Monthly Archives: December 2015

The rhetoric of economics, ctd.

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From [amazon_link id=”0521094461″ target=”_blank” ]Theoretical Welfare Economics[/amazon_link] by J De V Graaff: “On the one hand, it could be argued that the term ‘real national income’ is a mere definition, devoid of normative significance. … On the other hand, it could be objected that ‘the real national income’ is an emotive expression; and to say it has increased in to imply that the state of affairs thus described is approved or is in some sense thought to be good or desirable.”

He argues – and I wholeheartedly agree – that we should use the terminology as people normally understand it, with its normative connotation, and not like economists insisting that all that [amazon_link id=”0691169853″ target=”_blank” ]GDP[/amazon_link] measures is what it is defined to include.

[amazon_image id=”0521094461″ link=”true” target=”_blank” size=”medium” ]Theoretical Welfare Economics[/amazon_image]

Cotton, empire and mill workers

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I finished reading Sven Beckert’s prize-winning [amazon_link id=”0141979984″ target=”_blank” ]Empire of Cotton: A new history of global capitalism[/amazon_link] in Cottonopolis, aka Manchester. I grew up in Lancashire in a family many of whose members worked in the cotton mills. The noise and hot greasy, dusty smell of the mills was part of my childhood. At school we were taught that we had been the cradle of the Industrial Revolution: John Kay, Richard Arkwright, Samuel Crompton, created their inventions just down the road. In Lincoln Square in Manchester stands a statue of Abraham Lincoln, a recognition of the support Lancashire mill workers had given to the Union side in the American Civil War, even though the blockade of southern ports created the ‘cotton famine’ that was the source of the great hardship they were experiencing.

[amazon_image id=”0141979984″ link=”true” target=”_blank” size=”medium” ]Empire of Cotton: A New History of Global Capitalism[/amazon_image]

Not surprisingly, I’ve been immensely looking forward to reading [amazon_link id=”0141979984″ target=”_blank” ]Empire of Cotton[/amazon_link], saving it as a treat. And although I enjoyed reading it, it also left me very uneasy. The book wraps a huge amount of fascinating detail and insight around a single unwavering theme: that ‘war capitalism’, the violence of empire and slavery and thus the creation of a global trade with protected markets, made possible industrial capitalism. Now, I’m no imperialist, and there’s no question about the horrors of the slave trade – and the riches it created in the UK. David Olusoga’s recent BBC TV series about the UCL project on the legacy of British slave ownership highlighted the foundational importance of slavery for the UK’s 19th century prosperity, despite abolition. Even so, I distrusted the book. In 441 pages of great detail, was there really no room to mention those Lancashire mill hands? It isn’t an unknown story: Radio 4’s In Our Time had a fabulous episode on it earlier this year. Yet the book’s chapter on the cotton famine speaks only of ‘Manchester’ as a solo voice and its concern about the Union blockade. Life – and history – are more complicated than a [amazon_link id=”0415304458″ target=”_blank” ]Rosa Luxemburg[/amazon_link]-like frame with no room for anything that clouds the simplicity of an argument.

But this is – well, more than a quibble, just not enough to have stopped me enjoying the book. Three points were particularly interesting.

First was the analysis of the interaction between the labour-intensive upstream production and the capital-intensive downstream production, and how the technological practicalities shaped the organisation of processing, manufacture and trade. Although cotton is probably now the lowest profile industry of the industrial revolution, [amazon_link id=”B00PYY1AQU” target=”_blank” ]Empire of Cotton [/amazon_link]makes a persuasive case that it was the most powerful driver of globalised industrial capitalism – global precisely because of the differing production technologies along the supply chain.

Second is the emphasis on the interaction between private interests and the state, and the prevalence of the same kind of argument we still hear from industrialists who talk about the importance of free trade and yet constantly lobby the government to shape taxation, infrastructure, trade rules etc in their interests. The American Civil War prompted much British investment in Indian infrastructure, for example, as cotton manufacturers successfully lobbied for government assistance to create new sources of their raw material. More generally, the book quite rightly underlines the joint innovation of technologies, the organisation of production and trade, and financial and social institutional innovations.

Minard's infographic on the flows of raw cotton imports showing the effect of the Civil War

Minard’s infographic on the flows of raw cotton imports showing the effect of the Civil War

Third – and this is a truly nerdy point – I found fascinating the role of standardisation (of types and qualities of cotton) as the trade grew. In the early stages of the rise of cotton, the gathering of detailed information was a source of competitive advantage. Over time, places that collected information, and then provided it in standardised form, became central to the business. Liverpool was the centre of both physical and informational trade in the UK; in the US, although the South grew the cotton, New York became the hub. Ultimately, US standards dominated: in 1923 the Cotton Standards Act made it illegal to use anything but American standards in interstate or foreign commerce, so they became global standards. “The state also became an important supplier of statistics that made the market more legible, rendering much less central the sophisticated networks of information gathering and exchange that merchants had forged…. The state, centrally concerned with the reliable flow of inexpensive raw materials into the vortex of manufacturing enterprises, now quite literally made the market.”

So, I agree with some of Beckert’s argument and do recommend reading [amazon_link id=”0141979984″ target=”_blank” ]Empire of Cotton,[/amazon_link] – but with a large pinch of scepticism.

Joseph Coyle (far right, front, aged 14 with his workmates at the Old Ground Mill in Ramsbottom, Lancashire.

Joseph Coyle (far right, front, aged 14 with his workmates at the Old Ground Mill in Ramsbottom, Lancashire.

Measuring and markets

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I’ve been reading Michel Callon’s introduction to the edited volume [amazon_link id=”0631206086″ target=”_blank” ]Laws of Markets.[/amazon_link] It’s about the performativity of economics, a question that interests me (although I do struggle with the academic jargon of sociology; at least my own subject’s jargon is familiar). Callon writes: “The most interesting element is to be found in the relationship between what is to be measured and the tools used to measure it. The latter do not merely record a reality independent of themselves; they contribute powerfully to shaping, simply by measuring it, the reality that they measure.”

[amazon_image id=”0631206086″ link=”true” target=”_blank” size=”medium” ]Laws of Markets (Sociological Review Monographs)[/amazon_image]

Needless to say, the question of how the classification and structures embedded in economic statistics shape the reality of the economy (through affecting understanding, behaviour and policy) is of keen interest to me. For instance, part of the debate about productivity is about what it measures, but also partly about what it defines. What is productivity when products play a minority role in economic activity? The Callon intro doesn’t ultimately enlighten: it seems to me to place too much weight on economics as a subject, for markets existed long before economists did. There has to be some two-way influence between reality and the attempt to make systematic a description of it. In fact, I don’t think economics is as different from some other subjects as the performativity analyses suggest. For instance, classification in biology is not completely dissimilar. I also wish other social scientists would acknowledge that economists *do* think a lot about the specifics of markets as social institutions – see, for one, John McMillan’s brilliant book [amazon_link id=”0393323714″ target=”_blank” ]Reinventing the Bazaar.[/amazon_link]

[amazon_image id=”0393323714″ link=”true” target=”_blank” size=”medium” ]Reinventing the Bazaar: A Natural History of Markets[/amazon_image]

 

Still, there is something in this territory. It’s particularly important for sustainability that the concepts and measurements economists define and gather place ‘the economy’ in nature and the physical world. To be continued…

Holiday reading

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All lined up, just in case Santa doesn’t bring me any books. What about the rest of you?

Lined up for the holiday

Lined up for the holiday

[amazon_link id=”0691147728″ target=”_blank” ]The Rise and Fall of American Growth[/amazon_link] – Robert Gordon

[amazon_link id=”0062266683″ target=”_blank” ]Machines of Loving Grace[/amazon_link] – John Markoff

[amazon_link id=”0571275974″ target=”_blank” ]A Strangeness in My Mind[/amazon_link] – Orhan Pamuk

[amazon_link id=”0691163871″ target=”_blank” ]Hamburgers in Paradise[/amazon_link] – Louse Fresco

[amazon_link id=”1782271384″ target=”_blank” ]The Tokyo Zodiac Murders[/amazon_link] – Soji Shimada

Bringing ideas to the world

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Last week I attended the European Advisory Board meeting of Princeton University Press, the theme of the discussion being the role of university presses in the globalized 21st century. A while ago Sam Leith had an interesting article in the Guardian praising university presses for their stewardship of non-fiction publishing at a time when many commercial publishers have become fearful ‘me-too’ merchants. It could seem paradoxical: the university presses’ freedom from short term commercial pressure has created the conditions for longer term success, at least for some. Happily, Princeton University Press is one of those that’s thriving. There is a huge appetite for ideas, and the scholarly presses publishing books that address a wider audience than only academics and their libraries have been there to meet it. The appetite is also global, and again a small group of university presses have addressed the global market (much of PUP’s recent growth has been outside its home market in the US).

The other question is what will the ‘university’ part of ‘global university press’ look like in a decade or two? Higher education is ripe for disruption. It seems clear now this will not take the form of MOOCs, although they will have their market. Yet who knows what shape exactly it will take. One of my advisory board colleagues suggested publishing could be able to provide the true interdisciplinarity modern global issues require, whereas traditional university departmental silos discourage it. My hunch is that keeping a clear focus on the ‘product’ being the provision of ideas and scholarship to readers of all kinds around the world, and being agnostic about the exact means of delivering those ideas, will be the way to ride out disruptive technologies. A ‘freemium’ approach looks a good bet too: for example, the open access Digital Einstein website alongside the Quotable Einstein along with many other of his books for sale. (I note by the way there’s a holiday discount at the moment on purchases via the PUP website!)

My latest three books have been published by Princeton, and I’m delighted to be associated with such a distinguished purveyor of ideas to the world. During the holidays I’ll do my look ahead to forthcoming books in 2016 (publishers – do send me catalogues if you haven’t already) but here’s a trailer for just a few PUP titles for 2016: [amazon_link id=”B017MVYMSA” target=”_blank” ]Money Changes Everything: How Finance Made Civilization Possible[/amazon_link] by William Goetzmann; [amazon_link id=”0691167400″ target=”_blank” ]Success and Luck: Good Fortune and the Myth of Meritocracy[/amazon_link] by Robert Frank; and – just arrived at Enlightenment Towers, due for publicaiton on 27 January, Robert Gordon’s [amazon_link id=”B0131KW67U” target=”_blank” ]The Rise and Fall of American Growth: The US Standard of Living since the Civil War[/amazon_link]. I’m really looking forward to reading this over the holiday, & spoiling for a fight with Prof Gordon – but who knows, maybe he’ll win me over to his ‘innovation is so over’ thesis.

[amazon_image id=”B017MVYMSA” link=”true” target=”_blank” size=”medium” ]Money Changes Everything: How Finance Made Civilization Possible[/amazon_image]  [amazon_image id=”0691167400″ link=”true” target=”_blank” size=”medium” ]Success and Luck: Good Fortune and the Myth of Meritocracy[/amazon_image]  [amazon_image id=”B0131KW67U” link=”true” target=”_blank” size=”medium” ]The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World)[/amazon_image]