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on Business, Economic and Financial History |
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Issue of 2006‒10‒21
seven papers chosen by |
| By: | John H. Munro |
| Abstract: | Entrepreneurship, by its very essence, concerns the theory of the firm – the individual enterprise – which in turn is the essential core of micro-economics. A major theme of this study, however, is to demonstrate the interaction of micro- and macro-economic phenomena: to show how such firms or enterprises, and entrepreneurship itself, were often shaped by, and often helped shape, such macro-economic forces as demographic changes, monetary changes, price changes – in terms of both deflation and inflation – long distance trade, overseas exploration and expansion (colonialism), and indeed related changes in social institutions and socio-cultural values that were also influenced by such macro-economic changes. One generalization about macro-economic changes involving inflations and deflations has both general and considerable importance in the history of European business enterprises and entrepreneurship itself: for long-term inflations (when moderate) tend to cheapen or reduce the relative factor costs of labour, land (rent contracts), and capital (fixed interest rates in loan contracts). Similarly, long term deflations tend, in reverse fashion, in increase the real or relative factor costs of labour, land, and capital, especially with pronounced wage-stickiness, and related ‘stickiness’ in leasehold rent contracts (and more so with customary tenures), and with loan contracts -- even if the long-term trends in real interest rates was falling over this long period. At the same time, both inflations and deflations are accompanied by changes in the relative prices of key industrial inputs. The key question to be posed is this: how did entrepreneurs respond to such changes in their factor costs, both short term and long term? This study commences by demonstrating how deflation in mid-15th century Europe, in increasing the purchasing power of silver, provided the stimulus for two major technological innovations in silver-mining and smelting that led to the South German silver-copper mining boom of 1460-1540, which also meant major changes in commercial-industrial entrepreneurship and in industrial scales. That mining boom in turn laid the foundations for the 130 year inflation of the Price Revolution (1520-1650) – an inflation further fostered by a financial revolution in credit and banking institutions (from the 1520s), and then further fuelled by the influx of Spanish-American silver.. The heart of this study is on the role of inflation, and associated macro-economic changes, in producing the roots of modern capitalist entrepreneurship, during what is often called Tawney’s Century (1540-1640). We begin, however, with two famous related theses: Hamilton’s thesis of ‘Profit Inflation’ (in which wages lag behind consumer prices), a wrongly-constructed thesis that endures only because Keynes endorsed it; and Nef’s thesis of the ‘Tudor Stuart industrial revolution’ – a much ridiculed response to Hamilton – whose merit lies in revealing the capitalist entrepreneurship, major technological changes, and changes in industrial scale that resulted from the substitution of coal – the hear of modern industrialization – for every more costly wood charcoal. Tawney’s three theses themselves concern the origins of modern agrarian capitalist, the related ‘Rise of the Gentry’ debate (on the role of inflation in shifting land ownership from the aristocracy to the capitalist gentry landowners), and the Weber-Tawney thesis on Religion (Protestantism) and the Rise of Capitalism, which, I endeavour to show has its real relevance only from the late 17th century. Associated with the Price Revolution era is the Age of Overseas Expansion (involving one of the most momentous technological and entrepreneurial change of the early modern era: the development of the Full Rigged Atlantic ship, with heavy artillery). England joined that overseas commercial-colonial race rather late, in the 1550s, but in doing developed the foundations of modern capitalism in creating the joint stock company. The study ends with the following era of monetary scarcity and deflation provided another macro-economic challenge whose response was revolutionary changes in banking and financial institutions – i.e., in financial-commercial entrepreneurship. It also fostered the growth and spread of rent-seeking Mercantilist philosophies that also influenced the character of early-modern capitalist entrepreneurship. |
| Keywords: | Entrepreneurship; Inflation; Deflation; Factor Costs; Technological Innovations; Minind and Metallurgy; Coal-Burning Industries; Joint-Stock Company |
| JEL: | E31 E40 F10 G20 G21 J10 J30 L10 L71 L72 N13 N23 N33 N83 |
| Date: | 2006–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-257&r=his |
| By: | Christopher M. Meissner; Alan M. Taylor |
| Abstract: | Great attention is now being paid to global imbalances, the growing U.S. current account deficit financed by growing surpluses in the rest of the world. How can the issue be understood in a more historical perspective? We seek a meaningful comparison between the two eras of globalization: "then" (the period 1870 to 1913) and "now" (the period since the 1970s). We look at the two hegemons in each era: Britain then, and the United States now. And adducing historical data to match what we know from the contemporary record, we proceed in the tradition of New Comparative Economic History to see what lessons the past might have for the present. We consider two of the most controversial and pressing questions in the current debate. First, are current imbalances being sustained, at least in part, by return differentials? And if so, is this reassuring? Second, how will adjustment take place? Will it be a hard or soft landing? Pessimistically, we find no historical evidence that return differentials last forever, even for hegemons. Optimistically, we find that adjustments to imbalances in the past have generally been smooth, even under a regime as hard as the gold standard. |
| JEL: | F20 F30 F32 F40 F50 N10 N20 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12580&r=his |
| By: | Virén , Matti (Bank of Finland and University of Turku) |
| Abstract: | This paper deals with the fiscal behaviour of governments in the 1920s and 1930s. The intention is to see whether there were the same features in government behaviour as in the post-World War II era. In par-ticular, attention is paid to asymmetric fiscal policies, ie the question of whether government deficits react differently to income growth and inflation during depressions and booms. The analysis is carried out us-ing data primarily from the League of Nations. The data come from 32 countries and covers the period 1925–1938. Estimation results suggest the in pre-war period deficits were much less sensitive to output and did not show as many asymmetric features as in post-war period. Otherwise, the same regularities apply to the empirical results. In particular, this is true with the disciplinary role of government debt in terms of budget deficits. |
| Keywords: | fiscal policy; deficit; asymmetric behaviour |
| JEL: | E62 H62 |
| Date: | 2005–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2005_015&r=his |
| By: | Roine, Jesper (Stockholm School of Economics); Waldenstrom, Daniel (Research Institute of Industrial Economics) |
| Abstract: | This study presents new homogenous series of top income shares in Sweden over the period 1903–2004. We find that, starting from levels of inequality approximately equal to those in other Western countries at the time, the income share of the Swedish top decile drops sharply over the first eighty years of the twentieth century. Most of the decrease takes place before the expansion of the welfare state and by 1950 Swedish top income shares were already lower than in other countries. The fall is almost entirely due to a dramatic drop in the top percentile explained mostly by decreases in capital income, while the lower half of the top decile – consisting mainly of wage earners – experiences virtually no change over this period. In the past decades top income shares evolve very differently depending on whether capital gains are included or not. When included, Sweden’s experience resembles that in the U.S. and the U.K. with sharp increases in top incomes. Excluding capital gains, Sweden looks more like the continental European countries where top income shares have remained relatively constant. A possible interpretation of our results is that Sweden over the past 20 years has been a country where it is more important to make the right financial investments than to earn a lot to become rich. |
| Keywords: | Income inequality; Income distribution; Wealth distribution; Top incomes; Welfare state; Sweden; Taxation; Capital gains |
| JEL: | D31 H20 J30 N30 |
| Date: | 2006–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0667&r=his |
| By: | Ojo, Marianne |
| Abstract: | Prior to the adoption of the FSA (Financial Services Authority) model, supervision of UK banks was carried out by the Bank of England. Although the Bank of England's informal involvement in bank supervision dates back to the mid nineteenth century, it was only in 1979 that it acquired formal powers to grant or refuse authorization to carry out banking business in the UK. Events such as the Secondary Banking Crisis of 1973-74 and the Banking Coordination Directive of 1977 resulted in legislative changes in the form of the Banking Act 1979. Bank failures through the following years then resulted in changes to the legislative framework. This article looks into the claim that the FSA model has improved in terms of accountability in comparison to its predecessor, the Bank of England. It considers the impact the FSA has made on the financial services sector and on certain legislation since its introduction. Through a comparison with the Bank of England, previous and present legislation, reports and other sources, an assessment can be made as to whether the FSA provides more accountability. Evidence provided here supports the conclusion that the FSA is both equipped with better accountability mechanisms and executes its functions in a more accountable way than its predecessor. |
| Keywords: | regulators; accountability; supervision; financial; services |
| JEL: | G28 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:228&r=his |
| By: | Gabriel Galvez-Behar (IRHiS - Institut de Recherches Historiques du Septentrion - [CNRS : UMR8529] - [Université Charles de Gaulle - Lille III]) |
| Abstract: | Enjeu récurrent des débats sur la propriété industrielle au XIXè siècle, l'absence d'examen préalable des brevets d'invention est considérée comme l'une des particularités essentielles de la législation française en la matière. Pourtant, un rapide examen des statistiques de brevet de l'époque montre que toutes les demandes de brevet n'étaient pas couronnées de succès et chaque année, une trentaine de demandes étaient rejetées par l'administration du commerce et de l'industrie.<br /> C'est que les demandes faites par les inventeurs ou leurs agents étaient l'objet d'un examen mené en partie par le Comité consultatif des arts et manufactures. C'est sur cette institution, et sur son travail en matière de propriété industrielle, que se penche cet article. |
| Keywords: | Brevets d'invention; examen; Comité consultatif des arts et des manufactures; France; XXe siècle |
| Date: | 2006–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00008340_v1&r=his |
| By: | Juan Carmelo García (Secretario General - [Instituto de Estudios Políticos para América Latina y África]) |
| Abstract: | El Objetivo del Estudio, convertido en larga hipótesis de trabajo, es mostrar cómo las instituciones creadas a partir del final de la 2ª Guerra mundial han forzado el análisis, la comprensión y las estrategias seguidas por los organismos oficiales multilaterales y bilaterales, al aplicar políticas de AOD o Cooperación al Desarrollo que no responden a las condiciones objetivas ni subjetivas de los potenciales sujetos colectivos del Desarrollo...; ni, tampoco, a los “modelos”, patrones, definiciones o concepciones teóricas o técnicas de Desarrollo que se tienen en esos pueblos..., y que por tanto no pueden inspirar políticas con garantía de eficacia y practicidad suficientes para asegurar la viabilidad y continuidad progresiva..; y cómo, al estar vigentes y con “legitimidad” proporcionada por los Estados “donantes”, no posibilitan –incluso impiden- la apertura al cambio y, en consecuencia, la posibilidad de una Nueva Cooperación al Desarrollo que afronte con rigor científico, técnico, social, político... y ético la respuesta estructural –humana y sostenible- a las raíces causales más comunes que padecen los pueblos de América latina y el Caribe. A lo que es preciso añadir, que las inercias generadas por las fuerzas que propulsaron los procesos de “descolonización” e independencia de los países afroasiáticos y que condicionaron la concepción y políticas de Ayuda al Desarrollo estuvieron marcadas por una visión del neocolonialismo económico que impide el despegue necesario para la in-dependencia estructural que debería haber estado en las bases de un proceso de Desarrollo sea cualquiera la concepción que de él se haya tenido en las últimas seis décadas de doctrinas y políticas sobre el tema. Se tienen en cuenta los referentes históricos más decisivos desde la creación de los organismos de Bretton Woods -con una obligada referencia a la Carta de NNUU y su Doctrina y un seguimiento puntual a las respuestas dadas por los países colonizadores ante el hecho descolonizador y de no-dependencia. |
| Keywords: | Desarrollo ; Cooperación ; Organismos Internacionales; Estructura ; Sistema ; NNUU ; OCDE-CAD |
| Date: | 2006–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00104172_v1&r=his |