The members of the Association must be sick to death of “The Achievements of the Cliometric School.” The health of a field, it is said, is inversely proportional to the percentage of essays on method, by which standard cliometrics itself was sick to death in childhood and is only just now recovering. The few essays on method appearing nowadays are usually commissioned, lack revolutionary fervor, and have become as predictable as sportswriting: gee whiz, how extraordinary has been the growth of cliometrics; cliometrics, of course, is gravely limited by its attachment to neoclassical economics; do not be alarmed by counterfactuals. Essays on method, like articles on the sportspage, irritate the players (nobody loves a critic), flatter the owners (in whose pay he sometimes labors), and hearten the loyal fen (with the written equivalent of the chant “We're number one”). They foreshadow the post-season banquets and their awards: Most Valuable Scholar, Best Book Reviewer (Golden Glove), or, in another mode, Best Historian in a Supporting Role, and Farce of the Year.

We investigate the effect of the establishment of modern institutions on the risk premium associated with Japanese government bonds traded in London between 1870 and 1914. While most institutional innovations failed to elicit an immediate market response, the adoption of the gold standard did significantly reduce the perceived risk associated with Japanese bonds. In addition, some geopolitical events, especially the military victory over Russia, improved Japan's debt capacity.

This article takes advantage of an exogenous shift towards patenting in chemicals to test whether patents contribute to the geographic diffusion of innovations. Data on U.S. innovations that were exhibited at four world fairs between 1851 and 1915 suggest that innovative activity became less localized after patenting rates increased. These changes cannot be explained by changes in the localization of chemical production or economy-wide changes in the localization of innovations.

The problem of the origins of marine insurance is one of the most complicated and controversial questions in the history of business institutions. One cause of this confusion is the fact that the earliest documentary sources are often ambiguous and lend themselves to widely varying interpretations. The legal writers, who have done most of the research on the early history of insurance, have focused their attention upon certain documents of the late thirteenth and the early fourteenth centuries. As these sources unfortunately give incomplete information, the results of all this research have been rather disappointing. The minute scrutiny with which the legal writers have examined the early documents has produced subtle and brilliant examples of textual criticism but has also given rise to conflicting theories which have confused the issues instead of clarifying them.

Does a legal tradition adopted in the distant past constrain a country's ability to provide the protection that investors need for financial markets to develop? I look at the relationship between legal origin and the development of bond markets and find too much variation over time in bond market size, creditor protections, and court enforcement of bond contracts to assume that the adoption of a legal system constrains future financial development. I examine the evolution of bond markets in Brazil, a French civil law country, and provide preliminary results of similar variation for a small cross-section of countries.

This address considers the role of culture in economic history. It argues that AngloSaxon culture was an important factor determining where and when industrialization began and spread. The contrast between Anglo-Saxon individualism and Japan’s more collective culture also is important in understanding the differences between Japanese and American industrial practices today. I predict that Japan’s collective culture may give it an economic edge in the coming years despite its current difficulties. And I advocate greater attention to culture by both economists and historians in the practice of economic history.

This paper analyzes the transition from agents to branch selling as alternative institutional modes for transacting abroad by pre-1939 British manufacturing multinationals. A model to explain the shift between alternative modes is specified in terms of transaction costs. Agent opportunism and contract monitoring costs are the major transaction costs. Besides transaction costs, the frequency of transactions and the accumulation of market-specific knowledge by the principal were found to be important variables.

Although recent studies on African colonial tax systems have deepened our understanding of early fiscal capacity building efforts in the region, they have largely ignored the contributions from a widely used but invisible source of state revenue: that of labor contributions. Exploiting data on corvée systems in French Africa, this is the first article to make these in-kind taxes “visible” by estimating a lower bound of how much they augmented governments' revenue base. Revealing that labor taxes constituted in most places the largest component of early colonial budgets, I argue that studies on historical taxation need to make a greater effort to integrate this significant source of government revenue into their analysis.

I use Body Mass Index (BMI) to investigate how the ralationship between health status and retirement among older men has changed since 1900. Although BMIs for the elderly were much less healthy in 1900 than today, the BMI level that maximizes labor force participation rates has not changed. However, in 1900 the elasticity of nonparticipation with respect to BMI was greater than it is today, suggesting that health is now less important to the retirement decision than in the past. Other factors (especially rising income) are more important than health in explaining the historical changes in retirement rates.

We study the correlates of the monthly establishment wage—the average monthly wage at the establishment level—and changes in wage dispersion between plants using a model of manufacturing developed by Goldin and Katz and data from manuscript censuses of manufacturing. We find that wages were decreasing in establishment size, but increasing in capital intensity and use of steam power. We also find an increase in inequality in the establishment wage between 1850 and 1880. Most of the increase occurred below the median wage and can be attributed, in part, to the growing concentration of employment in large establishments.

Aggregate economic activity was heavily influenced by the construction sector's expansion, collapse, and failure to revive during the interwar years. The 1920s building boom was the first to respond to the potential of the automobile and the last to be largely unplanned. Its uncoordinated character slowed the growth of full employment output toward the end of the 1920s. The physical and legal detritus of unregulated land development posed continuing obstacles to recovery during the second half of the 1930s.

Although politics has a huge effect on economic outcomes, we still know too little about what public goods states furnish or what determines the laws, regulations, and policies that states adopt. Worse yet, we do not really understand how states arise in the first place and how they gain the ability to tax. There are numerous unanswered questions here that economic historians can profitably work on, and their research will be particularly valuable if they model the politics, gather data on taxation and spending by local and central governments, and pay serious attention to the historical details and to political behavior that may not involve optimization.

A biological model of nitrogen in agriculture is specified for early modern England and used to analyze the growth in grain yields from the middle ages to the industrial revolution. Nitrogen-fixing plants accounted for about half of the rise in yields; the rest came from better cultivation, seeds, and drainage. The model highlights the slow chemical reactions that governed the release of the nitrogen introduced by convertible husbandry and the cultivation of legumes. However efficient were England's institutions, nitrogen's chemistry implied that the English agricultural revolution would be much more gradual than the Green Revolution of the twentieth century.

The completion of the undersea Atlantic telegraph cable more closely integrated securities markets on two continents. This article conducts an event study on the introduction of the Atlantic Cable in July 1866. Using daily data on one security with a dual listing on the New York and London stock exchanges, the event study provides some evidence that the information lag between the two markets shortened from ten days to zero days. Cointegration analysis confirms the result. Historical markets priced securities so well that transatlantic steamship crossing times can be recovered from stock prices.

The debate over whether political democracy is the least bad regime, as Churchill said, remains unresolved because history has been misread, and because statistical studies have chosen the wrong tests. This address reinterprets five key experiences to show how the institutional channels linking voice and growth are evolving with the economy. Until the early nineteenth century, the key institutional link was property-rights and contract enforcement. Since then, the human-investment channel has assumed an ever-greater role. Elite rule damages growth by underinvesting in egalitarian human capital, especially primary schooling, relative to historical norms for successful economies.This Presidential Address was delivered at the Economic History Association Annual Meeting, 12 October 2002, in St. Louis, Missouri.

The relative importance of federal and local government was reversed between 1932 and 1940. This changing composition of government expenditures by level of government accounts for the rise of “big” government during the Depression. State governments expanded their fiscal activity, maintaining their share of total government expenditures. Utilizing data on federal grants and state and local expenditures, I find that the relative decline of local governments and sustained growth of state governments can be explained by the financial and administrative provisions of the federal New Deal programs.

This study examines technical change, trade, economic structure, and growth during the British Industrial Revolution by means of computational general equilibrium (CGE) modeling. It rejects Peter Temin's contention that our “new view” of sectorally concentrated productivity growth is inconsistent with industrial export data. A CGE trade model with diminishing returns in agriculture and realistic assumptions about consumer demand shows that while technical change in cottons and iron were major spurs to exportation of those specific goods, the need for food imports also stimulated exports generally. Incorporating trade data thus enriches our “new view.”

Formal rules and informal customs created innumerable obstacles to the socioeconomic advance of Virginia's free black population. Laws prohibited free blacks from some activities and occupations and restricted their participation in others. Racism and Klan-like terrorism also made advancement difficult. Despite these disadvantages, Virginia's free black population fared rather well. They grew nearly as tall as white Americans and towered over contemporaiy Europeans. Primary sources and the secondary literature are consistent with the anthropometric evidence.

The issue of why productivity growth during the British industrial revolution was slow despite the arrival of famous inventions is revisited using a growth accounting methodology based on an embodied innovation model. The results highlight the relatively small and long-delayed impact of steam on productivity growth even when capital deepening is taken into account. Even so, technological change including embodiment effects accounted entirely for the acceleration in labor productivity growth that allowed the economy to achieve “modern economic growth.”

With their legal personhood, permanent capital, transferable shares, separation of ownership and management, and limited liability, the Dutch and English colonial trading companies VOC and EIC are considered institutional breakthroughs. We analyze the VOC's business operations and financial policy and show that its novel corporate form owed less to foresight than to piecemeal engineering to remedy design flaws. The crucial feature of managerial limited liability was not, as previously thought, integral to that design, but emerged only after protracted experiments with various solutions to the company's financial bottlenecks. Legal form followed economic function, not the other way around.