“Green Capitalism? At the Crossroads of Environmental and Business History.”

17 09 2014

AS: I’m posting the programme of the forthcoming Hagley conference on business/environmental history here.

Hagely Museum and Library Soda House, Oct. 30-31, 2014


Friday, 30 October

8:30-9:00 Coffee

9:00-9:30 Welcoming remarks

Erik Rau, Hagley Museum and Library

Hartmut Berghoff, German Historical Institute-D.C.

9:30-12:00 Session 1: Firms as Conservationists?

William D. Bryan, Emory University: Corporate Conservation and Conflict: Determining the Ideal Forms of Development for the American South

Julie Cohn, University of Houston: Utilities as Conservationists: The Conundrum of Electrification during the Progressive Era in North America

David B. Cohen, Brandeis University: Capitalism and the Wilderness Idea: The Case of the Great Northern Paper Company

Frank Uekötter, University of Birmingham: How Green was Chemurgy? A Movement in Search of Corporations

Comment: Ann Greene, University of Pennsylvania

12:00-1:00 lunch

1:00-3:00 Session 2: Consumers’ Demands

Ai Hisano, University of Delaware: Making Natural: Coloring Florida Oranges, 1930s-1950s

Brian C. Black, Penn State Altoona: Energy Hinge: Green Consumerism and the Energy Scene since 1973

Rachel Gross, University of Wisconsin, Madison: Greening Outdoor Recreation in the Age of Plastics

Comment: Adam Rome, University of Delaware

3:30-5:30 Session 3: Globalization

B. R. Cohen and Matthew Plishka, Lafayette College: Cottonseed, Oil, and the Environmental Entanglements of a Global Gilded Age Industry

Emily K. Brock, Max Planck Institute: Naming Commodities: Colonial Power, American Business and the Rebranding of a Tropical Forest Tree in the Philippines

Simone Müller-Pohl,University of Freiburg: Why American Cities go Wasting Abroad: Local Political Economy and International Trade in Hazardous Waste

Comment: Yda Schreuder, University of Delaware

5:30-6:30: Reception

6:30-8:30: Dinner

Friday 31 October

8:30-9:00 Coffee

9:00-11:30 Session 4: Firms Going Green

David Kinkela, State University of New York Fredonia: Hi-Cone Plastic Six-Pack Rings, Ocean Pollution, and the Challenge of a Global Environmental Problem

Bart Elmore, University of Alabama: Towards a History of Sustainable Business?: What the Coca-Cola Company Can Tell us about the Ecological Causes of Corporate Restructuring

Leif Fredrickson, University of Virginia: The Rise and Fall of an Ecostar: Environmental Technology Innovation and Marketing as Policy Obstruction

Ann-Kristin Bergquist. Umeå University: Dilemmas of Going Green: Company Strategies in the Swedish Mining Company Boliden 1960-2000

Comment: John McNeil, Georgetown University

12:30-2:00 Session 5: Governance

Roman Köster, Bundeswehr University Munich: Private Companies and the Recycling of Household Waste in West Germany, 1965-1990

Hugh Gorman, Michigan Technology University: The Role of Businesses in Constructing Systems of Environmental Governance

Comment: Brian Balogh, University of Virginia

2:00-3:00 Conference summary

Christine Meisner Rosen, Haas School of Business, University of California-Berkeley

Advance registration is free but required. Contact Carol Lockman, clockman@Hagley.org, for program and registration information.

Scottish Referendum: Prediction Markets Versus Economists

16 09 2014

Predictions markets allow individual to bet real money on a wide range of events that extend from droughts in the US corn belt to elections. They have a fairly good track record in predicting the future because they aggregate the wisdom of large numbers of participants and they punish wishful thinking and reward unemotional realism. Prediction markets strongly encourage those making predictions to put their own normative views aside. They are, in the words of blogger Bryan Caplan, the ultimate tax on bullshit. Anyone can a make a prediction, but unless they have bet money on it, they are unlikely to the punished in the prediction is wrong: as Dan Gardner showed in FutureBabble, very few people who make false predictions are punished when their predictions are falsified. That’s why it was terribly unfair when Nate Silver, the pollster who correctly called the 2012 presidential election, was criticized by his bosses at the New York Times for backing up his predictions with bets.

It is, therefore, striking that the media is giving a great deal of credence of a recent poll of 31 economists about the chances of Scotland voting Yes in the upcoming referendum. Each economist gave a percentage estimate of the chances of a Yes vote in referendum, the median of which was 45%. Bloomberg, which normally carries high quality analysis of financial news, then reported that the chances of Scottish independence were 45%. This uncharacteristically bad news story is guilty of spurious precision. Are the chances really 45.0%!?!? Moreover, the odds of Yes vote being offered by prediction markets are about 25%.

Before be willing to trust the 31 unnamed  and mysterious experts over the prediction markets, I would like to know the following facts about them:

1) Where are they located? Do any live in the UK?

2) What are their qualifications for commenting on Scottish politics?

3) What stocks and bonds do they own? For full disclosure, let’s see their portfolios.

4) How many of these economists have visited Scotland? On average, how many days have they spent in Scotland in the last decade?

I’m not writing this post because I have a view one way or the other on Scottish independence. I’m writing it because I have strong views about the cult of the expert in our society.

P.S. The Betfair prediction market is already paying out on No bets.

Who Will Get the Bill? Lessons from #EconHis on Scottish Independence #indyref

16 09 2014


What would happen to the UK’s current public debt if part of the country (Scotland) became an independent state? History may provide some answers to this question, as Irish independence in 1921 raised similar questions.

Originally posted on The NEP-HIS Blog:

State dissolution, sovereign debt and default: Lessons from the UK and Ireland, 1920-1938


Nathan FOLEY-FISHER (nathan.c.foley-fisher@frb.gov)  Federal Reserve Board

Eoin MCLAUGHLIN  (eoin.mclaughlin@st-andrews.ac.uk) University of St Andrews


We study Ireland´s inheritance of debt following its secession from the United Kingdom at the beginning of the twentieth century. Exploiting structural differences in bonds guaranteed by the UK and Irish governments, we can identify perceived uncertainty about fiscal responsibility in the aftermath of the sovereign breakup. We document that Ireland´s default on intergovernmental payments was an important event. Although payments from the Irish government ceased, the UK government instructed its Treasury to continue making interest and principal repayments. As a result, the risk premium on the bonds the UK government had guaranteed fell to about zero. Our findings are consistent with persistent ambiguity about fiscal responsibility far-beyond sovereign breakup. We discuss the political and economic forces behind the…

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Sir John A. MacDonald call for papers – British Association for Canadian Studies (BACS)

16 09 2014

Sir John A. Macdonald: Son of Glasgow, Father of Canada
City Chambers, Glasgow, Saturday 10 January 2015
Confirmed speakers: Professor Sir Tom Devine and Professor Ged Martin

The historical connections between Scotland and Canada have long been celebrated. This one day conference will bring together a diversity of perspectives for an evaluation of the life and legacy of Sir John A. Macdonald and a timely appraisal of his links to Glasgow and Scotland. Canada’s first Prime Minister and the foremost ‘Father of Confederation’ was born in January 1815 in Glasgow.

John A. Macdonald’s family lived near the commercial heart of Glasgow – now known as the ‘Merchant City’. During this period, the area was a bustling trade hub where the city’s colonial merchants known as the ‘sugar aristocracy’ and ‘tobacco lords’ were based. Macdonald’s father, however, although based near the centre, operated a more modest textile business as a bandana merchant. Perhaps due to the economic conditions, the family sought a better life in Canada around 1820. Several questions are posed by this departure, which provides one of the two main themes for this conference. What conditions did the family live in? What were the wider motivations for Scots to emigrate? Why Canada? Macdonald’s subsequent legal and political career was certainly exceptional which provides the basis for the second theme. How did Macdonald’s Glaswegian origins influence his political outlook and career? How enduring is the Scottish imprint on Canadian political life?

Thus, whilst the conference has a specific focus on Sir John A. Macdonald’s background in Glasgow and his career in Canada, this will be placed within a wider transatlantic context. To this end we are delighted to have secured the services of two leading scholars. Professor Sir Tom Devine will address the audience on the ‘The Scottish Factor in Canadian History’ and Professor Ged Martin will speak about Macdonald and his links with Glasgow

Proposals for 20 minute papers on the above two themes are invited from both established and early career academics as well as postgraduate students. Although not limited to these suggestions, papers might include:

• The standard of living and social conditions in mercantile Glasgow
• Emigration from Scotland to Canada in the early nineteenth century
• Canadian legal training in the 1830s
• The political ascent of Macdonald
• Macdonald’s vision for Canadian unity
• Macdonald and Canada’s place in the Empire
• His legacy

Proposals should be submitted as Word documents of no more than 250 words and should be sent to Stephen Mullen, email address: s.mullen.1@research.gla.ac.uk no later than 29 September 2014.The proposal should contain the name of individual, title of paper, affiliation and status. Successful applicants will be notified by 13 October. Applicants requiring financial support should indicate their estimated travel and/or accommodation expenses. There are a small number of bursaries available to presenters who are postgraduates – primarily to cover their travel costs within the UK but possibly to contribute towards their accommodation costs (if any) as well. Receipts must be provided for all reimbursements. .This event is organised under the auspices of the British Association for Canadian Studies (BACS) and with the support of the Canadian High Commission and Glasgow City Council.

The Economic Advantages of an Independent Scotland

12 09 2014

Harvard Business Review:

A thoughtful piece by Justin Fox of Harvard Business School on the economics of Scottish independenc.

Originally posted on HBR Blog Network - Harvard Business Review:

If its voters choose independence next week, Scotland will join the ranks of the world’s small, affluent countries. Over the past couple of decades, that’s been a good club to belong to. As Gideon Rachman put it in the FT in 2007:

This is the age of the small state. Look at almost any league table of national welfare and small countries dominate.

Things have gotten a little more complicated since then. (Rachman in 2009: “Big is beautiful again.”) Several small nations suffered brutally from the financial crisis and subsequent Euro mess: Greece, Iceland, Ireland, Portugal.

Still, several of the emerging bigs (Brazil, India, Russia) have since run into economic headwinds too. And small countries remain overrepresented near the top of lists of the world’s most affluent, most competitive, healthiest, and smartest nations.

So it’s not crazy to think that Scotland, which on its…

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Scottish Independence and the Markets

11 09 2014


Jason Sorens has published a very thoughtful and well-informed blog post about how capital markets are responding to the threat of Scottish independence. The media has reported that the value of Scottish companies plunged when trading opened on Monday, largely in response to the shock YouGov poll over the weekend. Sorens points out that this so-called plunge primarily affected firms in particular sectors, with financial stocks taking a beating.

My reading of the situation is that the government of a large country is in a better position to bailout failed banks. When Scotland’s Royal Bank of Scotland collapsed, the UK government stepped in. It probably wouldn’t act as a lender of last resort to a bank in an independent Scotland, although British taxpayers did end up bailing out an Icelandic bank during the financial crisis. Of course, that raises the question of whether government bailouts of Too Big To Fail banks are indeed desirable. One could argue that the fragmentation of big countries into smaller ones could help to reduce moral hazard in the banking sector by eliminating the implicit guarantee that TBTF banks in large polities enjoy.

Big countries facilitate the pooling of risks between regions and firms. Such pooling has advantages, especially in the face of natural disasters such as the tsunami that affected north-eastern Japan in 2011. However, the pooling of risks facilitated by large states also creates moral hazard. Iceland, a country that was too small to bail out its banks, arguably had the best response to the 2008 financial crisis.

Originally posted on Pileus:

What can we learn from capital markets about the likely consequences of Scottish independence? A trio of recent polls has shown the “Yes” side to have pulled roughly even with “No.” With momentum on their side, it’s not unthinkable at all that “Yes” will pull it out, resulting in the first secession from a Western democracy since Iceland withdrew from Danish union in 1944. Most American commentators, from Paul Krugman to Tyler Cowen, oppose Scottish independence and forecast economic disaster for the new country. Are they right?

Let’s look at the behavior of capital markets in Britain since these polls’ release to find out. First, let’s set the stage by looking at how betting markets price the probability of Scottish independence. Unfortunately, there are no nice InTrade-style charts for implicit probabilities anymore, at least not that I can access from the United States. From oddschecker.com, I am able to…

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Krugman, Hayek, and Scottish Independence

8 09 2014


Paul Krugman has published an interesting article on the economics of Scottish independence, an issue that is front and centre in the wake of a poll saying that the Yes side may win this month’s referendum on independence.

One of the reasons Krugman’s article is interesting to me is that he discusses Canada. Canada is one the countries that has inspired modern Scottish nationalism: many Scottish nationalists want Scotland to have the same degree of autonomy from the England that Canada enjoys from the United States. (Norway is, however, clearly the most important role model of Scottish nationalists—thanks to the peaceful 1905 separation of Norway from Sweden, Norway controls all of its oil revenue, unlike Scotland. Other nationalist movements referenced by Scottish nationalists include Catalonian nationalism and Quebec nationalism).


Krugman coherently argues that the analogy between Canada’s current relationship with the United States and an independent Scotland’s future relationship with England is misleading because the Scottish nationalists envision a currency union between Scotland and the rest of the United Kingdom, whereas Canada has control over its own monetary policy.

Comparing Scotland with Canada seems, at first, pretty reasonable. After all, Canada, like Scotland, is a relatively small economy that does most of its trade with a much larger neighbor. Also like Scotland, it is politically to the left of that giant neighbor. And what the Canadian example shows is that this can work. Canada is prosperous, economically stable (although I worry about high household debt and what looks like a major housing bubble) and has successfully pursued policies well to the left of those south of the border: single-payer health insurance, more generous aid to the poor, higher overall taxation.

But Canada has its own currency, which means that its government can’t run out of money, that it can bail out its own banks if necessary, and more. An independent Scotland wouldn’t. And that makes a huge difference.


Krugman’s point is a very valid one. It also reminds me of a book that Jane Jacobs published in 1980, on the eve of the first referendum on Quebec independence. Jacobs argued that Quebec independence would only be beneficial if an independence Quebec has its own currency.

I think we need to be very careful in how we use the Canadian analogy to understand alternatives to current Anglo-Scottish Union.  As John Kendle demonstrated in his book on the federal tradition in British politics, British politicians have a long track-record misusing the Canadian experience as a data point.   

The use of the Canadian example in British constitutional politics is certainly not new. In Canada has loomed large in Scottish debates over nationhood since the early twentieth century.  Canada first started being used in British debates on constitutional reform in the 1880s, when Irish Home Rule was on the agenda in British politics. Gladstone and other supporters of Home Rule frequently used Canada as an example of the benefits of devolving a degree of autonomy to a restive outlying region. Their reasoning was straightforward: prior to the grant of Responsible Government (i.e., internal autonomy), Canada was convulsed by political disturbances. Responsible Government had, according to Gladstone cured the problem and turned the Canadians, even the Roman Catholics, into loyal British subjects. Ergo, Home Rule would pacify Ireland. This line of reasoning overlooked two crucial facts: most Irish Protestants hated the idea of Home Rule, and the Atlantic Ocean is a helluva lot wider than the strait between Ireland and the British mainland.

 In the early 20th century, when Irish Home Rule was again on the agenda in Britain, the Canadian example was again used. By this point, a small Scottish nationalist movement had emerged. In an attempt to form a tactical alliance with Irish Home Rulers, the Scottish nationalists advocated Home Rule All Round, the conversion of the United Kingdom into a federal state modelled on the Canadian Confederation. Under this arrangement, England, Scotland, Wales, and Ireland would each have their own legislature for local matters such as education and property and civil rights. The problem with this analogy was that creating a federation of autonomous colonies is very different from breaking-up a unitary state.


When the Scottish nationalist movement re-emerged in the 1960s and 1970s, Canada’s experience was again referenced. (Scottish independence emerged as a real political force in the 1960s thanks in part to the end of the British Empire. The discovery of oil in the North Sea and its subsequent jump in value in 1973 also helped to make Scottish nationalism more mainstream).


  I suspect that Canada looms large in the present-day debate on Scottish independence in part because of the Iraq War: even though the vast majority of Scots were opposed to the 2003 invasion of Iraq, the rest of the UK dragged Scotland into the conflict. Canada, in contrast, was able to opt out of the Iraq War because of the degree of autonomy it enjoys from the United States includes control over its foreign policy.  Scottish nationalists who admire Canada’s stand on the Bush-Blair invasion of Iraq would do well to take a close look at Canadian foreign policy in that period: while Canada’s government deferred to domestic public opinion and ultimately decided not to participate in the Iraq War, it actually helped the US invasion behind the scenes.  The action of Canada’s government at this juncture suggests that the degree of actual autonomy enjoyed by normally independent countries is perhaps more circumscribed than the idea of sovereignty might suggest.

There is a more serious problem with the attempts to the Scottish nationalist to use Canada, Norway, or indeed any other country, as a “model” of what an independence Scotland would be like. That’s because nation-states are such complex entities that any attempt to design what they will be like in advance according to some sort of master plan is likely to fail in the much the same way that central planning of economies always fails to deliver the promised results. I think that Scottish, nationalists and indeed anyone else who supports rapid change in the constitutional status quo would do well to consider Hayek’s writings on emerged orders and the limits of human reason. Hayek developed these ideas during the debate in the interwar period on the desirability of Soviet-style central planning, but the underlying principles are of more general applicability.

I think that Scottish nationalists may be rushing things. Nations such as Canada and Norway achieved their independence very gradually. (Canadians still quibble about the precise date on which Canada became fully independent).  By most metrics, they have outperformed the nations that went from zero self-government to full sovereignty very rapidly. The Canadian province of Quebec has been gaining powers and building capacity for self-government very gradually over several generations. If Quebec ever becomes independent, that outcome could be depicted as the natural culmination of a graduate process that began with the creation of the Quebec legislature back in 1867. In contrast, Scotland’s has only had its own parliament since 1999, when the devolved Scottish government was created. Of course, some of Scotland’s institutions, such as its distinctive court system and municipal governments are far older.  But the institutions of the Scottish state are quite new.

Don’t get me wrong: I’m very sympathetic to all forms of decentralization and am this inclined to feel that smaller nations are, ceteris paribus, better than large ones. I believe in cascading powers down to the smallest possible unit of government (subsidiarity).  So all of my instincts are to support Scottish nationalism. However, I fear the consequences of compressing a community’s progress to full statehood into a very short period.  The currency issue also needs to be resolved.  


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