Are businessmen from Mars and businesswomen from Venus? An analysis of female business success and failure in Victorian and Edwardian England

by Jennifer Aston (Oxford University)  and Paulo di Martino (University of Birmingham)

The full paper was published on the Economic History Review, accessible here

 

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Fashion in Edwardian England

Do women and men trade in different ways? If so, why? And are men more or less successful than women? These are very important questions not just, or not only, for the academic debate, but also for the policy implications that might emerge, especially in countries such as the UK where, rightly or wrongly, we believe in personal entrepreneurship as one of the main antidotes to unemployment and to the crisis of big business.

In economic history, it has traditionally been argued that women and men traded in similar ways up to the industrial revolution but, since then, women have ben progressively relegated to a “separate sphere” allowed, at most, some engagement with naturally “female” occupations such as textiles or food provision. Although more recent literature has strongly undermined this view, a lot of ground has still to be covered, especially about the period post 1850s.

We approach this debate by starting with a simple question about business “success” across gender: did women happen to fail more likely than men? Thanks to the reconstruction of original data on personal bankruptcy derived from contemporary official publications by the Board of Trade, this research suggests that this was not the case. In fact, depending on how prudently data on the number of female entrepreneurs are looked at, women appear more successful in, at least, keeping their businesses alive.

This finding, however, only paved the way for more questions. In particular, had the narrative of women only dealing with traditional and safe industries and operating in semi-informal businesses been true, what we observe via the lens of official statistics would be just a distorted view. This researched focussed on other primary sources: the reports of about 100 women whose businesses failed around the turn of the century. The findings support the initial hypothesis: although smaller than male counterparts (hence, in fact, riskier), female businesses were not hidden away from the public sphere, the official trading places, or the rules of the formal credit market. So, boarding house keeper Eleanor Bosito and the hotelier Esther Brandon were declared bankrupt and subject to formal proceedings despite having very few creditors who all lived within five miles from the businesses of the two women.  with unsecured debts of about £160 faced bankruptcy as a result of the petition filed by Jane Davis, a widow who lived less than half a mile from Agnes’s home and had lent her the sum of £5. This was the same destiny faced by Elizabeth Goodchild a businesswoman who, contrary to the other cases, operated on a large scale with suppliers and clients from all around Britain and Europe. This evidence reveals that, first of all, small scale trade was thus not necessarily the rule for women and, even when it was the case, it did not coincide with informality or sheltering from the “rules of the game”.

Businesswomen then did not come from, nor traded on, a different planet and certainly did not need the patronising protection of a male-dominated institutional environment. Instead the legal system forged ad hoc rules for married woman, via specific provisions in Bankruptcy Laws which lifted them from any responsibility. These level of defence, similar only to the one available to lunatics and children, proved ineffective. Or, in fact, the perfect background for frauds: in 1899 a spinster who was due to be declared bankrupt got married before the actual beginning of the procedure, thus avoiding any legal consequence (and, hopefully, having found love too).

In conclusion, this research indicates that Victorian and Edwardian businesswomen were perfectly able to trade in a fashion similar to the one of their male counterpart and, if anything, they were more successful. This leads to a basic and probably intuitive policy implication: if we want more women to successfully engage in business, all we have to do is to remove the economic, social, and cultural barriers that limit their access to opportunities.

Employment, retirement and pensions: the Victorian era as a golden age for the elderly

by Tom Heritage (University of Southampton)

Elderlyspinnera
Irish spinning wheel – around 1900
Library of Congress collection

For far too long, our elderly ancestors have been viewed through the prism of the National Health Service and the modern welfare state: old people are regarded as a burden, taking out of society rather than contributing. In contrast, this study of census data for five counties across England and Wales from 1851 to 1911 reveals a reciprocal relationship between those living in old age and wider society.

First, across the whole period, 86-93% of men aged 60 and over were in employment. Even if we exclude those in workhouses, the figure is 80-85%.

Most old men worked in agricultural and general labouring, although an increase was evident by 1911 in the mining industry in Glamorgan and metal manufacturing in Sheffield. Bricklaying, house painting, dock labouring and commercial sales were also pursued in urban areas. Labour force participation rates were higher among men in their sixties than among men in their seventies and eighties.

Second, from 1851 to 1911, between a sixth and a third of women aged over 60 were in employment. Although their occupations were less diverse than those of men, the majority were based in domestic service.

Old women were also involved in cotton and silk textiles and in the manufacture of straw hats. Over time, though, the employment rates of old women did not increase like those of men, owing partly to foreign competition in Asian straw imports and French silks.

Third, retirement was not an innovation brought about by the creation of old age pensions. As early as 1891, over 13% of old men were described in the census as ‘retired’, with high rates in the areas favoured by today’s retirees: the coastal areas of Christchurch and Portsmouth in southern England. More old people retired than went into the workhouse.

But retirement was only an option for those who had inherited or managed to accumulate wealth, such as former smallholders, grocers, innkeepers, civil servants or military officers. Others who lacked land or capital, for example agricultural labourers, or boot and shoe makers were forced to resort to the Poor Law.

Even then, this did not always, or usually, mean the workhouse. Welfare assistance to old people in their own homes was common, especially for women. ‘Outdoor relief’, usually around 2s 6d per week, was issued as a weekly ‘pension’.

Moreover, the women who received it were not always as old as those entitled to a pension in the modern era: in Yorkshire in 1891, over 10% of old women described as ‘on relief’ were under 66, which will be the minimum pension age for women by 2020.

So is it really true to say that nowadays, ‘the elderly have never had it so good’? In a sense it is, as old people lead healthier and longer lives today than they have ever done.

But it would be wrong to conclude that old people in Victorian times were largely condemned to lives of pain and poverty. They had a wide range of experiences, and many had access to employment opportunities and sources of assistance that are no longer offered.

In terms of present day policy, we might learn something from our Victorian forebears about ways to integrate the general population in their sixties into the workforce, so that they can contribute to society as well as receive welfare.

Repost – Gentlemen and capitalism: some questions

by Dave Postles, University of Hertfordshire

Consequent upon Wiener’s and Rubinstein’s research respectively into culture and industrial capital and ‘men of wealth’, Cain et al. embarked upon the elucidation of ‘gentlemanly capitalism’, which has become a paradigm of English entrepreneurship, status and the performance of the economy.(1) Perhaps, however, we can illustrate a dichotomy by reference to contemporary literature and ethnographic writing. Ostensibly, Henry Wilcox represents this ethos of gentlemanly capitalism, although his company is a commercial enterprise rather than industrial. We should recollect, however, that, although he purchased the Onibury estate (Clun, Shropshire), he really was not enamoured of the countryside, visited the estate rarely, and abandoned it when an unpleasant incident occurred there. Nor was he especially attracted to his wife’s Howards End. His countenance of both arose from expectations of status and family rather than a desire to enjoy the lifestyle of the country elite. His natural environment was the City.(2) In contrast, Jack London excoriated the 400,000 gentlemen in the 1881 census, ‘of no occupation’ and ‘unprofitable’.(3) Such a number could not have been composed of either retired industrialists or ‘men of wealth’.

Read the full article here: http://davelinux.info/wordpress/?p=32b1bb2b9a79a7a81b8033e6a9e8a9fd33

 

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*

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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/.

 

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