Professor John Munro passed away on December 23, 2013. This site is maintained and kept online as an archive. For more infomation please visit the Centre for Medieval Studies
Professor (Emeritus) John H. Munro passed away December 23, 2013
Department of Economics,
University of Toronto
150 St. George Street
My Home Page: freely accessible to everybody.
the ECO 301Y course web page.
Updated on: Tuesday, 2 April 2013
ECONOMICS 303Y LECTURE SUMMARIES FOR 2012 - 2013
(1) Summaries of all the lectures for 2012 - 2013: weeks 1 - 24, in one PDF file
(2) SUMMARIES OF THE INDIVIDUAL WEEKLY LECTURES: for the First Semester, 12 September (week 1) to 28 November 2012 (week 12), in individual PDF files.
- Week I: Lecture no. 1: 12 September 2012 (week 1): The Economy of the Netherlands: no summary and no PDF file (since no lecture was delivered in class). The full lecture is available on-line, on the
web site for ECO 303Y lecture notes, in both PDF and Word.
- Week I: Lecture no. 2: on 12 September 2012 (week 1): Great Britain as the Homeland of the Industrial Revolution: an Introduction.
- Week II: Lecture no. 3: on 19 September 2012 (week 2): Technology, the 'Scientific Revolution', Religion, Education, and Social Attitudes during the
British Industrial Revolution.
- Week III: Lecture no. 4: on 26 September 2012 (week 3): The Demographic and Industrial Revolutions: Expansion of the Market.
- Week IV: Lecture no. 5: on 3 October 2012 (week 4): The Expansion of the Market: Domestic and Foreign Trade.
- Week V: Lecture no. 6a: on 10 October 2012 (week 5): The Agricultural Revolution in England and Wales (1660-1820): Part One.
- Week VI: Lecture no. 6b: on 17 October 2012 (week 6): The Agricultural Revolution in England and Wales (1660-1820): Part Two - Conclusion.
- Week VII: Lecture no. 7a : on 24 October 2012 (week 7): Business Organization, Banking, and Financial Institutions: the Financial Revolution, 1660-1795, part One: Partnerships, Joint Stock Companies (from
the 1550s to the South Sea Bubble of 1720), the London Goldsmiths and Private Deposit Banking, 1660s - 1760; and the Formation of the Bank of England, 1694-1797.
- Week VIII: Lecture no. 7b : on 31 October 2012 (week 8): Banking and Financial Institutions during the Industrial Revolution, 1690 - 17975: the Establishment of the Permanent Funded National
Debt, from 1693 to 1757; the South Sea Company (1711) and the Bubble Crisis (1720); the Role of the Bank of England; Pelham's Conversion of the National Debt into Consols (1749-57), and its aftermath; the Financial Revolution in
Retrospect; the Country Banks during the Industrial Revolution, 1760 - 1820; the Scottish Banks and Banking System, 1695-1820; Financing Fixed Capital Formation during the Industrial Revolution.
- Week IX: Lectures no. 8 and 9: on 7 November 2012: (A) on the revolutions in coal-fired steam power (the Watt steam engine) and (B) in iron-making, with the establishment of blast furnaces
in 16th-century England and the consequent birth of industrial capitalism in this industry (whose organization was not changed, other than by a quantum leap in industrial scale, with vertical and horizontal inntegration) during the Industrial
Revoluion era. The essential theme is to explore
how and why coal became the most essential ingredient of modern industrialiation in the world (while also bringing about the onset of global warming).
- Week X: Lecture no. 10: on 14 November 2012: on the Industrial Revolution in Cotton Textiles, 1760 - 1850
- Week XAa: Lecture no. 11: on 14 November 2012: on Economic Cycles and Long-Term
Trends in British Prices (Inflations and Deflation), from 1815 to 1873. This lecture was not given in class, so that no summary is provided here; but the lecture itself is available on the website for the ECO 303Y lectures notes.
- Week XIb: Lectures no. 12 and 13A: on 21 November 2012: The two lectures given in class were: (1) Lecture no. 12: on Banking and Business Organization in Great Britain, 1815 - 1914:
Joint-Stock Banking, the Reorganization of the Bank of England (Bank Charter Act 1844), and the Coming of Limited
Liability Corporations in the 1850s; and (2) Lecture no. 13A: the 19th-Century Transportation Revolutions, Part A: the Steam-Powered Railways from the 1820s to 1914 (and the fate of the canals).
- Week XII: Lectures no. 13B and 14: on 28 November 2012: (1) Lecture no. 13B: on the 19th-century Transportation Revolutions, Part B: Steam Powered Iron and Steel Shipping; and (2) British Foreign Trade, 1815 - 1914:
the Corn Laws, the Coming of Free Trade in the 1840s; British Capital Exports, 1791 - 1914; the Imperialism of Free Trade, 1840 - 1870; and the Era of Capitalist or 'New' Imperialism and Capital Exports, 1870 - 1914 (with a supplementary lecture on
Imperialism and Racism).
This completed the twelve lectures given in the first semester of the 2012-13 academic year, for ECO 303Y.
(3) SUMMARIES OF THE INDIVIDUAL WEEKLY LECTURES: for the Second Semester, in 2013: from 9 January (week 13) to 3 April 2013 (week 24), in individual PDF files.
- Week XIII: Lectures no. 15 and 16: given on 9 January 2013: (1) Lecture no. 15: Agriuture in Great Britain: Innovation, Expansion, and Contraction Under the Corn Laws and then Free Trade, 1815- 1914; and
(2) Lecture no. 16: The Revolution in Steel Making, 1856 - 1914.
- Week XIV: Lectures nos. 17 and 18a: given on 16 January 2013: (1) Lecture no. 17: the 'Slow Industrialization of France: Introduction' and 'The Economic Consequences of the French Revolution (from 1789)';
and Lecture no. 18a: 'Changes in French Agriculture and in the status of the peasantry, part 1: Before and After the French Revolution'
- Week XV: Lecture no. 18b: given on 23 January 2013: Lecture no. 18b: the Economic Consequence of the French Revolutioanry Land Reforms, 1789 - 1795: on the the lack of enclosures before the 1850s; and
on relatively low levels of agricultural productivity, and of demographic, industrial, and overall economic growth, 1815 - 1914. Were they the product of the Revolutonary Land Reforms or of historical path dependency (going back to the 13th century)?
- Week XVI: Lectures nos. 19 and 20: given on 30 January 2013: Lecture no. 19: on French commercial and banking institutions, 1789 - 1914; and Lecture no. 20: on French industrialiazation, 1815 - 1914: our conclusions
concerning the ongoing debate about the supposedly slow pace of Frenchy industrialization, economic, and demographic growth in the the century 1815-1914. Two interesting questions: (1) do we frame the debate in terms of aggregate growth rates or per capita
growth rates (ignoring the importance of France's indisputable slow rate of economic growth; and (2) if the French economic performance is deemd to be 'inferior' to that of Great Britain, Germany, the US, etc., do we attribute the 'blame' to French
entrpereneurship and government economic policies or to France's heritage and natural-resource endowments (lack of coal, in terms of 'path dependency'?
- Week XVII: Lectures nos. 21 and 22: given on 6 February 2013. Topic no. 21 concerns German political and market unification (and physical market integration with railways); and the Topic no. 22
was on on the agricultural transformation of 19th-century Germany: with explanations for the prior spread of the so-called Second Serfdom in eastern Germany, to the 18th century; the land reforms of Prussia and other German states, in response to
the French Revolutionary Land Reforms, both during and following the Napoleonic Wars (up to 1850); the results of land reforms, east and west of the Elbe, especially in 'liberating' eastern land lords to engaged in enclosures, convertble husbandry,
and more advanced agricultural technqiues whose productivity gains are demonstrated in several tables in this lecture.
- Week XVIII: Lecture no. 23: given on 13 February 2013. Topic no. 23. This lecture primarily focuses on the contentious role of the new investment or 'universal' banks, created to meet the capital needs of rapid, large-scale
industrialization, especially in heavy industries, with a current (mid 19th-century) vacuum in German and continental capital markets. This lecture highlighted the famous Gershenkron thesis contending that in conditions of 'economic backwardness',
such as those that prevailed in mid-19th century Germany and Russia, these countries could not have followed the laissez-faire British model of industrialization, and that their sole route to economic growth and economic-military power lay in
a close alliance between the national state and the new investment banks. That thesis has encountered much criticism, chiefly on the grounds that (a) investment banks harmed economic growth by misallocating resources and/or (b) that German investrment banks played
a less significant role than has been commonly contended. In particular, we examined the role of investment banks in promoting industrial cartelization and in financing industrial research -- avenues to be more fully explored in the next and third lecture on German
industrialization, with a focus on the new steel, electrical and chemical industries. The final, very brief part of this lecture was on central banking after imperial union: the positive (or netural) role of the Deutsche Reichsbank, formed in 1875.
- Week of 18 - 22 February: Reading Week, with no classes.
- Week XIX: Lecture no. 24: given on 27 February 2013. Topic no. 24: on the rapid industrialization of Germany in the 19th century, especially in the period 1870 - 1914. This lecture focuses on German industrial
leadership or supremacy in three key fields, so very important for late 19th-century industrializaton: metallurgy, especially steel; chemicals; and electrical goods. In the steel industry, Germany gained supremacy only within Europe, since the US
had the world's most powerful steel industry. But in the other two industries, Germany gained supremacy in the world economy, in terms of both aggregate otuput and international trade; and both chemicals and electrical goods were a key component of
the post- 1870 Second Industrial Revolution. The remainder of the lecture focused on the role of industrial cartels,
and the investment banks. Cartels were vitally important in all industrial sectors, but, in these three key industries, the investment banks played a prominent role only in steel and and electrical goods. Some of these German firms, such as BASF and Bayer and Siemens
remain world leaders to this very day.
- Week XX: Lecture no. 25a: given on Wednesday, 6 March 2013. This was the first part of a two-part lecture essentially focused on changes in the Russian agricultural sector: as yet another examination of Peasant
Emancipation and Land Reform, from 1861 to 1914. The lecture's introduction began with the Barriers to Russian Indusrrialization: Russia's advantages and disadvantages. The advantages were the richness and vast supply of natural reources, combined with a growing
population; the chief disadvantages were 'distance', with primitive transportation facilities, and equally primitive agriculture under the sway of still feudal Serfdom. The introduction concluded with another examination of the Gerschenkron thesis: the vital
role of an interventionist state in a so-called 'backward' country; and in particular Gershenkron's sub-thesis that the State badly bungled its role and obligations, when called to begin the modernization process by abolishing Serfdom in 1861. Afte analysing
the origins, nature, and forms of the Second Serfdom in Russia, up to 1861, the rest of the lecture was devoted to the mechanics of peasant emancipation, and why, in Gershenkron's view, the state failed so miserably. The core of the thesis lies
in Gerschenkron's analysis of the post-Abolition rural institutions of the Obshchina (the village agrarian community) and the Mir: the council of village elders who organized the economy of the Obshchina (determined the lay-out of the Open Fields, and
determined crop rotations), and, more importantly, transferred taxes and the
obrok obligations for the still communal peasant to the Russian gov't, allowing the latter to finance the Redemption bonds given to the nobility to compensate them for the loss of their lands and servile labour, under Emancipation. Next day we will
examine the very severe (and distorting) limitations of the Gershenkron thesis -- for so much agriculture in Imperial Russia was developing outside Russian peasant communal agriculture. So be warrned -- don't take the Gerschenkron thesis as gospel truth!
- Week XXI: Lectures no. 25b and 26: given on Wednesday, 13 March 2013. In this two-part lecture, we completed the previous lecture on Russian Agriculture: the consequences of the abolition of serfdom, peasant
emancipation, and land reform, 1861 to 1914: chiefly by examining the arguments of those critics, such as Paul Gregory, who oppose the Gerschenkron thesis, thereby providing a far more optimistic portrait of progress and economic growth in the Russian
agrarian sector, especially from the 1880s. The published, online lecture, provides much statistical evidence in support of the critics and of this more optimistic portrait. The chief arguments are two-fold: (1) that the Gerschenkron thesis, in so far as
parts of it may remain valid, pertain only to a small proportion of the agrarian sector in the Russian Empire, that still based on peasant communal agriculture; and has no relevance for many parts of the Empire: Poland, the Baltic states (Lithuania, Latvia,
Estonia), Finland, and almost all of the Asian portions of the Russian Empire; (2) the extent to which within Russia itself large amounts of formerly servile peasant lands were transferred to the exclusive use of landlords (large and small), nmost of whom
now had the freedom to enclose their entire estates (no longer having demesne lands mixed with peasant lands in Open Fields; and in doing so, most adopted the more advanced techniques of convertible husbandry, multiple-course crop rotations (with nitrogen
fixing legumes), chemical fertilizers, agrcicultural machinery, etc. The remainder of the lecture in week 21 was devoted to Russian Railways: with geographic and market integration, in particular those of the 1880s: the Great Russian Railway Co
(largest in the world), the Trans-Caucasian Rlwy, the Trans-Caspian Rlwy, and the St. Catherine's Railway (in SE Russia and Ukraine).
- Week XXII: Lectures no. 27 and 28: given on Wednesday, 20 March 2013. These final two lectures completed our three-week survey of Russian economic development in the 19th century (to 1917), with an emphasis
on the Gerschenkron thesis (again): on the active interventionist role of the state in promoting industrialization, especially in alliance with investment banks. In Lecture no. 26,
on Russian banking and financial institutions, we focused on (a) Gosbank, the Russian state central bank, and its gold-standard moneteray policies, to attact foreign investments, and on (b) the role of Universal or investment
banks, especially in the period 1906-1914, in funnelling foreign investment into Russia, which also meant that the Russian investment banks themselves fell under increasing foreign owneership. In the scond lecture, Lecture no 27, we focused on such
direct foreign investments, especially promoted by Russian tariff policies, in two key industrial sectors: metallurgy (coal, iron, steel), and petroleum. And for both we emphasized once more the crucial role played by the railways. The lecture
concluded with an analysis of state-directed Russian cartels; and then the achievements, albeit limited (for just the years 1885 - 1914), of Russian industrialization and urbanization on the eve of World War I and then the 1917 Bolshevik Revolution.
- Week XXIII: Lecture no. 29: given on Wednesday, 27 March 2013. For the final two lectures of this course, we returned to Great Britain, for the period 1870-1914, to see how Britain fared in encountering new
international competition that threatened its former economic hegemony. In Lecture no. 29, we considered, principally, four current debates about the British economy in this era: the Industrial Retardation debate; the debate about the so-called 'Great
Depression'; the debate about the quality of British entrepreneurship; and the debate about Britain's role, as the world's leading capital exporter, in the so-called New Imperialism of 1870-1914, with an economic regime baed on complere Freee
Trade and adherence to the international gold standard. For all of these debates, we closely examined the course
of prices, and both the causes and consquences of changing price trends during the deflation of 1873-1896 and the ensuing inflation of 1896-1914 (though continuing into World War I), along with evidence for changes in industrial and general economic
productivity during these two periods. The final, short part of the lecture was devoted to post-1870 British banking: to investigate whether or not Britain adopted the new continental forms of investment banking -- and why British banking largely
remained differnt from continental banking.
- Week XXIV: Lecture no. 30: given on Wednesday, 3 April 2013. For this final lecture of ECO 303Y, Lecture no. 30 (in week 24), we focused chiefly on the more positive aspects of the British economy between
1870 and the outbreak of World War 1. In the firt part of the lecture, we noted three key, interrelated features of continued economic growth: a sudden and major rise in living standards, greatly exceeding any attained on the European continent (even if
lower than those in the United States); a marked fall in the death rate (i.e. an accelerated decline); and an increase in geneal literarcy with the expansion of mass education. A major factor in the now steeper rise in living standards was the effect of
nominal wage stickiness with deflation, from 1873-1896; but the other two factors and rising industrial productivity also contributed to improved living standards. In the second part of the lecture, we focused first on the decline or stagnation in the older industries
(cotton textiles, coal mining and metallurgy, perhaps shipbuilding), while noting continued strengths in banking, finance, shipping, international trade etc. We then focused more on some surprising British strengths in the newer industries, even if the British
had not fared so well in the coal-based electrical and coal-based chemical industries, despite natural resource advantages. Instead the great advances took place in an entirely new sphere: the wood or cellulose chemical industries, in which the British shone.
We also examiend the related phemomenom of a more general Consumer Goods Revolution, based on these and other new manufactring industries, including publishing; and the accopanying revolution in the tertiary sector: in the mass distribution of consumer goods,
especially with mass advertizing and department stores. This Consumer Goods revolution can be attibuted both to rising real incomes and to improved literacy, with advances in mass education. We looked, finally, at the new automobile industry, measuring
both successes and failures, noting that the real British success in this field came after World War I (beyond this course). We concluded the lecture and the course by examining the major gains but also the costs of economic growtth: (1) rising living standards,
falling death rates, improved literacy -- using our HDI index; but also (2) the future prospects of rising inequality (the Kuznets curve revisited) and global wsarming, from the coal-baaed forms of modern industrialization.