Drivers of Economic Development
Economic development in Britain and overseas, its causes not its consequences, is the final lineage. Paul Slack (Fellow in History at Exeter College from 1973, then Professor of Early Modern History and Principal of Linacre College until 2010), who is a prolific social historian, published The Invention of Improvement (2014), a fine study of the ideology of development from the sixteenth to the eighteenth centuries in Britain, encompassing the emergence of political economy and early estimates of national income.
A descriptive narrative had held sway from Toynbee to Mathias, but a break was made by the latter’s predecessor, John Habakkuk, whose genius was to connect welfare causally with productivity. In the post-war years, an abiding question in current policy was why labour productivity was so much higher in the United States than in Britain, despite their similarities in other respects. In American and British Technology in the Nineteenth Century (1962), Habakkuk argued that the United States suffered a shortage of industrial labour because workers could move west and set up as independent farmers with little need for hired hands. To economise on labour, American capitalists reached out for new technologies. Peter Temin, an American cliometrician, wrote that this account was inconsistent with economic theory and with some known stylised facts about the two economies (Temin 1966). Habakkuk later reflected that an invitation in 1967 to become Principal of Jesus College, Oxford, came in the nick of time to prevent a serious collapse in his self-confidence under the impact of this criticism, on the face of it demonstrating the superiority of American over British technology (Thompson 2004: 103-104). But Temin had argued mostly from theory, and theory is a premise, not a finding. Any mismatch with reality might arise from defective theory rather than historical induction. Habakkuk’s book is cited seven times more than Temin’s influential critique.How much did British economic growth benefit from empire and slavery? Sugar from West Indian slave plantations enriched merchants and planters, sweetened life a little for the labourers and stimulated the economy. Nevertheless, nowhere was wealth more detached from welfare. Figuring out this enterprise was part of the life work of Richard Pares, a Fellow of All Souls (1924-1945, 1954-1958, among several academic and government positions) and ‘perhaps the most admired and looked up to Oxford teacher of his generation' (Berlin 2001: 122), author most notably of War and Trade in the West Indies, 1739-1763 (1936), and Merchants and Planters (1960). He continued to write and to teach in defiance of a disabling disease which cut his career short. Did the profits of slavery also provide seed capital for British industrial growth? Eric Williams (later Prime Minister of Trinidad) made the case that it did in an Oxford DPhil published as the landmark Capitalism and Slavery (1944). British merchants also made fortunes in the slave trade, and the textile industry depended on raw cotton grown by slaves on millions of offshore “ghost acres” in the American South. Charles Feinstein, then a Marxist, wanted to study this question for his doctoral dissertation in 1952 but had no answer when asked by Joan Robinson, ‘How can you explain the prosperity of the Scandinavian economies if it is all due to Empire?' (Robinson quoted in Thomas 2008: 289). Patrick O'Brien took a similar approach, applying the counterfactual method and finding that ‘if the British economy had been excluded from trade with the periphery, gross annual investment expenditures would have fallen by not more than 7 per cent' (O'Brien 1982: 17; italics in original). It could be argued in response that this conception of development was too narrow in its focus on investment before the railways, when capital was not so critical (and also leaving out the heavy compensation received by planters for the abolition of slavery).
O'Brien also compared British performance with that of other countries, notably in Economic Growth in Britain and France, 1780-1914: Two Paths to the Twentieth Century (with Caglar Keyder, 1978). He reprised Habakkuk's point that ownership of land by those who worked it affected the choice of technique and induced slower urban growth in France. Its economy nevertheless arrived at similar levels of prosperity, albeit at a lesser pace but with not as much social harm.In 1969, Peter Mathias asked “Who Unbound Prometheus?” about the relation between science, technology and economic growth (Mathias 1969b). Nicholas Crafts, just before arriving in Oxford, speculated whether the occurrence of the Industrial Revolution in Britain rather than France, which had a similar endowment of talent and innovation, might not have been a matter of chance. In a class of his own in this area, Paul David (Senior Research Fellow, All Souls College, 1993-2002, Oxford Internet Institute, 2002-2008) continues to study the economics of technology. He came to prominence in the 1980s with his concept of “path dependence”, a claim that an industry might be locked into inferior technologies at an early stage because users committed prematurely to its inflexible routines. His example was famously the QWERTY typewriter keyboard. At Oxford, he continued to publish a stream of highly cited articles on the economics of science in historical settings and is cited almost five times more than any other Oxford economic historian.
In the post-war decades, several East Asian economies converged with those of the West, none more impressively than China. This motivated historians to speculate about a possible previous divergence. Kenneth Pomeranz’s The Great Divergence (2000) argued that the West only began to draw ahead of Asia in the eighteenth century. This stimulated a remarkable enterprise in Oxford, a synthesis of welfare and growth developed by Robert Allen. His innovation was to use microeconomic price and wage observations to infer macroeconomic trends.
The initial step followed the example of Rogers and used some of his data. Allen set out to establish long-run trends of prices and wages in terms of a standard subsistence basket of commodities. With a global network of collaborators, Allen constructed standard of living time series from the Middle Ages to modern times in a large number of countries. This defined the Great Divergence more precisely in terms of manual labour consumption patterns. It also provided more granular resolution to the “little divergence” between Northern and Southern Europe which persists to this day. Allen found that wages doubled in England and the Netherlands between 1500 and 1800, whereas in peripheral Europe they stagnated or declined. This led to an interpretation of the Industrial Revolution somewhat similar to the Habakkuk thesis on the relation between productivity and welfare: high wages in Britain incentivised its entrepreneurs to seek labour-saving innovations. As in North America, there was also a natural resource, cheap and accessible coal in the United Kingdom versus extensive land in the United States, except that nature worked for capital in Britain, not for labour. The combination of technical innovation and natural resources delivered a productivity breakthrough whose magnitude gave Britain a head start in development that lasted for almost a century.Oxford scholars of non-British economic history had prepared some of the ground for this work. Mark Elvin published The Pattern of the Chinese Past: A Social and Economic Interpretation (1973). D.C.M. Platt wrote in the 1960s and 1970s on the British involvement in Latin American development, Valpy FitzGerald and Rosemary Thorp on the region in more recent decades, and David Washbrook on colonial India. Pamela Nightingale, the medieval historian, wrote two books on India in the eighteenth century (1970, 1985), and one on Sinkiang, in Chinese Central Asia in the nineteenth century (with Clarmont Skrine, 1973). Roger Owen laid the foundations for his eminence as an economic historian of the Middle East, Michael Kaser edited a three-volume economic history of Eastern Europe since 1919 (with E.A Radice, 1986-1987), David Fieldhouse wrote several influential works on the political economy of imperialism, William Beinart wrote on environmental history, landownership and population in black South Africa while Feinstein’s An Economic History of South Africa (2005) was another profound investigation of how oppression can defeat markets.
Free labour markets will pay enough to motivate immediate effort, but not always to support its long-term requirements for education, health care, housing and support for disability and old age. In late Victorian Britain, almost a third of the population went short of food, shelter, clothing and fuel. It requires collective action, and ultimately government intervention, to compensate for market failures. Hence, it is odd that social policy is so incidental to economic history at Oxford, perhaps reflecting a bias against non-market arrangements. Instead, the subject is mostly taught and studied at Oxford by other kinds of historians, lawyers or social scientists. Already, Toynbee advocated municipal housing in 1884. In 1888, the Liberal statesman William Harcourt affirmed the same principle when he famously stated that ‘We are all socialists now’. That social policy is not primarily a matter of compassion but of national efficiency explicitly motivated Edwardian social insurance (Searle 1971). Alfred Venn Dicey (Vinerian Professor of Law, 1882-1909), a star of Anson’s All Souls College, described what he called the growth of collectivism (the curtailment of “freedom of contract” in favour of labour, of which he disapproved) in his magisterial Lectures on the Relation Between Law and Public Opinion in England During the Nineteenth Century (1905). Legal norms, he said, were not exogenous but always in England an expression of public opinion.
Social history is part of the official rubric of the economic history group where it is usually taken with some analytical or quantitative twist. Another strand within the Faculty of History at Oxford largely falls outside social science. It is a substantial department whose achievements are beyond my scope here, but several contributions have been salient for economic history. Asa Briggs, a giant of the discipline, was in Oxford for a decade from 1945 and from 1951 as the first Reader in Recent Social and Economic History set up for PPE. Apart from Victorian People (1954) and an excellent volume on the history of Birmingham (1952) (the first of several commissioned works), most of his immense contribution was made after he left and before he came back as Provost of Worcester College. Between them Paul Slack, Joanna Innes and Jose Harris depicted the unfolding of social policy from the early modern period and beyond the First World War. Finally, Charles Webster wrote a political history of the National Health Service (2002).
7