Revolutions - 7.07- The Hungry Forties

Episode Date: August 27, 2017

The mid-1840s were a rotten time.  Tides of History Interview  History Fangirl Interview  Pre-Order The Storm Before the Storm! Amazon Powells Barnes & Noble Indiebound Books-a-Million Indigo

Hello and welcome to revolutions. Episode 7.7, The Hungry 40s. When we began this series by introducing the volcano upon which Europe was sleeping at the dawn of 1848, I introduced the two great questions that loomed large in the equation, the political question and the social question. The political question was about what form of the world. government should take, how it should be organized, what its legitimate foundations were. This is where you have your increasingly heated mix of liberals and radical Democrats and nationalists challenging the conservative order. They demanded broader electoral franchise,

stronger civil rights, and argued that political sovereignty was rooted in the nation, the people, not the divine right of kings and a forest of bayonets. The social question, meanwhile, was about the slowly grinding gear of economic history, that was dislocating families from their traditional ways of economic and social life, and forcing them to fit into a new mold to better serve an increasingly industrialized world. Now, though the coming of the industrial economy had obvious material benefits, it was also an excruciating physical and psychological transformation that led to misery, hunger, and the erosion of dignity.

Today, we're going to talk more about the social question, with a discussion on an economic crisis that hit Europe in the mid-1840s, that brought into sharp focus, the general dehumanizing trends of the past generation. Then next week, we will take one final look at the political question as it sat on the eve of 1848, because when the political activist tapped the built-up social pressure, well, that's when the lid gets blown off the joint. So today what we're going to talk about is the economic crisis of the mid-1840s, which will begin with a disaster in the agrarian sector that proceeded to cause a recession in the burgeoning manufacturing sector that, after combining to make life miserable for the lower classes, would combine to create financial panic in the middle

and upper classes that will lead to bank runs, a credit crunch, and bankruptcy, all of which would combine to undermine the health of the various European kingdoms as they felt the effects of the tightening credit and the fall of tax revenue that left them not just shaky financially, but also big fat targets for those looking for someone to blame. So the place to start with all of this is the agricultural crisis. And for those of you who know even a little bit of 19th century European history, you already know what's coming. It's the potato famine.

Among the various causes of the general demographic rise over the previous century, the potato is always one cause that is thrown into the mix. The potato, for example, helps explain why, though more efficient and mechanized forms of agriculture were not yet widespread, the food supply was able to at least keep within sight of the many more bellies that the land needed to feed. Potatoes had come over from the new world back in the 1500s, but it was not until the beginning of the 19th century that mass potato cultivation literally took root. The potato was cheap, easy to plant and harvest. It was pretty durable and not prone to quick spoilage. Small plots of potatoes could be

managed by poor peasants and yield enough to keep their bellies full. Now, though not the most nutritious food, the potato was nutritious enough, and more importantly, it left you feeling filled up. So from about 1800 on, the potato began to spread exponentially, most especially through the British Isles, France, and Germany, where it formed a crucial part of the diet of both the rural peasants and the growing class of urban workers, both of whom needed a cheap source of calories to survive. But unfortunately, there was not much diversity in the types of potatoes that were planted across Europe. There were only a handful of varieties available, which meant that if, say, there was

a disease that destroyed one of those varieties, it could have catastrophic results. And in 1845, that is exactly what happened. A particular strain of potato blight showed up, and when it spread, it spread cruel and fast. The initial symptoms of the disease passed mostly unnoticed, and it was not until the crop was harvested that the scope of the disaster in 1845 was uncovered. In that first year, at least a third of the potatoes in Europe were inedible. They were ruined mush. And that was just the beginning, because over the next two years, potato yields across Europe would collapse, creating a political, economic, and humanitarian disaster. Now, this episode here today is about more than just the potato fan.

But before we move on, we should note the scale of the strictly potato-related disaster. Hardest hit was, of course, Ireland, where for a variety of reasons, potatoes had become the dietary staple of nearly the entire population, certainly the poor population. About a third of all the land in Ireland was given over to potato cultivation, and when the crops failed, it caused the capital G, capital F, great famine. as a tragedy of nearly unimaginable proportions unfolded over the next few years. About one million people either starved to death or died of hunger-related disease. Another one to two million were forced to emigrate out of the country,

with most of them moving across the Atlantic to the Americas. The Great Famine was a heavy blow on Ireland, and among other things, added yet another page to the long acrimonious relationship between Ireland and England, as many in Ireland then, and still today, believe that English conduct during the famine was unconscionably cruel. And whatever your take on that, it is true that during the years of the famine, Ireland remained incredibly a net exporter of food. While the Irish starved to death, other food was piled onto ships and sailed out of the harbors, much of it bound for England. Because one of the critical things to understand about these years of hunger,

the hungry 40s, as they were later dubbed, was that the problem was not that there was no food. It's just that there was no cheap food. You could still eat if you could afford to, but if you could not, you starved. So Ireland was the hardest hit by the potato famine by orders of magnitude, so they naturally draw most of the attention. But the potato famine also hit Scotland, England, Belgium, the Netherlands, France, and northern Germany. On the continent, about 100,000 total deaths are directly attributable to potato blight. 40 to 50,000 dead in Belgium, 40,000 in Prussia, another 10,000 in France. But in those kingdoms, the direct impact of the potato failure was blunted by the relative diversification of the local diet, says. Wheat and rye and barley remained staples.

But we would not be here talking about all this today if everything was just going to be hunky-dory, and it was not. Because with the potato blight already setting in by 1845, 1846 turned out to be a horrendous year for wheat and rye, thanks to a cruel combination of opposite disasters, a massive drought during the summer and then torrential rains during the fall and winter. Fields across Europe were decimated, and in the end, only something like 50% of the expected yields were produced. By the end of 1846, basic dietary staples across Europe were scarce, and we've got ourselves a full-blown agricultural crisis. Now, a couple of things to note about this. First of all, the crop yields of 1846 were terrible, yes, but different regions were hit harder than others, and in plenty of places, the crop yields were right at normal levels.

And as I just mentioned about Ireland, there were still technically food to eat. it's just that no one could now afford it, because the specific way the agricultural crisis manifested itself was not simply a lack of food, but skyrocketing prices for the food that was available. And the skyrocketing prices were universal, especially when grain merchants realized they could move grain from areas of abundance to areas of scarcity and make a massive profit, leaving the areas of supposed abundance, now staring down scarcity and high prices themselves. Meanwhile, those in badly affected areas were hit with the double whammy. They were ruined by their own crop failures, and now were staring down the barrel of exorbitant prices to stay alive. For the subsistence

farmers, this was literally now a matter of life and death. But for more affluent families in the broader middle classes, whether larger farmers or town, city artisans, or professional tradesmen, you saw your entire household budget now being swallowed up by the price of food. This grain crisis also spread over to the cattle and livestock trades. Without enough fodder to feed their flocks and herds, everyone was forced to make the same decision, slaughter and sell the meat. But with everyone forced to make the same decision individually, the market was flooded and prices for meat bottomed out.

And so the ranchers were left with the worst of both worlds, no money and no stock. All of this leads us to the next link in the chain of the economic crisis of the mid-1840s, a recession. The straight line from the agricultural crisis to the business recession was as straight as can be. With the cost of food swallowing up all available household money, I mean, in some places the cost of wheat doubled overnight, and if you were already spending 50% of your budget on food, well, that's the ballgame. In some regions of France, the cost of rye, which was poor man's wheat, nearly tripled. And even the quote-unquote cheap meat that was circulating around out there now was still too expensive for most of the lower classes. All of this meant that there was no money left over to purchase manufactured goods, most especially clothes and other textiles.

I mean, if it's either eat or buy new pants, the choice is pretty easy. Unfortunately, you know what comes next. By late 1846, the manufacturers, either those running the factories or managing artisans or the cottage workers, knew that demand was about to plummet. And to stay afloat with demand plummeting, the owners, managers, and buyers canceled orders. They laid off workers and they forced down wages of those workers still in their employ. So unemployment, underemployment, and collapsing wages swept through the working classes. So just as food was becoming more expensive, everyone had less. money to buy it with.

So just to run through a couple of examples here, in Berlin, the population of the city had risen more than 30% between 1840 and 1848, with almost all the newcomers being poor. More than 80% of the city was classified as some version of poor, with 100,000, a full quarter of the city's population, living below any reasonable definition of a poverty line. In France, in the rising industrial city of Lubez, 8,000. workers were unemployed by May of 1847, and that was out of a total workforce of perhaps 13,000. In Ruan, at least 30% of the population was living on wages that did not keep them fed, and another 1,600 were just out of work completely. In Vienna, 10,000 workers were laid

off over the winter of 1846, 1847. They congregated on the outskirts of the city in poor slums and were packed into dilapidated housing where the hunger and the misery and the unsanitary conditions made life unbearable. And those were just the industrial factory workers. A lot of the artisan classes was even worse. Having already spent the last 20 years falling behind the cheaper goods produced by the factories, the artisans were now squeezed completely when scarce consumer dollars went only to the cheapest item available. when the recession set in, apprentices and journeymen simply had no work to do at all. Even masters saw orders dry up or prices offered for their work so low that they could not support their families.

And remember, these guys still had a sense of dignity about their craft. They were masters, they were respectable, they were independent. But now, economically at least, they found themselves no better than an unskilled beggar. On top of everything else, the terrible winter of 1846, 1847, that contributed, to the agricultural crisis, also brought new construction to a grinding halt, threatening the livelihoods of masons and carpenters. And as we'll discuss in a minute, they were also unable to procure loans to see them through these hard times as a general credit crunch was about to set in everywhere,

ruining small proprietors, businessmen, and artisans across the continent. It was discouraging, dispiriting, enraging. As the scope of the crisis grew over the winter of 1846 and 1847, This is when food is scarce. Prices are skyrocketing and work and wages are disappearing, the people started to take matters into their own hand. And 1847 was marked by a wave of food riots across Europe. Now, the general pattern of these food riots was pretty tame.

We're not talking about mobs going insane with hunger and burning the town down. The rage was instead laser focused on high prices, and the merchants who the mobs thought were dishonestly gouging them. Often led by local women, mobs would descend on various parts of the food supply chain, marketplaces where grain was bought and sold, merchant stalls, the point of pickup or delivery, all the way down to the baker selling the final edible products. These mobs had two basic goals. First, disrupt the circulation of grain, which is to say,

if there is grain right here right now, and we are hungry, right here and right now, how can you possibly ship it somewhere else? Once they had surrounded some part of the supply chain, they then went after their second goal, demanding that the food be sold at a just price, which is just the price that it had been a year ago. The mobs did not care about supply and demand and the price fluctuations that came along with it. For the hungry mobs, it was obvious that dishonest merchants and government officials were conspiring to extort everybody's money or starve them to death. So these food riots broke out all across Europe. In April of 1847, Berlin was hit by what was called the Potato Revolution.

Crowds of angry women with hungry families storm market stalls of potato and grain merchants, demanding an end to the price gouging. They swept through, gathering up food and distributing it to the people at a just price. They also stormed bakeries and performed weight checks on the loaves they found. the doors of honest bakers were marked off limits, while dishonest bakers felt the wrath of the mob. After four days, the Prussian authorities finally ordered in the regular army to restore order. But as would be the case with most of these quote-unquote riots, there was actually very little in the way of loss of life or destruction of property. And the same was true across Europe.

In Vienna, butchers and bakers were ransacked. In northern Italy, a crowd of 2,000 attacked Swiss merchants who had bought grain to transport elsewhere. In France, these riots hit Lille in Paris in May of 1847 and then continued to break out for the rest of the year, with the final count being 400 separate incidents in France alone. Now, as I just mentioned, the main brunt of this was born by the merchants, major landlords, wholesalers, and retailers. But the people naturally turned their eye also on government officials who they accused of creating the circumstances for all of this, and now we're doing very little to alleviate the problem. And indeed, especially at the beginning, they kind of had a

point. Governments at first tried to downplay the scope of the crop failures, claiming that the alleged crisis was the work of a sensational press or just unfounded rumors. But that wasn't going to hold up for long. And once the state of denial collapsed, many local governments jumped straight to the dangerous effects of the crisis. That is, they were indicted. instantly gripped by fear of the mob and roaming bandits. In France, there was talk of fully remobilizing the National Guard, as well as calling in the regular army, which was the response in most of Central Europe, as the governments did not trust their own citizens to form armed militias. Now, the governments weren't wrong to fear the mob per se. Food riots were breaking out,

and the phenomenon of roving beggar bands exploded out in the countryside, and those bands of beggars turned into bands of thieves, if you tried to turn them down. But though the various governments and members of the respectable classes initially skipped right from, oh, there's no problem to, oh my God, how do we keep the mob suppressed, it's unfair to say that they did nothing. And it's certainly unfair to hold them responsible for the agricultural crisis in the first place. So once it became clear that a humanitarian disaster was in fact breaking out, officials in both the local municipalities and central governments

tried to attack both the causes and effects of the crisis. In France, for example, the ministry attacked the supply problem by dropping tariffs on imported grain and then directing the state itself to make bulk purchases of grain, most especially from Russia. Local governments also made direct payments to grain merchants and bakeries so that they could afford to sell at the quote-unquote just price. On the demand side, governments might open soup kitchens and poor houses and charity workshops, where indigent families could come and do some made-up work in exchange for food. Now, the conditions were deplorable, but it was something.

In Berlin, something approaching half the city was receiving some sort of assistance. In Lille, it was about the same with almost 30,000 of the 75,000 total residents receiving assistance. Augmenting the official government response were private. charity interests who raised funds to help the poor during these years. Manufacturers in Lille pooled money to buy food and distribute it either cheaply or for free. In Granobla, Mutual Aid societies pooled money to make bulk grain purchases. And in some cities, bread coupons were just distributed. You could go turn it in and get some bread. It wasn't enough. It was never going to be enough, but it was something. And in fact, the steps taken by the various governments to try to blunt the impact

of the agricultural crisis actually help move the general economic crisis onto the next link in the chain, from agrarian crisis to business recession to financial crisis, because a financial crisis is going to take hold by the end of 1847. But to fully explain that financial crisis, we need to take a brief detour and talk a little bit about railroad mania. Now, as we've discussed, We're just now at the tail end of the first burst of the Industrial Revolution. And it wasn't until the 1830s that the promise and the possibility of railroads became an object, both of public and private interest. And in the early 1840s, there was a burst of railroad construction.

In France, railroad projects took the form of large banks partnering with private corporations with the support of the government ministry to approve and fund new rail construction. most especially up in the northeast. In Prussia, the major landlords who owned the rich agricultural regions of the east pressured the government to build lines that would connect them directly to urban markets in the west, in the Rhineland. And then up in Britain, a very free market attitude took hold, where private companies raised private money through bank loans and stock offerings to construct lines that would crisscross the country. The point is that by the mid-1840s, there was a lot of credit and a lot of debt tied up in the railroads, and also a lot of exuberance over getting

rich quick, and a classic bubble was building. So the financial crisis hit England first. In the early 1840s, investors had flocked to railroads, as both middle and upper class investors saw them as an almost sure bet, so much so that many bought stock offerings with just 10% down, dumping their life savings into it with the hopes that they would get rich before the other 90% was ever asked for. But unfortunately, the only rule about starting up a railroad corporation in England was for a group of guys to get together, draw some lines on a map, and present it to Parliament for approval. Due diligence was not the order of the day, as MPs and government ministers were themselves heavy investors in these various companies. and Parliament nearly always approved a request for certification. They approved more than 200 in 1846 alone.

Even if the plans these companies were providing were ludicrously unfeasible, and the men operating the companies had no idea what they were doing. But with money flooding in, the price of all the railroad stocks kept rising, so nobody asked too many questions, because the point was now to make money off the rising stocks, rather than whatever profit the railroad underlying it might be capable of producing. So a bubble grew. The bubble finally burst at the end of 1847, thanks to a number of factors.

For example, the Bank of England raised interest rates, making state bonds a safer and more attractive investment, but the other big hit came from the European-wide agricultural crisis, as governments had to take on loans or spend species reserves to alleviate the crisis. crisis, and businesses hit by the resulting recession had to take on loans to float them through the hard times. With the pool of investment money for the railroad companies drying up, it became very clear, very quick that many of the companies were not viable at all and had been surviving on smoke and mirrors. The bubble burst at the end of 1847 as railroad stock prices collapsed. Life savings were wiped out as insolvent companies that couldn't take on new loans to

pay off their old loans, called in the other 90% of the stock purchases, and nobody had any money to pay. So this created a cascading failure. I can't pay my debts because this guy won't pay his debt to me, and he can't pay his debt to me because this other guy can't pay his debt to him. So most of the railroad companies declared bankruptcy, as did plenty of ruined investors. But the collapse of the railway mania bubble in England was not merely a local concern, because plenty of British investors had spread their money down to continental projects. And then, of course, the international finance system was international. And credit was now drying up everywhere, as it was directed towards the effects of the

agricultural crisis and business recession, and new railroad construction slowed to a crawl. And, for example, in France, some 700,000 workers were now out of a job. The general credit crunch also left small businesses and struggling artisans out in the cold, as they could not secure even small loans to keep themselves afloat because all the money was being tied up elsewhere. With the financial system getting a wee bit shaky, the banks of Europe were hit by runs of nervous customers withdrawing their savings. The Bank of France saw something like 65 million francs worth of specie withdrawn in October 1847 alone. Smaller banks were caught short and forced to close. The run of bankruptcies in all businesses, not just railroads, ballooned.

Already hit by the recession, many simply closed their doors, which contributed even more to unemployment. But there is some good news now, because by the time the financial crisis was blowing up, the agricultural crisis was starting to wind down. Now, potatoes were still wrecked, but the regular grain harvests of 1847 were mostly back to normal. But the good news did not really solve the problem, as both high prices and low wages lingered, heading into 1848. And plenty of speculators had bid high on grain, expecting the supply to remain low, and when it did not remain low, they now faced ruinous price falls. And I'm not sure how prevalent the practice was, but I know at least some hoarding of the new crop went on, as these merchants tried to keep the prices artificially high. And on top of that, the business recession and financial

crisis continued to cast a dark shadow over the whole European economy. Now, the expect of expectation was that work and wages would return, but insecurity and fear remained the dominant emotions. Plus, plenty of debt had been accumulated now over the past few years, and that all needed to be serviced, and credits still remained tight. So it's not like things were back to normal in 1848. The net effect of all this on the governments of Europe was quite negative, both financially and politically. Financially, they had to tap gold reserves or take out new loans to buy grants. subsidized merchants and retailers and fund charity operations. And the general recession also caused a contraction of tax revenue. So the books did not look good at the dawn of 1848. The Habsburg Monarchy in particular was on very shaky footing. They were underwriting large military expenses, running persistent deficits, and faced with a rotten balance of trade.

And it took a major infusion of cash by the Rothschild banking conglomerate to keep the monarchy afloat at the end of 1847. And in Austria, there was also a deeply unpopular problem where many of their consumption taxes were based on the price of the item. And when food prices shot up, so too did the taxes that went with them. But the government couldn't afford to cut those taxes because they needed the revenue to service their own debts. These excessive taxes levied on basic food staples were called the blood tax on the proletariat.

So what we're looking at generally here in the years spanning 1845 to 1847 was an economic and social crisis that rocked every level of society. We've got miserable, starving rural peasants, miserable, starving, unemployed poor people in the cities, underworked and out-of-worked artisans, that's masters, journeymen, and apprentices alike, ruined small business owners, large business owners holding on only by slashing wages or turning out workers and struggling themselves to secure men. much-needed loans. We've got bankrupt, middle, and upper-class investors, and professional classes whose services can no longer be afforded. And surrounding all of this everywhere was a basic breakdown of law and order. Mobbs were rioting over food, bandit groups were roaming the countryside. There was a rise in crime everywhere. Murder, robbery, assault, prostitution, fraud, all climbed noticeably in the mid-1840s. The economic crisis caused the death rate to rise and the birth rate to fall. And psychologically, the impact was traumatic. We know how bad poverty can be for basic

cognitive functions. And for years, for millions of people in Europe, their lives were defined by insecurity, fear, and hunger. Whether you were from the hard-pressed lower classes, joining mobs, or from the slightly more secure middle and upper classes worried about the effects of those mobs, or you had just had your savings wiped out, thanks to some business bankruptcy or bad investment or bank run, everyone was shell-shocked and looking for someone to blame. As I said at the beginning of this episode, the crisis of the mid-1840s brought into sharp focus, the discontentment, dislocation, fear, insecurity, indignity that had been brewing in the economic climate of Europe over the past generation.

The social question was now laid bare. Is this really how we plan to live? Are we just going to accept the cruelty, brutality, and inhumanity of this new economic and social system? What, if anything, was to be done? Next week, we will turn our attention to those who believe the answer to the social question was a political one. So we will take one last look at the political landscape of Europe in the late 1840s as the social and economic crisis unfolded. And we will discuss the mix of reformers. and radicals and activists who were happy to harness all of the social anger,

pointed at the existing political regimes, and say, that is where the problem lies. That is who to blame. This combination of the political and the social would mix together like vinegar and baking soda, and the volcano would explode. Before I leave you this week, however, I do want to mention I've recently done two podcast interviews you might want to check out. The first is with Stephanie Craig at the History Fan Girl podcast.

Stephanie was in the original Legion of the first History of Rome tour, and her show is principally focused on the places where history happens. And so we talk all about the Roman Forum. The second is with Patrick Wyman, he of the Fall of Rome podcast, but also now the Tides of History podcast. And he had me on as a guest, and we talked all about Roman history and especially late Republican history. and since I plugged the heck out of the book in both interviews, I mean, Patrick's actually read the book and really liked it. I won't bug you about it today, but you should pre-order the book. Anyway, it's The History Fan Girl podcast and Tides of History.