Jean-Laurent Rosenthal

Wealth Concentration in a Developing Economy: Paris and France, 1807-1994

Using large samples of estate tax returns, we construct new series on wealth concentration in Paris and France from 1807 to 1994. Inequality increased until 1914 because industrial and financial estates grew dramatically. Then, adverse shocks, rather than a Kuznets-type process, led to a massive decline in inequality. The very high wealth concentration prior to 1914 benefited retired individuals living off capital income (rentiers) rather than entrepreneurs. The very rich were in their seventies and eighties, whereas they had been in their fifties a half century earlier and would be so again after World War II. Our results shed new light on ongoing debates about wealth inequality and growth.

The Analytic Narrative Project

In Analytic Narratives, we attempt to address several issues. First, many of us are engaged in in-depth case studies, but we also seek to contribute to, and to make use of, theory. How might we best proceed? Second, the historian, the anthropologist, and the area specialist possess knowledge of a place and time. They have an understanding of the particular. How might they best employ such data to create and test theories that may apply more generally? Third, what is the contribution of formal theory? What benefits are, or can be, secured by formalizing verbal accounts? In recent years, King, Keohane, and Verba (1994) and Green and Shapiro (1994) have provoked debate over these and related issues. In Analytic Narratives, we join in the methodological discussions spawned by their contributions.

Analytic Narratives Revisited

We welcome the animated debate raised by Analytic Narratives concerning social scientific methods and the scope of rational choice. Advocates of mathematical and rational models have long claimed they have much to tell us about situations where behavior can be quantified or where the situation under study recurs many times. However, it was thought impermissible for rational choice theories (and rational choice) to venture into the analysis of big events. Political scientists like Gary King, Robert Keohane, and Sidney Verba (1994) implicitly conceded the issue by concentrating on the problem of case selection when the number of cases is small but greater than one. We believe unique events are too important to leave aside, and we use rational choice, particularly game theory, as a means to study unique events. A symposium on AN is a difficult exercise. The writing of analytic narratives is still in its infancy, and the topics and aims of the volume range across disciplines and over more than a millennium. The commentaries by Daniel Carpenter, Sunita Parikh, and Theda Skocpol reflect a patience and openness that we can only applaud. Overall they agree on the merits of the enterprise but debate the nature, relevance, and extensiveness of our contribution. The question that we must therefore confront is not whether to craft analytic narratives but what constitute the standards for research in this vein. Our critics perceptively indict us for a number of misdemeanors and perhaps even a few felonies. To most of Carpenter’s, Parikh’s, and Skocpol’s charges we plead guilty with honor. Rather than responding to each of their criticisms individually we recognize that they fundamentally concern four issues: (1) Does AN actually deliver what the introduction promises? (2) Where is the narrative? (3) Where is the analytical method? (4) How do we transform an approach to problems into a research area in social science?

Private Credit Markets in Paris, 1690–1840

Relying on a large sample of private and public loan contracts taken from Parisian notarial records, this article examines the private borrowers and lenders who participated in the credit market between 1690 and 1840. It explains the important role notaries played in the market, describes the types of loans available to borrowers and lenders, stresses the importance of the life cycle in explaining the recourse to indebtedness, and ends with a discussion of the difficulties lenders had in assessing creditworthiness.

Rural Credit Markets and Aggregate Shocks: The Experience of Nuits St. Georges, 1756–1776

Using a complete enumeration of credit contracts for a rural area in Burgundy, this article examines how credit markets functioned and what role they served. Credit markets distributed funds to a large fraction of the population, and they were organized to mediate problems of asymmetric information. A central constraint on credit markets, however, was the threat of government intervention. Because of this threat, capital markets remained relatively isolated from one another.

Redistribution and Long-Term Private Debt in Paris, 1660–1726

Based on a large sample from Parisian notarial records, this article examines the long-term private credit market in Paris in the late seventeenth and early eighteenth centuries and analyzes how it was affected by government-caused redistribution. It estimates the level of private indebtedness from 1662 to 1789, explains the problems the credit market faced, and determines who profited and who lost when government defaults, banking reforms, and currency manipulations struck private borrowers and lenders. It concludes by accounting for the expansion of the credit market in the last half of the eighteenth century.

New Work in French Economic History

Why should historians—and especially French historians—pay attention to economic history? After all, isn’t most of it written by economists? And aren’t their methods and concerns alien to most historians? In short, can’t it just be ignored? We say no. It would be a mistake to ignore economic history, particularly for French historians. Indeed, some of the best recent work in economic history concerns France, and although much of this scholarship has been overlooked by historians, it bears upon issues at the heart of French history: the nature of politics under the Old Regime, the strategies that women pursued in French society, and the origins and course of the French Revolution. This research speaks directly to French historians, but even when economic historians address questions in economics, what they say has important implications for French history. In recent years, their work has overturned older Marxist and Malthusian models of French society, models that still linger on in the background of much cultural history. In the place of these models, economic historians have fashioned a new understanding of French agriculture and peasant society; of French industry and demography; of the French fiscal and financial systems; and, above all else, of economic growth and stagnation in France up to the twentieth century—all matters that touched the lives of French men and women in the past.

The Democratization of Longevity: How the Poor Became Old in Paris, 1880–1913

At the end 19 century, industrialized countries experienced both a decline in urban mortality to the extent that rural-urban differentials, once vastly favorable to rural areas, reversed. The process can be linked with two broad phenomena: a rise in income and improved sanitation. Here we focus on the rich data available for Paris in the three decades preceding WWI. These allow us to assemble a longitudinal data set on mortality and income at a fine scale of Paris’s 80 neighborhoods during the key period of the health transition. Life expectancy in Paris is not very different from the rest of the country –around 50 years at age 5– but the difference between best and worst neighborhoods is over 10 years. To explain such huge mortality differentials, we add to this dataset various information on income and wealth from fiscal records, especially both the average rents and its distribution within neighborhoods. We document that the disparities in mortality between neighborhoods are strongly related to a variety of income indicators. Over time, mortality fell because of income increases rather than because of a change of the mortality income relationship.

Making Do with Imperfect Law: Small Firms in France and Germany 1890-1935

This paper uses a tight comparison of similar firms operating at the same time under ostensibly similar laws in two countries to study the implementation of new legal forms. The new forms are intermediate between limited partnerships and corporations. A French law of 1925 created the SARL, a new enterprise form modeled on the German GmbH of 1892. The new form was very popular in each country, partly because of the subtle balance it built in the relationships between managers and shareholders. Using samples of the articles of association for GmbHs and SARLs in the period 1892-1935, we show how German and French firms used these new frameworks, and how apparently minor differences in the provisions of each law can have significant implications for economic actors.

Discussion of Axel Leijonhufvud's 'The Individual, the Market and the Division of Labor in Society'

This paper is a comment on The Individual, the Market and the Division of Labor in Society by Axel Leijonhufvud which can be found at: http://ssrn.com/abstract=2206517.