Category: History

Melinda Miller says yes, based on a clever natural experiment:

Although over 140 years have passed since slaves were emancipated in the United States, African-Americans continue to lag behind the general population in terms of earnings and wealth. Both Reconstruction era policy makers and modern scholars have argued that racial inequality could have been reduced or eliminated if plans to allocate each freed slave family “forty acres and a mule” had been implemented following the Civil War. In this paper, I develop an empirical strategy that exploits a plausibly exogenous variation in policies of the Cherokee Nation and the southern United States to identify the impact of free land on the economic outcomes of former slaves. The Cherokee Nation, located in what is now the northeastern corner of Oklahoma, permitted the enslavement of people of African descent. After joining the Confederacy in 1861, the Cherokee Nation was forced during post-war negotiations to allow its former slaves to claim and improve any unused land in the Nation’s public domain. To examine this unique population of former slaves, I have digitized the entirety of the 1860 Cherokee Nation Slave Schedules and a 60 percent sample of the 1880 Cherokee Census. I find the racial gap in land ownership, farm size, and investment in long-term capital projects is smaller in the Cherokee Nation than in the southern United States. The advantages Cherokee freedmen experience in these areas translate into smaller racial wealth and income gaps in the Cherokee Nation than in the South. Additionally, the Cherokee freedmen had higher absolute levels of wealth and higher levels of income than southern freedmen. These results together suggest that access to free land had a considerable and positive benefit on former slaves.

Here is the paper, she is on the job market this year from University of Michigan.  The abstract is vague on magnitudes, for more detail see pp.29-30, for instance:

The livestock calculations find that the difference in the wealth gaps was substantial, and ranged from 46% to 75%.  For crop income measures, the difference in the gap was smaller, but still substantial.  My estimates place it between 20 to 56%.

There is controversy about whether geography matters mainly because of
its contemporaneous impact on economic outcomes or because of its
interaction with historical events.  Looking at terrain ruggedness, we
are able to estimate the importance of these two channels.  Because
rugged terrain hinders trade and most productive activities, it has a
negative direct effect on income.  However, in Africa rugged terrain
afforded protection to those being raided during the slave trades.
Since the slave trades retarded subsequent economic development, in
Africa ruggedness also has had a historical indirect positive effect on
income.  Studying all countries worldwide, we find that both effects are
significant statistically and that for Africa the indirect positive
effect dominates the direct negative effect.  Looking within Africa, we
provide evidence that the indirect effect operates through the slave
trades.  We also show that the slave trades, by encouraging population
concentrations in rugged areas, have also amplified the negative direct
impact of rugged terrain in Africa.

That’s a new paper by Nathan Nunn and Diego Puga.  Some say the paper is here, not I.  Others say you can get it here.  I say you can get an html version here.  Here is one quick summary of the argument.  Here are Nunn’s other papers on the slave trade, and how it continues to affect current African development.
 

Our corn did prove well, and God be praised, we had a good increase of Indian corn, and our barley indifferent good, but our peas not worth the gathering, for we feared they were too late sown.  They came up very well, and blossomed, but the sun parched them in the blossom.  Our harvest being gotten in, our governor sent four men on fowling, that so we might after a special manner rejoice together after we had gathered the fruit of our labors.  They four in one day killed as much fowl as, with a little help beside, served the company almost a week.  At which time, amongst other recreations, we exercised our arms, many of the Indians coming amongst us, and among the rest their greatest king Massasoit, with some ninety men, whom for three days we entertained and feasted, and they went out and killed five deer, which they brought to the plantation and bestowed on our governor, and upon the captain and others.  And although it be not always so plentiful as it was at this time with us, yet by the goodness of God, we are so far from want that we often wish you partakers of our plenty.

Edward Winslow, Plymouth in New England this 11th of December, 1621.

It seems to be advertising revenue, which gives media the incentive to appeal to a broad audience and the means to be independent of particular donors and interest groups:

The source of media revenues is an important
determinant of media behavior. News coverage depends on the preferences
of those who pay the costs. In a theoretical model, I argue that higher
potential advertising revenues increase the value of news outlet’s
audience and thus decrease media dependence on subsidies of interest
groups. The model shows that higher advertising profitability implies
lower media bias and less distortion caused by the presence of special
interest groups. I use data on 19th century American newspapers to test
the model, showing that there were more independent newspapers in
counties with higher profitability of advertising. The effect of
advertising works through both the entry of new newspapers and changes
of affiliation of old newspapers.

That’s from a new paper by Maria Petrova, who is on the job market this year from Harvard.

Leaders who make history are often provincials: Provincials attempt what sophisticates consider naive.  The two current candidates for world leadership [Reagan, Gorbachev] were both country boys, a state park lifeguard and a champion harvester, each an outsider to the inner elites of the government he headed, each in his own way an idealist determined to push beyond the status quo.  Reagan had been tailored in Hollywood, but the sophistries of Washington’s nuclear mandarins had failed to complicate his apocalyptic Dixon, Illinois, worldview.  Gorbachev’s southern Russian accent and hillbilly grammar offended the ears of the suave Moscow bureaucracy he outmanipulated a dozen times on any ordinary day.

That is from Richard Rhodes’s interesting Arsenals of Folly: the Making of the Nuclear Arms Race.  I’ve never seen a good quantitative study of how leadership biography matters for policy outcomes, and I expect that solid results are as hard to find as in birth order studies.  Does anyone know of a good, concrete stylized fact here?

In many parts of France, dog-power was vital to the early industrial revolution.  In the Ardennes, where nail-making was a major domestic industry, a passer-by who peered into one of the nail-makers’ low stone cottages would see a small dog scampering inside a wheel to keep the bellows blowing.  In the Jura, villages without a water supply used wheel-spinning dogs to run machines.  The usual stint was two hours, after which the dog, slightly singed by flying sparks, went to wake its replacement and could then do as it liked.  The humans worked for up to fifteen hours a day and were often stunted, myopic and claw-fisted.  The dogs seemed to have been better adapted to the task.

That is from the new and fascinating The Discovery of France: A Historical Geography from the Revolution to the First World War.  Most of all, this book shows just how recently our modern notions of France were formed, and how late particularism persisted in the French psyche and ways of life.

In the early 1970s, investment banking still maintained a relatively even balance between job satisfaction and the accretion of wealth.  The thirty-nine Morgan Stanley partners were paid $100,000 a year and considered that they were well compensated.  Parker Gilbert recalls commuting with a couple of colleagues when they were in their early thirties and hearing someone say:"If we could only make $5 million, we could retire and play golf."

Anyone lucky enough to have inherited a million dollars in 1970 could buy an apartment on Park Avenue — four bedrooms, two maids’ rooms, living room with wood-burning fireplace, dining room, kitchen, and library — for under $100,000.  In 1971 corporate raider Saul Steinberg bought one of the most expensive apartments in the city, at 740 Park Avenue, for $250,000.

That is from Patricia Beard, from Blue Blood & Mutiny: The Fight for the Soul of Morgan Stanley.

It is an interesting question — to say the least — how we got from there to here.  Most of all, the contemporary world is immensely better at allocating talent and maximizing the value that talent can create (admittedly some of this is paper shuffling value, it is not all social value).  That is one of the fundamental productivity shifts behind the rise in income inequality; people with that pro-golf attitude simply couldn’t make it to the top today, and back then many would-be earnings superstars were held in chains by sheer social stupidity, lack of access to the right training, or inability to connect with the proper social networks.

If you work in investment banking and don’t want to play by those rules, "the system" is happy to hit the hyperspace button, send you back to Butte, Montana, and feed you bananas and milk.  However no one is going to boil you in oil. 

Let’s be glad all those people — many of them silly — slave so hard on our behalf.

A new paper looks at some of the efficiency properties of castes:

The caste system in India has been dated to approximately 1000 B.C. and still affects the lives of a billion people in South Asia. The persistence of this system of social stratification for 3000 years of changing economic and social environments is puzzling. This paper formalizes a model of the caste system to better understand the institution and the reasons for its persistence. It argues that the caste system provided a tool for contract enforcement and facilitated trade in services, giving an economic reason for its persistence. A caste is modeled as an information-sharing institution, which enforces collective action. Trade is modeled as a version of the one-sided prisoner’s dilemma game, where the consumer has an opportunity to default. Consumers who default on a member of a caste are punished by denying them services produced in the caste. Various features of the caste system like occupational specialization by caste, a purity scale, and a hierarchy of castes are shown to be equilibrium outcomes that improve the efficiency of contract enforcement. The implications of the model are tested empirically using unique census data from Cochin (1875), Tirunelveli (1823) and Mysore (1941).

In other words, other caste members enforce norms on you and if you don’t follow them you are kicked out and you cannot easily join another caste.  Sounds like my idea of fun.  I have a few points:

1. No way should this paper spend so much time on a formal model.

2. The tests proffered on p.36 are related only tangentially to the paper’s main propositions.

3. When it comes to normative issues, the author can do no better than to write: "This should not be interpreted as saying that the case system was free of inefficiencies."  And that comes only on p.46.  Ha!

4. The paper commits the fallacies of excess functionalism.

5. Virtually any destructive institution which keeps economic transactions on a smaller scale may make contract enforcement "easier" in some regards.

6. This is nonetheless interesting work, and many more people should do research on this and related topics.  But in terms of emphasis this paper is way off base.

The pointer is from New Economist blog, which offers related links.  Readers, are any of you willing to defend the caste system, if only in part, on economic grounds?

In one year Al Gore won a Nobel Peace Prize, had a bestselling book, and won an Oscar.  What are other historical examples of a person having multiple notable recognitions or achievements within a single year?  And no, having sextuplets does not count…

I’m mystified by Joel Waldfogel’s claim — and Nike’s claim — that, until now, there have been no markets in shoes just for American Indians.

American Indian shoes have been produced and traded for centuries.  Most of all they have been produced by American Indians.  Some of them are called moccasins.  Here is a bibliography of writings on American Indian footware.  Here are native American clothing stores, which also sell shoes.  Here is a craft manual for how to make American Indian footwear.

And of course plenty of companies make extra-wide and extra-large shoes, though of course not for American Indians exclusively.  There is the Mexican market as well, which caters to many "indigenous shapes," although admittedly on the shorter side. 

I like Joel’s book but I think he is far too pessimistic about the prospects for diversity in the modern world.  It’s also worth noting that if any group has been victimized and robbed by government, and driven into partial isolation, it is the American Indian.

…this is my first visit to Thomas Keller’s temple of haute cuisine in Yountville, California, and I can’t wait to see whether it lives up to its reputation.  More importantly, however, my dining companions are three outstanding chefs from Sichuan province, a heartland of Chinese gastronomy…None of them has ever been to the West before, or had any real encounters with what is known in China as "Western food," and I am as much interested in their reactions to the meal as my own.

Driving down HIghway 29 to the restaurant, I had prepared my guests by casually remarking, "You’re very lucky, because we are going to visit one of the best restaurants in the world."

In the world? asked Lan Guijun.  "According to whom?"

..as I warm up to the pleasures of this utterly satisfying dinner, I can’t help noticing that my companions are having a rather different experience.  Yu Bo, the most adventurous of the three, is intent of savoring every mouthful and studying the composition of our meal.  He is solemn in his concentration.  But the other two are simply soldiering on.  And for all three of them, I realize with devastating clarity, this is a most difficult, a most alien, a most challenging experience.

They find the creaminess of the sabayon offputting, the rareness of the lamb unhealthy, and the olives to taste like Chinese medicine.  Don’t ask about the cheese, and they are amazed that "a bowl of soupy rice" [risotto] could cost so much.  A few days of dining later, they find eating salad to be barbaric (it is raw), and sourdough bread to be tough and chewy.

Yu Bo, to my great satisfaction, is pleasantly impressed with the first raw oyster of his life, and even ventures to take a second.  When I ask him how they taste, he nods furiously in approval.  "Not bad, not bad; a bit like jellyfish."

That is from Gourmet magazine, August 2005 issue.  Here is my previous post on inaccessibility and large cultures.