links for 2007-09-11

• 
  
• Recent Financial Developments and the Economic Outlook - Yellen - FRB SF
• Economists Divided Over Fed's Next Move - The Harvard Crimson
• Utility Will Use Batteries to Store Wind Power - New York Times
• Reshaping the Architecture of (computer) Memory - New York Times
• An Employment Recession May Already Be With Us - Kevin Hassett
• Brainy Parrot Dies, Emotive to the End - New York Times
• A War Still Seeking a Mission - George F. Will - washingtonpost.com
• Ben Stein on the economy: "What, me worry?" - Salon.com

Comments

[anne]

There was mention of German immigrant community resistance to military conscription in Texas during the Civil War, and conflict that developed. Evidently, as we might have guessed, there was considerable resistance to conscription North and South. Then, too, I realized there was historical resistance to conscription in Britain that I have come on in literature but usually as a muted subject because of the usual nee to affirm patriotism. Thomas Hardy wrote of such resistance, but so I realize did Balzac and Stendahl write of resistance to fighting for France. An interesting topic. that I will think more about.

[kthomas]

anne, sometimes, I must say, you show a very wide variety of interests. you're a fascinating woman.

[anne]

K Thomas, thank you so much and back at ya'.

[anne]

Mark Thoma set this abstract for us:

http://mpra.ub.uni-muenchen.de/4134/

July, 2007

The Long-Term Effects of Africa's Slave Trades
By Nathan Nunn

Can part of Africa's current underdevelopment be explained by its slave trades? To explore this question, I use data from shipping records and historical documents reporting slave ethnicities to construct estimates of the number of slaves exported from each country during Africa's slave trades. I find a robust negative relationship between the number of slaves exported from a country and current economic performance. To better understand if the relationship is causal, I examine the historical evidence on selection into the slave trades, and use instrumental variables. Together the evidence suggests that the slave trades have had an adverse effect on economic development.

But, there is an accompanying abstract of significant interest:

http://mpra.ub.uni-muenchen.de/4080/

July, 2007

Slavery, Inequality, and Economic Development in the Americas: An Examination of the Engerman-Sokoloff Hypothesis
By Nathan Nunn

Abstract

Recent research argues that among former New World colonies a nation's past dependence on slave labor was important for its subsequent economic development (Engerman and Sokoloff, 1997, 2002, 2006; Sokoloff and Engerman, 2000). These studies argue that specialization in plantation agriculture based on slave labor caused economic inequality, which concentrated power in the hands of a small elite, adversely affecting the development of domestic institutions needed for sustained economic growth. I test for these relationships looking both across former New World economies and across states and counties within the U.S. I find evidence that slave use is negatively correlated with subsequent economic development. However, I do not find evidence that this negative relationship is driven by large scale plantation slavery, or that the relationship works through slavery's effect on economic inequality.

[anne]

Nathan Nunn is arguing that we need to consider peripheral institutional changes to properly understand the economic effects of slavery. I am inclined to agreed, but I need to read and consider carefully. Also, the argument reminds me to think of what I take as similar arguments of WEB Du Bois.

[Farrar Richardson]

Haven't read the paper, but it seems obvious to me from historical readings on the American South amd the French West Indies that large scale plantation agriculture was responsible both for the early prosperity and the subsequent economic decline in these areas. Before mechanized agriculture, the plantation system could never have been developed without either slavery or caste-based peonage.

The tropical colonial crops - sugar, indigo, tobacco and cotton were at first extremely profitable, but rapidly wore out the soil and were vulnerable to competition from lower cost producers. This is what killed the plantation system in the post bellum American South, where cotton prices declined steadily through the end of the 19th century.

Meanwhile the ossified planter caste could see no solution except in the traditional ways, and staunchly resisted any spending for roads, education, public health, etc. which could have spurred economic development.

So the whole plantation system and mindset was responsible for economic stagnation, but it could never have existed without slavery or post emancipation near slavery.

Sometime I think the Civil War caused Southern planters to become more set in their ways by reaction against Reconstruction, and that everyone might have fared better if we'd let the South secede.

what led to these comments in this section, anyway?

[Farrar Richardson]

I've downloaded the paper and will read tomorrow. This could be a useful ref for my ggfather bio. Thanks Anne.

[Farrar Richardson]

Interesting paper, but I have a lot of trouble accepting this conclusion, at least in relation to Louisiana, which I have studied the most -

"Contrary to Engerman and Sokoloff’s hypothesis, slavery’s effect on income does not appear to be the result of slavery increasing initial inequality which adversely affected long-term growth."

There are several factors which the author does not seem to have considered.
-In LA there were large potentially rich holdings which had not yet been developed in 1860, and therefore in some areas a lower a lower proportion of slaves to land wealth.
-Smaller land holdings with fewer slaves were generally in the less fertile, poorer areas of the South.
-Before abolition, LA planters actually had more wealth invested in slaves than in land, but the authors consider only land in estimating wealth. They also had substantial debts, but the authors do not consider NET worth
-Abolition substantially reduced the assets of LA planters, but did not reduce their substantial debts Since slaves were their only liquid assets they no longer had easy access to credit. Many ante-bellum planters, were not able to hold on to their properties.

I am not sure what effects these factors might have had on this conclusion. Perhaps I am reluctant to accept this conclusion because it is contrary to generally accepted wisdom.

Perhaps I shall write to the authors.

Anyway, we all agree that human capital is most important for economic progress.

[Farrar Richardson]

Another problem with that paper - perhaps the biggest, the author relates 1860 wealth and slavery to GDP in 2000. But conditions changed dramatically in the early 20th century, when populist forces (Huey Long, etc) took over from the planter elite, who had held back economic development up to that time. There was also the introduction of mechanized agriculture about that time.