History

A long read

Rick Weber History, Links , , , ,

According to Instapaper this article at Wait But Why is a “139 minute read.” And it was time well spent.

It’s about a new Elon Musk venture, Neuralink, but there’s plenty non-Musk stuff in there of interest. I’m agnostic on whether Elon Musk is or isn’t the next coming of the (anti-) Christ. What’s really interesting is the background material this article gives, building up a highly entertaining natural history of knowledge. The section below really captures the main thrust of that story, but it’s worth reading anyways.

minimal tribal knowledge growth before language

And this:

That leads into a discussion of how brains work, that “soft pudding you could scoop with a spoon.” Here are some excerpts:

I’m pretty sure that gaining control over your limbic system is both the definition of maturity and the core human struggle. It’s not that we would be better off without our limbic systems—limbic systems are half of what makes us distinctly human, and most of the fun of life is related to emotions and/or fulfilling your animal needs—it’s just that your limbic system doesn’t get that you live in a civilization, and if you let it run your life too much, it’ll quickly ruin your life.

And…

Which leads us to the creepiest diagram of this post: the homunculus.

The homunculus, created by pioneer neurosurgeon Wilder Penfield, visually displays how the motor and somatosensory cortices are mapped. The larger the body part in the diagram, the more of the cortex is dedicated to its movement or sense of touch. A couple interesting things about this:

First, it’s amazing that more of your brain is dedicated to the movement and feeling of your face and hands than to the rest of your body combined. This makes sense though—you need to make incredibly nuanced facial expressions and your hands need to be unbelievably dexterous, while the rest of your body—your shoulder, your knee, your back—can move and feel things much more crudely. This is why people can play the piano with their fingers but not with their toes.

Second, it’s interesting how the two cortices are basically dedicated to the same body parts, in the same proportions. I never really thought about the fact that the same parts of your body you need to have a lot of movement control over tend to also be the most sensitive to touch.

Finally, I came across this shit and I’ve been living with it ever since—so now you have to too. A 3-dimensional homunculus man.17

This is too far outside my area of specialization to say, but it’s certainly an entertaining read that seems to fit with what I know about these topics (although the section on neurology could be made up as far as I know).

From there it builds up to the moon shot idea Musk apparently has in mind: building the core technology for a high bandwidth mind-computer interface. This would be the ultimate logical extreme of a trend towards better interfaces that’s been going on since before punch cards. If you think over the natural history of knowledge, it becomes clear that this idea is ultimately just a few dozen steps further down a path we’ve been on for billions of years.

And the implications of taking it that far are profound. The pros and cons of that power are huge. Consider how much more powerful your brain is with paper and pencil than without. Or a computer. Or a computer with a GUI and a copy of Excel. Once you can plug into your computer Matrix-style, all those awesome hot keys that let you zip through your computer like a pro will be like roller skates next to a rocket sled. And the two-way link would mean we could genuinely exercise some self control… for example,  by running a computer program that zaps you when you eat too much chocolate cake.

Readers of this blog will hear Hayek warning you! Such a device gives you a lot of power to manipulate a complicated thing in ways we may never be able to understand.

But this type of personal power might be a necessary bulwark against government or corporate power. Network externalities have already locked us in to Google and Facebook. A Byzantine government has created rent-seeking opportunities that puts enormous power in the hands of the politically connected. The NSA is terrifying. And machine learning will continue to get better, giving those entrenched players even more ability to understand and manipulate large numbers of people. (I’m not endorsing this forecast, just listing it as a possibility.)

In any case, even if Neuralink is just an April Fool’s joke I missed out on till now, this article provides a theory of knowledge that’s well worth reading.

In the near future I’ll argue why you need such a theory of knowledge. Stay tuned.

On Nancy MacLean’s Thesis

Nicolas Cachanosky Books, Current Events, History , ,

Nancy MacLean’s Democracy in Chains continues to yield surprises. Just a few days ago, Phil Magness now shows a “typo” that plays a significant role in MacLean’s thesis.

Despite all these detailed scrutiny of her work, it is not clear that MacLean understand the type of error is being pointed out about her book. There are two types of errors regarding a thesis: (1) the thesis is correctly defined, but the proof is flawed, or (2) the thesis is incorrectly defined, in which case there is no need to test the thesis. What MacLean and her supporters don’t seem to realize is that Democracy in Chains is built on the second error, not on the first one. Instead of ignoring her critics, MacLean should be up to the academic game and engage accordingly. Her behavior is very telling. If her research is so solid, what’s the problem?

Consider he following example. Let’s say you find a book built on the thesis that Milton Friedman was a french communist who lived in the 18th century. You don’t need to read this book to know that the author is wrong on her argument. This book on Friedman is both factually (Friedman did not live in the 18th century and was not French) and theoretically (Friedman was not a communist) wrong. This is how wrong MacLean’s thesis on Buchanan is for anyone with some minimal exposure to his work and Public Choice.

There a few reasons why someone would still read Democracy in Chains. For instance, if the book is a preach to the choir To try to understand how such a misguided thesis can actually be supported by by an author with so little knowledge and expertise on Buchanan and Public Choice. Etc. But a reason why MacLean thinks that their critics are unwilling to consider her thesis is because she is unaware her error is the second one mentioned above. Her thesis is just wrong from the go.

A short note on the Holy Roman Empire, “democracy,” and institutions

Brandon Christensen History , , , , , ,

At the heart of Europe […] lay a hugely complex and fragmented political entity which resisted the ‘modernizing’ trend of national state formation, and preserved medieval arrangements conceived as rooted in antiquity: the Holy Roman Empire. After three decades of bloodshed retrospectively known as the Thirty Year War (1618-1648), the Empire had achieved a somewhat precarious equilibrium in which hundreds of semi-autonomous imperial estates co-existed under the loose authority of an emperor and a college of princes. Disparaged as a multi-headed monster by many […,] for Leibniz the Holy Roman Empire remained a preferable alternative to national and absolutist states. In his mind, the Empire offered an ideal of shared sovereignty in which limited territorial autonomy could be combined with a central imperial authority, and the main Christian confessions could cohabit peacefully in a balanced, representative Reichstag. Alongside his more famous works on logic, metaphysics, and mathematics, Leibniz wrote innumerable memos and proposals advising rulers on how to strengthen and re-order the Empire into a stable, supra-national political structure which could protect and promote common interests while maintaining local self-determination in territories and imperial free cities. In short, Leibniz regarded political unity in diversity under a supra-national authority as a better path to peace, prosperity, and stability in Europe than the ascendancy of competing national states.

This is from Maria Rosa Antognazza, a philosopher at King’s College London, writing for Oxford University Press’s blog.  (h/t Barry) Check out this map of the outline of the Holy Roman Empire in 1600 AD (it is superimposed onto the outlines of today’s European states):

blog-holy-roman-empire-1600
(source)

It reminded me of this map I produced a couple of years ago showing the GDP (PPP) per capita of administrative units in Europe. What the map illustrates, generally, is a Europe where present-day Austria, western Germany, northern Italy, Switzerland, and Benelux are much wealthier than the rest of Europe (sans Scandinavia).

And here is a map, thanks to Vincent, of GDP per capita in European regions. What his map illustrates, generally, is a Europe where present-day Austria, western Germany, northern Italy, Switzerland, and Benelux are much wealthier than the rest of Europe (sans Scandinavia).

Wow, right? Eastern Germany, Poland, and Czech Republic are poor today, but the rest of what was once the Holy Roman Empire is very prosperous. So, two lines of thought here. One, socialism is really bad for people. It not only destroys economies and political and civil liberties, it also destroys institutions.

The second line of thought is to wonder aloud a bit more about institutions and their long-term viability. The first question that needs to addressed is “what are institutions?” Today, many scholars use “democracy” and “property rights” as generic answers when explaining to the general public what good institutions are, and they are not wrong, but they don’t do justice to the concept of democracy (or property rights, for that matter). I think a better term might be “representativeness,” or “constitutionalism,” or “republicanism.” Anything but “democracy.” Democracy implies rule of the people, but this doesn’t describe what has happened in the West, in regards to political equality and economic growth (both are uneven, but undeniably real).

“Democracy” sounds better than “political institutions favoring separation of powers and coalition-building in parliamentary settings, as well as the inclusion of people who don’t pull the levers of statecraft (through the voting mechanism),” but this shorthand has obvious negative unintended consequences: many a demagogue will use the term democracy to mean something quite different from what actual self-governance requires institutionally.

There is more to the Holy Roman Empire than just path dependency (albeit stretched to its limits). For instance, you’d have to explore why representative institutions in the HRE eventually failed. My quick guess would be that HRE’s neighbors (Russian Empire, French Empire, Ottoman Empire, Scandinavian kingdoms) were pretty ruthless and thus made it impossible for more formal constitutional institutions to take deep root and flourish in the heart of Europe. Instead, because of HRE’s unruly neighbors, the Empire was forever in flux between a loose alliance of petty states and a confederation.

On Financial Repression and ♀ Labor Supply after 1945

Vincent Geloso Economics, History , , , , , , , , ,

I just came back from the Economic History Association meeting in San Jose. There are so many papers that are worth mentioning (and many have got my brains going, see notably the work of Nuno Palma on monetary neutrality after the “discovery” of the New World). However, the thing that really had me thinking was the panel on which one could find Barry Eichengreen and Carmen Reinhart (who was an early echo of the keynote speech by Michael Bordo).

Here’s why : Barry Eichengreen seemed uncomfortable with the current state of affairs regarding financial regulation and pointed out that the after-war period was marked by rapid growth and strong financial regulation. Then, Reinhart and Bordo emphasized the role of financial repression in depressing growth – notably in the period praised by Eichengreen. I have priors that make more favorable to the Reinhart-Bordo position, but I can’t really deny the point made by Eichengreen.

This had me thinking for some time during and after the talks. Both positions are hard to contest but they are mutually exclusive. True, it is possible that growth was strong in spite of financial repression, but some can argue that by creating some stability, regulations actually improved growth in a way that surpassed the negative effects caused by repression. But, could there be another explanation?

Elsewhere on this blog, I have pointed out that I am not convinced that the Thirty Glorious were that “Glorious”.  In line with my Unified Growth Theory inclinations (don’t put me in that camp, but don’t exclude me either I am still cautious on this), I believe that we need to account for demographic factors that foil long-term comparisons. For example, in a paper on Canadian economic growth, I pointed out that growth from 1870 to today is much more modest once we divide output by household-size population rather than overall population (see blog post here that highlights my paper). Later, I pointed out the ideas behind another paper (which I am still writing and for which I need more data, notably to replicate something like this paper) regarding the role of the unmeasured household economy. There, I argued that the shift of women from the household to the market over-measures the actual increase in output. After all, to arrive at the net value of increased labor force participation, one must deduce the value of foregone outputs in the household – something we know little about in spite of the work of people like Valerie Ramey.

Both these factors suggest the need for corrections based on demographic changes to better reflect actual living standards. These demographic changes were most pronounced in the 1945-1975 era – that of the era of rapid growth highlighted by Eichengreen and of financial repression highlighted by Reinhart and Bordo. If these changes were most momentous in that period, it is fair to say that the measurement errors they induce are also largest in that era.

So, simply put, could it be that these were not years of rapid growth but of modest growth that were overestimated?  If so, that would put the clash of ideas between Bordo-Reinhart and Eichengreen in a different light – albeit one more favorable to the former than the latter.

But heh, this is me speculating about where research could be oriented to guide some deeply relevant policy questions.

Inventions that didn’t change the world

Kevin Kallmes Books, Culture, Economics, History, Law, Liberty, Politics , , , , , , , ,

Have you ever learned about an amazing invention–whether it was the Baghdad battery or the ancient Roman steam engine or Chinese firecrackers–and wondered why it didn’t do more to change the world? In this podcast, we examine a selection of curiosities and explore hypotheses for why their inventors didn’t use them to full effect.

We move VERY quickly through a range of fascinating examples and hypotheses, and therefore leave a lot up to discussion. We hope to see your thoughts, feedback, and additions in the comments section!

For any invention that you want to learn more about, see the links below:

Knossos’ toilets

In the 2nd millennium BC, a “palace” (now thought to be a building that served as administrative, trade, and gathering hub) had running-water toilet flushing. Much like the Roman Cloaca Maxima, likely a HUGE public-health benefit, but basically died out. Does this show that military protection/staving off the “Dark Ages” was the only way to maintain amazing inventions?

Link: http://www.nature.com/news/the-secret-history-of-ancient-toilets-1.19960;

The Nimrud lens

Whether it was a fire-starter, a magnifying glass, or (for some overeager astronomy enthusaists), the Neo-Assyrian ground-crystal Nimrud lens is an invention thousands of years out of place. While the Egyptians, Greeks, and Romans all used lenses of different sorts, and glass-blowing was certainly popular by the 1st century BC in Roman Egypt, no glass lenses were made until the Middle Ages and the potential scientific and engineering uses of lenses–that can hardly be understated even in their 16th-to-18th-century applications–had to wait another couple millennia. Many devices like the Baghdad battery and Antikythera device are heralded for their possible engineering genius, but this seems like a simple one with readily available applications that disappeared from the historical record.

https://en.wikipedia.org/wiki/Nimrud_lens

Hero of Alexandria’s steam engine

In the 1st century AD, Hero was a master of simple machines (that were mostly used for plays) and also invented a force pump, a wind-powered machine, even an early vending machine. However, he is likely most famous for his Aeolipile, a rotating steam engine that used heated water to spin an axle. The best attested use of this is for devotion to the divine and party tricks.

https://en.wikipedia.org/wiki/Aeolipile

The ancient mechanical reaper

Ancient Gallo-Romans (or just Gauls) invented a novel way of grain harvesting: rather than using sickles or scythes, they used a mechanical reaper, 1700 years before Cyrus McCormick more than tripled the productivity of American farmers. This antiquated device literally but the cart before the oxen and required two men to operate: one man to drive the beasts, and another to knock the ears off the stalk (this reaper was obviously far less sophisticated than McCormick’s). This invention did not survive the Volkswanderung period.

http://www.gnrtr.com/Generator.html?pi=208&cp=3

http://reapertakethewheel.blogspot.com/2013/03/impacts-of-invention.html

Note: the horse collar (which allowed horses to be used to plow) was invented in 1600-1400 BC in China AND the Levant, but was not applied widely until 1000 AD in Europe. https://en.wikipedia.org/wiki/Horse_collar.

Inoculation

Madhav, an Indian doctor, compiled hundreds of cures in his Nidana, including an inoculation against smallpox that showed an understanding of disease transmission (he would take year-old smallpox-infected flesh and touch it to a recently made cutaneous wound). However, the next 13 centuries did not see Indian medical understanding of viruses or bacteria, or even copied techniques of this, development. https://books.google.com/books?id=Hkc3QnbagK4C&pg=PA105&lpg=PA105&dq=madhav+indian+smallpox+inoculation&source=bl&ots=4RFPuvbf5Y&sig=iyDaNUs4u5N7xHH6-pvlbAY9fcQ&hl=en&sa=X&ved=0ahUKEwic8e-1-JXVAhUp6IMKHfw3DLsQ6AEIOjAD#v=onepage&q=madhav%20indian%20smallpox%20inoculation&f=false

At least, thank god, their methods of giving nose jobs to those who had had their noses cut off as a punishment survived: https://en.wikipedia.org/wiki/History_of_rhinoplasty

The Chinese:

List of all chinese inventions:

https://en.wikipedia.org/wiki/List_of_Chinese_inventions#Four_Great_Inventions

Gunpowder

Gunpowder was discovered by Chinese alchemists attempting to discover the elixir of life (irony, no?)

https://www.thoughtco.com/invention-of-gunpowder-195160

https://en.wikipedia.org/wiki/Four_Great_Inventions

(maybe a good corollary would be Greek fire, which was used effectively in naval warfare by the Byzantines, but which was not improved upon and the recipe of which is still secret: https://en.wikipedia.org/wiki/Greek_fire)

Printing

The Chinese invented the printing press possibly as early as the 6th century. However, unlike the explosion of literacy seen in much of Europe (particularly Protestant Europe–see our last podcast), the Chinese masses never learned to read. In fact, in 1950 fewer than 20% of Chinese citizens were literate. Compare this to Europe, where some societies saw literacy rates of as high as 90% (Sweden, Male population) in some societies within a few centuries of the introduction of the printing press. Why? There may be several reasons–cultural, religious, political–but in our opinion, it would have to be the characters: 100,000 blocks were needed to create a single set.

http://www.nytimes.com/2001/02/12/news/chinas-long-but-uneven-march-to-literacy.html

https://en.wikipedia.org/wiki/History_of_printing_in_East_Asia

They also invented pulped paper by the 2nd century BC: https://en.wikipedia.org/wiki/List_of_Chinese_inventions.

The compass

Invented by 200 BC for divination and used for navigation by the Song dynasty; despite this and the availability of easily colonizable islands within easy sailing distance, the Chinese did not colonize Indonesia, Polynesia, or Oceania, while the Europeans did within the century after they developed the technology and first sailed there.

https://en.wikipedia.org/wiki/History_of_the_compass.

The rudder

While they did not invent the rudder, they invented the “medial, axial, and vertical” sternpost rudder that would become standard in Europe almost 1,000 years before it was used in Europe (1st century AD vs 11th century).

Natural gas

The Chinese discovered “fire wells” (natural gas near the surface) and erected shrines to worship there.

https://link.springer.com/referenceworkentry/10.1007%2F978-1-4020-4425-0_9568

They even understood their potential for fuel, but never developed beyond primitive burning and bamboo piping despite having advanced mining techniques for it by the 1st century BC.

Chinese miscelleni:

Hydraulic powered fan: https://en.wikipedia.org/wiki/Fan_(machine)#History

Cuppola furnace for smelting and molding iron: https://en.wikipedia.org/wiki/Cupola_furnace.

Coke as a fuel source: https://en.wikipedia.org/wiki/Coke_(fuel).

Belt-drive spinning wheel: https://en.wikipedia.org/wiki/Coke_(fuel).

The Precolumbian wheel

The pre- and early Mayans had toys that utilized primitive wheels, but did not use them for any labor-saving purpose (even their gods were depicted carrying loads on their backs). This may have been because scaling up met with mechanical difficulties, but the potential utility of wheels in this case with a bit of investment literally sat unrealized for centuries.

https://tcmam.wordpress.com/2010/11/11/did-pre-columbian-mesoamericans-use-wheels/

The Tucker:

http://www.smithsonianmag.com/history/the-tucker-was-the-1940s-car-of-the-future-135008742/

The following book contained some of our hypotheses:

https://books.google.com/books?id=ynejM1-TATMC&pg=PA399&lpg=PA399&dq=roman+and+greek+labor-saving+devices&source=bl&ots=BI6GVGTrxC&sig=8ZJqirOVUyjH7TNq0fcW6UUPn1k&hl=en&sa=X&ved=0ahUKEwj55O7395XVAhVqwYMKHSb2Dy4Q6AEIKTAB#v=onepage&q=roman%20and%20greek%20labor-saving%20devices&f=false

 

The rest of our hypotheses were amalgamated from our disparate classes in economics and history, but none of them are our own or uncommon in academic circles. Thanks for listening!

Is Socialism Really Revolutionary?

Bruno Gonçalves Rosi History , , , , ,

A central feature of Karl Marx’s thought is its teleological character: the world walks inexorably towards communism. It is not a question of choices. It is not a question of individual decisions. Communism is simply the direction in which the world walks. Capitalism will collapse not because of some external force, but because of its own internal contradictions (centrally the exploitation of the workers).

I don’t know exactly what History classes are like in other countries, but in basically all my academic trajectory I was bombarded with some version of Marxism. Particularly as far as my country was concerned, the question was not whether a socialist revolution would happen, but why it was taking so long! Looking at events in the past, the reading was as follows: the bourgeoisie overthrew the Old Regime in the French Revolution. At that time the bourgeoisie were revolutionaries (and therefore left-wing). However, overthrowing the monarchy and establishing a constitutional government, the bourgeois became advocates of the new order (and therefore, reactionary, or right-wing). Socialists have become the new revolutionaries, the new left, the new radicals.

This way of seeing history has a Hegelian background: there are no absolutes. History moves through a process of thesis, antithesis, and synthesis. History’s god is learning to be a god. I’ve written earlier here about how this kind of relativistic view does not stand on its own terms. Now I would like to say that this way of looking at history can be intellectually dishonest.

According to the historical view I have learned, there is no absolute of what is left or right. One political group is always to the left or to the right of another, depending on how much this group is revolutionary or reactionary. Thus, the bourgeois were revolutionaries at one time, but today they are no longer. But what happens when the Socialists come to power? Do not they themselves become reactionary, defenders of the status quo? According to everything they taught me, no. The revolution is permanent. My assessment is that at this point they are partly right: the revolution must be permanent.

Socialists can not take the risk of becoming exactly what they fought at the first place. In practice, however, this is not the case: the Socialists occupy the posts of the state and begin to defend their position and these positions more than anything else. That’s what I see in my country today. In practice, it is impossible to be revolutionary all the time, just as it is impossible to be relativistic in a consistent way. I have not yet met a person who, looking at the red light, said “but to me it’s green and all these other cars are just a narrative of patriarchal society.”

Politics is unfortunately, for the most part, simply a search for power. Even the most idealistic groups need the power to put their agendas into practice. And experience shows that once installed in power, many idealistic groups become pragmatic.

Socialism is not revolutionary. It is only a reaction against the real revolution that is capitalism defended by classical liberalism. Classical liberalism says: men are all equal, private property is inviolable, exchanges can only occur voluntarily and no one can be forced to work against their will. Marxism responds: men are not all the same (they are divided into classes), private property is relative (if it is in the interest of the collective I can take what was once yours) and you will work for our cause, whether or not you want to. In short, Marxism is a return to the Old Regime.

The Counterfactual and the Factual

Mark Koyama Economics, History , , ,

Historians often appear skeptical of counterfactual arguments. E.H. Carr argued that “a historian should never deal in speculation about what did not happen” (Carr, 1961, 127). Michael Oakeshott described counterfactual reasoning as ‘a monstrous incursion of science into the world of history’ (quoted in Ferguson, 1999). More recently, Eric Foner is reported to have found “counterfactuals absurd. A historian’s job is not to speculate about alternative universes …It’s to figure out what happened and why” (cited in Parry, 2016, here).

Such skepticism is striking to the modern economic historian, who since Robert Fogel’s work on the impact of the railroad on American economic growth has been trained to think explicitly in terms of counterfactuals. Far from being the absurdity Foner suggests, counterfactuals represent the gold standard in economic history today. Why? Because they are the sine qua of causal analysis. As David Hume noted, a counterfactual is exactly what we invoke whenever we use the word “cause”: “an object, followed by another, . . . where, if the first object had not been, the second would had never existed” (Hume, 1748, Part II).

Hume’s reasoning can best be understood in the context of a controlled experiment. Suppose a group of randomly selected patients are treated with a new drug while another randomly selected group are assigned a placebo. If the treatment and control groups were ex ante indistinguishable, then the difference between the outcomes for these two groups is the causal effect of the drug. The outcome for the control group provides the relevant counterfactual which enables us to assess the effectiveness of the drug.

The modern revival of economic history is based largely on the skill with which economic historians have been able to use econometric tools to replicate this style of experimental design using observational data. Such techniques enable economic historians to assess such counterfactuals as how much did slavery contribute to Africa’s underdevelopment?, what was the impact of the Peruvian Mita? or the effects of the Dust bowl?

The rejection of the counterfactual approach by historians such as Foner seems to run deep and constitutes a major divide between historians and economic historians; it is therefore well worth exploring its source.

To begin with, let’s set aside some of the reasons why historians have dismissed counterfactuals in the past. We need not, for instance, pay too much attention to the attachment of Marxists (like Carr) and Hegelian idealists (like Oakeshott) to teleological history. Of course, if history represents the unfolding of a dialectical process, then events that did not occur cannot, by definition, constitute the subject of historical analysis. Crude Marxism (and Hegelianism) is, I hope, still out of favor. But another reason why historians are skeptical of the counterfactual seems better grounded. And this is historians’ attachment to the factual.

Consider, Niall Ferguson’s edited volume Virtual History. It provides an excellent defense of counterfactual history. The counterfactuals considered by Ferguson and co, however, are largely in military or diplomatic history: what would have happened had the Nazis’ invaded Britain? etc.

These counterfactuals are a useful way to think through a question. But their power typically depends on reversing a single decision or event, i.e. suppose Hitler doesn’t issue his Stop Order in June 1940 or Edward Grey decides not to defend Belgium neutrality, what then? To be plausible everything else has to be held constant. This means that counterfactuals in diplomatic and military history shed light on the short term consequences of particular events. But the ceteris paribus assumption becomes harder to maintain as we consider events further removed from the initial counterfactual intervention. Thus, we have a reasonable idea of what Nazi rule of Britain in 1940 might have looked like — with the SS hunting down Jews, liberals, and intellectuals and restoring Edward VIII to the throne. But once we consider the outcomes of a Nazi ruled Britain into the 1950s and 1960s, we have much less guidance. Lacking any documentary evidence of the intentions of Britain’s Nazi rulers in the post-war era leaves us in the realm of historical fiction like Robert Harris’ Fatherland or CJ Sansom’s Dominion; there are simply too many degrees of freedom to do conduct historical analysis. Counterfactuals become problematic once we run out of facts to discipline our analysis.

This is the one fact it a valid reason for historians to be skeptical of counterfactuals. The actual historical record has to serve as a constant constraint on historical writing. This goes back to Leopold von Ranke, the scholar responsible for history’s emergence as an academic discipline in the 19th century. Ranke and his followers insisted on rigorous documentation and established the idea that the craft of the historian lay in the discovery, assembly, and analysis of primary sources. Ranke urged historians to focus on what actually happened; simply put, the facts ma’am, just the facts. Many criticisms have been levied at Ranke in the intervening 150 years, and to jaded post-modern eyes this approach no doubt appears hopeless naïve. But we should not dismiss Ranke’s strictures too quickly given what happens when historians abandon them (here and here). What is important here is that the same Rankian strictures that helped form history as an academic discipline, also rule out speculating about things that didn’t happen. They instill in historians a natural skepticism of counterfactual, alternative, history.

Moreover, while military history lends itself naturally to counterfactual analysis, other areas of history such as social or economic history where change is typically more gradual appear less suitable. After all: how is one to assess such complex counterfactuals as the fate of slavery in the US South in the absence of the Civil War?

These are questions which benefit from counterfactual reasoning but which, unlike diplomatic, political or military history, often requires training in the social sciences to answer. For example, take a question that is of interest to historians of capitalism: would slavery have disappeared quickly without the civil war?

From the 1950s to the 1970s, cliometric historians utilized economic theory to try to answer this. They employed economic models to assess the profitably of slavery and to infer the expectations of slave owners in the south (here). The main finding was that, contrary to the suppositions of historians (who at the time were often sympathetic to the southern cause): slavery was extremely profitable in 1860 and slaveholders foresaw the institution lasting indefinitely. In this case, their use of counterfactual reasoning overturned the previous historical orthodoxy.

The issue of the economic importance of slavery to the American economy in the early nineteenth century is also a counterfactual question. Implicitly it asks what would GDP have been in the absence of the slave-produced cotton. Here it is not only economic historians who are making counterfactual arguments. Foner championed Ed Baptist’s book The Half Has Never Been Told. But in it, Baptist argued that almost 50% of GDP in 1836 was due to slavery, itself a counterfactual argument. He is arguing that, in the absence of slavery, the American economy would have been roughly half the size that it was. This claim is certainly false based as it is on double-counting. But the problem with Baptist’s argument is not that he had made a counterfactual claim, but that he conducted counterfactual analysis ineptly and that his estimates are riddled with errors (see here and here).

All of this sheds light on why counterfactuals are so often dismissed by historians. There is an important and deeply shared sense that the counterfactual approach is ahistorical and an unfamiliarity with the techniques involved. A natural lesson from the Baptist affair is that historians should become more familiar with the powerful tools social scientists have to assess counterfactual questions. Taking counterfactuals seriously is a way to make progress on uncovering answers to important historical questions. But there is also a sense in which the historians’ suspicion of counterfactual may be justified.

There remain many questions where counterfactuals are not especially useful. The more complex the event, the harder it is to isolate the relevant counterfactual. Recently Bruno Gonçalves Rosi at Notes on Liberty suggested such a counterfactual: “no Protestant Reformation, no freedom of conscience as we know today”.

But in comparison to what we have considered thus far, this is a tricky counterfactual to assess. Suppose Bruno had said, “no Martin Luther, no freedom of conscience as we know it today”. This would be easier to argue against as one could simply note that absent Luther there probably won’t have been a Reformation starting in 1517, but at some point in the 1520s-1530s, it is likely that someone else would have taken Luther’s place and overthrown the Catholic Church. But taking the entire Reformation as a single treatment and assessing its causal effect is much harder to do.

In particular, we have to assess two separate probabilities: (i) the probability of freedom of conscience emerging in Europe in the absence of the Reformation (P(Freedom of conscience|No Reformation)); and (ii) the probability of freedom of conscience emerging in Europe in the presence of the Reformation (P(Freedom of conscience| Reformation)). For Bruno’s argument to hold we don’t just need P(FC|R) > P (FC|NR), which is eminently plausible. We also need P(FC|NR) to equal zero. This seems implausible.

The problem becomes still more complex once one recognizes that the Protestant Reformation was itself the product of economic, social, political and technological changes taking place in Europe. If our counterfactual analysis takes away the Reformation but leaves in place the factors that helped to give rise to it (urbanization, the printing press, political fragmentation, corruption etc.), then it is unclear what the counterfactual actually tells us. This problem can be illustrated by considering a causal diagram of the sort developed by Judea Perle (2000).

Here we are interested in the effect of D (the Reformation) on Y (freedom of conscience). The problem is that if we observe a correlation between D and Y, we don’t know if it is causal. This is because of the presence of A, B, and F. Perhaps these can be controlled for. But there is also C. We can think of C as the printing press.

The printing press has a large role in the success of the Reformation (Rubin 2014). But it also stimulated urbanization and economic growth and plausibly had an independent role in stimulating the developments that eventually gave rise to modern liberalism, rule of law, and freedom of conscience. The endogeneity problem here seems intractable.

Absent some way to control for all these potential confounders, we are unable to estimate the causal effects of the Protestant Reformation on something like freedom of conscience. In contrast to the purely economic questions considered above, we don’t have a good theoretical understanding of the emergence of religious freedom. Counterfactual reasoning only gets us so far.

Historians need economic history (and this means economic theory and econometrics). And economists need historians. They need historians to make sense of the complexity of the world and because of their expertise and skill in handling evidence.

Freedom of Conscience and the Rule of Law

Federico Sosa Valle History, Law, Liberty , , , , , , , ,

Of course the concept of “freedom of conscience” was forged in Europe by Spinoza, Locke, Voltaire, John Stuart Mill, and many other philosophers. But the freedom of conscience as an individual right that belongs to set of characteristics which defines the rule of law is an American innovation, which later spread to Latin America and to the Old Continent.

This reflection comes from the dispute which has been aroused in Notes On Liberty about the Protestant Reformation and freedom of conscience. Now, my intention is not to mediate between Mark and Bruno, but to bring to the Consortium a new line of debate. What I would like to polemize is what defines which rights to be protected by the rule of law. In this sense, might we regard a political regime that bans freedom of conscience as based on the rule of law? I am sure that no one would dare to do so. But, instead, would anyone dare to state that unification of language in a given country hurts the rule of law? I am afraid that almost nobody would.

Nevertheless, this is a polemical question. For example, the current Catalan independence movement has the language of Catalan as one of its main claims, so tracing the genealogy of the rights that constitutes the concept of rule of law is a meaningful task —and this is why the controversy over the Protestant Reformation and the origin of Freedom of Conscience at NOL is so interesting.

Before the Protestant Reformation, the theological, philosophical, scientific, and political language of Europe was unified in Latin. On the other hand, the languages used by the common people were utterly fragmented. A multiplicity of dialects were spoken all over Europe. The Catholic Kings of Spain, for example, unified their kingdom under the same religion, but they did not touch the local dialects. A very similar situation might be found in the rest of Europe: kingdoms with one religion and several dialects.

There was a strong reason for this to be so. Before the Medieval Ages Bibles in vernacular had existed, but the literacy rate was so low that the speed of evolution and fragmentation of the dialects left those translations obsolete and incomprehensible. Since printing books was extremely costly (this was before the invention of  the printing press), the best language to write and print books and constitutional documents was Latin.

The Evangelical movement, emerged out of the Protestant Reformation, meant that final authority of religion was not the Papacy any more but the biblical text. What changed was the coordination problem. Formerly, the reference was the local bishop, who was linked to the Bishop of Rome. (Although with the Counter-Reformation, in some cases, like Spain, the bishops were appointed by the king, a privilege obtained in exchange for remaining loyal to the Pope). On the other hand, in the Reformation countries, the text of the Bible as final authority on theological matters demanded the full command of an ability not so extended until that moment: literacy.

It is well-known that the Protestant Reformation and the invention of printing expanded the translations of the Bible into the vernacular. But always goes completely unnoticed that by that time the concept of a national language hardly existed. In the Reformist countries the consolidation of a national language was determined by the particular vernacular which was chosen to translate the Bible into.

Evidently, the extension of a common language among the subjects of a given kingdom had reported great benefits to its governance, since the tendency was followed by the monarchies of France and Spain. The former extended the Parisian French over the local patois and, in Spain of the XVIII Century, the Bourbon Reforms imposed Castilian as the national Spanish language. The absolute kings, who each of them had inherited a territory unified by a single religion, sowed the seeds of national states aggregated by a common language. Moreover, Catholicism became more dependent on absolute kings than on Rome —and that is why Bruno finds some Catholics arguing for the separation of Church from the state.

Meanwhile, in the New World, the Thirteen Colonies were receiving the European immigration mostly motivated on the lack of religious tolerance in their respected countries of origin. The immigrants arrived carrying with them all kind of variances of Christian confessions and developed new and unexpected ones. All those religions and sects had a common reference: the King James Bible.

My thesis is that it was the substitution of religion for language as the factor of cohesion and mechanism of social control that made possible the development of the freedom of conscience. The political power left what was inside of the mind of their subjects a more economical device: language. Think what you wish, believe what you wish, read what you wish, write what you wish, say what you wish, as long as I understand what you do and you can understand what I mean.

Moreover, an official language became a tool of accountability and a means of knowing the rights and duties of an individual before the state. The Magna Carta (1215) was written in Medieval Latin while the Virginia Declaration of Rights (1776), in English. Both documents were written in the language that was regarded as proper in their respective time. Nevertheless, the language which is more convenient to the individual for the defense of his liberties is quite obvious.

Often, the disputes over the genealogy of rights and institutions go around two poles: ideas and matter. I think it is high time to go along the common edge of both of them: the unintended consequences, the “rural nomos,” the complex phenomena. In this sense, but only in this sense, tracing the genealogy – or, better, the “nomology” – of the freedom of conscience as an intended trait of the concept of “rule of law” is worth our efforts.

Some Thoughts on State Capacity

Mark Koyama Economics, History , , , , , , ,

State capacity is an important topic and the subject of much recent attention in both development economics and economic history. Together with Noel Johnson I’ve recently written a survey article on the topic (here). At the same time, many libertarians and classical liberals are uncomfortable with the concept (see here and here). I think these criticisms are useful but misplaced. Addressing them will hopefully move the debate forward in a useful fashion.

Here I will just focus one issue. This is the argument recently made by Alex Salter that state capacity is a black box. Alex notes correctly that we have a detailed and convincing theory for how markets can lead to economic growth (by directing resources to their most efficient use). In contrast, according to Alex:

“State capacity, by itself, addresses neither the information issue nor the incentive issue. While governance institutions obviously began centralizing at the beginning of the modern era, this is just a morphological description of what happened to institutions. On its own, that’s insufficient as a causal explanation”.

I think Alex and other critics are on the wrong track here. State capacity is not alternative explanation for economic growth to that offered by markets. The relevant question is what impeded market development before, say, 1700, and what enabled the growth of markets after around 1700. The evidence provided by a body of research suggests that prior to 1700 market development was impeded by political fragmentation both within and between states. Critics of the state capacity argument should engage with this literature.

A second claim Alex makes is that we lack a theory for why the more centralized states that arose after 1700 were less rent-seeking and predatory than their weaker and more internally fragmented predecessors. But in fact we have a fairly good understanding of many of the mechanisms responsible for the demise of the more costly forms of recent seeking that characterized medieval and early modern Europe. This understanding is based on the work of James Buchanan and Mancur Olson.

The basic argument is this. Medieval and early modern states were mostly devices for rent-extraction and rent-seeking. But this rent-extraction and rent-seeking was largely decentralized. They collected taxes through a variety of costly and inefficient means (such as selling monopolies). They then spent the tax revenue on costly wars.

Decentralized rent-extraction was costly and inefficient. For example, it is well known that weights and measures varied from place to place in preindustrial Europe. What is less well known is that there were institutional reasons for this, as each local lord wanted to use his own measures in order to extract more surplus from the peasants who were forced to grind their grain using his mill. Local cities similarly used their own systems of weights and measures in order to extract surplus from traveling merchants. This benefited each local lord and city authority but imposed a large deadweight loss on the economy at large.

The logic of internal tariffs was similar. Each local lord or city would choose their internal tariffs in order to maximize their own income. But we know from elementary microeconomics that in this setting each local authority will set these tariffs “too high” because they will not take into account the effect of their tax rate on the tax revenue of their neighbors who also set their tariffs too high.

When early modern European rulers invested in state capacity, they sought to abolish or restrict such internal tariffs, to impose uniform taxes, and to standardize weights and measures. This resulted in a reduction in deadweight loss as when the king set the tax rate he considered the tax revenue he gets from his entire realm, and internalized the negative externality mentioned above.  The reasoning is identical to that which states that a single combined monopolist may be preferable to an up-stream and down-stream monopolist. When it comes to a public bad (like rent-seeking) a monopolist is preferable to competition.

The Protestant Reformation and freedom of conscience II

Bruno Gonçalves Rosi History, Religion , , ,

Some months ago I posted a text on the connection of the Protestant Reformation and freedom of conscience. About it, fellow Notewriter Mark Koyama tweeted:

“Disagree or at least the effect of the Reformation on freedom of conscience was indirect. Just read Luther or Calvin on religious freedom!”

I’m not sure what he means. What should I read that Luther or Calvin wrote? Please, be more specific. I read a lot of Calvin and a little of Luther, but I maintain my point: there is a strong connection between the Protestant Reformation and freedom of conscience. I may, however, agree that this connection is indirect.

When Max Weber connected the protestant ethics to the “spirit” of capitalism, he was very careful to say the following: John Calvin and Martin Luther couldn’t care less about economics. The salvation of the soul, and only that, was their concern. Nevertheless, the ideas they preached set in motion a process that resulted in the development of modern capitalism. My observation about the connection between the Protestant Reformation and Freedom of Conscience is similar to that: maybe we will not be able to find in Luther or Calvin an advocacy of what we understand today as freedom of conscience. But it is my firm understanding that we will find in them the seeds for it. Actually, it’s more than that: we would find the seeds for it in Jesus Christ himself. When Jesus said “give to Caesar what is Caesar’s and to God what is God’s” he already established the separation of church and state. The Apostle Peter did the same when he said that “it is more important to obey God than men”, and so did the Apostle Paul when he established limits to the power of secular authorities in his epistle to the Romans. We could go even further and find seed to it in the prophet Samuel, when he warned the people of Israel of the potential tyranny of kings. All this was somehow lost when, from Constantine to Theodosius I, Christianity became the official religion of the Roman Empire, and also when Charlemagne was crowned emperor by Pope Leo III. The wall between church and state was severally breached.

So, again, I never actually said that John Calvin or Martin Luther were, to our modern standards, champions of religious freedom. That’s a statement I never made. Both were opposites of the Anabaptist and wrote extensively against them. Granted, some Anabaptists were very much the 16th century version of ISIS (important! I’m in no way putting an equal sign between these two groups! Please, don’t misread what I write), and I’m actually really happy those two opposed them. But other Anabaptists were peaceful (such as the Mennonites) and suffered along. We can also mention the bitter opposition Luther had to Jews at one point in his life. But regardless. What I said is that the religious freedom we enjoy in our world today is to a great degree a product of the Protestant Reformation. As much else in history, this is not a clear cut transformation, but a gradual one.

What I proposed was technically a counterfactual: no Protestant Reformation, no freedom of conscience as we know today. Of course, history has one big problem with counterfactuals: we can never rewind the tape of history and then play it again changing just one detail. But I believe that, as much as we can compare History to a more empirical discipline, we can say that without the Protestant Reformation we would not know freedom of conscience as we know today. As I mentioned in my first post, this was not a clear cut passage in history. When we talk about causality in history, very few things are. What I meant is that the Protestant Reformation was to a major degree the breaking point that lead to our modern understanding of freedom of conscience.

But what was the Protestant Reformation, anyway? The Protestant Reformation was mainly a religious movement in Western Europe that lead to the break of the unity of Western Christianity. It was not a perfectly cohesive movement. When we talk about “Protestants”, the group that best fits this description are some Lutheran princes that “protested” against the anti-Lutheran policies in the Holy Roman Empire in the 1520s. But very soon the name protestant began to be used to describe any non-catholic group that appeared in Western Europe in the 16th century. From that we have four main protestant groups: Lutherans (called simply evangelicals in Germany and other areas in Europe), Reformed (or Calvinists, after the major influence of John Calvin over this sect), Anabaptists and Anglicans (who sometime don’t even like to be called protestants).

Martin Luther and John Calvin may have been the great stars of the reformation, but they were most certainly not alone. Just to mention a few, we can remember Huldrych Zwingli, Martin Bucer William Farel, Thomas Cranmer and John Knox as great leaders of the reformation. These men were united in their opposition to the Pope in Rome, but had many disagreements among them. Certainly they knew what united them and where they disagreed. But they were not wish-wash about what they believed. But still we can notice the desire to tolerate differences and unite on essentials. Philip Melanchthon, a great friend to Martin Luther and also a great early Lutheran theologian would be an excellent example of this attitude. Zacharius Ursinus, the main author of the Heidelberg Catechism would fit just well.

Extremely early on in the history of the Reformation we have Martin Luther on the Diet of Worms stating that “Unless I am convinced by the testimony of the Scriptures or by clear reason (for I do not trust either in the pope or in councils alone, since it is well known that they have often erred and contradicted themselves), I am bound by the Scriptures I have quoted and my conscience is captive to the Word of God. I cannot and I will not recant anything, since it is neither safe nor right to go against conscience. May God help me. Amen.” Yeah, some people may contest that he never uttered these words, and that the whole episode is but a myth. Regardless, it came to encompass the spirit of the Reformation as few other moments.

Some may say that I have a very stretchy definition of the Reformation, but in general, when I think about it, I define it chronologically as a period that goes from Luther to the Westminster Standards, so, about a century and a half of religious transformations in Europe. In that way, Luther was just the start of this religious movement. Calvin was already a second generation reformer. Many theologians would follow in the next century or so. Each one would build on the knowledge of the previous generation, coming, among other things, closer to our modern understanding of religious freedom and freedom of conscience. That’s why we may be unable to find much about religious freedom in Luther or Calvin (as Mark seems to claim in his tweet), but we already find a whole chapter on it in the Westminster Confession of Faith.

Between Luther and the Westminster Assembly we had many notable events. For instance, the Augsburg Peace of 1555, that already granted some level of religious freedom to Catholics and Lutherans in Germany. It was not a perfect agreement, so much so that it couldn’t avoid the Thirty Years War (1618-1648), ended by the Peace of Westphalia. This peace agreement took religious liberty to a new level. Very importantly, as Daniel Philpott already observed: no Protestant Reformation, no Thirty Years War, no Peace of Westphalia, no International Relations as we know today. I could add no secular states and no religious freedom and freedom of conscience as we know today. We also had the English Reformation, with the Puritan Reformation in between. From England to the other side of the Atlantic the story was even more interesting, with puritans and nonconformist seeking for a place where they could exercise their religion freely.

I’d like to remember also that one of the mottos of the Reformation was “Ecclesia semper reformanda est,” the church must always be reformed. There is a classical period of the Reformation, stretching from the 16th to the 17th century, or from Luther’s 95 Theses to the Westminster Standards. But the Reformed (or more broadly, protestant) churches didn’t stop there. We still have important developments in protestant theology in the following centuries, and even today. Maybe John Calvin and Martin Luther are not the best way to look for a broader version of freedom of conscience. But the religious movement they helped to start, building on their foundations, helped more than anything I can think of to establish what we know today as freedom of conscience. In my last post I mentioned John Wesley. But I could just as well mention William Penn, Roger Williams and many others. William Penn, a Quaker, founded Pennsylvania, to where many people (Catholics included) fled in search of freedom of conscience. Roger Williams, a Baptist, was the original source for the concept of “wall of separation” between church and state, that years later, in 1802, Thomas Jefferson would quote in a letter to the Danbury Baptist Association.

Anyway: as I mentioned several times already, very few changes in history are clear cut. It is also pretty trick to identify causality in history. But I believe that, as far as we can go with that, the Protestant Reformation was a major changing point to what we have today as freedom of conscience, a freedom as basic as one can get in a classic liberal society.

Political Decentralization and Innovation in early modern Europe

Mark Koyama Economics, History , , , , , ,

My full review of Joel Mokyr’s A Culture of Growth is forthcoming in the Independent Review. Unfortunately, it won’t be out until the Winter 2017 issue is released so here is a preview. Specifically, I want to discuss one of the main themes of the book and my review: the role of political decentralization in the onset of economic growth in western Europe.

This argument goes back to Montesquieu and David Hume. It is discussed in detail in my paper “Unified China; Divided Europe’’ (forthcoming in the International Economic Review and available here). But though many writers have argued that fragmentation was key to Europe’s eventual rise, these arguments are often underspecified, fail to explain the relevant mechanisms, or do not discuss counter-examples. Mokyr, however, has an original take on the argument which is worth emphasizing and considering in detail.

Mokyr focuses on how the competitive nature of the European state system provided dynamic incentives for economic growth and development. This argument is different from the classic one, according to which political competition led to fiscal competition, lower taxes, and better protection of property rights (see here). That argument rests on a faulty analogy between competition in the marketplace and competition between states.  The main problem it encounters is that while firms can only attract customers by offering lower prices (lower taxes) or better products (better public goods), states can compete with violence. Far from being competitive, low tax states like the Polish-Lithuanian commonwealth were crushed in the high-pressure competitive environment that characterized early modern Europe. The notion that competition produced low taxes is also falsified by the well-established finding that taxes were much higher in early modern Europe than elsewhere in the world.

It is also not the case that political fragmentation is always and everywhere good for economic development. India was fragmented for much of its history. Medieval Ireland was fragmented into countless chiefdom prior to the English conquest. Perhaps we can distinguish between low-intensity but fragmented state systems which tended not to generate competitive pressure such as medieval Ireland or South-East Asia and high-intensity fragmented state systems such as early modern Europe or warring states China. But even then it is not clear that a highly competitive and fragmented state system will be good for growth. In general, political fragmentation raised barriers to trade and impeded market integration. Moreover a competitive state system means more conflict or more resources spent deterring conflict. For this reason political fragmentation tends to result in wasteful military spending. It can be easily shown, for instance, that a much higher proportion of the population spent their lives in the economically wasteful activity of soldiering in fragmented medieval and early modern Europe than did in either the Roman empire or imperial China (see Ko, Koyama, Sng, 2018).

Innovation and Decentralization

What then is Mokyr’s basis for claiming that political fragmentation was crucial for the onset of modern growth? Essentially, for Mokyr the upside of Europe’s political divisions was dynamic. It was the conjunction of political fragmentation with a thriving trans-European intellectual culture that was crucial for the eventual transition to modern growth. The political divisions of Europe meant that innovative and heretical thinkers had an avenue of escape from oppressive political authorities. This escape valve prevented the ideas and innovations of the Renaissance and Reformation from being crushed after the Counter-Reformation became ascendant in southern Europe after 1600. Giordano Bruno was burned in Rome. But in general heretical and subversive thinkers could escape the Inquisition by judiciously moving across borders.

Political fragmentation enabled thinkers from Descartes and Bayle to Voltaire and Rousseau to flee France. It also allowed Hobbes to escape to Paris during the English Civil War and Locke to wait out the anger of Charles II in the Netherlands. Also important was the fact that the political divisions of Europe also meant that no writer or scientist was dependent on the favor of a single, all powerful monarch. A host of different patrons were available and willing to compete to attract the best talents. Christina of Sweden sponsored Descartes. Charles II hired Hobbes as a mathematics teacher for a while. Leibniz was the adornment of the House of Hanover.

The other important point that Mokyr’s stresses is Europe’s cultural unity and interconnectedness. As I conclude in my review, Mokyr’s argument is that

“the cultural unity of Europe meant that the inventors, innovators, and tinkers in England and the Dutch Republic could build on the advances of the European-wide Scientific Revolution. Europe’s interconnectivity due to the Republic of Letters helped to give rise to a continent-wide Enlightenment Culture. In the British Isles, this met a response from apprentice trained and skilled craftsmen able to tinker with and improve existing technologies.  In contrast, political fragmentation in the medieval Middle East or pre-modern India does not seem to have promoted innovation, whereas the political unity of Qing China produced an elite culture that was conservative and that stifled free thinking”.

It is this greater network connectivity that needs particular emphasize and should be the focus of future research into the intellectual origins of growth in western Europe. At present we can only speculate on its origins. The printing press certainly deserves mention as it was the key innovation that helped the diffusion of ideas. Mokyr also points to the postal system as a crucial institutional development that enabled rapid communication across political boundaries. Other factors include the development of a nascent European identity and what Chris Wickham calls, in his recent book on medieval Europe, “the late medieval public sphere” (Wickham, 2016). These developments were important but understudied complements to the fragmented nature of the European state system so frequently highlighted in the literature.

Rent-Seeking Rebels of 1776

Vincent Geloso Economics, History, Law, Liberty , , , , ,

Since yesterday was Independence Day, I thought I should share a recent piece of research I made available. A few months ago, I completed a working paper which has now been accepted as a book chapter regarding public choice theory insights for American economic history (of which I talked about before).  That paper simply argued that the American Revolutionary War that led to independence partly resulted from strings of rent-seeking actions (disclaimer: the title of the blog post was chosen to attract attention).

The first element of that string is that the Americans were given a relatively high level of autonomy over their own affairs. However, that autonomy did not come with full financial responsibility.  In fact, the American colonists were still net beneficiaries of imperial finance. As the long period of peace that lasted from 1713 to 1740 ended, the British started to spend increasingly larger sums for the defense of the colonies. This meant that the British were technically inciting (by subsidizing the defense) the colonists to take aggressive measures that may benefit them (i.e. raid instead of trade). Indeed, the benefits of any land seizure by conflict would large fall in their lap while the British ended up with the bill.

The second element is the French colony of Acadia (in modern day Nova Scotia and New Brunswick). I say “French”, but it wasn’t really under French rule. Until 1713, it was nominally under French rule but the colony of a few thousands was in effect a “stateless” society since the reach of the French state was non-existent (most of the colonial administration that took place in French North America was in the colony of Quebec). In any case, the French government cared very little for that colony.   After 1713, it became a British colony but again the rule was nominal and the British tolerated a conditional oath of loyalty (which was basically an oath of neutrality speaking to the limited ability of the crown to enforce its desires in the colony). However, it was probably one of the most prosperous colonies of the French crown and one where – and this is admitted by historians – the colonists were on the friendliest of terms with the Native Indians. Complex trading networks emerged which allowed the Acadians to acquire land rights from the native tribes in exchange for agricultural goods which would be harvested thanks to sophisticated irrigation systems.  These lands were incredibly rich and they caught the attention of American colonists who wanted to expel the French colonists who, to top it off, were friendly with the natives. This led to a drive to actually deport them. When deportation occurred in 1755 (half the French population was deported), the lands were largely seized by American settlers and British settlers in Nova Scotia. They got all the benefits. However, the crown paid for the military expenses (they were considerable) and it was done against the wishes of the imperial government as an initiative of the local governments of Massachusetts and Nova Scotia. This was clearly a rent-seeking action.

The third link is that in England, the governing coalitions included government creditors who had a strong incentives to control government spending especially given the constraints imposed by debt-financing the intermittent war with the French.  These creditors saw the combination of local autonomy and the lack of financial responsibility for that autonomy as a call to centralize management of the empire and avoid such problems in the future. This drive towards centralization was a key factor, according to historians like J.P. Greene,  in the initiation of the revolution. It was also a result of rent-seeking on the part of actors in England to protect their own interest.

As such, the history of the American revolution must rely in part on a public choice contribution in the form of rent-seeking which paints the revolution in a different (and less glorious) light.

Algeria: a sparse memory

Jacques Delacroix History, Politics , , , ,

In 1962, France and the Algerian nationalists came to an agreement about Algerian independence. That was after 130 years of French colonization and eight years of brutal war including war against civilians. I participated in the evacuation of large number of French civilians from the country as a little sailor. The number who wanted to leave was much greater than anyone expected. It was too bad that they left in such large numbers. It was a pity for all concerned. The events were a double tragedy or a tragedy leading to a tragedy. The Algerian independence fighters who had prevailed by shedding quantities of their blood were not (not) Islamists. In most respects, intellectually and otherwise, they were a lot like me.

The true revolutionaries were soon replaced however by professional soldiers that I think of as classical but fairly moderate fascists. I went back to Algeria six years after independence. I was warmly received and I liked the people there. People invited me to lunch; I shared with them the fish I caught and a baby camel tried to browse my hair in a cafe.

I still think the nationalists were on the right side of the argument but I miss Algeria nevertheless. It’s like a divorce that should not have happened. And I am very sorry about where French incompetence and rigidity led everyone, especially the Algerians who keep migrating to France in huge numbers because they can’t find what they need at home.

The Deleted Clause of the Declaration of Independence

Kevin Kallmes Books, Culture, History, Law, Liberty, Philosophy, Politics , , , , , , ,

As a tribute to the great events that occurred 241 years ago, I wanted to recognize the importance of the unity of purpose behind supporting liberty in all of its forms. While an unequivocal statement of natural rights and the virtues of liberty, the Declaration of Independence also came close to bringing another vital aspect of liberty to the forefront of public attention. As has been addressed in multiple fascinating podcasts (Joe Janes, Robert Olwell), a censure of slavery and George III’s connection to the slave trade was in the first draft of the Declaration.

Thomas Jefferson, a man who has been criticized as a man of inherent contradiction between his high morals and his active participation in slavery, was a major contributor to the popularizing of classical liberal principles. Many have pointed to his hypocrisy in that he owned over 180 slaves, fathered children on them, and did not free them in his will (because of his debts). Even given his personal slaves, Jefferson made his moral stance on slavery quite clear through his famous efforts toward ending the transatlantic slave trade, which exemplify early steps in securing the abolition of the repugnant act of chattel slavery in America and applying classically liberal principles toward all humans. However, this very practice may have been enacted far sooner, avoiding decades of appalling misery and its long-reaching effects, if his (hypocritical but principled) position had been adopted from the day of the USA’s first taste of political freedom.

This is the text of the deleted Declaration of Independence clause:

“He has waged cruel war against human nature itself, violating its most sacred rights of life and liberty in the persons of a distant people who never offended him, captivating and carrying them into slavery in another hemisphere or to incur miserable death in their transportation thither.  This piratical warfare, the opprobrium of infidel powers, is the warfare of the Christian King of Great Britain.  Determined to keep open a market where Men should be bought and sold, he has prostituted his negative for suppressing every legislative attempt to prohibit or restrain this execrable commerce.  And that this assemblage of horrors might want no fact of distinguished die, he is now exciting those very people to rise in arms among us, and to purchase that liberty of which he has deprived them, by murdering the people on whom he has obtruded them: thus paying off former crimes committed against the Liberties of one people, with crimes which he urges them to commit against the lives of another..”

The second Continental Congress, based on hardline votes of South Carolina and the desire to avoid alienating potential sympathizers in England, slaveholding patriots, and the harbor cities of the North that were complicit in the slave trade, dropped this vital statement of principle

The removal of the anti-slavery clause of the declaration was not the only time Jefferson’s efforts might have led to the premature end of the “peculiar institution.” Economist and cultural historian Thomas Sowell notes that Jefferson’s 1784 anti-slavery bill, which had the votes to pass but did not because of a single ill legislator’s absence from the floor, would have ended the expansion of slavery to any newly admitted states to the Union years before the Constitution’s infamous three-fifths compromise. One wonders if America would have seen a secessionist movement or Civil War, and how the economies of states from Alabama and Florida to Texas would have developed without slave labor, which in some states and counties constituted the majority.

These ideas form a core moral principle for most Americans today, but they are not hypothetical or irrelevant to modern debates about liberty. Though America and the broader Western World have brought the slavery debate to an end, the larger world has not; though countries have officially made enslavement a crime (true only since 2007), many within the highest levels of government aid and abet the practice. 30 million individuals around the world suffer under the same types of chattel slavery seen millennia ago, including in nominal US allies in the Middle East. The debates between the pursuit of non-intervention as a form of freedom and the defense of the liberty of others as a form of freedom have been consistently important since the 1800’s (or arguably earlier), and I think it is vital that these discussions continue in the public forum. I hope that this 4th of July reminds us that liberty is not just a distant concept, but a set of values that requires constant support, intellectual nurturing, and pursuit.

For more underrecognized history surrounding the founding of America, see my Before the Fourth series!

Muslim Welcome

Jacques Delacroix History , , ,

Here is a nice little story, I think.

I was once a pretend hippie. It was only “pretend” because my drug consumption was moderate and limited and I never dropped acid. Also, I never dropped out as recommended. I attended graduate school and I even worked quite a bit.

At the end of a work interlude in France from graduate school in the US, I thought I deserved a reward. (I often think I deserve a reward; it does not take much.) I was a big-time free-diver (no SCUBA) for most of my life, not so much for the beauty of it but always in search of something good to eat. I decided to leave gray Paris for a diving vacation in sunny Algeria.

It was only nine years after the end of the bloody war by which Algerians won their independence from France. Practically, the whole French population was gone. There were tensions between the French and the Algerian governments although hundreds of thousands of Algerians were working and living in France. I thought my good manners and my smiling face would get me through any difficulty. Also, I thought that with the French gone, there must have been precious little spear fishing in Algerian waters. I half-believed that big groupers would practically jump at me

I packed my VW bus I had outfitted for camping and I put a small borrowed plastic boat on its roof. My then-future ex-wife (“TFEW”) and I drove to Marseilles where we checked in bus and boat. We spent the night-long crossing of the Med on deck. There was a moving moment in the middle of the crossing when all the portable radios on board suddenly tuned them selves to Arab music from Radio Algiers. The dolphins accompanied our ship into the light blue waters of Algiers Bay.

One thing the Algerians had learned from the French and had not yet forgotten was running a non-corrupt bureaucracy. (I believe corrupt is good, that it expedites bureaucratic processes.) It took hours to clear us because the TFEW had an American passport, something unusual then and there. Clearing the bus and the boat through customs took even more time. By the time we were out of the harbor building, the sun was setting. We did not want to spend the night in some shabby overpriced hotel in the big city so, we drove on out of town in a general eastward direction.

After a couple of hours in deep-darkness, we were on a dirt road climbing some hills which made me admit that it was probably not the main coastal highway. I couldn’t see much with the weak VW headlights and there was a little mist. The torchlight I had packed was not much more useful. I ended up stopping the bus more or less at random. We stepped outside for a leak. There were not house lights, not street lights, and no sound except the song of the cicadas. We figured we might just bed down in the van till morning.

The sun was fairly high in the sky when we woke up. I saw some blue through a window of the bus. I opened the door to take out the equipment necessary for a cup of Nescafé. I discovered we were parked right in the middle of a low farmhouse courtyard. And old man in a djellaba was quietly sitting on a rock outside our door with an earthenware jar of cool water at his side and a basket of figs on his lap. “Bonjour, Salaam” he said pleasantly.