Category: History
Early French economics, my lecture notes
Early French moralists, some of them Jansenists:
Pierre Nicole, La Rochefoucauld, etc. Invisible hand, idea of “mechanism”
Pascal, Pensées, 1669, probability and expected value
17th century mercantilism, Louis XIV, Colbert
18th century, Galiani (Italian), French debates on bread and bread prices
1748, Montesquieu, Spirit of the Laws, analysis of commerce
Diderot, Voltaire, Encyclopedia, rationalism
Beccaria (Italian), law and economics
Physiocrats (they bore me)
Turgot, 1767, liberal principles, stresses accumulation
Condorcet – stresses growth and progress
1789 French Revolution, Napoleon
Much of French economic thought ends up libertarian, e.g., the Ideologues
J.B. Say, Say’s Law, 1803, passim
French pick up on different strands in Smith
Fourier, Proudhon, and Utopian Socialism
1830 — Bourbon Restoration
1838 – Augustin Cournot
1844 – Jules Dupuit, French engineering tradition
Bastiat and free market tradition
1860 — Anglo-French Free Trade Treaty
1873 — Leon Walras, marginalism and general equilibrium theory
My notes/outline on the rise of Scottish economic thought
1650s, wars with England, invasions, Cromwell repels the Scots
1690s – Darien Scheme in Panama, Scots more generally grow interested in empire
1707 – Union with England
Scotland keeps its Presbyterian church and laws
Scotland never settled by Rome, for a long time closer to France
Post Glorious Revolution, many Scots still loyal to the Stuart monarchy, recurring theme
Jacobites – loyal to James, who was expelled by the Glorious Revolution
Glasgow – tobacco and sugar trade
Edinburgh – Intellectual, educational, and administrative center
Overall good educational system at multiple levels
Frances Hutcheson – born in Ireland to Scots family, key works in the 1720s, beauty, approbation, ethics, 1729 starts professorship in Glasgow
1739-40 – David Hume, Treatise on Human Nature
1745 – Major Jacobite uprising
Post-1745: The Highlanders and the clan system starts its true decline
Linen, cotton, wool, jute industries
Good schools, good universities, competitive, English-language, no class system
1748 – David Hume, Enquiry Concerning Human Understanding
1750s – David Hume’s essays on economics
1755 – 1.3 million people in Scotland
1759 – Adam Smith, Theory of Moral Sentiments
1762 – Ossian [James Macpherson], beginnings of Scottish romanticism
1767 — Adam Ferguson – Essay on Civil Society, progress, commercial society, militarism
1776 – David Hume dies
1776 – Wealth of Nations
The sciences: the physician and chemist William Cullen, the agriculturalist James Anderson, chemist and physician Joseph Black, natural historian John Walker, and James Hutton, the first modern geologist.
Late 18th century – onset of Scot inventors/tinkerers, most of all James Watt and the steam engine
Is Science a Public Good?
Science seems like a public good; in theory, ideas are non-rivalrous and non-excludable. But the closer we look at how ideas actually spread and are used in the world, the less they seem like public goods. As I am fond of pointing out, Thomas Keller wrote a literal recipe book for the dishes he served at his world famous French Laundry restaurant and yet, the French Laundry did not go out of business. Ideas are in heads and if you don’t move the heads, often the ideas don’t move either.
In a new NBER working paper, The Effect of Public Science on Corporate R&D by Arora, Belenzon, Cioaca, Sheer & Zhang, (Tyler mentioned it briefly earlier) the authors make a similar point:
…the history of technical progress teaches us that abstract ideas are also difficult to use. Ideas have to be tailored for specific uses, and frequently, have to be embodied in people and artifacts before they can be absorbed by firms. However, such embodiment also makes ideas less potent sources of increasing returns, turning non-rival ideas into rival inputs, whose use by rivals is easier to restrict. Our findings confirm that firms, especially those not on the technological frontier, appear to lack the absorptive capacity to use externally supplied ideas unless they are embodied in human capital or inventions. The limit on growth is not the creation of useful ideas but rather the rate at which those ideas can be embodied in human capital and inventions, and then allocated to firms to convert them into innovations.
The question of whether science is a public good is not merely technical but has significant implications. If science is a public good, markets will likely underproduce it, making government subsidies to universities crucial for stimulating R&D and economic growth. Conversely, if ideas are embodied and thus closely tied to their application, government funding for university research might not only fail to enhance economic growth but could also hinder it. This occurs as subsidies draw scientists away from firms, where their knowledge directly contributes to product development, towards universities, where their insights risk becoming lost in the ivory tower. (Teaching scientists who then go on to careers in the private sector is much more likely to be complementary to productivity growth than funding research which pulls scientists away from the private sector.)
In a commentary on Arora et al., the Economist notes that growth in universities and government science has coincided with a slowdown in productivity.
Universities have boomed in recent decades. Higher-education institutions across the world now employ on the order of 15m researchers, up from 4m in 1980. These workers produce five times the number of papers each year. Governments have ramped up spending on the sector. The justification for this rapid expansion has, in part, followed sound economic principles. Universities are supposed to produce intellectual and scientific breakthroughs that can be employed by businesses, the government and regular folk. Such ideas are placed in the public domain, available to all. In theory, therefore, universities should be an excellent source of productivity growth.
In practice, however, the great expansion of higher education has coincided with a productivity slowdown.
Arora et al. present detailed empirical evidence causally linking the productivity slowdown to the expansion of government science. Government science has yielded smaller-than-expected productivity improvements due to significant trade-offs. Subsidies have moved heads out of firms and into universities and for many firms this shift of talent has not only reduced the firms’ capacity to generate ideas (crowding out) but has also impaired their ability to adopt academic innovations. As the authors write:
…productivity growth may have slowed down because the potential users—private corporations—lack the absorptive capacity to understand and use those ideas.
The great Terence Kealey made many of these points much earlier in his important book, The Economic Laws of Scientific Research (here is an online precis). Kealey, however, was challenging a beautiful theory, supported by the great and good of the economics profession, by pointing to an ugly practice. Arora et al. show that the beauty of the theory may have misguided us and that “the vast fiscal resources devoted to public science…probably make businesses across the rich world less innovative” (quoting the Economist).
The Gershwins on free trade (that was then, this is now)
In 1927, George and Ira Gershwin put on a musical satire about trade and war entitled Strike Up the Band. The plot centres around a middle-aged US cheesemaker, Horace J. Fletcher of Connecticut, who wants to corner the domestic dairy market. When Fletcher hears that the US government has just slapped a fifty per cent tariff on foreign-made cheese, he sees dollar signs. High tariffs mean his fellow citizens will have little choice but to ‘buy American’. What’s more, the tariff’s impact soon reaches beyond the national market to sour the country’s trade relationships.. Swiss cheesemakers are particularly sharp in their demands for retaliation. Fletcher surmises that a prolonged Swiss-American military conflict would provide the necessary fiscal and nationalistic incentives to maintain the costly tariff on foreign cheese in perpetuity.
To make his monopolistic dream of market control a reality, Fletcher sees to it that the tariff spat between the two countries leads to an all-out war. He first creates the Very Patriotic League to drum up support for the Alpine military adventure, as well as to weed out any ‘un-American’ agitation at home. The Very Patriotic League’s members, donning white hoods reminiscent of the Ku Klux Klan, go about excising all things Swiss from the nativist nation. Not even the classic adventure The Swiss Family Robinson escapes notice: it gets rebranded The American Family Robinson. With domestic anti-war dissent quelled, Fletcher next orchestrates a military invasion of Switzerland. The farcical imperial intervention ends with a US victory. But just as the war with Switzerland winds down and a peaceful League of Cheese established, an ultimatum arrives from Russia objecting to a US tariff on caviar. And, it’s implied, the militant cycle repeats.
That is from the new and interesting Pax Economica: Left-Wing Visions of a Free Trade World, by Marc-William Palen.
My TLS essay on the Clinton administration
Here is the link, I am reviewing a bad book on the Clinton administration (A Fabulous Failure, by Lichtenstein and Stern). Here is one excerpt:
Clinton-era welfare reform is another area where many commentators go astray, and Lichtenstein and Stein are no exception. The Clinton pronouncement “I have a plan to end welfare as we know it” has stuck in people’s minds. The reality is that, after Clinton-era welfare reforms, America spent more money on helping the poor. Welfare payments were attached to work requirements, but the states could redeploy federal money to programmes other than simple welfare payments, so funds for childcare, college scholarships, food stamps and tax credits for the poor all went up. The rate at which children fall into poverty has declined steadily. A significant Medicaid expansion followed under President Obama.
Yet the authors state that “The Era of Big Government is Over” in the section on welfare reform. If you squint you can see periodic references to the fact that Clinton-era welfare reform was not entirely radical, but nonetheless they write that this was “a drastic reform of the welfare system … that did in fact repudiate its New Deal heritage”. Calling the policy “an utterly misogynist step backward”, they note that Clinton’s “reputation as a heartless neoliberal was hereby well advanced within the ranks of progressive America”. Again, argument by adjective displaces the numbers.
And here is my summary judgment:
Too often the authors’ substantive arguments are presented in an “argument by adjective” form, relabelling events, institutions and individuals with negative adjectives or connotations, but without providing enough firm evidence. They write as if describing a policy reform as not having done enough for labour unions is per se a damning critique…
I can’t help but feel this work is largely directed at an internal Democratic Party dialogue. The basic premisses, or even the interpretations of the facts, don’t need to be argued for much. But good Democrats need to be told how to think about their own history. If strong labour unions are a sine qua non for social and economic progress, and if all good (and bad) things come together, how would the rest of history, including that of the Clinton administration, have to read? The notion that such stifling readings have become part of the problem, rather than the solution, does not appear in Nelson Lichtenstein’s and Judith Stein’s book.
I had turned down the previous invitation to review, because I didn’t think the book in question was good enough.
Matriline versus Patriline: Social Mobility in England, 1754-2023
Greg Clark may well be the most important social scientist of the 21st century. His use of historical data informed by evolutionary theory and genetics is a unique contribution to social science with important and challenging results.
Clark’s latest paper (with Neil Cummins) makes a simple but striking point. If the primary systematic determinant of social outcomes is genetic then we expect the father and the mother to contribute equally (each giving half their genes). If, on the other hand, the primary determinant is social then we expect widely different mother-father contributions in different societies and at different times and for different characteristics. Fathers ought to matter more in patriarchies, for example, and mothers more in matriarchies and gender-egalitarian societies. Similarly, if social factors are determinative, we would surely see a rising contribution of mothers to child outcomes as the social power of women rises (you can’t use your mother’s contacts in the legal profession to get a job, for example, if your mother was never a lawyer.) Similarly, if social factors are determinative we would expect mothers to be more important perhaps for characteristics determined early and fathers for characteristics determined late.
As Clark and Cummins write:
Social institutions and conventions would suggest that social status will often be more strongly transmitted between generations on either the patriline or the matriline. The factors favoring stronger transmission on the matriline are the much greater involvement in all societies of mothers in the care and education of children. The greater time investment of mothers in childcare is found in all societies, even those such as in contemporary Nordic countries where gender equality is the most advanced. Thus we would on the human capital interpretation of social outcomes expect a greater maternal than paternal connection in the modern world. However, a countervailing force in earlier times was the greater access of fathers to resources, and professional contacts. Also since in earlier years only fathers had occupations and educational qualifications, the father could be much more of a model for the outcomes of sons. It is thus uncertain whether the paternal or maternal line would better predict social outcomes in any earlier society. But we would expect the paternal effect to be greater in high status groups, and the maternal effect greater in average or lower class families.
What we find with the FOE data, however, is that in 27 out of 31 child outcomes (other than wealth) examined across marriages in the years 1754-1995, the patriline and matriline had a predictive ability for child outcomes that was not statistically distinguishable at the 5% level. In the four cases where the coefficients differed significantly, in three the maternal effect was greater, and in one the paternal effect. Thus for most social outcomes – literacy, age at beginning work, age at leaving schooling, higher education, and occupational status – mother and fathers appear always to contribute roughly equally. The one clear exception is wealth, where always patriline wealth is a much stronger predictor of child wealth than is matriline wealth.
…The results suggest, however, that the mechanism of transmission is largely independent of parental time interacting with children. The results reported above are thus consistent with the finding of Clark (2023) that the pattern of inheritance of most social outcomes in England 1600-2022 was consistent with direct additive genetic transmission. Such transmission would imply a symmetry of mother and father predictive effects.
If econs could hoop — The New Bazaar
That is my podcast with Cardiff Garcia, now on-line and with transcript too. Cardiff proposed a novel approach:
Who is the Magic Johnson of economics? Who was the Adam Smith of basketball?
On this fun and oddball episode of The New Bazaar, Cardiff speaks with Tyler Cowen, economist and author of GOAT: Who is the Greatest Economist of all Time and Why Does it Matter?
Inspired by the sportswriter Bill Simmons, Tyler wrote his book from the standpoint of a fan—having fun, taking sides, admitting biases, unapologetically trying to entertain the reader instead of presenting sober (boring) analysis.
Cardiff and Tyler—both huge basketball fans—first discuss Tyler’s ranking of the great economists and his lament for what economics used to be. Tyler also gives his reasons for releasing the book as a ChatGPT trained on its text, the first such book of its kind.
Then begins the fun. They take turns finding analogs for the great economists from the history of the NBA. And they do the same in reverse for basketball’s own GOATs. Which economist changed the nature of the field similar to the way Steph Curry set off the three-point revolution? Is there an economist whose comprehensive genius rivaled the ability of LeBron James to engineer exactly the outcome he wants on the court? What basketball player matched the charisma, brilliance, and even investment success of Keynes?
And why does Cardiff argue that Tyler himself is the Charles Barkley of economists despite their differences in personality, size, and other obvious dimensions?
All throughout the chat, Tyler and Cardiff are exploring the common traits that lead to greatness in hoops, the social sciences, and perhaps other domains. A treat for fans of either economics or hoops, or who simply appreciate the virtues of fandom itself.
Recommended, for some (not all)!
From the beginning, “neoliberalism” was an obnoxious term
It was meant as an insult, implying that Mises – a marginalist – was trying to salvage 19th century liberal economics from the collectivist attacks of the Marxist left and the Nazi right, hence the “neo” moniker being attached.
One of the main promoters of this use was Othmar Spann, a rival of Mises on the University of Vienna faculty. Spann was a prominent proto-Nazi intellectual. In 1924 he added a disparaging chapter on “neoliberalism” to the new edition of his economics textbook.
By the time Mises arrived in Paris in 1938 for the CWL gathering, he had endured a decade and a half of simultaneous disparagement as a “neoliberal” by Nazis and Marxists. It should be no surprise that he was not keen to adopt the label himself.
Here is the full Phil Magness tweet storm.
What happened in 17th century England (a lot)
East India Company founded — 1600
Shakespeare – Hamlet published 1603
England starting to settle America – 1607 in Virginia, assorted, you could add Harvard here as well
King James Bible – 1611
The beginnings of steady economic growth – 1620 (Greg Clark, JPE)
Rule of law ideas, common law ideas, Sir Edward Coke – 1628-1648, Institutes of the Laws of England, four volumes
Beginnings of libertarian thought – Levellers 1640s
Printing becomes much cheaper, and the rise of pamphlet culture
John Milton, Aeropagitica, defense of free speech, 1644
King Charles I executed – 1649 (leads to a period of “Britain without a King,” ending 1660)
Birth of economic reasoning – second half of 17th century
Royal African Company and a larger slave trade – 1660
General growth of the joint stock corporation
Final subjugation of Ireland, beginnings of British colonialism and empire (throughout, mostly second half of the century)
Discovery of the calculus, Isaac Newton 1665-1666
Great Plague of London, 1665-1666, killed ¼ of city?
Great Fire of London, 1666
John Milton, Paradise Lost, 1667
Social contract theories – John Locke 1689
Bill of Rights (rights of Parliament) — 1689
Birth of modern physics – Newton’s Principia 1687
Bank of England — 1694
Scientific Revolution – throughout the 17th century, places empiricism and measurement at the core of science
The establishment of Protestantism as the religion of Britain, both formal and otherwise, throughout the century, culminating in the Glorious Revolution of 1688.
London – becomes the largest city in Europe by 1700 at around 585,000 people.
England moves from being a weak nation to perhaps the strongest in Europe and with the strongest navy.
Addendum: Adam Ozimek adds:
…first bank to print banknotes in Europe, 1661
Discovery of the telescope 1608
First patent for a modern steam engine 1602
What should I ask Benjamin Moser?
Yes I will be doing a Conversation with him. Here is one outdated bit from his home page:
Benjamin Moser was born in Houston. He is the author of Why This World: A Biography of Clarice Lispector, a finalist for the National Book Critics’ Circle Award and a New York Times Notable Book of 2009. For his work bringing Clarice Lispector to international prominence, he received Brazil’s first State Prize for Cultural Diplomacy. He won a Guggenheim Fellowship in 2017, and his latest book, Sontag: Her Life and Work, won the Pulitzer Prize.
I am a big fan of his new book on the Dutch painters, The Upside-Down World: Meetings with Dutch Masters. He lives in Utrecht and is also an expert on Brazil. Here is his Wikipedia page. Here are other assorted writings by him.
So what should I ask him?
My Conversation with Rebecca F. Kuang
Here is the audio, video, and transcript, here is the episode summary:
Rebecca F. Kuang just might change the way you think about fantasy and science fiction. Known for her best-selling books Babel and The Poppy War trilogy, Kuang combines a unique blend of historical richness and imaginative storytelling. At just 27, she’s already published five novels, and her compulsion to write has not abated even as she’s pursued advanced degrees at Oxford, Cambridge, and now Yale. Her latest book, Yellowface, was one of Tyler’s favorites in 2023.
She sat down with Tyler to discuss Chinese science-fiction, which work of fantasy she hopes will still be read in fifty years, which novels use footnotes well, how she’d change book publishing, what she enjoys about book tours, what to make of which Chinese fiction is read in the West, the differences between the three volumes of The Three Body Problem, what surprised her on her recent Taiwan trip, why novels are rarely co-authored, how debate influences her writing, how she’ll balance writing fiction with her academic pursuits, where she’ll travel next, and more.
Here is one excerpt:
COWEN: Why do you think that British imperialism worked so much better in Singapore and Hong Kong than most of the rest of the world?
KUANG: What do you mean by work so much better?
COWEN: Singapore today, per capita — it’s a richer nation than the United States. It’s hard to think, “I’d rather go back and redo that whole history.” If you’re a Singaporean today, I think most of them would say, “We’ll take what we got. It was far from perfect along the way, but it worked out very well for us.” People in Sierra Leone would not say the same thing, right?
Hong Kong did much better under Britain than it had done under China. Now that it’s back in the hands of China, it seems to be doing worse again, so it seems Hong Kong was better off under imperialism.
KUANG: It’s true that there is a lot of contemporary nostalgia for the colonial era, and that would take hours and hours to unpack. I guess I would say two things. The first is that I am very hesitant to make arguments about a historical counterfactual such as, “Oh, if it were not for the British Empire, would Singapore have the economy it does today?” Or “would Hong Kong have the culture it does today?” Because we don’t really know.
Also, I think these broad comparisons of colonial history are very hard to do, as well, because the methods of extraction and the pervasiveness and techniques of colonial rule were also different from place to place. It feels like a useless comparison to say, “Oh, why has Hong Kong prospered under British rule while India hasn’t?” Et cetera.
COWEN: It seems, if anywhere we know, it’s Hong Kong. You can look at Guangzhou — it’s a fairly close comparator. Until very recently, Hong Kong was much, much richer than Guangzhou. Without the British, it would be reasonable to assume living standards in Hong Kong would’ve been about those of the rest of Southern China, right? It would be weird to think it would be some extreme outlier. None others of those happened in the rest of China. Isn’t that close to a natural experiment? Not a controlled experiment, but a pretty clear comparison?
KUANG: Maybe. Again, I’m not a historian, so I don’t have a lot to say about this. I just think it’s pretty tricky to argue that places prospered solely due to British presence when, without the British, there are lots of alternate ways things could have gone, and we just don’t know.
Interesting throughout.
No One’s Name Was Changed at Ellis Island
No one’s family name was changed, altered, shortened, butchered, or “written down wrong” at Ellis Island or any American port. That idea is an urban legend.
Many names did get changed as immigrants settled into their new American lives, but those changes were made several years after arrival and were done by choice of someone in the family. The belief persists, however, that the changes were done at the entry point and that the immigrants were unwilling participants in the modifications. Sophisticated family history researchers have long rolled their collective eyes at the “Ellis Island name change” idea. In genealogy blogs and online publications, they wearily repeat the correction—names were not changed at Ellis Island; immigrants changed their own names, usually during the citizenship process. But the belief persists, perhaps because people need to explain surname changes in a way that satisfies them (thinking that their immigrant ancestors made the changes themselves apparently does not do so).
The explanation for this is pretty obvious when you think about it. Just as today, people bought tickets and their names were written on the tickets:
It’s vital to remember that the people coming over from Europe and other places were paying passengers, not cattle. They weren’t shoved onto ships and then dumped onto American shores to be newly cataloged by harried immigration officials. The shipping companies were running a business, much as airlines do today—they sold tickets to people who could afford to purchase them (even a steerage class ticket cost almost a thousand dollars in today’s currency)….Agents quoted ticket prices to the would-be traveler, accepted payment, and then recorded each traveler’s name and other identifying information (the specific information collected varied over the years). The information taken down by the agents was sent to the home office, where it was transferred by shipping company clerks onto large blank sheets provided by the US government. Those sheets became the passenger lists which later were used by American port officials.
After all the tickets for a particular voyage had been sold and the manifest was complete, it was turned over to the ship’s captain. On departure day, crew members checked people’s names against the list as they came on board. The crew allowed past them only those people whose names were on the list, i.e., those who had paid for a ticket….Captains were required by the 1819 Steerage Act to sign a statement printed on the manifest verifying that the names on each list matched the names of those people disembarking. Any discrepancies resulted in fines for the shipping company. Thus it was in the shipping company’s interest to make sure no one stepped onto American soil whose name was not already on a manifest.
When the ship arrived at an American port, the captain signed the manifest and delivered it to the chief immigration official. That official checked it and then gave the manifest to officers called registry clerks who questioned each traveler and verified the information recorded on the lists…Obviously then, despite what the Godfather film conveys, the officials at Ellis Island did not record travelers’ names—they had pages with the names already filled in. The task of the registry clerks was to do the same thing the ship’s crew had done: check each person’s stated name against the name recorded on the manifest.
…no federal officer at an American port ever carelessly or maliciously altered an immigrant’s name because it was too difficult to spell or sounded too foreign. On a side note, the belief that immigration officials changed names to make them less “foreign” presumes that the Ellis Island officials were of different ethnicities than the immigrants and were openly hostile to them. In fact, officials were often hired because they spoke multiple languages.
From an excellent debunking by Rosemary Meszaros and Katherine Pennavaria. Many people will continue to deny the obvious but if you still have doubts you can find the original manifests through the National Archives. The urban legend that names were changed at Ellis Island comes from a scene in the Godfather movie and perhaps because people with Americanized names today like to think that someone other than their ancestor changed their name.
Duke History of Economic Thought Summer Institute
The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics from June 3-12, 2024. The program is designed for students in graduate programs in economics, though students in graduate school in other fields as well as newly minted PhDs will also be considered.
Students will be competitively selected and successful applicants will receive free housing, access to readings, and stipends for travel and food. The deadline for applying is March 10.
We are very excited about this year’s program, which will focus on giving participants the tools to set up and teach their own undergraduate course in the history of economic thought. There will also be sessions devoted to showing how concepts and ideas from the history of economics might be introduced into other classes. The sessions will be run by Duke faculty members Jason Brent, Bruce Caldwell, Kevin Hoover, and Steve Medema. More information on the Summer Institute is available at our website, https://hope.econ.duke.edu/2024-summer-institute
Argentina fact of the day
The country was not quite as rich in the early days as it is sometimes made out to be:
Argentina’s performance on this measure is frequently exaggerated. In 1929, for example, Argentina’s per capita income was less than half of the average of other temperate agrarian societies (such as Canada and Australia) and of European industrialized countries (such as Great Britain, Germany, Belgium, and Sweden). In 1969 and in 1929, it was 38 percent of the U.S. figure…
That is from the very good 1996 Larry Sawers book The Other Argentina: The Interior and National Development. It is related to my earlier post on Salta.
The author also has an excellent explanation of how import substitution strategies run out of steam, even if they produce more growth in a shorter run. The import substitutes usually require subsidies to get started, which puts a squeeze on the government budget, and in fact you can think of import substitution as a kind of deficit spending/borrowing against the future. The import substitution also puts a squeeze on the agricultural sector, which for many countries, Argentina included, had been generating net foreign exchange. The balance of payments then worsens, which also becomes a longer run problem. Over time, in addition, obtaining the needed foreign inputs for the import-substituting sectors becomes yet another problem. In time, tariffs are needed for the nascent domestic sector, and that protectionism lowers living standards and also leads to higher corruption.
As the author notes:
In the early postwar years, ISI [import substitution] was highly recommended by almost every development economist in the world and pursued by virtually every Third World country.
At first it worked, but over time it fared far less well. This is one of the very best and also unheralded books about Argentina, as there are interesting points on almost every page. One point the author makes, for instance, is that the Argentina economy never had great facility in making high fixed investments, even before Peron and various later depredations. Most of all, this is a book that actually tries to answer your questions.
Economic ornithology
But a hundred years ago, birds were seen as the best remedy for the weeds and insect pests that threatened the country’s food supply and cost farmers hundreds of millions of dollars every year. And in order to identify the precise impact that birds had on agriculture, a field called economic ornithology was born. According to one of its leading practitioners, economic ornithology was “the study of birds from the standpoint of dollars and cents … in short, it is the practical application of the knowledge of birds to the affairs of everyday life.”1 And from the 1880s to the 1930s, birds were widely seen as economic agents, working alongside farmers in the fight against the insect hordes.
By the 1940s, economic ornithology had become discredited and obsolete. Effective and affordable pesticides had entirely replaced the birds’ bug-killing role, while economic ornithologists could never prove that their methods actually increased the number of helpful birds. But before their role in agriculture was dismissed, there was a time when we believed that we depended on birds for our food, and for our very survival.
And here was the method of economic ornithology:
In 1916, Gilbert Trafton summarized the primary approach used by economic ornithologists: “The practical value of birds to man, whether helpful or harmful, depends chiefly on their food habits,” and by examining what they eat, “the exact economic status of a bird is determined.” Sometimes this was done by observing the behaviors of birds in the field, but it usually meant dissecting birds and seeing what they had in their stomachs.
Here is the full Substack, by Robert Francis. Via Philip Wallach.