Economics, like geology, is an historical science. Geology has made incredible advances by accepting it is an historical, rather than a laboratory science. Economic historians can help economics make similar advances by adopting the research strategies of modern geology. Intensely empirical and global in their range, today's geologists focus on the historical remains of shocking, usually catastrophic, events in the earth's past. Already empirical and global, economic historians have ample shocks to study whether their specialty is population, technology, or institutions. A few examples of the possibilities should stimulate us to reinvigorate our parent disciplines of economics and history.

Did late-nineteenth-century U.S. tariffs promote infant industries? After earlier failures, the tinplate industry became established and flourished after receiving protection with the 1890 McKinley tariff. Treating producers' entry and exit decisions as endogenous, a probability model is estimated to determine the conditions under which domestic tinplate production will occur. Counterfactual simulations indicate that, without the McKinley duties, domestic tinplate production would have arisen about a decade later as U.S. iron and steel input prices converged with those in Britain. Although the traiff accelerated the industry's development, welfare calculations suggest that protection does not pass a cost-benefit test.

In 1855 the volume of immigration to the United States dropped precipitously, signaling the end of the first mass migration of Europeans. Although other work blames the decline on an economic depression, the outbreak of the Crimean War, or the improvement of conditions in Europe, this article argues that the rise of nativism was the initiating cause of the decline. This result is important because it affects our view of the factors that have cyclical effects on the volume of immigration.

Southern unions were the weak link in the American labor movement, organizing a smaller share of the labor force than did unions in the northern states or in Europe. Structural conditions, including a racially divided rural population, obstructed southern unionization. The South's distinctive political system also blocked unionization. A strict racial code compelling whites to support the Democratic Party and the disfranchisement of southern blacks and many working-class whites combined to create a one-party political system that allowed southern politicians to ignore labor's demands. Unconstrained by working-class voters, southern politicians facilitated strikebreaking and favored employers against unions.

The three articles that follow this introductory essay reflect a rapidly growing effort in the social sciences to integrate institutional analysis with more traditional theory. In economic history, institutional analysis attempts to expand and enrich our understanding by modeling the ways in which the “rules of the game”–specifically, political and economic institutions–have affected economic behavior. By drawing on the literature of political economy, for example, economic historians can explore how institutions have interacted to affect economic performance over time.

This study provides an empirical test of North and Weingast's theory of British capital-market development after the Glorious Revolution. The evidence is consistent with the hypotheses that institutional innovation in the 1690s led to the dramatic growth in London capital markets, and that threats to these institutions caused financial turmoil. We also find the economic motivation for these innovations to be consistent with the work of Ekelund and Tollison.

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.

Historical events are reflected in asset prices. We analyze movements in the price of bonds issued by five European governments and traded on the Swiss bourse between 1928 and 1948, with special attention to the war years. Some war events that are generally considered crucial are clearly reflected in government bond prices. This holds, in particular, for the official outbreak of the war and changes in national sovereignty. But other events to which historians attach great importance are not reflected in bond prices, most prominently Germany's capitulation in 1945.