Category Archives: Historiography

So, who was lightning the bulb in Latin America?

Foreign Electricity Companies in Argentina and Brazil: The Case of American and Foreign Power (1926 – 1965)
[Original title: Companhias estrangeiras de eletricidade na Argentina e no Brasil: o caso da American & Foreign Power (1926-1965]

By Alexandre Macchione Saes (alexandre.saes@usp.br), Universidade de São Paulo – FEA/USP and Norma S. Lanciotti (nlanciot@unr.edu.ar), Universidad Nacional de Rosario – CONICET

URL: http://econpapers.repec.org/paper/spawpaper/2013wpecon14.htm

Abstract

The article analyses the evolution, strategies and position of American & Foreign Power subsidiaries in electric power sector in Argentina and Brazil from their entry in the mid-1920s to their nationalisation. We compare the economic performance and entry strategies followed by the American holding in different host economies. We also examine the relations between the American electricity firms and the Governments of both countries, focusing on the debates and policies that explain American & Foreign Power’s withdrawal from Argentina and Brazil in 1959-1965. Finally, the article reviews the role of foreign direct investment in the development of electric power sector in both countries. The study is based upon the Annual Reports and Proceedings of American & Foreign Power (1923-1963) and other corporate reports, Government statistics and official Reports from Argentina, Brazil and the United States.

Review by Beatriz Rodríguez-Satizábal

This paper was circulated by NEP-HIS on 2013-11-02. Its topic deals with the popular subject of energy provision. Indeed, there has been no shortage of turning points in the history of the energy markets around the world. Since the development of the electricity in the late nineteenth century, energy markets have been a constant cause for debate. The discussion ranges from technical and engineering issues (such as heated debates around Nikola Telsa and Thomas Alva Edison), to the adoption of common standards, to questions as to who will provide the service, to a wider debate on government policies such as pricing and, more recently, on how to become “greener” (see for example the debate on UK gas and electricity providers).

Kilowatt

In the developing countries, the debate on energy has been tied to the relation between the foreign direct investment, the efficient provision of electricity, and nationalization policies (topics that, by the way, were picked up from a business history perspective in William J. Hausman, Peter Hertner & Mira Wilkins “Global Electrification” (2008, CUP). The question on the relation between foreign companies investing in such countries and the debate on the effects of imperialism is also latent in recent research (see for example the work of Marcelo Bucheli, Stephanie Decker, or Niall Ferguson). In this line of work, the paper by Macchione Saes and Lanciotti further explores the intricate relationship between a foreign company and its host countries but, at the same time, offers a contribution to the literature on Latin American foreign investment during the second half of the twentieth century.

According to Alexandre Macchione and Norma Lanciotti, the arrival of the American and Foreign Power Co in Brazil and Argentina marked the start of an expansion of US direct investment in those countries, while seeking new consumer markets during the 1920s (p. 2). However, it is important to notice that the company arrived to the region more than 20 years after the first electricity companies had established. Therefore, the case of American and Foreign Power Co offers an example of the aggressive expansion of an electricity company that only few years after its arrival suffered the effects of the crisis of 1929 and later on, had to deal with centralization and nationalization policies.

AlexandreNorma

The aim of the paper is to analyse the evolution, strategies, and position of the American and Foreign Power Company in both countries between 1926 and 1965. Divided in four sections, including an introduction and the concluding remarks, it presents first the greater attention that US companies gave to Latin America after the First World War, looking mainly to the evolution of the company in the US market and the subsidiaries in Brazil and Argentina. Then, the paper discusses the shift of the regulation and describes the complex relation between the state and the company. As a result, the main sections widely discuss the investment strategies which focus was in improving the service while achieving higher returns.

Three important issues emerge from this paper, namely:

1) The US investment was dominated by a few large holding companies that controlled the utilities supply in various countries. The localization in South America answers to both the search of economies of scale through new consumer markets and the need to diversify investment (p. 3). In order to keep growing in the local markets, the electricity companies acquired small and medium concessions keeping their organizational structure. Clearly, this served to the purpose of increasing returns, but there is no mention of the effects of this choice in the need for improving the service. In other words, how efficient the company became as a result of greater scale.

2) The effects of the Great Depression were greater than expected for the directors of the company. As explained by Macchione and Lanciotti, their main concern was that currency devaluation would damage the sustainability and profitability of their investments (p. 13), but they did not expect the shifted in the regulation that followed in the 1930s and 1940s. The link between government policy and business strategy is then questioned by the authors and the company strategies are evaluated. Small differences between the two countries are noticed, opening space for a future discussion on how foreign companies deal with diverse economic and political contexts, including an analysis of their role as regulators.

American and Foreign

3) One of the main factors for the company’s decision to withdraw from the region was the expropriation lead by the Latin American governments since the late 1950s (p.22). But to what extent expropriations responded to the inefficiency of the company? Macchione and Lanciotti explained that the low quality of the service added to the fluctuation of the long-term revenues and, in some cases, led to the confiscation of assets by the local national government. These arguments, of course, are not to minimise political and nationalistic ideas driving the confiscation of assets in Latin America during the twentieth century.

In summary, the paper Macchione and Lanciotti offers a case study that brings together elements from Latin American economic history that deserve more attention. These include the role of state, the interaction between businesses and regulators, foreign direct investment, and the relative efficiency of domestic acquisitions by foreign companies in the long-term. This paper is an important contribution to understand from the company perspective the links between strategy and government policies.

“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 (francesco.boldizzoni@unito.it), University of Turin
URL: http://econpapers.repec.org/paper/zbwmpifgd/136.htm
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).

Do business historians need a theory of the archive?

Why business historians need a constructive theory of the archive

by Stefan Schwarzkopf (Copenhagen Business School)(ssc.mpp@cbs.dk)

URL: http://EconPapers.repec.org/RePEc:pra:mprapa:46650

Abstract: Archival records are a constitutive element of business historical research, and such research, in turn, is fundamental for a holistic understanding of the role of enterprise in modern capitalist societies. Despite an increasing debate within business history circles about the need to theorize the historian as author and creator of narratives, a fuller reflection on the uses and limitations of the archive in business historical research has not yet taken place. This article takes its lead from theories of organisational epistemology, and asks to what extent business historians are trapped by an outdated, realist methodology and epistemology which is in danger of ignoring the multiple roles that archives play in their knowledge production.

Review by Stephanie Decker

Stefan Schwarzkopf’s paper on business archives (circulated by NEP-HIS on 2013-05-11) is a welcome addition to an increasingly lively debate about the future of business history. Originally published in the Business Archives Journal, it is now also available as an MPRA working paper. Even more refreshingly, it is a theoretical and more qualitatively focused discussion, which have remained rare on lists such as NEP-HIS, which are, as the name (New Economic Papers) suggests, dominated by debates based on the methodological apparatus of economics. In business and economic history, whether historians are quantitatively or qualitatively oriented, archives are central to their research. While business historians, the majority of whom work qualitatively, usually fail to discuss their methods at all, economic historians, mostly quantitatively oriented, provide detailed accounts of their numerical data and analytical procedures. Yet many also employ analysis based on historical sources in order to construct their models or to interpret their results; this aspect of gaining historical insight is however not discussed in methodological terms. The very familiarity of historians with their main research setting – the archive – apparently breeds contempt. Or disinterest at the very least.
This is precisely what Schwarzkopf highlights in his contribution: the need for a “fuller reflection of the uses and limitations of the archive in business historical research”. For this he blames the predominantly realist epistemology of many business historians even though other historians apparently have moved away from this in a variety of turns. Business history has certainly been somewhat divorced from the major trends and theoretical developments in mainstream history, even though this is perhaps less true in some continental European countries, where business historians remain integrated in history departments. More often than not they may be located in a variety of different departments, such as departments of social science or economics, as well as business schools. If business history ought to engage more with theoretical turns, the question today has become – which one? And from which discipline?
Schwarzkopf is certainly right to argue that a theory of the archive is necessary and important for business historians. It is in fact by now a much wider debate already (Ferguson, 2008; Stoler, 2009), and again one to which business historians have not contributed. But in this epistemological debate, even he seems to take too much for granted at times, first and foremost the very object of the debate. What do we think is an archive? “[A]rchives are organisations, they require institutional support.” Are archives really a ‘thing’, something tangible, an organisation, a location? To Michel Foucault archives were first and foremost structures that shaped the material, an approach that Schwarzkopf suggests greater engagement with at the end of the paper. And whatever empiricist historians may think about abstract Foucaultian constructs, in this digital, virtual age this definition is if anything gaining in relevance and reality. Are the two physical and conceptual notions of ‘archive’ mutually exclusive? Arjun Appadurai (2003) reminds us in “Archive and Aspiration” that they might be. He is interested in a very different type of archive, which is a personal locus of memory, identity and belonging for migrant communities. Postcolonial research is faced precisely with this absence of effective organisations that span past and present, thus the kind of archive that Schwarzkopf and many other business historians take for granted.


For business history, this is in fact also a more common issue than one would expect, at least for those who research the history of consumption or small firms in less concentrated industries. There are more theoretical options even for those cases, as the discussion by Newton and Carnevali (2010) shows. Because business historians are frequently dependent on private collection that are not institutionalised like their public counterparts, they have perhaps more in common with postcolonial approaches to a privatised past than they realise, because they are similarly weaving a patchwork that needs to contend with many gaps in the records (Decker, 2013). These issues cannot be neatly packaged into global North and South. What about the CEOs who offer their private papers to researchers? Archives come in increasingly different shapes and sizes. Can we have a theory that does justice to this variety? Or do we need many different theories?
Some of the most recent challenges to a stable notion of ‘archive’, such as digitisation, highlight the complexity of the issues. How does digitisation affect how archives are used, and vice versa? Will it determine what the collection stands for, more so than the entire body of files? Perhaps not a new problem for libraries that contain individual high value items that eclipse the totality of their collection, but certainly a phenomenon that will spread with digitisation. Just consider decisions to digitise parts of archival collections that are of greater public interest, such as World Bank’s digitisation of the Robert McNamara’s files. Faced with the impossibility of digitising an archive as vast as theirs, files of greater relevance to present-day audiences are prioritised, negating the need for people to physically enter 1818 H Street, NW, and engage with the overall collection. Is this a manipulation by the archivists, or is this it the pressure of demand shaping organisational responses?
Clearly neither history nor memory is simply determined by what was kept in the past. Memory is much more powerfully influenced by what the present is looking for in the past. Schwarzkopf highlights the important issue of ‘falsification’ in the example of Elsevier expunging undesirable products from the collection. The artificial boundaries between our knowledge of the past and present that have been taken for granted are called into question by new approaches such as memory studies. Here, history and archives are equated with “storage memory […] an ‘amorphous mass’ of unused and unincorporated memories that surround the functional memory like a halo (Tamm, 2013: 462 citing ; Assmann, 2011: 125).” The area of social remembering ought to be far more prominent in discussions of corporate history, while the theoretical implications of ‘mnemohistory’ still await critical engagement.
So what kind of archive are we talking about? The ground is shifting beneath us as we speak, as the meaning of the word “archive” is changing inexorably. Ask your undergraduate students, who might tell you the Financial Times database is an archive. And why not? “Digital humanities” are gaining ground, and debates about how this will change methodology and theory have just begun. And with technological advances, a postcolonial loss of organisational control is never far. Recent complaints in the UK newspaper the Guardian about the variable cost of archival research do not quite address the long-term impact of historical research via digital camera – that it allows all of us to build personal digital archives, removed from the oversight of institutionalised archivists. Business historians are by no means the only ones affected by these trends. If we ask whether we need a theory of the archive, surely nowadays we must first of all talk about how we define an archive, and whether business historians may actually be dead.

storageview
Schwarzkopf is right to criticise the widespread bias towards those easier-to-research, large corporate archives. Funnily enough, so has the more theoretically self-conscious Management and Organizational History (Mills and Helms Mills, 2011). But sometimes he overstates his case, for example when he writes: “If there is no archive that for example allows us to study the involvement of a specific company in arming Nazi Germany, or in exploiting slave labour in the Caribbean, then it has no space in academic discourse.” While clearly intended to be ironic, it is difficult to ignore the massive boom in German business history of the 1990s and 2000s in uncovering the Nazi past of German firms in the aftermath of the scandal surrounding Swiss bank accounts. The history of slavery and Atlantic history more generally has certainly been more significant outside business history (see for example Childs, 2002), but there are business historians engaging with these debates all the same (Haggerty, 2010). Painting the kettle too black detracts from the valid point that we need a greater epistemological engagement with our primary locus of research, the archive.
Not only has this debate been missing, as Schwarzkopf rightly points out, but there are also new approaches to theorizing the archive that go beyond the limitations of a short piece. This paper is one of the first to raise some of these fascinating questions for the practice of business history, and will hopefully spark a debate about the status of archival work in the field.

References

Appadurai, A. (2003) Archive and Aspiration. In: Brouwer J (ed) Information is Alive. Rotterdam: V2 Publishing.
Assmann, J. (2011) Cultural Memory and Early Civilization: Writing, Remembrance, and Political Imagination, Cambridge: Cambridge University Press.
Childs MD. (2002) Master-slave rituals of power at a gold mine in nineteenth-century Brazil. History Workshop Journal 53: 43-72.
Decker, S. (2013) The Silence of the Archives: Postcolonialism and Business History. Management and Organisational History 8: 155-173.
Ferguson, K.E. (2008) Theorizing Shiny Things: Archival Labors. Theory & Event 11.
Haggerty S. (2010) Risk and risk management in the Liverpool slave trade. Business History 51: 817-834.
Mills, A.J. and Helms Mills, J. (2011) Digging Archaeology: Postpositivist Theory and Archival Research in Case Study Development. In: Piekkari R and Welch C (eds) Rethinking the Case Study in International Business and Management Research. London: Edward Elgar, 342-360.
Newton, L. and Carnevali, F. (2010) Researching Consumer Durables in the Nineteenth Century: The Case of the Piano. Business Archives: Sources and History 101: 17-29.
Stoler, A.L. (2009) Along the Archival Grain: Epistemic Anxieties and Colonial Common Sense, Princeton: Princeton University Press.
Tamm, M. (2013) Beyond History and Memory: New Perspectives in Memory Studies. History Compass 11: 458-473.

The Mixed Blessings of Clio

The Cliometric Voice

Claude Diebolt (Bureau d’Économie Théorique et Appliquée (BETA), Université de Strasbourg) (cdiebolt@unistra.fr)

URL: http://ideas.repec.org/p/afc/wpaper/12-12.html

No abstract

Review by Anna Missiaia

Distributed by NEP-HIS on 2012-10-20, this is a short, dense, methodology paper by Claude Diebolt, the editor of the journal Cliometrica, tackles a well known issue among economic historians: the role of quantitative research in economic history (cliometrics) and its relationship with both history and economics. The so-called Cliometric Revolution has now come of age, having started in the 1960s with the work of Robert Fogel. It is safe to say that it has now conquered its space in the field. Diebolt offers us a retrospective of the field, and his vision of its future. The (sometimes harsh) debate is focused on the usefulness and validity of applying economic/econometric tools to the study of the past. He provides a lot of food for thought in this sense.

The paper’s main point is to highlight the usefulness of counterfactual analysis in history. The first example of this line of research that Diebolt discusses is the genre-defining work of Fogel (1964), reviewed here by Lance Davis over on EH.net. I think that Diebolt’s emphasis on counterfactual analysis is somewhat surprising; the shortcomings of this type of approach are now well known (see Leunig, 2010), and cliometric research today encompasses many other types of analysis that are as fruitful, from institutional analysis, to labour history, and historical economic geography.

I welcome Diebolt’s call for a shift in the economic history discipline at large from the “understanding side” to the “explaining side”. This implies that (quantitative) research should not limit itself to the description of historical phenomena, but also to the study of causal relationships.

Vermeer’s “The Art of Painting” (late 1660s), depicting a woman dressed as Clio, the muse of history.

The second part of the paper is devoted to the positioning of cliometrics with respect to both history and economics. Diebolt states that cliometrics is first and foremost a branch of history. It uses economic tools to provide historical answers, but it is not a mere application of economic models to the past. However, Diebolt recognises that cliometric research might also be seen as an auxiliary discipline with respect to economics. This last statement needs a clarification before the detractors of cliometrics start sharpening their weapons. The message here is that economic history could be a tool for economic theory building, not simply as a provider of empirical evidence for its models, but as a source of inspiration to theory. Ideally, there should be a mutual relationship in which cliometricians absorb from economists the latest theoretical and econometric advances, and economists get insights and ideas from the rigorous study of the past. Diebolt pushes the discussion forward, claiming that economic history could in future become a “full-fledged field of economic theory”.

Of the three main arguments about the “branding” of cliometrics, Diebolt’s mission to sell cliometrics as a field of economic theory seems to me the hardest. It is a difficult task to believe that cliometrics is, or ever will be, able to hold its role as a historical tool alongside the creation of a sort of unified theory of economic history. That aside, it would mean a reversal in the logic in what drives cliometric research. If cliometrics is meant to be part of history, as supported by the author, economic theory is just a mere tool used to provide possible answers to historical questions. Conversely, when history is used to prove the validity of an economic model, cliometrics becomes merely applied economics. I believe that the survival of the distinction between cliometrics as part of historical research and applied economics is most likely to be crucial for its future.

References
  • Fogel R., “Railroads and American Economic Growth: Essays in Econometric History”, The Johns Hopkins University Press, Baltimore, 1964.
  • Leunig, T., “Social Savings”, Journal of Economic Surveys, Vol.24 (2010), pp.775-800

Successful Entrepreneurship: A Matter of Location?

Entrepreneurship and Geography: An Evolutionary Perspective

By Erik Stam (Utrecht University)

URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa10p1267&r=his

Abstract

This paper is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The paper concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography.

Review by Beatriz Rodríguez-Satizábal

This paper was distributed by NEP-HIS on 2012-07-29. For the business historians immerse in the research of the history of entrepreneurship, this paper by Erik Stam is a piece to read. The thoughtful review of the challenges that the relation between entrepreneurship and geography present to future research invites to open the discussion on the differences among countries based on the characteristics of the entrepreneur’s location rather than only on its cultural values and the institutional environment.

Stam challenges the growing view of entrepreneurship as a subject exclusively to be deal by management scholars. The paper brings the history back to the discussion and innovates in the use of evolutionary economic geography. As Jones and Wadwhani (2006) explain, the historical research on entrepreneurship has been particularly concerned with understanding the process of structural change and development within economies using Schumpeter’s approach to innovation.

Understanding the importance of the newcomers is beyond the focus of only one discipline and the use of economic geography will allow the researcher to deal with the question on how the location increases the chances to have entrepreneurs that introduce organizational and product innovations, without falling in the vicious cycle of explaining the increase of entrepreneurs exclusively by social variables such as religion, family values, or networks.

Moreover, by explaining that the entrepreneurs are hardly lone individuals who rely primarily on their extraordinary efforts and talents to overcome difficulties, Stam introduces the argument that for nascent entrepreneurs the focal choice is what kind of firm to start given their location, not so much choosing a location for a given firm. Therefore, it deals with the concern on the spatial distribution of entrepreneurship by searching the aspects of the interaction between the newcomers and the geographical distribution.

Stam claims that “in order to improve the insights in the spatial variations of entrepreneurship, we need to specify the type of entrepreneurship” (p. 10). Although, this is not new for those who study entrepreneurship, Stam’s proposition to include evolutionary geography gives space to a new research agenda. In the future the study of entrepreneurship should take into account the spatial concentration of the industry, the combined use of the entrepreneur and the firm as a unit of analysis, and the study of the exit of young firms to accomplish a deep analysis of the role of entrepreneurs in economic development.