ABSTRACT
Figure 12.1 Shifts in the world market 141 Figure 12.2 The relevance of the International Chamber of Commerce (1919) 145
The rise of the industrial economy and the role of entrepreneurs
Among the explanatory factors in the successes of the nineteenth-century multilateral conferences and public international unions are the industrial economy and the active role of internationally-oriented entrepreneurs. Because the modern Westphalian state allowed for the functioning of an independent commercial class, entrepreneurs had the freedom to develop and implement their own economic strategies. In his book The Protestant Ethic and the Spirit of Capitalism (1904-05), Max Weber proposed that after the Middle Ages, warfare and state building ran parallel with the development of the capitalist world economy. The rise of Protestantism and what Weber termed the ‘spirit of capitalism’ ended the medieval traditionalism, which maintained methods of work according to fixed rules and prescribed quantities. Instead, a stimulus to expand economically developed, albeit in combination with personal thriftiness. The state profited from the creation of the legal, political and social space for this commercial and entrepreneurial class, as it had an increased resource base and developed a more complex class structure and a more pluralist distribution of power and interest within the state, separate from the traditional dynastic ruling establishment. This strengthening of state and society in turn gave impetus to free enterprise (Buzan and Little 2000, 252). Among the negative consequences of this new economic trend was a weakening of social cohesion. Modern urban society replaced traditional communities: Gesellschaft instead of Gemeinschaft, according to the German sociologist Ferdinand Tönnies. Firms began to develop their own legal identity as public limited companies, which gave them permanent existence as regards ownership. This meant that owners had limited liability for their debts and that the shares could be traded on a stock exchange (as public trade). Modern industrial capitalism did not take much notice of national borders and evolved into a worldwide phenomenon, with capitalism and the modern state reinforcing one another and with economic competition between
nation-states playing an increasingly important role. Because of this competition, governments of states in which industrial capitalism was developing involved themselves in the industrialization process. Generally speaking, they did not meddle with the practice of national commercial classes developing their own international strategies. However, governments stayed aloof when they could have promoted these strategies, without necessarily returning to mercantilist policies. ‘They strengthened the structures of the state and imposed reforms designed to remove any remaining obstacles that might impede the release of enterprise, market incentives or scientific and technological learning’ (Cohen and Kennedy 2000, 79).
