Colonial Military Garrisons as Labor-Market Shocks: Quebec City and Boston, 1760- 1775

I have a new paper (co-authored with Jeremy Land) that has recently been submitted for consideration. Jeremy and I argue that the military occupation of Boston in 1768 should be viewed as a labor market shock that would have fueled revolutionary fervor. We highlight that it is the combination of an increased supply of labor and the mandatory quartering of troops (which acts as a tax which mitigates any demand effect that the influx of troops might have had) that did the trick for reducing real wages. We compare with Quebec City at the same time which had a similar shock in 1760 when the British conquered the colony from the French. However, unlike Boston, the garrison was gradually reduced and real wages increased.  The abstract is below and I will provide an update when (or if – fingers crossed) the paper is accepted:

The military occupation of Boston in 1768 shocked the city’s labor market. The
soldiers, who were expected to supplement their pay by working for local businesses, constituted an influx equal to 12.5 percent of greater Boston’s population. To assess the importance of this shock, we use the case of Quebec City, which experienced the reverse process (i.e., a reduction in the British military presence from close to 18 percent of the region’s population to less than 1 percent). We argue that, in Boston, the combination of the large influx of soldiers and a heavy tax on the local population in the form of the billeting system caused an important wage reduction while the lighter billeting system of Quebec City and the winding down of the garrison pushed wages up. We tie these experiences to political developments in the 1770s.

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Does size matter? Implications of household size for economic growth and convergence

I have another working paper that has just been submitted for consideration. This time, it is co-authored with Vadim Kufenko and Klaus Prettner (see our previous paper in Economics Bulletin here and our working paper on History-Augmented Growth Models here). We argue that the study of convergence is impaired by the absence of corrections in variance changes in household size. As household size relates economies of scale in consumption, it has relevance to the measurement of living standards. The abstract of the paper is below:

We assess the effects of changes in household size on the long-run evolution of
living standards and on cross-country convergence. When the observed changes in
average household size across countries are taken into consideration, growth in living standards is slower throughout the 20th century as compared to a measure based on per capita GDP. Furthermore, the speed of divergence between different countries before 1950 is faster and the speed of convergence after 1950 is slower after adjusting for the evolution in household size.

The Lightship in Economics?

I have recently submitted a new paper for consideration. It is co-authored with Rosolino Candela (post-doctoral fellow at Brown University). We revisit the debate launched by Ronald Coase in 1974 with the publication of the lighthouse in economics by introducing the lightship. This is because we believe that the field has been too focused on the lighthouse as a public good without considering the wider market for naval security. This is why we introduce primary evidence about the lightship (seamarks at sea, especially efficient on riverways like the Thames). We argue that it highlights that private provision was possible by that it was crowded-out by Trinity House (i.e. the state mandated monopoly on seamarks). We have not put the paper online for the time being, but below is the abstract of the paper we submitted:

What role does government play in the provision of public goods? Economists have used the lighthouse as an empirical example to illustrate the extent to which the private provision of public goods is possible. This inquiry, however, has neglected the private provision of lightships. We investigate the private operation of the world’s first modern lightship, established in 1731 on the banks of the Thames estuary going in and out of London. First, we show that the Nore lightship was able to operate profitably and without government enforcement in the collection of payment for lighting services. Second, we show how private efforts to build lightships were crowded out by Trinity House, the public authority responsible for the maintaining and establishing lighthouses in England and Wales. By including lightships into the broader lighthouse market, we argue that the provision of lighting services exemplifies not a market failure, but a government failure.

Government and the Economic History of American Income Inequality

I have a new working paper available. This one is for a book chapter in a volume on income inequality edited by Stephen Miller and G.P. Manish of Troy University. In the paper, I argue that the U-Curve Narrative of income inequality is broadly correct in empirical terms. However, there are numerous nuances that need to be made to arrive at a reasonable interpretation. Some of these nuances are either empirical in nature, but most of them relate to the economic history of income inequality. I should warn readers that I have not yet sent the document to a copy-editor and there are probably numerous grammatical errors. As such, please do not cite without permission

The paper can be consulted here on SSRN, the “abstract” (I had to write one as book chapters normally don’t include abstracts) is below:

In the present paper, I intend to question the broad “U-Curve Narrative” of income inequality in the United States. First, I argue that a part of the rise of inequality in recent decades is overestimated but that it did nonetheless increase. Second, I argue that a part of that increase in inequality is not problematic in a normative sense as it results from mundane factors like population aging, immigration, innovation and the rise of increasingly heterogeneous preferences that cause a mild divorce between well-being and income. However, by arguing that a share of the increase stems from non-problematic causes, I must also argue that the remaining share emanates from reprehensible factors. These either come from those inherited at birth and those created by government intervention. This decomposition of inequality brings me to the third argument of this paper : that the high levels of the 19th century and early 20th century were not as problematic as emphasized by many and that the subsequent decline was largely led by mundane forces unrelated to government efforts whose role should be minimized. I also argue that the rise of inequality after 1970 is strongly related to state interventions in markets and societies.

James M. Buchanan, Public Choice, and the Political Economy of Desegregation

A few months ago, the Southern Economic Journal made a “reject and resubmit” decision on a paper written with Phil Magness and Art Carden. We have recently completed this resubmission by rewriting the paper in order to focus on the issue of desegregation. The paper is available here on SSRN and the abstract is below:

Recent historical works, most notably the book ‘Democracy in Chains,’ advance the claim that 1986 Nobel Laureate James M. Buchanan developed his formative contributions to political economy amidst the segregationist response to the Brown v. Board of Education decision. This argument accordingly holds that the research agenda of public choice economics emerged from an opportunistic alliance with Virginia’s “Massive Resistance” to school integration, and should be situated within the racially tinged tradition of southern conservatism. While Buchanan wrote very little on the economics of race, an extensive review of archival evidence as well as his published works conclusively refutes this claimed association. Buchanan’s intellectual associations with Frank Knight, W.H. Hutt, and other economists who worked within anti-racist frameworks suggest that Buchanan did not see anything of value in segregation, even as a political vehicle for advancing his agenda. To the contrary, we show that Buchanan held an antipathetic view of segregation and believed that the competitive processes of an educational voucher system would undermine the “Massive Resistance” status quo. We accordingly reject the primary thesis of Democracy in Chains as the product of unsound and grossly misinformed research, and offer an alternative assessment of the position of race in the origins of public choice theory.

A Revolution Delayed? Dairy Output and Tenure Institutions in Lower Canada, 1831

I have a new working paper available. This time, I consider the role that Canadian seigneurial tenure might have played in deterring early specialization in dairy production by limiting the ability to finance capital investments needed for that industry. The abstract is below and the paper can be consulted here:

A recent burst of research in the field of economic history emphasizes the role of dairy production in stimulating growth for small open economies like Denmark or Ireland in the 19th century. This paper attempts to link the province of Quebec in Canada, a key producer of cheese intended for export, to the literature in question. In Quebec, the emergence of large-scale dairy production was largely concentrated in areas operating under the British freehold tenure system (as opposed to the French seigneurial tenurensystem (Ouellet, 1988)). Using the censuses of 1831 as my primary data source, I question the role of seigneurial tenure in delaying specialization in dairy production. It is my conclusion that seigneurial tenure depressed production in 1831 relative to freehold areas. It should also be noted that the results hold different data specifications.

Trade or Raid: Acadian Settlers and Native Indians Before 1755

I have another working paper available which I will soon start presenting in order to obtain comments.  In the paper, I consider whether or not North America could have been settled more peacefully with fewer infringements of the property rights of First Nations. I argue that the case of Acadia – the French settlements in Atlantic Canada – offer an interesting counterfactual. The colonists were in a borderland which was largely left ungoverned by European powers and were thus more or less in a situation of statelessness. Being forced to shoulder all the costs of violence themselves, the settlers developed exceptionally peaceful relations with the First Nations of the region. In the paper, I survey this exceptional counterfactual and I provide new information about the region’s living standards. The paper is available on SSRN and the abstract is below:

The peopling of North America by European settlers often conflicted with the property rights of aboriginals. Trade could, and often did, represent a peaceful and mutually beneficial interaction between these two groups. However, more often than not, raid was preferred over trade. This was not always the case (as exemplified in this paper) for the French settlers of Atlantic Canada, known as Acadians, who enjoyed exceptionally peaceful relations with First Nations. In this paper, I argue that this colony was peripheral in the designs of European governments and was largely stateless and was left to fend for itself. As such, all the costs of raiding were borne by settlers who favored trade over raid for more than a century.