History by Numbers: The Importance and Risks of Economic History
Charles W. King
As the field of economics has developed better methods for understanding economic systems, scholars have used them to both look both forwards and back. For economists applying historical data allows them to refine and improve their models and theses. For historians economic methods facilitate big picture history. Tools like Gross Domestic Product (GDP) and Consumer Price Indices (CPI’s) are as useful to historians as they are to economists and policymakers. They allow historians to compare and contrast the economic history and development of technologies and politics in disparate parts of the world that were difficult to compare based on narrative history.
One of the most important questions for historians and social scientists for the past two centuries has been the rise of Europe; what was it that led Europe—particularly Great Britain—to become the power that it was in the 19th and 20th centuries? For decades the predominant historical narrative was one of the “Protestant Work Ethic” and market capitalism. Historians reached further and further back into European history to find the roots of industrial capitalism in the most rudimentary medieval markets.
This narrative was upended by economic histories of Europe, Asia, and the Middle East. Comparisons of agricultural productivity in the richest parts of Europe (Great Britain, Holland, and Italy) and the richest part of China (the Lower Yangtze Delta) found that they were roughly equal through 1800. Court documents and merchant’s ledgers in reveal that the commoditization of land occurred simultaneously in both England and Ottoman Palestine. These revelations have helped historians better understand how economies and nations have developed.
Innovation in economic history has not been without controversy. Robert William Fogel and Stanley L. Engerman’s 1974 book Time on the Cross: The Economics of American Negro Slavery attempted to revise the narrative of American chattel slavery, arguing that it was both more productive and less harsh than historians and the public at large had previously believed. Fogel and Engerman rely on the measurement of Total Factor Productivity (TFP) to demonstrate slavery’s productivity. TFP cannot be measured. It is found by measuring total output, labor input, and capital input, weighting the importance of capital and labor, and deriving TFP from those numbers. It is the fuzziest of fuzzy maths. To show the quality of food each slave received Fogel & Engerman used the weight of pork each slave was given per week, failing to consider the cut and quality of pork. The result is a tremendously important but problematic work.
Economic history is an innovative and important field of history with ramifications for policy-makers as well as historians. Understanding long term trends in economics and what caused the European breakout will help formulate new policies. But historians, economists, and policy-makers must resist the temptation to use economic methods to distill history down to a single statistic. Doing so ignores important variables and human factors that will continue to make both academic research and governance difficult, but without them history and policy will become myopic, less illuminating, and less useful.
Further Reading
"A not-so-golden age," The Economist, June 15, 2017, accessed June 15, 2017, http://www.economist.com/news/china/21723459-how-will-affect-xis-chinese-dream-china-has-been-poorer-europe-longer-party.
Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, NJ: Princeton University Press, 2000).
Max Weber, The Protestant Ethic and the Spirit of Capitalism trans. Talcott Parsons, (London, UK: Allen and Unwin, 1930).
Fernand Braudel, The Mediterranean and the Mediterranean World in the Age of Philip II (Berkeley: University of California Press, 1996)
Beshara Doumani, Rediscovering Palestine: Merchants and Peasats in Jabal Nablus, 1700-1900 (Berkeley, CA: University of California Pres: 1995).
Robert William Fogel & Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery (New York, NY: W.W. Norton and Company, 1974).