I have a new working paper out there co-authored with Louis Rouanet of George Mason University. Louis and myself argue that the formation of new cultural groups and new ethnic groups is a form of investment in governance in stateless environments. New ethnic groups can organize because they have low costs of providing governance within them and because they can serve as efficient intermediaries between other groups. Their ethnic identity is thus a collective action decision that reduces transaction costs between other groups and expands the size of the market.
We use two examples from Canadian economic history to make our case: the Acadians of Atlantic Canada and their relation with the Mi’kmaq and the Métis of the Canadian Prairies. Our paper is available here on SSRN and the abstract is below:
The process of ethnogenesis (i.e. the formation of new ethnic groups) can be considered equivalent to the production of “governance goods” in situation of statelessness. The process of ethnogenesis is a response to the problem of social distance between heterogeneous groups which is a barrier to trade. As an investment in governance, ethnogenesis reduces this trade barrier and expands the scope for specialization. To argue the case, this paper relies on two examples of peaceful and productive relations between Native Indians and European settlers in Canada before the mid-19th century. The emergence of “hybrid” cultural groups and identities fostered peaceful relations and permitted trade to occur in borderlands areas where state rule was virtually nonexistent. This in turn facilitated the transatlantic fur trade. Both these examples suggest that cultural processes can be endogenous responses to the production of governance.
A few weeks ago, Raymond March and myself received news that Research Policy accepted our article regarding why the practice of lobotomy boomed in the 1940s and 1950s. More precisely, we explain how the practice grew in popularity and persisted well after the academic community has raised serious doubt on the practice. I will upload the link to the published paper once it is only on the journal’s website (the working paper version is here). The abstract is below:
In the late 1940s, the United States experienced a “lobotomy boom” where the use of the lobotomy expanded exponentially. We engage in a comparative institutional analysis, following the framework developed by Tullock (2005), to explain why the lobotomy gained popularity and widespread use despite widespread scientific consensus it was ineffective. We argue that government provision and funding for public mental hospitals and asylums expanded and prolonged the use of the lobotomy. We support this claim by noting the lobotomy had virtually disappeared from private mental hospitals and asylums before the boom and was less used beforehand. This paper provides a more robust explanation for the lobotomy boom in the US and expands on the literate examining the relationship between state funding and scientific inquiry.
Last week, I received news that the International Review of Law and Economics accepted my paper (co-authored with Rosolino Candela) titled “Why Consider the Lighthouse a Public Good?”. The abstract is below and I will update this blog post to add the link to the article once it is online:
Was the lighthouse ever a public good? The lighthouse is presented as the quintessential public good as it was inherently non-excludable and non-rivalrous. Since the work of Ronald Coase (1974) on the lighthouse, economists have used debated the extent to which the private provision of public goods is possible. In this work, we highlight recent findings in the history of lighting services (especially private provision of said services) in order to argue that it may be incorrect to consider the lighthouse as a public good. First, we argue that lighthouses are probably better seen as a complement to other maritime services (e.g. pilotage, docking, ballastage). The lighthouse could have been bundled with these complements, which were excludable and rivalrous, in ways that would have permitted its provision. Second, we argue that organizations in charge of providing lighthouses were aware of this bundling possibility and lobbied hard to monopolize these other aspects of the trade in ways that limited entrepreneurial opportunities.
Last week, I gave an interview to Garrett Petersen of Economics Detective Radio. It concerned my paper with Vadim Kufenko on the rebellions of 1837-38 in Lower Canada where we advance the argument that the development of markets in Lower Canada (modern day Quebec) promoted rebelliousness against British rule. You can consult the interview here on Garrett’s website or via your favorite podcast app. I also embed the interview below.
During the weekend, I received news that my article co-authored with Vadim Kufenko on the rebellions of Lower Canada during 1837-38 has been accepted for publication at the Journal of Economic Behavior & Organization. The working paper (prior to revisions) is available here on SSRN and the (revised) abstract is available below. I will update the links when the early view version is available.
In 1837–38, the British colonies of Upper and Lower Canada rebelled. The rebellion was more virulent (and better organized) in Lower Canada. The rebellions were also concentrated in the richer areas of that colony. In this paper, we use the census of 1831 and databases of rebellious events to explain how the rebels managed to overcome the problem of collective action. We argue that the rich areas were more prone to rebellion because they were where markets were most developed. These well-developed markets allowed for cheaper coordination of seditious elements. We link our contribution to the literature on the collective action problem inherent to the organization of protests, uprisings and rebellions.
I have a new working paper on inequality. This time, I teamed up with one of my early influences: Peter Lindert of UC-Davis. Peter’s work was deeply influential on my development as an economic historian and economist and thus I am happy to work with him on this. We used the data for Canada that I assembled along with other price data to create measures of the inequality in the cost of living since the late 17th century in New World countries such as Canada, the United States and Australia (after 1850) which we could compare with the United Kingdom. We found that from circa 1800 to 1914, price trends were egalitarian (prices changes benefited the poor more than the rich). We also find that the New World was indeed the “best poor man’s country”. Finally, we find that when we adjust nominal-income figures of income inequality for inequalities in the cost of living, the movements of inequality are attenuated. The abstract is below and the paper is available here on SSRN:
The kinds of goods that richer and poorer households consumed differed more strongly in the past than today. Movements in the relative prices of luxury goods versus staples caused the real inequality to oscillate in ways missed by the usual historiography of (nominal) inequality. On both sides of the North Atlantic and in Australia, real inequality rose significantly less in 1800-1914 than the literature on nominal inequality has revealed. The reasons for this relate to the relative decline of food prices, rural-urban price gaps, and the delayed rise of luxury service prices, especially after 1850. Throughout these centuries, the North Americans enjoyed lower living costs than their counterparts in Western Europe.
A few days ago, I was informed that Rosolino Candela and myself were awarded the Gordon Tullock prize for best article published in Public Choice by junior scholars. The announcement is now public (see here). The award was granted for our article “The Lightship in Economics” (which can be consulted here).
The list of previous winners of the Gordon Tullock prize can be consulted here. I want to point out that, in recent years, many of the recipients have been interested in economic history. For example, Mark Koyama and Emily Skarbek shared the award for their respective works on private prosecutions in England during the 18th and 19th centuries and disaster relief efforts in Chicago following the Great Fire of 1871. Another example is that of Jayme Lemke on inter-jurisdictional competition and women’s rights at the dawn of the 20th century. I am happy to be in such great company economic-history wise.