Category: History

William Shakespeare, grain hoarder

There seem to be some new results about the life of the Bard:

The Bard of Avon, who championed the downtrodden in plays like “Coriolanus,” was a conniving character in his personal life, British researchers claim — a tax dodger who profiteered in food commodities during a time of famine.

William Shakespeare was fined repeatedly for illegally hoarding grain, malt and barley for resale during a time of food shortages. He also was threatened with jail for avoiding taxes, according to the study of court and tax archives by researchers at Aberystwyth University in Wales.

The profits were channeled into real-estate deals, the researchers wrote, making Shakespeare one of Warwickshire’s largest landowners.

…It would seem that Shakespeare was drawing on personal knowledge when he wrote “Coriolanus,” a political tragedy that includes an early 1600s version of an Occupy protest against the 1%:

“They ne’er cared for us yet: suffer us to famish, and their storehouses crammed with grain; make edicts for usury, to support usurers; repeal daily any wholesome act established against the rich, and provide more piercing statutes daily to chain up and restrain the poor.”

Adam Smith of course argued that the grain hoarder was usually welfare-improving.  Other accounts of the new Shakespeare results are here.  Here is one good article with this interesting bit:

She said the playwright’s funeral monument in Stratford’s Holy Trinity Church reflected this. The original monument erected after his death in 1616 showed Shakespeare holding a sack of grain. In the 18th century, it was replaced with a more ”writerly” memorial depicting Shakespeare with a tasseled cushion and a quill pen.

So far I cannot find a draft of the original research paper itself.

How effective are capital controls?

In general, capital controls are found to have little impact on the total volume of capital inflows and thus on currency appreciation.  For example, the imposition of inflow restrictions by Brazil, Chile, and Colombia in the 1990s had no significant impact on total capital inflows, nor were pressures on the exchange rate alleviated.  In fact, over the course of their capital controls, the real effective exchange rate appreciated by about 5 and 4 percent annually in Brazil and Chile, respectively.  In Thailand the real exchange rate started appreciating within a week after controls of short-term flows were imposed in December 2006. The most recent episode of control in Colombia (during 2007-08) was also ineffective in reducing the volume of non-FDI inflows or in moderating the currency appreciation…

That is from Jonathan D. Ostry, “Managing Capital Inflows: Old and New Debates,” in The Great Recession: Lessons for Central Bankers, edited by Jacob Braude, Zvi Eckstein, Stanley Fischer, and Karnit Flug.

Do note that the passage above can be taken either as evidence for or against restrictions on capital flows.

John Stuart Mill’s Letter to Bentham

TO JEREMY BENTHAM

My dear Sir,

Mr. Walker is a very intimate friend of mine, who lives at No. 31 in Berkeley Square. I have engaged him, as he is soon coming here, first to go to your house, and get for me the 3.d and 4.th volumes of Hooke’s Roman history. But I am recapitulating the 1.st and 2.d volumes, having finished them all except a few pages of the 2.d. I will be glad if you will let him have the 3.d and 4.th volumes.

I am yours sincerely

John Stuart Mill.

Newington Green,
Tuesday 1812.

A rather ordinary letter until one considers the date. Mill you see was born in 1806, thus making him six at the time of writing. The editors of Mill’s letters note that his essay on Hooke’s Roman history has survived and includes a footnote correcting Hooke’s Greek.

The new changes to British welfare policy

The process starts today, as listed by the FT:

1 April – Spare room subsidy ends

1 April – Council tax benefit eligibility decided by local councils

8 April – New benefit rates come into effect. Most will be increased by a below-inflation 1 per cent

8 April – Personal Independence Payment replaces Disability Living Allowance in north England

15 April – Benefit cap, limiting sums a single household can receive to about £500 [TC: that is per week], begins in four London areas before national roll-out in July

29 April – Universal Credit pilot begins in one English town

Here is a CRS-like summary of the changes (pdf).  The Guardian breaks down some of the exact numbers.  If I understand their categories correctly, total benefit spending in nominal terms is going up by 1.9%, less than the rate of price inflation.  Supporters of reform argue that welfare benefits have been going up at a higher rate than have wages.  At the first link you will see that British public opinion was about 60% in favor of higher benefits in 1991 and was about 27% in favor of higher benefits as of 2011.

There is a concomitant movement afoot to cut benefits for immigrants.

I have been reading up on the Poor Law reforms of 1834 for a forthcoming MRU course, and the number of parallels to the current situation is striking.  (By the way, here is a good D.A. Baugh article (jstor) about welfare costs leading up to those reforms.)  For instance as British workers themselves struggled, support for toughening up the Poor Laws increased considerably.  The final 1834 changes, which restricted eligibility, limited grants, consolidated categories of aid, and emphasized “putting the poor back to work,” passed Parliament by a considerable margin.  There was also at that time, and now, a variety of popular overestimates for how much the benefits were squelching work effort (see Mark Blaug on the Poor Laws for instance).

This current reform is viewed by many critics as not being very generous.  It also can be said, however, that relative to current and recently lowered expectations of future wealth for the middle class, this is probably offering a higher percentage of redistribution than was the case a few years ago or for that matter during the pre-Thatcher British welfare state.

*Worldly Philosopher*

The author is Jeremy Adelman and the subtitle is The Odyssey of Albert O. Hirschman.  This is the book I have looked forward to most all year and so far (p.153) it does not disappoint.  Here is one excerpt:

If there was one author who captured Hirschmann’s imagination, it was Michel de Montaigne.  The highly personal vignettes, meditations, and moral reflections shook Hirschmann to his core.  He immediately grasped the power of the essays — Montaigne questioned absolute forms of knowledge by submitting everything to the interrogating eye of the observer, starting by looking at himself, turning himself over and over to capture the multiple points of perspective or the multiple forms of the self.  “We are never ‘at home’: we are always outside ourselves,” Montaigne wrote.  “Whoever would do what he has to do would see that the first thing he must learn to know is what he is.”

I am pleased that this book has 740 pages and I am wishing for more.  Here is a WSJ review.  Here is a good UK review.  Here is a review from The Economist.

Mexico’s economy: current prospects and history

That is a new MRUniversity course, taught by University of Oklahoma Professor Robin Grier (with a small number of guest videos from me, too).  It is absolutely excellent and I recommend it highly.  The course outline is this:

1 An Overview of the Mexican Economy

2 Colonial Legacies: Obstacles to Growth after Independence
3 Development Strategies
4 Social Issues
5 Land & Agriculture
6 The Debt Crisis of the 1980s
7 The State Retreats: Reform in the 1980s & 1990s
8 The Peso Crisis

9 NAFTA & the Mexican Economy

The early videos are now on-line and new videos will be appearing regularly.  You can view them on your own or register sign up for email updates at the link.  You can check out our other courses at the home page of MRUniversity.com.

*How Revolutionary were the Bourgeois Revolutions?*

This is quite an extraordinary book, remarkably informationally dense, interesting on almost every page, though I would pass on the extended discussions of methodological Marxism.  Did the so-called bourgeois revolutions have relatively little to do with the bourgeoisie?  (This leads some readers to the further question, namely if so, how should this reshape our understanding of “neo-liberalism” today?)  What is a bourgeois revolution anyway?  This far-ranging book is a kind of esoteric blockbuster, to be worshiped by the handful of people who are familiar with Hotman’s Francogallia and its role in 1570s French politics, or who carry around in their heads some underlying sense of why 17th century Scottish and Polish feudal rule might have had significant common features.

Ideally, CrookedTimber should do a symposium on this book, though I am not sure they can find commentators who are up to the task.

Enthusiastically recommended, sort of, to some of you, maybe.

The author is Neil Davidson, a Scot, and the Amazon link is here.

Irish bank strikes 1966-1976

That is the title of this Wikipedia entry:

The Irish bank strikes between 1966 and 1976 were three strikes of about a years total duration which closed down all the clearing banks in the Republic of Ireland. The strikes provided economists a unique opportunity to study the functioning of a modern economy without access to bank deposits.[

The strikes affected all the associated banks which comprise of the Bank of Ireland, the Allied Irish Banks, the Northern Bank and the Ulster Bank. The strikes lasted from:

  • May 7 – July 30 1966
  • May 1 – November 17, 1970
  • June 28 – September 6, 1976

The longest strike was of six months in 1970. The Central Bank made limited facilities available to non-associated banks to issue cash. Not just financial transactions were affected, many property deals were also affected because the documents were kept in the banks. The country came through reasonably well in business terms despite the bank strike, a large firm Palgrave Murphy failed when the strike ended and settlements were made but its failure was probably inevitable anyway. The strike had little effect on the main economic concerns which were unemployment and industrial unrest caused by inflation.

Of course in contrast to current-day Cyprus, these were not banks otherwise attacked by runs and subject to insolvency.  So it is far from obvious that this Irish success (relatively speaking, that is) would be repeated.  Still, it is one example of how an economy copes once its banking system is shut down.

Here is further information about Ireland, note that “a highly personalized credit system without any definite time horizon for the eventual clearance of debits and credits substituted for the existing institutionalized banking system.”  Furthermore “Public houses and shops emerged as a substitute banking system.”

A short history of bank deposit levies

In July 1992 Italy’s Socialist Prime Minister Giuliano Amato imposed a one-off levy on bank accounts. It was a mere 0.6% in comparison with Cyprus’s scheme, and it still left a lasting scar on the country’s financial psyche. In 1936 Norway experimented with a bank deposit tax, but it caused an exodus of cash from the country. There are also some Latin American examples (Brazil in 1992, Argentina at the turn of the millennium) but most were combined with capital controls, and were last-ditch efforts to rescue the financial system when all else had already been tried.

That is from Edmund Conway, here is more.  From Carola Binder, here is a history of capital levies in fiscal crises, and via Google here is what Hungary did in 1920.

Good sentences about John Stuart Mill

He was so bewildered by his lack of books that he even began sleeping late, once not getting up till nine o’clock.  One of the daughters [in Toulouse] pitying his plight gave him Legendre’s Geometry.  He dissected it eagerly, although its muddled thinking on Ratio took away a good deal of its merits as an elementary work.  The confusion in the house grew worse; a dog went mad and terrorized the servants.  To John’s orderly mind the Benthams seemed to live in a state of constant uproar.  They were always interrupting him for other things.  He was never left to himself.  They took him to see peasant dances…

That is from Michael St.John Packe, The Life of John Stuart Mill.

Testing Doux Commerce in the Lab

In a famous priming experiment it was shown that changing the name of a prisoner’s dilemma type problem from “The Community Game” to “The Wall Street Game” reduced the amount of cooperation. The suggestion is that Wall Street evokes in the mind concepts of exploitation and self-regarding behavior thus making these behaviors more likely. Wall Street is a very particular aspect of capitalism, however, what about the idea of markets and trade more generally? Montesquieu famously noted that

Commerce is a cure for the most destructive prejudices; for it is almost a general rule, that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.

In fact, market economies are associated with greater levels of trust and cooperation, so might we not expect markets and trust to be associated in the mind? Al-Ubaydli, Houser, Nye, Paganelli, and Pan (the list includes several GMU colleagues) prime experimentees with words associated with markets and then have them play a trust game; they find evidence in support of the hypothesis:

Using randomized control, we find evidence that priming markets leaves people more optimistic about the trustworthiness of anonymous strangers and therefore increases trusting decisions and, in turn, social efficiency. Given the general mechanisms by which priming affects behavior–that an individual’s mental representation of markets is the result of the individual’s experiences with markets–we can interpret our results as evidence in favor of the hypothesis that market participation increases trust.

…Absent markets, economic interactions with strangers tend to be negative. Market proliferation allows good things to happen when interacting with strangers, thus encouraging optimism and leading to more trusting behaviors. Participation in markets, rather than making people suspicious, makes people more likely to trust anonymous strangers. Our results seem therefore to corroborate the idea of doux commerce….We stress, however, that this is cautious evidence; a wider array of evidence is necessary for the solidification of this conclusion.

Questions that are rarely asked

So, my libertarian devotees of evolutionary psychology, you can’t have it both ways.  If feminism is wrong to think we can and/or should resist the dispositions that evolution has given us, then why is it wrong for defenders of the classical liberal order to think we can and/or should resist those dispositions when it comes to our evolved instincts toward the morality of socialism?  Or put the other way around:  if resisting our evolved moral instincts and obeying the rules of just conduct work to generate a civilized, cooperative economic order, why should gender issues be any different?

That is from Steve Horwitz.

Bill Gates reviews Acemoglu and Robinson

He doesn’t like the book so much. Here is his bottom line:

This points to the most obvious theory about growth, which is that it is strongly correlated with embracing capitalistic economics—independent of the political system. When a country focuses on getting infrastructure built and education improved, and it uses market pricing to determine how resources should be allocated, then it moves towards growth. This test has a lot more clarity than the one proposed by the authors, and seems to me fits the facts of what has happened over time far better.

He also objects to the critique of foreign and, and the review closes with this:

As an endnote, I should mention that the book refers to me in a positive light, comparing how I made money to how Carlos Slim made his fortune in Mexico. Although I appreciate the nice thoughts, I think the book is quite unfair to Slim. Almost certainly, the competition laws in Mexico need strengthening, but I am sure that Mexico is much better off with Slim’s contribution in running businesses well than it would be without him.

The pointer is from Jeffrey Sachs.