In this episode, I had a conversation with economic historian Johan Fourie, who is a professor of economics at Stellenbosch University, and the author of one of the most enjoyable books on economic history called Our Long Walk to Economic Freedom. We spoke about the resurgence of economic history, particularly in Africa. Johan attributes this revival to multiple factors, including an interest in understanding past economic patterns, technological advancements enabling data analysis, and scholarly work drawing global attention to the field. We discuss Africa's economic development, noting the continent's reliance on primary goods and the impacts of political and economic policies on growth. Johan stresses the heterogeneity within Africa and warns against generalizing the continent's economic narrative.

The discussion then delves into the role of ideas in shaping economies, with a focus on industrial policy. Johan highlights the importance of empirical evidence in policymaking and warns against the potential misuse of industrial policy for political gains. He emphasizes the need for a more inclusive research ecosystem in Africa, advocating for better representation and the promotion of economic history as a vital sub-discipline.

Johan also addresses the importance of economic freedom, defining it in simple terms and discussing its implications in policy decisions. He touches on the challenges of racial history and representation in academia, emphasizing the need for diverse voices and a marketplace of ideas for better policy formulation.

Finally, Johan discusses the optimism inherent in economic history, acknowledging the significant progress humanity has made while remaining cautiously hopeful about the future. He advocates for policies that ensure the equitable distribution of the benefits of increased productivity, highlighting the potential of new technologies to contribute positively to Africa's economic growth.

Transcript

Tobi;

Welcome Johan. It's good to talk to you. I guess where I’ll start is economic history is enjoying a bit of a renaissance, I'd say. Personally, for me, I'll say in the last five years I've read more economic history books and papers than actual economics itself. So I just want to ask you, what was the turning point, at least in recent time, why does economic history seem to be having a moment or its moment right now?

Johan;

I think there are many answers to that question. I'll focus on African economic history because I think that's something, firstly, that I know a little bit of, and secondly, that the factors that affect African economic history might be slightly different than those that make economic history attractive to, kind of, global audience.Although I do think your sentiment is true also for for global economic history, that there's certainly been a resurgence in interest. Of course, they were previous episodes where this also happened in the 1960s there was a great interest in econometrics, but that kind of died down by the 80s and 90s. And certainly I think in the last decade or two that's made a comeback, but certainly in African economic history, also by the 60s and 70s, for different reasons, again, because of the end of the colonial period and many Africans being interested in their own economic pasts;  it was, you know, certainly intended to improve the development outcomes of many of these countries. And so studying what had happened in the past became important. And then by the 80s, you know, for reasons like the shift in history towards more cultural aspects of African history and, perhaps, also, to some extent, the fact that economics became more technical, more mathematical.

The fields really, economic history really, had kind of dialed down interest in Africa's past, but perhaps also to some extent, the fact that many African countries were struggling to grow. And so there was little interest in understanding of why these things had persisted. But by the 2000s, of course, African growth turned around and, you know, this is a continent [where] there were several countries that were growing quite rapidly and you had this covers of The Economist and Time magazine and all that was talking about Africa Rising, all these things, but also, I think, an interest by scholars, often scholars based outside of Africa, to understand this resurgence or what Morten Jerven called the, kind of, recurring African growth. So we know actually in the past that this had happened, that there were periods of growth. But understanding why there are these fluctuations became quite important. And then that combined with the ability to transcribe large historical data sets. Find many of these sources in African archives and then transcribe them and analyze them. So access to computing power also.

So it was both from a demand side like interest in Africa's past and also the supply side, the fact that they were now tools that would help us analyze what had happened in the past, that really kind of created this resurgence or Renaissance as some might call it. Of course, you know, initially led by economists in some of the leading universities. Work by, you know, James Robinson and Acemoglu, Nathan Nunn who wrote a book on slavery that was quite prominent and really pushed interest into the field. And so various kinds of groups of people, you might kind of think of them as two types, the one with the economists interested in kind of causal persistence studies. So thinking of how past shocks still affect the present outcomes and others, who're more kind of classically more like an old school economic historians that are interested in actually understanding long term patterns. So thinking of wages or standards of living or trade statistics that are actually trying to collect them and rebuild them for many African countries, because we don't actually have long term series for many of the regions across Africa. So I think that's really the main reason why we see this kind of renewed interest. And you can see that in, you know, participation of African Economic History Network meetings where you see papers maybe 10 or 15 in the early 2010s. And now you have, you know, the most recent conference in Pretoria was about 100 people attending. So it's a really massive growth in the participants and researchers trying to study Africa's past.

Tobi;

What immediately comes to mind, and when I talk to people, ordinary Africans, I should say, is that how did Africa sort of missed the boat on prosperity? I mean, as you said in your answer, growth has been recurring in Africa, but it has not been sustained enough for Africa to really join that group of countries that had a sustained growth spurt for decades. It happened a little bit in Latin America. Of course, East Asia is the most famous example of this. I mean from history what happened in Africa? 

Johan;

Yeah, I think the thing to stress is that Africa's experience has been quite different from, say, you know, a Western Europe, or if you want to take the kind of country where it'll started… this sustained period of economic growth - Britain or, you know, England more specifically. So what you find is you also find periods of quite rapid growth in Africa. But then, as you've just mentioned, there are periods of stagnation or even decline in many countries. I mean, that's a very valid question, is why is that? And again, there are, you know, a myriad of different reasons. I think one of the things that one should keep in mind is that Africa's economies are often tied very closely to kind of mineral resources, and even before that, before the mineral era, to cash crops. And these prices often fluctuate quite a lot. And so you would find periods when there's a boom cycle, you would find obviously countries doing quite well. But then when these prices collapse, then of course these countries suffer. So that's a very obvious reason. And of course there are other countries in the world that also are tied to kind of cash crops or minerals, and they seem to have experienced less of this. And that is also, of course, true.

But it's worth keeping in mind that for many African countries, they have a pretty short history of independence. So it's really only in the last 70 years or so that African countries are independent and where the economic policies are not determined by some, you know, European power. Of course, you can think of pre-colonial times before the kind of mid-19th century, but even then, these were mostly kind of subsistence based or focused on trade in commodities, cash crops and, even before that, of course, in slave individuals. So it's really only in the last 70 years that we can think really of kind of modern economic growth in many of these economies. And then, for example, think about industrialization, you know, growth of manufacturing and more recently, service industry. But many countries are still very much tied to primary sector exports and therefore are closely correlated to these international price fluctuations. So that's kind of one reason.

Of course, one could also think of political economy reasons that we see quite also large fluctuations in terms of political regimes. Often we find coups that undermine kind of longterm economic planning. Many people will also argue that, you know, there was involvement of international organizations setting certain rules for African countries, certainly in the 1980s and 1990s [that] put them on a different trajectory. But I think the kind of point is that actually many African countries were relatively young and therefore tied to very much primary goods exports and it's only really in the last 3 or 4 decades where we could see this kind of shift. And