The text is taken from my copy of FIELDS, FACTORIES AND WORKSHOPS: or Industry Combined
with Agriculture and Brain Work with Manual Work, Thomas Nelson & Sons, London, Edinburgh, Dublin and New York, 1912.

X.-THE SMALL INDUSTRIES IN GERMANY.

The literature of the small industries in Germany being very bulky, the chief works upon this subject may be found, either in full or reviewed, in Schmoller’s Jahrbucher, and in Conrad’s Sammlung national-okonomischer und statistischer Abhandlungen. For a general review of the subject and rich bibliographical indications, Schonberg’s Volkwirthschaftslehre, vol. ii., which contains excellent remarks about the proper domain of small industries (p. 401 seq.) as well as the above-mentioned publication of K. Bucher (Untersuchungen uber dies Lage des Handwerks in Deutschland), will be found most valuable. The work of O. Schwarz, Die Betriebsformen der modernen Grossindustrie (in Zeitschrift fur Staatswissenschaft, vol. xxv., p. 535), is interesting by its analysis of the respective advantages of both the great and the small industries, which brings the author to formulate the following three factors in favour of the former: (1) economy in the cost of motive power; (2) division of labour and its harmonic organization; and (3) the advantages offered for the sale of the produce. Of these three factors, the first is more and more eliminated every year by the progress achieved in the transmission of power; the second exists in small industries as well, and to the same extent, as in the great ones (watchmakers, toymakers, and so on); so that only the third remains in full force; but this factor, as already mentioned in the text of this book, is a social factor which entirely depends upon the degree of development of the spirit of association amongst the producers.

A detailed industrial census having been taken in 1907, in addition to those of 1882 and 1895, most important and quite reliable data showing the importance and the resistance of the small industries were brought to light, and a series of most interesting monographs dealing with this subject have been published. Let me name, therefore, some of them which could be consulted with profit: Dr. Fr. Zahn, Wirtschaftliche Entwicklung, unter besonderer Berucksichtigung der Volkszahlung, 1905, sowie der Berufs und Betriebszahlung, 1907; Sonderabdruck aus der Anaalen des Deutschen Reichs, Munchen, 1910 and 1911; Dr. Josef Grunzel, System der Industriepolitik, Leipzig, 1905; and Der Sieg des Industrialismus, Leipzig, 1911; W. Sombart, “Verlagssystem (Hausindustrie)”, in Conrad, Handworterbuch der Staatswissenschaften, 3te Auflage, Bd. VIII.; R. van der Borght, Beruf, Gesselshaftliche Gliederung und Betrieb im Deutschen Reiche, in Vortrage der Gehe-Stiftung, Bd. II., 1910; and Heinrich Koch, Die Deutsche Hausindustrie, M. Gladbach, 1905. Many other works will be found mentioned by these authors.

In all these books the reader will find a further confirmation of the ideas about the small industries that are expressed in chapters vi. and vii. When I developed them in the first edition of this book, it was objected to me that, although the existence of a great number of small industries is out of question, and although their great extension in a country so far advanced in its industrial development as England was not known to economists, still the fact proves nothing. These industries are a mere survival; and if we had data about the different classes of industry at different periods, we should see how rapidly the small industries are disappearing.

Now we have such data for Germany, for a period of twenty-five years, in the three censuses of 1882, 1895, and 1907, and, what is till more valuable, these twenty-five years belong to a moment in the life of Germany when a powerful industry has developed on an immense scale with a great rapidity. Here it is that the dying out of the small industries, their “absorption” by the great concerns, and the supposes “concentration of capital” ought to be seen in full.

But the numerical results, as they appear from the three censuses, and as they have been interpreted by those who have studied them, are pointing out to quite the reverse. The position of the small industries in the life of an industrial country is exactly the same which could have been foreseen twenty-five years ago, and very often it is described in the very same words that I have used.

The German Statistisches Jahrbuch gives us the distribution of workmen in the different industries of the German Empire in 1882 and 1895. Leaving aside all the concerns which belong to trade and those for the sale of alcoholic drinks (955,680 establishments, 2,165,638 workpeople), as also 42,321 establishments belonging to horticulture, fishing, and poultry (103,128 workpeople in 1895), there were, in all the industries, including mining, 1,237,000 artisans working single-handed, and over 900,000 establishments in which 6,730,500 persons were employed. Their distribution in establishments of different sizes was as follows:-

What appears quite distinctly from the last census is the rapid decrease in the numbers of artisans who work single-handed, mostly without the aid of machinery. Such an individual mode of production by hand is naturally on the decrease, even many artisans resorting now to some sort of motive power and taking one or two hired aids; but this does not prove that in the least that the small industries carried on with the aid of machinery should be on the wane. The census of 1907 proves quite the contrary, and all those who have studied it are bound to recognise it.

“Of a pronounced decay of the small establishments in which five or less persons are employed, is, of course, no sign,” writes Dr. Zahn in the afore-mentioned work. Out of the 14.3 million people who live on industry, full 5.4 million belong to the small industry.

Far from decreasing, this category has considerably increased since 1895 (from 732,572 establishments with 1,954,125 employees in 1895, to 875,518 establishments and 2,205,539 employees in 1907). Moreover, it is not only the very small industry which is on the increase; it is also the small one which has increased even more than the preceding – namely, by 47,615 establishments and 812,139 employees.

As to the very great industry, a closer analysis of what the German statisticians describe as giant establishments (Riesenbetriebe) shows that they belong chiefly to industries working for the State, or created in consequence of State-granted monopolies. Thus, for instance, the Krupp Shareholders Company employ 69,500 persons in their nine different establishments, and everyone knows that the works of Krupp are in reality a dependency of the State.

The opinion of the above-named German authors about the facts revealed by the industrial censuses are very interesting.

In speaking of the small industries in Germany, W. Sombart writes in the article, “Verlagssystem (Hausindustrie),” in Conrad’s Handwortezbuch: “It results from the census of 1907 that the losses in the small industries are almost exclusively limited to those home industries which are usually described as the old ones; while the increases belong to the home industries of modern origin.” The statistical data thus confirm that “at the present time a sort of rejuvenation is going on in the home industries; instead of those of them which are dying out, new ones are almost equal in numbers, are growing up” (p.242). Prof. Sombart points out that the same is going on in Switzerland, and refers to some new works on this subject.*

*Die Hausindustrie in der Schweiz: Auszug aus der Ergebnissen der Eidgenossischen Betreibszahlung von Aug. 9, 1905; E. Ryser, L’industrie horlogere, Zurich, 1909; J. Beck, Die Schweizerische Hausindustrie, ihre soziale und wirthschaftliche Lage, Grutliverein, 1909.

Dr. J. Grunzel comes to a similar conclusion: “Life experience shows that the home industries are not a form of industrial organization which has had its time,” he writes in his afore-mentioned work. “On the contrary, it proves to be possessed of a great life force in certain branches. It is spread in all branches in which handwork offers advantages above the work of the machine” (p. 46). It is also retained wherever the value of labour exceeds very much the value of the raw produce; and finally, in all the branches devoted to articles which are rapidly changing with the seasons or the vagaries of fashion. And he shows (pp. 46 and 149) how the home industries have been increasing in Germany from 1882 to 1895, and how they are widely spread in Austria, France, Switzerland, Italy, Belgium, and England.

The conclusions of R. van der Borght are quite similar.

“It is true,” Dr. van der Borght says, “that the numbers of artisans working single-handed have diminished in numbers in most industries; but they still represent two-fifths of all industries; but they still represent two-fifths of all industrial establishments, and even more than one-half in several industries. At the same time, the small establishments (having from one to five workers) have increased in numbers, and they contain nearly one-half of all the industrial establishments, and even more than that in several groups.”

As for Koch’s work, Die Deutsche Hausindustrie, it deserves special mention for the discussion it contains of the measures advocated, on the one side, for the weeding out of the domestic industries, and, on the other side, for improving the condition of the workers and the industries themselves by the means of co-operation, credit, workshops’ inspection, and the like.