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Frederick Nussbaum


Harper Torchbook, NYC., 1953, 304 pgs., index, notes, bibliography, map, paperback


Reviewer comment
This book provides details on the history of the critical period in European History that included the important stage in the advancement of bourgeois status and political- economic power. Much of the development that Dr. McCloskey describes in her great trilogy on the bourgeois took place during this period, especially on the Netherlands. And it was high point for the power of the 'kingly state' especially in France. And also the remaining life of the Stuart dynasty in England and strengtheing of the power of the bourgeois through Parliament. Plus the creation of the modern connection between money creation and banking.


Chapter 1 - Cosmos: A New Heaven and a New Earth


Chapter 2 - Baroque
This chapter contains description of the bourgeois society depicted in art.


Chapter 3 - Leviathan: The Organization of Power I
The chapter and the following one describe details of events and actors in the continued replacement of the 'princely state' with the more powerful 'kingly state' and explained by Philip Bobbitt in Shield of Achilles..


Chapter 4 - Leviathan: The Organization of Power II


Chapter 5 - Anarchy in International Relations


Chapter 6 - The Search for God


Chapter 7 - Mammon: The Evolution of the Capitalist Economy

I The Social and Intellectual Advance of the Businessman;

"The later part of the seventeenth century was the decisive period in the accumulation of bourgeois wealth. The reconstruction after the devastating period of war gave scope to the application of economic energy".

Dr. McCloskey dates this to the following century. Dr. Nussbaum describes the evolution in detail, especially the enlargement of the cities, which generated more and more commerce just to feed the population. Investment in land expanded. Raw materials in the earth were sought and developed.

"With the expansion of economic activity and its depersonalization in capitalist forms, businessmen becaue magnates and magnates business men" "As late as the end of the sixteenth century the commercial 'upper crust' in France was largely foreign, consisting of Italians, Spanish and Portuguese Jews, Swiss and Dutch". "Private banks were numerous but mostly in the hands of Italians". "The newly rich soon learned to live like lords. They built themselves great houses, They sent their sons to college with the sons of nobles and princes. Impoverished nobles counted themselves fortunate to marry into the family of a magistrate or a financier". "Government increasingly required businessmen". "the passion for profit did not fail to infect the nobility". "Business had even become a proper subject for a learned treatise".

II Urbanization and the Economy;

"The pattern of urbanism in Europe was changing. Old towns were declining and new towns were growing and producing new types of institutions".

Dr. Nussbaum describes in detail the expansion of Paris, Naples and London and mentions many other cities that either declined or grew.
"The big towns were developing characteristic urban institutions. Public transportation became available in Paris and London. Retail shops of a highly specialized character appeared in both cities. The conveniences of city life were developing. Free news sheets appeared in London in 1675 and 1679". "Colbert and even the king himself recognized the bad effects of existing restrictions on the grain market. In England the medieval tradition and form of the grain market was broken down in the same way". "In similar fashion the increasing demand of London for meat was surpassing the supply of cattle in near-by Norfolk and drawing as reinforcement the Highland cattle of Scotland. Expanding demand was also breaking down the old local markets in the English cloth industry".

III The Transportation Net;

"The development of the towns was closely paralleled by a corresponding development of transportation".

Dr. Nussbaum describes the many facets of commerce on the high seas as well as inland transportation and the commercial freighting systems that used these.

IV Money and Credit;

"The institutions of money and credit were still in a formative stage. In the last half of the seventeenth century the problem of money supply to carry on the growing economic life was being relatively well solved, for the expansion of the money supply was made possible by the continuing inflow of silver from America".

While the expansion of silver from America was declining, silver continued to flow in. And it was augmented by increased importation of gold from west Africa by the Dutch and English. Sumggling and buccaneering provided additional gold and silver. Much silver then continued to the Middle and Far East in exchange for luxury goods. Meanwhile, the decline of Spanish industry forced the Spain to exchange much silver for imported goods not only for Spain but to send to its American empire.

"As a result of these activities, legitimate and illegitimate, Holland, France and England were well supplied with cash".

Dr. Nussbaum describes this activity in detail. "The credit system of Europe was, in general, still comparatively undeveloped, but the use of credit instruments was expanding.

"Bills of exchange became flexible and were adequately legalized. Increasingly protected by the municipal law of the several states, bills were exchanged by simple endorsement instead of by separate documents and through the eighteenth century they continued to serve as a principal means of payment in interregional trade". Dr. Nussbaum discusses with specific names and dates the founding of many banks in Italy and throughout north western Europe well prior to the creation of the Bank of England.

"In France and England the involvement of powerful financial interests wish the governments served to prevent or delay the organization of banking as a public service". "Ways of getting other people's money for use in enterprise did exist. 'Grubstaking' mining enterprises, which had been so profitable for the Fuggers, persisted".

He mentions many more examples.

V The Stock Company;

"Even more indicitive of the future were the new companies that were becoming a common form of association in business activity. The old notion of the occasional, personal association was giving way to the concept of the stock company, a permanent association of credits, in which the property of the stockholder was merely a share in the company, not a claim against the company. The new feature was what today is familiar. The company became a continuous firm and the members became stock holders. From the balance sheet point of view, the change enabled the company to use the rather cheap credit available and thus by 'leverage' pile up some attractive dividends". "The stock company remained for a long time the character of an arm of the state rather than of a form of private business .It was chartered, regulated, favored with monopolies, politically dependent". "Marine insurance was highly developed. Amsterdam remained the unchallenged capital of the business. Its insurance chamber maintained sixty warships to protect its customers from pirates in the Baltic". "Fire and life insurance were becoming more clearly defined".

Today insurance companies hope for the assistance of national navies to protect ships from pirates.

VI The Advance of Agricultural Techniques; "Although the towns were growing rapidly, Europe remained through the seventeenth century overwhelmingly an agriculture economy. From 80 to 90 per cent of the population was rural and even that index is to be further weighted by the persistence to a degree now unfamiliar of agricultural activity in the towns, even in the great towns". "But manorial lordship had been generally commuted to money rents".

The unexpected results of this we will learn on books on 19th century economy. Dr. Nussbaum describes the developments in agriculture in detail.

VII The Transformation of Industry

"The handicraft system remained the dominant industrial form. It had been radically altered in England by the Elizabethan 'Statue of Apprentices' and, in the France of Louis XIV, by Colbert's subordination of the corporations to his all-inclusive system". "In the latter part of the seventeenth century the typical form of enterprise in industry was the vaguely and variously named domestic system, otherwise putting-out or, in German, Verlag".

This was the system employed by merchants to secure the production of the goods they increasingly were able to exchange in larger markets.
"The factory system which in this time was developing at a relatively rapid rate, was as old as the smelters, the shipyards, the sugar refiners and the other large-production processes requiring combinations of capital and labor force, beyond the range of either the gilds or the putters-out. "The textile industries enjoyed a dominance in size and geographical extension that gave change in that area a greater social significance than more radical novelties in other areas. The combination of various technical processes under a single management was fairly frequent in the latter part of the seventeenth century, although it is to be remembered that most of these concentrations consisted of a group under one roof surrounded by an even larger group of outworkers".

The chapter contains the history of events and concepts related to the changes in money and business related in Felix Martin's book on Money. ,, Frank Trentmann's Empire of Things, and to David Hacket Fischer's The Great Wave and Joel Mokyr's Culture of Growth


Chapter 8 - The Expansion of Europe


Chapter 9 - Bibliography


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