Economic development requires both secure property rights and the ability to reallocate property in response to technological and other changes. Significant reallocations have occurred repeatedly throughout U.S. history and have often been involuntary. This essay considers the question of how property rights can be subject to frequent involuntary reallocation and still be considered secure.

Andrew Carnegie

Between 1933 and 1936 the Home Owners’ Loan Corporation purchased more than a million delinquent mortgages from private lenders and refinanced those loans for the borrowers. Its primary goal was to break the cycle of foreclosure, forced property sales and decreases in home values that was affecting local housing markets throughout the nation. We find that the volume of HOLC lending was related to measures of distress in local (county-level) housing markets and that these interventions increased 1940 median home values and homeownership rates, but not new home building.

“[A] tremendous surge of residential building in the [last] decade… was matched by an ever-increasing supply of homes sold on easy terms [and only]… a small decline in prices was necessary to wipe out this equity. Unfortunately, deflationary processes are never satisfied with small declines in values. They feed upon themselves and produce results out of all proportion to their causes… In the field of real estate finance, particularly, we have depended so much upon credit that our whole value structure can be thrown out of balance by relatively slight shocks. When such a delicate structure is once disorganized, it is a tremendous task to get it into a position where it can again function normally.”1

Henry Hoagland, 1935

Focusing on the New York banking sector, we analyze a neglected, but profound impact of the National Banking Acts. By resisting federal banking legislation and “boycotting” newly chartered national banks, the New York Clearing House Association members created market opportunities for the new entrants to dominate the correspondent banking market. The new entrants’ aggressive tactics including interest payments on deposits increased their vulnerability to panicky withdrawals by country banks. They also magnified conflicts of interest within the clearinghouse, which weakened its central banking functions and further destabilized the macroeconomy.

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.

Building on a large sample of elderly French individuals, we evaluate the resources that were available to the old. We find that a considerable percentage of the French population did not have sufficient assets to live off of when aged. We compare the savings behaviors of pensioners and non-pensioners at a time when only a small part of the labor force was entitled to a pension. We show that pensioners were better able to accumulate wealth than were non-pensioners, even when we take into account their occupation and inherited wealth.

“Oh! La misère des vieux sans pain, des vieux sans espoir, sans enfants, sans argent, sans rien autre chose que la mort devant eux, y pensons-nous? Y pensons-nous, aux vieux affamés des mansardes? Pensons-nous aux larmes de ces yeux ternes qui furent brillants, émus et joyeux, jadis?”1

Guy de Maupassant

We examine the role of social and geographical networks in structuring entry into premodern London's skilled occupations. Newly digitized apprenticeship indenture records for 1600–1749 offer little evidence that personal ties strongly shaped apprentice recruitment. The typical London apprentices had no identifiable tie to their master through kin or place of origin. Migrant apprentices' fathers were generally outside the craft sector. The apprenticeship market was strikingly open: well-to-do families accessed a wide range of apprenticeships, and would-be apprentices could match ability and aptitude to opportunity. This fluidity aided human capital formation, with obvious implications for economic development.

While economists predicted a return to double-digit unemployment rates during the reconversion from World War II, this outcome did not materialize. This article explores the role that the significant rise in net exports—which accounted for nearly 4 percent of GDP in 1946 and 1947—played in helping the United States avoid a postwar unemployment problem. Using an input-output analysis, we find that the export surplus directly accounted for 1.33 million jobs in 1946 and 1.97 million jobs in 1947. This accounts for close to half of the gains to private sector employment during these years.

Why was the Industrial Revolution British? In a recent article published in this Journal, Robert Allen argues that only in England was the price of labor relative to capital high enough to justify the adoption of the labor-saving technologies which characterized the Industrial Revolution.1 To support his argument, he uses the spinning jenny as a case study. The jenny was indeed an important labor-saving technology that was invented and widely adopted in England but not in France. Allen explains this fact by calculating the returns to adopting the jenny in each country: according to his calculations the jenny was profitable in England but not in France.

The present note shows that Allen's conclusions rest on implausible profitability computations. In particular, Allen assumes that output remains constant after the adoption of the jenny while hours worked decrease dramatically. From a theoretical perspective, this is equivalent to an assumption that hours worked move inversely with the marginal product of labor. As soon as these restrictive assumptions are abandoned, the jenny turns out being profitable both in England and in France. Hence the mystery of the adoption of the jenny during the Industrial Revolution remains.

In “The Industrial Revolution in Miniature,” I calculated that the spinning jenny was profitable to install in England in the 1780s but not in France.1 My calculations assumed that a spinner using a wheel in a domestic setting worked a total of 100 days per year and spun 100 pounds of coarse cotton (one pound per day). The jenny raised labor productivity to three pounds per day in the “most likely” scenario. I showed that it would have been cheaper to spin 100 pounds per year with a jenny than with a wheel in England, while the reverse would have been true in France. Hence, the jenny was installed in England rather than France. Ugo Gragnolati, Daniele Moschella, and Emanuele Pugliese have pointed out that this argument assumes that output was kept at 100 pounds per year, and the effect of the jenny was to reduce the spinner's work year to only 33–1/3 days per year.2 They suggest that it was more likely that the spinner would have continued to work 100 days per year and produce 300 pounds of yarn instead. In that case, they argue, it would have been profitable to install the jenny in France as well as England. Profitability would have increased in both countries under these assumptions because capital costs would have been cut by a third if three times as much output was produced from the same capital (although profitability was still much higher in England). Hence, they conclude that economic considerations do not explain the diffusion of the jenny.