Globalisation, migration, trade and growth: Honouring the contribution of Jeff Williamson to Australian and Asia-Pacific economic history—Guest Editor's introduction

Abstract

This issue of the Australian Economic History Review honours the many contributions of Jeffrey Gale Williamson. Although Jeff has worked on an extraordinarily wide range of topics, countries and time periods, he is perhaps best known for his work on globalisation and the world economy beyond Europe and the United States. As part of this work, he has written extensively on Australian and Asia-Pacific economic history, the primary remit of this journal. This special issue features papers by several of Jeff's former PhD students and long-time collaborators on topics related to shared research agendas in Asian, Australian and global economic history.

Jeff Williamson needs little in the way of introduction. He has spent his academic career at Vanderbilt University (1961–1963), University of Wisconsin (1963–1983) and Harvard University (1983–2008). Since 2008 he has been an emeritus professor at Harvard and held a variety of visiting positions across the globe. As a scholar, Jeff is nothing if not prolific. His first paper in a leading economic history journal was published in 1961. He continues to publish frequently in these journals, with little sign of slowing down since his “retirement” in 2008. As of 2021, Jeff has published over 50 articles in the “top five” economic history journals. In addition, he has published over 20 articles in the leading general economics journals and the leading field journals in urban and development economics. He has written or edited 31 books. Over 70 of his works have at least 100 citations on Google Scholar (as of 30 March 2021). His production ranks at or near the very top of the all-time list of economic historians in virtually every meaningful category of measurable research output.

However, Jeff's contribution to economic history cannot be measured solely by quantity of output. Jeff's research has influenced generations of scholars on such diverse topics as globalisation during the nineteenth century and beyond (Bordo et al., 2003; Jacks et al., 2011; O'Rourke & Williamson, 1994, 1999; Taylor & Williamson, 1994; Williamson, 1996); migration from the Old World to the New World (Hatton & Williamson, 1991, 1994, 1998, 2005) and within the United States and United Kingdom (Weiss & Williamson, 1972; Williamson, 1986); the early development of the United States (Lindert & Williamson, 2013; Williamson, 1961, 1965, 1974); the consequences of the industrial revolution for quality of life (Lindert & Williamson, 1983; Williamson, 1981, 1984, 1990); the development of various Asia-Pacific economies (Becker et al., 1986; Kelley & Williamson, 1971, 1974; Williamson, 1969, 1979); Australian economic history (Bhattacharyya & Williamson, 2016; Panza & Williamson, 2019, 2020); and growth and inequality in the United States (Lindert & Williamson, 1976, 2016; Williamson & Lindert, 1980), Great Britain (Williamson, 1980, 1985), and in a comparative perspective (Aghion & Williamson, 1998; Lindert & Williamson, 1985; Williamson, 1991, 1997, 2011). He has been a pioneer in bringing new methodologies to economic history, particularly general equilibrium (Kelley & Williamson, 1973). Likewise, he was a leader in bringing the new economic history into economics (Kelley & Williamson, 1973; Kmenta & Williamson, 1966; Williamson, 1963, 1971a).

In addition to his many contributions to knowledge, Jeff has also been a pioneer in his approach to conducting research. At the start of his career a significant majority scholarship in economic history and economics more generally was sole authored (Seltzer & Hamermesh, 2018). Although Jeff has written many sole authored papers (as can be seen in the reference list), he has also engaged in far more collaborative research than any other economic historian of his generation. He has worked with an astonishingly large number of co-authors, several of whom have become long-term collaborators. The discipline has over time caught up to Jeff, and we now recognise that scholars often possess complementary skills and are able to do better work together than alone. In recent years, about 80% of the work in the top economics journals and the majority of work published in leading economic history journals have been co-authored.

The themes of collaboration and mentorship extend beyond the boundaries of published output. Jeff has been the supervisor or advisor of nearly 50 PhD students at Wisconsin and Harvard. He has also won several teaching awards, including the 2000 Jonathan Hughes Prize for Excellence in Teaching Economic History. He has held many leadership roles in the profession that helped advance the research of others, including editor of Explorations in Economic History, associate editor of Review of Economics and Statistics and Journal of Development Economics, member of the editorial boards for several journals, member of the AEA Committee on Education and Training of Minority Group Economists, President of the Economic History Association and Chair of the Economics Department at Harvard. In putting together this issue, I have the chance to talk to several of Jeff's long-term collaborators and they have all emphasised how working with Jeff shaped their careers. Several authors in this issue, including more than one who has never co-authored with Jeff, noted that he was one of the first senior people in the profession to take an interest in their work and provide support and feedback.

Jeff has held a lifetime interest in Asia, dating back to a year and a half spent at the University of the Philippines in the mid-1960s. He is probably one of very few living western scholars who visited Cambodia prior to the Secret Bombings of the Ho Chi Min Trail and the horrors of the Khmer Rouge regime. His lifetime interest in the region has led to an output consisting of dozens of papers covering aspects of the economic history or development of Japan (Kelley & Williamson, 1971, 1974), India (Becker et al., 1986, 1992), the Philippines (Williamson, 1969, 1971b), Indonesia (Kelley & Williamson, 1968), Korea (Williamson, 1979) and the Asia-Pacific region more generally (Kelley & Williamson, 1971; Williamson, 1968, 2000). Jeff was probably the first scholar to bring the cliometric approach to Asian economic history. His paper “Writing History Backwards: Meiji Japan Revisited” won the Cole Prize for best article published in the Journal of Economic History in 1971, the first time the prize was awarded for an article on a non-western country (Kelley & Williamson, 1971).

Jeff has also been a long-time friend to Australian economic history. He has had ongoing relationships with Australian National University and University of Melbourne extending over the past four decades. He first published in this Journal shortly after his first visit to ANU (Williamson, 1989). He delivered the inaugural Butlin lecture in 2004 (Williamson, 2004). His paper in this issue will be the fifth he has published in the AEHR, the most of anyone who has never held a full-time post in the Antipodes. He has been on the editorial board of this journal since 2003. As a personal comment, I will say that Jeff has always been the editors' best friend on the editorial board—every year he is among the very first to vote on the Coghlan Prize, his vote usually provides a preview of the mood of the rest of the editorial board, and when asked to referee he has been willing and constructive. Whenever I have seen him at Australian economic history events, he has always made an effort to spend much his time talking to younger scholars.

Each of the papers in this special issue have at least one author with a “Williamson Number” of one—a direct connection to Jeff as either a PhD student or collaborator. In each case, the main theme of the paper is drawn from earlier collaborations with Jeff. In putting together this issue, I have focused on Jeff's work and collaborations along the remit of this journal—Australian, Asia-Pacific and global economic history.

The first paper in this issue, “Emigration from the United Kingdom to the United States, Canada and Australia/New Zealand, 1870–1913: Quantity and Quality” is by one of Jeff's longest-term collaborators, Timothy Hatton. Jeff and Tim have published over 20 papers, chapters and books together, dating back to Hatton's visit to Harvard in 1988–1989. Most of these jointly authored works have examined different aspects of international migration, which is also the main theme of this paper. The focus of this paper is migrant destinations. This has been understudied in the literature, which typically focuses on a single destination country—usually the United States, as it received by far the most immigrants prior to the First World War (Abromitsky et al., 2012; Borjas, 1994). By focusing on a single destination country, the literature neglects the fact that, at the source, would-be migrants had a decision as to where to go. This paper examines the choice of destination by essentially reversing the normal approach in the literature. Rather than examining migrants to a single destination country from multiple source countries, this paper examines migrants from a single source country to multiple destination countries. The choice of the United States, Canada and the Antipodes is natural as these three destinations accounted for about 90% of migration from the United Kingdom over the time period of this study.

Most of the findings of the paper are in line with theoretical expectations. Emigrants chose their country of destination based on the cost of travel, previous migration and economic returns. Travel costs were determined by distance and, in the case of Australia/New Zealand, the extent of migration subsidies. Recent migrants were the primary source of information for perspective migrants back home. Thus, over time migrations rates were positively autocorrelated, for example, higher migration rates to a given destination in the previous year increased migration rates in the current year. The paper finds mixed evidence on the effects of returns. Emigrants responded to changes in wages in the destination country in the manner predicted by standard models of human capital. However, the pattern of migration by skill level is counter-intuitive in the context of the well-known Roy model of migration (Borjas, 1987; Roy, 1951) and remains an important unresolved puzzle. The skill premium (as measured by relative wages) for the United States was much higher than for Canada and particularly for Australia/New Zealand. However, the paper finds that Australia/New Zealand received a disproportionate share of skilled migrants.

The second paper “Four great Asian trade collapses” is by one of Jeff's former PhD students and longest collaborators, Kevin O'Rourke, along with three of Jeff's “intellectual grandchildren”—Alan de Bromhead, Alan Fernihough, and Markus Lampe. Jeff and Kevin have also published over 20 papers, chapters and books together, mostly on issues of the globalisation of the world economy. The paper in this issue is part of a larger project on the causes and economic consequences of anti-globalisation backlashes. Trade collapses are an important manifestation of anti-globalisation backlashes, as they may be an important mechanism for international contagion of recessions. While there exists a large literature on the trade collapse in the United States and Europe during the Great Depression (de Bromhead et al., 2019; Kindleberger, 1973), much less has been written about the rest of the world. This paper examines the collapse of trade over the period 1929–1933 for the four most populous Asian countries: China, the Dutch East Indies, Japan and India. For the first three of these countries, they construct a new data set of bilateral trade in 38 commodities with 42 partner countries. They then decompose the decline in the total value of trade into separate quantity and price effects and also examine the extent of decline in each country for different commodities and partner regions.

The Asian trade collapse was dramatic. Between 1929 and 1931, the nominal value of imports fell by about 40% in all four countries, about the same as the total decline in world trade. Thereafter, the paths of the four countries diverged sharply. Japan left gold in 1931 and its trade quickly recovered, surpassing 1929 levels by 1934. Trade stagnated or continued to decline in the other three countries, reaching as low as about 25% of 1929 levels in the Dutch East Indies in 1936. A simple decomposition shows that both quantities and prices mattered for the decline in trade over the periods 1929–1931 and 1929–1933, and the average share attributable to price declines was similar to that of the world average for both periods. By contrast, in the 2008–2009 trade collapse, the role of prices was far more important for these countries than for the world as a whole. The trade collapse was unbalanced in terms of composition and partner shares in each of these countries. Trade in durables dropped by more than trade in non-durables in Japan and the Dutch East Indies. The reverse was true in China, which the authors explain as a continuation of a pre-collapse trend, with China experiencing rapid industrialisation and growth in the export of durables immediately prior to 1929. The collapse also had a “colonial bias.” Trade with long-time colonisers (e.g., the United Kingdom in the case of India or the Netherlands in the case of the Dutch East Indies) dropped by more than trade with the United States.

The third paper “Commodity boom-bust cycles and the resource curse in Australia: 1900 to 2017” is by Jeff's first collaborator on Australian topics, Sambit Bhattacharya. Sambit and Jeff have previously written two papers on the effects of commodity price shocks on the Australian economy (Bhattacharyya & Williamson, 2011; Bhattacharyya & Williamson, 2016), and this is the main theme of this paper. The paper examines whether twentieth century Australia suffered from the “resource curse”—unfavourable reallocation of resources following commodity price booms, caused by changing factor prices. For example, rising mineral prices may lead to the reallocation of capital and labour to that sector, with the consequence of crowding out manufacturing. Under some theoretical conditions, the extent of this crowding out may be sufficiently large to lead to a decline in GDP. Given Australia's rich land endowment and history of export-led growth, it is perhaps not surprising that much of the early theoretical and applied work on resource curses was undertaken by Australian economists (Corden & Neary, 1982; Gregory, 1976). However, impressionistically Australia seems not to have suffered from the resource curse—if anything, Australian GDP growth accelerated during commodity booms.

This paper examines this proposition more formally using time series methods, specifically single equation error correction models. The model is used to estimate the determinants of Australian GDP and the impact of commodity cycles. Of particular interest are three commodity booms over the “long-twentieth” century: increased demand for wool and agricultural products in the early 1920s; increased demand for mining output, wool and agricultural products during the Korean War; and the mining boom in the early twenty-first century caused by the expansion of the Chinese economy. The results show, to misappropriate a well-known Australian phrase, that Australia was indeed the “lucky country” (Horne, 1964), experiencing a sustained increase in GDP over each of these episodes. Formal time series analysis shows that there was no resource curse, and over the entire period the economic effects of commodity price shocks are positive. Finally, the paper offers some speculations as to why Australia managed to avoid the resource curse, whereas so many other countries were impoverished by commodity booms.

The fourth paper “Dry bulk shipping and the evolution of maritime transport costs, 1850–2020” is by another of Jeff's collaborators on his globalisation research agenda and intellectual grandchildren, David Jacks, along with Martin Stuermer. This paper considers a factor identified in the literature as an important driver of globalisation, namely declining transportation costs (Harley, 1988; North, 1958). The focus is on shipping costs, specifically freight rates for dry bulk goods, which currently comprise about half of world trade by volume. The authors begin by constructing a new series of freight rates aggregated across different currencies, ports of origin and destination and goods. They then examine the determinants of movements in freight rates using a structural vector autoregressive model. Their objective is to identify the effects of different types of shocks on shipping rates, namely fuel prices, shipping demand, shipping supply and what they term a “residual shock.”

They show that over the period of their study, freight rates declined substantially, with rates at the end of the period barely 20% of those at the start. However, this decline was not linear and, consistent with a large literature arguing that the interwar period experienced substantial deglobalisation (James, 2009; Kindleberger, 1973) rates actually increased from about 1910 to 1950. Year-on-year changes could be quite substantial. These “spikes” in the data can be attributed to the four different types of shocks. For example, freight rates increased sharply between 1973 and 1979 due to the OPEC-led oil price surge. They show that over the entire period shipping demand shocks had the largest and most persistent effects. Demand shocks explain about half the total variation in world freight rates. The effects of shipping supply and fuel price shocks were in comparison quite modest, together accounting for slightly less variation in rates than demand shocks. Demand shocks were also the most persistent, with effects lasting for 10–15 years. The residual effect is minimal.

The final paper “Always egalitarian? Australian earnings inequality 1870–1910” is by Jeff Williamson himself, along with his most recent long-term co-author Laura Panza. The paper is part of a larger project on growth living standards and inequality in the New World since 1700. Jeff and Laura have written a series of papers exploring “Australian exceptionalism,” the combination of high average income and low inequality that characterised nineteenth and twentieth century Australia (Panza & Williamson, 2019, 2020). It has long been known that the Australian growth experience in the nineteenth century was exceptional. Over the century, Australia went from a single European settlement—the penal colony in Sydney—to being the wealthiest country in the world. There exists a large literature on why Australia grew rich (McLean, 2007, 2013). Much less has been written about Australian inequality as it grew wealthy, and this literature only begins with the twentieth century (Atkinson & Leigh, 2007). This paper extends the literature on Australian inequality back into the nineteenth century.

The authors use data from the Colonial Census, the Sessional Papers and the Official Yearbook of New South Wales and the Blue Books to construct social tables of earnings by occupation for New South Wales and Victoria. They demonstrate that the social tables show that in 1870 Australia was more egalitarian than the United States, England or Europe. Moreover, the inequality gap between Australia and other wealthy nations widened over the next 40 years; earnings inequality fell in Australia, while it rose elsewhere. The decline in earnings inequality is apparent from several alternative measures: including the gini coefficient, the top 10% and 1% shares, and the ratio of the top 10% share to bottom 10% share. They argue that the reason behind the simultaneous increase in income and decrease in inequality was an increase in the supply of skilled labour, driven by education and immigration.