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Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 111
Photo II-0-1. A Watt Steam Engine: From a reciprocating motion to a rotating motion suited to industrial application
https://upload.wikimedia.org/wikipedia/commons/9/9e/Maquina_vapor_Watt_ETSIIM.jpg
CHAPTER II ECONOMY AND SOCIETY 1715-1815
1. Population and Agriculture 115
Demographic Adjustment; Demographic Change; Agricultural Revolution; Agriculture in Continental Europe; Sea Fisheries
2. The Industrial Revolution and Technology 131
British Industrialization; Textile Industry; Iron and Steel; Steam Engine; Chemical Industry; the Spread of Industrialization
3. Commerce and Transportation 145
European Trade with Colonies; British Foreign Trade Policies; British Foreign Trade; Voyage to the Pacific and the Second New World; the Continental System
4. Finance and Banking 163
British Fiscal and Monetary Institutions; Taxation and Debt Finance in France; Finance in the Netherland, Spain, Portugal; Fiscal and Monetary Adaptation for the New World
5. The Change of Society in European States 181 Britain; France; Austria and Prussia; Poland and Russia;
Spain and Italy; the Netherlands and Scandinavia; the Ottoman Empire
(Please click each line to see the first page of contents)
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 112
Photo II-0-2. British Agricultural Revolution: an Image of certain Inventions Source: http://flagro.fladby.com/pictures/threshing.jpg
Photo II-0-3. A Cotton Mill constructed by using the latest technology in 1800 http://www.saburchill.com/history/chapters/IR/images/190306111.jpg
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 113
CHAPTER II. ECONOMY AND SOCIETY 1715-1815
The eighteenth century was revolutionary not only in politics but in economy: the demographic,
agricultural, industrial, commercial, transport, and financial revolutions were initially led by the
British. The continental states had experienced the impact of broader structural changes, taking
place in the international economies, with varying degrees of intensity, speed, and with different
timing; so that they had formed different patterns of economic growth by their needs to catch-up
with. During 1650-1750, the European economy suffered from a serious recession because of
war followed by disease and famine. Since then, the European population exploded from 140
million in 1750 to 266 million by 1850 due to the rising fertility and falling mortality rates. The
explosively rising population increased demand of basic necessities for eating, clothing, and
housing. The rising demand for food raised the prices of farm produce, which made agriculture
profitable so that landlords and tenants commercialized the primary sector by maximizing output
with minimized costs. This was the beginning of the agricultural revolution in Britain. The
enclosure movement was to develop open fields, common lands, meadows, and wastes for more
arable lands; and the fertility of soil was improved by marling, manuring, and drainage. The
Norfolk four-course system was introduced by rotating the wheat-turnips-barley-clover; and new
subsistence crops - potato and maize - were introduced and steadily diffused. As more efficient
and intensive cultivation promoted the farm productivity, the farmers grew industrial crops such
as timber, linen, hemp, and pitch. In the process of industrialization, farming tools were replaced
by cast iron and standardized by factory product for better cultivating, sowing, harvesting,
threshing, and transporting. The farm became larger in size, more efficient in production, and more
profitable in sales. Meantime, the pastoral farmers labored selective breeding of livestock, and
produced more dairy products with hides and wool. The agricultural revolution in Britain spread
widely to continental states with appropriate adjustments.
The British led the industrial revolution since they created demand for manufacturing goods
with the agricultural surplus; maintained favorable conditions for production in terms of labor,
capital, and technology; abandoned mercantilist protectionism and embraced the free trade
policies based on laissez faire; and improved transportation and communications by the infra-
structure investment. The first industrial revolution in British was developed in such sectors as
follows. First, the textile industry relied on spinning and weaving, which processes were
mechanized by John Kay and some others. Their inventions improved efficiency in production
and transformed the putting-out system into a factory system with standardization of products.
Second, Abraham Darby invented the process of smelting iron ore with coke for cast iron, which
freed the iron industry from reliance on charcoal. This was further improved by some others, as
the atmospheric steam engine replaced wind- or water-mills as sources of power in the iron and
steel industry. Third, James Watt obtained a patent for a steam engine: improving power trans-
missions to the wheel, he and his partner extended the use of engines to flour milling and cotton
spinning. The engine and the power transmission system were further improved by some others
later, which extended the use of engine to trains and ships. Fourth, the chemical industry became
more important in industrial life: furnace techniques transformed the metallurgical, glass, and
pottery industries; the process making artificial soda was used for manufacture of soap, glass,
paper, paint, pottery, and other products; and gas was used for light, heat, and cooking. The
industrialization in continental Europe was substantially slower than in Britain so that they
acquired new technology and established technical schools; their government subsidized the costs
of technical training and granted for the introduction of new technology; and their banks mobilized
capital resources to invest on a large scale in chemical and heavy industries.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 114
The commerce made another revolutionary stride in the century. Portugal monopolized the
trade with the East Indies and Spain did the same with the West Indies in the sixteenth century;
and the Dutch dominated the world trade in Asia, Africa, and Americas in the seventeenth. The
British and the French entered competition in trade: the former dominated the world trade in the
eighteenth century. Colonizing the thirteen American states, Canada, India, and islands in the east
and the west; the British exported manufactured goods to their colonies and imported raw
materials from them. To the East Indies, since few European goods were saleable, some profits
from the intra-Asia trade could partially reverse the trade deficit. The European states thus had
constantly pursued to protect mercantile interests overseas and to ensure supplies of essential
commodities by expanding colonies. “The economic advantages of possessing oversea territory,
as distinct from merely having access to it, were less obvious in the early nineteenth century than
they had been in the eighteenth. American commercial success in China and the South Sea,
without benefit of colonies or naval bases, supplied an object lesson.” After Waterloo, British
public opinion displayed little imperial enthusiasm, as several colonies became profitless in
possessions. Meantime, the French colonies had almost disappeared; the Spanish Indies were
largely semi-independent; the Dutch ceded most of its holding in the East Indies to Britain; and
the Portuguese decayed but survived in Timor, Macao, and the settlements in India, Angola, and
Mozambique in addition to Brazil. In the post-Napoleonic age, no serious threat existed to British
power so that they assumed that they had a right to trade anywhere. For a time being, they “stood
benevolently aloof.” If France and Russia challenged her overseas interests, it might cause a naval
arms race to maintain freedom of action in the maritime and colonial fields. In fact, the failure of
the Continental System made Napoleon invade Russia in 1812, which was the beginning of the
fall of Napoleon, and of the rise of Britain as a super power.
The fiscal and monetary institutions in the European states had been problematic throughout
the century because of the rising war expenditures in limited resources of each nation state - the
Great Northern War, the War of Polish Succession, the War of Austrian Succession, the Seven
Years' War, the American War of Independence, and the Napoleonic Wars. The ratio of tax
revenue to GDP in France was 9.4 percent in 1715 and 6.8 percent in 1788, while that in Britain
remained at the level of around 12.5 percent. The French institutions were inferior to the British
one because of the diversity of tax regime, tax exemptions for the clergy and nobility, unsecured
property rights and lack of legitimacy of taxation, and the private tax collection by contractors of
the tax farms. Spending 1.3 billion livres each for the Seven Years' War and the American War
of Independence, the French government by 1785 was on the verge of bankruptcy, and very few
financiers wanted to lend them. The financial crisis became one of major causes of the French
Revolution. Due to continuous wars, most European states faced such serious financial problems
as France. Finally, economic and political changes transformed European society. The rising
population and urbanization intensified problems of feeding, housing, and sanitary conditions of
the working class; the rise of capitalism created a class war between the rich bourgeoisie and the
poor proletariat; in the process of industrialization, the Protestant ethic emphasized capitalistic
efficiency with profit motive, which was different from the agrarian regime; and the industrial
revolution spread the ideas of capitalistic efficiency as much as socialist equality. The French
Revolution and Napoleonic Wars destroyed the ancient regime, but the landed nobility and the
rich commoners led politics and economy in European states, so that their societies remained in
stable by putting one leg in the old regime (reality) and the other leg in the new regime (ideal).
As a result, the ruling class of Europe emphasized higher education for the elite class or at least
including bourgeoisie, but not for the working classes, because they wanted the status quo and
could not accept a society ruled by the proletariat majority.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 115
1. Population and Agriculture
The population in Europe declined from 73 million in 1300 to 45 million in 1400 due to famines,
diseases, and wars; but revived from 1450 and recovered to 81 million in 1500 and 105 million in
1600; and the rising pace of growth was disturbed down to 115 million in 1700 because of the
recurrences of the same. In agriculture, the old feudal system rapidly declined in the sixteenth
century due to the impoverishment of the landed aristocracy and the massive loss of inhabitants.
Liberating the serfs by 1500, most countries in the west of the Elbe like Germany and France
developed a tenant farmer system; and rural society in countries like England was transformed
into a three tier structure: landlords, the tenant farmers, and the agricultural laborers. However,
countries in the east like Poland, Russia, or Rumania restored the feudal system benefiting from
the recurrence of wars by forcing serfs not to leave the land. During 1350-1450, the falling
population reduced the demand for food stuffs causing their prices to fall, and resulted in low rents
and high wages in production. The land owners adjusted the use of land by switching from labor-
intensive farming to land-intensive pasturing or planting of cash crops. During 1450-1600, the
rising population raised rents and reduced wages, which problems was resolved by two ways. First,
factors generally affecting agricultural output are weather conditions, available land and soil
fertility, a wide range of corps and rotation, plant or animal diseases, advanced tools and
equipment, proper knowledge and management skill. The ways increasing agricultural output are
in the more cultivated area, the more frequency of cropping, shifting to higher yielding crops,
technical advance in farming, the division of labor and regional specialization, and seasonal
migration. Second, the ways of demographic adjustments lie in fertility control, migration, and
mortality - falling fertility and rising mortality reduce the population growth.
In the seventeenth century, the population declined in countries like Germany, Poland, and
the Mediterranean states, and stagnated in northern Europe. However, the European population
increased to 190 million by the end of the eighteenth century. To avoid social unrest, European
rulers sent the surplus population to their colonies in America, Asia, and Africa – from and to
which they imported raw materials and exported manufacturing goods. Since material gains came
from additional lands, major powers competed with each other for more colonies, which caused
so-called imperial wars in the coming centuries. The overpopulation is defined by three ways.1
First, Malthus views that “overpopulation occurs when population growth causes output per head
to fall to the subsistence level and rising mortality causes population growth to cease.” He argues
that population rose geometrically but food supply increases arithmetically due to diminishing
marginal returns of production as technology remains constant. Second, assuming that other
factors influencing productivity are held constant when population changes, the optimum level of
output is derived from the ideas of increasing and decreasing returns of production:
“overpopulation occurs whenever population exceeds the optimum for a country with given
resources and technology.” The optimum level of population exists at the point where the
marginal output per head equals the average output per head on the population-output plane. Once
the optimum level is established, overpopulation can be measured by the difference with actual
population. Since it is based on a static assumption, the technological progress can change output
per head. Third, overpopulation is defined by rural underemployment, so that it occurs "when the
marginal productivity of labor is zero." It is difficult to measure rural under-employment, due to
various types of rural works and seasonal variations of labor demand. In general, overpopulation
is related to agricultural output and employment levels, so we can apply either the consumption
or the production approaches to measure the surplus population: that is either the lack of food
(food shortage) or the lack of jobs (underemployment).
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 116
Photo II-1-1. Population of England and Wales in 1780 Source: http://i1.wp.com/www.intriguing-history.com/wp-content/uploads/2011/12/19th-century-workers-Google-
Search.png?resize=350%2C200
Photo II-1-2. Cotton Plantation Farming, 1800 Source: http://www.landofthebrave.info/images/cotton-plantation-southern-colonies.jpg
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 117
Demographic Adjustments in Europe Pre-1750: General figures of population in Europe
are "only approximations" until the first national censuses were taken in 1801 in France and Britain,
although the parish registers in European archives show the number of baptisms, marriages, and
burials. The population grew, stagnated, or declined according to the degrees of fertility, mortality,
or migration. Without migration, the demographic change in a certain region depends on the
difference between rates of fertility and mortality. The factors changing the population are (1) the
crisis such as famine, disease, war, and unemployment that increased mortality, postponed
marriages, reduced marital fertility through birth control or abortion; (2) the social structure that
affected the population growth - higher fertility in industrial villages than in agricultural areas was
observed from 1730 onwards; and (3) group characteristics like religious minorities affecting the
population change - Jews were forced to reside in an unhealthy urban environment, but their
medical skill, hygienic regulations, and family structure were favorable for demographic growth.
The population growth affects politics, economy, and society. First in production, overpopulation
reduces labor prices and falling wages make producers use more labor and less capital, resulting
in labor-intensive production; and inversely, under-population results in capital-intensive
production by labor-saving technology. Second in consumption, population growth demands
more supply of food, that raises food prices, making agriculture profitable; but inversely, the
falling population reduces food prices, making the agrarian sector decline. Third in politics,
overpopulation induces migration from rural to towns, and urbanization forces political power to
shift to the bourgeoisie. As the surplus population migrated to the colonies, the major powers in
Europe exploited commercial gains and fought each other for more colonies, which caused
imperial wars. Fourth in society, overpopulation stimulated social changes: a different
composition of the people required new rules and created new customs of faiths, particularly after
the religious reformation and migration to foreign countries.
(a) Mortality: People died from the crises of famine, disease, and war before they reach the
ages of natural life. Until the mid-eighteenth century, the demographic changes of Europe were
“cyclical or wavelike” - inhabitants moved out their village altogether that disappeared, and they
might return as the crises were over - because of crop failures and famine, bubonic plague and
other epidemics, and religious wars for three generations. The supply of grain and flour was
crucial for the survival of the ordinary people. Successive poor harvests or crop failures caused
the shortage of food, which raised grain prices, resulting in hunger and famine. So malnutrition
weakens the physical resistance against diseases, causing the rising death rate; agricultural
slowdown reduces jobs in the countryside, and rising unemployment increases in the number of
beggars spreading contagious diseases that increases the death rate; and famines and pessimism
defer marriages and causes temporary loss of births, and the death of one spouse cuts off new
conceptions, which also reduces the birth rate. Thus, a bad harvest and famine resulted in rising
mortality and falling fertility. In the absence of the crises, normal mortality might carry off
"roughly 3 percent of a population each year" in the sixteenth and seventeenth century. In a crisis
year, "over a wide area this figure might rise to 6 percent or even 10 percent, and in more restricted
areas it was known on occasions to rise to 30 percent or 40 percent." Infant mortality for three
centuries of pre-1750 in Europe was running at around 150-250 per 1,000 live births, and their
survival rates at age 10 were 624 in England, 516 in France, and 533 in Switzerland, but there was
no clear pattern in the local or regional variations. Most epidemics were quite local but killed a
significant number of the people. The population loss from wars should be examined carefully:
the death in battles as well as the out-migration of the refugees at the time of war reduced the
population in the region until they returned after peace; and military activities contributed to the
spread of diseases by carrying bacteria in often and wide movements.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 118
Bubonic plague dominated the mortality crises from the fourteenth to seventeenth centuries,
so that both quarantines and sanitary control continued. Major Italian cities had permanent health
boards by 1600, followed by France, Holland, and Switzerland. “The quarantine period for any
person, transport animal, or goods wishing to cross the frontier was twenty-one days in normal,
plague-free time; forty-two days when there were rumors of plague in the Turkish empire; and
eighty-four days when plague was known to be present in the Balkans.” The failure of control
caused the plague to enter parts of northern Europe in 1710-11 and Marseilles in 1720, but the
disappearance of plague in Europe accelerated the population growth in the second half of the
century (though Moscow suffered from it in 1771). Europeans suffered from epidemic diseases:
cholera, tuberculosis, typhoid as well as periodic epidemics of dysentery, smallpox, typhus, and
influenza. The unsanitary conditions of poverty and the habits of hygiene helped the spread of
disease. “The habits of private hygiene as well as the practices of public hygiene seemed
conspiratorially designed to propagate diseases. Bathing was infrequent; water supplies often
contaminated; housing extremely overcrowded and poorly ventilated; clothing rarely washed or
changed. Above all, the disposal of waste was entirely haphazard, not only creating a pervasive
stench in the cities, but posing a danger to health in city and countryside alike.” Generally speaking,
medical profession in the eighteenth century was “under-manned, ill-equipped with knowledge or
technique, and distrusted by the mass of people, who preferred folk remedies and home-brewed
concoctions to its dubious treatments. There were few practitioners to begin with, and they were
concentrated disproportionately in the cities. In any case even the most progressive practitioners
understood little about the etiology or prevention of contagious diseases.”2 In 1776, the French
Royal Society of Medicine was founded and began to investigate the symptomology of disease
and the conditions that seemed to promote it. Doctors began to understand smallpox, and a form
of inoculation was developed by Edward Jenner in the 1790s.
(b) Fertility: The role of nutrition and disease was essential for the rising or falling rates of
mortality and fertility, while crop failures caused critical problems of poverty-stricken peasants in
most European states. [Note that the demographic growth in the second half of the eighteenth
century is principally explained not by better health care and hygiene, but by more stable and
better food supplies due to milder climate, improvement in live-stock breeding, introduction of
new crops such as maize and potato, and marginally improved trade and transport.] The first
determinant of overall fertility was marriage since there was little fertility outside marriage in early
modern Europe. The proportion of women at age fifty who married was from 80 to 90 percent of
all female in common; some of not-married (10 to 20 percent) would bear illegitimate children,
and others might be incapable in the reproductive process, though illegitimate births seldom rose
to 5 percent of all births (France kept below 2 percent). Two or more times of marriages amounted
in some cases to 15 percent of all marriages. The preventive check - postponed marriages, birth
control, or abortions - reduced the active reproductive years to 15 years in average, which was
much less than 35 years of that by nature. The average age at which men married seems to have
been no less than thirty, and single men and women worked and saved for years to establish their
own household. The range of mean ages of women at first marriage fell within 2.1 years range
between 24.6 and 26.7 years old in Europe in the period of pre-1750; while that of women at birth
of last child fell within 2.4 years range between 38.5 and 40.9 years old.3 For all married 1,000
women who lived in each age group by country, the women group aged 20-24 produced 414-509
children a year; the group aged 30-34 produced 344-401 children a year; and the group aged 40-
44 produced 138-190 children a year. Each woman produced more than 5 children on average.
The birth rate was also affected by the length of effective marital union, and the prolonged
separation of husband and wife throughout their reproductive ages.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 119
The most important demographic effect was in late marriage checking on the birth rate. “The
deferral of marriage until the late twenties was a widespread, natural form of birth control.
Moreover, this practice was evidently not offset by sexual relations outside of marriage, which
would likely have resulted in higher illegitimacy rates.” The Catholic religion emphasized that
married love was in moral rather than sexual passion: adultery was considered as a moral sin, and
sexual activity was permissible only for procreation. “Among certain priests in Catholic Europe
conjugal life became a matter for the confessional, and they did not hesitate to interrogate and
exhort their parishioners on this subject.” Contraception was the other element of preventive
check by curbing instinctual drives to promote rational economic ends. “It is also possible that
women were inducing their husbands to practice contraception simply to reduce the strain of
constant childbearing without requiring abstinence.” Malthus did not expect the practice of family
limitation: a married couple postponed its first child, spaced the children at wider intervals, or
ceased to have children at a certain point even though the wife was still fertile. The average
number of children of the French aristocracy, for example, declined from six during 1650-70 to
less than three during 1700-50, and about two during 1750-1800. “As a consequence, since
members of the aristocracy tended to marry very young (unlike the peasants and workers), the
mother’s age at the birth of her last child dropped from an average of thirty-one to twenty-five.”4
As employment and income was available from domestic industries, the need for land to feed a
family was reduced so that constraints on marriage became minimal. The industrial expansion in
the late eighteenth century increased the proportion of early marriage that brought more births
than the average of the previous period. Seeing that the population increased at high rates even in
some other non-industrial countries, we should consider political and social factors in its
determinants that disturbed fertility and expedited mortality.
(c) Migration: It was an important tool for demographic adjustments. In early modern Europe,
the population remained relatively static in predominantly agrarian society tied most people to
their land: a substantial proportion of the population "remained rooted to the parish of their birth
generation after generation." In the short run, a woman migrated at marriage to the place of her
spouse, a young man took up an apprenticeship, and an elderly person moved into an urban
hospital for the care of illness. In the long run, rural populations grew faster than urban
populations, so that the rising population caused fragmentation of land holdings by sons and
daughters. Since insufficient lands could not support their families, farmers even in the most static
society were forced to move out of their birth villages. So the surplus population of rural areas
naturally moved into towns, where the men seek apprenticeship to industrial occupations or
unskilled jobs available there, and the women search for jobs in textile industry or in domestic
service. Since the agricultural surplus of rural areas to feed towns people were limited to a certain
capacity, the share of urban population "could never have exceeded 25 percent of the whole" in
early modern Europe. However, the rapid expansion of cities needed significant labor forces for
their rising industry and commerce. The immigration to towns was vital, but problems of
sanitation, water supply, overcrowding, and poverty caused high mortality and created the
permanent urban shortage of labor. Meanwhile, new land or newly available land by drainage or
by new borders as a result of war required the resettlement by newcomers. Military activities
caused many large-scale and long-distance movements of population, and their service resulted in
a high proportion of death and hospitalization. Religious differences caused major migrations as
experienced in the Jews and the Moriscos from Spain, the Huguenots from France, and the
Dissenters from England. Thus, caused by overpopulation with its consequent threat of poverty
and the lack of food supply, migration in its root was an effective way of resource utilization in
order to resolve problems of food shortage in a region or a state.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 120
Demographic Changes in Europe 1750-1850: In the eighteenth century, growth rates of
population in European countries were much higher than those of the previous two centuries. The
population of Europe rose by 35 percent from 85 million to 115 million during 1600-1700, and by
65 percent to 190 million during 1700-1800.5 "Between 1750 and 1850, it grew from an estimated
140 million to 266 million souls"6 which means that in a half century, around 50 million souls
were added during 1750-1800 and 76 million souls during 1800-50. [Note that the European
population increased to 401 million by 1900: 135 million souls were added in a half century during
1850-1900.] Europe in 1800 was probably "the most highly populated part of the whole world,
with a density of about 18.7 inhabitants per square kilometer." In fact, Europe's share of the world
population increased from about 21% in 1800 to 22.23% in 1850 and at least to 25 % in 1900.7
The major shares of European population in 1800 were in 26.9 million souls in France, 24.5
million in Germany, 23.3 million in Austro-Hungary, 18.1 million in Italy, 11.5 million in Spain,
and 10.9 million in Britain. As the industrialization pushed more workers into cities, the urban
populations increased rapidly: the population of London grew from 959,000 in 1801 to near 2.4
million by 1850; that of Paris rose from 547,000 in 1801 to over 1 million by 1850; and that of St.
Petersburg rose from 200,000 in 1800 to 485,000 by 1850.
The mortality rate declined somewhere between 1750-1800 because of the decline of the
death rate from famines, diseases, and wars. First, agricultural productivity was increased greatly
during 1750-1825 due to "improved farming methods, and quite particularly to the introduction of
artificial manures, of new methods of crop rotation, and improvements in live-stock resulting from
planned in-breeding and cross-fertilization." Improved nutrition provided more resistance to
disease and lowered the rate of mortality. Second, “significant improvements in public health
reduce mortality, particularly in childhood. These are not so much medical breakthroughs as they
are improvements in water supply, sewage, food handling, and general personal hygiene following
from growing scientific knowledge of the causes of disease and the improved education and social
status of mothers.”8 Though most Europeans still suffered from various epidemics, a medical
progress contributed to stopping the cause of disease: Edward Jenner used cowpox to treat
smallpox, Robert Koch found bacteria causing diseases, and Louis Pasteur created vaccines for
rabies and anthrax.9 From the mid-eighteenth century, the mortality rate began to fall in Europe,
and continued to fall while the economy was expanded. The decline in death rates and the rising
survival of children changed the age structure of population.
The fertility rate, as noted previously, is affected by the marriage rate - age of marriage,
average life expectancy of a married couple, temporary migrations, economic factors, the state of
health, and so on. The birth rate began to decline in the nineteenth century, while the marriage
rate remained more or less stable. “The general fall in the birth rate was due to a host of factors,
all, however, closely related to economic and social changes: the decrease in infant mortality due
to better sanitation; industrialization; the trend towards individualism; the wish to rise in the social
scale; the spread of education; the women’s franchise; the decline of religious beliefs and their
replacement by rationalist norms.” International migration was of two types - spontaneous or
government sponsored – in the eighteenth century. France sent 100,000 people to Canada by 1800;
the European population of the British colonies in America rose from 250,000 in 1715 to over 5
million by 1800; and 200,000 Germans were living in America by 1776, and 17,000 of their
mercenaries took up residence in 1784. Frederick the Great brought 300,000 immigrants as
settlers into Prussian villages, and Catherine II of Russia tried to settle the southern steppes with
Russians and Germans. Russians immigrated to Siberia counted 575,000 settlers; Germans settled
in the Baltic states, Poland, and Russia as administrators and traders, and new settlements. Some
300,000 of the Swiss served as mercenaries under neighboring rulers.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 121
(a) England in 1750-1850: “By the 1550s, the population had nearly recovered to the pre-
Black Death level, and there were steady increases during the 1600s and 1700s. However, through
the 1800s the population virtually doubled every 50 years. The increase would have been even
greater, but many people emigrated in search of a better way of life, to the United States and then
in the British Dominions.” In England and Wales, the population increased by over 58 percent
for a century from 5.8 million to 9.2 million during 1701-1801; and total real output was doubled
during 1750-1800 and tripled during 1801-51. The rate of economic growth surpassed that of
population growth, average income per capita doubled in the first half of the nineteenth century.10
So the standard of living of ordinary Englishman improved, but personal income was unequally
distributed, and growth rates were different between the primary and the secondary sectors -
industrial output rose at three times the rate of agricultural output in the eighteenth century. Since
the agricultural and the industrial revolutions began in the second half of the eighteenth century,
we can assume that the revolutions could contribute to the population growth. In fact, the English
population almost doubled in eighty years from 6.5 to 13.9 million during 1751-1831, which was
paralleled elsewhere in Europe at this time because of rising fertility and falling mortality. The
falling mortality is explained by improvements in medicine, sanitation, and preventive treatment
in the late century; improved diet by the spread of potato and other new crops; the disappearance
of bubonic plague; and the end of the Napoleonic war. The rising fertility is explained by
industrialization encouraging early marriage that resulted in higher births since higher wages could
properly feed families. “The percentage of the children born in London who died before the age
of five decreased from 74.5 per thousand in 1730–1749 to 31.8 per thousand in 1810–1829.”11 A
survey shows that the life expectation at birth of British peers rose from 32.9 years in 1675-99 to
49.2 years in 1800-25. "The trends in mortality and fertility are still unknown for much of Europe
before the middle of the nineteenth century.”
The population of England and Wales nearly tripled in a century from 6.5 million to 17.9
million during 1751-1851, but historians view that 1840s were a critical turning-point. First, a
surplus population could not find full-time jobs in agriculture, so that part of them migrated from
the countryside to towns for many possible employments in manufacturing industries, commerce,
and other service sectors including household servants. All English towns gained over 742,000
people during 1841-51 and 620,000 during 1851-61 through migration from the rural areas. "In
London in 1851 only 46% of the adults were born there, in Norwich and Sheffield one half, and
in Manchester, Bradford and Glasgow little more than a quarter were natives." The proportion of
rural to total populations declined from 74.9 percent in 1751 to 65.9 percent in 1801, and to 46.0
percent in 1851 (urban is defined as places with a population over 2,500). Second, although the
urbanization absorbed the rising rural populations, the countryside was under pressure from
unemployment, which caused the Malthusian threat to be real and the migration to the American
colonies practical from the mid-eighteenth century. As the economy was more industrialized after
1861, the proportion of rural population rapidly declined in the second half of the century (to 22
percent by 1901). The emigrants from England and Wales to foreign countries increased from
23.7 thousand during 1825-29 to 677.7 thousand during 1850-59, and to 1.7 million during 1900-
09. Internal migration greatly exceeded emigration except a few decades in the nineteenth century,
so that "the main safety-valves for rural England and Wales were English cities rather than
overseas farmers."12 Third, "the repeal of the Corn Laws opened England to the cheaper grains
and meats of Russia, the New World and later Australia. English agriculture no longer had to
provide the 'means of substance'; indeed it is doubtful if it could have. Free trade was therefore
critical." In other words, the Industrial Revolution resolved unemployment problems and gains
from trade allowed England to purchase the food from foreign countries.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 122
(b) France in 1750-1850: The population of France increased by almost 45 percent from 19.5
to 27.5 million during 1700-1801, mainly after 1750. The French population increased by 30
percent to 35.8 million during 1801-1851; and by only 8.7 percent (3.1 million) to 38.9 million
during 1851-1901; which were far below the English case. "The crude birth rate remained above
30 per thousand until 1830 and then fell away, until on the eve of the First World War it was below
20 per thousand. The crude death rate also fell slowly after 1801."13 The fall in the death rate can
be attributed to an increase in agricultural production and the improvement of transport, but "there
is no reliable evidence to show that agricultural output increased much faster than population in
the eighteenth century." During a century 1750-1850, the population growth in France was far
less than that in England, but the rural population in France increased nearly as fast as that of
England, particularly during 1760-80. "The slow rate of growth of the French population between
1800 and 1911 was primarily due to a fall in marital fertility." The gross reproduction rate in
1816-20 was 201 and had fallen to 165 by the 1880s, due to a rise in the age of first marriage of
women. The first census was taken in 1801, but the first reliable census of France was that of
1821. Liberal economists in the 1820s argued that "poverty was a result of excessive population
growth" and historians believe that the population pressure in the countryside was a contributory
factor in the rural uprisings. The overpopulation is evidenced in the rising land values and rents
with high food prices. "Cereal prices rose by 65% during 1769-1789 and continued to increase
during the Revolutionary and Napoleonic period, although they did not reach the extraordinary
heights found in England at that time." In the subdivision of farms, the number of families holding
farms less than 1 hectare in designated four French villages was 490 in 1720, and rose to 870 in
1782-1800. A significant proportion of landless people existed in the rural in the 1780s. France
remained overwhelmingly rural until the mid-nineteenth century as industrialization was delayed.
The demographic response to population growth can be explained by domestic migration and
emigration to foreign countries. As discussed, the rising rural population in England during 1750-
1850 was effectively reduced by migration from the rural to the urban areas and by a lesser degree
of emigration overseas. However, in France, migration from the rural to the urban areas had little
effect until after 1850s due to delayed industrialization. Statistics show that the share of rural to
total populations slowly declined from 85.6 percent in 1811 to 82.2 percent in 1851, and to 68.2
percent in 1901. The loss of population from rural areas to towns remained from 0.40 to 0.67 per
100 rural populations during 1856-86. Some historians believe that the 1830s mark the turning-
point of migration. First, in France the lagged industrialization could not create enough jobs in
towns to absorb surplus labor of the rural areas. But in the second half of the nineteenth century,
as industrial wages were double agricultural wages, wage differentials began to attract the rural
population to the towns. Agricultural workers remained in the farms, while non-agricultural
workers in the countryside moved to towns. Second, England had a large-scale enclosure
movement to loosen ties with the soil, but France had no this kind of movement, so that
landownership of the peasants was increased. Third, in the middle of the nineteenth century, "a
substantial proportion of French industry was still carried out in rural areas, not yet having
succumbed to the competition of factory products." Hence, the seasonal migration of labor in the
countryside gave supplementary incomes to the rural poor. Fourth, there had been emigration from
France to overseas before 1800. By the beginning of the nineteenth century, there were few outlets
overseas except Algeria due to the failure of French colonial policy. However, at least two million
French people left France in the century; and in each decade, immigration exceeded emigration
except during 1851-72. Without immigration, the population of France would have hardly
increased at all in the second half of the eighteenth century. “Unlike the rest of Europe, there was
no strong population growth in France in the 19th century and first half of the 20th century.”
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 123
The Agricultural Revolution in England 1750-1850: Agriculture provided subsistence for
peasants and a steady income for landlords. "It was a small-scale type of cultivation whether by
serfs, sharecroppers, tenants, or petty proprietors. Villages were organized communally in the
sense that similar routines were followed by all members of the rural community. Common lands
and open wastelands were generally used for grazing their livestock and for fuel" while the
techniques were traditional and inefficient. The agricultural revolution began in England when
the growing population reached unprecedented levels – from 5.7 million in 1750 to 16.6 million
by 1850 – and surprisingly demanded more food, that raised prices of farm produce, particularly
in London and its suburbs, which stimulated the agricultural production in the countryside. Both
landlords and tenants made profits by increasing the farm production owing to "the selective
breeding of livestock; the removal of common property rights to land; and new systems of
cropping, involving turnips and clover."14 There were three classes in farming of England: first,
the great landlords and gentry were an educated class of rulers and administrators who drew their
income from the rents of land and such estate profits as arose from sales of timber and mining
royalties; second, the owner-occupiers or yeomen were farming their own land in a small scale
and sometimes renting additional land from a landlord; third, the cottagers were landless rural
people who had cottages and rights to use common land, and laborers were hired year by year and
lived in with the farmer and his family as farm servants. According to Gregory King, the farmers
in England and Wales numbered about 330,000 at the end of the seventeenth century, among
which 150,000 were the great landlords and gentry, and the remaining 180,000 were owner-
occupiers. However, the proportion of owner-occupiers declined from 20 percent of the land in
1750 to 12 percent of it in 1850; and the proportion of farm cottagers and laborers to land occupiers
increased from 1.75 in the early eighteenth century to 2.75 in 1831 because the rich purchased
more land from the owner-occupiers for profits from commercialized farming.15
The growth of large estates in the hands of a class of landlords improved cultivation to exploit
farm profits and increased in the number of tenant farming, establishing the landlord-tenant system
in England. It is one of partnership sharing the costs and risks of farming: "The landlords provided
the basic necessities for good farming, ideally an enclosed, convenient farm, with the buildings
well maintained and the land in good heart, and the farmers provided the stock and working capital,
and the vital element of skill and enterprise." This partnership made the English landlord-tenant
system reasonably efficient and flexible. However, there was a numerous class of small cultivators
depending on their few acres for a living, having a small surplus to exchange for necessities, and
raising cow, some pigs and poultry. The specialization was made in particular crops as well as in
fattening, in dairying, fruit and hops in various parts of the country: "the bread grains, wheat,
barley, rye and oats were grown very widely, it is clear, but with considerable regional
concentration." Potato-growing developed on a large scale, and other vegetables were also
cultivated. The Scots and Irish cattle flew into England and fattened in the countryside for the
local markets. The influx of Scots cattle into England were at least 30,000 heads at the time of
the Act of Union, but the number increased to as many as 80,000 cattle and 150,000 sheep by
1750. Large quantities of cheese, bacon, and malt were traded for the delectation of the London
housewives and their families. "Norfolk and Suffolk were famous for their turkeys and geese,
which every August began the long journey to the capital, proceeding in carts or on foot in droves
a thousand or more strong, and feeding on the harvest stubbles as they marched." Milk could not
be transported more than ten miles so that dairies were located near or within the large towns,
though butter could come from the farther place. The rivers or coastal shipping were indispensable
to transport agricultural products, though limiting the shipment to less than 20 to 30 miles to a
port, and the main roads like turnpikes were developed for better land transportation.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 124
The English thus experienced remarkable expansion and improvement in agriculture in the
eighteenth century as the growing population and increasing demand for farm produce raised its
prices and made agriculture profitable, so that landlords and tenants tried to maximize output by
reducing costs. An estimate indicates that output of agricultural produce increased by 43 percent
over the eighteenth century "due more to the increase in sown acreage than to an improvement in
yields." Enclosure was the vital element: "Where enclosure led to the abolition of fallows, the
effective acreage of newly-enclosed parishes was increased by up to a third or a half." Many
enclosures were not only concerned with open fields but were directed partly or entirely towards
the proper cultivation of overstocked or neglected commons, or the bringing into production of
waste land from moors, marshes, and forests. In addition, the more efficient and intensive
cultivation raised the farm productivity: "a better balance between arable land and pasture, the
creation of more convenient and larger farms, and the use of better rotations with roots and
legumes, improved breeds of sheep, cattle and horses, and more efficient implements."16 The
improvement in farming in the eighteenth century were in the spread of more flexible rotations of
crops, embracing roots (turnips, later swedes, and mangolds), legumes (clover and sainfoin), and
improved grasses (ryegrass); "which by providing more fodder enabled the land to carry more
stock, which in turn enriched the soil with their manure." Farmers became to know that legumes
added new nitrogen to the soil: legumes "have bacteria attached to their roots, which convert
atmospheric nitrogen into nitrates in the soil that can be used by whatever plants are grown there
in the following few years." The Norfolk four-course system (the wheat-turnips-barley-clover
rotation) was not only prevailed in England but also influential on continental farming: "wheat
was grown in the first year, turnips in the second, followed by barley, with clover and ryegrass
under-sown, in the third. The clover and ryegrass were grazed or cut for feed in the fourth year.
The turnips were used for feeding cattle and sheep in the winter."17
The natural fertility of the soil was improved by marling, manuring, and drainage. English
farmers manipulated the texture of their soils: "If the soil was light and sandy, they could resort to
marling, binding the soil with claylike substances so that it would retain water and fertilizer more
effectively. If, on the other hand, the soil was too heavy and claylike, they would introduce chalk
and lime mixtures to break it down into a finer texture, so that it would not clot in very wet or very
dry weather." Marl was dug in pits where it occurred near the surface and was carried in wagons
to the fields to be spread. Meantime, a variety of manures were in use as a fertilizer. "The folding
was systematic, acre by acre, and often the farmers pooled their flocks and hired a shepherd to
regulate the business. Sheep there were valued more for their dung than their wool." Livestock
manure is less rich in nitrogen, phosphorus, and potash that synthetic fertilizer. But "manure is
rich in organic matter, or humus, and thus improves the soil’s capacity to absorb and store water,
thus preventing erosion." Moreover, some land requires irrigation or drainage before its use for
any agricultural production. The method of surface drainage “by which the land was raised in
regularly spaced ridges and the rainwater led off in the furrows to the lower ground, was widely
used through the Midlands and other areas of heavy soil." On the other hand, selective breeding
of cattle developed the Shorthorn producing more and better milk and beef. Robert Blackwell
began his livestock experiments about 1745, and developed a new breed of sheep that "fattened
rapidly and had a high proportion of saleable flesh to bone" with a wool of reasonable quality. He
also produced the modern Shire horse, "a breed which sprang from the midland war horse modified
by crossing with continental mares." He also developed a method of watering meadows with
irrigation channels that received many noble visitors. Thus, “by 1800 the importance of quality
in livestock was becoming fully recognized by progressive farmers, and animal husbandry had
made a giant stride away from the haphazard breeding and indiscriminate standards.”
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 125
The farmer's tools were made of wood and wrought iron and generally crude and inefficient
in the eighteenth century. But in the process of industrialization, tools were substituted by cast
iron and standardized by factory product. (i) Cultivating Implements: The Rotherham plough was
based on Dutch designs and patented in England as early as 1730. It was "a swing plough with a
curved mould-board which performed its function of turning over the earth much better than did
the straight board formerly used; but its chief advantage lay in the design of its main frame, making
it smaller and lighter, and requiring fewer draught animals than traditional ploughs." (ii) Sowing
Implements: Jethro Tull invented seed-drills and horse-drawn hoes; drill-ing seeds in widely-
spaced rows, and regular hoeing of the soil between the rows, providing two advantages - saving
seeds and keeping down weeds. (iii) Harvesting Implements: Many reaping machines were
invented in England and America between 1780 and 1850. Joseph Voyce gained a patent for a
reaping machine in 1800, that used a series of scythes projecting from a circular disk; Patrick Bell
brought out the cutting apparatus in 1826 consisting of a series of scissors, and the grain was
brought on to the cutter by sails; and Cyrus McCormick invented the first reaper in America in
1831 to be generally adopted - cutting was done by a knife and cutter-bar, and the machine was
pulled, not pushed. Robert Salmon designed a simple haymaking machine about 1800; and the
mowing machine was developed as a by-product of corn harvesters. (iv) Threshing Machinery:
Andrew Meikle built the first successful threshing machine consisting of drum and concave in
1786. "Improving on earlier designs, it could be driven by steam, water, horses or hand, and
together with the later winnowing machines greatly shortened the time-honored process of
threshing the corn with flails and winnowing it by throwing the grain into the air by hand." (v)
Farm Transport: Although wheel-less sledges and barrows remained indispensable in the steep
hilly areas, "the two-wheel carts were supplemented or replaced by large four-wheel wagons
which could carry much heavier loads."18
The Enclosure was to develop open fields, common lands, meadows, and wastes in England
in the eighteenth and early nineteenth centuries. It was led by over 4,000 Acts of Parliament and
by private agreements between owners of land; and the great volume of enclosure was enforced
during 1764-80 and 1793-1815. The Acts made it possible “for the owners of the greater area of
land to force the hand of other proprietors in the village who might be opposed to the change.”
The main objectives of the enclosure were in more efficient farming, more profitable uses of land,
and the expanded area of land under regular cultivation in order to produce more food for the
growing population. The enclosure made farms more compact, larger and easier to work, made
possible a better balance between arable and pasture, encouraged the adoption of alternate or
convertible husbandry, and allowed better care of animals. Old arable land became profitable with
permanent grass or long leys; commons and rough hills were improved “by ploughing up and
putting under a suitable rotation” and waste was “cleared, ploughed up, and made valuable by a
judicious application of marl and manure.” The enclosure made well over 6 million acres arable,
a quarter of cultivated acreage, for English farming. Some enclosures were “to improve efficiency
by getting rid of tithes and by bringing order and greater convenience into a parish, where through
the years the gradual, piecemeal reduction of the open fields had resulted in an unwieldy complex
of tiny closes.”19 The enclosure was financed more by current estate income than by borrowing:
it is estimated that rents became doubled after enclosure, and landowner’s gross return on his
investment was “probably between 15 and 20 percent” on average. In the long run, larger farms
were more efficient and competitive, as farms over 300 acres were about one-third of the cultivated
land and farms less than 100 acres accounted only for 22 percent by 1851. The process of
enclosure created a landless working class that provided the labor required in the new industries
developed in the north of England, while the poverty was increasing in the countryside.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 126
Since the demand for grain was relatively inelastic, its prices depended on the supply due to
good or bad harvests. As farms grew in size and communications improved in the eighteenth and
nineteenth centuries, the movements of prices influenced more closely the lives of a rising
proportion of farmers. Much of English farming was mixed: "the cultivation of arable crops was
associated with the fattening of cattle and sheep, so that the great majority of arable farmers were
concerned with the prices of a number of quite different products." The Corn Laws were to control
the grain market largely by encouraging export and restricting import, which kept home prices
rather higher than they would have been. Before 1750 prices of grain and animal products were
low "mainly because of lengthy runs of good seasons, but also because the growth of the cultivated
acreage and the gradual improvements in land-use, fodder supplies and rotations, raised output
beyond the increase in consumption." In 1750-90, the general trend of agricultural prices was
upwards after the rising consumption by an increasing proportion of non-agricultural population.
The improving standard of living with industrialization raised the demand for meat and dairy
produce more rapidly than that for bread corn, the mainstay of the poor. After 1850, the production
of meat and dairy produce were more profitable than that of grain so that there was already a
considerable margin between the rents of the grassland farmers and of the arable farmers.20 The
prosperity of farmers depended on the rising income: revenues minus production costs - rents,
wages, and taxes. In the later eighteenth century, taxes rose heavily due to the poor law and war
expenditure; and at the end of the war, the prices of farm produce fell more rapidly than the costs
of production, though conditions had improved by the later 1830s. For example, during the wars
of 1973-1815, grain prices rose rapidly: “In the early 1790s wheat hovered about the level of 48s.
to 58s. per quarter …. In 1810, 1812 and 1813 the annual average was over 100s.”21 Meat prices
rose by between 70 and 100 percent "from the pre-war level of about 3s. to 4s. per stone" until
1802, though the average prices fell to 5s. 3d. per stone during 1800-15.
The British experienced the three great food crises in 1795-96, 1800-01, and 1809-12; and
the labor unrest forced the government to intervene "with bounties of imports and restrictions on
consumption" by substituting potatoes and rice for bread to reduce wheat consumption of the poor;
while "landlords and farmers enjoyed highly profitable conditions." In 1832, the Royal
Commission on the Poor Law proposed the new law governed by two operating principles: one
was less eligibility that "the pauper should have to enter a workhouse with conditions worse than
that of the poorest free laborer outside of the workhouse" and the other was the workhouse test
that "relief should only be available in the workhouse."22 The Parliament passed the Poor Law
Amendment Act in 1834 that overhauled the existing system and established the commission to
oversee its national operations for the giving of poor relief. On the other hand, the Corn Laws in
the eighteenth century encouraged exports of grain by a bounty when home prices were low, and
allowed imports at low rates of duty when home prices were driven up by bad harvests. As far as
they encouraged exports and restricted imports, the Corn Laws must have kept home prices rather
higher than they helped to stabilize prices and operated with fairness as between the interests of
producers and those of consumers. Due to the rising power of landlords and gentry, the new Corn
Laws after 1790, particularly of 1815, imposed agricultural protection by securing profitable
prices for English grain producers with high levels of duties on imports, although a much lower
range of preferential duties applied to grain from British colonies. In 1838, the Anti-Corn Law
League appeared and pursued economic advantages of free trade by demanding imports of cheaper
grain and more exports for more employment. The League mobilized public opinions to increase
its pressure on Parliament, and was politically successful in the Repeal of the Corn Laws by 1846,
which was a strategic retreat of the rich landlords and gentry. This part will be further discussed
later in the chapter of Commerce and Transport.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 127
Agriculture in Continental Europe 1750-1850: Agricultural prices rose or fell because of
changes of supply of and demand for food. During 1550-1650, the rising population and the
expansion of colonial markets increased the demand for food, which caused the agricultural prices
to rise. Moreover, the influx of gold and silver and speeding-up its circulation contributed to the
price revolution in this period. In a German town of Speyer in 1520-1621, for example, the price
of rye rose by 15 times as much, of wheat 13 times, of meat or salt 6 times, while wages rose by
2 to 3.5 times as much. Although there were some differences between towns or regions, real
wages fell significantly in this period.23 The high cereal prices stimulated farmers to produce more
output by expanding the cultivated area through reclamation, drainage, and polders. In the
reclamation, waterways were improved and dry areas were irrigated; for draining marshes,
financiers and technicians formed companies. The Netherlands largely developed polders. As
cereal prices rose, arable husbandry was so profitable that arable rents rose much higher than those
for meadow and pasture and pasture was converted to arable. In Maine of France, vineyards were
ousted by cornfields; and buckwheat was greatly demanded because it was one of the cheapest
foods suitable for the poor soil of that region. In Germany, cattle-farming and meat consumption
did not keep pace with the rise of population. A historian views following reasons: the growth of
population; the decrease in the import of beef from south-eastern Europe due to the Hungarian-
Turkish war; the urbanization prevented townsmen from keeping as many pigs as before; the
shrinking of the oak and beech forest reduced pigs; it was more profitable for the remaining
grassland to keep horse and pigs than cows; and the fall of real wages reduced the purchasing
power of consumers. The high cereal prices made it worth for farmers to buy manure and to use
marl, lime, clay, sea-sand, shells, or seaweed, as discussed previously, to make the soil richer,
particularly in England and some parts of France.
During 1650-1750, the European economy experienced a serious recession because of war
followed by disease and famine. The Thirty Years' War caused Germany to lose more than forty
percent of its pre-war population, and Spain lost a quarter of the population in the seventeenth
century. The plague, smallpox, and other epidemics hit European countries; and hunger from
famines expedited the depression. The symptoms of the depression were in "falling cereal prices,
relatively high real wages, little reclamation activity, conversion of arable to pasture, expansion
of animal husbandry, cultivation of fodder crops and various industrial crops, in some parts a
transition from agriculture to rural industry, few innovations in farming technique and little
interest in questions of an agrarian nature."24 Strong signs of land erosion appeared and remained
until the end of the eighteenth century when fodder crops were grown during the fallow years.
Falling prices of farm produce and rising wages of farm laborers caused farmhand to be better off
than his master. Statistics of some selective German towns show that the prices of rye fell to 65
percent of its value during the first fifty years in this period. Unlike the previous century, livestock
farming was more profitable than arable, so that plough-land was converted to grassland in major
European countries. "The transition from arable farming to animal husbandry reached a peak in
the seventeenth and the first half of the eighteenth century, above all, between 1719 and 1725, a
time especially low cereal prices." After 1764, cereal prices began to rise again, and the process
reversed itself in some places. When cereal prices were high, farm workers were more beneficial
than weavers in towns and larger villagers, but the situations became reversed when its prices fell.
In the period of depression, there were few inventions in the field of agricultural tools and
technique. In Germany after 1648, "No farmers could be found to repair the deserted farms or till
the neglected soil .... In other places it was the nobles who took possession of the abandoned land."
As a result, for a time being, the agricultural depression contributed to peasant rebellions in some
regions of France as well as of eastern and central Europe including Russia.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 128
During 1750-1850, the rapid increase in population and in the quantity of money led to an
expansion of agricultural and industrial productions after the long recession. Since the additional
demand for food surpassed the supply of farm produce from the expansion of the arable land; the
cereal prices rose; and the rising number of labor forces reduced wages of farm workers. In
selected six German towns, the price of rye increased by 31 percent and wages fell by 8 percent
in average during 1750-99 based on the years 1721-45; and in France, the price of rye rose by 60
percent and wages of workers rose 17 percent during 1771-89 based on the years 1726-41.25
Moreover, “As industry expanded, it created a demand for more horses than ever before, for the
transport of all sorts of goods. The cultivation of fodder crops to feed these animals required extra
land, which would otherwise have been used to grow crops for human consumption. Thus the
increase in the number of horses contributed to the rise in the price of bread-making cereals.” As
both rents and land values rose with the rise of cereal prices, speculators purchased land and resold
it at a profit. “In the Swiss canton of Vaud, land prices doubled, sometimes trebled, in the course
of the eighteenth century.” As real wages fell down, the purchasing power of workers declined
rapidly. For example, cereal prices doubled in Spain during 1750-1800, while money wages
increased by only 20 percent. The cost of living for a family climbed higher, and many of poor
families substituted cheap buckwheat or potato. The higher prices stimulated agricultural
development - reclamation, drainage, and polders; the grassland was converted to the plough-land
for arable farming as discussed previously. In Sweden, the scattered plots of arable were united
through exchange of land; while Spain lost the monopoly of breeding merino sheep, and its
government had no further objections to the practice of arable farming. The high cereal price
spoiled the French wine industry due to more spending on bread. Farmers spent more money on
manuring, soil improvement, and agricultural tools to increase productivity.
(a) Arable Farming: The Netherlands was highly evolved in agriculture, and its provinces
were "the Mecca of foreign agricultural experts, who came from England, Scotland, Germany,
France, Italy and even the United States." They imported large quantities of corn from the Baltic
lands to feed its dense population. Their industry was chiefly textile requiring all sorts of raw
materials: "flax for the manufacture of linen; dyes such as madder, woad and dyer's weed for the
cloth industry; barley and hops for brewing, hemp for rope-making, tobacco plants for tobacco-
making, and so on." The density of population made farmers to grow many of these industrial
crops with market gardening; which was essential to have rich soil for intensive tillage needing
more capital and labor. The introduction of clover or fodder-crops in the fallow year of crop-
rotation made the soil richer by taking nitrogen from the air; animals were fed with more fodder
in the winter season; and farmers could keep more animals and collect more manure to increase
production. The Norfolk system that rotated wheat, turnips, barley, and clover in four years
became popular by enlightened landlords in European countries at the end of the eighteenth
century. The intensive farming needed very fertile soil that was filled by the rotation of clover or
fodder crops, and by collecting more manure from extra livestock fed by additional fodder. Beside
marl, the land in Norfolk was dressed "with loam, gypsum, oyster shells, seaweed, burnt earth,
mud, fish, rape-seed cakes, ash, buckwheat, compost, leaves and town refuse." In crops,
buckwheat has several advantages: "it grows on light, sandy soil and is often grown on burnt-off
fenland; no direct application of farmyard manure is necessary, and it stifles weeds." Maize was
suitable as food for man or as cattle-fodder, and the yield was two or three times higher than that
of wheat. The potato became the main staple food in Ireland because the poor could cultivate it on
a small patch of ground. Major industrial crops included flax, dry plants, coleseed, hops, tobacco,
and sugar-beet, in various regions. The Flemings grew fodder crops, followed by the English; and
the French began to grow turnips, clover, sainfoin, and lucerne after 1760.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 129
(b) Animal Husbandry: The stocks are important for pastoral farmers to produce cheese,
butter, milk, meat, hides and wool for the market as well as the farmer's own household; and for
arable farmers to use the large animal - horses, oxen and cows - for draught, and to produce manure
as the dung falls on the fields as the animals graze. The long-distance trade in cattle was extensive:
"Western Europe was supplied with cattle from Scandinavia - the so-called Jute ox-trade - while
central Europe, especially the south German towns, got their supply from Hungary, Wallachia and
the Black Sea coast." As the Turks cut off the trade from Hungary and the Balkans, Poland
supplied cattle for the shortage. The cattle was transported by walking 330 Km losing 80 Kg if
sea transport was not available; which loss was recovered by fattening nearby destination towns.
The peasants began to make butter and cheese from milk and sold them in the market. The hides
of the slaughtered beasts were sent to the tanner or shoemaker. Horses were used for draught in
the northern part of Europe, but cows and oxen were used in the central and southern part. The
shift away from horses to oxen and cows often appeared according to the change of situations:
farmers took cows and oxen for draught rather than horses since the army wanted more horses
during the Napoleonic war; but the opposite trend was possible when the beef price rose. Small
farms in Palatinate often held two horses for draught and three cows to manure plough-land, but
the number of animals depended on the size of farms. "In regard to breed improvement, we must
remember that in the seventeenth and eighteenth centuries a great change took place in the qualities
considered desirable in the animals. Sheep, formerly kept for their wool and manure, were now
more valued for their meat. It many lands oxen, and sometimes cows, were used for draught,
which required strongly-developed shoulders; when they began to be bred chiefly for meat and
milk, the rump, loins and udders became the more important parts. Pigs used to have heavy heads
and strong, well-grown forelegs, but by breeding, the balance of weight was shifted to the
hindquarters, for the sake of the meat and fat."
(c) Farming Practice and Landownership: In farming practice, the farm was run on much
the same line as the Middle Ages from the sixteenth to eighteenth century, but the great change
was introduced in the first half of the nineteenth century through mechanization with new tools
and equipment, which will be further discussed in Book V. The landlord-tenant relations explain
the stratification of rural society. The landlord is a noble or a commoner who purchases lands
from nobles or governments; the owner-occupier is a land-holder who cultivates the land by
himself or hiring workers if necessary; the tenant-farmer holds no land but takes leases from
landlords by sharing profits according to contracts; and the cottager or day-laborer works at the
farm for wages and farm servants live in the farm. Although the proportion of each class varied
by towns or regions, in Saxony the proportion of cottagers and day-laborers rose from 6.9 in 1550
to 39.9 percent in 1750 of rural population, explaining that the proportion of landless class
increased by 33 percent of all agricultural population in two centuries. During the French
Revolution, "the property of the clergy and émigrés was confiscated. Some of the revolutionaries
wanted these estates to benefit the small peasants and landless proletariat, and urged that the land
should be distributed free." As a result, the French peasants owned about 30 percent of the land.
While England faced the redistribution of the open fields, the enclosure and partition of the
common lands, and France faced the confiscation of church property and the estates of the émigrés;
Germany handled the East German Gutsbesitz and the peasants' release from serfdom. In Prussia,
the liberation of the peasants granted in 1807 and it was possible for them to choose occupation
and to buy or sell land freely. It benefited the great land-owners: legal freedom brought social
injustice. Similarly, Russia abolished serfdom in 1861 and the United States removed Negro
slavery in 1862. However, history tells us that social mobility or upward transition of social status
of the landless class remained unchanged for many decades or a century.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 130
The European Sea Fisheries 1500-1800: There have been enormous fluctuations in the
catch of Fisheries due to changing conditions of climate in the long rum or weather in the short
run; and moreover, the fishing fleet was vulnerable in attack in times of war. The fisherman was
usually a poor man, who advanced money for the fitting out the ships, and pay the high cost of
preserving the fish. Subsistence fishermen were often part-time farmers fishing first for their own
needs and selling any surplus to buy grain or other foodstuffs. Coastal fishermen left the shore by
using small boats to sell the catch rather than to consume the bulk of them. The third category of
fisheries was deep sea operations like herring, cod, or whaling fisheries. The herring fishery in
England attracted 500-600 small boats in 1600, and the quantity of herrings cured and packed was
3,000 lasts during 1598-1604 and 4,000 lasts during 1712-20. From 1600 onwards, herring caught
round the Scottish coast was 300 lasts in average, which passed through the Sound to the Baltic,
while the fish products were more than 20 percent of Scottish exports by value. The Dutch
established the herring fishery under the statues of 1580-2, and maintained its supremacy in trade
nearly until 1700. The total number of fishing boats in 1562 was 700, among which 400 belonged
to Holland, 200 to Zealand, and 100 to Flanders; and the total catch was around 18,000 lasts in
1599 on the basis of salt taxes, which number increased to 20,000 lasts in the 1640s.26 Due to the
Anglo-Dutch wars, the number steadily declined and Scottish exports to Baltic overtook the Dutch
after 1714. Meantime, the Dutch achieved a consistent quality in their products: the Dutch
herrings sold at over £24 per last at Rouen in 1575. The curing was done on board ship; and after
landing, "the fish were gutted, washed in sea-water, mixed with salt, and finally packed in barrels
made of wooden staves and hoops. When full, these stood closed for ten days, during which the
herring sank a little owing to osmotic shrinkage. The barrels were then reopened, filled, and closed
again." Herring could also be preserved by smoked or dried. The French involved in herrings but
were inferior in quantity and quality to the Dutch.
The cod fishery was available off Newfoundland and in the Icelandic and North Seas. The
Iberian Peninsula was one of the best markets for dried cod known as stockfish in the sixteenth
century, which was lightly salted and then wind dried for varying lengths of time. As the Iberian
commerce was prosperous, the Portuguese fishermen increased cod supply until 1550, and then
the Spanish fishery increased the market share. As the English and French fleet began to involve
in cod fishing, the total English fleet in Newfoundland was 200-300 ships during 1615-40, and the
French cod fishery in the region reached its peak with around 400 ships in 1688. In the North and
Icelandic Seas, England dominated the cod fishery. On the other hand, whales were valuable for
oil and certain other products rather than their meat as food - the oil was useful for illumination
and for lubrication up to the middle of the last century. A large fleet of French, Dutch, English,
and Scandinavian ships were regularly engaged in whaling voyages to the north. In the 1630s, the
Dutch expanded its whaling into the open sea, and began regular and intensive whaling in the
Davis Strait in 1719. In competition, the British government introduced a bounty of £1.00 per
ship-ton in 1733, increasing £2.00 per ship-ton in 1749 for losing whaling voyages. "However,
reduction in the bounty and wars with America and France saw London's Greenland fleet fall to
19 in 1796" and Northern whaling declined after the mid-nineteenth century. "The British would
continue to send out whalers to the Arctic fishery into the 20th century, sending her last on the eve
of the First World War."27 Fishing suffered from bad communications and distribution until the
railway system was available with the use of ice. Monasteries and convents of Catholic Europe
provided a rich and steady demand for processed fish, while the English lost this at their
dissolution. "The Dutch dominated the supply of sea fish to Hamburg, the Rhineland, and the
Spanish Netherlands" during the years 1560-1714, while fishing in France, Germany, Iberia, and
Italy was much less important in the economy as a whole.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 131
2. The Industrial Revolution and Technology
Seeing the process of expansion and structural transformation of British industries, especially in
textiles, in the eighteenth century, French commentators used the term “Proto-industrialization.”
It was used with a reference to the linen industry of Flanders, where merchant-manufacturers
organized skilled workers, supplied raw materials for them to produce linen clothes, and sold the
output to distant, not local, markets. In the early stage of industrialization, the most important
developments were in the invention of spinning machine for the cotton industry, the substitution
of coal for wood and charcoal as fuel, and the introduction of the steam engine as a source of
power. The industrial revolution seems to imply a sudden increase in manufactured output by a
rapid change of production modes. However, the “revolution” must be a misnomer, considering
that the characteristics of economic processes were so slow and hesitant that industries could not
attain its full development until the mid-nineteenth century,28 though the term was applied to the
first industrialization in other countries. Peter Mathias defines the industrial revolution by the two
criteria: “sustained higher rates of growth and the onset of sustained structural change of the
economy” that are cumulative with the speed of change in a longer time-span. First, the growth
rate of an economy is measured by the expansion of aggregate output or that of output per head of
the population. Output is expanded by mobilizing more input factors into existing modes of
production with the same sort of economic organization and technology; and by productivity
growth coming from technological advance and other factors promoting efficiency. Second, the
structural transformation in the economy is measured by the shares of output in different sectors
– primary, secondary, or tertiary. During 1780-1800, the annual average growth rate of industrial
output in Britain was 2.11 percent which was much higher than that of agricultural output - 0.75
percent - in the same period,29 which was a beginning evidence of the industrial revolution.
The British was already rich in 1700 with income per capita of $1,405 (1990 prices) behind
the United Provinces but well ahead of France. The population in metropolitan London recorded
575,000 and the share of the agricultural population was between 30 percent and one-third in the
same year (that of Spain and Russia was two-thirds or more in 1900). The middle class began to
emerge, while the working-class constituted the bottom 20 percent of the income distribution. The
British extended their trade to Caribbean, North America, and Asia by exporting industrial goods
and importing raw materials. Since agriculture had been highly seasonal, off the season of farm
labor had engaged in the rural industry as cottage workers. The wool industry was one of pillars
of British foreign trade, which was replaced by the cotton industry, while labor saving machines
were invented and improved. Both stocks and bonds were traded in financial markets, and banks
and credit facilities supported business finance. The powerful groups sought specific economic
interests through lobbying activities for favorable regulations and restrictions. There were some
differences between Britain and continental states. First, the British had "a premium on
empiricism, pragmatism, and individual utilitarianism" for technical advances by applying useful
knowledge, which was different from the Cartesian approach. Even after importing the machinery,
the French could not compete with the British in the market because of lack of the immense details.
Second, in the Continent, the state absorbed a large share of engineering talent; but in Britain,
skilled artisans were hired mostly by the private sector, which generated more efficient output.
Unlike in France, "the state was not the enemy" of the people in Britain. Third, the French
Revolution and the Napoleonic war destroyed production capacities and distorted the allocation
of resources in continental economies; and the Continental System disturbed British trade with
continental countries. However, the British environment was safer and more peaceful than the
Continent to develop agriculture and to promote industry during the century.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 132
Figure II-2-1. Newcomen’s Steam Powered Atmospheric Engine, 1712 https://upload.wikimedia.org/wikipedia/commons/thumb/8/8e/Newcomens_Dampfmaschine_aus_Meyers_1890.png/170
px-Newcomens_Dampfmaschine_aus_Meyers_1890.png
Photo II-2-1. Mount Savage Oron-Works http://www.mountsavagehistoricalsociety.org/Iron%20Works/Iron%20Works.GIF
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 133
British Leadership of Industrialization: The first industrial revolution is largely confined
to Britain in the period 1760 to 1830. Why was it led by the British? First, in the demand side,
the population of England and Wales tripled during 1751-1851, which generated a tremendous
demand for eating, clothing, housing, and other necessities. The agricultural revolution created the
surplus of farm production as previously discussed, and the rising profits allowed them to purchase
more manufactured goods. The emergence of the middle class, who lived above the level of
subsistence, generated demand for manufacturing goods: “More and more people drank tea and
chocolate, sweetened them with sugar, smoked pipes, ate spicier mutton and beef from ceramic
plates, and dressed in fancier clothes made from imported fabrics.” Thus, the so-called consumer
revolution clearly preceded the Industrial Revolution. In addition, overseas markets in America,
Africa, and the Far East were crucial for them to export manufactured goods for raw materials.
Second, in the supply side, industrial output is expanded by mobilizing more input and by
improving productivity with technological advances. A rapid growth of population in the second
half of the century provided a pool of unskilled labor for new factories; and a relatively large
number of skilled mechanics and technicians was available. Business investments were financed
by an effective central bank and well-developed and flexible credit facilities as well as security
markets buying and selling stocks and bonds – its formal building in London known as the Stock
Exchange was opened in 1773. The rich mineral resources, such as coal and iron ore, were largely
available for the manufacturing process. The adoption of new technologies through invention and
innovation was essential for industrialization: the rapid mechanization of the cotton industry, the
new process of smelting iron ore with coke, and the invention of steam engines with continuous
improvements; which made a breakthrough toward industrialization. No destruction from the
Napoleonic war and inflow of skilled foreign artisans due to religious causes or other reasons
positively contributed to industrial production.
Third, in the market side, the British government protected private property and provided a
favorable market environment through an effective intervention with fewer restrictions, lower
trade barriers, lower interest rates, or lower taxation to encourage business activities. The British
abandoned mercantilist protectionism and embraced free trade policies, which stimulated her trade
volume doubled during 1700-70. Foreign trade often made importers first copy and then improve:
"travelling overseas, reading foreign books in translation, hosting foreign visitors, all the while
learning how foreigners made things" which gave them technological or structural inspirations.
The British became to know that free trade was not a zero-sum but a positive-sum game that
benefited both sides of trade partners taking comparative advantages as David Ricardo theorized.
But the British could not entirely escape from mercantilist policies imposing heavy tariffs on
certain imports. Moreover, colonial markets were significant for some industries over the course
of the eighteenth century, so that protection measures were applied for her imperial interests.
Fourth, in transportation and communication, Britain improved roads and developed new turnpike
with better-designed and lighter carriers, which reduced transport cost by over one-half according
to the cost index from 100% in 1700 to 46.4 % in 1799. They utilized rivers and constructed
canals, and renovated harbors and constructed the dock system for coastal and cross-channel
shipping, though the ocean shipping sector was relatively late. Farm transport was upgraded by
replacing two-wheel carts with four-wheel wagons carrying much heavier loads. Better transport
saved time and labor, which made farm products flow rapidly into London and other cities in
Britain with lower costs. After the appearance of the railway, though it became practical decades
later, the cost of transportation rapidly declined. Thus, above factors led the industrial revolution
in Britain, among which numerous mechanics and technicians contributed to inventions and
innovations pulling industrialization as the main engine.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 134
Patterns of Demand: The consumption demand is determined by the level of available
wealth "which is a function of climate, of geography, of the level of technology and the degree of
industrialization and of the kind of economy practiced." It is also essential how wealth was
distributed, "which depends on social structure, population pressures and other matters, and the
pattern of spending, which can be influenced by fashion and social custom, by the distribution
between private and public expenditure, and by other factors."30 Geography and climate affect
the demand for eating, clothing, housing, and even tools. People usually eat food available in their
home stations, to which their tastes are attached. Clothing and housing are also adjusted to the
regional environment, either cold or hot. "To a large extent, factor endowment imposed a control
upon what could be done, but the individual or collective skills of particular communities gave
their products" for them to overcome their distinctive constraints. Industrialization and
technology: The spread of industrialization with better technology brought a range of attractive
new products to the market, which transformed the patterns of demand. In the first phase, new
processes in textiles and in iron and steel increased output and reduced costs; and markets were
extended by improving roads, constructing canals, and developing shipping. The agricultural
revolution increased crop yields, the number of cattle, and their average weight, which supplied
more grain and meat. Since industrial products were capital-intensive, the share of investment
increased while that of consumption declined among the gross national product. Population and
urbanization: The European population grew from 140 to 266 million souls during 1750-1850,
which increased demand for food and other necessities and raised their prices, which not only
stimulated agriculture and industry but also changed the demand patterns. The rising population
pressured on resources, which expedited urbanization and migration to foreign countries; while
both central and local governments provided such services as piped water, sewage and garbage
disposal, public health facilities, urban transport and housing, and so on.
The articulation of the market: The transport improvements extended the size of markets,
increased the volume of commodities, and reduced their prices. The growth of towns expedited
the emergence of a considerable urban working class, increased the demand for food, clothes, and
other necessities, and established a new structure of retailing in the market. The retailing
revolution was expedited in the nineteenth century by wholesalers, regional chains, department
stores, and the bazaar-type chain stores, affecting the patterns of demand. Fashion and social
custom also affect demand patterns. The initial vogue for tea and coffee was a matter of fashion.
The purchase of luxury clothes, the style of housing and furniture are based on individual tastes.
Paris had been the center of upper class fashion, and "the high-born and well-to-do in other
countries did their best to emulate the French in style, color and fabric....Their purchasing power
formed the basis of their competitive emulation." The old landed aristocracy had a high leisure
preference like sports, hunting, shooting, and fishing. The Role of Government: The government
action affects consumption in a number of ways. Spread of free trade reduced prices of imports
and changed the demand patterns in Britain; and agricultural protection in France and Germany
was against the interests of consumers. Taxation affected income, so did patterns of demand. The
expansion of government spending reduced the share of private spending since the standing army
was established: the Napoleonic Wars mobilized the armies and navies, which created an
enormous demand for certain commodities with an expansion of military expenditures. Rising
income: the growth of wealth in Europe was slow during 1500-1750. The agricultural and
industrial revolutions created jobs and accelerated the growth of real income in Britain followed
by Belgium, France and Germany, although there was marked inequality in the distribution of
income by region. The increasing wealth with the new bankers, industrialists, and merchants
affected the patterns of demand and reshaped the social stratification.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 135
A survey on budgets of 127 families of agricultural workers in Britain during 1787-1793 show
that "food accounted for about 70 percent of expenditure, clothes for about 10 percent, rent and
fuel for another 8 percent, leaving 10 percent or so for medical care and other needs."31 Food was
a major item in the expenditure of the population of Europe in this period. "In the poorest parts
of Europe, in Ireland, Spain, Italy and Sicily, Bulgaria and Russia, their basic food consisted of
maize porridge or rye bread and vegetables (potatoes, cabbage, turnips, beans and onions), water,
tea or coffee, some alcoholic liquor depending on the locality and meat was taken but rarely ....
Wine was drunk in southern Europe with beer in the north and cider in Brittany and parts of
England." Cheeses, eggs, milk, and butter were supplied to towns from the countryside: French
peasants supplied cheeses to the armies fighting in Italy and Germany in about 1698, and those
were vital foodstuffs throughout Islam as far as Indies. Europeans were largely carnivorous, but
fresh, smoked and salted fish were important for religious feast. Europe had had a very old passion
for spices - pepper, cinnamon, cloves, nutmeg, and ginger. The sugar consumption was very
limited in the eighteenth century, but gradually increased. The tobacco plant was cultivated in
Spain in 1558 and spread rapidly to France, England, Italy, the Balkans, and Russia; and its
industry was commercialized by monopoly of governments. The clothes touch such issues as "raw
materials, production process, manufacturing costs, cultural stability, fashion and social
hierarchy." The rich spent money for luxurious dress, but the poor peasants and town workers
were extremely plain and modest. It was observed that many French peasants were badly dressed
and their rags could not adequately protect them against harshness of the seasons, but some years
later a large number of peasants were wearing woolen clothes. The industrial revolution brought
cheaper fabrics: "cotton yarn is cheaper than linen yarn; and cotton goods are very much used in
place of cambrics, lawns and expensive fabrics of flax; and they have almost totally superseded
the silks." Cotton was more easily washable than wool, which was its great advantage.
In housing, many people in every part of Europe lived in primitive conditions in this century
often without windows and with floors of beaten earth. "In Russia the huts were of timber, in
Ireland of sod, in Portugal of stone, in England depending on the area of brick, of stone, of wood
or of dried mud." The housing of the rural poor underwent with little change in this century. The
rising population and urbanization required quickly built houses - the barracks, and the British
designed back-to-back houses. The growing urban middle class favored expanded spaces from
modest town houses, and the water supply and sanitation were better in conditions of country
dwellers than of the poor in towns. Cold weather was a public disaster: in Paris in 1709, "the
people died of cold like flies" in the absence of heating. In about 1720, the chimneys were built
and the roads were cluttered by thousands of carts carrying wood. In Germany, there was no
chimney, but one fireplace was available in the kitchen. The large cast-iron stove appeared by the
end of the eighteenth century. In labor and services, in London in about 1700, household servants
formed 17 percent of the population. "In 1801 there were 600,000 domestic servants in Britain
while in 1851, out of a total population of 21 million, 905,000 women and 134,000 men were
employed in domestic service, forming after agriculture the largest occupational group." There
was also a demand for leisure services like festivals, private entertainment, theatre, opera, ballet,
sports, gambling, and so on. In capital goods, industrialization involved in capital demand for the
power supply, equipment, and buildings for business operations. More than 1200 steam engines
were in operations in Britain by 1800; machine tools were developed for textile mills for speed,
flexibility, and precision; and buildings were needed for manufacturing and distribution. The
Europeans needed more capital investment for the social infrastructure - roads and bridges, hotels
and inns, public utilities like water, sewage and refuse disposal, gas and electricity; which were
absolutely and increasingly necessary in the process of industrialization.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 136
The Textile Industry and Technology: Britain imported some 2.5 million pounds of raw
cotton in 1760 to feed the industry existing with the linen manufacture; and rose to 22 million
pounds a generation later in 1787. However, in a half century later, Britain imported 366 million
pounds of raw cotton, and the industry became more important in value of product, capital invested,
and numbers employed in the kingdom. The industrial transformation came from the introduction
of new machines and the factory system in production. The oldest pre-factory form was the craft
shop independently led by master often assisted by one or more journeymen and apprentices: the
artisans purchased raw materials, produced final products, and sold them to a small number of
local consumers. In the cottage system, "farmers might take in extra sewing or make cloth,
which was then sold to a larger retailer, in order to earn a few extra dollars during the slow
months of winter." Wishing to produce more and sell them in distant markets for more profits,
they needed the intermediary - merchants linking production to consumption in the market, which
introduced the domestic or putting-out system spreading widely in Western Europe, where
"merchant-employers 'put-out' materials to rural producers who usually worked in their homes but
sometimes labored in workshops or in turn put out work to others. Finished products were returned
to the employers for payment on a piecework or wage basis, while the workers neither bought
materials nor sold products; which increased efficiency due to lower wages and a more extensive
division of labor within the craft.32 The factory system replaced the domestic system in the second
half of the eighteenth century: the use of waterpower and then the steam engine mechanized the
processes of the textile industry, and standardization of products invited interchangeable parts in
the manufacture, through which a mass production was possible by relatively unskilled labor who
could complete finished products. For example, a part of any musket could be replaced by the
same part of any other musket of the same design.
Before cotton, the woolen and worsted industries were spread widely throughout Britain: the
input of raw material into the industry had increased by 14 percent per decade during 1741-72;
and the export proportion of wool textile to America rose from 25 to 40 percent during 1770-1800.
The industry was expanded rapidly owing to better quality - finer merino fabrics with silk
decorations, and a lower cost - 8 to 10 percent less than other west countries, while its weavers’
wages in 1760 were 40 percent lower.33 The woolen and worsted industries were complemented
by the manufacture of knitted yarn stockings for ordinary people: the number of yeoman knitters
in villages increased, but the industry was rapidly urbanized. Both industries were operated in the
water-powered mills, and the manufacturing processes were generally incorporated into the
putting-out system with existing artisans. Silk was a luxury industry produced by highly skilled
artisans; its ribbon weaving was important from the beginning of the nineteenth century; and the
industry was dominated by only a dozen families, and a small number of master manufacturers
controlled the business at least until 1812. The linen industry has a long history of a small-scale
production for localized markets, but a rapid increase appeared in the colonial demand for slaves'
clothing, coffee and indigo sacks, and mattress covers, as well as in the domestic demand such as
table cloths and napkins, towels, bedding, furnishings, and clothing. The linen flowered between
1740 and 1790 under trade protection, and grew together with the cotton industry due to its skilled
labor force. The increasing demand for calio-printing with popular fashion brought great pressure
on the cotton spinners to produce the finest possible fabrics. “The cotton industry developed
through a combination of dispersed and concentrated, factory and putting-out, forms of production
employing a complementarity of mechanized and hand technologies. But in spite of factories, a
substantial amount of spinning, both of high and low counts, was still carried out at home, or in
very small factories.” The textile industry was always the leader of the Industrial Revolution
towards the factory system with new technologies.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 137
The textile industries relied on two basic crafts of spinning and weaving. John Kay (1704-79)
received a patent for the flying shuttle in 1733, which was an improvement to looms that enabled
weavers to weave faster. In previous looms, the shuttle passed through the threads by hand, wide
fabrics required two weavers seated side by side passing the shuttle between them. “Kay mounted
his shuttle on wheels in a track and used paddles to shoot the shuttle from side to side when the
weaver jerked a cord. Using the flying shuttle, one weaver could weave fabrics of any width more
quickly than two could before.”34 Being attacked by textile workers who worried about the loss
of their jobs by his invention, Kay left Britain for France where he died in poverty in 1780.
Richard Arkwright (1732-93) patented the water-frame spinning machine in 1769, which guided
the four threads coming from the roving bobbins onto the flyers through the rollers; that could
make cotton thread thin and strong enough for the warp, or long threads, of cloth.35 Forming a
partnership with local businessmen, he set up a mill powered by horses, but converted to water
power and built a new mill. “Because the water frame operated with water power was heavy and
expensive, it led directly to the factory system on the model of the silk industry. The factories,
however, were built most often near streams in the country or in small villages, so that they did
not result in concentrations of workers in the cities.” He worked at the mill until his death. James
Hargreaves (1720-78) invented a spinning jenny, a hand-powered multiple spinning machine in
1764, but he did not obtain its patent until 1770. The thread passes from the roving bobbins
through the clasp to the spindles. These are rotated by bands from the roller, which is turned by
the large wheel. The jenny received several improvements, soon after it came into use. “The
water-frame produced a strong, well twisted yarn suited for hosiery and the warp of cotton goods.
Jenny-spun yarn was at first used for warp and weft, but proved more suitable for the latter.”36
The machine replaced the handloom weavers in large numbers.
Samuel Crompton (1753-1827) invented the spinning mule during 1774-1779, combining
elements of the jenny and the frame. “He combined the rollers of the water-frame with the
movable carriage of the jenny by placing the spindles on the carriage and the rollers where the
spindles had stood in the jenny. The spinner drew back the carriage at the same rate as the rollers
gave out the sliver, until about five-sixths of the whole distance had been traversed. Then the
rollers were stopped and made to act like the clasp on the jenny, while the carriage continued to
recede at a much slower rate and the spindles continue to twist. At the end of the stretch the
spindles were turned a few times in the opposite direction to disengage the yarn.”37 The mule
could spin finer and stronger yarn than any other machine so that it became the most popular
instrument for cotton spinning. Adopting steam power in about 1790, it favored the construction
of huge factories in cities where coal was cheap and labor was plentiful. The new spinning
machines caused the pressure to balance spinning and weaving for mechanization. Edmund
Cartwright (1743-1823) was a clergyman who had watched the long agonizing death throes of the
hand-loom weaving industry in England, that made him patent the first power loom in 1785, which
was one of the key steps in the mechanization of textile manufacture.38 He set up a factory in
Doncaster, England which was mechanically operated by steam power for weaving, but his
ignorance of industry and commerce made him close the factory in 1793. Deeply in debt, he
moved to London in 1796, where he worked on other invention ideas, but none proved workable.
Despite many minor difficulties hindering the progress of mechanical weaving, a large number of
factory owners used a modified version of his power loom in the early part of the nineteenth
century, while machinery began to replace the handloom weavers in large numbers. The
Parliament voted for his compensation of £10,000 “in recognition of benefits conferred on the
nation through his power loom” in 1803. The innovation of spinning and weaving along with
power engine contributed to the rapid expansion of the cotton industry in Britain.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 138
Iron and Steel and Technology: In addition to the mechanization of the textile industry, two
other innovations were essential for the first industrial revolution: the process for smelting iron
ore with coke that freed the iron industry from reliance on charcoal, and the atmospheric steam
engine that supplemented and eventually replaced wind- and water-mills as sources of power. The
mining of metallic ores and of coal have many commons but differ in two major respects: mineral
deposits tend to follow a near vertical course, but coal deposits are usually horizontally extended;
the coal miners concern about the possible existence of explosive and poisonous gases or dust, but
the metal miners do not encounter this kind of problems. During the late eighteenth and early
nineteenth centuries, there were metal-mining activities in Britain, Sweden, Bohemia, and Spain.
“Up to the time of the industrial revolution, the demand for the base metals had been limited to
the requirements of agricultural communities and the demands of war, but once new uses for such
metals became apparent, there was a rush to find new sources of raw materials.” Many of most
famous deposits were found by chance, and the limiting factor in mining below the surface was
water, which was the chief obstacle to further expansion of output. When water-power was
available, water-driven whims were used to draw water in barrels to the surface. Water-wheels
were also used where circumstances allowed. If water-power was not available, steam engines
were extensively used to pump out water from the mine. On the other hand, coal mining had been
well established in Britain and Western Europe by 1750. The invention of steam engine had little
effect on coal-mining, except for machinery on the surface, especially for pumping, hauling, and
hoisting. Around 1800, all coal was loaded on to wheeled trams except in a few isolated cases,
and the use of mechanical haulage became more common after 1820. The use of safety-lamp and
ventilation reduced the explosion of mine-gases. By making two roads into the mine - one for air-
in and the other for air-out, an air pump sucked gases out of the mine, which was the first
mechanical ventilator invented in 1807 desperately useful for coal mining.
Abraham Darby (1677-1717) heated coal in a closed oven of brick to get coke, almost a pure
form of carbon, by eliminating the sulfur content of raw coal; which was a similar method to
produce charcoal from timber.39 In 1709, he was successful in smelting iron ore in a coke-fired
blast furnace to produce pig iron. Since coke was available at a so much lower price and less
friable than charcoal, it was possible to use large furnaces with the stronger blast; which could
produce thin castings that competed with brass in such applications as the manufacture of pots and
other utensils. Iron casting was common in use of sand molds: a pattern of the required shape is
placed in a two-piece molding box and firmly packed in sand that is held together by a bonding
agent. After the sand has hardened, “the molding box is split open to allow the pattern to be
removed and used again, and then the box is reassembled and molten metal poured into the cavity
to create the casting.” Since the coke-smelting iron was superior to the iron produced from
charcoal-fired furnace, his products were competitive in the market. But “Pig iron made by
smelting with coke was defective on account of the brittleness caused by impurities; it could be
sold only because of its cheapness.” The coke-smelting iron from the blast-furnace was greatly
improved in terms of homogeneity and purity by adopting the foundry furnace (Cupola), which
was invented by William Wilkinson (1744-1808) who obtained a patent for a small blast furnace
in 1794.40 Since the coke-smelting required a stronger air-blast for which water-power was
insufficient, a steam engine was first used for the foundry furnace in 1776. The substitution of the
steam engine for the water-wheel raised the output of the blast furnace and developed the
capabilities of rolling- and slitting-mill. The next was the application of steam-power to forging:
the first forge-hammer driven by a steam-engine could strike 30 blows a minute in 1782. The
number of coke-fired furnaces was no more than 17 in operations in 1760, but increased to 81 out
of 106 blast-furnaces operated with coke in Britain by 1790.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 139
Pig iron made by smelting with coke was not suitable for conversion into wrought iron
because of impurities, which problem was resolved by Abraham Darby II (1711-63), but nothing
is known about technique he applied. Henry Cort (1740-1800) developed the puddling and rolling
processes.41 First, he obtained a patent in 1784 for the conversion of pig iron into malleable
wrought iron by puddling, which process consisted of “stirring molten pig iron on the bed of a
reverberatory furnace.” The puddler stirred the molten mass through the decarburizing action of
air which circulated through the furnace until it became converted into malleable iron. Second,
he invented grooved rollers patented in 1783. “Previously, bars had to be made by hammering, or
by cutting hot strips from a rolled plate with a slitting-mill. With grooved rollers 15 tons of iron
could be dealt with in 12 hours, whereas it was difficult to produce one tone in the same time with
the forge-hammer.” Cort achieved the simplification by combining the two processes, which
resulted in the lower cost of production. By around 1800, his success made Britain expand the
production of wrought iron to more than 200,000 tons a year, virtually all coke-smelted, making
them a net exporter of iron and iron wares. On the other hand, Benjamin Huntsman (1704-76)
found a method by which steel could be produced in a molten state.42 “He melted bars of blister
steel, with the addition of fluxes, in closed clay crucibles; the intense heat necessary was generated
by coke. The two crucibles were placed in a chamber lined with fire-brick. The top of the furnace
was closed by a cover of fire-brick, which was level with the floor of the melting-house. A vaulted
cellar gave access to the ash-pit.” His process was less complex than the previous method, which
reduced the cost and increased output of cast steel; however, which could not be welded “since it
would not bear more than a red heat (c 900o C).” While cast iron remained superior to other
materials for the construction of ordnance, attempts were made to substitute cast steel (carbon
content lower than 2%) for cast iron (cc upper than 2%) in manufacturing artillery.
The Swedish metallurgist T. O. Bergmann (1735-84) and the French chemist Guyton de
Morveau (1737-1816) arrived at the same conclusion from experiments that “the conversion of
iron into steel was due to its combination with carbon.” The great inventions and improvements
brought a revolution in the iron industry by around 1800. The end of the Napoleonic wars in 1815,
however, affected the demand for war material to fall to the bottom, but after 1830 the
industrialization stimulated the production of iron. James Beaumont Neilson (1792-1865) was a
Scottish inventor who obtained a patent in 1828 on the hot-blast process.43 He realized that the
force of the blast could be increased by passing hot air, rather than cold air, through the red-hot
vessel; which reduced the amount of coal required to make iron, and greatly increased the
efficiency of smelting iron production to meet steel demand for the railway and shipbuilding
industries. The hot-blast process allowed that the same amount of fuel could produce three times
as much iron as before, and that the same amount of blast acted twice as powerfully as a cold blast.
The use of a hot blast had become general in Britain by 1835, and his invention expanded the
output of iron. “Application of hot blast not only made it possible to smelt a greater quantity of
ore with the same amount of fuel but also to build larger furnaces. A further advantage was that
with the higher temperature generated by a hot-blast not only coke but raw coal could be used as
a fuel.” It was an important source of fuel to use the anthracite coal to the blast furnace for smelting.
There had been continuous innovations of the blast furnace. The circular shape of the furnace was
introduced to save fuel and to increase output of metal, which was accepted and put into practice
by 1832. The mouth (aperture) of the blast furnace had been left open to make gases escape; but
attempts to utilize the waste gases were made, and the first practical success was achieved in 1832.
44 “The gases were taken off the top of the furnace and conveyed through pipes to the hot-blast
stoves.” Improvements extended to the forge and to the practice of making malleable or bar iron,
which technology will be further discussed in Book V.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 140
The Steam Engine and Technology: In Western Europe, both watermill and windmill had
been the main sources of motive power for many countries. Roman engineers developed the
Vitruvian mill with a vertical wooden wheel on a horizontal axle, producing up to about 3 horse
power.45 It was constructed in two forms: the undershot wheel dips into a river so that water
flowed underneath and turned the paddles, and the overshot wheel regulated a stream of water
directed on to the top of the wheel. In the feudal times, the manorial watermill was a valuable
source of income for the lord, while numerous watermills were owned by monasteries and priories
or private individuals. In 1539, John Fitzherbert wisely confirmed “that more power can be
produced by breast and overshot wheels, if their buckets are well filled, than by undershot wheels.”
With the breast wheel, water flowed into the buckets just above or below the level of the horizontal
axle - it was a type intermediate between the undershot and overshot wheels. John Smeaton (1724-
92) contributed to the improvement of water wheels through many designs and experiments.46 In
1769 the cast iron axle was made to replace the wooden one. In the earlier phase of the industrial
revolution, water - not the steam engine - was the main source of power, while the windmill was
not a prime mover, though it played an important part in certain districts like on the coasts of the
North Sea and the Baltic. “In the eighteenth century no factory could be established far from a
stream powerful and swift enough to work its machines. Mill-owners therefore crowded in narrow
valleys, where an artificial fall could be secured by using dams. This continued as long as water
was the driving-power of machinery, but the introduction of steam gradually brought industrial
ruin to those districts where no coal was available locally.” In around 1750 the combined use of
steam engines and water-wheels was common everywhere. In Britain, energy output of water-
wheels was seldom better than10 hp, and on the average only 5 hp.47 Even when output of steam
engine rose above 10 hp in average, it did not quickly replace the water-wheel that continued to
play an important source of power until at least 1850.
The coal mines and iron industry promoted the development of steam engines. Scarcity of
charcoal and limitation of water-power were economic threats to the iron industry, so numerous
attempts were made to overcome the limit of wood and water. Steam power could resolve those
limits, but certain factors prevented the rapid displacement of the new machine. The machine-
builders needed skilled engineers, while their engines were built by a miscellaneous collection of
blacksmiths, wheel-wrights, and carpenters, who should be trained for necessary specialization
with precision works. The real development of the steam engine into a stronger prime mover
appeared during 1800-50. Thomas Savery (1650-1715)48 designed a piston-less steam pump in
1698 which brought two key contributions: “First, in order to allow the water supply to be placed
below the engine, he used condensed steam to produce a partial vacuum in the pumping reservoir,
and suing that to pull the water upward. Secondly, in order to rapidly cool the steam to produce
the vacuum, he ran cold water over the reservoir. Operation required several valves.” Though
expensive and inefficient, his engine helped to pump out water out of mines. Thomas Newcomen
(1663-1729) designed an atmospheric engine in 1712. “Newcomen used the vacuum to pull on a
piston instead of pulling on water directly. The upper end of the cylinder was open to the
atmospheric pressure, and when the vacuum formed, the atmospheric pressure above the piston
pushes it down into the cylinder. The piston was lubricated by a trickle of water from the same
cistern that supplied the cooling water….The piston was attached by a chain to a large pivoted
beam.”49 When the piston pulled the beam down, the other side of the beam was pulled upward.
By 1725, his engine pumped out water out of the mines, and raised water for operating water-
wheels to drive machinery.50 John Smeaton (1724-92) improved the Newcomen engine: to transfer
power off of the cylinder, he used wheels instead of beams, which made the machine more
compact. He built dozens of larger engines into the 100 horse power range.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 141
James Watt (1736-1819) was a Scottish instrument maker and inventor, whose steam engine
substantially contributed to the industrial revolution.51 Learning enough to be a journeyman, he
opened a workshop in a college building of Glasgow in 1757. Repairing a model of Newcomen
steam engines, Watt realized that the loss of latent heat of steam was the worst defect of the
Newcomen engine, and that therefore “condensation must be effected in a chamber distinct from
the cylinder but connected to it.” In 1769, Watt obtained a patent for A New Invented Method of
Lessening the Consumption of Steam and Fuel in Fire Engines. The essential part of this patent
was the use of a separate condenser52 that could save 75 percent of fuel used for the similar
Newcomen one. The operation of the engine was as follows. “When the piston was at the top of
its stroke, the exhaust valve was opened to produce a vacuum beneath it, and the inlet valve was
simultaneously opened to admit steam above it. The piston was then forced downwards by the
atmospheric pressure and the pressure of the steam. When the piston reached the lower end of its
stroke the inlet and exhaust valves were closed and the equilibrium valve was opened. The piston,
having then an equal pressure on each side, was pulled up again to the top of the cylinder by the
weight of the pump-rod.” Watt and Matthew Boulton entered a partnership which lasted 25 years:
his financial support made rapid progress in commercial production of steam engines, which were
attractive due to greater fuel-efficiency of their engines. In later improvements, it was possible to
use the motion of the beam to turn a wheel by transforming the action of the beam into a rotating
motion to connect the beam to a wheel by a crank; which allowed the steam engine to replace the
water wheel and horses as the main sources of power in British industry.53 Most of their early
engines were used for pumping mines, where coal was expensive; but after improving power
transmission to the wheel, the use of engines was extended to flour milling and cotton spinning,
which greatly contributed to the industrial revolution in Britain.
The main problem of the Watt's engine, despite the enormous improvements, was in his
opposing "to seam-pressure higher than a few pounds above atmospheric, because of supposed
danger." The first progress was made almost simultaneously by Richard Trevithick (1771-1833)
in England and Oliver Evans (1755-1819) in the United States. Trevithick jointly with his cousin
obtained a patent for Improvement in the Construction and Application of Steam Engines in 1802
and built an experimental pomp engine of the beam type, which was resistant to the pressure of
145 lb per square inch.54 "The boiler was of cast iron with a diameter of 4 ft and a thickness of
1.5 in; the cylinder was 7 inches in diameter with a 3-ft stroke....The next year he built another
steam-carriage with a single cylinder and a pair of 8-ft wheels driven by gearing. It would carry
eight or ten passengers, and made several trips in London." Trevithick built another steam-
locomotive "to draw a load of 10 tons over the 9 3/4 miles of cast iron tramway" and its trial in
1804 was successful. The engine weighed about 5 tons without water and pulled much more load
than expected, which was the first self-moving machine "to travel on a road with 25 tons at four
miles per hour, and completely manageable by only one man." His engines were used for driving
sugar-mills, corn-grinding, pumping water, and rolling iron. Arthur Woolf (1776-1837) improved
engines "by adding a high-pressure cylinder to an existing Watt engine." William Symington
(1763-1831) developed "a horizontal double-acting cylinder 22 inches in diameter by 4-ft stroke,
driving the crankshaft of a paddle-wheel directly through a connecting-rod in 1801. Henry
Maudsly (1771-1831) developed the table engine patented in 1807 that came into extensive use:
"In this engine a vertical cylinder stood at the centre of a small cast-iron platform, its piston-rod
carrying a cross-head having wheels running between vertical iron guides. A pair of connecting-
rod from the ends of the cross-head drive a crank-shaft running on bearings beneath the platform"
which engine was widely used in small factories for at least 40 years. George Stephenson (1781-
1848) built a better engine used on the first railway line.55
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 142
The Chemical Industry: From the mid eighteenth century, the chemical industry became
more important in industrial life. Rising demands for such commodities as glass, soap, soda, dyes,
and textiles led to an intense experimentation; which greatly improved in “the methods of
manufacturing such fundamental substances as the mineral acids and the common alkalis.” In the
seventeenth and eighteenth centuries, scientists investigated physio-chemical characteristics of
gases like reacting in volumes at the same temperature and pressure. A French chemist, Antoine
Lavoisier (1743-94) stated the law of conservation of mass in 1789 that “the total mass in a
chemical reaction remains constant.”56 He framed the word oxygen, meaning acid-producer in
Greek, since the products of combustion of sulfur, phosphorous, and carbon in the moist gas
proved to be acid. Henry Cavendish (1731-1810)57 observed “that when oxygen and the gas we
now know as hydrogen were sparked together, water was formed.” John Dalton (1766-1844)58
shaped the chemical atomic theory assuming “that all matter is composed of a vast number of
extremely minute particles or atoms, and that chemical analysis and synthesis are nothing more
than the separation of particles from one another, and their reunion….each element has its own
distinctive kind of atom, and similarly each compound has its own distinctive kind of compound
atom, or molecule as we now say.” He knew of carbonic oxide (CO) and carbonic acid (CO2).
Alessandro Volta (1745-1827), an Italian physicist, announced his invention of the voltaic pile or
electric battery in 1801 which became an indispensable part of equipment in a chemical laboratory.
Humphry Davy (1778-1829) in 1807 advanced a hypothesis that chemical and electrical
attractions are essentially identical, and expressed his belief that many substances might possibly
be decomposed if a sufficiently powerful current were passed through them.59 In 1832-3 Michael
Faraday (1791-1867) proved that any individual product liberated in electrolysis is directly
proportional to the quantity of electricity passed through the electrolyte.60
The chemical industry interacted with the industrial revolution, largely in response to social
needs. Furnace techniques were important for transformations of the metallurgical, glass, and
pottery industries. The manufacture of glass and pottery was established form China to the Baltic,
while craftsmen learned how to take raw materials to transform in the furnace and select the other
materials such as “plant-ashes to supply alkali, sand to supply silica, and clays with the proper
rheological properties.” Their use of fire techniques was accumulated in “tanning, involving
knowledge of aluminum salts, and the production and use of mordants and dye-wares.” Among
substances, soda and potash, mild alkalis derived from plant-ashes or from natural deposits until
1787 when Nicolas Leblanc (1742-1806) decomposed common salt by sulfuric acid with the
production of sodium sulfate. “This in turn was mixed intimately with chalk and charcoal and
heated in a crucible. The resulting black ash was leached with water and the resulting soda
recovered from the solution by evaporation.” This process was commercially applied in Britain,
and this artificial soda was used in manufacture of soap, glass, paper, paint, pottery, and other
products.61 Sulfuric acid was made from 10 percent of the weight of green vitriol, and was used
either for pickling and cleaning metals, or for removing silver from copper. John Roebuck (1718-
94) and Samuel Garbett (1717-1805) created their enterprise to produce sulfuric acid:62 they
imported sulfur from Leghorn and bought saltpeter from the East India Company, and exported
sulfuric acid to Holland. While the textile industry needed bleaching, dyeing, and printing;
experiments on bleaching suggested the use of dilute sulfuric acid in place of the traditional sour
or butter-milk in 1754. The Swedish chemist C. W. Scheele (1742-86) in 1774 and the French
chemist C. L. Berthollet (1748-1822) in 1785 discovered chlorine, a powerful bleaching agent.63
Charles Tennant (1769-1838) took a patent in 1789 for the production of a liquid bleach made
from chlorine and a sludge of slaked lime.64 In addition to the introduction of new dye-wares,
chromium compounds65 increased the range of color-effects with the improved dyeing process.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 143
Gas was used for light and heat. Ever since gas was discovered in the late sixteenth century,
natural inflammable airs had attracted the attention of chemists and many others. There was an
explosion of coal-gas that was too dangerous for common use. Discovering hydrogen in 1766,
Henry Cavendish generated it by the application of dilute sulfuric acid to chips of iron or zinc. In
1780 F. L. Ehrmann suggested lamps using hydrogen as an illuminant by squeezing from a bladder
through a narrow pipe and ignited by and electric spark. In 1821 Charles Green used coal-gas for
balloons burned with a beautiful flame. About this time, rudimentary experiments were made in
gas-lighting. Johann Georg Pickel (1751-1838) lighted his laboratory with gas in 1786, and
several others did the same. Philippe Lebon (1767-1804) conducted experiments on a large scale
in a house and took a patent in 1799 with a sketch of the gas-making plant.66 “Lebon states that
his gas was ready to extend everywhere the most sensible heat and the softest lights and could be
conducted through the smallest and most fragile pipes.” William Murdock (1754-1839)
“investigated systematically the comparative behavior of different classes of coal under conditions
of varying temperature and time of carbonizing” that contributed to commercial application of
gas-lighting.67 As the cost of lamp-oil and candles had risen steeply at the end of the eighteenth
century, any new source of light was attractive if economical and safe. Hence, the incentive to
overcome the difficulties was great in the way of generating, purifying, storing, and distributing
gas. Samuel Clegg (1781-1861) became Murdock’s successful rival in developing gas-lighting.68
“Gas was adopted almost immediately by factories, public buildings, and shops. By 1825,
churches, banks …. half a dozen London clubs were illuminated by gas.” However, gas could not
be applied efficiently “till the atmospheric burner in which a supply of air was introduced into the
gas stream just below the point of combustion was devised, surprisingly late, about 1840.” As the
gas ring was introduced in 1867, gas-cooking became common.
In ceramics, knowledge of porcelain may have reached Mediterranean Europe by the land
route through Persia and Egypt from China.69 Opening trade with Asia, the Portuguese brought
pottery-making knowledge to Europe from Macao. In the seventeenth century, both the Dutch
and the British East India Companies imported oriental wares from China and sold them to the
European markets, which had a profound influence on the technology and on the aesthetics of
European pottery.70 All the operations of pottery works were carried by hand under the primitive
conditions, but gradually power-operated machinery was used to mix the clay and artificial heat
was introduced to dry the molded. Abundant forest in northern Europe provided sufficient fuel to
enable the kilns for the stoneware to be heated to 1200-1400o C. The decoration and glazing
opened up new fields for aesthetic exploration. “In addition to the property of taking up traces of
iron, manganese, and cobalt to form colored glazes, lead glaze has also the useful property that it
can be rendered white and opaque by the addition of tin ash (stannic oxide).” Since the Dutch
greatly imported blue and white Chinese porcelain into Europe in the early years of seventeenth
century, its town Delft became a dominant center of European pottery production.71 Chinese
porcelain had a high quality and whiteness not previously known in Europe; to emulate such
excellence, “Dutch potters turned their attention to the more careful preparation of their clay and
to the quality of their glaze, and this new degree of refinement affords a technical distinction
between maiolica and delft.” However, a similar quality of wares was being produced in several
towns in Britain as well as on continent by the end of the seventeenth century. On the other hand,
John Dollond (1706-61) obtained a patent in 1758 for the invention of achromatic lenses;72 and in
1798 Pierre L. Guinand (1748-1824), a Swiss, made homogeneous glass which resolved the
problems associated with the making of optical glass. There had been significant improvements
in mirrors of glass, glass tubing and rod, sheet glass, and cast plate glass. Moreover, great
advances were made in the chemistry of glass coloration during 1750-1850.73
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 144
The Spread of Industrialization: The industrial revolution in continental Europe was
substantially slower than in Britain because of unfavorable internal and external conditions.74
Continental countries used resources less efficiently due to material difficulties: they imported the
bulk of wool from abroad and used traditional fuel rather than coal because of the relative
abundance of timber; moreover, they paid more for commercial and financial services such as
insurance, bank credit, and shipping. Their transportation costs were higher than the British since
the size of land was larger; terrain was difficult and roads were bad; waterways in France and
Germany were not developed; and political boundaries of kingdoms, duchies, bishoprics,
principalities, free cities, and other forms of sovereignty created trade barriers by different laws,
courts, coinage, tolls, and customs. Their income and wealth were more unequally distributed
than the British, so that the poor of Europe were far worse off than those of Britain, and their
poverty was far from generating mass consumption of industrial goods. Their custom and law
limited commercial activities of the nobility: European aristocrats heavily depended on the land
ownership, not on manufacture and commerce except mining and metallurgy. The entrepreneurs
tended to adhere to traditional business patterns: firms largely based on the family disliked
competition and avoided risks in investment particularly by borrowing. Old guild restrictions
were more prevalent, which disturbed the price system in the market by encouraging monopoly
and restraining competition. The French revolution and wars brought “capital destruction and
losses of manpower; political instability and a widespread social anxiety; the decimation of the
wealthier entrepreneurial groups; all manner of interruptions to trade; violent inflations and
alterations of currency.” The Continental System was a French embargo to Britain but limitedly
affected the economic life of Europe due to “the autarchy of the different countries.”75 Although
regular communications were recovered by 1815, the British prohibited the transfer of technology
to foreign countries until the mid-nineteenth century.
Jackson J. Spielvogel introduces three significant differences between British and continental
industrialization - borrowing new technology, government subsidies, and the use of joint-stock
companies. First, the initial obstacle to industrialization was lack of technical knowledge. The
British tried to prevent the transfer of technology to the Continent by prohibiting her artisans to
leave the country until 1825 and the export of important machinery and parts, especially for textile
production, until 1842. However, it was impossible for the British to control over this transfer by
legislation: continental countries possessed an advantage simply borrowing British techniques and
practices. “Already by 1825, there were at least 2,000 skilled British mechanics on the Continent,
and British equipment, whether legally or illegally, was also being sold abroad.” In the 1840s,
continental countries established technical schools to train engineers and mechanics. Second, the
role of government was important for continental countries to catch up the British industrialization.
Governments of the Continent “provided for the costs of technical education; awarded grants to
inventors and foreign entrepreneurs; exempted foreign industrial equipment from import duties;
and, in some places, even financed factories….government actively bore much of the cost of
building roads and canals, deepening and widening river channels, and constructing railroads.”
After 1815 when cheap British goods flooded continental markets, the French government
imposed high tariffs to protect their industries. Third, the role of the joint-stock investment bank
on the Continent was significant for industrialization. “Such banks mobilized the savings of
thousands of small and large investors, creating a supply of capital that could then be ploughed
back into industry. Previously, continental banks had been mostly merchant or private banks, but
in the 1830s two Belgian banks….took a new approach. By accepting savings from many
depositors, they developed large capital resources that they invested on a large scale in railroads,
mining, and heavy industry.”76 These were important to the Belgian coal industry.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 145
3. Commerce and Transportation
Commercial activities are basically natural for the people to link producers to consumers in the
market for buying and selling necessary commodities at reasonable or acceptable prices. Adam
Smith introduced a concept of an invisible hand in trade or laissez faire with the division of labor,
and David Ricardo presented the balance of payments theory - trade is mutually beneficial for its
partners by taking comparative advantages.77 But European rulers have not hesitated to take
mercantilist policies to protect home industries or to increase tax revenues. Mercantilism forced
the positive balance of trade, which distorted the allocation of resources, and benefitted landlords,
manufacturers, merchants, or governments at the cost of general consumers. The government
intervention in the market discourages fair competition and encourages monopolies for a small
number of specific interest groups; which reduces the total welfare gain from trade, which must
be an opposite of the government role maximizing services for the people. The mercantilist
position had been the prevailing reality of political economy in Europe until the mid-eighteenth
century, though the degree of their intervention was different from each other. To understand the
coming century, it would be helpful to review the colonial and commercial policies of Spain,
Portugal, Holland, England, and France in the sixteenth and seventeenth centuries.
Mercantilism and mercantile trade laws and policies “provided a constant source of raw
materials and become markets for the manufactured goods to the country that owned them or their
Mother Country. For example, the colonists cut down trees, these trees were sent to England where
craftsmen made furniture, paper, barrels, and tools. These goods were then sent back to the
colonies and sold to the colonists. The money went back to England. This process also helped
England establish a favorable balance of trade. A nation had to sell more products to other
countries than it bought from other countries. Products were sold for gold and silver which helped
build up the treasury for England. To enforce mercantilism England passed the Navigation Acts
(Trade Acts) beginning in 1651. These acts were designed to control trade with its colonies. These
laws forced the colonies to trade only with England. Under these laws the colonies were not
allowed to make any products they could buy from England. In other words, if you needed a barrel
to pack your goods, a cooper in your town could not make or sell you that barrel. You had to buy
the barrel from England. Also, all goods had to be shipped on English ships or ships built in the
colonies. In other words no Dutch, French, or Spanish ships could sell or trade their goods to the
colonies. The colonies were not allowed to sell raw materials or products to them.”78
“England passed other Trade Acts that continued to control colonial trade. The colonists
became increasingly angry as each new Act was passed and began to find ways around these
restrictions. Smuggling and piracy became big business. During the French and Indian War,
England needed the cooperation of the colonies so they did not work hard to stop the law breakers.
After the war England cracked down on the colonies and passed new and more restrictive Acts.
Another way the colonies found to get around trade restrictions was through the triangle trade
routes. To trade with European merchants, the colonial merchants shipped their products to
European ports. There they were traded for goods that were not available in England, such as fruits
and wines. Next, the fruits and wine were traded in England for manufactured goods. Finally the
manufactured goods from England were sold in the colonies. Another triangle trade route brought
African slaves to America. First, colonists traded their products for sugar and molasses in the West
Indies. Ships carried sugar and molasses back to the colonies where they were made into rum. In
the next step, ships carried rum and guns to Africa. In Africa these were exchanged for slaves.
Then slaves were shipped to the West Indies or to the colonies. As this form of trade grew, great
fortunes were made by merchants, slave traders, ship captains, and England.”
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 146
Photo II-3-1. The Bridgewater Canal crossing the Manchester Ship Canal opened in 1761 https://upload.wikimedia.org/wikipedia/commons/thumb/6/6c/Barton-on-Irwell_11.05.02R.jpg/170px-Barton-on-
Irwell_11.05.02R.jpg
Photo II-3-2. The Steam Boat, becoming popular for recreation by the late 1800s. Source: http://e97527f0.se/?placement=401698&redirect=1459151298132
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 147
The European Trade with Colonies in 1500-1700: Europeans had repeatedly fought over
colonial possessions and commercial monopolies ever since the time of Henry the Navigator.
Spain and Portugal competed for their monopolistic control over South America. The Treaty of
Tordesillas of 1494 specified the line of demarcation in leagues from the Cape Verde Islands;
accordingly, Spain moved to the west and Portugal to the east and lower Amazon.79 The former
conquered and exploited Peru, Mexico, Argentina, Paraguay, and Panama, as the latter entered
Brazil. The Caribbean area was generally ruled by Spain until the Dutch possessed Saba, St.
Martin, and other islands by the Treaty of Munster in 1648. Spanish Jamaica was captured by
Britain, which was recognized by the Treaty of Madrid in 1670; Spain also ceded St. Domingo to
France by the Treaty of Ryswyck in 1697; so that Caribbean navigation and trade was no longer
in an Iberian monopoly. Spain not only controlled the Pacific coast of South America but also
colonized the Philippines, the Spanish East Indies, being administered from Mexico during 1565-
1821.80 In North America, Spain founded St. Augustine in Florida in 1565, though was ceded to
Britain by the Treaty of Paris in 1763, constructed Santa Fe of New Mexico in 1609 and moved
up to the Pacific coast but was overthrown by Mexican nationalists in 1810.81
In Spanish America, the main sources of wealth were haciendas, ranches, and mines; owned
by the rich, many of whom were descendants of old conquerors and settlers. The fiscal relations
between crown and Spanish colonies were such simple and direct as not related to the theory of
mercantilism. “It simply assumed that, since the kingdoms of the Indies were subject directly to
the king of Castile, their duty was to render him tribute. The Spanish crown deliberately and
avowedly taxed its colonial subjects in order to defray its expenses in Europe. Revenue was
chiefly raised not by duties on trans-Atlantic commerce – though there were duties, and stiff ones
– but by taxes levied directly in the Indies.” They paid three types of taxes: alcabala or sales tax,
quinto or silver tax (one-fifth of silver output), and the Indian tributo or a poll tax; which were
collected and supposed to be remitted in silver to Spain, after deductions to meet the cost of
colonial government. The Spanish governments restricted all trade between Europe and the Indies
to officially organized and escorted fleets. The first priority of trans-Atlantic shipping lay in the
safe carriage of bullion to Spain, and all others including industrial and commercial affairs were
always subordinate. It is believed that “Much silver leaked away through the smaller harbors of
the Indies in payment for goods smuggled in by foreign ships.”82
The silver trade between the Americas and Europe and onward to China from 1500 to 1800
had a profound effect on the world economy. “Spaniards traveling west had only gold on their
minds, but they found silver instead. From 1500 to 1800 Mexico and Peru produced about 85% of
the world's silver with 30% of it eventually ending up in China. While this silver came from
Central and South America, it belonged to Europeans exclusively. The Spanish acquired the silver,
using it as a means of purchase which landed it mainly in the hands of the British, who then used
it to purchase the exotic commodities of China. The silver trade marked the era of commercial
capitalism and became the bridge between late medieval and modern times. Despite their best
efforts, by 1759, and because of the changing Atlantic trade seaway, Spain could no longer
compete successfully with England and France in the international economy. Between a medieval
management style and the expanding global economy, mostly through England's commercial and
industrializing economy that was in a phase of rapid expansion and competition on a global scale,
Spain found its empire in various stages of demise and most of the silver that came out of the
Americas went to Europe via trade. This was a time when China was considered novel and exotic
and everyone clambered for anything Chinese, be it porcelain or silks and spices. During this
period the Spanish-Mexican peso became the standard coin throughout much of the world. The
Chinese market for coins set the standard globally.”83
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 148
Meanwhile, the Portuguese exploited commercial gains from African coastlines and harbors,
which required professional sailors having seafaring skills and experiences. The monarchy, once
absorbed by Spain in 1580 but was restored by 1640, established trade factories in Guinea all of
which were taken by the Dutch in the 1630s. In Angola, the Portuguese founded Luanda and
Benguela, the principal slaving harbors, which were captured by the Dutch but were recovered in
1648. In Brazil, successfully defending colonial settlements from the Dutch, the Portuguese
secured the shore of South Atlantic in America just like that in Africa. In the late seventeenth
century, they concentrated in Brazil as Guinea was gone, Ceylon and Malacca lost, and Goa in
decline. Their sugar trade was the largest of all the volume of trans-Atlantic trades, and its
shipment to Lisbon was convoyed by organized armed fleets, while the crown imposed duties on
sugar entering and leaving Portugal for re-exports. Soon after, both English and French sugar
planters produced cheaper sugar than Brazilians, and began to compete in the open market in
Amsterdam. The Brazilians imported wine, olive oil, flour, and salted cod from and exported
tobacco, dyewood, and hardwood to Portugal; which were largely shipped by Dutch or English
carriers. In mining, gold was discovered and smelted in the Sao Paulo region, and shipped to
Lisbon; which volume increased from 725 Kg in 1699 to 14,500Kg in 1712.
The territorial division of the West Indies had reached a rough equilibrium by around 1700,
and fitted into the general pattern of foreign relations in Europe with a gradual reduction of
buccaneering. Any irritants to the Caribbean could lead to declaration of war because of serious
financial interests from their colonies: the English and French navies had secured the production
of sugar, tobacco, cotton, and cash crops such as cocoa, coffee, ginger, and indigo in the Indies
and their shipments to Europe. The colonies in North America were less attractive in making
investment profits than those in the West Indies. The English established eleven colonies along
the Atlantic coast of North America, where the Dutch, French, and Spanish joined the trade
competition. Though the Dutch failed in Manhattan, the Spaniards moved into New Mexico and
up to the Pacific coast, and the French connected their settlements in Louisiana with Canada.
Despite the war with the English, the French secured their settlements in North America. While
Spain was on the verge of collapse, Portugal was localized in Brazil, and the Netherlands began
to drop out of the power struggle in Europe; both England and France entered the second phase of
colonial confrontation for territorial expansion and commercial monopolies in North America in
the eighteenth century, particularly at the time of the American Revolution.
Another battleground of European commerce was in the Indian Ocean and the East Indies,
where piracy was common and trade was so dangerous that Europeans needed well-armed ships
with fortified trading posts to protect themselves. Unlike the West Indies, Asian countries had
their own jurisdiction based on a long history of civilization, and the foreigners needed to get an
approval from the ruler to open the trade with them. The Portuguese established the first trade
base at Goa in 1510, and connected a string of trading outposts from Lisbon to Africa, Middle
East, India, Indonesia, China, and Japan by 1571. They monopolized the spice trade of the
Malabar Coast of India and Ceylon, which was exceptionally profitable until the end of the
sixteenth century. The Portuguese government collected over one-half of the state revenue from
trading Indian spices and West African gold. Nevertheless, their monopoly on the spice trade was
disturbed by supply problems from pepper growers, market competition with the Venetian route,
and losses from unsafe-insecure maritime shipments. As the Portuguese trade system was unable
to meet growing demand for spices, the lagging supply of pepper caused its prices to rise sharply.
The Portuguese network of trading posts was so over-stretched that its naval forces could not
defend their interests in the region.84 As the Dutch and English East India Companies entered
completion, the Portuguese began to decline in the East Indies.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 149
The Dutch East India Company (VOC) founded the first trading post in Indonesia at Banten
in 1603 and the second one at Batavia in 1610 as colonial capital, controlling all Asian affairs.
The Dutch Republic gave quasi-governmental powers to the VOC including “the ability to wage
war, imprison and execute convicts, negotiate treaties, coin money, and establish colonies.”
Governor General, Jan P. Coen, drove out the entire native population of the Banda Islands to
replace them with Dutch plantations growing cloves and nutmeg for exports, but very few Dutch
were willing to immigrate to Asia. Coen resolved the deficit problem of the European trade with
Asia through the intra-Asiatic trade system. Europeans sold few goods to Asia but purchased
more spices and tea, which caused a trade-deficit to them but a trade-surplus to the Asians, who
demanded gold or silver for payments. He used profits from the intra-Asiatic trade to finance the
trade-deficit of Europe with Asia. “The VOC traded throughout Asia. Ships coming into Batavia
from the Netherlands carried supplies for VOC settlements in Asia. Silver and copper from Japan
were used to trade with India and China for silk, cotton, porcelain, and textiles. These products
were either traded with Asia for the coveted spices or brought back to Europe.” The profits from
this triangular trade in Asia could be used to finance the trade-deficit of Europe. The VOC not
only supported Christian missionaries but transferred modern technology to China and Japan by
supplying advanced goods with new technology. While the Portuguese power declined, the Dutch
took control over their trading posts and factories such as in Cochin and Ceylon by naval blockades
in 1640, and expanded their trading network to Persia, Bengal, Malacca, Siam, Canton in China,
Formosa, Malabar Coast and Coromandel Coast in India, and Nagasaki in Japan. Throughout the
seventeenth century, the VOC enjoyed profits from the monopoly of the spice trade with Asia.
“Between 1602 and 1796 the VOC sent almost a million Europeans to work in the Asian trade on
4,785 ships (while the British Company sent only 2,690 ships), and netted for their efforts more
than 2.5 million tons of Asian trade goods.”85
The Dutch commercial power began to decline in the world market in the late seventeenth
century mainly due to the loss of wars with the English and the enforcement of the Navigation
Acts by them. As the Dutch naval capability rapidly declined, the English exercised her military
power and pursued commercial interests in Asia. The English East India Company established
trading posts and factories in Surat in 1612, Madras in 1639, Bombay 1668, and Calcutta in 1690;
where they fortified major factories. Their trade was extended to the Bengal region with
hospitality of the Mughal emperor in 1634, who completely waived customs duties on the trade
with the British in 1717; while the Company monopolized the India trade mainly of cotton, silk,
indigo dye, saltpeter, and tea. During 1650-56, the company took control over the Dutch
monopoly of the spice trade in the Malaccan straits being acquired by ousting the Portuguese in
1640-41.86 While England had a huge trade deficit with China, the Company created a English
monopoly on opium that was produced in Bengal and illegally sold to China. Despite the ban on
opium imports by the Chinese government, the huge amount of opium was smuggled into China,
which resulted in the opium wars in the future. The French founded the French East India
Company in 1664 which “was granted a 50-year monopoly on French trade in the Indian and
Pacific Oceans, a region stretching from the Cape of Good Hope to the Straits of Magellan.”87 The
company established trading posts in Surat and Pondicherry, but was financially difficult mainly
due to insufficient working capital, over-generous dividend policy, insatiable tea market in France,
and banning silk imports into France, so was abolished in 1769. China sold silk for Japanese
copper beginning in 1685, and Russia sold furs for Chinese silk through land that was authorized
by the Treaty of Nertchinsk in 1689; which reduced the supply of silk to Manila and affected the
Dutch trade for Japanese copper. The Dutch retreat from and the French failure in the Asian trade
made the British a dominant power in Asia in the eighteenth century.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 150
British Foreign Trade Policies: Until Adam Smith introduced laissez faire in his Wealth of
Nation published in 1776, it was believed that government had a necessary role to reduce
economic problems by intervening in the natural market. The British government had regulated
foreign trade and shipping to promote employment, maintain a favorable balance of payments,
protect home industry, control colonial economies, and secure military potential; which were
closely related to the interests of the politically powerful and economically rich classes. The rising
population demanded more food, causing higher food prices that made the poor desperate for
survival. The poor with massive unemployment had nothing to lose but to cause uprising
particularly in the districts of the textile industry, where the local police always worried about
social instability, which was politically sensitive. The policy makers might consider available
options to deal with problems of the poor including the production of more food, creation of more
jobs, relief of the poor, and emigration to British colonies. However, history tells us that any
political system was unable to build full equality of society as experienced in the collapse of the
Soviet Union in 1991. Let’s focus here, among others, on the relief of the poor to which the
Parliament had paid attention. The old Poor Law of 1601 initiated by Elizabeth was a parish based
system, paying for food or clothes to those who were too ill or old to work, which was enforced
when the population was too small. In 1723, the Parliament passed the Workhouse Test Act “that
a person who wanted to receive poor relief had to enter a workhouse and undertake a set amount
of work” which could prevent irresponsible claims on parish’s poor rate. The Relief of the Poor
Act of 1782 established poor houses "solely for an aged and infirm" and introduced a system of
outdoor relief for the able-bodies, which made low-paid workers paid. Being criticized as
distorting the free market, the poor law system was altered due to increasing costs: the Parliament
passed the Poor Law Amendment Act of 1834 that was intended to reduce the burden of tax payers
by reducing the cost for relief of the poor.88
The mercantilist position was dominant in theory and practice for Europeans to maintain a
favorable balance of trade and payments in the eighteenth century. The precious metals were
essential for reserves, particularly at the time when the British fought wars not only in Europe but
in the West Indies, North America, and the East Indies. “War increased foreign spending sharply:
the naval supplies, loans to allies, purchasing by armies abroad, and for fleets on foreign stations.”
In addition, war hindered market activities, while “exports were unlikely to expand quickly enough
to absorb these strains in the balance of payments.” The trade with the East Indies, the Levant,
and the Baltic needed exports of bullion from Britain directly or indirectly. Although the inflow
of bullion was one of British trade policies, David Ricardo published the Principles of Political
Economy and Taxation in 1817 in which he views that trade is mutually profitable by taking
comparative advantages of trade partners. It is believed that the balance of trade, either surplus or
deficit, is adjusted by the terms of trade in the open economy.89 A trade surplus – more exports
than imports – brings more foreign currencies flowing into the domestic market, which causes an
inflation reducing the value of the domestic currency in the foreign exchange market. Hence, the
trade surplus weakens the competitiveness of exporting goods in the world market, so that the
export volume declines and the trade surplus is reversed even to a deficit level. The case of the
trade deficit – more imports than exports – is similarly reversed to the opposite direction in the
open economy. Moreover, a rising quantity of precious metals reduces the interest rate in the
financial market, which stimulates investment that generates employment and income leading to
economic booms; so that the prices would rise and exports would be discouraged. Nevertheless,
the direction can be converted by self-adjustment function: the lower interest may cause foreign
investors to move capital abroad to get higher returns from investments, which may partially
frustrate the original objectives if it is larger than the income effect.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 151
The British government aimed at the protection of home industry. The Parliament passed the
Wool Act in 1699 to protect the woolen industry - one of the largest occupations outside
agriculture, and its employment depended largely on the foreign trade. The Act attempted to
heighten taxation and increase control over colonial trade and production. “It opened Britain's
wool industry by limiting wool production in Ireland and forbidding the export of wool from the
American colonies. The law prohibited American colonists from exporting wool, wool yarn, or
wool cloth to markets outside the individual colony in which it was produced, and also restricted
the import of woolens and linens created in other areas of the British Empire. In effect, it forced
all wool and wool products produced by colonies and dependent areas of the United Kingdom to
be sold to British markets, and then resold to British citizens in all areas of the empire. Each sale
generated taxes on these goods.” 90 Similarly, the import of silks and printed calicoes was
prohibited in 1700: “a blow struck against the East India Company ostensibly for the wool trade,
but with the effect of giving a stimulus to the infant English cotton and silk industries.” The Wool
Act was repealed by the Statute Law Revision Act of 1867. On the other hand, the Corn Laws, in
force between 1689 and 1846, were designed to protect agriculture for the interest of landholders
by encouraging the export and limiting the import of grains when prices fell below a fixed point.
In 1815, the Parliament passed a corn law that permitted the import of foreign wheat with free of
duty only when the domestic price reached 80 shillings per quarter (8 bushels), which increased
food prices and encouraged wheat farming. There was a bad harvest in 1816, causing bread prices
to increase rapidly, followed by industrial unrest when workers demanded higher wages to pay for
the increased food prices. Strikes and riots were exploded throughout the country, while the Anti-
Corn-Law-League criticized that the law increased industrial cost by the subsidy. The new
political power of the British middle class, who influenced radicals of the working class, won the
legal battle when the Parliament abolished the law in 1846.
The control of colonial economies was another aim of British trade policies, which was
associated with the protection of home industries. The British exported manufactured goods to
and imported raw materials from their colonies: the colony was a protected-market for British
exports, and a secured-source of British imports of raw materials. “There was an attempt to ban
the woolen industry in the colonies in 1699; to limit the export of Irish wool textiles only to Britain,
and to outlaw any inter-colony trade in woolens. Their currencies were also controlled. At another
time the colonists were forbidden to export the refining of iron and manufacture of finished articles
from iron was prohibited in the North American colonies.” The British imported sugar, tobacco,
rice, cotton, and pepper from their colonies, some of which like New England supplied timber,
naval stores, and pig-iron with duty free. The “production of pig-iron had been encouraged there,
though not very successfully, to end dependence on Swedish and Russian iron, which was not in
the British political control.” The British allowed American colonies to build ships freely, which
was profitable at the expense of British shipbuilding: one-third of the total ships under the colors
of British merchant marine were built in America. The regulatory system intended to secure
strategic materials in order to maintain military potential. The mother country and her satellite
colonies should maintain self-sufficiency in war with secured strategic materials such as saltpeter
and naval stores including hemp, pitch, turpentine, tar, and timber. The Baltic had long been a
dangerous spot where hostile coalitions could happen: “once the stocks in the mast-ponds at naval
dockyards had been used up, all British naval strategy might be threatened, in contrast to oak, no
native soft-woods could provide large enough trees for main-masts of ship-of-the-line.” To
maintain military potential, it is necessary to encourage shipping capacity and to maintain a
number of enough seamen with appropriate training. A British strategic failure was observed in
containing the Dutch from the European fish trade with Baltic grain.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 152
The Navigation Acts had been a basis for British overseas trade policies for two centuries
from the original ordinance of 1651, with minor amendments in the early period, to its final repeal
in 1849. The laws had two objectives – to protect English shipping and to secure profits to the
home country from the colonies. The laws described that only British ships could transport
imported and exported goods from colonies; the only people who were allowed to trade with the
colonies had to be British citizens; and such commodities as sugar, tobacco, cotton, wool, dyeing,
and wood produced in the colonies could be exported only to British ports.91 Targeting the Dutch
controlling a large part of Europe’s foreign trade even much of England’s coastal shipping, the
Acts could stop the direct colonial trade with the Netherlands, France, and other European
countries. Moreover, the Molasses Act of 1733, the first Sugar Act, levied heavy duties on the
trade of sugar from the French West Indies to the American colonies, which forced the colonists
to buy the more expensive sugar from the British West Indies instead. Although the law was
widely flouted, British efforts to prevent smuggling created colonial hostility. The Acts caused
the four Anglo-Dutch Wars during 1652-84 as discussed in Book III. The impact of the laws on
Britain was significant: the laws gave advantages to English shippers by limiting the ability of
Dutch ships carrying English cargos; stimulated the growth of London “as a major entrepôt for
American colonial wares” at the expense of Dutch cities; and expanded the Royal Navy making
Britain a global superpower until the mid-twentieth century. The Acts could enrich Britain, but
caused resentment in the British colonies and contributed to the American Revolution, while their
economic impact on the colonies was minimal.92 In fact, shipping initiative carried so many related
businesses like re-exports, insurance, banking, warehousing, and port works. In addition, the
processing industries arising from the colonial trades were "sugar refining, rum distilling, tobacco-
chopping, snuff grinding, and packaging" all of which were located at the entrepôt. The Acts
forced English ships to distribute traded goods to the ultimate markets.
The slave trade took place across the Atlantic Ocean from the sixteenth century to the mid
nineteenth centuries.93 African tribal leaders or hunters sold Africans to European slave traders,
who transported them across the ocean to the European colonies in America. They were forced
“to labor on coffee, tobacco, cocoa, cotton and sugar plantations, toil in gold and silver mines, in
rice fields, the construction industry, timber for ships, or in houses to work as servants.” The
Portuguese had supplied African slaves to Spanish colonies in the West Indies by asiento that was
an exclusive contract supplying of slaves to the Spanish Indies. Later, merchants from Spain,
Holland, Britain, France, and others were involved in the Atlantic slave trade. With the rising
naval power, Britain took over Jamaica, Trinidad, the Leeward Islands, and Barbados in the West
Indies and British Guiana in South America, and settled in continental North America, where their
plantations demanded African slaves to cover the labor shortage. In 1713, the British government
obtained a contract from Spain of supplying African slaves to Spanish colonies in America for
thirty years, which monopoly rights were transferred to the South Sea Company. In America,
slave labor began to supplant indentured servitude during 1680-1700. The House of Burgesses
enacted a new slave code in 1705 that recognized the principles of white supremacy. According
to an estimate, 12 million Africans were shipped as slave to the Americas: 645, 000 of them were
shipped to the United States from the 16th to 19th centuries. The slave trade was profitable, but it
was always speculative and risky; losses in transit were often heavy; and war and piracy disturbed
the trade. Economically, profits from the slave trade and cheap slave labor helped to form British
capital, which contributed to the Industrial Revolution. The movement opposing the slave trade
became successful in1772 when slaves became free upon entering the British Isles. Accordingly,
the state of Virginia stopped the importation of slaves for sale in 1778, and U.S. President Lincoln
announced the formal emancipation of slaves in 1862.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 153
British Foreign Trade and Transport: The century from the glorious revolution to the fall
of Napoleon was critical for the British to establish a dominant position among trade partners as
well as to be a global empire in Europe, while the English sent out commercial ships for trade to
North America, the West Indies, the East Indies, and Africa.94 Like other European conquerors,
the English “acquired territorial footholds where they could, by settlement, grant or conquest, and
used territorial dominion to support, protect and extend their trade.” In North America, they
settled at Jamestown of Virginia in 1607 and St. George's of Bermuda in 1612, established the
thirteen colonies mostly in the seventeenth century, and gained Quebec by the Treaty of Paris in
1763. In the West Indies, they settled in Barbados in 1625, Bahamas in 1647, the Virgin Islands
in 1666, and received Jamaica from Spain in 1655 and other islands later. In South America, they
entered Belize and the Mosquito Coast in the 1630s, and captured Guiana from the Dutch in 1796.
First, the British exported manufactured goods, mainly woolen textiles and secondly iron and
hardware, to their American colonies and imported sugar, tobacco, cotton, indigo, dyewood, and
other tropical groceries from them. The United States depended on trade with Britain even after
the independence, because “no other European country could supply, at competitive prices, the
manufactured goods which the Americans needed; nor purchase in adequate quantity the raw
materials which they produced. This dependence was to increase, as population increased and
moved west, and as pioneer settlement in the north, cotton planting in the south, absorbed energies
which might otherwise have been used in building up industries on the eastern seaboard.”95
Meantime, few European goods were saleable to the East Indies. The British had nothing to offer
to India but their administrative and commercial services; while neither goods nor services from
Europe were wanted by China. The trade deficits were paid by bullion though some profits from
the intra-Asian trade could partially reverse the gap.
Second, in the trans-Atlantic trade, the triangular slave trade had been greatly profitable by
connecting trade of Europe, Africa, and European colonies in Americas from the late sixteenth
century. "The first leg of the triangle was from a European port to Africa, in which ships carried
supplies for sale and trade, such as copper, cloth, trinkets, slave beads, guns, and ammunition.
When the ship arrived, its cargo would be sold or bartered for slaves. On the second leg, ships
made the journey of the Middle Passage from Africa to the New World. Many slaves died of
disease in the crowded holds of the slave ships. Once the ship reached the New World, enslaved
survivors were sold in the Caribbean or the American colonies. The ships were then prepared to
get them thoroughly cleaned, drained, and loaded with export goods for a return voyage, the third
leg, to their home port, from the West Indies the main export cargoes were sugar, rum, and
molasses; from Virginia, tobacco and hemp. The ship then returned to Europe to complete the
triangle." 96 Third, the cotton industry was one of three key engines of the first industrial
revolution, which was closely related to the British overseas trade linking producers and
consumers. The cotton was light in summer and easily washable with colorful prints, so that the
demand for cotton clothes increased in the European markets. As cotton spinning and weaving
were mechanized by new inventions and innovation, the prices of cotton fabric and clothes
declined rapidly, which pulled the consumer demand throughout the world. The main obstacles
to the British cotton industry lay “not in production, nor in marketing, nor in the availability of
labor or of capital, but in the supply of raw material.” In 1790, of a total import of about 33 million
lb., “some 70 percent came from the West Indies as a whole, including Guiana.” In 1800, the
United States supplied 16 million lb., out of total British consumption of about 55 million lb., as
the share of the West Indies declined to 35 percent. “After the end of the French War, “the United
States supplied nearly half of British requirements, India and the East Indies a little over a quarter,
the West Indies only 7 percent. The total import in 1820 was over 144 million lb.”
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 154
According to the tables of E. B. Schumpeter,97 the total value of British exports increased by
6.3 times in the century from £6.47 million in 1700 to £40.81 million in 1800; while that of English
imports rose by 4.75 times in the same period from £5.97 to £28.36 million respectively. The
rising international trade stimulated the British economy to lead the industrial revolution. (1) The
share of British exports to Europe were 78 percent of her total exports in 1700 but declined to 45
percent by 1800; and the share of British imports from Europe were 50 percent of her total imports
in 1700 but also declined to 31 percent by 1800. The falling share of British trade with Europe
among the total trade was caused by the rising trade with North America, the West Indies, and the
East Indies. However, the average annual value of British exports to North Europe rose from
£3.12 million in 1701-05 to £11.77 million in 1796-1800; while that of British imports to the same
rose from £1.35 to £2.68 million correspondingly. (2) British exports to the West Indies rose from
£0.31 to £4.38 million during 1700-1800, while British imports from it rose from £0.61 to £5.90
million correspondingly; and British exports to North America rose from £0.27 to £6.70 million
in the same period, while British imports from it rose from £0.29 to £1.96 million correspondingly;
which resulted in a surplus of £4.83 million in 1800 - the value of British exports to North America
rose by 25 times in the eighteenth century. The American war disturbed the British-American
trade during 1776-1782, but trading volumes were fully recovered the pre-war level by 1785, and
the United States became the main cotton supplier to Britain. (3) The shares of commodity imports
among British total imports were changed during 1700-1800: raw cotton rose from zero to 6.0
percent, linens fell from 15.6 to 5.6 percent, and textile materials fluctuated from 16.2 to 15.4
percent. The share of commodity exports among British total exports were changed in the same
period: woolens fell from 57.3 to 28.5 percent, cotton goods rose from 0.5 to 24.2 percent, other
textiles rose from 2.4 to 6.1 percent, grain fell from 3.7 to zero percent, and iron rose from 1.6 to
6.1 percent. While the cotton industry was expanded, British woolen exports declined.
(4) British exports to the East Indies increased from £0.11 million in 1700 to £2.21 million in
1800; while British imports from them also rose from £0.55 to £4.83 million correspondingly;
which resulted in a trade deficit of £2.62 million in 1800. Moreover, the total amount of British
re-exports increased from £2.13 to £18.40 million and the share of grocery imports among British
total imports doubled from 16.9 to 34.9 percent in the same period. It is evident that the British
trade deficit with the East Indies came from rising re-exporting items belonging to groceries. The
British imported sugar, tobacco, pepper, coffee, tea, and others from the East and the West Indies,
and re-exported them to northern Europe. (5) The British trade with the Baltic, the Mediterranean,
and Africa was lagging like with old northern Europe. The amount of British exports with the
Baltic increased from £0.30 million in 1700 to £1.34 million in 1800, while that of British imports
with them rose from £0.48 to £3.19 million correspondingly. The British trade with the
Mediterranean and African countries remained little changed during the eighteenth century.
British exports to Spain and Portugal, the Mediterranean, and Africa in 1800 were £0.92, £0.74,
£0.97 million, and British imports from them in 1800 were £3.19, £1.22, £0.07 million respectively.
The Methuen Treaty of 1703 opened Portugal for British clothes and allowed Portuguese wine to
be imported into Britain.98 (6) Since commercial shipping could create various industrial linkages,
the more use of shipping space was critical for the economy: the Navigation Acts protected British
shipping and provided great benefits to the British economy. Since Britain imported shipbuilding
and maintenance materials from the Baltic, the rising Baltic trade signaled the expansion of the
shipping space; which was considerably used by the new colonial trades and coastal shipping for
coal, grain, or fishing. Above statistics might be reevaluated, either positively or negatively by
such factors as inflation of commodity prices, undocumented trade or smuggling, and major
international wars, which heavily disturbed the foreign trade.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 155
Transportation is essential part of the infrastructure and it is necessary for the economy to
reduce transport costs by developing the transport system through investment and innovation. An
inexpensive shipment of input factors and final goods reduces the production cost and lowers the
transfer-cost in the market. Better transportation weakens local monopolies and promotes
competition between producers and merchants, which stimulates the economy to grow owing to
efficient allocation of resources. Improving communications, easy transportation makes science
and technology be diffused with lower barriers. In Britain, road transport greatly improved with
better construction of roads, better-made carriages, and better institutions or organizations in this
century. Local authorities were responsible to build and maintain roads, but there were little
incentives to improve them unless they collected money from customers passing the tolls. The
Acts of Parliament set up turnpike trusts with powers to collect road tolls for maintaining the
principal highways in Britain: the first Turnpike Act was passed for the repair of the highway in
1696. "At the peak, in the 1830s, over 1,000 trusts administered around 30,000 miles of turnpike
road in England & Wales, taking tolls at almost 8,000 toll-gates and side-bars."99 It was observed
that "turnpike roads were used to transport cotton goods in the 1780s and 1790s because they were
faster and more reliable even if canals were less expensive." Meanwhile, the stagecoach was
pulled by four horses with a speed of less than 4 miles per hour in the 1760s, that was improved
to 8 miles per hour in the 1840s, when the number of public coaches was 5,805, of which 3,735
travelled less than 60 miles. As people communicated through personal letters, the post office
introduced mail coaches in 1784, which carried both passengers and mail by emphasizing on
"promptness, punctuality, and speed, traveling overnight and stopping only to change horses."
The Penny Post became the British postal system by 1840.
The British canals played a vital role in water transport. Canals were “designed for bulky,
slow-moving cargoes and served mostly local transport needs." It was so expensive to construct
aqueducts, embankments, bridges, locks, and tunnels that early canals were built by landowners
who put over 40 percent of all investment, but their share had declined to 22 percent by the years
1780-1815.100 The Bridgewater Canal is the first major canal built by the Duke of Bridgewater
who owned coal mines in northern England, and he opened the canal in 1761 to transport coal to
Manchester.101 The Grand Trunk Canal, completed by Josiah Wedgwood in 1777, connected the
east and west coasts of England. The Birmingham Canal completed in 1772 that connected to the
rest of the English canal system at several junctions. The Grand Junction Canal, completed in
1805, improved “the route from the Midlands to London, by-passing the upper reaches of the River
Thames near Oxford and by shortening the journey.” The capacity of the British inland waterways
“almost tripled from about 1,400 miles in 1760 to almost 3,900 miles in 1830." A contemporary
observed “that 90 out of the 165 passed between 1758 and 1802 had coal as their main prospective
traffic….Agriculturally-based rural traffic was less intensive and too seasonal to generate high
freight income.” The costs and benefits of British canals might be arguable in the process of the
Agricultural and the Industrial Revolutions,102 but canals and turnpikes largely absorbed financial
resources and entrepreneurial energies of local notables. Upon the arrival of railroad, the
construction of canals slowed down and then stopped altogether. On the other hand, coastal
shipping has been most attractive among the transport businesses. It is observed that “as late as
1910, coastal ships carried 59 percent of all ton-miles of internal freight, with the railroad picking
up 39 percent and canal only 2 percent.” The coastal shippers adopted steam power: there were
188 steamers in the coastal trade by 1821, which also carried passenger traffic. The renovation of
harbor and the construction of the dock system was one of significant transport improvements: the
Parliament passed the bills to improve the West India Docks in 1799, the East India Docks in 1803,
and London Docks were built during 1802-05.103
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 156
Voyages to the Pacific and a Second New World: It was essential for the Europeans to build
ships for their economic or strategic interests. The fluyt was designed by the Dutch around 1600
for the trans-Atlantic trade by minimizing its armaments to maximize cargo space with a few crew
(12-15 men was not uncommon). It was typically weighed 200-300 tons with around 80 feet in
length, and was square rigged with two or three masts allowing maximum speed of 8.5 miles per
hour. “Despite its large cargo capacity, the fluyt possesses a draft so shallow that it can enter rivers,
coves and small harbors inaccessible to larger craft.” Owing to lower shipment cost, the fluyt was
so competitive that the Dutch could dominate world commercial shipping in the seventeenth
century. As the Dutch declined from the early eighteenth century, the rising British exports and
shipments demanded more warships for overseas protection, and the continuous international wars
forced the British fleets to be expanded, although the ship of the line changed little in essentials.
Merchant ships were usually much smaller than warships, but the rising trade volume introduced
a tendency toward bigger ships, particularly in the East Indian, West Indian, and African trades to
carry bulks of coal, grain, and timber. The British East India Company employed bigger ships
since some of functions of warships were necessary. “In the two years 1790-1, 1,156 ships were
built in England; only a hundred and fifty were over 200 tons, and ten or dozen of these were
Indiamen of over 600 tons.” The most important innovations of ships lay in an improvement in
steering gear, rig refinements and extensions in the use of fore-and-aft sails, and developments in
the hull design.104 The wooden ships had a problem from weeds and barnacles attached to the
bottom of the ship, which reduced the speed and finally destroyed the ship if not removed; for
which copper sheathing was introduced. Twelve British warships had been coppered in 1776, and
the major European navies rushed to copper during 1779-80. In designing ships, Gabriel
Snodgrass, who was a surveyor of the East India Company, introduced an innovative system using
iron knees, riders, and braces to the new EIC ships in the 1780s.105
The development of maps and charts depended on national efforts: in the fifteenth century,
the best cartographers were Italians, in the sixteenth century the Portuguese, in the seventeenth the
Dutch with a hydrographical service by the East India Company, in the eighteenth the French, and
in the nineteenth the British.106 The construction of an accurate world map was the work of
geodesists and cartographers in the eighteenth century. In 1700-26, the collected observations
were incorporated in the maps by Guillaume Delisle (1675-1726). Rejecting traditional data, J. B.
Bourguignon d’Anville (1679-1782) published his map in 1759 with the critical method of
appraising, which became a starting-point for the exploration of inland Africa during the next
century. “The voyages of Louis de Vougainville, 1767-9, and James Cook, 1768-79, drew the
modern map of the South Pacific Ocean; and Matthew Flinders charted the coasts of Australia,
1798-1803. Cook, 1778-9, and La Perouse, 1785-7, surveyed the American and Asiatic shores of
the north Pacific; Malaspina, 1791-2, and Vancouver, 1792-4, its American coasts. Between 1770
and 1855 British, French, and German expeditions revealed the geography of northern Africa, and
the oceanic coast-line of the continent was surveyed in 1822-6.” For an accurate navigation, the
determination of longitude was important. “Cook, on his first voyage, relied for his longitudes on
the lunar distance method and took a prodigious number of lunar sights, which he worked with an
unexampled accuracy.” On his second and third voyages, he used a replica of the map made by
Larcum Kendall, but his chief use was to check the “longitude-by-chronometer” that was simpler
and more accurate.107 Several individuals introduced more precise methods of finding latitude, and
devised various ways using double altitudes as well as the ex-meridian method. However, “the
best navigating methods and most accurate maps and up-to-date charts were never the ones in
general use” while the weather remained always critical for safe returns from distant voyages,
though experiences gradually brought cheerful confidence.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 157
In the late seventeenth and early eighteenth centuries, the world outside Europe was mainly
the coastlines: the interior of Asia or of Africa was little known to Europeans, and Spaniards were
the only Europeans who regularly crossed the Pacific between Acapulco and Manila. Of the
thousands of islands in the Pacific between Equator and the Tropic of Capricorn, very few were
known, although a number of exploring expeditions had crossed the ocean. The second age of
discovery began with some private adventurers who were interested in exploring those unknown
parts of the world. The buccaneer-explorers visited the Pacific coast of South America, the East
Indies, Australia, and the Western Pacific, not for the discovery, but “to see what the country
would afford us” and to prey on other people’s shipping. Based on their narratives and
descriptions, a series Voyages was published among which Harris’s Voyages was influential in its
second appearance in 1744-8. The Pacific expedition was followed by Roggeveen in 1721-2 and
Anson in 1740-4. However, the systemic exploration of the Pacific was launched by naval officers
and scientists in concert of some states: the French and the British might hope some compensation
through the Pacific for their losses in America, while the Spanish might worry about a possible
loss of the monopoly crossing the Pacific by the appearance of France or Britain. The great series
of Pacific voyages began with Byron, Wallis, Carteret, or Bougainville (who settled in the
Falkland Islands in 1776); who crossed the Pacific diagonally from the east to the west. Among
many explorers, James Cook (1728-79) was the central figure of the second age of discovery. He
was “a British explorer, navigator and cartographer who ultimately rose to the rank of captain in
the Royal Navy. Cook made detailed maps of Newfoundland prior to making three voyages to the
Pacific Ocean, during which he achieved the first European contact with the eastern coastline of
Australia and the Hawaiian Islands, as well as the first recorded circumnavigation of New
Zealand.”108 Unfortunately, he was killed in Hawaii in a fight with Hawaiians during his third
exploratory voyage in the Pacific in 1779.
Map II-3-1.The Routes of Captain James Cook’s Voyages The first voyage is shown in Red, second voyage in Green, and third voyage in Blue.
The route of Cook’s crew following his death is shown as a dashed blue line.
Source: https://upload.wikimedia.org/wikipedia/commons/4/4a/Cook_Three_Voyages_59.png
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 158
James Cook led three voyages with Endeavour in 1768-71, Resolution in 1772-75, and the
same in 1776-80. The first voyage directed westward from the Cape Horn (S. America) to Tahiti
- New Zealand - the east coast of Australia - Batavia – Cape of Good Hope (Africa) - England.
He spent six months in a coastal survey of Australia and New Zealand. Among two alternatives
of returning routes, he chose the westward through the East Indies to the Cape of Good Hope. The
second voyage directed eastward: (i) in 1773 from the Cape of Good Hope (once losing his mean
track in the Atlantic and Indian Ocean away toward the Antarctic) to New Zealand - the Tuamotu
Islands - Tahiti - Tonga - New Zealand; (ii) in 1774 from New Zealand (twice losing his mean
track in the Pacific away toward the Antarctic) to Easter Island – Marquesas – Tahiti – Niue –
Tonga – the New Hebrides – New Caledonia – Norfolk Island – New Zealand – Cape Horn -
making a final sweep in the Atlantic-Antarctic – Cape of Good Hope – England. Cook’s
discoveries in the second voyage were significant and uncritically recorded. Being affected by a
strategic interest in arctic exploration and the “Northeast Passage to Asia” for a profitable trade
with Russia,109 the third voyage directed eastward from Cape of Good Hope to New Zealand –
Tonga – Tahiti – Hawaiian Islands – the Pacific coast of America – Nootka Sound – the NW coast
of America – Gulf of Alaska - Bering Sea – Bering Strait – the Arctic Ocean – NE coast of Asia
(Chukot) - Hawaii. Cook explored, described, and recorded what they saw during the voyages.
His twelve years sailing around the Pacific Ocean contributed much to European knowledge of
the area. “Several islands such as Sandwich Island (Hawaii) were encountered for the first time
by Europeans, and his more accurate navigational charting of large areas of the Pacific was a major
achievement.” After Cook’s death, the expedition was directed westward from Hawaii to
Kamchatka – Japan - China Sea – Batavia – India Ocean – Cape of Good Hope – England. His
new discoveries attracted the British to settle into the Pacific region.
Photo II-3-3. James Cook Witnessing Human Sacrifice in Tahiti, c. 1773 https://upload.wikimedia.org/wikipedia/commons/thumb/c/c3/James_Cook%2C_English_navigator%2C_witnessing_hu
man_sacrifice_in_Taihiti_%28Otaheite%29_c._1773.jpg
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 159
In 1786, the British Parliament passed an Act encouraging the “Southern Whale Fishery” in
the Pacific. The British whalers ranged the whole Pacific and regularly called at “Tahiti, Hawaii
and the Bay of Islands in New Zealand.” They cruised off the Pacific coast of the Americas for
whaling or sealing, followed by traders buying furs from the local Indians. In 1774-89, Spain sent
several expeditions up to Sitka Sound of the Pacific Northwest to reassert its long-held navigation
and territorial claims to the area. In 1789, the Spanish navy seized British vessels at Nootka Sound
to confirm their preoccupied monopoly in the Pacific navigation. When the news reached Europe,
the British government requested compensation and Spain refused. Both sides prepared for war
and sought assistance from allies, but the Nootka Sound crisis was peacefully resolved. “Spain
agreed to share some rights to settle along the Pacific coast but kept its main Pacific claims.”110
Spain recognized British whaling in the Pacific and agreed British right to access to the coast of
Spanish California. On the other hand, in 1787, the British government sent the fleet of 11 ships
to Australia under Admiral Arthur Phillip (1738-1814) to settle in Port Jackson-Sydney with about
1,530 people including 736 convicts, 211 marines, and about 300 officers – establishing the
Colony of New South Wales. The colony made commercial ties with Bengal for necessary
supplies; ships from Calcutta carried live cattle, textiles, tobacco, sugar, rice, and rum for sale to
the colonists, and returned with seal oil and skins to be sold to China or Britain. It was true that
time was needed “to clear heavy timber, to break rock-hard ground, to raise crops and breed cattle.”
Phillip’s governorship was extended to all the islands adjacent in the Pacific Ocean including
New Zealand that was more attractive than Australia due to pleasant climate, fertile soil, and useful
natural resources. The Polynesians of Hawaii wanted to buy firearms and iron tools from European
traders, and sell tortoise shell, mother-of-pearl, sandalwood, and sea-slugs. Bringing no silver,
spices, or silk like from the first age of discovery, the second age was in “more disappointment
than promise” to the Europeans, though the colony was taking shape with land-grants.111
The European colonies suffered from corruption and inefficiency demanding reformation.
Under Charles III of Spain, most officials of the West Indies obtained their posts “by purchase,
lease, inheritance, or personal patronage” so that the colonial office was a place making profit. In
the colonial government, there were no clear chain of command and no check-and-balance.
Numerous officials lived on fees collected from people who had public business to transact. The
Corregidores, the work forces of administration, received only token salaries, charged on the
Indian tributes; most of their income came from perquisites, in particular from the profits of the
repartimiento de comercio. They used it for their own profit “by compelling Indians to buy
miscellaneous imported goods which they did not want and could not afford to pay for.” As
minister of Indies, Galvez submitted a reform plan, which was implemented during 1972-88: the
office of Corregidor was replaced by intendancies – twelve in New Spain, six in Peru, eight in Rio
de lad Plata – each intendant, as a financial supervisor, governed an extensive province. The
collapse of Spain by war made the Indies fell to an administration at odds in itself. Meantime, the
British crown at least did not sell colonial offices officially, but patients were granted by ministers
to political supporters, election mangers, clients, friends, relatives, protégé or some others. The
principal patent officers in most colonies received no salaries or only token salaries, and the patent
system in colonial America made governors unable to hold his rule in obedience. The British
India separated from all the mixture with commercial interests and the abolition of patronage, by
recruiting the civil service through free competition and public examination. As the Europeans
tried to collect more revenues from their colonies, the police system became more effective against
the crime. Nevertheless, colonial governments generally used ruthless forces to control native
politics, economy, and society, which could not secure their collaboration but increased
resentment and induced resistance against the colonial rules.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 160
The Continental System and Its Impact: Britain and France maintained mercantilist
policies in the eighteenth century by limiting foreign imports to give a virtual monopoly of the
home market to native manufacturers or farmers. Influenced by new trade theories of Adam Smith,
they signed the Anglo-French Commercial Treaty or the Eden Treaty in 1786 lowering customs
duties to 10 or 15 percent of the value of traded goods, and abolishing prohibitions on imports.
First, the French national debt was estimated at 3,500 million livres, so it was expected that a
commercial treaty with Britain might bring more revenues by collecting customs duties from the
expanded trade. The British national debt was £250 million; they also wanted to collect more
revenues from customs duties by expanding foreign trade. Second, the French lost Canada and
India, while the British lost her thirteen colonies in North America. Although Britain and France
had been traditional enemies, they thought that a commercial treaty might provide the first step
towards conciliation mitigating mutual antagonism.112 In real trade, British exports were more
competitive in the French market: British exports of calico, woolen, pottery, steel, and leather
were so popular in France that those industries in France declined rapidly. Hence, their
employment and income declined, and consumer demand fell significantly; which caused
economic recession and social instability in France. The treaty was beneficial to the British but
seriously hurt the French economy: “This treaty was considered to be one of the grievances of the
French people that sparked the French Revolution.” The commercial war between them renewed
in 1791, when the Constituent Assembly adopted new tariffs; and the treaty was finally collapsed
due to the outbreak of war in 1793. The Convention annulled all treaties previously entered into
with enemy countries, and prohibited the importation of a large number of textile, metal, and
earthenware goods; and soon after prohibited imports and sale of British goods. In time of war,
certain raw materials or enemy goods might be often imported by neutral vessels or through
smuggling, though illegal, to overcome the commercial blockades.
In the maritime blockade, applying the law of war at sea, the British government authorized
fleet commanders and privateers “to stop and detain all vessels loaded wholly or in part with corn,
flour, or meal, bound to any port in France or any port occupied by the armies of France.” The
French measures against maritime trade had been milder than those of Britain at first, but in 1796
the Directory declared that British methods were to be applied against the neutrals in every respect.
The law of 1798 enforced that “if any vessel was carrying goods of any kind coming from England
or its possessions, no matter who was the owner, this fact alone should justify the confiscation,
not only of these goods, but also of the vessel itself and its entire cargo. Moreover, any vessel that
had touched at a British port was forbidden to put in at any French port.” Thus, expelling neutral
shipping, France lost benefits of purchasing strategic materials and products from the neutral
vessels. In 1799, “the British blockade had been maintained so strictly that not a single vessel was
sailing the sea under the French flag.” On the other hand, in the continental blockade, France by
the Congress of Rastadt of 1797 occupied the west of the Rhine, to which the prohibition against
British goods was extended. They planned to bar the mouths of the Elbe and the Weser to the
British, and to transform Hanover and Hamburg into a republic allied with France; “which would
lead to increased sales for French goods and to an embargo on British industrial products.” The
French general policy was to exclude Britain from the European Continent in order to weaken the
British industrial and commercial power in favor of the French sales in the continental market.
The Directory intended not only to exclude British shipping from the ports of the Mediterranean,
the Atlantic, and the North Sea but also to close the Baltic Sea to the British in 1795 “by playing
Sweden and Denmark against Russia, which for the moment was on friendly terms with Great
Britain.” The maritime and continental blockades during 1793-99 provided experiences being a
foundation of the Berlin Decree to be enforced in 1806 under Napoleon.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 161
Having been dominant in maritime and colonial affairs after the decline of the Netherlands,
Britain supported the wars of continental powers against France. The total amount of subsidies
for three years in 1794-6 was over £41 million; and the British national debt amounted to £230
million in 1789 that increased to £507million in 1802 (though remained at £587 million in
1914).113 Those subsidies were paid not by gold and silver, but by consumable goods, while the
British exports had usually increased during the war. The British exports were “a necessary pre-
condition for her capacity to carry on a war against France on the mainland." If it is not possible
to pay subsidies by exporting goods, she must pay by bullion with the partial circulation of paper
money within the country; or she loses sufficient balances to her credit on the Continent so that
the exchange rates will fluctuate against her. An attack on British exports reduces her balance of
payments and forces Britain to export bullion, which weakens her financial capability; that was a
reason why they took mercantilist policies during the Anglo-French war. Napoleon encouraged
smuggling with Britain in order to extract bullion from Britain by exporting French goods. As
Napoleon gained a temporary peace by suppressing internal and external enemies, France and
Britain signed the Treaty of Amiens in 1802. However, the French expansionary strategies caused
the outbreak of war in 1803: Britain seized all French and Dutch vessels lying in British ports;
blockaded the mouths of the Elbe and Weser and cut off the entire trade of Hamburg and Bremen;
restricted the colonial trade with the Americans; and controlled the trade with the North Sea coast.
France also excluded Britain from all connections with the mainland, especially with the North
Sea coast, to prohibit imports of British goods, and the high rates of customs duties were widely
applied. After the battle of Trafalgar, France lost the power of communication with her colonies
such as the French West Indies, so that the colonial trade fell more and more into the hands of the
British. Nevertheless, at least Napoleon was effectively able to close the French, Italian, and Swiss
markets to British industry and trade until 1812 when France revoked decrees.
Winning the war against Prussia, France established the Continental System by the Berlin
Decree of 1806 that forbid the import of British goods into European states. “First, the British Isles
are formally declared in a state of blockade, and all trade or communication with them is prohibited.
Secondly, the decree turns against all British subjects in territories occupied by the French; they
are declared to be prisoners of war, and all property belonging to them to be fair prize. Thirdly,
war is made on all British goods; all trade in them is prohibited and all goods belonging to England
or coming from her factories or her colonies are declared to be fair prize, half of their value to be
used to indemnify merchants for British captures. Fourthly and lastly, every vessel coming direct
from ports of Great Britain or her colonies, or calling at them after the proclamation of the decree,
is refused access to any port on the Continent.”114 Although its practical effect was to blockade
British exports to the German territories in the very beginning, Napoleon intended to transform
the system “from a mere visionary program into a political reality” embracing the whole European
mainland. The Milan Decree of 1807 authorized “French warships and privateers to capture
neutral ships sailing from any British port or from any country that was occupied by British forces.”
The Hanse towns like Hamburg were flourished by the trade with the French West Indies, but both
decrees hit those towns to decline, which was largely extended not only to France but also to
Holland occupied by France. Since the British maritime trade with the Hanse towns was vital to
her interest, the decrees seriously damaged the British trade with Germany. The decrees also hurt
the United States which sold more goods to Germany than to the entire British Empire around the
time. Similarly, it was difficult for the French industries to obtain colonial raw materials, but
Napoleon considered that “the injury to England was yet greater owing to her greater dependence
on industry and foreign trade,” though the United States was an enemy of Britain but a friend of
France by then. Napoleon intended to isolate Britain economically to be collapsed.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 162
The British took three counter-measures: attempting to break through the blockade; placing
obstacles in the way of French imports to bring economic pressure to bear; and injuring the trade
of France and her allies in the same ways as Napoleon had sought to injure Britain, by cutting off
her exports, which was a policy of retaliation. The British government ordered to exclude certain
necessary commerce from the territory of the enemy; to blockade the importation of French and
Spanish colonial goods into France, and to enforce that no goods should be carried to France
except they first touched at a British port. Russia joined the Continental System by the Treaty of
Tilsit in 1807 after Alexander’s loss of war against Napoleon at Friedland; by then most of
European states stood at the French side against the British trade; and even Turkey bound herself
to exclude British goods. On the other hand, great fleets of American merchants sailed from the
various colonies in the West Indies to the United States where they neutralized the voyage and
then went on to Europe. A triangular trade brought them profits: they carried corn and timber
from America to the French and Spanish West Indies; took on colonial goods like sugar and coffee
there and conveyed to Europe; and returned with European goods like textiles and iron goods to
be sold to the United States or the rest of America. However, as the neutrality was disturbed by
the French decrees and the British orders, the United States enacted the Embargo Act of 1807 that
restricted American ships from engaging in foreign trade during 1807-1812,115 which had cut off
not only the supply of raw materials from but the possibility of their sales to the United States.
The Non-Intercourse Act of 1809 resumed all foreign trade except France and Britain, still
targeting on Britain due to her naval supremacy. In December 1810, Russia withdrew from the
Continental System, and allowed neutral ships to enter her ports. In March 1812 France revoked
the Berlin and Milan decrees, and in June Britain revoked the Orders for all blockade, when the
United States entered a war with Britain (June 1812-February 1815).
The Continental System was a self-blockade or self-embargo that stimulated the production
of domestic goods by prohibiting the import of all foreign goods; which was different from the
protectionist policy restricting the import of industrial and agricultural goods, not raw materials
for manufacturing. Declaring a war against France in 1793, the British issued the maritime
blockade, and the French responded with the continental blockade. The Berlin Decree of 1806
widened the restricted regions to Germany and other allies, and the Milan Decree of 1807 to
Americas; which were in reality an extension of the original blockade at the time of war in 1793-
1812. The Continental System had “little success in its mission of destroying the economic
organization of Great Britain” because of such reasons as follows. First, the economic life of
Europe was primarily the autarchy of the different countries so that their self-sufficiency was
consistent and vital to their survival. The Continental System could partially disturbed economic
activities, as experienced the lack of raw materials like cotton from the United States, but could
not change the fundamental of their economies. Second, the effective period of the Continental
System was too short to change “the self-healing power of nature” due to the Russian withdrawal
from the system by late 1810. As appeared in smuggling and corruption, economic lives are so
natural that any intervention could not easily turn down the trends of the natural flow of resources.
Third, international relations are so dynamic that a political treaty between nation states can easily
be revoked whenever it is necessary for the interests of member states. Russia was forced to join
the system after the loss of war against France, but Alexander could not hold the member status
because of political pressures from demanding free trade. The collapse of the system was a matter
of time from the beginning, since politics was too dynamic to control economic interests in the
long run. Finally, it was harmful to attack the neutral ships under the U.S. flag since they supplied
raw materials and provided strategic products not attainable through the normal channel in the
time of war, though Britain and France saw the dark side of effects.116
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 163
4. Finance and Banking
The rise of the modern system of nation states often refers to the Treaty of Westphalia of 1648
that recognizes each other's sovereignty and territory as a new world order. Unlike previous
dynasties, nation states use the state as an instrument of national unity in politics, economy, and
society. The five major nation states in Europe including France, Britain, Austria, Prussia, and
Russia wanted to expand their territories for more resources by maintaining the balance of power
through alliances in various wars in the eighteenth century. The wars became larger in scale and
longer in period, so that the costs of wars increased tremendously as experienced in such inter-
national wars as the War of the Austrian Succession, the Seven Years' War, and the Napoleonic
Wars. When the wars were small in scale and short in period, sovereigns could finance themselves
with resources derived from their own lands or from their feudal rights, but the rising expenditures
of the new nation states required many resources, which should be collected from their subjects.
The fundamental constraint lay in property rights since no part of private wealth could be invaded
by the state or any others without consent of the property holder. As the sovereign claimed the
right to collect taxes in case of fiscal needs of state, his subjects demanded the right to be consulted
concerning the existence of actual needs and the implementation of taxes. Hence, the sovereign
allowed his subjects to send their representatives to participate in the decision making process of
the state, which created institutions of political representation such as the House of Commons in
Britain or the Third Estate of France. Thus, property rights of the people made it possible for them
to participate in decision-making over taxes, while lack of consent resulted in tax evasion or the
fiscal uprising. The legitimacy of taxation required representation with proper negotiations and
agreements between sovereign and subjects in the political institutions.
The purpose of this subsection is to investigate the development of the fiscal and monetary
institutions in the nation states in Europe as well as in the new world. Generally, there were two
types of taxes: direct taxes were imposed on income, production, wealth, or person; and indirect
taxes on consumption such as excises (inland taxes - sales or value added) and customs duties
(border taxes). The amount of contribution or tax rates were different among states according to
the economic conditions, the degree of consensus, and the methods of assessment and collection.
Tax exemptions had survived from feudal times, but the rise of military professionalism made the
role of nobles for war useless so that traditional tax exemptions for them could not be justified.
As the old order was destroyed, the taxes were generalized to all citizens without privileges to
anyone. The European states centralized tax collection, while their colonies in the new world
established decentralized systems by allowing local authorities to collect certain taxes. As the
nation state demanded huge amounts of money for wars, the fiscal institutions collected taxes, and
the monetary institutions managed the rising public debts. Debasement was the practice of
lowering the value of currency by reducing the quantity of gold, silver, copper or nickel in coins;
and monarchies had engaged in the debasement of the coinage to reduce the debt. To avoid state
default, financial institutions introduced annuity as a long-term investment instrument to the
financial markets in the Netherlands, Britain, and France. On the other hand, the European
colonies in Americas adopted the fiscal and monetary institutions to their own resources and
environments. For example, the British colonial governments collected taxes on foreign trade and
some excise taxes; and the local administration collected direct taxes on property and wealth. The
thirteen colonies developed a monetary system based on bills of credit and land bank bills to
finance government expenditures. After the independence, the new nation quickly adapted the
advanced fiscal and monetary institutions from Britain. The Latin American colonies followed
the bimetallic standards, but used paper currencies after independence.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 164
Photo II-4-1. The Bank of England, 1800 Source: http://projects.ecfs.org/bome/cities/HBand2004/London/mstern/PICTURES/WWW_INTA/BANKOFE_.JPG
Photo II-4-2. View of Paris from the Pont Neuf, 1763 https://upload.wikimedia.org/wikipedia/commons/thumb/a/a6/Nicolas-Jean-
Baptiste_Raguenet%2C_A_View_of_Paris_from_the_Pont_Neuf_-_Getty_Museum.jpg/400px-Nicolas-Jean-
Baptiste_Raguenet%2C_A_View_of_Paris_from_the_Pont_Neuf_-_Getty_Museum.jpg
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 165
Fiscal and Monetary Institutions in Britain: As the economy revived in England, the new
rich families purchased huge quantities of confiscated lands from Henry VIII at bargain prices.
Purchasing more lands from nobles who sold their holdings to keep their luxurious life style, the
new rich commoners formed the Gentry class, who sent their children to universities for higher
education, becoming professional leaders of society. When Charles I ascended the throne in 1625,
the three-fourths of the House of Commons were from the Puritans rooted in the gentry class, who
challenged the divine rights of the crown and demanded no taxes without consent. Charles sent
solders to arrest the opposition leaders, but the Parliament reorganized the armed forces and
crushed the royalist army. The captured king was beheaded in 1649 and Cromwell established his
government. The monarchy was restored in 1660 when Charles II ascended the throne, and James
II succeeded him in 1685. The Glorious Revolution of 1688 forced the Bill of Rights enacted,
confirming that England was a constitutional monarchy, so that the Parliament controlled all fiscal
and monetary affairs, and property rights of the people were secured by law, which was significant
in two ways. First, the legitimacy of taxation was established, which was the starting point of
modern finance, so that the fiscal and monetary institutions could maximize the efficiency of
resources and minimize transaction costs. Second, since property rights were legally secured, the
capital market in Britain became competitive and attractive to investors more than in other states;
which efficiently pulled and pushed the British economy. Traditionally, in normal times, indirect
taxes were used for the ordinary expenses; but in wartime, direct taxes were imposed. The
principle of taxation lay in equality and welfare: the lowest level of incomes was usually exempted
from taxation; the higher income receivers paid a rising scale of taxes; and the tax rate of non-
labor incomes was different from that of labor incomes.
During 1690-1815, fighting eight wars of varying length, Britain was at war with France for
65 years. The British nominal GNP increased from £46 million in 1690 to £57 in 1730, £130
million in 1790, and £320 million in 1815; while the national debt rose from £3.1 to £51.4, £244,
and £745 million in the corresponding years. Accordingly, the debt to GNP ratio increased from
6% in 1690 to 100% in 1730, 185% in 1790, and 220% in 1815.117 In the early days of the 1690s,
the total amount of national debt was less than £10 million. In the eighteenth century, the major
international wars demanded huge amounts of money due to larger scales in longer terms. Since
the rising cost of wars was far above the annual tax revenue, the annual budget deficit was
continuously accumulated. In 1815 when Napoleon lost his final war, the British debt rose to £745
million or 220% of GNP as noted above.118 Since then, peace and prosperity expedited economic
growth in the nineteenth century, so that the debt fell to a manageable level of 35% of GNP by the
beginning of the twentieth century. In fact, the tax revenue increased from £2.05 million in 1690
to £6 million in 1730, £16.5 million in 1790, and £63 million in 1815; and their tax proportions to
GNP rose from 7% to 10.7, 12.3, and 18.2% correspondingly. Meanwhile, the government
expenditure increased from £4 million to £5.5, £16.8, and £112.9 million in the corresponding
years; so that their proportions to GNP increased from 9% to 10, 13, 35% accordingly. The
revenue mainly came from excise, customs, and direct taxes, and their proportions in the total
revenue were 25, 20, and 45% in 1690; which moved to 45, 26 and 25% in 1730; 44, 23 and 18%
in 1790; and 36, 30, and 34% in 1815. It shows that the proportion of direct taxes declined from
45% in 1690 to 18% in 1790, while that of excise taxes rose from 25% to 44% correspondingly.
In the early years, the principal direct taxes were on land, but increasingly on income later. Post
office and stamp duties provided significant amounts of the revenue. In the expenditure, the
military used around 65% of the total revenue in the war year and around 35% in the peace year;
while the civil administration used around 15 to 20% consistently; and the remaining part went to
interest payments such as 44% in 1730, 56% in 1790, and 28% in 1815.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 166
Monetary Institutions: A pawnbroker was an individual or business that offered secured loans
with personal properties as collateral. Goldsmiths had been financial intermediaries - bullion
merchants, money changers, and money lenders - in England since the sixteenth century, and
scriveners kept deposits and rerent them in the early seventeenth century. Rich merchants
accumulated wealth in gold and stored it to the Royal Mind. In 1640 Charles I seized the private
gold stored in mint as a forced loan, so that merchants preferred to store the gold with the
goldsmiths of London, who possessed private vaults and charged fees for the storage service.
Cromwell borrowed money from the goldsmiths for his army in the Civil War. The goldsmiths
bankers issued receipts certifying the quantity and the purity of the stored metal, which could not
be assigned. Taking over the function of deposit banking from scriveners, the goldsmith issued
the promissory notes payable on demand, and their advances or loans to its customers were
repayable in a long term period. The promissory noted developed into an assignable instrument,
circulated as a safe and convenient form of money backed by the goldsmith's promise to pay.
Hence "goldsmiths could advance loans in the form of gold money, or in the form of promissory
notes, or in the form of checking accounts." 119 Charles II borrowed £1.3 million from the
goldsmiths to build a sailing fleet, but the underfunded Royal Navy lost the war with the Dutch in
1667. Charles decided to defer the repayment of debts, which damaged the crown's credit and
destroyed profits of bankers. The problem was resolved by a financial innovation - the creation
of Annuities - the first long term investment instruments. Charles II created a Commission for
Treasury reforms: it was ordered that all expenditure must have specific Treasury approval even
if money has already been voted by Parliament. The Commission raised additional money by
selling marketable Treasury Orders with a guaranteed repayment date, which was the origin of
the government bonds. Taxes had been collected by private firms making huge profits from the
activity, but the collection was nationalized under Commissioners reporting the Treasury.
The Bank of England was founded under the Royal Charter in 1694, primarily to raise money
for the war with France - the needs of government finance with the distrust of the Crown. The
bank provided a loan of £1.2 million to the government not to be paid until 1706 with interest
payments of £100,000 per year. The bank had a monopolized right to issue own bank notes (paper
currency) and coins (metallic currency), and deposit banking was possible. The bank became the
government's bank and the banker's bank "due to the convenience of depositing their surplus
balances." A key element of the financial revolution lay in the system of bilateral settlement in
interbank debt, which could minimize transaction costs and monitor the discipline of member
banks. The goldsmith bankers and the Bank of England were confined to London, while the
progress of the Industrial Revolution created the need for monetary services outside the city. When
the Bank of England suspended cash payments because of the shortage of notes and coins in 1797;
Parliament authorized country banks to issue low-denomination notes. In 1784, there were 230
banks outside London, which was increased to 470 in 1804 and 800 in 1808.120 In England, the
first joint stock company was the Company of Merchant Adventures to New Lands with 250
shareholders, chartered in 1553. The East India Company was chartered by the Crown in 1600
with trade privileges in India, while the company virtually ruled India with auxiliary governmental
and military functions until its dissolution. The South Sea Bubble caused financial ruin to many
in 1720, which led to a new act allowing joint-stock banks in 1826 operating only outside of 65
miles from London. As a result, the private banks were absorbed by the joint-stock banks, which
established more branches in the provinces to support exports, and the branch banking system
made the financial institutions more efficient like present times. Thus, the creation of annuities,
government bonds, the Bank of England issuing notes and coins, country banks, and joint-stock
banks were the great achievement of the monetary institutions.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 167
Investment Finance: The economic growth in theory comes from two ways: mobilization of
more input into existing modes of production with the same technology, and productivity growth
from technological advance and other factors promoting efficiency such as managerial skills. As
an input factor, capital formation and investment was essential in the process of industrialization.
In the pre-industrial revolution era, the methods of production employed in industries involved in
little capital equipment. Domestic industry carried on in the home needed few of machinery items
or equipment such as spinning wheels, looms, or knitting frames; costing more than a few shillings
or less than a few pounds. In early days, output expansion was achieved through the multi-
plication of low-capital units, requiring a very low level of net investment. Of course, there were
heavier industries such as shipbuilding, mining, metallurgical, or some other industries demanding
greater capital investment, but they tended to remain in labor-intensive production. However, the
industrial revolution was “the substitution of capital for labor” by replacing the old hand-driven
units with powered machinery in the textile industries, and taking over heavier tasks from men
and animals in the mining and metal industries. The industrialization required massive capital
investment, so that the shortage of capital could be a crucial blockade to development. 121
Generally, the initial size of capitals was remarkably small even in many large-plant industries,
while capital-saving techniques were widely employed. In case of adopting massive production,
in the beginning very modest capital outlays were used to get off the ground, and raw materials
could be gained on credit from merchants. Once the business was established, yielding profits
relaxed the capital constraint and allowed the owner to build a splendid new industrial plant. If a
country desires its economy to grow fast like from 5% to 10% of GNP in a certain period, a rising
degree of capital investments must be necessary. In the early stage of industrialization, the level
of investment was low, as the infrastructure costs were modest and production technology was
relatively simple, but it increased progressively in the nineteenth century.
An estimate suggests that “the rate of capital investment in Britain rose very slowly from
about 5 percent of national income in the mid-eighteenth century, to about 7 percent at its end and
subsequently reached 10 percent a little more only at the end of the 1850s under the great demands
of concentrated railway boom years.” 122 The cost of wars with France during 1793-1815
amounted to approximately £1,000 million that contained national savings and investment and
reduced the rate of growth. The demand for capital investment in Britain increased in the second
half of the eighteenth century, but the scale of industry was still sufficiently small for its capital
requirement. Annual investment in fixed capital in the entire British cotton industry was only £0.4
million in 1809-10, but the largest proportion of investment demand went to transport: “the total
accumulated capital in the canal system, from 1750 to 1820 was about £20 million.” Canal
companies and turnpike trusts attracted transport investment by “giving limited liability for
investors, the advantages of incorporations for the operators, and legal power” to overcome
problems through compulsory purchase of land or some other ways. In the process of the
Agricultural Revolution, an efficient mortgage market existed “to help investment in land
improvements, enclosure acts and drainage acts.” To reduce the risk of investments, the ownership
of ships was broken down into small fractions, while insurance companies were involved in
shipping. The loanable funds were generally available from falling in interest rates on government
bonds "where annual rates fell from 7 percent in 1700 to 3 ½ percent in the 1750s. Mortgage rates
followed gilts in this fall, staying between ½ and 1 percent higher. Between 1714 and 1832 the
usury laws imposed a 5 percent maximum on commercial interest rates.”123 The available funds
for investment came from domestic savings and foreign loans, and the allocation of resources were
affected by state policies mobilizing funds to specific sectors like the infrastructure or transport or
energy, although military spending and interest payments were dominant.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 168
Taxation and Debt Finance in France: France was the larger state than Britain in terms of
the population and national income. In 1715, France held 19.25 million people with £116 million
of GNP (£6.0 per capita), and Britain held 7.13 million people with £46.2 million of GNP (£6.5
per capita), The numbers rose in 1788 to 26.60 million people with £280.8 million of GNP in
France (£10.56 per capita), and 9.37 million people with £134.8 million of GNP in Britain (£14.38
per capita). The ratio of tax revenue to GNP in France was 9.4% in 1715 and 6.8% in 1788, while
that in Britain remained at the level of around 12.5% in the corresponding years. The ratio of tax
revenue to GNP was much lower in France than in Britain in both peace and war years. If France
had maintained the same level of tax revenue as Britain in the pre-Revolutionary year, the total
amount of the tax revenue would have been 865 million livres instead of 472 million, which would
have reduced much of the outstanding sovereign debt. Nevertheless, the French institutions
collecting taxes were inferior to the British ones because of following reasons. First, France had
absorbed new regions in Europe from the Middle Ages until Louis XIV, who expanded the
frontiers of the kingdom towards the north and towards the Rhine, that retained separate tax
regimes that created the diversity of taxes and tax rates by regional or personal legal status. Second,
the clergy and the nobility plus privileged individuals or groups were exempted from taxes. The
inherited old order remained so persistent that their special interests obstructed reforms improving
efficiency of fiscal policies despite many reform efforts. Third, France had no national institution
representing taxpayers: unsecured property rights and lack of legitimacy in taxation caused
resistance against taxes - tax evasion or fiscal uprising - whenever new taxes were imposed.
Fourth, the tax collection system was operated by tax officials and contractors of the tax farms
having considerable autonomy in assessment and collection by providing short-term loans to the
sovereign based on anticipated taxes. They took advantages in getting contracts with the
government in the absence of free competition in the open market.
Taxation: The principal direct tax was taille imposed on landed income from the Middle Ages
until 1789, while both the clergy and the nobility were exempted from it. Most direct taxes were
managed by the tax officials. "Parishioners named four to eight tax collectors, who were paid a
commission of 2.5 to 5 percent to assess and collect taxes. They sent the money to the receveur
of the election who paid some local expenditures. About 90 percent of the revenue was forwarded
to the receveurs-generaux, who made payments assigned by the king, passing on a fraction of
collections to the central treasury." Meanwhile, tax officials used tax funds for their benefits as
short-term credits to the king until they were obliged to remit them. The taille was augmented by
additional levies of taxes in the sixteenth century. 124 There were three main forms of indirect
taxes in the ancient regime - gabelle or the salt tax, aides or the sales tax, and to traites or the
transit fees. Additional taxes were created by the crown: the tailion was a tax for military
expenditures, the douanes was taxes on exports and imports, and the octroi was local taxes. Most
indirect taxes were collected by the tax farms, with which the monarchy had three basic choices
of contract offering different incentives: tax collectors were paid a fixed wage for delivery of all
tax revenue to the crown; the crown creates a tax farm paying rent of a fixed sum to the government
for the right to collect a tax and keep the revenues; or create a tax farm with the lease to collect a
tax by sharing of the revenue. To maximize the tax revenue, the crown often used the combined
types of tax firms - paying rent and sharing the revenue. Moreover, the king sold the venal offices
to raise funds, which managed royal finances, justice, and other affairs. The venal offices were a
source of income, investment, and status; and they were either hereditary or transferable at the
price of one-sixtieth of the annual tax revenue. The central treasury was created in 1523 to reduce
the dominance of the receveurs-geneaux controlling tax collection. However, the central
administration of finance remained relatively modest in France.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 169
Since the war expenditure surpassed the tax revenue, the sovereign debt was continuously
accumulated, so that it was impossible for the crowns to repay the debt in full in a short period of
time. The Key problem of sovereign debts lay in that no internal or external device existed to
enforce debt repayments, and frequent defaults of debts raised the risk premium of loans, so did
the costs of future financing. Under the old regime, France had the Estates General that was a
legislative assembly of the three classes - clergy, nobility, and commoners. In fact, having no true
power, they were an advisory body to the king who called or dismissed them. The Estate-General
met intermittently until 1614, but disappeared from the scene until 1789. The vacuum was filled
by the Parlement de Paris and regional parlements, which consisted of privileged noble judges
managing the judicial affairs of the king. Traditionally, the Parlement de Paris "legalized all royal
acts of taxation or loans by recording them in its registers in formal plenary sessions." If the edict
was illegal or harmful to the kingdom, it refused to record and made the edict unenforceable.
Sometimes, the king closed the Parlement or exiled its members. There was a bottom line limiting
its flexibility: no new permanent taxes could be decreed without an approval of the Estate-General.
From the sixteenth century, the crowns attempted to increase the tax revenue by the centralization
of tax collection, the reduction of tax avoidance and evasion, and the increase of tax rates, although
those efforts were often frustrated. Henry III (1574-89) endeavored to centralize and standardize
the tax system. The Wars of Religion, the sales of royal offices, and the growth of tax privileges
limited his efforts, but real tax revenues climbed over 50 percent. Louis XIII (1610-43) faced
internal wars with Protestants, peasant and urban revolts, and the entry of the Thirty Years War,
but gained more control of assessment and collection of taxes. In the minority period of Louis
XIV, France moved into internal chaos until 1661: the civil war and political instability forced
him to grant more privileges to the nobility, while the old privileges firmly entrenched into the
French tax system in favor of the nobility and the clergy.
After the death of Mazarin, Louis XIV (1643-1715) reorganized royal councils and began to
pursue a major fiscal reform. Punishing corrupt officials, he selected Jean-Baptiste Colbert as the
head of royal finance to design and oversee the reforms. Colbert consolidated the tax farms: "The
varied and scattered farms were organized into a single institution with a clear line of
accountability to the Crown." The leases on the tax farms in 1683 produced 65.3 million livres,
which was 1.77 times of the previous amount leased by his predecessor in 1661. Colbert tried to
raise more revenue from direct taxes by creating new taxes such as capitation levied on all lay
people. As the War of the Spanish Succession drained the treasury, he used a wartime tax - the
dixieme - imposing a 10 percent tax on all incomes. He gave greater authority to the intendants
monitoring venal officials, who assessed and collected direct taxes, to reduce self-enrichment.
Louis XV (1715-74) used the dixieme during the Wars of the Polish and Austrian Successions but
abolished in 1751. He introduced a new tax, the vingtieme, imposing 5 percent tax on income that
was extended to finance the Seven Years' War. Waging a long struggle with the Parlement de
Paris, he restructured its two chambers to be a single chamber to reduce their influence. Louis
XVI (1774-93) engaged in the American War of Independence, which drained many resources
and exacerbated the fiscal condition of France. During his reign, the character of taxation was not
substantially reformed, but he gradually raised the lease price of the tax farms to 144 million livres
by 1784, which was not sustainable. While the Parlement de Paris blocked any new taxation
without an approval of the Estate-General, the crown called its meeting for new taxes in 1789,
which ignited the French Revolution that finally removed all of tax exemptions allowed to the
privileged classes under the old regime. During the Napoleonic Wars, direct tax receipts fell to
20%, while those from indirect taxes increased: customs duties reached at 25%, and both excises
and stamp taxes increasingly contributed more to the total revenue of taxes.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 170
Deficit Finance: The French adhered to the bimetallic standard at a bimetallic ratio of 14.5
(that means 14.5 ounce of silver equal 1 ounce of gold) until the French Revolution. Hence,
sovereign deficits had been financed by debt rather than printing money because of the inflation
fear. The debasement of the coinage, reducing the weight of gold or silver in coins or increasing
the face value of coins, lowers its value causing inflation. The crowns could collect an inflation
tax, which generated substantial revenues for the government. The French Crown had engaged in
five major debasements until the early fifteenth century, which created technical problems of
coinage. As the demand for coin certificates increased to 6.7 million livres, the crown created a
caisse d'emprunts or loan treasury in 1704, issuing notes bearing 6 to 10 percent of interest so that
the coin certificates began to carry interest. A new minister created the Caisse Legendre, by
pooling resources of the 12 receveurs-generaux who issued interest-bearing notes collateralized
by taxes, which created substantial short-term credit for the government. Louis XV appointed
John Law to Controller General of Finance. "In 1716 Law established the Banque Generale in
France, a private bank, but three-quarters of the capital consisted of government bills and
government-accepted notes, effectively making it the first central bank of the nation."125 Law
instituted many reform policies, which increased 60 percent of industrial output in two years.
However, the Mississippi Bubble - a sudden collapse of the inflated stock prices hurt investors
and created political and social problems - forced him dismissed from the court. In 1776 the crown
created the Caisse d'Escompete modeled on the Bank of England, having "a limited liability
partnership with the right to discount bills of exchange and other commercial paper at a maximum
interest of 4 percent and issue banknotes redeemable in coin." It was a bankers' bank offering
credit to the private bankers. As the crown forced 70 million livres of loans; despite increased
reserves, the redemption of bank notes was suspended by 1789.
The national debt of France was 2.4 billion livres after the death of Louis XIV in 1715
excluding royal promissory notes since the War of the Spanish Succession (1701-14) added 1
billion to the debt. The ratio of annual debt service to the tax revenue increased from 33 percent
in 1699 to 69 percent by then, which level was not sustainable, so that the debt default was
unavoidable. The regent created the chambres de justice that summoned many individuals, who
involved in the tasks of tax collection and lending to the state, to investigate possible wrong doing.
"Some accused persons fled the country, while others battled the court. In most cases the sentences
were never applied, and the accused 'redeemed' themselves by paying a fine to the king for
immunity or amnesty." From the sixteenth to the eighteenth century, the defaults on the debt and
the chambres de justice were "part of the financial housekeeping" in France when the debt burden
became explosive after the long and expensive wars. The cost of the War of the Austrian
Succession was 1 billion livres: the outstanding debt was 1.2 billion by 1753, while the debt
service was 85 million, which was 20 percent of the annual tax revenue. The Seven Years' War
required France to pay the cost of 1.3 billion livres, which raised the French debt to 2.3 billion,
and the annual debt service rose to 160 million - over 40 percent. During the American War of
Independence, France spent 1.3 billion livres: by 1785 France was on the verge of bankruptcy,
and few financiers wanted to lend them. "Like the tax system, the system of borrowing was never
fully reformed. The critical needs of war financing led successive kings and finance ministers to
continue their reliance on the system of privileged lenders that included the tax officials and the
venal office holders....the monarchy was unable to depend completely on the open market. The
inability to generate sufficient tax revenue and its frequent defaults made the government a risky
borrower."126 Thus, the high cost of wars continuously accumulated sovereign debts; the fiscal
institutions not-fully mobilized resources; and default risks and inefficient money markets resulted
in the high cost of public loans in the eighteenth century of France.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 171
The Netherlands and Trade Finance: The Low Countries - current Netherlands, Belgium,
and Luxembourg - consisted of a number of duchies, counties, and bishoprics under the reign of
the Holy Roman Empire until Charles V who unified the seven provinces by the Pragmatic
Sanction issued in 1549. He was succeeded by his son Philip II in 1556. The Netherlands, led by
William I of Orange who converted to Calvinism, revolted against the Catholic Spain in 1568,
which was the beginning of the Eighty Years War. The Peace of Westphalia of 1648 recognized
the Republic of the United Provinces, while the southern provinces (Belgium) remained under
Habsburg rule, which caused massive migration from the south to the north. The rural society of
the Netherlands was modernized: "the autonomous rights asserted by farmers united in drainage
associations," and "the urban and proto-urban settlements of the region all served to endow the
maritime province with property rights and personal freedom long before the emergence of a full-
blown capital society." The rise of cities and the existence of fragmented sovereignty were the
potential sources of political leadership, causing to emerge constitutional rule. The increasing
maritime power and the emergence of free markets made the Dutch Republic prosperous, and
Amsterdam became the trading center in northern Europe in the seventeenth century.
The seven provinces of the Netherlands shared the financial burden according to a quota that
each province was required to support the central government's budget: Holland was the leading
province paying 58 percent of this budget. The central government had no authority to impose
taxes except the customs duty levied on imports and exports - on average 3-4 percent of the trade
value - in terms of defraying the cost of convoy services provided by admiralties to the merchant
marine. Holland levied taxes on real property; miscellaneous taxes such as inheritance taxes,
stamp taxes, and occasional wealth taxes; and the excise tax on sales. The excises were under 3
guilders per inhabitant of Holland in 1584, and steadily increased to 10 guilders by the 1630s, and
became 17 percent of the annual earnings of a fully employed unskilled laborer. The further
revenue was increased by new direct taxes on income and wealth. The revenue share of Holland
coming from the excise was 60 percent in the 1630s; and that from the indirect taxes was 40
percent in 1790. Urban governments charged additional taxes levied by drainage boards and a
wide range of fees such as tolls for the use of roads, canals, locks, bridges, and harbors. The
provincial government tried to minimize infrastructural investments and educational costs, so that
the Dutch Republic suffered from underinvestment in such things as paved roads and canal
dredging, while the central government had no taxing power for them.
The tax revenue of Holland in 1688 was 21.70 million guilders, its population was 860,000
persons, and the tax burden per capita was 25.3 guilders; and in 1788, 24.9 million guilders,
783,000 persons, and 31.8 guilders respectively. The public debt of Holland was no more than 5
million guilders in 1600, which increased to 23 million guilders in 1621. Holland borrowed 115
million guilders during 1621-47. "By 1640 the debt of some 95 million guilders required 6.5
million per year in debt service - itself about 60 percent of Holland's tax revenue." By 1713, "the
total debt probably exceeded 200 percent of gross domestic product, and service costs absorbed
nearly the entire ordinary tax revenue of the provinces." Provincial borrowers issued three types
of debt instrument: Obligatien were negotiable promissory notes for short-term debts; Losrenten
were redeemable long-term bonds; Lijfrenten were life annuities. Holland reduced its annual debt
service considerably by converting bonds to lower interest annuities.127 The financial sector was
developed in the eighteenth century: merchant bankers, commercial lenders, private account
holders (kassiers), and foreign exchange brokers, that facilitated financial markets with bank
deposit receipts, kassiers' promissory notes, bills of exchange, inland bills, and notarial credit
instruments. The Amsterdam Exchange Bank was a bank of deposit and transfer; while the Bank
of Amsterdam became insolvent by 1790 and the city took over in 1791.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 172
Trade and Finance: The States-General of the Netherlands chartered the Dutch East India
Company (VOC) in 1602 by granting a 21-year monopoly to carry out colonial activities in Asia:
some 1800 people formed the largest joint-stock company by investing 6.4 million guilders.
"Between 1602 and 1796 the VOC sent almost a million Europeans to work in the Asia trade on
4,785 ships, and netted for their efforts more than 2.5 million tons of Asian trade goods."128 The
company supplemented its Europe-Asia trade in spices with an intra-Asian trade coordinated from
Batavia. The Dutch West India Company (WIC) was chartered by the States-General in 1621
granting a trade monopoly with Brazil, the Caribbean, and North America as well as the African
slave trade.129 Initially, the 7.1 million guilders were capitalized from chambers of all provinces
and some other cities. Jan de Vries observed the four phases of colonial development of the
Netherlands in the new world as follows.130 In the first phase, the Dutch settlements in the new
world were closely related to the trade through the WIC. In 1628 Admiral Piet Heyn of the WIC
captured the Spanish silver fleet on the Cuban coast, carrying a cargo of 12 million guilders worth
of gold, silver, and other expensive trade goods.131 The Dutch conquered Pernambuco in 1630
(that was originally inhabited by the Portuguese in the sixteenth century), and established a Dutch
colony of Vitoria da Conquista for the cultivation of sugar and cotton.132 The colony annually
exported 24,000 tons of sugar to Amsterdam alone in the 1640s; and the WIC annually sent over
30,000 African slaves to Brazil until they surrendered it to Portugal by 1654. In North America,
the WIC established a colony at New Amsterdam (New York), which population was only 270 in
1628.133 They intended to supplement the fur trade with an expanded production of foodstuffs by
developing plantations. The lack of leadership and the Anglo-Dutch War caused them to pass the
colony to England in 1664.134 Unlike the VOC in Asia, the WIC in the Atlantic lost its monopoly
privileges against foreign competitors or Dutch private traders - allowing its shareholders to trade
privately, which resulted in the decline of the company.
In the second phase, after the loss of Brazil and New York, the Dutch integrated the Atlantic
system focusing on the trading centers of Curacao, Saint Eustatius, and New Amsterdam in the
absence of a territorial base controlled by the Dutch, and the WIC restricted its trading monopoly
to African gold, ivory, and slave trade. Drifting away from Brazil, Dutch planters and merchants
directed their attention to Barbados and Martinique by transforming tobacco farms into sugar
plantations with extended credit. The Dutch supplied manufactures to the Caribbean islands
controlled by the British, French, Spanish, and tobacco plantations in the Chesapeake. They
preferred Dutch commercial services to their national monopolists, which was extended to the
slave trade. The size of Dutch slave trade was the second to the Portuguese until 1675: during
1650-75, the WIC shipped 57,000 African slaves to Curacao occupied by the WIC since 1634.135
The sugar shipments from the Caribbean to Amsterdam increased, and the Republic supplied a
half of the refined sugar consumed in all of Europe by 1660. The Navigation Acts excluded the
Dutch as suppliers of slaves and manufactures to and buyers from Barbados and other English
islands, but "Sint Estatius flourished as a center of sugar smuggling, while New Amsterdam swept
up Chesapeake tobacco"136 until the mid-1660s. The commercial losses and military Expenditure
limited the WIC to hold "the African trading outposts, six Caribbean islands, and its Wild Coast
possessions, most notably Surinam." When the WIC was bankrupt in 1674, the Republic
pressured the stock holders to add 1.2 million guilders for its survival. As the Dutch influence
declined in the Caribbean, Spain turned to the Netherlands by giving the rights to supply slaves
and commercial services to its colonies in the West Indies. Hence, the WIC and its Curacao
trading center prospered in the 1680s and 1690s by holding the Spanish asiento - a slave trade
contract. The Peace of Utrecht ended the War of the Spanish Succession in 1713, which forced
the profitable contract to shift to the British South Sea Company.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 173
Unlike English law, the Dutch did not recognize the legality of indentures, so that the WIC
offered grants of lands to private investors, patroons, “in return for their commitment to furnish
the colony with a minimum number of adult settlers together with the necessary complement of
farm capital and infrastructure.” The patroonship was “designed to save the capital and reduce
the expenses of the WIC, encourage private investment and settlement, and expand trade,”
although its role was brief and limited in the early phase of colonization. In the third phase, the
plantation economies of the Netherlands had been developed on current Surinam and Guyana since
the 1680s. In Surinam of 1770, the total population was around 65,000 persons including 59,900
slaves in the 465 Dutch plantations, exporting 12 million guilders; while in Guyana, the total
population was 27,000 persons including 25,000 slaves in the 250 Dutch plantations. The
merchant bankers extended credit to the planters, accepted their bill of exchange, and received
their commodities, which the bankers transported, insured, and sold for a commission. In 1775
the average plantation debt stood at 32,000 guilders that was “between one-third and one-fourth
of the assessed value of the plantations.” Investors received usually 6 percent of an interest rate,
which was 1 percent more than most foreign government bonds.
In the fourth phase, the Netherlands remained a land of abundant capital, accumulated in the
seventeenth century, seeking profitable investments, but “neither the domestic economy nor the
New World colonies seemed to offer inviting prospects, and the Asian realm of the VOC was
closed to private investors.” Hence, the foreign government bonds became a better choice of the
investment for Dutch capitalists. The first Dutch loans to the American rebels, guaranteed by
France and the Netherlands, were 5 million guilders in 1781, and Dutch debtors held 22 percent
of U.S. domestic debt - US$ 13.1 million by 1803. The Holland Land Company organized by the
six Amsterdam banking houses in 1792 financed the First and Second Banks of the United States.
As the default wave swept Europe during and after the Napoleonic Wars, Dutch investors showed
a strong interest in foreign investing. Amsterdam supplied capital to the U.S. federal government
and to American railways. ”By 1895 Dutch foreign investment stood at a level 1.75 times its GNP,
a level not exceeded by the United Kingdom, then the world’s dominant exporter. Much of Dutch
capital then went to the East Indies, but the Dutch always remained important investors in the
United States, which was the recipient of 30 percent of all Dutch capital invested abroad in the
period 1875-1900.” The amount of Dutch investment to the United States rose to around 40
percent of their total foreign investment (US$2,000 million) by 1914.
Much of coinage was designed for exports and flowed into the east, and it was impossible to
keep Dutch coins in circulation in the colonies. The British American colonies experienced “(1)
the scarcity of small change, (2) the large role of Spanish and Portuguese coins, (3) the resort to
paper issued by the colonies, and (4) the importance of commodity money, where units of tobacco,
sugar, and so on, circulated at fixed values.” The debasement of colonial coins made the exchange
rate tend to be around 1.25 Surinam guilders per Dutch guilder, which could sink to 4:1 by 1811.
The major credit instrument was the bill of exchange “not only for trade between the colonies and
Patria, but also for payments within the colonies.” The introduction of paper money or bank notes
in the colonial economy reduced the domestic circulation of the bill of exchange: 5.6 million
Surinam guilders were circulated in 1800 and 6.5 in 1811. Meanwhile, the share of Dutch
production among the total Caribbean output declined from 8 percent in the 1680s to 6 percent in
the 1750s and to under 5 percent by 1775. Despite this falling share, Dutch imports from the
Caribbean rose as much as those from Asia by the 1770s. After the fourth Anglo-Dutch War
(1780-84), the WIC was unable to defend its colonies, so that its government nationalized the WIC
by 1791 and the VOC by 1796. Most of Dutch possessions in Asia were occupied by Britain
during the Napoleonic Wars and the Republic was dissolved by 1815.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 174
Fiscal and Monetary Institutions in Spain and Portugal: (a) Spain: Charles V was
involved in wars against France over Italy in the 1520s, against the Turks in the Mediterranean in
the 1530s, and against the Protestants in Germany in the 1540s and 1550s. He had enormous
resources: "Italy and the Low Countries provided the largest part of imperial resources; in the long
run, however, Spain (mostly Castile) became the main financial supporter of the empire." Castile
flourished with sheepherding, wool exports, and woolen textiles with inflow of precious metal
from Spanish America. "Castile had a tradition of strong royal power, whereas Aragon-Catalonia
had a contractual constitutional system that substantially reduced the taxing power of the
monarch." However, numerous wars made his empire indebted, and his financial burden was
passed to Philip II, who also exhausted all resources for wars against the Ottoman Turks and
against the forces of the Protestant Reformation. The revenue sources of Spain were rich as of
1560 as follows. Ordinary revenues (around 38 percent of total) came from the tercias, alcabala,
and customs duties. The tercias was a direct tax imposed on agriculture by 2.22 percent of gross
output; and the alcabala was a sales tax that was 5 to 10 percent of sale price. The tax farmers
collected them until 1536, but a new system - encabezamiento - was adopted, that was based on
quota given to each territorial unit (city, town, or county). The customs duties were 12 percent to
the total revenue. Extraordinary revenues were 11.3 percent to the total: the servicio was an
emergency tax granted by the Cortes and typically intended to support a war effort; and was paid
by local quotas for which each commoner was assessed according to his wealth. American
remittances were 23.4 percent of total revenue: about one-third of precious metal from America
belonged to the Spanish Treasury in the sixteenth century. To finance debts, the Crown sold royal
estates, feudal rights, offices, patents of nobility; confiscated American silver remittances, and
forced donations and loans. The share of church donations was significant by reaching 13.2
percent to the total revenue in the same year. It was like throwing water on thirsty soil.
The war expenditure caused the continuous growth of public debt with asientos (literally,
settlements) for the short-term debt and juors (literally, I swear) for long-term debt. "The asientos
were contracts between the Crown and bankers entailing the bankers' obligation to deliver a certain
amount of money in a pre-determined location (typically silver in Flanders) against short-term
promissory notes or bills of exchange by the Crown." At the beginning, these notes and bills were
payable at fairs, but as the government asked for too much for too long, the asientos were made
"directly repayable from a specific source of revenue instead of in a future Fair." Since available
revenues for several years were assigned to creditors at a certain point of time, bankers refused to
extend more credit. So Philip II unilaterally converted asientos to juros (from short- to long-term
debt) with low interest. "Debt default and arbitrary confiscation made property rights patently
insecure, weakened the credit of the Spanish state, and gravely hurt the banking system." Spain
established a tri-metallic system through the monetary reform of 1497 - a gold, silver, and vellon
coins. Under Philip II, the monetary system was not greatly affected despite the three bankruptcies,
because he was firmly against the debasement of coinage. But Philip III (1598-1621) used the
debasement of coinage to finance the unmanageable huge deficit: he issued copper vellon with
lack of silver proportion, and the copper coins were re-stamped at "double their face value" which
induced monetary inflation. 137 The undervalued money (silver) left the country or disappeared
from circulation, while the devalued money (vellon) flooded into circulation, as Gresham
predicted that bad money drives out good.138 In the seventeenth century, the tax revenue faltered
continuously because over-taxation ruined the Castilian economy; the sale of nobility patents
reduced the number of tax payers; and the insecurity of markets and property rights affected the
economy negatively. Moreover, the ineptitude and corruption of bureaucrats and tax farmers
directly affected the tax revenue further to decline.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 175
In the eighteenth century, state revenues came from five categories. (1) Provincial revenues
were mostly the consumer and excise taxes collected by territorial quotas, which proportion of
total revenue was about 20 percent in the second half of the eighteenth century. (2) General
revenues came from taxes on foreign trade - customs duty, which contributed about 15 percent to
total revenue in the same period. (3) Fiscal monopolies provided income from the monopoly of
state as well as from private concessionaries. The list of monopolies includes tobacco, salt, pepper,
soda, liquor, and many others; which category generated over 22 percent of total revenue in the
same period. (4) American remittances from the Mexico City, Lima, and Buenos Aires yielded 15
- 25 percent of total, but the share declined in the last third of the century. (5) Tithes and other
revenues were about 10 percent of total. Above sources delivered about 90 percent of total revenue,
and the rest came from extraordinary income such as "originating in the army treasuries, income
from the royal estate, fines, deposits, and so on." The expansion of colonial trade resulted in a
rapid growth of general revenue after 1778. The enlightened rulers of Spain pursued the
reformation of the fiscal system to increase revenue, to stimulate economic growth, and to share
the tax burden reasonably; though not successful. By imitating the French, Spain created the posts
of superintendent of finance and of provincial Intendentes, which system was transplanted to the
Spanish Americas. In 1721, the superintendent became minister of finance, who created a series
of central offices to oversee several areas of fiscal administration. It was a significant reform to
introduce the single tax levied not only on agricultural wealth but also on all sort of assets; that
was planned to be a direct tax replacing some provincial revenues. Philip V issued a slightly
debased gold coin for provincial circulation by keeping the old gold and silver coins for
international operations. The tow-tier system had advantages, but two sets of coins caused internal
confusion. Nevertheless, the repeated bankruptcies of Spain ruined several generations of bankers
and destroyed its financial and credit system, made itself the second class state.
(b) Portugal: The Portuguese dominated the trade with the East Indies in the sixteenth century,
but its wealth declined under the Spanish rule during 1580-1640. The Portuguese court received
domain revenues of seigniorial duties from trade in pepper, slaves, timber, or gold, but revenues
from those monopolies fell rapidly "due to difficulties in pepper trade and to the low cargoes of
gold coming from eastern Africa." The other main source of state revenues was indirect taxes
imposed "on internal circulation, transactions and consumption, and also custom taxes, which
were responsible for over two-thirds of revenue in 1588." The tax burden rose during the last
decades of the union with Spain due to the decline of the Atlantic trade and the rising Spanish
demand for Portuguese contribution. "Extraordinary taxes were imposed on the mercantile
community of Lisbon and the municipalities of the kingdom; a new duty on salt was introduced
in 1631; the encabecamentos of the excise were increased in 1635; and income tax on officers and
privileged people was introduced in 1631." After the independence, the cost of the army - 25,000
infantry men and 5,000 cavalry men - was 65 percent higher than total revenue of Spanish rule,
which forced Lisbon to create the direct tax (the decima) from rents, labor income, profits from
investment and commercial activities in 1641; and to impose property tax on land and houses,
except owned by the Catholic Church and welfare institutions in 1654. The revenue from the
direct tax became 20 percent of the total revenue during 1660-1681. The involvement in the War
of Spanish Succession forced them to raise the decima from 4.5 percent to 10 percent by a decree
of 1704. The Portuguese crown used the debasement of coinage to finance the rising expenditure,
while the nominal price of gold rose from 142 to 487 reis per gram, and that of silver from 16 to
31 from 1641 to 1688. The trade deficit of Portugal caused the outflow of coins, mainly silver,
but the devaluation of Portuguese coins as well as the trade balance in the 1680s and 1690s
prevented the drainage of precious metal from Lisbon.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 176
The Brazilian gold rush began in the 1690s, and gold arrived at Lisbon not only in bullion or
dust, but also in coins minted in Brazil. The Brazilian mints provided the colony with monetary
circulation without total dependence on the Lisbon mint. After 1714, the Porto mint ceased its
activity and the Lisbon mint was the only center for coining money, which centralized monetary
issue of the land. During the period of 1699-1788, gold was minted in Lisbon was less than one
third of the total arrivals of gold from Brazil. Since Castilian silver currency was circulated in
Portugal, bimetallism practically prevailed in Portugal until 1785. The abundance of gold made
the currency debasement unnecessary, and gold revenues arrived from Brazil transformed into
currency, that was used to finance war expenditure. Individuals could go directly to the Lisbon
mint to coin precious metal they received. "Gold arrivals helped to increase the Portuguese money
supply at a rate six times greater than the domestic output in 1689-1759, yet with little effect on
prices, certainly compared to the 1555-1640 period." Gold applied to the redemption of public
debt; that lowered interest charge and the reimbursement to creditors. In the beginning of the 1660s,
the Portuguese Crown was challenged on several fronts. The 1755 earthquake resulted in serious
losses of private property and wealth, and it demolished the royal palace and public building. The
Atlantic trade declined particularly in staples such as sugar and tobacco, which were large sources
of state revenues through monopoly and customs duties. Gold mining began to show a downward
trend, which lowered the state revenues. The major powers forced Portugal to participate in the
Seven Years' War, which required the rise of state expenditure. Pombal, the king's Minister,
introduced fundamental administrative, educational, economic, and ecclesiastical reforms.139 He
strictly revised "the regulations over the monopoly of gold mining and the payment of duties
associated with it, custom taxation, and the prevention of smuggling" and raised the rate of the
decima to 10 percent. His economic and financial reforms increased tax revenues, which would
increase the pressure on taxpayers. In 1777 the new Queen Maria I dismissed Pombal.
During the Napoleonic Wars, the tax immunities having been enjoyed by both classes of the
clergy and nobility were removed in order to overcome the financial problems of the state. "In
1796 Church and nobility were required to pay the excise duties. The Church was also taxed in
1800 by an ecclesiastic decima and in 1809 was included in the exceptional defense contribution
by an increase of the decima. In 1800 the decima was extended to the comendas. These measures
widened the tax base and lessened existing tax inequities, but the results were very modest."140 As
a consequence of the French invasion, indirect taxes dropped by 36 percent at the end of 1810s,
which required other means to innovate monetary and debt policies to overcome the financial
deficit. In 1796, a long-term debt, requiring registration through a public deed, was offered, which
increased the capital and the rate of interest, lowered the face value of the bonds, which was useful
for some state payments. "The lasting difficulties of Treasury eventually led to the issuance of
bonds with an even smaller face value than before, which could circulate as money at their nominal
value and were to be accepted in any transaction. These small bonds created an inconvertible
fiduciary means of payment, paper money" which was circulated along with gold and silver coins.
Like Britain and France, it was necessary to create a bank capable of managing the public debt
and issuing convertible bank notes, but no such bank was created. Hence, the circulation of paper
money caused a loss to the state, since discount of paper money reached 60 percent during the
French invasions. As the state debt rose, the Crown sold some royal properties, and resorted to
external borrowing. After the French war, foreign loans were partially paid by the indemnities of
the Treaty of Vienna, and foreign loans during 1815-28 became Brazilian debt. Finally, the Banco
de Lisboa was created in 1821 by royal charter issued banknotes for acceptance and consideration
in Exchequer Departments on the same terms as metal coins, while remaining exempt from all
taxes in its transactions. Such privileges were confirmed by the Royal Charter in June 1824.141
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 177
Map II-4-1. Political Boundaries of the World in 1700 Source: https://upload.wikimedia.org/wikipedia/commons/thumb/7/71/1700_CE_world_map.PNG/1280px-
1700_CE_world_map.PNG
Map II-4-2. Political Boundaries of Europe in 1815 Source: http://www2.bc.edu/~heineman/maps/1815label.jpg
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 178
The New World - Fiscal and Monetary Adaptation: (a) The United States had maintained
the annual growth rate of 3.3 to 4 percent for most sub-period of two or three decades during 1650-
1900 in line with the rising population. After the successful American Revolution of 1775-83,
local governments continued to finance their activities with property and poll taxes, while the new
federal government relied primarily on customs duties, supplemented by land-sale and excise taxes
for revenues. In the 1790s, the federal government spent about 60 percent of total revenues, the
state governments about 10 percent, and local governments 30 percent. Deficits of the federal
government arose mostly in wartime when the Treasury issued bonds to finance war expense.
Since the federal government could maintain budget surplus if not at war, the national debt was
totally redeemed in the 1830s. Alexander Hamilton (1757-1804) was appointed to the first
Secretary of the U.S. Treasury in 1789: he strengthened public finance by organizing the
department and its machinery to collect the customs duties and internal excise revenues; and
established a banking system based on its liabilities convertible into a capital market in which
governments and private entities could raise funds by issuing bonds and stocks that were tradable
in securities markets. Hamilton founded the Bank of the United States in 1791, funded primarily
by a tariff on imports and later by excise tax on whiskey.142 In the colonial period, the monetary
regime featured a variety of moneys and the use of coins. Because of chronic trade deficits, any
hard-money system proved difficult to maintain. The bills of credit quickly evolved into a fiat
paper currency, which were over issued during the 1730s and 1740s, followed by the worst
inflation. The Currency Act of 1751 limited on fiat paper issue in New England. In 1775, the
Continental Congress authorized an issue of $2 million in the Continental Currency, national bills
of credit; and states issued paper money and loan certificates. After the independence, the United
States adopted a bimetallic system, where the U.S. dollar was defined by an amount of gold and
silver, and banknotes and deposits should be convertible into specie.
(b) Canada was ruled by France until ceded to Britain by the Treaty of Paris in 1763, when
the population was increased to 50,000 from 23,000 in 1713. Under the French rule, Canada was
part of the Domaine d'Occident, a tax farm that controlled French West Indian territories, which
collected import and export duties and some seigniorial dues. The expenditures of the French
government, mostly arising from military activities, far outweighed taxed raised in Canada. The
Canadian money was coins minted in France, which caused a shortage of currency. The colony
used the playing card as a medium of exchange: the colonial intendant paid his bills by writing
IOUs on playing cards with promising to redeem. The colonial government issued ordonnances
in 1730 that filled the same function as the initial playing card currency. However, war-induced
fiscal problems led to a depreciation of bills down to 25 percent of their value. After the American
Revolution, an estimated 32,000 to 40,000 of Loyalists immigrated to Nova Scotia or settled in
Quebec ruled by Britain since 1763. In 1791 the Canada Act split the colony into Upper (Ontario)
and Lower (Quebec) Canada. The colonial governments collected revenues, "primarily from trade-
based taxes, land revenues, and fees, to pay for the expanding costs of government." Because of
war, Lower Canada faced the first financial crisis from two sources: militia spending in 1812-15
and the repayment of Army Bills. The population of Lower Canada was near three times that of
Upper Canada, and the revenue of the former was £110,000 and the expenditure was £80,351 in
1825. Upper Canada pursued an aggressive infrastructure projects largely financed by the issue
of debt. The Canadian monetary system applied the multi-coin standard "with the legal tender
ratings of the coins being altered intermittently by the colonial legislature." The first paper money
was issued to finance the War of 1812; and the authorities allowed to issue two types of bills
circulated freely - large bills (denominations of $25 or above) bore 6 percent interest per annum,
and small bills (denomination between $1 and $20) bore no interest.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 179
(c) Mexico was the largest silver producer and exporter in the world in the late eighteenth
century, and its silver pesos circulated throughout the world including the Caribbean islands,
Europe, and even China and India. The colonial government of Bourbon Mexico collected taxes:
the annual average of the total revenue during 1795-9 was 20.45 million silver pesos, collection
costs were 5.13 million, and net income was 15.32 million (around 75 percent of gross income).
There were four major income sources: (1) mining taxes - 10 percent duty levied on all silver
produce, which was minted in Mexico city; (2) trade taxes most of which were duties on internal
commerce and on native alcoholic beverages; (3) the state monopoly of the tobacco industry; and
(4) the tribute tax levied on all heads of households in the Indian towns who lived and cultivated
their own land. The proportion of mining taxes in the same period was 22.06 percent, trade taxes
20.41, Indian tribute 6.10, state monopolies 43.28, and the remaining proportion was 8.15 percent
of the total revenue, in which the transfer of Catholic Church income to the state was 3.36 percent,
and forced loans were 3.19 percent. The tax revenues went to three ways. The first level of
spending went to the 24 different regional treasury offices of the colony, which are responsible
for the payment of a substantial part of military expenses of the region. The second level was the
transfer of surplus fiscal funds from New Spain to the Greater Caribbean. The third level of
spending went to the home country - the fiscal funds were transferred from Mexico to Spain, which
scale was much less than the second level of transfer in the eighteenth century. The annual amount
of fund transfer from Mexico to Spain was almost 5 million pesos in average in the 1790s. As
public debts were accumulated, more funds were extracted from the Mexicans by both voluntary
and forced loans, and so-called donations. After independence in 1821, the federal government
co-existed with state governments, while public debts increased rapidly. The National Bank of
Mexico was established in 1881; capital markets were stimulated by the railway construction; and
Mexico finally adopted the gold standard by 1905.
(d) Brazil was landed by the Portuguese in 1500, who set up fifteen hereditary captaincies in
1534-6, though only Pernambuco and Sao Vicente were prospered with sugarcane mills installed
after 1542, in addition to cutting and exporting of dyewood. The Crown sent Governor to Brazil
who established the capital city in Bahia in 1549, and founded the city of Rio de Janeiro in 1565
by expelling French Calvinists.143 In 1580-1680, Brazil became the largest sugar producer and
exporters in the world, while the governor established a customs house and collected taxes on
sugar crops - tithe (10 percent) in Brazil, and 10 percent for customs duties and 10 percent for
sales tax upon entry in Lisbon. Excises on certain imported or local consumer goods were levied
in some cities of Brazil. The Crown imposed tax on agriculture, monopolized certain products
such as salt and tobacco sales as well as whaling. The taxes imposed on Brazilian products upon
entry in Portugal was higher than 30 percent during the war time due to additional new taxes,
which increased the burden on the colony's inhabitants and consumer prices. "The generalized
system of credit granted by metropolitan and local merchants to the colonists, involving the use
of letters of exchange since late sixteenth century, with balances being only periodically settled in
currency instead of paid in kind, as was most frequently done, coincided with a limited circulation
of coins in the colony."144 The first mint was authorized in Bahia to issue coins for local use, and
6.66 percent of production costs were charged on the coinage of gold and silver. "Copper coins
were also issued in Oporto between 1694 and 1699 for exclusive circulation in Brazil." As Brazil
became the largest producer of gold in the world, Lisbon permit a significant increase in Brazilian
coinage of gold, silver, and copper, while the Treasury enjoyed revenues coming from gold mining.
As gold production faltered after mid-century, average revenues of quinto (fifth) declined from
over 100 arrobas in the 1750s to 68 arrobas during 1774-85. Coins were already scarce and the
Crown restricted economic freedom in the colony.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 180
(e) Argentina was discovered in 1516 and the Spanish Crown established the Viceroyalty of
the Rio de la Plata in 1776, which colony consisted of today's Argentina, Uruguay, and Paraguay,
as well as much of present-day Bolivia.145 As ships from Spain became scarce after the battle of
Trafalgar, the British invaded Buenos Aires and Montevideo in 1806 and 1807 but was defeated,
and Argentina declared its independence in 1816, which was officially recognized by Britain in
1825 with the signing of a Treaty of Friendship, Commerce, and Navigation. The colonial life
centered on the plains of the northern pampas and its major city of Cordoba, where the ranches
were managed by Jesuit administrators. The Viceroyalty collected four types of taxes which were
the principal sources of income. First, the tithe: "This was originally a fifth that was paid to the
Crown for the silver mine concessions. In response to the labor shortage that began in the
seventeenth century and increased costs, the fifth was reduced to a tenth." The Crown received
additional revenue through seigniorage - gained from the coining of money. Second, tribute from
the indigenous population: "A head tax assigned to each member of a village or tribe and paid
either individually or communally." Third, alcabalas was a sales tax collected from transactions
of all properties including consumer good that was originally in force in Spain from the 12th
century until 1845. Fourth, almojarifazgo: This was a tax imposed on imports that Buenos Aires
collected along with the alcabala. The regional tax offices - intendances collected taxes, and
remitted them to the Crown after paying their collection expenses. In money, gold and silver coins
were circulated, while one gold peso was 16 to 17 silver pesos worth. Neither copper coins nor
the paper money circulated in Spain was popular in Argentina. As Spain was engaged in the war
with France, the May Revolution took place in Buenos Aires in 1810 and the revolutionary
government authorized free trade and maintained colonial privilege on the trade monopoly with
the right of taxation. The separation of upper Peru and Chile from Argentina impeded the inflow
of silver, which caused a general shortage of money in circulation.
(f) New Granada was the name given in 1717 to a group of Spanish colonies including modern
Colombia, Ecuador, Panama (by 1739), and Venezuela. The territory of the Viceroyalty of New
Granada additionally included Guyana, and parts of northwestern Brazil, northern Peru, Costa
Rica, and Nicaragua.146 The population of New Granada was 739,759 in 1778: the proportion of
mixed races and the free blacks was 49.0 percent, white 25.4, American Indians 19, and black
slaves 6.2. New Granada experienced two cycles of gold production: the first gold cycle (1550-
1620) was concentrated in central Colombia, Popayan, and Antioquia; and the second gold cycle
(1680-1820) was centered in Choco and Antioqueno. The gold production increased throughout
the century, and its annual growth rate was around 2.3 percent in average in the eighteenth century.
The net fiscal income of the Viceroyalty of New Granada amounted to $2.23 million silver pesos
in 1783, in which 29.3 percent were from Cartagena and 19.7 percent were from Santa Fe. The
revenue sources of New Granada were 59.4 percent from monopolies of state (mainly liquor,
tobacco, and salt), 14.7 from taxes on foreign trade, 9.8 from mining, 9.0 from taxes on commerce
and production, 2.8 from Indian tribute, 1.8 from taxes on royal bureaucratic salaries and sales of
offices, and 2.5 from miscellaneous income. The structure of tax revenues changed in two ways:
the proportion of state monopolies declined from 59.4 to 42.2 percent during 1783-1808, while
Indian tribute increased from 2.8 to 18.0 percent in the same period. The new Republic abolished
several taxes in 1821 including Indian tribute, sales tax on domestic production, liquor monopoly,
exports of various items, and others. In New Granada, gold and silver coins were minted with
different standards of purity; and low quality of coins (copper) were minted in 1811 to finance the
war expenditure. "The Constitutional Congress of 1821 decreed that all the coins of gold and
silver minted after that date had to conform to the same specification that had been used in the
Spanish Empire." However, it was impossible to follow it in the state of disarray.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 181
5. The Change of Society in European States
Social changes mean an alteration of the social order in society: if the socio-economic structure
shifts from feudalism toward capitalism, it may refer to social revolution. Society is transformed
by the influence of various factors - philosophical or ideological changes, political and religious
movements, international wars, economic transformation, scientific development, and other
intellectual improvement. The age of Enlightenment that was sparked by John Locke and Isaac
Newton in England and led by Voltaire and Rousseau in France. It transformed human mind from
"faith, tradition, and authority" to "reason, liberty, and equality" which influenced society in two
ways. One was in the conflict between reason and faith or between religion and science-plus-
philosophy, which transformed society toward secularization - from religious values toward
nonreligious values through modernization and rationalization.147 The other was in the change of
the political system - liberal ideas spread to educated elites across Europe, reached at the British
colonies in America, and influenced politicians to lead the American Revolution. In France,
liberal ideas ignited to the resentment of the people oppressed and exploited by the privileged
classes, which led to the revolution. The French revolution destroyed the old regime - the clergy
and nobility classes lost their privileges which they had traditionally obtained and enjoyed. Many
of the old nobility were impoverished "by careless or absence management of domains, or by
unprogressive agricultural methods, or by exhaustion of the soil, or by depreciation of the currency
in which they received tenant rents or feudal dues." The Church was nationalized, and their
properties were confiscated by the state, paying salaries to bishops and priests. In the protestant
states, the Church was reorganized, while priests and nuns were dismissed from the Church and
dispersed by individual choices. The French Revolution restructured the society, so that no
privileged classes – the nobility and the clergy - were accepted by society.
Wars massively mobilized manpower and military logistics, and increased communications
between states, which contributed to social changes. The French conquest caused a movement of
resistance against Napoleon in the conquered lands such as Spain, Prussia, and Austria; which was
based on nationalism loving their country and culture. Just like political changes, economic
transformation caused social changes, so the social impact of the Industrial Revolution was deep
and wide. First, the population growth was explosive due to the decline of death rates throughout
Europe owing to an increase in food supply and a decrease in famines, epidemics, and wars. The
rapid urbanization by industrialization intensified problems of housing, sanitary conditions, and
adulteration of food for the working class. Second, the rise of capitalism created the industrial
middle class (bourgeoisie) and working class (proletariat). The working conditions for the
industrial workers were dirty, dusty, and unhealthy such as in the cotton factories; and dangerous,
cramped, and damp in the coal mines. Both children and women were employed in a large number
in factories and mines long hours under strict discipline. The inequality of income and wealth
became wider despite improvement of worker’s income. Third, the Industrial Revolution
transformed morality of the protestant ethics as a capitalistically-minded middle class became
thicker. It emphasized profit motive and capitalistic efficiency, which were different from the
agricultural regime where the family was the unit of economic production and social order. Finally,
the first Industrial Revolution spread the capitalism as much as the socialism. The former preached
the doctrine of economic liberalism - laissez faire in investment and trade, while the latter
propagated the idea of political and economic equality for the unprivileged class throughout
Europe. 148 This section deals with the changes of society, education, and culture in major
European countries in the eighteenth century, for which I want to see grand woods through
recognizing how individual trees are surviving during the cold winter.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 182
Photo II-5-1. Women’s Involvement in the French Salons (early 18th century) http://upload.wikimedia.org/wikipedia/commons/a/a9/A_Reading_in_the_Salon_of_Mme_Geoffrin,_1755_Small.jpg
Photo II-5-2. The Height of Popularity of the Perspective Views (late 18th century) Source: http://www.philaprintshop.com/images/vuebrussels.jpg
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 183
The Social Structure in Britain: In British society, the nobility consisted of two entitles -
the peerage and the landed gentry. The peerage included duke, marquess, earl, viscount, and baron;
who were the peers or lords - the Scottish (since 1707) and the Irish (since 1801) peerages elected
some of their members to sit in the Lords. The landed gentry included baronets, knights, esquire,
and gentleman: they were nobles but not members of the peerage. They were separated by law,
marriage, income, lifestyle, and proximity to the throne; and no one thought of breaking down the
barrier between the classes in the eighteenth century. Successful burghers tried to use it, and
"often were successful in capitalizing on their accumulated wealth to establish themselves as
landed gentry." 149 The nobility is sustained by the family system, marriage strategies, and
privileges. The family system is disturbed by that a high proportion of children never married;
that the lack of emotion exists in relations between husband and wife, and between parents and
children; and that the number of eligible partners is smaller for the marriage of heir. On the other
hand, the privileges given to the nobility became powerless: the noble conception of honor granted
dueling to them, which behavior was criticized by the enlightened thinkers; the authority
exercising over land and people was limited by absolute rulers, the liberal ideas of the people, and
the rising new riches; and the nobility showed little enthusiasm "for acquiring the necessary
specialist skills or for adapting its lifestyle to accommodate a bureaucratic career." Social mobility
is largely achieved by education, marriages, and wealth. Although Britain experienced relatively
high social mobility, "its peerage was normally recruited from the gentry....it remained exceptional
for personal achievement to join wealth as a means of crossing social barriers."150 The decline of
the landed nobility and the rise of industrialists and merchants influenced the privileges of the
nobility to be less significant in the century of industrialization. Unlike France, the clergy was
unable to protect their traditional interests in Britain.
The Church of England was founded by replacing papal authority with the supremacy of the
English crown: Henry VIII dissolute the monasteries, seized and sold their assets to the nobility
and rich commoners by 1540. The process of reformation began with the publication of the Book
of Common Prayer in 1549 and the enforcement of the Acts of Uniformity. Elizabeth brought the
religious settlement between the factions of Rome and Geneva with the 1559 Book of Common
Prayer, the Thirty-Nine Articles, the Ordinal, and the two Books of Homilies; which became the
basis of all of Anglican doctrine and identity. The Parliament passed the Act of Supremacy which
recognized Elizabeth as the Church's supreme governor. James I attempted to bring unity to the
Church of England by publishing the King James Version of Bible in 1611. The Puritans sought
more far-reaching reform, while the more conservatives kept traditional beliefs and practices;
which was developed to the Civil War - Anglicanism was disestablished and Presbyterian
ecclesiology was introduced. Charles II restored Anglicanism in a form not far from the
Elizabethan version. In 1689 after the Glorious Revolution, the Act of Toleration was enacted, and
allowed freedom of worship to Nonconformists - Protestants who dissented from the Church of
England. Anglicanism spread outside of the British Isles "by means of emigration as well as
missionary effort."151 The British monarch has the constitutional title of Supreme Governor of the
Church of England, which power is exercised through Parliament and the Prime Minister. The
church is structured as follows: Parish often consists of one church building and community;
Deanery is a district for which a rural dean is in charge of a number of Parishes; Archdeaconry is
the area consisting of a number of deaneries under archdeacon; Diocese is the area under the
jurisdiction of a diocesan bishop, with a number of archdeaconries; Province is the area of
archbishop controlling dioceses. Primacy is the Church of England, and Royal Peculiar is a small
number of churches for the Crown.152 The development of the British Church in the eighteenth
century is previously discussed in the section 4 of Chapter I (page 94-5).
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 184
The British commoners were the people who did not belong to the nobility - the peerage and
the landed gentry. Traditionally, members of the House of Commons were commoners, while
members of the House of Lords were peers. The commoners include peasants, bourgeoisie, and
proletariat. Peasant commoners consist of landed, cottage, and landless peasants. Landed peasants
are the yeoman class that includes small farmers who held a reasonable amount of land and are
able to protect themselves from neighboring lords. Cottage peasants own no land but have the
cottage right - an occupancy right of some cottages, inns, millhouses, farmhouses, and other
buildings or sites of former buildings; which brings pasture rights for cows, sheep, and horses.
Landless peasants are the people who own or rent no land at all, and have no cottage right: they
are the manual laborers in the farms, and sometimes immigrants and squatters are included in
some parishes. Bourgeoisie commoners are the middle class including doctors, professors,
administrators, manufacturers, merchants, financiers - who make its way to wealth and power.
Proletariat commoners are landless peasants, urban laborers, domestic servants, the artisans in
shops or factories, the craftsmen who build or repair, and the poor including beggars, vagabonds,
pickpockets, street singers, organ players, medicine mountebanks. "In the first half of the
eighteenth century, the laboring classes organized as journeymen and apprentices under the old
guild system were gradually reduced to ordinary laborers as the skill required to operate weaving
and spinning machinery lessened." After the French Revolution, the Napoleonic Wars and with
the progress of industrialization, the division in three estates like in France had become somewhat
outdated, although the habits of the old regime remained unchanged in the lagged areas. "The
term 'common people' continued to be used, but now in a more general sense to refer to regular
people as opposed to the privileged elite....In America, a famous 1942 speech by vice president
Henry A. Wallace proclaimed the arrival of the "century of the common man."153
In the eighteenth century Britain, "The aristocracy was not interested in education except for
its own sons. It seemed better for the status quo that the peasant and the proletariat, and probably
the bourgeois too, should be unable to read." Therefore, the educational reform was delayed not
to be compulsory. "The wealthy educated their children privately, i.e. at home, with a hired
governess, or possibly tutors once they were older; boys of that class were often sent away to
boarding school, hence these fee-based educational establishments were known, confusingly, as
public school. The town-based middle class may have sent their sons to grammar school; daughters
were left to learn what they could from their mothers or from their father's library." The children
from the poor families like factory workers received no formal education, working alongside their
parents for long hours. "There were charity schools, which offered elementary education to both
sexes and all classes without charge; but the total enrollment in 1759 was only 28,000, they
excluded Dissenters, and they reached only a small fraction of the peasantry and hardly any of the
urban poor." In the 1780s, Sunday schools were set up to provide education to working children
on their one day off from the factory: they taught the youngsters reading and writing, and a
knowledge of the bible. "By 1831, Sunday schools in Great Britain were attended weekly by 1.25
million children, approximately 25 percent of the population." For the artisan class, apprenticeship
was the best education. Higher education was provided for the affordable, by domestic tutors,
public schools, lecturers, and two universities. The public schools opened to the nobility and the
gentry including affluent bourgeois. The courses were primarily classical - the languages and
literature of ancient Greece and Rome. From the time of Isaac Newton, the Cambridge University
maintained a strong emphasis on applied mathematics and mathematical physics. Oxford was also
involved in "an era of scientific discovery and religious revival" - Edmund Halley and John and
Charles Wesley.154 The Elementary Education Act of 1870 required partially state-funded board
schools to provide primary education in areas where existing provision was inadequate.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 185
French Society and Education: Under the reign of Louis V, French society was skeptic,
immoral, and poverty-stricken. "If irreligion shared in releasing moral laxity in the upper class,
poverty co-operated with the natural lawlessness of men in producing moral chaos among the
lower strata of Paris." Skepticism was prevailed in philosophers who were hostile to Christianity:
they attuned their speeches to the men and women of the salons in Paris; and wrote their liberal
ideas in books, pamphlets, and newspapers. The spread of skeptic ideas to the mass of Paris might
make atheism attractive, so that it was possible for social forces of reason to move into the decay
of faith in medievalism. An increase in wealth of the upper class accelerated the race for pleasure,
which weakened religious zeal of the people. Philosophers often inclined to deism, a theological
position concerning the relationship between the God and the natural world, by rejecting
supernatural like prophecy and miracles. The traditional theists called them atheists, though deists
denied themselves to be atheists. Immorality was criticized by the people. Since the national
religion forbade the divorce, adultery was accepted as a pleasant substitute in the high society.
"Marriage was accepted to preserve the family, its possessions, and its name; but beyond that no
fidelity was demanded, by the mores of the time and class, from either the husband or the wife."
The husband is not only bound to his wife but attached to his mistress. According to a
contemporary, three quarters of the noble lords about the court were living with women whom
they did not married. Poverty was predominant in French society, particularly to landless peasants
and urban laborers. "Historians have estimated that in lean years 90 percent of the peasants lived
at or below the subsistence level, earning only enough to feed their families....documents on life
in the countryside at this time reflect the omnipresence of poverty." Since the urban poor was
always hungry, "Crime of all shorts flourished, from pickpockets in Paris to brigands on the roads."
The moral of French society was sustained only by the landed peasantry and the urban middle
class, while the proletariat always challenged law and order.
Primary Education was monopolized by the Catholic church with facilities and teachers. The
church used the curricula for religious indoctrination, "strengthening its own position and
propagating faith rather than literacy," which was criticized by the enlightened philosophers and
bourgeoisie, who wanted the state to educate useful citizens rather than the church to indoctrinate
loyal Catholics. Most parishes had an elementary school, where the priest or his appointee taught
reading, writing, and catechism for a small fee paid by parents per pupil. In the middle upper
classes, "most education was carried on at home by governesses, then by tutors, finally by dancing
masters." The Revolution led by the bourgeoisie nationalized schools and secularized education,
when the religious orders were entirely dissolved. Although the state confiscated church
properties, that curtailed its monopoly of educational resources, it took time to replace the pool of
experienced school teachers because of limited manpower and financial constraints. It was
essential for the state to fill the people with new ideology to eradicate religious influence and to
replace it by a secular system of instruction, which could perpetuate the revolutionary alliance and
ensure popular allegiance to the new regime. The revolutionary plans for primary schools - the
main principles - lay in that "the right of children to be educated - equality of educational
opportunity - the duty of the state to organize primary instruction as a secular and gratuitous public
service - the duty of families to guarantee school attendance - the use of French as the teaching
language."155 Napoleon had relatively little interest in primary education by leaving it to the
church of the local municipalities and insisting that "it should not extend beyond the rudiments of
reading, writing, and arithmetic" since "any extension of training to the masses would be
economically wasteful and socially dangerous."156 The Revolution of 1830 required that primary
education must enable the lower classes of society "to increase their output, to improve their living
standards and thus to create new sources of wealth for the State."
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 186
Secondary and Higher Education under the ancient regime was monopolized by religious
orders like primary one. Secondary education for boys was almost wholly in the hands of Jesuits,
though the Oratorians and the Benedictines shared in the work" until the expulsion of the order
from France in 1762. Generally, secondary education of girls was carried at home, while their
higher education was carried on in convents. After the Revolution, the instrumental activities
declined due to financial constraints with reduced teaching staffs. "While the clergy could be
debarred from teaching, its replacement by secular staff required financial resources, admini-
strative provisions and training facilities which did not exist until Napoleon came to power."
Napoleon had greater interest in secondary education "as the base education for the future leaders
of the nation, as well as members of the bureaucracy and the military." He divided higher
education into two parts - under and over age twelve. "The first four classes (grades) would teach
general topics such as reading, writing, history, and the use of arms. The second class would be
divided into those boys who were destined for a civil career, and those destined for a career in the
military. Civil careers would stress languages, rhetoric and philosophy; military education would
stress mathematics, physics, chemistry, and military matters. Both civil and military graduates
could be guaranteed employment in their chosen career."157 His educational system improved the
social position of the bourgeoisie by giving them entry to the civil and military services and to the
professions based on their capacity of efficiency and utility. although the church continuously
challenged this domination by advocating traditional values at the expense of utility. Napoleon
established the Imperial University in 1808, by which the state intended to monopolize both
secondary and higher education, but "the monopoly never existed in the sense that the University
was never alone in giving instruction." The clerical influence in the university grew after 1815,
but the form of the state educational system remained unaltered.
As of around 1810, the characteristics of educational institutions were different between
Britain and France.158 (i) In Britain, educational establishments were owned, organized, and run
by private individuals - on purely voluntary basis; while in France, education was monopolized
by the state. Thereby, its administration was localized in Britain, but was centralized in France.
(ii) All funds devoted to educational purposes came from private sources in Britain, while all
revolutionary educational plans were financed by the state in France, and financial difficulties
were resolved by Napoleon. (iii) In Britain, the educational goal was in character formation to be
a social and political elite or to be a passive follower. In France, the goal of higher education was
to provide for the application of knowledge to the professions - career orientation, concentrating
on state efficiency and professional competence. (iv) The educational structure was hierarchical
and un-integrated in Britain - no ladder existed from one institution to the next, and the curricula
of the various levels were not interrelated. In France, the state pursued equality by providing a
minimal standard of elementary instruction for all citizens, and equal opportunity by creating an
educational ladder based on merit alone. (v) In Britain, the teaching professionals came from
untrained individuals, so that the pedagogical standards were unsatisfactory. In France, the law
required an official certificate of civic virtue for primary-school teachers, and later similar
requirements existed for appointments to secondary and higher education. (vi) In Britain, the
attendance at all educational levels was determined by self-selection based on fees, prestige, and
social orientation. In France, the merit-based selection secured equal opportunities, though the
existence of fees disturbed educational mobility. (vii) In Britain, curricula at both secondary and
higher level education varied widely between colleges and schools because of the absence of any
form of state control or central co-ordination by the university authorities. In France, the state
pursued egalitarianism and nationalism via the centralized organization, the integrated structure,
the meritocratic selection, and standardized curricula in education.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 187
Social Changes in Austria and Prussia: Charles VI of the Holy Roman Empire intended to
develop the economy by abolishing trade barriers and improving the line of communications, but
the Austrian economy remained too weak to sustain the strength, and the public debt arising from
wars and court expenditures amounted to near bankruptcy. Maria Theresa engaged in two
international wars, which exacerbated the Austrian economy. She was not an enlightened despot:
she did not develop rational principles of government nor did she care about systemic thought. "A
great part of her success as a ruler was due to her able ministers. She accepted their lead and
earned their devotion." She rebuilt the Imperial army of 108,000 men "under unified training and
central control" but her military reforms were confined to Austria and Bohemia, while the
governing system of Hungary and the Netherland was untouched. In order to finance this force,
she introduces a property and an income taxed to the nobility and the clergy despite their protest.
Remaining in a devout Catholic, Theresa ordered religious reforms: "She reduced the number of
religious establishments, and ordered the taxation of all religious property. All of churches and
convents were no longer to afford asylum to criminals by right of sanctuary. No papal brief was
to be recognized in the Austrian realm until it had received Imperial consent. The Inquisition was
subjected to governmental supervision, and was in effect suppressed." The torture was abolished
in 1776. Education was reorganized under the direction of good leaders: "in many professorships,
Jesuits were replaced by laymen; the University of Vienna was brought under laic administration
and state control; the curriculum there and elsewhere was revised to widen instruction in science
and history." Theresa abolished serfdom on her lands, and "imposed upon the haughty magnates
of Hungary a decree empowering the peasant to move, marry, and bring up his children as he liked,
and to appeal from his lord to the county court." In Vienna, lower classes lived in traditional
poverty, and the peasantry of Hungary and Bohemia was as poor as in Russia.
Her son Joseph II kept supreme authority over internal affairs by 1765. (i) He unified the
empire by creating a single centralized office in Vienna and applying centralized policies. He
developed a state police system: "The various police departments in the provinces were
subordinated to the chiefs of the provincial administration, but they also sent secret reports to the
central govern-ment."159 (ii) He introduced a new civil code of judicial procedure: "Penalties were
lightened, and capital punishment was abolished. Magic, witchcraft, and apostasy were no longer
punish-able by law. Dueling was forbidden; to kill in a duel was classified a murder. Marriage
was made a civil contract; marriages between Christians and non-Christians became legal; divorce
could be obtained from the civil authority....Many ecclesiastical courts were abolished. All
persons were to be held equal before the law." (iii) He prohibited all connections with Rome.
"The monastic orders were placed under the supervision of the indigenous bishops, and on this
occasion all those monasteries that were exclusively devoted to contemplation rather than
education or the nursing of the sick were dissolved. Four hundred convents were closed in the
German lands of the monarchy and about eight hundred in the empire." (iv) Expelling the Jesuits
from Austria by confiscating their properties in 1773, he reformed education: "Grade schools
provided compulsory education for all children; they admitted Protestants and Jews as students
and teachers, gave religious instruction in each faith to its adherents, but placed control in the
hands of state officials....Normal schools were established to train teachers; Hauptschulen
specialized in science and technology, and Gymnasien taught Latin and the humanities." All
education was controlled by the state, and the University of Vienna was devoted to higher
education.160 (v) He abolished serfdom: "The right to change residence or occupation, to win
property, and to marry by mutual consent was guaranteed to all, and special attorneys were
provided to protect the peasants in their new liberties." The barons lost criminal jurisdiction over
their tenants, but could require some customary services from their former serfs.161
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 188
Frederick William I of Prussia established a new bureaucracy and created a standing army by
spending eighty percent of all revenues in contrast to about sixty percent in France, fifty in Austria,
and a little over thirty Bavaria (government consumption in 2014 GDP: China 13.6%, Japan 20.6%,
US 15%). The monarchy was divided into cantons, "districts of 5,000 hearts for infantry regiments
or 1,500 for cavalry regiments." The social groups such as all burghers, educated people, and the
workers in specialized manufactures were exempted from military service. In 1740, the army had
two foreigners to one Prussians, which ration declined to half and half later years. The king trained
and drilled the army relentlessly, focusing on the firing speed of their flintlock muskets - expecting
to fire six times in a minute, three times as fast as most armies - and formation maneuverability.
The officers came from the Junkers and the rank and file from the peasants, but the borderline was
not clear. "The middle class of the towns was required to quarter soldiers and enroll in the
bureaucracy." 162 The king had excluded the nobility to participate in the actual conduct of
government to avoid unnecessary conflict with them in power politics. The Prussian nobility was
predominantly so poor that many Junkers had gone to foreign countries and soldiering was fairly
common among them: the king founded a cadet school in Berlin for the sons of nobles to acquire
a suitable education, which policy was entirely successful. "The function of the burghers was to
produce the money for the maintenance and expansion of the state beyond the traditional income
from agriculture. In exchange for this, the townspeople received some privilege, but little honor,
by exemption from military service. And below the townspeople were the mass of the population,
the peasants, burdened....consisting of their endless toil for their landlord and state and military
service."163 The high positions in the civil service were reserved to noblemen, but in some measure,
"burghers were accepted and assimilated in higher posts." The upper rank of civil servants was
not yet exclusively university graduates, but appointments were already by examination.
Frederick the Great was an enlightened ruler who transformed Prussia "from a European
backwater to an economically strong and politically reformed state." (i) He acquired Silesia that
provided more human and natural resources, and expanded agriculture, industry, and commerce.
"Canals were built, including between the Vistula and the Oder, swamps were drained for
agricultural cultivation, and new crops, such as the potato and the turnip, were introduced." In
trade, he inclined to mercantilism by promoting exports and limiting imports; and controlled the
grain prices at the time of crisis. He reorganized the system of taxes, which provided the state
with more revenue than direct taxes. (ii) The religion in Protestant North was more subordinate
to the state than the Catholic south. He supported religious toleration as shown in the retention of
Jesuits as teachers in Silesia. He recognized the educational skills the Jesuits had as an asset for
the nation. "He was interested in attracting a diversity of skills to his country, whether from Jesuit
teachers, Huguenot citizens, or Jewish merchants and bankers, particularly from Spain." (iii)
Frederick emphasized elementary education: "Education was to provide the individual with a set
of moral rules and equip him with the practical knowledge necessary in his occupation." The
primary education was desired to be compulsory in 1717, which was legally enforced by 1763 for
all children for eight years from the age five to thirteen.164 All schools must use the German
language for education in Prussia. He thought justice that "There is no kingdom without soldiers,
no soldier without money, no money without population, no population without justice." (iv) The
Junkers became military officers and civilian officials, who deserved to protect the social and
political rights of the landed nobility. While the traditional classes remained stable, the marriage
outside one's class was almost unthinkable, but some merchants and financiers bought nobility.
The land was cultivated by serf, but the princes, prelates, and nobles of western Germany began
to free their peasants from serfdom by 1780. The German home had been the source of moral
discipline, social order, and activity, while the wife was subject to the husband.165
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 189
Social Changes in Poland and Russia: A Polish noble with an outstanding military career,
was elected to the king of the Polish-Lithuanian Commonwealth as John III Sobieski in1674, who
ruled a devastated land by almost half a century of constant war.166 He reorganized the army into
regiments and cavalry by increasing the number of guns with new tactics. Joining the Holy League,
he fought the Great Turkish War at the battle of Vienna with a decisive victory in 1683. Augustus
II succeeded his throne in 1697. The Great Northern War exposed the weakness of Poland as well
as the shortcomings of new king, and the dubious value of the Saxon alliance. 167 He possessed
"neither the stamina nor the subtlety, nor even the interest in Polish affairs." After the War of
Polish Succession, Augustus III succeeded his father's throne in 1734 by the support of the Russian
army.168 Speaking no Polish, he spent only two years in Poland during the entire period of his
reign except staying in the Seven Years' War. They brought the Commonwealth further
disintegration. Stanislaw Poniatowski became a king in 1764 by the support of Catherine II: his
rule was under control of Russia at the time of partitions. (i) The ethnic and religious diversity:
The majority Polish collided with German, Jewish, Lithuanian, and Russian minorities; the
Teutons and the Slaves were spontaneously hostile; and the majority Catholics oppressed the
dissidents who were divided by themselves between Protestants, Greek Orthodox, and Jews. No
cohesive force pulled Poland to transform the diversity into the unity to revive the country. (ii)
No political system functioned: The landed nobility (szlachta) held most of the executive offices
in the state, and dominated the Sejm or Diet from which sovereign power came. The Diet was
controlled by family factions such as the Czartoyskis and the Potockis, who opposed important
bills by using power of the liberum veto in order to make the king powerless or the government
inefficient. They called their homes courts, "with retainers, private armies, numerous servants,
and semi-royal displays." Foreign diplomats often bribed them to pass bills for their interests.
(iii) Foreign relations were unfavorably developed for national interests of Poland. The
neighboring countries were hostile to Poland: Prussia from the west, Russia from the east, Sweden
from the north, Austria and Turkey from the south intended to gain Polish lands, while Poland was
unable to hold a reliable security alliance with neighboring countries. It is not surprising that
"neighboring rulers should think that they could make better use of some parts of Poland than
could the Poles themselves." Particularly, Russia maintained westward strategies, resulted in an
immediate military intervention in Polish affairs whenever it was necessary. (iv) The elected kings
were not much interested in Polish affairs. Augustus II and III mostly stayed in the Saxony, and
their ministers might run the Polish affairs from Dresden. Since the key family factions dominated
the Diet and decided important national affairs in favor of their interests, the lack of political
leadership could disturb fair competition by allowing monopoly to powerful factions, which could
distort the allocation of resources. If the hard-working labor of Saxony, for example, was mixed
with rich raw materials of Poland, Polish products might be competitive in the world market;
which would have improved Polish exports to foreign countries. (v) The land owners favored
agriculture to industry or commerce, because they feared the rise of middle class in towns with
their costs. The Catholics excluded the dissidents from public offices and the Diet, and all suits
were tried before Catholic courts, so that the dissidents such as the Protestants left towns as
merchants or artisans. As a result, the cities decayed and the economy declined, while the peasants
suffered from poverty, hardship, or cold. (vi) Since the Polish education lagged behind the
standard of Europe, the Commonwealth created the Commission of National Education in 1773,
which supervised 2 universities, 74 secondary schools, and about 1600 parish schools; and
published 27 textbooks and manuals in Polish language, which saved the Polish language and
culture despite heavy Russification and Germanization under three partitions. Being operated
roughly 20 years, the Committee changed the shape of education in Poland.169
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In Russia, Peter the Great was the engine of social changes. He visited the western countries
and directly learned modern technology by himself including working at the shipbuilding place.
He was anxious to westernize Russia: he intended to make St. Petersburg a capital as well as a
military and commercial port to the Baltic though it was too close to hostile Sweden. He also
intended to make the Dnieper and Volga the military and commercial exit to the Black Sea and
the Mediterranean. He built a navy that would secure the lane of commerce through the Baltic to
the West; and reorganized the old guards to be a new standing army "manned by conscription,
equipped with the latest weapons of the West, officered by men who had passed through the ranks,
and disciplined in the new ideal of proudly serving Russia rather than a narrow province or a
hatred lord." He commanded the all of male to shave their beard and to adopt western dress, except
only the Patriarch of the Orthodox Church - the beardlessness was a sign of modernity and of
willingness to enter Western civilization. Peter encouraged women "to remove their veils, to
dance, to make music, and to seek education, even if only through tutors." In religious reforms,
he had "three main concerns: to eliminate the possibility of political resistance, to use the church
as an instrument of education in the ideas of the west, and to secure a proportion of the income of
the church for the state." The clergy realized that his reforms would lessen their prestige and
power "They bemoaned his toleration of Western faiths in Russia, and they suspected that he
himself had no religious belief." When Patriarch Adrian died in 1700, Peter did not appoint his
successor, and became head of the church and led a Reformation in Russia. In 1721, "Peter
abolished the office altogether, and replaced it with a 'Holy Synod' of ecclesiastics appointed by
the Czar and subject to a lay procurator. In 1701 he transferred the administration of ecclesiastical
properties to a department of the government." The religious courts were curtailed and monks
were to be compelled to do useful work. Peter was really great for Russian modernization.
The landed nobility provided military leadership and economic organization, with the right to
own serfs in the eighteenth century. A serf could regain freedom by buying it from his owner or
by enlisting in the army, but this required his owner's consent. "Free peasants could buy and own
serfs; some of these freemen dominated village affairs, lent money at usurious rates, and exceeded
the lords in exploitation and severity." Peter allowed merchants to buy serfs for their factories:
the right to buy serfs sometimes created "a class struggle between the factory-owning bourgeoisie
and the serf-owning nobility."170 Religion was still strong in Russia, "for poverty was bitter, and
merchants of hope found many purchasers." The priests seldom mingled with the aristocracy or
the court, "but lived in modest simplicity, celibate in their monasteries or married in their
rectories." The nobles of the court "adopted the morals, manners, and language of the French
aristocracy; their marriages were transactions in reality, and were alleviated with lovers and
mistresses." Alexander I adopted new regulations, which "abolished secret police, forbade torture,
allowed free Russians to move about and go abroad, and allowed foreigners to enter Russia more
freely. Twelve thousand exiles were invited to return. Censorship of the press remained, but it
was placed under the Ministry of Education, with a polite request that it be lenient with authors.
The embargo on the import of foreign books was ended, but foreign magazines remained under
the ban. A statute of 1804 established academic freedom under university councils." The new
system of public education divided Russia into six regions, and called for at least one university
in each region, one secondary school in each province, one county school in each county seat, and
one primary school for every two parishes, while the nobles maintained tutors and private schools
for their children. The Russian government issued the Jewish Constitution in 1804 that allowed a
bill of rights and an edict of urban confinement. "The Jewish children were assured free access to
all public schools, Gymnasia, and universities in the Russian Empire." They might establish their
own schools.171 Nicholas I (1825-55) should manage the overall poverty of Russia.
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Social Changes in Spain and Italy: The greater part of the Spanish countryside was
administered by the church or the nobility, who were virtually immune from royal control but
enjoyed senorio, which provided a range of feudal dues and monopolies. "Besides right of mill,
oven, wine press and slaughter house, with road and ferry tolls, there were sometimes tithe and
pasture rights and even the right to take the alcabala, the 10 percent sales tax." The nobility
remained dominant, politically and socially like in Poland, and was exempted from personal taxes
and the normal processes of law. The clergy had the real power in Spain: the total number of
clerics including priest, men in minor order and nuns was 200,000 with 3,000 religious houses in
1700; and a census of 1797 showed that there were 53,000 monks and 24,000 nuns. Catholicism
was not merely a creed and a liturgy but also a way of life, "offering something to everyone in a
society which had not as yet experienced the separation of two cultures, that of the educated elite
and that of the simple masses" where such extremes of riches and poverty existed. The religious
processions were "frequent, dramatic, and colorful," and two religious orders prospered in Spain.
"The Jesuits, through their learning and address, dominated education and became confessors to
royalty. The Dominicans controlled the Inquisition, and through this institution had long since
passed its heyday it was still strong enough to terrify the people and challenge the state." The
conservative forces of the Inquisition prevented from the spread of new learning, which isolated
Spain from new knowledge, resulting in the decay of universities like Italy. The expansion of the
privileged classes, concentration of wealth and lack of investment, and the lag of higher education
further impoverished Spain. The unemployed, beggars, and vagrants were waiting for food, while
weak administration was unable to identify the cause, although the Church was faithful in helping
them. Some anti-clericalism appeared in sacrilege and morality: "It was acceptable that priests
should have concubines; brothels catered for the laymen and perhaps preserved their marriages."
The long war to drive out the Moors had made Catholicism a part of patriotism, which
sanctified its faith by the cost of nation. Charles III intended to reform the Church under control
of the state: he expelled the Jesuits from Spain in 1767; the inquisition became milder after 1770,
Toleration was granted to Protestants, and in 1779 to Moslems, though not Jews. The waves of
the Enlightenment reached in Madrid and other centers, where nobles, priests, and commoners
without distinction of sex formed economic societies to study and promote education, science,
industry, commerce, and art. "They founded schools and libraries, translated foreign treatises,
offered prizes for essays and ideas, and raised money for progressive economic undertaking and
experiments." Charles III urged towns to lease their uncultivated common lands to peasants at the
lower practical rent; created pious funds from crown revenues for lending money to farmers at
low interest; facilitated the breakup of large estates into peasant properties; and reduced the
privileges of the Mesta sheep monopoly. He supported industry by removing old restrictions in
favor of the development of large-scale capitalistic production. He also terminated a protected
monopoly of commerce with the Spanish colonies, which tripled her exports. His reform policies
stimulated the economy and expanded the maritime centers - Barcelona, Valencia, Seville, and
Cadiz - to hold the population from 80,000 to 100,000 by 1800; and Madrid had 168,000 with
30,000 foreigners. The Spanish character could be intense religion, courage and sense of honor,
and family coherence and discipline. Social morality was relatively high, while political and
commercial corruption existed. In education, Charles III financed to establish free elementary
schools, and private individuals joined to found academies for the advanced education. After the
expulsion of the Jesuits, secondary schools were remodeled. He modernized higher education by
expanding science courses, modernizing textbooks, and admitting laymen to their faculties. The
University of Valencia was the first university in Spain authorized by Pope Innocent IV in 1246,
and grew to be the largest cultural center in Spain with 2,400 students in 1784.
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Since the Middle Ages, the Italian cities had maintained an economic hegemony and cultural
superiority for centuries because of its central location in the Mediterranean and partially of the
importance of Rome in the Christian world. The feudal structure of society remained unchallenged
in independent and prosperous communal cities. The population growth commercialized agri-
culture; the rising industry and trade created the rich merchant-capitalists, who transformed the
communes into the signorie (Lordly Power) "to maintain law-and-order and suppress party strife
and civil discord." The diffusion of the signorie expedited the feudalization of society in Italy in
the fourteenth and fifteenth centuries. As the cities were politically divided and economically
declined, the Italian Wars (1494-1559) between France and Spain established an Spanish
hegemony in Italy, and the Spanish influence restructured Italian society by replacing wealth-
power-ideals of communal merchants with those of aristocrats. The urban ruling class with the
inflation of noble titles massively purchased land that "offered security, tax exemptions in many
cases, food supplies for the family, and the most legitimate base of claims to office titles. It could
also produce a satisfactory income through supplementary seigneurial rights and, above all,
through the exploitation of labor, facilitated by harsher tenurial contracts and the growing
indebtness of the peasants."172 The revival of the aristocratic class brought the structural crisis of
Italian economy. The output of woolen textiles "declined sharply in Florence and Milan from the
1560s and in Venice by the 1620s." The dominant form of landed tenure - share-cropping - limited
any increase in production, and the rising population threatened the self-sufficiency of peasants.173
Hence, the rural population became increasingly pauperized, and some 20 to 30 percent of them
depended on charity. While both the church and civic authorities displayed a hostile approach
towards beggars and vagrants, Italy became a country of ubiquitous poverty by around 1700.
In the eighteenth century, Italy became a battle ground of European powers that influenced
Italian society significantly. The War of Spanish Succession (1701-14) established an Austrian
hegemony in Italy; the War of Polish Succession (1733-38) allowed Spain to regain control over
Naples and Sicily; and the War of Austrian Succession (1740-48) forced Austria to cede Parma,
Piacenza, and Guastalla to Spain. The British advanced to the Mediterranean by conquering
Gibraltar and Minorca, established naval superiority of the British fleet in the Sea, and supported
Savoy to check the French advance to the south and to counterbalance the expansion of Austrian
power in Milan, and secured British economic interests in Italy.174 France had always been
interested in Italian affairs, but other matters forced her to use "more peaceful and personal
methods of marriage ties and family pacts" until Napoleon conquered Italy. Thus, Italian society
was dominated by Austria in the north, and Spain in the south: the ruling class of the duchy of
Milan firmly tied with Vienna, while that of the kingdoms of Naples and Sicily consolidated its
power with Madrid. The long period of Spanish rule transformed Italy into aristocratic society:
"Too many Spaniards owned lands in Naples and Sicily. Too many Italians still served as Spanish
diplomats, too many nobles, merchants, craftsmen, bureaucrats, and soldiers had emigrated to
Spain in the previous century." 175 Industry and commerce had declined and the population of
cities remained stationary or even fallen; the clergy and the nobility gained power with privileges;
manufacturers and merchants was weakened; and the regional states were centralized but
challenged by the privileged classes. As the cities declined, Italy became a greater agrarian society
than two centuries ago; which required the farmers to support the cities by sending farm products
to them without exports, and paying more taxes - direct taxes on land, consumption taxes, the
increasing number of exceptional taxes, customs duties, the salt excise, and poll tax. As the Italian
city states involved in the international wars because of Austria and Spain, the heavy financial
burden of the peasants made them more impoverished. Through the restoration period (1815-35),
a new Kingdom of Italy was founded in 1861 that moved toward Italian unification.
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Meanwhile, the power of nobles and ecclesiastics was reinforced by their privileges. The land
possessed by the nobility and the clergy was exempted from taxes, which became the basis of their
wealth, that was augmented by the exaction of seigneurial and ecclesiastical rights like the feudal
past. They included tithes, hunting and fishing rights, tolls, monopolies of mills and ovens, civil
and criminal jurisdiction, and payment due for a multitude of reasons. Consequently, the structure
of landownership was changed - holdings had increased in size and concentration. "Ecclesiastical
possessions grew steadily with donations to the Church that varied from small plots to fairly large
estates." However, "many small holdings were sold, according to the testator's desires, in order to
raise the necessary capital to provide an annual income for masses." On the other hand, "Noble
landed estates grew more ostentatiously, as the decline of industry and the uncertainties of trade
led to an increasing investment of capital in the land, and as the social prestige of the aristocracy
induced successful bankers, fermiers and lawyers to buy the estates which were regarded as the
necessary accompaniment to their newly acquired titles." Particularly, in the south, "foreign
merchants and bankers - Genoese, Lombards and Venetians - established and expanded their
possession of the land, alongside the great papal families and Spanish officers or courtiers." In
terms of their shares of holdings, "In Lombardy, in the mid-eighteenth century, the nobility owned
42 percent of the plateau and 46 percent of the plain (alongside 49 percent of the hilly areas), while
the Church (including lay religious confraternities and hospitals) owned 21, 22 (and 23) percent
respectively." "In the kingdom of Naples the baronage owned at least 20 percent of landed income
and the Church a further 20 to 30 percent....The Sicilian barons and prelates did not lag behind
their Neapolitan relative and compeers." "In Naples, ecclesiastical income was as great or greater
than state revenues in the 1720s." The concentration of holdings was closely linked to the new
systems of land tenure and peasant pauperism – the problems of the old regime.
The rising cost of warfare forced the government to borrow money from private financiers by
mortgaging tax revenues. It was calculated in 1747 that "half of the Lombard revenues of 6 million
lire were pledged as interest on past debts." In this regard, "the governments of all the Italian states
were impelled towards reforms." The reform-minded princes and their leading ministers,
influenced by new ideas of the Enlightenment, were ready to secure the collaboration of
intellectuals demanding reforms. The reforms were intended "to eliminate the most evident
weaknesses in the administrative and legal structure of the state, to limit the encroachments of
privileges, to provide a firm basis for taxation, to stimulate industry and commerce, to assert the
sovereign's control over the Church, to break the ecclesiastical monopoly of education, to create a
broader administrative class of new men alongside the nobility, to forge a large and efficient
diplomatic service and army." The Enlightenment influenced Italian society to move, although
the reforms in the Church were less impressive in Rome. A Catholic priest Pietro Tamburini
published an essay On Ecclesiastical and Civil Toleration in 1783, in which he condemned the
Inquisition and advocated toleration of all theologies except atheism.176 The popes faced the
demand of Catholic monarchs for the dissolution of the Society of Jesus. It was part of power
game between the nationalism of modern states and the internationalism of papacy weakened by
the Enlightenment, while Jesuits had meddled in state affairs through their close ties with
influential members of the royal court in order to enhance special interests of their order or the
papacy. The Society was expelled from Portugal, France, Sicily, Parma, and Spain; and Clement
XIV suppressed the Jesuits in 1773, but Pius VII restored it in 1814. The French Revolution
moved Italian society towards the new order: Napoleon abolished feudalism and the Inquisition,
closed over five hundred religious houses, and gave "an uncomfortable freedom" to 5,852 monks
and nuns. He dismissed corrupt officials, introduced public accountancy, proclaimed religious
liberty, and allowed the Jews to move freely from their ghettos.
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Social Changes in the Netherlands and Scandinavia: In the Eighty Years' War (1568-1468),
the first fifty years were the conflict between Spain and the Netherlands, and the other thirty years
became a European war - the Thirty Years' War. The seven rebellious provinces of the
Netherlands were united by the Union of Utrecht in 1579 and formed the Republic of the Seven
United Netherlands (known as the United Provinces), which was confirmed by the Peace of
Westphalia in 1648. Holland was the largest province, but foreigners often called it as the entire
Republic. Becoming de facto independent from the empire of Philip II of Spain in 1585, the
Netherlands experienced explosive economic growth down to around 1740. The main engine of
economic growth lay in foreign trade based on its naval power equipped with the advanced
shipbuilding, naval artillery, military tactics, and navigation skills.177 The Dutch fleet attacked the
Portuguese ships and its trading posts in the East Indies, and took over their monopoly of spice
trade, but their commercial operations in the West Indies declined. The Treaty of Munster between
the Dutch Republic and the Kingdom of Spain recognized "the right of the Dutch to conquer and
hold all the Portuguese colonial lands claimed by the Dutch India company." The Dutch provinces
became the important trading center of Northern Europe by replacing Antwerp in Flanders with
Amsterdam. As the Dutch took over much of England's maritime trade with North America, the
Parliament passed the Navigation Act in 1651, which ignited to the three Anglo-Dutch Wars
(1652-74). In the late seventeenth century, Dutch commercial power began to decline due to the
loss of wars. "Dutch trade and shipping remained at a fairly steady level through the eighteenth
century, but no longer had a near monopoly and also could not match growing English and French
competition." As the Netherlands lost its superiority in sea power and trade, the world trading and
financial center moved from Amsterdam to London. The fourth Anglo-Dutch War (1780-84)
started when the Netherlands entered the alliance with the United States and their allies. The war
exposed the weakness of its political and economic foundations.178
William III of Orange (1672-1702) was a stadtholder of the Republic, who invaded England
in 1688 to be the king, and William V (1751-95) was the last stadtholder.179 (1) The seventeenth
century was a golden age of the Netherlands. "The Dutch were probably the best-fed people in
Europe; they certainly took most care of their urban poor. Calvinists faith was influential as
ministers expounded the austere doctrines that gave their congregations a sense of being a chosen
people....Immigrant southerners brought their capital and skills to the cities of the north.
Dutchmen traded profitably in the East Indies, Africa and India." (2) The Dutch fishermen pursued
the herring shoals, "operating mainly from ports at the mouth of the Maas, under the regulation of
College of the Fishery....Salted herring and cod provided security against famine in winter months
and a valuable export to other countries. To acquire salt of sufficient quality the Dutch went to
the Bay of Biscay and to Setubal in Portugal. To build their ships they imported timber from
Norway and the Baltic." (3) In education, politically, a conflict arose between centralized power
of the stadtholder - supporters and independency of the Provinces and cities; economically,
mechanization in the textile industry differed from the guild system demanding monopoly;
educationally, the bourgeoisie resisted the structure and contents of education influenced by the
Church.180 Despite the lack of intellectual vitality in universities, "it is evident that the widespread
growth of new institutions, academies and learned societies was catering for a demand for learning
and the facilities for research." (4) "The Netherlands did not only include the seven relatively
independent Protestant provinces of the Dutch Republic but also a Roman Catholic
Generaliteitsland, which was governed by the State-General." Its religious toleration allowed
many immigrants - the first generation immigrants outside the Netherlands were nearly 50 percent
of the population of Amsterdam in the seventeenth and eighteenth centuries. They were the Jews
from Antwerp, Huguenots from France, Puritans from England.181
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Denmark was one of the strongest states in Europe at the time of Frederick II (1559-88) whose
rule extended to Norway. Christian IV (1588-1648), a Lutheran king ruled one million subjects:
"His German estate of Holstein gave him a private income and a seat on the imperial diet; his
Sound due provided revenue and a measure of bargaining power." He intended "to strengthen his
authority over the nobles, to expand from his base in Germany, and to recover what he regarded
as Danish lands from the Swedes" though failed. His son Frederick III (1648-70) attacked Sweden
in 1657 but was defeated, so ceded Scania, Halland, and Blekinge, with the island of Bornholm as
well as Tronheim and Bohuslan in Norway to Sweden by the Treaty of Roskilde.182 Christian V
(1670-99) modernized administration: he standardized the Danish code and replaced the old
provincial laws; all weights and measures were standardized; and an agricultural survey allowed
the government to impose taxes directly and fairly. Frederick IV (1699-1730) joined an anti-
Swedish coalition during the Great Northern War, but made peace with Sweden in the very
beginning. After the loss of lands, the population of Denmark was only 700,000, and increased to
near one million by 1807. "Rural administration remained primarily the preserve of the large
landholders and of a few law-enforcement officials. In 1733, low crop prices caused the
introduction adscription,183 an effort by the landlords to obtain cheap labor. The effect of this was
to turn the previously free Danish peasantry into serfs....Peasant who refused to rent a farm were
subject to six years of military service."184 So Danish agriculture became very inefficient. Under
Christian VII (1766-1808), agricultural reforms took place with the abolition of the open-field
system, integration of small farms into larger ones, and abolition of the adscription system. The
serfdom was abolished from 1784 to 1815, and many peasants became landowners. Denmark
maintained a number of colonies outside Scandinavia - Greenland and Iceland with Norway;
Tranquebar on the Indian coast; and some small islands in the Caribbean.
Sweden became a strong power in the second half of the seventeenth century. Charles XI
(1660-97) ascended the throne at the age of five and his mother was his regent until 1672. In the
Scanian War, Sweden allied with France fought against Denmark-Norway, United Provinces,
Brandenburg, and Holy Roman Empire. The Danish army attacked the Swedish in the Scania in
1675 to recover the lands lost by the treaty of Roskilde. Defending the lands, he avoided further
warfare by gaining larger independence in foreign affairs, while he promoted the economy and
reorganized the military. Charles XII (1697-1718) was a young and inexperienced king, thus
initiating the Great Northern War as discussed in Chapter I. Despite his initial victory, he was
decisively defeated by Peter the Great at the battle of Poltova in 1709, and spent five years of exile
in the Ottoman Empire before returning to his native land. During his exile, he convinced the
Turks to surround the Russian army in Azov where Peter sued a peace with them to save his men
and equipment. At a battle in Norway, he was killed, which ended the Great Northern War. In
the War of Austrian Succession and the Seven Years' War, Sweden joined the Russian side against
Prussia to recover Pomerania. However, their roles in both wars were not comparable to that of
the army led by Charles XII. Gustav III (1771-92) worked for reforms: he allowed the liberty of
the press within certain limits, introduced new economic policies, and abolished a number of
oppressive export tolls. He amended the poor law, and proclaimed limited religious liberty for
Catholics and Jews. "Criminal justice became more lenient, the death penalty was restricted to a
relatively short list of crimes (including murder), and torture was finally abolished in order to gain
confessions, although strict death penalty was maintained." Gustav fought the war against Russia
during 1788-90: the Swedish navy decisively won the Battle of Svensksund in 1790, while the
Russians lost one-third of their fleet and 7,000 men. Nevertheless, signing a peace, Gustav formed
a defensive alliance with Russia against France in 1791 by receiving an annual subsidy of 300,000
roubles from Catherine the Great of Russia.185 In 1808, Russian army invaded Sweden.
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The Ottoman Empire - Politics, Economy, and Society: In the sixteenth and seventeenth
century, the Islam world comprised two major regions. The first region was the Turco-Mongol
Empire, that had established four major states - the Ottoman, Safavid, Uzbeks, and Mughal states;
where ruling families spoke Turkic languages as their native tongues, and relied upon Turkic or
Turco-Mongol tribes or military units to gain power. The second region included North Africa,
Sudanic Africa, and Southeast Asia: "it was usually Arabic-speaking merchants, ulama, or sufis
who either founded dynasties or converted local elites to Islam. Despite their cultural and political
differences, the two regions were linked by a common body of Islamic scholarship and the
pilgrimage to Mecca, which Muslims undertook in greater numbers as security and transportation
improved."186 The Safavids holding the Shia faith over the Iranian plateau intensified conflict
with both Ottomans and the Uzbecks holding the Sunni faith. Suleiman the Magnificent (1520-
66) mobilized the Ottoman armies in order "to conquer the Christian strongholds of Belgrade,
Rhodes, and most of Hungary before his conquests were checked at the Siege of Vienna in 1529.
He annexed most of the Middle East in his conflict with the Safavids and large swathes of North
Africa as far west as Algeria. Under his rule, the Ottoman fleet dominated the seas from the
Mediterranean to the Red Sea and the Persian Gulf."187 In the Indian Ocean, the Ottoman navy
frequently confronted Portuguese fleets to defend its traditional monopoly over the maritime
routes between East Asia and Western Europe. The Great Turkish War (1683-98) - the Ottoman-
Habsburg Wars, Polish-Ottoman Wars, and Russo-Turkish Wars - ended with the victory of the
Holy League. The Treaty of Karlowitz forced the Ottomans to retreat to its northern front - the
line of the Danube and the northern coast of the Black Sea. However, conflicts continued between
the Ottomans and the Habsburg as well as Russia, since the desires to expand their territories
collided along this border. (See Ottoman Wars in the eighteenth century, page 39-40).
In the Great Northern War, the Ottoman took Azov from Russia in 1711; but in the War of
Polish Succession, the Russians defeated the Turks and regained Azov with the right of free trade
by the Treaty of Belgrade in 1739. The Ottomans enjoyed economic growth in peace until Russia
started a war against them for territorial expansion. Through the two Russo-Turkish Wars (1768-
74 and 1787-92), Russia obtained Crimea and Ochakov from the Ottoman by the Treaty of Jassy,
that allowed them to access to the Mediterranean through the Black Sea. After the war, Selim III
(1789-1807) attempted to modernize his army in line with European states. But these efforts were
hampered by "reactionary movement, partly from the religious leadership, but primarily from the
Janissary corps, consisting of infantry musketeer units forming household troops and bodyguards
of the Ottoman sultan.188 The janissary revolt of 1807 deposed Selim III, and elevated Mahmud
II (1808-39) to the throne, who captured and executed Mustafa - the head of the revolt. As the
sultan informed them his intention to create a new army in 1826, they mutinied again as predicted.
All of them were killed by fire, or captured and executed or exiled; and their properties were
confiscated - now called it the Auspicious Incident. In the eighteenth century, the Ottomans
declined continuously. Bill and Ariel Duran wrote that the major causes of the Ottoman's decline
lay in "the movement of Asia-bound West-European commerce around Africa by sea instead of
overland through Egypt or western Asia; the destruction or neglect of the irrigation canals; the
expansion of the empire to distances too great for effective central rule; the consequent
independence of the pashas and the separation of the provinces; the deterioration of the central
government through corruption, incompetence, and sloth; the repeated rebellions of Janissaries
repudiating the discipline that had made them strong; the domination of life and thought by a
fatalistic and unprogressive religion; and the lassitude of sultans who preferred the arms of women
to those of war."189 Moreover, "the Serbian revolution (1804-1815) marked the beginning of an
era of national awakening in the Balkans during the Eastern Question."190
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 197
The economic foundation of the Muslim world system, created by Umayyads and Abbasids
in the first century of the Muslims, rested on "settled agriculture, urbanization, and long-distance
trade." They controlled the maritime trade through the Persian Gulf, the Red Sea, and the eastern
Mediterranean owing to the skills of the seafaring people of Bahrain, Oman, and the shipbuilders
of Egypt. The growth of production and consumption in the enlarged market of the Muslim world
was made possible by following three parallel developments. "First, the Islamization of the
conquered people created a partially homogeneous religion, moral, and juridical system. Secondly,
the Arabization of the army and the administration helped to break down ethnic and national
barriers by recruiting local entrants or by the incorporation of the warlike steppe people. Finally,
the Semitization process was completed through the adoption of Arabic as the universal language
of communication, education, literary expression, and government." The products of Islam
civilization were mainly two kinds: the luxurious goods - "silk, porcelain, spices, incense, fine
horses, and precious objects of all kinds" and the necessities of daily life - "food grains, fuel,
timber, and cooking oils." The Mediterranean trade was largely shared between the Muslims and
Christians, the Arab and Persian shipmasters in the Indian Oceans established themselves over
oceanic routes to southeast Asian ports and even to the Far East.
By 1429, the sultan Mamluk of Egypt monopolized the entire pepper trade of his kingdom.
In 1433, a large Chinese fleet from Canton arrived in the Yemen, though later the Ming dynasty
discouraged overseas trade. Discovering the ocean route to India in 1498, the Portuguese began
to monopolize the spice trade with India by controlling Hormuz and blockading Bab-el-Mandeb.
The situation began to change: the Portuguese in India did not strictly follow the Lisbon's policy
if it interfered with their own trade; the Ottoman's naval power under Sulayman attempted to
challenge the Portuguese in the Red Sea and the Persian Gulf; and the Indian and Malay merchants
began to arm their ships with heavy artillery and fighting capacity. "By the end of the century,
not only were pepper and spices once flowing through the Middle East to reappear in Alexandria
and Beirut but the Portuguese empire in the Indian Ocean was about to be challenged by the rising
sea power of England and Holland." In 1622 a joint English and Persian force captured Hormuz
and destroyed the century-long Portuguese control of the Gulf. "As the Portuguese fleets were
relentlessly defeated by the Dutch throughout the Indian Ocean, the ruler of Oman besieged
Muscat in 1649-50 and forced the Portuguese garrison to surrender." As the Cape route was used
to bring large volumes of Asian goods to Europe, the Arabs finally lost a large proportion of their
transoceanic trade of the Red Sea and the Persian Gulf by 1700.
On the other hand, there were three factors demanding overland trade in the Muslim world:
land transportation was required to distribute goods from the ports to consuming areas; the widely
dispersed inland producing centers; and the declining use of wheeled transport due to bad road
conditions. The camel was an efficient land carriage by camel caravan, "combined with the
expense of maintaining roads suitable for wheeled transport," though their main danger came from
bandits hiding in the mountain passes. The Muslims built towns for the temporary military
garrisons "to separate the Arab tribal warriors from the sedentary populations of the conquered
land and to keep the military contingents in a state of alert in case of any sudden uprising."191
Agriculture was important since towns were still dependent on the rural surplus: irrigation and the
technology lifting water were developed with other crop-growing techniques. The large noria was
used "by swift-flowing streams and rivers." The nomadic pastoralism was necessary in the desert
areas by two reasons. "First, the grain production and irrigated agriculture needed the traction
power of domesticated animals besides their dairy products, wool, and hides. Secondly, the
climate's law rainfall could not support stock-rearing as well as the cultivated fields of settled
arable farming."192 Now the exploitation of oil transformed the entire region.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 198
In the Ottoman society, religion was more powerful and pervasive than in Christendom: "the
Koran was the law as well as the gospel, and the theologians were the official interpreters of the
law. "The pilgrimage of Mecca annually led its moving drama over the desert and along the dusty
roads." But the rationalists heresies voiced in the upper class: the learned had no more faith in the
inspiration of Mohammed than in the infallibility of the pope; they made "a frank profession of
deism among themselves, or to those they can trust, and never speak of their law." Islam was
divided by the Sunni and Shia sectors just like Catholicism and Protestantism: "In all the sects
superstitions were popular; religious impostors and bogus miracles found ready credence; and by
most Moslems the realm of magic was considered as real as the world of sand and sun." The
clergy dominated education, and believed that "good citizens or loyal tribesmen could be more
surely made by disciplining character than by liberating intellect. "The clergy had won the battle
against the scientists, philosophers, and historians who had prospered in medieval Islam;
astronomy had relapsed into astrology, chemistry into alchemy, medicine into magic, history into
myth." Slavery was more wide spread in Islam, but "they saw no difference between slaves in
Turkey and serfs or servants in the Christian world." The Ottoman Empire was to accept a
relatively high degree of tolerance for ethnic differences, that was one of its strength in integrating
new regions, but "this non-assimilative policy became a weakness after the rise of nationalism."
The Ottoman lifestyle was a mixture of western and eastern life and fragmented. "The millet
concept193 generated this fragmentation and enabled many to coexist in a mosaic of cultures. The
capital of the Ottoman Empire, Constantinople also had a unique culture, mainly because before
Ottoman rule it had been the seat of both the Roman and Byzantine Empires. The lifestyle in the
Ottoman court in many aspects assembled ancient traditions of the Persian Shahs, but had many
Greek and European influences."194 We have seen the similar in present time.
Conquering Arabic Egypt in 1517, the Turks degraded its government pashas and viceroys.
In 1768, a Mamluk soldier - Ali Bey - deposed the Ottoman ruler and declared independence of
Egypt from Ottoman rule in 1769, but lost power in 1772. In Cairo, 300 mosques supported the
poor, among which El Azhar was the mother university of Islam, to which two or three thousand
students came from "as far east as Malaysia and as far west as Moroco, to learn Koranic grammar,
rhetoric, theology, ethics, and law." In Islamic theology, woman was subordinate to the man.
"Children grew up in the discipline of the harem; they learned to love their mother and to fear and
honor their father; nearly all of them developed self-restraint and courtesy." The Safavid dynasty
ruled Perisa from 1501 to 1722 (experiencing a brief restoration from 1729-36) and established
the Twelver school of Shia Islam as the official religion. On the other hand, in the eighteenth
century, Persia was "Conquered by Afghans from the southeast, harassed by slave-gathering raids
from the Uzbeks in the northeast, attacked by Russian depredations in the north, repeatedly
overrun by vast Turkish armies in the west, impoverished by the tax-gathering tyranny of its own
spectacular Nadir Shah, and dismembered by the brutal conflict of rival families for the Persian
throne - how could Iran continue, in this turbulence, the great traditions of Persian literature and
art?" Nadir Shah (1736-47), a brilliant military commander, rose to power from Khorasan during
a period of anarchy in Iran, and established the Afsharid dynasty. "Believing that the religious
differences between Turkey and Persia made for repeated wars, he declared that henceforth Persia
would abandon its Shi'a heresy and accept the orthodoxy of Sunni Islam....He confiscated the
religious endowments of Kazvin to meet the expenses of his army, saying that Persia owed more
to its army than to its religion." He conquered Afghanistan and India with 100,000 men. As the
religious leaders resented his religious policy offending its religious faith, he was killed by one of
his bodyguards. After his death, the country fell into disorder: Agha Muhammad Khan conquered
Afsharid and founded the Qajar Dynasty in 1796, that lasted until 1925.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 199
Endnotes
1 D. B. Grigg, Population Growth and Agrarian Change (New York: Cambridge, 1980), 11-9. 2 Isser Woloch, Eighteenth-Century Europe Tradition and Progress (New York: W. W. Norton, 1982), 110. 3 Michael W. Flinn, The European Demographic System, 1500-1820 (Baltimore, MD: Johns Hopkins
University Press, 1981), 25-26. 4 Isser Woloch, Eighteenth-Century Europe Tradition and Progress, 117. 5Accessed to http://www.britannica.com/EBchecked/topic/387301/modernization/12022/Population-change
on June 4, 2011. 6 Accessed to http://www.jstor.org/pss/3786266 on July 1, 2011. 7 Andre Armenguad, "Population in Europe 1700-1914," in The Industrial Revolution 1700-1914, ed., Carlo
M. Cipolla (New York: Harvester Press/Barnes & Noble, 1976), 28-9. 8 Accessed to http://en.wikipedia.org/wiki/Demographic_transition on July 2, 2011. 9 Accessed to http://en.wikipedia.org/wiki/Louis_Pasteur, http://en.wikipedia.org/wiki/Robert_Koch, and
http://en.wikipedia.org/wiki/Robert_Koch on July 1, 2011. 10 D. B. Grigg, Population Growth and Agrarian Change, 163. 11 Accessed to http://en.wikipedia.org/wiki/Demography_of_the_United_Kingdom on July, 2011. 12 D. B. Grigg, Population Growth and Agrarian Change, 188. 13 Ibid., 193. 14 Accessed to http://www.bbc.co.uk/history/british/empire_seapower/agricultural_revolution_01.shtml on
July 16, 2011. Agricultural Revolution in England 1500-1850. 15 J. D. Chambers and G. E. Mingay, The Agricultural Revolution (New York: Schocken, 1966), 18. 16 Ibid., 35. 17 Accessed to http://www.britannica.com/EBchecked/topic/418152/Norfolk-four-course-system on July
18, 2011. 18 Charles Singer and et al, eds. A History of Technology, Volume IV (Oxford, UK: The Clarendon Press,
1967), 13-43. Agricultural Techniques of Farming. 19 J. D. Chambers and G. E. Mingay, The Agricultural Revolution 1750-1880, 80. 20 Ibid., 110. 21 Ibid., 113. 22 Accessed to http://en.wikipedia.org/wiki/English_Poor_Laws on July 28, 2011. 23 B. H. Slicher van Bath, The Agrarian History of Western Europe: A.D. 500-1850 (London, UK: Edward
Arnold Publisher, 1966), 193-4. 24 Ibid., 206. 25 Ibid., 222. 26 A. R. Michell, "The European Fisheries in Early Modern History," in The Cambridge Economic History
of Europe Volume V, ed. E. E. Rich (New York: Cambridge University Press, 1978), 147. 27 Accessed to http://en.wikipedia.org/wiki/History_of_whaling on August 21, 2011. 28 N. F. R. Crafts, “The New Economic History and the Industrial Revolution,” in The First Industrial
Revolution, ed. Peter Mathias and John A. Davis (Cambridge, MA: Blackwell Publishers, 1989), 25-43. 29 Peter Mathias, “The Industrial Revolution: Concept and Reality,” in The First Industrial Revolution, 8. 30 Walter Minchinton, "Patterns of Demand 1750-1914," in The Industrial Revolution 1700-1914, ed. Carlo
M. Cipolla (New York: Harpers & Row, 1976), 78 and 75-186. 31 Ibid., 116. 32 Accessed to http://www.britannica.com/EBchecked/topic/168578/domestic-system and
http://en.wikipedia.org/wiki/Putting-out_system on September 18, 2011. 33 Maxine Berg, The Age of Manufactures, 1700-1820 (London, UK: Fontana Press, 1985), 200. 34 Accessed to http://www.britannica.com/EBchecked/topic/211694/flying-shuttle on September 18, 2011. 35 Accessed to http://en.wikipedia.org/wiki/Richard_Arkwright on September 18, 2011. 36 Charles Singer and et al, eds., A History of Technology, Volume IV, 279. For further, accessed to
http://en.wikipedia.org/wiki/Spinning_jenny on September 18, 2011. 37 Ibid., 280-1. For further, accessed http://en.wikipedia.org/wiki/Samuel_Crompton on Sept., 18, 2011.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 200
38 Rondo Cameron, A Concise Economic History of the World: From Paleolithic Times to the Present, 3rd ed.
(New York: Oxford University Press, 1997), 180-2; and Maxine Berg, The Age of Manufactures: 1700-1820
(London: Fontana Press, 1985), 234-63. 39 Accessed to http://en.wikipedia.org/wiki/Abraham_Darby_I on November 4, 2011. 40 Rhys Jenkins, Links in the History of Engineering and Technology from Tudor Times (North Straford, NH:
Ayer Company Publishers, 1977), 122. 41 Accessed to http://en.wikipedia.org/wiki/Henry_Cort on November 6, 2011. 42 Accessed to http://en.wikisource.org/wiki/Huntsman,_Benjamin_(DNB00) on November 6, 2011. 43 Accessed to http://gdl.cdlr.strath.ac.uk/mlemen/mlemen070.htm on November 6, 2011. 44 Accessed to http://en.wikipedia.org/wiki/Blast_furnace on November 6, 2011. 45 Accessed to http://www.angelfire.com/journal/pondlilymill/graphics.html on November 6, 2011. 46 Accessed to http://en.wikipedia.org/wiki/John_Smeaton on November 6, 2011. 47 Charles Singer and et al, eds., A History of Technology, Volume IV, 155. The largest series of water-
wheels was the colossal ‘machine of Marly’ built for Louis XIV in 1682, which had a potential capacity of
124 hp and delivered at least 75 hp in actual work with proper maintenance. 48 Accessed to http://en.wikipedia.org/wiki/Thomas_Savery on November 6, 2011. 49 Accessed to http://en.wikipedia.org/wiki/History_of_the_steam_engine on October 16, 2011. 50 Accessed to http://en.wikipedia.org/wiki/Thomas_Newcomen on November 6, 2011. 51 Accessed to http://en.wikipedia.org/wiki/Watt_steam_engine on November 6, 2011. 52 Accessed to http://www.britannica.com/EBchecked/topic/637673/James-Watt on October 16, 2011. 53 Accessed to http://en.wikipedia.org/wiki/Watt_steam_engine on October 19, 2011. 54 Accessed to http://en.wikipedia.org/wiki/Richard_Trevithick on October 19, 2011. 55 Accessed to http://en.wikipedia.org/wiki/George_Stephenson on November 6, 2011. 56 Accessed to http://en.wikipedia.org/wiki/Atomic_theory on November 7, 2011. 57 Accessed to http://en.wikipedia.org/wiki/Henry_Cavendish on November 7, 2011. 58 Accessed to http://en.wikipedia.org/wiki/John_Dalton on November 7, 2011. 59 Accessed to http://en.wikipedia.org/wiki/Humphry_Davy on November 7, 2011. 60 Accessed to http://en.wikipedia.org/wiki/Michael_Faraday on November 7, 2011. 61 Accessed to http://www.answers.com/topic/nicolas-leblanc on November 7, 2011. 62 Accessed to http://en.wikipedia.org/wiki/Sulfuric_acid on November 7, 2011. 63 Accessed to http://en.wikipedia.org/wiki/Chlorine on November 8, 2011. 64 Accessed to http://en.wikipedia.org/wiki/Charles_Tennant on November 8, 2011. 65 Accessed to http://www.weitzlux.com/chromium/history_403673.html on November 8, 2011. 66 Accessed to http://en.wikipedia.org/wiki/History_of_manufactured_gas on November 8, 2011. 67 Accessed to http://en.wikipedia.org/wiki/William_Murdoch on November 8, 2011. 68 Accessed to http://en.wikipedia.org/wiki/Samuel_Clegg on November 8, 2011. 69 Accessed to Chinese Porcelain at http://archaeologydataservice.ac.uk/catalogue/adsdata/arch-769-
1/ahds/dissemination/pdf/vol16/16_063_078.pdf on November 9, 2011. 70 Accessed to http://en.wikipedia.org/wiki/Porcelain on November 9, 2011. 71 Accessed to http://en.wikipedia.org/wiki/Delftware on November 9, 2011. 72 Accessed to http://www.reference.com/browse/john+dollond on November 9, 2011. 73 Accessed to http://www.ehow.com/about_5384282_history-colored-glass.html on November 9, 2011. 74 David S. Landes, The Unbound Prometheus (New York: Cambridge University Press, 1999), 124-92. 75 Eli F. Heckscher, The Continental System (Glouchester, MA: Peter Smith, 1964), 365. 76 Spielvogel, Western Civilization, 714-9. 77 Accessed to http://en.wikipedia.org/wiki/David_Ricardo on November 19, 2011. 78 Accessed on March 28, 2016 to
http://score.rims.k12.ca.us/score_lessons/market_to_market/pages/mercantilism_imports_and_e.htm. 79 Accessed to http://en.wikipedia.org/wiki/Treaty_of_Tordesillas, on November 19, 2011. 80 Accessed to http://en.wikipedia.org/wiki/History_of_the_Philippines on November 19. 2011. 81 Accessed to http://en.wikipedia.org/wiki/Santa_Fe,_New_Mexico on November 19. 2011.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 201
82 H. H. Parry, Trade Dominion: The European Oversea Empires in the Eighteenth Century (London, UK:
Phoenix Press, 2000), 26. The Spanish fleets never monopolized the market of the Indies. 83 Accessed on March 28, 2016 to
https://en.wikipedia.org/wiki/Global_silver_trade_from_the_16th_to_18th_centuries. 84 Accessed to http://en.wikipedia.org/wiki/Portuguese_India and
http://en.wikipedia.org/wiki/History_of_Goa on November 20, 2011. 85 Accessed to http://en.wikipedia.org/wiki/Dutch_East_India_Company on November 20, 2011. 86 Accessed to http://en.wikipedia.org/wiki/East_India_Company on November 20, 2011. 87 Accessed to http://en.wikipedia.org/wiki/French_East_India_Company on November 20, 2011. 88 Accessed to http://en.wikipedia.org/wiki/English_Poor_Laws on November 25, 2011. 89 Accessed to http://en.wikipedia.org/wiki/Comparative_advantage on November 25, 2011. 90 Accessed to http://en.wikipedia.org/wiki/Wool_Act_1699 on November 25, 2011. 91 Accessed to http://www.usahistory.info/colonial/Navigation-Acts.html on November 26, 2011. 92 Accessed to http://en.wikipedia.org/wiki/Navigation_Acts on November 26, 2011. 93 Accessed to http://en.wikipedia.org/wiki/Atlantic_slave_trade on November 27, 2011. 94 Accessed to http://en.wikipedia.org/wiki/British_colonization_of_the_Americas on December 2, 2011. 95 H. H. Parry, Trade Dominion, 277. 96 Accessed to http://en.wikipedia.org/wiki/Triangular_trade on December 3, 2011. 97 Peter Mathias, The First Industrial Nation (New York: Routledge, 2001), 87-8. 98 Accessed to http://people.ischool.berkeley.edu/~duguid/articles/M_of_M.pdf on December 3, 2011. 99 Accessed to http://en.wikipedia.org/wiki/Turnpike_trust on December 4, 2011. 100 Accessed to http://en.wikipedia.org/wiki/History_of_the_British_canal_system on December 4, 2011. 101 Accessed to http://en.wikipedia.org/wiki/Bridgewater_Canal on December 4, 2011. 102 Accessed to http://people.upei.ca/rneill/canechist/topic_8.html on December 4, 2011. 103 Accessed to http://en.wikipedia.org/wiki/West_India_Docks on December 4, 2011 and the same to
http://en.wikipedia.org/wiki/East_India_Docks and http://en.wikipedia.org/wiki/London_Docks. 104 Accessed to http://scienceray.com/technology/the-history-of-the-ship-steering-wheel/ on Dec. 7, 2011,
and the same to http://en.wikipedia.org/wiki/Hull_(watercraft) and http://en.wikipedia.org/wiki/Square_rig. 105 Accessed to http://www.maritime.org/conf/conf-goodwin.htm on December 7, 2011. 106 H. H. Parry, Trade Dominion, 230. 107 Accessed to http://en.wikipedia.org/wiki/Longitude_by_chronometer on December 7, 2011. 108 Accessed to http://en.wikipedia.org/wiki/James_Cook on December 8, 2011. 109 J. C. Beaglehole, The Life of Captain James Cook (Stanford, CA: Stanford Univ. Press, 1974), 482-3. 110 Accessed to http://en.wikipedia.org/wiki/Nootka_Crisis on December 11, 2011. 111 Accessed to https://en.wikipedia.org/wiki/Arthur_Phillip on March 28, 2016. 112 W. O. Henderson, The Genesis of Common Market (London UK: Frank Cass, 1962), 44-7. 113 Lei F. Heckscher, The Continental System (Gloucester, MA: Peter Smith, 1964), 61. 114 Ibid., 90. 115 Accessed to http://en.wikipedia.org/wiki/Embargo_Act_of_1807 on December 21, 2011. 116 The continental system paved the way for the downfall of Napoleon himself in three ways: It caused (1)
the peninsula war forcing France to fight two fronts; (2) Moscow expedition to punish its trade violation;
and (3) coalition of European power by nationalist feeling developed against Napoleon. 117 Brian Mitchell, Abstract of British Historical Statistics (Cambridge, UK: Cambridge Univ. Press, 1988). 118 The high debt ratio to GDP caused a financial crisis even in present days like in Greece 143% in 2010. 119 Accessed to http://en.wikipedia.org/wiki/History_of_money on February 23, 2012. 120 Accessed to http://www.banking-history.co.uk/history.html on February 23, 2012. 121 M. W. Flinn, Origins of the Industrial Revolution (London, UK: Longman, 1972), 37 122 Peter Mathias, “Financing the Industrial Revolution” in The First Industrial Revolution, 70. 123 Ibid., 73. 124 Accessed to http://en.wikipedia.org/wiki/Taille on February 16, 2012. 125 Accessed to http://en.wikipedia.org/wiki/John_Law_(economist) on February 28, 2012.
Chapter II. Economy and Society
Book IV. The French Revolution and the Industrial Revolution, 1715-1815 202
126 Eugine N. White, "France and the Failure to Modernize Macroeconomic Institutions," in Transferring
Wealth and Power, ed. Michael D. Bordo and Roberto Cortes-Conde (New York: Cambridge, 2011), 86. 127 William M. Goetzmann and K. Geert Rouwenhorst, eds., "Perpetuities in the Stream of History: A
Paying Instrument from the Golden Age of Dutch Finance," in The Origin of Value: The Financial
Innovations that Created Modern Capital Market (New York: Oxford, 2005), 177-88. 128 Accessed to http://en.wikipedia.org/wiki/Dutch_East_India_Company on March 9, 2012. 129 Accessed to http://en.wikipedia.org/wiki/Dutch_West_India_Company on March 9, 2012. 130 Jan de Vries, “The Netherlands in the New World” in Transferring Wealth and Power from the Old to
the New World, ed. Michael D. Bordo and Roberto Cortes-Conde (New York: Cambridge, 2001), 100-39. 131 Accessed to http://en.wikipedia.org/wiki/Piet_Pieterszoon_Hein on March 9, 2012. 132 Accessed to http://en.wikipedia.org/wiki/History_of_Pernambuco on March 9, 2012. 133 Accessed to www.coins.nd.edu/ColCoin/ColCoinIntros/Netherlands.html on March 9, 2012. The size of
the population was 2,000 to 3,500 in 1655, growing to about 9,000 by 1664. A significant number of the
inhabitants were Germans, Swedes and Finns who immigrated after 1639. 134 Accessed to http://en.wikipedia.org/wiki/New_Netherland and
http://en.wikipedia.org/wiki/New_Amsterdam on March 9, 2012. 135 Accessed to http://en.wikipedia.org/wiki/Cura%C3%A7ao on March 9, 2012. 136 Accessed to http://en.wikipedia.org/wiki/Sint_Eustatius on March 9, 2012. 137 Accessed to http://www.frenchcoins.net/links/vellon.pdf on March 30, 2012. 138 Accessed to http://en.wikipedia.org/wiki/Currency_of_Spanish_America#1578.E2.80.931621_Philip_III
and to http://en.wikipedia.org/wiki/Gresham's_law on March 30, 2012 139 Accessed to http://en.wikipedia.org/wiki/Sebasti%C3%A3o_Jos%C3%A9_de_Carvalho_e_Melo,_1st_
Marquess_of_Pombal on April 15, 2012. 140 Accessed to http://prof.fe.unl.pt/~jbmacedo/papers/war.htm on April 15, 2012. 141 http://www.bportugal.pt/en-US/ServicosaoPublico/ArquivoHistorico/Pages/BancodeLisboa.aspx
accessed on April 15, 2012. 142 Access to http://en.wikipedia.org/wiki/Alexander_Hamilton on April 15, 2012. 143 Accessed to http://en.wikipedia.org/wiki/Colonial_Brazil on April 16, 2012. 144 Accessed to http://www.econ.puc-rio.br/pdf/td370.pdf on April 16, 2012. 145 Accessed to http://en.wikipedia.org/wiki/History_of_Argentina on April 17, 2012. 146 Accessed to http://en.wikipedia.org/wiki/Viceroyalty_of_New_Granada on April 17, 2012. 147 Accessed to http://en.wikipedia.org/wiki/Secularization on April 24, 2012. 148 Charles Breunig, The Age of Revolution and Reaction, 1789-1859 (New York: Norton & Company, 1977),
155-79; Spielvogel, Western Civilization, 719-29; and Durant, Rousseau and Revolution, 676-82. 149 Accessed to http://en.wikipedia.org/wiki/Landed_gentry on May 7, 2012. 150 Christof Dipper, "Orders and Classes: Eighteenth-Century Society under Pressure," in The Eighteenth
Century Europe 1688-1815, ed. T. C. W. Blanning (New York: Oxford, 2000), 52-90. 151 Accessed to http://en.wikipedia.org/wiki/History_of_the_Church_of_England on May 8, 2012. 152 Accessed to http://en.wikipedia.org/wiki/Church_of_England on May 8, 2012. 153 Accessed to http://en.wikipedia.org/wiki/Commoner on May 8, 2012. 154 Bill and Ariel Durant, The Age of Napoleon, The Story of Civilization 11, 363. 155 Michalina Vaughan and Margaret Scotford Archer, Social Conflict and Educational Change in England
and France 1789-1848 (New York: Cambridge University Press, 1971), 121. 156 Ibid., 124. 157 Accessed to http://www.napoleon-series.org/research/society/c_education.html on May 12, 2012. 158 Michalina Vaughan and Margaret Scotford Archer, Social Conflict and Educational Change, 202-30. 159 Hajo Holborn, A History of Modern Germany 1648-1840 (Princeton, NJ: Princeton U. P., 1982), 280. 160 Bill Durant, Rousseau and Revolution, 341-66. 161 Hajo Holborn, A History of Modern Germany, 288-91 and Bill Durant, Rousseau and Revolution, 356-8. 162 Accessed to http://en.wikipedia.org/wiki/Prussian_Army on May 19, 2012. 163 Hajo Holborn, A History of Modern Germany, 203. 164 Accessed to http://en.wikipedia.org/wiki/Prussian_education_system on May 17, 2012.
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Book IV. The French Revolution and the Industrial Revolution, 1715-1815 203
165 For further, see Hajo Holborn, A History of Modern Germany, 262-77 for Frederick's Policies. 166 Accessed to http://en.wikipedia.org/wiki/John_III_Sobieski on May 20, 2012. 167 Accessed to http://en.wikipedia.org/wiki/Augustus_II_the_Strong on May 20, 2012. 168 Accessed to http://en.wikipedia.org/wiki/Augustus_III_of_Poland on May 20, 2012. 169 Accessed to http://en.wikipedia.org/wiki/Commission_of_National_Education on May 16, 2012. 170 Jerome Blum, Lord and Peasant in Russia from the Ninth to the Nineteenth Century (New York:
Atheneum, 1968), 361. "Decrees of 1084 and 1814 ordered that henceforth 'personal' nobles could no
longer own serfs. 171 Bill and Ariel Durant, The Age of Napoleon, The Story of Civilization 11, 680-1. 172 Stuart Woolf, A History of Italy 1700-1860: The Social Constraints of Political Change (London, UK:
Routledge, 1991), 23. 173 Share-cropping is a tenant-farming system called Mezzadria - in which a landowner allows a tenant to
use land in return for a share of the crop produced on the land such as 50 percent of the crop. Accessed to
http://en.wikipedia.org/wiki/Sharecropping on May 4, 2012. 174 British annual imports from Italy during 1717-40 reached at about £500,000 in average, which was
nearly 10 percent of all British imports. 175 Stuart Woolf, A History of Italy 1700-1860, 31. 176 Accessed to http://it.wikipedia.org/wiki/Pietro_Tamburini (in Italian) on May 5, 2012. For further, Mark
Goldie and Robert Wokler, eds, Eighteenth Century Political Thought (New York: Cambridge, 2006), 100. 177 Accessed to http://en.wikipedia.org/wiki/Fluyt on May 22, 2012. The fluyt was a sailing vessel that was
a significant factor in the seventeenth century rise of the Dutch seaborne empire. 178 Accessed to http://en.wikipedia.org/wiki/Anglo-Dutch_Wars on May 22, 2012. 179 Accessed to http://en.wikipedia.org/wiki/Stadtholder on May 22, 2012. The stadtholder is a medieval
function which during the eighteenth century "developed into a rare type of de facto hereditary
head of state of the thus crowned Dutch Republic." 180 Jan Wolthuis, Lower Technical Education in the Netherlands 1798-1993: The Rise and Fall of a
Subsystem (Apeldoorn, the Netherlands: Oomo/Garant, 1999), 52. 181 Accessed to http://en.wikipedia.org/wiki/History_of_religion_in_the_Netherlands on May 22, 2012. 182 Accessed to http://en.wikipedia.org/wiki/History_of_Denmark#Early_Modern_Denmark and
http://en.wikipedia.org/wiki/Treaty_of_Roskilde on May 23, 2012. 183 "The adscription system tied rural laborers to their place of birth and required them to rent farms on the
estates. As rent, they were required to work the landlords' plots and could not negotiate contracts or demand
payment for improvements made to the farm." 184 Accessed to http://en.wikipedia.org/wiki/History_of_Denmark#Absolutism on May 24, 2012. 185 Accessed to http://en.wikipedia.org/wiki/Gustav_III_of_Sweden on May 24, 2012. 186 Stephen F. Dale, "The Islamic World in the Age of European Expansion, 1500-1800," in The Cambridge
Illustrated History of the Islamic World, ed. Francis Robinson (New York: Cambridge U. P., 1998), 62. 187 Accessed to http://en.wikipedia.org/wiki/Suleiman_the_Magnificent on May 25, 2012. 188 Accessed to http://en.wikipedia.org/wiki/Janissary on May 25, 2012. 189 Will and Ariel Durant, Rousseau and Revolution, 414. 190 Accessed to http://en.wikipedia.org/wiki/Eastern_Question on May 24, 2012. The Eastern Question in
European history encompasses "the diplomatic and political problems posed by the decay of the Ottoman
Empire." It was believed that the dissolution of the Ottoman Empire was imminent when the first Russo-
Ottoman War ended in defeat for the Ottomans. 191 K. N. Chaudhuri, "The Economy in Muslim Societies," in The Cambridge Illustrated History of the
Islamic World, 143. 192 Ibid., 154. 193 Accessed to http://en.wikipedia.org/wiki/Millet_(Ottoman_Empire) on May 26, 2012. 194 Accessed to http://en.wikipedia.org/wiki/Ottoman_Empire#Society on May 26, 2012. "Millet is a term
for the confessional communities in the Ottoman Empire. If refers to the separate legal court pertaining to
'personal law' under which communities were allowed to rule themselves under their own system."