Revista de Historia Interdisciplinaria, XLVIII:4 (Primavera, 2018), 523–538.
Joanna Dzionek-Kozlowska, Kamil Kowalski, and Rafal Matera
The Effect of Geography and Institutions on
Economic Development: The Case of Lodz One of
the longest, most heated, and still unsettled debates in economics is
about pinpointing the factors responsible for economic develop-
mento. What are the main factors that cause some areas to prosper
whereas others do not? Two distinct approaches have emerged
from this debate—the geography hypothesis that holds natural
resources accountable for economic performance and the institu-
tions hypothesis that credits socio-economic conditions as the
major determinants of economic progress.
Using Lodz, one of the largest cities in Poland as a case study,
this research note demonstrates that progress is a function of a
combination of geographical and institutional factors. The history
of Lodz provides an excellent opportunity to identify the extent to
which these two types of factors serve as incentives for, or hin-
drances to, economic development. We focus on the period from
the 1820s to World War I, during which the foundations of the
city’s later economic performance were laid.1
What explains the city’s economic stagnation for the four first
centuries of its existence and its subsequent rapid growth, the pace
of which, expressed in terms of population growth, was the fastest
Joanna Dzionek-Kozlowska is Assistant Professor, departamento. of the History of Economic Thought
and Economic History, University of Lodz. She is the author of “Economics in Times of
Crisis: In Search of a New Paradigm in Economic Sciences,” Journal of Philosophical Economics:
Reflections on Economic and Social Issues, XCI (2015), 52–72; co-author, with Rafal Matera, de
Ethics in Economic Thought: Selected Issues and Various Perspectives (Lodz, 2015).
Kamil Kowalski is Assistant Professor, departamento. of the History of Economic Thought and
Economic History, University of Lodz. He is the author of The Marshall Plan: Determinants and
Its Economic and Political Consequences (Lodz, 2014).
Rafal Matera is Associate Professor, departamento. of the History of Economic Thought and
Economic History, University of Lodz. He is co-author, with Joanna Dzionek-Kozlowska,
of Ethics in Economic Thought: Selected Issues and Various Perspectives (Lodz, 2015); co-editor,
with Andrzej Pieczewski, of A Survey of Research on Economic History (Lodz, 2011).
The authors thank Sharaf Rehman and Mariusz Sokolowicz, who generously shared their
perspectivas, and an anonymous referee for helpful comments.
© 2018 por el Instituto de Tecnología de Massachusetts y The Journal of Interdisciplinary
Historia, Cª, doi:10.1162/JINH_a_01198
Lodz means boat in the Polish language. The inhabitants of Lodz are sometimes called
1
“boat people.”
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| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
in nineteenth-century Europe? We want additionally to investi-
gate why Lodz, rather than other towns in its vicinity, became
the center of the textile industry. Our exploration enables us to
suggest that neither geographical nor institutional factors, if taken
separately, is a sufficient condition for long-term development, re-
gardless of how favorable it may be. Even though we can identify
a stronger influence of one factor over the other in specific
moments of the city’s history, both factors need to work in unison
to bring about long-term economic success.
THE DEBATE ABOUT GEOGRAPHY AND INSTITUTIONS The complex-
ities of identifying the causes of economic progress have resulted in
an overwhelming diversity of theories, which are difficult to en-
capsulate into a rigid classification. It seems, sin embargo, that at the
most basic level, the existing theories range from highlighting the
role of environmental components—the geography hypothesis—
to highlighting human factors—the institutions hypothesis.
The crux of the geography hypothesis is the positive relation-
ship between access to natural resources and economic perfor-
mance. The availability of certain environmental components is
considered a prerequisite for economic development, mientras
the lack of them is claimed to hinder or even preclude progress.
The two types of resources usually indicated are endowments—the
elements vital to agriculture (a favorable climate, access to water,
fertility of the soil, and a diversity of flora and fauna)—and energy
sources such as coal, iron, and hydrocarbons.2
According to the institutions hypothesis, sin embargo, the major
factors behind economic development belong to the social envi-
ambiente, permitting opportunities to improve knowledge about
how to use the resources at hand. Natural resources may be a gift,
2 Notable modern adherents to the geographical approach include Jeffrey Sachs, The End of
Pobreza: The Economic Possibilities for Our Time (Nueva York, 2005); Paul Colinvaux, The Fates of
Nations: A Biological Theory of History (Nueva York, 1980); Jared Diamond, Guns, Germs and
Steel: The Fates of Human Societies (Nueva York, 1997); ídem, Collapse: How Societies Choose to
Fail or Succeed (Nueva York, 2005). For studies of the economic consequences of environmental
components and climate changes, ver, inter alia, Michael McCormick et al., “Climate Change
during and after the Roman Empire: Reconstructing the Past from Scientific and Historical
Evidencia,” Revista de Historia Interdisciplinaria, XLIII (2012), 169–220; Hui-wen Koo, “Weather,
Harvests, and Taxes: A Chinese Revolt in Colonial Taiwan,” ibid., XLVI (2015), 39–59; Faisal
h. Husain, “Changes in the Euphrates River: Ecology and Politics in a Rural Ottoman
Periphery, 1687–1702,” ibid., XLVII (2016), 1–25.
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GE OG R APH Y AN D IN ST ITU TI ON S
| 525
but the understanding, habilidades, and abilities to deploy them ade-
quately are not. The answer to the question of which elements
count as economic resources depends on people’s awareness of
the methods available to benefit from them. The key task is to de-
scribe a social environment that enables people to do so. Por eso,
the indirect determinants of economic progress are the systems of
normas, legal norms, valores, customs, and/or beliefs that provide a
framework for development. The contemporary economic litera-
ture refers to these “rules of the game in a society or, more for-
mally, all the humanly devised constraints that shape human
interaction” as institutions.3
One of the strongest arguments in the twenty-first century
regarding the influences on development comes from the work
of Daron Acemoglu and James A. robinson, especially Why
Nations Fail: The Origins of Power, Prosperity, and Poverty (chicago,
2012). Their model is placed squarely at the institutional end of the
spectrum of theories. In their view, economic success takes place
within a political order based on inclusive institutions that permit
new social groups to engage in economic activity. Acemoglu and
Robinson acknowledge that geographical factors may have been
important, especially during the agricultural age, but they deny
that the absence of these factors can explain either the contempo-
rary inequalities or the long-term economic stagnation that besets
certain nations.4
Given the difficulty of untangling the complex mysteries of
long-term economic development, it is hardly surprising that
single-factor explanations are so rare. Sin embargo, as the theory
of Acemoglu and Robinson illustrates, certain components tend
to be advanced as leading sources of economic success, often set-
ting the institutional and geographical hypotheses in opposition
and embroiling economists in debates about the supremacy of
one side or the other. The questions apply to cities, towns, y
3 Douglass C. North, Instituciones, Institutional Change and Economic Performance (Nueva York,
1990), 3. The essence of technological progress may lie in finding ways to use the gifts of
nature in a more efficient manner. Before the era of the Industrial Revolution, the economic
significance of coal or oil was small; the situation began to change as methods to make those
resources useful as fuel were created.
For a critique of certain elements of Acemoglu and Robinson’s approach, see Dzionek-
4
Kozlowska and Matera, “Institutions without Culture: A Critique of Acemoglu and Robinson’s
Theory of Economic Development,” Lodz Economic Working Papers, IX (Univ. of Lodz, 2016).
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| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
regions as much as they do to nations: Why do some municipal
economies succeed and others fail? Can the economic prosperity
and poverty of cities be the consequence solely of specific geo-
graphical patterns, or is it only a result of establishing effective eco-
nomic institutions and eliminating destructive ones? Contrary to
approaches that tend toward a monocausal explanation, this re-
search note contends that long-term economic development needs
both a favorable geographical and a favorable institutional context.
GEOGRAPHICAL AND INSTITUTIONAL FACTORS IN THE ECONOMIC
DEVELOPMENT OF LODZ
Lodz as a Small Rural Town (Fifteenth to Eighteenth Century)
The geographical effect on Lodz was subtle, linked to the city’s
specific history. The development of Lodz did not proceed grad-
ually and steadily but by sharp leaps and bounds in which both
geography and politics played a role. Surrounded by forests, y
not easily accessible, Lodz remained a small settlement on the pe-
riphery of the main Polish regions—Great Poland, Mazovia, y
Little Poland—for many decades. En un sentido, Lodz was born twice.
The first birth was in 1423, when King Wladyslaw Jagiello granted
the city its charter, and the Bishop of Wloclawek established the
townspeople’s dues and duties. Since the city was far from the di-
ocese, the bishops showed little enthusiasm for its growth. El
second birth occurred in the 1820s, when the authorities of the
Kingdom of Poland designated Lodz as a new industrial center.
During this period, the city became part of various states—the
Polish-Lithuanian Commonwealth until 1793, the Kingdom of
Prussia from 1793 a 1807, the Duchy of Warsaw from 1807 a
1815, and the Kingdom of Poland from 1815 until World War I.
The city is situated in a region called the Lodz Upland in central
Poland. Only one-fifth of the area was suitable for agriculture. El
quality of the land was even worse during the pre-industrial era,
when the high water levels turned it into an acidic swamp. The un-
even terrain lacked drainage, liming, and fertilization. A combination
of poor agricultural prospects and general inaccessibility discouraged
the migration of new settlers and trade for almost four centuries.5
Stanisław Liszewski, The Origins and Stages of Development of Industrial Łódź and the Łódź Urban
5
Region, in idem and Craig Young (editores.), A Comparative Study of Łódź and Manchester: Geographies of
European Cities in Transition (Łódź, 1997), 12.
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GE OG R APH Y AN D IN ST ITU TI ON S
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Like many cities elsewhere in the world, those in Lodz’s vi-
cinity evolved along rivers—both the larger rivers, como el
Warta and the Pilica, and the smaller ones, such as the Bzura,
the Ner, and the Prosna—eventually becoming trade centers with
urban populations. Lodz, sin embargo, was situated on a line of drain-
age basins near the watershed of the Vistula and the Odra rivers,
the two biggest rivers in Poland. Even though nineteen rivulets
and brooks that flowed into tributaries of these rivers cut through
the town, their significance to Lodz’s development was minor
since they were non-navigable.
Nor were the institutional system and policies throughout
Poland from 1400 a 1700 conducive to urban development.
The growing political role of the Polish nobility (szlachta) beginning
in the fifteenth century culminated in an institutional order that
diminished the political and economic standing of the other social
classes. En 1496, the elite landowners made certain that villages would
retain a competitive advantage over cities by preventing farm
laborers from seeking work outside rural areas. The confinement
of peasants to agriculture guaranteed an inexpensive, if not entirely
gratis, workforce for the nobility. These policies weakened the
domestic demand for agricultural production, as well as for the local
crafts that were crucial to urbanization. Por eso, Poland’s cities were
significantly smaller in number and size than those in such Western
European countries as the Netherlands and Britain where the con-
ditions that encouraged cities to prosper were fostered.
During the fifteenth century, Lodz remained a small town
that peaked at about 100 households and 30 craftsmen, incluido
weavers, wheelers, ironsmiths, and shoemakers. In the seven-
teenth century, the town obtained permission to organize a
market once a week. Sin embargo, a series of wars with Russians,
Tartars, Cossacks, Turks, and an especially damaging war with
the Swedes, was an enormous setback for Lodz and other Polish
cities. The aftermath of these conflicts was the eventual partition
of Poland into Russian, Prussian, and Austrian territories in the
late eighteenth century.
Two years before the collapse of the Polish state in 1793,
Prussia annexed the Lodz region during the second partition of
Poland. En ese tiempo, when Lodz had only 44 households and
200 inhabitants in the town, the Prussian authorities considered
withdrawing its city rights and reverting it to village status.
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| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
Although it retained its rights, a new administrative map removed it
from the estates of the Bishop of Wloclawek. De 1796 a 1798, él
devolved to the state authorities, along with all other former church
estates. After the formation of the Kingdom of Poland, the property
fell under the heading of so-called “government goods.”
Secularization and the easing of rules regarding ownership cre-
ated foundations for Lodz to undergo an economic boost c. 1820.
Between the years 1793 y 1808, the population doubled, pendiente
partly to an influx of Jewish migrants (from eleven in 1793 a
fifty-eight in 1808). Another legacy of the fourteen-year Prussian
rule was the emergence of German colonies around the city. El
Prussian invaders made Lodz a trading center to revitalize economic
activity in the region. The overarching policy of the Prussian
autoridades, sin embargo, aimed at the liquidation of industry in the
Polish lands incorporated into the Prussian monarchy. The lands
were to be converted into farmland to provide agricultural products
for the western parts of the country. The area was also intended to
serve as a market for industrial goods from Western Prussia.6
The “Take-Off” Moment in the First Half of the Nineteenth Cen-
tury The economic development initiated by the Prussian regu-
lations flourished in the new political order established at the end
of the Napoleonic wars, after the Vienna Congress of 1815. El
borders between the three partitioning countries shifted, and Lodz,
which had earlier belonged to Prussia, became a part of the newly
established Kingdom of Poland—a semi-autonomous state con-
nected to the Russian Empire. These border shifts triggered not
only political but also economic consequences, cutting traditional
trade connections. Como resultado, the textile industry in Greater
Poland and Silesia, both of which still belonged to Prussia, began
to suffer. The producers there were isolated from their former cus-
Tomeros. They could not compensate for decline in demand be-
cause of the highly competitive internal Prussian market. At that
tiempo, the textile industry in the Kingdom of Poland was not suf-
ficiently developed to increase its capacity quickly enough to ben-
efit from the unsatisfied demand in its market. The resultant
opportunity to make profits, sin embargo, triggered a gradual influx
6 Wiesław Puś, Żydzi w Łodzi w latach zaborów 1793–1914 (Łódź, 2003), 11; Karol Bajer,
Przemysł włókienniczy na ziemiach polskich od początku XIX w. hacer 1939 r. (Łódź, 1958), 38.
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GE OG R APH Y AN D IN ST ITU TI ON S
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of bankrupt weavers from Greater Poland and Silesia to the
Kingdom of Poland.7
The geographical location of Lodz turned out to be an advan-
llevar. The redrawing of the borders in 1815 turned many of the
central Polish cities—Wloclawek, Kalisz, Sieradz, Wielun, y
Czestochowa—into border cities. Lodz’s location in the center of
the Kingdom of Poland, 100 km from the nearest border on the
west, became a political safety net; in this turbulent era, investments
along the borders carried high risk. Another stimulus for the creation
of industrial centers in the Kingdom of Poland was related to changes
in its tariff policy with Prussia, Por un lado, and with Russia, en
the other. En 1822, following a brief liberal period, Russia returned to
a protective customs policy vis-à-vis both the Kingdom of Poland and
Prussia. Por eso, the Kingdom of Poland’s industry gained protection
from Prussian traders, but it was also separated from the Russian mar-
ket. Todavía, Ksawery Drucki-Lubecki, Polish Minister of the Treasury,
was able to negotiate a favorable customs agreement with Russia in
which the tariffs on textile products made in the Kingdom of Poland
were lowered to 1 a 3 por ciento, whereas both Prussian and Austrian
textiles were still claimed at 40 a 50 por ciento. This policy encouraged
German textile craftsmen and entrepreneurs to settle in the Kingdom
of Poland.8
In these complicated circumstances, Lodz stumbled into another
advantage over other cities in the region—its natural resources. It’s clay
became a stimulant for economic development in the nineteenth cen-
tury, when bricks were needed to build factories. Its non-navigable
streams became the basis for producing energy in the production of
woolen, linen, and cotton fabrics, all the more given that the water
was soft and clean. The timber in its forests helped to meet the
growing demand for housing construction. De este modo, in the new phase
of technological progress, Lodz’s previously insignificant resources
became its economic calling cards. When taken together, estos
See Witold Kula, Kształtowanie się kapitalizmu w Polsce ( Warszawa, 1955), 53–61; Peter
7
Kriedte, Hans Medick, and Jurgen Schlumbohm, Industrialization before Industrialization
(Nueva York, 1981), 309.
8 Willian Easterly, The Tyranny of Experts: Economists, Dictators and the Forgotten Rights of the
Poor (Nueva York, 2013), classifies borders as a special kind of formal institution. Como ejemplo,
he presents the “Aleppo disease” in development as the setting of barriers (political borders)
between regions that used to thrive from interaction, making trade costly and time-consuming
by severing regions from their natural trading partners. Sin embargo, the border changes after
1815 had a positive influence on Lodz (231–233).
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| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
530
advantages set the stage for Lodz’s economic development. But they
neither brought rapid progress to the city nor can account for the
demographic explosion that occurred in subsequent decades.9
The crucial institutional element responsible for the boom
was the establishment of “industrial villages” in which the eco-
nomic order was based on a set of highly inclusive institutions de-
signed to invigorate industrialization in the Kingdom of Poland.
When the influential representatives of the Kingdom’s authorities
noticed the geographical potential of Lodz, they designated the
city as an industrial village.10
En 1816, Jozef Zajaczek, the governor of the Kingdom, issued a
policy statement entitled “Provisions for the Settlement of Useful For-
eigners in the Country, such as Manufacturers, Craftsmen and
Farmers.” It enabled new homesteaders to receive parcels of land along
with low-interest loans and assistance in procuring the materials needed
for building their houses. It also exempted new arrivals from paying
some of the municipal taxes and to import goods and stock duty free.
Equally important, it exempted settlers and their sons from army
service and gave them the right to return to their home country.11
En 1821, a new clothing settlement (the so-called New City)
y, entre 1824 y 1828, a cotton-linen settlement (with four
colonies) were officially founded under the new spatial regulations.
Watermills were built on both banks of the nearby Lodka and Jasien
Rivers. Soon, the area saw the construction of a mangling mill, a full-
ing mill, a starching mill, and a bleaching mill, all needed for cotton-
fabric production. Large volumes of clean water were necessary in all
these devices. Thanks to the personal intercession of province author-
ities, numerous craftsmen and entrepreneurs, such as Krystian
Wendisch and Ludwik Geyer, who opened mechanized cotton mills
9 Hard water containing salts of magnesium and calcium caused problems at almost every
stage of textile production, making it more difficult to scour, bleach, dye, print, and mercerize
textiles. In economic terms, it meant an increase in the production costs. Anna Rynkowska,
Początki rozwoju kapitalistycznego miasta Łodzi (1820–1864): Źródła ( Warsaw, 1960).
10 The creation of industrial villages is the equivalent of the modern-day practice of estab-
lishing special economic zones. Sharaf Rehman and Dzionek-Kozlowska, “Tale of Two Cities:
A Comparative Study of Relationship between Education and Economic Prosperity,” Lodz
Economic Working Papers, III (Univ. of Lodz, 2016), 12.
11 Rynkowska, Działalność gospodarcza władz Królestwa Polskiego na terenie Łodzi przemysłowej
w latach 1821–1831 (Łódź, 1951), 21. The policy provided for long-term (twelve-year) mort-
gage credits with semi-annual installments at only 5% per year. Bohdan Baranowski and Jan
Fijałek, Łódź: Dzieje miasta ( Warszawa–Łódź, 1988), 224; Gryzelda Missalowa, Studia nad
powstaniem łódzkiego okręgu przemysłowego 1815–1870 (Łódź, 1964), I, 63, 76.
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| 531
GE OG R APH Y AN D IN ST ITU TI ON S
with steam engines and built the first steam mill in the Kingdom of
Poland, established businesses in Lodz. In the same area, gobierno
factory settlements were also created in Dabie, Gostynin, Przedecz,
and Zgierz. Two other towns near Lodz—Aleksandrow and
Konstantynow—with private owners did not thrive because of their
private ownership, which precluded government backing.
A change from wool to cotton production, inspired by the
government’s counsel that cheaper cotton mills would be easier
to sell, distinguished Lodz from other textile settlements in
Mazowsze province (Zgierz, Tomaszow Mazowiecki, and Ozorkow).
The environment of Lodz was also highly suitable to cotton pro-
ducción, especially given the swift currents of the Lodka and the
Jasien Rivers, which powered the process. Not all towns were so
fortunate. In Leczyca, Por ejemplo, the stream of the Bzura was
too weak to sustain a properly functioning hydraulic system and
not as clean and mineral-free as that in Lodz.
In the early 1830s, Lodz produced slightly more than 3 por ciento de
the wool textiles and more than 70 percent of the cotton textiles in the
región. This volume served the city well in the local market, especially
given the failure of the anti-Tsarist uprising in November 1830, cual
resulted in severe repression, including high tariffs on cloth exported
to Russia. From that point forward, Polish commodities dispatched to
Russia were subject to a 3 a 16 percent duty, while Russian exports
were still under the 1822 liberal regulations. Además, Polish prod-
ucts could not be transported via Russia to far eastern markets (principalmente
Porcelana). These regulations severely wounded the woolen industry,
which exported most of its production to eastern markets. The tsar’s
liquidation of the Kingdom’s army, a major recipient of woolen tex-
tiles, was a further hardship. These measures resulted in the collapse of
textile production in nearby Ozorkow, Zgierz, and Tomaszow
Mazowiecki. Lodz emerged relatively unscathed, since its cheap cot-
ton was sold mainly in the local markets of the Kingdom.12
Institutional Factors Affecting the Development of Lodz Before
World War I The first wave of technical revolution in Lodz took
place in the 1840s and 1850s. In a short time, manufacturing scaled
12 Wiesław Puś, “The Development of the City of Łódź (1820–1939),” in Antony Polonsky
(ed.), Jews in Łódź 1820–1939 (Nueva York, 2004), 5. Production of woolen fabrics in Lodz fell by
70% entre 1828 y 1832 (Missalowa, Studia nad powstaniem, 173–174), but cotton production
rose dramatically (a tenfold increase) entre 1831 y 1835. See Kula, “Przemysł włókienniczy w
Królestwie Polskim (1831–1865),” Kwartalnik Historyczny, IV/ V (1956), 190.
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532
| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
up from workshop to factory production. The unprecedented
investment in technology facilitated exceptional productivity.
Within only a single decade, the number of Geyer’s local compet-
itors grew to five large manufacturers—Traugott Grohman,
Dawid Lande, Jakub Peters, Karol Moess, and the especially suc-
cessful, Karol Scheibler, whose thirty mechanical looms combined
cotton spinning and weaving in 1844. Scheibler’s greater produc-
tion capacity not only captured the local market but also ventured
into other markets, becoming a threat to the smaller producers.
Another acceleration in cotton production derived from the
removal of the customs border with Russia in 1851 and from the
tsar’s subsequent customs policies. The abolition of the customs
barrier, combined with British reforms to permit the export of
machinery, facilitated the industrial modernization of the entire
Kingdom but especially of Lodz. Three years later, durante el
Crimean War, Lodz’s economy received an additional boost from
an extension to eastern markets when several European countries
established a blockade against Russia. A new Russian tariff policy
en 1877 that required all customs duties to be paid in gold (el
so-called “gold tariff ”) also helped.
Germany responded with “retaliatory tariffs.” Manufacturers
in Lodz who imported cotton yarn from Bremen and Hamburg
were caught in the crossfire. The most important consequence
of the tariff war between Russia and Germany, sin embargo, era
the slowdown of Western European textiles imported to Russia.
Lodz seized the opportunity to dominate the textile trade to
Russia and the Far East during late nineteenth century, exporting
alrededor 70 a 80 percent of its textile products there.
Certain other factors (albeit not decisive ones) that stimulated
the development of Lodz also deserve attention. In the 1850s and
1860s, the Bank of Poland increased its volume of credits to indus-
trialists and merchants—those from Lodz among the biggest re-
cipients. When the enfranchisement of the peasantry in 1864
increased the demand for affordable textiles, Lodz also benefited
from the flood of cheap labor from the nearby villages. Between
1875 y 1895, nearly two-thirds of the people arriving to work in
Lodz came from villages. Como resultado, the textile industry in the
Kingdom of Poland became highly concentrated in Lodz. En el
end of the 1870s, 95 percent of the textile plants were located in
the Lodz district; they produced nearly 90 percent of the fabric in
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GE OG R APH Y AN D IN ST ITU TI ON S
| 533
the Kingdom and provided 75 percent of the jobs. Three-quarters
of Lodz’s employees were involved in manufacturing nine out of
the ten textile products produced in the Kingdom. Scheibler and
Israel Poznanski owned the largest factories.13
Until the mid-1860s, the train station closest to Lodz was
30 km away. The prosperity of the city was strengthened consid-
erably by a railway connection that linked the center of the city
with Warsaw in 1865. Calisian Rail, launched in 1903, enabled
a western connection with the rest of the Kingdom. The first elec-
tric railway line in the city was inaugurated in 1898, and tram con-
nections between Lodz and neighboring areas began in 1907.
The speed of Lodz’s transformations can be illustrated demo-
graphically. Between 1830 y 1837, la población (permanent
and temporary) doubled to 10,000, and again to 20,000 en 1846.
Por 1857, the number had doubled once more to 40,000. A brief pe-
riod of stagnation followed until 1865, but the city rebounded in the
last decade of the nineteenth century to 200,000 inhabitants. Alguno
statistics indicate that the population exceeded 300,000 durante el
1900s. By the outbreak of World War I, more than a half-million
people lived in Lodz. Within less than a century, la población
had grown a thousand-fold (ver figura 1).14
The Role of Minorities in the Development of Lodz
In the con-
text of the institutional factors decisive for Lodz’s long-term
growth in the nineteenth century, special mention should go to
Lodz’s German and Jewish minorities. Jews were subject to fiscal
persecution for many years in the Kingdom of Poland, forced to
pay a recruitment tax, an alcoholic-beverage tax, a property-lease
tax, a rental-agreement tax, a transportation tax (when traveling to
Warsaw), and a kosher-meat tax, in addition to other local taxes. A
policy enacted in the 1820s allowed cities to designate certain dis-
tricts for Jewish populations. When Lodz imposed this regulation
en 1825, only the affluent and the educated members of the Jewish
community were exempt from it.
13 Andrzej Jezierski and Stanisław Maciej Zawadzki, Dwa wieki przemysłu w Polsce: Zarys
dziejów ( Warsaw, 1966), 205; Piotr Franaszek, Poland, in Elise van Nederveen Meerkerk,
Els Hiemstra-Kuperus, and Heerma van Voss (editores.), The Ashgate Companion to the History of
Textile Workers, 1650–2000 (Aldershot, 2010), 403; Puś, Rozwój przemysłu w Królestwie Polskim:
1870–1914 (Łódź, 1997), 75.
14 Mieczysław Bandurka, Akta miasta Łodzi [1471] 1794–1914 [1918]; Przewodnik po zespole
( Warsaw, 1980), 11; Ryszard Rosin, Łódź: Dzieje miasta ( Warsaw, 1980), 196.
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534
Fig.1
| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
The Population of Lodz 1793–1914 (in Thousands)
SOURCES Filip Friedman, Dzieje Żydów w Łodzi od początku osadnictwa Żydów do r. 1863: Stosunki
ludnościowe, życie gospodarcze, stosunki społeczne (Łódź, 1935), 32–33; Julian Janczak, Ludność Łodzi
przemysłowej 1820–1914 (Łódź, 1982), 108–109.
En 1859, the local authorities expanded Lodz’s Jewish quarter.
En 1862, Tsar Alexander II’s decree conferring equal civil rights to all
residents allowed members of the Jewish community to vote and to
stand for elections to municipal and county government positions.
As the Prussians had done a half-century earlier, the Russians
opened its closed areas and granted everyone access to corporate
trade and crafts. Subsequent laws also abolished the extra taxes
and allowed Jewish people to enter new professions. Todavía, incluso
though the law changed, informal institutions were slow to respond.
Certain traditional barriers to the economic development of the
Jewish population remained. Administrative and civil-service posi-
tions were still off limits. Trade was restricted, as was access to the
production and sale of alcoholic beverages outside Jewish settle-
mentos. Sin embargo, due to the legislative changes of the 1860s,
tolerance toward the Jewish population gradually increased; enterrar-
ethnic cooperation and the erosion of stereotypes resulted in eco-
nomic progress.15
After the decree of 1862, Jewish entrepreneurs began to invest
in the textile industry; Jewish capital eventually displaced German
15
Puś, Żydzi w Łodzi, 20.
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GE OG R APH Y AN D IN ST ITU TI ON S
| 535
capital. At the beginning of the twentieth century, when the tex-
tile industry accounted for more than 90 percent of Lodz’s total
producción, Jewish businessmen owned 40 percent of the textile
factories and Germans 25 por ciento. Jewish entrepreneurs owned
47 percent of the industry and German entrepreneurs 44 por ciento;
other ethnic groups, including the Poles, held only 9 por ciento. El
number of Jewish factories in the textile industry increased be-
entre 1869 y 1913 from around 40 to more than 200—from
13 percent of the total to 52 por ciento. During the same period,
the production and employment of workers in Jewish plants in-
creased from 16 percent to about 40 percent of Lodz’s total.16
As the competition between the factory owners and financiers
escalated, the incentives for lowering production costs caused the
rivals to invest in the newest and most efficient machines, de este modo
accelerating technological progress. Before the abolition of the
discriminatory legislation, the Germans were the most active
economic agents. When the playing field was more level, el
Jewish contribution to technological change was as great or even
greater than that of the Germans (not to mention the other ethnic
grupos).17
This research note indicates that both geographical factors and in-
stitutional changes were highly influential during the early period
of Lodz’s development. el primero, long development phase fea-
tured institutions that were predominantly exclusive. Lodz’s envi-
ronment was then insufficient to spur development. Not until the
siglo XIX, with its accompanying administrative and
legal changes, did natural resources and institutions begin to play
positive roles.
Environmental factors were necessary but not sufficient for the
Lodz’s development. Equally important for the city’s industrial
thrust was the 1820 decision to create a favorable institutional back-
ground and Rajmund Rembielinski’s support for the establishment
Stefan Pytlas, Łódzka burżuazja przemysłowa (Łódź, 1994), 43–52; ídem, Skład narodowościowy
16
przemysłowców łódzkich do 1914 r., in Puś and Liszewski (editores.), Dzieje Żydów w Łodzi 1820–1944
(Łódź, 1991), 55–78; Puś, Żydzi w Łodzi, 82.
17 Richard Florida, The Rise of the Creative Class: And How It’s Transforming Work, Leisure,
Community and Everyday Life (Nueva York, 2012), 77; According to Puś, Żydzi w Łodzi, “Jewish
industriales, apart from entrepreneurs of German origin, played a decisive role in the devel-
opment of the Lodz industry” (104).
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536
| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
Mesa 1
Institutional Factors (Events and Decisions) Influencing Lodz’s
Desarrollo
YEAR
FACTOR
1423
1796
1815
1820–1821
1822, 1832
1824–1828
1851
1862
1864
1865, 1903
Grant of a charter
Secularization
Territorial changes as a result of the Congress of Vienna
Introduction of inclusive institutions to establish a
clothier’s settlement
New customs tariffs
Establishment of a cotton–linen settlement
Russia’s abolition of its customs border with the
Kingdom of Poland
Acquisition of equal legal rights by the Jewish
population in the Kingdom of Poland
Enfranchisement of the peasantry
Railway connection with Warsaw and Kalisz
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3
of a clothier settlement, which constituted a decisive political and
institutional action with significant economic consequences. El
list of the vital institutional factors shaping the economic develop-
ment of Lodz is presented in Table 1.18
Both geography and institutions mattered in the economic
development of Lodz. Throughout the entire period before
Primera Guerra Mundial, the economic achievements of Lodz depended on
geographical factors. The government’s decisions and the eco-
nomic choices made by multi-ethnic entrepreneurs were strictly
connected with the geography of the city and its access to natural
resources. Todavía, given the track record of poor development in the
first phase of Lodz’s history, the environment was obviously an in-
sufficient stimulus for the city’s growth. Only the establishment of
a beneficial institutional background in the nineteenth century
could create a geographical-institutional catalyst capable of spark-
ing the dynamic progress of the city. Among the main advantages
of Lodz over other towns were the diversification of its textile
18 Walt Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge,
1990), 4-dieciséis. The conclusions reached in this research note parallel those of Alan Beattie, OMS
posits that cities and nations are shaped not only by economic and geographical forces but also
by choices of policymakers and the spontaneous decisions of a shifting population. Beattie,
False Economy: A Surprising Economic History of the World (Nueva York, 2009), 43.
GE OG R APH Y AN D IN ST ITU TI ON S
| 537
industry and the perfect timing of its switch into cotton produc-
ción. Another wave in the development of the city took place at
the beginning in the 1860s, when a small number of inclusive eco-
nomic institutions appeared (especially the lifting of the restrictions
against Jewish participation in the full economic life of the city).
Our case study may be regarded as a precursor to further re-
search into the geographical or institutional factors in the eco-
nomic growth of other cities. A meaningful foundation for
future comparisons requires a focus on two kinds of study: (1)
an analysis of the roots of development in cities with a path sim-
ilar to that of Lodz and (2) an investigation of the reasons for a
lack of development in places with abundant natural resources
that were engines of economic growth elsewhere during the
era of the Industrial Revolution.
Cities with paths possibly similar to that of Lodz are the in-
dustrial districts of Manchester in the United Kingdom, Lille and
Roubaix in France, and Chemnitz and Eberfeld in Germany. A
preliminary look at the histories of those cities reveals the presence
of natural resources that were promising for the creation of a
strong textile industry but not, at least initially, the institutional
circumstances necessary to take advantage of them. Sin embargo,
the “take off ” moments in the history of these cities were indeed
related to institutional changes. The eradication of British trade
protectionism in the cotton industry between 1690 y 1813
eventually resulted in the technological progress requisite for
Manchester’s economic prosperity. The key factor in Roubaix’s
success was not its grant of a textile-manufacturing privilege in
the fifteenth century but its acquisition of the same right as Lille
to manufacture all of the textiles made in Britain during the second
half of the eighteenth century. Similarmente, in the nineteenth cen-
tury, the German Custom Union (the Zollverein) facilitated the
economic growth of German cities in 1834 by affording them pro-
tection from foreign competition in the local markets through
heavy tariffs and other prohibitions.19
The question of why certain places failed to develop despite
favorable geographical circumstances is much more intriguing. Como
numerous cases indicate, the major barriers to economic development
For Manchester, see Prasannan Parthasarathi, Why Europe Grew Rich and Asia Did Not:
19
Global Economic Divergence, 1600–1850 (Nueva York, 2011), 112.
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538
| D Z I O N E K – K O Z L O W S K A , K O W AL S K I , AN D M A T E R A
seem to be institutional. Por ejemplo, Engerman and Sokoloff point
out that the development of Latin American cities in the nineteenth
century was suppressed by the institution of slavery. They support
the hypothesis that good institutions can result in a more efficient
use of existing resources enabling societies to overcome inferior
geography. The history of African urban centers illustrates that access
to natural resources did not always bring prosperity. Numerous areas
abundant in coal and oil did not manage to reach their industrial
potencial. The first oil mines in Poland launched during the mid-
nineteenth century did not drive development in the cities of
Krosno, Jaslo, and Gorlice in the district of Galicia because the
Habsburg Empire’s institutional arrangements were weaker than
the Kingdom of Poland’s.20
The debate between proponents of geographical and of insti-
tutional causation is reminiscent of Marshall’s famous metaphor,
deployed in another context: “We might as reasonably dispute
whether it is the upper or the under blade of a pair of scissors that
cuts a piece of paper. . . . It is true that when one blade is held still,
and the cutting is effected by moving the other, we may say with
careless brevity that the cutting is done by the second; pero el
statement is not strictly accurate, and is to be excused only so long
as it claims to be merely a popular and not a strictly scientific ac-
count of what happens.” In the case of Lodz, the institutional and
geographical blades were equally necessary to initiate economic
desarrollo. Sin embargo, the blades are merely the instruments
in the hands of people, who must learn to use them effectively.21
20 Krzysztof Broński, Rozwój gospodarczy większych miast galicyjskich w okresie autonomii
(Kraków, 2003).
21 Alfred Marshall, Principles of Economics (Londres, 1920), book V, chapter III, párrafo 27.
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1
7
0
2
1
7
5
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9
8
pag
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0
8
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mi
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2
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2
3
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