Thoughts on the New Economic History

Or is it? Undeniably, in the years from the mid-1950s to the early 1970s, economic history was exciting, as an ever-expanding army of scholars, stirred by the theories of development economists, and buoyed up by the apparent successes of the post-war welfare state, turned with relish to Britain’s industrial past, partly to test and refine the grand generalisations of Toynbee, the Hammonds, Clapham and Ashton, and partly to see what (if any) guidelines that past might yield for those who wished to transform the Sahara Desert of the present into the Sunset Boulevard of the future. As a result, the Economic History Review scintillated with provocative, seminal and wide-ranging articles, many of them nurtured and inspired by that most creatively entrepreneurial of editors, M.M. Postan. Major controversies, such as the storm over the gentry and the standard of living debate, were fought within its pages, as the protagonists assailed each other like Punch and Judy – with a great deal of punching, if rather less judiciousness. And a wide variety of substantive problems – the growth of population, capital accumulation, home and overseas demand, technological change and innovation – were identified, investigated and then synthesised in a new generation of late Sixties textbooks which remained the last word for undergraduates until the appearance of Floud and McCloskey’s volumes.

Since then, the wheel has turned again, as these second-generation generalisations have themselves been further tested and refined. But the scrutiny to which they have been subjected has been fundamentally altered by the emergence of the ‘New Economic History’, which rose to prominence in the United States in the late 1960s, and which has profoundly shifted the subject’s status, from being a client of history to a vassal of economics. The two most famous works in this genre were both written by Robert Fogel, who was thus established as midwife and guru, entrepreneur and high priest, of this new cult. The first, Railroads and American Economic Growth, was an audaciously-conceived study which cut the iron horse so emphatically down to size, by exploring a hypothetical late 19th-century American economy without railways, that some critics wondered whether Professor Fogel himself was any longer on the rails. The second, Time on the Cross, was a co-authored, revisionist investigation into the economics of the American slave experience, which made many people angry at the time by suggesting that slaves did not fare as badly on the Ante-Bellum plantations as had generally been supposed. Both these books were bold and brash, trumpeting their new methodology with such messianic zeal and impassioned conviction that it seemed only a matter of time before old-fashioned economic historians became the hand-loom weavers of their generation – doomed to sad decline and slow extinction.

From the beginning, this ‘New Economic History’ was characterised by a distrust of literary and impressionistic evidence, by a heavy reliance on quantitative data elaborately manipulated and computed, by the explicit and widespread employment of economic theory, by the careful specification and testing of hypotheses, and by the use of the counterfactual technique, which required imagining how an economy would have evolved if certain specified ‘factors’ had not actually been there – a sophisticated version of the ‘If Napoleon had won the Battle of Waterloo’ school of history. Old-fashioned economic history was condemned for its unsystematic and unscientific marshalling of unreliable data; the new discipline ardently aspired simultaneously to bring economic standards of logic to history and historical standards of fact to economics; and its practitioners spoke with relish of having ‘captured’ the Journal of Economic History and moulded it to their new creed. The military metaphor well reflected the embattled and belligerent status of the ‘New Economic Historians’ who soon found themselves waging war on two fronts: crusading against the infidel without, and quarrelling among themselves within. And the weapons with which these battles were fought were fashioned in the white-hot heat of the Sixties technological revolution. The solitary scholar-gladiator of old, replete with lance and trident, was replaced by a new model army of research assistants, computer experts and applied economists who, under the guidance of a lab-coated field-marshal, launched massive bombardments with all the scholarly firepower (and some of the strategic futility) of a Somme offensive.

Not surprisingly, it took longer for this approach to catch on in England (where economic historians had always tended to be historians first and economists second, and where the vast sources required for such projects were initially harder to obtain) than it did in the United States (where the circumstances in both cases were rather the reverse). So although there have been some important individual studies, The Economic History of Britain since 1700 is the first full-scale attempt to apply the ‘New Economic History’ systematically and comprehensively to this country’s industrial past. The result – as befits its neoclassical presuppositions – is a book carefully tailored to the requirements of the market: the paperback version is moderately enough priced for undergraduates; there is a large and comprehensive bibliography; each of the short chapters is written by an expert on the subject; and the statistical methods and economic theory which are employed are fully explained. The editors and publishers are to be congratulated on producing two volumes which serve both as an up-to-date guide to the development of the modern British economy and as a monument to the methodological changes which have taken place within the discipline during the last decade and a half. This work is not merely the history of an economy in the past: it is also a progress report on economic history in the present.

But is the result, as the editors hope, exciting? Does it convey in words the drama which is so vividly caught in the picture on the cover of Volume One? And does it suggest that British economic history has been revived and reinvigorated by the importation of this new transatlantic methodology? The volumes are so well-intentioned that it would be agreeable to answer positively: but it is rather harder actually to do so. In the first place, much of the writing is arid and bleak: if the contributors are lit up by the substantive or methodological excitement of what they are doing, they certainly keep their ecstasy very much in check. Of course, it is difficult to write lively, high-coloured prose when the subject-matter requires graphs, tables and statistics in profusion, and when complex concepts and theoretical jargon must be deployed with precision and care. But even if, as the editors candidly admit, economic history is concerned with ‘the dullest parts of human life’, that is no justification for writing it in the dullest sort of human prose. Indeed, as the welcome and characteristically zestful contributions of Professor McCloskey himself eloquently demonstrate, there is really no need to write like this at all – although his predilection for literary allusion does lead him mistakenly to suppose that the Holmes-and-Watson story about the dog that didn’t bark in the night comes from ‘The Hound of the Baskervilles’. High marks for coincidental correlation, low for causal attribution.

It is also rather unfortunate that, because of the time-lag in the diffusion of this innovation across the Atlantic, this book has come out at the very moment when, in the United States, there is a growing recognition that the ‘New Economic History’ has not lived up to the great expectations which were initially (if in retrospect rather naively) entertained of it. The climacteric of Cliometrics has come and gone: so the time is not exactly propitious for the appearance of these two volumes. Despite the massive assaults that have been launched on subjects such as the economics of slavery, very little sure ground seems to have been gained, and there are growing doubts as to whether this new methodology can be used authoritatively on any but the most trivial of projects. The statistical data available, even for the 19th century, seem so fragile as to belie the elaborate manipulations to which they are subjected, and the whole concept of the counterfactual – of inventing what did not happen in order to explain what did – seems altogether too clever by half (= 50 per cent). Above all, there is a real and growing anxiety about the ominously ahistorical nature of an enterprise which is so wedded to the application of neoclassical economic theory that it cannot accommodate more diverse modes of human behaviour, that it assumes a static, equilibrium economy when its real concern is with change over time, and which presupposes perfect competition, full utilisation of resources, rational and profit-maximising entrepreneurs, and non-interference by government, when it is clear that no past society has ever conformed to these fanciful assumptions.

Certainly, there is much in The Economic History of Britain since 1700 which will lend support to doubts such as these. The first volume in particular seems conceived extremely narrowly: among the conventional topics of economic history which go virtually unmentioned are entrepreneurship, the city, war, government, banking, taxation and the trade cycle. There is no sense of the regional nature of the English economy; Ireland and Scotland are completely ignored; and Wales fares little better. Apart from one chapter which rushes bravely and breathlessly through social change, there is no awareness of religion, ideology, social attitudes or cultural values, still less any attempt to come to terms with contemporaries’ experience of what was happening. And, on the positive side, even those subjects which are included are treated in a negative and curiously narrow-minded way. Canals, steam power, railways, cotton, capital, technological change, exports, free trade, home and overseas demand, are all analysed in turn, and each is pronounced not to have been ‘indispensable’ to economic development. ‘The phrase-turner in economic history,’ we are grandly informed, ‘yearning for romance in the counting house and the factory’, who delights ‘in verbal play with big events and big machines’, is not merely disappointed: he is positively assailed. The idea of the Industrial Revolution as an heroic happening, as conventionally embodied in the picture on the dust-jacket, is seen as at best atypical and at worst a myth.

Of course, there is much in this which is of value. It is important to have established that old and crude notions about cotton or steamengines or exports being leading sectors can no longer be sustained. And it is especially comforting in these days of rapid de-industrialisation to be told that, even as late as 1860, the Industrial Revolution was ‘the central event in modern Britain more in memory than in happening’. But if everything once thought to be big and indispensable is now presented as small and insignificant, it is not entirely clear, historically speaking, what such a reformulation accomplishes. After all, no one would say that Floud and McCloskey’s book is indispensable: but, since they presumably wish us to read it because of its substantive contents, that is hardly the point. To limit discussion of what are still recognised as the major themes of the Industrial Revolution to proving that none was as important as was once thought seems a curiously myopic way to proceed. Railways may not have been ‘indispensable’: but they were still, apparently, more important than any other single ‘factor’ mentioned in this book. The heroic events may not have been typical: but, as the cover eloquently demonstrates, they did actually happen. To evaluate everything with reference to this rather bizarre criterion is to miss most of the really important historical questions. What happened? How did it happen? What is the dynamic interaction between the different factors of production? How did the machines work? How can this be evoked and explained in terms humanly comprehensible both to contemporaries then and to their descendants now? ‘Economic history,’ the editors tell us in their introduction, ‘is not a story.’ Perhaps it would be better history if it were.

This view of the Industrial Revolution as being something of a non-event, to be appropriately commemorated in non-writing, is all the more ironic because the other book which sports a Mancunian dust-jacket, Wrigley and Schofield’s Population History of England, is partly concerned to argue the opposite case: that the economic and demographic changes in England at the end of the 18th century constituted ‘a radical break with the past’ of a ‘decisive nature’, ‘one of the most fundamental of all changes in the history of society’. In the classical age of the Industrial Revolution, they argue, it first became possible for a nation to experience considerable population expansion while not merely avoiding the hitherto ubiquitous Malthusian poverty trap, but while actually increasing standards of living. Hitherto, they explain, any increase in population sooner or later outstripped the growth of productive resources, so that, in response, prices rose, real wages fell, and population growth was halted. But from the late 18th century, this relationship was decisively broken, as increased output made it possible to sustain growing population and expanding incomes simultaneously.

For the whole period with which they are concerned, Wrigley and Schofield argue that the major determinant of population growth has been the birth rate, itself primarily influenced by the age at which people married, which was in turn a leisurely response to economic circumstances, usually lagged by a generation or more. This conclusion is reached after an exhaustive collection and ingenious manipulation of the records for baptisms, marriages and deaths which are found in 404 sample parish registers. The result of their labours is a clear picture of the major trends in English population growth – of expansion for a century from 1540, of stagnation from the Civil War to the early 1700s, and then of a renewed upswing from the middle of the 18th century. Early Modern England, the authors note, was characterised by low mortality and also low fertility, unlike many underdeveloped countries of the post-war world. So the key to growth was the rise in fertility which, especially in the later 18th century, is to be explained by the decline in the age and increase in the frequency of marriage. Significantly, they also show that it was only at the very end of the 18th century that the rates of English population growth surpassed the previous high levels of expansion reached in the late 16th century, and also began to outstrip the general level of population expansion in contemporary Europe. Most important for those who have watched the debate on the causes of English population growth as bemused spectators will be Wrigley and Schofield’s substantial assertion that old beliefs in the importance of the falling death rate cannot now be convincingly sustained.

Of course, doubts are bound to persist and, to their credit, most of them are candidly ventilated by the authors themselves. Despite their heroic efforts, it is difficult to believe that they can satisfactorily have overcome all the inadequacies of the raw data, and it is particularly unfortunate that the two most important turning-points, in the mid-17th and late 18th centuries, are those when parish registration was least comprehensive. There are bound to be reservations about the use of the venerable Phelps Brown and Hopkins index of real wages as a reliable guide to the standard of living which is such a central concept for their argument, and it is a source of regret, especially from the late 18th century onwards, when the experience of economic growth was so diverse and localised, that the figures are only given in aggregate form, which must conceal some major variations in different areas of the country. Even so, it is difficult to see how their basic findings could be undermined or improved upon, and the authors are surely right in defending their work from ‘exaggerated scepticism’. Such a defence is, in fact, hardly necessary, since few would deny their remarkable achievement in linking complex biological, social and economic processes over four centuries and more. In the breadth of its conception, the scope of its coverage, the range of skills and techniques displayed, and the subtlety and strength of its argument, The Population History of England is a work of remarkable virtuosity.

For Wrigley and Schofield, as for Floud and McCloskey (in whose first volume an abridged summary of their population findings is printed), the great divide comes in the last quarter of the 19th century, when the classical age of what was (or is mistakenly supposed to be) the Industrial Revolution came to an end. For the ‘New Economic Historians’, one particular way in which this latter phase differs is that there is far more data available, and this is reflected in the greater size and density of Floud and McCloskey’s second volume. For those already familiar with McCloskey’s work (a great deal of which is attractively gathered in his collected essays), the general argument of this later book will be instantly recognisable. Far from experiencing a Great Depression, largely caused by entrepreneurial failure, the British economy in this period, characterised by an adequate supply of labour and capital, was in fact more productive, resilient and successful than is often supposed, not least because entrepreneurs behaved in a way which was sensible and rational. ‘From damnation to redemption’ is the verdict passed on that much maligned figure, the Late Victorian businessman – insofar as he mattered at all. But, as the arguments of the first volume have already made plain, nothing was really indispensable: entrepreneurship, empire, free trade, overseas investment, the lot. Once more, nothing is big, fundamental or revolutionary: mundane realities rule.

The advantage of this approach for the later period is that it does seem to impose some welcome rigour on the concept of economic failure. How, after all, does one define decline: by comparison with what has gone before, or with contemporary rivals, or with what might have been the expected performance of the economy? How much popular anxiety at the time was merely because of a realisation that other nations were catching up, as they were bound to do, rather than because Britain was doing less well than she might have done? To pose these questions is to cut through much of the flabby thinking which has characterised earlier scholarly treatment of this period: to try to answer them, however, is to illustrate once more the limits and drawbacks of the ‘New Economic History’. Is it realistic to suppose full employment prevailed in late 19th-century England? Was capital really being utilised as efficiently and as rationally as possible? Did the market actually work? Is it possible to reach agreement on what the expected performance of the economy should have been? It is significant that Pat Thane (to whom another social history scamper is entrusted) is clearly somewhat sceptical of all this, and it is noteworthy that B.W.E. Alford bravely resurrects the thesis of entrepreneurial failing in his treatment of the inter-war economy. The biggest problem with this second volume is that there is no sense of when, if ever, Britain became an industrial nation: if not before 1860, and if not after 1914, when, if at all, did it happen? Either the revisionists go to one extreme, and argue that it was at the time of the Late Victorian ‘Great Depression’, or they go to the other and suggest that it was never fully industrialised.

The very real difficulties in writing about economic decline, or more generally about the economic history of Britain in the last century, are well illustrated in two books of rather old-fashioned economic history. M.W. Kirby bases his tale of woe on the assumption that British economic decline began around 1870, which, bearing in mind McCloskey’s argument that the economy was not yet mature in 1860, leaves a very short period in which the workshop of the world got its act together. His account of subsequent developments embodies judicious summaries of most secondary literature, although the balance of some of the chapters seems rather curious, as in his treatment of the 1940s, where he gives a great deal of space to the negotiations for US aid but says almost nothing on the nationalisation of industry by the Labour Government. His general theme is that ‘Britain’s economic decline has its origins in the past.’ In a sense, of course, that is true: presumably all things in the present have their antecedents at an earlier date. But there are real difficulties with this superficially-appealing notion. In part, this is because his somewhat routine explanations – entrepreneurial failure, defective education, anachronistic social structure – need to take rather more extensive account of the wayward but important criticisms levelled at them by McCloskey than in fact they do. But it is also because it is not precisely clear how any of these issues can realistically be said to be continuous throughout Britain’s recent history. Entrepreneurial failure is a very different thing in the 1980s from what it was a century before, and the social structure, however defective it might be to its critics, is not the same as it was a hundred years ago. A theme retrospectively identified over time is not the same as a deep-seated cause.

In delicious contrast, Hamish Fraser’s account of the rise of a consumer society (which took place at the very same time that Kirby and others see the British economy in decline) is good old-fashioned economic history at its best: it tells a story; it is well written; it is about real people; there is a sense of change and development; and there is a pleasing balance between the particular detail and the general argument. In essence, Fraser’s picture illuminates the aggregates, tables and arguments assembled by Barry Supple in his essay on the same subject in the second volume of Floud and McCloskey. Here is the rise of a mass market, a revolution in retailing, and the transformation of light industry, with results which have lingered until our own day. For the last decades of the 19th century saw the appearance of such old faithfuls as fish and chips, New Zealand lamb, breakfast cereals and whisky; of Maypoles, Liptons, Sainsburys, Lyons, Harrods and Selfridges; of the bicycle, the cinema and the yellow press; and of Hovis, Peak Freans and Huntley and Palmers. When Edward VII went to sea with Sir Thomas Lipton, it was noted with surprise that the King ‘had gone yachting with his grocer’; when the first J.J. Sainsbury died, his last words were, reputedly: ‘Keep the shops well lit.’ ‘To be conscious of our forefathers as they really were and, bit by bit, to reconstruct the mosaic of the long forgotten past’ is an injunction of G.M. Trevelyan to his fellow historians which McCloskey cites with approval in his collected essays. Here, for once, is a work of economic history which does not lose sight of that paramount objective.

Taken together, these books suggest that neither the new nor the old economic history has a monopoly of good or bad scholarship, plausible or wayward argument, bright or dull writing. Satisfying either of these jealous and demanding gods of historical method and economic theory is in itself a daunting and difficult task. Satisfying both is probably impossible, if only because the cost of venerating the one deity must of necessity be insufficient genuflection at the other’s altar. Economists may lament that old-fashioned economic history may sometimes be insufficiently theoretical; historians are bound to be more concerned that the newer version is on occasion only incidentally historical. The problem with Cliometrics is that there is more to Clio than can be discovered merely by applying the tapemeasure. ‘A reviewer’s job,’ McCloskey observes in his collected essays, ‘is to raise plausible doubts.’ In this case at least, the anxieties are real: I will show you fear in a handful of dust-jackets.