Johan Fourie's blog

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A good year

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Helanya and I, with Willem and Zorada, in Berlin

Reichstag selfie: Helanya and I, with Willem and Zorada, in Berlin

I’m officially on leave from today. It’s been a good year; a busy first six months of teaching followed by a productive second half of research. I presented in Barcelona in September and at the LSE and Sussex in October, but these were mostly opportunities to meet old and new friends (economic history is like that). It’s fantastic to see African economic history take off, and it is thanks to a dedicated group of great people. The 2014 South African Economic History Annual will be online soon, but a sneak peak can be found here. There are many exciting things awaiting in 2015 too. More research, more workshops and conferences in places I haven’t been before, and more good times with good friends.

But first it’s time for a holiday. I’m off on a golf tour for four days. I don’t play golf, so it promises to be memorable and hilarious for all the wrong reasons. Robin Williams summarized the rationality of golf best, I think. Then it’s Christmas, which in the southern hemisphere is associated with sun tan lotion and ice cream and hours spent in front of the TV watching the Proteas play cricket. It also means time to reflect on the year that’s been, and appreciate those around you. There are many people who have made this year special. Our parents and parents-in-law enable us to travel to and spent time in some of South Africa’s most exotic locations, like the southern Cape coast or the Kruger National Park. We spent a wonderful time with Willem and Zorada in Berlin and then Barcelona. Alfonso Herranz-Loncan was very kind to host us in this wonderful city. Pim de Zwart invited me to Amsterdam, Leigh Gardner invited me to London, and Alex Moradi and Felix Meier zu Selhausen welcomed me in Sussex. This year, for the first time I think, I’ve learned more from my students than they from me. My colleagues and co-authors have been kind and encouraging in their advice, and many have become role models that I hope to emulate in some way or another. Special mention must go to Ina Kruger who organizes my jumbled admin, Hanlie and Carine at the university library for fielding urgent requests, and Di Kilpert for her hard work in fixing my sometimes dodgy English. I still don’t get English grammar, and play it all by ear.

Many close friends became married: Willem and Zorada, Anne and Rohan and, this coming Saturday, Dieter and Marisa. Others found new jobs, or graduated (well done Wynand – now can I finally see some returns on my investment, please?), moved to a new city or into a new place, or welcomed new members to the family.  There was sad news too, and this year was the first time I had to preside over the funeral of a close family member. None of the ups and downs, though, would have been possible without the support of my wonderful wife, Helanya. She puts up with being woken (very) early and runs our little household like a “well-oiled machine”, while also having a full-time job with far more demands than mine. Thank you for the good memories.

On 2014, and the possibilities of 2015!

Written by Johan Fourie

December 16, 2014 at 09:09

South Africans need higher EQON

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BrainScang

The much maligned measure of intelligence – IQ – has an equivalent that measures emotional intelligence – EQ. I vaguely remember studying this in industrial psychology, but, as with most things I’ve studied, I had to go to Wikipedia to get the exact definition: “EQ is the ability to monitor one’s own and other people’s emotions, to discriminate between different emotions and label them appropriately, and to use emotional information to guide thinking and behavior.”

But this is not a post about South Africans’ emotional intelligence. Instead, I want to propose another measure: Economic intelligence, or EQON (pronounced with a click to sound hipster). What is economic intelligence? I’ve borrowed from the other EQ: It is the ability to monitor one’s own and other people’s economic behaviour, to discriminate between different economic actions and label them appropriately, and to use economic information to guide thinking and behaviour.

Reading the press, and especially the comments on a news site like News24, is a nightmare for anyone with a basic understanding of economics. See, economists disagree a lot. If you ask ten economists what will happen to the economy, you will get eleven different answers. (Forecasting is a game only the brave or ignorant play, and it is actually a very small part of what economists do.) But even though economists debate many things, this is not to say that they don’t also agree on many things. We all study the same laws and theories that guide our thinking. We know that if demand increase, prices will tend to increase too. Of course there are assumptions, and we can debate those assumptions. But the theories hold, most of the time.

Which is why it is often excruciating to read comments on news or business sites which report about issues that impact the economy. Take the recent ban on chicken imports from Europe. Because of bird flu, South Africa has closed imports from several European countries to ensure that bird flu doesn’t spread into our borders. How will this policy impact us? It is indeed necessary to protect consumers of chicken to the harmful effects of chicken, but there should be no doubt that consumers will lose because a ban on imports will inevitably push prices higher. This is indeed what has happened after the tariffs on chicken imports increased. But there are winners too: South African producers – mostly oligopolists like Rainbow Chicken and County Fair – will benefit through higher prices and a larger market share. One commentator saw this as a positive step: “Thank God”, he said. “Let’s grow our own industry.”

It would indeed be great to grow our own industry, but at what cost? Should all South Africans pay double for their largest source of protein so that we can create a couple of hundred additional jobs? Do the math: if 50 million South Africans pay only R1 more per month for chicken, we would ‘lose’ R600 million a year. Are producers really going to create 6000 new jobs at R100 000 a job? No, they’re not. The bird flu epidemic is bad, not only for European producers but also for the South African economy too, and especially the poorest South African consumers, who now will be forced to either switch to more expensive proteins are to go without it. That’s why nearly all economists would agree that trade is beneficial for a country, because it allows consumers to improve their living standard much higher than if they had to only bought locally produced goods.

Another thing that most economists would agree on, is that immigration is a good thing. Last month News24 reported that close to 200 000 Zimbabweans are applying for a special extension of their visas. The comments all reflected the following sentiment: “Send the f#ckers back. That’s why there’s no jobs for our guys (sic).” But economists know that immigration is not a zero-sum game. When 10 people immigrate to South Africa, the don’t steal the 10 jobs of South Africans. Many immigrants become entrepreneurs, employing locals. Many work very productively in existing firms, allowing those firms to expand and employ more people. Immigration, especially of well-qualified individuals like the ones moving to South Africa, is a boon not a bane to the economy. We should welcome them with open arms, give them citizenship and let them contribute to the economy to the benefit of everyone else.

Let me give a third example. Economics 101 teaches us that a price floor such as a minimum wage creates a disconnect between the amount of labour supplied and the amount of labour demanded. We call this unemployment. If the minimum wage increases, this disconnect will become larger still, meaning unemployment will increase further. There are exceptions, of course. Sometimes the markets are not competitive, or there are information asymmetries, or there are counterveiling shocks in the rest of the economy that mitigates against the rise in minimum wages. But, in general, a higher minimum wage leads to higher unemployment.

Which is exactly what I predicted two years ago when, after the labour unrest in November 2012 on Western Cape wine farms, the government implemented a higher minimum wage for farm workers. What has happened since? Well, according to Carmen Louw of Women on Farms, “more than 73,000 jobs were lost in the Western Cape farm sector after the statutory minimum wage was raised by more than half in the wake of the violent farm worker strikes of 2012.” Seventy-three thousand! That is nothing less than tragic.

Of course, even in the face of such glaringly obvious evidence that higher minimum wages hurt poor farm workers, some are still not willing to accept that it’s the most basic economic law that explains the higher unemployment. As Dave Marrs points out in yesterday‘s Business Day, Women on Farms and Cosatu believe it is “a matter of racist and misogynist white farmers taking revenge for the strike by victimising black women, rather than simple economics”. Not a lot of EQON there.

Fortunately, in contrast to IQ and EQ, there is actually hope for those with a low EQON. It helps to remove the ideological blinkers, and focus on the evidence. (This is true for economists too. Again, not all economists agree on everything, and much of the disagreement is an unwillingness to accept the evidence of the opposite school of thought.) But people struggle to understand what evidence is. Is one anecdotal account of a woman losing her job because her chicken farm is struggling to compete against cheap Brazilian imports enough evidence to tell us that chicken imports are bad? No, it is not. Because what of the millions of other stories of consumers, unknowingly, buying more chicken products because of cheap prices. Unfortunately the story of the woman – usually accompanied with a photo of her family – appeals to our emotions much more than the story of cheap food.

Economists can also help to remove the blinkers by doing better research: if we can convincingly show with numbers how immigration improves an economy, or that higher chicken prices hurt consumers, or that higher minimum wages cause people to lose their jobs, and if we can convincingly communicate our results to a public often unwilling or unable to see both sides of a story, then it will be easier to convince people of the merits of our case.

Let the quest for a higher national EQON begin!

Written by Johan Fourie

December 12, 2014 at 09:19

The dangerous appeal of the benevolent dictator

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General Park Chung-hee, South Korean president from 1962-1979

General Park Chung-hee, South Korean president from 1962-1979

Two weeks ago, Alan Knott-Craig Jnr, South African entrepreneur and IT whiz, tweeted the following to his more than 12000 followers:

Young countries are like startups. They need to move fast to find a viable economic model. That’s why dictators are best for young countries.

Dictatorships are appealing. They can transform a country more rapidly than any other mode of government. Consider the widely cited example of South Korea’s General Park Chung-hee. He took over the ineffectual South Korean government in 1962 and imposed a military regime that included giving the president sweeping (almost dictatorial) powers and permitted him to run for an unlimited number of six-year terms. He suppressed the media and instituted morality laws with mandatory curfews and regulations on attire and music. Yet during his 17 years in charge until his assassination in 1979, he oversaw a massive expansion of the South Korean economy, known as the Miracle on the Han River. Relying on cheap wages, South Korea industrialized in the manufacturing of cheap manufactured goods. It invested heavily in new technology and education. Within two decades, the economy had transformed from an impoverished backwater to the host of a very successful 1988 Seoul Olympic Games. Today, Seoul is one of the most technologically advanced cities in the world.

Knott-Craig Jnr is correct that dictators can be best for young countries, as the South Korean example shows. But are they, on average? A new paper by Papaiounnou and Van Zanden shows they are not. The authors build a large database, measuring the length of tenure of each of the heads of states of all countries since 1960. They then regress the length of tenure on the economic performance of a country. Their findings? The longer a president is in office, the worse that country’s economy is doing. They explain:

In all specifications, we find a strong negative coefficient linking years in office to economic growth and the quality of institutions, and a positive coefficient relating years in office and the rate of inflation. In particular, there is enough evidence to suggest that the young states of Africa and the Near East are the ones more severely affected by the ‘dictator effect’. The average country in this region saw its GDP per capita double between 1960 and 2009, implying an average growth rate of almost 1,5% per year; had there been no ‘dictator-effect’ as estimated here, average growth would have at least been 2,38% per year, and GDP per capita in 2009 75% higher than its current level.

A dictatorship is not the way to grow your economy. Sure there are a few exceptions, but they are exactly that: statistical outliers. A country where the president stays in power longer than two terms will, on average, perform worse than had a new president been elected. Perhaps the main issue is that a dictator, even a benevolent one, may do well in his (it is always men) initial few years. His power to affect change becomes an all-consuming drug that can only be appeased by more power. Consider South Africa’s neighbour, Robert Mugabe. Leading the revolution against white rule, Mugabe emerged not only as the hero of the people but also the one to put Zimbabwe’s economy on the path to prosperity. During the early 1990s, the Zimbabwean economy was often growing at more than 5% per annum. Mugabe was praised in his own country and also abroad; he received honorary doctorates from the universities of Edinburgh, Massachusetts Amherst and Michigan State (all since revoked). But Mugabe, like all dictators before him, could not retire and admire their achievements. Instead, he changed the constitution (which is possible if you are widely admired) and remained in power. Zimbabwe’s economy and people have suffered as a result.

The wise Adam Smith, in his lesser-known Theory of Moral Sentiments, writes about this ‘terrible drug’ as Russ Roberts calls it in his new book How Adam Smith Can Change Your Life:

To those who have been accustomed to the possession, or even to the hope of public admiration, all other pleasures sicken and decay. Of all the discarded statesmen who for their own ease have studied to get the better of ambition, and to despise those honours which they could no longer arrive, how few have been able to succeed?

There is no way of knowing what would have happened to South Korea had General Park Chung-hee not been assassinated. My guess is he would have hung onto power, and pulled the South Korean economy down with him. Robert Mugabe stayed on too long, and Zimbabwe are the poorer for it. The lessons are clear: dictators are bad not because they immediately do bad things, but because they become addicted to power. And to hold on to that power, they distort the institutions – an independent judicial system, a free media, regular elections – that are essential for sustainable and shared growth.

In memory of Phillip Hughes

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Kids in Mumbai, India pay tribute to the memory of Phillip Hughes. Source.

Kids in Mumbai, India pay tribute to the memory of Phillip Hughes. Source.

The reaction to the death of Phillip Hughes this week has been nothing short of overwhelming. Hughes died tragically after being hit on the head by a bouncer playing in an Australian provincial cricket game. He lost conciousness less than 10 seconds after being hit, and never regained it. His death was announced two days later. Here is the report in Australian media showing on-field events.

Tributes to Hughes’ family and team mates have poured in from all over the world. His death has touched me and my cricket-loving friends too. Even though we are all amateur cricket players, playing at school and university and perhaps the odd club game afterwards, we share in the camaraderie of the game. As batsmen, we have had to face fast bowling too, and shared the fear and doubt of playing the short ball. There is always the risk of misjudging a pull shot or the bad luck of an uneven pitch. Hughes’ freak accident, and it is nothing more than that, has put all these doubts in perspective.

Google pay tribute too

Google pays tribute too.

How cricket is played will not change much because of this event. Bowlers will – and should – continue to bowl bouncers. If anything, I suspect more batsmen worldwide will 1) understand the importance of wearing a helmet, and 2) be more circumspect in their approach to playing the bouncer. (This includes kids: I still have the scars of a bouncer that hit my mouth in grade 11. Only then did I realise that a helmet was essential.) But I suspect the psychological and emotional scars will run much deeper. Hughes was the smile, the friendly face of the Australian team. Not only that, but he was the nexus of an Australian team that was often divided. Here are the opening lines of the obituary on Cricinfo:

Michael Clarke and Ricky Ponting. David Warner and Shane Watson. Simon Katich and Justin Langer. Brad Haddin and Matthew Wade. Darren Lehmann and Brett Lee.

These strong men of Australian cricket have often had very little in common. Their competitiveness, pride and differences of opinion have caused plenty of arguments and disagreements. Apart from the baggy-green cap, there was often only one thing that they all agreed on: Phillip Hughes.

His death will make all these squabbles seem petty. The impact on the Australian team can already be seen in this touching press-conference by Australian captain Michael Clarke earlier today. Spare a moment for Sean Abbott, too, the bowler who had probably bowled hundreds of bouncers like that in his career. He will find it hard to return to the playing field.

It is often after tragic events that we re-evaluate what we do and why we do it. The next time I walk in to bat, I will do so with a smile on my face.

Written by Johan Fourie

November 29, 2014 at 07:18

The fruit of the vine

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SignaturesFrenchHuguenots

Signatures of some of the French Huguenot migrants to South Africa. Source.

As I write this in my cozy hotel room, I hear lions growl in the background. Next to my window, guinea fowl do what they do best: squeal with a voice that evolution would find difficult to explain. Somewhere a donkey hee-haws its own contribution to the cacophony. At 5am it’s still supposed to be silent night. But not in Pretoria. The sun is rising. Welcome to Africa.

Pretoria is a different country, and so is the past. I recently read Elsa Joubert’s The Hunchback Missionary, a book of historical fiction first published in Afrikaans in 1989 about a Dutch missionary traveling to the Cape around the year 1800 with the purpose to bring Christianity to an uncivilized world. In the end, it’s Aart Anthonij van der Lingen, the hunchback missionary, whose worldview is challenged by what he sees and experiences in the wilderness of the Northern Cape and the Eastern Frontier. It’s a world we would find difficult to imagine: months of painfully  slow travel, constant threats from wild animals and unknown peoples, and utter, deadly loneliness. The Business Day reviews it here. I would recommend the book if only for one scene that is inexplicably sad and shocking and unexpected and vivid that I am unable to banish it from my memory. You’ll know which one it is when you read the book.

What historical fiction books like these do for me is to contextualize the often dry economic history I investigate. Consider the French Huguenots. When the Huguenots fled France in 1685 following the revocation of the Edict of Nantes, they settled across the Western world. Many moved across the English Channel and settled in London. Others moved to similarly familiar places like Switzerland and Germany. Here they continued to make telling contributions to the local economy. A recent paper by Erik Hornung published in the American Economic Review shows, for example, how Huguenot migrants stimulated textile production in German, then known as Prussia.

But others, far fewer in number, decided to move to the Cape. What could they have possibly known about this small colony at the bottom tip of the massive African continent? What made them come to the Cape than to England or Europe or even America, where there were at least a large number of European settlers already? (At the Cape in 1685, there were about 400 settler families.) We don’t know, although we do know what they did when they got here: most founded farms in the Drakenstein region and began planting wheat and barley. Some planted vines. The Huguenot memorial in Franschhoek documents their arrival and early struggles and eventual contribution to South African society. (They continue to have: consider, for example, the current captain of the Proteas cricket team and Springbok rugby team.) But even though we know much about their social and cultural activities, there has been little attempt to quantify the economic impact of the 150 or so French Huguenots that arrived in the Cape Colony in 1688. In 2009 when I just started my PhD, Dieter von Fintel and I decided to see whether we could somehow find a way to identify whether the Huguenots were somehow different than their settler counterparts. We used eighteenth-century tax censuses to estimate the productivity of the French settlers and their descendants. The results of these investigations were published in the December issue of the Economic History Review. (An older working paper version is available here.)

We follow a novel approach to identify not only how much more productive French Huguenots were in making wine, but why they were so productive. We do this by tracing the origin district of each French family that arrived at the Cape, which allow them to split the sample between those that arrive from wine-producing regions and those that arrived from wheat-producing regions. We then show that those from wine-producing regions were more productive winemakers at the Cape than their counterpart Huguenots that originated from wheat-producing regions.

What is even more surprising is that this productivity bonus persisted for at least 80 years, in other words, for more than two generations. One would expect that those families with some skills in making wine would have an initial advantage, but that this would disappear as other families learn from them or intermarry. Yet we find the exact opposite result: the gap between the descendants of Huguenots who originally came from wine-producing regions and those who originally came from wheat-producing regions widened.

The reason, we suggest, is because families protected the knowledge of making good quality wine. Eighteenth century wine was typically bad tasting, so ‘good quality’ here simply refers to wine that would last several months, long enough for a ship to sail to India. OF Mentzel, a traveller in the 1730s, explained it thus: “There is no doubt that many colonists at the Cape do indeed know the secret of preparing good wine and therefore wines are made which stand the test, and grow mellower with age: but they are not such fools as to give away their secret and thus make the good wines more common.”

So what was the economic impact of the Huguenots? Their greater productivity in wine-making meant that wine production expanded significantly a few years after their arrival. Different to stock and wheat farming, though, viticulture required (and still requires, although mechanisation is finally changing this requirement) large numbers of labourers during harvest season. There was a shortage of labour at the Cape, and so the expansion in viticulture forced the Company to import more slaves from modern-day Malaysia, Indonesia, India, Madagascar and, later, Mozambique. The fruit of the vine, we argue, was the beginning of South African (racial) inequality.

It’s 6am. The sun is already high. For some reason the lions, guinea fowl and lone donkey have fallen silent. Time for this Huguenot-descendant and missionary of the African economic history gospel to get to work.

Lessons from a computer game

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BE

Those who know me well, know that one of my secret indulgences is playing Civilization, a computer game that let’s you build a virtual empire. I don’t remember when and where I first encountered Civ, but I do remember spending countless hours over weekends and school holidays building my Egyptian, French or Zulu empire. I’m glad that as a student I never owned a computer with the specs necessary to play, as I’m pretty sure it would have cost me another year at varsity. I do remember playing it while writing my Masters dissertation: for a month, I would write from 5am to 9am, and then play for the rest of the day. I even mentioned Civ IV in the conclusion of my dissertation, using it as a metaphor to explain why a lack of infrastructure is holding back African development.

Why is Civ so appealing (and addictive)? I suspect there are many reasons, but for me it certainly has something to do with the ability to rewrite history. Civilization is in essence a massive simulation of counterfactual history, simplified of course to make it playable. While your aim is to found towns and cities, explore new territories, invent new technologies and conquer other nations, I am always struck by the relevance of economic theories in explaining ‘success’ in the game. Play on the world map, for example, and see how difficult it is to win when starting on the continents of America or Africa. The reason? Economic isolation. Trade and warfare between competitive civilizations benefits your civilization more than if you had developed on your own in peace. This concurs with much of what we know about trade and economic history and is summarised by Gary Fields’ classic remark that “you can’t get rich by selling to yourself”. Trade requires infrastructure, though, and here Africa is particularly problematic. The vast distances and the thick jungles of the continent (clearly visible when you play on a customized map to reflect the actual size of continents) makes it nearly impossible to build roads and railways to connect and defend your cities, and if you’re building cities on the coast of southern Africa, the harbours of other nations are simply too far to trade with. And apart from losing out on profitable trade routes, you also lose out, most critically, on gaining new technologies from your neighbours. The lesson: if you settle in southern Africa, be prepared for a tough game.

ImpiNot only is geography a limitation, but the lack of alternative strategies is sometimes patently obvious. This is most clearly visible in one of the scenarios in the latest Civ V version which allows you to start as the Boers or the Zulus during the period of African colonisation. There really is only one way to win as the Zulus: destroy the Boers as soon as possible and found as many cities in the ‘empty’ African interior. Similarly with the Boers: destroy the Zulus and beat back (or trade with) the Portuguese (in Mozambique) or the English (in Cape Town). Was there ever really an alternative to the hundred-years war between settler farmers and the Xhosa (from 1779 to 1879)? Perhaps we will uncover different options if a larger South African map was available, and one that included more southern African tribes. I’d like to see the Tswana, for example. Their special building could be the Kgotla (which could replace the courthouse and be built in any city (not only occupied ones), reducing unhappiness) and their special unit could be the Donkey (which improves the efficiency of workers). Or the Basotho, with their special building the Mokorotlo (or hat maker, which grants one additional gold for every grassland) and their unit the War Pony (which replaces the chariot archer and allows units to cross mountains). For those who haven’t played, the Zulu’s have a special building – the Ikanda – which replaces the barracks and grants extra experience to units, and a special unit – the Impi – which replaces the pikeman.

Simulations are used in many fields to predict future events, and economics is no exception. The world is incredibly complex, and simulations (based on our theories of how the economy functions) help us to explain what the impact of some shock would be. A good macroeconomic model, for example, can explain how an increase in the interest rate should affect other economic variables. Civilization was never meant to simulate the past or the future, but it recently did exactly that: one man who goes by the name Lycerius played a single Civ II game for more than a decade. In the game, he reached the year 3991. What does the future look like? Bleak. He finds himself (playing with the Celts) in perpetual war with the Americans and Vikings, with all other populations annihilated. Communism is the only political system that allows him to constantly make war. Malnourishment and pollution is rife. Sea levels rise. CNN reports on his efforts here. The one positive about this sad state of future affairs is that the game designers did not (and could not) factor in future technological innovations that might alleviate all this misery. Which just shows us the importance of incentivising innovation if we are to survive as a species.

As computers become more powerful, our models will become more complex too. Civ V: Brave New World (the third extension of the fifth edition) does an excellent job of replicating the major historical developments, perhaps with the exception of two things. Disease has shaped (African) history far more than anything else. The black plague, some scholars argue, were the root causes of the Industrial Revolution. Smallpox killed First Nation peoples at rates that warfare could never do. The deadly disease environment in many African countries forced Europeans, according to Acemoglu, Johnson and Robinson, to build extractive institutions that continue to have a detrimental effect on development. The resistance of  Africans to tropical diseases was also pivotal into them being coerced into slavery. If the next Civ could add disease and slavery, history might really come alive.

Two weeks ago, Sid Meyer and his team of Firaxis designers released the latest Civilization installment: Beyond Earth. As the name suggests, it takes mankind into space after an unexplained “Great Mistake” on earth. At the start of the game, you must choose one of eight different factions that builds a space ship and leaves earth to permanently settle a distant planet. (For an explanation of why mankind needs to go into space, listen to the two designers discuss it here.) On the new planet you have to choose one of three philosophies (or affinities as they call it) about how you want to live in your new environment. The Harmony affinity allow humans to adapt to the indigenous life, developing new technologies that eventually make you a new species. Choosing the Supremacy affinity means you choose to improve the robotics that allowed you to reach the new planet. Your interaction with the new environment is limited and you rely generally on advanced technology to stay alive and conquer. Following the Purity affinity suggests you believe that humans are the pinnacle of evolution and you therefore want to recreate (through prodigious terraforming) Earth in your new environment. Which affinity you choose, I think, will determine how you interact with the new environment and alien life forms.

columbus_1772950bI wondered whether there are parallels in the process of European colonisation? Some colonisers set out to create a new society, intermixing with the indigenous population. Think of the Cape Verde islands or Mauritius or perhaps Brazil and Mexico. Others set out to create a new Europe. Here the settler societies of the US, Australia and, to a lesser extent, South Africa are good examples. Others, again, tried to simply extract as much as possible, not settling but simply using their superior technology to extract resources as fast as possible. These are the places AJR say have ‘extractive institutions’, places like the Congo, and Hiati and the Philippines. It’s not difficult to see which of these turned out best for the descendants of the settlers, but the same is not true when we consider the welfare of the indigenous people of course. The millions of American Indians or Aboriginal Australians or Cape Khoesan that died due to smallpox or European guns had to give way for the Europeans to create their New Europe. (New Zealand was literally renamed after the home province of the European mapmakers. Think also of New York, first named New Amsterdam.) It is also patently obvious that the indigenous populations in the ‘extractive’ colonies benefited very little, even though they generally survived. If we were to maximise the welfare of the indigenous populations, integration was evidently the better alternative.

It’s not clear how humanity will react when we first discover alien life on a new planet. But let’s hope we learn from our own planet’s history – and the simulations of a computer game – about what not to do.

A renaissance reconsidered

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AEHW

The 2014 African Economic History Workshop, ably organised by Leigh Gardner (centre), kicks off at the LSE.

Last week I attended the African Economic History Workshop at the London School of Economics. It was an excellent workshop, with 40 high-quality papers presented and more than 70 attendees. That is remarkable growth if you consider the previous African Economic History Workshop I attended, in Geneva in 2012, attracted around 10 papers and perhaps not more than 25 participants.

EHRAfricaThe reasons for the renewed interest in African economic history is discussed in the introduction to a new special issue of the Economic History Review entitled The Renaissance of African Economic History, incidentally the same title I used in a blog post in October last year. African economies are rising, if you haven’t heard, and with it comes greater interest in understanding the long-term determinants of this rise in prosperity. For long, much of the literature focused on the perceived persistence of poverty across the continent, but as new research reveals (some of which was presented at the workshop), not all of Africa has always been poor. The innovation of this New African Economic History School, if I can call the new approach to African economic history that, is to rely on big data. This is not the sort of Big Data that is fashionable in business intelligence or behavioural sciences, but rather a return to the historian’s own laboratory, the archives. Funding is now available to digitise and transcribe documents like historical military, missionary and marriage records which provide, often for the first time, individual-level information on the economic living standards of Africans during the colonial, post-colonial and, in rare cases, even pre-colonial period. These records often remain hidden in African archives, but as the workshop showed too, there is still much to learn from exploiting the wealth of statistical information in the colonial Blue Books, most of which is now available online. Browse through the papers presented at the workshop and you’ll see all kinds of interesting data: trade records from the Blue Books, Ugandan missionary records, tax records from Portuguese Mozambique, wage records from Senegal, household data for apartheid South Africa.

Another feature of the New School is the young age of participants, on average. A new generation of scholars, taught in the language of statistics and unburdened by the ideological struggles of the post-independence period, is coming of age, initiating their own research programmes, winning research grants, training new PhDs and opening positions for postdocs. It was difficult, for example, not to bump into one of Ewout Frankema’s PhD-students or postdocs at the conference, all doing wonderfully exciting work on a wide range of topics and (African) countries.

Yet it also struck me – and perhaps as a South African I am more sensitive to this – that there is still a long road ahead. Much of the new African Economic History is happening in Europe. Of the 56 authors (if we allow for several authors per paper), only three were from Africa. Of those three, only one was black. This echoes the fact that only one of the nine papers in the EHR’s special issue on Africa was written by a team from Africa. Of course, this is not limited to the EHR: as I’ve written recently, in the Economic History of Developing Regions special issue on the economics of apartheid which I edited with Martine Mariotti, no paper was published by a black author. This imbalance of contributions is not easy to rectify; funding lacks at many African universities to attend these workshops, and even where there is funding, there is often a disconnect between the methodologies employed by the New African Economic History School and those of an older generation of economic historians whose work remain isolated in History departments throughout the continent.

More should be done, though. The best would be to start at the bottom and train a new generation of African students in the methods and tools of the New School. The good news is that this is happening; this textbook, written by members of the New School, is available for free to anyone teaching African economic history. But intervention is required at higher levels too. We need to deliver more African Masters and PhD students that are able to use the tools of both Economics and History. We need more opportunities for the best African students to study at European and American universities. We need stronger networks and exchanges between African and European economic history research centres; networks that allow for the greater cross-fertilization of ideas, methods and data.

If we are to avoid another Scramble for Africa (this time in search of historical data) or, as has been suggested to me by local archivists, the ‘recolonization of African data’, we need to actively empower more African students, and especially black students. This is a challenge to myself and my colleagues at South African universities, but also to my European colleagues who perhaps have access to more resources. I am happy to report that there is certainly a demand from African students: at the end of November, I will run an ERSA Economic History training workshop in Pretoria. Although I had planned (and budgeted) for only 15 students, more than 30 mostly Economics students signed up. Of those, more than 70% are black. It is time to ensure that the renaissance of African economic history is not only about Africa, but also for Africa.

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