The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

by David S. Landes

  Historians rightly emphasize gains in land productivity and output in a society overwhelmingly rural because compelled to devote most of its resources to feeding itself. Yet these advances were essentially permissive. It was the urban minority that held most of the seeds and secrets of transformation—technical, intellectual, political. To be sure, the towns and cities were themselves shaped by the countryside: immigrants from the fields brought with them values, habits, and attitudes that made more sense on the land and then set them as a straitjacket on urban activity. Thus the organization of tradesmen and craftsmen in corporate guilds assumed a zero-sum game—one man’s increase was another’s diminution—like pieces in a bounded field. Besides, the urban setting itself made it necessary to ration space and time, again with an eye to discouraging self-aggrandizement. So, no stealing a march and selling before a certain hour or after another; no price competition; no trade-off of quality and solidity for cheapness; no buying low (“jewing down,” in popular parlance—bad habits always belong to someone else) to sell high; in short, no market competition. Everyone who did his job was entitled to a living. Laudable but static. The aim was an egalitarian social justice, but it entailed serious constraint on enterprise and growth—a safety net at the expense of income.

  That was the principle. One should always assume that rules, then as now, were made to be broken. Business, like love, laughs at locksmiths. So in medieval Europe, where the move toward guild controls was as much a response to free dealing as the expression of an older morality. Cities and towns sprang up thick and ambitious; in France, the Low Countries, the Rhineland, rulers encouraged them by generous grants of privilege. But attempts to sustain local monopoly were thwarted by the growth of suburbs (faubourgs), where urban rules did not apply. There outsiders and Jews settled in, and journeymen worked for masters who had outgrown their shop. There market restrictions did not hold. Hence pairings like Hamburg-Altona and Nürnberg-Fürth: old wealth, new wealth; decorum, disorder; tight access, free entry.

  One inevitable consequence of active trade was selection by merit. This ran against the parity principle (equality of results), but it was not possible to impose uniformity of performance. Some craftsmen simply did better work and attracted buyers beyond their capacity. At the same time, the very effort to restrain competition by limiting access to mastership meant talent unemployed. It did not take much to bring together such masters and journeymen. Since the journeymen were often not permitted to work in the master’s city shop (limits on size), they worked en chambre or in the suburbs. Here was the beginning of putting-out and division of labor, with substantial gains in productivity.

  Urban closure was also thwarted by the spread of industrial production to the countryside. Agriculture, with its seasonal and irregular pattern of activity, offered a pool of untapped labor, the greater because outside the cities constraints on the use of female and child workers no longer applied. Women and children, grossly underpaid, gave more product for the penny. Early on (thirteenth century), then, merchants began to hire cottage workers to perform some of the more tedious, less skilled tasks. In the most important branch, the textile manufacture, peasant women did the spinning on a putting-out basis: merchants gave out (put out) the raw material—the raw wool and flax, and, later, cotton—and collected the finished yarn.

  This shift to outsourcing initially encountered little resistance from urban workers; but when merchants started putting-out yarn to cottage weavers, they were attacking one of the most powerful vested interests of the day, the guild weavers of the towns. Then the fat was in the fire. In Italy, the autonomous cities, which held political control over the surrounding countryside, managed to destroy much of this “unfair” competition. In the Low Countries, the other great medieval center of cloth manufacture, urban weavers marched into the villages to break cottage looms; and although the country weavers fought back, the putting-out system was held in check for centuries. The one country where putting-out had a free field was England, where local political autonomies made it hard for the monarchy to sustain corporate (guild) claims to monopoly and where guilds were quickly reduced to ceremonial fraternities. By the fifteenth century, more than half the nation’s woolen cloth was being made in rural cottages. This recourse to cheap labor lowered costs over competitors abroad, so that by the sixteenth century a country that had once been largely an exporter of primary products, including raw wool, was well on its way to becoming the premier manufacturing nation of Europe.

  The economic expansion of medieval Europe was thus promoted by a succession of organizational innovations and adaptations, most of them initiated from below and diffused by example. The rulers, even local seigneurs, scrambled to keep pace, to show themselves hospitable, to make labor available, to attract enterprise and the revenues it generated. At the same time, the business community invented new forms of association, contract, and exchange designed to secure investment and facilitate payment. In these centuries a whole new array of commercial instruments came into use; commercial codes were elaborated and enforced; and partnership arrangements were devised to encourage alliances between lenders and doers, between the men who supplied the funds and merchandise and those who went to distant lands to sell and to buy. Almost all of this “commercial revolution” came from the mercantile community, bypassing where necessary the rules of this or that city or state, inventing and improvising new venues for encounter and exchange (ports and outports, faubourgs, local markets, international fairs), creating in short a world of its own like an overlay on the convoluted, inconvenient mosaic of political units.

  They got thereby substantially enhanced security, a sharp reduction in the cost of doing business (what the economist calls “transaction costs”), a widening of the market that promoted specialization and division of labor. It was the world of Adam Smith, already taking shape five hundred years before his time.

  4

  The Invention of Invention

  When Adam Smith came to write about these things in the eighteenth century, he pointed out that division of labor and widening of the market encourage technological innovation. This in fact is exactly what happened in the Europe of the Middle Ages—one of the most inventive societies that history had known. Some may be surprised: for a long time one saw these centuries as a dark interlude between the grandeur of Rome and the brilliance of the Renaissance. That cliche no longer holds in matters technological.1

  A few examples:

  1. The water wheel. It had been known to the Romans, who began to do interesting things with it during the last century of the empire, when the conquests were over and the supply of slaves had shrunk almost to nothing. By then it was too late; order and trade were breaking down. The device may well have survived on Church estates, where it freed clerics for prayer. In any event, it was revived in the tenth and eleventh centuries, multiplying easily in a region of wide rainfall and ubiquitous watercourses. In England, that peripheral, backward island, the Domesday census of 1086 showed some 5,600 of these mills; the Continent had many more.

  Even more impressive is the way waterpower technique advanced. Millwrights increased pressure and efficiency by building dams and ponds and by lining the wheels up to utilize the diminishing energy for a variety of tasks, beginning with those that needed the most power, and descending. At the same time, the invention or improvement of accessory devices—cranks, toothed gears—made it possible to use the power at a distance, change its direction, convert it from rotary to reciprocating motion, and apply it to an increasing variety of tasks: hence not only grinding grain, but fulling (pounding) cloth, thereby transforming the woolen manufacture; hammering metal; rolling and drawing sheet metal and wire; mashing hops for beer; pulping rags for paper. “Paper, which was manufactured by hand and foot for a thousand years or so following its invention by the Chinese and adoption by the Arabs, was manufactured mechanically as soon as it reached medieval Europe in the thirteenth century…. Paper had traveled nearly halfway around the world
, but no culture or civilization on its route had tried to mechanize its manufacture.”2 Europe, as nowhere else, was a power-based civilization.

  2. Eyeglasses. A seemingly banal affair, the kind of thing that appears so commonplace as to be trivial. And yet the invention of spectacles more than doubled the working life of skilled craftsmen, especially those who did fine jobs: scribes (crucial before the invention of printing) and readers, instrument and toolmakers, close weavers, metalworkers.

  The problem is biological: because the crystalline lens of the human eye hardens around the age of forty, it produces a condition similar to farsightedness (actually presbyopia). The eye can no longer focus on close objects. But around the age of forty, a medieval craftsman could reasonably expect to live and work another twenty years, the best years of his working life…if he could see well enough. Eyeglasses solved the problem.

  We think we know where and when the first spectacles appeared. Crude magnifying glasses and crystals (lapides ad legendum) had been found earlier and used for reading.3 The trick was to improve them so as to reduce distortion and connect a pair into a wearable device, thus leaving the hands free. This apparently first happened in Pisa toward the end of the thirteenth century. We have a contemporary witness (1306) who says he knew the inventor:

  Not all the arts [in the sense of arts and crafts] have been found; we shall never see an end of finding them. Every day one could discover a new art…. It is not twenty years since there was discovered the art of making spectacles that help one to see well, an art that is one of the best and most necessary in the world. And that is such a short time ago that a new art that never before existed was invented…. I myself saw the man who discovered and practiced it and I talked with him.4

  These convex lenses were obviously not uniform or of what we would call prescription quality. But here medieval optical technology, however primitive, was saved by the nature of the difficulty: the lenses to correct presbyopia do not have to be extremely accurate. Their function is primarily to magnify, and although some magnify more than others, just about any and all will help the user. This is why people will occasionally borrow glasses in a restaurant to read the menu, and why five-and-dime stores can put out boxes of such spectacles for sale. The buyer simply tries a few and picks the most suitable. Myopes (shortsighted people) cannot do that.

  That was the beginning. By the middle of the fifteenth century, Italy, particularly Florence and Venice, was making thousands of spectacles, fitted with concave as well as convex lenses, for myopes as well as pres-byopes. Also, the Florentines at least (and presumably others) understood that visual acuity declines with age and so made the convex lenses in five-year strengths and the concave in two, enabling users to buy in batches and change with time.

  Eyeglasses made it possible to do fine work and use fine instruments. But also the converse: eyeglasses encouraged the invention of fine instruments, indeed pushed Europe in a direction found nowhere else. The Muslims knew the astrolabe, but that was it. The Europeans went on to invent gauges, micrometers, fine wheel cutters—a battery of tools linked to precision measurement and control. They thereby laid the basis for articulated machines with fitted parts.

  Close work: when other civilizations did it, they did it by long habituation. The skill was in the hand, not the eye-and-tool. They achieved remarkable results, but no piece was like any other; whereas Europe was already moving toward replication—batch and then mass production. This knowledge of lenses, moreover, was a school for further optical advances, and not only in Italy. Both telescope and microscope were invented in the Low Countries around 1600 and spread quickly from there.

  Europe enjoyed a monopoly of corrective lenses for three to four hundred years. In effect they doubled the skilled craft workforce, and more than doubled it if one takes into account the value of experience.5

  3. The mechanical clock. Another banality, so commonplace that we take it for granted. Yet Lewis Mumford quite correctly called it “the key-machine.”6

  Before the invention of this machine, people told time by sun (shadow sticks or dials) and water clocks. Sun clocks worked of course only on clear days; water clocks misbehaved when the temperature fell toward freezing, to say nothing of long-run drift as a result of sedimentation and clogging. Both of these devices served reasonably well in sunny climes; but north of the Alps one can go weeks without seeing the sun, while temperatures vary not only seasonally but from day to night.

  Medieval Europe gave new importance to reliable time. The Church first, with its seven daily prayer offices, one of which, matins, was in spite of its name a nocturnal rite and required an alarm arrangement to wake clerics before dawn. (Hence our children’s round, Frère Jacques: Brother Jacques has overslept and failed to sound the bells for matins.)* And then the new cities and towns had their temporal servitudes. Squeezed by their walls, they had to know and order time in order to organize collective activity and ration space. They set a time to wake, to go to work, to open the market, close the market, leave work, and finally a time to put out fires (couvre-feu gives us our word “curfew”) and go to sleep.

  All of this was compatible with the older devices so long as there was only one authoritative timekeeper; but with urban growth and the multiplication of time signals, discrepancy brought discord and strife. Society needed a more dependable instrument of time measurement and found it in the mechanical clock.

  We do not know who invented this machine or where. It seems to have appeared in Italy and England (perhaps simultaneous invention) in the last quarter of the thirteenth century. Once known, it spread rapidly, driving out the water clocks; but not solar dials, which were needed to check the new machines against the timekeeper of last resort. These early versions were rudimentary, inaccurate, and prone to breakdown—so much so that it paid to buy a clockmaker along with the clock.

  Ironically, the new machine tended to undermine ecclesiastical authority. Although Church ritual had sustained an interest in timekeeping throughout the centuries of urban collapse that followed the fall of Rome, Church time was nature’s time. Day and night were divided into the same number of parts, so that except at the equinoxes, day and night hours were unequal; and then of course the length of these hours varied with the seasons. But the mechanical clock kept equal hours, and this implied a new time reckoning. The Church resisted, not coming over to the new hours for about a century. From the start, however, the towns and cities took equal hours as their standard, and the public clocks installed in the towers and belfries of town halls and market squares became the very symbol of a new, secular municipal authority. Every town wanted one; conquerors seized them as specially precious spoils of war; tourists came to see and hear these machines the way they made pilgrimages to sacred relics. New times, new customs.

  The clock was the greatest achievement of medieval mechanical ingenuity. Revolutionary in conception, it was more radically new than its makers knew. This was the first example of a digital as opposed to an analog device: it counted a regular, repeating sequence of discrete actions (the swings of an oscillating controller) rather than tracked continuous, regular motion such as the moving shadow of a sundial or the flow of water. Today we know that such a repeating frequency can be more regular than any continuous phenomenon, and just about all high-precision devices are now based on the digital principle. But no one could have known that in the thirteenth century, which thought that because time was continuous, it ought to be tracked and measured by some other continuity.

  The mechanical clock had to meet the unsparing standards of earth and sun; no blinking or hiding its failures. The result was relentless pressure to improve technique and design. At every stage, clockmakers led the way to accuracy and precision: masters of miniaturization, detectors and correctors of error, searchers for new and better. They remain the pioneers of mechanical engineering—examples and teachers to other branches.

  Finally, the clock brought order and control, both collective and personal. Its public di
splay and private possession laid the basis for temporal autonomy: people could now coordinate comings and goings without dictation from above. (Contrast the military, where only officers need know the time.) The clock provided the punctuation marks for group activity, while enabling individuals to order their own work (and that of others) so as to enhance productivity. Indeed, the very notion of productivity is a by-product of the clock: once one can relate performance to uniform time units, work is never the same. One moves from the task-oriented time consciousness of the peasant (one job after another, as time and light permit) and the time-filling busyness of the domestic servant (always something to do) to an effort to maximize product per unit of time (time is money). The invention of the mechanical clock anticipates in its effects the economic analysis of Adam Smith: increase in the wealth of nations derives directly from improvement of the productive powers of labor.

  The mechanical clock remained a European (Western) monopoly for some three hundred years; in its higher forms, right into the twentieth century. Other civilizations admired and coveted clocks, or more accurately, their rulers and elites did; but none could make them to European standard.