Premodern Germany and the teleology of economic history

The most important question in economic history concerns the causes of sustained growth. For some time, the standard narrative in the English-language scholarship (which dominates this aspect of economic history just as it dominates the discipline of economics) has seen the answer to this puzzle in a series of related developments that are thought to be, if not unique to, then at least predominant in premodern England, centering around the development of a centralized state with associated institutions of justice, systems of weights, measures, and currencies and the consequent growth of market integration and increasing specialization of production. The English path to modernity was by no means the only one; it is only by opening our minds to other regions—which we can study only by reading other languages—to gain insight into alternative historical trajectories that we can, in a world increasingly dominated by English, see the path that led to where we are now with some critical distance. A knowledge of the economic history of the German lands before the birth of a German state shatters the cherished view of the unique and special place of England in world history (a view that is even easier to cherish when scholars working on this subject can read no language other than English with facility) and demonstrates that sustained economic growth can and did take place in regions with very different political histories. It is beyond dispute that the German-speaking regions followed a trajectory completely different from that of England, remaining a patchwork of polities of varying size, each with different courts, currencies, weights, measures, customs, and legal systems—and as a further hindrance to trade and the growth of long-distance markets and market integration, the whole region was full of boundaries with requirements that goods be assessed for various kinds of tolls. Orthodox economic theory suggests that all these factors ought to have seriously hindered the growth of commercialization, market dependence, production for the market, and specialization. If it is too expensive and too much of a hassle to depend—for one's subsistence commodities or for the raw materials with which one manufactures goods—on being able to convert currencies and measures and pay for tolls, and if one cannot be certain about the fairness of courts in other jurisdictions where disputes might be adjudicated, it makes sense to prefer to be self-sufficient in as many things as possible, so as to avoid the outlay and bureaucracy involved in obtaining stuff from, or shipping it to sell, elsewhere. Economic involution, or at the very least stagnation, ought to follow. In contrast, in order to attain sustained economic growth, the holy grail of modern economic and political ideology, the conditions obtaining in England seem to be necessary: When it is easy to get stuff from somewhere else, and the costs are not too great, it might make sense to specialize in one's production, in the knowledge that one can safely rely on a steady stream of whatever one needs coming from elsewhere without too much difficulty, as well as easy access to markets for one's products. Such specialization should lead to greater productivity, innovation in production, and increasing profits. This eminently logical economic orthodoxy, although it works wonderfully for England, does not stand the test of real history in the German lands in the period between circa 1300 and 1800: In particular, in the southern and western regions, there is abundant evidence to show that there was exponential growth in commercialization and specialization, and concomitant interregional interdependence, despite all the manifest hindrances to market integration. Across numerous political boundaries, the southern regions of what is now Germany supplied northern Switzerland with grain and flax for the burgeoning textile industry there, in a manner entirely analogous to the symbiotic relationship—without borders—between the agrarian south and industrializing north of England in the same period. Everywhere in Germany, everyone was increasingly dependent on the market. Regions such as Swabia became known for their specialized production (in the case of Swabia, of fustian cloth), possible only because of their close economic ties with other regions that supplied subsistence commodities and raw materials. Cattle were driven hundreds of miles to supply meat to the growing commercial towns. There were even substantial changes in patterns of consumption of clothing, comestibles, and culture, similar to what can be found in England in this period. Over the course of these centuries, the segment of the populations of both the German-speaking lands and England that was dependent on the market for the bulk of its needs for biological subsistence and/or social survival at least doubled in size. By circa 1800, it was at least 75% of the population, and in many parts substantially more, in both regions. At all levels, there was an increase in forms of aspirational consumption, from the adoption of fashions modeled on their employers by urban servants to new media such as newspapers or journals patronized by the manufacturing classes in both the town and countryside. Economic ideology in the German-speaking lands itself underwent a transformation similar to what happened in England and at roughly the same time. By the later 18th century, we find in both places the ideal of a moral economy coming into conflict with a notion of productivity as an absolute good. That is, an ethical system with just prices, in which farms and workshops were thought of as households rather than profit-oriented businesses, began to decline in favor of productivity in all manner of production, both agrarian and industrial, with so-called agrarian improvement becoming increasingly the mantra of landowners as they sought to boost efficiency on their farms. While England's history is, of course, important, it must be remembered that England's growth up to and beyond circa 1800—unlike Germany's even in later decades—was fundamentally tied to and in many respects dependent on its colonial expansion; although England's industrialization preceded that of the German-speaking regions, the history of the latter from the later 19th century onward can hardly support English delusions of innate economic and industrial superiority. The interest in England has been driven by a belief that there was a long-term trajectory in England leading to growth, but the long-term trajectory of the German-speaking lands might help us think of types of growth with different characteristics as being equally possible pathways to the present. While English, and later American, growth was characterized by colonial expansion, the unsustainable exploitation of purportedly (but not really) “empty” lands, massive corporations, and regressive labor legislation, from the later 19th century onward, Germany, Switzerland, and Austria pioneered social security, sustainable and organic farming, and protections for labor and environment. The progressive elements of these remain largely in advance of most of the Anglophone world even now, despite the recent increasing corporatization of the German-speaking countries. While they do not offer, perhaps, any alternative to the narrative of capitalistic growth as such, the economic histories of these regions might help us conceive of a more sustainable version of modernity. Encompassing a great deal of religious, linguistic, cultural, political, and of course geographical diversity, these regions provide an excellent laboratory for economic (and other) history as a means of escaping the teleology of Anglophone world domination.

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