Germany, whose proliferation of tolls was a byword for madness—furiosa Teutonicorum insania—was much slower to clear the way, partly because of the very size of the task, partly because of the extraordinary territorial fragmentation: thirty-eight separate tariff systems in 1815, plus thousands of local autonomies, down to small towns and landed estates. Only power politics—Prussian screws—and chauvinist ideology could do the job, and then painfully. Die-hards had to be shown that it cost more to stay out than to come in. Treaties and negotiations following the Napoleonic wars freed up transport along the Rhine, and a series of ever bigger customs unions culminating in the Zollverein of 1834 opened most of the country to relatively untrammeled trade. I say “relatively,” because even then much remained to be done. Some states were not brought in, heels dragging, until the 1860s and in 1870. The old Hanseatic cities of Frankfurt and Hamburg, rich in history and pride, yelped with pain, but in such matters, La Fontaine’s dictum applies: La raison du plus fort est toujours la meilleure, or might makes right.
The tenacity of the enemies of other people’s trade fairly beggars the imagination. Take the river Scheldt. It rises in northern France and flows through one of the most prosperous industrial regions in the world on its way past Tournai, Ghent, and Antwerp to the sea. Some distance below Antwerp, by the accidents of history, the mouth of the river passes into Holland, which by the Treaty of Munster in 1648 obtained the right to close it to navigation. This Holland did, for over two hundred years, for the aim was to kill Antwerp as seaport in favor of Rotterdam—no small matter. For fifteen years, however, from 1815 to 1830, Antwerp and Rotterdam were both part of the Netherlands, so in theory, these rights should have lapsed. Not at all: in 1830, when Belgium seceded, Holland reaffirmed its right and got the other interested powers to accept this levy on international trade. Not until 1863 could Belgium, after long negotiations, buy in this outrageous toll, with each of the powers interested in the trade paying its quota.
The sole exception to this process of rationalization and unification was the persistence of customs barriers at the entrance of cities, what the French call the octroi. These survived into the twentieth century; even the railway had not managed to kill them (one could always inspect baggage on arrival). It was the automobile that did the job: as the number of vehicles increased, it became impossible to halt them at city boundaries for inspection of contents; or to compel Paris autos, for example, to submit as in the 1920s to a dipstick measurement of the fuel in the gas tank upon leaving and returning. Even so, as late as the 1960s, road signs advised drivers entering Florence from the surrounding countryside to declare such commodities as wine and cigarettes. So far as I could tell, no one stopped or was stopped; but I was a short-term visitor.
Russia was a different story. Transport was difficult, to begin with, and tolls were not a problem. Nature was. On land, it was easier to move goods in winter than in summer. Snow and ice were smooth; the roads were not. Water was better for bulky commodities (grain, timber). But Russian rivers run north-south, and most traffic moved east-west. Here cold was the enemy: in the south, waterways remained open nine months of the year; in the north, only six weeks. Miss the cut-off, and goods would perish; machines, rust; idleness, turn into oblivion.
The significance of institutional and cultural impediments to development shows well in the contrasting experience of Europe’s periphery—the lands around the edge, outside the core of industrialization in western and central Europe; and, within this periphery, between those countries and regions that learned to catch up and those that still lag.
Start in the north. Scandinavia, desperately poor in the eighteenth century yet intellectually and politically rich, was late in learning the ways of modern industry, but, once started, quick to pick them up. The implications for wages and income show in the statistical estimates (see Table 16.2).
This impressive performance owes everything to cultural preparation. The Scandinavian countries, equal partners in Europe’s intellectual and scientific community, enjoyed high levels of literacy and offered a first-class education at higher levels.21 They also operated in an atmosphere of political stability and public order. Once among the most warlike populations in Europe—one thinks of the Viking raiders of the Middle Ages or of the imperial ambitions of seventeenth-century Sweden—now they were the most peaceable, even stolid by comparison with peoples to the south. Property rights were secure; the peasantry was largely free; and life was a long stretch of somber hard work broken intermittently by huge bouts of drinking and seasonal sunshine.
Table 16.2: Estimates of Real GNP per Capita in Groups of European Countries, 1830-1913 (U.S.$ of 1960; unweighted averages within each group)
1830
1860
1913
Industrial core
268
402
765
Scandinavia
219
297
682
Scandinavia without Finland
228
315
735
Rest of periphery
215
244
343
Industrial core: Austria (except 1830), France, Germany, Italy, Netherlands, Switzerland, U.K.
Scandinavia: Denmark, Finland, Norway, Sweden
Rest of periphery: Bulgaria, Greece, Hungary (except 1860), Portugal, Romania, Spain, Russia, Serbia. The 1830 figure refers to Portugal and Russia only
SOURCE: Pollard, “The Peripheral European Countries,” as from Bairoch, “Main Trends in National Economic Disparities.”
Scandinavia was ready. Even in the eighteenth century, one sees the promise of later enterprise: the machine works and ingenious equipment of Polhem in Sweden; the Norwegian cobalt mines and refinery, which supplied brilliant blue colorants to the glass and porcelain works of Europe, from Wedgwood to Meissen. Much of the craftwork was crude and dowdy by comparison with that of nations to the south, but Scandinavia was fast catching up in tools, instruments, and technique. No better clue than horology: by the end of the eighteenth century, the best Danish and Swedish clock-and watchmakers were making machines equal to those of London and Geneva; and these were local artists, not the West European expats of Constantinople, Moscow, and Peking.
Scandinavia built on free enterprise and quick response, on the export of staples to more advanced industrial countries, on the investment of these gains in more diversified production. The big export commodities were timber, copper, later on, iron ore; for Denmark, agricultural products. In all cases, development proceeded by moving from the raw to the processed—from logs to boards, and then to pulp; from iron ore to pig iron to wrought iron; from raw fish to canned and jarred; from milk to cream, butter, and cheese. Much of this was fostered by improvements in transportation and banking institutions, and here the state and foreign capital played a role. But very early on, Scandinavia was exporting know-how in the form of its own emigres, toward tsarist Russia for example, where Alfred Nobel was one of the pioneers of the infant petroleum industry. The Russian state had been pushing industrial development on and off for hundreds of years, huffing and puffing and squeezing the population as it went; the Scandinavians eased into the process and glided away.
Compare the late industrial development of Mediterranean Europe, in particular of Italy, Spain, and Portugal. All of these were hurt by religious and intellectual intolerance, and all were plagued by political instability. Spain, though nominally united, was divided as before by regional autonomies, and the weakness of central authority invited foreign intrusion and dynastic pretensions, with intermittent revolution and civil war. Portugal, better knit, was politically much the same, with the exception that the monarchy could flee to Brazil and wait for better times. Italy remained fragmented, with Lombardy still in Habsburg (Austrian) hands as late as 1860 and Venetia to 1866; the Kingdom of the Two Sicilies (Naples and the south) under Bourbon rule until 1861; the papal states and Rome under clerical government
until 1870.
All these countries were poor, handicapped by meager, highly variable rainfall that reduced agricultural yields far below those of well-watered northern Europe. Spain was the least favored. A notional line between wet northern Europe and dry southern (above and below 750 mm. [30 in.] of rain a year) divides Portugal and Italy approximately in half; but 90 percent of Spain lies on the dry side, and much of the wetter land above the line is mountainous and not arable. Add in Spain’s high average altitude and hence extremes of temperature, and we have a bad country for cereals.22
One might have thought such poor lands good candidates for cottage industry, à la Suisse, but Iberia particularly wanted for enterprise and skills, including the ability to read. These failings went back centuries—to religious zealotry and Counter-Reformation cultivation of ignorance—and ruled out the kind of diversification that would have compensated for agricultural infertility and poverty.23 Comparative literacy rates are not exact, in large part because definitions and judgments varied from one country to another. Even so, the contrast between Mediterranean and northern Europe is undeniably large. Around 1900, for example, when only 3 percent of the population of Great Britain was illiterate, the figure for Italy was 48 percent, for Spain 56 percent, for Portugal 78 percent.24 The religious persecutions of old—the massacres, hunts, expulsions, forced conversions, and self-imposed intellectual closure—proved to be a kind of original sin. Their effects would not wear off until the twentieth century…and not always even then.25
(Needless to say, this indictment has not been to the taste of Spanish elites, political and intellectual. No one likes to be told [reminded] that his failures are due to his failings; or that his sources of pride are vices rather than virtues. Hence a protracted effort by Spanish and his-panophile scholars to dismiss the historical indictment as a “black legend”—a slander by people of bad faith. Yet the fact of “decadence” remains and calls for explanation: more than three centuries of backwardness exacted a high price in income and achievement.)
A few centers of exceptional (if modest) adaptability escaped the general fate. In Spain, Catalonia diverged from the rest and as early as the eighteenth century began mechanizing textile manufacture. Later on, the exploitation of mineral resources, especially of iron ore in the later nineteenth century, drew money and trade to the Basque country. Most of this ore, however, went to ironmaking centers abroad; Spanish industry made little use of it.
Italy moved ahead faster, especially in the Po Valley (Lombardy, under Habsburg rule) and in and around Genoa. Venice and Florence, once flourishing industrial as well as commercial centers, were well on the way to becoming pure tourist attractions—clusters of shops and hotels and living museums. No traveler could afford to miss them. (The process continues, and Venice has already had to restrict access.) Italian unification (1870) changed little of the earlier division of labor and wealth. The north, especially Lombardy and the Piedmont, mixed agricultural and industrial, riverbottom and plain. The south (il mezzogiorno, the land of noon) remained a wilderness of hardscrabble landscratching on barren uplands and broad latifundia. Illiterate peasants, most of them sharecroppers and landless laborers, deferred to local notables—old and new rich, who cultivated pride (“respect”) and a style of living that evoked the Old Regime.* The biggest export of the Mezzogiorno was people: emigrants to the New World, especially to the United States and Argentina, and after World War II, to the northern half of the country. Even the north sent its children abroad, generally to the richer industrial areas north of the Alps. The French, for example, relied heavily on Italian immigrants to work the newly opened (1880s) iron mines and mills of Lorraine.
The south has remained backward, in spite of huge development subsidies from the Italian government and, in our time, from the European Community. The landscape is dotted with idle factories, unfinished housing developments, roads that go nowhere. This slough of failure and despond testifies to deep failings: ignorance, bias, want of community, organized criminality. The Mezzogiorno continues to pay for the sins of yesteryear. Many northerners are disgusted to the point of talking secession. Read: expulsion. It won’t happen. It takes matter-of-fact Czechs to let Slovakia go.
Eastern Europe was like another world. In Slavic lands—Russia particularly—serfdom persisted in its worst form. So much wealth in the hands of a spendthrift nobility meant reduced consumer demand for those basic manufactures that might lead to modern industry. Under ordinary circumstances, autocratic Russia might simply have taken its time about emulating the West: the people were used to poverty and ignorant of the outside world. But Russia was a power, with big territorial ambitions. It had tried very early (sixteenth century) to learn from the West, if only to gain autonomy in such strategic branches as gunmaking. Russia as a power needed industry, and the tsarist government wooed foreigners, paying them to set up factories or to settle and work in Russia. Individual landowners allowed enterprising serfs to engage in trade and industry in return for money dues. The result was a spotty, stunted industrialization.
Nor did Russian enterprises operate in the same world as those of western Europe. They sold to the national market, exported little or nothing. They were simply not competitive—not then, not later—especially not during the Soviet years. The only sales of manufactures outside the USSR went to satellite countries and dependencies in the Third World. Meanwhile the production data piled up, and many believed. Are you going to trust the numbers or the lying evidence? The statisticians would have come far closer to the truth had they deflated output for true market price and quality.
Poorer and more backward than Russia were the Balkan lands, most of them suffering under the inefficient Ottoman yoke, the tyranny of a society more primitive than theirs. Long quiescent, they caught the nationalist virus in the eighteenth and nineteenth centuries and got tangled in an endless struggle for freedom, first with the Turks and then with other Balkan nationalities. This could be a noble cause, but because identity rested on uncompromising religion, it easily conduced to hatred and unreason. Not good for business or development.
These were societies that did not generate enterprise from within. Trade and money were for Greeks, Jews, Armenians, Germans. These outsiders were not popular—not only because they got rich by buying and selling (so, not by hard work) and did so at the expense of peasants and landowners, but also because they were different in manners, dress, appearance, religion. (The outsiders returned the scorn, in spades.) When independence and modern politics came to the Balkans, the natives did their best to drive out the strangers, that is, to expel the most active elements in the economy. And they succeeded, in the face of the outsiders’ natural reluctance to leave. (These inhospitable and hostile places offered so many chances to make money.)
The Balkans remain poor today. In the absence of metics, they war on one another and blame their misery on exploitation by richer economies in western Europe. It feels better that way.
Leftist political economists and economic historians like such explanations. They think in terms of core and periphery: the rich center vs. the surrounding dependencies. But that is not the relevant metaphor or image: Europe’s development gradient ran from west to east and north to south, from educated to illiterate populations, from representative to despotic institutions, from equality to hierarchy, and so on. It was not resources or money that made the difference; nor mistreatment by outsiders. It was what lay inside—culture, values, initiative. These peoples came to have freedom enough. They just didn’t know what to do with it.
“The Bayonet Is a Fine Lad”
During the first half of the nineteenth century, the standard Russian infantry weapon was a smoothbore, muzzle-loading, flintlock musket rather like the weapons used in the previous century. (Daniel Boone, with his Kentucky long rifle, had better.) The 1828 Russian model, like those before, used round balls and was not accurate beyond 200 yards. The breechloaders used in West European armies were not deemed suitable—too complicat
ed and not sturdy enough for field combat. Also too difficult for Russian armory production techniques.
Russia’s army as a whole was reconciled to this backwardness. For one thing, procurement was a regimental matter, and officers preferred to spend their money on food and drink. (Drink, more than combat, was the favorite test of an officer’s manliness.) “Regiments tried to pay as little as possible for weapons, and the regimental suppliers regarded periodic trips to grimy government arsenals and to distant small arms factories as punishment.”26 The arms makers in turn gave the buyers what they were looking for—so and so many pieces, good, bad, and indifferent. The government tried to prevent shoddiness by assigning inspectors to examine the arms. To little avail; the inspectors were part of the system and were not going to bite the hands that fed them. (A similar attitude toward production would flourish under various Soviet five-year plans. Fulfill the plan, turn out the units, pay the inspectors, and devil take the quality.)
The result was bad screws and rivets, misfit barrels, rotten stocks, mismatched lock parts. In 1853, just before fighting began in the Crimea, the tsarist army had only half the muskets that were authorized. And as bad as the arms were, the Russian soldier made them worse. Like the serf on the land, the twenty-five-year conscript—military duty was a life sentence—had no care of his tools. Guns (“a machine for presentation”) were polished for parade, but the soldier had to pay out of pocket for grease; so, little or no grease. Bullets were costly—they were not the sort of thing that Russia could produce in large quantities—so clay bullets were used for target practice and damaged the barrels. Even officers took little care of their sidearms, to the point where the Ministry of War advised issuing pistols rather than revolvers. Regimental gunsmiths lacked training and proper equipment and had to shoe horses, fix wheels, and repair guns with the same chisels, hammers, and saws.
The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor Page 30
