History and Economic History

The work of CAMPOP has been of great importance in the interpretation of English economic history, but is not without its critics, even in Cambridge. John Hatcher, a medieval economic historian, criticises CAMPOP’s approach as ‘robotic’, operating in a manner that is ‘simple, predictable and linear, rather than complex, volatile and non-linear’. In his view, the Group pared down the ‘elemental simplicity’ of Malthus’s ‘sparse propositions’. Hatcher proposed a more complicated picture in which forces were ‘manifold, complex and variable rather than singular, simple and mechanistic’. He suggests that the low- pressure regime did not apply in the mid- and late sixteenth century, and that mortality was dominant between 1691 and 1751. He criticised CAMPOP’s model as closed: the rate of population growth influenced real wages, and real wages then determined nuptiality, fertility, and the rate of population growth. He also pointed out that their analysis covered less than two cycles of population growth, so the extent to which there was a low-pressure regime over a longer period is not clear (Hatcher 2003: 85, 87-89). Similar complaints have been made about CAMPOP’s view of the old Poor Law as an integral element of the nuclear household system that facilitated economic growth. Was it really so inclusive, with a general acceptance that supporting the elderly of other families was a sensible strategy to ensure one’s own care in old age?

Many economic historians in Cambridge accept the limitations of the Group’s approach but build on it to produce a more nuanced picture. One shortcoming was the lack of sufficient attention to the internal dynamics of households and how decisions were reached. Wrigley and Schofield assumed that the interests of men, women, and children were symmetrical and the outcomes were in the best interests of the household as a whole. Economic historians in the Faculty of Economics have been more sensitive to these issues, above all Sara Horrell and Jane Humphries (a member of the Faculty prior to her move to Oxford). They point to the gendered changes in households as families ceased to be the most significant unit of production and became more dependent on male breadwinners. The number of dependants changed, as did non-wage inputs such as common rights exploited by women. There were major shifts in the ability of women and children to earn. For example, in factory districts, more children went to work at a younger age, their relative wages rose, and they could leave home, so that younger children made a more modest contribution to the household. Further, the allocation of resources within households dependent on a male breadwinner varied according to the availability of female waged labour (Horrell and Oxley 1999, 2012; Humphries

1990; Horrell and Humphries 1995a, b). This interest in the employment of women and children has also been pursued by Craig Muldrew for an earlier period. He argues that employment of women and children increased from the late seventeenth century, providing sufficient income for a woman to support herself and not marry—a possible explanation for the low rate of nuptiality. The changing level of female employment was possibly more important than changes in male earnings, and a bottleneck in labour supply could then lead to mechanisation and hardship (Muldrew 2011a).

Other work refers back to the concerns of Postan on credit. Chris Briggs suggests that debt in fourteenth-century villages was not, as in Postan’s account, a sign of a Malthusian crisis of over-population and harvest failure leading to borrowing to buy food and pay rent. Rather, it was a sign of commercialisation, with ‘horizontal’ loans between middling and upper peasants (Briggs 2009: 8, 10, 146, 216—218). Another project at CAMPOP, led by Smith, considered the role of private law in medieval village society, arguing that even unfree serfs could use the civil courts to defend private property rights, predating the emergence of modern democracies. Such a view has important implications for the claim of new institutional economists that economic growth was the result of secure property rights after 1688 (CAMPOP undated).

A concern for credit was extended to the early modern period, above all in the work of Keith Wrightson who initially wrote on household formation. Subsequently, he and his students stressed the emergence of a new form of market society that changed the nature of human relationships. Economic practices were embedded in social relationships and cultural meanings. Initially, households were connected with the local community through neighbourliness and personal, mutual obligation. This system was tested in the sixteenth century by rising prices and population, and in the seventeenth by falling prices and population. Landed society became more differentiated; the development of rural industry and urban trade created a larger ‘middling sort’ and more people became landless labourers. Traditional social morality was reworked, with the state encouraging a commercial economy and ‘improvement’ while also preventing the pursuit of self-interest at the expense of the public good by providing poor relief and maintaining employment (Wrightson 2000).

Wrightsons approach has been pursued by Muldrew’s analysis of how expanding market relations affected households in early modern England. As chains of credit became longer, personal reputation for honesty and reliability became less secure, and there were greater risks of default with a surge in litigation to secure payment. This shift from personal reputation was central to contemporary writings on social relations, and one reaction was their definition in terms of contractual equality, as by John Locke. The market was not just an abstraction, a means of exchanging goods based on individual desire or selfinterest: it was about the ‘complex motivations and practices of agents acting out relationships of economic exchange—together with an understanding of how they themselves interpreted such actions’. Such an approach ‘can produce a much more subtle and complex economic history’ (Muldrew 1998: 8, 10). The rapid decline in litigation in England from the early eighteenth century rested on a shift from personal trust to a more impersonal trust in systems—in monetary systems, banks, government, or in accounting standards. Muldrew’s ambition was to link the approach of CAMPOP, with its concern for households, with the Cambridge school of contextual intellectual history, which considered one text in the light of its interaction with other texts in the past or at the time. Muldrew went a stage further by considering the context of the market and social relations with which writers were interacting (Muldrew 1993, 1998).

Muldrew has also extended Wrigleys interest in energy inputs into the economy by considering the diet of agricultural labourers during the organic economy from the middle of the sixteenth century to 1780. He argues that English agricultural labourers could work harder because they were better fed than previously assumed, with a higher consumption of bread, beer and meat than in the rest of Europe, in particular after 1650. Further, these were years of low population growth which meant that it was possible to use income to build up capital rather than spending it on food. Once again, Muldrew shows how these concerns informed contemporary debates and provided a central theme of Adam Smith. Traditionally, low wages were assumed to be needed to drive idle labourers to work longer hours. Smith disagreed, arguing that prosperity arose from workers’ productivity and consumption. Smith believed that labourers were active savers of capital and consumers of the products they produced, so that a virtuous circle of rising production and ‘public opulence’ was created by the labouring poor rather than colonies. In Smith’s analysis, free markets were designed to benefit small producers and labourers who were disadvantaged by regulations. Muldrew argues that Smith’s analysis reflected economic reality, for labourers accumulated capital for investment and savings for consumption during the period of stable population from 1650 to 1760. Although rising population created problems later in the eighteenth century, sufficient capital had been accumulated and financial institutions developed in order to maintain investment, consumption and growth (Muldrew 2011b, c, 2013). Muldrew made a compelling move, bringing together two highly fertile and distinctive areas of work in the Faculty of History—the structural analysis of CAMPOP and the history of thought—in order to create a distinctive form of economic history.

The intellectual and ideological context of economic relations was a major theme of the Centre for History and Economics set up in 1991 and now working jointly with Harvard University. The Centre has been concerned with the large-scale political, economic, and cultural systems of the Atlantic, south-east Asia, and Indian Ocean, and with the history of political and economic thought in the context of economic, religious, and legal history. Such an approach brought together historians of thought such as Gareth Stedman Jones and Emma Rothschild with historians of empire such as Chris Bayly.^[1] One outstanding example of the approach is Rothschild’s book on Smith, Condorcet and the Enlightenment in which she showed how ‘Economic thought was intertwined with political, philosophical, and religious reflection. The life of cold and rational calculation was intertwined with the life of sentiment and imagination’ (Rothschild 2001: 1). The Centre also continues Wrigley’s interest in energy. The project on ecology, economy, and society between 1500 and 2000 considers flows in natural and processed resources, and their place in the economic and political thought of Europe. Much of this initiative is based at Harvard, with Paul Warde taking a lead in Cambridge with his interest in long-term trends in energy consumption in England and Europe. His initial work considered the growth of government in early modern Germany through the uses of wood, a fundamental material resource in pre-industrial society. A dilemma emerged in the responses to environmental and ecological challenges: institutions designed to prevent local conflict over scarce resources were not easily adapted to optimise the management of those resources (Warde 2007, 2010; Kander et al. 2015).^[2]

This concern for the nature of institutions and how they handled exploitation of resources or the risks of trade has become a major theme in both economics and economic history, above all as a result of the work of new institutional economists. Many economic historians see in this work the dangers of generalisation that Postan warned against and prefer to consider the concrete without losing sight of general processes. One of the leading critics of the new institutionalists is Shelagh Ogilvie, an economic historian in the Faculty of Economics at Cambridge whose approach rests on close archival work on particular episodes allied to a deep appreciation of wider processes. She has analysed the way in which guilds shaped economic development. Some scholars see them as beneficial social capital: by generating sociability and trust, they mitigated the risk of trade by establishing norms of behaviour.

They are also seen as sources of efficiency that overcame various economic problems of state extortion, commercial insecurity, contract enforcement, principal-agent relations, imperfect information, and economic volatility, so fostering the medieval commercial revolution. On this view, ‘whatever is, is right’ (Ogilvie 2007). Ogilvie took a more sceptical view: social capital could exclude outsiders, and institutions are about distribution as well as efficiency.

Guilds might in some places and times assist economic growth, but most secured rents for their members, part of which they transferred to political elites in return for the legal privileges that enabled guilds to extract rents. Hence, guilds did not arise to deal with market failures but to ‘serve the distributional interests of powerful groups’ (Ogilvie 2014: 187). They survived because the considerable costs of lower growth were spread over large numbers of potential entrants, consumers, and workers; the benefits were minimal, but concentrated in a small group of members and political elites. In Ogilvie’s view, ‘the Commercial Revolutions of medieval and early modern Europe took place despite the social capital generated by merchant guilds’ (Ogilvie 2011: 17). Growth needed generalised institutions that facilitated transactions and secured property rights impartially between all members of society. Ogilvie points out that there were always some areas, such as the Champagne fairs, with generalised rather than particularised institutions. However, the process could go into reverse, for the generalised public institutions of Champagne shifted to a more particularised system that constrained particular classes of merchants, so leading trade to shift to other centres with generalised institutional services. The shift in some countries to a more generalised pattern arose from representative institutions constraining how rulers granted privileges. Nevertheless, strong parliaments did not necessarily lead to growth for the whole economy, for large landowners and merchants might impose policies for their own interests. More significant was the growth of a more diversified urban system in which competing towns limited the ability to secure privileges, and the way in which people came to be wealth holders and hence the policies they wished to adopt (Edwards and Ogilvie 2012; Ogilvie and Carus 2014). Ogilvie is pursuing Postan’s approach of microcosmic history—a concern for the concrete and real without losing sight of the general.

CAMPOP’s approach to the development of the English economy was largely internal, with little concern for trade, imperialism, and international migration, all of which were significant in reducing pressure on available resources. Migration to the colonies held down population growth at home; and the import of colonial commodities such as cotton, sugar, tea, and coffee from North America and Asia added more ‘shadow’ acres. Of course, many of these crops entailed the use of slavery. Economic interests in these commodities were also connected with the nature of economic policy on the lines discussed by Ogilvie: Were the chartered companies such as the East India Company rent-seeking, particularised institutions, and, if so, how did generalised institutions emerge? These questions have been considered by imperial historians who are interested in the interconnection between British traders and settlers and indigenous economies, and in the ways in which domestic economic interests shape policy.

Imperial historians in Cambridge developed two concepts that have been central to debates in economic history. One was the notion of informal or free trade imperialism developed by John Gallagher and Ronald Robinson which argued that the expansion of formal empire from the 1880s rested on the mid-Victorian informal empire based on the principles of free trade and capital exports (Gallagher and Robinson 1953). The second was the notion of ‘gentlemanly capitalism’ proposed by A.G. Hopkins, an economic historian of Africa who was appointed to the Smuts Professorship of Commonwealth History at Cambridge, in conjunction with Peter Cain. In Hopkins’ view, landed aristocrats and financiers dominated economic policy at the expense of industrial capital—a view that is not universally accepted (Cain and Hopkins 1986, 1987; for a critique, see Daunton 1989). Nevertheless, he did point to a major issue: How did economic interests at home form alliances to shape policy and restructure institutions? These connections between imperial and economic history, between domestic and external economics and politics, are of growing interest.

The interest in free trade imperialism and gentlemanly capitalism has links with another approach which is again not well represented in CAMPOP’s concern with the response of households to economic signals. How do businesses function and make decisions? A number of economic historians in Cambridge have written business history which shows how entrepreneurs respond to market opportunities, how they manage their firms and respond to or shape economic policy. The pioneer was Charles Wilson whose initial graduate work was on Anglo-Dutch finance and commerce in the eighteenth century. This research led in two directions. One was to a major reinterpretation of mercantilism, not as some abstract entity with a fetish for bullion, but as a response to actual problems facing politicians (Wilson 1949, 1957a). Wilson understood how merchants and politicians thought—but he was less interested in economic and social structures, and he was hostile to ‘sociologised history... which is less concerned with individuals and more with men as members of social groups’ (Wilson 1959: 100). In Wilson’s view, personal ambitions and character were more important than economics: ‘[A]s so often in history what looks like economic interests powerful enough to swing politics in their wake turn out in reality to be a puny thing, politically vulnerable to the slings and arrows of outrageous politics’ (Wilson 1970: 17). Not surprisingly, Wilson was appointed to the Professorship of Modern History at Cambridge in 1964 rather than waiting for the Chair in Economic History on Postan’s retirement (Mathias 2000: 561-565, 567-569). His attitude was apparent in the second major strand of work. His expertise in Anglo-Dutch history led to an invitation to write the history of Unilever, the first professional economic history of a major multinational firm, and one that had extensive imperial connections such as palm oil plantations in West Africa. The book had an underlying philosophy with political resonance: the need to celebrate ‘great entrepreneurs whose genius helped to provide...abundance’. Growth was not a natural process but rested on ‘human intelligence, human character, ingenuity and enterprise’ (Wilson 1954, volume 1: ix-x; italics in original). Wilson went on to write other business histories that celebrated businessmen but paid little attention to productivity growth, profitability, investment and return on capital, management, and organisation. His main interest was the importance of ‘a sense of market opportunity combined with the capacity needed to exploit it’ (Wilson 1957b: 103)—a theme that he brought out in his study of the so-called great depression of the later nineteenth century where he saw opportunities for businessmen to exploit the market for consumer goods for an expanding domestic market (Wilson 1954, 1957b, 1965, 1968; see also Mathias 2000: 556-560).

This theme was pursued by Neil McKendrick in his study of the marketing strategies of Josiah Wedgwood (McKendrick 1960). Clive Trebilcock considered Vickers Brothers who were major producers of steel for the merchant marine as well as armaments that provided the basis for British naval and military supremacy; he went on to write a history of an insurance company, an important way of mitigating risk through impersonal trust, and an example of the type of investment that worried Postan (Trebilcock 1977, 1985, 1999). The Professorship of Economic History went to people who worked more in this vein—to David Joslin (1966-1970) whose major book was a history of the Bank of London and South America, to Donald Coleman (1971-1981) who wrote a business history of Courtaulds and Barry Supple (1981-1994) who wrote about business history but was deeply interested in the relationship between economic thinking and events, both in relation to trade in the seventeenth century, the insurance industry and the regulation of thrift in the nineteenth century, and the coal industry in the twentieth century (Mathias 2004; Coleman 1969; Supple 1959, 1970, 1987; Furner and Supple 1990).^[3] None of these holders were close to CAMPOP or to the approach of Postan—a pattern broken by the appointment of Wrigley.

Between 1997 and 2014, I held the Chair of Economic History and pursued a somewhat eclectic approach which brought together several of the strands mentioned above. One concern has been the changing boundaries of the market in modern Britain. A major focus has been on taxation and collective spending, understanding how levels of public spending and debt changed over time, and how a sense of legitimacy or trust was created to secure consent from taxpayers. Why has insurance against social risks shifted over time between market, charitable and public spending, and between local and central government? Why did Britain so rapidly adopt public housing after the First World War, and then move so swiftly to sell social housing in the 1980s? Why were utilities regulated, then handed to municipal or state ownership and then privatised? How were the externalities of pollution treated? An answer to these questions requires an appreciation of changing economic structures and of politics—and an appreciation that ‘interests’ are not preordained but shaped by political rhetoric and culture. Politicians and officials faced difficult choices in how to respond to economic problems, and might reach a politically contingent solution—but that solution created an institutional pattern that shaped subsequent options. Hence, the welfare reforms of Edwardian Britain utilised the administrative capacity and knowledge of trade unions and friendly societies created by working people to mitigate the risks of industrial society. These structures could influence the adoption of different policies and the reception of economic ideas, whether it be Keynes and public works in the 1930s or monetarism in the 1970s and 1980s. Further, there was an interplay between domestic and international economic policies, whether to adopt fixed exchange rates under the gold standard or allow the currency to float, to pursue free trade or protectionism, or allow free capital movements. What shaped the outcomes in Britain and in other countries, and how credible were commitments to international policies designed to mitigate the risks of globalisation? (Daunton 1983, 1985, 2001, 2008).^[4]

• [1] See http://www.histecon.magd.cam.ac.uk/research/hex/objective.htm.
• [2] See also http://www.histecon.magd.cam.ac.uk/ees/index.html and http://www.fas.harvard.edu/-histecon/energyhistory/index.html.
• [3] For Barry Supple, see also the interview at https://www.repository.cam.ac.uk/handle/1810/229662.
• [4] See also the interviews at http://www.history.ac.uk/makinghistory/resources/interviews/Daunton_Martin.html and http://www.sms.cam.ac.uk/media/1587173?format=mpeg4&quality=360p.