The relentless revolution: a history of capitalism (9 page)

Maintaining imposing royal establishments drew heavily on France’s resources. Being both powerful and placed cheek to jowl with rivals got French kings into wars of dynastic and religious ambitions. England benefited from its island geography. During the course of the seventeenth century it acquired a powerful navy, which supported trade a good deal more than could an army however splendid. In the next century English shipyards at Portsmouth were the largest workplace in the country and an important consumer of coal and ironmongery.
¹⁸
It was said that Louis XIV would have spent more on a navy could he have reviewed it before the ladies of the court the way that he did his magnificent army. From such seemingly irrelevant factors economic advantages disappeared or accrued.

Both the crown and the French nobility lived off the taxes and rents levied on the peasants, most of whom could not produce enough to feed their families in bad years, much less invest in new farming techniques. With more sons and daughters to provide for during the sixteenth-century spurt in population, many rural families divided their properties into ever-smaller morsels of land. This morselization of property made almost inevitable the degradation of farming in much of France. Only intervention from the government saved the country from several severe famines.

The effects of France’s backward agriculture radiated throughout the economy. Kings awarded their favorites special perks, such as the right to charge a fee to cross a bridge much like that which the billy goat in the fairy tale possessed. The holder of this privilege could bequeath it to his heirs. Over time, tolls for roads, bridges, canals, and towpaths accumulated, making it slow and costly to ship food from region to region. In a country as climatically diverse and large as France, harvest failures would not occur everywhere, but the fact that there was food elsewhere in the land didn’t help the hungry, because distribution was clogged by these seignorial privileges. Transporting grains from one region to another became a herculean task, unless the government strongly intervened to save lives. France had nothing like England’s unified internal market, where goods passed freely once the king’s patents of monopoly had been abolished during its Civil War. France’s truly byzantine transportation arrangement wasn’t limited to food shipments. The industrial sector suffered as well because harvest failures pushed up the price of food, leaving the people without money to buy clothing or house furnishings.

The splendor of the French court rose on the backs of the impoverished peasantry. Fear of the wrath of this destitute people influenced decisions at court. The king’s ministers considered any reforms in agriculture too risky to implement. The one time a minister tried, his opponents blamed his innovation for the subsequent bad harvests. In this institutional straitjacket the old regime persisted until the end of the eighteenth century, when it came tumbling down in the French Revolution. France remained powerful economically and politically with impressive manufacturing enterprises in textiles, furnishings, wines, leather goods, and printing, but this sector could never grow larger than 20 percent of the economy because it took at least 80 percent of French workers to produce food for the whole country.

The more successful Dutch economy depended upon peace. When fighting for its independence during the sixteenth century, the Dutch navy had been ferocious in its attacks on the Spanish, but with independence finally gained, the burghers of the Netherlands designed their boats for speed and cargo capacity. They carried very light armament. This fact did not escape the attention of the French and English. The famous Dutch flyboats made a most attractive target. Both neighbors—the English three times, the French once in consort with the English—provoked war with the Netherlands in the middle decades of the seventeenth century. They seized the vessels of the Dutch East India Company and disrupted those herring fisheries off the coasts of Scotland and England that formed the backbone of the Dutch commercial empire. While the Netherlanders retaliated with great skill and ferocity, the superior size of France and England won out. During the last war the Dutch prevented a French invasion of Amsterdam only by opening the dikes that held back the waters of the North Sea. In attacking the United Provinces, France and England used their coercive power to win commercial concessions, much as the Portuguese had done in the Indian Ocean. Evidently in the minds of European rivals what could not be gained through competition might yield to violence. Though by no means unable to defend themselves, the Dutch came out of these wars chastened by their vulnerabilities.

Even though the Netherlands surpassed England in wealth and the reach of its trading prowess during most of the seventeenth century, its economic development hit a plateau in the eighteenth century. Instead of pressing on to new levels of development, the Dutch became the great financiers of other countries’ ventures and follies. The American colonists turned to them when they needed money for their war for independence. The Dutch, so inventive in craftwork and commerce, did not become technological pioneers. It took a century before they followed others into industrialization. Even their neighbors the Belgians, who did not succeed in breaking away from their Spanish overlords until 1830, pushed ahead of the Dutch. The Belgians’ abundance of iron and coal played a critical role in their industrialization, making more salient the importance of natural resources to capitalist development.

Dutch success as Europe’s shipper, finisher, and banker may help explain their industrial backwardness. Many a Dutchman or woman found ways to enjoy the good life as a rentier. As was the case with so many successful merchants, many in the Netherlands turned their attention to acquiring status and enjoying the good life by investing in land or becoming bankers, or doing both.
¹⁹
What the Dutch had succeeded in doing was to push to the outer limits the profits from commerce. After many generations of expanding prosperity, their ruling class began to ossify, but not before dazzling the rest of Europe with the wonder of riches created from nothing but hard work and ingenuity. While never becoming poor, Holland and its sister provinces declined relative to their neighbors. Though still thriving in the eighteenth century, they were left behind in the relentless, ceaseless search for new developments that have marked the history of capitalism.

Explaining things that didn’t happen, but might have happened, is always a challenge. Why the arrest in forward movement, innovation, and changes in investment? Were the Dutch, as their critics claimed, smug, complacent burghers with little interest in striking out in new directions once they had found their comfortable niche? Or were there other inhibitors of economic development? One fact does seem relevant. The Dutch never freed themselves of those most ancient of all limitations, food shortages and the fear of famine that accompanied them. Dutch farmers were wizards of agricultural techniques but could produce on the land available to them only two-thirds of the amount needed to feed the people each year. This shortfall made the Dutch crucially dependent upon others. And interestingly, this vulnerability seems to have stifled their imagination more than it caused them hunger. They remained attached to a provisioning mentality that prized security above risk taking.

I began this chapter by noting that commerce had existed for centuries before capitalist practices appeared and would have continued to flourish without that development. I wanted to break the connection in most people’s minds between the discovery of the New World and the emergence of capitalism because capitalism was not an extension of trade. It required a different set of attitudes and skills. Although the term “commercial capitalism” is frequently used, it misleads by giving the impression that commercial capitalism merged into full-blown capitalism. That didn’t happen in many countries, as the experience of Spain and Portugal, even France and the Netherlands attests to. The connection fails on this record alone.

One of the reasons that commerce could not transform, as opposed to influence, the world’s economies is that it involved too small a part of the working population. Farming absorbed upwards of 80 percent of a country’s workers, year in, year out. Changing this proportion would revolutionize an economy—or at least make it possible to do so. Yet the explorations and trading that began at the end of the fifteenth century did do something remarkable: They linked Asia, Europe, North America, and South America closely to one another. Now the world’s countries could not totally escape the impact of events thousands of miles away. A perfect example of this is the conversion of China’s monetary systems to a silver standard that doubled the value of silver worldwide in the early sixteenth century. With this switch came a surge in the production of silver destined for China. Manila galleons brought new foods from the New World, helping to feed more Chinese. As China’s population grew, so did the demand for silver, which served for money on all the linked continents.
²⁰

The novelties from European trade in the East Indies and the New World promoted new commercial institutions, created a fresh group of entrepreneurs, and stimulated the imagination of contemporaries. Public discussions ensued that analyzed these economic novelties. Fresh intellectual interests, enhanced by a new vocabulary, became crucial to the modern transformation of traditional countries. Many mechanical devices and institutional procedures became useful to entrepreneurs without themselves being causes of the emergence of capitalism. The invention of movable type made printing cheaper, promoting a book trade that carried news of explorations throughout Europe. The Greek astrolabe and compass proved a great aid to navigating the waters of three oceans. Italian double-entry bookkeeping enabled merchants to keep better track of their profits. All these improvements contributed to industrial enterprise, but they didn’t cause capitalism to appear; they were propitious factors in its development. Capitalism required a different social dynamic and innovations that changed how food was grown and goods produced.

Because traditional mores were thoroughly embedded in the literature, laws, religious rites, work rituals, and habits of people, they didn’t suddenly collapse; they crumbled slowly. Governments continued to regulate many occupations outside of farming. Statutes and edicts specified the proper procedures in the producing and selling of woolens, the Central European manufacturing sector. In the cities, guilds limited the number of workers in enterprises like making paper, printing books, working leather, and crafting tools. Overseas merchants had restrictive charters. Both England and the Netherlands secured political systems more open to commercial interests during the seventeenth century. The English government remained strongly aristocratic, but much of that aristocracy entered enthusiastically into new enterprises. More important, it sponsored many agricultural improvements that would determine how many workers and how much money would be available for other economic ventures.

CRUCIAL DEVELOPMENTS IN THE COUNTRYSIDE

A
LL ECONOMIES BEGIN
with food production. We know this, but not intuitively. The array of goods at our ubiquitous malls dulls our sense of what scarcity might be like. Famines are things that occur in other, distant lands. Yet they were once as common as the bad weather that caused them. Despite the handsome buildings constructed in the Middle Ages, the universities founded, the wars funded, Europeans—along with the rest of the world—often did not have enough to eat. The very rich might have plenty in the months before the first harvests came in, but most people had to tighten their belts, hoping that the carrots and turnips they had laid down the last fall would not mold, nor a late frost delay spring planting.

There were few ways to preserve food in those days. During the lean months farmers would be hard pressed not to eat the animals wintered over for spring breeding or the seed reserved from the grain harvest for next year’s planting. Dying from starvation was not common, but it loomed as a possibility when harvests fell short. With the benefit of hindsight, we can see the absolute necessity of producing more food with less labor if countries were ever to support other economic pursuits because only the restructuring of farming could free up workers and investment funds needed for, say, industry.

Scarcity exercised a pervasive influence in premodern societies. Public authorities kept a weather eye on each year’s harvest as it came into the granaries to be stored for the coming year. Officials were always on the lookout for farmers who held their grain off the market, hoping for a rising price, or who sold part of it to brewers without permission. Fear of famine promoted pervasive oversight. The growing and marketing of grain were enmeshed in a skein of regulations. Each country’s laws reflected the authorities’ fear of famines and the riots they provoked. Every step in the production of the wheat, barley, oats, or rice—those precious grains that composed the staff of life—came under surveillance.

The great triumvirate of marketing evils in English law—engrossing, forestalling, and regrating—were all felonies. What were these heinous acts? Buying up large quantities of foodstuffs and holding them off the market, waiting for a better price, and then retailing them to others. These old statutes with their wonderfully archaic names, affirmed that the growing and marketing of grains were as much social as economic activities. Grain was not seen as a commodity to be moved through the countryside in search of the best price.

The farmer who grew grain, what the English called corn—be he tenant, freeholder, or landlord—did not really own the crop; he attended it during its passage from the field to the market. He could not store it, he could not move it to a distant market, nor while it stood in the field could he sell it to a middleman. Rather he had to load up his cart with the grain not needed in his household and proceed to the nearest market. There he offered his harvest to his traditional customers. Similarly, the miller who made the flour and the baker who worked it up were constrained to push the finishing process along in an orderly fashion to its final form as a loaf of bread, selling at a price set by the local assize court.