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Eine darüber hinausgehende unerlaubte Verwendung, Reproduktion oder Weitergabe einzelner Inhalte oder Bilder können sowohl zivil- als auch strafrechtlich verfolgt werden. 9 German Entrepreneurial Networks and the Industrialization of Milan MONIKA POETTINGER Introduction: Entrepreneurial Migrations in the Process of Industrialization In the eighteenth and nineteenth centuries ‘commerce’, though a measurable entity that was already a primary subject of statistical and accounting works,1 had no life of its own. It existed only as the result of the operation of mercantile networks,2 wide-ranging eco- nomic agents acting through a complex set of personal relationships based on trust and barely reflected in accountable relations between or within firms. The triggering effect that these networks had on eco- nomic development and industrialization was reflected in both eco- nomic and social changes. The exchange of goods and money through the creation and maintenance of trade and payment routes was only one aspect of the activity of merchant groups at the time under consideration. Trade flows and comparative advantages represented the past decisions of merchants and reflected older information and established manufac- turing capabilities. But merchant networks also operated by project- ing into the future. In order to spread risks, enlarge their networks, and increase profitability, they constantly compared not only prices but also factor prices and production costs, assessed the profitability of new technologies, and organized production accordingly, chang- ing routes and seeking new entrepreneurial opportunities. Mainly as 1 William Playfair, The Commercial and Political Atlas and Statistical Breviary (London, 1786; repr. New York, 2005). 2 On the operation of networks as an alternative to institutionalized firms and markets in international trade, see Mark Casson and Howard Cox, ‘In - ter national Business Networks: Theory and History’, Business and Economic History, 22 (Fall 1993), 42–7. 249 MONIKA POETTINGER a consequence of this second kind of activity, production processes were introduced to different countries and production factors were moved. Adam Smith observed simply: ‘Such manufactures, there- fore, are the offspring of foreign commerce’; ‘they have been intro- duced . by the violent operation, if one may say so, of the stocks of particular merchants and undertakers, who established them in imi- tation of some foreign manufactures of the same kind.’3 In the reality of nineteenth-century Europe, such ‘violent operation’ implied deli- cate factor movements and the nurturing of local human capital: a difficult process confronted with many barriers. It was the cos- mopolitanism of merchants, their ability to act internationally and to organize the production of goods wherever they considered it prof- itable, that enabled the spread of industrialization. Their role was at times misjudged or even condemned by contemporaries. The history of merchant houses, mostly private banks, in Conti - nental Europe during the century of industrialization has undergone a profound reassessment,4 but we cannot yet give an unequivocal answer as to the role of merchants and their networks in the process of industrial dissemination and the managing of entrepreneurial migrations.5 Entrepreneurial migrations have mostly been studied as vehicles for technological transfer,6 while their originating motiva- 3 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London, 1852), 165–6. 4 See Stanley Chapman, The Rise of Merchant Banking (London, 2006); and Youssef Cassis, Capitals of Capital: A History of International Financial Centres 1780–2006 (Cambridge, 2006). For Frankfurt see Udo Heyn, Private Banking and Industrialization (New York, 1981). For Italy see Luciano Segreto, ‘I banchieri privati e l’industrializzazione italiana’, Imprese e Storia, 24 (2001), 273–306; and Giandomenico Piluso, L’arte dei banchieri (Milan, 1999). An exhaustive bibliography of earlier works may be found in Sidney Pollard, ‘Industrialization and the European Economy’, Economic History Review, 26/4 (1973), 644–5. 5 The literature on the role of merchants in pre-industrial economies is im - mense. For a bibliography of merchants’ guides, textbooks, and treatises see e.g. the volumes edited by Jochen Hoock and Pierre Jeannin (eds.), Ars Mercatoria: Handbücher und Traktate für den Gebrauch des Kaufmanns, 1470–1820. Eine analytische Bibliographie, 3 vols. (Paderborn, 1991–2001). 6 See Paul Mathias, ‘Skill and the Diffusion of Innovations from Britain in the Eighteenth Century’, Transactions of the Royal Historical Society, 25 (1975), 250 German Entrepreneurs and the Industrialization of Milan tions, diffusion lines, methods of financing and, above all, their social consequences,7 have been severely neglected.8 As a result, the pres- ence of foreign entrepreneurs in all states of Continental Europe dur- ing the industrialization process has merely been noted,9 but not explained. In the case of Lombardy,10 still one of the most industrialized and richest regions of Europe, historians have usually dealt with entre- 93–113; Sidney Pollard, Peaceful Conquest: The Industrialization of Europe 1760– 1970 (Oxford, 1981); and Ian Inkster, ‘Mental Capital: Transfers of Know - ledge and Technique in Eighteenth-Century Europe’, Journal of European Economic History (Fall 1990), 403–41. 7 On the social impact of entrepreneurial migrations on England see Inkster, ‘Mental Capital’, 424. On Italy, see Agopik Manoukian, ‘Le matrici della fab- brica in Italia’, Studi di Sociologia (Apr.–Sept., 1972), 369–77. 8 On the importance of the process of industrial dissemination, Sidney Pollard observes: ‘It is this dynamic element, the method of transmission, which should be a major object of study, but has inevitably been lost sight of in the traditional approach. To change the metaphor, we have tended to treat each country like a plant in a separate flower pot, growing independently into a recognizable industrialized society according to a genetic code wholly contained in its seed.’ Sidney Pollard, ‘Industrialization and the European Economy’, in Joel Mokyr (ed.), The Economics of the Industrial Revolution (Totowa, NJ, 1985), 166. 9 In cities such as Berlin, Vienna, and Frankfurt foreigners accounted for between 30 and 40 per cent of entrepreneurs until the 1830s, when this figure began a steady decline through the 1860s to the turn of the century. On this see Wolfgang Meixner, ‘Imprenditori austriaci nel XIX secolo’, in Luigi Trezzi (ed.), A che punto è la storia d’impresa? Una riflessione storiografica e due ricerche sul campo (Trento, 1995) 58–78; Wolfgang Meixner and Rupert Pichler, ‘Austrian Entrepreneurs in the Nineteenth Century’, Historical Social Research, 16 (1991), 208–9; Dieter Gessner, ‘Frühindustrielle Unternehmer im Rhein–Main Raum (1780–1865)’, Scripta Mercaturae, 28 (1994), 121–87; Roberto Tremelloni, Storia dell’Industria italiana contemporanea dalla fine del Settecento all’Unità Italiana (Turin, 1947), 136–7; Rolf Straubel, Kaufleute und Manufaktur-Unternehmer (Stuttgart, 1995), 130. 10 On the historiography of Lombardy’s economy during industrialization see Mario Romani, ‘Aspetti e problemi di storia economica lombarda nei sec- oli XVIII e XIX’, Vita e Pensiero (Milan, 1997), pp. xv–xxix; and Angelo Moioli, ‘L’industrializzazione in Lombardia dall’Ottocento al primo Novecento: un bilancio storiografico’, in Lucio Avagliano (ed.), L’Italia industriale nelle sue origini: Bilancio storiografico (Naples, 1986), 17–59. Also published in Annali 251 MONIKA POETTINGER preneurial migrations in only a few sentences and a cursory list of names,11 while foreign entrepreneurs have been examined exclusive- ly from the point of view of entrepreneurial minorities,12 or as indi- vidual case studies.13 The link between entrepreneurial migrations and international mercantile networks has so far been unexplored, and the industrialization of the region mainly linked to the growth effect triggered by the rich trade in silk.14 The ‘moving principle’ behind Lombardy’s economic develop- ment has thus been reduced to the accountable entity of ‘commerce’. But international merchants’ networks not only transformed the agri- cultural richness of Lombardy into exportable goods and import capacity; they also fostered a new entrepreneurial culture and the acceptance of scientific innovation, financed countless ventures in established as well as new manufactures, imported innovative pro- duction processes, specialized workers, and managerial forces, founded commercial journals, favoured statistical appraisal of eco- nomic quantities, and set up the Society for the Encouragement of Arts and Science. The first section of this essay will highlight the direct impact of Lombardy’s growing trade on the local structure of production: agri- cultural specialization and manufacturing stagnation. Further sec- tions will then assess the