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‘Commerce and manufactures gradually introduced order and good government,’ wrote Adam Smith in his Wealth of Nations, ‘and with them, the liberty and security of individuals.’ However, Philipp Rössner shows how, when looked at in the face of history, it has usually been the other way around.
This book follows the development of capitalism from the Middle Ages through the industrial revolution to modern day, casting new light on the areas where pre-modern political economies of growth and development made a difference. It shows how order and governance provided the foundation for prosperity, growth and the wealth of nations.
Written for scholars and students of economic history, this is a pioneering new study that debunks the neoliberal origin myth of how capitalism came into the world.
This chapter moves on to another field of empowering capitalism in the preindustrial age, looking at origins of creativity in manufacturing. It does so through a focus on economic writings and ideas. During the Renaissance, manufacturing became conceptualized as the main source of the wealth of nations. Somewhat unoriginally – given that many other authors had used the example as a case in point before – Smith’s Wealth of Nations (1776) commences with the example of a (pin) manufactory. But rather than discussing the full implications in terms of value-added and creativity, Smith chose to proceed by demonstrating that the true origin of wealth lay in the division of labour, improving the distributional efficiency of the existing market systems. But even for a preindustrial economy – Smith’s template of analysis – this wasn’t completely the case; political economy had much more in stock. Smith thus missed a great opportunity – where did the wealth of nations originate?
We return to policy and empirical or archival-based histories zooming in on a now all but forgotten type of business venture once characteristic of the preindustrial oeconomic landscape as a case in point: the very same large centralized workshop or manufactory (Manufaktur) that Smith had used in the opening chapters of the Wealth of Nations to illustrate his point about division of labour, stopping short of a full explanation of how the origin of the wealth of nations through the virtuous forces of manufacturing really came about (the difference between Smithian and cameralist development; just a nuance, but of world-historical dimensions). Since the 16th century it was consensual among European writers to see manufacturing or the crafting of things as a main source of national prosperity. Manufacturing embodied skills, value-added, curiosity, learning and creativity so much more so than other economic activities such as farming, finance or trade. Studying the history of industrial policy with a focus on Manufakturen or manufactories in the Germanies, Scotland, Sweden, Austria and France, the chapter surveys how discourses examined in Chapter 7 reflected back upon and interacted with medieval and early modern economic practices, providing the foundations for capitalism, industrialization and the wealth of nations.
( Chapter 4 ) or monetary policy and management ( Chapters 5 and 6 ), which makes the ‘cameralist’ vision of political economy look somewhat hybrid; but still principally dynamic in vision and scope. It thus has a lot to offer when studying the origins of the wealth of nations. There thus was a link between cameralism and the ‘standard model’ of European development presented so concisely by List. From the 17th century onwards Portuguese, 123 Spanish, 124 Swedish, 125 Danish-Norwegian, 126 Russian 127 or German 128 economic writings belonging to the cameralist
emerging from the historical record is a long legacy of experiences with industrial capitalism in Europe since the later Middle Ages. This legacy was reflected in cameralist writings discussing how the emerging princely fiscal-military states should best deal with processes of capitalist accumulation, exploitation, rent-seeking and other social and economic asymmetry in the marketplace. Their answers were models of coordinated capitalism that we have encountered by ways of case study in the preceding chapters. Since the Middle Ages and into the 1970s the origin of the
at variance with the evidence, as we will further see in Chapters 7 and 8 . 50 Cameralists during the later 17th and into the 18th centuries paid increasing attention to manufacturing and how this could be stimulated across the board, encouraging general economic development. They thus extended an initially rather narrowly conceptualized view on oeconomy as prudent or ‘thrifty’ (in the word of one recent scholar) management into a wider conceptual analysis of the causes, nature and origin of the wealth of nations. 51 In Grundsätze der Policeywissenschaft
