Ronald Rogowski
Commerce and Coalitions
© Randall W. Stone, 2002
Rogowski I: 1840-1914
• Real trade: increased 4 times 18401870, 2 times 1870-1900
• Railroads decreased transportation
costs by 85-95%
• Steamships decreased
transportation costs by 50%
© Randall W. Stone, 2002
Trade and Cleavages
Land-Labor ratio
High (land)
High K
Low K
Low (labor)
(class
(urban-
conflict)
rural)
(urban-
(class
rural)
conflict)
Cleavages shift when:
– Relative factor endowments change
(development: K increases)
Power shifts when:
–Trade increases/decreases
© Randall W. Stone, 2002
Trade and Cleavages, 1840-1914
Land-Labor ratio
High (land)
Low (labor)
UK, Fr
Russia: High land,
High labor, Low capital
High K
Low K
US, Canada
before W W I
Germany
Austria,
Italy
1875 US grain
Change occurs when:
– Trade increases (transport costs decrease)
– Relative factor endowments change
(development: K increases)
© Randall W. Stone, 2002
1914-Present
Land-Labor ratio
High (land)
High K
US 20th
century,
Canada,
Aus, NZ, SU
1960’s
Class Conflict
Low (labor)
Rural
H-H
L-L
England
19th, W.
Europe 20th
EE 60’s,
Japan 60’s
Norway
Sweden
green
Urban
Low K
US 19th cent.
LA, Africa after
W W II
Germany 19th
Japan until 1960
China, Vietnam,
Spain, EE, India
red
Russia &
Africa until
WW II
© Randall W. Stone, 2002
Structure of an argument
Assumptions
Logic
Hypotheses
Research
design
Evidence Conclusions
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Generality
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Confidence
Scope
How would you attack Rogowski?
© Randall W. Stone, 2002
Objections: assumptions
Assumptions of Stolper-Samuelson model
violated:
• Capital flows internationally
• Capital, labor locked in specific sectors
– Frieden: specific assets - incentives to
lobby; everybody benefits from industryspecific protection
• Country size (Katzenstein)
© Randall W. Stone, 2002
Objections: assumptions
• Firms vary in their international position
Milner: - export- vs. import-oriented
- multinational vulnerability
Export dependency
Low
IV
Multi - H
nationality
L
Selective protection
I
Global protection
High
III
Most free trade
II
Strategic trade
Compare: 1920’s & 1970’s; US & France
(subsumed by Rogowski? A finer cut?)
© Randall W. Stone, 2002
Objections:
hypotheses
•Not a test
–What would falsify hypothesis?
• Outcomes? Most interesting claims not
testable
• Cleavages
• Right-wing authoritarianism with
contracting trade. Left-wing revolution
with expanding trade
© Randall W. Stone, 2002
Objections:
research design
Fuzziness of key variables
• Independent variables: land, labor,
capital intensity
• Dependent variables:
– what is evidence of a cleavage?
– expectations about timing of trade
expanding/contracting and political
shifts
© Randall W. Stone, 2002
Objections: evidence
• US New Deal (decline of trade – strong labor)
– But why switch to Democrats if Republicans are
protectionists?
– Rogowski claims New Deal was not very free
trade.
• Problem: business switched to free
trade after Smoot-Hawley
© Randall W. Stone, 2002
Objections:
evidence
Bureaucratic-Authoritarianism in Latin
America in the 1970s (trade increased; land +
foreign capital ally for free trade)
• But: Mexico & Brazil vs. Chile & Argentina.
• Collapse of regimes after ’82
reforms, not
protection
© Randall W. Stone, 2002
Objections:
treatment of exceptions
Why no revolution in India?
(Trade contracts – fascism; trade expands –
revolution; why not in India?)
Rogowski: too satisfied to revolt
– Building roads relieves pressure
– Congress represents a land-capital
coalition, pays off peasants
– protectionist
Ad hoc?
© Randall W. Stone, 2002
Objections:
scope of theory
Soviet Union and Eastern Europe
Stolper-Samuelson does not apply to planned
economies
• no free markets;
• no comparative advantage;
• no convertible money;
• no profit incentive
© Randall W. Stone, 2002
Conclusions?
© Randall W. Stone, 2002