Fairly Recently: Must- and Should-Reads, and Writings... (April 3, 2019)

Anna Stansbury: "The Black Death in England in the mid-1300s was an enormous human tragedy-and a fascinating labor supply shock. (Who said economists are heartless?) A thread FRED has a new record holder: The longest data series now belongs to a new addition, Population in England, which dates back to 1086. Check it out here: http://ow.ly/Dzkb50kfrvA. The Black Death first hit England in 1348. The population fell by more than a third in just a few years: from over 6 million to less than 4 million. As the graph from @stlouisfed and @bankofengland shows, it would take another 250 years for the population to recover...

...As taught in myriad Econ 101 courses, the massive fall in labor supply as a result of the Black Death caused wages to rise. The magnitude of the rise is disputed, as is the timeframe (some argue it kicked in instantaneously, others that it took decades). But today I want to highlight the political response to this labor supply shock. In 1349, one year after the Black Death first hit England, King Edward III issued the Ordinance of Labourers. Parliament followed with the Statute of Labourers in 1351. These set a maximum wage for laborers equal to the wage before the plague hit. Laborers who would not work for this wage would be imprisoned. The statute stated that "servants... were idle, and not willing to serve after the pestilence, without taking excessive wages". The statute remained in place for nearly a century, until 1444.

It's disputed as to how well it was enforced and how much it actually affected wages-there was widespread evasion. There were at least some enforcement processes, though (see these excerpts from Poos 1983). And whether or not it actually affected wages, it was certainly perceived to: it was one of the grievances which led to one of the most seismic events in the period-the Peasants' Revolt of 1381. So perhaps the Black Death is a neat parable for students of economics in more ways than one. Market forces may dictate how prices rise and fall, but the operation of market forces depends on the institutions regulating them, which depend on the power structures in place. And if those market forces get too much in the way of the vested interests of those controlling the power structures, they might well do their best to prevent them from operating (though they also might not succeed very much in doing so)...


#noted #economichistory

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