Economic History Comp June 2014
Answer all questions
1. Regulation:
Both the banking sector and the corporate manufacturing sector share some history in the US.
Both kinds of enterprises could only be established by personal charter in the early years of the
US. Entry into both sectors then became “freed” in the sense that states discontinued the
system of personal charters and created minimum requirements. (The National Bank Act
created federal minimum requirements for “national banks.”) Both sectors grew substantially.
Both were subjects of regulatory action in the Progressive era. To what extent did governmental
involvement in these sectors promote or inhibit economic growth?
2. Slavery:
Robert Whaples (1994) surveyed economic historians. He asked whether they “agreed” or
“disagreed” with the following four statements:
a. Slavery was a system irrationally kept in existence by plantation owners who filed to
perceive or were indifferent to their own best economic interests.
b. The slave system was economically moribund on the eve of the Civil War.
c. Slave agriculture was efficient compared with free agriculture. Economies of scale,
effective management, and intensive utilization of labor and capital made Southern salve
agriculture considerably more efficient than non-slave Southern farming.
d. The material (rather than psychological) conditions of the lives of the slaves compared
favorably with those of free industrial workers in the decades before the Civil War.
Nearly all respondents disagreed with (a) and (b), but views were split on (c) and (d). Why?
3. Institutions:
a. Paul David and Douglass North have argued that institutions are the “carriers of history”.
What evidence and research designs have economists produced to support and qualify
this contention? What constitutes an institution?
b. In Farewell to Alms, Greg Clark presents evidence that arguably undermine institutional
theories of the emergence of capitalism? Are the Clarkian points sound? Why or why
not?
c. What are the most important take-aways from the historical literature on institutions for
policy today? Explain.
4. Culture:
a. Becker and Woessman (2009) find that Protestantism led to better economic outcomes
within historic Germany. What is the research design? Is it convincing? Why or why
not? Do their findings deliver a strong argument for the importance of culture in
economics? Why or why not?
b. David Landes (2006) and Ha-Joon Chang (2007) have very different views on the role of
culture in determining economic development. How would you summarize the Landes
and Chang positions? Which is more compelling and why?