be illegitimate long before anti-slavery activists called for the abolition of the slave trade in the eighteenth century. Slavery is now prohibited in international law, but it was a legal institution in the vast bulk of societies at some point in the past.

A range of legal methods were used to enslave people, of which the most common were birth, capture in war, judicial punishment, debt, and poverty. But there was another method of enslavement that historians include in their list: the kidnap and theft of persons for sale on the market.

These practices were never considered acceptable forms of enslavement. In among the earliest law codes that survive from Old Babylonia in the second millennium BCE, to Israel in the first, are punishments for the theft of a person, which attracted the death penalty.

But demand for slaves created opportunities for traders to sell those they had stolen as if they were slaves proper, and increase their wealth in the process. These cases of illegal enslavement ran alongside bona fide sales throughout the period in which slavery was legitimate.

Examples include the activities of Cilician-based pirates in the eastern Mediterranean in the late Roman Republic and early Empire, and the violent sourcing of labour in Africa for the American plantations in the early modern Atlantic world. But it was the raiding bands that scoured the Slav lands of Eastern Europe for captives in the high medieval period that encouraged an understanding of the meaning of slavery as illegal in the west.

The term ‘slave’ appeared in English, and in the languages of Western Europe more generally, from the late medieval period via the ethonym Slav. This was the name given to members of the Slavic peoples living in Eastern Europe whose communities were frequently raided for persons who could be sold as slaves.

But the term ‘slavery’ does not enter the English language until the mid-sixteenth century. At that point, it was applied as a metaphor for the tyranny of Catholicism, as the development of Protestantism created a major religious schism.

The term ‘slavery’ was also applied to the activities of the earliest English slave traders. During his first voyage in 1562, John Hawkins is reputed to have violently captured around 400 Africans in Guinea, whom he later sold in the West Indies. He repeated these activities over the next five years with the support of Queen Elizabeth.

Hawkins was following in the footsteps of other Europeans, most notably Lançarote de Freitas, the Portuguese explorer, who is recognised as having set the transatlantic slave trade in motion. De Freitas returned from North Africa to Lagos in 1444 with a cargo of 235 Berber captives seized in a series of raids, who were subsequently sold into slavery.

From the mid-seventeenth century, with the challenge to the divine right of kings, ‘slavery’ became a metaphor for, and a weapon of, political tyranny in England. It also became a reality for travellers.

The seventeenth century saw an increased level of activity by the so-called Barbary pirates, operating out of North Africa, who seized European sailors and travellers and held them as ‘slaves’ for ransom. Englishmen and women were captured and enslaved in the Americas too, as the Atlantic economy underwent expansion.

As a result, the meaning of ‘slavery’ as a system of illegal subjection, linked to tyranny, violence and theft, had become deeply embedded in English thought before the abolitionists were established as an organised force from the late eighteenth century.

Family standards of living in England over the very long run

by Sara Horrell (University of Cambridge), Jane Humphries (University of Oxford), and Jacob Weisdorf (University of Southern Denmark and Centre for Economic Policy Research)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.


Over London–by Rail from London: A Pilgrimage (1872). Available at Wikimedia Commons.

The secular evolution in human wellbeing, measured by unskilled workers’ real wages, has long been the subject of scholarly debate. Attention is focused on whether modern economic growth is a relatively recent phenomenon in human history, prompted by the Industrial Revolution, or if workers in England experienced economic progress well before the Industrial Revolution, even if on a more modest scale. The answer will help inform third-world policy-makers about alternative routes to economic growth.

Thanks to recent archival work, we now have information on payments made to working-class men, women and children across 600 years of English history – from before the Black Death through to the classic years of the Industrial Revolution. In a study to be presented at the Economic History Society’s 2019 annual conference, we bring all of these payments together to provide a first-ever account of the earning possibilities of working-class families in historical England.

By asking how much a typical lower-class family consumed, in terms of basic consumption goods, such as calories, clothes, heating and housing, we are able to ask how much work was needed by the husband, as well as his wife and children, in order to achieve this. Also, because historical families were rather large (four to five children were not uncommon), we pay particular attention to the ‘family squeeze’ – that is, stages during the family lifecycle when the ratio of dependants to earners peaked.

Despite the post-Black Death period being regarded as a ‘golden age of labour’ and on assumptions of plentiful work, the husband’s earnings were not enough in the fourteenth century to satisfy a typical family’s basic consumption needs during the family squeeze. Women and children’s work was regularly needed in order to make ends meet and, even then, this was not enough to avoid insolvency problems during a couple’s old age.

But as we move forward through the medieval and early-modern periods, progressively less women and children’s work was required to ensure a stable standard of living, and old age poverty became less severe. In this sense, we conclude that the quality of life of an average lower-class family gradually improved in the centuries leading up to the Industrial Revolution.

We also conclude by arguing that a surplus in the family budget after necessities had been bought in the run-up to the Industrial Revolution enabled families to allocate a growing fraction of their income to market goods rather than homemade products.

This served as a stimulus to the Industrial Revolution because it motivated producers to innovate and profit from satisfying this increased demand. A widening market seemed important in combination (or competition) with the hypotheses that industrialisation sprung from entrepreneurial efforts to save labour.

The economic assimilation of Irish famine migrants to the United States

by William Collins and Ariell Zimran (Vanderbilt University)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.


Engraving of Emigrants leaving Ireland, 1868. Available at Wikimedia Commons.

Restrictive immigration policy is often justified by claims that immigrants and refugees are slow to assimilate culturally and economically in the receiving country. Our new research, to be presented at the Economic History Society’s 2019 annual conference, shows that the largest wave of refugees to ever arrive in the United States experienced rapid economic assimilation, closing much of the gap in occupational status relative to native-born Americans in a single generation.

These refugees were victims of the Great Irish Famine, which killed an estimated one million Irish between 1846 and 1850 and drove another million to flee abroad, mostly to the United States. Their poverty and predominantly Catholic religion set them apart from the typical American of the day, and led many politicians and commentators to argue that the Irish could and would not assimilate and thus were dangerous to American democracy and the American economy.

Notwithstanding these claims, data limitations have masked how the Irish immigrants’ labour market outcomes evolved after their arrival. To study these patterns, we use data from the US censuses of 1850 and 1880.

We begin by identifying Irish men in 1850 and using information on the birthplaces and ages of their children to determine whether they had arrived in the United States during the famine or before. We then locate their sons in the 1880 census, enabling the comparison of the sons’ adult occupations with those of their fathers. Similar links are constructed for the sons of native-born Americans.

The new data enable the documentation of three facts. First, in 1850, the Irish famine-era migrants had considerably lower levels of human capital, as measured by their literacy, than earlier Irish arrivals and native-born Americans. They were also 57% more likely than natives to hold an unskilled occupation.

The poor conditions faced by the famine Irish migrants thus did not bode well for the success of the next generation. Indeed, a simple comparison of the sons of the famine-era Irish to the sons of US natives reveals the second fact: as late as 1880, the sons of the famine Irish still fared worse than the sons of natives. These first two facts would seem, at first glance, to support claims of failure to assimilate (that is, ‘catch up’ to natives) in labour markets.

But a more detailed analysis reveals that the gap had shrunk considerably over the generation. In 1880, the sons of famine-era Irish were only 24% more likely than the sons of natives to hold an unskilled occupation. Thus, in a single generation, they closed much of the gap in status faced by their fathers.

Moreover, when the sons of the famine Irish were compared only to the sons of natives whose households were similar in 1850, only an 8% gap between the two groups remained. Thus, despite experiencing poverty, a nativist backlash against migrants, especially Catholics, and in some cases the trauma of the famine itself, the largest wave of refugee immigrants ever to arrive in the United States experienced almost the same intergenerational mobility as natives.

It is difficult to draw conclusions from these results to modern waves of refugees seeking sanctuary in Europe and the United States. The American and European economies have changed radically over the intervening centuries, and the open border policy of the United States – responsible for saving untold lives during the Irish famine – has long been closed.

But the parallels in rhetoric faced by modern and historic refugees suggests that the results of our new research can provide a useful lens through which to view modern debates.

Slavery and Anglo-American capitalism revisited

by Gavin Wright (Stanford University)

This research will be presented in the Tawney Lecture during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.


Slaves cutting sugar cane, taken from ‘Ten Views in the Island of Antigua’ by William Clark. Available at Wikimedia Commons.

For decades, scholars have debated the role of slavery in the rise of industrial capitalism, from the British Industrial Revolution of the eighteenth century to the acceleration of the American economy in the nineteenth century.

Most recent studies find an important element of truth in the thesis associated with Eric Williams that links the slave trade and slave-based commerce with early British industrial development. Long-distance markets were crucial supports for technological progress and for the infrastructure of financial markets and the shipping sector.

But the eighteenth century Atlantic economy was dominated by sugar, and sugar was dominated by slavery. The role of the slave trade was central to the process, because it would have been all but impossible to attract a free labour force to the brutal and deadly conditions that prevailed in sugar cultivation. As the mercantilist, Sir James Steuart asked in 1767: ‘Could the sugar islands be cultivated to any advantage by hired labour?’

Adherents of an insurgency known as the New History of Capitalism have extended this line of analysis to nineteenth century America, maintaining that: ‘During the eighty years between the American Revolution and the Civil War, slavery was indispensable to the economic development of the United States.’ A crucial linkage in this perspective is between slave-grown cotton and the cotton textile industries of both Britain and the United States, as asserted by Marx: ‘Without slavery you have no cotton; without cotton you have no modern industry.’

My research, to be presented in this year’s Tawney Lecture to the Economic History Society’s annual conference, argues to the contrary, that such analyses overlook the second part of the Williams thesis, which held that industrial capitalism abandoned slavery because it was no longer needed for continued economic expansion. We need not ascribe cynical or self-interested motives to the abolitionists to assert that these forces were able to succeed because the political-economic consensus that supported slavery in the eighteenth century no longer prevailed in the nineteenth.

Between the American Revolution in 1776 and the end of the Napoleonic Wars in 1815, the demands of industrial capitalism changed in fundamental ways: expansion of new export markets in non-slave areas; streamlined channels for migration of free labour; the shift of the primary raw material from sugar to cotton. Unlike sugar, cotton was not confined to unhealthy locations, did not require large fixed capital investment, and would have spread rapidly through the American South, with or without slavery.

These historic shifts were recognised in the United States as in Britain, as indicated by the post-Revolutionary abolitions in the northern states and territories. To be sure, southern slavery was highly profitable to the owners, and the slave economy experienced considerable growth in the antebellum period. But the southern regional economy seemed increasingly out of step with the US mainstream, its centrality for national prosperity diminishing over time.

Indeed, my study asserts that on balance the persistence of slavery actually reduced the growth of cotton supply compared with a free-labour alternative. The truth of this proposition is most clearly demonstrated by the expansion of production after the Civil War and emancipation, and the return of world cotton prices to their pre-war levels.

The comfortable, the rich and the super-rich: what really happened to top British incomes during the first half of the twentieth century?

by Peter Scott and James T Walker (Henley Business School, University of Reading)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.



Across road junction at Clapham Common, London, England. Available at Wikimedia Commons.

Long-run analysis of British income inequality has been severely hampered by poor historical income distribution data relative to other western countries. Until 1937, there were no official peacetime income distribution estimates for Britain, despite considerable contemporary interest in how much of the national income was taken by the rich.

In research to be presented at the Economic History Society’s 2019 annual conference, we address this question, focusing on changes in the incomes of the top 0.001-5% of the income distribution. This group is important for two reasons. First, because top incomes accounted for a substantial slice of total personal incomes, with the top 1% and top 5% taking around 30% and 45% of total income in 1911, according to our estimates.

Second, income redistribution in western countries is typically dominated by changes in the shares of the top 5% and, especially, within the top percentile. Thus examining higher incomes is crucial to explaining the apparent paradox between a relatively stagnant income distribution among the bulk of the British population and the generally assumed trend towards a more equal pre-tax income distribution.

Using a newly rediscovered Inland Revenue survey of personal incomes for taxpayers in 1911, we show that Britain had particularly high-income inequality compared with other Western countries. Top British income shares fell considerably over the following decades, though British incomes remained more unequal than in the United States or France in 1949.

Inequality reduction was driven principally by a collapse in unearned incomes, reflecting economic shocks and government policy responses. Over the period from 1911 to 1949, there was a general downward trend in rent, dividend and interest income, with particularly sharp falls during the two world wars and the recessions of 1920-21 and 1929-32.

War-time inflation eroded the real income received from fixed interest securities; new London Stock Exchange issues of overseas securities were restricted by the Treasury (to protect Britain’s foreign exchange position), reducing rentiers’ ability to invest their income overseas; and the agricultural depression lowered real (inflation-adjusted) land rents.

These trends reflected a progressive collapse of the globalised world economy from 1914 to 1950, which both reduced the incomes of the rich and redistributed income to the bottom 95% of the income spectrum.

For example, rent control (introduced in 1915 and continuing throughout the period of our study), depressed the incomes of landlords, but substantially reduced the real cost of a major household expenditure burden, in a country where around 90% of households were private tenants. Rent control also led to extensive house sales by landlords, mainly to sitting tenants, at prices reflecting their low, controlled, rents.

Meanwhile the scarcity of low-risk, high yielding assets during the interwar years led to substantial deposits in building societies by high-income individuals, funding the house-building boom of the 1930s. Restrictions on overseas new issues also led the City of London to become increasingly involved in British industrial finance – expanding industrial growth and employment.

Conversely, the policy liberalisations of the 1980s that heralded the start of the new globalisation (and the resumption of growing income inequality in western nations) have made it far easier for the rich to offshore their assets, or themselves, either in search of better investments opportunities or jurisdictions more suited to protecting their wealth. This has produced a strong international trend towards rising income inequality, with Britain returning to its position as one of the most unequal western nations.