European Historical Economics Society EHES WORKING PAPERS IN ECONOMIC HISTORY | NO. 39 Agricultural development during early industrialization in a low-wage economy: Saxony, c. 1790-1830 Michael Kopsidis Leibniz Institute of Agricultural Development in Central and East-ern Europe (IAMO) Ulrich Pfister University of Muenster JUNE 2013 EHES Working Paper | No. 39 | June 2013 Agricultural development during early industrialization in a low-wage economy: Saxony, c. 1790-1830 Michael Kopsidis* Leibniz Institute of Agricultural Development in Central and East-ern Europe (IAMO) Ulrich Pfister** University of Muenster Abstract The characteristics of regional paths of industrialization had a deep impact on agricultural development during early industrialization in Germany. From 1840 rising incomes in the course of a “high wage-low energy cost” industrialization based on coal and steel and a rapid urbanization triggered a demand driven agricultural revolution in Northwest Germany. In contrast, Saxony’s early industrialization c. 1800-1860 followed a “low wage-high energy cost” trajectory based on textile production and slow urbanization. The low level and slow growth of income meant that up to 1830 the adaptation of agricultural innovations neither followed demand impulses transmitted through markets, nor did they facilitate inter-regional specialization according to comparative advantage. Rather, regional agriculture ac-commodated to population growth by expanding the cultivation of subsistence crops, mainly potatoes, probably at the detriment of animal husbandry. Whereas the increase of sown area indicates an intensification of land use yield ratios remained at best stable between the early 1790s and the late 1820s. Hence, local supply could barely cope with population growth, and since grain market integration did not evolve over time imports did not com-pensate for the shortcomings of domestic production. Our evidence of a deteriorating food standard goes a long way toward explaining the decline of the biological standard of living during Saxony’s early industrialization. JEL Codes: N93, O13, Q11. Keywords: Agriculture and industrialization, regional specialization, Agricultural Revolution. Acknowledgements: Research support from the Deutsche Forschungsgemeinschaft (grants KO 1823/3-1 and PF 351/7-1) is great-fully acknowledged. We would like to thank Judith Raue and the members of her team Miriam Groschwitz, Sindy Kretzschmar, Nico Martschink, Constanze Reif, Johanna Riese, and Robert Röder for collecting the data in the state archive of Dresden. As well we would like to express our thanks to Timo Eule and Oscar Dube for preparing the data for analysis * Corresponding author: Michael Kopsidis, IAMO, [email protected] **Ulrich Pfister, University of Muenster, [email protected] Notice The material presented in the EHES Working Paper Series is property of the author(s) and should be quoted as such. The views expressed in this Paper are those of the author(s) and do not necessarily represent the views of the EHES or its members Table of Contents List of Tables .......................................................................................................................... iii List of Figures ......................................................................................................................... iv List of Appendix tables ........................................................................................................... v List of Appendix figures ......................................................................................................... vi 1. Introduction ............................................................................................................................ 1 2. Background: Demand and supply forces in agricultural development .................................. 3 3. Sources and data preparation .............................................................................................. 14 4. Growth and structural change of output ............................................................................. 17 5. Sources of output growth: Seed quantities and yield ratios ................................................ 24 6. Regional experiences ............................................................................................................ 40 7. Food standards between subsistence production and market ........................................... 47 8. Conclusion ............................................................................................................................ 57 Appendix ................................................................................................................................... 69 Archival Sources for output and population statistics ......................................................... 69 Conversion rules ................................................................................................................... 69 Tables and Figures ................................................................................................................ 69 List of Tables Table 1: Population size, 1750-1870 ........................................................................................... 4 Table 2: Non-agricultural population (Kingdom of Saxony, excluding Oberlausitz) ................... 5 Table 3: Urban growth according to community size, Kingdom of Saxony 1750-1834 .............. 6 Table 4: Meat consumption per head in Saxony, 1835-1890 (sum of pork and beef) ............... 7 Table 5: Trend estimates of price of meat and butter relative to grain in Leipzig (OLS estimates, t values in parentheses) ............................................................................................. 9 Table 6: Farm structure in 1853 ................................................................................................ 10 Table 7: The evolution of sheep stocks, 1779-1873 .................................................................. 11 Table 8: Output quantities (in million grain equivalents) and growth of total gross crop production, 1772-1812 and 1815-1830 .................................................................................... 18 Table 9: Shares of major crops in total gross crop output in per cent (Saxon in current borders, 1791-1812 and 1815-1830) ........................................................................................ 18 Table 10: Yield ratios in Saxony, 1791-1830 ............................................................................. 25 iii Table 11: Exponential trend growth rates of yield ratios for selected regions, 1791-1830 (in per cent) .................................................................................................................................... 28 Table 12: Rate of change of seed quantities for selected regions, 1791/93-1810/12 (per cent, annual growth rate)................................................................................................................... 31 Table 13: Rate of change of seed quantities ............................................................................. 32 Table 14: Sources of grain output growth * .............................................................................. 35 Table 15: Regional grain yield fluctuations, 1791-1830* .......................................................... 37 Table 16: Agricultural growth of highly fertile lowland districts and of upland industrial districts in comparison, 1791-1830 (annual exponential trend growth rates, in per cent) ..... 41 Table 17: Trends in regional specialization of agricultural production in Saxony, 1791-1830 (linear trend growth rates of the variation coefficient, in per cent) ........................................ 42 Table 18: Agricultural growth in Erzgebirger Kreis and Vogtländer Kreis in comparison, 1791- 1830 (exponential trend growth rate of gross output, in per cent) ......................................... 44 Table 19: Net output per capita (grain equivalents) ................................................................. 50 Table 20: Net Share of potatoes in staple crop production per capita, 1791-1829 (per cent)* ................................................................................................................................. 52 Table 21: Net output per capita 1791/93-1809/11 (grain equivalents) ................................... 54 Table 22: Net output per capita 1815/17-1827/29 (grain equivalents) ................................... 56 List of Figures Figure 1: Saxony in 1792 and after 1815 ..................................................................................... 3 Figure 2: Prices of meat, butter and oats relative to rye in Leipzig, 1765-1860 ......................... 8 Figure 3: Total gross crop production in Saxony, 1791-1812 and 1815-1830 (million grain equivalents) ............................................................................................................................... 19 Figure 4: Output of major crops, 1791-1830 (in million grain equivalents) ............................. 19 Figure 5: Structure of total gross crop production for Saxony, the Erzgebirger Kreis, and the Leipziger Kreis, 1791-1830 (shares in per cent) ........................................................................ 20 Figure 6: Yield ratios in Saxony, 1791-1830 .............................................................................. 26 Figure 7: Yield ratios