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Tag Archives: economic history

A Slice of a Pineapple

Sometimes food is about a lot more than eating.

When a !Kung Bushman hunter returns from the forest, he is greeted with, “What, you made us come all this way for this bag of bones?” One Bushman explained why. “When a young man kills much meat, he comes to think of himself as a chief or a big man, and he thinks the rest of us his servants or inferiors. We can’t accept this. So we always speak of his meat as worthless. In this way we cool his heart and make him gentle.”

By contrast, try to imagine a painting that shows England’s King Charles II (1630-1685) in a garden with an opulent house in the background and 2 spaniels nearby. Yes, it shows the wealth and prestige the artist wanted to convey but the clincher is a pineapple. In the picture, the king’s gardener is offering him a pineapple. Rare in 17th century England, frequently rotting during the voyage from the West Indies, the pineapple is the fruit of royalty. More than anything else, the pineapple displays power.

My source: I’ve been reading Tom Standage’s An Edible History of Humanity. A perfect vehicle for economic history, Standage’s food stories start with ancient (and contemporary) hunter gather communities, they illustrate the monumental impact of the beginning of agriculture, they tell how food connected disparate cultures around the world, they look at the spice trade, at sugar, at potatoes, at pineapples and the future. As he points out, his book is focused on the impact of food–not eating it. In addition, his notes and bibliography provide an excellent springboard for further reading. (My quote about the !Kung Bushmen of the Kalahari can be found in the Standage book on p.35.)

While Standage does not discuss GDP (the money value of the goods and services a country produces), as we discuss here in econlife, food and GDP closely relate. And, for more about how we display our power and prestige, you might want to read about Thorstein Veblen and conspicuous consumption.

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A Traditional Telephone Book

Among all of the innovations that changed our lives, have you ever thought about the phone book?

The first phone book dates back to 1878. Compiled by the the District Telephone Company of New Haven, soon to become SNET, the Southern New England Telephone Company, it had 50 names but no phone numbers because the first phones had no numbers. Its purpose was to list phone owners so that people knew with whom they could talk through a central switchboard. One early version of the phone book suggests saying “Hulloa” to start a conversation although Alexander Graham Bell preferred “ahoy.”

Reading about the phone book, I soon realized that it conveyed a lot about our economic history. Soon after New Haven, Connecticut, then San Francisco, New York City and Chicago printed the earliest phone books. During 1916, researchers were asked to figure out the best way to organize a phone book. Experimenting with 3 or 4 columns to a page, font size, indentations, they actually figured out a format that shortened number look-up time to 9.28 seconds. According to a 1954 edition of The Saturday Evening Post, the larger phone books, maybe 2000 pages, cost AT&T $1.50 to produce. And remember, millions were printed and delivered, they were in almost every home, and no one directly paid for a copy. Or, just skim through the 1979 Yellow Pages. You find, for example, plenty of listings that relate to the typewriter and none that say computers.

And that takes us to Joseph Schumpeter. Schumpeter characterized the unsettling process through which innovations replace established technology as creative destruction. The computer replaced typewriters. The auto eliminated the need for buggy whips. Because of CDs, 78 and 45 rpm records became obsolete. Stepping back, you can see that creative destruction fuels massive economic shifts, it eliminates existing jobs and it necessitates new kinds of labor and capital.

With the proliferation of cell phones, aren’t phone books undergoing creative destruction? Is anything replacing them?

And lastly, a painting contractor whose name was Bill Holland, hoping to be easily found, listed his name in the 1960s Los Angeles Yellow Pages as Zachary Zzzra.

My phone book facts are from Ammon Shea’s The Phone Book. And here is an interesting Washington Post article on the future of the phone book.

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Seeing current concerns about the money owed by Greece, I wondered about her past record.  Until 1932, it was not good.  The first report of Greece defaulting on her debt was during the fourth century B.C.  At the time, ten Greek municipalities defaulted on their debt to the Delos Temple. More recently,  Greece defaulted five times: 1826, 1843, 1860, 1893, 1932. 

Even worse, Spain holds a “default record” with seven nineteenth century defaults after having six defaults during previous centuries.

These default records led me to wonder why investors still buy these securities. I found the answer by looking at the actual and potential returns which sometimes are more lucrative than more secure securities.

The Economic Life

Alexander Hamilton surely knew about sovereign debt defaults and wanted to avoid them. Reading about his plan to fund and refinance the United States’ revolutionary war debt reveals his commitment to establishing our good credit.  His approach was varied, including issuing new bonds to pay for those outstanding and servicing the interest promptly on the foreign debt.  It worked.  Even those in Holland, then the financial capital of the world, displayed confidence in our public credit. Adhering to the Hamiltonian philosophy, the United States has never defaulted on its debt. 

Sovereign debt: government debt;  money owed (or guaranteed) by a country to investors who purchase its bonds.

 

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Driving to and from NYC, I have been listening to Part 2 of “America and the New Global Economy,” a Teaching Company course. Interesting in every way, the professor, Timothy Taylor, combines a general economic overview with great specific stories as he guides the listener through China, India, the Middle East, Africa and Latin America. Professor Taylor suggests that we should picture mushrooms rather than yeast when thinking of economic growth.

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