New Economic School

1st module, 2010/11 “World Economic History”

Andrei Markevich

Aim: Economists recognise that history can help us to learn about the present; since Simon Kuznets (1966), they have been interested in the ‘success stories’ of economic growth demonstrated by ‘western’ countries. More recently Paul David (1985) and Douglass North (1990) demonstrated that institutions and their history are important. History is a treasury of different stories for which contemporary analogues are often not available for study, either because they no longer exist or because data are lacking. Due to this history is a natural testing area for various hypotheses and models in contemporary economics. However, it is difficult to test theories without at least preliminary idea what actually happened. The aim of the course is to provide an introduction to the sources and methods of quantitative economic history, together with a review of major historical findings of interest to economists. The learning outcome should be that students achieve an understanding of both how historical research can be used to shed light on the current state of the economy and how economic analysis can sharpen our understanding of history.

Summary: The course focuses on particular topics of Word economic history; there is no aim to cover all aspects of the human history (that is actually impossible in one course). The list of topics includes very long-run trends in the world economy; pre- industrial medieval economy; institutions and European exceptionalism; the great divergence between Europe and Asia; Industrial revolution and transition to “modern economic growth” in Europe and North America; American slavery; the first wave of globalisation of the 19th century; the interwar globalisation backlash and the great depression; the post-WWII “golden age”.

Grading: The course grade will be based on a final exam (60%) and 5 referee-reports (the 1st, 2rd, 4th and 5th - 7.5% each and the 3rd – 10%). The final exam consists of a test and several essay-type questions on the topics discussed in class. The deadlines for referee-reports are Tuesdays’ evenings of the third, forth, firth, sixth and seventh week correspondingly. The word limits for referee-reports are 600 words (1000 for the 3rd). Extensive reading is a compulsory part of the course. Submission of at least a half of referee-reports is a prerequisite for the exam.

Attendance. Attendance in this course is strictly required. Students who miss 50% of the lectures will not be allowed to take the exam and will fail the course. A student late by 15 minutes is considered absent. Illustrative reading: There is no formal textbook for the course, but the following monographs could be use as an illustrative reading. Камерон Р. Краткая экономическая история мира: От палеолита до наших дней. М.: Росспэн, 2001. Maddison, A. (2001), The World Economy: A Millennial Perspective, Paris: OECD.

Historical economic statistics can be found at the following websites: http://www.ggdc.net/maddison/ - GDP in cross-country comparison http://www.iisg.nl/hpw/data.php#europe – historical statistics on prices and wages http://www.nber.org/databases/macrohistory/contents/ - USA pre-WWI and interwar economic statistics http://www2.history.ubc.ca/unger/htm_files/wheat.htm - historical grain prices

The course structure and reading lists: The course consists of 14 lectures. * - obligatory reading

1. Introduction. Economic history: between history and economics. A very brief history of the discipline. What can we learn from the past? Does history matter? Path dependence and economic development. Crafts, N.F.R. (1987), “Cliometrics, 1971-1986: A Survey”, Journal of Applied Econometrics, 2, 171-92. *David, Paul A. (1985), “Clio and the Economics of QWERTY”, AER 75 (May): 332-7. Fogel R.W. (1975), "The Limits of Quantitative Methods in History," AHR, pp. 329- 350. Liebowitz, S.J., and Stephen E. Margolis. 1995. "Path Dependence, Lock-In, and History." Journal of Law, Economics, and Organization 11: 204-26. McCloskey Donald (1976), “Does the Past Have Useful Economics?” JEL, 14(2): 434-61. North, Douglass C. (1990), Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge University Press. Puffert D.J. (2000), “The Standardization of Track Gauge on North American Railways, 1830-1890,” JEH 60, pp. 933-60.

2. World Economic History in the very long run, 1-2001 AD. A quantitative overview. Clark, Gregory (2008) A Farewell to Alms: A Brief Economic History of the World. Princeton University Press, 2007. Ch.2 Fogel R.W. (1994), “Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy", AER, 84(3), pp. 369-95. *Maddison, Angus. (2001). The World Economy: A Millennial Perspective. OECD, Paris. Phelps Brown, H. and Hopkins, S.V. (1956), “Seven Centuries of the Prices of Consumables compared with Builders’ Wage Rates”, Economica, 23: 296-314. Kuznets, Simon 1966. Modern Economic Growth: Rate, Structure, and Spread. Yale University Press, New Haven, CT Steckel R. (1995), “Stature and the Standard of Living,” JEL, pp. 1903-40. 3. Medieval economy and agrarian institutions: open fields and the manorial system North D. and R. Thomas (1971), "The Rise and Fall of the Manorial System," JEH, pp. 777-803. Fenoaltea S. (1975), "Authority, Efficiency, and Agricultural Organization in Medieval England and Beyond: A Hypothesis," JEH, pp. 693-718. Clark, Gregory (1988), "The Cost of Capital and Medieval Agricultural Technique," EEH, 25, 265-294. Fenoaltea, Stefano (1976), "Risk, Transactions Costs, and the Organization of Medieval Agriculture," EEH, 13, 129-151. McCloskey, Donald and J. Nash (1984), "Corn at Interest," AER, 74(1), 174- 187. *McCloskey, Donald (1976), "English Open Fields as Behavior Towards Risk, Research in Economic History. Bockstette, Valerie, Louis Putterman Areendam Chanda (2002), States and Markets: The Advantage of an Early Start. Journal of economic growth, 7, pp. 347-69. Van Zanden Jan Luiten (2009) The Long road to the Industrial Revolution. The European Economy in a global perspective. Leiden: Brill

4. The European miracle: merchant capitalism de and institutions. *Acemoglu, D., Johnson, S. and Robinson, R. (2005), “The Rise of Europe: Atlantic trade, Institutional Change and Economic Growth”, AER, 95(3): 546-79. Acemoglu D., S. Johnson, and J. Robinson (2002), “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution”, QJE 117, pp. 1231-94. Djankov Simeon, Edward Glaeser, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer, (2003). “The New Comparative Economics”, Journal of comparative Economics, 31: 595-619. Easterly William and Ross Levine, (2003), ‘Tropics, germs, and crops: how endowments influence economic development’, Journal of Monetary Economics, 50: 3–39. Greif, A. (1994), “Cultural Beliefs and the Organisation of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies”, JPE, 102(5): 912- 50. *Greif, Avner (2000), “The Fundamental Problem of Exchange: A Research Agenda in Historical Institutional Analysis”, European Review of Economic History, 4: 251- 284. Greif, Avner, Paul Milgrom & Barry R. Weingast, (1994) ‘Coordination, Commitment, and Enforcement: The Case of the Merchant Guild”. JPE, 102 (4): 745- 76. Levine, Ross, (2008) “Law, Endowments and Property Rights”, Mimeo. Nunn, Nathan (2008), “The Long-term effects of Africa’s slave trades”, QJE Sokoloff Kenneth L. and Stanley L. Engerman, (2000), ‘History Lessons: Institutions, Factors Endowments, and Paths of Development in the New World’, The Journal of Economic Perspectives, 14(3): 217-232.

5. The Great Divergence in living standards between Europe and Asia. *Allen, R.C. (2001), “The Great Divergence in European Wages and Prices from the Middle Ages to the First World War”, EEH, 38: 411-447. Allen, R.C. (2003), “Progress and poverty in early modern Europe” EHR, LVI (3): 403–443. O'Brien, Patrick K. (1988), ‘The Costs and Benefits of British Imperialism 1846- 1914’, Past and Present, 120: 163-200. O'Brien, Patrick K. (1982), ‘European Economic Development: The Contribution of the Periphery’, EHR, 35(1): 1-18. *Broadberry, S.N. and Gupta, B. (2006), “The Early Modern Great Divergence: Wages, Prices and Economic Development in Europe and Asia, 1500-1800”, EHR, 59: 2-31. Clark, Gregory (1998) ‘Work in Progress? Industrious Revolution’ JEH, 58(3): 830- 843. Deng, K.G. (2000), “A Critical Survey of Recent Research in Chinese Economic History”, EHR, 53: 1-28. Lin, Justin Yifu (1995), The Needham Puzzle: Why the Industrial Revolution Did Not Originate in China, Economic Development and Cultural Change 43(2), pp. 269-292 *Maddison, Angus. (1998). ‘Chinese Economic Performance in the Long-run’. OECD, Paris. Thomas, Robert Paul (1968), ‘The Sugar Colonies of the Old Empire: Profit or Loss for Great Britain?’, EHR, 21(1): 30-45. Van Zanden, Jan (1999) “Wages and the standard of living in Europe”, Eropean Review of Economic History, 2: 175-197. Vries Jan De (1994), “The Industrial Revolution and the Industrious Revolution”, JEH, 54(2): 249-270.

6. British industrial revolution. Allen, R. (2009), The Industrial Revolution in Miniature: The Spinning Jenny in Britain, France, and India. JEH, .69(4): 901-927 *Clark, Gregory (2008) A Farewell to Alms: A Brief Economic History of the World. Princeton University Press, 2007. Clark, Gregory. (1991), ‘Yields per Acre in English Agriculture, 1250-1860: Evidences from Labour Inputs’, EHR, 44(3): 445-460. Clark, Gregory (1996), “The Political Foundations of Modern Economic Growth: England, 1540-1800,” Journal of Interdisciplinary History, 26:563-88. Clark, G. (2005), “The Condition of the Working-Class in England, 1209-2003”, JPE, 113: 1307-1340. Craft N.F.R. (1978) “Industrial Revolution in England and France: Some Thoughts on the Question, “Why was England First?” EHR, 31(4): 429-41. Crafts, N.F.R. (1985), British Economic Growth During the Industrial Revolution, Oxford: Clarendon. *Crafts N. F. R. and C. K. Harley (1992), “Output Growth and the British Industrial Revolution: A Restatement of the Crafts-Harley View”, EHR, 45(4): 703-30. Crafts N.F.R. and C. Knick Harley, (2000) “Simulating the Two Views of the British Industrial Revolution,” JEH, 819-846. Feinstein, Charles (1998), "Pessimism Perpetuated: Real Wages and the Standard of Living in Britain during and after the Industrial Revolution," JEH, 58(3):625-658 Galor, O. and Moav, O. (2002), “Natural Selection and the Origin of economic Growth”, QJE, 117: 1133-1191. *Galor, O. and Weil, D.N. (2000), “Population, Technology, and Growth: From Malthusian Stagnation to Demographic Transition and Beyond”, AER, 90: 806-828. Mokyr, Joel. 2005. The Intellectual Origins of Modern Economic Growth. JEH, 65(2): 285 -335. *North, D.G. and Weingast, B.R. (1989), “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England”, JEH, 49: 803-832. Temin, Peter (1997),“Two Views of the British Industrial Revolution,” JEH, 57(1): 63-82. Temin, Peter (2000), ‘A Response to Harley and Craft’, JEH, 60(3): 842-846. Wrigley E.A. (1998), Explaining the Rise in Marital Fertility in England in the Long Eighteenth Century, EHR LI (3), pp. 435-464.

7. Industrial Revolution and 19th C. economic development Grantham, George W. (1980), The Persistence of Open-Field Farming in Nineteenth-Century France, JEH, 40 (3): pp. 515-531. Hoffman, Philip (1988), "Institutions and Agriculture in Old Regime France," Politics and Society, 16, 241-264. Jeremy Edwards and Sheilagh Ogilvie (1996), "Universal banks and German industrialization: A reappraisal," Economic History Review 49:3, pp. 427-446 Kenneth L. Sokoloff and B. Zorina Khan (1990), "The Democratization of Invention during Early Industrialization: Evidence from the United States, 1790-1846," Journal of Economic History, 50, pp. 363-78. *Mokyr, Joel (2001), The Rise and Fall of the Factory System: Technology, firms, and households since the Industrial Revolution. Mimeo Nelson, R. R. and Wright, G. (1992), "The Rise and Fall of American Technology” , JEL, 30(4): 1931-1964 Richard Roehl (1976), "French industrialization: A reconsideration," EEH, 13:3, pp. 233-281 Robert R. Locke (1981), "French Industrialization: The Roehl Thesis Reconsidered" and Richard Roehl, "French Industrialization: A Reply," EEH, 18,4: 415-435. Teich, Mikulas and Roy Porter eds. (1996), The industrial revolution in national context. Europe and the USA, Cambridge: Cambridge University Press. Temin, Peter (1988), "Product Quality and Vertical Integration in the Early Cotton Textile Industry," Journal of Economic History, 48, pp. 891-207. *Wright, Gavin (1990), The Origins of American Industrial Success, 1879-1940, AER, 80(4), pp. 651-668

8. Catching up and falling behind: historical economic growth and convergence hypothesis Abramovitz Moses (1986), “Catching Up, Forging Ahead, and Falling Behind”, JEH, 46(2): 385-406. Acemoglou, D. and Johnson, S. (2005), "Unbundling Institutions", JPE, 113, 949- 995. Barro, Robert (1991), "Economic Growth in a Cross-Section of Countries," QJE, 407- 444. *Baumol, W.J. (1986),”Productivity Growth, Convergence and Welfare: What the Long Run Data Show”, AER, 76: 1072-1085. Bleaney, M. and Nishiyama, A. (2002), "Explaining Growth: a Contest Between Models", Journal of Economic Growth, 7, 43-56. Bosworth , B. P. and Collins, S. M. (2003), "The Empirics of Growth: an Update", Brookings Papers on Economic Activity, 2, 113-206. Broadberry, S.N. (1993), “Manufacturing and the Convergence Hypothesis: Long- Run Data,” JEH 53, pp. 772-95. Clark, Gregory (1987), ‘Why isn’t the Whole World Developed? Lessons from the Cotton Mills’, JEH, 47(1): 141-173. Crafts, N. (2002), "The Human Development Index, 1870-1999", European Review of Economic History. Dollar, D. and Kraay, A. (2004), "Trade, Growth and Poverty", Economic Journal, 114, F22-F49. Easterlin, Richard (1981), "Why Isn't the Whole World Developed?" JEH, 1-21 Economic History, 6, 395-405. Glaeser, E., La Porta, R., Lopez-de-Silvanes, F. and Shleifer, A. (2004), "Do Institutions Cause Growth ?", Journal of Economic Growth, 9, 271-303 Hall, R. E. and Jones, C. I. (1999), "Why Do Some Countries Produce So Much More Output per Worker than Others", Quarterly Journal of Economics, 114, 83-116. Knack. S. and Keefer, P. (1997), "Does Social Capital Have an Economic Payoff ?; A Cross-Country Investigation", Quarterly Journal of Economics, 112, 1251-1288. *De Long, J.B. (1988), “Productivity Growth, Convergence and Welfare: Comment”, AER, 78, 1138-1154. Pritchett L. (1997), “Divergence, Big Time,” JEP, pp. 3-17.

9. The phenomena of modern slavery: the US South in the 19th century David P. and P. Temin (1974), "Slavery: The Progressive Institution," JEH, pp. 739- 783. Egnal M. and J. Ernst, (1977) "An Economic Interpretation of the American Efficiency of Slave Agriculture," AER 67. Field E. (1988), “The Relative Efficiency of Slavery Revisited,” AER 78 (June 1988), pp. 543-49. Fogel R. and S. Engerman (1977), “Explaining the Relative Efficiency of Slave Agriculture,” AER 67, pp. 275-95. Fogel Robert W. (1989) Without Consent or Contract: The Rise and Fall of American Slavery. New York, London: W.W. Norton&Company. Fogel Robert W. and Stanley L. Engerman (1971), "The Relative Efficiency of Slavery: A Comparison of Northern and Southern Agriculture in 1860." EEH, 8(3), pp. 353-67. Fogel Robert W. and Stanley L. Engerman (1973), Time on the cross: the economics of American Negro slavery. New York, London: W.W. Norton&Company *Fogel R. & S. Engerman (1980), “Explaining the Relative Efficiency of Slave Agriculture: Reply,” AER 70, pp. 672-90. Gavin Wright (2003), “Slavery and American Agricultural History,” Agricultural History 77. Robert Whaples (1995), "Where Is There Consensus Among American Economic Historians? The Results of a Survey on Forty Propositions," JEH, 55:139-154. Wright G. (1979), “The Efficiency of Slavery: Another Interpretation,” AER 69, pp. 219-26.

10. XIXth century Globalisation. Bordo, M., Eichengreen, B. and Irwin, D. (1999), "Is Globalization Today Really Different than 100 Years Ago ?", NBER Working Paper No. 7195. Bordo, M., Taylor, A. and Williamson, J. G. (2003), Globalization in Historical Perspective. Chicago: University of Chicago Press. Crafts, N. (2004), "Globalization and Economic Growth: an Historical Perspective", The World Economy, 27, 45-58. Crafts, N. (2005), "The 'Death of Distance': What Does It Mean for Economic Development?", World Economics, 6(3), 1-14. Hatton, T. J. and J. G. Williamson [1994], "What Drove the Mass Migrations from Europe in the Late Nineteenth Century?" PDR 20: 1-27. (#) Kindleberger, C. P. (1975), "The Rise of Free Trade in Western Europe, 1820-1875," JEH 35: 20-55. O'Rourke, K. and Williamson, J. (2002), "When Did Globalization Begin?" European Review of Economic History, 6: 23-50. O’Rourke Kevin and Jeffrey G. Williamson (2002), “After Columbus: Explaining the Global Trade Boom 1500-1800,” JEH 62(2): 417-56. O'Rourke, K. H., A. M. Taylor, and J. G. Williamson [1996], "Factor Price Convergence in the Late Nineteenth Century," IER 37: 499-530. *Williamson, Jeffrey G. ‘Globalization, Convergence, and History’, JEH, 56(2): 277- 306.

11. Golden Standard before and after WWI. Eichengreen, B. and Sachs, J. (1985), "Exchange Rates and Economic Recovery in the 1930s", JEH, 45: 925-46. *Eichengreen, B. (1993), Globalising Capital: A History of the International Monetary System. Princeton University Press. Feinstein, C. H., Temin, P. and Toniolo, G. (1997), The European Economy Between the Wars. Oxford: Oxford University Press. Meissner C.M. (2005), "A New World Order: Explaining the Emergence of the Classical Gold Standard," Journal of International Economics 66: 385– 406. McKinnon, Ronald I. (1993), “The Rules of the Game: International Money in Historic Perspective,” JEL, 31: 1-44.

12. The Great Depression. Bernanke, B. (1995), "The Macroeconomics of the Great Depression: a Comparative Approach", Journal of Money, Credit and Banking, 27: 1-28. *Eichengreen, B. (2004), "Understanding the Great Depression", Canadian Journal of Economics, 37(1): 1-27. Eichengreen B. (1992), "The origin and nature of the Great Slump revisited," Economic History Review 45:2, pp. 213-239. Eichengreen, B. and Portes, R. (1986), "Debt and Default in the 1930s: Causes and Consequences", European Economic Review, 30: 599-640. Grossman, R. S. (1994), "The Shoe that Didn't Drop: Explaining Banking Stability during the Great Depression", JEH, 54: 654-82. Milton Friedman and Anna Schwartz (1963), A Monetary History of the United States, 1867-1960 Princeton University Press. Temin, Peter (1976), Did Monetary Forces Cause the Great Depression? New York, London: WW Norton & Company. Romer, C. (1992), "What Ended the Great Depression ?" JEH, 52: 757-84. Romer C. (1993), "The Nation in Depression," Journal of Economic Perspectives, 7(2).

13. The post-war “golden” age. Ван дер Вее Г. История мировой экономики, 1945-1990; Пер. с фр. А.И.Тихонова; Под. ред. В.И.Бовыкина. — М.: Наука, 1994. Broadberry, S. N. and Crafts, M. (2003), "UK Productivity Performance from 1950 to 1979: a Restatement of the Broadberry-Crafts View", EHR, 56, 718-735. *Crafts, N. (2004), "Fifty Years of Economic Growth in Western Europe: No Longer Catching Up but Falling Behind ?", World Economics, 5(2): 131-145. Eichengreen, Barry (2007), The European Economy since 1945: Coordinated Capitalism and Beyond. Princeton University Press. Lindbeck Assar (1983), The Recent Slowdown of Productivity Growth, The Economic Journal, 93(369), pp. 13-34 *Temin, P. (2002), "The Golden Age of European Growth Reconsidered", European Review of Economic History, 6(1): 3-22.