pseudoerasmus | Blog about economic history comparative development

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Web Name: pseudoerasmus | Blog about economic history comparative development

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There used to be more research and debate on the negative effects of labour resistance on early industrialisation, but that topic has been crowded out by the intense focus on inequality of recent years. There now prevails a quiet presumption that labour movements have made only positive and large contributions to the historical rise in living standards.So I illustrate the relevance of labour relations to early industrisalisation through the contrasting fortunes of India s and Japan s cotton textile industries in the interwar period, with some glimpses of Lancashire, the USA, interwar Shanghai, etc.TL;DR version: At the beginning of the 20th century, the Indian and the Japanese textile industries had similar levels of wages and productivity, and both were exporting to global markets. But by the 1930s, Japan had surpassed the UK to become the world s dominant exporter of textiles; while the Indian industry withdrew behind the tariff protection of the British Raj. Technology, human capital, and industrial policy were minor determinants of this divergence, or at least they mattered conditional on labour relations.Indian textile mills were obstructed by militant workers who defended employment levels, resisted productivity-enhancing measures, and demanded high wages relative to effort. But Japanese mills suppressed strikes and busted unions; extracted from workers much greater effort for a given increase in wages; and imposed technical organisational changes at will. The bargaining position of workers was much weaker in Japan than in India, because Japan had a true surplus labour economy with a large number of workers released from agriculture into industry. But late colonial India was rather Gerschenkronian , where employers options were more limited by a relatively inelastic supply of labour.The state also mattered. The British Raj did little to restrain on behalf of Indian capitalists the exercise of monopoly power by Indian workers. Britain had neither the incentive, nor the stomach, nor the legitimacy to do much about it. But a key element of the industrial policy of the pre-war Japanese state was repression of the labour movement.Addendum 25 Oct 2020: Let me clarify several things about this post.By labour repression I do NOT mean the coercion of workers or the suppression of their wage levels.Furthermore, I do NOT argue it s bad to improve working conditions for workers, such as safety regulations or limits on the length of the work day, etc.Nor am I saying unions are bad! I ve written before that unions in Germany are great.My argument is fundamentally historical: in early industrialisation, in the transition from an agrarian to an industrial society, workers were usually Luddite, i.e., resistant to factory discipline, increased work effort, and productivity-enhancing measures in general.My overall point is that societies which overcame worker resistance had an advantage over those which could not.Therefore, this post does not have any relevance for today s developed countries. It s mainly about labour-intensive manufacturing in historical industrialisation.Does it have relevance for developing countries today? It really depends on what exactly are the labour-friendly or labour-repressive policies in question. Continue reading Share this:EmailTwitterFacebookRedditPocketPinterestPrintMoreTelegramLinkedInSkypeWhatsAppTumblrLike this:Like Loading... Inspired by Vincent Geloso, here is a list of the 25 books in economic history published since 2000 which I have found most stimulating or provocative. Not the best, nor the most correct , nor the most balanced, but those things which influenced, stimulated, or provoked my own personal thinking.Allen, The British Industrial Revolution in Global PerspectiveClark, A Farewell to AlmsClark, The Son Also Rises: Surnames and the History of Social MobilityDe Vries, The Industrious Revolution: Consumer Culture and the Household Economy, 1650-presentEngerman Sokoloff, Economic Development in the Americas since 1500Federico, Feeding the World: An Economic History of Agriculture, 1800-2000Findlay O Rourke, Power and Plenty: Trade, War, and the World Economy in the Second MillenniumGalor, Unified Growth TheoryGat, War in Human CivilizationGreif, Institutions and the Path to the Modern Economy: Lessons from Medieval TradeKuran, The Long Divergence: How Islamic Law Held Back the Middle EastLee Feng, One Quarter of Humanity: Malthusian Mythology and Chinese Realities, 1700-2000Lieberman, Strange Parallels (2 volumes)Mokyr, The Enlightened Economy: An Economic History of Britain 1700-1850 (Edit: late addition: Mokyr, Gifts of Athena: The Historical Origins of the Knowledge Economy)Mitterauer, Why Europe? The Medieval Origins of its Special PathNorth, Wallis Weingast, Violence Social Orders: A Conceptual Framework for Interpreting Recorded Human HistoryO Rourke Williamson, Globalization and History: The Evolution of a Nineteenth-Century Atlantic EconomyPomeranz, The Great Divergence: China, Europe, and the Making of the Modern World EconomySeabright, The Company of Strangers: The Natural History of Economic LifeSmil, Vaclav (several, but especially Creating the Twentieth Century: Technical Innovations of 1867-1914 and Their Lasting Impact)Temin, The Roman Market EconomyTooze, The Wages of Destruction: The Making and Breaking of the Nazi EconomyTurchin Nefedov, Secular CyclesWard-Perkins, The Fall of Rome and the End of CivilizationWilliamson, Trade and Poverty: How the Third World Fell BehindSome of these also appear on my bigger Economic History Books page, which is intended to be a list of survey reference books for the economic history of particular regions or countries.Share this:EmailTwitterFacebookRedditPocketPinterestPrintMoreTelegramLinkedInSkypeWhatsAppTumblrLike this:Like Loading... Many global historians argue that the British cotton industry was the product of (unintentional) infant industry protection from Indian competition in the 18th century. The various Calico Acts created an import-substitution industry by banning Indian cloths and reserving the home market for British producers. This supposedly gave them the freedom to invent and adopt the machines that led to the Industrial Revolution.To the best of my knowledge, economic historians have never seriously examined this issue, perhaps because the necessary data are lacking or remain unearthed. Nonetheless there are sound historical reasons for doubting the presumption that protection allowed British goods to become competitive .Warning: This is a tedious post which gets into some detail about the British textile industry in the 18th century. A must-skip, if you ask me. Which is why I provide this handy summary:The Calico Act of 1721 (which was intended to protect the wool and silk industries) actually banned most varieties of pure-cotton cloths in general, not just Indian.Before the era of mechanisation, British cotton  was overwhelmingly cotton-linen, a limitation of British technology (in the economic sense).Mainstream economic theory supplies many justifications for interventionist trade policy to promote innovation. But the standard rationales simply do not apply to constant returns-to-scale activities such as handicraft cottage industry.Lancashire would have survived competition with Indian cloths in an unprotected home market.British machine-spun yarn never faced any direct foreign competitor, since Britain barely imported cotton yarn in the 18th century. The domestic output of yarn was affected by foreign competition only to the extent that it was turned into printed cloth.But there were many other products besides British imitations of Indian cloth which used cotton yarn as a major input, and their role in the mechanisation of yarn production is overshadowed by a selective, Whiggish genealogy which overemphasises the calico branch.IF, as so many argue, competition in the export markets was an important stimulus to inventions in cotton, then the home market could have served just as well and the only reason overseas became so important is that British firms were denied a home market for all-cotton cloths by the Calico Acts!Therefore, it s entirely plausible  not demonstrated that the Calico Acts functioned as a Luddite policy which delayed the mechanisation of textile production by decades.This post elaborates on the above points, covering the period up to 1774, when the Calico Act was repealed. Continue reading Share this:EmailTwitterFacebookRedditPocketPinterestPrintMoreTelegramLinkedInSkypeWhatsAppTumblrLike this:Like Loading... { Note: This post describes and summarises a literature on 19th century growth trade. I do not necessarily endorse its findings. This post is intended as largely descriptive. }There is a vast cross-country literature which finds a positive correlation between economic growth and various measures of openness to international trade in the post-1945 period. Despite intense methodological bickering amongst researchers, nonetheless maybe 50 studies (maybe more?), using a variety of methods and approaches, come to the same conclusion: trade openness was associated with growth after 1945. (This amazing critical survey lists most of those studies.)This huge body of research does have some quite compelling critics, the most prominent being Rodríguez Rodrik (2000). This widely cited paper argues amongst many other things that there is no necessary relationship between trade and growth, either way. It depends on the global context as well as domestic economic conditions. I think that view is correct. Continue reading Share this:EmailTwitterFacebookRedditPocketPinterestPrintMoreTelegramLinkedInSkypeWhatsAppTumblrLike this:Like Loading... Enter your email address to follow this blog and receive notifications of new posts by email. Join 6,696 other followers Email Address:

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