The Prudent Village

The Prudent Village - The Prudent Village: Risk Pooling...

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386 The Prudent Village: Risk Pooling Institutions in Medieval English Agriculture # G ARY R ICHARDSON The prudent peasant mitigated the risk of crop failures by scattering his arable land throughout his village, Deirdre McCloskey argued, because alternative risk- sharing institutions did not exist. But, alternatives did exist, this essay con- cludes. Medieval English peasants formed two types of farmers’ cooperatives. Fraternities protected members from the perils of everyday life. Customary poor laws redistributed resources towards villagers beset by bad luck. In both institu- tions, the expectation of reciprocation motivated farmers with surpluses to aid neighbors with shortages. eirdre McCloskey’s theory of the prudent peasant has three tenets. 1 Scattering farm fields reduced the variance of crop yields and thus the risk of starvation. Scattering farm fields reduced average crop yields and thus peasants’ incomes. Scattering farm fields was the only way in which medieval English peasants mitigated risk. Translating the tenets into terms of portfolio theory forms the foundation of McCloskey’s model. The risk to each farmer as measured by the variance of total out- put was reduced by diversifying holdings among many small plots fac- ing different weather, weed, water, rodent, insect, and soil conditions. If one plot did poorly and another did well, a farmer could still harvest enough grain to survive from all of his plots put together. However, di- versification was expensive. Scattered holdings yielded 10 percent less grain than their consolidated counterparts. So, scattering entailed an ex- change of return for risk. The prudent peasant chose to scatter his farm fields to protect himself and his family from idiosyncratic agricultural shocks because better alternatives did not exist. Peasants had no better way of protecting themselves from idiosyncratic agricultural shocks. # The Journal of Economic History , Vol. 65, No. 2 (June 2005). © The Economic History Association. All rights reserved. ISSN 0022-0507. Gary Richardson is Assistant Professor, Department of Economics, University of California at Irvine, 3151 Social Science Plaza, Irvine, CA 92697-5100. E-mail: garyr@uci.edu I thank seminar participants at UCB, UCLA, UCI, and USC, the editors of this JOURNAL, and several anonymous referees for comments that improved all aspects of this essay. I thank the All-UC Group in Economic History, the Social Science Research Council, and UC Berkeley’s Department of Demography for financial support. Doris Sum provided exceptional research as- sistance. 1 For a recent rendition of McCloskey’s theory, see McCloskey, “Prudent Peasant.” The original version appears in McCloskey, “English Open Fields.” D
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Prudent Village 387 Peasants lacked access to cheap relief. Medieval men and women, for example, neither practiced charity nor pooled risk. McCloskey’s conclusion piqued Miles Kimball’s curiosity. Modern
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This note was uploaded on 04/29/2010 for the course ECON 4514 taught by Professor Shuie during the Spring '08 term at Colorado.

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The Prudent Village - The Prudent Village: Risk Pooling...

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