Tag Archives: history

Manchester, Marx (and Engels), and Me

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Yesterday I was in the magnificent Chetham’s Library in Manchester with Colm O’Regan, recording a radio programme featuring the desk at which Karl Marx and Friedrich Engels studied for 6 weeks in the summer of 1845. The librarian Michael Powell set out for us the yard of books the two had read during that visit, saying they were very dull including for example William Petty’s [amazon_link id=”B00A1G5MHY” target=”_blank” ]Essays in Political Arithmetick[/amazon_link].

A yard of reading by Marx and Engels

A yard of reading by Marx and Engels

Well, be still my beating heart! As the author of a brief (but affectionate) history of [amazon_link id=”0691169853″ target=”_blank” ]GDP,[/amazon_link] I was delighted to find it had been one of Marx’s early economics texts. Here I am holding the very copy that K.M. read (no marginalia, unfortunately). Rooting around on Google Scholar this morning, I find that Marx emphatically considered Petty to be the founding father of political economy, in [amazon_link id=”1840226994″ target=”_blank” ]Capital[/amazon_link] citing Petty’s description of capital as ‘past labour’. (Bizarrely, Google said it had witheld some search results because of data protection law – ??)

Me holding Petty

Me holding Petty

Here is Colm, metaphorically scratching his head about one of the other books, a super-dull history of trade since ancient times, in three volumes. More information about our podcasting project in the weeks ahead.

Colm O'Regan dipping into the history of trade

Colm O’Regan dipping into the history of trade

Marxian economics is a chasm in my education, although I did try to read Capital when young.[amazon_link id=”0140445684″ target=”_blank” ]Capital: Critique of Political Economy v. 1 (Classics S.)[/amazon_link] The [amazon_link id=”0141397985″ target=”_blank” ]Communist Manifesto[/amazon_link] is good and stirring stuff of course, and sitting in the Chetham’s Library, which could have served in a Harry Potter film, you understand why they had spectres in mind. However, for me Engels’ book, [amazon_link id=”0199555885″ target=”_blank” ]The Condition of the Working Class in England[/amazon_link], is one of the finest pieces of analytical economic reportage, and a true call to arms.

[amazon_image id=”0199555885″ link=”true” target=”_blank” size=”medium” ]The Condition of the Working Class in England (Oxford World’s Classics)[/amazon_image]

Update: the entire list of books read that summer by Marx and Engels, kindly provided by the librarian Michael Powell, is:

Aikin, John                                 Description of the country from thirty to forty miles around Manchester (London, 1795)

D’Avenant, Charles                     Essays on peace at home and abroad (London, 1794)Discourses on the publick revenues and on the trade of England (London, 1698)

Eden, Frederick Morten                The state of the poor, 3 vols. (London, 1795)

Gisbourne, Thomas                     Inquiry into the duties of men in the higher ranks and middle classes of society in Great Britain (London, 1795)

Macpherson, David                     Annals of commerce, manufactures, fisheries and navigation, 4 vols. (London, 1805)

McCulloch, John Ramsay            The literature of political economy (London, 1845)

Petty, William                               Essays in political arithmetick (London, 1699)

The Rise and Fall of American Growth

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Robert Gordon’s magnum opus, [amazon_link id=”0691147728″ target=”_blank” ]The Rise and Fall of American Growth: the US Standard of Living Since the Civil War [/amazon_link](out in mid-January), is going to be an essential read for anyone interested not only in US economic history but also American economic prospects. The book is a comprehensive overview of growth from 1870 on, with a close focus on innovation and productivity. It does not consider at all macroeconomic policy, and is not much interested in events such as the Great Depression or the creation and later collapse of Bretton Woods. This is the supply-side story. This is not a criticism; as it is, the book weighs in at 650 pages – 730 with notes etc.

[amazon_image id=”0691147728″ 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]

There are three sections: the first covers 1870 to 1940; the second 1940-2015; the third is about the sources of growth and why it was fastest from the 1920s to 1950s (this is just about the US so this is earlier than European readers would recognise as the peak growth era) – and is slowing now. The final chapters are a kind of crescendo, for the whole book is organised to support Gordon’s well known thesis that the days of miracle and wonder, the rapid growth era of the early to mid-20th century, is long gone, and slower growth lies ahead of us. As he writes in the introduction: “Our central thesis is that some inventions are more important than others, and that the revolutionary century after the Civil War was made possible by a unique clustering, in the late 19th century, of what we will call the ‘Great Inventions’.” [his italics] By Great Inventions, he means electricity, water supply and sewage systems, the internal combustion engine, radio then TV, and innovations that reduced household drudgery such as refrigerators and washing machines. The core of his argument is that these so transformed health, life expectancy and connectivity that no future invention could possibly have such a dramatic impact on people’s living standards.

Who could argue with the idea that this era saw such dramatic change in human lives? For that matter, it is also hard to argue with the headwinds he notes about growth now: demographic change with ageing populations, and inequality, limiting the mass market for future innovations. The final chapters particularly emphasise the damaging effects on the economy of greatly increased income and wealth inequality. Hear, hear. What I find odd about Gordon’s argument is his insistence that there is a kind of competition between the good old days of ‘great innovations’ and today’s innovations – which are necessarily different.

One issue is the extent to which he ignores all but a limited range of digital innovation; low carbon energy, automated vehicles, new materials such as graphene, gene-based medicine etc. don’t feature. The book claims more recent innovations are occurring mainly in entertainment, communication and information technologies, and presents these as simply less important (while making great play of the importance of radio, telephone and TV earlier). (A minor European carp – he also claims that it is only Americans who invent things now, when it would be more accurate to say it is only Americans who commercialise them to massive scale, especially in digital.)

Sure, we won’t repeat the impact of connecting houses to the electricity grid; but if we can keep them connected while generating power at simlar cost with zero greenhouse gas emissions, well that would be a Great Invention with the potential to utterly transform humanity’s prospects. We won’t see the same gains in life expectancy as with the previous introduction of public health measures and antisepsis, but if we can increase the quality of health and life for the over-60s, that would be a very big deal.

A second issue is that throughout the first two parts of the book, Gordon repeatedly explains why it is not possible to evaluate the impact of inventions through the GDP and price statistics, and therefore through the total factor productivity figures based on them – and then uses the real GDP figures to downplay modern innovation. “This book … focuses on the aspects of improvements of human life that are missing from GDP altogether.” For example, he writes, just as important as the calorific intake, or price of a given quantity of meat, is the fact that Americans’ diets changed from the monotony of ‘hogs’n’hominy’ in the 1870s to a much more varied diet by the 1920s. I wholeheartedly agree with this approach. While the very long run of real GDP figures (the ‘hockey stick of history’) does portray the explosion of living standards under market capitalism, one needs a much richer picture of the qualitative change brought about by innovation and variety. This must include the social consequences too – and the book touches on these, from the rise of the suburbs to the transformation of the social lives of women.

Yet in the later chapters of the book, turning to modern growth, Gordon does an about turn, saying: “The impact of innovations and technological change [since 1970] was measured by their effect on total factor productivity.” If this is going to be the yardstick in the ‘race between the decades’, he should have addressed here the questions about the measurement of GDP and productivity in the modern US economy, based as it is on services and intangibles.

For instance, he says: “Nothing in the history of price index bias compares with the omission of automobile prices from the official price indexes over the entire period from 1900 to 1935.” His data in chapter 5 show a decline in quality-adjusted prices between 1906 and 1940, from $650 to $266, which does not seem to support the broad claim. Even the decline in the per capita ratio of quality adjusted price to nominal disposable income (from 2.47 to 0.46) presented there looks smaller than some other innovation-related price declines, similarly omitted from or understated in, official price indexes. The book does not explain, but it would need to go into the figures in more detail if the argument is to turn on the GDP and TFP statistics. Anyway, there are two points about current and future growth. One is about the extent to which innovation is slower, or its effects less important – case unproven, in my eyes. The other is the issue of headwinds slowing down whatever innovation-driven growth there might otherwise be – a stronger case, well expressed in the final chapters.

The obsession with things having been much better, innovation- and growth-wise, in the old days is an irritation, and does make the reader wonder how much the narrative has been bashed into shape to fit the conclusion. Having said that, the wealth of detail in the book far outweighs this annoyance. It is stuffed with wonderful evocations of the effects of economic growth, with institutional details, with tables and charts of useful historical data. The history is brought alive by such things as recounting the living conditions of different kinds of families – midwestern farms with their space and light, compared with New York tenements – or discussing the effect of food quality standards – dairy products stopped being watered down, but butter lost the distinctive taste and smell of its ‘terroir’. Some parts of the story will be familiar to some readers; if you have read a lot already about the history of the computer industry, or Ford’s creation of the assembly line and the mass market, the capsule versions here will not add much. But the book as a whole is a tremendous achievement. If not for the holiday, I wouldn’t have been able to read it from page 1 to page 650; I’m very glad I was able to do so.

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.

Revolutionary money

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Today I finished reading properly Rebecca Spang’s marvellous [amazon_link id=”0674047036″ target=”_blank” ]Stuff and Money in the Time of the French Revolution[/amazon_link], having only dipped in when I first bought it. It really repays the attention. What seems to be a book about a specific aspect of the historical episode is really a reflection on the nature of money and its intrinsic relationship with politics and with conceptions of property. Set in the 1780s and 90s, it could not be more relevant to the bitcoin/ledger debate.

[amazon_image id=”0674047036″ link=”true” target=”_blank” size=”medium” ]Stuff and Money in the Time of the French Revolution[/amazon_image]

I learnt much from it, starting with the insight that the problems with the infamous assignats issued after the revolution stemmed from the unquestioned belief that the venal offices sold by the old regime, raising much government revenue, could not be cancelled or expropriated. Spang writes: “Throughout the debate, no one (not even Marat or Robespierre) took the truly revolutionary position of suggesting venal offices might be illegitimate privileges that could be cancelled without payment.” But, she adds, “Simply aboloshing the offices was unthinkable but so too was leaving the debt on the books, since officeholders who had not been repaid woulf retain their property and ‘privilege’ would still exist.” Settling the debts in one go would would consign the ancien regime to history and complete the revolution. Hence the issue of assignats backed by the expropriated land of the church.

The book also has a fascinating section on [amazon_link id=”0691116350″ target=”_blank” ]The Big Problem of Small Change[/amazon_link] (to quote the title of Tom Sargent and François Velde’s book on this): the cost of manufacturing the low-denomination coins used by most people exceeded their face value. A shortage of usable cash led to the proliferation of private currencies in many areas, and eventually their replacement by breaking up the assignats into smaller denominations, so that they morphed from something like bills of exchange, backed by specific property, into generic paper money. A sophisticated credit network built on personal relationships and specificities gave way to anonymity and ultimately distrust. But the distrust was the product of political uncertainty, the dissolution of everything familiar and the clear invalidation of the assumption that the future would be enough like the present that credit – and money – could be relied on.

[amazon_link id=”B00RLHMOF4″ target=”_blank” ]The book[/amazon_link] concludes with a reminder that the past is different from the present but what it does serve to underline is the culturally specific character of not only money but other foundation stones of economic relationships – property and value. These “have never been naturally given categories but are historically produced.” And, perhaps, poised for another revolution, as digital everything continues to strain conventional ideas of property and value to breaking point and beyond.

Not the end of history, again

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This morning I picked up Tony Judt’s brilliant 2005 book [amazon_link id=”009954203X” target=”_blank” ]Postwar, a history of Europe since 1945[/amazon_link]. He wrote in the Introduction:

“An era was over and a new Europe was being born. … What had once seemed permanent and somehow inevitable would take on a more transient air. … Europe’s future would look very different – and so too would its past.”

[amazon_image id=”009954203X” link=”true” target=”_blank” size=”medium” ]Postwar: A History of Europe Since 1945[/amazon_image]

Until re-reading this passage, I had forgotten that Austria did not join the EU until 1995, and that in 1999 Jorg Haider and his “Freedom Party” won 27 per cent of the vote.

Judt continues, explaining the roots of the 2nd World War in the 1st, “The little countries that emerged from the collapse of the old land empires in 1918 were poor, unstable, insecure – and resentful of their neighbours.” It is only 20 years since the last, dreadful & bitter, Balkans conflict.

I do hope that somewhere in Europe there are political leaders reflecting on this past rather than obsessing about what the latest opinion polling tells them about popular attitudes to migrants. Century-old resentments and suspicions are not far below the surface; keeping them in their place is an unfinished, probably permanent, task.