(^260) THE WEALTH AND POVERTY OF NATIONS
bonds led (obliged) other countries to do the same, freeing people to
move in space and across outworn status lines. The economic payoff to
these changes did not come until after the peace. By that time, the task
of catching up was bigger, but the potential gain as well.
For this reason, some have argued that it pays to be late: you can skip
the mistakes, begin with the latest techniques and equipment. * On the
other hand, the time lost lagging also costs. It pays to get started as
soon as possible.
So the Continental follower countries felt that they had neither
means nor time to grow as Britain had. They were competing in the
same arena. Why wait fifty years to catch up with 1815? They needed
more capital than Britain had needed, and they wanted it now. They
wanted up-to-date factories, machines, engines. From about 1830 on,
they wanted railways, canals, roads, and bridges. Where would they get
the money?
Four places: (1) personal investment; (2) financial intermediaries
and private credit; (3) government assistance; (4) international capital
flows.
First, the Continent had its share of rich people. Unfortunately,
most of these were landowners who scorned the ungenteel activities of
trade and industry. Indeed, many of them had a distaste even for agri
culture (they preferred to feel the earth through horses' hoofs) and
hired stewards to manage their estates. The owners lived on rents and
produce; sometimes on capital. The stewards got rich.
Yet some gentry and aristocrats did gravitate to industry, partly be
cause they hoped to make money, pardy because industry was a logi
cal by-product of estate management and regalian rights. Their land
held valuable mineral resources or forests that could provide timber for
ships, buildings, or pit props in mines. In central and eastern Europe,
their control over a resident serf population provided them with a
ready-made factory (or protofactory) labor force. Some of these no
blemen actually became industrialists and merchants themselves. One
thinks of such families as the Desandrouin and the Arenberg in the
Hainaut (in later Belgium), the Furstenberg and Schwarzenberg in
Austria, the Wendel in Lorraine (become French in 1766), the
- These may or may not be appropriate to relative factor costs. The choice of tech
nique is a complicated matter. Take equipment: new machines may be available only
in the latest version, because that is what manufacturers are making. But second-hand
equipment may offer significant economies—for those who know how to use it. Not
simple, though; older machines may be harder to maintain; and where to get replace
ment parts—cannibalize?