Entering the Market

Arnold Kling

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Cambridge University reports on research by economic historian Sheilagh Ogilvie. In some communities in Germany, people recorded their possessions at the time of marriage. This can allow Ogilvie to reconstruct the development of the German economy from 1600 to 1900

"Aspirations for the latest fashions, furnishings and stimulants motivated people to shift time from leisure and do-it-yourself to income-earning work, creating a virtuous circle," explained Professor Ogilvie. "More work meant more earnings, more earnings meant people could buy more consumer goods, and this spurred producers to innovate and expand."

Glen Whitman, who emailed the link to me, knew that I would be struck by the shift from non-market activities to market work. That is what happens when people create patterns of sustainable specialization and trade (PSST). It goes into reverse when patterns break down, until new patterns are created.

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CATEGORIES: Economic History , Macroeconomics

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Gaspard writes:

I can't refind the link now, but the groundbreaking research on this involved looking at probates and court cases in 18th century England and how pocket watches filtered quite rapidly to the working classes, even though they were proportionally still very expensive. This is the closest I can find:

http://www.historytoday.com/john-styles/time-piece-working-men-and-watches

Bling culture avant la lettre. It vindicates Virginia Postrel et al on the substance of style, etc.

Posted June 1, 2011 12:34 PM

Ted writes:

The problem with your PSST story (I always read this acronym as PTSD) is that it is so vague it's the type of theory (really a conjecture at this point) where nearly every observation can be rationalized.

I could just as easily tell stories about preference shifts; technology shocks; institutional change; human capital accumulation allowing for greater specialization etc that would be observationally equivalent to your PSST story on this matter.

Posted June 1, 2011 1:40 PM

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