Econstudentlog

The Cambridge Economic History of Modern Europe: Volume 1, 1700-1870 (2)

Here’s my first post about the book. I have now finished it, and I ended up giving it three stars on goodreads. It has a lot of good stuff – I’m much closer to four stars than two.

Back when I read Kenwood and Lougheed, the first economic history text I’ve read devoted to such topics, the realization of how much the world and the conditions of the humans inhabiting it had changed during the last 200 years really hit me. Reading this book was a different experience because I knew some stuff already, but it added quite a bit to the narrative and I’m glad I did read it. If you haven’t read an economic history book which tells the story of how we got from the low-growth state to the high-income situation in which we find ourselves today, I think you should seriously consider doing so. It’s a bit like reading a book like Scarre et al., it has the potential to seriously alter the way you view the world – and not just the past, but the present as well. Particularly interesting is the way information in books like these tend to ‘replace’ ‘information’/mental models you used to have; when people know nothing about a topic they’ll often still have ‘an idea’ about what they think about it, and most of the time that idea is wrong – people usually make assumptions based on what they know about, and when things about which they make assumptions are radically different from anything they know, they will make wrong assumptions and get a lot of things seriously wrong. To take an example, in recent times human capital has been argued to play a very important role in determining economic growth differentials, and so an economist who’s not read economic history might think human capital played a very important role in the Industrial Revolution as well. Some economic historians thought along similar lines, but it turns out that what they found did not really support such ideas:

“Although human capital has been seen as crucial to economic growth in recent times, it has rarely featured as a major factor in accounts of the Industrial Revolution. One problem is that the machinery of the Industrial Revolution is usually characterized as de-skilling, substituting relatively unskilled labor for skilled artisans, and leading to a decline in apprenticeship [...] A second problem is that the widespread use of child labor raised the opportunity cost of schooling (Mitch, 1993, p. 276).”

I mentioned in the previous post how literacy rates didn’t change much during this period, which is also a serious problem with human-capital driven Industrial Revolution growth models. Here’s some stuff on how industrialization affected the health of the population:

“A large body of evidence indicates that average heights of males born in different parts of western and northern Europe began to decline, beginning with those born after 1760 for a period lasting until 1800. After a recovery, average heights resumed their decline for males born after 1830, the decline lasting this time until about 1860. The total reduction in average heights of English soldiers, for example, reached 2 cm during this period. Similar declines were found elsewhere [...] in the case of England, it is clear that the decline in the average height of males born after 1830 occurred at a time when real wages were rising [...] in the period 1820–70, the greatest improvement in life expectancy at birth occurred not in Great Britain but in other western and northwest European countries, such as France, Germany, the Netherlands, and especially Sweden [...] Even in industrializing northern England [infant mortality] only began to register progress after the middle of the nineteenth century – before the 1850s, infant mortality still went up [...] It is clear that economic growth accelerated during the 1700–1870 period – in northwestern Europe earlier and more strongly than in the rest of the continent; that real wages tended to lag behind (and again, were higher in the northwest than elsewhere); and that real improvements in other indicators of the standard of living – height, infant mortality, literacy – were often (and in particular for the British case) even more delayed. The fruits of the Industrial Revolution were spread very unevenly over the continent”

A marginally related observation which I could not help myself from adding here is this one: “three out of ten babies died before age 1 in Germany in the 1860s”. The world used to be a very different place.

Most people probably have some idea that physical things such as roads, railways, canals, steam engines, etc. made a big difference, but how they made that difference may not be completely clear. As a person who can without problems go down to the local grocery store and buy bananas for a small fraction of the hourly average wage rate, it may be difficult to understand how much things have changed. The idea that spoilage during transport was a problem to such an extent that many goods were simply not available to people at all may be foreign to many people, and I doubt many people living today have given it a lot of thought how they would deal with the problems associated with transporting stuff upstream on rivers before canals took off. Here’s a relevant quote:

“The difficulties of going upstream always presented problems in the narrow confines of rivers. Using poles and oars for propulsion meant large crews and undermined the advantages of moving goods by water. Canals solved the problem with vessels pulled by draught animals walking along towpaths alongside the waterways.”

Roads were very important as well:

“Roads and bridges, long neglected, got new attention from governments and private investors in the first half of the eighteenth century. [...] Over long hauls – distances of about 300 km – improved roads could lead to at least a doubling of productivity in land transport by the 1760s and a tripling by the 1830s. There were significant gains from a shift to using wagons in place of pack animals, something made possible by better roads. [...] Pavement was created or improved, increasing speed, especially in poor weather. In the Austrian Netherlands, for example, new brick or stone roads replaced mud tracks, the Habsburg monarchs increasing the road network from 200 km in 1700 to nearly 2,850 km by 1793″

As were railroads:

“As early as 1801 an English engineer took a steam carriage from his home in Cornwall to London. [...] In 1825 in northern England a railroad more than 38 km long went into operation. By 1829 engines capable of speeds of almost 60 kilometers an hour could serve as effective people carriers, in addition to their typical original function as vehicles for moving coal. In England in 1830 about 100km of railways were open to traffic; by 1846 the distance was over 1,500 km. The following year construction soared, and by 1860 there were more than 15,000 km of tracks.”

How did growth numbers look like in the past? The numbers used to be very low:

“Economic historians agree that increases in per capita GDP remained limited across Europe during the eighteenth century and even during the early decades of the nineteenth century. In the period before 1820, the highest rates of economic growth were experienced in Great Britain. Recent estimates suggest that per capita GDP increased at an annual rate of 0.3 percent per annum in England or by a total of 45 percent during the period 1700–1820 [...] In other countries and regions of Europe, increases in per capita GDP were much more limited – at or below 0.1 percent per annum or less than 20 percent for 1700–1820 as a whole. As a result, at some time in the second half of the eighteenth century per capita incomes in England (but not the United Kingdom) began to exceed those in the Netherlands, the country with the highest per capita incomes until that date. The gap between the Netherlands and Great Britain on the one hand, and the rest of the continent on the other, was already significant around 1820. Italian, Spanish, Polish, Turkish, or southeastern European levels of income per capita were less than half of those occurring around the North Sea [...] From the 1830s and especially the 1840s onwards, the pace of economic growth accelerated significantly. Whereas in the eighteenth century England, with a growth rate of 0.3 percent per annum, had been the most dynamic, from the 1830s onwards all European countries realized growth rates that were unheard of during the preceding century. Between 1830 and 1870 the growth of GDP per capita in the United Kingdom accelerated to more than 1.5 percent per year; the Belgian economy was even more successful, with 1.7 percent per year, but countries on the periphery, such as Poland, Turkey, and Russia, also registered annual rates of growth of 0.5 percent or more [...] Parts of the continent then tended to catch up, with rates of growth exceeding 1 percent per annum after 1870. Catch-up or convergence applied especially to France, Germany, Austria, and the Scandinavian countries. [...] in 1870 all Europeans enjoyed an average income that was 50 to 200 percent higher than in the eighteenth century”

To have growth you need food:

“In 1700, all economies were based very largely on agricultural production. The agricultural sector employed most of the workforce, consumed most of the capital inputs and provided most of the outputs in the economy [...] at the onset of the Industrial Revolution in England , around 1770, food accounted for approximately 60 percent of the household budget, compared with just 10 percent in 2001 (Feinstein, 1998). But it is important to realise that agriculture additionally provided most of the raw materials for industrial production: fibres for cloth, animal skins for leather, and wood for building houses and ships and making the charcoal used in metal smelting. There was scarcely an economic activity that was not ultimately dependent on agricultural production – even down to the quill pens and ink used by clerks in the service industries. [...] substantial food imports were unavailable to any country in the eighteenth century because no country was producing a sufficient agricultural surplus to be able to supply the food demanded by another. Therefore any transfer of labor resources from agriculture to industry required high output per worker in domestic agriculture, because each agricultural worker had to produce enough to feed both himself and some fraction of an industrial worker. This is crucial, because the transfer of labor resources out of agriculture and into industry has come to be seen as the defining feature of early industrialization. Alternative paradigms of industrial revolution – such as significant increases in the rate of productivity growth, or a marked superiority of industrial productivity over that of agriculture – have not been supported by the empirical evidence.”

“Much, though not all, of the increase in [agricultural] output between 1700 and 1870 is attributable to an increase in the intensity of rotations and the switch to new crops [...] Many of the fertilization techniques (such as liming and marling) that came into fashion in the eighteenth century in England and the Netherlands had been known for many years (even in Roman times), and farmers had merely chosen to reintroduce them because relative prices had shifted in such a way as to make it profitable once again. The same may also be true of some aspects of crop rotation, such as the increasing use of clover in England. [...] O’Brien and Keyder [...] have suggested that English farmers had perhaps two-thirds more animal power than their French counterparts in 1800, helping to explain the differences in labor productivity.[2] The role of horsepower was crucial to increasing output both on and off the farm [...] [Also] by 1871 an estimated 25 percent of wheat in England and Wales was harvested by mechanical reapers, considerably more than in Germany (3.6 percent in 1882) or France (6.9 percent in 1882)”

“It is no coincidence that those places where agricultural productivity improved first were also the first to industrialize. For industrialization to occur, it had to be possible to produce more food with fewer people. England was able to do this because markets tended to be more efficient, and incentives for farmers to increase output were strong [...] When new techniques, crop rotations, or the reorganization of land ownership were rejected, it was not necessarily because economic agents were averse to change, but because the traditional systems were considered more profitable by those with vested interests. Agricultural productivity in southern and eastern Europe may have been low, but the large landowners were often exceedingly rich, and were successful in maintaining policies which favored the current production systems.”

I think I talked about urbanization in the previous post as well, but I had to include these numbers because it’s yet another way to think about the changes that took place during the Industrial Revolution:

“On the whole, European urban patterns [in the mid-eighteenth century] were not very different from those of the late Middle Ages (i.e. between the tenth and the fourteenth centuries). The only difference was the rise of urbanization north of Flanders, especially in the Netherlands and England. [...] In Europe, in the early modern age, fewer than 10 percent of the population lived in urban centers with more than 10,000 inhabitants. At the end of the twentieth century, this had increased to about 70 percent.[7] In 1800 the population of the world was 900 million, of which about 50 million (5.5 percent) lived in urban centers of more than 10,000 inhabitants: the number of such centers was between 1,500 and 1,700, and the number of cities with more than 5,000 inhabitants was more than 4,000.[8] At this time Europe was one of the most urbanized areas in the world [...], with about one third of the world’s cities being located in Europe [...] In the nineteenth century urban populations rose in Europe by 27 million [...] (by 22.5 million in 1800–70) and the number of cities with over 5,000 inhabitants grew from 1,600 in 1800 to 3,419 in 1870. On the whole, in today’s developed regions, urbanization rates tripled in the nineteenth century, from 10 to 30 percent [...] With regard to [European] centers with over 5,000 inhabitants, their number was 86 percent higher in 1800 than in 1700, and this figure increased fourfold by 1870. [...] Between 1700 and 1800 centers with more than 10,000 inhabitants doubled. [...] On the world scale, urbanization was about 5 percent in 1800, 15–20 percent in 1900, and 40 percent in 2000″

There’s a lot more interesting stuff in the book, but I had to draw a line somewhere. As I pointed out in the beginning, if you haven’t read a book dealing with this topic you might want to consider doing it at some point.

March 8, 2014 Posted by | books, data, economic history | Leave a comment

A Geography of Russia and Its Neighbors (I)

I’m currently reading this book, and I like it so far. The book has stuff on physical geography (relief and hydrography, climate, biomes, and environmental stuff), the history and politics of the area/region, cultural and social geography (demographics and population distribution/structure, cultural stuff including religion and language etc.), some stuff about economic factors of interest, as well as some chapters providing more details about the specific regions towards the end of the book. The book mostly deals with Russia, but there’s stuff about other post-Soviet states as well.

Reading it feels a little like reading a very detailed wikipedia article (~450 pages long) and I must admit that I’ve probably lost a little more respect for humanities students along the way while reading this; again it’s not that the book is bad, far from it, but I feel pretty sure you don’t add much value to an education by including courses such as ones dealing with material like this. The ability of a university student to read and understand a book like this will tell you very little about their abilities as nine out of ten high schoolers technically ought be able to do that without problems. Also, reading the book will take a normal person at most a couple of days, so if an employer has a position that really requires one to know stuff like what’s in the book I don’t see how it could ever be a big deal if the applicant doesn’t – the situation is a bit different if the individual doesn’t know multi-variable calculus and that is a requirement. A depressing point is that even though this is an easy read, a course dealing with the stuff in this book is probably potentially a lot more useful than are many other courses those students might have taken instead (art history, Hebrew studies, theatre research, Indology (“In this course, students will be introduced to the basic Indian systems of Yoga, both in its ancient texts and practices and in its modern practice and will pay particular attention to the development of Yoga in Denmark in the 20th century.”),…) (all examples in the previous parenthesis taken directly from the University of Copenhagen course catalogue).

This is not the first book about Russia/USSR I read, but most of the stuff I’ve read so far has only dealt with the history of the country/region; this book adds a lot of stuff because it deals with a lot of other things as well. I think he actually handles the history part quite well, but of course it’s not a very detailed account.

Below I’ve added some observations from the first third of the book or so:

“Russia has over 120,000 rivers over 10 km long, which collectively create 2.3 million km of waterways. Fifty-four percent of their flow enters the Arctic Ocean, with only 15% entering the Pacific. Another 8% of water flows to the Atlantic Ocean via the Black and Baltic Seas, and 23% to the Aral-Caspian interior basin with no outlet to the ocean. [...] The [Volga] basin occupies only 8% of the country, but is home to 40% of its population. [...] The Volga loses 7% of its annual flow to human consumption. Its flow has been reduced by about 20% in the last 100 years. The Siberian rivers primarily flow north to the Arctic Ocean, with the exception of the Amur, which flows east into the Pacific.”

“Climatologists generally consider the following factors important in producing a particular climate type: Latitude, [...] Elevation above sea level [...] Proximity to the ocean [...] Presence of ocean currents [...] Prevalent wind direction [...] Position relative to a mountain range [...] Cloud cover and dust [...] Human infrastructure.” [there are further details in the book about how these factors impact the climate of the FSU, in broad terms, but I won't go into the details here...]

“Only a fraction of the Russian population (8%) lives near a seacoast [...] Compare this to the United States, where two-thirds of all people live within 200 km of a coast” [...] [I've previously blogged this map, and it's pretty handy if you want to know more about the details of where people live -  more than three out of four Russians live in the European part of the country, and so Siberia is relatively empty. If you want to know more about the population density of the US, I've blogged that stuff before as well here.]

“The biomes of Northern Eurasia are similar to those of Europe or North America: tundra in the north; taiga and deciduous forests in the middle; steppe and desert in the south. The extreme south has deserts or subtropical Mediterranean-like shrub vegetation. [...] For millions of years, Northern Eurasia and North America were connected to each other [...] This resulted in an array of animals and plants that are shared by these two regions. [...] The flora and fauna of India (which is on the same continent as Russia), on the other hand, are completely dissimilar to Northern Eurasia’s; they are more like Africa’s. [...] Many animal genera or even species are identical in North America and Northern Eurasia [...] If an exact match is missing, there is usually a pretty good substitute/vicariant species” [...]

“The overall diversity of the plants and animals in Russia is not great, because of its northern location. For example, there are 11,000 species of vascular plants, 30 of amphibians, 75 of reptiles, 730 of birds, and 320 of mammals in the Russian Federation. By comparison, the United States (a more southern country half the size of Russia) has 19,000 species of vascular plants, 260 of amphibians, 360 of reptiles, 650 of birds, and 360 of mammals.”

“In Northern Eurasia, the taiga is a huge biome (covering over half of all Russia) [...] The boreal forests of Eurasia make up about 21% of the world’s total tree cover on 5.3 million km2 [...] Soils of the taiga are poor in nutrients and acidic [...] Steppe forms in areas with moisture deficit that precludes tree growth. Although steppes are on average warmer than most of the forested biomes to the north, it is really the lack of water that determines the tree boundary. [...] The classic Eurasian steppe is treeless [...] There are few places where virgin steppe can still be seen. As in North America, over 99% of this biome in Eurasia was plowed under in the 19th and 20th centuries.” [...]

“With its spacious, rainless interior, Eurasia is home to the northernmost deserts in the world. [...] The main deserts in North America are found at latitudes between 25º and 35ºN, whereas in Eurasia they occur between 38º and 44ºN. [...] Altogether, the Central Asian deserts occupy 3.5 million km2 — an area as large as Saudi Arabia and Iran combined.” [...]

“The exact sequence and elevation of the vegetation belts [of a mountain range] are determined by the direction of the slope (north-facing slopes are always colder and have a lower treeline) and by local climatic and biological factors. The treeline, for example, occurs at 300 m in the polar Urals and the Khibins in the Kola Peninsula in the Arctic, but at 2,000 m in the Carpathian mountains, 2,500 m in the Caucasus, and above 3,000 m in much of Central Asia” [...]

“The U.S.S.R. was one of the largest polluters of air on the planet, and Russia still is today [...] Between 2000 and 2005, an average big city in Russia saw a 30% increase in air pollutants. [...] Although there has been some increase in production since 2000, Russia generally pollutes less today than it did 20 years ago. However, a major new contributor to air pollution is car exhaust. Moscow, for example, had only 500,000 automobiles in the late 1980s. Today there are about 4 million cars and trucks in the city [...] In 2007, Russia as a whole had 195 passenger cars per 1,000 people [...] In the late Soviet period, Russia had only 50 cars per 1,000 people.” [...]

“Every spring, Moscow faucets run with brownish-tinged water smelling faintly of manure; it enters the Moscow water supply system from agricultural fields upstream.” [...]

“At the end of the Soviet period, the U.S.S.R. boasted over 40 [nuclear] reactors at 15 sites (today Russia has 31 reactors at 10 operating plants), not counting a few dozen small research reactors at scientific institutes. By comparison, the United States has slightly over 100 commercial reactors, Japan has 63, and France has 59. [...] Nuclear pollution is unevenly concentrated in the FSU, and much of the information about former accidents is still classified. [...] the highest levels of such pollution are found in and around Chernobyl (northern Ukraine, southeastern Belarus, and southwestern Russia); in the Novaya Zemlya islands and Semey, Kazakhstan; and at the production facilities in Sarov, Kyshtym, and a few cities near Krasnoyarsk. Furthermore, there are several submarine staging areas where offshore dumping of nuclear waste took place in the Far East and off the Kola Peninsula. Beyond these areas, there are a smattering of sites polluted by radiation—for example, in European Russia in Ivanovo and Perm Oblasts close to Moscow, as well as in the Komi Republic [...] Unlike in the United States, information on the actual location of [toxic waste] sites in Russia or other post-Soviet states is not readily available. [...] These sites number in the hundreds, if not in the thousands” [...]

“The eventual rise of Moscow to the preeminent position among Russian cities had to do with some pure luck and the political talents of the early princes there, but it also owed a good deal to geography: Originally an insignificant wooden fort (established in 1147), it was located at a perfect midpoint between the sources of the Dnieper and the Volga. It was situated on a tributary (the Moscow) of a tributary (the Oka) of the Volga—not on the main water artery, but close enough to Smolensk (100 km to the west in the Dnieper basin) that the Dnieper headwaters could be easily reached. In the age before highways, all transportation of goods took place by rivers. [...] The main exploratory push and the expansion of the Russian frontier across Siberia came in the mid-17th century with the new Romanov dynasty [...] in less than one century (from 1580 to 1650), the Russian state was extended from Tyumen in western Siberia all the way to Okhotsk on the Pacific Coast! Of course, this vast area was not fully settled by any means, but about two dozen forts were built at strategic locations. [...] Every major Siberian city that was established during this period is situated on a big river. The movement was somewhat analogous to the opening of the American West, except that it was driven less by farmers and more by fur traders [...] The early settlers were a highly mobile force, not interested in farming or other sedentary pursuits. [...] In comparison, the movement to the west, north, and south was much slower, because more developed states and tribes there made rapid expansion impossible.”

“By the start of World War I in 1914, the Russian Empire included most of Ukraine, Belarus, and Moldova (Bessarabia); Finland, Armenia, Azerbaijan, and Georgia; the Central Asian states (Russian Turkestan); Lithuania, Latvia, and Estonia; significant portions of Poland; and some Turkish cities in the Balkans. Only about 45% of its population consisted of ethnic Russians. The total population was 125 million in 1897, the time of the first Russian census. Alaska was sold in 1867 to the United States [...] After a bitter civil war [...] in 1917–1922 [...] U.S.S.R. [...] reconstituted itself within the former borders of the Russian Empire, with the
exceptions of Finland, Poland, the Baltic states, much of western Ukraine and Belarus, and Moldova. This may be explained by not only political and cultural but also geographic factors. [...] northern Eurasia forms a large, easily-defensible area bounded by some of the highest mountains in the world on the south, by the frozen Arctic Ocean on the north, and by the Pacific Ocean on the east. It is much more open and vulnerable in the west, and this is precisely where all the major wars were fought. Once these boundaries were reclaimed by the Soviets in the 1920s, there was relatively little change for 70 years.” [...]

“It is important to understand that the Russian Federation today is not merely a smaller U.S.S.R. It is qualitatively different from either the Russian Empire or the U.S.S.R. The latter two had fewer than 50% ethnic Russians and had external borders with nations of very different cultures (e.g., Hungary, Turkey, Iran, Afghanistan), whereas Russia is over 80% ethnically Russian and mainly borders other Russian-speaking territories in Ukraine, Belarus, or Kazakhstan [...] Although Russia remains the biggest state in the world by area, it is half of its original size and is now only 9th in terms of population” [...]

“The average Soviet citizen had less than 20% of the square footage available to the average American, and perhaps about 40% of the level available to the average European. In addition, over half of the country’s population had no access to indoor plumbing. [...] In the late 1980s, over 60% of the Soviet Union’s industrial output was in the form of heavy machinery (tractors, turbines, engines, etc.), thought to be necessary for the production of better goods and weapons. Less than 30% was accounted for by consumer goods.” [...]

“The important geographic outcome of 1991 was that a single, unitary state, the U.S.S.R., with its capital in Moscow, was replaced on the world maps by 15 newly independent states (NIS), each with its own capital, president, parliament, and so on. Twelve of these would soon form the Commonwealth of Independent States (CIS), a military and economic alliance; three others, the Baltics, would be admitted to the North Atlantic Treaty Organization (NATO) and the European Union (EU) in 2004. From 1991 on, the political and economic changes in each NIS were decoupled to a large extent from those in others, and proceeded along individualized trajectories. There were very rapid reforms in the Baltic states, almost no reforms in Uzbekistan and Belarus, and intermediate levels of reforms in others.”

November 18, 2013 Posted by | books, data, demographics, economic history, history, Russia | Leave a comment

Commodity prices

Just thought I’d post the graph here:

Mark Perry, via MR.

In the graph, there’s included a downward sloping trend. Just two remarks, do note that…

1) given the volatility of this dataset, a lot depends on which time period you’re looking at; a trend from 1935 to 1980 would most likely slope upwards, so it’s not like it’s a natural law that commodity prices slope downwards over time, and…

2) it depends a lot on which commodities you’re looking at. Here’s a graph mapping the cost development of coal, natural gas, petroleum ect.; every single one of these price indexes increased from 1970 to 2000. If you like, you can compare this with this graph of world grain prices over (roughly) the same time period. Incidentally, the estimated world population grew by more than 50 percent during that time period.

February 20, 2010 Posted by | data, economic history, economics | Leave a comment

Share of world GDP by region, 1969-2009

You can read more about these numbers at Mark Perry’s blog. The world’s real GDP has more than trippled during this period.

Update: A commenter at Carpe Diem has added a link to the graph below in the comments section, taking the population variable into consideration as well. The graph is quite big, so I’ve only added a small version – click to see it in a higher resolution. Do note that the variable ‘Asia’ is not the same as the one used in the graph above, as The Middle East is included in the latter but not the former, a region which incidentally has experienced substantial population growth during the period in question. Also note that the x-variable is not smooth but rather changes interval from left to right at 1950.

November 24, 2009 Posted by | data, economic history, economics | Leave a comment

   

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