ECN111B- MT1
What were the problems that small farmers believed to be important? How valid were each of these complaints and why?
1. indebtedness due to expensive land and machinery (true) 2. the cost of land was rising 3. they had to pay short term mortgages with high interest rates to help establish trust --> feeling of insecurity 4. declining prices of wheat (not true, overall price levels were just falling) 5. had to get goods and services from industries with growing economic power such as railroads --> made smaller farmers pay more money (true but exaggerated) 6. money lenders and speculators were controlling of their success. they drove up
Know the definition of path dependence and be able to give an example of path dependence from the course.
Path dependence is how one decision in history can affect our future in a big way. An example would be how the souths trajectory in terms of labor and income was path dependent upon the civil war.
Be able to discuss the decline in income per capita in the South relative to the Midwest after the Civil War. You should be able to discuss the various theories regarding the depth and duration of this decline (War destruction, Efficiency Loss (Fogel and Engerman), leisure for labor trade- off (Ransom and Sutch), Debt Peonage (Ransom and Sutch), Regional Labor Demand (Gavin Wright), Temin's discussion of the cotton market, and the impact of hookworm (Brinkley)).
Post civil war much of the resources were depleted due to farmland destruction. The implementation of sharecropping proved to be far less efficient. Ransom and Sutch discussed the idea of debt peonage and how people should decide the hours they want to work. Along with this debt peonage proved that the process of sharecropping was an endless cycle of debt. Another problem that contributed to the overall decrease in productivity was hookworm. It was found that by the end of the civil war most southern soldiers were without shoes and an estimated 40% of the population had hookworm. This left many unable to work due to bad health, which created a less productive population and an increase in poverty.
How did the balance between "tenant" farming and "farmer owned" farming change in the period after the civil war?
Tenant farming was where you paid to live on the land in exchange for a portion of your crop. In the north this continued to increase post civil war due to the increase in price of land. Overall the amount of farmer owned farming increased while tenant farming increased.
How did the 1933 National Industrial Recovery Act and the 1938 Fair Labor Standards Act and the New South Movement finally end the disparity in income per capita and lead to wage convergence?
The 1933 National Industrial recovery act gave power to unions, reduced work hours and started the establishment of a minimum wage. In 1938 there was a minimum wage set of 25 cents/hour which would increase 5 cents/hour until in reached 40 cents/hour. This caused a high level of unemployment in the south and along with this there was also the implementation of overtime pay and child labor laws. The new south movement worked to prove that the south was worthy of investment, and was pretty much a marketing effort.
How did the integration of the Midwest into the world market for grain affect farming in the U.S.?
The crimean war caused the price of wheat to increase due to other countries being unable to export, which was good for american farmers. post war midwestern farmers faced inelastic supply of land and decreased productivity with rising costs of production. the foreign demand for wheat kept the market afloat during this time. The cheap transportation also helped for the midwest to get their wheat into the international market.
You should also be able to use the signaling model to discuss the persistence of racism. How does racism delay growth? How did the government help promote racism and therefore delays in growth? Be able to discuss and define the Black Codes and Jim Crow laws.
The signaling model discussed how your race would signal information about your productivity to different people, for example you banker, employer or lender. They looked at population averages rather than the individuals. During this time slaves were not allowed to be educated and therefore as racism persisted it kept 1/2 the southern population from getting the tools they needed to be productive. This model was followed as black codes and Jim Crow laws further continued to disadvantage black families. The black codes were laws in the south post civil war that tried to keep black people as slaves even though they had technically been freed.
Be able to define cliometrics and give an example of where it has been used in the course.
cliometrics is the use of economic theory and statistical measurement in the study of economic history. an example of this was seeing how much items in other time periods such as the 1920's would cost in todays US dollars
How did the crop mix change across the U.S. during the post-Civil War period?
overall post civil war there was too much reliance upon cotton as a cash crop. Boll weevil infected southern crops which forced the farmers to switch the crops they grew. Along with this they also tried techniques such as putting other crops between the cotton so that the boll weevil could not travel through. In the north they started specializing in different crops such a wheat.
Be able to describe why understanding economic history is so important.
we have to look to history so that we do not repeat the same mistakes, it adds context to current policies and we gain path dependency from it. path dependency is how one decision in history can impact our future in a big way
Be able to give an example of how we can learn from economic history in order that we do not make the same mistakes.
with the 2008 great recession we looked back to how we handled the great depression. instead of closing the banks like we had then, the fed bailed out the banks to help keep our economy afloat.
