Economist Claudia Goldin on the Origins of “Capital in the Nineteenth Century”

Contemporary debate around inequality is centered on a common theme: capital. Capital, broadly speaking, is wealth. People who have capital enjoy more leverage, security, and flexibility in their economic lives.

Capital in the Nineteenth Century is a history of how and where capital was originated and consolidated in the United States’ first century as an independent nation. It is an utterly original and painstaking work of economic history, one that illustrates the power of the field to inform our thorniest debates in the present.

Here, the eminent economist Claudia Goldin recounts the origins of the project: an unexpected (and not entirely organized) mailing from the late Robert Gallman.

In August 1998 a large envelope arrived from Bob Gallman, who was then a distinguished economic historian at the University of North Carolina. Inside was an unwieldy set of chapters that Bob was asking me to consider for the National Bureau of Economic Research monograph series, Long Term Factors in Economic Development, for which I served as editor for almost three decades. Bob and I had no prior discussions of the book he was proposing, which is not to say I was surprised by the manuscript’s arrival since I knew Bob had intended to pull together his extensive work on the US capital stock. I was excited to publish a volume that was so thoroughly in the NBER tradition and that contained all of Gallman’s data on capital and national income.

The rough shape of the manuscript was not a concern. I knew from my stint as editor of the Journal of Economic History that Bob’s drafts differed wildly from their later, polished publications. I recalled a report I’d received on one of Bob’s earlier papers from a referee who noted how he/she had taken special care with his/her criticisms since the paper must have been written by a rookie economic historian. I chuckled, assured as I was that Bob would rise to the occasion and rewrite the paper such that the referee would someday feel embarrassed to learn that the extraordinary Bob Gallman was the author.

 I sent Bob my thoughts about what to do with the many chapters he had sent. I drafted an outline for the book; much of that outline follows the chapters that are in Capital in the Nineteenth Century. I noted: “There are various problems, some more major than others.” I asked him to check the concordance of data across the various tables. I had a long paragraph on what he should do with his introduction that concluded: “Add some spice to the volume with your colorful descriptions of the capital stock, and put that spice at the beginning of the introduction.”

But I also knew that Bob in August 1998 was not the same Bob as in the late 1980s when I edited his JEH paper. He had cancer that had spread to his spine. I ended the note: “I know that this coming week is your chemo time and that you’ll be exhausted for a short while.  When you recover (and you seem to be doing that well), you can figure out how to proceed with this task.” Then I added, “I would guess that a good UNC student could do all the work in about four weeks (full-time) with a bit of your assistance.”

Those were the days when we mailed and faxed letters. My letter of August 10 appears to have arrived after an initial fax from Bob, so I sent him another fax on August 15 responding to his points. I wrote: “My advice generally … is to be wordier and to give more detail. Although this volume will be mainly for those who know something about national income accounts, even they will find many of the terms you use to be a bit baffling.” I reminded Bob that many of his papers were written for a limited audience. “There will be many people who would like to use the data, or who are simply curious about the history of the project, but who have forgotten the intricacies of national income accounts. Try to help them along.”

I ended with this advice: “In sum, make the preface and the introduction more accessible. Talk to your readers as you would to your (intelligent yet not-entirely-informed) graduate students on the first day of class.  Pull them into the subject and give them sufficient information so that they can make full sense of it.  Write it less like IRS code and more like one of those Your 1040 and You self-improvement books.”

That was 20 years ago. I don’t know if I really believed that a smart graduate student working full-time for four weeks with Bob’s help could have whipped the manuscript into shape. But I wanted to be upbeat for Bob.

The beauty of economic history is that it never gets old. Historians, economic historians, economists, and others are fortunate that Paul Rhode completed what I had asked of Bob and his (imaginary) graduate student. It took a while because it was difficult to locate Bob’s voice and yet add some of the “spice” I had requested.

Just before Bob Gallman died in November 1998, I was sent an invitation to a showing at Boston’s Newberry Street Gallery called “Into the West.” The invitation featured the Currier and Ives print “Through to the Pacific.” I knew, then, that the lithograph would be the cover of the volume. It illustrates the unbounded exuberance of nineteenth-century America as revealed by the land that was cleared, the factories that were built, the railroads that linked the nation, the ships that sailed from ports, the logs that were cut, the homes that were erected, and the people who plowed the land, chopped wood, and labored across a grand nation. I looked at the print and saw the spice of the volume.

Claudia Goldin, Department of Economics, Harvard University

Capital in the Nineteenth Century is available now from our website and your favorite bookseller.