Dynamics of “Overlapping Clusters”: Economic Development in the Industrial Region of Aachen, 1800‐1860

The economic transition characterizing the process of European industrialization in the 19th century was concentrated on regions rather than on states. In the first half of the 19th century, the region of Aachen (in the west of Prussia) pioneered on the territory of the German states and developed to a powerful industrial region. The implementation and diffusion of the factory system and the economic impact of adapted and new institutions make the core of this paper. Reciprocal interconnections between firms of different clusters shaped the region and created economic dynamics. Investments transgressed the boundaries of single industries and new industries emerged. One important feature of the regional production system was cross-sectional knowledge transfer; a second was institutions supportive to this process

DER STEINKOHLENBERGBAU IN DER AACHENER REGION / 1780-1860

In the early 19th century coal mining in the region of Aachen (Prussian Rhine Province) developed to an industrial scale within few decades production was mechanised and new types of industrial organization emerged that allowed for concentration on production and economies of scale. The region hosted two mining areas (the Wurm area and the Inde area) showing rather different patterns of development; while the industry on the Inde was al-ready concentrated at the turn of the century, and industrial modes of production emerged earlier, the industry on the Wurm developed slowly more slowly. Decentralized ownership prohibited scale economics before the mid-1830s. Then, new joint stock companies allowed for concentration of ownership, rationalisation of production and efficient governance. The analysis shows that these different patterns result from different pre-industrial institutional arrangements that were only harmonized during the French occupation of the Rhineland. The ms. [written in German] containes 189p., 24 figures and maps, 49 tables on regional industrial production; the data is available from the author

Industrial and institutional revolution in the district of Aachen (Aix‐la‐Chapelle), 1800‐1860

In the first half of the 19th century, the industrial district of Aachen was a small dynamic economic region in the West of the Prussian Rhineland. It was a leading industrial region in terms of production and a region in which modern economic institutions advanced modern industrial organizations. The regional institutional arrangements were partly based on the French law:1 During the French Revolutionary Wars, the West of the Rhineland had been a part of France with the region of Aachen (see maps 1 and 2) forming the Département de la Roer. After the French defeat in 1814, the Rhineland was integrated as the Rhineprovince into the Prussian State, but with very few exceptions the French legal system continued. The French code de commerce rather than the Prussian civil law constructed the norms of business and commercial activities2 and institutional arrangements that had emerged in the ‘French period’ continued to influence regional economic development. Not only property rights and civil rights, also other institutions of French origin like chambers of trade and commerce, commercial courts, or collective institutions for the settlement of work related conflicts shaped economic behaviour. 3 New Prussian laws did not dramatically influence regional economic development; only the Railroad Law (1838) and the Prussian Joint Stock Companies Law (Preußisches Aktiengesetz) of 1843 had a certain impact. Just like the General German Trade Law (Allgemeines deutsches Handelsgesetzbuch) of 1861, the Joint Stock Company Law was based on French ideas and aimed at modernizing the Prussian economy. It perhaps helped developing the eastern parts of Prussia towards a more capitalistic economy; for the region of Aachen it mainly introduced more oversight from the Prussian State. The Prussian integration of the Rhineland did, of course, also induce some economically relevant change; this regards e.g. the introduction of the Prussian currency or the Prussian trade union. These aspects will be discussed later

Why did early industrial capitalists suggest minimum wages and social insurance?

Today the European welfare states are strongly challenged and it is heavily debated how much social security a society should provide and how much private insurance is possible. This article goes back to the origins of the German welfare state. In the 1830s, industrialists from the district of Aachen (Prussian Rhineprovince) suggested to implement collective labour rules regulating working hours and wages. In the 1860s – 20 years before Bismarck – they proposed a mandatory pension system with equal contributions of employers and employees; they suggested labour conflict resolution by joint arbitration panels of employers and labour representatives. The proposals did not gain support from the Prussian ministries arguing collective agreements would violate freedom of contracting. Entrepreneurs demanding social welfare and the Prussian state defending economic liberalism – this challenges the perception of the Bismarckian welfare state as a means to reconcile labour with the German state. Yet, in the early 19th century the district of Aachen was the most advanced economic region in Prussia in regard with industrial employment and modern industrial organisation. Producing quality goods for the world markets, the industrialists aimed at stabilizing the social environment and reconciling labour with the capitalist society. Their motivation, however, was not based on philanthropy; it was guided by economic aims and collective selfinterest. Analysing ‘social policy’ as a capitalist aim, the paper puts the German welfare state in a new perspective. By doing this it also wants to contribute to the discussion on the future of the modern welfare states, because if the argument presented here holds it might have implications for the possibility of privately solving social problems

Dynamics of Overlapping Clusters: Industrial and Institutional Revolution in the Industrial District of Aachen, 1800‐1860

The economic transition characterizing the process of European industrialization in the 19th century was concentrated on regions rather than on states. In the first half of the 19th century, the region of Aachen (in the west of Prussia) pioneered on the territory of the German states and developed to a powerful industrial district. The implementation and diffusion of the factory system and the economic impact of adapted and new institutions make the core of this paper. Reciprocal interconnections between firms of different clusters shaped the region and created economic dynamics. Investments transgressed the boundaries of single industries and new industries emerged. One important feature of the regional production system was cross-sectional knowledge transfer; a second was institutions supportive to this process

Dynamics of Overlapping Clusters: Industrial and Institutional Revolution in the Industrial District of Aachen, 1800‐1860

The economic transition characterizing the process of European industrialization in the 19th century was concentrated on regions rather than on states. In the first half of the 19th century, the region of Aachen (in the west of Prussia) pioneered on the territory of the German states and developed to a powerful industrial district. The implementation and diffusion of the factory system and the economic impact of adapted and new institutions make the core of this paper. Reciprocal interconnections between firms of different clusters shaped the region and created economic dynamics. Investments transgressed the boundaries of single industries and new industries emerged. One important feature of the regional production system was cross-sectional knowledge transfer; a second was institutions supportive to this process

Dynamics of “Overlapping Clusters”: Economic Development in the Industrial Region of Aachen, 1800‐1860

The economic transition characterizing the process of European industrialization in the 19th century was concentrated on regions rather than on states. In the first half of the 19th century, the region of Aachen (in the west of Prussia) pioneered on the territory of the German states and developed to a powerful industrial region. The implementation and diffusion of the factory system and the economic impact of adapted and new institutions make the core of this paper. Reciprocal interconnections between firms of different clusters shaped the region and created economic dynamics. Investments transgressed the boundaries of single industries and new industries emerged. One important feature of the regional production system was cross-sectional knowledge transfer; a second was institutions supportive to this process

DER STEINKOHLENBERGBAU IN DER AACHENER REGION / 1780-1860

In the early 19th century coal mining in the region of Aachen (Prussian Rhine Province) developed to an industrial scale within few decades production was mechanised and new types of industrial organization emerged that allowed for concentration on production and economies of scale. The region hosted two mining areas (the Wurm area and the Inde area) showing rather different patterns of development; while the industry on the Inde was al-ready concentrated at the turn of the century, and industrial modes of production emerged earlier, the industry on the Wurm developed slowly more slowly. Decentralized ownership prohibited scale economics before the mid-1830s. Then, new joint stock companies allowed for concentration of ownership, rationalisation of production and efficient governance. The analysis shows that these different patterns result from different pre-industrial institutional arrangements that were only harmonized during the French occupation of the Rhineland. The ms. [written in German] containes 189p., 24 figures and maps, 49 tables on regional industrial production; the data is available from the author

1780-1860

In the early 19th century coal mining in the region of Aachen (Prussian Rhine Province) developed to an industrial scale within few decades production was mechanised and new types of industrial organization emerged that allowed for concentration on production and economies of scale. The region hosted two mining areas (the Wurm area and the Inde area) showing rather different patterns of development; while the industry on the Inde was already concentrated at the turn of the century, and industrial modes of production emerged earlier, the industry on the Wurm developed slowly more slowly. Decentralized ownership prohibited scale economics before the mid-1830s. Then, new joint stock companies allowed for concentration of ownership, rationalisation of production and efficient governance. The analysis shows that these different patterns result from different pre-industrial institutional arrangements that were only harmonized during the French occupation of the Rhineland. The ms. containes 189p., 24 figures and maps, 49 tables on regional industrial production