Tag Archives: history

Technology in history

Posted on by

I’ll collate the economic history suggestions another time. Meanwhile, though, seeing a recommendation for David Edgerton‘s influential [amazon_link id=”1861973063″ target=”_blank” ]The Shock of the Old: Technology and Global History since 1900[/amazon_link] sent me to both that – which insists that there is too much cheerleading about invention and not enough focus on the implementation of technologies in specific historical contexts – and to his subsequent book, [amazon_link id=”0141026103″ target=”_blank” ]Britain’s War Machine: Weapons, Resources and Experts in the Second World War[/amazon_link].

The latter makes some contrarian arguments about the war. Edgerton argues that (a) Britain was the richest and most powerful combatant thanks to its imperial resources – it is a mistake to think of it as a beleagured nation standing alone begging for American charity, and Germany would (and did) struggle to combat it; and (b) the ‘declinist’ histories about Britain after the war (notably Corelli Barnett in [amazon_link id=”033034790X” target=”_blank” ]The Audit of War[/amazon_link] and  [amazon_link id=”0333480457″ target=”_blank” ]The Lost Victory [/amazon_link]etc) are mistaken, as relative decline was due largely to strong growth in other countries.

[amazon_image id=”0141026103″ link=”true” target=”_blank” size=”medium” ]Britain’s War Machine: Weapons, Resources and Experts in the Second World War[/amazon_image]

Edgerton’s argument is pinned on a materialist account of the resources and technology developed and used by Britain. Some of this evidence is very striking. One example is a graphic showing the vastly, vastly greater tonnage of bombs the UK dropped on Germany compared with German bombing of the UK – the horrors of the firestorms and mythology of the Blitz notwithstanding. It’s all very interesting. Britain’s early defeats led to a huge emphasis on increasing production, he writes, saying there was a “powerful sense that the war was a war of production,” with contemporary debate focusing on industrial efficiency, or the lack of it.

The importance of scientific advance in the conflict is obviously a well-known part of the story, from codebreaking (my favourite account is R.V Jones’s [amazon_link id=”185326699X” target=”_blank” ]Most Secret War)[/amazon_link] to the Manhattan Project. Edgerton adds to this the sense of Imperial power and the availability of material resources.

[amazon_image id=”185326699X” link=”true” target=”_blank” size=”medium” ]Most Secret War (Wordsworth Military Library)[/amazon_image]

His reinterpretation is certainly interesting, and it must always be fruitful to test received wisdom. His claim that postwar decline is misinterpreted is less convincing, however. Surely the loss of Empire is a decline, whether you think it was a good thing or not? And the transition to US superpowerdom postwar is clear.

I see from his website that Prof Edgerton is working on currently working on Capitalism, Empire and Nation: a new history of twentieth-century Britain, a forthcoming book for Penguin. That will be an essential read.

What economic history do economists need to know?

Posted on by

There’s an interesting VoxEU column by Coen Teulings about the economic history economics students ought to know. The list is terrific for learning about economic growth and development, including for example Jared Diamond’s classic [amazon_link id=”0141024488″ target=”_blank” ]Guns, Germs and Steel [/amazon_link]and Paul Bairoch’s [amazon_link id=”B009NO0MH0″ target=”_blank” ]Cities and Economic Development[/amazon_link], as well as more recent entries like Acemoglu and Robinson’s [amazon_link id=”1846684307″ target=”_blank” ]Why Nations Fail[/amazon_link]. However, there are some obvious omissions – David Landes’ [amazon_link id=”0349111669″ target=”_blank” ]Wealth and Poverty of Nations[/amazon_link], Joel Mokyr’s [amazon_link id=”0691120137″ target=”_blank” ]Gifts of Athena[/amazon_link], [amazon_link id=”0691090106″ target=”_blank” ]The Great Divergence[/amazon_link] by Kenneth Pomeranz, not to mention some straightforward histories of the Industrial Revolution such as Bob Allen’s [amazon_link id=”0521687853″ target=”_blank” ]The Industrial Revolution in Global Perspective[/amazon_link]. There are some less obvious omissions too – James Scott’s [amazon_link id=”0300078153″ target=”_blank” ]Seeing Like A State[/amazon_link], maybe?

[amazon_image id=”1846684307″ link=”true” target=”_blank” size=”medium” ]Why Nations Fail: The Origins of Power, Prosperity and Poverty[/amazon_image]

Economics students certainly need to have more history included in their courses – I would favour weaving it in as well as offering separate courses, because much as students claim to want to study economic history, I’m not at all sure they walk the talk in large numbers. However, the list in the VoxEU column is only one strand of economic history. For industrial organisation courses, for example, what’s needed is business history. The Mokyr book might feature, but so also Alfred Chandler’s [amazon_link id=”B00BR5MIXY” target=”_blank” ]The Visible Hand[/amazon_link], or his [amazon_link id=”B00L6K91RG” target=”_blank” ]book about DuPont[/amazon_link], say, or a terrific book I read recently about Bell Labs, Jon Gertner’s [amazon_link id=”1594203288″ target=”_blank” ]The Idea Factory[/amazon_link].

[amazon_image id=”1594203288″ link=”true” target=”_blank” size=”medium” ]The Idea Factory: Bell Labs and the Great Age of American Innovation[/amazon_image]

I’m sure there are lots of other good suggestions out there – both books, and how to weave economic history into economic teaching. This summer I’m finalising my Public Policy Economics course to teach at the University of Manchester in the autumn so econ history suggestions for that are especially welcome.

The economic classics

Posted on by

One of the constants in calls to reform economics, and how it’s taught, is the demand for more history of thought. The most contact students have with the history of economics itself is probably Robert Heilbroner’s [amazon_link id=”068486214X” target=”_blank” ]The Worldly Philosophers[/amazon_link]. I really liked Agnar Sandmo’s [amazon_link id=”0691148422″ target=”_blank” ]Economics Evolving: A History of Economic Thought[/amazon_link], because it links how economists thought to changes in the economic context. Economics is, like geology or evolutionary biology, an historical science – the specifics of time and place are fundamental to what happens.

However, even if they read a survey like one of these books, economists hardly ever read the originals, not even [amazon_link id=”1451522851″ target=”_blank” ]Adam Smith[/amazon_link] or [amazon_link id=”9650060251″ target=”_blank” ]Maynard Keynes[/amazon_link]. Still, it was intriguing to get the announcement of the launch of a new series of republished (minor) classics by Vernon Press – the titles include some better known ones like Friedrich List’s [amazon_link id=”1622730100″ target=”_blank” ]The National System of Political Economy[/amazon_link], [amazon_link id=”1622730097″ target=”_blank” ]The Great Illusion[/amazon_link] by Norman Angell; and some hardly known at all ones – [amazon_link id=”1622730003″ target=”_blank” ]Women in Industry[/amazon_link] by Edith Abbott anyone? Or perhaps Daniel Defoe’s [amazon_link id=”1622730011″ target=”_blank” ]A Plan of the English Commerce[/amazon_link]. New to me.

[amazon_image id=”1622730003″ link=”true” target=”_blank” size=”medium” ]Women in Industry: A Study in American Economic History (Vernon Series in Economic Methodology)[/amazon_image]   [amazon_image id=”1622730011″ link=”true” target=”_blank” size=”medium” ]A Plan of the English Commerce (Vernon Series in Economic History)[/amazon_image]

How can there be a borrower from hell?

Posted on by

The joy of a four-day weekend – as well as cooking and gardening, I’ve read a thoroughly enjoyable economic history book with great relevance for the present debate on sovereign borrowing. It’s [amazon_link id=”0691151490″ target=”_blank” ]Lending to the Borrower from Hell: Debt, Taxes and Default in the Age of Philip II [/amazon_link]by Mauricio Drelichman and Hans-Joachim Voth.

[amazon_image id=”0691151490″ link=”true” target=”_blank” size=”medium” ]Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II (The Princeton Economic History of the Western World)[/amazon_image]

Part of my enjoyment was that I studied this period for my history A level (and almost read history at university before economics captured me), and so was absorbed in 16th and 17th century Europe during those impressionable teenage years. It’s extraordinary that so many Europeans know so little about it now – certainly, British schoolchildren jump from the Tudors straight to World War II and the Cold War. For a sense of how turbulent and decisive a period it was, the novel [amazon_link id=”0099439832″ target=”_blank” ]Q[/amazon_link] by the Italian collective Luther Blissett is hard to beat; I have the Wu Ming “sequel”, [amazon_link id=”1781681678″ target=”_blank” ]Altai[/amazon_link], on my in-pile now.

[amazon_image id=”1781681678″ link=”true” target=”_blank” size=”medium” ]Altai: A Novel[/amazon_image]

However, even if you don’t share my specific interest in the period, this is an essential book for economists interested in sovereign debt – and which of us is not at the moment? It fills in some important detail about an episode in debt history that features in the data set of the monumental [amazon_link id=”0691152640″ target=”_blank” ]This Time is Different[/amazon_link]. A large part of the achievement of the authors is the collection of a highly impressive data set on the debt issuance, repayments, revenues and expenses of Philip II of Spain, based on obviously extensive archival research as well as secondary sources.This was, of course, the period when New World silver started to reach the coffers of the Castilian crown in large quantities. [amazon_link id=”0691151490″ target=”_blank” ]The Borrower from Hell[/amazon_link] underlines the concept of resource curse.

[amazon_image id=”0691152640″ link=”true” target=”_blank” size=”medium” ]This Time Is Different: Eight Centuries of Financial Folly[/amazon_image]

Philip II has the reputation of being the Borrower from Hell because of the frequency with which he defaulted – there was a payment suspension more often than one year in every five during his reign. As the authors point out, the [amazon_link id=”0691152640″ target=”_blank” ]Reinhart-Rogoff data set[/amazon_link] shows 20% of countries in default on average in every year since 1800, so the reputation may be unfair; but the scale of the borrowing was large and Philip II defaulted a record-breaking 13 times in succession: “No country in recorded history has defaulted more times.”

So the question is why he got the opportunity to do so; why did bankers continue lending to him? How can there be a ‘borrower from hell’? The book carries out an IMF-type sustainability exercise on the historical data set and concludes that the debt burden was sustainable although there were liquidity crises due to events – usually a military loss. It also argues that the structure of the lending meant there was a kind of balance of power between king and lenders. The form the lending took was syndicated loans provided by a relatively small and tight-knit group of families; 130 people from 63 families lent Philip money over the years but 3 families accounted for 40% of all loans and 10 families for 70%. The banking network was stable and dominated the available funds. So whereas two hundred years earlier Philip IV of France had executed those who lent him money (Jews, Lombards, Templars) when he couldn’t pay, Philip II of Spain had a long relationship with his financiers. The ‘absolutism’ of the 16th and 17th centuries was in fact constrained, a useful fiction for both monarch and elites.

The data indicate that despite the defaults, holidays and renegotiations, the average return on the loans was highly favourable. The book argues that the lending was understood to be contingent and that a renegotiation would ensue if events turned out badly for the king. The negotiations were typically speedy, as was the return to lending. The bankers were sharing the risk with Philip, their return amply compensating them for it. It sounds not unlike Robert Shiller’s proposal for event-dependent sovereign loans in his book [amazon_link id=”0691120110″ target=”_blank” ]The New Financial Order[/amazon_link].

[amazon_image id=”0691120110″ link=”true” target=”_blank” size=”medium” ]The New Financial Order: Risk in the 21st Century[/amazon_image]

[amazon_link id=”0691151490″ target=”_blank” ]Lending to the Borrower from Hell[/amazon_link] is a useful reminder that, not only is sovereign lending wholly intertwined with the state, it can perform a useful rather than a solely destructive function. The book does not indulge in drawing lessons for modern finance, but it’s hard to escape the conclusion that the structure of modern financial markets deserves close scrutiny in evaluating lessons from the crisis. And that the balance of power between, say, the Greek government and Wall Street banks has been made completely clear by the terms of Greece’s “rescue”.

As for the resource curse, Drelichman and Voth conclude with a discussion of the reasons for later Spanish economic decline: “The inability to raise state capacity must ultimately be traced back to a resource windfall – silver. It kept the Crown fiscally sound without the need to strike a bargain that would have helped build a stronger, more capable state in the long run.”

A final note: this is a tremendously well-written book, a pleasure to read.

 

The borrower from Hell

Posted on by

A book has arrived that will probably have to wait until my summer holiday, or at least Easter, but it has me mightily intrigued. It’s [amazon_link id=”0691151490″ target=”_blank” ]Lending to the Borrower from Hell: Debt, Taxes and Default in the Age of Philip II[/amazon_link], by Mauricio Drelichman and Hans-Joachim Voth.

[amazon_image id=”0691151490″ link=”true” target=”_blank” size=”medium” ]Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II (The Princeton Economic History of the Western World)[/amazon_image]

I know, I know. But if I’d not quixotically decided to apply to study Philosophy, Politics and Economics at Oxford (to further my ambition of spending my life being a philosopher like [amazon_link id=”0007203942″ target=”_blank” ]Simone de Beauvoir[/amazon_link] in a Parisian cafe), and if I hadn’t got in, and if I’d not had a brilliant economics tutor in Peter Sinclair and so ended up being an economist, I would have done a history degree instead. At school we studied 16th and 17th century Europe – these were the days before British schools only taught the Tudors and the Nazis – and what times they were! [amazon_link id=”0099439832″ target=”_blank” ]Q[/amazon_link] by the Italian writing collective Luther Blisset gives a good flavour of it.

And as the intro to this book points out, in extraordinary times like 2008 and its aftermath, the long history of debt and default might hold useful lessons. Economists in general should pay more attention to economic history. History should be reintroduced as a requirement in all Econ PhD courses – I benefited greatly from courses by Barry Eichengreen and Steve Marglin in mine, possibly grumbling at the time, but young people don’t entirely know what’s good for them.

[amazon_image id=”0099439832″ link=”true” target=”_blank” size=”medium” ]Q[/amazon_image]

I’ve read the first three pages of [amazon_link id=”0691151490″ target=”_blank” ]The Borrower from Hell[/amazon_link] and am going to have to tear myself away….