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Abstract:
At first glance, American insurance history is Whiggish, the story of self-insured risks slowly becoming managed by intermediaries. A closer look reveals more complexity, many directions of change, and numerous questions of importance today. Why, for example, did mutual life insurers wax and then wane? Why did for-profit corporations supplant non-profit fraternal societies? Why did prepaid physician and hospital plans disappear? To answer those and similar questions, a thorough survey of both traditional branches of the U.S. insurance industry, income (life/health) and property (property, liability, and casualty) insurance, is necessary.

Typically, self-insured risks became predominantly intermediary-insured due to improvements in the technology of insurance - the nuts and bolts of setting premiums and selling policies, making appropriate investments, and paying claims - and increases in consumer confidence in insurer solvency and market competition. Competition helped to drive those technological improvements and also ensured provision of the best price and quality available at any given technology frontier. Extant companies, however, sometimes successfully resisted competition with cartels. Sometimes a certain type of intermediary or market dominated because it was the most economically efficient method of managing a particular set of risks. Sometimes, however, government regulation and taxation explain why friendly associations, mutuals, joint-stock companies, or markets dominated the provision of specific areas of risk management. Similarly, political rather than economic realities often best explain the emergence and expansion of government insurance programs.

insurance, history, regulation, taxation, mutuality, United States of America

Abstract:
If they could be believed, Farley W. Grubb's recent papers on the early U.S. monetary system would be important contributions to scholarship and public policy. This paper shows, however, that Grubb's papers should not be believed. Grubb's key assumption, that the medium of exchange can be inferred from the unit of account, is erroneous, rendering his data analyses nugatory. State-issued bills of credit did not play the role Grubb attributes to them in the years after 1781, when most Americans had eschewed government paper money in favor of full bodied coins and convertible bank liabilities. Bankers did not foist the Constitutional clause banning state emissions onto an unsuspecting public.

Monetary union, exchange rates, United States of America, Pennsylvania, history

Abstract:
Government involvement in transportation infrastructure is often wasteful because improvements are made where they are not needed or necessary improvements are more costly or of lower quality than they would be if privately owned. Early in the nation's history, large numbers of bridges, roads, canals and the like were owned and operated by private corporations, strongly suggesting that they are not pure public goods and could be privately owned and operated again. The early U.S. experience points to some of the problems associated with privately owned infrastructure but also suggests ways of mitigating them.

transportation infrastructure, market failures, government failures, hybrid failures, public goods, private ownership

Abstract:
Although ingenious, Farley Grubb's (2004) recent money supply estimates for colonial Pennsylvania are too inaccurate to be of use to scholars. "Pounds" in runaway advertisements do not invariably refer to Pennsylvania's bills of credit, as Grubb asserts, but to her unit of account money. Similarly, ads promising "dollars" cannot be taken to refer to silver coins. Finally, bills of credit readily often passed current across the Middle Colonies, rendering any attempt to estimate the money supply at the colony-level highly problematic. Spot estimates of the money supply, some from archival records and some using methodologies that Grubb himself espouses elsewhere, vary widely from Grubb's time series.

monetary history, Pennsylvania, medium of exchange, unit of account

Abstract:
Most scholars know little about the Panic of 1792, America's first financial market crash, during which securities prices dropped nearly 25 percent in two weeks. Treasury Secretary Alexander Hamilton adroitly intervened to stem the crisis, minimizing its effect on the nascent nation's fragile economic and political systems. U.S. policymakers soon forgot the crisis management techniques Hamilton invented but failed to codify. Many of them were later rediscovered, and became theoretical and practical standards of modern central bank crisis management. Hamilton, for example, formulated and implemented Bagehot's rules for central bank crisis management eight decades before Walter Bagehot wrote about them in Lombard Street.

Panic of 1792, Alexander Hamilton, Bagehot's Rules, government bonds, securities markets, financial crises

Abstract:
Early American firms ranging from farms to factories compared the relative advantages and disadvantages of each of the major types of laborer - family, wage, indentured, and slave - available to them. Major variables of comparison included the total productivity, liquidity or availability, cost of control, and cost of hypocrisy of each labor type. Outcomes varied over time, place, and context. In general, slaves were preferred in warmer climes, where work could be organized in gangs, or where slavery was already prevalent. Indentured servants were preferred in northern climes, where some skills were required, or where slavery was uncommon or viewed critically. In northern latitudes, where labor markets were liquid, in roles where skill or education requirements were high, or where slavery was uncommon or considered hypocritical, firms preferred wage laborers.

slaves, slavery, wage laborers, wage labor, economic history

Abstract:
Before the Civil War a portion of South Carolina's economy was "capitalist" in the sense that entrepreneurs and other business firms relied on capital markets to supply their external financing needs. Antebellum South Carolina was home to all the major components of corporate capitalism, including investors, banks, securities markets, and entrepreneur-borrowers, including numerous business corporations. That finding accords with those of several recent historians of antebellum Virginia and South Carolina and suggests that a form of Southern capitalism coexisted with the region's much more intensively studied slave economy.

South Carolina, corporate capitalism, entrepreneurs, American South

Abstract:
Laymen and scholars alike often lament the failure of business firms and business historians focus most of their efforts on the small percentage of successful entrepreneurs. That is unfortunate because the failure of firms often and ironically leads to the success of economies. In a world haunted by the specter of bounded rationality, asymmetric information, nontrivial transaction costs, and uncertainty, entrepreneurs test the margins of economic reality. This paper shows how early nineteenth century America's failed agricultural manias, particularly the beet sugar craze of the late 1830s, helped the burgeoning American economy to learn where its comparative advantages lay, and where they did not. Early American beet sugar is also a story of abolition and slavery, technology diffusion and confusion, laissez faire ideology and government interference in the economy, and surprisingly advanced capital and money markets.

beet sugar, entrepreneurs, capital markets, economic growth