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on History and Philosophy of Economics |
| By: | Ward, Charley |
| Abstract: | In 1703, the Methuen Treaty removed duties on the exchange of English cloth for Portuguese wine, the trade later immortalised by David Ricardo’s use of it to explain his theory of comparative advantage. While Ricardo described Portugal as productively superior in both goods, he showed how specialisation and trade could still produce a higher level of output and mutual benefits. Ever since, Ricardo’s theory has been used by neoclassical economists as a theoretical tool to assert the logic of free trade. However, a subset of political economists, including Friedrich List, deny that trade liberalisation is always good for growth. These scholars have re-historicised the exchange of English cloth for Portuguese wine, finding that the Methuen Treaty ruined Portugal’s domestic textile industry and left them with a “slow-growing export market for wine.”1 This paper examines historical accounts of the Methuen Treaty and Anglo-Portuguese trade to assess the accuracy of the mainstream and heterodox characterisations of Ricardo’s classic example. It uses articles from prominent 19th and 20th century British, Portuguese, and Brazilian historians to develop a coherent narrative of the circumstances that produced the Methuen Treaty. Ultimately, this paper finds that the treaty was one event in a series that impeded the growth of Portuguese domestic industry, inflated their trade deficit, and produced wealth for the English. This reveals how Ricardo’s theory obscures a very simple insight: that some specialisations are better than others. |
| JEL: | F10 |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125859 |
| By: | Seltzer, Andrew J. |
| Abstract: | The Victorian Factories and Shops Act of 1896, the second minimum wage law in the world, empowered administrative agencies (‘Special Boards’) to set trade-specific minimum rates on the basis of age, sex, and occupation. Some Victorian supporters of minimum wages looked to end sweating and protect women and children, while others sought to use the law to protect adult men. Opponents argued that they would disrupt labour markets, increasing employers’ costs and creating unintended consequences for workers. Evidence from actual minimum wages suggests that boards were loosely constrained by market factors, but also that they had some discretion. Some Special Boards essentially followed the market for their trades while others set rates that were binding for some workers. To the extent that minimum rates were binding, they tended to reduce inequality among adult male workers, particularly after a 1907 federal law established a living wage covering employers with operations in multiple states. However, they also increased inequality across groups, increasing wages of adult men relative to those of women and youths. The act formally institutionalized gender-based pay differences, a practice that continued in Australian minimum wage setting for more than 70 years. |
| Keywords: | Australia; minimum wages; protective legislation |
| JEL: | N37 |
| Date: | 2024–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125987 |
| By: | Vanberg, Viktor |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:aluord:305290 |
| By: | Stefano Vanucci |
| Abstract: | A critical discussion of some of the main themes of Arrow’s work as presented by Antonio Gay in his 1987 Introduction to K.J.Arrow: Equilibrio, incertezza, scelta sociale is provided. Jel Classification: A12 C6 C7 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:919 |
| By: | Schläger, Dan |
| Abstract: | This paper offers a comprehensive examination of the role played by economic policy uncertainty in shaping the historical trajectory of interwar Germany. The central argument posits that economic policy uncertainty constituted a significant destabilising force during this tumultuous period, a proposition substantiated through a blend of qualitative and quantitative evidence. A qualitative investigation grounded in historical newspaper records unveils hesitancy among both companies and households due to uncertainty about fiscal, monetary, and reparation policies. Companies delayed investments due to high irreversible costs during uncertain times, while households adopted a 'wait and see' approach by postponing consumption decisions. This uncertainty stemmed from a lack of clarity about the country's direction, curtailing the joy of creation and commercial enthusiasm, which led to a slackening of economic impetus. On a quantitative front, constructing a novel newspaper-based uncertainty index in conjunction with vector autoregression analysis, this research establishes a resilient linkage between economic policy uncertainty and a cascade of adverse macroeconomic consequences. Remarkably, up to one-third of the overall macroeconomic volatility can be attributed to the pervasive uncertainty surrounding economic policies between 1925 and 1935. Consequently, this research suggests that a veil of uncertainty hung over the German interwar economy, paralysing sustainable recovery in the aftermath of World War I. |
| JEL: | N14 |
| Date: | 2024–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125837 |
| By: | Andrea Fazio (Department of Economics and Social Sciences, Marche Polytechnic University, Ancona, Italy. GLO, Essen, Germany); Tommaso Reggiani (Cardiff Business School, Cardiff University, Cardiff, United Kingdom; Masaryk University, MUEEL lab, Brno, Czechia; IZA, Bonn, Germany); Paolo Santori (Department of Philosophy, Tilburg University, The Netherlands) |
| Abstract: | This paper empirically tests Max Weber’s thesis on how religious narratives, particularly the Protestant Ethic, influence attitudes toward wealth redistribution. Weber suggested that the Protestant Reformation, led to the belief that economic success was a sign of divine favor, legitimizing wealth inequality. Using a variation of the dictator game with "blessed" framing, we measure how participants’ redistribution behaviors change when primed with this narrative. Our results show that low-income Protestants exposed to the "blessed" narrative are less likely to redistribute wealth compared to Catholics, supporting Weber’s idea that Protestants justify inequality through divine providence. Furthermore, a narrative analysis reveals that Protestants interpret “blessing” as divine election, while Catholics focus more on well-being. These findings suggest that religious narratives significantly shape economic behaviors and preferences for redistribution, providing empirical support for Weber’s thesis. |
| Keywords: | dictator game; Max Weber; pro-social behaviour; redistribution |
| JEL: | J14 J15 Z12 Z1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:mub:wpaper:2024-06 |