In which ways and with what consequences for German society did the German economy change during period of 1500-1555?

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E. Fry

L6 - 8

In which ways and with what consequences for German society did the German economy change during period of 1500-1555?

In 1500 Germany was entering a period of economic unrest despite appearances to the contrary. The German economy appeared to be flourishing between 1460 and l540. Textile production, manufacturing and mining levels were high. Natural resources were being exploited at previously unseen levels and trade was booming all along the Rhine, the Danube and Germany's lesser rivers. Also, the population was expanding and consumer demand with it, and towns saw spectacular expansion.

But already general European economic changes had already inflicted damaging blows before 1500. The whole economic structure of Europe was turning to Germany’s disadvantage. The once matchless Hanseatic League, at the height of its power in the fifteenth century, was losing its market share of international trade in the Baltic and across northern Europe to Flemish, English and Swedish merchants, and its control of Baltic shipping to the Dutch. The lack of a native German merchant fleet was a serious weakness and put Germany at a major disadvantage.

Natural accidents such as the migration of herring shoals to the North Sea compounded this. North Germany depended on large-scale herring fishing, and this thriving industry was almost destroyed when, for whatever natural cause, the summer herring shoals vanished in 1473. Once so powerful, the Baltic economy was in decline, its strength undermined further by the rise Atlantic economy based on Antwerp and Seville.

Germany was also experiencing a relative decline in population compared with countries such as France. Germany was beginning to lose its pre-eminence given its central position as the Mediterranean declined and the rise of the Atlantic economy began to cities such as Lisbon, Seville and Antwerp, due to this new economic avenue of trade the movement of goods along the German rivers in declined sharply after 1500.

One major exception to this was trades in metals. Silver was mined in the Hartz Mountains and Saxony, as well as the Tyrol, Carinthia and Bohemia. Together, these supplied most of the bullion produced in Europe; in the period 1460-1530 production increased by 500%. Copper, lead and zinc came from the same areas, while iron ore mining was developing well in the Rhineland, Thuringia and the Upper Palatinate.

Mining employed a total of 100,000 Germans in 1523.Productivity improved significantly as technical developments to pumps made deep mining possible, and improvements in the chemical processing of ores led to higher yields from mined rock.

But with the Spanish discovery of vast silver deposits in America in 1545-48, the price of silver was instantly driven down. This undercut the European supply and German mines simply could not compete, and by the 1550s silver imports from America outpaced European production by far. German mining fell into a long slump. In turn, that hit badly German banking houses such as the Fuggers and Welsers in Augsburg. The fifteenth-century expansion in silver mining had enabled German banking to develop and challenge the Italian near monopoly in financial services. From 1550, German banking was much weaker.

Most key to the economic change was the massive population rise. From the 1480s onwards the population rose and with significant consequences from the late 15th Century to the early 18th Century, from between 12–18 million in 1500 to 16–21 million by 1618. Growth was strongest in the south and west. Population estimates put Germany at around l2 million people in 1500 and 15 million in 1550. Complaints were frequently heard that 'Germany is overcrowded'.

This in turn led to a price revolution. Growing demand for food pushed up prices in what is known as “demand-pull inflation”, and this combined with growing supplies of coin from the metal deposits in South America produced the price inflation known as the Price Revolution of the mid decades of the 16C. This is the key economic trend. Price inflation was however mild in the early part of the 15th century, there being no revolution as such as inflation was around 2-3% per annum and it was caused mainly by population growth causing a greater demand for land, food and commercial goods. The effects of the influx of American silver were yet to be felt as it only really started arriving in large quantities after 1550. Such a mild rate of inflation generally stimulated economic growth by creating an increase in demand - towns were the key beneficiaries in the first half of the century therefore and the growth of certain German towns is a clear feature. As long as inflation was mild, the stimulation offered to commercial expansion was generally a good thing, and initially this was the case until around 1530. After this point prices began to rise more steeply, and the value of real incomes fell more severely. It is not possible to give precise figures, but prices in Germany during the sixteenth century rose by between around 270% and 430%. Even though wages doubled, incomes were falling behind industrial prices and even further behind food prices. As real incomes for the majority fell, the gulf between rich and poor widened markedly and social tension grew. These were not problems unique to Germany but, compared with rest of Europe, Germany appears to have suffered more acute distress.

The large important commercial centres such as Cologne and Nuremberg all benefited from an ongoing boom in the great manufacturing centres of the south and centre. The growth of centres like Hamburg, Nuremberg, and the Saxon mining towns was revealed in sharp rises in their population as their opportunity for employment grew due to economic expansion, and the growing pressures in the rural economy forced people to seek alternative employment.

In such centres, individuals could make fortunes in cheap textile manufacture eg Augsburg whose Fugger enterprise was initially based on textiles employing large numbers of textile outworkers in the neighbouring villages to spin and weave. In the Harz, Thuringia and the Alps, mining was important (for a while as explained above) as significant new veins were opened up by new methods: lead, copper, silver though the latter was badly affected by the flood of Spanish silver after 1550, but the capital gained from mining often lead to substantial banking services supplanting Italians though in turn the Fuggers and Welsers after mid-century were to be supplanted by Antwerp and then Amsterdam and it was only towns such as Hamburg with Atlantic connections which were able to prosper. Some urban growth was spectacular.

Manufacturing and trading centres in central and southern Germany flourished; Augsburg, Danzig and Munich, booming on the production of cheap textiles, are good examples. The mining towns of Saxony also saw rapid expansion. Yet German urban growth was limited. There were 19 towns with populations of over 10,000 people in 1500, and only 20 in 1600.

The picture remained very mixed as some areas prospered, but some towns declined especially with the exhaustion of silver mining and foreign competition and urban centres began to move from commerce into finance. There was consequent resentment and an upsurge in notions of a moral economy, condemning monopolists, and usurers. Popular mentalities thus remained rooted in a pre-capitalist age while the political fragmentation of the country was held to be responsible for its decline and inability to establish a Reich regulated economy.

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The rural economy was also affected by economic changes. 16th century Germany was mainly ruralised; in 1500 about 75% of the population lived in rural communities. From this it isn’t surprising that population pressures caused land hunger. In some parts of Germany it was possible to clear forest or plough mountain pasture, but opportunities to create new high quality farmland were limited. Many areas had no option but to subdivide existing farms and tenancies. Such action meant however lower yields and smaller incomes, and this forced many to leave for towns adding to pressures there.

In response to a growing urban market ...

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