------------ EH.NET BOOK REVIEW --------------
Classic Reviews in Economic History
Brinley Thomas, _Migration and Economic Growth: A Study of Great
Britain and the Atlantic Economy_. Cambridge: Cambridge University
Press, 1954. 362 pp. (second edition, 1973, xxxi + 498 pp.)
Review Essay by James Foreman-Peck, Department of Economics, Cardiff
Business School, Cardiff University.
The Rise and Fall of the Atlantic Economic Community
Brinley Thomas' (1906-1994) contention that "it is instructive to
regard the Atlantic community of nations as one economy" was
immensely refreshing for those of us brought up on national economic
histories. Interactions with the wider world tended to be downplayed
or at least left unexplained in more conventional accounts. Moreover
_Migration and Economic Growth_ was not the work simply of a period
specialist historian; Thomas was an economist, deploying a massive
range of statistics to discover the nineteenth-century world that had
been lost after a half century of total war.[1] In the second
edition, this world, in many respects rather close to textbook
neoclassical economics, provided a fruitful means of interpreting the
great boom after 1945, as well.
Unusually by today's standards, the study begins with a history of
nineteenth-century thought about non-competing groups, social
mobility and migration. Traditionally trade theory assumed perfect
mobility of labor within the national economy, but none between
economies. Changes in trade policy and market integration required
shifts of employment between sectors within the national economy. Yet
in the later nineteenth century, rather than change occupation and
sectors, workers would often choose a different country of residence;
they were not substitutes or competitors for other types of labor.
Thomas concentrates on class rather than occupational immobility,
however. He has a model of secular changes in social structure and
mobility (from landless laborer to landowning farmer). This scheme
bolsters an argument for national protectionism, when land is owned
by residents of a different country. Industrialization brings social
stratification and, with a rigid social structure, immigrants are no
longer welcome. In a later chapter his "dynamic theory of economic
development," involving increasing U.S. social rigidity as the land
filled up over the nineteenth century, is used to explain the switch
of British immigration away from the U.S. in the years 1896-1913,
when immigration from other destinations was booming.
In Part 2, Thomas discusses his British and U.S. statistical sources.
He concludes that changes in the series, if not the levels, can be
trusted. Part 3 contains the analysis of the first edition and the
second edition includes a Part 4, a reappraisal.
As Thomas's obituarist and former research assistant makes clear, the
structure of the book, and particularly the second edition, is the
outcome of an evolutionary process (Lewis 1996). The central idea was
published as an article in 1951, and appears as chapter 7 -
"Migration and the Rhythm of Economic Growth." The new edition was
strongly influenced by Thomas's work in the intervening years on
urban development and economic growth and on the Welsh economy. The
chief revision to the material of the first edition concerns Southern
U.S. migration to the North. Thomas also adds chapters taking issue
with his critics on the brain drain and on monetary influences, these
last two swayed by the very different economic environment of the
1950s and 1960s.
Unlike Schumpeter, Thomas regards international migration as
responding to innovations, as well as contributing to fluctuations.
He also believes internal or rural-urban migration was a substitute
for emigration so that when one was high the other was low. If the
same type of people emigrated as migrated internally this is what we
would expect -- but not if they were non-competing groups.
Thomas's central theme translates well as a real business cycle. A
technology shock in a region raises the productivity of labor there.
More capital and labor are supplied (migration) because higher wages
match higher productivity; there is a positive correlation of the
real wage and the upswing. This contrasts with shorter cycles perhaps
based on workers' misperceptions of prices and the real wage in
monetary fluctuations. In the region without the positive shock, less
labor and capital are supplied, because better returns are to be had
elsewhere. In the booming region, the time necessary for building the
infrastructure to take full advantage of the technology means that
the flow of labor and capital continues for some years, until
marginal returns are equalized again between regions (allowing for
non-pecuniary differences and costs of migration), or other shocks
occur.
Demographic impulses as well as technology shocks promote the
distinctive inverse cycles between the regions. A case in point is
the Napoleonic war "baby boomers" that, in due course Thomas
maintains, created the "hungry forties." Malthusian pressure in
Europe pushed migrants to the U.S., capital tended to follow them and
the demand for housing in the U.S. rose (even though, in contrast to
the positive technology shock, real wages in the receiving region
fall and those in the transmitting region rise, relative to what they
would have been). Non-competing groups add richness to the model. To
the extent that the immigrants are complementary to the indigenous
work force, wages will rise. More likely is that some wages (say
skilled) will rise and others fall - if, for instance, immigrants are
unskilled. The more capital that flowed with the migrants the
stronger the growth they promoted, and the less adverse the impact on
wages.
Today we are more likely to consider Heckscher-Ohlin derived
approaches, for example that focus on income distributional
consequences of factor flows, or the determinants of skill premia.[2]
When transport costs fall, free trade permits a lower price of food
in land-scarce countries like Britain and leaves landowners and
agricultural laborers worse off. This encourages migration (internal
or external) from the rural sector regardless of class mobility,
although not regardless of occupational mobility. But Thomas largely
ignores trade, as well as product and factor prices.[3]
Part 3 of the second edition concludes with a chapter (12) on the
impact of the U.S. immigration restrictions of the 1920s. Thomas
observes that the legislation encouraged agricultural protectionism
in Europe because redundant population, unable to move to the U.S.,
was employed growing subsidized crops. Migrants were also diverted to
Canada and South America, boosting output there. He contends that the
restrictions played an important part in the process that ended in
the world depression. But "it is an ill wind that blows nobody any
good"; Thomas's final chapter (18) argues that black migrants from
the South gained from the elimination of European competition. In the
second edition he notes that white and black internal migration were
inverse. The immigration restriction act of 1924 was followed by big
increases in southern blacks in the North.[4] Conversely, "What the
evidence suggests is that in the sixty years after the end of the
Civil War the strong competition of white workers from abroad ... set
a stern limit to the number of blacks who could obtain employment in
the booming urban areas of the North and West, and consequently they
suffered relative impoverishment" (p. 333). Jeffrey Williamson (2005)
cites later literature to this effect, and discusses the corollary
that the position of blacks deteriorated after 1970 because of
competition from immigrants.
Thomas's chapter 16 on migration and British regional growth
introduces the wider world to Welsh "exceptionalism." This thesis
allows the possibility of enlivening economic history syllabuses with
questions such as "If Ireland had Wales' coal would New York now
conduct a parade on St. David's rather than St. Patrick's Day?" In
the later nineteenth and early twentieth centuries Wales absorbed
immigrants at a rate not much less than the U.S. in the same period.
Migration cycles for Wales were inverse to those of Scotland and
England; Wales exported coal (measured by tonnage Cardiff was the
largest port in the world by 1890), whereas English coal was for
domestic consumption.[5] Whereas Ireland lost population absolutely,
and Scotland lost natural increase by net migration, Wales gained
from net migration and the population almost doubled between 1871 and
1911.
Taking issue with "exceptionalism," Dudley Baines (1985) has pointed
out that the Welsh were more likely to emigrate than the English, and
through England (Liverpool boasted the first real Welsh-language
newspaper). He contends that the U.S. returns of the 1880s almost
certainly classified the Welsh as English, and that internal
migration does not seem to have been a substitute for emigration.
Wales actually experienced a massive influx of English and others. In
the 1870s and 1880s they may well have been assimilated, for the
numbers of Welsh speakers rose in every decade to 1911, when there
were more than a million (Davies 1994). But in the two decades before
the First World War, foreign arrivals were too numerous to be
absorbed culturally.
Omitted from the second edition is a discussion of the wider
consequences of the interwar regime shift for the "Atlantic
community." In Chapter 14 ("The Atlantic Economy, Old and New") of
the first edition, the focus is on the disruption of factor flows and
the role of government transfers within national economies. The labor
and capital movements, that allowed adjustment of "regional"
economies despite the apparently irrevocable linking of exchange
rates through the gold standard, and compensatory public spending,
are suggestive of the later optimum currency area literature.
Pursuing the greater role of government, Thomas analyzes the "brain
drain" in the years after 1945 in chapter 17 of the second edition.
Highly skilled labor migrated from poorer economies (often where they
were trained at public expense) to richer countries. In the U.S.
Brinley explains the phenomenon by the massive expansion of
government expenditure, particularly research and development
spending, together with inelasticity of skilled labor supply. In
Britain by contrast, immigration of highly skilled personnel merely
offset emigration to the U.S. and elsewhere.
How much further has half a century of analysis and data construction
taken us? General equilibrium modeling and econometric estimation
have certainly added precision both to the questions and the answers.
But Thomas's book continues to be worth reading thanks to his ability
to identify and analyze empirically a range of important problems
over 120 years or more of the Atlantic economy.
Notes:
1. I met Thomas in California in the early 1980s when I believe he
was in demand to entertain the All-California group of economic
historians with after dinner speeches. Among other nuggets he offered
me was the optimum quantity of money to carry if obliged to walk in
Berkeley after dark (as he was sometimes). He estimated that two 20
dollar bills were sufficient to avoid being beaten up by frustrated
muggers, while not imposing an intolerable burden on the budget. I am
unsure as to whether this doctrine was ever tested.
2. Jeffrey Williamson and collaborators (for example Hatton and
Williamson 1998, and O'Rourke and Williamson 1999) have been
particularly influential in this respect.
3. The neglect of Ohlin's (1933) book is presumably because it was
nominally about trade while Thomas was interested in factor mobility.
4. Subsequently Hatton and Williamson (2006) constructed a
counterfactual immigration rate and level in the absence of the
legislation, showing that it accounted for about half of the
reduction in labor supply and therefore for even more of the decline
in unskilled labor force growth.
5. Lewis (1960) analyzes a helpful model of such an export economy,
in which today "coal" would probably be replaced by "tradable goods"
and "building" by "non-tradable (capital) goods."
References:
Baines, Dudley. 1985. _Migration in a Mature Economy: Emigration and
Internal Migration in England and Wales, 1861-1900_. Cambridge:
Cambridge University Press.
Davies, John. 1994. _A History of Wales_. London: Penguin.
Hatton, Timothy J. and Jeffrey G. Williamson. 1998. _The Age of Mass
Migration: Causes and Economic Impact_, New York: Oxford University
Press.
Hatton, Timothy J. and Jeffrey G. Williamson. 2006. _Global Migration
and the World Economy: Two Centuries of Policy and Performance_.
Cambridge, MA; MIT Press.
Lewis, J. Parry. 1960. "Building Cycles: A Regional Model and Its
National Setting," _Economic Journal_ 70 (September): 519-35.
Lewis, J. Parry. 1996. "Brinley Thomas, C.B.E., M.A., Ph.D., F.B.A.:
Formerly Fellow of the University of Wales," _Economic Journal_ 106
(July): 984-93
Ohlin, Bertil G. 1933. _Interregional and International Trade_.
Cambridge, MA: Harvard University Press.
O'Rourke, Kevin H. and Jeffrey G. Williamson. 1999. _Globalization
and History: The Evolution of a Nineteenth-Century Atlantic Economy_.
Cambridge, MA: MIT Press.
Williamson, Jeffrey G. 2005. _The Political Economy of World Mass
Migration: Comparing Two Global Centuries_. Washington, DC: American
Enterprise Institute.
Director of the Welsh Institute for Research in Economics and
Development and former President of the European Historical Economics
Society, James Foreman-Peck has been Economic Adviser at H.M.
Treasury concerned with micro-economic policy issues, particularly
public service delivery and procurement. Other previous posts include
Professor of Economic History at the University of Hull, Visiting
Associate Professor of Economics at the University of California,
Davis, and Fellow of St Antony's College, University of Oxford. His
books include _A History of the World Economy: International Economic
Relations since 1850_, _Public and Private Ownership of British
Industry 1820-1990_ (with R. Millward) and _European Industrial
Policy: The Twentieth Century Experience_ (edited with G. Federico).
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Published by EH.Net (August 2006). All EH.Net reviews are archived at
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