From Notes on Liberty – Ten best papers/books in economic history of the last decades (part 1)

In my post on French economic history last week, I claimed that Robert Allen’s 2001 paper in Explorations in Economic History was one of the ten most important papers of the last twenty-five years. In reaction, economic historian Benjamin Guilbert asked me “what are the other nine”? As I started thinking about the best articles, I realized that […]

via Ten best papers/books in economic history of the last decades (part 1) — Notes On Liberty

From the LSE blogs – Industrial strategy: some lessons from the past

Industrial strategy is back on the government’s agenda, with a promise to produce a ‘match fit’ economy that ‘works for everyone’ and is able to thrive after Brexit. As yet, however, there is little sign of the promised broadly-based and coherent industrial strategy emerging. In crafting it, explains Hugh Pemberton, its architects may profitably look…

via Industrial strategy: some lessons from the past — British Politics and Policy at LSE

Spinning little stories: Why cotton in the Industrial Revolution was not what you think

Judy Stephenson reviews some of the developments in debates about causes of the Industrial Revolution from this year. 

When Nick Crafts reviewed competing ‘meta-narrative’ explanations of the Industrial Revolution by Joel Mokyr and Robert C. Allen in 2010 he noted that explanations of the cause of the IR were a bit like the Holy Grail (1). He was expressing the feeling of a generation of economists who believed that economics could ‘explain’ the modern world, and so must explain the IR. When Deirdre McCloskey’s critique (2) of every meta narrative ever generated about the Industrial Revolution declared that economics could do no such thing it was indicative of a shift generally away from that kind of thinking, or as John Kay said, there are no meta-narratives, only little stories. But in economic history, Allen’s meta narrative has largely prevailed. A recently published little story has questioned it.

 Allen ‘explained’ the Industrial Revolution by claiming that because Britain was a ‘high wage’ economy in the eighteenth century, the high cost of labour and the relative cheapness of coal and capital incentivised labour saving mechanisation, and this is why Britain industrialised before other countries. The theory has met with challenges already. In 2013 Humphries undermined the assumptions about household conditions, and since she has also produced new wage data with Jacob Weisdorf that is fundamentally at odds with the day wages Allen used. (3) (I have shown to these be too high, 4). Humphries and Ben Schneider have also shown that spinning was a very low wage activity (5). Whilst all this undermines Allen’s theory, a well told little story by John Styles in the latest edition of The East Asian Journal of British Studies, is notable because it challenges much of what we understand about the innovations at the core of the IR.

http://www.history.ac.uk/sites/history.ac.uk/files/eajbhvol5.pdf see p.161 onwards.

 Allen’s favourite and oft used case of the effect of British factor prices has always been that of the spinning jenny. In ‘The Industrial Revolution in Miniature’ (6) he sets out high British spinning and labouring wages, and low French wages to show that the jenny was only economical in England. Styles brings some other facts to the case. It’s enjoyable reading so I won’t attempt to reproduce it here but suffice to say he also shows in the first part of the paper that French wages were higher, British lower, and there were more jennies in France than thought.

 Whilst every economic historian knows that whoever says the IR says ‘cotton’, what many probably didn’t know is that ‘cotton’, in England, for most of the eighteenth century meant cotton weft spun on linen warp. The inability of English spinners to create cotton warp strong enough to go on larger frames needed for calicoes meant that English ‘cottons’ were a cotton linen mix, which, although popular and cheap, was not a match for the colour and fineness of proper cotton calico. The burgeoning American market wanted calicoes above all else, and to provide it, and tap into that valuable demand, properly spun cotton warp was the only answer. The spinning jenny did not provide such warp, and whilst the calico acts protected or sheltered the home market it was not until Arkwright’s water frame that English cotton could conquer the profitable American market.

In the story of the spinning jenny, high wages (nor cheap coal) had no part to play. It was Arkwright’ invention which fundamentally changed the production of cotton and which met the demand for fine new cotton fashions, and the incentives are far less clear in this story. Styles makes the important point that Arkwright’s macro-invention was the “outcome of a long history of applying capital-intensive, mechanical solutions to quality and supply problems in luxury textile manufacturing” (see particularly pp.186-7). This is not all bad news for Allen. Styles is clear that the wage for those who could produce good warp was very high, but Arkwright, nor others, could not produce enough of it at the volumes needed at any wage. As many readers will understand this little story has implications for our understanding of jennies as ‘macro’ or ‘micro’ inventions, and so for Mokyr too. Bear in mind that Wallis, Colson, and Chilosi and separately Keibek have both shown this year that industrialisation was as much 17th century phenomenon as 18th, so we may need some new models anyway (7). 

 Styles contribution highlights how a strong empirical basis for economic analysis is essential if meta narratives or ‘big theories’ are to explain economic developments of the past. Allen has always stressed the comparative level of wages in Britain, and there is work to be done on current sources here. (There is a developing Twitter conversation between myself, @pseudoeramus @VincentGeloso @MarkKoyama @benmschneider @ulyssecolonna regarding this subject and market size for instance). But in a year where the notion of economic rationality itself has been shaken to its foundations perhaps it’s not surprising that the Industrial Revolution is moving back towards being ‘unexplained’, although we should await reviews of Mokyr’s latest contribution, (which seems to chime with McCloskey’s ‘cultural’ one) before returning to the view of a couple of decades ago that there really wasn’t one at all.

In the meantime research on the coal tax in early modern England is long over due….

Notes:
(1) http://wrap.warwick.ac.uk/44710/1/WRAP_Carfts_10.2010_craftsindustrial.pdf

R..C Allen, The British industrial revolution in global perspective, CUP, 2009.

J. Mokyr, The enlightened economy: an economic history of Britain, 1700-1850, Yale, 2009.

 (2) McCloskey, Deirdre N. Bourgeois Dignity : Why Economics Can’t Explain the Modern World. Chicago: University of Chicago Press, 2010.

http://www.johnkay.com/2011/10/04/the-map-is-not-the-territory-an-essay-on-the-state-of-economics/ http://www.johnkay.com/product/the-truth-about-markets/

(3) http://www.ehs.org.uk/app/journal/article/10.1111/j.1468-0289.2012.00663.x/abstract

http://www.economics.ox.ac.uk/Oxford-Economic-and-Social-History-Working-Papers/unreal-wages-a-new-empirical-foundation-for-the-study-of-living-standards-and-economic-growth-1260-1860

(4)http://www.lse.ac.uk/economicHistory/workingPapers/2016/wp231.pdf

(5)http://www.economics.ox.ac.uk/Oxford-Economic-and-Social-History-Working-Papers/spinning-the-industrial-revolution

(6) Allen, Robert C. “The Industrial Revolution in Miniature: The Spinning Jenny in Britain, France, and India.” The Journal of Economic History 69, no. 04 (2009): 901-27.

(7)http://www.lse.ac.uk/economicHistory/workingPapers/2016/WP240.pdf , for Keibek see this blog 

  J.Z. Stephenson, Wadham College, Oxford. judy.stephenson@wadh.ox.ac.uk, tw:@judyzara

How to win the EHS New Researcher Prize

As the Society’s New Researchers prepare to submit their final papers for our conference in March, Anne Murphy gives some invaluable tips on how to win the highly coveted prize for the best ‘new researcher’ paper. Excellent advice for first time and new scholars presenting everywhere ….

WHAT DO WE LOOK FOR IN A PRIZE-WINNING EHS NEW RESEARCHER PAPER?

Don’t skip the Friday afternoon of the Economic History Society Conference, that’s when the New Researchers Sessions are scheduled and it’s often the most interesting part of the weekend. Adding to the excitement is the tension in the air because everyone knows that the presenters are competing for one of the Society’s prestigious New Researcher prizes, awarded each year to the best one or two (and sometimes three) papers.

Between 2014 and 2016 I was lucky enough to be the Chair of the Committee. Hence I got to read dozens of New Researcher papers, to observe numerous panels at the Conference and to hear and read the deliberations of my colleagues on the Committee. I concluded that, although we sometimes disagreed about the merits of a particular paper, what we were looking for was not in dispute and could be summed up in five points. I offer these points here as advice for future New Researchers but with the caveat that, as with any advice, it’s easier to deliver than to act upon!  

1) The Committee wants to know why they should care about your argument and findings.  

This point shouldn’t come as a surprise. Your PhD supervisor will have told you many times that you need to position your thesis carefully within the existing historiography to demonstrate your original contribution to scholarly knowledge. You need to do this in a conference paper too. Tell us why your work is important. The Committee won’t just know because they won’t all be experts in your field. Also, never assume that you are writing about something so obvious that all scholars rooted in economic history automatically will see its significance. They might but they will still want to know what you are bringing to the debate.

2) The Committee wants you to demonstrate your credentials as a historian.  

To do this ensure that your paper provides details on your data, sources and methodology. Are you the first to use the source or are you using your data or sources in a new way? It is true that your footnotes might demonstrate this but you should also reinforce these points through your argument. Also discuss your methodology but with a focus on what you are doing that will make a contribution to the literature or on establishing the appropriateness and relevance of your techniques. Do remember though that your paper should not just focus on your methodology, the Committee expects to see historical context and a strong conclusion.

3) The Committee wants to read work that is clear and well-written.  

The Committee will be reading lots of papers and will appreciate well-written work. Again this won’t come as a surprise, you have probably done some teaching, and marking, so will already know the joy of coming across beautifully crafted prose. To generate a clear piece of writing you should remember that you can’t, and shouldn’t, cram your entire thesis into 2,500 words. Pick a representative aspect of your work, something that illustrates its totality but is compact enough for you to present a tight argument based on sound evidence. Pay attention to the way that you say things, not just what you want to say.

4) The Committee wants you to deliver an excellent presentation  

Everyone understands that you might be giving your first paper at a big conference and you might be presenting in front of people whose work you admire (or indeed question). We know that is nerve-wracking. But, the prize is not just awarded for the written paper, it’s expected that the presentation at conference will be excellent too. So be clear, confident, pay attention to timing and engage your audience. With regard to content, you should highlight your research question, establish your scholarly contribution, focus on your argument and analysis and present your conclusion.

5) The Committee will expect you to give good responses to the questions  

You will be asked questions at the end of your presentation and the Committee will be taking note of how well you address those questions. They will be concerned chiefly with how you defend your argument so make sure you have thought about what sort of things you might be asked before the presentation. Do defend your position and do so calmly, politely and firmly. Be precise and concise. Remember that the time allocated to questions will be short so don’t use it all explaining one point.

If these are the things the committee is looking for, how can you maximise your chances of delivering them? 

• Pay attention to the criteria for the New Researcher papers: especially the word count and time limit. 

• Write a new paper, don’t just cut down a chapter and think that will do. It won’t!

• Get feedback. Show your paper to your supervisors before you submit.

• Act on the feedback. It might be right; it might be wrong. If you believe the latter, consider why your reader misunderstood or was not convinced by your point. Maybe you need to explain more clearly and evidence more effectively.

• Read previous winning papers: http://www.ehs.org.uk/events/nr-prize-winners.html

• Rehearse your presentation to ensure that you can present well and that you keep to time. And then rehearse again!

• When presenting be confident, speak clearly and loudly enough to be heard.

• Face the audience: do not turn around and speak to the PowerPoint. If you’re using your PowerPoint as a prompt then look at it on the computer screen or better still have some prompt cards in your hand.

• Ensure that your PowerPoint presentation is neither too text-heavy nor too sparse.

• Don’t have dozens of slides, a good rule of thumb is one for every two minutes.

• Keep to time!

• Make eye contact and smile (even if you feel like weeping)!

And finally… ..Good Luck! And remember to practice your gracious winner/loser face for the conference dinner… 

Anne L. Murphy  

University of Hertfordshire

Review: Avner Offer and Gabriel Soderberg, The Nobel Factor: The Prize in Economics, Social Democracy and the Market Turn (Princeton University Press, 2016)

The Nobel Factor: On the eve of the announcement of the Nobel prize in economics we review Offer and Soderberg’s new book and ask “What relationship should economic historians have to economics? ” 

index

What relationship should economic historians have to economics? For those who see economic history as essentially applied economics, the answer is perhaps obvious. But for those of us who see ourselves as ‘historians who are interested in the economy’, the question is fundamental – and difficult to answer. EHS co-founder R. H. Tawney, rejecting the Marshallian economics of his day, asserted that ‘There is no such thing as a science of economics, nor ever will be. It is just cant…’

Tempting as such a wholehearted rejection might sometimes be, it plainly won’t do. Whatever one’s ultimate judgment about its knowledge claims, economics is the most powerful, influential social science. For good or ill, economic historians are fated to spend our lives grappling with the discipline.

In an ideal world, economic historians would be equipped with a profound knowledge of economics, coupled with a profound scepticism about its capacity to help us understand how things work. This book demonstrates that its authors possess both these virtues. They use the Nobel prize in economics, awarded since 1969, as a means of examining the nature and role of economics in a book whose depth and breadth of vision make it a hugely important contribution to our understanding of the ‘market turn’ in economic policy over the last 40 years.

The Nobel prize in economics arose from an initiative of the Swedish central bank to raise the prestige of both itself and the discipline of economics, in the context of the bank’s struggle with Sweden’s governing Social Democrats. Like most central banks, the Riksbank prioritised low inflation and limited government; and it was hostile to the stabilising and equalising policies pursued by Sweden’s dominant political party.

Offer and Soderberg offer a sustained analysis of the pattern of winners of the prize. Over its whole history, there has been a careful attempt to award the prize to a balance of economists, with the most famous case being the 1974 joint prize awarded to Friedrich Hayek and the Swedish social democratic theorist, Gunnar Myrdal.

This balancing act has helped to maintain the high prestige of the prize, while also acting to undermine the ‘scientific’ pretensions of the discipline. Not only have the prize-winners come from a wide range of positions in economics, but several have also been acknowledged for contributions that directly or indirectly contradict the work of other recipients.

Much of the most detailed analysis of economics here concentrates on undermining the claims of the ‘market liberals’, a term embracing proponents of the new classical macroeconomics, rational expectations and public choice. The book is scathing about the claims made for these (and other) theories, arguing that they ultimately rest on ethical presuppositions, while showing little capacity to explain empirical changes in the economy.

The failure of the awarders of the Nobel prize to be concerned with empirical validity is seen as their biggest failing in how they have made their judgments. As the authors suggest, while Hayek opposed the scientistic pretensions of many economists, his own work, most notably his Road to Serfdom, has been ‘grotesquely falsified’ (p.9). The expansion of the state in post-war Western Europe, far from leading to a slippery slope of ‘serfdom’ has been combined with an enlargement of freedom, however that capacious term is defined. (While Hayek, Milton Friedman and other Nobel prize-winners were keen supporters of the Chilean dictator and murderer Pinochet in the name of ‘economic freedom’).

Despite their aversion to the ‘theoretical mumbo jumbo’ (p.212) of some economics and their dismissal of the scientific claims of many of the practitioners of the discipline, the authors by no means share Tawney’s dismissive attitude. Economics they proclaim, in one of the books many bon mots, ‘is not easy to master, but it is easy to believe.’ (p.2).

Their response is to undermine such ready belief, by showing that the effort at mastery is not wasted, as it allows us to exercise informed discrimination. Some economics is extremely useful. They are particularly enthusiastic about national accounting: ‘The best empirical programme in twentieth-century economics… an empirical, pragmatic and practical model of general equilibrium, based on a deep understanding and knowledge of the economy.’ (p.153)

This book is hugely persuasive about economics, where the knowledge displayed is extraordinary and the judgments highly persuasive. On social democracy, it is perhaps not so strong. There is some fascinating discussion of the development of Swedish social democracy and its relationship to key Swedish economists.

Most attention is given to Assar Lindbeck, a long-term member of the Nobel prize committee and its chair from 1980 to 1994. His work and role is subject to a blistering attack, coupled with a persuasive defence of the benefits of his country’s version of social democracy, which he renounced and then bitterly attacked.

But social democracy comes in many different forms, whereas in this book, the ‘Swedish model’ is used to define a singular form, characterised, we are told, by a collective provision response to insecurity over the lifecycle. Thus, ‘The difference between Social Democracy and economic market doctrine is easy to draw. It is about how to deal with uncertainty.’ (p.5)

While this stark, one-dimensional, definition is somewhat qualified elsewhere, the persistent assertion of its foundational status raises two problems. First, there is a question about how far such positioning is exclusive to social democracy. Most obviously, perhaps, would not Beveridge-style social insurance fit this definition? The Liberal William Beveridge proclaimed ‘social insurance for all and for every contingency’; with all its mid-twentieth century trappings, surely a clear advocacy of a collective response to security over the lifestyle?

Conversely, social democrats outside Sweden have focused less on redistribution of income over the lifecycle and more, for example, on more direct ‘vertical’ redistribution or on collective control of the means of production or on economic planning. They may have been strategically mistaken, but that is surely no reason to deny them the ‘social democrat’ label?

Jim Tomlinson

University of Glasgow

Keynes and Actual Investment Decisions in Practice — The NEP-HIS Blog

Keynes and Wall Street By David Chambers (Judge Business School, Cambridge University) and Ali Kabiri (University of Buckingham) Abstract: This article examines in detail how John Maynard Keynes approached investing in the U.S. stock market on behalf of his Cambridge College after the 1929 Wall Street Crash. We exploit the considerable archival material documenting his […]

via Keynes and Actual Investment Decisions in Practice — The NEP-HIS Blog

Market anomalies and market crashes: Historical perspectives on modern finance

Early Victorian observers would have found our financial markets familiar,
but would likely expect a crash, writes Andrew Odlyzko*

leadenhall_street

 

What would early Victorians make of today’s markets?  Such questions are more than just idle curiosities.  For example, the recent wide acceptance around the world of negative interest rates was a surprise. Why didn’t the money go into cash?  Yet observers should not have been startled by this development.  In Britain in the early 1850s, Exchequer Bills effectively offered negative rates.  The convenience of those paper instruments gave them higher value than stacks of gold coins, just as today the convenience of electronic ledger balances is worth something compared to having to handle containers full of banknotes.

The Exchequer Bills episode is just one minor finding from recent studies that integrate data from the ledgers in the Bank of England Archive with price reports, press coverage, and other sources. Previously unknown  statistics about completeness of price reports, turnover rates, and dealer activity have been obtained.  It has also been found that the London Stock Exchange was a key part of the “shadow banking system” of the time.

Aside from statistics, we can also obtain some qualitative insights about modern finance from these investigations.  Our basic laws and institutions are clear linear descendants of those created at that time. If some of those early Victorians were to come alive today, they would have no difficulty recognizing all the modern financial instruments and services, although they would surely marvel at such concoctions as CDO squareds.  Many current concerns would have been familiar to them as well.  While they did not talk about climate change, they did worry about natural resource depletion, and effects of globalization. Inequality was even greater than today.  Deflation and the analog of our “Great Savings Glut” were visible, and seemed natural.  Although the terms secular stagnation and liquidity trap had not yet been invented, they corresponded to widely held attitudes.

Although the financial system was far smaller than today, public opinions about it were not dissimilar.  Respect was often mixed with fear and loathing,  as in an 1850 magazine article that called the London Stock Exchange “an institution destitute of moral principle, but at the same time omnipotent in its influence upon the moral and social condition of nations.”

So what would have surprised those early Victorians observers the most, were they to come alive today?  One candidate would surely be our touching acceptance of financial innovation as socially productive.  Another would have been our faith in central planning, in the presumed ability of policy makers to ensure smooth and steady growth.  The Minsky Instability Hypothesis would have been regarded as obviously true.  What we find in the 19th century are opinions, such as that of The Times, that crashes occur about once a decade, and that they lead people to “the reflection that they are at least the wiser for it, that they will not be taken in a second time,” and yet “the next fit comes on them like the rest, and they go through all the stages of the disease with pathological accuracy.”

The Efficient Market Hypothesis would have seemed to the early Victorians as amusing, but a fantasy.  They understood that some semblance of efficiency could be achieved, but only through diligent efforts of experienced traders.  And even those traders could not always control market irrationalities, and were themselves subject to limitations of groupthink.

Perhaps the greatest and hardest to accept surprise in modern markets would have been the combination of high equity prices and low long term interest rates.  Today’s commentators regard this as natural, and keep reassuring investors that low interest rates help sustain record-high corporate profits, which justify the high share prices. There is certainly evidence that in the short run, low interest rates do boost profits.  But on a long scale, basic economic logic says that interest rate and profits should move the same way. After all, bonds and equity are just different ways to fund ventures, and interest and profits are the cost of capital.  There is a difference between the two, reflecting different risks.  But there should be a strong positive correlation.  And that is how the early Victorians thought about it.  The theoretician Robert Hamilton wrote about it in the 1810s. So did James Morrison, one of the richest merchant bankers of that era, in the 1840s.  And so did others.  Were they to come alive today, they would surely be astounded.  They would wonder why, if Lloyd Blankfein, the head of Goldman Sachs, was indeed “doing God’s work,” was he not mobilizing all that low-cost money lying around in order to compete away the extravagantly high equity returns?  And they would surely conjecture that once capitalism started working properly again, this anomaly would disappear, and either bond or share prices (or both) would crash.

 

Notes: this post is based on the author’s papers “Financialization of the early Victorian economy and the London Stock Exchange“, and “Supplementary material for
`Economically irrational pricing of 19th century British government
bonds’” .

This research was presented at the annual conference of the Economic History Society in Cambridge, April 1-3, 2016.

The post gives the views of its author, not the position of the University of Minnesota.

The post is being co-published with the LSE Business Review: http://blogs.lse.ac.uk/businessreview/

* Andrew Odlyzko has had a long career in research and research management
at Bell Labs, AT&T Labs, and most recently at the University of Minnesota,
where he built an interdisciplinary research center, and is now a
Professor in the School of Mathematics.  He has written over 150 technical
papers in a variety of of fields, and has three patents.  In recent
years he has also been working in electronic commerce, economics of data
networks, and economic history, especially on diffusion of technological
innovation.  More information, including papers and presentation decks,
is available on his web site, http://www.dtc.umn.edu/~odlyzko/.

 

Quantifying historical developments in occupational structures

Sebastian Keibek, University of Cambridge, won the New Researcher Prize at the Society’s conference in March for his work on England’s occupational structure. Establishing the occupational a structure of England before 1800 is made difficult because the nature of records is particularly complex. Here, he explains a little about his sources and methodology, and his important findings

Thirteen years ago, Leigh Shaw-Taylor and Tony Wrigley embarked on a research project called ‘The Occupational Structure of Britain, 1379-1911’. As is clear from its title, the project aims to describe over five centuries of change in British working life. My research, which focuses on men’s work during the 1600 to 1850 period, is part of the wider project, building on earlier efforts and feeding back into the ongoing programme of research. Understanding occupational change is of interest to economic historians for many reasons, but I would like to highlight two of these here. Firstly, quantitative data on the composition of the labour force provide us with excellent information on the structure of the economy, uniquely so at sub-national geographic scales. Secondly, when independent output estimates are available, understanding the contemporary occupational structure allows us to determine labour productivity growth and, thereby, gauge the effects of technological and organisational change as well as the room for improvements in living standards.  

Both reasons are especially pertinent for historians trying to understand the British Industrial Revolution. Traditionally, economists analysing this critical transition to modern economic growth have reserved an important role for structural change in their models. Arthur Lewis, for example, virtually equated industrialisation with a shift in the occupational structure from agriculture to industry, by which underutilised labour in the former was put to more productive use in the latter (1). Simon Kuznets too emphasized ‘the shift away from agriculture to non-agricultural pursuits’, followed later by one from industry to services (2). Walt Rostow’s five-stages model of economic growth was also strongly stucturalist in nature, with the share of the working population engaged in agriculture declining from seventy-five to forty per cent during the ‘take-off’ stage, and to twenty per cent during ‘drive to maturity’ stage (3).

In its quantification of the Industrial Revolution, the authors of Britain’s national accounts literature – from Dean and Cole, via Crafts and Harley to, most recently, Broadberry et al – have based their occupational estimates almost entirely on so-called ‘social tables’ (4). These were created by contemporary proto-statisticians like Gregory King and Joseph Massie. But these tables only provide information at the national scale and only for a single moment in time, are phrased in terms which allow wildly varying interpretations, were created by men pushing specific political agendas, and are, as Holmes phrased it, ‘far more the product of strained deduction, of mathematical juggling, or even plain guesswork, than of firmly grounded information’ (5). 

Fortunately, much more reliable and detailed information on men’s work is available in a number of sources. National censuses provide increasingly good occupational information, but only from 1831, so other sources are required for earlier years. The most important of these are baptism registers and testamentary documents. From 1813, registering the occupations of fathers became mandatory in Anglican baptism and during the eighteenth century too, these occupations were reliably registered in some English and Welsh parishes. Male occupations were also commonly recorded in testamentary documents such as wills and probate inventories, which are available in large numbers for most English and Welsh counties, often back into the sixteenth century. Baptism registers and testamentary documents complement one another beautifully: the former are reliable but scarce, the latter are widely available but heavily biased towards certain social groups and occupations. My methodology makes use of the complementary strength and weaknesses of each source: baptism data are used to calibrate the (biased) testamentary data, whilst testamentary data are used to interpolate and extrapolate the (scarce) baptism data. This methodology was applied to a new national database of over two million probate records, created from indexes to testamentary documents in forty-six (out of fifty-four) English and Welsh counties. Using the existing Cambridge Group’s baptism register database to calibrate these probate data, tables at the occupational sub-sector level (farming, fishing, textiles, transport, etcetera) were created for every twenty-year time interval between 1600 and 1850, for England and Wales as well as for the forty-six individual counties. Additionally, successions of maps were created for each of these counties, depicting the labour shares of the three main sectors (primary, secondary, tertiary) at the registration district level.

The picture of the Industrial Revolution which emerges from these tables and maps differs dramatically from the traditional one. There was no structural shift from agriculture to manufacturing during the Industrial Revolution; instead, this shift took place from the second half of the sixteenth to the early eighteenth century, with manufacturing overtaking agriculture as the largest male employer in c.1740. Whilst agriculture continued to decline in occupational importance after 1740, it was to the service sector rather than manufacturing to which superfluous labour flowed; whilst only one in eight men were employed in the service sector in 1740, this had risen to one in five a century later. But the occupational data also make clear that such national observations are only a small part of the story. The truly spectacular developments were regional in nature, with highly diverse trajectories for different parts of country. England and Wales witnessed rapid concentration of function, with regional economies focusing on their specific strengths, all tied together by a continuously growing number of transport workers. Where the north-west of England and the West Midlands rapidly industrialised, many southern English counties witnessed equally rapid de-industrialisation. Norfolk’s secondary sector labour share, for example, fell from a high of sixty-three per cent in 1700 to thirty-four per cent in 1820. Functional concentration took place at local levels too, as the example of Cheshire (see figure) demonstrates. Similarly, industry and services became more and more concentrated in urban areas; whereas half the secondary sector workers in 1700 were rural, this was the case for only one in three a century later.

Figure: Share of adult men working in the secondary sector (Cheshire, 1620-1820)

 

References:
1.  Lewis, ‘Economic development with unlimited supplies of labour’, The Manchester School, 22:2 (1954), pp. 105-38.

 2.  From his Nobel Prize lecture titled ‘Modern economic growth: findings and reflections’, http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1971/kuznets-lecture.html.

3.   Rostow, The stages of economic growth: a non-communist manifesto, 3d edn (Cambridge: Cambridge University Press, 1991), p. 71.

4.   Deane and Cole, British economic growth, 1688-1959: trends and structure, 2nd edn (Cambridge: Cambridge University Press, 1967), p. 137; Crafts, British economic growth during the Industrial Revolution (Oxford: Clarendon, 1985), pp. 11-7; Broadberry et al, British economic growth, 1270-1870 (Cambridge: Cambridge University Press, 2015), pp. 345-60.

 5. Holmes, ‘Gregory King and the social structure of pre-Industrial England’, Transactions of the Royal Historical Society, 27 (1977), p. 63.

I am currently finishing my PhD dissertation which will serve as the basis of a number of papers on the methodology and conclusions described above as well as a planned book jointly authored with Leigh Shaw-Taylor and Tony Wrigley. More generally, the baptism and probate data offer a uniquely detailed basis to (re)analyse issues of economic development at regional, local, and national scales – there is much work to be done!

Sebastian Keibek, sk571@cam.ac.uk

From VOX – Comparative advantage in manufacturing: A look back at the late Victorian ‘workshop of the world’

Modern discussions about a country’s ‘decline in manufacturing’ are seldom meaningful. Such talk of industrialisation and deindustrialisation across the entire sector tends to ignore important variation across individual industries. This column draws lessons from the revealed comparative advantage of late-Victorian Britain – the ‘workshop of the world’. Advantage lay mainly in industries that were relatively…

via The late Victorian ‘workshop of the world’ — VoxEU.org: Recent Articles

From the LSE Business Review – GDP per capita: from measurement tool to ideological construct

An excellent reading suggestion from the LSE Business Review

GDP per capita: from measurement tool to ideological construct