Investment in Fixed and Working Capital During Early Industrialization: Evidence From U.S. Manufacturing Firms

This paper utilizes a survey of the US manufacturing firms from 1832 to investigate the structure of manufacturing investment during early industrialization. Although several manufacturing industries, such as cotton textiles, depart from the pattern, most appear to have devoted the hulk of their investments to working capitaL This variation across industries in the composition of capital investmentsis indicative of a more general variation in factor intensities, and bears on the issues of why industries became concentrated in the regions they did, and the degrees to which they were adversely affected by the limited availability of long-term loans. Evidence that most manufacturing industries had quite modest investments in machinery and tools per unit of labor is also presented, serving to undercut the notion that the early period of industrialization was based on a proliferation of new, machinery-intensive technologies

The Heights of Americans in Three Centuries: Some Economic and Demographic Implications

This paper discusses the potential usefulness of anthropometric measurements in exploring the contributions of nutrition to American economic growth and demographic change. It argues that although the value of height-by-age data to economic historians will ultimately be resolved in the context of investigating specific issues, the early results of the NBER Projecton Long-term Trends in Nutrition, Labor Productivity, and Labor Welfare have been encouraging. Among the most significant findings to date are: (1)that by the time of the Revolution, Americans had attained a mean final height (and net nutritional status) that was very high, one that European populations did not generally reach until the twentieth century; (2) that the variation in stature across occupational classes was much less in the U.S. than in Europe; (3) that natives of the South have been taller than those from other regions of the U.S. since the middle of the eighteenth century, and that their absolute height increased during the antebellum period while mortality was declining there; and (4) that natives of large antebellum cities were much shorter than their country men born in rural areas or in small cities. The paper also examines, in a preliminary fashion, how a newly available data set bears on the hypothesis that a cycle in U.S. final heights began during the antebellum period. The theory might continue to be sustained, but a sample of U.S. Army recruits from 1850 to1855 does not seem to provide much support for it.

Was the Transition from the Artisanal Shop to the Non-Mechanized Fctry Assoc. w/Gains in Effcny?: Evdnc. from the U.S. Mnfctr. Censuses of 1820 & 1850

There are few more dramatic episodes in economic history than the displacement of the artisanal shop by the factory during the early stages of the Industrial Revolution as the predominant form of manufacturing organization. Despite the attention this development has received, however, the issues of why and how it occurred remain in dispute. This paper employs recently-collected samples of data on northeastern firms from the 1820 and 1850 Federal Census of Manufactures to investigate this transition in the U.S. context. It argues that the evidence is consistent with the hypothesis that even the early non-mechanized factories enjoyed an efficiency advantage over the traditional artisanal shop organization. The growth of average firm size in nearly all manufacturing industries between 1820 and 1850 indicates a systematic movement toward the factory organizational form. Some shops did survive, but they accounted for only modest shares of industry value added and become increasingly concentrated in areas where the extent of the market was less likely to justify firm expansion. Moreover, the estimation of production functions suggests that the non-mechanized industries were generally characterized by scale economies up to a threshold size similar to that of a small factory.

Manufacturing Where Agriculture Predominates: Evidence from the South and Midwest in 1860

We employ the 1860 Census of Manufactures to study rural antebellum manufacturing in the South and Midwest, and find that manufacturing output per capita was similar across regions in counties specialized in the same agricultural products. The southern deficit in manufactures per capita appears to have been largely attributable to the very low levels of output in counties specialized in cotton production. This implies that it was the South's capabilities for the highly profitable cotton production, not the existence of slavery per se, that was responsible for the region's limited industrial development -- at least in rural areas. The other major finding is that in both the South and the Midwest measured total factor productivity was significantly lower in counties specialized in wheat (the most seasonal of agricultural products as regards labor requirements). This is consistent with suggestions that agricultural districts where the predominant crops were highly seasonal in their requirements for labor were well suited to support manufacturing enterprise during the offpeak periods

Colonialism, Inequality, and Long-Run Paths of Development

Over the last few years, colonialism, especially as pursued by Europeans, has enjoyed a revival in interest among both scholars and the general public. Although a number of new accounts cast colonial empires in a more favorable light than has generally been customary, others contend that colonial powers often leveraged their imbalance in power to impose institutional arrangements on the colonies that were adverse to long-term development. We argue here, however, that one of the most fundamental impacts of European colonization may have been in altering the composition of the populations in the areas colonized. The efforts of the Europeans often involved implanting ongoing communities who were greatly advantaged over natives in terms of human capital and legal status. Because the paths of institutional development were sensitive to the incidence of extreme inequality which resulted, their activity had long lingering effects. More study is needed to identify all of the mechanisms at work, but the evidence from the colonies in the Americas suggests that it was those that began with extreme inequality and population heterogeneity that came to exhibit persistence over time in evolving institutions that restricted access to economic opportunities and generated lower rates of public investment in schools and other infrastructure considered conducive to growth. These patterns may help to explain why a great many societies with legacies as colonies with extreme inequality have suffered from poor development experiences.

The Evolution of Suffrage Institutions in the New World

Most analysis of how the distribution of political power affects the patterns of growth has been confined to the late-twentieth century. One problem associated with a focus on the modern record is that processes that take place over the long run are not examined. We may all agree that institutions concerned with the distribution of political power have an impact on growth, but our interpretation of the relationship will vary with our understanding of where institutions come from: to what degree are institutions exogenous, and to what degree are they endogenous. This paper contributes to our knowledge of where institutions have come from by examining how the rules governing the extension of suffrage, a key measure of the distribution of political influence, evolved over time within the United States and across the societies of the Americas. We have previously argued that there was enormous variation in the initial extent of inequality across the New World colonial societies established by the Europeans because of differences in their factor endowments present early in their histories. Moreover, these initial differences in inequality may have persisted over time if they affected the ability of elites to obtain disproportionate political leverage, and to shape legal frameworks and state policies to advantage themselves relative to others in terms of access to economic and other opportunities. In this paper, we show that the early patterns of the extension of the franchise, the proportions of the respective populations voting, and other aspects of the conduct of elections are indeed generally consistent with the notion that the extent of initial inequality and population heterogeneity was associated across societies -- even within the United States -- with the nature of the political institutions that evolved. Specifically, where there was greater inequality, the proportion of the population that had the right to vote was generally lower, and the timing of the extensions of this right from elite groups to a broad population generally later, than in areas where there was relative homogeneity in the population.

Institutional and Non-Institutional Explanations of Economic Differences

Although we cannot conceive of processes of economic growth that do not involve institutional change, in this essay we outline some reasons why one should be cautious about grounding a theory of growth on institutions. We emphasize how very different institutional structures have often been found to be reasonable substitutes for each other, both in dissimilar as well as similar contexts. The historical record, therefore, does not seem to support the notion that any particular institution, narrowly defined, is indispensable for growth. Moreover, we discuss how the evidence that there are systematic patterns to the ways institutions evolve undercuts the idea that exogenous change in institutions is what powers growth. Institutions matter, but our thinking of how they matter should recognize that they are profoundly influenced by the political and economic environment, and that if any aspect of institutions is crucial for growth, it is that institutions change over time as circumstances change.

Factor Endowments, Inequality, and Paths of Development Among New World Economics

Whereas traditional explanations of differences in long-run paths of development across the Americas generally point to the significance of differences in national heritage or religion, we highlight the relevance of stark contrasts in the degree of inequality in wealth, human capital, and political power in accounting for how fundamental economic institutions evolved over time. We argue, moreover, that the roots of these disparities in the extent of inequality lay in differences in the initial factor endowments (dating back to the era of European colonization). We document -- through comparative studies of suffrage, public land, and schooling policies -- systematic patterns by which societies in the Americas that began with more extreme inequality or heterogeneity in the population were more likely to develop institutional structures that greatly advantaged members of elite classes (and disadvantaging the bulk of the population) by providing them with more political influence and access to economic opportunities. The clear implication is that institutions should not be presumed to be exogenous; economists need to learn more about where they come from to understand their relation to economic development. Our findings not only contribute to our knowledge of why extreme differences in the extent of inequality across New World economies have persisted for centuries, but also to the study of processes of long-run economic growth past and present.