Author Archives: Manuel A. Bautista-González

About Manuel A. Bautista-González

I am a doctoral candidate in United States History at Columbia University in the City of New York. I specialize in American economic, business, entrepreneurial, financial, banking and monetary history. For my dissertation at Columbia, I study the concurrent use of domestic and foreign currencies as means of payment and their relationship with interregional and external trade circuits and financial markets in antebellum New Orleans. I am also interested in Mexican and Latin American history, global history, the history of economic thought, the history of economics as discipline and profession, the methodology of economics and economic history, as well as the broader relationship between history, economics and other social sciences.

The Data We Have vs. the Data We Need: A Comment on the State of the “Divergence” Debate (Part II)

How Well Did Facts Travel to Support Protracted Debate on the History of the Great Divergence between Western Europe and Imperial China?

By: Kent Deng (London School of Economics), Patrick O’Brien (London School of Economics)

Abstract: This paper tackles the issue of how reliable the currently circulated ‘facts’ really are regarding the ‘Great Divergence’ debate. Our findings indicate strongly that ‘facts’ of premodern China are often of low quality and fragmented. Consequently, the application of these ‘facts’ can be misleading and harmful.


Distributed by NEP-HIS on: 2017-03-19

Review by: Kenneth Pomeranz (University of Chicago)


Comparative Consumption


This brings us, finally, to consumption.  As noted at the beginning of this comment, I agree that this is the most promising area for future research that might illuminate comparative living standards.  It is hard to know where really definitive data would come from: since the Chinese state did not systematically tax any major consumer goods except salt, and very little that ordinary people used was imported, we are unlikely to find data anywhere near as reliable as what we have for liquor, sugar, tobacco, etc., in various European countries.  Nonetheless, it is not that hard to imagine data that would help us make some progress in this area.[1]  And the area where O’Brien and Deng concentrate here – calories from grain – is, of course, fundamental, and there are various ways to generate estimates.  (It should be noted, however, that in unequal societies, the grain consumption of the poor is likely to be a lagging indicator of overall economic divergence –changes in the lives of the first and second quartiles of the income distribution could produce significant differences in average incomes well before the food intake of the poor in one society began to significantly outpace that of their counterparts in another.)  Thus, I applaud the attempt to see what we can learn by focusing on estimates of poor people’s incomes in kilocalories.  I have strong doubts, however, about the conclusion that Deng and O’Brien reach about this matter.

First, it is worth noting that various estimates have been made, which suggest that at least in this area, Chinese poor people (and perhaps some others elsewhere) were no worse off than their Western European counterparts. I have discussed several of them elsewhere, and little would be served by repeating that effort here.[2] 

O’Brien and Deng disagree, and rely upon a paper they published  in Journal of World History (2015).  That paper takes estimates of the likely income from a typical-sized tenant farm in the 18th-19th century Yangzi Delta, as calculated by Philip Huang, Robert Brenner and Christopher Isett, Robert Allen, and myself, and suggests that they converge upon a range of likely incomes that falls considerably short of the incomes of English laborers at the same time. I do not think that that is the most reasonable inference to be drawn from this data.

As they note in their current publication, I wrote to O’Brien and Deng after their  paper was published, largely agreeing with their methodology but questioning their data.  They apparently do not think the difference over data is important, since quickly continue “Nevertheless, these procedure provided us with figures for levels and changes in the standard of living for peasant households in Jiangnan from circa 1600 to circa 1829.” This, I think, misses the significance of the disagreement on data, which is easily stated.  Allow me to quote from the letter I wrote at the time, adding only some boldfaced type for emphasis, and a few explanations of reference in square brackets::

    “…    The key is Row 3 [of Table 4, pages 248-253]: ‘Area cultivated: mu,’ where you suggest that Huang, Brenner and Isett and I all accept an average farm size of 7.5 mu.  Brenner and Isett, of course, simply accepted Huang’s figure: they were all working together,  Brenner reads no Chinese and Isett (B and H’s student) had never worked on the Yangzi Delta.  So that is really one assertion that the farm size was 7.5 mu.  In your notes to that row you suggest that I also accept that figure; there is no direct citation for that point, but earlier you cite my “Facts Are Stubborn Things” essay.   But here’s what I wrote there, referring back to my essay in the first round of our debate [that is, my debate with Huang] (“Beyond the East-West Binary):

‘  …while I accepted Huang’s average farm size of  7.5 mu for purposes of our initial discussion, this  prevailed (if at all) only in the Delta’s most crowded prefectures, where people mostly grew cotton or mulberries.  The larger Delta I discuss had 59,000,000 registered cultivated mu circa 1770, or 10.5 mu  per 5-member farm family. [1]   This confirms Li Bozhong’s estimate that mid-Qing Jiangnan farms averaged 10 mu…’


And indeed, the 7.5 mu figure seems very unlikely to be right.  Consider, just for starters, that the sources you cite for 1820 give farm sizes of either 9.0 or 10 mu (depending on what definition one uses for Jiangnan);  it is widely agreed that there was no new land cleared in Jiangnan after the mid-18th century (further intensification took the form of more double-cropping), and while population figures are not very reliable, there was almost certainly some increase.  (Cao Shuji’s figures (2000, 5:691-92)  suggest a 38% increase from 1776 to 1850, with the rate of increase faster in the earlier years,  for instance; I think that is probably too high, but you see the point.) It thus seems pretty implausible that farmed acreage per family would have been anywhere from 1/6 to ¼ less in 1750 than it would be 70 years later.

Since I think you [Deng and O’Brien] have accurately reported the other figures in your table, the consequences of this one change would be quite significant.  Using 10 mu per family for 1750 would raise the estimate of caloric income in my data from 2,438 to 3,251; using 10.5 raises it to 3,413.  Thus, instead of more or less agreeing with Brenner and Isett, my numbers come to be 30-40 % above theirs – and over 80% above Huang’s (rather than about 33%). Perhaps more importantly, if you turn to your table 6, making this change would mean that instead of having a rough consensus on Jiangnan caloric intake that had already fallen a bit below English farm laborers (if one assumes they ate wheat) or significantly behind them (if they ate oats), you would be back to two views: one based on Huang’s data, that suggested what I have just said, and one which placed the caloric intake of Jiangnan farmers even with English farm laborers if they consumed oats, and still well ahead of them if they consumed wheat.  Significant divergence on this particular measure (admittedly one that lagged others) would be pushed well into the 19th century.  (In fact, if we accept Li or Allen’s work, as summarized in your column for 1800-1849, it would still not have happened in that period.).The difference is therefore quite significant…”


Moreover, I would add,  the adjustment I suggested in this missive would sharply alter the picture of change over time in the Yangzi Delta, yielding a more likely picture that has different comparative implications.  Without the correction, Deng and O’Brien’s data suggest a fairly sharp decline in living standards between 1600 and 1750, with a recovery to roughly 1600 levels by 1829.[3]   This, however, seems unlikely, since it was widely agreed that 1750 was near the middle of a prosperous era, while 1829 was (as already noted) part of an era of crisis.  (Whether the 1620s were part of a good period or not is less settled.[4] )     If we instead adjust the 1750 farm size figures as I have suggested, we have a probable improvement of living standards between 1620 and 1750 (perhaps even a large improvement), followed by either stasis or decline between 1750 and the 1820s; this would be much more in line both with the testimony of contemporary voices and the views of most historians.  And if that is right, it would also fit the picture of an East/West divergence  that came late but gathered steam quickly: not only because first Britian and then other parts of Northwestern Europe surged, but because the most prosperous parts of China began to fall into crisis.

Obviously, we would like comparisons of living standards, even among the poor, to go beyond caloric intake; and attempts have been made, by a number of us, to look quantitatively at cloth, sugar, tea, and a few other goods, and more impressionistically at tobacco, various forms of entertainment, and so on.   But for the time being, those discussions are nowhere near consensus; and in the world of the late 18th century, basic calories still loomed quite large in any case.  And there, I would respect, correcting the error noted above suggests that the balance of available research still suggests comparability until quite late. (Huang’s numbers have other serious problems, which I have discussed elsewhere.[5])    Until we get beyond basic calories in discussing the poor – and get much better estimates, on the Chinese side, of the distribution of income,[6] so we know more about what comparisons of the poor do and do not tell us, our picture of comparative consumption will remain quite inadequate for settling our debates, even if it remains the most promising area for further research; and as long as our understanding of consumption remains so inadequate, I would be loath to shut the door on the other approaches that Deng and O’Brien encourage us to abandon.


Allen, Robert.  2000. “Economic Structure and Agricultural Productivity in Europe, 1300 – 1800,” European Review of Economic History 4:1 (April, 2000),

Allen, Robert. 2004. “Mr. Lockyer Meets the Index Number Problem: The standard of Living in Canton and London in 1704,”  July 2004, available at http://www., accessed December 7, 2008

Allen, Robert. 2009a. The British Industrial Revolution in Global Perspective. Cambridge: Cambridge University Press.

Allen, Robert. 2009b. “Agricultural Productivity and Rural Incomes in England and the Yangzi Delta, ca. 1620-1820,” Economic History Review 62:3 (August), pp. 525-550.

Allen, Robert, 2011.  Robert Allen, Jean-Pascal Bassino, Debin Ma, Christine Moll-Murata, and Jan LuitenVan Zanden, “Wages, Prices and Living Standards in China 1738-1925: In Comparison with Europe, Japan, and India,” Economic History Review 64:1 (February), pp. 8-38.

Baten, Joerg. et al.  2010.  Joerg Baten, Debin Ma, Stephen Morgan and Qing Wang, “Evolution of Living Standards and Human Capital in China in the 18th – 20th Centuries: Evidences From Real Wages, Age-Heaping, and Anthropometrics,” Explorations in Economic History 47, pp. 347-359.

Benedict, Carol. 2011.  Golden-Silk Smoke: A History of Tobacco in China 1550- 2010. Berkeley: University of California Press.

Brenner, Robert and Christopher Isett. 2002. “England’s Divergence from the Yangzi Delta: Property Relations, Microeconomics, and Patterns of Development,” Journal of Asian Studies 61:2 (May), pp. 609-662.

Broadberry, Stephen, Hanhui Guan and David Daokui Li. 2014. “China, Europe, and the Great Divergence: A Study in Historical National Accounting, 980 – 1850,”


Chang Chung-li (Zhang Zhongli). 1962. The Income of the Chinese Gentry.  Seattle: University of Washington Press.Deng, Kent G., and Patrick K. O’Brien. 2015. “Nutritional Standards of Living in England and the Yangtze Delta (Jiangnan), circa 1644 – circa 1840: Clarifying Data for Reciprocal Comparisons,” Journal of Wor;d History 26:2 (June), pp. 233-267.

Guan Hanhui and David Daokui Li.  2010. “Mingdai GDP ji jiegou shitan,” (A Study of  GDP and its Sturcture in China’s Ming dynasty),” Zhongguo jingji jikan 9:3 (April), pp. 787-829,
Huang, Philip. 1990. The Peasant Family and Rural Development in the Lower Yangzi Region, 1350-1988.  Stanford: Stanford University Press.

Huang, Philip C.C.  2002a. “Development or Involution in Eighteenth Century Britain and China?  A Review of Kenneth Pomeranz’s The Great Divergence: China, Europe and the Making of the Modern World Economy,”  Journal of Asian Studies 61:2 (May), pp. 501-538.

Huang  Philip. C.C.  2003. “Further Thoughts on Eighteenth-Century Britain and China: Rejoinder to Pomeranz’s Response to My Critique,” Journal of Asian Studies 62:1 (February), pp. 157-167.

Lal, Deepak. 1998. Unintended Consequences: The Impact of Factor Endowments, Culture, and Politics on Long-Run Economic Performance.  Cambridge: MIT Press, 1998.
Landes, David. 1998.  The Wealth and Poverty of Nations.  New York: Norton.

Lee, James, Cameron Campbell and Wang Feng. 2002. “Positive Check or Chinese Checks?” Journal of Asian Studies 61:2  (May), pp. 591-607.

Li Bozhong and Jan Luiten Van Zanden. 2012. “Before the Great Divergence? Comparing the Yangzi Delta and the Netherlands at the Beginning of the Nineteenth Century,” Journal of Economic History 72:4 (December), pp. 956-989.

Li Wenzhi and Jiang Taixin, 2005.  Zhongguo dizhu zhi jingji lun (Essays on the Chinese Landlord Economy). Beijing: Zhongguo shehui kexue chubanshe,

Liu, William Guanglin. 2015.  The Chinese Market Economy 1000-1500,  Albany: State University of New York Press.

 Ma,Debin. 2004. “Modern Economic Growth in the Lower Yangzi in 1911-1937: a Quantitative, Historical, and Institutional Analysis” (Discussion paper 2004-06-002, Foundation for Advanced Studies on International Development, Tokyo.

Maddison, Angus. 2001.  The World Economy: A Millenmial Perspective.  Paris: OECD.

Maddison, Angus. 2003. The World Economy: Historical Statistics. Paris: OECD.


Moll-Murata, Christine. 200. “Chinese Guilds from the Seventeenth to the Twentieth Centuries: An Overview,”  International Review of Social History 53, Supplement, pp. 213-247.


Morgan, Stephen. 2004.  “Economic Growth and the Biological Standard of Living in China 1880-1930,” Economic and Human Biology 2:2

Pomeranz, Kenneth. 2000.  The Great Divergence: China, Europe, and the Making of the Modern World Economy.  Princeton: Princeton University Press.

Pomeranz, Kenneth. 2002 “Beyond the East-West Binary: Resituating Development Paths in the Eighteenth Century World,”  Journal of Asian Studies 61:2 (May, 2002), pp. 539-590.

Pomeranz, Kenneth.  2003“Facts Are Stubborn Things: A Response to Philip Huang,”  Journal of Asian Studies  62:1 (February, 2003).: 167-181.

Pomeranz, Kenneth. 2006.  “Standards of Living in Rural and Urban China: Preliminary Estimates for the Mid-18th and Early 20th Centuries.”  Paper for Panel 77, World Economic History Congress, Helsinki.

Pomeranz, Kenneth. 2011. “Development with Chinese Characteristics?” Convergence and Divergence in Long-Run and Comparative Perspective.” European University Institute (Florence) Max Weber Programme, Working Paper 2011/06.


Pomeranz, Kenneth. 2013. “Skills, Guilds, and Development: Asking Epstein’s Questions to East Asian Institutions,” in Maarten Prak and Jan Luiten van Zanden, eds., Technology, Skills, and the Pre-Modern Economy in the East and West: Essays Dedicated to the Memory of S.R. Epstein  (Leiden: E.J. Brill), pp. 93-127.


Rawski, Evelyn.  1972.  Agrarian Change and the Peasant Economy of South China.  Cambridge: MA: Harvard University Press.


Xue Yong. 2006. . “Agrarian Urbanization: Social and Economic Changes in Jiangnan from the Eighth to the Nineteenth Century” Yale University Ph. D. dissertation.

Yang Guozhen, Ming Qing tudi qiyue yanjiu  (Research on land contracts in the Ming and Qing)  Beijing: Renmin chubanshe, 1988,

Zhang Peiguo. 2002.   Jindai Jiangnan xiangcun diquan de lishi renleixue yanjiu. (A Historical Anthropology of Rural Village Land Rights in Jiangnan.)  Shanghai: Renmin chubanshe.







[1] See Benedict 2011:49, lending cautious support to my conjecture that tobacco acreage stagnated or declined between the late 18th and early 20th centuries, greatly reducing per capita output (and thus allowing us to use early 20th century figures to conservatively approximate 18th century consumption).  Thomas Rawski has suggested that we could approach this issue more rigorously if we found a long run of tobacco prices to compare with those for grain: something which hasn’t happened yet, but is certainly possible.

[2] See Pomeranz 2000:36-40,Pomeranz 2002, and Pomeranz 2003.. See also Lee, Campbell and Wang 2002. More recent work on height, longevity, etc., is largely restricted to the 19th and 20th centuries, and has little to say about the Yangzi Delta in particular, but tends to suggest that the parts of China that are represented in the data were at or above the middle of a European distribution in the early 19th century.  See for instance Morgan 2004; Baten et. al. 2010..

[3] This effect is partly the result of the choice of data discussed here, but it is also partly the result of the fact that the data for 1600 and 1829 include estimates from Li Bozhong, who tends to be optimistic in his view of Delta conditions, while the section of the table for 1750 does not; at the same time, Philip Huang, the most pessimistic of the scholars in this debate, is cited in the 1750 section of the table, but not in the other two.

[4]For a recent overview that takes a relatively dour view of the late Ming (though it does accept that it represented a very significant recovery from ehat it considers a catastrophic early and mid-Ming), see Liu 2015.

[5] Pomeranz 2002, 2003.

[6] I made an extremely quick and crude attempt in Pomeranz 2003.  An earlier and partial attempt is Chang 1955.

The Data We Have vs. the Data We Need: A Comment on the State of the “Divergence” Debate (Part I)

How Well Did Facts Travel to Support Protracted Debate on the History of the Great Divergence between Western Europe and Imperial China?

By: Kent Deng (London School of Economics), Patrick O’Brien (London School of Economics)

Abstract: This paper tackles the issue of how reliable the currently circulated ‘facts’ really are regarding the ‘Great Divergence’ debate. Our findings indicate strongly that ‘facts’ of premodern China are often of low quality and fragmented. Consequently, the application of these ‘facts’ can be misleading and harmful.


Distributed by NEP-HIS on: 2017-03-19

Review by: Kenneth Pomeranz (University of Chicago)

Kent Deng and Patrick O’Brien have done us all a service by taking a step back from the conclusions drawn by different participants in the so-called “great divergence debate” to focus  on the types and quality of our data, and on some conceptual problems with the application of modern measurements such as GDP to economies that were radically different from ours – in part because they were incompletely monetized.  I find myself agreeing with most of their criticisms of both GDP and real wage comparisons, and have some of my own to add. Not surprisingly, then, I share their preference for research on comparative consumption – which was a big part of my approach in The Great Divergence – and agree that this is where we have the best prospects for making further progress on these issues.  But I am not as ready as they seem to be to completely discard approaches based on GDP or real wage estimates; and perhaps more importantly, I would significantly modify their assessment of where our discussion of consumption and popular living standards currently stands.

We are, quite simply, unlikely to find any data that is good enough to lay these disputes  to rest.  I agree that the chances of finding significantly better consumption data are higher than are our chances of finding everything we would need to construct truly persuasive GDP estimates, and that the problems with treating wages as representative of living standards in a society like 18th century China are quite severe,  even if we could resolve the more narrowly empirical problems with the wage data themselves (e.g. unstated but significant in-kind components, differences in the currencies in which Chinese wages and prices are often quoted, uncertainty about the length of the “day” in day wages, and so on).  But at the moment, the consumption data also have significant problems; so while this may well be where we want to concentrate future research efforts, that  does not mean that this is the only metric we should be tracking as we make our best guesses about the current state of this controversy.  (We could, of course, theoretically all agree not to comment on this controversy until we  know more, but that seems unrealistic, given how many other issues it touches upon.)   So I would be inclined to keep the wage data, and even the GDP estimates, in play in this discussion, even though I share Deng and O’Brien’s sense that the consumption data are stronger (and even though those data are more favorable to the position I took in my 2000 book).  Let me briefly review each of these areas.


Comparative GDP Estimates


I would not disagree with Deng and O’Brien’s critique of the GDP approach, or of Maddison’s figures in particular: the latter were based on far too narrow an evidentiary base for much of the world and much of history.  I think, however, it is worth noting that there have been some more recent attempts to estimate GDPs, which have the advantage both of somewhat better data and of attempting to construct GDP figures for the Yangzi Delta, rather than for China. Given the points that some of us have made repeatedly about the vastly different scales of China and any single European nation, and about the advantages of comparing the most developed region of a continent-sized China with the richest regions of Europe rather than insisting on national units, these numbers seem to be worth at least some attention.
For instance, a recent paper by Stephen Broadberry, Hanhui Guan and David Daokui Li suggests that Britain must have overtaken the Yangzi Delta in per capita GDP by the first quarter of the 18th century.[1]  This is, of course, materially different from my claim in The Great Divergence that the Yangzi Delta had not fallen significantly behind until well into the second half of the 18th century, and maybe not until 1800 (though my conclusions were based on estimates of consumption, longevity, and basic human well-being, rather than GDP).  Nor has this paper found a way around all the problems with historical GDP and comparisons between very different societies to which Deng and O’Brien have pointed.(These include the radically different market baskets of these two societies, which had relatively little trade between them, the very different degree to which the government tracked various kinds of production, and others; to which I would add, large differences in the degree to which various goods and services passed through the market.)  Still, I would not want to simply discard such work, given the difficulties that dog other approaches. Moreover, I think it is noteworthy that a debate between an early and a late 18th century divergence represents a considerably different intellectual landscape than the one we would have if we relied on Maddison’s GDP numbers,[2] or on the non-quantitative work of David Landes, Deepak Lal, and various others – or for that matter, on an earlier attempt by Guan and Li to estimate comparative GDPs, which had previously claimed that a huge gap already existed in the 15th century.[3]  An earlier paper by Debin Ma suggested that the per capita GDP of the Lower Yangzi  — which he defines slightly more broadly than I do, so that it includes some poorer areas – probably exceeded that of China in general by about 50% in 1750:[4] such an adjustment, patched onto Maddison’s data, would leave the Delta behind Britain, but by considerably less (in percentage terms) than, say, Germany lags Norway today, or the U.S. lags Luxembourg (when nobody argues that this makes either Germany or the U.S. a “backward” economy fundamentally different from the “advanced” ones, as we used to think China was relative to early modern Europe.). Similarly, a study by Li and Van Zanden, based on data for the 1820s, finds Holland well ahead of two counties in the Delta for which there are particularly good data in those years; but as  they note, the 1820s were a period of both agricultural crisis due to natural disasters and depression in the cloth trade, the second biggest sector of that region.  They suggest that if we had data for 1800, it would show a smaller gap, but still a significant one, with Holland perhaps 50 or even 70% higher in per capita GDP.[5] Admittedly, that is far from the rough parity I had originally suggested at 1800, and would now be inclined to put at somewhere around 1750 instead; there are some plausible adjustments that I think would narrow the gap further, but that is not really the point for now.  Instead I would emphasize that despite continuing disagreements and continuing data problems – the latter of which will probably never be fully solved – we have made some progress in narrowing the range of plausible answers about when and how much divergence occurred in these terms.  Even if GDP is a seriously flawed measure for purposes of this debate, I am not sure we want to throw it out entirely.

Real Wage Comparisons

The wage data is similarly vexed, and Deng and O’Brien have, I think, explained very convincingly some reasons for skepticism.  But let me add two more, extend the discussion of another, and suggest a possible implication of how we might read this imperfect data in conjunction with the even more imperfect GDP data.

The first additional cause for skepticism in Robert Allen’s own reconstruction of real wages based on prices and wages recorded by the supercargo of an East India Company ship docked in Guangzhou during the trading season of 1704.  Using the same basic approach as he and his co-authors use on the larger data set they compiled a bit later, Allen arrives at the conclusion that the real wages here were roughly equal to those in London at the same time – and Guangzhou, it is generally agreed, was not quite as wealthy as the Yangzi Delta.  (Allen 2004).  Let me make clear that I am not saying that these data give the correct picture,  and the other data a false one: there are certainly reasons why the Guangzhou data could be unrepresentative.[6] But these are at least prices and wages that we know were actually paid by individuals in private markets, and that should be relatively free of unreported in-kind benefits.  (Chinese workers would certainly not have lived on a British ship, and are unlikely to have eaten British food.) By contrast, the Chinese data in the later and better-known 5 author paper on early modern wages around the world are from administrative reports of prevailing wages, with no evidence that the reporters actually made any sort of survey, and no data at all on in-kind compensation.  I would thus not be quick to throw out the Guangzhou material just because it is a smaller database – and that it gives a figure which is so much higher than those derived from the other data seems lke a good reason to doubt the data overall.  There is also something highly suspicious about the lack of difference between the wage rates for different parts of China in the administrative data, when every qualitative source we know of agrees that there were very large regional differences in material living standards.  Again, this is not sufficient reason to discard these data when we have so few; on the contrary, they represent the best large-scale data set that we have, and the authors have used them to make interesting claims.  But I think we need to be very careful about how we use them for this particular debate.

It is crucial that most Chinese did not rely on wages for their income – as O’Brien and Deng note.  But we also know quite a bit about  the likely relationship between these wages and peasant earnings.  All our evidence suggests that tenant farmers earned a great deal more than agricultural laborers, even if the latter were able to find year-round employment. This conclusion is confirmed whether we look at estimates of money earnings, convert wages into cash and compare to farm yields net of rent and other expenses, or consider key social indicators – including the especially lowly status of wage laborers, and the fact that most tenants were able to marry and raise families, and most agricultural laborers could not.[7]  And in a society without strong guilds or unions, there is no reason to think that unskilled wages in town would be much higher than in the countryside.  (This would be particularly true in the Yangzi Delta, where towns were very densely distributed across the map, so that almost any rural resident could bid for an unskilled job in a town without going very far.[8] )  Indeed, in the admittedly limited data we have, the difference between the earnings of a farmer with an average-sized tenancy and a wage laborer are on the order of 2.5 – 3.0:1.  Under the circumstances, wages are a very poor guide to popular living standards: and comparing them to wages in England or Holland, where proletarians made up a large portion of the labor force by the 18th and especially the 19th century, represents a comparison between the bottom of the income distribution in one place and something approaching to middle in the other. [9]

But even if these wages do not tell us much about comparative living standards, they might nonetheless tell us something about trends in comparative labor productivity. Significantly, estimates of rural incomes and rural labor productivity suggest that the Yangzi Delta was still on a par with England and Holland on these measures even as late as the 1820s.[10] This would place it far above the rest of Europe – including, of course, a number of countries that began mechanized industrialization and sustained per capita growth well before China did.[11]  Delta agriculture was also still well ahead in total factor productivity in agriculture as late as 1820.[12] When taken together with the evidence already discussed which suggests a relatively late divergence, and therefore a fairly sudden widening of the gap once it manifested itself  – since nobody doubts that it was quite large by the mid-19th century – this would at least suggest that we should not probably be looking at agriculture to explain the divergence.  It also suggests, as Robert Allen has argued in his discussion of British industrialization, that it was higher wages in the growing urban sector that pulled up rural wages, necessitating labor-saving innovations in agriculture, rather than agriculture creating an enlarged urban work force by shedding workers on its own.[13]  It does not appear that urban demand exerted a comparably strong effect on rural Chinese wages, even though the barriers to rural-urban migration – whether in the form of exclusionary institutions or urban dis-amenities – were comparatively weak in Qing times;[14] instead, the most likely reason not to leave was that, as noted above, most rural people earned far more than unskilled wage laborers in either city or countryside, and nothing was pushing up urban wages fast enough to overcome this disincentive.  A significant gap in urban real wages – if confirmed by further studies that can more fully overcome the problems described by Deng and O’Brien – might then be significant not as a sign of a difference in living standards that already existed, but as a sign of urban changes in Europe that were beginning to create such differences.

(to be continued…)


[1] Broadberry, Guan and Li 2014..

[2] Maddison 2001: 42, suggesting that Western Europe overtook China ca. 1300.

[3] Guan and Li  had previously argued (2010) that China was far behind by the 15th century, if not earlier, and had fallen even further behind over the succeeding centuries. See also Landes 1998, Lal 1998.

[4] Ma 2004. Compare Maddison 2003: 262.for an interpellated UK figure.

[5] Li and Van Zanden 2012:973,

[6] It is true, for  instance, that not every Chinese worker in Guangzhou was able to offer his services to the  foreigners who docked there, perhaps reducing competition and driving up wages.  Bt quite a few could – numerous memoirs from foreigners who visited Guangzhou in this period speak about foreigners being besieged by crowds of potential porters and other service providers. Nor is it clear why any restrictions would have driven up the price of labor more than it did that of the many kinds of provisions for which Lockyer records prices paid, and which Allen uses to create the denominator of his real wage.

[7] I review some of this data in Pomeranz 2006, and Pomeranz 2011. On the strength of tenant rights, which helped make this income differential durable, see  for instance Rawski 1972 Li Wenzhi and Jiang Taixin 2005;Yang Guozhen 1988; Zhang Peiguo 2002.

[8] On the distribution of towns across space see Xue Yong 206: 319, and 302-346, 432-475 for a discussion of various estimates of urbanization in the Yangzi Delta more generally.

[9] Pomeranz 2011.

[10] Allen 2009b; Li and Van Zanden 2012.

[11] For intra-European comparisons, see Allen 2000..

[12] Li and Van Zanden 2012:975; Allen 2009b.

[13] Allen 2009a.

[14] On Chinese guilds in this period, see Moll-Murata 2009, Pomeranz 2013. Though our data is thus far inconclusive, China does not appear to have had a pronounced “urban graveyard effect” – that is clear evidence of worse health and higher mortality in cities, providing a disincentive to migration that had to be overcome by significant wage differentials, as was the case in early modern and industrializing Europe.

“Empire State of Mind”: The Land Value of Manhattan, 1950-2013

What’s Manhattan Worth? A Land Values Index from 1950 to 2013.
by Jason Barr, Rutgers University (, Fred Smith, Davidson College (, and Sayali Kulkarni, Rutgers University (
Abstract: Using vacant land sales, we construct a land value index for Manhattan from 1950 to 2013. We find three major cycles (1950 to 1977, 1977 to 1993, and 1993 to 2007), with land values reaching their nadir in 1977, two years after the city’s fiscal crises. Overall, we find the average annual real growth rate to be 5.1%. Since 1993, landprices have risen quite dramatically, and much faster than population or employment growth, at an average annual rate of 15.8%, suggesting that barriers to entry in real estate development are causing prices to rise faster than other measures of local well-being. Further, we estimate the entire amount of developable land onManhattan to be worth approximately $825 billion. This would suggest an average annual return of 6.3% since the island was first inhabited by Dutch settlers in 1626.

URL: [this link will download a Word copy of the paper to your computer]

Review by Manuel A. Bautista González (Columbia University)

“All cultures have their creation myths, and according to cherished New York legend, the Manhattan real estate market was born when the Dutch paid $24 in shells to the Indians for an island that is today worth billions of dollars. The persistence of this story tells us more about the justifying strategies of our own times than about the past. The Manhattan real estate market, the myth implies, is as natural as its bedrock and harbor, and real estate magnates who today pursue “the art of the deal” are only fulfilling their forefathers’ vision of the profits embedded in Manhattan land. The conditions of Manhattan’s land and housing markets, far from being part of the natural order of things, are rooted in a social history. It is, after all, people who organize, use, an allocate the benefits of natural and social resources, and the value they assign to land depends on the larger set of social relations that organize property rights and labor. […] How did land become “scarce”? […] Who profited, who lost, and what difference did the flow of rents make to New Yorkers’ understanding of their social responsibilities within a shared landscape […] The myth that celebrates a real estate deal as New York’s primal historical act lends an aura of inevitability to the real estate market’s power to shape the city landscape and determine the physical conditions of everyday life. New Yorkers today live in the shadows of deals that have produced the glitter of Trump Tower, the polished facades of renovated brownstones, and the shells of abandoned buildings. These shadows especially darken the paths of those who are getting a bad deal: the more than 50,000 people who have been displaced onto the city’s streets and sleep in doorways, subway stations, railroad terminals, or temporary shelters. Contemporary politicians invoke this landscape of light and shadows to point to the contradictions of of our time: a city that can indulge extravagant displays of wealth cannot afford to house its people.”

(Blackmar 1989: 1, 12)


Debates over the high market value of real estate and the unaffordable price of housing occupy a constant place in the public spheres of the major cities of the world, especially in those where land is already a very scarce factor and vertical, intensive urban development takes place in the form of tall buildings, towers and skyscrapers. However, historical perspectives on the real estate and housing markets are for the most part lacking in these discussions. In their paper, Jason Barr, Fred Smith and Sayali Kulkarni attempt to fill the gap for New York City, a capital of capital like no other, to borrow from the title of the book by financial historian Youssef Cassis (Cassis 2007). In their work, published in NEP-HIS 2015-04-11, the authors develop a land value index between 1950 and 2013 in Manhattan, the island that defines the Big Apple like no other borough does.

According to the deflated value of their index, the real value of real estate in Manhattan since 1950 has increased at an (otherwise impressive) average annual growth rate of 5.1%. The authors identify three long cycles: the first one, 1950-1977, roughly coincided with the golden era of Western capitalism, a skyscrapers boom and the demise of urban industries; the second one, 1977-1993, began with the consequences of white flight to the suburbs and fiscal crises in the city and lasted until the financial Big Bang of the late 1980s and early 1990s; and the third one, 1993-2007, manifested the impact of financialization of the U. S. economy, the rise of Manhattan as a services powerhouse, and the emergence of New York as a truly global city, in the sense proposed by the sociologist Saskia Sassen (Sassen 2001).

View of Manhattan from Top of the Rock Observation Deck, Sunday, May 20, 2012, 5:13 PM EST. A gift from the author to the loyal audience of the NEP-HIS blog.

View of Manhattan from Top of the Rock Observation Deck, Sunday, May 20, 2012, 5:13 PM EST. A gift from the author to the loyal audience of the NEP-HIS blog.

The authors go through the methodological problems of developing a land value index. The first problem has to do with whether one assesses the value of undeveloped land or whether one incorporates the constructions on it. The second problem is that of using either market prices or assessment of values for taxation purposes, for example. A third problem derives from the divergence of market prices and assessed values, a divergence which is considerable in the case of New York City during this period.

Continue reading

“As in the modern world.” Foreign and Domestic Equities in the London Stock Exchange, 1869-1928

Interior of the London Exchange, The Illustrated London News, March 25, 1854.

Interior of the London Exchange, The Illustrated London News, March 25, 1854.

Bloody Foreigners! Overseas Equity on the London Stock Exchange, 1869-1928.

by Richard S. Grossman, Wesleyan University (
Abstract: This paper presents data on quantity, capital gains, dividend, and total returns for domestic and overseas equities listed on the London Stock Exchange during 1869-1928. Indices are presented for Africa, Asia, Europe, Latin America, North America, Australia/New Zealand and for the finance, transportation, raw materials, and utilities sectors in each region. Returns and volatility were typically highest in emerging regions and the raw materials sector. Dividend yields were similar across regions and differences in total returns were due largely to disparities in capital gains. Returns of firms in more industrial markets were relatively highly correlated with each other and with developing regions with which they had substantial colonial or trade connections. Contingent liability was most extensively employed where leverage was high and the physical assets were either meager or inaccessible to creditors.


“The nominal value of the securities listed [in the London Stock Exchange] went from £2.3 billion in 1873 to £11.3 billion in 1913; in other words, more than the New York Stock Exchange and the Paris Bourse combined. As evidence of its highly cosmopolitan character, foreign stocks, which represented between 35% and 45% of the total in 1873, exceeded 50% from 1893 onwards. By 1914 one-third of all negotiable instruments in the world were quoted on the London Stock Exchange” (Cassis 2007: 98)
Since it was established in 1801 and most notably during the period commonly referred as the first globalization, the London exchange was the most important market for securities in the world. In this paper, distributed by NEP-HIS on 2014-01-17, Richard Grossman presents an analysis of newly assembled data on UK and foreign equities listed in the London Stock Exchange between 1869 and 1928.
The study of the performance of equities in London by Grossman offers an unparalleled register of the rhythms of the world economy, from the late nineteenth century until the start of the Great Depression. It thus offers an excellent portrait of the role of the London equities market as the chief financial intermediary for capital flows within the British empire and the rest of the world.
Data to construct annual equities indicators from 1869 to 1929 was sourced from the  Investor’s Monthly Manual, which was digitized by the International Center for Finance (ICF) at the Yale School of Management. Grossman describes with detail the problems of determining the industrial sector of each firm in question, the criteria used by the staff of the Manual and the ICF to ascertain the domestic or foreign nature of the firms therein listed, and accounting issues arising from several other situations, such as a share’s volume of trade and differences between the nominal and market value of shares at different points in time. Grossman uses end-of-January data from 77,248 observations of equity securities, as “equity, a claim on firm profits, may be more likely to reflect expectations about future corporate profits than bonds” (Grossman 2014: 4).

“The Otherness of the Past:” (Economic) History and Policy in the Age of Disenchantment

On history and policy: Time in the age of neoliberalism
Francesco Boldizzoni (, University of Turin
Abstract: It is often said that history matters, but these words are often little more than a hollow statement. In the aftermath of the Great Recession, the view that the economy is a mechanical toy that can be fixed using a few simple tools has continued to be held by economists and policy makers and echoed by the media. The paper addresses the origins of this unfortunate belief, inherent to neoliberalism, and what can be done to bring time back into public discourse.

“How will the 2008/09 crisis influence historical scholarship? […] The recent crisis reminds us that the policy response is as much a matter of ideology and politics as it is a matter of economics. […] The widespread use of the Great Depression analogy in the recent crisis having reminded us that historical narratives are contested, we will see more explicit attention to the question of how such narratives are formed.” – Eichengreen (2012: 303-304, my own emphasis added)

This paper, based on a lecture Francesco Boldizzoni gave as a scholar in residence at the Max Planck Institute for the Study of Societies, and distributed via NEP-HPE on July the 15th, 2013, explores the difficult relationship between history and policy, focusing on the ways in which scholars and policymakers have used and abused history in recent times.
Francesco Boldizzoni

Francesco Boldizzoni

The unnamed field in the title of Boldizzoni’s paper is no other but economic history, which comes as no surprise for those following the reception of his book The Poverty of Clio. Resurrecting Economic History, a controversial and dismal depiction of the state of economic history published in 2011. In his book, Boldizzoni (research professor of economic history at the University of Turin, and fellow at Clare Hall in Cambridge University) argues that economic history is dead, sickened by the epistemological and methodological faults of cliometrics and the new economic institutionalism (NEI), as well as “a lack of historical sensibility, linguistic skills, and by an amazing level of scholarly illiteracy” amidst her practicants and followers (Boldizzoni 2011b). Boldizzoni claims that if scholars are to “resurrect” economic history, they must draw inspiration from the example set by historians of the Annales school, the historicized socioeconomic modeling of Karl Polanyi, Moses Finley, Alexander Chayanov and Witold Kula, and insights taken from the neighboring disciplines of economic sociology and economic anthropology.
The paper now reviewed problematizes the relationship between history and policy, and more specifically, the interaction of economic history with economic policy, with particular attention to the uses and abuses of history and memory. Standing in the crossing of economic history, the history of economic knowledge and thought, memory studies, and the history of economics and science, Boldizzoni’s paper demonstrates the merits of interdisciplinary and multidisciplinary work, as his approach offers a nuanced, cautious answer to the role of historically-informed policymakers during economic downturns and illuminates what stance should economic historians have in the public sphere. Boldizzoni argues that history “is both a search for meaning and an injection of antibodies:” honest economic historians should necessarily denounce poor scholarship that mobilizes and abuses the past for political purposes in the present, and inform their audiences that the economic system is a “historically determined […] social construction, a man-made environment.” (Boldizzoni 2013: 10).

“A fluid, ever-evolving, and organic process of improvement, misstep and improvement”: The Long Road to Monetary Union in the USA

Politics on the Road to the U. S. Monetary Union

Peter L. Rousseau (, Vanderbilt University


Abstract: Is political unity a necessary condition for a successful monetary union? The early United States seems a leading example of this principle. But the view is misleadingly simple. I review the historical record and uncover signs that the United States did not achieve a stable monetary union, at least if measured by a uniform currency and adequate safeguards against systemic risk, until well after the Civil War and probably not until the founding of the Federal Reserve. Political change and shifting policy positions end up as key factors in shaping the monetary union that did ultimately emerge.

Review by Manuel Bautista Gonzalez

Peter L. Rousseau

Peter L. Rousseau

In this piece published in NEP-HIS 2013-04-13, Peter Rousseau argues for the need to complicate the widely-held, simplistic view that political union is a necessary condition for a successful monetary union. By studying the intersection of politics, money and finance in the United States from the American Revolution to the Great Depression, Rousseau posits that there is no automatic mechanism to ensure the concurrence of political and monetary union.

Although Rousseau begins his paper with a rather narrow definition of monetary union as a “system with a uniform currency and adequate safeguards against systemic risk” (Rousseau 2013: 1), he expands it throughout the paper to take into account other characteristics and consequences of processes of monetary unification.

The most obvious element of monetary union is the adoption of a single unit of account and uniform currency throughout a territory. To function, monetary union requires credible authorities with effective powers to control the supply of money while properly backing liabilities to minimize uncertainty. To reduce transactions costs, monetary union also demands institutional arrangements between the government and the banking system as a private supplier of means of payment. With monetary union, short-term and long-term capital markets become part of a payments system, whereby due to network effects, the reduction of borrowing costs in regular conditions can meet rapidly-spreading liquidity squeezes in times of financial distress. To recapitulate, monetary union has a dual, difficult nature, for it requires the virtuous alignment of public and private interests; henceforth, politics will mold for better or for worse the actual operation of any monetary union.

Continue reading

“If they couldn’t guarantee the property rights of the land they gave away, how could they possibly sell it?”. Land Privatization and Property Rights in the Nineteenth Century Neo-Europes

The Political Economy of Land Privatization in Argentina and Australia, 1810-1850: A Puzzle

Alan Dye (, Barnard College, Columbia University

Sumner La Croix (, University of Hawai’i-Mānoa


Abstract: This paper compares public land privatization in New South Wales and the Province of Buenos Aires,in the early nineteenth century. Both claimed frontier lands as public lands for raising revenue. New South Wales failed to enforce its claim. Property rights originated as de facto squatters’ claims, which government subsequently accommodated and enforced as de jure property rights. In Buenos Aires, by contrast, original transfers of public lands were specified de jure by government. The paper develops a model that explains these differences as a consequence of violence and the relative cost of enforcement of government claims to public land.

Review by Manuel Bautista Gonzalez

The U.S. economy has racked up an enviable record of two centuries of sustained economic growth —an achievement, it has often been asserted, that was predicated on the establishment of institutions guaranteeing the security of property rights. My aim in this article has been to qualify this assertion by reminding scholars that economic development also requires that societies be able flexibly to reallocate property rights in response to new technological and other developments. If such reallocations could always occur smoothly—either through market transactions or a consensus effort on the part of society to capture the resulting gains in efficiency—there would be nothing mysterious about this qualification. As I have shown, however, reallocations in the United States have often been involuntary, and losers have not always received adequate (or any) compensation. Owners whose property has been taken from them have routinely charged that property rights are in fact not secure, but aside from some relatively brief episodes when broader protest movements have taken up their cause, these kinds of complaints have never become general. Hence the mystery. Despite the many involuntary reallocations of property that have occurred repeatedly since the formation of the republic, Americans still strongly believe that their property rights are secure and they act in their economic lives accordingly. – Lamoreaux (2011), emphasis added.

This paper was first distributed by NEP-HIS on 2012-05-15. The paper reviewed in this post was a more recent version from January 4, 2013, made available by the authors.

Alan Dye

Alan Dye

Sumner La Croix

Sumner La Croix

Dye and La Croix’s paper is an illuminating exploration of the history of land property rights in the province of Buenos Aires (Argentina) and the colony of New South Wales (Australia) in the first half of the nineteenth century. Whereas Australian squatters acquired de facto claims over lands outside the official settlement areas defined by colonial authorities and some of them managed to transform their claims into de jure property rights, porteño landholders often relied on the will of the authorities of the nascent republic to enforce de jure property rights, with mixed results. Why did authorities honor or not existing claims over land when governments stood to lose revenues from their sale or lease?

In their answer, the authors refute the presentist bias of popular institutionalist and factor-endowment accounts: contrary to the belief, developed countries have not always had a better record of securing and enforcing property rights over land than developing countries. Why?

Continue reading