The Political Economy of the Family Farm: the Agrarian Roots of American Capitalism.

• Author: Majewski, John

Sue Headlee's Political Economy of the Family Farm reads like two separate essays: a historiographical overview of economic history, and an econometric study of reaper diffusion in the Old Northwest (the states of Ohio, Indiana, Illinois, Michigan, and Wisconsin).

The introduction covers a vast expanse of history, ranging from the transition from feudalism to capitalism in Western Europe to the importance of the Civil War to American economic growth. She agrees with Maurice Dobb and Robert Brenner that the rise of markets was not a sufficient cause for the rise of European capitalism. She applies this approach to the United States, arguing that economic historians of antebellum America should concentrate on "class structure" rather than "market forces." The class structure she finds most important was the family farm, created by the egalitarian land policies of the federal government. The relatively even distribution of wealth among family farms, Headlee argues, created a deep market for farm machinery, which in turn spurred northern industrialization in the antebellum North.

Headlee then spends the remainder of the book discussing the diffusion of the reaper (a horse-drawn machine that greatly speeded wheat harvests) in the Old Northwest in the 1850s. A seminal debate in historical economics is why was the reaper not used in large numbers until the 1850s, decades after the invention was first introduced. Headlee rejects Paul David's explanation based on threshold size. She calculates that most farmers had not reached the minimum size that would optimize the efficiency of the reaper. She also rejects Alan Olmstead's argument that farmers either shared or rented reapers to reach the minimum threshold size. Headlee contends that there were simply too many reapers relative to the number of acres of wheat to make sharing or renting very important. She then disputes Heywood Fleisig's claim that labor shortages induced reaper adoption. Using data from the Bateman and Faust sample of the 1859 census manuscript returns, Headless finds no correlation between the ratio of farm employees to farm operators and the ownership of farm machinery in Old Northwest townships.

Headlee's explanation is that risk-averse farmers did not want to participate in labor markets. They therefore purchased reapers even though their farms were too small to use the reaper at its most efficient level of use. Again using data from the Bateman and Faust sample, she finds a...