Schonhardt-Bailey, Cheryl. From Corn Laws to Free Trade: Interests, Ideas, and Institutions in Historical Perspective.

Schonhardt-Bailey, Cheryl. From Corn Laws to Free Trade: Interests, Ideas, and Institutions in Historical Perspective. Cambridge, MA: MIT Press, 2006, 426 pp., $47.50. IBSN: 0-262-19543-7.

This book, by political scientist Cheryl Schonhardt-Bailey, is a carefully researched, thorough and well-documented analysis of the famous and problematical 1846 decision by Prime Minister Robert Peel to repeal the British "Corn Laws" (agricultural tariffs). The Parliamentary decision championed by him is famous because it transformed the conventional role of Britain's Conservatives as guardians of a landed aristocracy, moving them politically toward support of the manufacturing classes, who opposed protection. As The Economist recently observed, this made Peel the "father of globalization." It is problematical (and was then for Peel) because of the complex politics and economics involved in the reforms. It is of major contemporary interest to economists interested in trade and agriculture because so many of today's policy challenges, especially the Doha Round, revolve around the politics of agricultural protection.

Peel's January, 1846 speech to Parliament provided a complex set of explanations for repeal: what might now be called a "shotgun approach." First, Peel argued that it would allow Britain to retain a dominant position in world trade. Second, even if other countries failed to follow suit, Peel adopted the neoclassical argument that Britain would still be better off. Third, resulting economic growth combined with new income taxes would offset lost tariff revenues. Finally, Peel drew on the prosperity following a less dramatic 1842 reduction in duties to suggest that further reductions would mean more of the same.

To explain Peel's ultimate policy "success," the author draws on the political economy and endogenous protection literature to argue for the combined role of "interests, ideas and institutions." She thus follows closely approaches to protection in agricultural economics by Hayami and Anderson in The Political Economy of Agricultural Protection (1986) and Runge and von Witzke in Institutional Change in the Common Agricultural Policy of the European Community (1986). Interests were those of free trade industrialists versus protectionist landowners, and the shifting balance of power resulting from the concentration of textile manufacturers in Lancashire and the spread of exporting firms nationally. But while interests describe "the force that drove repeal to the doors of Parliament," they are necessary but not sufficient to explain the 1846 vote. Ideas were important too--especially the anti-aristocratic, morally righteous arguments of the Anti-Corn Law League, inspired by popular demands to democratize Parliament. Finally, adopting Douglass North's definition of institutions as rules of the game that constrain human behavior, the author notes that the Reform Act of 1932 led to demands for more democratic representation and changed the parameters within which Conservatives and Liberals maneuvered.

The immediate context of the Corn Law debate was Cobdan's Anti-Corn Law League and the rise of manufacturing and export interests as a threat to the political control of the landed aristocracy. But behind these shifts were more profound changes in the global economy traceable to the late fifteenth and sixteenth century voyages of discovery: the exploitation of New World agricultural land. As developed in O'Rourke and Williamson's 1999 Globalization and History, the discovery of the New World effectively increased the land-per-capita ratio for each inhabitant of continental Europe sixfold. The eventual realization of its bounty in nineteenth century grain exports from North America doomed grain production in the Old World to both absolute and comparative disadvantage. Only Great Britain, however, seemed prepared to abandon mercantilism and protection in recognition of this altered reality, which turned North America into the dominant agricultural exporter of the next 150 years (a position it may now be losing to Brazil).

After setting the terms of argument around interests, ideas, and institutions, the author develops an eclectic set of empirical tests of the demand and supply sides of trade policy reform. Chapters 3-6 focus on demand side pressures for change, beginning with the role of both concentrated and dispersed interests that put political pressure on Parliament to end agricultural tariff protection. On the one hand, the textile industry's concentration in and around Lancashire from 1825 to 1850 allowed for both an economic and political "pole de croissance." Correspondingly, Lancashire towns such as Liverpool and Manchester recorded especially high membership in the Anti-Corn Law League. At the same time, the overall export sector was becoming more dispersed, allowing for expanded political influence in Parliamentary jurisdictions across England. From 1825 to 1846, British Customs records noted 154 new categories of exports, especially of semi-finished products such as yarn, iron girders, and processed wool, cotton and hides.

Chapter 4 focuses on the ideas and interest groups that pressed for freer trade by "nationalizing" the argument. Freer trade advocates argued that liberalization would result in positive external effects; they drove this argument with a clear organizational focus; and they made use of a conducive institutional environment. The Anti-Corn Law League popularized its themes of national prosperity, righteous indignation at protectionists, and an anti-aristocratic ideology. Set against the institutional background of the preceding 1842 liberalization, shifting allegiances in the Conservative and Liberal parties, and support for freer trade in the Board of Trade itself, the League won many converts.

Chapters 5 and 6 consider how purely economic explanations of the shifting balance between landlords and manufacturers fail without more subtle interpretations of how agricultural interests hedged their bets by becoming capitalists themselves. A Ricardo-Viner specific factors model draws a stark contrast between landowners as losers from liberalization and manufacturing exporters as winners. But when portfolio diversity and capital flows are considered, empirical and statistical evidence shows that landowners were early and active investors in railroad shares and other securities linked to emerging export-manufacturing industries. The author tests the hypothesis that members of Parliament representing areas with more diversified economic activity were more likely to vote in favor of free trade, and finds it supported. Chapter 6 dissects numerous votes in Parliament ending in liberalization to distinguish two factions in the Conservative party: diehard, landowning non-Peelites who tenaciously clung to the Corn Laws, and Peelites who could be pried away from protectionism as their constituencies shifted beneath them toward a more diversified and export-oriented economic base.

Chapters 7-10 turn to the supply side, relying on analysis of Parliamentary speeches to identify themes leading to the final vote to repeal on May 15, 1846. The author uses recent developments in "content analysis," based on the co-occurrence of various words and phrases, to discern patterns and trends. Speeches are also analyzed in historical context, reaching back from 1846 to the Parliamentary debates of 1814-1815, 1826-1828, and 1842--44. While rather tedious, these reviews yield interesting insights into the key role of changes in the British economy and the makeup of Parliamentary constituencies as the main drivers of a shift in ideas about free trade. As the author concludes, "economic interests led Britain to repeal, but ideas and institutions delivered the final outcome."

Stylistically, the book is quite academic: ponderous and a bit stilted. If it was not the author's dissertation, it reads like it. This deficiency is widespread in the social sciences, however, and the book is no worse than average. Such deficits are overcome by the inherent interest of her subject, and the logical and creative methods she brings to it, blending economics and political science. For the practical analyst of trade policy and protection, it offers many useful historical lessons relevant to today's challenges.

C. Ford Runge

University of Minnesota