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on Business, Economic and Financial History |
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Issue of 2015‒08‒01
thirteen papers chosen by |
| By: | Svizzero, Serge; Tisdell, Clem |
| Abstract: | The main purpose of this paper is to propose the hypothesis that inequality was essential for the sustainability and ‘development’ of early agriculturally based societies that developed in Prehistory and Ancient History. This was so for varied reasons: there was a need for some members of societies - the dominant class also called the elite - to escape from the Malthusian trap. In most cases, agriculture produced a bigger economic surplus eventually. Managerial problems – such as the ones associated with storage, the division of labor, irrigation, trade –being part of the consequences of the Neolithic revolution, created pressures to develop more centralized political organizations, a process which led later to the formation of the early states. This process allowed the appearance of powerful local chiefs who changed the nature of their original communities with new forms of social organization, in which one individual and his enlarged family - transformed into a ruling elite - received the benefits of the labor of a large number of serfs belonging to less-favored communities in neighboring areas. Although the surplus appropriated by the elite was used in specific ways – consumption, investments and expenditures on armed forces - it increased the power and wealth of these societies, albeit a solution involving unequally distributed wealth. While this is not the only factor in the growing dominance of agriculturally based societies, it is one of main ones as is evidenced by considering six early civilizations resulting from the Neolithic revolution. This result involves an important modification of Malthus’ theory. However, inequality - though necessary - was not a sufficient condition for the sustainability and economic development of these early societies. |
| Keywords: | economic surplus, elite dominance, early civilizations, inequality, Malthus, property rights, wealth., Community/Rural/Urban Development, Crop Production/Industries, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, N1, N3, E02, O30, P14, |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseet:183285&r=his |
| By: | Guglielmo Forges Davanzati (University of Salento) |
| Abstract: | Nicholas Kaldor’s contribution to economic theory covers a wide range of topics, elaborated in different historical contexts, such as theories of economic growth and the balance of payments, studies on interregional divergences and monetary theory. In most cases, historians of economic thought have devoted their attention to single aspects of his contributions. This paper aims at integrating Kaldor’s monetary theory and his view of the relevance of increasing returns. His theory of endogenous money is very similar to the view proposed in the contemporary monetary theory of production, and, in this respect, Kaldor’s contribution can certainly be considered an “antecedent” of this line of thought. |
| Keywords: | endogenous money, aggregate demand, labour productivity. |
| JEL: | B3 E4 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1505&r=his |
| By: | Ferdinand Rauch (Oxford) |
| Abstract: | Do locational fundamentals such as coastlines and rivers determine town locations, or can historical events trap towns in unfavorable locations for centuries? We examine the effects on town locations of the collapse of the Western Roman Empire, which temporarily ended urbanization in Britain, but not in France. As urbanization recovered, medieval towns were more often found in Roman-era town locations in France than in Britain, and this difference persists today. The resetting of Britain's urban network gave it better access to natural navigable waterways when this was important, while many French towns remained without such access. We show that towns without coastal access grew more slowly in both Britain and France from 1200-1800, and calculate that with better coastal access, France's urban network would have been up to 20-30 percent larger in 1800. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:203&r=his |
| By: | Alexander Klein; Nicholas Crafts |
| Abstract: | WWe investigate the role of industrial structure in labor productivity growth in U.S. cities between 1880 and 1930 using a new dataset constructed from the Census of Manufactures. We find that increases in specialization were associated with faster productivity growth but that diversity only had positive effects on productivity performance in large cities. We interpret our results as providing strong support for the importance of Marshallian externalities. Industrial specialization increased considerably in U.S. cities in the early 20th century, probably as a result of improved transportation, and we estimate that this resulted in significant gains in labor productivity. |
| Keywords: | agglomeration economies; Jacobian externalities; manufacturing productivity; Marshallian externalities; industrial structure |
| JEL: | N91 N92 R32 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1514&r=his |
| By: | Tisdell, Clem; Svizzero, Serge |
| Abstract: | Several contemporary economists claim that ‘real’ economic development only occurred following the Industrial Revolution. We contend that this is only so if a narrow view is taken of what constitutes economic development, namely increasing per capita income. Given a wider perspective, we argue that economic development occurred in hunter-gatherer societies and eventually accelerated in the second stage of the Agricultural Revolution. During this stage, a small dominant class (the elite) were able to extract rent (the economic surplus) from the mass of the population (the dominated) which they could use for development purposes. As a result of this rent extraction, the bulk of the population remained at subsistence level. Nevertheless, dissipation of the rent as a result of population increase was prevented. Consequently, the Malthusian trap could be avoided and the economic surplus could be used by the elite for development or other purposes. Whether or not economic development occurred depended on how the elite allocated the economic surplus. In the second stage of the Agricultural Revolution, the economic surplus was extracted primarily in the form of staples and the exchange of commodities was mostly directly controlled by the elite. This situation changed as states became larger in size and commodities became more diverse. In the few centuries preceding the Industrial Revolution in Europe, monarchs exerted decreasing direct control over the exchange, production and use of commodities. This was particularly noticeable in England. Also devolution of increased political power to nobles and local areas added to principal-and-agent problems. Sovereigns, instead of concentrating on the extraction of the economic surplus in the form of staples, increasingly relied on its extraction and storage in the form of treasures, precious metals and gems. Monarchs (in order to maximize their net extraction) focused on increasing the number of different markets and the extent of these but at the same time, extracted rent from them in the form of levies. Consequently, this Age of Mercantilism was marked by a substantial expansion in marketing even though this was combined with royal imposts on markets. This increase in marketing activities helped to pave the way for the Industrial Revolution by altering the balance of political power and facilitating sales of the products of the Industrial Revolution. Despite this, it seems likely that the Industrial Revolution only happened as a result of the chance occurrence of a combination of events. It was not inevitable. |
| Keywords: | economic development, economic surplus, Malthus, pre-industrial economics, rent extraction., Community/Rural/Urban Development, Institutional and Behavioral Economics, Research and Development/Tech Change/Emerging Technologies, N00, O1, |
| Date: | 2015–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseet:204256&r=his |
| By: | Fabrice Murtin (Departement d'Economie de Sciences Po); null null (Anderson School of Management) |
| Abstract: | Over the last two centuries, many countries experienced regime transitions toward democracy. We document this democratic transition over a long time horizon. We use historical time series of income, education and democracy levels from 1870 to 2000 to explore the economic factors associated with rising levels of democracy. We find that primary schooling, and to a weaker extent per capita income levels, are strong determinants of the quality of political institutions. We find little evidence of causality running the other way, from democracy to income or education. |
| Keywords: | Democracy; Modernization; Human Capital; GMM |
| JEL: | I25 N30 N40 O43 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/5m0od0o9jn9pqbdmos7fpt28hg&r=his |
| By: | Daniyal Khan (Department of Economics, New School for Social Research) |
| Abstract: | After discussing and analyzing exploitation as an analytical category in The Economics of Imperfection Competition and An Essay on Marxian Economics, Joan Robinson hardly mentioned it in The Accumulation of Capital. Despite analyzing her contributions at length, the literature has completely failed to recognize this curious turn, let alone explain it. This paper explains the abandonment of exploitation by arguing that it was one way to resolve the tension between the inherently normative aspects of the concept and her increasing discomfort with conflation of ideology and analysis across the first two books mentioned above. |
| Keywords: | Joan Robinson, exploitation, theory of value, ideology |
| JEL: | B50 B22 B31 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1515&r=his |
| By: | Aurélien Goutsmedt (Centre d'Economie de la Sorbonne); Erich Pinzon-Fuchs (Centre d'Economie de la Sorbonne); Matthieu Renault (Centre d'Economie de la Sorbonne); Francesco Sergi (Centre d'Economie de la Sorbonne) |
| Abstract: | The standard history of macroeconomics considers Lucas (1976)– “the Lucas Critique” –as a path-breaking innovation for the discipline. According to this view Lucas's article dismissed the traditional macroeconometric practice calling for new ways of conceiving the quantitative evaluation of economic policies. The Lucas Critique is considered, nowadays, as a fundamental principle of macroeconomic modeling (Woodford, 2003). The interpretation and the application of the Critique, however, represent still unsolved issues in economics (Chari et al., 2008). Even if the influence of Lucas's contribution cannot be neglected, something seems to be missing in the narrative: the reactions of the economists that were directly targeted by the Critique. Modeling practices of economic policy evaluation were not overthrown immediately after Lucas (1976), creating a divide between theoretical and applied macroeconomics (Brayton et al., 1977). The purpose of this paper is to study the reactions of the macroeconometricians criticized by Lucas. We focus especially on those macroeconometricians who worked on policy evaluation and who held an expertise position in governmental institutions. We categorize the different reactions to the Critique, in order to enrich the understanding of the evolution of modeling and expertise practices through the analysis of the debates–which have not yet been completely solved. In the first section, we propose a careful account of Lucas's argument and of some of the previous works anticipating the substantial outline of the Critique (like Frisch's notion of autonomy). Second, we bring our own interpretation of Lucas (1976). We think that we find two points of view in Lucas paper: a prescriptive one that tell you how to build a good macroeconometric model (it is the standard interpretation of the article); a positive one that relies on the fact that the Lucas critique could be seen as an attempt to explain a real-world phenomenon, the stagflation. Third, we classify the reactions of the Keynesian macroeconometricains following this line of interpretation. On the prescriptive side, the Keynesians protested against the New Classical solution to the Lucas critique (the use of the rational expectation hypothesis among other things). Klein, for instance, proposed an alternative microfoundational programme to study more empirically the formation of expectations. On the positive side, the Keynesians put into question the relevance of the Lucas Critique to explain the rise of both unemployment and inflation in the 1970s. They tried to test the impact of policy regime changes and of shifts in agents behaviour. According to us, in general, the explanation of the stagflation was elsewhere |
| Keywords: | History of macroeconomics; Keynesian economics; Lucas critique; Macroeconometrics; Rational expectations |
| JEL: | B22 B41 E60 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:15059&r=his |
| By: | Tisdell, Clem; Svizzero, Serge |
| Abstract: | Presents a simple economic theory explaining how some agriculturally based preindustrial societies (for example, in the Neolithic period) developed despite most of their population being subject to Malthusian dynamics. Their development depended on a dominant class (limited in size) extracting the economic surplus which could be used (among other things) to accumulate capital and advance knowledge and thereby, add to this surplus. Cities facilitated this process. Extraction of the surplus prevented increased population from dissipating it and curtailing development. Several early extractive and non-inclusive societies were long lasting. This is at odds with the theories of some contemporary development economists. |
| Keywords: | Institutional economics, Malthusian trap, Neolithic development, population dynamics, social inequality and development, Research and Development/Tech Change/Emerging Technologies, O1, P4, N00, |
| Date: | 2015–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqsese:197551&r=his |
| By: | Tisdell, Clem |
| Abstract: | Concern about agricultural sustainability emerged as a major issue in the closing decades of the last century as part of the global debate about the sustainability of economic development. In the 1980s, the three pillar concept of sustainable development was proposed and specifically applied by Conway to the evaluation of alternative agroecosystems. Although Conway’s contribution was important at the time, it was limited in its perspective. Recent approaches adopt a wider approach, and in this century, attention has been focusing on ways to sustainably increase agricultural supplies rather than to just maintain these. This recognizes the fact that a substantial increase in demand for agricultural produce is expected in this century. Consequently, the scope and rationale for sustainably intensifying agriculture is examined (in some detail), and the extent to which greater use of organic agriculture is able to contribute to sustainable agricultural development is assessed. The comparative roles of agroecology and economics in guiding agricultural production are discussed, and the concept of multifunctional agriculture is re-examined in the light of proposals for the sustainable intensification of agriculture. Important shifts in the debate about agricultural sustainability have occurred in this century. |
| Keywords: | Agroecology, agroecosystems, multifunctional agriculture, organic agriculture, sustainable agriculture, sustainable intensification of agriculture, sustainable development., Environmental Economics and Policy, Q18, Q56, Q57, |
| Date: | 2015–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseee:197549&r=his |
| By: | Tisdell, Clem; Svizzero, Serge |
| Abstract: | Examines two parallel approaches, one in economics and the other in anthropology, intended to explain the behaviours of Neolithic societies, particularly their transit from foraging to agriculture. Both approaches assume that human behaviour is a response to rational human decisions to optimise. The application of microeconomic theory by a Danish professor to explain the transition of foragers to agriculture and the corresponding complementary views of some American anthropologists about this transition are outlined and discussed. While these approaches provide valuable insights into the evolution of Neolithic societies, it is also important to be aware of their limitations, several of which are identified in this article. Such approaches are unlikely to provide a general theory of the evolution of Neolithic societies. Because of the diversity of human behaviours, a range of theories are required. |
| Keywords: | Economic evolution, economic optimisation, human behavioural ecology, hunter-gatherers, Neolithic Revolution, satisficing behaviour, Research and Development/Tech Change/Emerging Technologies, D01, 010, P00, Q10, |
| Date: | 2015–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseet:197550&r=his |
| By: | Svizzero, Serge; Tisdell, Clem |
| Abstract: | It is argued that attributes which have been widely used to typify hunter-gatherer societies are inadequate for several reasons. One is that they fail to capture the full extent of the diversity of these societies. We suggest some additional attributes which should be taken into account in characterizing these societies. Linear (unidirectional) models of the development of prehistoric societies are criticized and multi-linear models are discussed. Currently, three main stereotypes of the nature of hunter-gatherer societies exist. While these indicate that they were diverse, they fail to capture the full extent of their diversity. It is suggested that this diversity increased with the passage of time and was shaped by the varied local eco-geographic conditions (local resource endowments) in which these societies existed. This raises the question of whether this development had the same basis as speciation in the biological theory of natural selection. This is discussed and then particular attention is given to Adam Smith’s vision of the evolution of human societies. In conclusion, it is suggested that the evolutionary path of modern societies has diverged from that of prehistoric societies. |
| Keywords: | Biological diversity, biological evolution, hunters and gatherers, prehistoric societies, social diversity, social evolution., Community/Rural/Urban Development, Land Economics/Use, Livestock Production/Industries, O1, P00, P4, P5, |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseee:183259&r=his |
| By: | M. Mitka; K. Mumford; C. Sechel |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:15/10&r=his |