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Rural land and credit markets, the permanent income hypothesis and proto-industry: evidence from early modern Zurich

Published online by Cambridge University Press:  04 December 2007

ULRICH PFISTER
Affiliation:
History Department, Westfälische Wilhelms-Universität, Münster.

Abstract

The study documents fluctuations of proto-industrial income, of occupation, debt and presence on land markets across the life course for rural households in a major proto-industrial region during the seventeenth and eighteenth centuries. These fluctuations are interpreted on the basis that a major objective of households is to equalize their income across different stages of their development. The permanent income hypothesis is then extended to take into account land purchases and debt-contracting that result from the need to adjust land and capital to fluctuations in the size of the family labour force across the family cycle and from endeavours to improve the family's welfare by increasing the labour to land ratio. The empirical material presented shows marked fluctuations of income from proto-industrial work across the life course and suggests the existence of permanent income-cum-accumulation strategies to cope with these fluctuations.

Type
Research Article
Copyright
Copyright © Cambridge University Press 2007

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References

ENDNOTES

Important case studies from continental western Europe during the early modern period include Béaur, G., Le marché foncier à la veille de la Révolution: les mouvements de propriété beaucerons dans les régions de Maintenon et de Janville de 1761 à 1790 (Paris, 1984)Google Scholar; Levi, G., Inheriting power: the story of an exorcist (Chicago, 1988)Google Scholar; Sabean, D. W., Property, production and family in Neckarhausen, 1700–1870 (Cambridge, 1990)Google Scholar; Postel-Vinay, G., La terre et l'argent: l'agriculture et le crédit en France du xviiie au début du xxe siècle (Paris, 1998)Google Scholar. Documentations of conferences and workshops include North, M., ed., Kredit im spätmittelalterlichen und frühneuzeitlichen Europa (Cologne, 1991)Google Scholar; Annales: Histoire, Sciences Sociales 49 (1994), 6; Dorban, M. and Servais, P. eds., Les mouvements longs des marchés immobiliers ruraux et urbains en Europe (xvie–xixe siècles) (Louvain-la-Neuve, 1994)Google Scholar; Fontaine, L. et al. eds., Des personnes aux institutions: réseaux et culture du crédit du xvie au xxe siècle en Europe (Louvain-la-Neuve, 1997)Google Scholar; and Cavaciocchi, S. ed., Il mercato della terra secc. XIII–XVIII (Settimane di Studi 35; Florence, 2003)Google Scholar.

Sabean, Property, ch. 15, p. 16; G. Fertig, Bodenmarkt–Familienstrategien–Verwandtschaft: drei westfälische Kirchspiele im 19. Jahrhundert (unpublished habilitation thesis, University of Münster, 2001), chs. 3 and 4.

For a detailed discussion of the role of crises in credit markets, see Rosenthal, J.-L., ‘Rural credit markets and aggregate shocks: the experience of Nuits St. Georges, 1756–1776’, Journal of Economic History 54 (1994), 288306CrossRefGoogle Scholar.

This section is intended to refine my earlier analysis of the proto-industrial household economy; see Pfister, U., ‘The proto-industrial household economy: toward a formal analysis’, Journal of Family History 17 (1992), 201–32Google Scholar, here pp. 220–2; see also my ‘Proto-industrialization’, in Barbagli, M. and Kertzer, D. eds., The history of the European family, vol. 1: Family life in early modern times 1500–1789 (New Haven, 2001), 63–84, esp. pp. 80–3Google Scholar. It also takes up some of my earlier discussion of rural credit in ‘Le petit crédit rural en Suisse aux XVIe–XVIIIe siècles’, Annales: Histoire, Sciences Sociales 49 (1994), 1339–57. Since the data available do not allow an econometric test of the model, the analysis is developed in a non-formal, narrative way.

Ghez, G. R. and Becker, G. S., The allocation of time and goods over the life cycle (New York, 1975)Google Scholar, ch. 1; Modigliani, F., ‘The life cycle hypothesis of saving twenty years later’, in Abel, A. ed., The collected papers of Franco Modigliani (Cambridge, Mass., 1980), vol. 2, 4175Google Scholar.

As an alternative to the use of land and credit markets, labour markets for day labourers and servants may be used to balance fluctuations in the family labour force. In this case the size of farmsteads (in terms of land and physical capital) remains largely constant over time, and the need to rely on land and credit markets is vastly reduced. See Mitterauer, M., Formen ländlicher Wirtschaft: historische Ökotypen und familiale Arbeitsorganisation im österreichischen Raum’, in Mitterauer, M. and Ehmer, J. eds., Familienstruktur und Arbeitsorganisation in ländlichen Gesellschaften (Vienna, 1986), 187323Google Scholar, for a typology of peasant household economies resting largely on differential uses of labour markets. An empirical analysis of the elasticity of substitution between offspring and servants suggests that the relationship certainly existed but that it is far from strong (correlation coefficient of ca. −0,1); see also Pfister, U., Haushalt und Familie auf der Zürcher Landschaft des Ancien régime’, in Brändli, S. et al. eds., Schweiz im Wandel: Studien zur neueren Gesellschaftsgeschichte (Basel, 1990), 1942, here p. 31.Google Scholar

This assumption is warranted on the grounds that farmer households usually display higher levels of material welfare than those of smallholders engaging in labour-intensive agriculture or in artisanal and industrial by-employments. Evidence is provided by studies on social differences with respect to wealth in post-mortem inventories, the value of bequests and physical height; on the first, see for instance, Zell, M., Industry in the countryside: Wealden society in the sixteenth century (Cambridge, 1994), 135CrossRefGoogle Scholar. Ogilvie, S. C. (in A bitter living: women, markets, and social capital in early modern Germany (Oxford, 2003), 71)CrossRefGoogle Scholar performs an analysis of the value of burial donations in a proto-industrial community of Württemberg. Even when a number of other variables are controlled, proto-industrial occupation exerts a significantly negative influence. In Saxony, cohorts of military recruits born during the late eighteenth century displayed above-average physical height if they came from a farming background and below average height when they were (proto-)industrial workers or miners, whereas craftsmen showed heights around the mean; Ewert, U. C., ‘The biological standard of living on the decline: episodes from Germany during early industrialisation’, European Review of Economic History 10 (2006), 5188CrossRefGoogle Scholar, here pp. 60, 76.

The relationship between the agrarian system and the structure of the land market has been rarely studied. Work for three communities in the canton of Zurich studied below suggests that dispersed settlement went together with a tendency towards transactions involving complexes of several plots, rather than individual plots. Maybe this was related to the high transport costs involved in the use of plots lying far away from the farmstead of the owner in an agrarian system of dispersed settlement; see U. Pfister, Entre marchandise et don: le foncier paysan en Suisse au xviiie siècle’, unpublished working paper, University of Geneva (1993), 6–18. See also Fertig, Bodenmarkt, 190–6.

Kriedte, P., Medick, H. and Schlumbohm, J., Industrialization before industrialization: rural industry and the genesis of capitalism (Cambridge and Paris, 1981), ch. 2Google Scholar; Levine, D. ed., Proletarianization and family history (Orlando, 1984)Google Scholar; Braun, R., Industrialisation and everyday life (Cambridge, 1990), chs. 1, 2 and 6CrossRefGoogle Scholar.

10  Pfister, U., Die Zürcher Fabriques: Protoindustrielles Wachstum vom 16. zum 18. Jahrhundert (Zurich, 1992), chs. 2, 4 and 5Google Scholar; see also the overview provided in Pfister, Proto-industrialization in Switzerland’, in Ogilvie, S. C. and Cerman, M. eds., European proto-industrialization (Cambridge, 1995), 137–54Google Scholar.

11  On inheritance law, see T. Weibel, Erbrecht, Gerichtswesen und Leibeigenschaft in der Landvogtei Grüningen (Mitteilungen der Antiquarischen Gesellschaft, 54; Zurich, 1987); on family organization see Pfister, Haushalt und Familie’, esp. pp. 22–9.

12  Kertzer, D. I., ‘Future directions in historical household studies’, Journal of Family History 10 (1985), 98107CrossRefGoogle Scholar, here pp. 101–2.

13  Hand-spun silk yarn (fleuret or filoselle) was made of silk waste, and was used primarily in the production of silk ribbons.

14  The negative sign of this coefficient may be explained as follows: the number of young adult males present in the household correlates strongly with farm size. Farm work and house work supporting a large male labour force may have diverted female labour from proto-industry on large farmsteads and thus reduced the proto-industrial family income independent of the size and composition of the female labour force.

15  Pfister, U., ‘Work roles and family structure in proto-industrial Zürich’, Journal of Interdisciplinary History 20 (1989), 83105CrossRefGoogle Scholar, here pp. 88–97, and Zürcher Fabriques, 334–5.

16  Pfister, Zürcher Fabriques, 259.

17  See Kriedte et al., Industrialization, ch. 2.

18  See Pfister, ‘Work roles, 89, 99–100, for comparisons, and Pfister, Zürcher Fabriques, 346–54, 411, for more information on Hirzel.

19  Due to the small number of married men, this difference slightly fails to attain the significance level of 5 per cent: Chi2=3.53, df=1, p=0.060.

20  See A. Kussmaul, Servants in husbandry in early modern England (Cambridge, 1981), 3, 70–84; Mitterauer, M., ‘Servants and youth’, Continuity and Change 5 (1990), 1138CrossRefGoogle Scholar, here pp. 19–20.

21  These occupations fall into two groups: the first group of trades was related to the provision of local markets with goods and services: wood-processing trades such as timber-cutter and joiner, smith, shoemaker, butcher and miller. The second group of occupations was related to the livestock and dairying economy: traders in cheese and butter as well a veterinary and a dealer in calves belong to this group.

22  One may object to this conclusion on grounds that cross-sectional data overstate intra-generational upward mobility because of differences between classes with respect to adult mortality; low mortality in the upper class and high mortality among the lower class would, on its own, produce higher proportions of the population who were upper-class in the older age groups. If we realistically presume that adults at the age of forty had an average life expectancy of some twenty-five years and that the class differential amounted to some five years, then the differences between the occupational profiles of the later age groups should be reduced by some 20 per cent. This reduces but by no means eliminates the differences across age groups observed in Table 2. In addition, the conclusions drawn in the text are confirmed by longitudinal data. In 1689, the pastor of Hirzel compiled another listing, which can be linked with the one from 1678, the result providing information on career mobility; see Pfister, Zürcher Fabriques, 373. While the entries in individual cells of the resulting mobility table are too few to render a statistical analysis feasible, the overall pattern corroborates the diachronic interpretation of Table 2. For instance, inward mobility into the farmer category dominates over outward mobility, and there is mobility from proto-industry to artisans and tradesmen, but not vice versa.

23  The multivariate analysis in question (based on log-linear analysis) considers the share of female silk-gauze-weavers as endogenous variable and age group, marital status, the number of children and husband's occupation (silk-gauze-weaver vs. other) as exogenous variables. The objective is to find an exogenous variable that can account for the decline in the proportion of female silk-gauze-weavers with age. Only husband's occupation substantially reduces the age effect; see Pfister, Zürcher Fabriques, 375. Research on female activities in proto-industry have stressed their geographical mobility; see Ogilvie, A bitter living, 146–9, 224–7, and Leboutte, R., ‘Saving male time, exploiting female labour: the woman as the “driving force” in premodern society, 1700–1914’, History of the Family 11 (2006), 145150CrossRefGoogle Scholar. For the canton of Zurich, court records also show that rural women regularly went to town to conclude contracts with urban merchants and bring back finished goods. However, the data on Affoltern analysed in Table 1 show that women having no adult male in their household would rely more frequently than others on local putters-out as intermediaries, which clearly indicates restricted female mobility and the importance of male intermediation; Pfister, Zürcher Fabriques, 194–5, 224. For a general statement on the relationship between proto-industrial employment and gender relations, see Gullickson, G. L., ‘Love and power in the proto-industrial family’, in Berg, M. ed., Markets and manufacture in early industrial Europe (London, 1991), 205–26Google Scholar.

24  Pfister, Zürcher Fabriques, 336–40, 380–4; on Hausen, see also my ‘Work roles’, 87–8.

25  See Schlumbohm, J., ‘Agrarische Besitzklassen und gewerbliche Produktionsverhältnisse: Grossbauern, Kleinbesitzer und Landlose als Leinenproduzenten im Umland von Osnabrück und Bielefeld während des frühen 19. Jahrhunderts’, in Mentalitäten und Lebensverhältnisse: Beispiele aus der Sozialgeschichte der Neuzeit (Festschrift Rudolf Vierhaus, Göttingen, 1982), 15–34, here pp. 328–9Google Scholar for a similar finding. See also the discussion in Pfister, ‘Petit credit rural’, 1345.

26  Using log-linear analysis, the relationships between age, the proportion of households with spinners and the level of indebtedness have been explored. Controlling for the presence of spinners, the relationship between age and indebtedness largely disappears. Hence, the variation in the level of indebtedness over the family cycle can be explained statistically by the variation of the presence of spinning in the household; Pfister, Zürcher Fabriques, 369.

27  Pfister, ‘Work roles’, 97–103, and Zürcher Fabriques, 282, 299, 356, 360–2, 374; for the general argument about the curvilinear relationship of some types of proto-industrial activities with land wealth, see my ‘Proto-industrial household economy’, 205–7.

28  Pfister, U., ‘Volumes et prix sur le marché immobilier de trois communes zurichoises au xviiie siècle’, in Dorban, M. and Servais, P. eds., Les mouvements longs des marchés immobiliers ruraux et urbains en Europe (XVIe–XIXe siècles) (Louvain-la-Neuve, 1994), 71–94, here pp. 7581Google Scholar.

29  This connection between the liquidity of the land market and the development of mortgage credit is also stressed by Béaur, G. in ‘Foncier et crédit dans les sociétés préindustrielles: des liens solides ou des chaînes fragiles?’, Annales: Histoire, Sciences Sociales 49 (1994), 1411–28CrossRefGoogle Scholar.

30  The two most notable examples concern contracts with (step-)son-in-laws. In one case, the buyer is simply obliged to provide for the maintenance of the selling couple, whereas the latter promises to contribute his/her labour to the tasks of the farmstead (State Archive of Zurich, B XI Stäfa 112, pp. 236r–237v, 8/5/1772). The other contract contains a specification of the plots, rooms, entitlements and objects the seller retains in order to continue an independent livelihood on the same farmstead (ibid., p. 183r/v, 9/9/1771).

31  Sabean, Property, 361–2, 407–8; Fertig, Bodenmarkt, 96–103; Zeitlhofer, H., ‘Besitztransfer in frühneuzeitlichen ländlichen Gesellschaften: die südböhmische Pfarre Kaplicky (Herrschaft Vyssi Brod), 1640–1840’, in Cerman, Markus and Zeitlhofer, Hermann eds., Soziale Strukturen in Böhmen: ein regionaler Vergleich von Wirtschaft und Gesellschaft in Gutsherrenschaften, 16.–19. Jahrhundert (Vienna, 2002), 240–61, here p. 243Google Scholar. The difference in the total values of sales and purchases is explained by purchases by farmers living in neighbouring parishes and immigrants.

32  Note the small number of cases of farmers in the age group 20–29 and the predominance of sales over purchases even during this phase of the family cycle. In contrast to the other two social groups, then, household creation for farmers did not involve the purchase of land. Presence on the land market during this phase appears to have been primarily motivated by the necessity to satisfy the competing claims of several heirs after the death of parents.

33  See Schlumbohm, J., Lebensläufe, Familien, Höfe: die Bauern und Heuerleute des osnabrückischen Kirchspiels Belm in proto-industrieller Zeit, 1650–1860 (Göttingen, 1994), 370–4Google Scholar, and Clark, G. and Hamilton, G., ‘Survival of the richest: the Malthusian mechanism in pre-industrial England”, Journal of Economic History 66 (2006), 707–36CrossRefGoogle Scholar.

34  In fact, offspring of farmers left their parental household earlier than young adults originating from lower-class households. This can be interpreted as an effect of the substantial income-generating opportunities offered by proto-industrial activities requiring some amount of household capital such as muslin-weaving; see Pfister, ‘Work roles’, 102–3.

35  Pfister, ‘Haushalt und Familie’, 40.

36  Béaur, G., ‘Investissement foncier, épargne et cycle de vie dans le pays chartrain au XVIIIe siècle’, Histoire et Mesure 6 (1991), 257–88CrossRefGoogle Scholar, here pp. 281–3; V. Lünnemann, ‘Bodenmarkt und Familie im Kirchspiel Beelen (Kreis Warendorf) in der Mitte des 19. Jahrhunderts’ (unpublished master's thesis, University of Münster, 1999), 111; Fertig, Bodenmarkt, 96–103.

37  Braun, Industrialisation, 64–83; Pfister, Zürcher Fabriques, 384–6.