The Wealth of Nations does not recognize the fact of industrial production, and its analysis of price does not account for the fundamental feature of industrial markets, falling price per output unit based on exponential growth obtained by technological applications. Smith's laissez-faire doctrine contains distinctive value postulates intended to promulgate an egalitarian agrarian capitalism in the spirit of physiocracy. Criticisms of Smith by Alexander Hamilton, J.-B. Say, Andrew Ure, and Friedrich List are instanced to support the present interpretation.

Since the time of Ashley at least, it has not been possible to charge the Catholic church of the Middle Ages with having intended to throttle business enterprise by its doctrine of usury. Very few medieval writers, certainly after the early thirteenth century, wished to outlaw profit when it was a legitimate return on investment. To authoritative theologians and jurists there was a world of difference between usury, that is profit openly demanded or secretly hoped for in a contract of loan (mutuutn), and justifiable returns derived from partnerships, where there was a sharing of the risk and venture of the capital. The doctors operated with distinctions of Roman law by which the mutuum, explicitly referred to in the Vulgate at Luke 6:35, was clearly marked off from other transactions, such as the consensual contracts of partnership (societas), letting and hiring (locatio conductio), and purchase and sale (emptio venditio).

Using the 1888 Cost of Living Survey, I estimate the demand for calories of American and British industrial workers. I find that the income and expenditure elasticities of calories for American households are significantly lower than the corresponding elasticities for British households, suggesting that American industrial workers were nutritionally better off than their British counterparts. I further find that the calorie elasticity differential between the two countries was driven by the higher wages enjoyed in the United States. Additional analysis reveals that the relative price of calories was approximately 20 percent greater in Great Britain than in the United States.

The redemption system transformed the American auction of immigrant servants. The potential for exploiting immigrants was created by search restrictions in the redemption auction. A model of the auction was estimated using 4,455 German and British servant contracts. Average servant compensation equaled resident free labor compensation, and the variance in servant compensation was systematically related to the variance in servant productivity, contract restrictions, and work amenities. Competition among buyers overcame the search restrictions placed on immigrants in the redemption auction.

In the eighteenth-century British Empire and the antebellum South, slaves were concentrated in domestic service and rural enterprises like agriculture and ironworks. I argue that employers in these sectors chose to employ slaves rather than free labor because they faced especially high turnover costs—that is, costs of searching for a worker and going without labor when a free worker quit or was fired. In the absence of slavery, these sectors were marked by other institutions designed to deal with turnover costs: indentured servitude, employment agencies, and deferred compensation.

Recent accounts of medieval agricultural organization begin not with a description of “the” manor but with a warning that no single archetype may be considered appropriate. From place to place, from generation to generation, a property might be exploited as a single unit, divided between tenancies and demesne, or wholly partitioned into tenancies; and the land would be worked by a correspondingly varied mixture of “employees” and independent labor. This complex historical record is still far from being explained by a suitable model. In the secondary sources, the varying size of the demesne is most frequently attributed to changes in relative prices: the demesne is buoyant, it is argued, when output prices are high and wages low; when prices fall and wages rise, rents become more attractive and the demesne is parcelled out. The difficulty with this explanation, however, is that rents are not independent of output prices and wages: in simple economic theory, rent so adjusts to prices and wages as to always equal the surplus that could be earned by direct exploitation, and the proportion of tenant land on an estate is a matter of indifference. This does not of course mean that it was so in fact; it does mean, however, that one must carefully specify which of the many considerations neglected by that simple theory are in fact critical to the problem at hand.

This study of Indian behavior in the fur trade is offered more as a report of a study in progress than a completed piece of historical research. In fact, the research has barely begun. But in spite of its unfinished state, the tentative results of the work I have done to this point may be of some interest as an illustration of the way in which the recent revival of analytical interest in institutions may be used to develop an approach to the economic history of the fur trade.

Even in a country whose patron saint is the Horatio Alger hero, there is no parallel to their [the Japanese American] success strory.

The view that Japanese and other Asian Americans constituted an economic success story gained popularity in the mass media and among scholars during the 1960s. At a time when the demands of the Civil Rights movement were challenging the government to redress the racism ingrown in American society, Japanese and other Asian Americans were often held up as “model minorities” who had overcome discrimination through their own efforts and without aid from government laws or service programs2. This practise has led to a debate over both the extent of the successs of Asian Americans and the reasons for their economic achievement3.

New data on mortality and voyage length in the nineteenth-century slave trade make possible further testing of hypotheses on why slaves died during the middle passage. Mortality rates (defined as death per slaves embarked/voyage length in days × 1000) were higher in the nineteenth century than in earlier centuries and varied markedly between regions of embarkation. In the high mortality regions, all ships in the sample appeared to have experienced a higher death rate, suggesting that epidemics were not of prime importance. Mortality rates do not appear to have fluctuated very much during the voyage nor does the slaves–per–ton variable have much explanatory power. The major explanation is probably endemic disease.

Using the records of British firms that supplied nearly 90 percent of world trade in cotton spinning machinery, we track the evolution and diffusion of spinning technology over more than 50 years. In contrast to scenarios in which modern technologies supplant older methods, we observe two paradigms in competitive coexistence, each one supporting ongoing productivity growth through complementary improvements in machinery, organization, and workforce skills. International productivity differences were magnified under the skill-based mule, British spinners being the world's best. Global diffusion of ring spinning was driven by advances in fiber control, a “directed” technological response to the expansion of world trade.

In the early 1910s state governments debated the private versus public underwriting of workers' compensation risk. The choices they made established the existing system today and set the stage for later debates over the government's underwriting of unemployment, health, and disability risks. This article offers both quantitative and case-study analyses of states' original choices between public and private insurance. Monopoly state funds were adopted in some states because of an unusual combination of strong unions and weak insurance and agricultural interests. In other states, the emergence of progressive political coalitions played the decisive role.

Like Europeans and colonists, eighteenth-century Native Americans were purchasing a greatly expanded variety of goods. As fur prices rose from 1716 to 1770, there was a shift in expenditures from producer and household goods to tobacco, alcohol, and other luxuries by Indians who traded furs at the Hudson's Bay Company's York Factory post. A consumer behavior model, using company accounts, shows that Indians bought more European goods in response to higher fur prices and, perhaps more importantly, increased their effort in the fur trade. These findings contradict much that has been written about Indians as producers and consumers.

This article provides an overview of wealth inequality in Germany during 1300–1850, introducing a novel database. We document four alternating phases of inequality decline and growth. The Black Death (1347–1352) led to inequality decline, until about 1450. Thereafter, inequality rose steadily. The Thirty Years’ War (1618–1648) and the 1627–1629 plague triggered a second phase of inequality reduction. This distinguishes Germany from other European areas where inequality grew monotonically. Inequality growth resumed from about 1700, well before the Industrial Revolution. Our findings offer new material to current debates on the determinants of inequality change in western societies, past and present.

Until the end of the nineteenth century, Japan raised its per capita income, starting from a low level, by exporting primary commodities and importing manufactured goods. Around the turn of the century, Japan became a net importer of natural resources. Yet it is doubtful that Japan ever suffered severely from a shortage of natural resources before the Manchurian Incident of 1931. It was the military expansion in the 1930s that created an artificial shortage of mineral resources, the wholesale exodus of population, and a lowering in the standard of living of the general public.

The geographical distributions of French and British foreign investment portfolios differ markedly before World War I. Did French portfolios favor European investments just as British portfolios favored “New World” assets? Should economic rationality have encouraged investors to invest widely in the “New World” rather than in Europe? Combining Modern Portfolio Theory and a new data set comprising assets listed on the Paris and London Stock Exchanges, we show that investing in the “New World” did not yield higher returns than investing in Europe. The “European preference” of the Paris Bourse and, by extension, of French investors was not inefficient.

This paper examines the proposition that U.S. manufacturing experienced biased technical change during the period 1850–1919. Tests for bias, in Hicksian terms, are conducted using the translog cost dual. Redefined census data permit these tests to be made at the two-digit level of industry classification and with four inputs considered—labor, capital, materials, and a residual factor input. The tests demonstrate that labor-saving and capital-using biases existed, but material-using biases also were present. Furthermore, the patterns of bias varied considerably from industry to industry and often were of such a magnitude as to overpower ordinary substitution effects.

Before 1850, American farms were cut from the forest, and the work of forming a farm took time. The clearing of a few acres for first crops was followed by the endless labors of improvement—fencing, building, ditching, and the ambitions of a farmer for land could load him down for life with acres to clear and keep up. Five acres of forest clearing in a year in addition to current crops was about the limit for a farm family. Improved land could be a cash crop like any other, its yield no more risky than wheat or cotton, and only a little more remote. But even farmers who specialized in clearing land for sale might count on two hundred acres or so of forest clearing as the labor of a lifetime. The work of clearing forest was extremely hard, but it could be done in off-season, and deprived a settler not of cash income but only of hours of idleness. Nearly all the tasks could be done by the little labor force under a farmer's control—by sons, or on southern plantations by slaves; and the work converted otherwise half-idle labor into an important form of farm capital.

The purpose of the following essay is to evaluate the existing economic opportunities for Jewish immigrants from Eastern Europe and to indicate the pace of their economic progress during the period 1890–1914. This purpose can best be achieved by viewing the mass migration of these European Jews in the proper perspective, that is, in terms of the dynamics of their situation at the places of original habitat; second, by differentiating successive cohorts of immigrants in terms of their skill composition, literacy, and degree of experienced urbanization, all elements important for the adaptability to and utilization of existing economic opportunities; third, by analyzing the structure of the U.S. industries that provided employment opportunities to the East European Jewish immigrants; fourth, by assuming the income level and standard of living of the native-born labor force as the yardstick for measuring the economic progress of the immigrants. Such an approach may broaden our understanding of the mechanism of adjustment that enabled the Jewish immigrants from Eastern Europe both to take advantage of existing economic opportunities and to create new ones.

Increasing our knowledge of Tokugawa economic history is important for a better understanding of the causes of the rapid Japanese industrialization which followed, but as yet no attempt has been made to provide a theoretical framework with which to analyze the Tokugawa economy. The cost of neglecting to work out a new economic history of Tokugawa Japan is high. Many Western historians, economic as well as others, continue to make use of findings and interpretations provided by Japanese economic historians, most of whom are Marxist in their ideological and methodological orientations. Presented with the force of ideological conviction and repeated in book after book, the Marxist view of Tokugawa economic history is so deeply rooted in Japanese literature that it can claim many followers who make use of its interpretations and views without suspecting the ideological and methodological framework upon which they rest. Another increasingly serious cost is that many of the research findings contributed recently by a few Western scholars and a small group of Japanese economic historians continue to remain disjointed findings in search of an analytical framework which can accommodate them into a meaningful whole.