What numbers make visible & what they erase

That I read Caitlin Rosenthal’s Accounting for Slavery: Masters and Management was a bit random – we’re going away for a week and I didn’t want to start a holiday book, so pulled this bound proof the publisher had sent me off the pile. I’m glad I did. It’s a terrifically interesting book. It’s in effect a business history of slavery in the Caribbean and the American south, using the detailed management records that remain to understand how plantations were run – just as business historians would later use similar documentary evidence to trace the practices of management in industry. As she writes, “Scale required structure.” The sugar and cotton plantations were sometimes very large scale indeed. And the science of management emerged in this context before any manufactories grew to the same kind of scale.

There is a particularly illuminating section on the standardisation of record keeping: “Preprinted forms were an important and overlooked technology in organizing plantation labor.” Early records were hand written and ruled, with documents often sent to absentee owners in England – this was, Rosenthal points out, also one of the earliest instances of the separation of ownership and control, as large plantations were often run by professional managers. (The role of earnings from slavery in fuelling the growth of financial instruments and the City in England are the subject of this UCL research project, Legacies of British Slave-ownership) The availability of standard forms helped spread the ‘scientific management’ techniques – again, ahead of Taylor’s famous introduction of scientific management in industry. (This reminded me of Donald Mackenzie’s brilliant essay on how the commercial availability of options prices calculated by computers helped grow derivatives markets.)

Rosenthal also covers the role of slaves as, literally, human capital. Plantation managers kept inventory records and appied several different valuation techniques. As she observes, this was fundamentally an issue about property and therefore about power and politics, property being something defined by law. (And property in the form of people is more political than most.) By the eve of the Civil War, the total value of enslaved human capital was over $3 billion. (Before anyone takes this particularly noxious version of human capital as an opportunity to knock economics, economists were prominent in the abolition campaign, and historian Thomas Carlyle named economics the ‘dismal science’ for not respecting the property rights of slave owners.)

Rosenthal (formerly a management consultant) ends by pointing out that labor conditions for many people in the world still leave much to be desired: “Confronting plantation account books can remind us how easy it is to overlook the conditions of production from the comfort of a counting house or safety of a computer screen. Reckoning with the ways planters accounted for slavery should encourage us to rethink the kinds of data we record and how we use it. Quantitative records can help us to see farther, but only if we remember what the numbers make visible and what they erase.”

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Global Britain and national Britain

It has taken me a while to finish David Edgerton’s new book, The Rise and Fall of the British Nation: A Twentieth Century History. This is because of the packaging rather than the contents – it’s a heavy volume I’ve had to read at home propped up with cushions. So although I’ve enjoyed the book, I have a rather impressionistic take on it.

The chief impression is that there isn’t a single piece of received wisdom about Britain in the 20th century the author doesn’t challenge. Edgerton has challenged the ‘declinism’ thesis in his previous books and does so again. But there are other myths to bust. The welfare state wasn’t distinctively new after 1945 – a lot of it had been established in the 1920s. The Labour Government of Harold Wilson wasn’t especially technology-friendly. It is nonsense to claim the Establishment consisted of anti-scientific art historians and classicists, there were loads of technologists and scientists in government. It is indeed refreshing to read such an upbeat take on the 1950s and 60s.

Above all, the book argues, the key phenomenon of the post-world war 2 decades was not welfarism or corporatism but  the creation of a distinctive British nation – until Mrs Thatcher started to turn the country back into an internationalist capitalist one, as it had been in the early 20th century. Edgerton’s British nation lasts only from 1945 to 1979.

This makes for a refreshing read, there’s nothing like a bit of lively contrarianism. In fact, you can see Edgerton’s compulsion to be contrary in his challenge to both industrial declinism and techno-boosterism simultaneously, which – while surely the correct stance – is also pretty argumentative.

But not every bit of his myth-busting is wholly persuasive. On the NHS, for instance, Edgerton argues that most of the provision was in place prior to 1945, and those with low incomes did not have to pay for treatment. He offers some facts on the extent of municipal provision, the role of GPs, and so on. This surely greatly underplays the uncertainty and anxiety of getting medical treatment before the NHS. Even if it is true that people ended up being able to access treatment and not having to pay, I remember from my 1960s childhood the deep, deep financial worry illness caused older people, not habituated to the idea that you could turn up at a surgery or hospital and nobody would ask about your means.

The book is at its best on technology and industry, which is hardly surprising given Edgerton’s wonderful previous books on technology – particularly The Shock of the Old but also Warfare State and Britain’s War Machine. It ends with New Labour, and the attempt to define a forward-looking, techno-optimistic Global Britishness. In fact, it ends with Mrs Thatcher’s state funeral – the first accorded to a PM since Churchill’s:

“There were no cranes left to be dipped in respect by dockers in the unprecedented honour the London proletariat gave Churchill in 1965. In the old and distressed pit villages of England, Scotland and Wales, forgotten former miners celebrated bitterly. Tony Blair meanwhile was making money working for some of the vilest torturers and dictators on earth. Only satirists, not historians, could do justice to this turn of events.”

And then it stops. Hmmm. There were of course loads of cranes on the London skyline, contstructing rather than unloading, and nobody chose to dip them for the funeral. Mrs Thatcher’s governments had indeed ravaged the country’s economy outside of south east England – this book does far better than many histories of Britain in not being a wholly London- and Westminster-centric one, given its focus on industry – and the real criticism of the decision to give her a state funeral would surely be her divisiveness. It’s an unsatisfactory (lack of) ending to a very interesting book.

An earlier chapter considers the emerging divisions in society but also within the main political parties from the 1970s on and it would have been more satisfying to see this rounded out somehow with reference to current debates about the utter mess of Westminster politics, a devolving Britain, the polarisation over Brexit, and in the middle of all this ideas about industrial policy and the technology frontier. Unfair to ask a historian for comment on the present – but the idea of the British nation is surely at the heart of it all today?

Anyway, as noted, these are impressions. It isn’t just the bulk: there is a flavour of one thing after another, as sections plunge into detail – albeit always fascinating. This is well worth a read nevertheless (although in paperback maybe?)

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Economic history of the world, short version

Daniel Cohen’s The Infinite Desire for Growth is a nice bird’s eye view of the debated issues concerning economic growth from the dawn of civilisation to the present and future. Translated from the French, it starts with a rather masterly synopsis of the issues debated in some of the recent works on growth in the distant past, such as Ian Morris’s Why the West Rules for Now, and some older ones like Jared Diamond’s Guns, Germs and Steel, Joel Mokyr’s Gifts of Athena (not to mention French works I haven’t read). The first section covers the distant past up to the Enlightenment and Industrial Revolution.

The second part canters through some of the recent debates: the singularity, automation and robots, the stagnation versus measurement of digital debate, Piketty and inequality, and the vulnerability of the interconnected global economy to crisis and collapse. Cohen agrees with Robert Gordon‘s contention that innovation just ain’t what it used to be. There’s a final section with some reflections on culture, happiness (lack of), and the question of the demise of democracy. This cites Daniel Bell’s marvellous Cultural Contradictions of Capitalism. The question is whether our societies are capable of dealing with future upheavals – be they tech related or a crisis of climate or contagion – if growth has permanently slowed. I would say the conclusion here is a resounding ‘don’t know’. Which is fair enough.

All of this fits into 153 pages. I’m a bit of a fan of short books, so say this just to indicate the focal length here. The book kept me happily occupied for a 2 hour train ride. And it’s a real service to summarize some very chunky economic histories.

My main complaint – which grew in force as I read on – is that a book citing a vast literature only mentions three women’s names, one of them being Margaret Thatcher. The others are Esther Boserup (who gets a proper name check) and Sandra Black (in a footnote). Do women really have nothing to say about all of human (economic) history and the future economy?

Price: £13.33
Was: £20.00
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Remembrancing the national debt

My husband teased me for saying The National Debt: A Short History by Martin Slater was a rattling good read, but it is. Published in late May, it puts the ‘austerity’ debate in illuminating context.

This is the UK’s national debt we’re talking about, and the book starts in the Middle Ages and ends at the financial crisis. For government debt is about high politics, from the needs of feudal monarchs to fund armies increasingly consisting of mercenaries to the long battles – in the Civil War, literal battles – over the respective powers of monarch and Parliament, to the effective private sector default in 2008 that led to banks being bailed out with the government borrowing to purchase bank equity of uncertain future value.

The history is delivered with a light touch and nice anecdotes. For instance, income tax was so hated than both times it was scrapped after its early, temporary introduction – all the records were destroyed, by immersion in water in 1802 and by burning in 1815. It turned out, however, that there was an official called the Remembrancer whose job was to keep a copy of all government financial records. This post was so obscure, that nobody had noticed and the copies were found many years later. (Created in 1154, the post still exists. What a great job title.)

There are boxes on famous economists’ views of the National Debt – including Karl Marx, who like all the others frowned on public indebtedness. He noted that most institutions in Britain were ‘Royal’ but the debt was ‘National’: another way working people had to support, through taxes to pay the interest, the rentier classes.

I learned that the founding President of the Royal Economic Society (no, not ‘National’) was an economist I’ve never heard of: George, Viscount Goschen, whom Slater describes as “perhaps one of the most economically literate Chancellors of the Exchequer to hold office before the late 20th century.” He wrote text books, encouraged the expansion of the universities, and was also President of the Royal Statistical Society.

The book ends with a (painlessly) theoretical section setting out a very clear explanation of debt sustainability. It does involve two equations, but even the most algebra-averse reader will be able to cope. The history behind the upward-ratchet of the net debt to GDP ratio makes it all too apparent that usually governments treat their purchases of assets (such as bridges or nationalised corporations) as capital expenditure but their sales of assets as current revenue, available to be spent on political priorities. For sustainablility, the government’s primary surplus of tax revenue less current spending, relative to the size of the economy, needs to be at least as big as the debt to GDP ratio, multiplied by the gap between the interest rate and growth rate (remember Piketty‘s famous r>g inequality). A higher growth rate is always the deus ex machina hoped for by governments struggling with high debt and interest payments. Currently, the UK’s national debt would start to decline (relative to GDP) with a modest 0.9% of GDP primary surplus, but that is quite a turnaround from the present deficit.

As Slater says, however, it is not straightforward to decide what the optimal level of the debt ratio would be; there is probably no better option than waiting for growth to do the job. The book concludes with a plea for a more comprehensive accounting for the government’s finances; the experimental whole of government accounts go a long way toward including other obligations that will fall on future taxpayers. Even these do not include non-legally binding future payments – such as state pensions or the NHS – while future PFI obligations are included as notes but are not in the figures. The politics of national debt are not going to get any easier.

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Euro-vision

Benn Steil’s The Marshall Plan: Dawn of the Cold War reminded me at times of the movie 13 Days (about the scary 1961-62 confrontation between the US and USSR over Soviet missiles heading for Cuba): you know how the story ends, but even so the dramatic tension of men in suits talking in a room is almost unbearable. The dawn of the Cold War – particularly the status of Berlin and the airlift – was one of those extraordinary turning points too. Steil is also a terrific writer. For example, here he describes Kennan: “George Kennan would make a career out of repeatedly testing his powers of persuasion and then recoiling from the consequences.”

It’s also particularly poignant to read this book in Brexit Britain, for it makes clear the Marshall Plan’s bold vision of political cooperation and growing economic links between all of the western European nations, and the achievement of American politicians and diplomats in enabling this in a continent devastated by the war and not surprisingly beset by mutual suspicion. Prosperity and security for the whole were inextricably linked – hence the biggest challenge in launching the plan was to overcome the Europeans’ pursuit of individual national aims when the whole could be so much bigger than the sum of the parts. This went for making steel more efficiently and also for collective defence. It was difficult for the French in particular to see the (west) Germans and the Ruhr in this light. Kennan and others were clear that outside a new intergrated western Europe, “Britain would appear to have no future.” It depresses me utterly that we are turning our back on the vision that kept western Europe at peace and prospering since 1945 – this time without the Americans to set us straight.

The Marshall vision, however, also in a way sowed some Cold War seeds, for the Soviets were just as keen as the French to ensure German industry could not recover to its own benefit, but only to the extent that its outputs could be shipped to the USSR as reparations. The main issue was still Stalin’s desire to extend Soviet control as far as possible, including encouraging the Communist parties in France and Italy to engage in economic sabotage; but it’s fascinating to see how often questions of politics and influence were played out in seemingly dry economic issues such as the right to print currency, and whose versions of different currencies circulating in Berlin could be used to purchase which goods.

The essence of the Marshall Plan, Steil writes, was that the US taxpayers would sustain a minimum standard of living in the beneficiary countries in return for economic liberalization and integration to kick start the war-devastated economies and the momentum for continuing growth. “In essence the State Department was tendering the largest foreign aid program in history as a social shock absorber for the largest structural adjustment program in history.” The book covers the American political debate in detail, revealing new (to me) heroes, notably Arthur Vandenburg, the Republican senator who ensured President Truman got Congressional approval for the deal. And new villains: we all know Philby, Burgess and Maclean spied for the Soviets but they’ve been too sanitised by literature.

There are loads of nice details in the book too – for instance, when Molotov visited London on 1942 to negotiate an Anglo-Soviet treaty, he distrusted his hosts so much he slept with a revolver next to his bed. (If he were visiting London now, of course, he’d be having to distrust his compatriots more.)

A highly recommended read (and given the appendices and footnotes, not as daunting as its size suggests!)

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