Case Studies on Modern

European Economy

Entrepreneurs, Inventions, Institutions

Ivan T. Berend

Ö Routledge fim Taylor & Francis Group LONDON AND NEW YORK Contents

Preface

Introduction Notes 10

1 The power of entrepreneurship Introduction 11 Mayer Amschel Bauer and the foundation of the House of Rothschild 12 James Nasmyth, the pioneer of standardized mass production of tools and machines 16 The Morozov dynasty: from illiterate serfs to Russia's richest industrialists 19 Werner and Wilhelm Siemens and the second industrial revolution 21 William R. Morris and the British car industry 25 Louis Renault and the French car industry 28 Emil and Walther Rathenau: the birth of the German electric and electrochemical industries 32 Jewish entrepreneurship in Hungary 35 Women in business and management 38 The birth of the Vizcaya iron industry in Spain 41 Notes 43

2 The power of institutions: economic regimes and the permanent renewal of Introduction 46 The cycle of protectionism and laissez-faire in the 49 The birth and renewal of capitalism: colonization and decolonization 53 German wartime Planwirtschaft: the cradle of new economic regimes 57 Contents The economic regime of fascist modernization dictatorship 60 The non-market, centrally planned economic regime 62 The Nazi Grossraumwirtschaft and the Soviet-led Comecon—regional autarchy 65 Trade unions and Sozialpartnerschaft 68 Renewal of capitalism: the 72 Renewal of capitalism: the regulated market system 75 The European Union's redistributive system: towards a homogenous Europe 79 Globalization: its winners and losers 81 Notes 85

The power of ideas and inventions Introduction 90 Enlightenment and Romanticism: the ideas of modern society and the nation-state 91 Liberal and secular values that formed the modem capitalist attitude 95 Pre-modern culture that blocked the road to the modern capitalist transformation 99 The two books that contributed the most to creating the modern world: Newton and Darwin 102 Inventing and reinventing agriculture 105 Revolutionizing transportation with the steam engine 108 Killing the killers: from vaccinations to antibiotics 111 The creation of synthetic dyes 114 Electrical power and its applications 116 From the macadam road to the autobahn 118 The birth of the movie 122 Women in work and on the labor market 124 Wernher von Braun: the visionary pioneer of the missile technique—and an "apolitical" war criminal 128 The computer, the internet, and the world wwfe wW) 7J2 Notes 134

Pioneering companies Introduction 140 em/wre/ compamej f&e cofMpamg/ em/way 747 The port of Rotterdam—"port of Europe" 144 Rolex—one of the most successful Swiss watch-makers 146 &W/ ü "fhòrzgwej coßecfzvgj" m industry 148 The Ganz Works: a cutting edge engineering company in a less developed country 150 Contents ix The Thyssen empire: from local to global 152 The Universal Suez Ship Canal Company 155 The Orientalische Eisenbahnen company and German colonization plans 158 Vickers-Armstrong: the multi-arms military giant 160 The Dutch Philips: from the electrical to the electronic age 164 "Guinness is good for you" 167 The first airlines: Air France, KLM, and Lufthansa 169 Gucci 171 Notes 174 5 From the rise of industrial cities to post-industrial suburbanization 176 Introduction 176 The world's first industrial city: 177 Lyon: the silk center of Europe 179 Turin: the industrial capital of Italy 182 The emergence of the largest urban industrial agglomeration: the Ruhrgebiet 186 Budapest: an old capital city becomes a new industrial center 7&S The rise of Brno (Brünn), Central Europe's foremost industrial city 190 Lódz—the "Polish Manchester" 193 Rebuilding of Paris and Prague in the second half of the nineteenth century 196 Humanizing the cities: the garden city and pedestrianization 200 Stalin's industrial fortresses: Stalingrad and Stálinváros 203 The emergence of post-industrial cities: suburbanization 207 The two major types of urban sprawl 209 Notes 211 6 Bubbles, great depressions: economic cycles 214 Introduction 214 The pharaoh's dream and modern economic cycles 217 A shocking new recognition: Nikolai Kondratiev and the long economic cycles 219 From the Dutch tulip bubble (1637) to the Irish housing-market

The greatest economic crash ever: the Great Depression

Ivar Kreuger's suicide in 1932: the sensation and symbol of the Great Depression 228 The anatomy of bank crashes in the 1930s 232 Contents History's greatest inflation: Hungary 1938-46 234 How to make a state bankrupt: Greece, 1981-2010 237 The European peripheries and the 2008-12 economic crisis 239 Notes 242 Index