The Political Calculus of Capital: Banking and the Business Class in Prussia, 1848–1856

Abstract

The emergence of commercial investment banks after the revolution of 1848 was an institutional breakthrough for modern capitalism and one of the central factors in the accelerated development of the Industrial Revolution in Germany between 1848 and 1871. The accumulation and mobilization of capital in concentrated and accessible forms was indispensable for underking such large-scale projects as railroads, coal mines, and iron works. Long-term promotional loans that enabled entrepreneurs to start up new business became a self-evident necessity in the growth of modern business. As one bank director noted, “capital, more than water, steam, or electricity, put the machines into motion.”