After 1850, St Petersburg had the second biggest population in Europe after Paris. The development of the Black Sea ports took Ukrainian grain to Europe. But only the railways created a national grain market, and a significant share of the Russian grain export went via St Petersburg. State intervention played a decisive role in this success. Although grain was grown mostly by private producers and the price of bread was mostly free-floating, only the state could develop infrastructure. When the price of commodities is defined not by their production cost but by the cost of transportation, the state has a defining role in creating the market.
War and potatoes
The revolution in European agriculture occurred only when America and the most important of her treasures, the potato, were discovered. Following the example of the Incas, the Spanish fed potatoes to the workers in the silver mines of Potosí. Their ships carried potatoes back to Europe. Accustomed to the purity of grain, European farmers were appalled by the dirty, oddly shaped potato. In France, people believed it caused leprosy, but in other places it was thought to be an aphrodisiac. In Ireland, the potato appeared just when the English were colonising the country in the sixteenth century. Walter Raleigh may have introduced it there himself. In 1594 he had been looking for gold in South America; when he failed to find it, he wrote a book about Eldorado. Queen Elizabeth gave him tobacco plantations in Virginia and estates in Ireland, which were also called plantations. In 1602 Raleigh sold his Irish plantations to Richard Boyle, the father of the famous chemist. Potatoes were already being grown there on a massive scale. The Catholics rebelled, the English suppressed the uprisings, and the Irish discovered the strategic superiority of the potato. The enemy trampled down your crops and stole the grain from your barns, but the humble potato continued to lie in the ground waiting for its rightful owner.
Potatoes contain seven times more moisture than wheat and are therefore prone to rot. This made potatoes beneath the notice of the Exchequer and saved millions of peasants. An acre of potatoes could feed ten people, five times as many as an acre of wheat. Having discovered potatoes on his own land, Frederick II forced his farmers to plant potatoes on their fallow fields. As a result, the peasants consumed less grain and paid more taxes. The population increased thanks to the potato, and this was a long-standing aim of the Prussian crown. The potato helped Prussia to survive its multiple wars. 17 Following Frederick’s example, European monarchies introduced the potato throughout Northern Europe. Potatoes and crop rotation were the key reasons for the population explosion in Europe in the nineteenth century. Diseases in cereals are quite different to those in potatoes, which helped to stabilise the harvests. Without the potato there would have been no urbanisation and no industrial revolution. In the 1830s, in the central Russian provinces, peasants rioted against the potatoes that landowners imposed on them in order to get more revenue from their ‘empty lands’. In contrast, in Ireland the landowners complained about ‘the idleness of peasants’, which they explained by the easy productivity of their potatoes. Undoubtedly, potatoes in the ground saved the peasants from starvation in a bad year. Perhaps that is why Soviet collectivisation led to a worse famine in the black soil, grain-growing regions of Ukraine than in northern Russia, where more vegetable crops were grown. Across Europe, potato growing increased the area of land under cultivation by a whole quarter. Then the introduction of tractors and motor vehicles released another quarter of the land which had been used for feeding horses. Agricultural expansion kept pace with industrial expansion.
Space and power
On the eve of modernity, the European economy depended on hundreds of towns with surrounding green belts. The main route for trade was by water. On the canals built in the Low Countries, one horse could pull as big a barge-load of grain as fifty horses could carry on a good road. Thanks to its rivers and sea coast, Poland was the main supplier of grain to the Netherlands. Productivity was low, but Poland contributed to the Netherlands a huge number of ‘ghost acres’ – according to the historian Jan de Vries, almost 2.5 million hectares of arable land, half the area of modern Holland. Still, only 5 per cent of the wheat and 12 per cent of the rye grown in Poland was exported. All the rest was consumed locally or kept back as seed. To increase his revenue, the landowner needed to reduce his peasants’ consumption even further, but they were barely able to subsist. Grain exports fed the thriving Dutch culture but led to serfdom in Poland. 18
While big cities were increasingly dependent on foreign trade, the countryside relied on the nearest town. In 1826, the Mecklenburg landowner Johann Heinrich von Thünen demonstrated that agricultural revenue depends not on the soil or the farmer’s skill but on the farm’s distance from the nearest town. In his book The Isolated State , von Thünen constructed a formal model for the relation between town and country. In this model, each town is surrounded by concentric rings of agricultural activity. The inner ring consists of nearby farms, which produce vegetables, milk and meat for the town’s markets. These fetch high prices in the town, but only the nearest farms make a profit on these perishable goods. They do not practise crop rotation because they fertilise the land with night soil which they get from the town. The next ring out is made up of arable farms, which supply wheat and rye to the town. The closer the farm is to the town, the cheaper the cost of transport; von Thünen’s estate was situated 5 miles from Rostock, so he knew what he was talking about. If a farm is 10 German miles (75 kilometres) away from the town market, the horses and carts will be on the road there and back for four days. The horses have to be fed. According to von Thünen’s calculations, on such a journey they would eat one-eighth of the grain delivered. Delivering grain from farms further than 50 German miles from a town, the horses would eat the entire load on the journey. The forest zone is situated in the third ring, on the periphery. The prices in the town shift the borders of the agricultural belts: the higher the price of grain, the greater the area of arable land, but then firewood will be too distant. 19 Therefore von Thünen re-examined the theory of land rent: it is defined not by the productivity of the land, as Ricardo thought, but by the land’s distance from the market.
Grain is the most widespread of all main resources after air and water. However, it became the subject of protectionist laws, which limited free trade for the sake of security. The interests of the grain producers, who wanted to raise prices, clashed with the interests of the consumers, who faced starvation. When the Napoleonic wars ended and troops were demobilised all over Europe, there was an immediate fall in the demand for grain. In England, a parliament of landowners chose to protect the market and voted for the Corn Laws, which limited the import of cereals. The price of industrial products fell but the price of grain and flour stabilised. The cotton mill workers couldn’t earn enough to buy food, and bread riots broke out in London. In 1815 the volcano Tambor erupted on the remote island of Sumbawa in the Dutch East Indies. The result was ‘the year without a summer’, when harvests failed on a catastrophic scale. Defending the ‘cotton interest’ against the ‘grain interest’, a group of journalists and intellectuals from the cotton-processing town of Manchester demanded a free market. The leader of the movement was Richard Cobden, the owner of a profitable calico factory. Free trade, wrote Cobden, is the secret of permanent peace, because all nations will have as great an interest in the prosperity of other nations as in their own. For the generation that had lived through the Napoleonic wars and the continental blockade, this opinion was convincing. In 1841, Robert Peel, a reader of Adam Smith and supporter of free trade, became prime minister. He was the son of a textile magnate – the first leader of the government whose wealth came from cotton, not grain or sugar. In 1846 the Great Famine began in Ireland after blight devastated the potato crop. The same variety – a monoculture – was planted throughout the island, and the blight spread like wildfire. A proportion of British grain went to Ireland, and this helped Peel to repeal the Corn Laws. The debate about the advantages of free trade over mercantilism resulted in a victory for the free trade lobby.