Economic history is to economics what historical fiction is to literature – underappreciated, but recently returned to the limelight. Hilary Mantel’s Wolf Hall reinforced the idea that reimagining the past could be literature, while the first global pandemic in 100 years proved that history can be as useful to economists as spreadsheets. Economic history also teaches you things squeezed out by British schooling’s mania for Henry VIII and the Nazis.
Take new research on the Manila galleons – ships working the lucrative trade route between Manila and Acapulco from the late 16th century. It examines a puzzle: why were vessels on this route, a monopoly of the Spanish crown, three times more likely to sink than those journeying between the Netherlands and East Asia?
Historians cite the weather as the main reason why one in eight ships, carrying incredibly valuable spices and silver between the Philippines and Mexico, sank. But the researchers pose a different possibility – that monopoly restrictions on ship numbers incentivised bribe-taking by galleon officials, undermining limits on cargo weight. Overloaded vessels have a tendency to sink, and one galleon, the San José, went down with cargo equivalent to almost 2% of the entire Spanish empire’s GDP.
We spend a lot of time worrying about the negative impact of monopolies in raising prices. But we need to take a wider view of their damage, which can include lower wages for workers and, it turns out, being lost at sea.
• Torsten Bell is chief executive of the Resolution Foundation. Read more at resolutionfoundation.org
