Post-factual history: Seth Rockman edition

Pseudoerasmus sent me a tweet by Seth Rockman.

The message refers to this article on The Other Slavery in the Chronicle of Higher Education and suggests that economic historians will argue that slavery never existed among Native Americans.

The Chronicle article notes that

The Other Slavery: The Uncovered Story of Indian Enslavement in America by Andrés Reséndez “offers a capacious but defensible definition, including peonage; rebels sentenced to servitude; orphans and vagrants bound to service; victims of the mita (a forced labor quota imposed on Indian villages); and ostensibly free wage laborers whose employers never paid them.”

This definition of slavery, which includes a variety of institutions that were used to coerce labor from Native Americans got me to wondering which economic historians Rockman will be the first to try to argue this away. Perhaps he thinks it will be my friend Tim Yeager author of "Encomienda or Slavery? The Spanish Crown's Choice of Labor Organization in Sixteenth-Century Spanish America." The Journal of Economic History 55, no. 04 (1995): 842-859. Wait, that article must be an aberration, economic historians wouldn’t let something like that or Ricardo D. Salvatore’s "Modes of Labor Control in Cattle-Ranching Economies: California, Southern Brazil, and Argentina, 1820-1860." The Journal of Economic History 51, no. 2 (1991): 441-51 into the Journal of Economic History. Maybe Rockman suspects that the firt one to try to argue it away will be Melissa Dell author of "The persistent effects of Peru's mining mita," Econometrica 78, no. 6 (2010): 1863-1903. Yes, Dell seems like a good choice, publishing in Econometrica is about as economist as you can get. Actually, I am a little surprised that Rockman had not at least heard of that paper. It has received a lot of attention. I thought it might be known to even someone who was adamant about preserving his ignorance of the work of economic historians.

Rockman’s own flexibility in interpreting the past can also be seen in his reactions to the recent Chronicle article about slavery and capitalism.

Last week the article highlighted the deficiencies of the economists

Today the Chronicle article was just one of three articles that tried to make slavery tangential to American economic development.

Such abrupt about faces would make my head spin. Moreover, nothing in any of the articles suggested that slavery was “tangential” to American economic development. Questioning claims that slavery was “the driving force” behind economic development or claims that it accounted for half of GDP are not even close to saying that slavery was tangential.

These guys are starting to make me feel like like Michael Palin in this Monty Python skit.

Capitalism and Slavery Debate is not about differences in methodology

Marc Perry wrote about the ongoing argument over the relationship between slavery and the American economic development that is taking place between some economic historians (economists) and some new historians of capitalism (historians)  Some people, including the author of this essay at the Economist, view the argument as a controversy over differences in methodology between economists and historians. Several of the quotes by historians in Parry’s article seem consistent with this view. 

Personally, I do not view it as an argument about methods between historians and economists. The economists, including myself, who have criticized the work of Baptist and Beckert have focused more on their poor use of historical methods than their poor use economic methods.

There is no universally accepted description of appropriate research methods in history or economics. People within disciplines often argue about the appropriate methodology for the discipline. Nevertheless, I think that most historians would agree that good historical work presents an accurate historiography, so the reader understands the current state of the conversation on the topic, and builds an interpretation of the past based upon an honest and critical interpretation of the sources. Economic historians have criticized Baptist and his supporters for failing to follow these practices, for failing to do good history. I haven't criticized Baptist and his supporters  for not having a formal model or not doing econometric analysis. I have criticized them for misrepresenting what economists and historians have written and said about slavery. I have criticized them for creating interpretations of the past that are based upon made up stories and numbers rather than actual sources.

Misleading historiography.

One of the chief claims of Baptist and his supporters is that they have overturned a long held view of the slave economy of the South as stagnant and pre- or even anti- capitalist. This is one of the central claims of The Half. In Parry’s article, Edward Ayers echoes Baptist’s claim to novelty. “What’s exciting about that approach is the way it renders the slave South as a dynamic, changing society, in contrast to Genovese’s static, anti-capitalist vision, says Edward L. Ayers, a historian and former president of the University of Richmond. "To have that overturned so quickly," he says, "it looks more like the sciences than it does the humanities."” But these claims to have overturned long held views about slavery in the United States are based solely upon a misleading historiography.

It is simply a myth that Genovese’s view of the economics of slavery was held by the majority of economists or historians until Baptist and Beckert cam along. While I think it can safely be said that Genovese’s work on culture, such as Roll, Jordan, Roll remains relevant, his work on the economics of slavery, expressed in the Political Economy of Slavery has long been discounted by both economists and historians. Consider the interpretation of the South presented in an undergraduate text book three decades ago: George Brown Tindall’s America: A Narrative History Volume, 2^nd edition (1988). Tindall wrote on page 371 that “More often than not the successful planter was a driving newcomer, bent on maximizing profits. While the profitability of slavery has been a long standing subject of controversy, in recent years, economic historians have reached the conclusion that the slaves on average supplied about a 10 percent return on their cost.” He went on to note that slaves were the most profitable investment available in the South, and that incomes in the South were not only comparable to the wealthiest countries in the World, but that in the newer cotton lands incomes were among the highest in the United States. The view that he presented to undergraduates almost 30 years ago was of a thriving and successful southern economy based on slave labor. There is no indication that he thought this was a controversial interpretation. 

Tindall was not an outlier, the interpretation in his textbook was the standard one among. In 1995, Robert Whaples surveyed a sample of both economists and historians who worked on economic history. He asked them whether they generally agreed, agreed with provisos, or generally disagreed with a series of statements. For the statement “Slavery was a system irrationally kept in existence by plantation owners who failed to perceive or were indifferent to their best economic interests,” ninety-three percent of economists and ninety percent of historians disagreed with the statement. For the statement “The slave system was economically moribund on the eve of the Civil War,” ninety-eight percent of economists and ninety-five percent of historians disagreed.

It is not just the claims about the nature of slavery in the American South that Baptist and his supporters misrepresent. I argued in another blogpost that Baptist’s entire argument against Rhode and Olmstead is about misrepresenting their argument. Beckert also claims an inordinate amount of novelty for his argument about the role of force (“war capitalism”) by choosing not to cite works like Findlay and O’Rourke’s Power and Plenty.

Creating interpretations of the past that are not based on evidence.

The claims about the size of the economic impact of slavery have not been based upon the available evidence. For instance, "The slave economy of the Southern states had ripple effects throughout the economy," Beckert wrote, "not just shaping but dominating it." Or according to Baptist “ All told more than $600 million, or almost half of the economic activity in the United States in 1836, derived directly or indirectly from cotton produced by the million odd slaves― 6 percent of the total US population―who in that year toiled in labor camps on slavery’s frontier.” Beckert makes the claim that slave produced cotton was the driving force based upon its predominant role among exports, and Baptist simply makes up the numbers that he uses to make his “estimate.”

In contrast, economic historians have noted that

1. Cotton was the largest export from the U.S., but exports were only about 9 % of GDP. Similarly, cotton accounted for about 23 % of income in the South, but the South accounted for only 26% of U.S. income. See D. A. Irwin, “The Optimal Tax on Antebellum U.S. Cotton Exports,” Journal of International Economics 60(2003):287) Ultimately, the value of cotton production was equal to about 6% of GDP.

2. The South had lower average incomes than the North; and per capita income was growing more slowly in the South even before the Civil War. See Unequal Gains by Lindert and Williamson Chapter 5. In addition, about twice as many people lived in the Union states.

3. The more important slavery was in a country or state the lower the level of income was in the future. Nathan Nunn “Slavery, Inequality and Economic Development in the Americas: An Examination of the Engerman-Sokoloff Argument (October 2007).

4. Slave states had lower levels of educational attainement and less innovation (measured by patents) than states without slavery. This was true even in the areas that were most like the North in geogrpahy and economic activity. See John Majewski "Why Did Northerners Oppose the Expansion of Slavery? Economic Developemnt and Education in the Limestone South" Chapter 14 in Slavery's Capitalsm.

Foner complains that for the economic historian history “is just a source of numbers, a source of data to throw into their equations." History is not just a source of numbers, but, if you are going to use numbers, shouldn’t they come from history, not the historian’s imagination? The current dispute is not about economic methods versus historical methods; it is about bad history. Because it is about bad history, it is all the more disappointing when historians like Foner, who know better, are willing to stand behind it. After his NYTimes review of Baptist's book I wrote a post titled "et tu Foner?"

Economic historians have criticized Baptist and his supporters because they are doing bad history. By the way, throughout this post I have used the phrase Baptist and his supporters not historians because I do not believe that they represent the discipline of history. There is far too much really good work being done to take the worst work as representative of the discipline. More than a few historians have questioned his historiography, his propensity to make things up, and his use of sources (see for instance this Historically Thinking podcast). After reading Slavery’s Capitalism I am not even convinced that Baptist and his supporters represent people who regard themselves as historians of capitalism.

Caitlin Rosenthal, for instance, said she would like to promote more cooperation between economists and historians (and I thought her paper in Slavery's Capitalism was consistent with this statment). Carlo Cipolla long ago noted that there are differences between economists and historians, but he argued these differences should complement not conflict with each other. Mary and I recently argued in the Journal of Institutional Economics that economists had much to gain by paying more attention to the historian’s craft. Finally, Kevin O’Rourke pointed out on twitter that the economic history department at Oxford has both economists and historians, and they seem to get along just fine.


Note: This post was edited on 11 December 2016 to add point number 4 in the list above and the reference to John Majewski's paper on the Limestone South.

The New Post-Factual History

The Chronicle of Higher Education has published “Shackles and Dollars,” an article on the forum on slavery and capitalism that was held at Dartmouth. Dough Irwin moderated a discussion between Caitlin Rosenthal, Sven Beckert, Alan Olmstead and Trevon Logan. While reading the article, I realized that I had not really appreciated how revolutionary the work of Edward Baptist and his supporters is.  I had thought that it was just bad history: misleading historiography, misrepresenting the work of others, omitting evidence that is inconsistent with your claim, not providing evidence to support your claim, and simply making up evidence. Yes, it is true that in the past these things were regarded as characteristics of bad historical work, but that is the past. Baptist is on the cutting edge of bringing standards of historical scholarship in to line with a post-factual age. Baptist and his supporters are less interested in changing the questions that historians focus on than they are in changing the methods that historians use to answer questions. It is not the new history of capitalism; it is the new post-factual history.

Eric Foner is onboard. He tells us that the economic historians who point out that Baptist is just making stuff up are “champion nitpickers.” Foner declares that “I’m sure there are good, legitimate criticisms of the handling of economic data. But in some ways I think it’s almost irrelevant to the fundamental thrust of these works." The thrust of Baptist’s book (other than the style in which it is written) are the claim that unlike previous economists and historians he shows that the slave South was a capitalist system, the claim that slave grown cotton was the driving force behind economic growth, and the claim that the increases in cotton production were driven by ever more intense use of torture. The first claim is demonstrably false: The vast majority of economic historians, as well as many other historians, had long regraded slave owners as capitalists driven by profit motives (see this 1995 survey of economic historians conducted by Robert Whaples). Baptist’s only evidence to support the second claim is a series of numbers that he makes up and then proceeds to sum ; he does appear to be able to do at least some basic addition. (See Pseudoerasmus  for an extensive critique of the cotton driven growth argument, as well as pretty much everything else Baptist says; see also my blogpost.)  For the last claim Baptist provides no evidence in support of his argument and omits evidence that is inconsistent with his argument. When people challenge his argument his response is always the same: throw up a straw man and beat it to pieces. But, of course, all this is merely nitpicking. The critical evaluation of evidence is irrelevant to the fundamental thrust of the work.  

                

The article also notes that “For all the mudslinging, the slavery fight does not break cleanly along disciplinary lines. Historians under attack find support for their ideas in the writing of some economists, like Ronald Findlay and Kevin H. O’Rourke. What the article does not note is that Beckert’s book never mentions that Findlay and O’Rourke had made a similar argument six years earlier. As a matter of fact, Beckert does not cite Power and Plenty at all in his book. That is probably just more nitpicking.

                

The degree to which Baptist and his supporters seek a post-factual history was brought home to me again when I saw that Seth Rockman had tweeted that “new CHE article highlights economists thinking ahistorically and ahistoriographically.” Read the article and judge for yourself. I will, however, point out that the article notes that “Historians and economists criticize the new slavery scholarship on grounds that go beyond economics.” And it gives the last word to the economist Trevon Logan: “Like many others, Baptist "continues to see the enslaved as a vehicle for his own need to tell us something new, even when it is not," Logan writes. "That, I believe, is the true shame about the historiography of slavery."”

If you are a historian or simply someone interested in history. Read Beckert and Baptist, but also read Rhode and Olmstead, and Logan. Read them all carefully and critically. If you are persuaded by, for instance, Ed Baptist's calculation of the quantitative impact of slavery (page 321-22 of The Half), please tell me what you found persuasive about it.  

Pope Francis and Economics

The latest issue of the Independent Review is devoted to consideration of the relationship between Pope Francis and economics. The Introduction is by Robert Whaples. He is a good economic historian, and I hope that I am being fair to his argument.  That said, I do take issue with at least part of the argument. Specifically, he states that “It is clear that Pope Francis and many in the economics profession do not see eye to eye at a fundamental level.” He then proceeds to argue that Pope Francis’s views are inconsistent with fundamental assumptions of economic theory. To make the point clear he refers to the description of the assumptions about consumer behavior in Pindyck and Rubinfled’s microeconomics text :“[C]onsumers always prefer more of any good to less . . . [and] are never satisfied or satiated; more is always better, even if just a little better. (Pindyck and Rubinfeld 2005, 66)" He points out that this assumption is also known as “nonsatiation.”

Whaples then argues that the assumption of non-satiation gives rise to a fundamental difference between economists and Pope Francis:

“As shown earlier, Pope Francis’s view of the world is that one of these foundational assumptions is assuredly invalid. This simply isn’t how God made people. Christianity holds that God made man in His own image. In many cases, this relationship can make man capable of the rationality that goes into the first two assumptions about consumer choice—that preferences are complete and transitive—but the third assumption is fundamentally flawed, says Francis. More material possessions and greater consumption aren’t always or even generally better. A consumer who never feels satisfied with his material life—who always wants more—is not on the path to God.”

Whaples argument, however, misconstrues both what economists do and what Pope Francis is trying to do. First, notice the difference between what Pindyck and Rubinfled say and what Whaples says. Pindyck and Rubinfeld assume that “[C]onsumers always prefer more of any good to less . . . [and] are never satisfied or satiated.” Whaples suggests that Francis believes that “More material possessions and greater consumption aren’t always or even generally better.” Whaples switched from “goods” to “material possessions” and “consumption.” A “good” in economic is anything that a person derives satisfaction (utility) from. A good does not have to be a material possession or something that is generally described as consumption. Whaples is perpetuating one of the most common misconceptions about economics: the belief that economists think people are only interested in their own material well-being, narrowly conceived. People who believe that economists think this way have suggested that voting for interest is inconsistent with economic theory because your vote will not affect the outcome of an election, and therefore will not affect your material well-being. But voting is just as consistent with economic theory as buying a new car. Economic theory does not say what you will or will not get utility from. You can get utility from buying a car, or voting, or going out to dinner, or praying, or buying a diamond ring, or giving to charity, or even from eating this. The things that give people satisfaction are usually the result of culture, personal history, and individual tendencies.

No matter what your preferences, however, you still face the fundamental problem of choice in the face of scarcity. I tell my students it doesn’t matter whether you are Donald Trump or Mother Teresa you have to make choices about how to allocate the resources you have. By the way, I used the Donald in the example long before the election. Even if you only seek to serve God you have time make choices about how to allocate your limited resources, especially time. Francis himself has to choose between time spent in prayer, time hearing confession, time celebrating Mass, time spent on writing encyclicals, time spent meeting with Bishops, and time spent on his many administrative duties as the head of the church.

If economic theory does not say what people want, what does it do? Economic theory says that if people derive satisfaction from something they are likely to do it more if the cost of doing it decreases and likely to do it less if the cost of doing it increases. What economists get out of their models of consumer behavior is predictions about how people will respond to changes in the constraints (things like income and the costs of goods). In models of rational utility maximizing behavior, people respond in predictable ways to changes in the constraints they face. Do people in the real world maximize behavior? I don’t know. I don’t care? I can’t observe their utility. I can observe changes in constraints, and I can observe changes in behavior, and I can assess the degree to which the changes in behavior are consistent with the predictions of the model. I can’t say whether some person will think that voting is a good, but I can predict if the cost of voting increases they are less likely to do it.

As an economist I take people’s preferences as they are. Personally, I may find attendance at stock car race to be more bad than good, but as an economist it is not my business to tell other people that they should not get utility from it. The fundamental difference between economists and the Pope is that telling people what they should want is an essential part of his job as Pope. The Pope is not taking preferences as given and trying to make predictions about behavior. I stated before that people’s preferences tend to come from culture, personal history, and individual tendencies. The Pope, as well as other religious leaders and many secular leaders, do not take people’s preferences as given. They want to shape those preferences. They try to persuade us that we should get satisfaction from one thing rather than another. They try to persuade us that we will be happier if we consume more prayer and charity rather than more cars and marble counter tops.

Ultimately, economists have no more business complaining about the Pope trying to persuade people that they will gain more satisfaction from consuming prayer, penance, and charity than they do complaining about Apple trying to persuade people that they will gain more satisfaction from a Mac than a PC. 

Economic History Update

Eric Hilt has a new paper on “Economic History, Historical Analysis and the "New History of Capitalism."  He is presenting the paper at the Penn Economic History Forum. The paper reviews eleven books that have figured prominently in the New History of Capitalism. It summarizes many of the complaints that economic historians have made about these works but still makes a plea for increased dialogue between economic historians and historians of capitalism.

The Annual Meeting of the American Economic Association will have a session on Cliometrics in Historical Perspective: In Remembrance of  Robert Fogel and Douglas North (follow the link for abstracts of the papers):

A Cliometric Counterfactual: What If There Had Been Neither Fogel nor North?

Claude Diebolt

France National Centre for Scientific Research and University of Strasbourg

Michael Haupert

University of Wisconsin-La Crosse

What Fogel and North Got (Spectacularly) Right, and What They Got (Modestly) Wrong

Deirdre McCloskey

University of Illinois-Chicago

Douglass North, Cliometrics, and the New Institutional Economics: Continuity or Divergence?

Lee Alston

Indiana University and NBER

Cliometrics and Econometrics

Robert Margo

Boston University and NBER

Here are a couple of links related to Joel Mokyr’s most recent book A Culture of Growth: the Origins of the Modern Economy:

Here is review by Brad De Long

Here is an interview with Mokyr

Recent Capitalism and Slavery Stuff

The Junto has been hosting a weeklong series of posts about Slavery’s Capitalism. I blogged about the book here back in August. Part of the discussion in the comments section at the Junto has considered the use of terms like “essential.”

Speaking of “essential”, yesterday Dartmouth hosted what should have been a very interesting debate “Was Slavery Essential to Capitalism?” Doug Irwin was the moderator. Unfortunately, you had to be at Dartmouth to see it, but I heard from Irwin that the Chronicle of Higher Education planned to cover the debate. The participants were Alan Olmstead, Caitlin Rosenthal, Sven Beckert and Trevon Logan.

Speaking of Trevon Logan, I was re-reading his paper A Time (Not) Apart: A Lesson in Economic History from Cotton Picking Books, which I had assigned to my Economic History  class. For what it’s worth, I highly recommend the paper to economists and historians, as well as to people who aren’t economists or historians.

History of Capitalism at AHA

Here is an interesting session scheduled for the meeting of the American Historical Association. Abstracts of each paper can be seen by clicking on the paper title. I have read the first two papers and like them a lot. The Lamoreaux and Wallis paper applies the North, Wallis and Weingast framework of movement from limited access orders to open access orders to the United states by examining changes at the state level during the antebellum period. If you wish to read the paper, it can be found quite easily by searching google scholar. The Rhode and Olmstead paper is a pretty devastating critique of the sloppy quantitative analysis of some of the most prominent “New Historians of Capitalism,” especially Baptist and Beckert. Similar arguments have been made online by me, Pseudoerasmus, and others, but the Rhode and Olmstead paper is very thorough. I haven’t read the Rosenthal paper, which seeks to provide a definition of capitalism that is consistent with both wage labor and slavery. I am somewhat skeptical that capitalism can be a useful analytical concept. The term carries too much baggage. Nevertheless I look forward to reading her paper at some point in the future.

Perspectives on the New History of Capitalism

AHA Session 321

Sunday, January 8, 2017: 11:00 AM-12:30 PM

Centennial Ballroom B (Hyatt Regency Denver, Third Floor)

Chair:

William Summerhill, University of California, Los Angeles

Papers:

The “New History of Capitalism,” Cotton, and Slavery
Paul W. Rhode, University of Michigan; Alan L. Olmstead, University of California, Davis

States, Not Nation: The Sources of Political and Economic Development in the Early United States
Naomi R. Lamoreaux, Yale University; John J. Wallis, University of Maryland, College Park

Slavery, Capitalism, and Commodification
Caitlin Rosenthal, University of California, Berkeley

Comment:

Eric Rauchway, University of California, Davis

Session Abstract

Research within what scholars have come to call the "New History of Capitalism" has revitalized interest in economic history among historians. This session provides an assessment of this work from diverse perspectives. One paper highlights significant problems in the interpretation of evidence in major studies within the New History of Capitalism that focus on slavery and the cotton economy. A second sheds new light on the critical role played by states in key changes that underpinned political and economic modernization in the antebellum era. And a third paper problematizes the scope of phenomena encompassed by capitalism, as the term is presently employed, in order to craft an operational definition that accommodates both wage labor and slavery in antebellum America. Taken together the papers identify pitfalls in both traditional and new interpretations of antebellum economy and polity, while pointing the way forward for historians who seek to undertake research on the fundamental economic and political issues of the era.