This article presents the results of an extensive inquiry into urban consumption of foodstuffs in Flanders between 1800 and 1860. The octroi tax, an indirect tax levied on various consumer items, formed the principal source. During the initial phase of Belgian industrialisation the inhabitants of the eight cities under study (Antwerp, Bruges, Brussels, Courtrai, Ghent, Lokeren, Leuven and Mechelen) experienced a sharp decrease in the consumption of bread grains, meat, fish, beer, wine and gin. A number of other indicators suggest at the same time an accelerated widening of the gap between rich and poor. This process of impoverishment and pauperisation, which occurred in all cities (small or large, industrial or merchant centre), is explained as a result of Malthusian tensions. The rapid population growth, which started around 1750, generated the division of arable land and a sharp increase in land prices. The growing demand for food, stagnating agricultural output, and the trade and agricultural policy of the government led to a significant increase in the price level of foodstuffs. The capitalism hypothesis of Lis and Soly, elaborated for Antwerp, is rejected.

It is commonly believed that not much happened in the transmission of information before the introduction of the electric telegraph. This article, however, argues that this was not the case, that quite a substantial improvement in the speed of information transmission had already taken place a few decades before this technical breakthrough. Between 1820 and 1860, global dispatch times diminished remarkably, on average to about a third of what they had been around 1820. This implies that on most routes the improvement during these three decades amounted to more saved days than was achieved after the introduction of the electric telegraph. The development can be described as an evolution which started in Europe in the 1830s and was diffused gradually all over the world. The first transcontinental communications to benefit were those across the North Atlantic and to the Far East, with South America, Africa and Australia clearly trailing behind. The ‘take-off’ was initially connected with the introduction of steamships on coastal or short sea routes and subsequently on increasingly long ocean voyages. However, even traditional overland mail-coach connections improved as also did sailing-ship (‘packet’) connections over the North Atlantic until the late 1830s. It was only in the late 1840s and 1850s that railways started to shrink distances within Continental Europe.

The articles published in this special issue of the European Review of Economic History were originally presented at the First German Cliometrics Conference held at the Centre for International Studies, University of Toronto, 23–26 September 1999. The conference was organised by Scott Eddie, John Komlos and Jörg Baten. The essay by Richard Tilly on German Economic History and Cliometrics serves as an introduction.

This article presents a quantitative test of the oft-repeated view that Italy's backward and poor South suffered from low ‘social capital’, a tendency to defect from co-operative engagements. The problem with such assertions is that they run the risk of taking as evidence in favour of the hypothesis the very observations that need to be explained. The analysis carried out in this work tries to break out of this impasse by analysing the conditions under which it was ex ante welfare-improving for farmers in early twentieth century Italy to join an unlimited liability rural co-operative bank which would give them access to cheaper credit, but also exposed them to the risk of their neighbours’ defection. These ‘co-ops’ are a prime testing ground for the cultural explanation in that they spread rapidly throughout Northern Italy in the late nineteenth century, but never gained a similar popularity in the South. I estimate the switching function for these co-ops in different parts of the country to test whether Northern and Southern farmers faced significantly different choice sets when making the decision to join. Identical choice sets but differential responses would of course favour the cultural explanation of the South's backwardness. The results suggest that for the same parameter values, the choice sets for North and South were indeed different.

Reparations as an instrument of international peace settlements were abandoned after the failure of Germany to pay its post-World War I indemnity. However, reparations played a useful role in the construction of earlier peace treaties. This article examines the payment of reparations by the French after the Napoleonic Wars. By most measures, these reparations were the largest ever fully paid; and they imposed a high cost on the economy in terms of lost output, consumption, and diminished capital stock. The incentives to pay were appropriately set and payment permitted France to be accepted once again as an equal among the great powers.

This article discusses recent cliometric contributions by German and non-German economic historians to the field of German economic history. After a brief attempt to describe the field in Germany I survey recent work in four specific topical areas – which thus serve as rough indices of the spread and development of econometric and quantitative techniques in the field. I conclude that a German ‘cliometric revolution’ has not yet taken place, but that promising beginnings have been made.

This article challenges the established orthodoxy concerning industrial growth in Greece during the interwar period. A Paasche quantity index weighted by value-added shares for 1938 is constructed and then compared to earlier estimates. The new index indicates rapid growth though not free of interruptions in the 1920s, an early and robust recovery from the Great Depression and high rates of growth in the 1930s. By contrast with earlier estimates which imply that Greece escaped the Great Depression unscathed, the new index shows that industrial output plummeted after 1929. These findings, backed up by alternative tests, suggest that the new index gives the best possible assessment of industrial production in Greece in the interwar period. The article also explores mechanisms that stimulated industrial activity and provoked cyclical collapses of industrial output in Greece in the interwar period.

It is well-known that clearing banks in Britain did not publish their true profits until 1969. This article sets out to establish from sources in the banks’ archives reliable and consistent estimates of the true profits and profitability of the major English clearing banks during the period 1920–68. The methods used and problems encountered are explained, and the results discussed, together with possible sources of data outside the banks. The impact of inflation on rates of return is considered. The question of ‘smoothing’ of published profits by the banks is addressed. The results are discussed in the context of economic theory and the perceived cartel nature of banking and some comparisons made to estimates of profitability in the wider UK economy. Finally, some interesting questions raised by the results, and which require further study, are identified.

As recent commentaries on Western European unemployment have noted, high unemployment, limited worker mobility, and a limited creation of jobs characterise the current inflexible labour market structures. This article uses a new source, extracts from the Arbeiterbücher of eight German firms found in textiles and heavy industry during the period of high industrialisation, to identify key features of the labour markets of pre-1914 Germany. The results are consistent with neo-classical economic models of labour markets. Hazard analysis of firm employment records suggests that while marital status played an important role in mobility, even older workers held three to four times as many jobs as workers today. Information and skill levels were also crucial determinants. Mobility was highly responsive to shifts in demand conditions as well.

This article analyses three crucial elections which determined the fate of free trade in Britain and Germany. These are the elections of 1906 in the UK and 1877 and 1878 in Germany. We examine the political economy of trade policy by examining the voting patterns of the electorates in their choice of commercial policy. The underlying hypothesis to be explored is that voting behaviour was based on the economic interests of the constituents as determined by the international trade performance of the sector in which they were employed. An econometric model reveals the degree to which the support for and opposition to free trade was based on occupational characteristics and well explains the outcome for Germany in 1877. The analysis for Britain extends previous work by Irwin (1994) by assessing how considerations of turnout, religion and restricted voting rights alter the results of his original model. In 1878 in Germany religious affiliation and turnout played a significant role in the result although not in the ways assumed by historians, in particular the outcome of the election was not determined by the mobilisation of agricultural labourers on the great estates. The results of estimating the model shows that franchise restrictions contributed to the victory of free trade in Britain, but their absence had no impact on the result in Germany.

By the 1820s, as a result of the protracted struggle with France, the market value of the British Government debt was twice British GDP. It has been argued that this debt represented a huge institutional failure by the government, significantly slowing growth in the Industrial Revolution period by crowding out private investment. This article constructs measures of private rates of return in the years 1725–1839 and shows these imply that neither the government deficits nor the mounting debt are associated with much higher private rates of return on capital. The reason the government could issue so much debt without raising rates of return is unclear. One possibility is that crowding out was occurring, but population growth in 1770–1839 was reducing rental income as a fraction of GDP, creating a demand for other asset income so that we do not observe tightness in capital markets.

This article analyses the effects of globalisation on wage inequality in a group of eight now-developed countries during the century prior to 1970, using the same dependent variable and methodology as research on the impact of globalisation since 1970. The results suggest that the impact of globalisation on wage inequality before 1970 was confined largely to the effects of the pre-1914 mass migrations in the United States and Canada. Powerful domestic forces – expanding native supplies of skilled labour, the growth of new skill-intensive industries, and fluctuations in the level of aggregate demand – were the main influences on wage inequality for most of the period.

This article revisits the German system of fiscal federalism between unification in 1871 and hyper-inflation in 1923. I argue that the ill designed fiscal system led to systematically excessive debt for the Reich. The system was the outcome of overlapping distributional conflicts between centre and states, and between capital and labour. It was also responsible for the debt problems arising in World War I and the unsuccessful attempts at fiscal reforms during and after the war. Ultimately, these distributional conflicts contributed to the hyper-inflation in Germany. The German example also has implications for the debate about fiscal federalism in the European Union.

This article analyses the impact of the onset of the Great Depression on voting patterns at the local level in the final years of the Weimar Republic. A special pooled longitudinal/cross sectional, fixed-effects approach with spatial autocorrelation (EGLS) is used in order to simultaneously estimate the popularity determinants for the entire system of political parties for each of the 830 localities in our data set. By analysing the determinants for the vote shares of all major parties/party blocs we demonstrate unequivocally that the economic crisis was the crucial prerequisite for the political collapse of the Weimar Republic. In contrast to other empirical studies in this field, we use an essentially longitudinal approach by which we can completely avoid the problems associated with ecological inference and show that unemployment had a strong positive effect in favour of the National Socialists. Because of using aggregated data, we cannot, however, distinguish between egotropic and sociotropic voting behaviour.

We analyse a newly constructed data set of monthly prices for wheat and rye in Nuremberg (1490–1855) to address the issue whether models of rational investment behaviour provide an adequate description of grain markets and grain storage in early modern Europe. Based on the empirical evidence presented here we conclude that the case for well functioning arbitrage in the market for grain in Nuremberg is quite weak. This can only partly be explained by the institutional background.