Tom Kemp – industrialization in nineteenth century europe
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French Economic Development a Paradox

French I 19^th century profoundly influenced by two circumstances

1. British I dominant position export markets – French entrepreneurs at disadvantage never recover
2. Revolution: output to unproductive sources and curtails trading links with overseas world and indirectly through creation land settlement retards economic growth, creation industrial working force and resources and to industry.

By standards of 18^th century advanced, rel. wealthy – prosperous trade despite lack of empire, thriving middle class.

Lot of peasantry poor and miserable but retained his own land – feudal relationships as well – landlords did little to invest in and neither did peasants, bought little to market as mostly subsistence – peasants bought little and nobility luxury items – government revenue also luxuries and paying for wars – church consumer traditional goods.

Small inefficient productive unit for handicrafts to meet demand – poor transport meant little competition and small markets – some machinery late 18^th but industry remained archaic.

Technical change in French industry before 1789 limited application cf. England – various inducements to entrepreneurs and innovators Louis XIV and Colbert – hot-house growths – bureaucratic design without economic base.

1715 internal development from trade, but prosperity mainly linked to ports – did not transform internal economic structure as commodities not produced by new methods like Britain – fluctuated with empire and wars.

Landlords some effort latw 18^th to improve land – tended to increase income by exacting more from peasantry – patchy efforts half-hearted support from the peasantry.

Structural change in Britain – substantial part of population depended on production and sale of commodities or upon the sale of its labour – intricate system division of labour ad market relations penetrated into social life – France traditional agrarian relations great majority populace largely self-sufficient peasants.

Economic Social Structure of pre-Revolutionary France before – many disincentive investment for capital in industrial production without state support – risks high, markets prospects doubtful, rate of return less than other fields – bourgeoisie more interested crown lands and offices which draw capital away from more productive fields – inducements to pursue a business career and to become dedicated to accumulation for the family firm greater than in France.

Conditions old regime permitted steady rate of growth and some dev. Capitalist activity – institutions and structures which its survival was bound precludes anything like IR – al necessary conditions could not be bought together without reshaping of institutions inconsistent with capitalism.

Revolution provides favourable juridical basis for full and free development of capitalism – allowed scope individual enterprise BUT revolution negative effects – loss trade links hampers ports most prosperous area and continental system did not provide British goods into Europe or aid French industry.

Openings for industrial investment little attraction ,men with money – chronic political instability encouraged speculation not investment, men stamp bought land and property

Revolution strengthens the lot of the peasants and encourages them to keep land and hold on to it at all costs. – difficult to reduce weight agriculture in the French economy or to improve the productivity of land - little chance of capitalist farms being extended at the expense of the peasantry

Revolutionary settlement and partage encouraged all sons to stay on the land – material conditions of peasants poor but weak incentives to leave the village.

Brake on industrialisation - purchasing power and incomes kept down – limiting market and discouraging investment – recruitment to industry more difficult labour on and, concentration self-sufficiency and of husbandry means output grew slowly peasant sector – land was wasted instead of arable usage.

Preservation old-style agric. limited division of labour and expansion of the internal market – French economy remained until well after 181 old 18^th century type – paradoxically rev. created near perfect legal and institutional conditions for full flowing capitalist relations left intact major social barriers to their realisation in the industrial field.

1789 – 1815 – little incentive or scope for large scale investment in new methods of production – encouragement offered by Napoleon little appreciable effect – needed capital investment big enough to effect structural transformation speed up growth other sectors – few signs of this changing after the revolution.

BUT revolution relased economy from the straitjacket of the old regime – post 1815 bourgeoisie consolidated its social influence and its wealth- agric. output slowly increased – without spec. departures industrial growth made possible and incentives for new machines and power developed in Britain – steady growth wealth and rising incomes widened the internal market.

Industrial entrepreneurs adapt to market and emphasis quality not cost – low cost production – prestige abroad with French fashion and taste still much production consist of transformation local materials and agricultural products by village craftsmen and small town artisans

New changes bought about piecemeal in traditional structures NOT modern plant for mass production – putting out textiles iron and coal rely peasant rural labour – exception like Alsace uses British and advances machinery.

1830s industrial sector growing rate emerged within predominantly agrarian economy – market expanded slowly due to poor transport – technical improvement absorbed slowly and selectively over a protracted period – some used industrial inferiority to go for high end markets – others satisfied with routine production under tariff barriers.

Wealth locked up in land and not easily tempted out into more productive outlets – not credit or banking systems to spread capital. Reflective of lack of need for credit than causal factor – railways offered opportunities from which banks willing to profit – responded to growing demand investment capital and chronic need for short-term credit.

Modern large-scale industries main beneficiaries of admittedly slow growing railways – no evidence in 1840s or later for Rostow take off – maintenance steady rate of growth one qualitative breakthrough after another – France as a whole not economically stagnant – new forms of wealth

Ethos of enterprise – preferred frequently security to risk taking, clung to obsolete methods, looked to government to protect them from foreign competition and retired early to live on their rentes. Not to blame business men but blame environment that they operate in: structure as a whole that main attention should be directed.

Post 18521 new railway projects + public works required raising large amounts of capital – establishment new financial institutions and adoption new banking methods – Credit Mobilier – raised money for direct investment in business concerns – established baking houses adopted similar practices in line with the needs of the new form of capitalism. – funds property owning classes tapped intoi, investment habit spead, apparatus of credit grew up

Railways growing but many rural areas still untouched – regional or local markets still prevail – railway network tended to confirm and intensify the centralization of economic as well as of administrative activity – even more than before talent tended to be drawn away from the provinces to the capital

Acretion rather than leaps and bounds industry playing increasing role in society

1860 Commercial Treaty – reduction of tariffs – stronger firms were strengthened and weaker + less competitive firms went to the wall.

Industry in particular depended to a large extent on the old forms of investment represented by family capitalism – increased weight of heavy industry

No uniformity to growth and development – many lacked capital to push ahead with mechanization – internal demand held back by preservation large agrarian sector – demographic trend slowing ate of popn. Growth repercussions on industry – distinctive character of capitalism take into 10^th century

Cause French retardation? Lack of acumen and business enterprise – does not account for real growth and technological advance which took place in modern, large-scale industry – Schneider, Peugeot, Michelin – lacked large export markets of Britain – nature of internal market – encourage stereotypes.

Banking system could have changed but were adapting themselves to the market – investment habits hard to change – intermediary bank too many foreign loans – Tsarist Russia in particular.

Whole complex of institutional and structural conditions gave France its peculiar physiognomy + characteristic weakness – useless to blame entrepreneur, banking system, state, tariff, lack of cheap coking coal or bourgeoisie as a whole

National self-sufficiency in basic foods and a balance between industry and agriculture believed to have special virtues – peasantry seem socially stable – little done to challenge their position

Despite large population engaged in agriculture ad excellent physical conditions – Prench proiducts, exception luxuries and wine found little place in the markers of the industrial countries of Western Europe.

Was there a connection between demographic pattern and lack of adaptation to modern requirements of parts of the economic and social structure?

Large progeny incompatible continued wealth due to partage even bourgeoisie – much wealth still in land and property.

Small family size response to the individual possessiveness with permeated French society after the Revolution – wealth grew steadily individual encouraged to seek self-advancement without excessive risks or obligations – popn. Growth represented a rational adaptation to the specific features of economic and social development found in the country – respect for progress as long as it did not threaten to provoke radical change

Long draw out, piecemeal character of industrialisation – steady growth, large areas rural – perpetuate these traits – capitalism small town prevailed in non urban areas – little changed since 18^th century – town market centre for peasants, home small town middle class traders and professionals men, men of property on a modest scale, safe outlets for capital penetration of advanced business methods into such a milieu was extremely slow – still indispensable as purveyor of goods from the outside world and supplier of professional services – as long as old-style capitalism would continue – microcosms of old society remain

Not on the entrepreneur or number of missing factors distinguishing characteristics of society as a special historical product whole complex of interacting factors contributed

ALL POTENTIALITIES FOR GROWTH NOT REALISED – institutions of capitalism operated in this particular historically conditioned environment in such a way as to prevent a major breakthrough favourable to a more rapid and throrough IR – favourable legal foundations of FR laid for capitalist development – preceded coming together of necessary conditions for rapid industrial change – advantage to small-scale (even preindustrial) forms of capitalism assoc. with commercialisation of agric. products and petty production

Opportunities which the Revolution offered for self-advancement favoured speculation and the acquisition of land by the middle class – by their influence on state bourgeois talents into state and admin – could have gone into business – allowed peasants to stay on land – Britain’s head start and allowed to large share of world markets

French Revolution of 1789 made it difficult for French to close the gap on Britain – lacked stimulus large + growing export market – many industrialists showed enterprise by developing external market for products higher finish and quality – nature of internal market large rural sector = remained built-in obstacle to rapid-industrialisation .

Other Notes in this Category

1. Adaptations of the Traditional Sector
2. Conclusions
3. Definitions and Historiography
4. Direct Transfer
5. Economic Growth in france and britain, 1830-1910 –a review of the evidence
6. Grantham: survey of cliometric contributions to french economic history
7. Growth Rates, Data and Methods
8. Indirect, Embodied Transfer
9. Kindelberger’s review of keyder and o’brien
10. Pioneer industrialiser
11. Post 1750 Growth Coke-Smelting Sector
12. Richard roehl – french industrialisation: a reconstruction
13. Structural Change
14. Technological Transfer: failure, partial adaptations, success
15. The Innovations of the coke blast furnace, of puddling and rolling
16. The modern technology breakthrough ‘right down the line’
17. Tom Kemp – industrialization in nineteenth century europe

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