Economics 129: American Economic
History
J-L Rosenthal (jlr
at hss.caltech.edu) Office:
Baxter 133.
T-TH: 9:00-10:25 Baxter 128
Rather than teach American Economic
History as a list of topics through time, we will look at the record of
American economic performance through three lenses: technical change,
federalisms and financial development. You can all read a textbook, but you
have analytical skills that should make a conversation around topics that are
more substantive (both in content and form) more interesting and valuable. The
readings assigned are therefore research articles. Should you want more
background you can consult two text books (Attack and Passel “a New Economic View of Economic history”
or Walton and Rokoff, History of the American Economy) or the Cambridge Economic History of the U.S. both of which are on
reserve.
If you have data questions, the
Historical Statistics of the U.S. are a wonderful on line resource
http://hsus.cambridge.org/HSUSWeb/HSUSEntryServlet.
ORGANIZATION
Class: We
will discuss the assigned reading (s) during the first half of each class. You
are encouraged to seek out connections across the readings (both those assigned
for the day and those that we have seen before) and between past and present.
In the second half of the section I will lecture on the material to come.
Work expectations
Reading:
each class meeting has one or two readings (they are preceded by a*). You must
complete at least of these and respond to the relevant queries. This task
should require an hour or an hour and half of your time. Your task is to
identify A. important issues (What makes this an interesting question), B. Strange issues in either the logic, the evidence, or
the method of analysis, C. are there lessons from this for other contexts? Then you must write no more than a page (a
paragraph is ideal) that explain what you think about the reading, these notes
are due at the end of each class. The
principal value of these notes is that they make sure you have something to
contribute to the conversation.
Writing and examination:
Beyond the class assignments, you are expected to complete two papers of about
2000 words each. Paper 1 first drafts are due in class January 31, final drafts February
9, 5pm in my box. Paper 2 first drafts are due in
class March 1, and final drafts March 15, 5pm by email. The tight schedule is designed to give me
time to give you feed back between drafts For more
details on papers see the end of the syllabus
Presentation:
You must also present a paper/book sometime in the quarter (on the reading list
preceded by a (p). You will have 10 minutes so you must turn in a two page
outline/summary of your presentation to say. We will decide on a schedule of
presentations during Class 3.
READING LIST
Introduction to
Growth over the Long Term.
Jan 5 Day 1: Introduction to growth
No reading
Jan 10 Day 2: Markets and Inequality
* Engerman, Stanley, and Kenneth Sokoloff,
1997. “Factor Endowments: Institutions, and Differential Paths of Growth Among
New World Economies: A View from Economic Historians of the United States,” in
S. Haber ed. How
Latin America Fell Behind: Essays on the Economic Histories of Brazil and
Mexico, 1800-1914.
Section 1: Technological Change
A. Agricultural
Productivity and Technology
Jan 12 Day 1: Plants and animals
* Olmstead,
Alan, and Paul Rhode, 2002. “The Red Queen and the Hard Reds: Productivity
Growth in American Wheat, 1800-1940” The
Journal of Economic History, Vol. 62 (4):929-66.
(p) Alan L.
Olmstead. 2009. “The First Line of Defense: Inventing the Infrastructure to
Combat Animal Diseases,” The Journal of
Economic History, Vol. 69 (2):327-57.
Jan 17 Day 2: Property
*
Hornbeck, R. 2010. "Barbed Wire: Property Rights and Agricultural
Development," Quarterly Journal of Economics, 125:2. PDF
link
(p) Kantor,
Shawn. 1991. “Razorbacks, Ticky Cows, and the Closing
of the Georgia Open Range: The Dynamics of Institutional Change
Uncovered,” Journal of Economic History, 51(3).
B. Technology as
embodied in machines
Jan 19 Day 1: Speed and Power
* Knick Harley,
1988. “Ocean Freight Rates and
Productivity, 1740-1913: The Primacy of Mechanical Invention Reaffirmed,” The Journal of Economic History, Vol.
48(4):851-76.
(p) Allen Robert
C. 1979. “International Competition in Iron and Steel, 1850-1913,” The Journal of Economic History, Vol. 39(4):
971-97
(p) Fishlow, Albert. 1966 Productivity and Technological Change
in the Railroad Sector, 1840-1910. In Dorothy S. Brady.
Ed. Output, Employment,
and Productivity in the United States after 1800.
Jan 24 Day 2: Cotton (machines and workers)
* Clark,
Gregory, 1987 Why Isn't the Whole World Developed? Lessons from the Cotton
Mills” The Journal of Economic History
47(1): 141-173. PDF link
(p) Sandberg,
Lars, 1969. “American Rings and English Mules: The Role of Economic Rationality
“The Quarterly Journal of Economics,
Vol. 83(1):25-43:
(p) Saxonhouse, Gary and Gavin Wright. 2010. “National
Leadership and Competing Technological Paradigms: The Globalization of Cotton
Spinning, 1878-1933,” The Journal of
Economic History 70(3): 535-66.
C. Technical
change, skills and education
Jan 26 Day 1:
Learning by markets
* Sokoloff, Kenneth. 1984 “Was the Transition from the
Artisanal Shop to the Non-mechanized Factory Associated with Gains in productivity?”
Explorations in Economic History Vol.
21(4):351-82.
(p) Ross
Thomson, Structures of Change in the Mechanical Age: Technological Innovation
in the United States, 1790 to 1865. Johns Hopkins UP 2009.
(P) Lo Shih-Tse and Dhanoos Sutthiphisal, "Crossover Inventions
and Knowledge Diffusion of General Purpose Technologies? Evidence
from the Electrical Technology. The Journal of Economic History
70(3)744-64.
"
D. Patents and the market for ideas
Jan 31 Day 1: The Market for Ideas
* Sokoloff, Kenneth L. and B. Zorina
Khan, 1990. “The Democratization of Invention During Early Industrialization:
Evidence from the United States, 1790-1846” The
Journal of Economic History, Vol. 50 (2):363-78. PDF Link
* Lamoreaux,
Naomi R., Kenneth L. Sokoloff, and Dhanoos
Sutthiphisal, 2008 “The Reorganization of Inventive Activity in the United
States in the Early Twentieth Century” in Costa and Lamoreaux eds.Understanding Long Run Economic Growth NBER 2011.
FIRST
DRAFT OF PAPER #1 due in Class
Section 2: Taxes and Public Goods
Feb 2 Lecture: Union Imperfect
No reading
Feb 7 Taxes
* John Wallis. "American Government Finance in the Long
Run: 1790 to 1990," Journal of Economic Perspectives, 2000. PDF Link
(p) Boustan,
Leah, Fernando Ferreira, Hernan Winkler and Eric
Zolt. 2010. "Income Inequality and Local Government in the United States,
1970-2000," NBER Working Paper 16299.
March 9 Day 2: Education.
* Goldin
Claudia, 2001. The Human-Capital Century and American
Leadership: Virtues of the Past” Journal of Economic History, Vol 61 (2) 263-92.
PDF Link
(P) Moelhing Carolyn and Melissa Thomasson.
2012. “The Political Economy of Saving Mothers and Babies: The Politics of
State Participation in the Sheppard-Towner Program” The Journal of Economic History 72(1).
.
FINALDRAFT
OF PAPER #1 due 5 PM February 10
Feb 14:
Federalism
Paul Rhode and Koleman Strumpf. “Assessing the
Importance of Tiebout Sorting: Local Heterogeneity
from 1850 to 1990,” American Economic Review 93:5:1648-77. PDF Link
Section 3: Finance and Financial crises
A. Banks, Loans and
Knowledge
Feb 16 Lecture: Risk and Return
No reading
Feb 21 Day 1: Bank Regulation
* Naomi R
Lamoreaux, 1986. Banks, Kinship, and
Economic Development: The New England Case.” The Journal of Economic History, Vol. 46(3):647-67 PDF Link
(p) Sylla, Richard,
1969. Federal Policy, Banking Market Structure, and Capital Mobilization in the
United States, 1863-1913. The Journal of
Economic History, Vol. 29 (4): 657-86.
(p) Carlson Mark ,
Kris Mitchener and Gary Richardson “Arresting Banking Panics: Federal Reserve
Liquidity Provision and the Forgotten Panic of 1929.” Forthcoming in the Journal
of Political Economy 2012
B. Financing
Growth and Crises
Feb 23: Mortgages and Crises
* Kenneth
Snowden. 1995. "The Evolution of Interregional Mortgage Lending, 1870‑1940:
The Life Insurance-Mortgage Company Connection. In Lamoreaux and Temin eds.
Coordination and Information: Historical Perspectives on the Organization of
Enterprise, Univ. of Chicago, 1995, 209-47.
(p) Rajan
Raghuram and Rodney Ramcharan 2010. The Anatomy of a Credit Crisis: The Boom and
Bust in Farm Land Prices in the United States in the 1920s. Mimeo U Chicago. PDF Link
(p) Bogue Alan, Money at Interest.
Feb 28 Watching over the Capitalists
* Lamoreaux,
Naomi and Jean-Laurent Rosenthal, “Corporate Governance and the Plight of
Minority Shareholders in the United States before the Great Depression.” In E. Glazer and C. Goldin eds. Corruption
and Reform: Lessons from America’s History. University
of Chicago Press. 2006, 125-152.
(p) J Bradford DeLong, 1995. “Did J-P Morgan add Value?” In
Lamoreaux and Temin eds. Coordination and
Information: Historical Perspectives on the Organization of Enterprise,
Univ. of Chicago,, 209-47.
C. From
Investment banks to firm finance
March 1: Firms, law and markets
(*) Hilt, Eric,
2008, When did Ownership Separate from Control?
Corporate Governance in the Early Nineteenth Century. Journal of Economic History Vol. 68(3): 645-85.
(p) Musacchio,
Aldo, 2008. Can Civil Law Countries Get Good Institutions? Lessons from the
History of Credit and Bond Markets in Brazil” The Journal of Economic History , Vol. 68(1): 80-108.
FIRST DRAFT OF PAPER #2 due in class
March 5 Day 3: Capital markets
(*) Rajan, Raghuram and Luigi Zingales.
2003. “The Great Reversals: The Politics of Financial Development in the 20th
Century" Journal of Financial
Economics, Vol. 69(1), 5-50. PDF Link
(p) Haber,
Stephen. 1991. Industrial Concentration and the Capital Markets: A Comparative
Study of Brazil, Mexico, and the United States, 1830-1930.” The Journal of Economic History, Vol. 51(3):559-580. PDF link
Section 3: The American Economy at 400:
March 9 Day 2: Life and power
* Piketty,
Thomas and Emmanuel Saez. "Income Inequality in
the United States, 1913-1998" Quarterly
Journal of Economics, 118(1), 2003, 1-39 PDF Link
(P) Wojciech Kopczuk and Emmanuel Saez, “Top Wealth Shares in the United States, 1916-2000:
Evidence from Estate Tax Returns.”
(p) Frydman, Carola and Raven Saks, 2008. “Executive Compensation: A New
View from a Long-Run Perspective, 1936-2005” mimeo
FIRST
DRAFT OF PAPER #2 due March 15 5pm
Writing
guide, see next page
A
Guide to Writing Papers
Purpose: These papers
aim to give you an opportunity to integrate the material we have seen without
having to do an excessive amount of research.
What matters is that you think through the material, not how many facts
you can compile. You are of course welcome
to do some research or further reading. They are also an opportunity for you to
practice/sharpen your writing and presentation skills. To that end your first
drafts will be read and feedback will be provided, but not graded. We all have
the right to error, and we learn by fixing mistakes, not by getting things
right the first time. Hence after feedback you will revise your paper and
return it to me for grading and further comments.
Sources: Wikepedia, however is not a source, while it is useful as a
quick reference, it is not evidence for this class. If
you have data questions, the Historical Statistics of the U.S. are a wonderful
on line resource http://hsus.cambridge.org/HSUSWeb/HSUSEntryServlet.
Citations are essential, plagiarism (failure to cite, or extensive borrowing
from other authors) is unacceptable.
Keep citations brief (3 lines or less).
Structure:
When
you turn in a paper, it must have (1) a title, (2) a short summary which
contains both the question you are answering and the summary of the answer, (3)
an outline (4) the body of the paper,
(5) a set of references (you can use in text author, date page, citation). It has been found over the years, that being
able to concisely state the question and the answer is a necessary step to
writing a good paper. Outline help you think through where different ideas go.
Length: The body of the
first paper should not exceed 1700 words (5 pages double space 12 pt times new
roman, standard margins). The body of the second paper should not exceed 2300
words (7 pages, same format). Shorter papers that are tightly argued and
confront the material we have seen are acceptable. First drafts that are 20%
shorter than the final paper are a good way to start.
Collaboration: papers must be
sole authored. You are free and encouraged to discuss ideas with your peers but
before you put pen to paper or fingers to key board you must return to your
ideas and your arguments.
Paper
topics:
You can design your own paper topics, if so you should turn in a topic
paragraph to me no later than January 24 for the first paper and February 21
for the second paper. Alternatively you can pick from one of the topics below.
Topics, see next page
Topics for Paper 1:
1.A:
For some scholars the key to growth is well defined and well enforced property
rights. For others it is the broad diffusion of knowledge, to what extent is
the material in this course consistent with the idea that there are important
tradeoffs between these two views. Can either explain America economic
performance?
1.B:
Olmstead and Rhode draw a fundamental difference between biological and
mechanical technologies. To what extent are do differences involves who can
invent versus who can profit from different forms of
technologies versus how these different technologies become obsolete.
1.C:
How much of the evidence so far is consistent with the induced innovation
hypothesis and how much favors a more broad based process of growth? Did the relative importance of factor prices
change over time, or is just that the structure of the economy has changed?
Topics for Paper 2:
1) Narrow:
From the reading in the second half of the course
please consider whether in U.S. economic history growth causes the development
of capital markets or is it the other way around (finance causes growth).
2) Not
so narrow
In the three essays that we read of Ken Sokoloff, he made a great deal of the importance of broad access to
markets. To what extent does the history of capital markets in the U.S. show
that they also responded to market opportunities? To what extent does it
suggest that financial institutions participated in giving broad access to
market to either producers or consumers?
3) Broader
Does history matter? Why? In class we have often
discussed the connection between current policy issues (budget deficits,
education…technical change). Please
define a way whereby you can evaluate whether history matters to understanding
economic growth (or not). And then using the material we have seen in this
class make a case of your thesis.
4) Make
your own.
If you want to make your own, (A) keep in mind that
research is not the goal, rather it is the crafting of an answer to a question
that stems from the class material. (B) produce a
question and one paragraph/one page idea about how you might go about answering
in by February 23, so that I may approve it.