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The Beginnings of Capitalism in Central Europe

Edited By Cyril Levitt

This book focuses on the beginnings of capitalism in Central Europe with emphasis on the German-speaking areas from the 14th to the 17th century. It also reviews and assesses the writings on the topic by the most important thinkers of the twentieth century. At the center of the presentation are the developments in mining, metallurgy, smelting, book publishing, clock making, ship building and advances in trade, commerce and finance. This book will be of interest to students of medieval and early modern European history, the so-called transition debate of feudalism to capitalism, social scientists and historians who are interested in the various transitions in human history, and philosophers who follow developments in the changing issues regarding freedom and bondage over the course of human development. Anthropologists who are familiar with Krader’s writings on the development of the Asiatic mode of production will be interested to see how Krader treats this transition from feudalism to capitalism by way of comparison and contrast.

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Preface: Krader in Context by David Levine

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Krader in Context


Historians—and their historical studies—are products of their own time. This is, of course, a truth universally acknowledged. Lawrence Krader’s study of the beginnings of capitalism in Central Europe is very much a work of mid-century scholarship even though it was first published in German in the 1990s. Readers of Krader’s essay will come to appreciate what has been gained as a result of academic scholarship concerned with early-modern German capitalism and industrialization. What they will mostly learn is that the results of archival research “in the field”—provide us with a complicated understanding of the uneven development of early-modern capitalism and industrialization. But, perhaps most significantly, the results of this new research shift the focus away from formal documentation and towards the wider context of social relations.

Reading this manuscript gave me a sense of déjà vu—it was eerily reminiscent of Maurice Dobb’s Studies in the Development of Capitalism.1 Both works concentrate on the origins of capitalism in the formal relations between capital and labour; neither work gives much credence to the agricultural origins of industry, consumer demand, urbanization, historical demography, transportation, technology, and, in particular, energy sources. Indeed, Krader’s essay—like Dobb’s—is remarkable for the way in which a 21st century student of “the transition” recognizes the absence of the gigantic historiography which is pertinent to this subject. It could be said ←xix | xx→that contemporary studies render Krader’s vision almost unrecognizable or, at the very least, anachronistic.

At the heart of this difference is the way in which the “transition debate” spawned an almost entirely new subject—social history. Nowhere, perhaps, is this difference made clearer than in a simple comparison between the sources and references in Krader’s essay and those provided by the more than three dozen authors whose essays have been collected in the three volumes of Germany: A New Social and Economic History.2 Each of these essays is buttressed by dozens and dozens of footnotes, almost-all of which refer to studies published in the 1960s, 1970s, 1980s, and 1990s when the series itself was published. One can only imagine how much denser, wide-ranging, and intensive the bibliography would be in a revised publication.

Capitalism—buying low and selling high—was hardly a novel invention of the post-feudal, early-modern period. What was new about early-modern capitalism was the ability to harness labour-power in a systematic fashion to the production of both goods and services. Of course, there were precursors to the factory system—the famous (and perhaps apocryphal) workshop organized by Jack of Newbury or the Venice Arsenal (and its English, Spanish, French and Dutch contemporary competitors) are pertinent examples of pre-modern, large-scale, integrated works—but what was new and revolutionary was the way in which inanimate energy made it possible to replicate these methods spreading across the economy into new sites of production, from brewing to publishing.

Moreover, the very nature of the questions asked by the “post-Krader” generations of scholars has changed. Perhaps the foremost difference can be neatly summarized as follows: a modern industrial economy required not only abundant supplies of cheap energy but also a method of transporting coal from its point-of-production to its point-of-use. The key to this issue is that the substitution of inanimate energy for other sources—wind and waterpower as well as human- and animal-power—opened vast new horizons for production.3

Bulk commodities were liable to extra-ordinary transportation surcharges. In the South Tyneside coal industry, for example, there were radical and revolutionary technological innovations before the Industrial Revolution—first, in place of carriages, wooden waggon ways and then iron-flanged wheels and rails criss-crossed Whickham parish, the centre of production; next came the advent of steam-powered engines—used for draining pits from the 1690s.4 These early machines were built according to the design of Thomas Newcomen. Then, in the third quarter of the 18th-century, the internal combustion models vastly increased efficiency while constant tinkering with the Boulton/Watt design led to massive increases in efficiency—three-fold in the next thirty years. Yet, it was only in the 1820s that ←xx | xxi→these transportation and energy systems were married in the most characteristic technology of the Industrial Revolution—the railways.5

From the 1500s onwards, the north-eastern English coal-economy grew largely as a result of innovations which were built upon factor endowments of cheap, water-based transportation from the mines to their primary markets. Statistics portray a stark difference between English and German experiences of substituting inanimate energy from coal. In the early 19th-century, the English mined 30,000,000 tons of coal; German mines produced 1,700,000 tons. German mines did not reach the English 1830s-level until the last quarter of the 19th century. It was only around 1900 that German production equalled the output of English mines. What began as a gigantic divergence which was crucial in the beginning decades in the third quarter of the 18th century converged—but only after more than a century into the Industrial Revolution.

The key point here is that Germany—like China, today’s largest coal-producer—had vast supplies of coal but lacked the wherewithal to move that resource to market. The result was that in early-modern Germany—just as in Imperial China and, more generally, continental Europe and the USA—production was not modernized or, to put it more succinctly, “revolutionized”. The Industrial Revolution came to Germany in response to English competition that threatened local, proto-industrial producers with technological obsolescence—this threat was altogether modern because these traditional entrepreneurs had to innovate or die. And the Germans did innovate—and, in comparison to the English, their primary innovation was to apply engineering studies (largely based in new educational institutions) to production routines.

In the earlier “proto-industrial” economy of the early-modern period, capitalists had access to an almost-unlimited supply of under-employed labour which could be used to undertake repetitive processes. There is now a vast literature on this subject which began with the publication of Franklin Mendels’ pioneering, 1971 essay.6 While his original argument has been repeatedly contested, the relevant point in relation to Krader’s essay is that Mendels drew attention to the linkages between the labour supply of under-employed cottagers—men and women, girls and boys—and the demands of urban producers who “put-out” materials to cottagers in the “Verlagssystem”. Mendels argued that “proto-industry” (perhaps more accurately described as “cottage industry”) was the first phase of industrialization but critics of his thesis have cited numerous examples that this was not the usual route—in fact, a great many rural industries rose and fell in the unredeemed time of “the transition”.7 With regard to Krader’s arguments, Mendels’ thesis is significant because it points to a blind-spot—Krader relied heavily on urban, guild ←xxi | xxii→documentation whereas cottage industries were usually set up to side-step the conservative labour regulations of these institutions.

Krader’s reliance on formal, urban documentation—as opposed to the informal and largely unregulated evasions of their surveillance mechanisms—significantly narrows the scope of his vision of capitalist enterprise in early-modern Germany. Even in the evidence he has consulted regarding mining—gold, silver and copper—in the south-eastern Saxon Erzgebirge borderland with Bohemia, his primary source of documentation comes from formal sources and, of course, the famous contemporary writings of Georgius Agricola [Georg Bauer] (De re Metallica) or the business dealings of the Fugger Bank. Yet in the thirty years before its publication in 1993, there were numerous scholarly works which delved into the particularities of the social history of mining but none of these found their way into Krader’s essay. Indeed, the comparison with English economic historiography on this subject is quite notable by its absence.

The significance of these omissions is that for a 21st century reader, this essay is incomplete. Whether it’s labour organization or, even more significantly, labour supply, the micro-variations in experience are largely outside the scope of Krader’s research. In a sense, this narrow scope gives his work its anachronistic flavour. But it also gives the reader a sense of what an earlier generation of library-based scholarship overlooked because it did not attend to the particularities of early-modern capitalist industries. Learning about these particularities and exceptions has been the province of social historians whose scholarly output can be likened to a tsunami which has overwhelmed the earlier historiography that privileged progress over regression or industrial involution. To be sure, some local success-stories provided the lineage of later developments—especially in regard to capital accumulation and marketing. What better example of this point are the family histories of Max Weber and Friedrich Engels? In Weber’s family there were connections with proto-industry, their wealth had been based on putting-out thread to the cottagers in the Westphalian textile industry while Engels was the child of a Barmen/Wuppertal industrialist who was a partner in a Manchester spinning factory. Did the Engels’ factory-spun yarn supply raw materials for the Weber’s cottage weavers? Of course, neither Weber nor Engels is remembered today for these connections but their ascent into the upper bourgeoisie was founded upon wealth accumulated in the transition from early-modern to modern capitalist industrialization. Yet for every Weber or Engels who successfully benefitted from the inheritance of cultural capital in this way, there were countless others whose experiences were less remarkable—many (most?) experienced downwards mobility as their businesses were overwhelmed by the revolutionary changes of the transition from localized production to international competition.

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1. 1 M. Dobb, Studies in the Development of Capitalism. Routledge London 1946.

2. 2 B. Scribner, ed., Germany: A New Social and Economic History. Volume 1, 1450–1630. London Arnold 1996. S. Ogilvie, ed., Germany: A New Social and Economic History. Volume 2, 1630–1800. London Arnold 1996. S. Ogilvie and R. Overy, eds., Germany: A New Social and Economic History. Volume 3, Since 1800. London Arnold 1996.

3. 3 E. A. Wrigley, Energy and the English Industrial Revolution. Cambridge University Press Cambridge 2010.

4. 4 D. Levine and K. Wrightson, Wickham: An Industrial Society in the Pre-Industrial World. Oxford University Press Oxford 1991.

5. 5 M. W. Flinn and D. Stoker, The History of the British Coal Industry. Volume 2, 1700–1830. Oxford University Press Oxford 1985.

6. 6 F. Mendels, “ ‘Proto-industrialization’: the first phase of the industrialization process”, Journal of Economic History, 31, 1971, 241–261.

7. 7 J. Schlumbohm, “Proto-industrialization’ as a research strategy and a historical period—a balance sheet”, in S. C. Ogilvie and M. Cerman, (eds.) European Proto-Industrialization. Cambridge University Press Cambridge 1996, 12–22.

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