Migration and Inequality in Germany, 1870-1913

Published by EH.NET (April 2009)

Oliver Grant, Migration and Inequality in Germany, 1870-1913. Oxford: Oxford University Press, 2005. vii + 406 pp. $199.50 (cloth), ISBN: 0-19-927656-0.

Reviewed for EH.NET by Simone A. Wegge, Department of Economics, College of Staten Island ? City University of New York.

In this impressive work, Grant explores the economic transition that Germany underwent during its period of industrialization. The Kehrite School, inspired by a doctoral thesis Eckart Kehr published in 1930, has argued that prior to 1914 Germany did not make necessary and important social changes that would have modernized German democratic society and made government more accountable and accessible to non-elites, the vast majority of the German population.

Here, Grant presents an alternative view, namely that Germany was not that different or special in the challenges it faced in moving from an agricultural economy to a more industrial one. The country faced many of the typical problems that a developing country goes through when industrializing, including a surplus of labor, shifting demographics, a migrant population, and changing land tenure systems. Throughout the book, the author applies the Lewis model of labor surplus from development economics and finds again and again that it is very suitable for describing the evolution of the German economy and specifically how internal migration can fit in a stage-of-growth story.

While Grant?s main objective is to counter the Kehrite view and convince the reader that Germany faced ?normal? problems over which its politicians had little control, the largest part of the book, eight of the ten chapters, is not about political history but instead about how agriculture, industry, income inequality, and demographics changed over the course of four decades or so. Only the first and last chapters deal specifically with the sociopolitical economy of Germany. As such, the first and last chapters seem somewhat divorced from the middle eight chapters.

Grant?s work provides an explanation as to how the migration decisions of many Germans were related to the economic transformations taking place in the German economy. As the German economy expanded in the late nineteenth and early twentieth centuries, many workers had to make adjustments in leaving declining businesses and occupations and taking up better-paid ones in other parts of Germany or the world. By 1895 German emigration had decreased substantially from its heyday, and more Germans could find employment somewhere at home.

At the outset of Migration and Inequality, Grant suggests that Germany be considered among the group of late-stage developers like Russia, Italy and Spain, all of which adopted British technology. However, by 1890 Germany had a GDP per capita that was substantially larger than that of all three of these countries (Crafts, 1984, 440, Table 1). Using a Chernery-Syrquin framework, Crafts considers Germany to have industrialized later than Britain and Belgium but around the same time as France and well ahead of Italy, Russia and Spain (Crafts, 1984, 448-9). A bit more consideration of such findings would have been helpful.

In Chapter 3 Grant presents some of his main results on internal migration as it was affected by an economy on the path to industrialization. Here he provides a picture of who moved in and who moved out, and how the long-distance migration flows were related differentially to agriculture, industry and especially railroad building. He uses a number of sources, most of which are aggregated statistics previously published, but his key results in this chapter are based mostly on one city, Berlin. I would have preferred that he had examined more cities. He could at least have framed the results in light of other recent works on internal German migration such as Hochstadt (1999) on D?sseldorf and Jackson (1997) on the Ruhr Valley, a hotbed of industrial activity at this time. Both works are listed in the bibliography, but more effort towards placing his findings in the context of these works would have made this an even more valuable study.

Grant?s work also places a large emphasis on internal migration and less so on Germans who left for overseas destinations. Migration is analyzed at a macro and not at the micro level. This approach misses insights on selection patterns that could be gained from looking at how migrants differed from non-migrants. Of course, migration history is an enormous subject, and no single book on migration history can be all things to all scholars.

Chapter 4 expands on this work by describing what important variables influenced internal migration. Agricultural areas lost more than urban areas, as a significant amount of the internal migration consisted of classic rural-urban moves. Further, people were more likely to leave places with lots of large farms, a close proximity to cities and high rates of productivity growth in agriculture. Grant tackles demographic issues in Chapter 5. All sorts of demographic variables differed by region, with the upshot that after 1870, population growth was higher in the east than in the south: although both regions experienced sizable emigration flows the east still lost more people than the south, partly due to a much higher percentage of women who never married in the south.

With a heavy emphasis on eastern Germany, Chapters 6 and 7 discuss the popular view of nineteenth-century social scientists that there was something backward about the prevalence of large estates and a property-less agricultural labor force in the east when peasants in the rest of Germany tended to own their own holdings. Grant argues that higher wages in the urban centers convinced many young people in the east to abandon their parents? way of life, which prompted estate owners to seek seasonal laborers from Poland. Wages were low in the east partly because landowners had a substitute labor force.

Grant finds other evidence that migration in the decades after 1870 represented a release of surplus labor from conditions of underemployment, as the Lewis model predicts. Regions of high productivity growth in the agricultural sector were correlated with higher migration rates: as farmers became more productive they needed fewer workers. At the same time though, the product mix changed, towards more labor?intensive activities like root crops (sugar beets) and livestock. With suspected widespread underemployment across Germany many in agricultural areas could still be employed, and in the east a cheap seasonal labor force was available for such crops.

Grant also argues that in the 1870s and 1880s migration was more likely to take place from communities with high population densities, which validates the prediction of the Lewis Model he presents in Chapter 1. This result should be considered with some caution, as it is based on a regression with basically just one right-hand-side variable, population density. What else could be driving migration rates?

In Chapter 8, Grant finally discusses the process of industrialization in more detail, focusing on capital markets and Germany?s changing terms of trade as related to exports. ?Inequality,? part of what is promised by the book?s title, is finally tackled in Chapter 9, where Grant calculates Gini coefficients from Prussian tax statistics. Inequality was never that high in Germany but ironically it was higher in the urban sector than in the rural sector. Grant finds evidence for a Kuznets Curve and argues that his findings fit within the perspectives of Kuznets, Lewis and Weber.

Grant covers a lot of ground in his book. There are dozens and dozens of different tables and regression estimates spread throughout this work. Like a good detective he has dusted off many existing studies and sources of data from government and journal publications, many published more than a century ago and many of which have undergone little sophisticated treatment. By using modern statistical and regression analysis he sheds new light on these previously published sources. In fact there are so many tables and maps, I wish he had devoted a few pages to listing them in an organized fashion. He also goes out of his way to make this work user-friendly by placing most of the econometric results in the appendices and explaining their economic and social significance in the main body of each chapter. This feature makes the book very accessible to a variety of social and economic historians.

While he refers to long-standing debates stemming from the scholarship of Max Weber, Eckart Kehr and Kuznets, there could be more reference to the debates that economic historians are currently engaged in. As I mentioned above, comparison with Crafts? work would have been desirable. Using the insights of recent studies on internal migration within Germany would also have been helpful. Further, while Grant spends time comparing land ownership institutions between Britain and Germany, it would have been intriguing to know more about his thoughts on Britain?s own experience with a surplus of labor. Contrasting his findings with those of Baines (1985) would have been interesting, and perhaps this may provide Grant with an idea for further work.

In spite of these quibbles, Grant lays down piece by piece the argument that between 1870 and 1913, Germany was going through economic adjustment problems, and that these should be considered as a normal part of most industrialization processes, both historical and contemporary. This is the thesis of the book. Importantly, he argues that the Kehrite School, which viewed Germany as deeply flawed, has overlooked relevant economic realities and focused too much on internal political problems. Without trade, for instance, Germany could not have industrialized, as self-sufficiency would have entailed a higher agricultural labor force and allowed fewer for the factories. Here Germany needed food imports, which it supported with a moderate level of protection. Even the Kaiser acknowledged this.

Grant thus comes to reject the Kehrite School view that Germany suffered from internal socioeconomic flaws and could not make adequate political progress. Instead, he states on page 354 that ?the path to democracy was getting easier, not more difficult.? He goes further to conclude that ?The events of 1914 represented a derailment …? He thus provides his own particular views on the Sonderweg debate in German history, which attempts to trace the political-economic origins of the Nazi catastrophe. Luckily for him, his book ends in 1913. If we are to accept Grant?s view and reject the Kerite perspective that German sociopolitical evolution was misguided, we need a roadmap that takes us through World War I and further ? food for thought for future research.

For those interested in a case study of long-term economic development and transition, Grant provides a very interesting example in the form of Germany in the late nineteenth century. Germany industrialized inordinately quickly and came to dominate Europe not only economically but obviously politically in the twentieth century. Economic historians need to understand this particular case and compare it to others. Grant succeeds admirably in showing that it is relevant that we characterize historical processes accurately, both to understand the past and to examine carefully how socioeconomic evolution affects later periods. Lastly, Grant has provided a work that reminds economists and others of what insights they can gain on economic growth and political history by examining economic history.

References:

Baines, Dudley. Migration in a Mature Economy: Emigration and Internal Migration in England and Wales, 1861-1900. Cambridge: Cambridge University Press, 1985.

Crafts, N. F. R. 1984. ?Patterns of Development in Nineteenth Century Europe.? Oxford Economic Papers 36 (3): 438-58.

Hochstadt, Steve. Mobility and Modernity: Migration in Germany, 1820-1989. Ann Arbor: University of Michigan Press, 1999.

Kehr, Eckart. Battleship Building and Party Politics in Germany 1894-1901: A Cross-Section of the Political, Social, and Ideological Preconditions of German Imperialism. Chicago: University of Chicago Press, 1973.

Kehr, Eckart (ed. by Gordon A. Craig). Economic Interest, Militarism, and Foreign Policy: Essays on German History. Berkeley: University of California Press, 1977.

Jackson, James H. Jr. Migration and Urbanization in the Ruhr Valley, 1821-1914. Atlantic Highlands, N.J.: Humanities Press, 1997.

Simone A. Wegge is an associate professor of economics at the College of Staten Island and at the Graduate Center, both of the City University of New York. Her research focuses on European and German economic history, especially emigration. Her most recent paper is titled ?Network Strategies of Nineteenth-Century Hesse-Cassel Emigrants.? History of the Family 13 (3): 296-314.