Lecture #3

"Making History"

This lecture builds on Topic I, Part C in the printed Guide. Please read that material first. 

CLICK HERE for the PowerPoint/Real Audio presentation of this lecture. 

Much of the preceding lecture was concerned with "theory". Here we will look at "history". 

Methods of inquiry:

Induction  
  • the traditional method of historians and lawyers
  • inferring cause from the evidence ("facts")
Deduction  
  • the traditional method of economists
  • inferring cause from a prior set of general principles ("theory")
"History" is necessarily something we "make" or invent. Since writing history is never a "once-and-for all" activity, the past is continuously reinvented.  

Economic history is a specialized branch of general history. 

Until the 1950s the methods used in writing economic history were the same as those used in writing political, constitutional, or general history, although economic historians may have tended to make greater use of theory (deductive methods) than other historians who relied more on inductive approaches. 
  

Leopold von Ranke 1795-1886 

  • father of modern documentary history
  • rigorous scrutiny, analysis and verification of the evidence
  • the historian as scientific investigator
  • history as truth…"what really did happen"
  • influence on economic history 
In the past there have been attempts to make the writing of history "scientific" and objective (and if they had been successful would have resulted in history being written once-and-for all). 

This was the objective of  Leopold von Ranke who hoped to make historical research so exact  that it yielded  truth itself.  

Ranke's approach was influential throughout Europe and North America in the latter part of the 19th Century. 

But those who tried to apply it to the writing of economic history encountered a difficulty. What about the use of theory (such as English classical economic theory)? 
 

Economic Institutions 

Bruno Hildebrand and the "German Historical School"  were devoted to understanding economic life by studying real-world institutions and practices versus the English theoretical tradition. 

When economic history began to develop as an academic discipline in North America these two traditions were in contention. Specifically, the classical economic theory of Smith, Ricardo, Malthus and the empiricism of Bruno Hildebrand and other members of the German Historical School. 
  

Influence of the German Historical School in North America 

  • In the US
  • Richard Ely and the American "institutionalists"
    • In Canada 
      • William Ashley at the University of Toronto 
      • Adam Shortt at Queen's University in Kingston and his successors O.D. Skelton and W.A. Mackintosh
    Led by Richard Ely in the US, some economic historians rejected classical economic theory and took up the German historical school approach, but while influential this "institutionalist" school was overwhelmed by a mainstream movement dominated by theory.  

    In Canada, the German historical / American institutionalist approaches were imported to major universities such as Queen's and Toronto. 

    Yet the theoretical influence of the English classical tradition also affected the teaching and writing of economic history in Canada.  
      

    The "Laurentian School"

    These imported influences (both empirical and theoretical) were combined with a peculiar "Canadian" perspective on North American development which involved studying the particular implications for economic change of  
    • geography
    • technology
    • markets
    • business
    • on culture and institutions
    The elements just described were all incorporated into what eventually emerged as a distinctive Canadian approach to economic history, an approach which also dominated Canadian historical writing generally for a period of about 50 years, from its emergence in the 1920s until the late 1960s.  

    This approach was characterized by heavy emphasis on the "facts" of the Canadian situation, especially the geography of the country. Indeed, so great was the emphasis on one particular geographical feature, the St. Lawrence River, that the chief contributors to the approach have been referred to as comprising the "Laurentian School".  

    At the same time, the role of the price system, the way production was shaped by world market forces, the influence of fixed and other costs of production, were also embodied in the analysis, particularly in the works of Harold Innis and W.A. Mackintosh who are credited with creating the central component of the analysis the so-called "staple thesis".  

    The Laurentian School

  • Harold Innis 
        • geography and culture
    • Arthur Lower 
        • nation as family
        • the frontier experience
    • Donald Creighton 
      • history as drama
      • the "commercial empire of the St. Lawrence"
    Innis dominated Canadian economics, economic history and the Canadian social sciences generally through the 1930s and 1940s. 
    - shared with with Mackintosh invention of the staples thesis  which explained not only Canadian economic, but the country's social, political and cultural development in terms of its early economic specialization in the production of a succession of basic raw-material exporting industries.  
    - influenced the work of other Canadian scholars of the time, notably Arthur Lower and Donald Creighton 
     

    Harold Innis 

    • interaction of culture and geography
    • European commercial interest in the resources of the New World
    • the staples tradition
    • communications
    • the influence of media on history
    - early studies of particular Canadian businesses (Canadian Pacific Railway) and industries  (Atlantic cod fishery and the North American fur trade).  
    - expanded by work of followers such as Lower, Creighton, Britnell who wrote histories of the forest industries, the growth of trade and commerce on the St.Lawrence - Great Lakes system, and the development of the prairie wheat industry.  
    - later inquiries into the nature of communications and the influence of the media on history, subsequently taken up by Marshall McLuhan.  
      

    Separate Identities:

    Regional history  
    W.L. Morton  
    • imagination and the sense of place
    George Britnell and Vernon Fowke  
    • the West as an instrument of national policy
    Other histories  
    • business history
    • labour history
    • native history
    • women's history
    • ethnic histories ….
    In the 1960s those writing Canadian history abandoned both the staples orientation  of the Laurentian school and Canada as a nation to in favour of more narrowly-defined topics 

    - the history of specific regions such as the prairie west  (W.L. Morton, Vernon Fowke, George Britnell), British Columbia (Margaret Ormsby), the North (K.J. Rea) 
    - the history of particular groups and communities ( women's history, native history, ethnic studies .... 

    Two economic historians at the University of Saskatchewan, George Britnell and Vernon Fowke were also important contributors to the regional history of prairies, both working in the staples tradition of the early Innis.  
      

    The New Economic History:

    the "cliometric revolution"  
    • the attack of "theory" on "history"
    • testing the historical record against the theoretical models
    • empirical (statistical) testing of neo-classical theory
    • the "counterfactual method"
    applications to US economic history  
    • the "axiom of indispensability" (railroads)
    • the economics of slavery in the American south
      

    Another change in the writing of economic history in Canada that came in  the 1960s --  the " cliometric revolution" and its product, the "New Economic History".   

    Application of modern techniques of statistical analysis and formal theoretical economic  models to challenge long-established interpretations of the economic history. 

    Examples: 

    - the building of the railways was not a major cause of the great expansion of the US economy in the decades following the Civil War as had previously been believed 
    - the slave economy of the American South prior to the Civil War was not an inefficient and declining system. 
     

    Fogel and the US Railways:

    Railways and American Economic Growth, 1964  

    were the railways necessary for the great expansion of US economic growth after the Civil War as had been widely believed?  

      question is "re-examined with the aid of the analytical and quantitative techniques of modern economics" 
      answer is "no" -- other forms of transportation would have been developed.
    Robert Fogel is perhaps the best-known of the "New Economic History" pioneers. (In 1993 he shared a Nobel Prize for his work.) 

    - showed that the long-held belief that the construction of the transcontinental railway system had been an important cause of the great expansion following the Civil War was simply wrong.   
     

    Slavery in the US South

    • was the slave economy of the south a moribund, degenerate, backward system?
    • no…the new analysis shows it was efficient, highly productive, and yielded higher returns to owners and "workers" than most of the industrial activities of the north.
    Demonstrated that the traditional historical representation of the ante-bellum South was the product of crude propaganda disseminated by northern "abolitionists" who wanted to obscure the injustices of the new industrial society of the northern states.  

    Detailed analysis showed that the southern slave economy was at least as progressive, profitable, efficient, and productive as the "free labour" economy of the north.  
     

    Canadian Applications: 

    Chambers and Gordon  
    • was the establishing of the prairie wheat economy the cause of the economic boom in Canada 1896-1911?
    • no, it contributed only some 8 per cent, at most to the actual real growth of Canadian GDP during that time period
    • implications for accepted theories of Canadian economic development.
    The "New Economic History" was initially rejected by established Canadian economic historians trained in the Innis tradition, but it soon overwhelmed the indigenous approaches to the subject matter. 

    Example:  
    - a now-classic paper by  Chambers and Gordon challenged the traditional view that Canada's rapid growth at the turn of the century was driven by the development of the prairie wheat economy 
    - showed that the Canadian economy would have grown almost as much without prairie wheat as it did with it.   
      

    Current Trends:

    In North American university economics departments:  
      economic history as applied econometrics 
      decline of "history" component 
      Migration to history departments 
      sociology (social history) 
      geography (economic geography) 
      women's studies, native studies, ethnic ….. 
       
    Canadian economic history disappearing  an academic university-based discipline 

    - descriptive and institutionally oriented study of the Canadian economy is migrating  to history departments and  to departments specializing in fields such as  women's studies, ethnic studies ....   
     

    NEXT:

    the legacy of colonial institutions and experience:  
    • how developments in the pre-Confederation colonial period influenced the subsequent economic development of what is now Canada
    • why did Canada develop along a different path than the United States…or Mexico?
    In the next lecture we begin to look at the historical record of economic development in North America, beginning with the proposition that North American economic development was an extension of what was going on Europe at the time of the discoveries and that the resulting institutional development in North America significantly influenced the subsequent economic history of its various regions -- of which present-day Canada was one.  


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