Craig Muldrew. The Economy of Obligation: The Culture of Credit and Social Relations in Early Modern England. New York: St. Martin's Press, 1998. xvii + 453 pp. $69.95 (cloth), ISBN 978-0-312-21565-1.
Reviewed by Anne E. C. McCants (Department of History, Massachusetts Institute of Technology)
Published on EH.Net (August, 1999)
The economic history profession has recently witnessed a resurgence of interest in the cultural underpinnings of past economies. Prominent examples, to name just a few, can be found in Peter Temin's Presidential Address to the Economic History Association in 1996, in the sweeping argument of David Landes' The Wealth and Poverty of Nations and of most direct relevance to the work in question here, Deirdre McCloskey's Presidential Address to the EHA in 1997. Muldrew's book then makes a timely appearance, given its dedication to a reconstruction of the "culture of credit" as it existed in England between the sixteenth and eighteenth centuries.
Craig Muldrew (Department of History and Civilization, European University Institute--Florence) takes as his broad subject both the material realities of the early modern English marketplace, and the cultural milieu in which those realities manifested themselves. Thus, he investigates probate inventories, shop account books, household expenditure diaries, and civic tax schedules, as well as the court records of debt litigation, family correspondence, personal diaries, sectarian sermons, and a large prescriptive literature written for the middling householder and small tradesman. The intellectual reach of his sources even extends to the natural law theorists of the seventeenth century, such as Thomas Hobbes, Richard Hooker and Gerard de Malynes to name just the most famous. In this literature he finds, as did Max Weber and countless others after him, an almost excessive attention paid to the themes of diligence and frugality. But contra Weber, Muldrew does not see this primarily as evidence for the profit motive of capitalism in its early manifestations. Rather he argues that all this advice was fundamentally about the preservation of reputation in a society where credit was the key to market participation, and thus wealth. It should be further noted that the word credit for Muldrew means more the "social communication and circulating judgment about the value of other members of communities" than it does our more typically modern usage as a financial sum or a claim on assets (p. 2). Thus, early modern marketplace exchanges dependent on credit were typically solidified only after hours of negotiation in a local tavern, over drinks and in front of witnesses. In this insistence on the communicative (even persuasive) aspects of the marketplace, Muldrew's work strongly reinforces the argument made by McCloskey that economic historians can only ignore social variables (which McCloskey sometimes short-hands as "sweet talk") at their peril.
The first part of the book will be the most familiar territory for economic historians. For it is here that Muldrew makes most use of quantitative techniques to answer a number of important questions of fact, as it were. He begins with an effort to reconstruct the sheer magnitude of market transactions in early modern England, and to date with some precision the impressive rise in marketing during the sixteenth century, from what was already an arguably "commercial" medieval England. He attributes the economic boom of the decades after 1550 to the expansion of marketing stimulated by the demand generated by the demographic expansion then underway. In fact, on the basis of a limited number of probate inventories, a handful of account books, and a more voluminous court record, he argues that this was England's "most intensely concentrated period of economic growth before the late eighteenth century" (pp. 20-21); and moreover, that the late sixteenth century was not the period of absolute immiseration that it would appear to have been on the basis of the Phelps-Brown and Hopkins real wage index. Relative poverty may indeed have been on the rise, but he claims that at least the poor households which were inventoried lived about as well, if not better, than their fifteenth-century peasant equivalents (p. 32). This latter claim is a very strong one, and probably needs much more evidence before we disregard the implications of the real wage series entirely. Nonetheless, much of the argument is compelling, despite the fact that it rests only on indirect types of evidence (admittedly from several different types of sources). What these strong claims should really do is stimulate the profession to dig anew for yet more data which can either confirm or refute his revisionist position, particularly as it pertains to the lower end of the economic spectrum.
The sixteenth century is not the only place, however, where Muldrew takes on one of the sacred tenets of the historiography of the English economy. Part of his project also challenges the long accepted figures for the size of the English economy at the end of the seventeenth century as devised by the contemporary political arithmeticians Gregory King, William Petty and Charles Davenant. Muldrew argues that their figures, designed as they were to evaluate the taxable and thus cash portion of the economy, grossly underestimate the scale of all marketing in England, dependent as most of that was on the extension of local (oral) credit. Muldrew's estimate for total national consumption in the latter part of the seventeenth century (146,000,000 pounds) is over three times greater than King's contemporary estimate of total household income (p. 90). While this calculation depends critically on the representativeness of only seventeen household account books from a period of over a century and across the social scale, it does have the significant advantage of including purchases made on credit. If Muldrew's calculations can be confirmed by further research (preferably with a much larger data base than his seventeen account books), they will force us to fundamentally rethink the magnitude of the economic transition from the early modern to the industrial period. T his could prove to be additional evidence of the significance of the so-called "industrious revolution" of the early modern period.
This however is not Muldrew's main agenda, but merely a by-product of his work for other purposes. The real agenda here is to demonstrate, given the extreme scarcity of metal coinage throughout this period, the intense reliance that commerce of this magnitude placed by necessity on mechanisms of informal credit. Even more importantly, Muldrew stresses the implications of such widespread and interlocking networks of credit for the exacerbation of tensions between the households of consumers and producers, which were, of course, merely the same households wearing their various many hats. With the initial mid-sixteenth century boom, these tensions played themselves out in an explosion of debt litigation and an outpouring of moral literature on the perils of the prodigal (that is the indebted) life. With time, adjustments were made to the legal system and new forms for public credit were established which allowed credit to "become less dependent on individual morality" (p. 329). Marketing could not only continue at its new high level, but even expand, without the security of the social fabric being irreparably damaged.
This is a fascinating book and one which I highly recommend. It moves comfortably between the quantification of material life in early modern England, and the way that life was understood by contemporaries. Historians of the economy and historians of ideas will both find much in this book to stimulate further research in their respective fields. Finally, it offers a potent reminder that the now dominant utilitarian understanding of economic behavior as essentially individualistic and fundamentally competitive, is not always an appropriate model for studies of even strongly market-centered economies. Trust (and trustworthiness), and by extension, cooperative behavior, were essential to the generation of wealth by households in early modern England. Thus it is that Daniel Defoe could write as late even as 1726 that "He that gives no trust, and takes no trust, either by wholesale or by retail ... is not yet born, or if there ever were any such, they are all dead" (quoted on p. 95).
David S. Landes, The Wealth and Poverty of Nations: Why Are Some So Rich and Others So Poor?. New York: W.W. Norton, 1998.
Deirdre N. McCloskey, "Bourgeois Virtue and the History of P and S," Journal of Economic History, June 1998, 58 (2): 297-317.
Peter Temin, "Is It Kosher to Talk about Culture?," Journal of Economic History, June 1997, 57 (2): 267-87.
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Anne E. C. McCants. Review of Muldrew, Craig, The Economy of Obligation: The Culture of Credit and Social Relations in Early Modern England.
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