Thorstein Veblen
Review author of: 'Zur Genesis des modernen Kapitalismus: Forschungen zur 
Entstehung der grossen bürgerlichen Kapitalvermögen am Ausgang des 
Mittelalters und zu Beginn der Neuzeit, zunächst in Augsburg'. By JACOB 
STRIEDER. Leipzig: Duncker & Humblot, 1904. 8vo, pp. ix + 233.
The Journal of Political Economy, vol. 13, No. 1 (Dec., 1904), pp. 120-122.
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The subtitle sufficiently indicates the purpose of the book, except that it 
has as a secondary purpose the refutation of a certain point in [121] Mr. 
Sombart's exposition of the origins of capitalist. The discussion 
throughout takes the controversial form, but the handling of the materials 
seems to be none the less painstaking and thorough on that account Mr. 
Strieder has gone into the details of the formation of the large fortunes; 
that played a part in business enterprise in the fifteenth and sixteenth 
centuries much more exhaustively than Mr. Sombart seems to have done; and 
he seems, on the whole, to have made good his point against Mr. Sombart's 
contention, so far as anyone who is not an expert on that particular 
chapter of economic history may judge.
Those who are familiar with Mr. Sombart's Moderne Kapitalismus will 
remember that characteristic passage in his exposition where he contends, 
with a considerable citation and analysis of historic material, that the 
great fortunes which made possible the magnificent growth of South German 
business enterprise in early modern times were derived, not from the 
profits of business, but from accumulations outside of business, chiefly 
the incomes from rent accruing to members of the nobility and to other 
landed proprietors. The contention may be put in the form of a general 
proposition to the effect that investment for a profit did not create the 
great capitalized fortunes, but the accumulation of great fortunes gave 
rise to investment for a profit and so led to their capitalization. In 
other and more general terms of economic theory, the growth of a market did 
not give rise to investment for a profit and so to capitalized 
accumulations, but conversely the accumulation of capitalizable fortunes 
gave rise to investment for a profit and so created the market. Mr. 
Strieder argues for the contrary and traces the origin of nearly all the 
wealthy families concerned in the trade of Augsburg, particularly, and 
shows step by step how they came by their holdings. In virtually all the 
cases in which conclusive evidence is to be had the invested holdings seem 
to have had their origin in the petty trade carried on by master-craftsmen. 
That there was a relatively large volume of this petty trade always going 
on, especially during the better days of the handicraft system, is, of 
course, a well-attested fact. Such trade was an unavoidable accompaniment 
of the growth of handicraft; indeed, it was an integral factor of the 
handicraft system. That some accumulations of appreciable magnitude should 
arise from this source would also be reasonably expected. But that 
capitalizable accumulations should also have taken place outside the range 
of this petty trade seems likewise reasonable. Mr. Strieder claims that, 
within [122] the range of data examined by him, these accumulations from 
outside the trade are a negligible factor, as against Mr. Sombart who sees 
in them the genesis of all the capitalized wealth that entered into that 
era of business enterprise.
The point in controversy, it should be said, is not of vital consequence to 
Mr. Sombart's views as to the rise and progress of capitalism, and does not 
in any serious manner impugn the value of his great work. The value of Mr. 
Strieder's work also does nor lie in his refutation of Mr. Sombart's view, 
but in the thoroughness with which he has cleared up a special point in the 
early history of business.
V.