Nick Crafts and the importance of history in understanding economic performance

Stephen BroadberryBishnupriya GuptaTim HattonTim Leunig 

14 Oct 2023

https://cepr.org/voxeu/columns/nick-crafts-and-importance-history-understanding-economic-performance

Nick Crafts, who passed away in October 2023, was the most distinguished British economic historian of his generation. This column, written by a group of his friends and colleagues, outlines his many contributions to economic history. Perhaps his most far-reaching work was his radical reinterpretation of the Industrial Revolution in Britain, which marks the first transition to sustained economic growth and, as such, lies at the heart of economic history. He also published path-breaking studies of economic geography, the role of technological change in growth, and both past and contemporary economic policymaking. Over 50 years of energetic teaching and research, he reshaped British economic history and had a huge influence on generations of economic historians.

Nicholas F R Crafts was the most distinguished British economic historian of his generation. He was born in 1949 in Nottingham, England and educated at Trinity College, Cambridge, where he graduated as the top student in the Economics Tripos in 1970. After just a year of graduate studies, he took a lectureship at Exeter before moving to Warwick in 1972 and then on to University College, Oxford in 1977, where he was lecturer and domestic bursar. He became professor of economics at Leeds from 1987-88, then moved back to Warwick, where he served as chair of department 1991-94. From 1995 to 2005, he was professor of economic history at the London School of Economics, serving as convenor in 1996-99, before returning to Warwick until his retirement to Sussex in 2019.

Crafts was an early observer of the Cliometrics Revolution that was sweeping across US at the time of his visiting assistant professorship at the University of California, Berkeley (1974-76). He was one of the pioneers in applying the approach in Europe, establishing an annual Quantitative Economic History Conference in Britain.

He established a worldwide reputation on the basis of important contributions in many areas of economic history, but perhaps his most important and far-reaching work was his radical reinterpretation of the First Industrial Revolution, which occurred in Britain between the mid-eighteenth and mid-nineteenth centuries and marks the first transition to sustained economic growth. As such, it lies right at the heart of the discipline of economic history.

Slow growth during the British Industrial Revolution

Building on foundations laid in his 1976 Economic History Review article, Crafts’ path-breaking book, British Economic Growth during the Industrial Revolution, first published in 1985 and reprinted four times, presented a radically different view of the Industrial Revolution as a more gradual process than previously believed. This book also set the British experience firmly in a European context, an important methodological contribution, which continues to affect the way that European economic history is written today.

Crafts demonstrated convincingly that earlier writers had exaggerated the growth rate of industrial production and hence of total national output during the Industrial Revolution. From this, he was able to demonstrate that the British economy must have been richer and more developed in 1700 than previously thought. As well as dramatically changing our view of the Industrial Revolution itself, this view also cast an entirely new light on earlier periods of economic history. If Britain was already quite developed on the eve of the Industrial Revolution, then this opened up the possibility of earlier episodes of growth and development, a perspective that encouraged a whole new wave of research on early modern and medieval economic history, the effects of which are still being felt in the discipline to this day.

Following a massive debate, which saw Crafts appearing in the major journals almost on a quarterly basis, a major restatement of the ‘slow growth’ interpretation of the Industrial Revolution was published (together with Knick Harley) in the Economic History Review in 1992. A further important response to the subsequent debates can be found in a 2000 paper in the Journal of Economic History (also joint with Knick Harley).

Crafts led the way in the application of modern economic concepts and techniques to shed light on a range of debates in British economic history. His 1989 Journal of the Royal Statistical Society paper on trends and cycles in industrial production, co-authored with Stephen Leybourne and Terrence Mills, applied innovative statistical techniques to the data to establish the chronology of growth during the Industrial Revolution.

In early work with Norman Ireland (Journal of Economic History 1976), he applied simulation techniques to assess the contribution of delayed marriage to fertility decline. And in a major contribution to the standard of living controversy (Economic History Review 1997) he adapted the Human Development Index to Britain from 1760 to 1830 showing that, due to urban mortality, this proved only slightly more optimistic than views based on trends in real wages or heights.

He also demonstrated (European Review of Economic History 2002) that in contrast to assessments based on per capita income alone, developing countries at the turn of the twenty-first century ranked significantly higher than the European leaders in 1870. This has stimulated much subsequent work on applications of the Human Development Index in economic history.

European economic growth and development

A second area where Crafts has made a major contribution is the analysis of European economic growth and development. He had already begun to ask the question of why the Industrial Revolution had occurred first in Britain rather than in France in an important Economic History Review paper in 1977, and this was followed up with a comparative study of levels of economic development in nineteenth century Europe, published in Oxford Economic Papers in 1984.

Building on this pioneering work of placing the British Industrial Revolution in its European context, Crafts went on to study the comparative experience of economic growth in Europe during later periods. Particularly noteworthy here is his leadership, together with Gianni Toniolo, of a project on European economic growth during the postwar period, financed by a large grant from the European Commission, and run through CEPR. This project led to the publication of two important books on economic growth in Europe since 1945, and represented an important step in demonstrating the relevance of economic history beyond academia, in shedding light on issues of current economic policy.

British economic policy and performance since the late-nineteenth century

Crafts later made important contributions to our understanding of the development of the British economy from the late-nineteenth century to the end of the twentieth century. Much of this work is summarised in his book Forging Ahead, Falling Behind and Fighting Back British Economic Growth from the Industrial Revolution to the Financial Crisis (CUP 2019), based on his Ellen McArthur Lectures delivered at the University of Cambridge. With an endogenous growth framework in the background, he stressed that the potential for growth varies widely, both across countries and over time, so that slow growth in one era may represent better performance, relative to potential, than another. Key elements in achieving or falling short of potential are the effects of the institutional environment on incentive structures for innovation and investment.

Within this framework, he argued that British growth faltered rather than failed in the late nineteenth century and that growth potential was greater in the US due to its large market size and a configuration of its factor endowments that favoured directed technological change in progressive sectors. The two World Wars were major setbacks and, although from 1950 to 1973 the British economy grew faster than ever, it fell short of its potential. This was partly a penalty of the early start and partly the result of polices, which from the 1930s onwards, included tariff protection, a complicated tax system with high marginal tax rates, the nationalisation of large swathes of industry and misdirected R&D effort.

Although growth subsequently slowed, relative to potential, economic performance improved due to three key elements. One was the reforms undertaken by the Thatcher governments (1979-90), which included tax reform, industrial deregulation and privatisation of state enterprises, and the dramatic reduction of the power of trade unions. Another was the rapid adoption of information and communications technologies (ICT). The third, stressed elsewhere in his work, was the competition-enhancing effect of Britain’s membership from 1973 of what is now the European Union.

The role of technology in economic growth

Crafts has made important contributions to analysis of the role of technology in economic growth. His 2004 Economic Journal paper on steam power during the nineteenth century is the standard reference on steam as a general purpose technology, raising productivity across a wide range of economic activities during the nineteenth century, foreshadowing the radical effects of electricity in the twentieth century and ICT in more recent times. His 1995 Journal of Economic History paper used innovations in the modelling of economic growth to provide a new way of looking at technology during the Industrial Revolution, testing ways in which technological progress could be seen as an endogenous response to economic incentives rather than an exogenous process.

The role of economic geography

Crafts’ work with Tony Venables offered an economic geography view of unequal development of economic activity across countries despite globalisation and declining trade costs. Using historical data, they showed patterns that are consistent with locational advantage created by agglomeration economies, that made firms choose from market access and location specific endowments over low wages. The result was lack of convergence in economic activity across space.

The ideas of geography and agglomeration were applied in his work with Niko Wolf to explain the location of the cotton textiles industry in north-west England in the nineteenth century. The ideas of market potential and factor endowments were applied in his work with Alex Klein to understand the spatial variation in manufacturing industry in the US during the nineteenth and twentieth centuries.

Nick the master craftsman

Nick was a masterful lecturer. In his lectures, he dissected often conflicting and confusing research literatures to provide a clear analytical roadmap for students with limited economics. Unlike many, he wanted to give the big first year lectures that most faculty try to avoid. As well as lecturing his own students, Nick gave many other talks, ranging from visiting American students to public lectures to groups in the City of London.

No matter the group, he would always describe attendees as “punters”. They had paid in time, and sometimes in money, to hear him speak, and as such he always took his responsibilities to them seriously. That did not mean he dumbed things down in the search for popularity: on the contrary, he set high standards for those attending, as well as for himself. After a lecture on the Gold Standard, he remarked: “The punters didn’t like that one. They never do. But you can’t say you have studied economic history if you don’t know how the Gold Standard worked.” Nick was, as many former students can testify, a Gold Standard lecturer.

Nick was very heavily involved in economic policy throughout his career, and was unrivalled in the way that he used economic history to inform his policy conclusions. He was a CEPR Research Fellow from 1985, serving as Director of the Human Resources Since 1900 Programme between 1989 and 1991. From 2010 until his retirement in 2019, Nick was the founding Director of CAGE, an ESRC-funded research centre at Warwick.

In recognition of his achievements, he received many high honours. He was elected to a Fellowship of the British Academy at the young age of 43 and in the Queen’s Birthday Honours of 2014, he was appointed Commander of the British Empire (CBE) for services to economics. He also served as President of the Economic History Society, President of the Royal Economic Society, and was a Fellow of the Economic History Association and of the Cliometric Society.

Nick’s retirement from Warwick in 2019 was marked by a gathering of the great and the good for a two-day soirée that included keynote lectures and research presentations by many of Nick’s former graduate students, now distinguished academics in their own right. After retiring from Warwick, Nick moved to a part-time post at Sussex where he continued to teach and research. Sadly, his (semi) retirement was all too brief and he died on 6 October 2023 after a lengthy illness. Over 50 years of energetic teaching and research, he reshaped British economic history and had a huge influence on generations of economic historians. He will be sadly missed.

References

Crafts, N F R (1976), “English Economic Growth in the Eighteenth Century: A Re-examination of Deane and Cole’s Estimates”, Economic History Review 29: 226-235.

Crafts, N F R (1977), “Industrial Revolution in England and France: Some Thoughts on the Question ‘Why Was England First?'”, Economic History Review 30: 429-41.

Crafts, N F R (1984), “Patterns of Economic Development in Nineteenth Century Europe”, Oxford Economic Papers 36: 438-458.

Crafts, N F R. (1985), British Economic Growth during the Industrial Revolution, Oxford: Clarendon Press (reprinted in paperback in 1986, 1987, 1990, and 1991).

Crafts, N F R (1995), “Exogenous or Endogenous Growth? The Industrial Revolution Reconsidered”, Journal of Economic History 55: 745-772.

Crafts, N F R (1997), “Some Dimensions of the ‘Quality of Life’ during the British Industrial Revolution”, Economic History Review 50: 690-712.

Crafts, N F R, (2002), “The Human Development Index, 1870-1999: Some Revised Estimates”, European Review of Economic History 6: 395-405.

Crafts, N F R (2004), “Steam as a General Purpose Technology: A Growth Accounting Perspective”, Economic Journal 114: 338-351.

Crafts, N F R (2018), Forging Ahead, Falling Behind, Fighting Back: British Economic Growth from the Industrial Revolution to the Financial Crisis, Cambridge: CUP.

Crafts, N F R and C K Harley (1992), “Output Growth and the British Industrial Revolution: A Restatement of the Crafts-Harley View”, Economic History Review 45: 703-730.

Crafts, N F R and C K Harley (2000), “Simulating the Two Views of the First Industrial Revolution”, Journal of Economic History 60: 819-841.

Crafts, N F R and N J Ireland (1976), “Family Limitation and the English Demographic Revolution: A Simulation Approach”, Journal of Economic History 36: 598-623.

Crafts, N F R, S J Leybourne and T C Mills (1989) “Measurement of Trend Growth in European Industrial Output before 1914: Methodological Issues and New Estimates”, Explorations in Economic History 27: 442-467. 

Crafts, N and A Venables (2003), “Globalization in history. A geographical perspective”, in Globalization in historical perspective, University of Chicago Press.

Crafts, N and N Wolf (2014), “The location of the UK cotton textiles industry in 1838: a quantitative analysis”, Journal of Economic History 74: 1103-1139.

Klein, A and N Crafts (2012), “Making sense of the manufacturing belt: determinants of US industrial location, 1880–1920”, Journal of Economic Geography 12: 775-807.

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