CHAPTER VIII

STAGES IN THE DEVELOPMENT OF INDUSTRY AND MINING

The starting point of the development is house industry, producing for the requirements of a small or large household. From this point the development may lead to tribal industry, which may arise in consequence of the possession by a tribe of a monopoly, either of certain raw materials or of certain products. Tribal industry is carried on originally as a welcome auxiliary source of income, but later to an increasing extent as a regular occupation. It signifies in the one as in the other of these stages that the products of household activity, prepared with the tools and raw materials of the house community, are brought to the market, so that a window is opened, as it were, in the self-contained household economy, looking out on the market. The monopoly of raw material may be conditioned by the exclusive occurrence of certain materials—stone, metals, or fibers, most commonly salt, metal, or clay deposits—within the territory of the tribe. The result of exploitation of a monopoly may be the appearance of wandering trade. It may be carried on by those who conduct the industry, as in the case of many Brazilian tribes or the Russian “kustar,” who in one part of the year as a farmer produces products and in the other part peddles them. Again, it may be qualities of workmanship which are monopolized, as frequently in the case of wool products of artistic distinction, the worker being in the possession of a trade secret or special skill not readily transferred. This case involves a special form of price-work in which the craft is monopolized through the possession of land and is attached to a tribe or clan by an hereditary charism. Specialization of production takes place between ethnical groups. It may be confined to the exchange of products between geographically adjacent regions, as in Africa, or there may be a wider development.

The one possibility leads to the establishment of castes, as in India.¹ Through the combination of individual tribal groups under an overlordship, tribal industries which originally lay side by side horizontally have here become arranged vertically in a stratification, and the ethnic division of labor is now found among persons subjected to a common master. The original relationship of the tribes as mutually foreign is expressed in a system of castes whose members do not eat together or intermarry and receive only specified services at each other’s hands. The caste system has had tremendous consequences for the whole social organization of India, because it is anchored in ritualistic and hence religious institutions. It has stereotyped all craft work and thus made impossible the utilization of inventions or the introduction of any industry based on capital. The introduction of any technical improvement whatever at any time would have presupposed the founding of a new caste below all the old series previously existing. When the Communist Manifesto says of the proletarian that he has a world to win and nothing to lose but his chains, the expression would apply to the Indian ² except that he can only get free of his chains in the after world, through the fulfillment to the last detail of his caste obligations in this. Every Indian caste had its production process traditionally fixed; one who abandoned the traditional process lost caste, and was not only expelled and made pariah but also lost his chance in the future world, the prospect of reincarnation in a higher caste. Hence, the system became the most conservative of possible social orders. Under the English influence it has gradually broken down, and even here capitalism is slowly making its way.

The second possibility which opens up in the stage of exchange between ethnic groups is evolution in the direction of market specialization. Regional division of occupations may be first “demiurgic”—that is, not yet related to a market though no longer inter-tribal, the village or a landed proprietor acquiring craft workers and compelling them to work for the village or the estate (oikos). Here is to be classified for example the village industry of India, and in Germany as late as the 14th century the lord of the land was considered under obligation to provide a corps of village craftsmen. Here we find local specialization for self-sufficient production, with which an hereditary proprietorship of work places is regularly associated.

Going beyond this is a sort of local specialization which in its end results leads to specialization for the market. Its prior stage is the specialization of village and manorial industry. In the village are found, on the one hand, peasants and, on the other, landed proprietors who bring about the settlement of craft workers to produce for the requirements of the lord, for payment in the form of a share in the harvest or otherwise. This contrasts with specialization for the market in that there is no exchange. Furthermore, it still carries the marks of specialization between ethnic groups, in that the craftsmen are foreigners; however, they include some peasants who have lost their status, because unable to maintain themselves, due to inadequacy of their holdings of land.

A different course is taken by the seigniorial form of exploitation of craft workers, that is, the large household or estate type of specialization carried out by princes or lords of the land for private or political purposes. Here also specialization takes place without exchange. The duty of furnishing particular services for the disposal of the lord is laid upon individual craftsmen or whole classes of such. In antiquity this arrangement was widespread. In addition to the officia—the officials of the great household, such as the office of treasurer, which was usually filled by a slave—appeared the antificia. These consisted chiefly of slaves and included certain categories of craft workers within the familia rustica, who produced for the needs of the large estates. Such were smiths, iron workers, building craftsmen, wheelwrights, textile workers—especially female in the gynecium or women’s house—millers, bakers, cooks, etc. They are also found in the city households of the higher nobility, who have at their disposal large numbers of slaves. The list of the Empress Livia, the wife of Augustus, is known; it includes craft workers for the wardrobe and other personal requirements of the princess. A similar situation is found in the princely households of India and China, and again in the medieval manors, both of the lay lords and of the monasteries.

In addition to the craft workers for the personal needs of the lord, are those who serve his political requirements. An example on a large scale is the administration of the Pharoahs of the New Empire, after the expulsion of the Hyksos. Here we find a warehouse system replenished from the payments in kind of the dependent classes, and along with it extensive industrial specialization of hand work for the household and political needs of the king. The officials are paid in goods out of the storehouse, receiving a specified allotment, and the written claims to the goods circulate in commerce in the fashion of government notes today. The products are obtained in part from the work of peasants and in part from specialized estate industry. In the large estates of the near east also, luxury crafts were developed and encouraged. The Egyptian and Mesopotamian kings caused the marvels of ancient oriental art to be developed by workers trained in their workshops and dependent upon them and thus gave the estate (oikos) a mission to fulfill in the history of culture.

In order that a transition be effected from this condition to production for a clientele and for the market, a circle of consumers with purchasing power to absorb the output was necessary; that is, an exchange economy of some extent had to develop. Here we have a situation similar to that found in the development of the peasantry. The prince, or lord, or slave holder, had his choice between utilizing the skill of the workers as labor power, himself producing for the market by means of them, and exploiting them as a source of rent. In the first case the lord became an entrepreneur utilizing the work of the unfree population; such a system is found both in antiquity and in the middle ages, the lord employing someone to look after the marketing. This person is the negotiator, the dealer, who is attached as an agent to the princely or other sort of household.

The way in which the lord may utilize his people as labor force in such a case may vary. He may employ them as unfree home workers; they remain in their own dwellings and are compelled to deliver certain quantities of goods, the raw materials for which may belong to them or may be furnished by the lord. In antiquity, this relation was widespread. Textiles and pottery products were brought to the market in this way, being produced mainly in the women’s house (γυναικεoν, gynecium). In the middle ages, the linen industry in Silesia and Pomerania arose in this manner; the lord is the merchant-capitalist-employer or “factor” (Verleger) of the craft worker. Or, the lord could go over to shop industry. In antiquity we find among the auxiliary industries of the great landed proprietors terra cotta works, sand pits and stone quarries. We also find the large gynecium in which female slaves were used in spinning and weaving. Similarly in Carolingian times as to the gynecium. Shop industry developed to an especial extent in the monastic economy of the middle ages in the breweries, fulling mills, distilleries, and other industries of the Benedictines, Carthusians, etc.

In addition to auxiliary industries on the land, we find town industries with unfree labor. While in the rural industries the lord disposes of the products through the agency of his unfree labor force, in the towns it is generally the merchant who by means of his trading capital sets up establishments with unfree workers. This relation was common in antiquity. For example, tradition tells us that Demosthenes inherited from his father two ergasteria, a smithy shop, making weapons, and a work shop for the production of bedsteads—which at that time were objects of luxury and not necessities. The combination is explained by the fact that the father was an importer of ivory, which was used for inlaying both in the handles of swords and in the bedsteads, and had taken the shops with their slaves as a forfeit in consequence of the inability of his debtors to pay. Lysias also mentions a “factory” with a hundred slaves. In both cases we find production for a small upper class on the one hand and for war purposes on the other. In neither case, however, are we concerned with a “factory” in the modern sense, but only with an ergasterion.

Whether an ergasterion operates with unfree or with freely associated labor depends on the individual case. If it was a large establishment producing for the market with slave labor it was a case of labor accumulation, not of specialization and co-ordination. Many persons worked together, each turning out independently a single class of products. Over them all was set a foreman who paid the lord double head dues and whose single interest lay in a certain uniformity in the product. Under such relations there could be no question of large scale production in the sense of the modern factory, for the ergasterion had no fixed capital, and did not usually belong to the lord, though it might in some cases.

Furthermore, the special features of slave holding made for the impossibility of the development of such an establishment into a modern factory. The human capital consumes more in the very moment when the market fails, and its upkeep was a very different matter from that of a fixed capital in machines. Slaves were especially subject to vicissitudes and exposed to risk. When a slave died it meant a loss, in contrast with present conditions where the risks of existence are shifted on to the free workers. Slaves could also run away, especially in time of war, and did so with especial frequency at a time of military misfortune. When Athens collapsed in the Peloponnesian War, the whole slave capital utilized in industry became a loss. Furthermore, the price of slaves fluctuated in the most astonishing way in consequence of the wars which were the normal condition of antiquity. The Greek city-state carried on war continuously; to contract a durable peace was regarded as a crime; peace was concluded for a respite, as commercial treaties are made today. In Rome also, war was an every-day occurrence. Only in war time were slaves cheap, in time of peace extraordinarily dear. The lord had his choice in the treatment of this capital, often obtained at high cost, either to keep the slave in a barracks or to support his family along with him. In the second case occupations of a different sort must be found for the women; hence the lord could not specialize his establishment, but had to carry on several branches in combination in his oikos. If he did specialize, the death of a slave was very disastrous. An additional factor was the absence of all interest in the work on the part of the slave; only by means of quite barbaric discipline could be extracted from them the amount of work which free laborers give today under a system of contract. The large-scale establishments with slaves were therefore a rare exception ; in all history they appear to a considerable extent only where there is an absolute monopoly of the branch of production concerned. The example of Russia shows that factories manned by servile workers were completely dependent on the maintenance of such a monopoly; the moment it was broken they collapsed in the face of competition with free labor.

It is true that the organization of antiquity often presents a somewhat different aspect. The lord does not appear as an entrepreneur but as an income receiver, utilizing the labor power of the slave as a source of rent. He had the slave taught some craft; then if he did not hire him out to a third party he allowed him to produce independently for the market, or himself to hire out for work, or finally, left him free to conduct his own business, imposing on him in each case a tax. Here we have economically free but personally unfree craftsmen. In this case the slave himself possessed a certain capital, or the lord lent him capital to carry on trade or small craft work (the peculium). The self-interest of the slave thus aroused had, according to Pliny, the result that the lord granted him even testamentary freedom. In this way the great mass of the slaves were utilized. A like condition is found in the middle ages, and also in Russia, and everywhere we find some technical designation for the tax as a proof that we are concerned not with an extraordinary but with a quite normal relation, πoφoρ, Leibzinz, obrok.

Under this manner of utilizing the slaves, whether the lord operated on his own account depended on the presence of a local market, in contrast with a general one in which the slaves could sell their products or labor power. If the labor organization of antiquity and that of the middle ages start from the same point and are similar in the early stages and then later take quite different courses, the reason is found in the completely different character of the market in the two civilizations. In antiquity the slaves remained in the power of the lord, while in the middle ages they became free. In the latter there is a broad stratum of free craftsmen unknown to antiquity. The reasons are, several:

1. The difference in the consumptive requirements in the occident as compared to all other countries of the world. One must understand clearly what a Japanese or Greek household required. The Japanese lives in a house which is built of wood and paper; the mats and a wooden kettle-stand, which together yield a bed, together with dishes and crockery, form the whole establishment. We possess the auctioneer’s list from the trial of a condemned Greek, possibly Alcibiades. The household exhibits an incredibly restricted equipment, works of art playing the leading role. In contrast, the household equipment of the medieval patrician is much more extensive and materialistic. The contrast rests on climatic differences. While in Italy heat is not indispensable, even today, and in antiquity the bed counted as a luxury—for sleeping one simply rolled up in one’s mantle and lay down on the floor—in northern Europe stoves and beds were necessities. The oldest guild document which we possess is that of the bed ticking weavers of. Cologne. It cannot be said that the Greeks went naked; part of the body was covered, but their clothing requirement was not to be compared with that of the middle European. Finally, again in consequence of climatic relations, the German appetite was greater than that of the southerner. Dante somewhere speaks of the “German land of gluttons.” As soon as it was possible to satisfy these needs, a much more extensive industrial production than that of antiquity necessarily developed among the Germans, in accordance with the law of diminishing utility. This development took place from the 10th to the l2th century.

2. The difference in the market as compared with antiquity, as regards extension. In the northern Europe of the 10th to the 12th centuries, purchasers in possession of buying power and industrial products were at hand to a much greater extent than in the countries of antiquity. The civilization of antiquity was coastal; no city of note lay more than a day’s journey from the sea. The hinterland back of this thin coastal strip was, to be sure, included in the market area; but it possessed little purchasing power since it was in the product-economy stage of development. In addition, the culture of antiquity rested on slavery. As this civilization moved back from the coast and began to take on an inland character, the supply of slaves ceased. Hence the territorial lords endeavored to make themselves independent of the market by providing for their own needs with their own labor force. This autonomy of the oikos which Rodbertus ³ thought to be characteristic of the whole ancient world, is in reality a phenomenon of later antiquity and reaches its highest development in Carolingian times. Its first effect is a narrowing of the market, and later fiscal measures worked in the same direction.⁴ The whole process signified an accelerated retrogression toward product economy. In the middle ages, on the other hand, the market began in the 10th century to increase in extent through the growing purchasing power of the peasantry. Their dependency became less oppressive, the control of the lords losing in effectiveness because the intensivity of tillage was making progress, while the lord, who was tied to his military duties, could not profit by this progress but had to let the whole increase in rent go to the peasant. This fact made possible the first great development of the handicrafts. It began in the period of market concessions and of the founding of the towns, which in the 12th and 13th centuries moved eastward also. Viewed from the economic standpoint, the towns were speculative ventures of the princes; the latter wished to acquire taxable dependents and therefore founded towns and markets, as settlements of persons who bought and sold. These speculations did not always turn out happily. Those of the Polish nobility mostly failed when the growth of anti-semitism drove the Jews into the east and the nobles tried to exploit the movement in the founding of towns.

3. The third reason is the unprofitableness of slavery as a labor system. Slavery was profitable only when the slave could be cheaply fed. This was not the case in the north, where in consequence slaves were preferably exploited as rent payers.

4. The great fact of the instability of slave relations in the north. Runaway slaves were found everywhere in northern lands. There was no criminal news service, the lords were pitted against each other in regard to the slaves and one who escaped did not risk much, as he could find shelter with another lord or in a town.

5. The interference of the towns. The emperor especially granted privileges to the towns, giving rise to the principle “town air makes free.” He decreed that anyone, no matter whence or from what class he came, belonged to the town if he settled there. The citizenship of the towns came in part from such acquisitions; in part it was noble, in part made up of merchants, and in part of dependent skilled craftsmen.

This development was favored by the increasing weakness of the imperial power and by the particularism of the towns, which was promoted by this weakness; the towns possessed the power, and were in a position to laugh in the faces of the territorial lords. The principle “town air makes free” did not, however, go unopposed. On the one side the emperors were forced to promise the princes to oppose the seizing of new privileges by the towns; on the other their poverty continually forced them to grant the privileges. It was a contest of power in which finally the political power of the princes, who took an interest in the towns, proved stronger than the economic power of the territorial lords, whose interest lay in retaining their dependents.

The craftsmen, who settled on the basis of these privileges were of various origins and of divers legal status. Only exceptionally were they full citizens possessing land free of obligations; in part they were persons subject to feudal head dues, bound to make payments to some lord within or without the town. A third category consisted of the “Muntmannen,” in a sort of wardship status, who were personally free but were commended to some free citizen who represented them in court and to whom they owed specific services in return for his protection.

In addition there would be manors within a town, possessing their own craftsmen and special craft regulations. However, one must guard against the belief that the craft system of the towns developed out of regulation of craft work by the lords. (See below, p. 144.) In general the craftsmen belonged to different personal overlords, and in addition they were subject to the lord of the town territory. Hence only the town itself could originate a craft ordinance, and it happened that the lord of the town excluded his own dependents from the legal rights which he granted to the town, not wishing them to obtain the status of the class of free craftsmen in the town itself. The free craftsmen were without fixed capital; they owned their own tools, but did not work on a basis of capital accounting. They were almost always wage workers who carried to market their labor power and not their products. However, they produced for a clientele and originally on order; whether they remained wage workers or became price workers depended on market conditions.

Wage work is always the rule where the work is done for the wealthy classes, price work where it is done for the mass of the people. The mass buys single, ready-made articles; hence, the growth in the purchasing power of the mass is the basis for the appearance of price work, as later for that of capitalism. However, the distinction cannot be sharply drawn; wage workers and price workers exist side by side, but in general wage workers predominate, in the early middle ages as in antiquity, in India and China, as in Germany. As such they may be either itinerant workers (workers in the house of the employer) or home workers, depending largely on the costliness of the material. Gold, silver, silk, and expensive fabrics were not given the craftsman to work upon at his home but they were made to come to the work, in order to guard against theft and adulteration. On this account itinerant work was especially common in the field of the consumption of the upper social strata. On the contrary, those whose tools were costly or heavy to transport were necessarily home workers; such were the bakers, weavers, wine pressers and millers; in these occupations we already find the beginnings of a fixed capital. Between the fields of wage work and price work there are intermediate cases where chance or tradition fixes the type. In general, however, the terminology of wage work strongly predominates: κδóτης μισθóς, merces; all these expressions relate to wages, not to prices. The provisions of the edict of Diocletian also point in the direction of wage rather than price tariffs.