Overcoming the Egyptian cotton crisis in the interwar period: the role of irrigation, drainage, new seeds, and access to credit

By Ulas Karakoc (Tobb Etü and Humboldt University) and Laura Panza (University of Melbourne)

The full paper from this blog post was published on The Economic History Review and is currently available on Early View at this link

By 1914, the Egyptian economy confronted a unique conundrum: its large agricultural sector was negatively hit by declining yields in cotton production, the main driver of the economy. Egypt was a textbook case of export-led development, because  cotton production and exports had dominated the country’s economy.  The decline in cotton yields, which came to be regarded as a “cotton crisis”, was coupled with two other constraints: land scarcity and high population density. Nonetheless, despite unfavourable price shocks, Egyptian agriculture was able to overcome this crisis in the interwar period.  The output stagnation between  1900 and the 1920s contrasts with the following recovery (Figure 1).

Figure 1. Egyptian raw cotton output, acreage under raw cotton and raw cotton yield, c.1890s-1940. Source: Annuaire Statistique (various issues)

Previous research documented that during the crisis the decline in yields was caused by expanded irrigation without sufficient drainage, which led to a higher water table and made cotton more prone to pest attacks (Radwan, 1974; Owen, 1968; Richards, 1982).  This problem was addressed when the government  introduced an extensive public works programme directed to drainage and irrigation.   Simultaneously, Egypt’s farmers changed their cotton cultivation from the long staple and low- yielding Sakellaridis to the medium-short staple and high yielding Achmouni.  This change reflected income maximizing preferences (Goldberg 2004 and 2006). Another important feature of the Egyptian economy between the 1920s and 1940s was the expansion of credit facilities to farmers. Cooperatives, and the Crèdit Agricole (1931) were established  to facilitate small landowners’ access to inputs and  small loans (Issawi, 1954, Eshag and Kamal, 1967). These credit institutions coexisted with a number of mortgage banks, among which the Credit Foncièr was the largest, servicing predominantly large owners. Figure 2 illustrates the average annual real value of Credit Foncièr land mortgages in 1,000 Egyptian pounds (1926-1939).

Figure 2.  Average annual real value of Credit Foncièr land mortgages in 1,000 Egyptian pounds (1926-1939). Source: Annuaire Statistique (various issues)

Our work investigates the extent to which these factors contributed to the recovery of the cotton sector. Specifically: to what extent can intra-cotton shifts explain changes in total output? How did the increase in public works boost production? And, what role did differential access to credit play? To answer these questions, we construct a new dataset by exploiting official statistics (Annuaire Statistique de l’Egypte) covering 11 provinces and 17 years between 1923 and 1939.

We find  that access to both finance and improved seeds significantly increased cotton output,  and the declining price premium of Sakellaridis led to a large scale switch to Achmouni.  By putting farmers’ choices and agency centre stage in our analysis, our study shows that cultivators’ response to market changes was fundamental to the recovery of the cotton sector. Access to credit was also a strong determinant of cotton output, and productivity-enhancing innovations in agriculture (Glaeser, 2010).

Surprisingly, perhaps,  our results show that the expansion of irrigation and drainage did not have a direct effect on output (in the same or following year). However, we cannot completely rule out the role played by improved irrigation infrastructure for two reasons: first, we do not observe investments in private drains, and thus we cannot empirically assess the potential complementarities between private and public drainage. Second, we find some evidence pointing to the cumulative effect of drainage pipes, two and three years after installation.

We also find that the structure of land ownership, specifically the presence of large landowners, contributed to output recovery. Thus, despite the attempted institutional innovations aimed at giving small farmers better access to credit, large landowners benefitted disproportionally from credit availability. This observation accords  with Egypt’s extreme inequality of land holdings.

To contact the authors:

Ulas Karakoc, ulaslar@gmail.com

Laura Panza, lpanza@unimelb.edu.au

References:

Eshag, E., and Kamal, M.A.,  “A Note on the Reform of the Rural Credit System in U.A.R (Egypt).” Bulletin of the Oxford University Institute of Economics & Statistics 29, no. 2 (1967): 95–107. https://doi.org/10.1111/j.1468-0084.1967.mp29002001.x.

Glaeser, B. The Green Revolution Revisited: Critique and Alternatives. Taylor & Francis, 2010.

Goldberg, E. “Historiography of Crisis in the Egyptian Political Economy.” In Middle Eastern Historiographies: Narrating the Twentieth Century, edited by I. Gershoni, Amy Singer, and Hakan Erdem, 183–207. University of Washington Press, 2006.

———. Trade, Reputation and Child Labour in the Twentieth-Century Egypt. Palgrave Macmillan, 2004.

Issawi, C. Egypt at Mid-Century. Oxford University Press, 1954.

Owen, R. “Agricultural Production in Historical Perspective: A Case Study of the Period 1890-1939.” In Egypt Since the Revolution, edited by P. Vatikiotis, 40–65, 1968.

Radwan, S. Capital Formation in Egyptian Industry and Agriculture, 1882-1967. Ithaca Press, 1974.

Richards, A. Egypt’s Agricultural Development, 1800-1980: Technical and Social Change. Westview Press, 1982.

COVID-19 and the food supply chain: Impacts on stock price returns and financial performance

This blog is  part of the Economic History Society’s blog series: ‘The Long View on Epidemics, Disease and Public Health: Research from Economic History’.

By Julia Höhler (Wageningen University)

As growing evidence about COVID-19 and its effects on the human body and transmission mechanisms emerges, economists are now making progress in understanding the impact of the global pandemic on the food supply chain. While it is apparent that many companies were affected, the nature and magnitude of the effects continue to require investigation.  A special issue of the Canadian Journal of Agricultural Economics on ‘COVID-19 and the Canadian agriculture and food sectors’, was among the first publications to examine the  possible effects of COVID-19 on food-supply.  In our ongoing work we take the next step and ask the question: How can we quantify the effects of COVID-19 on companies in the food supply chain?

Figure 1. Stylized image of supermarket shopping Source: Oleg Magni, Pexels

Stock prices as a proxy for the impact of COVID-19

One way to quantify the initial effects of COVID-19 on companies in the food supply chain is to analyse stock prices and their reaction over time. The theory of efficient markets states that stock prices reflect investors’ expectations regarding future dividends. If stock prices fluctuate strongly, this is a sign of lower expected returns and higher risks. Volatile stock markets can increase businesses’ financing costs and, in the worst case, threaten their liquidity. At the macroeconomic level, stock prices can also be useful to indicate the likelihood of a future recession. For our analysis of stock price reactions, we have combined data from different countries and regions. In total, stock prices for 71 large stock-listed companies from the US, Japan and European were collected. The companies’ activities in our sample cover the entire supply chain from farm equipment and supplies, agriculture, trade, food-processing, distribution, and retailing.

Impact on stock price returns comparable to the 2008 financial crisis

 We began by  calculating the logarithmic daily returns for the companies’ stocks and their average. Second, we compared these average returns with the performance of the S&P 500.  Figure 2, below,  shows the development of average daily returns from 2005 to 2020. Companies in the S&P 500 (top) achieved higher returns on average, but also exhibited higher fluctuations than the average of the companies we examined (bottom). Stock price returns fluctuated particularly strongly during the 2008 financial crisis. The fluctuations since the first notification of COVID-19 to the WHO in early January to the end of April 2020 (red area) are comparable in their magnitude. The negative fluctuations in this period are somewhat larger than in 2008. Based on the comparison of both charts, it can be assumed that stock price returns of large companies in the food supply chain were on average less affected by the two crises. Nevertheless, a look at the long-term consequences of the 2008 financial crisis suggests that a wave of bankruptcies, lower financial performance and a loss of food security may still follow.

Figure 2. Average daily returns, for the S & P 500 (top panel) and 71 food-supply companies (FSC), lower panel, 2005-2020. Source: Data derived from multiple sources. For further information, please contact the author.

Winners and losers in the sub-sectors

In order to obtain a more granular picture of the impact of COVID-19, the companies in our sample  were divided into sub-sectors, and their stock price volatility was calculated between January and April, 2020. Whereas food retailers and breweries experienced relatively low volatility in stock prices, food distributors and manufacturers of fertilizers and chemicals experienced relatively higher volatilities. In order to cross-validate these results, we collected information on realized profits or losses from the companies’ financial reports. The trends observed in  stock prices are also reflected in company results for the first quarter of 2020. Food retailers were able to increase their profits in times of crisis, while food distributors recorded high losses compared to the previous period. The results are likely related to the lockdowns and social distancing measures which altered food distribution channels.

Longer-term effects

Just as the vaccine for COVID-19 is still in the pipeline, research into the effects of COVID-19 needs time to show what makes companies resilient to the effects of unpredictable shocks of this magnitude. Possible research topics relate to the question of whether local value chains are better suited to cushion the effects of a pandemic and maintain food security. Further work is also needed to understand fully the associated trade-offs between food security, profitability, and climate change objectives. Another research question relates to the effects of government protective measures and company support programmes.  Cross-country studies can provide important insights here. Our project lays the groundwork for future research into the effects of shocks on companies in the food value chain. By combining different data sources, we were able to compare stock returns in times of COVID-19 with those of the 2008 crisis, and  identify differences between sub-sectors. In the next step we will use company characteristics such as profitability to explain differences in returns.

To contact the author: julia.hoehler[at] wur.nl

The Diaspora of a Diaspora: The Cassana and Rivarolo family network in the Atlantic, 1450-1530

By Andres Mesa (Università degli Studi di Teramo)

This research is due to be presented in the sixth New Researcher Online Session: ‘Spending & Networks’.

The Coast of Genoa, by Jasper Francis Cropsey, 1854. Available at Wikimedia Commons.

My project re-assesses the nature of Genoese family networks in the Atlantic, at the end of the fifteenth and early sixteenth centuries. The canonical understanding of these networks is based on three observations: family networks were highly co-dependent, centralized, and that Genoa was the centre of operations for all the Genoese. My research shows a multitude of scenarios and provides new explanations for these observations. Using a case study of the Rivarolo-Cassana family network, I show that this particular network functioned more in terms of cooperation, using a pluricentric language. As the title suggests, the economic endeavours of these merchants involved  a complex migration process. Consequently, their trading activities coincided with the interests of those in permanent settlements.

Genoese merchants chose cities in the Iberian peninsula for their homes and as a base for their  business activities. For example, Lisbon, Seville, and Valencia had a significant permanent Genoese population who were in the process of becoming naturalized Spanish and Portuguese citizens. In turn, some of the families that dominated the economic landscape of the 15th and 16th centuries disappeared in Genoa. Yet, their descendants still appear in Portugal and Spain with their original Ligurian surnames altered into Castilian or Portuguese.

The findings from my study indicate the need for a major reassessment of our understanding of Genoese family networks. The data I have collected shows that most of the day-to-day trade happened outside the family network, and the contractual relationships that emerged between partners  extended well beyond familial ties. Because the structure of private property ownership was connected to new interests and new markets, it was inevitable that these, in turn, were linked to the discovery of new lands. Consequently, The Genoese adopted a new business model based on owning the means of production for the goods they traded, particularly soap, wheat, and sugar.

Finally, I argue that the economic ties between families and family members, did not always translate into a share of business responsibility or welfare. The relationships and partnerships functioned in terms of very particular historical and geographical contexts. The contracts were between ‘individuals (Societas) to share losses and gains.’ Thus, liability was an individual matter despite the frequent use of jurists.


Andrés Mesa

Twitter: @mesaandres

The Paradox of Redistribution in time: Social spending in 54 countries, 1967-2018

By Xabier García Fuente (Universitat de Barcelona)

This research is due to be presented in the sixth New Researcher Online Session: ‘Spending & Networks’.

Money of various currencies. Available at Wikimedia Commons.

Why are some countries more redistributive than others? This question is central to current welfare state politics, especially in view of rising levels of inequality and the ensuing social tensions. Since coming to power in 2019, Brazil’s far-right government has restricted access to Bolsa Familia—a conditional cash-transfer program—despite its success at reducing poverty with a very low cost (less than 0.5% of national GDP). In richer countries, the social-democratic project is said to be obsolete, as left-wing parties forsake egalitarian policies to cater to economic winners (Piketty, 2020).

How can we make sense of this sort of distributive conflict? Are there common patterns in rich and middle-income countries? My research suggests that welfare state institutions show great inertia, so we need to observe the origins of social policies to explain current redistributive outcomes. Initial policy positions —how pro-poor or pro-rich social transfers were— determine what groups emerge as net winners or net losers when social expenditure increases, which crucially affects the viability and direction of policy change.

Korpi and Palme (1998) famously suggested the existence of a Paradox of Redistribution: ‘the more we target benefits at the poor … the less likely we are to reduce poverty and inequality’. In their framework, progressive programs may be more redistributive per euro spent, but they generate zero-sum conflicts between the poor and the middle-class and obstruct the formation of redistributive political coalitions. In contrast, universal programs align the preferences of the poor and the middle-class and lead to bigger, more egalitarian welfare states. In sum, redistribution increases as transfers become bigger and less pro-poor.

Using survey micro-data provided by the Luxembourg Income Study (LIS), my research updates Korpi and Palme’s (1998) study and addresses two gaps. First, I extend the sample to 54 rich and middle-income countries, including elitist welfare states in Latin America and other middle-income countries. As Figure 1 shows, extending the sample would clearly refute the Paradox: redistribution is higher in more pro-poor countries.

Second, in line with the dynamic political arguments suggested in the Paradox, I explore the evolution of social transfers and redistribution within countries over time. Overall, countries have increased redistribution by making their transfers less pro-poor, which matches the predictions of the Paradox (see Figure 2). The relationship is especially strong in Ireland, Canada, United Kingdom and Norway. Parting from highly progressive (pro-poor) policy positions, these countries have improved redistribution increasing expenditure and reducing their bias towards the poor.

Latin American countries are a notorious exception to this pattern. They are markedly pro-rich and, contrary to the cases above, they have improved redistribution very modestly by becoming more pro-poor (see Figure 3).

What does it mean that redistribution increases as transfers become more or less pro-poor? United Kingdom and Mexico provide a good example (see Figure 4). In the United Kingdom, redistribution through social transfers increased from 7 Gini points in 1974 to 19 Gini points in 2016. In the same period, the share of total social transfers received by the poorest 20% of the population decreased from 35% to 18%. In Mexico, the share of total social transfers obtained by the poorest 20% went from 2% in 1984 to 10% in 2016, while the share obtained by the richest 20% decreased from 66% to 51%. Yet, despite these advances, redistribution through social transfers in Mexico remains very low (2.5 Gini points in 2016, from 0.1 Gini points in 1984).

Conclusions

In countries with pro-poor social transfers, extending coverage involves reaching up the income ladder to include richer constituencies, which narrows the gap between net winners and net losers. This reduces the salience of distributive conflicts and eases welfare state expansion, leading to higher redistribution. However, as transfers become more pro-rich the margin to leverage the progressivity-size trade-off narrows, which helps explain the inability of current welfare states to increase redistribution as inequality rises.

In countries with pro-rich social transfers, extending coverage involves reaching down the income ladder to include the poor. Launching programs for the poor requires rising taxes or cutting the benefits of privileged insiders, which creates a clearly delineated gap between net winners and net losers. This increases the salience of distributive conflicts, leading to smaller, less egalitarian welfare states.

In sum, social policy design is very persistent because it crucially shapes distributive conflicts. Advanced welfare states have increased redistribution by getting bigger and less progressive (less pro-poor). This fits with historical evidence that advanced welfare states grew from minimalist cores, but it also describes contemporary policy change. Following this same reasoning, elitist welfare states in developing regions will find it difficult to become more egalitarian. Figure 5 shows the persistency of distributive outcomes across welfare regimes.

References

Korpi, W. and Palme, J. (1998). The paradox of redistribution and strategies of equality: Welfare state institutions, inequality, and poverty in the western countries. American Sociological Review, 63(5):661–687.

Piketty, T. (2020). Capital and Ideology. Harvard University Press.


Xabier García Fuente

Twitter: @xabigarf

Settler capitalism: company colonisation and the rage for speculation (NR Online Session 5)

By Matthew Birchall (Cambridge University)

This research is due to be presented in the fifth New Researcher Online Session: ‘Government & Colonization’.

 

Birchall1
Scan from “Historical Atlas” by William R. Shepherd, New York, Henry Holt and Company, 1923. Available at Wikimedia Commons.

My research explores the little-known story of how company colonisation propelled the settler revolution. Characterised by mass emigration to Britain’s settler colonies during the long nineteenth century, the settler revolution transformed Chicago and Melbourne, London and New York, drawing all into a vast cultural and political network that straddled the globe. But while the settler revolution is now well integrated into recent histories of the British Empire, it remains curiously disconnected from the history of global capitalism.

Prising open what I call the inner lives of colonial corporations, I tell the story of how and why companies remade the settler world. It takes a fresh look at the colonial history of Australia and New Zealand in an attempt to map a new history of chartered colonial enterprise, one that is as sensitive to rhetoric as it is to ledgers documenting profit and loss. We tend to understand companies in terms of their institutional make-up, that is to say their legal and economic structure, but we sometimes forget that they are also cultural constructions with very human histories.

The story that I narrate takes us from the boardrooms of the City of London back out to the pastures of the colonial frontier: it is a snapshot of settler capitalism from the inside out. From the alleys and byways immortalised in Walter Bagehot’s Lombard Street (1873) to the sheep-runs of New South Wales and the South Canterbury plains, company colonisation has a global history – a history that links the Atlantic and the antipodes, Māori and metropolitan capital, country and the City of London. My study marks a first attempt at bringing this history to light.

In digging deep into the social and cultural history of company colonisation, I focus in particular on the legitimating narratives that underwrote visions of colonial reform. How did these company men make sense of their own ventures? What traditions of thought did they draw on to justify the appropriation of indigenous lands? How did the customs and norms of the City shape the boundaries of what was deemed possible, let alone appropriate in the extra-European world? I aim to show that company colonisation was as much an act of the imagination as it was the product of prudent capital investment.

My research engages with large questions of contemporary relevance: the role of corporations in the making of the modern world; the relationship between empire and global capitalism; and the salience of social and cultural factors in the development of corporate enterprise. I hope to enrich these debates by injecting the discussion with greater historical context.

 

 

Coordinating Decline: Governmental Regulation of Disappearing Horse Markets in Britain, 1873-1957 (NR Online Session 5)

By Luise Elsaesser (European University Institute)

This research is due to be presented in the fifth New Researcher Online Session: ‘Government & Colonization’.

 

Elsaesser1
Milkman and horse-drawn cart – Alfred Denny, Victoria Dairy, Kew Gardens, Est 1900. Available at Wikimedia Commons.

The enormous horse drawn society of 1900 was new. An unprecedented amount of goods and people could only be moved by trains and ships between terminal points and therefore, horses were required by anybody and for everything to reach its final destination. But, the moment the need for horsepower peaked, new technologies had already started to make the working horse redundant for everyday economic life. The disappearance of the horse was a rapid process in the urban areas, whereas the horse remained an economic necessity much longer in other areas of use such as agriculture. The horses decline left behind deep traces causing fundamental changes in soundscapes, landscapes, and smells of human environment and economic life.

Elsaesser2

Against prevailing narratives of a laissez-faire approach, the British government monitored and shaped this major shift in the use of energy source actively. The exploration of the political economy of a disappearing commercial good examines the regulatory practices and ways the British government interacted with producers and consumers of markets. This demonstrates that governmental regulations are inseparable from modern British economy and that government intervention follows the careful assessment of costs and benefits as well as self-interest over the long time period.

Public pressure groups such as the RSPCA as well as social and business elites were often strongly connected to government circles embracing the opportunity to influence policy outcomes. For instance, the Royal Commission on Horse Breeding was formed in December 1887 is telling because it shows where policy making power that passed through Westminster originated. The commissionaires were without exception holders of heredity titles, members of the gentry, politicians, or businessmen, and all were avid horsemen and breeders. To name but two, Henry Chaplin, the President of the Board of Agriculture, had a family background of Tory country gentlemen and was a dedicated rider, and Mr. John Gilmour, whose merchant father grew rich in the Empire, owned a Clydesdale stud of national reputation. Their self-interest and devotion to horse breeding seems obvious, especially in the context of the agricultural depression when livestock proved more profitable than the cultivation of grain.

Although economic agents of the horse markets were often moving within government circles, they had to face regulations. For example, a legal framework was developed which fashioned the scope of manoeuvre for import and export markets for horses. The most prominent case during the transition from horse to motor-power was the emergence of an export market of horses for slaughter. British charitable organisations such as the RSPCA, the Women’s Guild for Empire, and the National Federation of Women’s Institute pressured the government to prevent the export of horses for slaughter on grounds of “national honour” since the 1930s. However, though the government never publicly admitted it, the meat market was endorsed to manage the declining utility of horsepower. With technologies becoming cheaper, horsemeat markets were greeted by large businesses such as railway companies as way to dispose of their working horses without making a financial loss. Hence, the markets for working horses were not merely associated with the economic use and demand for their muscle power but were linked to government regulation.

Ultimately, an analysis of governmental coordination can be linked to wider socio-cultural and economic systems of consumption because policy outcome indeed influenced the use of the horse but likewise coordination was monitored by the agents of the working horse markets.


Luise Elsaesser

luise.elsaesser@eui.eu

Twitter: @Luise_Elsaesser

How to Keep Society Equal: The Case of Pre-industrial East Asia (NR Online Session 4)

By Yuzuru Kumon (Bocconi University)

This research is due to be presented in the fourth New Researcher Online Session: ‘Equality & Wages’.

Kumon2

Theatrum orbis terrarum: Map Tartaria, by Abraham Ortelius. Available at State Library Victoria.

 

 

Is high inequality destiny? The established view is that societies naturally converge towards high inequality in the absence of catastrophes (world wars or revolutions) or the progressive taxation of the rich. Yet, I show that rural Japan, 1700-1870, is an unexpected historical case in which a stable equality was sustained without such aids. Most peasants owned land, the most valuable asset in an agricultural economy, and Japan remained a society of land-owning peasants. This contrasts with the landless laborer societies of contemporary Western Europe which were highly unequal. Why were the outcomes so different?

My research shows that the relative equality of pre-industrial Japan can partly be explained by the widespread use of adoptions in Japan, which was used as a means of securing a male heir. The reasoning becomes clear if we first consider the case of the Earls Cowper in 18th century England where adoption was not practiced. The first Earl Cowper was a modest landowner and married Mary Clavering in 1706. When Mary’s brother subsequently died, she became the heiress and the couple inherited the Clavering estate. Similar (miss)fortunes for their heirs led the Cowpers to become one of the greatest landed families of England. The Cowpers were not particularly lucky, as one quarter of families were heirless during this era of high child mortality. The outcome of this death lottery was inequality.

Had the Cowpers lived in contemporary Japan, they would have remained modest landowners. An heirless household in Japan would adopt a son. Hence, the Claverings would have an adopted son and the family estate would have remained in the family. To keep the blood in the family, the adopted son may have married a daughter if available. If unavailable, the next generation could be formed by total strangers but they would continue the family line. Amassing a fortune in Japan was unrelated to demographic luck.

Widespread adoptions were not a peculiarity of Japan and this mechanism can also explain why East Asian societies were landowning peasant societies. China also had high rates of adoption in addition to equal distributions of land according to surveys from the 1930s. Perhaps more surprisingly, adoptions were common in ancient Europe where the Greeks and Romans practiced adoptions to secure heirs. For example, Augustus, the first emperor of the Roman Empire, was adopted. Adoptions were a natural means of keeping wealth under the control of the family.

Europe changed due to the church discouraging adoptions from the early middle ages, leading to adoptions becoming rarities by the 11th century. The church was partially motivated by theology but also by the possibility that heir-less wealth would get willed to the church. They almost certainly did not foresee that their policies would lead to greater wealth inequality during the subsequent eras.

 

Figure 1. Land Distribution under Differing Adoption Regimes and Impartible Inheritance

Kumon1

 

My study shows by simulation that a large portion of the difference in wealth inequality outcomes between east and west can be explained by adoption (see figure 1). Societies without adoption have wealth distribution that are heavily skewed with many landless households unlike those with adoptions. Therefore, family institutions played a key role in determining inequality which had huge implications for the way society was organized in these two regions.

Interestingly, East Asian societies still have greater equality in wealth distributions today. Moreover, adoptions still amount to 10% of marriages in Japan which is a remarkably large share. Adoption may have continued creating a relatively equal society in Japan up to today.

Did the Ottomans Import the Low Wages of the British in the 19th Century? An Examination of Ottoman Textile Factories (NR Online Session 4)

By Tamer Güven (Istanbul University)

This research is due to be presented in the fourth New Researcher Online Session: ‘Equality & Wages’.

 

Guven1
The Istanbul Grand Bazaar in the 1890s. Available at Wikimedia Commons.

Compared to the UK and Western Europe, there are a limited number of studies on wages and standards of living in the Ottoman empire. For the Ottoman empire the only source that can provide regular wage data for industry are the Ottoman state factories established in the 1840s to meet the needs of the state’s growing and centralized military and bureaucracy. Limitations in the sources of data are explained by the relative absence of industrial wage series in the monographies on Ottoman industrial institutions, and that manufacturing mainly comprised small manufacturers who did not keep records. This paucity in data may change as the Ottoman Archives become fully catalogued. The main aim of this study is to construct a wage series using the wage ledgers of those working in state factories. Consequently, I examined four prominent textile-related factories: Hereke Imperial Factory, Veliefendi Calico Factory, Bursa Silk Factory, and İzmit Cloth Factory. Only the Hereke Factory offers a 52-year wage series between 1848-1899. The data for the Veliefendi Factory started in 1848 but are disrupted in 1876 as the factory was transferred to military rule; the same applies to the İzmit Factory, which was established in 1844, but transferred to military rule in 1849.

I created two separate daily and monthly wage series to determine how many days workers worked per month and how this changed during the nineteenth century. Thus, not only the workers’ potential wages but also the workers’ observed monthly wages can be analysed. Some groups of workers were eliminated from the dataset for a variety of reasons. For example, civilian officials and masters working in factories were excluded because of their relatively high wages. Conversely, because of their relatively low wages, I also exclude carpet weavers —  mostly young girls and children.  I preferred to use median values for monthly wage series to include as many workers as possible in the analysis. As with much historical data, the wage series created in this study are incomplete. To overcome this I complement data for the Hereke Factory wage series with data from the  Veliefendi and Bursa Factories.

My results indicate that daily real wages increased by only by 0.03 per cent,  per annum,  between  1852 and 1899.  However, the real monthly wages of Hereke Factory workers rose by 0.11 per cent, per annum,  between 1848 and 1899, but by 0.24 per cent per annum using 1852 as a starting point.  Monthly wages increased faster than daily wages, but at the cost of more workdays for workers. Average workdays increased by 0.44 per cent, per annum over the span of the period. Although the Veliefendi Factory provides a narrower wage series from 1848 to 1876, it supports this pattern. Limited,  but prominent examinations of Ottoman wage history claim that construction, urban, and agricultural workers’ wages increased, albeit at different rates in the same period. How can we explain the increase in wages of other sectors when the wages of textile workers were stagnant?

Many observations on the Ottoman cities has shown that industrial production, particularly in the textile sector, shifted from urban to rural,  or from craft workshops to houses, to compete with cheap British yarn and fabric in the 19th century. According to my calculations, imports of Ottoman cotton yarn increased by a factor of 25 to 50 in the 19th century. This trend was most pronounced after the 1838 Anglo-Turkish Convention, when cheap English products were imported into the Ottoman Empire, and Ottoman producers sought cheaper labour.  Labour-saving machines both facilitated the export of  British yarns and fabrics to, and lowered wages in, the Ottoman empire.  Although the wage series for the Hereke factory,  and, to a more limited extent,  the Veliefendi factory provide evidence in support of this hypothesis, numerous studies on Ottoman industry in the 19th-century support the same argument, though without a wage series.

Women in the German Economy: A Long Way to Gender Equality (NR Session 4)

By Theresa Neef (Freie Universität Berlin)

This research is due to be presented in the fourth New Researcher Online Session: ‘Equality & Wages’.

 

Neef2
Scanned image of a mid-1930s postcard depicting Unter den Linden in Berlin. Available at Wikimedia Commons.

Female employees in the European Union (EU-27) earn, on average, about 85 per cent of the wages received by male employees. While some countries such as France and Sweden exhibit closer pay equality, women in Germany face a larger gap and receive just 79 per cent of the average male wage, according to the 2018 results from Eurostat 2020. How did this state of affairs emerge?

To understand contemporary pay inequality, it is vital to take a long-run perspective and look at the development of the gender pay ratio in Germany since 1913.  An in-depth analysis of historical inquiry reports and publications by the statistical offices reveals that in 1913 women in Germany earned around 44 per cent of male wages. Although  World War I led to a temporary increase in women’s pay in blue-collar occupations, this trend was soon reversed and the gender-segregated labour market was re-established following demobilization.

The interwar period brought about the most dynamic leap in gender relations during the 20th century. While in 1920 German women earned on average 45% of a man’s average pay, by 1937 this share had increased to 61%, a consequence of women’s occupational transition and the more progressive institutional framework adopted during the Weimar Republic.

With the growing number of white-collar jobs, young females had job opportunities that were better paid and more socially accepted than the work in low-paid domestic services or agriculture. That was an opportunity they took: from 1910 to 1960, women increased their share in those fast-growing occupations from 18% to 45%, while their share decreased in agricultural work. This trend most likely contributed to women’s wage gains relative to men.

During the Weimar Republic, a new constitution and a more progressive institutional framework fostered further equalization of earnings, especially in the white-collar occupations. In 1919, the Weimar constitution introduced compulsory schooling for all youths under 18 years irrespective of gender. For the first time, this law provided girls with the same chances to receive vocational education and an apprenticeship as their male peers. All youths that worked in commercial and industrial firms were obliged to attend vocational commercial school at least once a week for two to three years.  Before the introduction of this law, employers hardly invested in girls’ apprenticeships because women were seen as transient employees leaving the labour force upon marriage. This non-gendered schooling obligation led to a dynamic convergence of vocational training between boys and girls.

In the post-1945 period, the gender pay gap decreased in Germany from 65 percent in 1960 to 74 per cent  twenty years later. In contrast,  Sweden took the lead among European countries and by 1980, the gender pay gap was just 14 percentage points. However, since the 1980s, the gender pay gap has stagnated in many European countries.

 

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Figure 1: Gender pay ratio, Germany, Sweden, and the USA. Swedish and German series based on mean earnings; US-American time series based on median earnings if not indicated differently. The German time series covers the German Reich, the Federal Republic of Germany and reunified Germany (hollow items).

 

All in all, the long-run perspective shows that since the beginning of the 20th century Germany has persistently exhibited a lower gender pay equality than other European economies, such as Sweden, despite the important improvement observed in the interwar period. In the postwar period, the gap between Germany and Sweden widened further due to slower progress in the young Federal Republic. These results suggest that differences in gender pay inequality across countries can be traced back to historical roots that go beyond the developments in the past forty years.

The Growth Pattern of British Children, 1850-1975

By Pei Gao (NYU Shanghai) & Eric B. Schneider (LSE)

The full article from this blog is forthcoming in the Economic History Review and is currently available on Early View.

 

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HMS Indefatigable with HMS Diadem (1898) in the Gulf of St. Lawrence 1901. Available at Wikimedia Commons.

Since the mid-nineteenth century, the average height of adult British men increased by 11 centimetres. This increase in final height reflects improvements in living standards and health, and provides insights on the growth pattern of children which has been comparatively neglected. Child growth is very sensitive to economic and social conditions: children with limited nutrition or who suffer from chronic disease, grow more slowly than healthy children. Thus, to achieve such a large increase in adult height, health conditions must have improved dramatically for children since the mid-nineteenth century.

Our paper seeks to understand how child growth changed over time as adult height was increasing. Child growth follows a typical pattern shown in Figure 1.  The graph on the left shows the height by age curve for modern healthy children, and the graph on the right shows the change in height at each age (height velocity). We look at three dimensions of the growth pattern of children: the final adult height that children achieve, i.e. what historians have predominantly focused on to date; the timing (age) when the growth velocity peaks during puberty,  and, finally,   the overall speed of maturation which affects the velocity of growth across all ages and the length of the growing years.

 

Figure 1.         Weights and Heights for boys who trained on HMS Indefatigable, 1860s-1990s.

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Source: as per article

 

To understand how growth changed over time, we collected information about 11,548 boys who were admitted to the training ship Indefatigable from the 1860s to 1990s (Figure 2).  This ship was located on the River Mersey near Liverpool for much of its history and it trained boys for careers in the merchant marine and navy. Crucially, the administrators recorded the boys’ heights and weights at admission and discharge, allowing us to calculate growth velocities for each individual.

 

Figure 2.         HMS Indefatigable

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Source: By permission, the Indefatigable Old Boys Society

 

We trace the boys’ heights over time (grouping them by birth decade) and find that they grew most rapidly during the interwar period. In addition, the most novel finding was that for boys born in the nineteenth century there is little evidence that they experienced a strong pubertal growth spurt unlike healthy boys today. Their growth velocity was relatively flat across puberty.  However, starting with the 1910 birth decade, boys began experiencing more rapid pubertal growth similar to the right-hand graph in Figure 1. The appearance of rapid pubertal growth is a product of two factors: an increase in the speed of maturation, which meant that boys grew more rapidly during puberty than before and, secondly,  a decrease in the variation in the timing of the pubertal growth spurt, which meant that boys were experiencing their pubertal growth at more similar ages.

 

Figure 3.         Adjusted height-velocity for boys who trained on HMS Indefatigable.

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Source: as per article

 

This sudden change in the growth pattern of children is a new finding that is not predicted by the historical or medical literature.  In the paper, we show that this change cannot be explained by improvements in living standards on the ship and that it is robust to a number of potential alternative explanations.   We argue that reductions in disease exposure and illness were likely the biggest contributing factor. Infant mortality rates, an indicator of chronic illness in childhood, declined only after 1900 in England and Wales, so a decline in illness in childhood could have mattered. In addition, although general levels of nutrition were more than adequate by the turn of the twentieth century, the introduction of free school meals and the milk-in-schools programme in the early twentieth century,  likely also helped ensure that children had access to key protein and nutrients necessary for growth.

Our findings matter for two reasons. First, they help complete the fragmented picture in the existing historical literature on how children’s growth changed over time. Second, they highlight the importance of the 1910s and the interwar period as a turning point in child growth. Existing research on adult heights has already shown that the interwar period was a period of rapid growth for children, but our results further explain how and why child growth accelerated in that period.

 


Pei Gao

p.gao@nyu.edu

 

Eric B. Schneider

e.b.schneider@lse.ac.uk

Twitter: @ericbschneider