Why labour relations matter: Global Labour History and New Institutional Economic History
The undeniably big achievement of New Institutional Economic History (NIEH) is that it returned the historical and political dimensions to the economic discipline. Dimensions, that despite their centrality in the work of Smith and Marx have been notoriously neglected in neo-classical economics. NIEH has developed the ambition to explain why certain national economies show a better long-term performance than others. Acemoglu’s and Johnson’s definition of property rights as institutions that ‘provide citizens protection against government and elite appropriation’ has given further focus to discussions and research projects on how colonial exploitation might have impinged upon long-term economic growth prospects.
Interestingly enough, the way in which NIEH views the effects of rapacious colonialism is not that different from the Dependencia scholars; the divergence pertains rather to the purported mechanisms of this rapaciousness. Whereas the latter focus on power as the key variable and attribute a major role to exogenous factors, the institutionalist taking an endogenising approach by attributing a central role to ‘extractive institutions’. These are defined as the exact opposite of the property rights. This is not a contentious point for those who agree that colonial conquest is about disrespect for existing property rights and about withholding citizen rights. What merits further discussion, however, is what mechanisms cause these extractive institutions and what mechanisms of transmission makes them persistent. This is still a black box. There are roughly two strategies to deal with that. One is the strategy proposed by Douglas North 20 years ago to include more and more variables in a macro-scale analysis in the hope to find the golden bullet or, alternatively, to scale down the unit of analysis and hypothesise historically discrete causes.
The latter strategy can build upon the early work of Engerman and Sokoloff who developed the notion of plantations as key vehicles in what they termed a reversal of fortune for resource rich tropical environments. This is an obvious point of entrance for labour historians. It is also an exciting strand of research among economic historians. The long-lasting consequences of systems of forced labour coercion have been examined by Nunn and Dell, for example. Yet they found out that correlations between extent of extraction of wealth and severe labour coercion and contemporary poverty may sound plausible but they can sometimes be inverse and that the mechanisms of transmission are not that obvious and sometimes counter-intuitive.
The good news is that labour relations matter and do seem to be an important explanatory factor for long-term economic development, but the bad news is that we still have no consistent theory or set of theoretical notions about how they do. In our view there is room for theoretical reflexion and hypothesis building on how labour relations matter for long-term economic growth and what mechanisms of transmission are involved.
- Marcel van der Linden, International Social History Association, email@example.com, Netherlands
- Gareth Austin, University of Cambridge, firstname.lastname@example.org
- Karin Hofmeester, International Institute of Social History, email@example.com
- Pat Hudson, University of Cardiff, HudsonP@cardiff.ac.uk
- Nathan Nunn, Harvard University, firstname.lastname@example.org
- Ulbe Bosma, Vrije Universiteit Amsterdam, email@example.com