The Resource Nexus: Global Flows, Military Supplies and State Capacity in the Baltic Region, 1740-1815
Most studies on the organization of warfare during the early modern period have focused on military actions, revenue-raising institutions and the political processes within the warring states. Scholars have concentrated less on how states spent their resources and what consequences the spending had in different European societies. Since the procurement of supplies for military needs constituted such a large share of the expenditure, it can provide us with important information about the building of state capacity and the development of markets. The research objective of this project is to use a global history approach to investigate how these procurement systems functioned and the impact they had on European societies. The project aims to answer the following questions: how were the relationships between states and government contractors for military supplies in the period 1740-1815 organized in the Baltic region, and what were the economic and political consequences of these relationships. The project will examine the Prussian and Swedish states. The two states are nodes in the project, but they are not viewed as systems in themselves. Instead they participated in much larger exchange networks along with actors such as merchants in Amsterdam, Danzig and Riga. Thus, the project will focus on the flows of capital, information and goods between the different nodes in the Baltic region. This will lead to new important knowledge about the growth of state capacity and markets.
Final report
The project has focused on deliveries of goods, such as grain, peas, meat, pork, fish, tobacco, wine and hay to the Swedish and Prussian military forces during the period 1740–1815. We have used a global history perspective to examine flows of capital, information and goods between different nodes in the Baltic Sea region. However, we have shown that the supply chains also extended beyond the Baltic Sea. It was also important during some wars to bring in fish from Norway and Scotland, tobacco from North America and salt and various alcoholic beverages from the Mediterranean.
The purpose of examining these supply chains has been to gain a better understanding of how states used their resources and what consequences these expenditures had in different European societies. Since supplies to the European armed forces constituted such a large proportion of expenditures, they can give us important information about how the state's capacity to act militarily grew and how markets developed. At a more concrete level of analysis, we have analyzed the relationships between representatives of the state apparatus and different suppliers to the military. The idea has been that these ties can tell us something important about both the functioning of the states and the markets for different goods. During the project, we have primarily focused on the conflicts during the 1740s (Sweden's war against Russia 1741–43 and Prussia's attack on Silesia), the Seven Years' War 1757–62 when Prussia and Sweden fought each other, and the alliances against Napoleon 1805–1807 and 1813–1814. We have worked with various archives in Bergen, Berlin, Lübeck, Lövstabruk, Oslo, Riga, Rostock, Stockholm, Stralsund and Täby/Arninge.
One challenge that we have faced when analyzing the material has been to find workable boundaries for the task. Since the number of suppliers was large and there were several types of goods, there were many relationships to examine, even though we mainly focused on the largest suppliers. It has also turned out that it was more important than we initially anticipated to analyze the systems for payments and transfers of funds, since these systems helped to structure the markets and the relationships between the parties. One strategy for limiting the task has been to use the relatively few preserved archives of merchants involved in war supplies to gain insights into the practices of the trading houses. It has thus been more interesting to reconstruct market mechanisms and how the different actors tried to use them to their advantage in different situations than to map all the relationships in the different systems. It has also proven difficult to calculate how profitable it was to supply the military, since the merchants' accounts mainly focused on balancing income and expenses and not on reporting profits. Another strategy has been to use customs accounts, trade statistics and price lists to gain an overview of the entire market in a location and how prices developed for different goods. These materials have been used to discuss the importance of war supplies for local economies.
The main result of the project is that we can show that military demand had a major impact on the development of trade, prices and availability of goods during the eighteenth century. The empirical studies have shown that military demand, which was very high during wars, not only led to price increases but also to shortages of various goods. Competitive situations could also arise between not only belligerent but also neutral states for the existing goods. At the same time, it is clear that wars led to increased activity among the merchant houses as they tried to satisfy the increased demand and find other ways/markets to obtain more resources or alternative goods. The activity is visible not only in the correspondence and accounts of the merchant houses, but also in trade statistics. Thus, wars must be considered business opportunities for the merchants.
States were dependent on relationships with merchant houses to obtain sufficient goods for their armed forces. Without the information, credit and transport capacity that merchants had access to, it would have been practically impossible to wage war on the scale that was done in the eighteenth century. At the same time, the close ties between state representatives and suppliers meant that problematic dependencies could arise where merchant houses could exploit, for example, information asymmetries to increase their revenues. States tried to manage these risks by negotiating with different actors and by comparing different offers of goods. Many merchants specialized in certain markets and goods and had well-established contacts with other merchant houses in these markets. Thus, for example, the Swedish state had to have relationships with several different networks of traders if it wanted to obtain necessary goods. This pluralism in contacts also meant that there was an opportunity to redirect flows of goods if a war made certain markets unavailable or if there were shortages in certain places.
There was a continuity of old trade patterns that had in many cases been established during the Middle Ages. For example, when the Swedish state bought grain from Danzig, Königsberg and Stralsund, herring and cod from Bergen and pork from Holstein, old well-established channels in the Baltic Sea area were used and reproduced. The internal trade within the Baltic Sea that had developed under the Hanseatic League thus continued to play an important role in the eighteenth century.
Concurrently, increased contacts with the Mediterranean and the Atlantic during the eighteenth century meant that goods from these areas were available to the military forces in the Baltic Sea region. Consequently, goods such as salt, herring, tobacco and wine were purchased by merchants with contacts in these areas. However, deliveries to the military do not seem to have affected prices and availability to the same extent as for goods such as grain, where volumes were larger.
The project has shown how the state's capacity to act militarily was dependent on contacts with various merchant houses, which strengthened the political position of the merchants, but the ties with the state could lead to accusations of self-interest and corruption. The state, in turn, was dependent on credit to maintain its relations with the merchants. In a comparison between Sweden and Prussia, it is clear that Sweden had a more developed state procurement system already in the 1740s, which had its origins in the Great Northern War when the state's need for both internal and external resources was very great. Several of the actors involved on both the state and the merchants' side in the 1740s had already been involved during the earlier conflict, and they used several practices regarding payment and deliveries that had been established during the Great Northern War. This system remained in place at least until 1800.
Prussia lacked a similar system, which meant that they were more dependent on established state warehouses with supplies from the kingdom's landowners and on forcibly mobilizing resources in enemy territory. But the longer the conflicts lasted, the Prussian state was also forced to buy goods on the market. For example, after 1743, Swedish Pomerania became an important market for the Prussian state during the continuing war against the Habsburgs. These supplies created debts that took a relatively long time to settle. During the Seven Years' War, we have also seen that Prussia used coercion to access the credit that, for example, the merchants in Rostock possessed. In other words, the state's own lack of long-term credit was solved by demanding contributions from the city's citizens - contributions that could only be delivered by the merchants using their own credit. During the Napoleonic Wars, however, it is clear that the Prussian system of internal warehouses and external exploitation was insufficient. The purchases of various goods, not least during the time when the Prussian state had to supply goods to Napoleon's giant army that invaded Russia, required completely different planning and contacts with merchants around Europe. It also required long-term credit, since it was impossible for the Prussian state to pay suppliers with current income. Thus, war supplies became the driving force behind the emergence of a long-term national debt in Prussia, a debt that survived even after the end of the war. In Sweden, however, credit was not nearly as important during the Napoleonic Wars, since the Swedish state made itself dependent on foreign subsidies and supplies from allies. In other words, the Swedish state used the credit of other states to wage war. The reason for this shift can probably be sought in internal political circumstances rather than changes in global flows of capital, where not least the new regime after 1809 wanted to free itself from the financial ties between the state and commercial interests that had existed under previous regimes. The mechanisms behind this change and the subsequent period of peace in Swedish history need to be further investigated. It is clear, however, that the Prussian state's capacity to wage war was strengthened in the early nineteenth century, while the Swedish state's capacity to wage war independently decreased as a result of the change in the credit system.
The purpose of examining these supply chains has been to gain a better understanding of how states used their resources and what consequences these expenditures had in different European societies. Since supplies to the European armed forces constituted such a large proportion of expenditures, they can give us important information about how the state's capacity to act militarily grew and how markets developed. At a more concrete level of analysis, we have analyzed the relationships between representatives of the state apparatus and different suppliers to the military. The idea has been that these ties can tell us something important about both the functioning of the states and the markets for different goods. During the project, we have primarily focused on the conflicts during the 1740s (Sweden's war against Russia 1741–43 and Prussia's attack on Silesia), the Seven Years' War 1757–62 when Prussia and Sweden fought each other, and the alliances against Napoleon 1805–1807 and 1813–1814. We have worked with various archives in Bergen, Berlin, Lübeck, Lövstabruk, Oslo, Riga, Rostock, Stockholm, Stralsund and Täby/Arninge.
One challenge that we have faced when analyzing the material has been to find workable boundaries for the task. Since the number of suppliers was large and there were several types of goods, there were many relationships to examine, even though we mainly focused on the largest suppliers. It has also turned out that it was more important than we initially anticipated to analyze the systems for payments and transfers of funds, since these systems helped to structure the markets and the relationships between the parties. One strategy for limiting the task has been to use the relatively few preserved archives of merchants involved in war supplies to gain insights into the practices of the trading houses. It has thus been more interesting to reconstruct market mechanisms and how the different actors tried to use them to their advantage in different situations than to map all the relationships in the different systems. It has also proven difficult to calculate how profitable it was to supply the military, since the merchants' accounts mainly focused on balancing income and expenses and not on reporting profits. Another strategy has been to use customs accounts, trade statistics and price lists to gain an overview of the entire market in a location and how prices developed for different goods. These materials have been used to discuss the importance of war supplies for local economies.
The main result of the project is that we can show that military demand had a major impact on the development of trade, prices and availability of goods during the eighteenth century. The empirical studies have shown that military demand, which was very high during wars, not only led to price increases but also to shortages of various goods. Competitive situations could also arise between not only belligerent but also neutral states for the existing goods. At the same time, it is clear that wars led to increased activity among the merchant houses as they tried to satisfy the increased demand and find other ways/markets to obtain more resources or alternative goods. The activity is visible not only in the correspondence and accounts of the merchant houses, but also in trade statistics. Thus, wars must be considered business opportunities for the merchants.
States were dependent on relationships with merchant houses to obtain sufficient goods for their armed forces. Without the information, credit and transport capacity that merchants had access to, it would have been practically impossible to wage war on the scale that was done in the eighteenth century. At the same time, the close ties between state representatives and suppliers meant that problematic dependencies could arise where merchant houses could exploit, for example, information asymmetries to increase their revenues. States tried to manage these risks by negotiating with different actors and by comparing different offers of goods. Many merchants specialized in certain markets and goods and had well-established contacts with other merchant houses in these markets. Thus, for example, the Swedish state had to have relationships with several different networks of traders if it wanted to obtain necessary goods. This pluralism in contacts also meant that there was an opportunity to redirect flows of goods if a war made certain markets unavailable or if there were shortages in certain places.
There was a continuity of old trade patterns that had in many cases been established during the Middle Ages. For example, when the Swedish state bought grain from Danzig, Königsberg and Stralsund, herring and cod from Bergen and pork from Holstein, old well-established channels in the Baltic Sea area were used and reproduced. The internal trade within the Baltic Sea that had developed under the Hanseatic League thus continued to play an important role in the eighteenth century.
Concurrently, increased contacts with the Mediterranean and the Atlantic during the eighteenth century meant that goods from these areas were available to the military forces in the Baltic Sea region. Consequently, goods such as salt, herring, tobacco and wine were purchased by merchants with contacts in these areas. However, deliveries to the military do not seem to have affected prices and availability to the same extent as for goods such as grain, where volumes were larger.
The project has shown how the state's capacity to act militarily was dependent on contacts with various merchant houses, which strengthened the political position of the merchants, but the ties with the state could lead to accusations of self-interest and corruption. The state, in turn, was dependent on credit to maintain its relations with the merchants. In a comparison between Sweden and Prussia, it is clear that Sweden had a more developed state procurement system already in the 1740s, which had its origins in the Great Northern War when the state's need for both internal and external resources was very great. Several of the actors involved on both the state and the merchants' side in the 1740s had already been involved during the earlier conflict, and they used several practices regarding payment and deliveries that had been established during the Great Northern War. This system remained in place at least until 1800.
Prussia lacked a similar system, which meant that they were more dependent on established state warehouses with supplies from the kingdom's landowners and on forcibly mobilizing resources in enemy territory. But the longer the conflicts lasted, the Prussian state was also forced to buy goods on the market. For example, after 1743, Swedish Pomerania became an important market for the Prussian state during the continuing war against the Habsburgs. These supplies created debts that took a relatively long time to settle. During the Seven Years' War, we have also seen that Prussia used coercion to access the credit that, for example, the merchants in Rostock possessed. In other words, the state's own lack of long-term credit was solved by demanding contributions from the city's citizens - contributions that could only be delivered by the merchants using their own credit. During the Napoleonic Wars, however, it is clear that the Prussian system of internal warehouses and external exploitation was insufficient. The purchases of various goods, not least during the time when the Prussian state had to supply goods to Napoleon's giant army that invaded Russia, required completely different planning and contacts with merchants around Europe. It also required long-term credit, since it was impossible for the Prussian state to pay suppliers with current income. Thus, war supplies became the driving force behind the emergence of a long-term national debt in Prussia, a debt that survived even after the end of the war. In Sweden, however, credit was not nearly as important during the Napoleonic Wars, since the Swedish state made itself dependent on foreign subsidies and supplies from allies. In other words, the Swedish state used the credit of other states to wage war. The reason for this shift can probably be sought in internal political circumstances rather than changes in global flows of capital, where not least the new regime after 1809 wanted to free itself from the financial ties between the state and commercial interests that had existed under previous regimes. The mechanisms behind this change and the subsequent period of peace in Swedish history need to be further investigated. It is clear, however, that the Prussian state's capacity to wage war was strengthened in the early nineteenth century, while the Swedish state's capacity to wage war independently decreased as a result of the change in the credit system.