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In response to Deirdre McCloskey's comments on my earlier posting I have
several reactions.
She writes
>Well, don't we an quantitative intellectuals owe it to ourselves to show
>this quantitatively? How important? How big?
Yes--I agree (in principle), but what I'm arguing is that this is not
always easy to do.
Because of the interdependence of economic, social, and political
arrangements, calculating how big may often be impossible. Take
automobiles for example. Consider the extent to which land use, commercial
development, and population patterns in the United States are linked to
cheap gasoline powered transportation. What would the world look like if
electric autos had been somewhat more competitive and beaten out gasoline.
It's not simply gas vs. electric motors, but a whole host of other
interrelated developments that must be considered.
In addition, How big? is only part of the problem. The question "who gets
it?" seems like it is equally important. Accepting Pareto efficiency we
tend not to look at redistribution, but some kinds of path dependence are
going to manifest themselves in distributional issues. This may not matter
for the aggregate economy, but you can bet it matters to all the
participants, and the discussion so far seems ignore that issue entirely.
As to the examples that I mentioned earlier, let me clarify:
1) Manufacturing. Absent the tariff, would there have been any significant
manufacturing in the U.S. before 1850? Quite possibly not. The country's
international comparative advantage was in agriculture, and plausibly the
course of events was for New England to become depopulated.
This is a "happy" accident I suppose from the perspective of U.S. economic
growth, but still an accident that can be traced to some chance events not
rational economic calculation.
2) Slavery. Two points. First, did the legacy of slavery slow Southern
economic growth in the 20th century and impede Black economic progress?
Certainly Gavin Wright has argued this case cogently. Second, how would
U.S. history have looked if the Northwest Ordinance had not prohibited
slavery north of the Ohio River? Slaves might well have been used in
Illinois, and Indiana on large wheat farms. What then? This again appears
to be a happy accident, but one that could have gone the other way
Joshua Rosenbloom
University of Kansas
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