Productivity and Market Integration in American Communal Dairying, 1830-1875

In our late twentieth century experience, survival of an economy seems critically dependent on well established rights to private property and a return to labor that rewards greater effort. But that need not be so. History provides examples of micro-socialist economies that internally, at least, allow for little private property for participants and a constant return to labor that is independent of effort. Some such economies may even be termed 'successful,' if success is taken to mean survival over several generations. If these communities survived without conditions that are generally thought to be necessary for success, a question worth asking is how this occurred, for we can then shed some light on what really is necessary for economic survival. Addressing this issue emphasizes the critical role of time, for even if the microsocialist economies that we study here eventually became the merest shadow of their former selves, the fact that they did flourish for so long makes them a valuable counterexample, and hence, a phenomenon in need of explanation. We consider here the dairy industry of the Shakers, which was characterized by intensive efforts to increase productivity, in part through the use of market signals, but efforts that were also limited by the ideological goals of the community. The Shakers were (and are, but since it is the historical Shakers that concern this paper, the past tense will be used) a Christian communal group. Some of their distinctive beliefs included the existence of a male and female Godhead, from which followed sexual equality, and active communication between Believers (a Shaker term for members of the sect) and denizens of the spirit world. Practices of the Society (their official name is the United Society of Believers in Christ's Second Appearing, the second appearing being in the body of their foundress, an illiterate Englishwoman named Ann Lee) included pacifism, celibacy, confession of sins to elders, and joint or communal ownership of the Society's assets. Each Shaker received the same return for his or her labor: room, board, clothing, and the experience of divine proximity in a community of like minded Believers (Stein 1992).

Regional Specialization in Communal Agriculture: The Shakers, 1850- 1880

When the Shakers established communal farms in the Ohio Valley, they encountered a new agricultural environment that was substantially different from the familiar soils, climates, and markets of New England and the Hudson Valley. The ways in which their response to these new conditions differed by region has not been well documented. We examine patterns of specialization among the Shakers using the manuscript schedules of the federal Agricultural Censuses from 1850 through 1880. For each Shaker unit, we also recorded a random sample of five farms in the same township (or all available farms if there were fewer than five). The sample of neighboring farms included 75 in 1850, 70 in the next two census years, and 66 in 1880. A Herfindahl-type index suggested that, although the level of specialization was less among the Shakers than their neighbors, trends in specialization by the Shakers and their neighbors were remarkably similar when considered by region. Both Eastern and Western Shakers were more heavily committed to dairy and produce than were their neighbors, while Western Shakers produced more grains than did Eastern Shakers, a pattern imitated in nearby family farms. Livestock and related production was far more important to the Eastern Shakers than to the Western Shakers, again similar to patterns in the census returns from other farms. We conclude that, despite the obvious scale and organizational differences, Shaker production decisions were based on the same comparative advantages that determined production decisions of family farms.

Liberalization, Ownership, and Efficiency in Indian Banking: A Nonparametric Approach

This paper empirically estimates and analyzes various efficiency scores of Indian banks during 1997-2003 using data envelopment analysis (DEA). During the 1990s India's financial sector underwent a process of gradual liberalization aimed at strengthening and improving the operational efficiency of the financial system. It is observed, none the less, that Indian banks are still not much differentiated in terms of input or output oriented technical efficiency and cost efficiency. However, they differ sharply in respect of revenue and profit efficiencies. The results provide interesting insight into the empirical correlates of efficiency scores of Indian banks. Bank size, ownership, and the fact of its being listed on the stock exchange are some of the factors that are found to have positive impact on the average profit efficiency and to some extent revenue efficiency scores are. Finally, we observe that the median efficiency scores of Indian banks in general and of bigger banks in particular have improved considerably during the post-reform period.

Responding to Price Signals in Communal Agriculture: Shaker Hog Production, 1788-1850

Isolated Shaker communal farms stressed self-sufficiency as an ideal but carefully chose which goods to buy and sell in external markets and which to produce and consume themselves. We use records of hog slaughter weights to investigate the extent to which the Shakers incorporated market-based price information in determining production levels of a consumption good which they did not sell in external markets: pork. Granger causality tests indicate that Shaker pork production decisions were influenced as hypothesized, strongly by corn prices and weakly by pork prices. We infer that attention to opportunity costs of goods that they produced and consumed themselves was a likely factor aiding the longevity of Shaker communal societies.