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The population base in both the United States and Japan is growing older and, as those populations age, they provoke heretofore unexamined economic consequences. This comparative volume, the third in the joint series offered by the National Bureau of Economic Research and the Japan Center for Economic Research, explores those consequences, drawing specific attention to four key areas: incentives for early retirement; savings, wealth, and asset allocation over the life cycle; health care and health care reform; and population projections. Given the undeniable global importance of the Japanese and U.S. economies, these chapters shed light on the complex correlations between aging and economic behavior. This work not only deepens our understanding of the Japanese and American economic landscapes but, through careful examination of the comparative social and economic data, clarifies the complex relation between aging societies, public policies, and economic outcomes.

Though the U.S. Constitution granted it the power to create a bankruptcy law, Congress did not pass the first permanent bankruptcy law until 1898. Bankruptcies rose from about one per 10,000 people annually in the first decades of the twentieth century to about one per 300 people at the turn of the twenty-first century. Bankrupt in America explains how bankruptcy evolved from an option that Congress seldom used, to an indispensable tool for businesses, to a central element of the social safety net for households, all in the span of a century. The analytical narrative unites the history of how Americans have used bankruptcy with the history of the bankruptcy law itself. The central argument is that bankruptcy law and bankruptcy rates interact over time. Bankruptcy is the last in a series of choices by debtors and creditors about borrowing, lending, repaying, and collecting debt. Changes in federal bankruptcy law, in state and federal law governing debtor-creditor relations, in local legal culture, and in the supply of credit influence the choices and lead to changes in how the bankruptcy law is used. Changes in how the bankruptcy law is used give rise to changes in beliefs and in interest groups, which in turn result in changes in the law. The interactions create an ongoing historical process of institutional change. The book traces the interactions over the twentieth century using a rich combination of statistics and documents, including recently digitized bankruptcy statistics and stories constructed from court case files.

A nation’s capital stock is widely recognized as a crucial determinant of the productivity of its workers and the standard of living of its citizens. Tracking the evolution of capital is therefore a critical input to economic history. Economist Robert E. Gallman (1926–98) gathered extensive data on US capital stock and created a legacy that has, until now, been difficult for researchers to access and appraise in its entirety. Gallman measured American capital stock from a range of perspectives, viewing it as the accumulation of income saved and invested, and as an input into the production process. He used the level and change in the capital stock as proxy measures for long-run economic performance. Analyzing data in this way from the end of the US colonial period to the turn of the twentieth century, Gallman provided a firm empirical foundation for our knowledge of the long nineteenth century—the period during which the United States began to experience per capita income growth and became a global economic leader. Gallman’s research was painstaking and his analysis meticulous, but he did not publish the material supporting his findings during his lifetime. Here Paul W. Rhode completes this project, giving permanence to a great economist’s insights and craftsmanship

Despite recent corporate scandals, the United States is among the world's least corrupt nations. But in the nineteenth century, the degree of fraud and corruption in America approached that of today's most corrupt developing nations, as municipal governments and robber barons alike found new ways to steal from taxpayers and swindle investors. This book explores this shadowy period of United States history in search of better methods to fight corruption worldwide today. The chapters address the measurement and consequences of fraud and corruption and the forces that ultimately led to their decline within the United States. The chapters show that various approaches to reducing corruption have met with success, such as deregulation, particularly “free banking,” in the 1830s. In the 1930s, corruption was kept in check when new federal bureaucracies replaced local administrations in doling out relief. Another deterrent to corruption was the independent press, which kept a watchful eye over government and business.

In the global marketplace of ideas, few realms spark as much conflict as religion. For millions of people, it is an integral part of everyday life, reflected by a widely divergent supply of practices and philosophical perspectives. Yet, historically, the marketplace has not always been competitive. While the early Common Era saw competition between Christianity, Judaism, and the many pagan cults, Roman Christianity came eventually to dominate Western Europe. Using basic concepts of economic theory, this book explains the origin and subsequent spread of Roman Christianity, showing first how the standard concepts of risk, cost, and benefit can account for the demand for religion. Then, drawing on the economics of networking, entrepreneurship, and industrial organization, it explains Christianity’s rapid ascent. Like a business, the church developed sound business strategies that increased its market share to a near monopoly in the medieval period. The book offers a look at the dynamics of Christianity’s rise, as well as how aspects of the church’s structure—developed over the first millennium—illuminate a number of critical problems faced by the church today.

This book is a collection of seven original research papers by leading scholars of American economic history. The papers engage a diverse but clearly related set of topics regarding the establishment and growth of various kinds of economic enterprises that were central to American economic development. Prominent themes include changes in business organization and governance, bank behavior and credit markets, and scale economies in nineteenth-century manufacturing and agricultural production. The volume does not attempt to review and synthesize the literature on all aspects of American economic enterprise. Rather, the papers together provide inter-connected accounts of how businesses, banks, and credit markets promoted the transformation and growth of the American economy, as seen through a lens that focuses on how such enterprises were organized and operated. Most of the papers feature analyses of new or under-utilized archival sources. The emphasis on “enterprise” reflects the view that understanding modern economic growth requires attention to the historical context in which individuals came together to form voluntary associations whose goal was to provide goods and services to markets and, in doing so, to earn profits. Contributors include Jeremy Atack, Howard Bodenhorn, William Collins, Mary Hansen, Eric Hilt, Matthew Jaremski, Naomi Lamoreaux, Robert Margo, Alan Olmstead, Claudia Rei, Paul Rhode, Peter Rousseau, and Eugene White.

The political decisions made by the founding fathers were crucial to the success of the early republic. But the economic decisions they made were just as pivotal, ensuring the general welfare and common defense of the United States for decades to come. This book explores these economic choices and their profound influence on American life, westward expansion, and influence abroad. Among the topics covered are finance, trade, and monetary and banking policy, with a focus on the factors guiding those policies and their end result.

As awareness of the process of globalization grows and the study of its effects becomes increasingly important to governments and businesses (as well as to a sizable opposition), the need for historical understanding also increases. Despite the importance of the topic, few attempts have been made to present a long-term economic analysis of the phenomenon, one that frames the issue by examining its place in the long history of international integration. This volume collects eleven chapters doing exactly that and more. The first group of chapter explores how the process of globalization can be measured in terms of the long-term integration of different markets—from the markets for goods and commodities to those for labor and capital, and from the sixteenth century to the present. The second set of contributions places this knowledge in a wider context, examining some of the trends and questions that have emerged as markets converge and diverge: the roles of technology and geography are both considered, along with the controversial issues of globalization's effects on inequality and social justice, and the roles of political institutions in responding to them. The final group of essays addresses the international financial systems that play such a large part in guiding the process of globalization, considering the influence of exchange rate regimes, financial development, financial crises, and the architecture of the international financial system itself.

This book examines the origins of California surface water law in the earliest years of statehood: the decade of the 1850’s. This decade was dominated by a key event in California history, the Gold Rush. The Gold Rush comprised a major exogenous shock to the California economy, resulting in tremendous economic and population growth within an extremely short period of time, along with significant structural changes to the economy. Importantly, the Gold Rush caused a dramatic increase in the demand for water, a key factor input into placer mining. The increased use of water led to a large number of disputes among miners over its use, which set into motion a series of changes in how water rights were defined and how disputes over water rights were to be resolved. The emergence of California water law was a complex process that contained both formal and informal elements. A key component of the picture was the creation of basic legal principles within a network of mining camps. Many of these principles were subsequently incorporated into the official system of water law as promulgated by the courts. This book examines legal developments that governed disputes in three key areas: diversions of water, water quality, and dam failures. The resulting principles were broadly consistent with attempts to maximize rents within local water basins, including the minimization of various components of transaction costs, including enforcement and measurement costs.

The American economy has provided a level of well-being that has consistently ranked at or near the top of the international ladder. A key source of this success has been widespread participation in political and economic processes. This book chronicles the significance of America's open-access society and the roles played by government in its unrivaled success story. America's democratic experiment, the book shows, allowed individuals and interest groups to shape the structure and policies of government, which, in turn, have fostered economic success and innovation by emphasizing private property rights, the rule of law, and protections of individual freedom. In response to new demands for infrastructure, America's federal structure hastened development by promoting the primacy of states, cities, and national governments. More recently, the economic reach of American government expanded dramatically as the populace accepted stronger limits on its economic freedoms in exchange for the increased security provided by regulation, an expanded welfare state, and a stronger national defense.

Relative to the other habited places on our planet, Hawai‘i has a very short history. The Hawaiian archipelago was the last major land area on the planet to be settled, with Polynesians making the long voyage just under a millennium ago. Our understanding of the social, political, and economic changes that have unfolded since has been limited until recently by how little we knew about the first five centuries of settlement. Building on new archaeological and historical research, this book considers the economic history of Hawai‘i from the first Polynesian settlements in the thirteenth century through US colonization and the formation of statehood to the present day. It shows how the political and economic institutions that emerged and evolved in Hawai‘i during its three centuries of global isolation allowed an economically and culturally rich society to emerge, flourish, and ultimately survive annexation and colonization by the United States. The story of a small, open economy struggling to adapt its institutions to changes in the global economy, Hawai‘i offers broadly instructive conclusions about economic evolution and development, political institutions, and native Hawaiian rights.

Friedrich A. Hayek is regarded as one of the preeminent economic theorists of the twentieth century, as much for his work outside of economics as for his work within it. During a career spanning several decades, he made contributions in fields as diverse as psychology, political philosophy, the history of ideas, and the methodology of the social sciences. This book offers us an intellectual biography of this pivotal social theorist. The book begins by providing the necessary background for understanding Hayek's thought, tracing the emergence, in fin-de-siècle Vienna, of the Austrian school of economics—a distinctive analysis forged in the midst of contending schools of thought. The second part of the book follows the path by which Hayek, beginning from the standard Austrian assumptions, gradually developed his unique perspective on not only economics but a broad range of social phenomena. The third part offers both an assessment of Hayek's arguments and, in an epilogue, an estimation of how Hayek's insights can help us to clarify and reexamine changes in the field of economics during the twentieth century. As Hayek's ideas matured, he became increasingly critical of developments within mainstream economics: his works grew increasingly contrarian and evolved in striking—and sometimes seemingly contradictory—ways. The book's analysis situates Hayek in a broader intellectual context, unpacking the often difficult turns in his thinking, and showing how his economic ideas came to inform his ideas on the other social sciences.

The twentieth century saw significant increases in both life expectancy and retirement rates—changes that have had dramatic impacts on nearly every aspect of society and the economy. Forecasting future trends in health and retirement rates, as we must do now, requires investigation of such long-term trends and their causes. To that end, this book draws on new data—an extensive longitudinal survey of Union Army veterans born between 1820 and 1850—to examine the factors that affected health and labor force participation in nineteenth-century America. Contributors consider the impacts of a variety of conditions—including social class, wealth, occupation, family, and community—on the morbidity and mortality of the group. The chapters investigate and address a number of special topics, including the influence of previous exposure to infectious disease, migration, and community factors such as lead in water mains. They also analyze the roles of income, health, and social class in retirement decisions, paying particular attention to the social context of disability. The book offers a clear view of the workings and complexities of life, death, and labor during the nineteenth century.

The central role played by housing in the “Great Recession” of 2007 leads to this question: “What was different this time?” This book is designed to bring historical perspective to the answers to this question. This volume begins with a brief account of the development of the housing and mortgage markets in the U.S. during the first half of the twentieth century and a historiography of the extraordinary burst of scholarship that analysed it. This important research was conducted under the auspices of the NBER between 1935 and 1960 and shaped both post-depression institutions and views of policy makers. Several essays treat the American boom and bust of the 1920s that was followed by extraordinary collapse of the 1930s. These studies yield new measures of the movement of housing prices, analyses of the factors behind the boom, and how the crashes led to further economic decline via disruption of financial institutions and markets and falls in consumer spending. One essay examines how failing financial institutions were liquidated in these troubled times, differing from approaches during the recent crisis. Studies of the evolution of mortgage securitization in Germany and the Netherlands yield insightful contrasts to the American experience. By offering a broad historical and international appreciation of housing and mortgage markets, this volume provides new information that should inform future policy debates.

This volume honors the contributions Claudia Goldin has made to scholarship and teaching in economic history and labor economics. The chapters address some closely integrated issues: the role of human capital in the long-term development of the American economy, trends in fertility and marriage, and women’s participation in economic change. Specific topics include change over time in the relative demand for skilled labor and its relationship to technical progress; factors affecting the growth in the supply of high school graduates since World War Two; human capital investment in immigrant families; long-term changes in complementarities between investment in schooling and health; cross-country differences in the relationship between female labor force participation and economic development; the evolution of racial differences in female labor force participation from the end of the Civil War to today; changes in the relative costs and benefits of cohabitation versus marriage and their relationship to childbearing after mid-twentieth century; differences in the nature of fertility decline in the early versus the late twentieth century and implications for economic and social development; and changes in beliefs about women’s role in the economy and their impact on female labor force participation, occupational choice, and investment in human capital.

The essays in this volume argue that an exploration of economic outcomes must include an examination of the values, beliefs, and norms that enabled them. They emphasize humanistic perspectives of economic well-being and explore the pivotal role of changing values and beliefs in shaping economic history. A more humanistic economics can also re-enchant contemporary politics and policy making. In challenging the dominant economic paradigm, the insights from low-powered economic reasoning are acknowledged and enriched through multiple ways of knowing. Written by distinguished scholars of economics, history, philosophy, politics, gender studies and communications, the essays embrace the intellectual pluralism of Deirdre N. McCloskey.

Denmark today is one of the richest, most equal, and happiest societies in the world. This book explores the roots of Danish development beyond its remarkable export success in the nineteenth century, when Danish butter and bacon rapidly gained a strong foothold on international markets, based largely on a large number of peasant-owned cooperatives. These became cornerstones of Danish national identity, and remain at the core of Denmark’s reputation for having experienced a socially and economically balanced path to modern economic growth. This book re-examines the roots of this success, emphasizing that it was only possible thanks to more than a century of agricultural innovation by elites. From the late eighteenth century, large landowners – often immigrants – took advantage of agrarian reforms to import and adapt new practices in crop rotation and animal husbandry from outside the kingdom, initially by hiring specialist administrators and skilled dairywomen from abroad. Then, as international markets integrated after the Napoleonic Wars, this existing cluster intensified efforts to take advantage of increased market access, developing a variety of important innovations, including new techniques for production, breeding, marketing, and information-gathering. The reputation, technologies and institutions established by the elites were then able to spread to much wider segments of the rural population when the steam-driven cream separator, a centrifuge, allowed for the centralized production of high quality butter from dispersed small producers. Peasants then organized in cooperatives, extending export-oriented dairying, and laying the foundations of balanced economic development at the national level.

At independence from British colonial rule (1947), India inherited from the Raj a complex legal system, including elaborate laws about private property and commercial contracts. Opinions differ on the quality of the legacy. Some historians suggest that the legal system served imperial power, others that it helped trade and enterprise grow. This book revisits the debate with a careful analysis of the origin of property and contractual laws. It uncovers two distinct ways that laws emerged. On the one hand, with law on property, especially agricultural land, indigenous rules, local power, political expediency, and fiscal needs were more influential factors in the making of laws than were concepts borrowed from Europe. With commercial and corporate law, on the other hand, there was considerable borrowing from European legal theory. In all cases, the Raj struggled with insufficient knowledge of pre-existing norms, limited capacity to enforce its laws, and the enormous diversity and differentiation within Indian society. The chaotic course of legal evolution and limited state capacity made British Indian law a disorderly system, and a legacy of questionable value.

References to the economy are ubiquitous in modern life, and virtually every facet of human activity has capitulated to market mechanisms. In the early modern period, however, there was no common perception of the economy, and discourses on money, trade, and commerce treated economic phenomena as properties of physical nature. Only in the early nineteenth century did economists begin to posit and identify the economy as a distinct object, divorcing it from natural processes and attaching it exclusively to human laws and agency. This book traces the emergence and transformation of economics in the eighteenth and nineteenth centuries from a natural to a social science. Focusing on the works of several prominent economists—David Hume, Adam Smith, Thomas Malthus, David Ricardo, and John Stuart Mill—the book examines their conceptual debt to natural science and thus locates the evolution of economic ideas within the history of science.

Modern developed societies are rich and secure in large measure because citizens possess the civil right to form organizations and have access for this purpose to a set of legal tools that the government provides to everyone on essentially the same terms. Entrepreneurial activity thrives where organizations can freely form and freely dissolve and resources can move from lower to higher valued uses. Such an environment is also conducive to political security, for a competitive economy, with open access to markets and organizations, underpins economic interests needed to support a competitive democratic political system. These advantages are obvious, yet perhaps eighty percent of the world’s population still lives in countries that prohibit open access to organizations and whose governments cannot enforce rules that treat every citizen the same. Why have so few societies moved to open access? We examine the experiences of the first developing nations of the eighteenth and nineteenth centuries, and how they came to grant their citizens organizational rights. The transition was not easy. Neither the political changes of the Age of Revolutions nor the beginnings of economic growth alone led to open access. In important ways, change initially occurred in the opposite direction, as political coalitions restricted access to rent-generating organizations in order to maintain control. Eliminating rents from privileged organizations threatened the entire foundation of political and social order. We document this problem and trace the difficult path by which these countries became modern civil societies.