Early Capitalism in Germany

The Emergence of Early Capitalism (Germany)

Augsburg

• By Western European standards, the South German cities were not large: they had populations of 18,000–20,000.
• Their development began later, but it was rapid.
• From the 14th century, linen and barchent weaving (a fabric made with one wool thread and one plant-fiber thread, making it cheaper) was practiced in the city.
• Production of fine linen: gyolcs (from this time on, underwear and bed linen came into use).
• Its manufacture brought rapid development; it satisfied mass demand rather than luxury needs.
• The rise of the Fugger family illustrates the development of trade: their wealth amounted to 2 million (1527), 5 million florins (1560), four times the wealth of the Medici.
• Hans Fugger migrated here in 1367; later he became the city's first guild master.
• Jakob Fugger the Elder married the wealthy daughter of a goldsmith; Jakob Fugger the Younger was a brilliant businessman.
• The other brothers operated as intermediaries across Europe.
• The textile industry was the modest beginning, a good marriage gave momentum, and mining brought enormous wealth.
• Mining: without metals Europe could not exist; until the discovery of America, Europe's silver demand had to be met from European mines.
• Large-scale money circulation required precious metals, so metal production was expanded:
• discovery of new mines;
• technical innovations were needed for deeper mining (drainage);
• technological development (extracting more silver from ore).
• Specialists and engineers were required; Agricola died in 1555 (+ De re metallica).
• Water was drained with waterwheels (treadmills), air was supplied with leather bellows; all this required major capital investment.
• Large mines existed in the German Ore Mountains, the Tyrolean Alps (Falkenstein), Bohemia (Kutná Hora), and Hungary (Besztercebánya/Banská Bystrica).
• Where copper and silver were mined together, they had to be separated in a liquation furnace using lead (the center of lead trade was Kraków).
• Copper was important in shipbuilding and cannon casting.
• Blacksmithing had a sacred character and required serious expertise; János Thurzó of Bethlenfalva was an outstanding specialist.
• In 1494 the Thurzó–Fugger company was founded: the Fuggers provided the capital, the Thurzós the expertise.
• The greatest profits, however, came from founding banks: the Fuggers acquired the right to manage papal revenues.
• From this wealth they lent money to rulers (e.g., the Habsburgs).
• They also intervened in politics (1515 Jagiellonian–Habsburg marriage treaty; 1519 election of Charles V as emperor—he was loaned 500,000 florins).
• Several loans were never repaid; later they turned away from finance and purchased landed estates.
• The commercial axis was first shaken during the plague, and a second time in the 16th century.