What Does an Economic Historian Do?

New economic history refers to the United States in the 1950s and 1960s. Some economists have begun to combine standard economic theory with econometric and statistical methods and apply them to the study of American economic history, thus opening up a fusion of historical research. And new fields of economics research. In more than half a century, the history of new economic history has made great progress, from the mere quantitative analysis of historical phenomena to the construction of a grand theoretical system on the evolution of social history, and trying to be within its own theoretical framework. New and systematic explanations of human development and stagnation, prosperity and decline.

New Economic History

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Paradigm conflict between new economic history and Chinese traditional economic history :

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The salient feature of the new economic history is the use of economic theory and econometric methods to analyze the history of human economic and social development, to explore the causes of success and failure, and to provide a reference for the current social and economic development. The current research framework of new economic history is mainly summarized according to the chronicle. Generally, the new economic history is divided into three stages: The first stage (from the 1950s to the 1970s) is based on quantitative analysis. The main method is It is "counterfactual measurement" and "indirect measurement"; the second stage (1970s to 1980s) is based on the analysis of economic institutions. The main method is the theory of institutional economics, especially the theory of property rights. The third stage (20 Since the 1980s, it is historical physiology, which combines the study of the evolution of human living conditions with the study of socio-economic history, integrates and expands historical econometric analysis, institutional analysis, and natural science achievements such as modern biological and medical analysis technologies. [1] The three phases are interlocking, progressive, layer by layer, and have an inherent logical connection. However, this does not give an intuitive impression of a comprehensive understanding of the research content of new economic history, and if there are different research methods, the same research content will be repeatedly researched and discussed.
Inspired by the division of economics into micro, meso, and macro economics, we try to divide the new economic history into a micro, meso, and macro analysis of the new economic history system, which analyzes the economy of a single market or a project Historical research is summarized as microeconomic analysis of new economic history; economic history that analyzes the development and change of the overall status of an industry is summarized as meso-analysis; economic history that analyzes the overall development and change of a country or region is summarized as macro analysis.
I. Micro-analysis of new economic history The so-called micro-analysis of new economic history refers to the use of micro-economic theory as an analytical tool, and the economic activities of production and consumption of individual economic units as research objects. The relationship between the rational actions of economic agents is analyzed and tested. The representative research result is the Dojima Rice Market in Osaka during the Edo period in Japan.
The Dojima Rice Market in Osaka was born during the reign of the Edo Shogunate. The Edo shogunate is a conservative government that follows the feudal system and the identity system. The shogunate not only established a strict social order, but also prohibited foreign contacts and trade. This gives the impression of a dark period similar to the stagnation of the medieval European economy.
The shogunate's income mainly depends on the peasants' tribute. The lord of the shogunate exercises unified control over the year-end tribute in the shogunate. When it is necessary to transport a large amount of food outside the lord, the shogunate lord feels that it is inconvenient to rely on the early merchants. The reason is that the method adopted by the early luxury merchants could not profit from the circulation process, nor could it well manage the transportation and sales of nangong rice, which was very inefficient. Therefore, the lords of the Mufans directly carried out the delivery, storage, and sales of nangong rice, carried out the preparation of harbors and transportation routes, managed rice quality and packaging within the territory, established a transshipment warehouse in the transshipment center Osaka, and hired transport and commodity transactions. Financial professionals participate in management. In the second half of the 17th century, rice was successively transported into Osaka by all the Japanese lords, and the sales volume of Tibetan rice in Osaka gradually increased, and a spontaneous rice market appeared. [2]
With the increase of transaction scale, in order to promote the smooth progress of transactions and avoid transaction risks, the Osaka rice market is gradually standardized. Initially, the transactions on the rice market were mainly physical transactions, which caused many inconveniences. In order to facilitate transactions, the market spontaneously produced "rice coupons", which stipulated that the holders of rice coupons could exchange (withdraw) rice within 30 days, but in fact they could still be circulated for a long time. In this way, the rice coupon not only has the function of a value storage and exchange means, but also promotes the circulation of the rice market.
With the prolongation of rice coupons from issuance to pickup, the risk of rice merchants to changes in rice prices increases. Over time, this will inevitably lead to the shrinking of rice market transactions. In order to eliminate this transaction risk, two rice economists in Osaka have developed an "intra-business transaction" transaction law. The specific method is to set up a "building material meter". Those in the same industry must pay a certain deposit to carry out futures trading within a certain period of time and pay the balance of the purchase and sale within the prescribed date. The opening balance settlement is carried out between the parties. As the transactions become more frequent and the relationship between buyers and sellers becomes more complicated, a special settlement agency called "removing two replacements (raising for exchange)" is responsible. This was the origin of the later "Accounting Rice Merchants" (futures exchange), [3] which subsequently developed into the Osaka Dojima Rice Futures Market. [4]
For the Dojima Rice Market in Osaka, some Japanese new economic historians have done fruitful research using traditional methods. New economic historians believe that it is not enough to analyze and describe the formation and significance of the Dojima rice market. It is more economically significant to find out whether the price formation of the market has the kind of effectiveness in the sense of modern financial theory.
Based on this assumption and the price data of the Dojima rice market at that time, Japanese scholars conducted quantitative empirical tests on the function and nature of the rice market at that time. They also compared the difference between the futures price and the spot price (future premium) to the price in Kumi. Regression analysis was performed on the quantity, etc., and the conclusion was that the Dojima rice market at that time already had the nature of a commodity futures market to some extent.
In view of this, the Edo era should not be viewed as a dark period of stagnation, but as an era of vigorous development based on social stability. During this period, Japan s agricultural productivity has greatly improved, commercial crops and domestic trade have made rapid progress, and Japan has already met the conditions for industrialization. [5]
Second, the meso-analysis of new economic history The so-called meso-analysis of new economic history refers to the application of meso-economics theories such as industrial organization economics, regulatory economics, etc., and focuses on analyzing the history of a certain industry, department, or region. The change of events, so as to explore the impact of such events on social and economic development, the representative research results include the social and economic impact of the British Navigation Regulations on Britain and relevant European countries and North American colonies.
The so-called maritime regulations are a series of legislation on maritime trade in British history. Its original purpose was to encourage the development of British maritime industry and overseas trade, and to protect the interests of Britain in the mercantilist system. Its direct manifestation is to maintain a surplus in international trade. status. [6] The navigation regulations mainly stipulate that: First, in the trade of the colonies, the vessels used must be manufactured, owned and commanded by British or colonies, and at least 3/4 of the crew must be British or colonial; All international trade with the colonies (referring to places outside the British Empire) must be handled by the United Kingdom; third, certain colonial goods can only be exported to the United Kingdom. At first these commodities were limited to tobacco, sugar, cotton, genistein and indigo, but by the early 18th century commodities such as rice, molasses and naval supplies were also included. [7]
Maritime regulations protect Britain s economic interests as a colony s home country: one is to ensure that huge revenues from transportation and trade remain in the empire; the other is to strengthen British naval power and consolidate military hegemony; the third is to limit colonies and Direct foreign trade can enhance British economic interests.
Sailing regulations can also benefit colonies. First, it protected the colonies from competition from outside the British Empire and protected the colonial infant industry. Secondly, Britain's policy of subsidizing some production in the colonies benefited the colonies. For example, since 1748, the British government has subsidized 6 pence per pound of indigo, which has played a key role in the growth of the South Carolina industry. [8] Finally, due to mercantilist protection policies, the British government opened its domestic market to North American colonies, benefiting North American colonial exporters who did not enjoy product subsidies indirectly.
However, navigation regulations have harmed the social benefits of other European countries and North American colonies. For other European countries, first of all, the trade target is limited to the United Kingdom and its colonies. It may appear that it cannot choose the transport service provider with the lowest transport price as the cooperation target. For example, the Dutch earlier adopted unarmed punts. Although they can provide transportation services at lower prices, they cannot become partners. Second, any trade outside the British Empire must pass through the United Kingdom. More unnecessary freight, moving, berthing, customs clearance and other related costs, [9] these additional costs reduce the profits of colonial farmers when selling tobacco, and also increase consumption Consumers pay the price of tobacco products, harming the interests of producers and end consumers. For example, from 1725 to 1729, the price of tobacco in Amsterdam was more than four times the price of tobacco in Philadelphia, which mainly reflected the difference in handling and transportation costs between the two markets. [10]
Sailing regulations also placed additional burdens on North American colonies. Maritime regulations imposed an additional burden on North American colonies during the import process. If the colonists were to import goods from outside the British Empire, they had to pay high prices for these goods, because the import price included the added cost of indirect transit through Britain. Similar to the import process, navigation regulations have also brought a serious negative effect on the export of North American colonies. Tobacco and rice produced in the colonies must be re-exported from the UK for export to Europe, and a large part of the re-export costs will be borne by the southern colony plantation owners. Sailing regulations make these plantations mainly pay higher transportation costs. In order to compete in the market, the planter's product price cannot be increased accordingly, thereby reducing profitability. In addition, navigation regulations may exclude foreign ships with lower freight rates from trade shipping, making colonial exporters have to pay higher freight to ships within the British Empire, thereby correspondingly increasing the production and operating costs of North American colonies and reducing Profit.
According to Robert Thomas, the total burden imposed by the navigation regulations on colonial imports and exports in 1770 was $ 3.1 million. [11] Therefore, the artificial extension and restriction of the foreign trade chain caused economic losses to the colonial people.
In addition, the North American colonies did not have the right to issue currency and had to export precious metals to their home country, the United Kingdom. This caused a serious shortage of precious metals in the colonies and a serious imbalance in the amount of currency, which led to chaos in the intra-colonial trade and could not proceed smoothly, seriously affecting the lives of the colonial people And economic order, causing increasing dissatisfaction among North American people. In a sense, the economic consequences of navigation regulations were one of the economic reasons for the outbreak of the war of independence.
3. Macro-analysis of new economic history The so-called macro-analysis of new economic history mainly refers to the use of macroeconomic theories to study the historical changes of national economic activities, focusing on the national income, employment levels, and price levels of countries or regions in history. Changes in economic aggregates and their impact on changes in socio-economic development. Among them, Douglas North and Robes Thomas are the most representative of the research on the development and decline of countries in the Western world. It provides a macro-analysis framework for new economic history.
One of the tasks of the new economic history is to explain the structure and performance of the economy in each historical period. When explaining performance, the initial emphasis was on total output, per capita output, and social income distribution. [12] It can be seen from these contents that economic performance is economic growth. [13] The basic characteristics of the neoclassical growth model for analyzing economic growth are: First, the model assumes that resources are scarce, and individual choices reflect a set of desires, needs, or preferences, and these choices are made based on opportunity costs. The second is maximization. It is assumed that individuals would rather choose more goods and services than fewer goods. Since increasing the production potential can produce more goods, the whole society will contribute part of their results for increasing the capital stock. The theory holds that the capital stock that determines output is a function of physical capital, human capital, natural resources, technology, and knowledge.
However, North believes that the neoclassical economic growth model is questionable. He believes that this model uses unproven assumptions to explain all interesting issues and is only applicable to the ideal society without friction because the model's Several important assumptions cannot withstand further scrutiny. First, the neoclassical growth model assumes that there is an incentive mechanism in the economies of Western countries. This incentive mechanism enables individuals to receive the full social return on investment, that is, the private rate of return. It is equal to the social rate of return, and there is no externality. Second, the model assumes that there is no marginal diminution in the gain of new knowledge and utilization, because the stock of natural resources can be increased at a fixed cost. Third, the model assumes Savings have real returns. Fourth, the model assumes that the personal and social costs of childbearing are equal. Fifth, the model assumes that people's choices are consistent with expected results. [14] But reality contradicts these assumptions.
In view of the many shortcomings of the neoclassical growth model, North advocates rebuilding the economic growth model. He believes that the theory of new economic history to explain historical economic growth problems requires a theory of demographic change, a theory of knowledge stock growth, and an institution theory in order to make up for the foregoing Defects in neoclassical economic theory. [15]
The new economic history should include the following main contents: First, the economic structure theory. North believes that the determining force of economic growth consists of socio-political and economic systems, technology, population, and ideology. The second is the institutional factor in economic growth. This is the core of North's economic growth theory. North's reinterpretation of Western economic history concludes: "Efficient economic organization is the key to economic growth; the development of an efficient economic organization in Western Europe is the reason for the rise of the Western world." [16] This revises that economists often consider innovation, economies of scale, education, and capital accumulation as the reasons for economic growth.
To sum up, while referring to the economic growth theory of macroeconomics, North made a thorough analysis of the rise of the western world, and combined with the historical realities of various countries, he put forward a new academic point of view. The new point of view convincingly explained the rise of the western world , Making the interpretation of historical events in the history of new economics more unprecedented.
4. Summary After analyzing and discussing in this article, the research content of new economic history can basically be divided into three levels: macro, meso and micro. This division method has constructed a relatively clear and layered new economic history research framework, making the new economic history research thinking clearer. However, this article is only a preliminary idea for the study of new economic history, and it must be inappropriate. This article only wants to play a role in attracting new ideas in the study of new economic history, and hopes to promote the study of new economic history in the discussion. ^[1]