The Ruhr’s mining industry and its power struggle with the High Authority of the European Coal and Steel Community

by Juliane Czierpka (Ruhr-University Bochum)

 

Ruhr
Ruhr mining. Available at Pixabay.

Since the beginning of the Ruhr area’s industrialisation in the second half of the nineteenth century, the local mining industry has always been a powerful player. Controlling vast amounts of coal, the Ruhr’s mining companies held a huge share of the European coal market and were usually able to influence political decisions made by German governments.

One reason for the power of the Ruhr’s mining industry was of course the importance of the energy sector and the country’s dependence on its coal. But the local mining companies also used to present themselves as a unity, speaking with one voice and – even more importantly – selling their coals collectively.

In other words, the mining companies of the Ruhr had built a huge coal cartel, even though it wasn’t called a cartel or syndicate after 1945 – at least within the Ruhr area, everyone was quite keen on finding new names for the sales.

In the early 1950s, the newly constituted German government was desperately trying to reduce the Allies’ control. While Britain and the United States were willing to give the Germans back parts of their sovereignty and started to loosen the regulations on the production of steel and other goods, the French did not like this approach.

Naturally, after 1945 the French government not only felt threatened by the German heavy industry, which was seen as having made the war possible by quickly adapting to the production of arms in order to support Hitler and its troops, but also by the German mining industry’s market power, because the energy sector was closely linked to questions of national autonomy and security. Furthermore, the French steel industry depended on specific qualities of coal from the Ruhr area.

The specific combination of interests in Europe in the aftermath of the war – a French government trying to keep control over the German coal and steel sector and a German government that was trying hard to win back at least parts of its sovereignty from the Allies – led to the foundation of the European Coal and Steel Community (ECSC).

The ECSC’s principal goal was to merge the coal and steel markets of Germany, France, Belgium, Luxembourg and the Netherlands, thereby leading to a high degree of economic and political cooperation, and peace between the member states. These words were of course mainly tinsel and glitter, as every member state pursued its own national interests.

The High Authority, the ECSC’s supranational executive institution, is usually seen as a failure by historians and political scientists, because it did not succeed in enforcing the ECSC’s treaty against the member states’ national interests.

My research shows that the hypothesis of a weak HA is not generally true. Looking into the HA’s dispute with the Ruhr’s mining industry over the organisation of their coal sales, I show how the HA managed to break up the traditional structures in the Ruhr area, even though the mining industry fought fiercely for their cartel and was supported by the German government – which had initially sold the mining industry out for membership in the ECSC.

My research also sheds light on the relationship between businesses and national governments and shows how this relationship was changed by the emergence of a new player – the supranational HA. My research also shows that there would have been a very early Gerxit, which only was prevented by the pressure of the Allies, which forced the German government to be part of the ECSC regardless to domestic protests.

Spinning the Industrial Revolution

by Jane Humphries (All Souls College, University of Oxford) and Benjamin Schneider (Merton College, University of Oxford)

The full paper is published on The Economic History Review and is available here

 

The wages of hand spinners have been pushed to the forefront of economic history in recent years by Robert Allen’s ‘high-wage economy’ interpretation of British industrialization. Allen contends that rising earnings of hand spinners in the mid-18th century can explain why the spinning innovations of the industrial revolution were invented and adopted first in Britain. This is an extension of his broader argument that the ratio of wages to capital and energy costs in Britain was higher than in other parts of the world and served as a general spur to innovative activity. However, many gender historians and scholars of women’s work have contended that spinning, like other occupations dominated by women, was systematically underpaid. We set out to resolve this dispute by constructing a large dataset of spinners’ earnings from primary sources.

Spinning is the process by which raw fiber (cotton, flax, wool, or synthetic fibers) is turned into yarn. Hand spinners undertook this work on spinning wheels, imparting twist and draft into the fibers with their fingers. Qualitative sources suggest that spinning was a very common employment in the early modern period, especially for women and children. It was organized along the lines of the putting-out system, with many spinners receiving fiber from yarn merchants, spinning it in their homes, and returning the finished yarn in return for payment.

fig1
Fig. 01 Pieter Nys, Woman Spinning, 1652 (Dulwich Picture Gallery)

Allen presents a set of claims regarding spinners’ time rates which are taken from the work of Craig Muldrew and Charles Feinstein. Muldrew brought spinning into the limelight with a 2012 article that presented much larger estimates of the number of women employed in yarn production in the 17th and 18th centuries. However, the primary sources underlying Allen’s composite wage series are mostly claims about earning levels provided by commentators interested in emphasizing the value of Britain’s textile industry or showing the reduction in spinners’ earnings produced by mechanization at the end of the 18th century.

To address the question of spinners’ wages with firmer evidence, we collected more than 2500 observations of hand spinners’ earnings from the late 16th to the early 19th century. Spinners were generally paid by piece rates—payments per weight of yarn—which made constructing their remuneration challenging in many cases. In addition to sources that provided recorded earnings per day or a total amount earned over a known time span, we also collected data on their output per time in order to estimate their productivity. We then combined the productivity estimates with piece rates in primary sources to construct daily wages. These constructed wages supplemented the observed earnings per time and claims about remuneration. Our series incorporates the claims of interested parties, the writings of social commentators, and, more importantly, a very large body of new evidence on direct payments to spinners in the account books of putting-out enterprises, spinning schools, and the writings of putting-out merchants.

Fig 02
Figure 2: Nominal daily wages, decadal averages. Source: See online appendix S4 and table 2 in the paper

Our results show that Allen’s claim for high wages in spinning cannot be supported by the contemporary evidence. Productivity in hand spinning was far below the optimistic claims of social commentators, who wrote that a “sturdy woman” could spin a pound of fiber in a day. Direct evidence of spinners’ output shows that most of them produced less than half of this level each day. Unsurprisingly, we also find that earnings per day (even when discounting the constructed wages that use our productivity estimates with piece rates) were also substantially lower than previously claimed. Spinners barely earned enough to support themselves throughout most of the 17th and 18th centuries, and their wages did not rise precipitously in the middle of the 18th century.

At the same time, we know that cloth production expanded substantially in early modern England. We present several possible explanations to resolve this apparent paradox of rising labor demand and stagnant wages. First, we know that the geographical extent of spinning grew in the 18th century. Flax spinning, for example, spread further into the Scottish Highlands. We also provide extensive documentation regarding the involvement of the Poor Law and charitable enterprises in spinning. These entities allowed production to expand while taking advantage of the low wage demands of impoverished families, particularly in the countryside. Finally, we present evidence from contemporary descriptive sources that suggest most spinners faced monopsony power: the putters-out could act as a cartel and hold down spinners’ wages.

The growth of hand spinning provided modest but valuable household earnings for a growing number of poor families in 18th century Britain. However, spinning wages did not rise in the 18th century and therefore they cannot explain the invention of the spinning machines of the Industrial Revolution.

 

To contact the authors:

Benjamin Schneider (benjamin.schneider@history.ox.ac.uk) 

War, shortage and Thailand’s industrialisation, 1932-57

by Panarat Anamwathana (University of Oxford)

This study was awarded the prize for the best conference paper by a new researcher at the Economic History Society’s 2019 annual conference in Belfast.

 

1950S-BANGKOK-STREET-SCENE
1954 Bangkok street. Available at Wikimedia Commons.

Thailand fell under Japanese occupation during the Second World War. The small agrarian country relied on imports from the West for consumer and industrial goods, and suffered shortages of everything from clothes to machinery between 1941 and 1945.

After the Japanese surrender, the Thai government learned from its trauma, adapted its economic approach and began domestic production of its own consumer goods – although at the cost of inefficiencies and rent-seeking.

Economic historians have expressed different perspectives on Thailand’s immediate post-war economic development and state-led industrialisation programme. Some, such as Hewison (1989) and Ingram (1971), mention the expansion of manufacturing capacity, despite government inefficiencies. Others, such as Suehiro (1989) and Phongpaichit and Baker (1995), are more critical of state involvement, saying that rent-seeking and corruption hindered any real progress.

Anyone familiar with state-operated enterprises might be suspicious of Thailand’s state-led industrialisation approach. To protect many of the country’s new industries, import tariffs and quotas were introduced. At the same time, a new class of capitalists emerged from an alliance of politicians and entrepreneurs. These people benefitted from favourable concessions, state-sponsored monopolies or being granted lucrative import licences. The question is: did anything come out of all this?

Since Thailand had no industrial census for the period, it is difficult to measure changes in the kingdom’s manufacturing capacity from before the war to after the war. To address this challenge, I have gathered statistical data on three industries: sugar, textiles and gunny bags (which are essential for transporting rice, Thailand’s most important export crop). These goods were three of Thailand’s most important pre-war imports, key to the wellbeing of the population and rationed during the war.

My data come from a variety of primary sources from the National Archives of Thailand, the National Archives at Kew, and the National Archives and Records Administration in Washington, DC. I also read previously unused qualitative sources, such as government reports, correspondence and old newspapers to build a more complete picture of wartime Thailand.

I find that Thailand was able to produce more of its sugar, textiles and gunny bags after 1945, and continued to substitute for imports as the decade progressed. This was achievable in part because the shortage of goods during the war reinforced the drive to diversify the economy. Government systems and infrastructure established under the Japanese occupation but hindered by wartime circumstances could then make use of importing machinery and international credit.

Finally, machines and facilities abandoned by the Japanese army could be used by the post-war Thai government and their capitalist allies. I also find that per capita consumption either plateaued or increased during this period, suggesting that Thais were not deprived of these products because of the government’s industrialisation programme.

Corruption and rent-seeking, however, were common and can easily arise from state-led industrialisation programmes with little transparency, like that in Thailand.

For example, the Sugar Organisation, the most important state-operated enterprise in this industry, played a large role in transporting sugar from both private and government mills to shops. Unfortunately, this organisation was completely corrupt. It embezzled, cheated farmers, sold sugar to fake agents and distributors, and was extremely permissive on check-ups and regulation. Although the state did revoke some of the privileges of the organisation, it continued to operate throughout all the scandals.

My study not only contributes to the historiography of Thai economic development, but also engages with studies of various models of economic growth, the efficiency and costs of state-operated enterprises, and the legacies of the Second World War in occupied territories.

 

 

Further reading

Hewison, Kevin (1989) Bankers and Bureaucrats Capital and the Role of the State in Thailand, New Haven.

Ingram, James C (1971) Economic Change in Thailand, 1850-1970, Stanford University Press.

Phongpaichit, Pasuk, and Chris Baker (1995). Thailand: Economy and Politics, Oxford University Press.

Suehiro, Akira (1989) Capital Accumulation in Thailand, Tokyo.

Cotton, industrialisation and a missing piece of the puzzle

by Alka Raman (London School of Economics)

This study was awarded the prize for the best new researcher poster at the EHS Annual Conference 2019 in Belfast. The poster can be viewed here.

 

Cotton_merchant_in_Bombay_by_Francis_Frith
Cotton merchant, taken by Francis Frith between 1850 and 1870. Available at Wikimedia Commons.

The first Industrial Revolution has long been seen as the beacon of modernity, heralding unprecedented economic growth and the biggest uplift of living standards in human history. Its prominence amid themes in economic history is such that it dwarfs all others in comparison, including the fact that the British cotton industry – the nucleus of industrialisation – was not the world’s first cotton manufacturing industry serving a global demand for cotton goods.

Handmade cotton fabrics were exported from India to the rest of the world as early as the twelfth century. Indeed every textbook on economic history, when charting the growth of the British cotton industry, precedes its achievements with a dutiful narration of the introduction of cotton goods into England by the English East India Company in 1699 and the ‘frenzy’ for these cottons within the domestic and overseas markets.

But a passing reference to imitations quickly gives way to an impressive series of mechanisations and illustrious British inventors associated with them. Any connection to the preceding handmade Indian product is effectively lost.

Consequently, a crucial piece of the puzzle – how the seat of cotton manufacturing went from the Indian subcontinent to the heart of England – has remained inadequately explained. Learning from pre-existing products has been mentioned, but what this learning contained, how it may have been transferred and with what kind of outcomes are concepts that have been under-explored.

Hence the question at the heart of my research: did the pre-existing, handmade and globally demanded Indian cottons influence the growth and technological trajectory of the nascent British cotton industry?

Central to my thesis is the idea that the pre-industrial Indian cotton textiles contained the material knowledge required for their successful imitation and reproduction. These handmade Indian cottons embodied the cloth quality, print, design and product finish that the machine-made goods sought to imitate. Did learning from these pre-existing market-approved products contribute to the growth of early British cotton manufacturing?

My research identifies learning from the benchmark product, as well as competition with it, as two simultaneous stimuli shaping the British cotton industry during its initial phase. In terms of methodology, the thesis tests these two stimuli against historical textual and material evidence.

The writings of manufacturers, traders and historians/commentators of the period show that both manufacturers and innovators recognised that there was a knowledge problem or a ‘skills gap’: British spinners could not spin cotton warp to match Indian hand-spun warp’s quality. Entrepreneurs identified matching the quality of Indian hand-spun warp as a key motivation for innovation. Their language of quality comparisons with reference to Indian cottons is crucial and highlights comparative quality-related learning from Indian cotton goods.

Does the material evidence corroborate this textual finding? To establish if cloth quality improved over time, I study the material evidence (surviving cotton textiles from the period) under a digital microscope and thread counter to chart the quality of these fabrics over the key decades of mechanisation. I use thread count to establish the comparative quality of the machine-made cotton fabrics vis-à-vis the handmade Indian cottons.

My findings show that early British ‘cottons’ were, in reality, mixed fabrics using linen warp and cotton weft. In addition, the results show a marked increase in cloth quality between 1746 and 1820.

Assessed together, the textual and material evidence demonstrate that mechanisation in the early British cotton industry was geared towards overcoming specific sequential quality-related bottlenecks, associated first with the ability to make the all-cotton cloth, followed by the ability to make the fine all-cotton cloth.

Imitation of benchmark Indian cottons steered the growth of the British cotton industry on a specific path of technological evolution – a trajectory that was shaped by the quest to match the quality of the handmade Indian cotton textiles.