This ambitious study seeks to restore economic history to the center of the debate on Germany's sociopolitical “peculiarity” in the Imperial epoch. According to Grant, the “Kehrite” interpretation of German history persists because scholars continue to employ the wrong paradigm of economic development, namely the capital-intensive (“classical”) model based on the Industrial Revolution in Great Britain. Grant suggests that the labor-intensive “Lewis Model” is better at explaining late-developing economies such as Germany, Russia, China, and Japan's. In this model social inequality follows a “Kuznets Curve” (inverted “U”) during the process of industrialization, increasing precipitously as capital draws on a near limitless supply of surplus rural labor. Inequality then decreases as the economy matures and the demand for both agricultural and factory labor begins to outpace supply. Before Germany's industrial “take-off,” peasants had little reason to migrate to cities, where wages were low and the social situation was miserable. But the consolidation of large estates and competition from Polish farm labor raised the price of land and lowered rural wages over the course of the nineteenth century. Combined with rapid population growth and more technologically intensive agriculture, these factors facilitated the replacement of annual with seasonal migrant labor. Rural underemployment was initially offset by a rising demand for factory work in the 1870s, causing agricultural laborers to migrate to nearby industrial centers. Following Kuznets' prediction, however, the competition for urban employment eventually pushed wages lower in the 1880s, allowing German industry to accumulate capital for reinvestment while increasing the level of urban inequality. Heavy industrial competition from Great Britain and in migration from Eastern Europe depressed wages further, prolonging the “labor surplus period in German industrialization” and yielding a highly volatile social situation characterized by the escalation of class conflict and the rise of Social Democracy.

In contrast to the “Kehrite” school, Grant explains the simultaneous transition from laissez-faire to moderate protection as a perfectly “modern” response to Germany's rapid industrialization. Great Britain could afford free trade with Russia and the United States because of its relatively small agricultural sector and comparative advantage in terms of capital and technology. Farming took up a far larger proportion of GDP in Germany, while its developing heavy industrial sector could not compete with Britain's without tariffs. German agricultural productivity was improving in the last three decades of the nineteenth century, providing a relatively large proportion of the urban food supply and slowing the pace of agricultural unemployment. Conversely, the collapse of German agriculture in the face of cheap foreign grain threatened to flood cities with millions more peasants in search of work. Introducing tariffs on “iron and rye” was therefore “a sensible solution, which avoided the social costs of a complete agricultural collapse, but still allowed urban living standards to increase” (p. 225).

Ameliorated in part by economic protection, this quarter-century trend toward rising inequality gradually reversed field after 1895, as entrepeneurs embraced technology-intensive, light-industrial production. Insulated for the first time from direct British competition, Germany enjoyed a rapid increase in exports. As industry reinvested excess capital, the demand for labor began to outpace supply, initiating an upward trend in industrial wages. A continuing shift in labor from the relatively egalitarian countryside to less equal cities may have masked the overall trend toward equality, Grant reasons, but there is no denying Germany's rising standard of living and nearly limitless potential for growth. Only the outbreak of hostilities in August 1914 could interrupt this burgeoning “economic miracle.” The rest, as they say, is history.

Grant's analysis becomes shakier when he abandons the sure footing of economic history and attempts to draw broader political conclusions. His contention that the “Kehrite” interpretation is still “deeply entrenched in German historiography” is hardly tenable. Neither is the argument he presents to dispel it. Indeed, most recent scholarship views the rise in radical nationalism and imperialism after 1890 as a popular response to real socioeconomic dislocation and political polarization. Grant denies the existence of either. He does concede that Germany “was not a particularly rich country by the standards of the time,” and merely held the “potential for strong export-led growth, eventually realized by the Federal Republic after 1945” (p. 265). But what if it was the perception and not the reality of domestic social crisis that contributed to Imperial Germany's political polarization and helped push the Kaiser's government into war? Instead of addressing this potential contradiction, the author returns seemingly by default to the pre-Kehrite interpretation that German Weltpolitik was a rational response to the “genuine strategic dilemma” presented by British hegemony at sea and Franco-Russian encirclement on the continent (p. 348). Coming at the end of a scintillating and exceptionally nuanced economic history, this conclusion is incongruous and difficult to support.

Migration and Inequality offers an uncommonly sophisticated and lucid econometric analysis, important in reopening the virtually dormant debate on the relative “peculiarity” of Imperial Germany's sociopolitical development. The book is likewise persuasive in revising the conventional wisdom that inequality was increasing during the latter phase of the Second Industrial Revolution. Unfortunately the main target of revision, the so-called “Kehrite” school, is no longer worthy of the attention the author renders it. Nor do the superficial forays into comparative and political history match the book's otherwise penetrating economic insights. Perhaps the Kaiserreich was poised for an export-fueled, “economic miracle” in the decade before the First World War. But the evidence presented here does less to refute the Sonderweg than it does revisionist interpretations emphasizing class conflict and the “crisis of classical modernity.”