Flows of capital and forms of industry in Europe, 1500–1900

Abstract

An unwary traveler in Paris or London often straightens out the river in his imagination, and then makes terrible deductions about the shortest path from one place to another within the city. If he follows up those deductions without consulting a well-drawn map, he finds himself wandering, worn, and confused. Neither the Seine nor the Thames comes close to describing a straight line. Similarly, a straight-line model of industrialization is not merely inaccurate in itself; it leads to faulty, costly deductions about the likely consequences and correlates of the whole process. The Industrial Revolution model of industrialization follows a straight line from agriculture to handicraft to full-scale industry, with handicraft a weak anticipation of full-scale industry. That model not only exaggerates the role of technology and foreshortens the history of industrial production, but also - at least for the European experience - misstates the relationships between urban and rural capital and labor. The classic Marxist model, with its intermediate stage of Manufacture drawing heavily on rural labor, improves our understanding of the historical terrain by putting an appropriate bend in the river of industrialization. It also improves on the Industrial Revolution model by drawing attention to the accumulation and redeployment of capital. Yet the classic Marxist model, too, exaggerates the importance of technological change, and underestimates the interdependence of changes in city and country, of alterations in the organization of industry and agriculture.