The European economy developed steadily through the final centuries of the Middle Ages, then gained momentum from the mercantilist policies of great states and the exploitation of new lands overseas. In England during the eighteenth century economic progress gained revolutionary force, brought in the reign of the steam engine and of mechanized power, and on the eve of the French Revolution gave Britain a superiority which was to play an essential role during the long struggle that followed. With the advantage of historical perspective we label this economic surge the industrial revolution because we can perceive in it the germ of world transformation. Its development was slow, nevertheless, even in the country of its origin, and the fact that England owed its superiority merely to the first stages of industrialism implies that the continent was as yet scarcely affected. Europe’s economy in the concluding years of the eighteenth century seemed, despite its relative prosperity, to share much in common with the past.
The old methods of production yielded a slow and meagre output. Agriculture was governed by climatic caprice; industry was restricted by the scarcity of raw materials and the inadequacy of power resources. The peasant laboured for his own consumption and sold none of his produce or sold only enough to acquire the cash that king, lord, or landholder demanded of him. The artisan supplied only his local market. Difficulties of transportation forced each district to live off its own produce. Every region jealously guarded its grain crop, exported little, and lacked the means to import.
In large measure, the situation as yet was little changed. England still purchased no more than one-tenth of its wool. Central and eastern Europe lived in a virtually closed economy. Yet natural conditions dictated a certain economic interdependence. This was especially true of the grain trade; Turgot estimated that its volume ran to 25 or 30 million bushels. Spain, Portugal, Norway, and Sweden always bought grain, and Switzerland and Great Britain imported one-sixth of their domestic consumption. There was a regular demand for wood, resin, tars, and potash from Poland and Russia, for minerals and metallurgic products from Sweden and Germany. Wine, brandy, and salt came from southern Europe, soda and wool from Spain, alum and sulphur from Italy. Thus, the eastern, southern, and central portions of Europe supplied foodstuffs and raw materials, and the western areas furnished manufactured goods and colonial products in exchange.
The major avenues of inter-European trade were sea routes, benefiting chiefly the ports and merchant fleets of the North Sea, the English Channel, and the Atlantic. The English were the leading shippers, followed by the Dutch, the Hanseatics, and the Scandinavians. The Mediterranean ports of Marseille, Genoa, and Leghorn still played a role, but the most striking change was a surge of traffic upon the Baltic. This northern trade profited Denmark, ruler of the Oresund; became of vital importance to England’s consumption and to her navy; and brought Prussia, Poland, Scandinavia, and Russia into the European economic circuit.
Commerce within states was relatively insignificant. Here, too, England took the lead, followed by France. Transportation by water was the only economical way to ship goods, but rivers were rarely navigable and canals were few, so land routes costing half as much again were generally employed. Highways in England, France, and the Netherlands were being improved, but elsewhere there were only more or less rocky trails which were unusable during the winter months. Mountain ranges such as the Alps did not yet have roads that could bear vehicles. Even the countries with the best roadways had neither main routes nor rural roads which could carry heavy traffic, and pack animals were still commonly used. In the South and East such difficulties grew more pronounced; whereas fairs were fading in western areas, they retained importance in the south, as at Beaucaire, were especially popular at Frankfurt and Leipzig, and farther east continued to play their medieval role. These conditions indicate that no state could have created a truly national market even if it had not already been divided by internal customs barriers—except for England—and manorial or royal toll houses.
Factors which had stimulated the transformation of Europe’s economy over the past few centuries were still at work. The powerful states of Western Europe had begun to practise mercantilism as soon as they came into being, and eighteenth-century rulers abandoned none of the economic aspects of that policy: prohibition or strict control of imports; navigation acts and exclusive colonial rights; establishment of royal factories and monopolistic companies; privileges granted to private enterprises; controls exercised through the agency of gilds. In England and France there were always loopholes in these controls; gilds did not exist in the countryside and did not extend to all cities or to all trades. The mercantile system had undeniably protected nascent industries from a competition they could not have borne, particularly in the cases of textiles and luxury goods, and the policy had favoured accumulation of capital by reserving to nationals the profits accruing from freight service and colonial exploitation. Late in the eighteenth century criticism from economists began to undermine protectionist policies, but most of the enlightened despots supported them with a vigour befitting Colbert himself. Moreover, if liberty appealed to manufacturers and merchants, they had no intention of extending it to foreign competitors; they remained uncompromising protectionists. Commercial treaties of a liberal nature, such as that signed by Vergennes and Pitt in 1786 or those granted by Catherine the Great to her Black Sea ports, were the exception rather than the rule.
Luxury industries were aided by purchases from princes and courtiers, who set the style for the upper classes; metallurgical industries, shipyards, and textile and tanning factories were aided even more by government orders that resulted from expansion of the armed forces. And, finally, by farming out indirect taxes, by giving commissaries charge of certain public services, and especially by granting them responsibility for supplying the armies out of their own advances, by borrowing with loans granted in perpetuity, by issuing life, or, more often, short-term annuities, governments guaranteed the increasing prosperity of financiers and bankers. The productive activity of these men affected the central treasuries of almost all states.
Furthermore, colonial exploitation regained the importance it had held in the sixteenth century. Once again bullion poured into the Old World, reaching an unprecedented level after 1780. During the eighteenth century 57,000 metric tons of silver and 1,900 of gold were extracted; of these totals, 17,500 tons (30 per cent) and 356 tons (19 per cent), respectively, were mined in the last two decades of the century. Gold was at a premium; in England silver was used only for small change after 1774, and Calonne had to recoin the louis in 1785 to reduce its weight. Latin America supplied more than nine-tenths of the metal for this currency, but Spain and Portugal used it to pay for imports, and it thus passed into English, Dutch, and French circulation. From there a part reached Asia; luxury expenses and hoarding kept another portion in Europe. France’s coin circulation may have ranged from 2 to 3 billion livres. Holland’s per capita coin circulation is considered to have been greater; that of England, now estimated to have been less than a billion, was smaller; and in both countries there was also paper money issued by banks. With an abundant supply of money, financiers had funds at their disposal. They unfortunately followed tradition in offering indebted governments the option on this capital, but some part of it did go into production. Amsterdam was the financial centre of the world. Although its bank was jeopardized by advances to the India Company and to the city, its financiers were still able to provide credit to other states. It was said that they could lend 14 million florins annually and that their investments reached 1 billion. Genoa, Geneva, and Bern also placed funds abroad; London and Paris were more often borrowers. Bankers of these cities maintained close contact. Always on the lookout for advantageous speculation, they built up a network of international finance which ignored national boundaries. Among them were Baring at London, Hope and Labouchère at Amsterdam, Parish at Hamburg, Rothschild and Bethmann at Frankfurt, and the foreigners—mostly Swiss and usually Protestant—who had colonized Paris. The exchange of each city was the gathering place for the money handlers. Dealings in futures had long been practised at both Amsterdam and London.
The increase in specie, boosted somewhat by fiduciary issue in England, by the paper currency of several continental states, by a certain amount of bank credit, by circulation of commercial bills of exchange, resulted in a steady rise in prices. A long-term upward movement which began about 1730 and lasted until 1820 replaced stagnation. Despite cyclical fluctuations, a rise of this nature encouraged investment with the allure of unearned income. An increase in population, marked after 1760, acted as a rejuvenating force by augmenting both consumption and the labour force, but the rise in prices remained a major stimulant to the European economy.
Commercial dealings with overseas territories caused a significant expansion in Western trade. On the eve of the French Revolution commerce with their colonies represented 40 per cent of the trade of France and of England. Both countries fed many colonial products into their exported goods, and because Spain and Portugal purchased those goods, France and England to a certain extent had at their disposal, indirectly, Spanish and Portuguese possessions. In addition, the French and British traded illegally with Spanish America and Brazil. Produce extracted from plantations owned by Europeans and the various profits accruing from colonial development also figured in Europe’s commercial wealth. In 1798 Pitt valued revenue from the American plantations at 4 million pounds sterling and income from the English in Asia at 1 million. The slave trade too brought profits: in 1780 it was estimated that the slave traders of Liverpool earned 300,000 pounds each year; in the decade between 1783 and 1793 they outfitted between 110 and 120 vessels and sold 300,000 slaves for a total of over 15 million pounds.
This new money, concentrated in the hands of relatively few individuals, was spent for luxury items, lent to royal treasuries, invested in land, or hoarded. Nevertheless, a significant part was undoubtedly used to finance enterprises. In regard to technical progress, perhaps the most important stimulus was the introduction of cotton into European industry. From it was manufactured not only printed cloth—the first English machines were put to work spinning and then weaving cotton textiles.
It was maritime commerce which, by the boldness and risks it involved, had produced the first economic innovators. Trade from market to market and then finance in the service of the state were later associated with it. A mentality foreign to the conventional economy inspired these traders. Their attitude, characterized by a hazardous quest for profit, transformed the warring spirit into a ruthless determination to vanquish competitors and made speculation the mainspring of their activity. With them appeared certain characteristics of what we call capitalism—concentration of capital and of business concerns so that exploitation could be rationalized, a development that gave this economic technique cardinal importance in the rise of European civilization. By the end of the eighteenth century domestic trade and even financial transactions were less risky, but maritime commerce was still subject to the hazards of fortune—in France, funds invested in ocean trade were called loans ‘for the great venture’. In recompense, these investments built up huge fortunes. Rationalization of business procedures had long been evident in methods of financial exchange, in use of commercial notes and deposit banks, in development of individual enterprises—firms or business associations—through adoption of double-entry book-keeping, made possible by the use of balance sheets. Monopoly companies introduced another improvement by specializing management, employing technicians rather than shareholders. But this process was in its early stages, and functions were still mixed—the shipowner was also a merchant, the merchant was also a shipper, both were commission agents, underwriters, bankers. Business methods were perfected in slow stages. The exchange was little more than a convenient meeting-place; trading in futures was rare. Few business houses employed commercial travellers, and the itinerant merchants who went from fair to fair as hawkers still played an important role, less to cover the markets than to deal with retailers as small-scale wholesalers. Many of the retailers themselves, such as those called merciers in France, did not specialize in any one item; moreover, in various regions—even in England—villagers supplied their needs by patronizing occasional pedlars.
Commercial capitalism, the master of distant markets, had soon begun to exploit the artisanry and to develop a rural industry which paid low wages and did not have strict regulations. The importation of cotton stimulated these home industries through all Western Europe. Merchants played a varying part in domestic production: some only picked up the finished goods; more frequently they rationalized productive methods by supplying raw materials and equipment, establishing standards, and themselves supervising the preparing and dyeing of cloth. They enlarged the peasant labour force through the offer of extra wages, taught new methods, and lengthened the work day. Women and children were herded into work brigades long before the advent of the factory. Often, what was called the manufactory of a town meant only the aggregate of resident workers employed in the urban centre or surrounding areas. The term acquired another meaning as some or all labourers were later gathered in one workshop and were sometimes forced to live in neighbouring buildings. Production of goods requiring costly equipment did not suit individual craftsmanship: mines, foundries, forges, glass and crystal works, earthenware and porcelain manufactories, paper works, silk winderies, breweries, and distilleries had long gathered the workers under the immediate supervision of proprietors. This system was the most practicable one for new industries such as those producing printed cloth. But rarely was the number of workers thus employed large.
The rise of commerce and industry did not overshadow agriculture as the mainstay of the economy. Everyone was in one way or another involved with land: the individual, rich or poor, who aspired to become a man of property; the statesman who knew that population increase depended upon more food and hence meant more taxpayers and prospective public servants. Yet mercantilism often sacrificed agriculture to industry by curtailing export of raw materials; and administrators hesitated to abandon trade controls despite strong criticism from economists and landed aristocrats. A free grain trade meant high bread prices and would cause starvation and riots. The farmer therefore was forbidden to sell his produce on the spot; instead he had to deliver it to the local market, where consumer pressure or, failing that, the municipality, kept prices down. Domestic trade employing sea routes was controlled by the acquit à caution, which required the shipper to furnish proof that the cargo was unloaded in a national port. Land shipments ran afoul of suspicions from the authorities and popular hostility. Shipments abroad were strictly prohibited. The state was reluctant to allow unregulated cultivation because almost all peasants remained devoted to traditional controls.
The economy of continental Europe thus remained essentially what it had been for centuries. Only in Flanders was intensive cultivation and the stabling of livestock commonly practised—which was made possible by abandoning the tradition of permitting the ground to lie fallow and instead using this land for fodder and oleaginous crops. Elsewhere in Europe extensive cultivation was relied on to increase production: new land was drained and cleared. In mountainous areas and all regions that, lacking lime in the subsoil, were wastelands, crops were raised in strips, fenced against the cattle who grazed over vast common lands. The commons were seeded only rarely, in patches where weeds had been burned off. In the fertile plains village lands were split up into separate fields, which lay fallow one out of every three years in northern Europe, one out of two in the South. Each farmer had at his disposal scattered strips of land within the fields. The strips were elongated and parallel in the North, of irregular shape elsewhere. The ground lay fallow because there was little manure; the peasants fed only a few beasts in stables during the winter because there was little hay; the animals were expected to graze in fallow fields, common lands, and forests the rest of the time. Free pasturage required open fields: enclosures were forbidden altogether in the North and frowned upon elsewhere unless there were large expanses of uncultivated land, as in western France. Free pasturage lost its importance only in the Mediterranean regions, where the few unproductive, small plots, partly irrigated or terraced, were planted indiscriminately in vines and fruit and olive trees.
The peasant was burdened with obligations and either did not possess the means to introduce new methods or else used his savings only to buy another plot. He was usually uneducated and clung to the security of traditional routine. He stubbornly defended the right of free pasturage, without which, he declared, he could not raise his livestock. Along with the right to use forests for building materials and fuel, free pasturage ranked first among the collective rights required for his livelihood.
These are the general characteristics of Europe’s economy. Yet the eighteenth century witnessed decisive economic events. The development of a banking organization, of new business methods, of machines and mechanized power, was to entail a radical change in production, replacing commercial capitalism with industrial capitalism as the driving force within the economy. Similarly, aspects of modern agriculture were beginning to appear.
These innovations were at work in England, a nation which outstripped the rest of the Western world while its continental neighbours were only awakening to new developments, or, in central and eastern areas, were unaware of any changes.
Since the end of the seventeenth century economic progress had given England a clear lead. During the eighteenth, its ships tripled in number and the tonnage they carried quadrupled. In 1788 it outfitted 9,630 vessels, carrying a total of 1,453,000 tons; in 1790 three times as many ships passed through its ports as in 1714. Foreign trade rose from 6 million pounds in exports and the same in imports at the beginning of the eighteenth century to 19 million pounds for imports and 20 for exports on the eve of the French Revolution. Domestic trade was facilitated by coastal shipping, since the sea was never far from any British town. Geography also encouraged the construction of interconnected canals, and roads were improved with Macadam’s process. Soft coal came into more extensive use at an earlier date than on the continent. As early as the fifteenth century commercial capitalism, not satisfied to use artisans of the towns, had begun to develop rural industries.
It is estimated that between 1740 and 1800 personal capital increased 500 per cent in Great Britain. Exportation, the slave trade, overseas plantations, freight services, and insurance brought in enough money to put the nation on a virtual gold standard during the last quarter of the eighteenth century. In 1694, however, business and the state, acting in concert, had founded the Bank of England upon entirely new principles: issue of bank-notes backed by cash on hand, and discounting of commercial notes. In 1789, 10–11 million pounds circulated in the form of bank-notes. Only 1 million at most were exchanged in the provinces, yet Scotland had had its own bank of issue since 1695, and another was established at Dublin in 1783. In addition, there were about sixty private banks in London, nearly three hundred outside the city, and others in Scotland and Ireland that all issued notes on their own authority. The Bank of England, like the financiers on the continent, bowed to a certain extent before needs of the state treasury, accepting exchequer bills and cash vouchers from the ministers. But the Bank also used its own special issue in discounting bills of exchange and thus offered short-term credit to companies. It dealt directly only with citizens of London, but by opening accounts for some private banks, which were adopting the practice of discounting, the Bank of London became a superbank.
The industrial revolution also confirmed Britain’s economic superiority. Metallurgy was transformed with the substitution of coal for wood as fuel: puddling furnaces were introduced in 1783, rolling mills in 1784. An increasing number of machine tools generalized use of iron, which came to be employed in construction of barges and bridges. The fame of Birmingham hardwares spread. The engineering profession assumed prestige in public eyes, as Maudslay later illustrated. Changes in the cotton industry brought even greater fame: the jenny, the water frame, and, after 1780, Crompton’s mule, mechanized spinning. Cartwright’s invention of the power loom promised a similar revolution in weaving. Improvements were being introduced into pottery manufacture and dyeing as well. Watt’s steam engine, perfected between 1764 and 1789, provided a source of power of unsurpassed importance.
Economic controls relaxed, and businessmen attacked the monopoly held by the British East India Company. Yet mercantilism by no means lost all its rights: customs protection, exclusive colonial rights, and navigation acts remained as a defence against foreign competition. On the other hand, agriculture freed itself from tradition and began to modernize as a result of consolidating open-field strips into compact holdings and dividing up the commons. This permitted enclosures and eliminated free pasturage. Enclosures had existed for some time, but now the gentry, masters of the country since the Glorious Revolution, found themselves in a position to enclose on a grand scale. Parliament regularized the process in 1780. Scottish lords began to follow suit in the Highlands. A number of enlightened farmers possessing extensive lands and sufficient capital suppressed the practice of fallow fields, developed fodder crops, and increased their livestock by stabling the animals during the winter and applying selective breeding. The reputation of British herds spread. Following 1688 the great landowners had protected grains by inaugurating a system of corn laws which flouted tradition in allowing exports to continue and in prohibiting imports whenever their domestic price did not exceed a level considered profitable.
The deep penetration of new techniques advanced at a slower rate than has long been believed. Enclosures, perhaps the most advanced of these techniques, let landholders remain in many regions. One cotton spinning factory employed the steam engine; in 1788 twenty-six furnaces, producing one-fifth of the nation’s cast iron, still used wood for fuel. Cartwright’s method was not used for weaving cotton fabrics; the woollen industry had not changed. With the exception of distilling and brewing industries, handicrafts prevailed in London. Even with progress in banking methods England could finance enterprises only to a limited degree, and concentration of industry on any large scale was therefore difficult. The joint-stock company, subject to Parliamentary authorization, had not adjusted to a new era.
In transportation there was an urgent need to revolutionize methods by adopting the steam engine for power. Shipbuilding was undergoing technical improvement, and after 1780 vessels were covered with copper. But they were built of wood and their number and dimension depended on the timber supply—it took 4,000 oak trees to build one large vessel—and on the size of trees—out of 10,000, only one might provide a suitable mast. Most ships were consequently built to carry less than 100 tons; only the East India Company owned a few with more than 800 tons capacity. The vessels could at best travel a slow and irregular course with their clumsy sails. Stagecoaches and diligences had been somewhat modernized, but even the stoutest could carry no more than 1,500 pounds and needed four horses to do so. The transportation industry employed an enormous labour force, and mechanization threatened congestion and unemployment.
A new economic era was none the less heralded. By 1789 England no longer fed its expanded and partly industrialized population from its own resources. Significantly, the depression of 1789 was attributed to over-extension of credit and to clumsy efforts at mechanization, as well as to a bad harvest. When the Bank of England’s discount fell from 58 million pounds in 1788 to 35 million the next year blame fell upon private banks for making advances without thought for the future, thus generating overproduction, and upon the over-abundance of cotton, since not all could be absorbed by the unmechanized weaving industry. It was also observed that war in Eastern Europe shut off the markets and that because England had not widened those markets paralysis gripped the economy. During the Revolutionary and Napoleonic period Great Britain clearly asserted its economic supremacy: it was able to finance coalitions, and, ruling the seas, could open up new outlets for its industry when the continent was blockaded.
The states of Western Europe lagged noticeably behind Britain, not excluding France, which nevertheless led the rest. Stagnation increased proportionately as one travelled eastward.
Europe’s first banks had been established in Italy and then in Holland—at Genoa, Venice, and Amsterdam. But these were still little more than deposit houses: their certificates of payment, although transferable, could not compare to bank-notes; and they did not practise commercial discounting. France alone had founded a Bank of Discount in 1776, authorized by the state to issue notes which could be exchanged for bills drawn upon clients by suppliers. These notes, however, circulated only in the Paris area. There were few private banks, and many of the important cities, such as Orléans, had none at all. Those in existence did not usually issue fiduciary currency upon their own authority. In France an abundant money supply was available only at Paris, where tax collections accumulated; in the provinces credit was rarely offered, and then only at high rates. In Italy endorsement of commercial bills was not practised. Entrepreneurs generally used personal capital drawn from family and friends and mortgaged real property to obtain necessary funds. They had to endure long delays from their buyers, even when the purchaser was wealthy, and so resorted to accommodation bills. The law recognized only ‘general companies’— i.e., firms or other collective organizations—and sleeping partnerships. State authorization was needed to establish a joint-stock company. Stocks were registered, or at least could not be transferred without the company’s consent. Sleeping partners and shareholders lacked the legal protection of limited liability. French jurisprudence, still in an indecisive stage, tended only to restrict the shareholder’s contribution to the company’s assets. In contrast with England, continental Europe lacked a banking apparatus that could accumulate savings and use them to finance new companies.
Amsterdam, Hamburg, and Lisbon were regarded by the British as important centres—since the Treaty of Methuen Portugal had been virtually an English colony, and Lisbon’s exchange had figured prominently at London—yet the only country to offer what the English considered significant competition in the area of trade was France. Traffic from France alone could stand comparison with that of Britain: it surpassed one billion livres on the eve of the Revolution. True, its balance was unfavourable—542 million livres in exports and 611 million in imports—but over 200 million of the imports were brought in from the colonies. The merchant marine, in contrast, was relatively small, even with two thousand ocean-going ships. Communications within the country were still in a backward state. The only serviceable canals were those of Flanders and the southern region; three others, in Picardy and Burgundy, still had to be completed. Rivers were little used—two hundred ships a year sailed through Château-Thierry, four hundred through Mantes. The state was making a great effort to construct a network of royal roads under the direction of trained engineers from the ministry of roads and bridges, using corvée labour, but this was still far from complete, and no work was being done on either the connecting or local roads. Internal customs barriers and tolls exacerbated regional particularism. Only recently had grain been shipped from province to province, and almost all areas continued to raise their own grapes. The capital city of the kingdom exported few of its goods to the provinces, and of the 75,000 tons it shipped, none went to southern France.
Business, particularly maritime commerce, was traditionally of primary importance to the French economy. Marseille continued to thrive; Nantes gained a prominent position during the eighteenth century, Bordeaux in the latter decades of that period. Several industries, particularly sugar refining, brought new wealth to the ports. Finance in the service of the king had always been responsible for the accumulation of large fortunes. Commercial capitalism had begun to expand, employing the artisanry. As early as the sixteenth century in the silk centre of Lyon the ‘manufacturer’ had become a businessman who imported silk and exported finished goods, employing the local silk weavers as his salaried home workers. Domestic industry spread and was given official authorization by the king’s council in 1762. Many provinces benefited from it: Flanders produced linen cloth, wool, and cottons; Cambrésis, Hainaut, and Vermandois, linen and batiste; upper Normandy the cotton print of Rouen as well as wool; Maine and Brittany, linen; Champagne and Orléans specialized in knitted goods, Languedoc in cloth. There were also factories in the true sense of the term. Some were founded by the king for production of luxury goods; others manufactured munitions, anchors, and cannons for the navy, guns and sidearms for the army. In some cases individual names were associated with particular industries—the ironworks of Creusot, and of the Périers at Chaillot; the textile factories and printed cloth manufactories of Alsace and of Jouy-en-Josas, where Oberkampf set up his industry: the chemical works of Chaptal at Montpellier. The administration leaned towards less economic control, but approached the issue in an indecisive fashion. Turgot suppressed the gilds; his successors re-established them, after introducing certain reforms. Businessmen grew more insistent upon exclusive colonial rights and customs protection as the threat of modernized production from England increased. The liberal treaty of 1786 provoked countless protests.
The French did not lack an inventive spirit. Berthollet transformed the bleaching process in 1785; the Montgolfiers had launched a balloon. Industrialists were interested in new machinery, and a few Englishmen provided workers for cotton. Yet in 1789 France had only an estimated 900 spinning jennies, as compared to 20,000 in Great Britain. The Périers built a few steam engines, but they were as yet used only in the mines of Anzin, Aniche, or Creusot. Metallurgy had undergone little change and, dependent upon wood for fuel, remained widely scattered.
Agricultural production in France slowly continued to improve. Corn had transformed it in the south-west, vineyards spread throughout the nation, potatoes and fodder crops were cultivated. The government endeavoured to improve the breeding of stock, and its agricultural associations lavished advice upon farmers. Yet traditions persisted. Special efforts were made to increase grain production in particular, but instead of practising intensive cultivation the grain growers usually chose to clear new land, often indiscriminately. The aristocracy inclined to follow the example set in England, as the physiocrats advised, but in this respect, too, the administration hesitated. Louis XV was content to authorize the enclosure and partitioning of communal lands in a few provinces, with mild success. Similar vacillations marked government policy towards the grain trade: internal restrictions were abolished by Bertin and then by Turgot, only to reappear later.
France remained a nation of agriculture and of handicrafts. The development of capitalism and of economic freedom met strong resistance on French soil, a fact which was to be of major importance during the Revolution: within the Third Estate, disagreement broke out between the upper bourgeoisie and the lower classes; the controlled economy of the Committee of Public Safety was thwarted by inadequate transportation and scattered sources of production; a nation still deeply attached to traditional economic methods did not think its neighbour, ‘modern Carthage’ whose power rested on credit and a thriving export trade, was invincible.
The countries bordering on France had similar economic histories but had not kept pace with the French because, with the exception of Holland, they did not profit as much from territories overseas. Nevertheless, Spain, and Catalonia in particular, seemed to be realizing some progress after Charles III authorized several ports to trade directly with the colonies and strengthened customs protection. The rise of rural industry, and particularly the production of cotton goods, brought new life to several regions—Switzerland, the Black Forest, Saxony, northern Italy—but mechanization lagged. Switzerland was beginning to use the spinning jenny, and it was adopted at Chemnitz in 1788. The coke furnace appeared in the Ruhr.
With the exception of regions bordering on the Baltic, Central and Eastern Europe did not participate extensively in international trade. Commercial capitalism took root only in a few port towns and in even fewer interior cities, mainly for the purpose of exporting raw materials. Enlightened despots practised a kind of borrowed Colbertism with promising but modest results, and they encouraged—or founded, as the situation required—factories. The mining and metallurgical industries of Silesia and the Urals were created and nurtured in this way. In some areas trade had subjugated artisans, such as the weavers of Silesia. Home industries developed in the Bohemian countryside, but Prussia’s government proscribed them, finding that cities lent themselves better to the collection of taxes. Agriculture was little changed. A few men praised the English techniques—Thaër in Germany, for example, and Kraus at Königsberg—but they had few followers. Expansion of Baltic commerce encouraged grain production in surrounding areas. To increase produce landlords evicted tenants and enlarged the manorial domain to practise extensive cultivation with corvée labour. Governments, however, did not always leave them free to act: Prussian kings laid some limitation upon peasant dues; only Denmark consented to enclosures in Schleswig and Holstein, benefiting the squires.
By the end of the eighteenth century the economic revolution inaugurated by Great Britain seemed to confirm Europe’s supremacy, although an observer fifty years earlier might well have been dubious. He might have noted that the wood supply was diminishing while industrial production increased but little, that agriculture appeared incapable of supporting the labour force; and that if the West did not succeed in supplying its overseas territories, colonial exploitation might soon exhaust them. Europe, it had seemed, might suffer the same fate as Rome, whose purely commercial and financial capitalism had ultimately ruined its conquered territories. Now, however, optimism was justified. Wood was being replaced by coal and iron, the steam engine and power-driven machinery were augmenting production, and Europe’s agriculture fed its labouring population. The continent had not yet shifted to a new economy, but this was only a matter of time—provided that peace continued.
In any case Europe was growing increasingly wealthy, especially in the West, as was to be expected.1 The precise rate of enrichment is not known. It is believed that the national income of England and of France had more than doubled during the eighteenth century. These nations were able to raise taxes and borrow money. While England’s national debt rose from 16 million pounds in 1701 to 257 million in 1784, that of France, reduced to 1,700 million livres in 1721, rose to 4.5 billion in 1789. Ease of material existence and refinement in human relations reached new and higher levels, although, naturally, improvements affected the upper classes most of all.
Ostentation has never been confined to any particular period, but an outstanding trait of the eighteenth century was the pursuit of well-being and of pleasure, enhanced and moderated by a more refined comprehension. To huge livingrooms intended for pomp and display were added comfortably furnished apartments that could be easily heated and were preferred for daily living. Styles of furniture changed accordingly—proportions were modified, curves replaced rigid lines, seats were padded; comfort and attraction were enhanced by varied lines and delicate ornamentation. Use of exotic materials such as mahogany spread; Alexandrian décor followed the discovery of Pompeii. Manners grew more polished in salon society, where gallantry tried its skill at respecting decorum within the confines of a clever remark.
In the cafés of Paris a more mobile, liberal, and varied society developed. A spreading thirst for knowledge led to more and more academies, reading rooms, lectures, and courses. Sentiment and sensitivity, charity and philanthropy lent new aspects to the enjoyment of life. Talleyrand turned the phrase, but many others, less fashionable than he, were to look back nostalgically upon the douceur de vivre of pre-Revolutionary life.
The new wealth filtered down to the artisans, to shopkeepers, and to well-to-do peasants. This was evident in a greater consumption of certain commodities. Tea-drinking, for instance, was becoming the custom in England. In 1784, 8.5 million pounds of tea, exclusive of contraband, were imported; and when Pitt lowered the customs duty this figure jumped to 12 million pounds two years later. Coffee enjoyed the same success in France. Sugar became a popular commodity; the English are said to have consumed ten times more than the French. Chocolate and tobacco, beer, wine, and brandy were articles in popular demand.
The rise in population is the most noticeable fact concerning the condition of the wage-earning classes, and the rate of increase continued to rise during the last decades of the century. France gained 3 million inhabitants after the Seven Years War. Britain grew from a nation of 5.5 million to one of 9 million people in the eighteenth century; Austria increased from 20 to 27 million, Spain from 5 to 10 million, Italy from 11 to 18. Fewer famines, plus the additional resources offered by industrial progress, lowered the mortality rate.
There are, of course, many qualifications necessary. In Central and Eastern Europe aristocrats continued to inflict physical punishment on their ‘dependents’. In Western Europe aristocratic manners were growing more refined, but not necessarily more moral. The nobility thought itself born to live on a plane above the common man and too frequently displayed its extravagant and libertine nature. Among the lower classes, poverty and ignorance often encouraged drunkenness and violence. The petty bourgeoisie, the artisanry, and the wealthier peasantry were the most attached to restrained conduct, but were not exempt from crudeness and cruelty.
It is none the less true that Europe’s enrichment was the basis of an optimism whose intellectual expression was the idea of progress and which encouraged the men of that era confidently and boldly to undertake the reforms that concomitant changes in social and intellectual life seemed to demand.
1 According to a new method of calculating imports, exports, and re-exports, worked out by A. H. Imlah (‘Real Values in British Foreign Trade’, Journal of Economic History, VIII [1948], 133–52), Britain did not grow rich from its balance of trade. Its balance of payments was, nevertheless, favourable, since abundant capital was available for investment in the economy, especially in industry, and was used to underwrite loans asked by the government. Freight service, insurance, and commissions undeniably contributed to exports. But during this period England did not furnish capital to continental Europe. On the contrary, the Dutch and Genevans had large investments in England, which weakened the balance of payments. It can therefore be concluded that Imlah’s figures prove the essential importance of revenue from overseas territories—from the slave trade, funds tied up in plantations, salaries and pensions of the India Company agents, individual speculations by colonial traders. This was undoubtedly true not only of England but, to a varying degree, of the other colonial powers.