Research in Economic History: Volume 23

This volume of Research in Economic History (REH) includes eight papers, five of which were submitted and evaluated through our regular channels. An additional three were solicited from among those presented at the conference “Toward a Global History of Prices and Wages,” held in Utrecht in August of 2004. Because of the emphasis of these papers on data and the relevance of their findings for our understanding of long-run economic growth and development in different parts of the world, we encouraged a number of authors from this conference to submit their work to REH. Associate editor Gregory Clark took responsibility for soliciting, refereeing, selecting, and editing the submissions. We anticipate publishing up to three more of these in the next volume, enriching both REH and our understanding of economic history.

This paper is about how a command system allocated resources under profound uncertainty. The command system was the Soviet economy, the period was Stalin's dictatorship, and the resources were designated for military research & development. The context was formed by the limits of the existing aviation propulsion technology, the need to replace it with another, and uncertainty as to how to do so. We observe the formation of a quasi-market in which rival agents proposed projects and competed for funding to carry them out. We find rivalry and rent seeking, imperfectly regulated by principals. As rent seeking spread and uncertainty was reduced, the quasi-market was closed down and replaced by strict hierarchical allocation and monitoring. In theory, a dictator cannot commit to refrain from taxing the returns from today's effort tomorrow; therefore, we expect agents in a command system to seek only short-term returns from quasi-market activity. Agents’ willingness to invest in the Soviet quasi-market for inventions is ascribed to a reputation mechanism that enforced long-run returns.

During the early development of the telegraph industry, the network consisted of many interconnected firms that were often local monopolists. This market structure gave firms an incentive to supply a lower quality of service and charge a higher price than an integrated monopolist. Telegraph entrepreneurs attempted to contract with each other in order to provide better quality service throughout the network. However, the high costs of monitoring and enforcing these agreements made them untenable and ultimately contributed to the integration of the industry.

This paper presents the first estimates of Spanish infrastructure stock and investment for the period 1845–1935. Several sources and techniques have been used in the estimation, and the new series are reasonably reliable to the standards of historical statistics. Two distinct periods may be distinguished in the series: the years before 1895 (characterized by the prominence of railroads) and the period 1895–1935 (when most investment was addressed to other assets). The new series allow a preliminary comparison of the Spanish infrastructure endowment with that of the most advanced countries, showing a gradual process of convergence before 1936.

Based on empirical patterns of annual earnings and saving from new micro-data covering a large sample of American workers around a hundred years ago, we develop a model for simulating the cross-section distribution of wealth at the turn of the twentieth century. Our methodology allows for a direct comparison with the wealth distribution from a sample of families in a comparable part of the contemporary income distribution. Our primary finding is that patterns of wealth accumulation among American workers at the turn of the century bear a striking resemblance to contemporary profiles.

Prior to widespread social insurance, European governments experimented with a variety of programs to protect workers from income loss due to illness. This paper examines the consequences for worker absenteeism of making sickness insurance coverage voluntary or compulsory. Medical benefits appear to have reduced absenteeism for all workers. The effect of paid sick leave depended on insurance fund membership status. Better-paid workers found it easier to take time off in compulsory than in voluntary funds. Distinctive information problems plagued voluntary systems, and eventually were resolved by rejecting the voluntary ideal and forcing all workers into a single risk pool.

This study examines the long-term trends in wages of skilled and unskilled construction workers in Constantinople-Istanbul, and to a lesser extent in other urban centers in the Near East and the Balkans from about 1100 until the present. It also compares long-term trends in eastern Mediterranean wages with those elsewhere in Europe. Two events had significant and long-lasting impacts on urban real wages around the eastern Mediterranean during the last millennium: the Black Death and modern economic growth. The available price and wage data also point to the existence of a gap in urban real wages between northwestern Europe and the eastern Mediterranean during the first half of the sixteenth century.

Constructing consumption baskets for the benchmark periods 1745–1754 and 1882–1886, and price indices, we calculate real wages for Japanese unskilled daily laborers in 1741–1913. Matching caloric content and protein contents in our Japanese consumption baskets with those for Europe, we compare Japanese and European urban real wages. Real wages in Kyoto and later Tokyo are about a third London wages but comparable to wages in major Southern and Central European cities for 1700–1900. In Japan, wages are substantially higher in the Meiji period than in the Tokugawa period. These findings have implications for the debate on conditions in Europe and Asia on the eve of the Industrial Revolution.

We provide new measures of relative UK and US GDP per capita and output per worker for the crucial years between 1830 and 1870. Our estimates are current price comparisons that compare expenditure on GDP for five benchmark years using new price data. They show that the US leads in income per capita and output per worker compared to Great Britain and the United Kingdom. We check our estimates against sectoral productivity data and real wages.