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Economic Crisis in Germany

During the years 1846-1849 several economic crises overlapped: an agrarian crisis of the years 1846-47; against the background the e arly industrialization since the second half of the 1830s a structural crisis of the urban trades; a cyclical business crisis that became noticeable in the German states in late 1847; and a resultant credit and financial crisis.

The harvests of 1845 and 1846 were very poor. In addition a potato blight raged. As a result of grain and potato scarcity the cost of basic commodities dramatically increased, especially in the spring of 1847. Besides village and urban poverty which already had turned to pu blic or private charity, artisans were especially hard hit. Formerly prosperous masters were impoverished; journeymen and the autonomous mass artisans suffered chronic undernourishment and particularly in the spring of 1847 often had to go hungry on a regular basis. In the first half of 1847, inflation and pauperization in numerous Prussian and south German states led in turn to bread riots and hunger revolts, directed against usurers and grain speculators and often could only be brought under control by massive deployment of troops. The bumper harvest of the fall of 1847 ended the last preindustrial variety of economic crisis. Most contemporaries were conscious of the agrarian crisis far more clearly than the consequential business crisis, which began at the end of 1847 in England and spread to the continent, partially occasioned by the reduced demand for textiles against a background of a reduction in real wages.

Although the onset of the cyclical business crisis was already unquestionably disce rnible at the beginning of 1848, the German states were only aware of the economic crisis when the Parisian February revolution made the general public cognizant. The first news of happenings in Paris brought a panic among the middle class and the economic bourgeoisie which almost caused a collapse of banks by the run on hard currency, which in turn dramatically acceleration and deepened the crisis in the following months. Indicators of this development were the growing number of bankruptcies and a declin e in railway stocks, state bonds, and bank shares; by early summer 1848 many had lost over a half of their value. The business crisis ran parallel to the financial and credit crisis. Caused less by a basic lack of capital than the anxiety of poor credit risks and the lack of an expectation of profit, industry and craftsmen could no longer obtain credit in sufficient quantity. The newly appointed March cabinets' financial-political initiatives were hardly an initial success; the cyclical crisis only slow ly recovered. A new economic upturn was only clearly discernible in mid-1849 and recovered once more from the delay in tempo of the industrialization process of 1848-49.

A symptom of the business-industrial crisis during the revolutionary year was high unemployment, which in many large cities reach hitherto unknown dimensions. Although the unemployment statistics of 1848 do not compare to today's, however, the high number of jobless employed in Vienna and Berlin at public expense says much about thi s politically explosive social problem: in Vienna state and community employed around twenty thousand men and women in primitive earth moving in early summer, in Berlin close to ten thousand men (only), without entirely ending unemployment in both cities. A further expression of the crisis in large cities was the drastic decline in the price of real estate and the increasing number of empty, expensive apartments. At the same time the number of homeless of the cities rose.

The resultant social and p olitical consequences of the four economic crises were poignant: the chronological sequence of the agrarian and the business cycle crises condensed in the perspective of many artisan masters and journeymen to a long lasting economic crisis, particularly since many branches of employment, in particular the textile and clothing trades as a result of early industrialization were already driven beforehand into economic ruin. Especially independent craftsmen from 1846 to 1848 often had to take on loans, from w hich they saw no escape. In the weeks before the outbreak of the March revolution a further factor was the mass firings of factory workers in hitherto prosperous branches of industry like machine building.

The coincidence of the four crisis was one but not the only cause of the outbreak of the 1848 revolution. The further intensification of the economic crisis in the course of the revolution politicized and radicalized those effected in different manners: artisan masters and small traders, but als o the actual economic bourgeoisie turned to political conservatism and the old rulers from which they expected a reconsolidation of economic conditions and a functioning pacification of the social and political rebellious workers and journeymen, simultaneously however also a modernization of the trade law and trade policy and thereby a long term renewed economic prosperity. These expectations benefitted the state: in addition to agrarian reforms, the feudal remnants swept aside and finally leaving the way free for modern, agrarian capitalistic developments, for example, the Prussian state in the beginning of February 1849 obliged the expectations of artisans masters with trade regulations and considerably strengthened the position of the guilds in comparison with the trade regulation of 1845. (see Guilds in Germany).

While the majority of the masters and even also the entrepreneurs were reconciled with this sort of concessions of authorities, at the same time many journeymen and workers, perhaps a maj ority, drew contrary conclusions from the crisis in the social-economic system and the suppression of the revolutionary movement. Disappointed by the old authorities as well as the liberal March cabinets in whom they at first had great expectations, they increasingly turned to political positions and theoretical concepts of a democratic and socialist color, because these promised to overcome old guild conditions as well as the negative social consequences of modern, industrial capitalistic developments wh ich they found oppressive.

Rüdiger Hachtmann (translated by James Chastain)


Jürgen Bergmann, Wirtschaftskrise und Revolution: Handwerker und Arbeiter 1848/49 (Stuttgart, 1986)

_______. "Ökonomische Voraussetzungen der Revolution von 1848: Zur Krise von 1845 bis 1848 in Deutschland" in Hans-Ulrich Wehler (ed.) 200 Jahre amerikanische Revolution (Göttingen, 1976) 254-87.

_______. "Die Revolution von 1848 als Modernisierungskrise" in Hartmut Kaelble et al. (eds) Probleme der Modernisierung in Deutschland (Opladen, 1979) 13-35. Reinhard Spree, Die Wachstumszyklen der deutschen Wirtschaft von 1840 bis 1880 (Berlin, 1977).

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