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

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 correlation between the average value of farm machinery and the number of medium-sized farms in Old Northwest townships. By taking farm machinery (or at least machinery valued at $150 per farm) as a proxy for reaper ownership, Headlee arrives at the conclusion that it was medium-sized family farms that purchased most of the reapers sold in the Old Northwest.

In a brief conclusion, Headlee reiterates her point that the family farm structure constituted a distinct "American Road to Capitalism" and that the "family farm was the cause of American industrialization." She even goes so far to argue that Third World countries today should adopt land reform to allow the development of American-style family farms.

While Headlee makes an important contribution to the debates over reapers, there is a wide gulf between her general conclusions regarding the nature of capitalism and her specific evidence on reaper adoption. The two sections are not well integrated, leaving one with the feeling that her 60 pages of historiographical introduction is filler for what otherwise would be an extended essay on reapers in the Old Northwest. Some of the issues she raises in the introduction--such as the importance of the Civil War to American industrialization--are only mentioned in cursory fashion throughout the rest of the book. On the other extreme, literature relevant to her central arguments, such as Jeremy Atack and Fred Bateman's To Their Own Soil, are ignored.

On her specific arguments about reapers, some of Headlee's claims are not well supported. She provides little evidence that the production of agricultural machinery was crucial to American industrialization. Also lacking is any analysis of the risks of using reapers versus the risk of hiring more wage labor, leaving one to wonder what factors made hiring labor so risky for farmers. Her analysis raises the question of why "risk-averse" farmers purchased reapers to expand output instead of simply producing less wheat. Headlee's answer--that farmers produced more wheat to pay higher mortgages--is asserted, not proved. Indeed, the direction of causality might have been reversed: mortgages may have been higher because farmers were producing more, thereby increasing farm sizes and land values. At the very least, "risk averse" seems a strange term to describe commercial farmers who increased output through technological innovation.

Headlee's statistical claims about reaper diffusion are based on several crucial assumptions that may prove controversial. Her most important assumption is that farmers planting more than 20 acres of wheat and owning $150 worth of farm machinery can be classified as reaper owners. Headlee's arguments also rest on the assumption that the regional distribution of reapers was proportional to the amount of wheat grown in each region. Headlee does not provide any tests that show how sensitive her findings are to a different set of assumptions.

In sum, Headlee's technical chapters will be of interest to agricultural and economic historians, but most economists and historians will find her broader arguments disappointing.

John Majewski Philadelphia Center for Early American Studies and University of California, Los Angeles