“Top 10 Things That Tipped Off Revolutionary War”

That’s the title of my weekend column over at RealClearHistory. Check it out:

5. The continued quartering of British soldiers. Imagine, for a moment, an Iraqi household being forced to give room and board to an American or a Polish soldier in 2005. That’s not quite what happened in the North American colonies but it’s not a far cry, either. The colonists of North America considered themselves to be British subjects of the Crown, and most were proud to be. (In fact, a little further down the list, you’ll see why the Americans, as rebels, were so adamant about liberalizing citizenship laws.) A much better analogy would be to imagine the LAPD or the Texas National Guard forcing households to give quarter to soldiers. The analogy is better, but the picture is still a frightening one.

Please, read the rest. The other 9 are also good. Heck, you might even learn something new…

The problem with Brazil (and it’s not socialism)

The problem with Brazil is not Luis Inacio Lula da Silva. It’s not the Worker’s Party. It’s not Socialism.

Certainly one of the most important politicians in Brazilian History was Getulio Vargas. Vargas came to power in a coup (that symptomatically most Brazilian historians call a revolution) in 1930. He ended up staying in power, without ever being elected by popular vote, until 1945. Then he peacefully resigned, not without electing his chosen successor, Eurico Gaspar Dutra. Vargas came back to power immediately after Dutra, and committed suicide while in office. Almost all Brazilian presidents from 1945 to 1964 were from Vargas’ close circle.

Brazilians to this day are still taught that Vargas was a hero, persecuted by an evil opposition. Initially, Vargas was some kind of Brazilian positivist. He was anti-liberal because liberalism is weak and slow. We need a strong technical government, able to identify problems and come with solutions fast. However, while in office, he became “the father of the poor,” a defensor of the lower classes. Nothing could be farther from the truth, of course, but that’s how Vargas is remembered by many.

One of my favorite interpretation of Brazil comes from Sergio Buarque de Holanda. According to Holanda, the problem with Brazil is that Brazilians are cordial. What he means by that is this: using Weber’s models of authority, he identified that Brazilians were never able to support a Legal-Rational authority. Vargas was seen as “a father.” not a president. The country is seen as a big family. Lula used a very similar vocabulary and tried to reenact Vargas’ populism.

As I mentioned, Holanda’s interpretation is Weberian. Weber’s most famous book is The Protestant Ethic and the Spirit of Capitalism. The problem with Brazil is that it never went through a protestant reformation. And because of that, it never developed the “spirit of capitalism” that Weber describes. Brazil is still, to a great degree, stuck with traditional and charismatic forms of authority.

To be sure, Brazil has many features of a modern liberal state. Since late 18th century Portugal tried to copy these from more advanced nations, especially England. Brazil followed suit. But you can’t have the accidents without the substance. Unless Brazil actually goes through a transformation in its soul, it will never become the modern liberal state many want it to be. Quoting Domingo Faustino Sarmiento, “An ignorant people will always choose Rosas.”

Monarchical Brazil was not a conservative paradise

Seems to me that there is a strong tendency between contemporary Brazilian conservatives to consider the Brazilian Empire (1822-1889) a golden age in Brazilian history. Many Brazilian conservatives are now defending the monarchy as an ideal form of government for Brazil.

As someone said, “the more we change, the more we remain the same.” Brazil became independent from Portugal in 1822. The independence was officially proclaimed by Dom Pedro I, son of Dom João VI, the king of Portugal. I think that maybe Brazilians are so acquainted with this fact that they don’t realize how crazy it is: the prince of Portugal declared the independence of Brazil! That didn’t happen because Dom Pedro fought with his father. By all accounts, father and son enjoyed the best relationship possible. Dom Pedro declared Brazil’s independence because if he didn’t, someone else would.

Dom Pedro’s independence was just one among many others. Tiradentes tried to proclaim the independence of [at least part of] Brazil in 1789, basically 30 years before Dom Pedro! And this is just one example! Tiradentes independence was not successful because it was averted by Portugal. Dom Pedro’s independence was successful because he was Portugal (ok, he wasn’t Portugal, but he was part of it)!

The fact that Brazil’s independence was proclaimed by a Portuguese monarch gives a very special meaning to what means to be conservative in Brazil. Today, in the US, one may call himself a conservative because he defends the ideas of Thomas Jefferson. But in his day Thomas Jefferson was a radical! A rebel who revolted against the British monarchy. Dom Pedro was not exactly a rebel. He wanted, to a great degree, to maintain things just the way they were. Certainly, many of his supporters were afraid of a more radical independence movement. To say the least, Brazil’s independence was a compromise between radicals and conservatives.

Brazilian monarchy avoided many reforms, inspired by classical liberalism, that were happening in other places. To give just one example (in my personal view, the most glaring), Brazil was the last country in the Western Hemisphere to abolish slavery (in 1888). I don’t blame Dom Pedro I for this. I also don’t blame his son, Dom Pedro II, who ended up being emperor for the majority of the monarchical period (1840-1889). But the fact is that the monarchy maintained many of the privileges inherited from Portugal, and avoided reforms that Anglo-American conservatives would support.

Brazilian conservatives have to be careful with the use of this word. To be a conservative in Brazil is not necessarily the same as being a conservative in England or the US.

On the rift between economics and everything else

The line is often heard: economists are “scientific imperialists” (i.e. they seek to invade other fields of social science) jerks. All they try to do is “fit everything inside the model”. I have this derisive sneer at economists very often. I have also heard economists say “who cares, they’re a bunch of historians” (this is the one I hear most often given my particular field of research, but I have heard variations involving sociologists and anthropologists).

To be fair, I never noticed the size rift. For years now, I have been waltzing between economics and history (and tried my hand at journalism for some time) which meant that I was waltzing between economic theory and a lot of other fields. The department I was a part of at the London School of Economics was a rich set of quantitative and qualitative folks who mixed history of ideas, economics, economic history and social history. To top it all, I managed to find myself generally in the company of attorneys and legal scholars (don’t ask why, it still eludes me). It was hard to feel a big rift in that environment. I knew there was a rift. I just never realized how big it was until a year ago (more or less).

There is, however, something that annoys me: the contempt appears to be self-reinforcing.  Elsewhere on this blog (here and here) (and in a forthcoming book chapter in a textbook on how to do economic history), I have explained that economists have often ventured into certain topics with a lack of care for details. True, there must be some abstraction of details (not all details are useful), but there is an optimal quantity of details. And our knowledge grows, the quantity of details necessary to answering each question (because the scientific margin is increasingly specialized) should grow. And so should the number (and depth) of nuances we make to answer a question.  There is a tendency among economists to treat a question outside the usual realm of economics and ignore the existing literature (thus either rushing through an open door or stepping in a minefield without knowing it).  The universe is collapsed into the model and, even when it yields valuable insights, other (non-econs) contributors are ignored.  That’s when the non-econs counter that economists are arrogant and that they try to force everything into a mold rather than change the mold when it does not apply. However, the reply has often been to ignore the economists or criticize strawmen versions of their argument. Perceived as contemptuous, the economists feel that they can safely ignore all others.

The problem is that this is a reinforcing loop: a) the economists are arrogant; b) non-economists respond by dismissing the economists and ridiculing their assumptions; c) the economists get more arrogant. The cycle persists. I struggle to see how to break this cycle, but I see value in breaking it. Elsewhere, I have made such a case when I reviewed a book (towards which I was hostile) on Canadian economic history. Here is what I said for the sake of showcasing the value of breaking the vicious circle of ignoring both sides:

These scholars (those who have been ignored by non-economists) could have easily derived the same takeaways as Sweeny. Individuals can and do engage in rent-seeking, which economists define as the process through which unearned gains are obtained by manipulating the political and social environment. This could be observed in attempts to shape narratives in the public discourse. According primacy to the biases of sources is a recognition that there can be rent-seeking in the form of actors seeking to generate a narrative to reinforce a particular institutional arrangement and allow it to survive. This explanation is well in line with neoclassical economics.

This point is crucial. It shows a failing on both sides of the debate. Economists and historians favorable to “rational choice” have failed to engage scholars like Sweeny. Often, they have been openly contemptuous. The literature has evolved in separate circles where researchers only speak to their fellow circle members. This has resulted in an inability to identify the mutual gains of exchange. The insights and meticulous treatments of sources by scholars like Sweeny are informative for those economists who consider rational choice as if the choosers were humans, with all their flaws and limitations, rather than mechanistic utility-maximizing machines with perfect foresight (which is a strawman often employed to deride the use of economics in historical debates) . In reverse, the rich insights provided by rational choice theorists could guide historians in elucidating complex social interactions with a parsimony of assumptions. Without interaction, both groups loose and resolutions remain elusive.

See, as a guy who likes economics, I think that trade is pretty great. More importantly, I think that trade between heterogeneous groups (or different individuals) is even greater because it allows for specialization that increases the value (and quantity) of outputs.  I see the benefits of trade here, so why is this “circle of contempt” perpetuating so relentlessly?

Can’t we just all pick the 100$ bill on the sidewalk?

Brazil-Africa Relations, Now and Then

The first academic paper I ever published was about Brazil-Africa Relations, approximately from the 1960s to the 2000s. The main point of the article was to compare three moments of Brazilian Foreign Policy Towards Africa: the Independent Foreign Policy of the Early 1960s; the Foreign Policy of the latter Military Governments (late 1970s) and the Foreign Policy of the Lula administration (2003-2011). My main conclusion was that the foreign policy towards Africa of these three moments was very similar. Although some would exalt Lula’s foreign policy as something extraordinary, the truth, as I saw it, was that it was very well grounded in a tradition of Brazilian Foreign Policy.

Today I feel somewhat ashamed of that paper. I failed to highlight the irony: the leftist government of Lula had a foreign policy strikingly similar to that of the (supposedly) far-right military regime. The information, to be sure, is all there. One has simply to come to this obvious conclusion.

The foreign policy of Lula and Dilma was indeed very similar to that of Ernesto Geisel and João Batista Figueiredo, the last two generals to be presidents of Brazil, and not only regarding Africa. Dilma’s economic policy was extremely similar to that of Geisel, the same policy that, by the way, led Brazil to the hyperinflation of the 1980s and early 1990s.

It is definitely ironic. The Workers Party began as an opposition to the military government in Brazil. Dilma was a terrorist guerrilla warrior who fought against that regime (and never publicly apologized for that). However, once in power, they became very similar to their enemies. I’ll leave the readers to come to their own conclusions about this. But regarding Africa: I wasn’t able to continue my research. But I’m still very interested in that continent. Brazil is geographically and culturally very similar to many African nations. I believe there are great opportunities for mutual aggrandizement. But “mutual” is not what I saw in my research. I saw Brazil being hypocritical: The US is (in the sick mind of some leftist Brazilian politicians and diplomats) imperialist towards Brazil; therefore, Brazil will be imperialist towards Africa. I hope that a more market-friendly Brazil will be able to do something different.

“10 things you didn’t know about World War I”

That’s the title of my weekend piece over at RealClearHistory. The structure of the pieces, if you’ll remember, is Top 10 style, but I try to throw some more in-depth stuff into the mix, too. An excerpt:

3. World War I showed the world what a united Germany could do. Germany was formed in 1871, making it almost 100 years younger than the United States and much younger than France and the United Kingdom. Prior to the formation of Germany, which came about due to Prussian diplomat Otto von Bismarck’s genius machinations, observers and thinkers throughout the world penned works speculating on what a unified German-speaking world would do, politically, economically, culturally, and militarily. Rome’s decentralized barbarian enemies were from Germania, the Holy Roman Empire (which was neither Holy nor Roman nor an Empire), the Hanseatic League, and the German Confederation which all tried, in vain, to do what Bismarck did. Many of the attempts to unite Germany were foiled by French, British, Austro-Hungarian, and Russian statesmen because of fears that a united Germany would come to dominate Europe and upset the balance of power that European elites had come to rely on as their foreign affairs blueprint. They weren’t wrong.

Please, read the whole thing.

Revisiting Epstein’s Freedom and Growth


I was fortunate to be invited give the Epstein Lecture at LSE this March. The series is named after the great LSE economic historian Larry (Stephen) Epstein. Here I’ll summarize why it was such an honor to give the lectures. The content of the lecture will be another post.

Epstein was a historian whose origin field of expertise was medieval Italy. I encountered him through Freedom and Growth. Published in 2000, I first read it a couple of years later, perhaps in 2002 or 2003. At the time I was devoted to a story of economic growth shaped by Douglass North, particularly Structure and Change in Economic History (1981).

The focus of Structure and Change was on transaction costs. High transaction costs limited market exchange and kept societies poor for most of history. Sustained economic growth could only occur once transaction costs fell to a level that allowed markets to expand and the division of labor to develop. On this view, market expansion or Smithian growth was itself a stimulus to technological innovation. But what kept transaction costs high?

One answer North gave was the state. To paraphrase: the state had the ability to both keep a society mired in poverty through predatory behavior and to provide the preconditions for growth by securing property rights. The origins of sustained economic growth for North lay in institutional changes that occurred secured property rights and lowered transaction costs. The most important such institutional change was the Glorious Revolution of 1688.


North’s account received many challenges, but the issue that Epstein honed in on was the assumption that there was such a state, able to either revoke or secure property rights. It was assumed that “rulers rule”. Epstein contested this arguing that New Institutional Economists

“project backwards in time a form of centralised sovereignty and jurisdictional integration that was first achieved in Continental Europe during the nineteenth century; they therefore fundamentally misrepresent the character of pre-modern states.”

North, Wallis, and Weingast would address this in their 2009 Violence and Social Orders. But Epstein’s criticism was spot on in 2000. Epstein argued that alongside the problem of predatory states, a central problem was the lack of integrated markets. He attributed market disintegration to coordination and prisoners’ dilemma problems between political authorities. In so doing, Epstein set the agenda for the subsequent “state capacity” research agenda.

Epstein made several points which continued to be expanded upon by current research (see here). First, he documented that the lower interest rates that the British state paid after 1688 were characteristic of city republics from the middle ages onwards. He argued that the English monarchy in the 17th century was characterized by an anomalously backwards financial system. Lower interest rates after 1688 partly represent a convergence to the Republican norm achieved by Italian city-states centuries earlier.

Second, he challenged the argument that monarchies “overtaxed” cities. There was “no evidence that townspeople paid higher taxes under monarchies than republics”. Per capita taxes were likely higher in Republican city-states.

Third, he disputed that Republican city-states like Florence brought economic freedom noting that “republican subjects faced several limitations to their economic and political freedoms that monarchical subjects did not”. All of this challenged generalizations made by historical sociologists like Charles Tilly and economic historians like North.


Epstein’s historical evidence came from medieval Italy. Late medieval Italy was highly urbanized and prosperous by pre-industrial standards. According to Broadberry’s estimates, per capita GDP in Italy in 1450 was not matched by England until 1750. Like growth elsewhere in the premodern world, it was Smithian growth, driven by trade, market integration, and the division of labor. But unlike in England, this Smithian growth did not continue and blossom into modern growth. Epstein’s explanation for why this did not take place was that late medieval Italy suffered an “integration crisis”.

He saw the late medieval period as characterized by new opportunities for growth and innovation. Urbanization increased. Capital markets expanded and deepened. Interregional trade developed. Proto-industrialization took place. But Epstein contended these opportunities were only seized in areas where political authority was centralization.

In reference to proto-industrialization, he observed that

“Crucially, the success of regional crafts was inversely proportional to the concentration of economic and institutional power in the hands of a dominant city.”

With respect to the establishment of permanent fairs, he noted that

In fifteenth-century Lombardy, new fairs proliferated only after the balance of power shifted decisively from the former city-states to the territorial prince with Francesco Sforza’s victory in 1447.

Market integration was complemented and perhaps driven by political integration. Integrated urban hierarchies were themselves the product of political centralization.

“Centralisation underlies all the major institutional changes to market structures previously described. It lowered domestic transport costs, made it easier to enforce contracts and to match demand and supply, intensified economic competition between towns and strengthened urban hierarchies, weakened urban monopolies over the countryside, and stimulated labour mobility and technological diffusion.”

The more centralized parts of Italy — notably Lombardy — were better able to benefit from these trends than was Tuscany. But in general, political fragmentation and regional diversity were “distinctive features of pre-modern Italy” in general and an impediment to its long-run growth prospects.

Unlike in his analysis of interest rates, Epstein brought little data to bear on these claims and I am unaware of subsequent research on late medieval Italy. As such, the thesis of a late medieval integration crisis laid out in Freedom and Growth remains speculative. Epstein would no doubt have fill in the details had he lived longer. Subsequent research has mostly focused on early modern rather than medieval Europe (see here).  But the larger message: the importance of the state for premodern economic development has been central to subsequent research, including my own work (e.g. here).