Postan and Economic History
Postan was very different from Clapham. His characteristic output was articles that posed explicit questions and then used (admittedly modest) empirical work to present striking interpretation that provoked argument and created a sense of intellectual excitement. The editors of The Economic History Review remarked that he was ‘direct, alert, and perceptive, with an impish humour, quick on his feet intellectually, deploying an incomparable intelligence’ so that there was ‘always a sort of magic about him’. Eric Hobsbawm remembered the impact of his lectures:
Looking somewhat like a red-haired Neanderthal survivor and speaking through a heavy Russian accent, he was nevertheless so brilliant and compelling a lecturer that he filled Mill Lane at nine o’clock in the morning ... Everyone of his lectures — intellectual-rhetorical dramas in which a historical thesis was first expounded, then utterly dismantled, and finally replaced by his own version — was a holiday from interwar Cambridge insularity.
He brought the thinking of Marx, Weber, and other Continental thinkers into the Faculty of History (Flinn and Mathias 1982: v-vi; Hobsbawm 2001: 136; Habakkuk quoted in Miller 1983: 544).
Postan was an outsider, born in Tighina in Bessarabia in 1899 to a Jewish family. He attended school locally and in Odessa and enrolled at university in St Petersburg in 1915 to study natural sciences and sociology, moving to Odessa to study law and economics. He served in the army in 1917, and on demobilisation he entered Kiev University. He was involved with radical socialism and the Jewish autonomy movement in the Ukraine, writing Treatise on the Political Organization of Autonomous Minorities in 1919, though his Jewish identity was not subsequently of any importance. He was out of sympathy with events in Russia and he left at the end of 1919, spending some time in the Balkans and Central Europe before arriving in London in 1920. His early years in Russia shaped some of his later career. John Habakkuk pointed out that ‘there were many perceptions about peasant society and early industrialisation which came naturally to someone educated in Russia before 1918’—and Postan was sceptical about Marxist interpretations of history and apologists for the Soviet Union (Miller 1983: 543-544; Mell 2012: 561-562; Flinn and Mathias 1982: iv).[1]
In October 1921, Postan entered the LSE; after completing his master’s degree in 1926, Power secured his appointment as a research assistant. They became close intellectual collaborators and married in 1937. Although Postan specialised in medieval economic history, he was encouraged by R.H. Tawney to ‘engage in some modern history as well’, and he followed this advice in his teaching and writing. He taught at UCL (1927-1931) and LSE (19311935), forming a circle of friends closely involved in politics, including Hugh Gaitskell and Evan Durbin (colleagues at UCL). In 1934, Postan took over the editorship of The Economic History Review, a position he held until 1960.
In 1935 he was appointed to a Lectureship at Cambridge where he made an immediate impact, bringing in the words of Habakkuk, ‘an entirely fresh vision of economic history’ (Miller 1983: 544-546).[2]
This sense of excitement led to his election to the Professorship in 1938—a post that Power had in mind for him as early as 1931, when she pointed out that the chairs in London and Oxford would not be available:
It is a snag that you are not a Cambridge man; but as far as I can see there aren't going to be any Cambridge men available, for Clapham has failed to train up any successor of the right calibre ... I shall never say this to anyone but you, because it would be most unsafe, but I have had it for some time in my mind.
It depends entirely on how big a reputation you can amass in the next 7 years,
& on how we manage Clapham.
The plan was successful, somewhat to Power’s surprise, for ‘I never thought the Committee would have the sense’. Postan held the post until 1965, apart from his absence during the war as head of the Russian section of the Ministry of Economic Warfare from 1939 to 1942, and then as part of the team to write the history of the war which led to his volume on the history of war production in 1952 (Power to Postan, 29 January 1938, and Power to Camb, 6 February 1938, quoted in Berg 1996: 192, 197; Miller 1983: 548-549).
In fact, Postan’s election was not entirely surprising for Power ruled herself out and he had acquired a considerable reputation through a number of important articles. At this stage, Postan’s views on the medieval economy were closely aligned with those of Power, and initially focused on trade in the fifteenth century. Their work attacked the views of Werner Sombart and the German Historical School on the pre- or non-capitalist nature of the medieval economy as an ‘epoch whose economic system contrasted in every detail with the rational and acquisitive system of modern capitalism’. Postan and Power disagreed and were more persuaded by Henri Pirenne that there were different types of capitalism in different periods of the Middle Ages rather than a stable, non-acquisitive community. Pirenne was a powerful influence on Power and on Marc Bloch, and all three influenced Postan (Mell 2012: 562-563; Power and Postan 1933; Postan 1933: 212).
In contrast to Sombart’s pre-capitalist view, Postan stressed ‘the organic part which credit played in medieval trade’ and ‘the precocity of financial capitalism in the Middle Ages’. He rejected the view of German Historical Economists that credit was little used in the Middle Ages—a line adopted by
Cunningham. Postan disagreed: ‘[C]redit commonly entered into the commercial practice of the Middle Ages’, and there was ‘an irreducible common factor’ in medieval and modern capitalism which ‘makes it possible to treat them as two species of the same genus’ (Postan 1928: 234, 236, 238, 261, 1930, 1933: 212-214, 216-217, 223). He pursued this line of reasoning in his criticism of the supposed rise of a money economy. In his view, money was used from the start of documented history and could not be used to explain any later phenomenon; the crucial point was the extent to which people turned to buying and selling, which depended on varying circumstances such as Africans producing for the market because of colonial taxation, or Russian peasants because of state policies of capital accumulation. Hence ‘increases in the relative volume of money transactions could reflect a whole variety of economic changes and were little more than passing, and sometimes recurrent, historical phenomena, which combined with other phenomena to create unique and unrepeatable historical phenomenon’. There was ‘not one rise of money economy but several rises of several money economies’, with retreats in some times and places. The rise of money was not itself an emancipating force: without large reserves of free landless labour and the legal safeguards of a liberal state, the expansion of markets was likely to lead to an increase in labour services to meet demand for agricultural produce—as in East Germany with the growth of grain export markets, and in England with the development of agricultural production for the market in the thirteenth century (Postan 1944: 130, 134; see also Postan 1937).
Postan started to turn away from a concern with medieval credit, money, and trade to understand changes in manorial structures and the commutation of labour services in the context of long-run economic trends. He adopted a Malthusian approach of demographically driven expansion and contraction (Brenner 2008: 540). His essay of 1937 on labour services was his first major contribution on the agrarian history of England, explaining variations in labour services by the needs of the demesne—land directly farmed by lords. Partial or complete commutation of labour services in the twelfth century was reversed in the thirteenth century when rising population and land hunger led to high prices of food, a shift in the balance of power towards manorial lords, a growth in demesnes to supply markets, and the reimposition of labour dues. In the fourteenth and fifteenth centuries, population and prices fell, less land was cultivated, holdings were vacant, and trade declined. The fifteenth century was a period of agricultural recession with a decline in markets for produce and higher costs as a result of labour shortages so that demesnes were no longer profitable. Peasants and landless labourers benefited, for they had a stronger bargaining position to force landlords to commute labour services for cash, and gained from lower land prices and higher wages (Postan 1937, 1939a). Such an approach was central to Postan’s later work: a stress on cycles between resources and population, and on the way that trends could operate in seemingly contradictory ways depending on circumstances.
Postan continued to develop his thinking on demographic and agrarian structures, arguing against the common assumption that the Black Death was an interlude in rising population. In his view, the population of England started to fall from the opening of the fourteenth century, about 30 years before the arrival of plague as a result of ‘the inherent tendencies of population on the Malthusian level of existence’. The increase in population in the thirteenth century led to land reclamation, a movement onto marginal soils, a shift from pasture with a decline in livestock, and consequently a drop in manure needed to maintain the fertility of soil. Agrarian society was ‘balanced on the margin of subsistence’ with ‘an extreme degree of rural overpopulation’ and small holdings, which meant that it was susceptible to shocks of poor harvests caused by the vagaries of weather and disease. The result was ‘long periods of reckoning when the marginal lands, no longer new, punished the men who tilled them with recurrent inundations, desiccations and dust storms’. Postan thought that previous levels of population might not have been regained until the Industrial Revolution. These trends had a varying impact on different levels of rural society. During the period of over-population, village smallholders and labourers formed a rising proportion of the population and were more sensitive to harvests. However, with the fall in land values and rents, the losers were large landowners, and the beneficiaries were the smaller peasants who could buy land and become kulaks, with an opportunity for landless families to acquire property (Postan 1950: 146, 1962: 248; Postan and Titow 1959: 402, 409-410; Miller 1983: 553-554).[3]
Postan’s approach was unlike Claphams cautious unwillingness to adopt a position; as Edward Miller remarked, Postan showed ‘a taste for speculative thought not altogether common among historians, even economic historians’. He was influenced by both the transformations in Russia and the Soviet Union—the emancipation of the serfs in Tsrarist Russia and the destruction of the kulaks by Stalin formed an undercurrent in his thinking—and by the economic crises of the interwar period, which made him reject the assumptions of the Historical School and liberalism of ‘continuous ascent’ from barbaric primitivisim to the modern world (Miller 1983: 546; Postan 1939a: 160-161). Neither was he sympathetic to the Marxist interpretation of a transition from feudalism to capitalism that was propounded by Maurice Dobb in the Faculty of Economics at Cambridge, a man who inspired a post-war generation of Marxist economic history.
This debate over the transition from feudalism to capitalism started in 1940 with a disagreement among Communist historians over the English Civil War: Did it mark the start of the capitalist mode of production, or had capitalism emerged earlier with the war provoked by a feudal counter-revolution? Dobb took the former line which was the position of the Communist Party. In 1946, the Communist Party Historians Group was established, with Dobb as the senior member and younger members including Christopher Hill, Hobsbawm, E.P Thompson, Rodney Hilton, and John Saville who went on to play a leading role in British economic and social history. Dobb’s Studies in the Development of Capitalism appeared the same year, providing a Marxist interpretation of English capitalism since the fifteenth century. History was a succession of class systems, each with its own mode of extracting income for its ruling class. By the seventeenth century, some craftsmen had enough capital to become merchant capitalists, and subordinated production to capital; the emergence of industrial capitalism required the destruction of restraints on trade which had been designed to benefit merchant capitalists, who turned to the monarchy for support. The outcome was the Civil War. The book was greeted with excitement by Marxist historians, with Hilton commenting that Dobb ‘demonstrated in a most striking way the superiority of the Marxist approach to historical problems over the bourgeois eclecticism which nowadays passes as a substitute for proper analysis’ (Hilton quoted in Shenk 2013: 112). Postan was not sympathetic, and he declined to have a review of Studies in The Economic History Review (Hobsbawm 2004; Shenk 2013: 71, 99-115). Dobb’s class interpretation differed radically from Postan’s Malthusian model in which different levels of agrarian society were affected by demographic variables.
A major concern of Marxist historians was the ‘primitive accumulation’ of capital for industrialisation. In 1935, Postan published an article on recent trends in capital accumulation which had a different approach. He suggested that there had never been an absolute shortage of capital in the past but that savings were hoarded. In the late eighteenth and early nineteenth centuries, industrialists had to rely on their own savings, reinvested profits, and their friends and relatives so that ‘[c]apital.. .was intimately bound up with human personality’ (Postan 1935: 5). The situation changed in the nineteenth century with the emergence of joint-stock banks and shares, and a single capital market dominated by the rate of interest. Postan saw a decline from this peak by the 1930s, so that capital was no longer so mobile or divisible, or so responsive to the rate of interest: international capital flows were controlled by governments, and domestic investment was forced into directions it would not otherwise have gone. Further, there was a decline in ‘pure investors’, people who put their money to profitable use by the sole criterion of interest. New sources of capital came from compulsory saving through the state by means of taxation and social insurance; from the reserves of joint-stock companies; and ‘provident’ savers in savings banks, friendly societies, and insurance companies. Postan worried that this capital was not responsive to interest rates, and could be misallocated. As he said, ‘there is no failure like success’: prosperity created provident savings and self-financing corporations, so that capital was not used to its best effect (ibid.: 12). This short article pointed the way to many subsequent works by economic historians on patterns of investment since the Industrial Revolution. Postan’s approach to capital did not rest on a Marxist account of exploitation of labour by capital or a conflict of classes, but on changing institutional patterns with a concern about the stultifying effect of the demise of personal ownership of capital.
Postan developed his views on economic history and economics in a lecture in 1935 and his Inaugural Lecture at Cambridge in 1938. He felt that historians had become concerned with facts for their own sake, leading to the danger of antiquarianism. Postan argued that ‘If history is to regain its place in the general intellectual movement of our time, it must restore to the full its erstwhile connection with social generalizations’, without falling victim to a second danger of grand theories of social development. History was distinct from both antiquarianism and ‘general sociology’, considering the past in terms of general problems without abstracting from real situations to develop propositions independent of particular circumstances.
Postan was highly critical of theoretical economists who ‘tried to solve the largest possible problems from the least possible knowledge’. He complained that
The price of deduction is abstraction: the logical rigour and consistency of economic propositions is a direct consequence of the fact that the fundamental concepts, the original assumptions and the successive stages of economic argument are all treated in isolation from the rest of [the] social environment (Postan 1939b: 18).
A case in point was Keynes’s General Theory which explained employment and interest by the propensity to consume, and the preference for more or less liquid savings:
But how much do the economists know about them? Do they know or have they explained the complex social process which throughout history has determined the employment of income and its allocation to consumption or rather to consuming classes, or have they tried to discover what social forces lurk behind liquidity preferences? (ibid.: 23).
Postan wanted an approach on the lines of his analysis of capital, not as an abstract, uniform concept but through understanding its nature in precise social and institutional settings. What was needed was a concern for the ‘whole combination of social forces’ that was irreducible to mathematical formulae, ‘an interrelation so multiple as to make the work of abstraction impossible and undesirable’:
What gives facts of history, or all social facts, their worth as evidence, and their value for causal analysis, is their existence, their tangible and verifiable reality. Only tangible and concrete phenomena can be fitted into a social setting and demonstrated as a link in a chain of causation ... Where the historian shows his scientific preoccupations, and qualifies for membership of the social sciences, is in concentrating the study of his individual subject on its relevance to general and theoretical problems. He studies rural society in the Middle Ages, which is a unique and unrepeatable phenomenon, because the study is relevant to such sociological problems as the correlation of population, social structure, social class and tenure, economic technique and legal concepts. But unlike a sociologist he refuses to ask universal questions or try to formulate general laws (ibid.: 30—32).
The economic historian should make ‘microscopic problems of historical research’ into the ‘microcosmic—capable of reflecting worlds larger than themselves. It is in this reflected flicker of truth, the revelations of the general in the particular, that the contribution of the historical method to social sciences will be found’ (ibid.: 32, 34; see also Postan 1936: 20-21). He held the same view in 1968, when he said that universal generalisations were not possible, for history was too complex:
Their preference must be for generalizations which are not formulated but merely implied. They would imply the existence of underlying social laws by showing how a seemingly concrete phenomenon is shaped by the actions of general forces; they could make a unique phenomenon reflect the laws of society by presenting it as a microcosm — a particle of a universe and of a flow of events much wider than itself (Postan 1968a: 63).
Postan’s credo is still one that most Cambridge economic historians could accept.
He was highly critical of the harm caused by abstract economics. In 1968, he lay some of the blame for Britain’s economic problems on a ‘plague of economists’ whose sophisticated theories were out of touch with real economic situations. The macroeconomic Keynesian approach to demand, savings, investment, labour, and prices was detached from local and specific circumstances, lacking a microeconomic concern with individual firms and people.
The result was policy driven by aggregate concerns, whereas the real problems were ‘not general, not organic, but local, and not always purely economic’ (Postan 1968b: 83). He looked to specific failings in individual sectors, in management, design, or sales, which were not helped by general solutions: his model was the French planning system. In particular, he criticised the misleading approach of dividing the economy into primary, secondary, and tertiary sectors, with the assumption that growth came with the transfer of labour from the primary to secondary sector, and that the growth of services was harmful. In his view, the argument rested on a poor understanding of the Industrial Revolution which led to the ‘Economist-Communist’ route (ibid.: 88) of industrialisation in the Soviet Union and India, with a waste of capital on over-ambitious, capital-intensive projects that did nothing to relieve poverty. He was scathing about the ideas of Nicholas Kaldor that led to the Selective Employment Tax designed to move labour from services into manufacturing. Postan pointed out that grouping all services together was ‘to be guilty of the worse crimes of irrelevant classification’ (ibid.: 89). Some services had low productivity; others made a greater contribution to trade balances and productivity than manufacturing. What was needed from economists was ‘a larger dose of micro-economic understanding, i.e. with ideas about the influences affecting the individual factors of production, labour capital and management, or the factors shaping the structure and behaviour of individual industries and firms’ (Postan 1968c: 93).
Amongst the first pupils to fall under the spell of Postan was Hrothgar John Habakkuk who read history at Cambridge between 1933 and 1936. Clapham suggested that he should carry out research on the industrial history of his native South Wales, but Habakkuk was more enthusiastic about Postan’s suggestion that he turn to estate records in order to understand the gentry in the eighteenth century—a chronological continuation of the study of agrarian society that Postan was carrying out for the Middle Ages. He started from the question of why England developed a distinctive tenurial system of aristocratic landowners, tenant farmers, and landless labourers at the expense of the gentry and freehold peasants. Like Postan, he was concerned with the impact of economic change on different levels of agrarian society. He found the answer in the legal system of marriage settlements which allowed aristocratic families in the eighteenth century to concentrate wealth in favour of the male heir at the expense of the younger sons and daughters. Marriages were dynastic and patriarchal rather than affectionate, and were the most important factor in the rise of great estates (Habakkuk 1940, 1950). Habakkuk’s own views changed and many subsequent works modified this picture.
In 1938, Habakkuk was elected to a Fellowship at Pembroke College. He left Cambridge for war service at Bletchley Park (1940-1942) and then to assist in drafting papers on international financial negotiations leading to Bretton Woods. He returned to Pembroke in 1946, and ran a course with Postan on the development of the British economy between 1886 and 1938. In 1950, he moved to the Professorship of Economic History at Oxford and soon thought that the subject had moved in directions he could not understand as a result of the rise of ‘cliometrics’ (Thompson 2006). The application of econometric analysis to the past was a challenge to economic historians in Britain. In many universities, separate departments were closed and posts lost. Cambridge was different, for economic history was taught within both the Faculty of History and the Faculty of Economics, and it continued to flourish in part through the continuation of Postan’s focus on the relationship between population and resources rather than the use of econometrics.
Here was the central concern of E.A. Wrigley who was, like Postan, a Fellow of Peterhouse, and like him a proponent of a Malthusian approach to economic history. Wrigley brought another intellectual strand into economic history, for he studied both history and geography as an undergraduate at Cambridge, and then wrote a doctoral thesis on the coal belt of north-west Europe during the Industrial Revolution. Wrigley was a Lecturer in geography at Cambridge between 1958 and 1974, and that department had a considerable role in teaching economic history. A major figure was Henry Clifford Darby, whose books on the medieval fens and on the drainage of the fens showed the links between geography and history. Clapham was a strong influence on Darby, encouraging him to produce An Historical Geography of England before AD 1800 (1936). After he moved to Liverpool in 1945, historical geography continued to flourish at Cambridge with scholars such as Alan Baker. Graduate students in the department made a major contribution to economic history—such as the cohort in the early 1970s of Bruce Campbell (who argued that the pressures on rural society prior to the Black Death arose from the generosity of landlords allowing tenants to have access to land through subdivision), Richard Smith (who analysed medieval English peasant inheritance practices and their impact on social and kinship networks), and Mark Overton on the agricultural revolution (Williams 2004). The approach was quantitative but not econometric, based on a firm grasp of regional characteristics of landscape, farming systems, and demographic regimes, and the connection between people and resources.
The debate over the growth of population had long been a subject of contention. Population collapsed in the fourteenth century. At what point did it regain and surpass earlier levels? Also, why did population recover? Conventional wisdom pointed to a drop in the death rate as a result of better nutrition and living conditions, or a decline in diseases such as smallpox. Here was the central concern of Wrigley. Careful analysis of demographic systems in relation to changing social structures was one of the highlights of Cambridge economic history, following in the steps of Postan’s analysis of rural demographic structures, tenurial systems, and use of resources. Of course, an estimate of the total population of the country was essential for a calculation of long-run trends in British economic growth—a task that started with the compilation of national income statistics in the Department of Applied Economics after the Second World War (as explained in other chapters). The data produced by Charles Feinstein for the period after 1855 became a benchmark for modern economic historians (Feinstein 1972), but there were greater difficulties for the earlier period. In 1962, Phyllis Deane and Max Cole produced the first estimates of British economic growth going back to 1688 (Deane and Cole 1962), a pioneering enterprise that was obviously tentative, not least because of uncertainties about the level of population before the first census of 1801. Here was the task for Wrigley and his colleagues.
