Monthly Archives: June 2015

Inventors and manufacturers, and their economics (Version 1.0)

Posted on by

Courtesy of Anton Howes (his economic history blog is here) and Marc Andreessen, here are other works of political economy written by 19th century people who could and did make things. There is obviously a rich vein of literature to revisit here. This post is now updated with better links, also courtesy of Anton.

Here is his list, with his comments and a few notes from me.

“The one that immediately sprang to mind was the chemist Andrew Ure (1778-1857) and his [amazon_link id=”5519176558″ target=”_blank” ]The Philosophy of Manufactures[/amazon_link] (1835). (Free online copy.) I believe he had other works on political economy too.

[amazon_image id=”5519176558″ link=”true” target=”_blank” size=”medium” ]The Philosophy of Manufactures[/amazon_image]

My note: Here’s another, [amazon_link id=”1231159510″ target=”_blank” ]The Cotton Manufacture of Great Britain[/amazon_link]:

[amazon_image id=”1231159510″ link=”true” target=”_blank” size=”medium” ]The cotton manufacture of Great Britain systematically investigated Volume 1; with an introductory view of its comparative state in foreign countries[/amazon_image]

And a free online copy.

[amazon_link id=”1170437060″ target=”_blank” ]James Anderson[/amazon_link] (1739-1808) had quite a few writings on political economy, apparently anticipating Ricardo. Here is Observations on the means of exciting national industry. My note:  this article says he critiqued Adam Smith.

John Marshall (1765-1845), the flax spinning pioneer, wrote a book called The Economy of Social Life in 1825. I’m not sure if it’s on political economy, but he certainly lectured on the topic later on in life.

[amazon_link id=”1171962851″ target=”_blank” ]John Sinclair[/amazon_link] (1754-1835), the agricultural pioneer and writer, had quite a few works touching on political economy and the national finances. He was apparently a notorious bore offering unsolicited advice on the latter topic in particular. Here is his History of the Public Revenue of the British Empire.  [amazon_link id=”1438505582″ target=”_blank” ]Arthur Young [/amazon_link](1741-1820) may have similar works, but was a little more focused on just agriculture.

[amazon_image id=”1170437060″ link=”true” target=”_blank” size=”medium” ]Account of the origin of the Board of Agriculture, and its progress for three years after its establishment. By the president.[/amazon_image]  [amazon_image id=”B00A1V6SOA” link=”true” target=”_blank” size=”medium” ]An Account of the Systems of Husbandry Adopted in the More Improved Districts of Scotland: With Some Observations On the Improvements of Which They … Agriculture with a View of Explaining How F[/amazon_image]

[amazon_link id=”1152894218″ target=”_blank” ]Andrew Yarranton[/amazon_link] (1619-1684), the metallurgist and civil engineer, has quite an interesting work called “England’s Improvement by Land and Sea: how to Beat the Dutch without Fighting” (2 vols., 1677–81). Quite interesting, particularly for the time. Here is the free online copy.

[amazon_image id=”1152894218″ link=”true” target=”_blank” size=”medium” ]England’s Improvement by Sea and Land[/amazon_image]

John Chapman (1801-1854), the inventor of the cab, had quite a few well-known (at the time) works on the political economy of India. May well be considered one of the earlier development economists! Here’s The Cotton and Commerce of India.

The actuarial and navigational pioneer Francis Baily (1774-1844) had quite a few works on political economy. One that sticks out as sounding quite interesting is called “The Rights of the Stock Brokers Defended Against the Attacks of the City of London” (1806)

Another actuarial pioneer, Robert Wallace (1697-1771), was also very prolific writing about demography and political economy. One that sounds quite intriguing is called [amazon_link id=”1142321886″ target=”_blank” ]Dissertation on the Numbers of Mankind[/amazon_link] (1753). Here’s the free online version.

[amazon_image id=”1140998420″ link=”true” target=”_blank” size=”medium” ]A dissertation on the numbers of mankind in antient and modern times: in which the superior populousness of antiquity is maintained. With an appendix, … on Mr. Hume’s Political discourse, …[/amazon_image]

A lot of people also tend to overlook [amazon_link id=”1170181791″ target=”_blank” ]Richard Price[/amazon_link]’s (1723-1791) contributions to economics. They’ve been largely overshadowed by his radical political and theological works. But it was he who originally proposed and then advised on the National Debt sinking fund, as well being the person to promote Bayes’ work on statistics and probabilities. Here is Observations on the Debt.

[amazon_image id=”1170181791″ link=”true” target=”_blank” size=”medium” ]An appeal to the public, on the subject of the national debt. The second edition. With an appendix, … By Richard Price, D.D. F.R.S.[/amazon_image]

[amazon_image id=”B00FDVBZHI” link=”true” target=”_blank” size=”medium” ]Observations on Reversionary Payments: On Schemes for Providing Annuities for Widows, and for Persons in Old Age; On the Method of Calculating the Values of Assurances on Lives; And on the National Debt. Also, … a PostScript on the Population of the Kin (Paperback) – Common[/amazon_image]

You may also be interested in the works of William Cobbett (1763-1835). [Me: best known name on this list.] He’s on my list as an agricultural pioneer, but he’s better known as a political radical and for compiling what would later be better known as Hansard. In 1815 he wrote something called [amazon_link id=”1172783411″ target=”_blank” ]Paper against Gold[/amazon_link], (available here too) but there are many other works on economics and political economy.”

[amazon_image id=”1172783411″ link=”true” target=”_blank” size=”medium” ]Cobbett’s Paper against gold: containing the history and mystery of the Bank of England, the funds, the debt, the sinking fund, the bank stoppage, the … shewing, that taxation, pauperism, poverty,[/amazon_image]

Many thanks to Anton for those. And from Marc via Twitter (@pmarca), this one by David Wells, Recent Economic Changes and Their Effect on the Production and Distribution of Wealth and the Well-Being of Society.

On The Economy of Machinery

Posted on by

[amazon_link id=”184637927X” target=”_blank” ]On The Economy of Machinery and Manufactures[/amazon_link] by Charles Babbage was published in 1832. I discovered it courtesy of Sydney Padua’s [amazon_link id=”0141981512″ target=”_blank” ]The Thrilling Adventures of Lovelace and Babbage[/amazon_link], not having known Babbage had written at all about political economy.

[amazon_image id=”1511434422″ link=”true” target=”_blank” size=”medium” ]On the Economy of Machinery and Manufactures[/amazon_image]

It’s a marvellous book. Babbage clearly had a joyous, expansive interest in everything. The first half describes and discusses all kinds of innovations in manufacturing – how machines work, what different industries have been introducing, and a long chapter on different types of copying, from copperplate printing to mass production techniques making copies of manufactured items.

The second half turns to questions of political economy and it is fascinating to see how Babbage links his observations about actual businesses that he visits – clearly, very many of them – and the price lists he sees, and the machines he has seen built – with analytical principles. He describes the importance of fixed costs and increasing returns to scale; the importance of asymmetric information in explaining many phenomena in business; the way large productivity gains depend on a reorganisation of production, but may be left untapped unless there is enough pressure from competitors because old techniques are still profitable; the phenomenon of geographic clustering for exactly the reasons Alfred Marshall more famously set out his 1890 [amazon_link id=”1573921408″ target=”_blank” ]Principles of Economics[/amazon_link]; and the sheer restless dynamism of the industrial economy. He even has thoughts about the relationship between automation and jobs.

All in all, it adds up to a very modern-seeming view of how the economy operates. Although of course it would have seemed very old-fashioned to 20th century economics, having no equations, no steady state equilibrium, no machinery of assumptions and axioms.

I love Babbage’s detailed empiricism. He is overjoyed by the potential of the division of labour, and takes Adam Smith’s example of pin manufacture. He visits pin makers of all kinds and describes the 10 stages of pin making in some detail. He tells us whether tasks are mainly done by men, women or children, and what their typical wages are. He describes the tools used and how they work. He also has a detailed account of pin making from half a century earlier. He can put a figure on the productivity gain from the division of labour!

It turns out Babbage wrote a fair bit of economics. I might move on to another of his works.

[amazon_image id=”1616407522″ link=”true” target=”_blank” size=”medium” ]Passages from the Life of a Philosopher[/amazon_image]  [amazon_image id=”110341688X” link=”true” target=”_blank” size=”medium” ]Reflections on the Decline of Science in England, and on Some of Its Causes[/amazon_image]  [amazon_image id=”B00X61XRDM” link=”true” target=”_blank” size=”medium” ]Thoughts on the principles of taxation, with reference to a property tax, and its exceptions[/amazon_image]

Generalizing about Africa (& why it’s a bad idea)

Posted on by

This morning I attended a breakfast at the Centre for Global Development at which Morten Jerven spoke about his new book, [amazon_link id=”1783601329″ target=”_blank” ]Africa: How Economists Get It Wrong[/amazon_link],” which I’m now looking forward to reading – especially after enjoying his previous book, [amazon_link id=”080147860X” target=”_blank” ]Poor Numbers: How We Are Misled by African Development Statistics[/amazon_link]. The new book is published today.

[amazon_image id=”1783601329″ link=”true” target=”_blank” size=”medium” ]Africa: Why Economists Get it Wrong (African Arguments)[/amazon_image]  [amazon_image id=”080147860X” link=”true” target=”_blank” size=”medium” ]Poor Numbers: How We are Misled by African Development Statistics and What to Do About it (Cornell Studies in Political Economy)[/amazon_image]

His talk kicked off with a critique of two successive approaches to ‘Africa’ by economists – a category refined in discussion to macroeconomists, and not absolutely all of those. The first approach was cross-country regression analysis, given its definitive shape by [amazon_link id=”0262522543″ target=”_blank” ]Robert Barro[/amazon_link], in which a dummy variable for African countries would have a negative coefficient. (Charles Kenny has an excellent critical review of growth regressions, and Dani Rodrik has a terrific paper on the limitations of trying to get policy prescriptions from this approach.) The second approach takes low growth in African countries as a given and tries to pin that to institutional failures – corruption, clientilism, lack of transparency etc – and is perhaps symbolized by Acemoglu and Robinson in their ambitious [amazon_link id=”1846684307″ target=”_blank” ]Why Nations Fail[/amazon_link]. Morten Jerven said, “There are economists who have written non-modest books.” He argued that the latter approach leads to policy prescriptions of the kind that ask, “Why aren’t you like Denmark?”

[amazon_image id=”0262522543″ link=”true” target=”_blank” size=”medium” ]Determinants of Economic Growth: A Cross-country Empirical Study (Lionel Robbins Lectures)[/amazon_image]  [amazon_image id=”B007HLIUN4″ link=”true” target=”_blank” size=”medium” ]Why Nations Fail: The Origins of Power, Prosperity and Poverty[/amazon_image]

Instead, he suggests focusing on trajectories from today’s specific situation, rather than seeking to explain deviations from a rich world ‘norm’. He argued too for, “Fingertip knowledge of each country’s data.” Yes!! The standard international datasets lead researchers to think history started in 1960, and also are misleading because they interpolate or otherwise guess to fill in the many gaps “They should leave gaps if there are no data – or at least put them in a different colour,” Jerven says.

There was some challenge from the attendees. One said that there clearly is something distinctive to explain about most African economies, where people are still poor on average. Another argued that most economists in the development field do recognise the need for a rich description of specific economies, so the book attacks a straw man. However, I think Jerven is right to highlight the cavalier approach far too many economists have to the data, and their tendency to generalise. Surely he is right when he says, “A paper about ‘Africa’ gets more citations than a paper about ‘Tanzania’.”?

And how valid are those generalisations, when you consider the following Economist covers from 2000 and 2011. Was there really so much change in just over a decade?

Hopeless?

Hopeless?

Or Rising?

Or Rising?

Enlightened economists

Posted on by

It’s hard for me to resist a book about the Enlightenment, and I’ve just read [amazon_link id=”0691161453″ target=”_blank” ]The Enlightenment: History of an Idea[/amazon_link] by Vincenzo Ferrone. I have to confess it was quite hard work because it’s written in the scholarly language of another discipline. But the argument is interesting: that the Enlightenment as a set of philosophical ideas and as an historical phenomenon need to be kept separate, and are all too often conflated.

[amazon_image id=”0691161453″ link=”true” target=”_blank” size=”medium” ]The Enlightenment: History of an Idea[/amazon_image]

There is a definition in the introduction of the historical Enlightenment: “A conscious and passionate creative effort aimed at bringing about a fairer and more equitable society, made by man for man [sic], an attempt to put into practice individual rights, giving political space to what was the truly revolutionary discovery of the natural right of man to pursue happiness as the ethical foundation of a new universal morality.” I suppose it’s historically accurate that it was mainly by and about men, but it would have been good if Ferrone had explicitly acknowledged this limitation, as this language is so exclusionary.

He adds: “One can scarcely imagine a greater challenge to the political action and coherence of those European citizens who were working with passion and intellectual honesty to spread the new political language than the deportation of millions of African slaves mostly to the United States of America, the self-styled homeland of rights and freedom.” Economics, or rather political economy, was born of the Enlightenment, and economists were on the side of the angels in the anti-slavery campaign. Carlyle labelled it the ‘dismal science’ because he was pro-slavery and disliked the argument by political economists such as J S Mill and  – I learned from Sydney Padua’s [amazon_link id=”0141981512″ target=”_blank” ]The Thrilling Adventures of Lovelace and Babbage[/amazon_link] – by Charles Babbage. (I’ve now started Babbage’s 1832 book [amazon_link id=”B004TS7610″ target=”_blank” ]On The Economy of Machinery and Manufactures[/amazon_link], which is a ripping good read so far.)

[amazon_image id=”0141981512″ link=”true” target=”_blank” size=”medium” ]The Thrilling Adventures of Lovelace and Babbage: The (Mostly) True Story of the First Computer[/amazon_image]  [amazon_image id=”1511434422″ link=”true” target=”_blank” size=”medium” ]On the Economy of Machinery and Manufactures[/amazon_image]

Back to Ferrone. He wants to preserve a historical understanding of the Enlightenment from those from the post-modernists to [amazon_link id=”0691151725″ target=”_blank” ]Jonathan Israel[/amazon_link] who, he argues, make it too philosophical: “The idea of natural rights is not philosophical in origin. It is an extraordinarily important moral idea …. that in the course of the 18th century became a powerful new political and juridical discourse. … Far from being a project single-mindedly aimed at the goal of modernity, the Enlightenment is more accurately understood as a cultural experience defined first and foremost by the values it has bequeathed us.” As a process or experience, it has no definitive conclusion, he concludes. Of course I understand the importance of the historical context, but I must say I don’t see that Ferrone entirely avoids the same pitfall himself as the scholars he critiques. Aren’t ‘inherited values’ staking a philosophical claim? Luckily I feel no need to reach a firm conclusion about a debate in another discipline.

[amazon_image id=”0691169713″ link=”true” target=”_blank” size=”medium” ]Revolutionary Ideas: An Intellectual History of the French Revolution from The Rights of Man to Robespierre[/amazon_image]