History matters in many ways, some more significant than others. One school of thought with an ancient pedigree holds that the suite of events unrolls according to an immanent plan that necessarily realizes the best, or in one version the plenitude, of possible worlds; the chief alternative holds to the contrary that history is contingent upon events that possess no intrinsic logic other than the empirical fact of their having happened. That philosophical divide is the backdrop to this fine series of essays honoring Paul David's lifelong advocacy of the proposition that contingency matters for the history of economies.

The editors have organized the 17 essays in this collection into four classes. The first takes up the logical foundations for contingent history. In a characteristically elegant argument, Kenneth Arrow demonstrates that the necessary condition for path-dependence is the irreversibility of investment, what in a simpler age we used to call fixed cost. As one expects, the importance of that irreversibility depends on the durability of the investment relative to the frequency and durability of complementary investments. The temporal disjunction establishes the coordination problem that defeats global optimality. Douglas Puffert takes a more discursive approach to this question by analyzing the several types of network externality. Just as Arrow shows how the panoply of positive externalities can be reduced to a single principle, Puffert illustrates the enduring worth of taxonomy in distinguishing cases. In understanding concrete cases, the details matter as much as the principle. Perhaps the most interesting piece in this set is Melvin Reder's meditation on the tension between historical and teleological explanations in economic history. He notes that the debate between neoclassical economists and partisans of path-dependence fundamentally turns on who should bear the burden of proof, which depends on whether the case is heard by historians or economists. This is a fine essay that deserves a place in seminars on the methodology of economic history.

The second section considers specific examples of path-dependence. In a review of postwar monetary institutions Charles Calomiris argues that the financial rules and institutions designed to socialize financial risk were a response to the spike in that risk that attended the Great Depression. The socialization of financial risk inevitably created new forms of moral hazard that in the fullness of time provoked renewed excess in risk-taking and financial instability. Whether this is an instance of path-dependence, or simply an event in a Hegelian developmental process that inexorably runs to crisis can be debated. The Gold Standard was terminated by the First World War. The current regime may well be destroyed by American fiscal and military policy. Were these random or predictable events? Phillip Lim's essay applies the path-dependent paradigm to the history of Korean developmental policy by arguing that the emergence of powerful business interest groups in response to the policy shifts of the early 1960s made it difficult for the Korean government to change course in the 1980s and early 1990s, when private debt-equity ratios mounted to unsustainable levels. This seems to stretch the paradigm beyond the point of usefulness. Peter Temin's review of the legal and economic arguments over how the common cost of long-distance communications infrastructure should be allocated between the original provider of that infrastructure and potential competitors who require to be connected to it observes that the “path” of regulation seems to have been set by a consistent hostility to the incumbent firm by the FCC, deriving its role as a protector of competition. Although the narrative certainly defines a path, the story could be strengthened by identifying the branching point at which that path was taken. The most useful essay in this set is the Paul Rhode's account of how the Pacific Coast coped with the aftermath of World War II. He shows that the flush of wartime investment probably tipped the balance to making the Far West a major economic region several decades earlier than might otherwise have happened. One thinks of the Canadian province of British Columbia, which remains mired in resource extraction, as the null hypothesis. This is an excellent piece that deserves a place on any reading list in twentieth-century American economic history.

The last two sections are more heterogeneous. In the section entitled “Context Matters,” Timothy Besley, Stephen Coate, and Timothy Guinnane propose that the English Work House test was a policy response induced by the rising cost of distinguishing the deserving poor from slackers and malingerers. This is a “just-so” story, which though plausible as economics seems at odds with the notion of path-dependence. Susan Carter, Roger Ransom, and Richard Sutch also strain the paradigm in their excellent study of the life-cycle transition in antebellum America. This is a first-rate survey of the literature on the antebellum fertility decline, and gives new evidence favoring Paul David and William Sundstrom's child-default theory of declining fertility over Richard Easterlin's target bequest model. By contrast, David Weiman's account of the early development of Bell's regional and long-distance telephone networks confirms the grasp of the long arm of the past. He shows that the sequence and pattern of long-distance connectivity mapped the patterns created earlier by rail and telegraph. That hierarchical ordering of urban centers provided an ideal mold for connectivity supported by the technology of telephonic communication in the first half of the twentieth century. Serendipity is also a form of path-dependence. This is an excellent essay. The remaining essays deal with other parts of David's opus. Peter Mancall, Joshua Rosenbloom, and Thomas Weiss report conjectural estimates of eighteenth-century economic growth in the Lower South; Mark Thomas and the late Charles Feinstein perform a critical analysis of the index-number problems in the value-added approach to measuring economic growth and plump for Fisher's index. Warren Sanderson, Thomas Mroz, and David Weir take up demographic matters. These last essays are essentially methodological and intended for specialists rather than the general economic historian.

The collection testifies to Paul David's impact on the practice of economic history in the last third of the twentieth century. It does not exhaust that impact. One wishes for an essay on the historiography of the American tariff, and a deeper account of the sequence and institutional foundations of scientific and technological innovation. But this is to quibble. The organizers of this volume have met the obligations of the genre: to honor the man, and to advance his work.