This is part two of a multi-part series in an effort to understand the economics and societal impact of information. This is going to be an evolving work where I am going to start by formalizing a framework for the text.
Gutenberg did not invent printing, nor did printing lead to the creation of a market for books. Both of these had existed for many centuries. What he did was invent an economically viable method of printing a large volume of texts- up to 3600 per day as opposed to the 40 before.
The print industry grew dramatically from one printing press in 1450 to seventeen hundred by 1500². There was also a massive increase in the production of books.
Logically speaking, this should have been a tremendous economic book for both writers and publishers. Unfortunately, they ran into the infinite replicability problem. Johannes Guttenberg died without financial success. Not even the most popular authors could think of quitting their job to become a full-time writer.
Scarcity in 15th Century Europe
As we explained in the previous article of this series- scarcity is key to earning a profit. Like always, the lucrative businesses of this era controlled scarce resources- commodities, capital, land and so on. For instance, Inns were so profitable that the British Crown passed a law regulating the prices innkeepers could charge as early as the 16th century⁴. But the most profitable business was spice, which didn’t grow in Europe at all. With a printing press, printed works could be infinitely replicated.
Consider one of the first best-selling authors in history. William Bartjens was a renowned schoolteacher and the author of a mathematics textbook in 17th Century Holland. Demand for his book was high, but a lot of it was filled by cheap pirated editions. Even worse, once the market saw how popular his books were, other mathematics textbooks quickly flooded the market. The returns were so meagre that the Bartjens family did not bother to renew the copyright when it expired.
The other problem facing print were abysmally low literacy rates of 5-10% throughout Europe. Even the most sophisticated town had only a 30% literacy rate. Moreover, reading had yet to be established as a behaviour, unless for scholarly purposes.
This raises the question- if no one was making any money, then why were there so many printer-shops printing so many books?
The Early Print Industry
Stage 1: Slow Growth
Much of the early print industry survived thanks to the following:
1) Propaganda and Publicity
Since they could not suppress the new technology, the church instead decided to adopt it for its purposes. The Church used the printing press for a variety of works such as ordinances, works of popular piety and, and much to the ire of a certain German Monk called Martin Luther, Indulgences¹. European rulers at this time also fought a series of internal and external battles with each other, from the Hundred Years War to the War of the Roses and the Italian Wars. Monarchs often relied upon the printing press to spread their word.
The church and the monarchy not only helped sustain it during the early years but also laid the seed for its future growth. They would very much come to regret this
2) Barriers to Entry
Setting up a print-shop was both capital-intensive and skill-intensive. This limited the number of substitutes that could enter the market. (Notice the difference between the news industry and the internet)
3) Rising Literacy Levels
A series of events led to this particular contingency. First- the black death of the 14th century decimated populations throughout Europe. Paradoxically, this led to a massive shift in the bargaining power between labour and the nobility, leading to a more equal society. This additional disposable income for the population meant there was more money to spend on education.
The church and the monarchs at this time were also embroiled in a series of conflicts, which required all their financial and organizational ingenuity. This led to increasingly sophisticated bureaucracy, which required an army of literate civil servants and clergy to manage the increasingly complex administration of the emerging modern state.
4) The Renaissance
Another key event at this point was the Renaissance. The Renaissance’s role in printing was not so much to spread the technology but to make reading aspirational. One of the keys causes was an explosion of interest in the classical literature of ancient Greece and Rome. Familiarity with the works of Cicero and other great classical authors was a key status symbol. This behaviour slowly but surely spread to Europe.
Stage 1 continued until a certain German monk called Martin Luther decided that he had enough with indulgences. He walked to the local church in Wittenburg and nailed a document to the door. This, of course, led to one of the most pivotal events of the last millennia - the Protestant Reformation.
Stage 2: Explosive Growth
The printing press enabled the Reformation- but the reformation also helped spread he printing press across Europe¹. The ideas of the reformation caught the popular imagination and led to a huge demand for the written word. Reformers in towns and cities placed huge orders at the local printers for pamphlets and brochures. The church, of course, responded to these with propaganda of their own. The printers ended up benefitting from both sides.
That Germany was at the heart of the reformation is no coincidence. Not only was it the birthplace of the printing press but also the place where the Monarchy and the Church had the weakest information monopoly. Despite that, is quite possible that even elsewhere in Germany he would have been burnt at the stake soon after his first heresy. (This is actually a fascinating story full of contingencies- explained further in the third footnote³).
Was Print Inevitable?
Yes, print probably was probably inevitable, but the specific trajectory it took to market could have been very different. It could have come to market at a later time and at a later place, with the world looking like a very different place. History offers a very powerful example in Ottomans.
At the start of the 15th century, the Ottomans were arguably richer and more technologically advanced than Europe. However, the Ottomans immediately banned the printing press for the first 200 years of its existence, and while this may not be the sole reason why it fell so far behind Europe, it surely had a huge impact.
The reasons behind the ban are not known, but religion likely had a major role to play. The place of the religious elite was secured by a monopoly in knowledge in all societies in general, but for Islam in particular. Crucially, the relationship between the religious elites and the sultans in the Ottomans was far stronger than the relationship between the church and the monarchs of Europe. The economic historian Jared Rubin argues that this meant the church was in no position to get printing banned, unlike the religious elites in the Ottoman Empire that leveraged its relationship with the Sultan to suppress the spread of the printing press.
Conclusion
Whew! A lot happened in the 16th century. Old orders were severely weakened, and a new structure for society emerged. Arguably, it also set the stage for a new global order- one where the west would dominate for the next 500 years.
At the heart of this epoch-making century was the invention and establishment of a new technology print. In the next post, we will follow the print industry as it matured.
Thank you for reading. This was the second part of the five-part series outlined below. I recommend reading in order, but feel free to skip ahead to any part you find more interesting.
Part I explains why it’s hard to monetize information, and the state of society until the invention of the printing press in the 15th Century.
Part III covers the birth of the newspaper industry, and why the news was profitable in a way that books weren’t.
Part IV covers the growth of both the newspaper and the book publishing industry until the 2000s
Part V explains why despite the rise in media consumption and addressable market, why the internet decimated the newspaper industry, while also discussing the impact of this new distribution channel.
Footnotes
This is one of the things from the medieval world that is hard to put one’s mind around. In the 16th century, indulgences were basically a way for rich people to gain forgiveness for their sins from God through money. Martin Luther wasn’t the only person this pissed off!
The Economic Historian Jared Rubin wrote a paper on this that you can find here: https://eh.net/eha/wp-content/uploads/2013/11/Rubin.pdf
Germany was almost certainly have been absorbed into a more traditional state if it was not under the protection of the Holy Roman Empire- which was technically speaking the fourth great power in Europe (aside from England, France and a region of Spain), but which itself needed the semi-autonomy to rule it’s a patchwork of territories effectively. But this wasn’t enough protection. Martin Luther was also lucky that his publications coincided fortuitously with the election of the new Holy Roman Emperor. Emperor Maximilian, who as the sovereign of the patchwork of territories that was Germany, was desperate for the title to be passed to his grandson Charles V and not to his great rival- the emperor of France Louis XII. The elector of Saxony, who held Wittenburg, had a vote in that election and protected Martin Luther for a brief window that allowed for the spark of the Reformation to get the oxygen it needed to become a blazing inferno.