Government decisions before and during the First World War and the living standards in Germany during a drastic natural experiment

The First World War hit Germany severely, particularly the agricultural sector, because the outbreak came unexpected and its duration exceeded all expectations. Many resources necessary for agricultural production were required by the war economy and led to shortages and shrinking supplies. Many agricultural laborers were drafted and the blockade imposed by the allies prevented Germany from a great deal of imports. As a consequence, the nutritional situation was devastating, particularly after 1916, and hit all groups of the German society.The period under observation provides one of most drastic natural experiments in the 20th century. This study uses anthropometric data from German soldiers who served in the Second World War to trace living standards between the 1900s and the 1920s. In contrast to other approaches, this paper is able to distinguish between social groups by occupation, religious denominatio\n, regional origin, and city size. The results suggest that although all social strata were hit by famine conditions, the height of farmers, urban citizens, Catholics, and especially individuals born in the highly integrated food-import regions along the coast and the banks of the Rhine declined most.     

Making profits in wartime: corporate profits,inequality, and GDP in Germany during the First World War1

Making profits in wartime: corporate profits, inequality, and GDP in Germany during the First World War. This article reconsiders, and rejects, Kocka's (1973) hypothesis that a strong income redistribution from workers to capital owners occurred in Germany during the First World War. A small number of firms profited from the war, but the majority experienced a decline in real income, similar to the decline in workers' real wages. This finding also has important implications for the political history of the Weimar Republic. The authors also use their figures to improve German GDP estimates for the war period, since their sample makes it possible to estimate private service sector development. Economic indicators were worse for the war year of 1917 than previously believed.     

Social mobility in the early middle ages

Estimates of inequality of living standards based on average height differences between socioeconomic strata are likely biased if the social status of some individuals changed during their lifetime. Height differences estimated from skeletal remains, reflecting living standards during childhood and adolescence, are probably too small if social status is inferred based on grave goods which are associated with the individuals’ social status at the time of their death. The higher the level of social mobility, the more distinguished individuals will not have had a privileged childhood and, therefore, have the biological characteristics of the disadvantaged group. In a newly assembled sample of individual level anthropometric data from 26 early medieval row grave cemeteries in south-western Germany, men buried with a long sword in their grave were on average about 3 cm taller than the others. In a simple model of the mechanics of the social-mobility bias, this height difference, together with parameters from the literature, implies a level of social mobility typical of small-scale agricultural or pastoral societies.     

Political risk and the international bond market between the 1848 revolution and the outbreak of the First World War1

This article uses price data and editorial commentaries from the contemporary financial press to measure the impact of political events on investors’ expectations from the middle of the nineteenth century until the First World War. The main question addressed is why political events appeared to affect the world's biggest financial market, the London bond market, much less between 1881 and 1914 than they had between 1843 and 1880. In particular, I ask why the outbreak of the First World War, an event traditionally seen as having been heralded by a series of international crises, was not apparently anticipated by investors. The article considers how far the declining sensitivity of the bond market to political events was a result of the spread of the gold standard, increased international financial integration, or changes in the fiscal policies of the great powers. I suggest that the increasing national separation of bond markets offers a better explanation. However, even this structural change cannot explain why the London market was so slow to appreciate the risk of war in 1914. To investors, the First World War truly came as a bolt from the blue.     

Inequality in turbulent times: income distribution in Germany and Britain, 1900–50

Using social tables, this article provides new data on inequality in Germany and Britain on an annual basis for the first half of the twentieth century. Inequality trends in these two countries tended to follow opposite patterns. The decline in inequality in Germany was interrupted during the First World War and the Nazi period, while in Britain the reversal took place between the end of the First World War and the Great Depression. Results show that the drop in inequality during the twentieth century in Europe did not follow secular trends, thus supporting the notion of inequality cycles.     

Capital income taxation of Swedish households, 1862–2010

This study describes the evolution of capital income taxation, including corporate, dividend, interest, capital gains and wealth taxation, in Sweden between 1862 and 2010. To illustrate the evolution, we present annual time-series data on the marginal effective tax rates on capital income (METR) for a marginal investment financed with new share issues, retained earnings or debt. These data are unique in their consistency, thoroughness and time span. We identify four tax regimes separated by shifts in economic policy. The first regime stretches from 1862 until the Second World War. The METR is low, stable and does not exceed 5% until the First World War, when the METR begins to drift upwards and varies depending on the source of finance. The outbreak of the Second World War establishes the second regime, when the magnitude and variation of the METR sharply increase. The METR peaks during the third regime in the 1970s and 1980s and often exceeds 100%. The 1990–1991 tax reform represents the beginning of the fourth regime, which is characterised by lower and smaller variations in the METR. The METR varies between 15% and 40% at the end of this period.     

西欧跨越中等收入陷阱:理论分析与历史经验

从历史发展进程来看,西欧曾经落入中等收入陷阱,时间跨度大约是一战之前到二战结束。在"量"上表现为人均GDP处于3000～6000美元区间内,从"质"上表现为经济增长迟滞、技术进步缓慢、两级分化加剧、社会问题丛生等不利局面。西欧落入中等收入陷阱的原因是工业化生产方式变迁所带来的社会问题缺乏相应的社会保护机制化解。二战之后,经过第三次产业革命以及社会民主化的社会政治改革,通过重构社会保护机制和建设福利国家,西欧重新获得了经济增长的动力,摆脱了中等收入陷阱。     

Second World War spending and local economic activity in US counties, 1939–58

Studies of the development of local economies often point to large‐scale Second World War military spending as a source of economic growth, even though spending declined sharply after demobilization. We examine the relationship between war spending per capita and the changes in economic activity in US counties between 1939 before the war and a period several years after the war. In the longer term counties receiving more war spending per capita during the war experienced greater population growth, but growth in per capita measures of economic activity showed little relationship with per capita war spending.     

Shakeout in the early commercial airframe industry

The commercial airframe industry in the US experienced a shakeout from the early 1930s into the post‐Second World War period. Unlike shakeouts in automobiles, tyres, or televisions, the commercial airframe industry's early life cycle was affected by external factors, particularly government demand. Using newly digitized data on all planes introduced in the commercial market between 1926 and 1965, we find that commercial airframe manufacturers with bomber contracts during the Second World War were more likely to have postwar market share than firms without such contracts, controlling for plane characteristics and other forms of government contracting. We attribute the effect of bomber contracts to advantages in R&D learning capacity acquired by firms with military airframe contracts. Despite low (or zero) initial presence in the commercial market, these learning capacity advantages allowed such firms to survive the early period of the shakeout, and later to thrive.     

The South African social safety net: past,present and future

Discriminatory social provision in South Africa originated soon after Union. This differentiation continued in the period before Nationalist rule, but there were also attempts at liberalisation, particularly during the Second World War. Nationalist rule brought with it a reversal of what little gains may have been made. From the early 1970s there was a gradual shift away from apartheid dogma. Future policies will need to eliminate gaps in the social safety net and ensure that adequate entitlements are delivered prudently and cost‐effectively.     

Inheritance taxation in Sweden, 1885–2004: the role of ideology,family firms,and tax avoidance

This article studies the evolution of Swedish inheritance taxation since the late nineteenth century to its abolition in 2004. The contribution of this article is twofold. First, the annual effective inheritance tax rates are computed for different sizes of bequests and asset types, accounting for all relevant exemptions, deductions, and valuation discounts. Second, an attempt is made to explain changes in inheritance taxation over time. Ideology appears to be the main driver of the sharp tax increases of the 1930s to the 1960s. Wartime economies with higher pressures on the people induced politicians to raise inheritance taxes on the wealthy, primarily during the First World War. Increased opportunities for tax planning for the wealthy are also documented, most notably a series of tax cuts on inherited family firms in the 1970s. This rise in avoidance opportunities for the rich, while middle‐class heirs faced growing inheritance tax rates, undermined the legitimacy of the tax and led to its repeal.     

Latin American manufacturing and the First World War: An exploratory essay

In the 1960s many writers on Latin America accepted the idea that the conditions for industrial growth were most propitious when international commercial and financial flows were disrupted, as in the First World War. Recent work has raised doubts, however, about the extent of manufacturing expansion between 1914 and 1918, while drawing attention to the growth of industry in the 20 years preceding 1914. This paper, through a discussion of the secondary literature and a sampling of primary sources on five countries, seeks to explain why increases in production and profits during the war were not accompanied by significant new investment or a diversification of Latin America's industrial structure.     

Economic freedom in the long run: evidence from OECD countries (1850–2007)

This article presents historical indices for the main dimensions of economic freedom and an aggregate index for the developed countries of today, specifically pre‐1994 OECD members. Economic liberty expanded over the last century‐and‐a‐half, reaching more than two‐thirds of its possible maximum. However, its evolution has been far from linear. After a substantial improvement from the mid‐nineteenth century, the First World War brought a major setback. The postwar recovery up to 1929 was followed by a dramatic decline in the 1930s. Significant progress took place during the 1950s but fell short of the pre‐First World War peak. After a period of stagnation, steady expansion since the early 1980s has resulted in the highest levels of economic liberty of the last two centuries. Each of the main dimensions of economic freedom exhibited a distinctive trend and its contribution to the aggregate index varied over time. Overall, improved property rights provided the main contribution to the long‐run advancement of economic liberty.     

An annual index of Irish industrial production, 1800–1913

We assemble the Irish industrial data currently available for the years 1800–1921, the period during which the entire island was in a political union with Great Britain, and construct an annual index of Irish industrial output for 1800–1913. We also construct a new industrial price index. Irish industrial output grew by an average of 1.3 per cent per annum between 1800 and the outbreak of the First World War. Industrial growth was slightly slower than previously thought, especially during the two decades immediately preceding the Great Famine. While Ireland did not experience absolute deindustrialisation either before the Famine or afterwards, its industrial growth was disappointing when considered in a comparative perspective.     

Latin America and the Great War: A preliminary survey of developments in Chile,Peru, Argentina and Brazil

In this paper we present some preliminary ideas on a comparative study of the economic and social effects of World War I on Latin America. We argue that this issue has generally been conceived too narrowly, and that the events of the war years have much to tell us about the nature of capitalist development in the region. We begin by outlining some of the major external factors which influenced the course of economic change in the years before 1914. The initial impact of the war is then considered, particularly with regard to finance, trade and social dislocation. Finally, we briefly examine similar topics during the remaining war years. We conclude by arguing that the war did not provide an opportunity to alter the course of economic growth, but tended to highlight the weaknesses and magnify the contradictions of Latin America's brand of capitalist development.     

Stature growth in industrializing Argentina: The Buenos Aires industrial belt 1916-1950

A sustained long-term increase in average stature accompanied the process of import-substituting industrialization in the main suburban area of Argentina, the Buenos Aires Conurbano. This gain in net nutrition was attained before the rise to power of a re-distributionist political party: the Peronists. The article also provides evidence of a decline in average heights during the period 1939-1945, which challenges us to revise the traditional wisdom about the impact of World War II and Peronist social policies and its implications for the nutrition and health of children. The new evidence on heights shows also persistent social and regional differences over time that had not been documented before.     

Extending home ownership before the First World War: the case of the Co‐operative Permanent Building Society, 1884–19131

Formed in the mid‐nineteenth century, the building societies grew rapidly from their humble beginnings as localized ‘self‐help’ institutions to become the dominant players in the house mortgage market by the interwar period. Throughout their early history, the societies presented themselves as champions of home ownership among the working classes, but historians of housing have generally disputed the role that building societies played, or could have played, in extending home ownership before the First World War. The case study presented in this article shows that it was possible for a building society to lend to working‐class borrowers, and that home ownership before the First World War was not beyond the grasp of such people. While it was undoubtedly an exception within the movement, the Co‐operative Permanent Building Society showed a genuine commitment to working‐class owner‐occupation, providing the majority of its loans to both skilled and unskilled workers on easy repayment terms. How it was able to overcome the adverse selection and moral hazard risks involved in lending to such groups of people is the focus of this article.     

Militarisation and Urbanisation: The Second World War,Public Housing,and the Shaping of Metropolitan Adelaide

Adelaide entered the Second World War with an industrial urban axis extending north-west from the city to its port, and emerged from the War re-aligned to the north. This article asks why the re-alignment occurred. It argues that previous explanations for Adelaide's north–south alignment are inadequate, and concludes that the orientation is the result of Commonwealth Government investment in military–industrial development and accompanying urbanisation on a remote rural site to the north of Adelaide's metropolitan area. These explanations are now hidden in the landscape and almost forgotten in historical accounts.     

Health,height, and the household at the turn of the twentieth century

This article examines the health and height of men born in England and Wales in the 1890s who enlisted in the army at the time of the First World War, using a sample of recruits from the army service records. These are linked to their childhood circumstances as observed in the 1901 census. Econometric results indicate that height on enlistment was positively related to socio‐economic class, and negatively to the number of children in the household in 1901 and the proportion of household members who were earners, as well as to the degree of crowding. Adding the characteristics of the locality has little effect on the household‐level effects. However local conditions were important; in particular the industrial character of the district, local housing conditions, and the female illiteracy rate. These are interpreted as representing the negative effect on height of the local disease environment. The results suggest that changing conditions at both household and locality levels contributed to the increase in height and health in the following decades.