Wool and Society: Manufacturing Policy, Economic Thought, and Local Production in 18th-Century Iceland (review)

Eighteenth-century Iceland was part of the realm of the Crown of Denmark, the dual monarchy of Denmark and Norway. Never a colony, it was instead regarded as one of the "outlying provinces," and it had in principle the same status as other regions or provinces of the realm. The eighteenth century was in general a period in which the Crown of Denmark, in accordance with cameralist and mercantilist principles, sought to improve the economic performance of the different regions in order to strengthen the central state.Wool and Society is an analysis of economic thought—mainly in Copenhagen, with the civil servants acting as a link between the capital and the local regions—and the changes affected by the economic policy of the state. Hrefna Róbertsdóttir differentiates, in accordance with eighteenth-century thinking, between the state (including Icelandic officials) and regional/local society; it was not until the end of the eighteenth century that Iceland came to be regarded as an economic entity. Her central argument is that the economic thought of the eighteenth century, promoting manufacturing of wool and knit-wear in Iceland, should not be interpreted as a forerunner of industrialization. Róbertsdóttir thus addresses the debate about protoindustrialization.

Danish economic history has a long tradition of regarding the mercantilist policies of the eighteenth century as a failure. This tradition was founded by liberal economists of the nineteenth century, looking back and accusing the economic thinkers of the eighteenth century of dirigisme, calling their policies a failure because they did not introduce liberalist market principles. But Róbertsdóttir shows that the aim of the eighteenth-century economic thinkers was improvement of the old order, not the introduction of a new order. It is a good point and proves that her approach is useful in shedding new light on eighteenth-century economic policy. So, although wool production in different localities in Iceland may seem like a relatively exotic subject, the thesis is of general interest for everyone interested in eighteenth-century European economics.

The old order, Róbertsdóttir argues, was based on agriculture as the economic cornerstone. The aim of promoting manufacture of woolen goods was not to industrialize, but rather to enlarge or better utilize the available workforce. Manufacturing (or fishing) could serve as a supplement or keep otherwise idle hands busy in seasons where these hands where not needed in agriculture. The question was therefore not whether woolen goods could be produced competitively in the local community, but whether the local community offered alternative ways of producing useful goods. "Old order economics" did not conceive of regions or local communities in terms of comparative market advantages.

The region or local community was viewed as a kind of household, where the available resources could be utilized in more or less industrious ways. Compared with idle hands, any kind of manufacturing would be a gain. Although some of the schemes may seem unsuccessful according to the economic logic of later times, they made perfect sense according to eighteenth-century economic precepts. Here, Róbertsdóttir introduces the idea of "relative usefulness,"which proves fruitful in explaining the internal logic of eighteenth-century economic thought. The manufacturing policy did not change the rural basis of the economy, but neither was it a failure; instead, if we judge by the standard of eighteenth-century economic thought, it was a hallmark of success.

Róbertsdóttir is well-read in European economic history andmust have spent numerous hours in libraries and archives in Reykjavik and Copenhagen. The result is an interesting, empirically founded thesis which is an important supplement to Danish literature on economic history and also contributes to the general historical debate on manufacture in eighteenth-century Europe.