The history of German industrialization has long been told as a nineteenth-century event. The precise when and where continues to be debated, of course, but most narratives follow the rough periodization that Richard H. Tilly outlined in his memorable Vom Zollverein zum Industriestaat (1990). According to this account, modern economic growth gripped the German lands no sooner than the 1830s. It was jumpstarted by earlier efforts to create an integrated domestic market; accelerated around midcentury under the aegis of the railroads and political unification; and reached its apogee in the famous science–industry–banking nexus of the imperial period. It is this periodization that Tilly, together with Michael Kopsidis, now aims to revisit and challenge.

From Old Regime to Industrial State is no mere summary of familiar events. It is an ambitious attempt to assemble a new common sense approach to German industrialization. To begin, the Zollverein is abandoned as a meaningful starting point. Not even the enormous disruptions caused by the Napoleonic era qualify for that role. Both events still mattered, to be sure, but they are downgraded to catalysts of institutional and political changes long underway—in some regions since the mid-eighteenth century. Next, the literature's long-standing preoccupation with iron, rye, and big banks is set aside to make room for an expansive analysis of subsistence agriculture and proto-industry. Both are no longer seen as mere precursors to modern, market-based growth, but rather as essential features of it. Not only did this cottage industry foster greater market orientation, but it also kept a growing population fed without raising wages. Tilly and Kopsidis advance a similar argument about guilds, which did not always constitute the drag on growth for which they have been criticized. In the eighteenth century, at least, guilds seem to have supported merchant-manufacturers by acting as “delegated monitors” who guaranteed product quality and thus reduced transaction costs (24). Finally, recent work on Germany's financial system suggests that savings banks—long a “terra incognita” in the literature (202)—were, in fact, crucial to German growth. With their prodigious lending activity to small businesses, they rivaled the “great banks” as “agents of economic development” (202).

To be sure, not everything we know has been cast aside. Many elements of the old story remain, including the well-known coal, steel, and railroad sector; the high-tech chemical and electrical industries; the deftness of German businesses’ marketing; and, above all, the early and sustained investment in education, so crucial to the development of human capital. All this makes good sense; certainly, the importance of education cannot be overstated. But there are also certain holdovers from older literature that seem ripe for, but largely avoid, re-examination. A prime example is the continued use of World War I as the endpoint to the narrative. The choice seems appropriate at first—the war undoubtedly marked a caesura—but in a book that is so explicitly concerned with periodization, the absence of a discussion about endpoints is conspicuous.

It is also at odds with one of the book's larger ambitions, which is to revisit the role of the state in German industrialization. This interest in the state is what motivated the authors’ initial dive back into the eighteenth century, which is when places like Saxony and Prussia (along with a few minor principalities like Jülich-Berg or the County of Mark) first began implementing political and institutional reforms that subsequently paved the way for a “modern capitalist market economy” (77). These reforms consisted mostly of efforts to weaken so-called pre-modern economic stakeholders—guilds, magistrates, the landed gentry—whose interests tended to be at odds with the “economic demands of capitalists” (104). Only powerful states could do this. “Weak, highly indebted ‘non-absolutist’ German states” remained beholden to local stakeholders and were therefore “forced” to prevent market formation by upholding local actors’ “particularistic privileges in manufacturing and trade” (25). By contrast, states that “successfully centralized power in the post-1648 period”—Prussia is the most important example—could afford to disregard local stakeholders and move more aggressively to install “the institutional framework of a modern market economy” (25). Further political consolidation in 1834 and 1871 pushed the process along, which returns us to the original point about the war: if state power was indeed essential, why stop short of World War I, the moment when the German imperial state reached the pinnacle of its power? Arguably the conflict put the government in a position to finally finish the modernizing reforms initiated in the eighteenth century, sweeping away all remaining vestiges of the old regime, creating a true national market, and mobilizing more labor and capital than ever before.

To be sure, the sheer complexity of the war may well push it outside the scope of a book of this nature. But there is another possible explanation for the omission. It has to do with the authors’ manifest hesitance to engage with the history of empire and with violence more generally. Questions of empire are reduced to a brief discussion of the Baghdad Railway (an economic blunder); trade with African colonies (largely insignificant); and the export of capital (attributable to “its high profitability” and not any “political considerations” [221]). Surely there is more to this story. The book itself offers ample evidence. Take, for instance, the Saxon textile industry in the eighteenth century. Its success, according to the authors, “depended” (30) on the Leipzig trade fair, a bustling biannual event where Saxons sold vast quantities of their merchandise (mostly textiles) to Russian, Ottoman, Habsburg, and later Anglo-American agents. Such demand did not arise from nothing. Saxon clothes were coarse but reputedly durable, which made them perfect material to dress serfs and slaves, equip navies with sails, and make soldiers’ uniforms. Saxon industry was humming in this period precisely because of the booming slave trade and because its main clients, notably the Russians, Ottomans, and Habsburgs, were in a near-constant state of war with one another. Similar dynamics existed elsewhere throughout the period under investigation. “German industrial growth,” the authors themselves conclude, “benefited greatly from the global expansion of world trade … in the period 1850–1914” (255). Or, one might say, in the highwater-mark period of European empire.

World War I forced the question of empire to the forefront of public consciousness. Indeed, it caused nothing short of a reckoning. It was the moment when the Germans discovered that world markets were not just somewhere to dump their exports, rather that they were political constructs that could be, and ultimately were, turned against them. The country's historical dependence on the warmongering exploits of foreign empires had come to a head. One solution, in the near term, was to try and build a more robust German empire. It failed spectacularly. After 1945, one could argue, East and West Germans went back to riding the coattails of foreign empires—this time the American and Soviet ones.

Whether or not these twentieth-century events should be part of an economic history of German industrialization remains to be seen. That the subject is not broached seems like a missed opportunity, especially in light of the authors' other important interventions regarding the role of the state. For what is at stake here is not just the recovery of links between empire and economic growth but also, more generally, the need to confront a persistent myth-history that understands German industrialization as a comparatively benign, apolitical event built on little more than hard work and human ingenuity.