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As economic institutions, craft guilds have been judged unfavourably at least from the late eighteenth century onwards. In the view of the enlightened elites pressing for liberal reforms, craft guilds presented an obstacle to economic growth and welfare. In the course of the nineteenth century, both liberal and radical economists considered craft guilds as a paradigmatic institution of a pre-capitalist economy, while writers of the German historical school, such as Werner Sombart, viewed craft guilds as a materialisation of a typical pre-modern economic spirit. Prominent among the arguments put forward by eighteenth-century philosophes and nineteenth-century economists figures the supposition that craft guilds served mainly as cartels for the appropriation of monopoly rents for its members. At the same time, craft guilds are said to have resisted the transition from simple commodity production to more complex production regimes, which increased the control of entrepreneurs over production and enhanced productivity by applying new technology. Recent scholarship has begun to re-evaluate the economic effects of late medieval and early modern craft guilds. First, it has been argued that craft guilds prevented market failure (adverse selection) in long-distance trade. Bales of textiles, in particular, were characterised by considerable asymmetry of information, in the sense that a buyer would have had to assess quality by unrolling and inspecting each bale, which would require a lot of time. Since long-distance merchants, local retailers, and consumers might all need to assess quality individually, information costs were unavoidably inflated. [ABSTRACT FROM AUTHOR]

This chapter develops and analyzes statistically a model of economic development that is consistent with the description of the changes in the Polish economy presented in the previous chapter. This model draws heavily on the arguments of Joseph Schumpeter ([1911] 1934) and later works of organizational theorists in sociology and economists in industrial organizations. Schumpeter's proposition is that economic growth is the “new combination” of materials and processes to create new products, production methods, markets, raw materials, or organizations: he also says these “new combinations are, as a rule, embodied, as it were, in new firms which generally do not arise out of the old ones but start producing beside them” (Schumpeter, 1934, pp. 65–66). The emphasis is on new firm creation, survival, and growth as a means for transforming and expanding economic activity rather than on the transformation and growth of existing enterprises. In fact, the new economic organizations displace and replace the older, outmoded ones – what Schumpeter and others refer to as creative destruction. The key variables of birth, survival, and growth of new firms constitute the entrepreneurial process. MODELING NEW-FIRM CREATION, SURVIVAL, AND GROWTH In our simple model of economic evolution, there are three central variables: the creation of new firms, the survival rates of these firms, and the growth rates of the surviving firms. This emphasis on these variables as a means for transforming and expanding economic activity is the focus of work in organizational ecology. [ABSTRACT FROM AUTHOR]

The distinguishing feature of the Polish economy during the 1990s is the high rate of job creation among new firms, which provides an important counter to the job destruction among the large state-owned enterprises existing at the start of the transition. As indicated in the previous chapter, Poland was more successful than many other transitional economies in expanding the small and medium-sized enterprise section and in creating jobs in de novo firms. We now want to elaborate on that description; consider the policies of the Polish government, taken both before and after the dramatic changes beginning in 1989, that laid the basis for this creative activity; and discuss some of their social and political implications. This chapter sets the stage for the detailed statistical analyses of the Polish economic and political transformation in subsequent chapters. INITIAL CONDITIONS AND POLICIES Two developments during the 1980s had important consequences for Poland's simultaneous development of a market economy and a democratic political system during the 1990s. One is the determined effort throughout the 1980s to reform the economy under the guidelines provided by the concept of market socialism. These efforts at reform left several important positive and negative legacies for the new government taking over in 1989. The other development is the emergence of a strong independent union movement, Solidarność, which became a broad-based resistance movement and eventual political party. [ABSTRACT FROM AUTHOR]

Britain's myriad of small towns remained at the heart of economic and social life into the early Victorian era, bridging the urban and rural worlds. Diaries like that of the Sussex shopkeeper Thomas Turner of East Hoathly reveal an almost constant interaction between villagers and small towns. Turner records how he went to the nearby town of Lewes to buy cottons and cheese, to attend property sales, pay debts, get a doctor, scotch rumours about the disharmony between him and his wife, to participate in church events, to ‘see the finest horse-race that ever I see run’ and as often as not to get drunk and come rolling home. While the traditional open market, the nucleus of most small towns since their inception, was often in decline after 1700, these communities consolidated their position in Georgian provincial society, growing in population and prosperity, as they acquired retail shops and specialist crafts, as well as new leisure activities. The transformation did not occur overnight. In the 1720s the antiquarian and polymath William Stukeley, fresh from London, was dismayed at the small town of Stamford in Lincolnshire, where there was ‘not one person … that had any taste or love of learning’ but within a few years things began to improve, as music making and club life blossomed, and he concluded eventually that this ‘is true life, not the stink and noise and nonsense of London’. By the 1760s Fanny Burney could talk of the ‘perpetual round of constrained civilities … unavoidable in a country town’. [ABSTRACT FROM AUTHOR]

Introduction: London in European perspective ‘London is the capital of England and so superior to other English towns that London is not said to be in England, but rather England to be in London, for England's most resplendent objects may be seen in and around London; so that he who sightsees London and the royal courts in its immediate vicinity may assert, without impertinence that he is properly acquainted with England.’ (Thomas Platter, Travels in England in 1599) London's growth was a phenomenon of European importance in our period. At the start, London was already a major capital city, ranking sixth in terms of size in mid-sixteenth-century Europe (see Table 10.1). It was dwarfed by the Italian city of Naples and was much smaller than either Venice (ranked second) or Paris (ranked third); and it was outnumbered by the Portuguese capital of Lisbon and London's principal trading partner, Antwerp. Within fifty years all this had changed. By 1600 London was ranked third in Europe after Naples and Paris, and its neighbour and erstwhile trading partner, Antwerp, was nowhere. Continued growth meant that London came second only to Paris by 1650 and by the end of the seventeenth century was the biggest European city containing some half a million people. London then developed from a modest capital city, with an economy largely dependent on the export of woollen cloth, to a metropolis at the heart of the European economy. Over our period its population spilled out from the original relatively densely populated districts of the City within and without the Walls (see Plate 1) to form an urban conurbation stretching from Wapping and Poplar in the east to Westminster in the west. Its economic impact on the nation expanded from the immediately adjacent counties to the entire nation, including its overseas colonies. The task of this chapter is to provide some idea of how this extraordinary growth was accomplished and what kind of economy and society it produced. [ABSTRACT FROM AUTHOR]

This chapter traces some key relationships between Norwegian textile enterprises and British suppliers of machinery and ancillary equipment who provided the technology on which the Norwegian industry was based; the objective here is to evaluate the interaction between these two industries in terms of its significance for Norwegian textile industrialization. The question asked, therefore, is what were the roles of, and the technological functions performed by British textile machinery makers in the development of the Norwegian textile industry? Showing the importance of British machine makers for Norwegian industrialization involves two things. First, I shall demonstrate that the extent of the relationship between the two industries was large. This is of interest in itself, for it suggests that the existence of the British industry, and its active foreign role, was a necessary condition for the development of the Norwegian industry. As I showed in Chapter 4, the textile technology flow was large in relation to the size of the capital stock of the Norwegian industry, but it is also of great importance that a very large number of British firms were involved in this technology flow. At the same time, the substitution possibilities were limited or non-existent. No non-British economy had a textile machinebuilding capacity to compare with Britain's, and it is difficult to see how Norwegian entrepreneurs could have looked elsewhere for technology supplies on the same scale. Without the transfer of technology through British machine makers, therefore, Norwegian firms would simply not have been able to enter the business. [ABSTRACT FROM AUTHOR]

Japanese industrial policy in 1946–9 was still dominated by the paradigm of the managed economy. Although many elements of the wartime economic system were greatly challenged by the democratic reforms of the occupation authority, the practice of priority production (keisha seisan hōshiki), which referred to concentrating human, financial, and material resources in the coal, iron and steel, and fertilizer industries in order to provide basic materials for postwar economic reconstruction in all industries, contributed greatly to transforming the wartime legacies into the postwar economy. Japan's defeat in World War II opened a new chapter in its history. Like Germany, Japan experienced a storm of democratic reforms by the Occupation Authority. What was the impact of these reforms on postwar Japan? For a long time, 1945 was considered by many people the “birthday for a new Japan” (Noguchi 1995), a “Year Zero, when everything could be remade and redone” (Fallows 1994:120). In academic discussions, the discontinuity argument presented by Yamada Moritarō prevailed. It held that the postwar democratic reforms changed Japanese capitalism fundamentally because the production cycle of the Japanese economy was no longer sustained by militarism and colonies, the land reform eliminated the landlord class, and the majority of economic output shifted from textile industry to heavychemical industry (Ōishi 1974). This view was influential not only in Japan, but also in Germany. As Simon Reich (1990:4) points out, the astonishing achievement of Germany in postwar economic growth has been interpreted as being “like a phoenix [rising] from the ashes,” which had nothing to do with the German experience in the dark valley. [ABSTRACT FROM AUTHOR]

Until very recently, the economic ideology that inspired Japanese industrial policy has been largely neglected in social science discussions in English-speaking countries (but see Pyle 1974). It was widely believed that the Japanese experience of economic development had little intellectual foundation. Not only does every educated person in North America know that Western mainstream economics is largely irrelevant to the study of Japanese-type economies, even specialists in Japanese studies believe that neither academic nor government economists played a major role in Japan's high-growth strategy. Academia in general has long indulged in what Saitō Seiichirō (1981:298) calls “a fallacious contrast between the prosperity of the Japanese economy and the desolation of Japanese economics.” These perceptions may be correct in the sense that neoclassical economics has not exerted any notable influence on Japanese development. Academicians, however, have neglected the fact that a group of Japanese economists represented by Arisawa Hiromi (1896–1988), Nakayama Ichirō (1898–1980), and Tōbata Seiichi (1899–1983), who belonged to the generation educated before World War II, played a very important role in the state's policy making. These economists helped the nation to establish an urgent agenda, to identify the future direction of economic development, and to build a theoretical framework for Japan's industrial policy in the context of international pressures and domestic turmoil from the 1930s to the 1960s. Their major propositions, reflected in successive state policies, constituted the core of what Japanese economist Kanamori Hisao (1985:127) calls “Jissen-ha economics” (the economics of actual fighting) – the logic of Japanese industrial policy. [ABSTRACT FROM AUTHOR]

Introduction The last thirty-five years have witnessed some extraordinary changes in the world tobacco industry. For example, the expansion abroad of US cigarette companies (which had been domestically oriented from 1911 to 1952) first led to the break-down of forty years of international co-operation among the major producers (a de facto cartel) in the 1960s and 1970s and, then, to the re-establishment of global ‘equilibrium’ in recent years. This, in turn, signified the emergence of a truly global, highly concentrated transnational cigarette industry. Likewise other changes have had considerable impact on the industry. Medical research in the last three decades has increasingly revealed the lethal side of the industry, implicating smoking with a wide variety of illnesses, usually terminal: lung, mouth, throat and bladder cancers, emphysema, cardiovascular diseases and so forth (USDHEW, 1979). The development of the smoking and health issue in all the industrialised nations has caused stagnating and even declining cigarette sales in those nations, thus leading to a shift in growth to LDCs where, for a variety of reasons, the public health issue is much less salient. The major cigarette firms have therefore turned to LDC markets for future growth. [ABSTRACT FROM AUTHOR]

Introduction The decade of the 1920s was an era of great difficulties for trading companies in Japan. A number of large trading firms became insolvent: Mogi Shōten, Furukawa Shōji and Kuhara Shōji during the crisis of 1920; Takada Shōkai in 1925; and Suzuki Shōten during the financial panic of 1927 were representatives. Moreover, even those trading firms which barely escaped bankruptcy often suffered severely from widely fluctuating incomes which accompanied losses in the worst situation or from stagnating at low income levels as shown for the firms excluding Mitsui Bussan in table 15.1. However, in what was a period of hardships for most trading firms, Mitsui Bussan performed exceptionally well, continuously attaining high profit rates. Its profit rate, as shown in table 15.1, remained almost constant at around 15%, and stood out in sharp contrast to the movement and the level of other traders' profit rates. The purpose of this chapter is to look into the factors behind the superb managerial performance of Mitsui Bussan during the 1920s. The characteristic features of Mitsui Bussan's commodity transactions The close relationship between its commodity transactions and key industries Mitsui Bussan was not a mere trading company but also was active in sideline businesses such as marine transportation, shipbuilding, agencies for ocean transport and insurance, and was rapidly taking on the characteristics of a holding company at this time. [ABSTRACT FROM AUTHOR]

Introduction This chapter sets out with two rather ambitious objectives. The first follows from an attempt to place international economic expansion in the twentieth century in its historical context. One aspect of this expansion has been the evolution of the multinational enterprise (MNE). The aim here is to distinguish four phases in the evolution of the international firm, corresponding to four different periods which appear to have characterised an emerging international economic system since around 1600. The chosen division between periods consequently reflects an essentially macroeconomic rather than a business history perspective. In particular, the objective is to identify the major underlying forces behind international economic growth, and how they have changed as the world economy has become more integrated. It is suggested that the components comprising the mainspring of capital accumulation in each period were at the same time shaping the typical form of expansion of the firm. It is argued that the MNE is representative of the type of international economy that has grown up since 1945, in the sense that the rise of new technologies and products, a wider international division of labour, and the greater integration of production and services across countries have all been associated with the rapid growth of MNEs. However, this argument is seen to suggest rejection rather than support for the commonly held view (especially prevalent among economic nationalists) that MNEs behave sufficiently differently from other firms to warrant an entirely separate kind of analysis. [ABSTRACT FROM AUTHOR]

So much work has already gone into this theme, and so many accomplished experts have contributed papers on the general and theoretical, as well as on the detailed and empirical question of multinational enterprises, that there hardly appears much scope for a further contribution. And yet the sheer volume and variety of submissions – evidence of the pervasive significance of the topic as well as of the persistence of the organisers of this session – mean that some search for main issues might be useful. Looking through the contributions on multinational enterprises produced for this Congress, it is not difficult to detect a small number of themes which recur, and are worth emphasising. The initial point is perhaps an obvious one. It concerns the role of historical research. The problem of multinational firms actually existed in the contemporaneous world of economic observation and political anxiety before it became a fully-fledged and explicit topic of historical inquiry. As with other questions in applied economics (inflation, for example, or economic development), it soon became clear that not only did multinationals have a history, they also only exist in history. The historian's task, then, became the essential one of empirical elucidation: to examine the origins of multinational enterprise and investment, to produce a typology of such activities, and to suggest (through case-studies and comparative work) answers to such questions as: Why do multinational enterprises evolve? [ABSTRACT FROM AUTHOR]

Wars and financial crises ravaged eighteenth-century England and it was widely recognised that businessmen bore the brunt of the dislocation they caused. But how far did such destructive powers lead to the downfall of businesses and cause the fluctuations in the numbers of the bankrupts uncovered at the start of the previous chapter? WAR Between 1700 and 1800 England was involved in five major wars, covering a total of forty-six years: the War of the Spanish Succession (1702–13); the War of the Austrian Succession (1739–48); the Seven Years War (1756–63); the American War of Independence (1775–83); and the Revolutionary War (1793–1802). Some of these wars were more serious than others and conflict was never continuous or consistently destructive. At the very least, it is sensible to remember the distinction introduced earlier between the threat of war, the waging of war and the making of peace. Within this broad chronology, wars need to be looked at in terms of their impact on domestic and overseas trade on both the supply and the demand sides of economic activity. All these concerns centre on the impact of war on the competitive balance in the business world and the changing nature of risk and uncertainty produced. This is not to forget that wars created as well as destroyed opportunities, but just to emphasise that they increased the degree of unpredictability. If financiers or ironmasters could make their fortunes from war, plenty of other businessmen could lose them. On the demand side, the most obvious impact of wars was felt in the closure of foreign markets, especially in Europe and America. [ABSTRACT FROM AUTHOR]

Seven out of ten bankrupts in the eighteenth century were involved in the textiles, food and drink and distribution sectors of the economy. Examining the patterns and causes of bankruptcy in those areas should shed some light on their wider fortunes as well as further fleshing out arguments which have been advanced about the interactions at work between risk and failure. TEXTILES Over the century as a whole, one in four bankrupts was involved in the production and distribution of textiles and clothes. But only a small proportion was involved in the clothing trades. If the contribution of clothes is taken out then textiles accounted for 26 per cent of all bankrupts 1701–20, 23 per cent 1741–60 and 20 per cent 1781–1800. If numbers of bankrupts there failed to grow as quickly as in other areas of the economy, it could be that this simply mirrors the declining importance of textiles within the English economy over the century. Alternatively, it may have been caused by the changing nature of bankruptcy within the various parts of the textile sector as they experienced variable rates of growth. What particularly needs to be examined is whether the rapidly expanding cotton industry suffered a different pattern of bankruptcy from the woollen industry, with its slower evolution. In absolute terms, the number of bankrupts from the textile sector trebled between the first and last decades of the eighteenth century. Deflating this to take account of the possible impact of inflation produces a growth of 122.6 per cent, as against 185.0 per cent for non-textile bankrupts. [ABSTRACT FROM AUTHOR]

During the eighteenth century some 33,000 businesses went bankrupt. More than this number failed of course, but this many found themselves enmeshed in the law of bankruptcy just described. But what does this figure tell us about eighteenth-century enterprise and is it a large or a small total? This and the following four chapters look at changes in the numbers of bankrupts between periods, regions and occupations in an attempt to sketch the pattern of failure, to suggest some broad causes and to indicate its significance. COUNTING BANKRUPTS This chapter has two aims: to outline the ways in which data about bankruptcy were collected and adjusted and, secondly, to examine trend levels of bankruptcy in relation to trend developments within the economy as a whole. The second objective is in fact novel because earlier economic historians have invariably limited their use of bankruptcy to studies of short-term fluctuations rather than long–term developments. High levels of bankruptcy have usually been equated with depression, low levels with prosperity. Over the short run, this equation is true, but over the long run, it is not. If anything, in the eighteenth century prosperity over the long term bred higher levels and rates of bankruptcy. One of the main reasons why bankruptcy has been little used as an economic indicator by historians is because of the manifest problems in finding a reliable data series. The various figures produced by the authors listed in footnote 2 are rarely consistent with one another. [ABSTRACT FROM AUTHOR]

The conclusions in the last chapter were necessarily tentative. Explanations of the patterns of levels and rates of bankruptcy were more in the form of hypotheses than statements of fact. Such uncertainties can be partly dealt with by looking at trend movements in the sectoral composition of bankruptcy and at differential rates of bankruptcy between parts of the eighteenth-century business world. For if it is true that high trend levels and rates of bankruptcy are associated with opportunities and buoyancy and low levels and rates with certainty, stagnation and lack of enterprise, then the composition of bankruptcy should tie up with what historians know about the structural realignments taking place before and during early industrialisation. Prospering parts of the economy such as the Lancashire cotton industry, or declining areas like the Devon woollen trade, should be associated with high and low levels and rates of bankruptcy respectively. Moreover, it has become possible to appreciate better the extent of restructuring within eighteenth-century England following the new and vigorous impetus of the arguments of Crafts and others. Answers to questions such as ‘What share of the business community that went bankrupt was involved in overseas trade or textiles?’ should help confirm perceptions of the relative weights to be attached to the various sectors of the economy at the time. THE OCCUPATIONS OF BANKRUPTS To help identify bankrupts both the London Gazette and the Docket Books gave occupational descriptions of everyone listed. Such evidence has to be handled cautiously for a number of reasons. Some descriptions were very broad, such as ‘merchant’, or had different meanings depending on the social and economic context of the individual. [ABSTRACT FROM AUTHOR]