The German Economy during the Nineteenth Century

Published by EH.NET (September 2004)

Toni Pierenkemper and Richard H. Tilly, The German Economy during the Nineteenth Century. New York: Berghahn, 2004. xvi + 176 pp. $65 (hardback), ISBN: 1-57181-063-3; $22.50 (paperback), ISBN: 1-57181-689-5.

Reviewed for EH.NET by Timothy W. Guinnane, Department of Economics, Yale University.

Most universities in English-speaking countries teach courses on the economic history of “Europe,” but as we all know, those courses tend to focus heavily on Britain. There are a number of sound reasons for this, including the fact that Britain had the first industrial revolution, and thus has valid claim to priority in courses that focus on industrialization and its aftermath. But another reason is purely linguistic: few students in English-speaking countries know another language well enough to cope with readings assigned in that language. Until recently most economic history of Continental European countries was published in the native language, rightly enough, and it will take a while for the new, English-language research to filter through to useful textbook-level treatments. Thus general accounts written in English and meant for students tend to dated even when they first appear. Even faculty with competence in one or more foreign languages must shape their courses around this constraint.

One particularly egregious example of this problem has always been Germany. For many themes in economic history, Germany provides either a useful contrast to the British experience (for example, banking systems), or illuminates an issue that does not really arise in the British case (for example, the consequences of economic unification). Given the size and dynamism of the German economy in the nineteenth century, economic historians have always known in some sense that its experience was very important, and have tried to include it in their courses. But limitation to English-language readings (whether originals or in translation) posed serious problems. There are a few chapters and a few good textbooks, but they have tended to be so dated as to have missed important revisions in central themes in economic history. Some of the best, recent general economic histories have unfortunately never been translated.

Some of these revisions go to the heart of what we “know” about Germany’s economic history. For most English-speaking scholars, Alexander Gerschenkron’s work cast a powerful influence, as it well should. But there is a tendency to take his claims as authoritative in a way they no longer are, which means there is an increasing gap between the research literature on German economic history and what is taught to students elsewhere. The work of Richard Tilly and others, for example, requires serious modification of Gerschenkron’s vision of large banks that at once cradled new firms and bullied old ones.1 Gerschenkron’s remarks about the role of the state in German economic development have also not worn well. We could draw other examples from industrial organization, the role of agricultural tariffs, etc. The point is that it is high time for a new, serious survey of Germany’s economic history in the nineteenth century.

Pierenkemper and Tilly’s volume fits the bill precisely. Pierenkemper began the volume after visiting Georgetown University as the Konrad Adenauer Professor. At some level, then, it is designed around the needs of an undergraduate course at one of the selective private U.S. universities. Tilly, who was Pierenkemper’s Doktorvater, or advisor (Dear Paul: no), joined forces later, and the result is a serious, comprehensive work that covers the major themes and integrates the results of recent research in a slim, highly readable volume. I especially appreciate two features of the book. Its discussion of the role of the state in German economic development transcends old stereotypes partly because it is more accurate (the German government did not build the railroad system, it nationalized the system once built) but moreso because the authors taker a broader view of the state and its actions. The book also includes two chapters on the author’s subjects of specialization — Tilly on money and banking, and Pierenkemper on entrepreneurship — and here the work really sings. The two scholars are research leaders in their respective fields, and these chapters successfully blend a serious view with the need to keep things simple for the audience. Much of the material underlying Pierenkemper’s chapter in particular has never made it into English. The book concludes with an 11-page select bibliography that will keep even the most energetic students busy with research papers and senior theses.

The German Economy in the Nineteenth Century is an excellent synthesis that fills an important gap in the literature useful for teaching undergraduates. The discussion is both sophisticated and clear, so it could be used in a wide range of undergraduate settings. I also highly recommend it as a supplementary work for graduate students and to anyone looking for an entry into the economic history of this large and important country. Pierenkemper and Tilly have done us all a great service.

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For those interested, here is an admittedly idiosyncratic overview of the major synthetic works suitable for advanced undergraduates or graduate students that focus on Germany in the period 1750-1914 or so. Where possible I cite the English version of the work, although some were originally written in German. This sketch is deliberately limited to works that either focus primarily on Germany, or that have discussions of German issues embedded in useful comparative discussions. I also omit some fine studies that focus on a particular issue, such as money and finance. I suspect I have unintentionally omitted something important. If you or your advisor were the author of that work, please accept my apologies without actually demanding the apology!

Arnold Publishers has recently published a three-volume economic and social history of Germany that is similar in spirit to the Floud and McCloskey volumes on Britain. The work consists of thematic chapters written by specialists in various aspects of German economic and social history. The level of difficulty is appropriate to top U.S. undergraduates as well as graduate students and interested scholars from other fields. Compared to the Pierenkemper and Tilly volume, the chapters do less economic but more social and demographic history. The third and final volume, which covers 1800-present, is Ogilvie and Overy (2003). (Full disclosure: I have a chapter in this volume.) A very stimulating if somewhat quirky recent work was written in French and to my knowledge was never translated into either German or English (Hau 1994). Pollard’s (1981)’s emphasis on regions rather than nation-states makes the relevant portions of his book especially useful. He was also, as a professor in Germany, very well-acquainted with the German-language literature of the time. Landes (1969) has been to my mind shown wrong on a number of points, but for sheer scope and vision there remains little that can challenge it. Milward and Saul (1979) was written for a general course in European economic history, and includes very useful short bibliographies after each chapter. Yale undergraduates quite like Borchardt (1973), not least for his bold, quick sketches of important positions. Henderson (1967, 1975) were intended for undergraduate courses, and their only serious drawback is being out of date. I should also mention Sylla and Toniolo (1991). This volume has a fine chapter by Tilly on Germany, and because it is shaped around Alexander Gerschenkron’s claims, much of the synthetic chapters also deal with Germany. One more volume is worth mentioning for those who read German. Tilly (1990)’s short work is a thoughtful and sophisticated account, and while focused on Germany benefits from a broader comparative understanding.

References to other works:

Borchardt, Knut, 1973. “Germany 1700-1914.” In Carlo M. Cipolla, editor, The Fontana Economic History of Europe: The Emergence of Industrial Societies, Part One. London: Fontana.

Hau, Michel, 1994. Histoire ?conomique de l’Allemagne: XIX-XXe si?cles. Paris: Economica.

Henderson, W.O., 1967. The Industrial Revolution on the Continent: Germany, France, Russia 1800-1914. Second edition. London: Frank Cass and Company.

Henderson, W. O., 1975. The Rise of German Industrial Power, 1834-1914. Berkeley: University of California Press.

Landes, David, 1969. The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present. New York: Cambridge University Press.

Milward, Alan S., and S.B. Saul, 1979. The Economic Development of Continental Europe, 1780-1870. Second edition. London: George Allen & Unwin.

Ogilvie, Sheilagh, and Richard Overy, 2003. Germany: A New Economic and Social History (Volume 3: Since 1800). London: Arnold.

Pollard, Syndey, 1981. The Peaceful Conquest: The Industrialization of Europe 1760-1970. New York: Oxford University Press.

Sylla, Richard and Gianni Toniolo, 1991. Patterns of European Industrialization: The nineteenth Century. London and New York: Routledge.

Tilly, Richard, 1990. Vom Zollverein zum Industriestaat: Die wirtschaftlich-soziale Entwicklung Deutschlands 1834 bis 1914. Munich: DTV.

Note:

1. For more on this, see my article in the Journal of Economic Literature listed below.

Timothy W. Guinnane is professor of economics and history at Yale University. His recent publications include “A ‘Friend and Advisor’: External Auditing and Confidence in Germany’s Credit Cooperatives, 1889-1914,” Business History Review, 2003; “Delegated Monitors, Large and Small: Germany’s Banking System, 1800-1914,” Journal of Economic Literature, 2002; and “Fertility Transition in a Rural, Catholic Population: Bavaria, 1880-1910” (with John C. Brown), Population Studies, 2002.