Networked Industry Survival

Abstract

This chapter introduces the reader to the deeply entrenched relation of capitalist networks and the Dutch paper industry. The production of paper from rags—old and torn cloth—already existed in pre-industrial seventeenth-century Netherlands and continued well into the nineteenth century. Initially, the chapter conducts an international comparison of this well-established industry before delving into a more detailed exploration of the four dimensions of networks in capitalism: technology, state-industry relations, competition and cooperation, and labor-capital relations. The chapter concludes by outlining the methodology used to historicize the industry across four phases of capitalism: the rise of Dutch capitalism (1580–1815), Dutch monarchic liberalism (1815–1914), Fordism (1914–1980), and post-Fordism (1980 until now).

RAGS make paper,

PAPER makes money,

MONEY makes banks,

BANKS make loans,

LOANS make beggars,

BEGGARS make RAGS.

Author unknown, around the eighteenth century.¹

This eighteenth-century anonymously authored poem captures the deeply entrenched relation of capitalism and paper technologies. Paper not only shaped capitalist activities through, for example, the rise of accounting practices in organizations and the use of maps for colonial projects but also served as metaphor and materiality of capitalist exchange and wealth extraction through, for example, the introduction of paper money.² The production of paper from rags—old and torn cloth—already existed in the pre-industrial seventeenth-century Netherlands and continued well into the nineteenth century. Initially introduced from the Islamic world in the twelfth century, papermaking gradually gained momentum and transformed into a vital industry in Europe.³ Prior to paper, parchment and vellum, made from animal skins, were the primary writing materials. However, paper proved to be a more affordable and versatile alternative.⁴

Paper can be described as a watery accumulation of various plant fibers and other substances, arranged in the shape of a sheet or web. It is formed from a fibrous material that arises from the extraction of plant fibers through mechanical methods, chemical methods, or a combination of both. During the paper production process, these liberated fibers are reassembled either using a box-like mold featuring fabric bottoms and wire meshes or later through a paper machine.⁵ Rags proved to be a superb substance for paper production because a solitary cotton fiber held remarkable robustness, enabling it to endure substantial weight despite its relative thinness.⁶ The origins of Dutch paper production can be traced back to the utilization of rags.

Research on paper production and trade is currently experiencing a vibrant surge within the academic world, as researchers endeavor to address an important historiographical gap. With advancements in interdisciplinary studies and access to diverse historical sources, scholars are delving into the intricacies of papermaking techniques, the development of paper mills, and the dissemination of paper across different regions and cultures.⁷ This increased attention stems from the recognition that the history of paper is integral to understanding the evolution of knowledge, communication, and cultural exchange throughout human civilization. To shed light on the profound impact of paper on various aspects of society, recent studies on paper production and dissemination contribute to a more nuanced and comprehensive understanding of the historical significance and transformative power of this ubiquitous material.⁸ This book contributes to this renewed interest in paper production by delving into the historical evolution of the Dutch paper industry⁹ over a span of six centuries since its inception.

1.1 A Long-Established Industry in International Comparison

The Dutch paper industry evolved under state monopoly capitalism in the Seven United Provinces from 1588 onwards. Commonly extenuated as the ‘Golden Age’, this phase describes seventeenth-century Dutch wealth creation through colonial exploitation.¹⁰ During this time, the Dutch paper industry became internationally famous for its superior product quality. This superior quality was achieved through distinctive production methods and the disposability of raw materials to Dutch paper makers, first and foremost rags, and, crucially, water and wind. Due to the Netherlands’ flourishing textile production and shipping industry at that time, rags and cloth were readily and affordably accessible to paper makers in the region.

The introduction of the Hollander beater marked a significant advancement in Dutch papermaking, enhancing the reputation of Dutch paper production even more. This machine, featuring multiple bronze blades rotating on a wooden or metal foundation, was utilized to meticulously beat rags and extract their fibers. Even though the resulting quality of paper was much lower than that produced by a wood-pounder (hamerbak) in terms of strength and contaminants, Dutch paper makers had gained worldwide fame with their largely increased production output by the end of the seventeenth century.

Around this time, paper mills were set up all across Europe. Next to the Netherlands, Germany also established itself as one of the leading centers of paper production in Europe due to its favorable geographic conditions, abundant water resources, and access to raw materials.¹¹ Driven by a combination of trade, technological innovations, and a growing demand for paper, water-powered mills, stamping technologies, and refining equipment furthered the quality and efficiency of paper production in Germany. Especially printing and publishing industries started flourishing here, leading to the increasing publication of books and manuscripts.¹²

The Dutch paper industry also played a crucial role in the cultural development at that time. With its ability to produce high-quality paper, the industry met the demand for books, maps, and other printed materials across Europe and beyond. In fact, the Dutch paper industry's reputation for producing high-quality paper fostered a vibrant publishing and printing sector in the Dutch Republic, too. Dutch printers and publishers capitalized on the availability of paper, contributing to the dissemination of knowledge, advancements in printing technology, and cultural production.

The extensive utilization of paper for printing scientific texts and treatises, along with the ensuing dissemination of knowledge, played a pivotal role in fostering the Scientific Revolution during the sixteenth and seventeenth centuries in Europe. Intellectuals and academics made notable advancements across diverse fields during this period. Paper became an essential medium for preserving and transmitting scientific discoveries, enabling the accumulation of knowledge and the development of scientific disciplines.¹³ Additionally, paper's affordability and versatility also played a significant role in the cultural realm, as it facilitated the production of literature, poetry, and artistic works, contributing to the flourishing of cultural heritage.¹⁴

In contrast to the Netherlands and Germany, the development of papermaking in Scandinavia was characterized by a gradual adoption and adaptation of the craft between the fourteenth and seventeenth centuries.¹⁵ Relying on imported paper and raw materials primarily from Germany and the Netherlands, Scandinavia strongly depended on its trading partners. England, on the other hand, relied on its own paper mills and raw materials from the seventeenth century onwards.¹⁶ Similar to the development in the Netherlands, England’s paper industry was fueled by advancements in technology, by the acceleration of colonialism, and by the growing demand for paper. Water-powered mills became the primary method of production here too, utilizing the power of rivers and streams to drive the machinery.¹⁷

Soon the worldwide paper demand resulted in a scarcity of rags and a subsequent increase in their prices throughout Europe. From the mid-eighteenth century onwards, European papermakers started searching for a more abundant, cost-effective raw material. From 1840 onwards the main ingredient of paper—rags—was replaced by wood fiber. Making paper from wood fiber necessitates pulping. Pulping is a process, which transforms fibrous raw materials into a collection of liberated fibers, achieved by dissolving the binding components (primarily lignin) that hold the cellulosic fibers together.¹⁸ Pulping can include mechanical beating and/or chemical methods and demands a lot of energy. As a result, the emergence of wood fiber as a primary material for paper production led to a significant rise in the importance of forestry, substantial energy sources, and the supply of chemicals for paper manufacturers.

Around this time, Scandinavia transitioned from its reliance on imported paper and raw materials from Germany and the Netherlands to establishing its own raw material supply and thriving paper mills.¹⁹ The abundant water resources and vast forests in Scandinavia provided favorable conditions for paper production.²⁰ Not only Scandinavian paper makers but also those in Central Europe and North America had access to large quantities of forest, including highly sought-after coniferous trees like spruce and fir trees, which were optimal to deliver highest quality fibers for paper production. Also Britain adapted quickly, as the expansion of its colonial empire entailed the extraction of vast wood areas, particularly in North America, ensuring a steady supply of raw materials for British paper production.²¹

In the nineteenth century, there was a significant increase in the production and circulation of newspapers in Europe compared to the previous centuries. The rise of industrialization, urbanization, and advancements in printing technology led to a proliferation of newspapers catering to various interests and demographics. Consequently, during the nineteenth century in Europe, the production of newsprint experienced a significant increase in proportion to previously popular paper types such as uncoated paper stock and stationery. The Netherlands lacked the substantial quantities of pulp required for paper production, including newsprint. The nation once had a thriving forest dominated by hardwoods, especially oak trees. However, this valuable resource dwindled over time due to widespread deforestation for agricultural purposes, firewood, and population expansion, reaching a critical point by the conclusion of the Middle Ages. Due to the enduring shortage of native coniferous trees necessary for pulp production, Dutch papermakers tried to either hold onto traditional papermaking materials or explore alternative raw materials like straw.

Around the same time as wood fiber was introduced, industrialization took off in several European countries, and innovations such as the Fourdrinier machine enabled the continuous production of paper in large rolls, propelling production capacities in Britain, Belgium, Scandinavia, Germany, and France even further.²² Between 1900 and 2005, paper machines’ top speed increased by a factor of ten from 200 to 2,000 m/min, and machines are nowadays more than three times wider, with a width of up to 11 meters.²³ Since 1900, worldwide paper production increased 40-fold to 409 million tons in 2016.²⁴ This period also witnessed a diversification of paper types, including newsprint, packaging materials, and specialty papers, establishing both Scandinavia and Britain as significant players in the global paper market.

The swift growth of the paper and pulp industry in Scandinavia, Central Europe, and North America far outpaced the progress of the Dutch paper sector. Dutch paper makers tried to keep up by finally transitioning from traditional handmade paper techniques to large-scale, industrialized production by the end of the nineteenth century. Around that time, the Dutch state made its first attempts at forest cultivation, particularly monoculture pine plantations.²⁵ However, in addition to significant technical and economic competition, obstacles resulting from the geographical location and conditions of the Netherlands proved insurmountable for Dutch paper producers. Scandinavian producers, for instance, capitalized on their inherent strengths, which included ample pulp resources, cost-effective hydropower, extensive waterway networks, and favorable geographical proximity. They further solidified their position by employing pricing strategies and establishing marketing cooperatives like the Central Association of the Finnish Forest Industry. Through such initiatives, Finnish forest companies established a firm grip on, among others, the Dutch market.²⁶

All these factors had a profound impact on the profitability and international standing of the Dutch paper industry. With increasing foreign competition, the dominance of Dutch paper in Europe started to decline rather quickly. Due to the prolonged transition from traditional handmade paper techniques to large-scale industrialized production in the Netherlands, coupled with its geographical disadvantage, the Dutch paper industry found itself in a fixed position in the global modern pulp and papermaking landscape. Essentially, the Netherlands was never optimally situated to emerge as a substantial or enduring contender in the modern pulp and paper sector. While it could temporarily address challenges posed by its geographical location and environmental conditions, it couldn't avoid the inevitable outcome. The scarcity of local raw materials, especially coniferous fibers, put Dutch papermakers at a distinct disadvantage. Despite their efforts to manage by importing pulpwood, pulp, and paper supplies, this disadvantage persisted for an extended period.

Left behind with non-competitive, niche-focused paper products, the history of the Dutch paper industry is marked by a decline in production sites and machines. Nonetheless, industrialization also helped increase production output since. In 1740, the Dutch paper industry was comprised of roughly 150 paper mills in the region of Veluwe, a forest and heather area in central Netherlands, and 40 paper mills in the region of Zaanstreek, an industrial area in North Holland, producing a total of 3,750 tons of paper annually.²⁷ Almost three centuries later in 2021, 23 paper mills produced a total of 2,942,000 tons of paper annually in the Netherlands.²⁸

While the overall decline in a number of paper mills has been a longer-standing reality for the Dutch paper industry, the industry managed to survive. The industry’s resilience becomes particularly striking when considering its international context: No longer the leading European paper-producing country as it was during the sixteenth and early seventeenth century, it never rose back to its old fame. Presently, the Dutch paper industry is recognized as a small sector in relation to both its production volume and the dimensions of its paper mills when juxtaposed with global rivals. This compactness enables the industry to foster innovation and engage in exploratory ventures involving novel paper manufacturing methods and products. Unlike its international counterparts that prioritize incessant growth in paper output, the Dutch paper sector stands out as a specialized, small-scale, and innovative sector focused on high-quality paper and board production. Today, the historical legacy of the Dutch paper industry as a hub of innovation and trade remains an important part of the country's industrial heritage and cultural identity.

To gain a deeper understanding of how this long-established industry managed to survive six centuries of capitalist development, this book foregrounds the crucial role of cooperative networks in alleviating some of the pressures arising from the contextual challenges faced by the Dutch paper industry. Networks were and continue to be essential to the industry’s development throughout capitalism. Central to maintaining the profitability of the Dutch paper industry over time, networks played a crucial role in facilitating the negotiation of industrial interests within the context of four key dimensions: State-industry relations, capital-labor relations, competition and cooperation, and technology. Although these dimensions are frequently analyzed independently, it is the combined interaction of networks spanning these four dimensions that markedly bolstered the industry's enduring strength over the course of its history.

These networks played a pivotal role in enabling the industry to adeptly embrace technological progress, effectively manage and alleviate labor disputes, navigate the intricacies of competitive forces by fostering intra-industry cooperation and aligning with governmental bodies, as well as advocate for the interests of key industrial stakeholders. It is precisely along, within, and between these four dimensions that different class fractions were able to negotiate and install their interests as general interests on both national and international levels as well as within the Dutch paper industry, culminating in those networked relations, which satiated industrial capital and safeguarded the industry’s survival, albeit in ever-more marginal form.

1.2 Networks in Capitalism

Painting a picture of a long-established industry and its survival throughout different phases of capitalism, this book captures the paramount importance of various networks between state, industry, and labor agents to the industry’s viability. Previous historical research has shown that sets of colonial, trade, merchant, and family networks, tightly interwoven through a dense web of capital, were pivotal to paper production and trade in early modern Europe.

First, colonial networks formed a crucial aspect of paper production and trade as colonies were exploited and extracted for raw materials, like cotton and rags, as well as enslaved labor. These networks facilitated the extraction of raw materials and their transportation back to Europe, ensuring a steady supply for the growing demand of the paper industry.²⁹ Additionally, trade networks, such as the Dutch East India Company (VOC), were key players in the colonial trade of goods, expanding the reach and influence of European paper globally.³⁰ These networks distributed paper across Europe through marine and land transportation, connecting colonial production hubs, harbors, paper mills, printing houses, and customers. Trade networks also facilitated the import of raw materials, like dyes and chemicals, necessary for paper production in the Netherlands, thereby supporting the industry's growth and diversification.

Also, merchant networks were instrumental in driving paper production and trade. Merchants formed connections with paper mills, printers, and customers, creating a network that facilitated the distribution and sale of paper.³¹ They acted as intermediaries, negotiating contracts, arranging shipments, and establishing trade routes.³² Merchant networks also played a vital role in financing paper production, providing capital for investments in equipment, expansion of production capacity, and marketing efforts. The expertise and connections of these merchants contributed to the expansion of paper production and the development of a competitive European trade market.

Lastly, family networks played an important role in the paper trade.³³ In smaller-scale paper production, family-based paper mills and workshops were common in the Dutch region called Veluwe, where knowledge and skills were passed down through generations. These family networks allowed for the transmission of specialized techniques, ensuring the production of high-quality paper. Family connections provided a source of labor, with family members working together in different aspects of the paper production process. In larger-scale production, family networks encompassed the transferal of generational wealth, such as ownership of paper mills, particularly in the region of Zaanstreek, and shares in other lucrative financial investment and colonial outlets. The cohesion and continuity of both these family networks contributed to the stability and growth of paper production and trade in the Netherlands. Both merchant and family networks have been closely intertwined in the early modern Netherlands, as family patriarchs aided state-building processes through their merchant capital.³⁴

To enrich the revitalized debates on the role of networks for paper production, this book foregrounds four key dimensions of networks throughout different phases of capitalism, namely state-industry relations, capital-labor relations, cooperation and competition, and technology. To do so, networks are understood as forms and fora of organization, which are historically contingent social phenomena and embedded in capitalist relations of (re-)production. Capitalism rests on both the social organization of production and reproduction of the means for human subsistence. While production refers to the exploitation of commodified labor by those owning the means of production for the accumulation of surplus value, reproduction refers to “the work required to maintain people as social, emotional, and intellectual beings on a daily and intergenerational basis”.³⁵ While classical Marxists solely focus on the antagonism between capital and labor as constitutive of capitalist social relations, queer-feminist, anti-racist Marxists break with the idea that class is the only constitutive dimension of social relations of (re-)production in capitalism, instead pointing out how gender, sexuality, race, nation, and (settler) colonialism simultaneously determine these relations.³⁶

Capitalist relations of (re-)production describe the economic and social order we live in, namely “the accumulation and competition of capitals”.³⁷ In turn, these social relations of (re-)production constitute social relations of power within capitalist societies. As each capitalist phase is demarcated by a changing institutional setup of the state, which always reproduces capitalist relations of (re-)production, the state in capitalism is always a capitalist state.³⁸ Understanding industry development more generally and the survival of the Dutch paper industry more specifically, thus, becomes a matter of scrutinizing the changing relations between industry and state. Since regulatory regimes in capitalism imply specific “constellation[s] of legal, administrative and coercive state apparatuses to both legitimize and shield themselves from political and social contestation”, a historicization of the Dutch paper industry has to, therefore, entail an analysis of the particular spatial–temporal relations between state and capitalist class fractions.³⁹ In fact, the very processes of negotiating hegemonic ambitions between the political, administrative, and capitalist class fractions are the cohering and decaying forces of the networks that sustained the Dutch paper industry throughout different phases of capitalism.⁴⁰ Thus, the industry’s networked survival needs to be traced along the lines of state-industry relations.

Capitalist relations of (re-)production are always already classed, gendered, and racialized relations. The state is “a historically determined form of the organization of domination”.⁴¹ This said, the state mediates the conflicts between different capital fractions, while labor and social struggle are subjugated within these.⁴² As a matter of fact, the state’s institutional setup conceals who the dominating class(es) and who the dominated classes are, due to framing itself as being representative of ‘the people’. Political and material hierarchies in terms of gender, race, and class are hidden behind the concept of a democratic state, which in tendency universalizes dominant capitalist interests as the interests of all. Times of increased socio-political conflict occasionally expose this façade: In critical times, state institutions—as agents in their own right—no longer only rely on active or passive consent, but actively exert coercion.⁴³ Overall, the very processes of convulsion between state and labor (including classed, gendered, and racialized labor forces) are additional cohering and decaying forces of the networks that sustained the Dutch paper industry throughout different phases of capitalism. Thus, the industry’s networked survival needs to also be traced along the lines of capital-labor relations.

Processes of competition and cooperation are innate to capitalist relations of (re-)production. As exchange-value is privileged over use-value in capitalism, “cooperation and mutual aid—the antithesis to competition—are marginalized as organizing principles”.⁴⁴ In fact, as cooperation becomes merely an effort to decrease competition, they become two sides of the same coin. The fact that capitalist accumulation regimes are anchored in competition to (re-)produce surplus value and that cooperation exists in a tensional relation to competition, leads to growing disintegration.⁴⁵ As a result, industries take on new forms of institutionalized power-play between various capitalist class fractions throughout time. These class fractions compete with each other, while at the same time aligning their common interests to maintain the capitalist system. Consequently, also processes of competition and cooperation cohere and decay the very networks that sustained the Dutch paper industry throughout different phases of capitalism. Thus, the industry’s networked survival needs to be traced along the lines of competition and cooperation.

Capitalist relations of (re-)production also manifest in technology. As the material conditions of production, technology more generally, and technological innovation more specifically are crucial to capitalism. Capitalist class fractions continuously compete for profit maximization, which in turn drives the introduction of ever-more powerful and productive technology.⁴⁶ Since “technology is produced amidst [these] conflicting social relations”,⁴⁷ it needs to be understood as both a material artifact as well as a discursive practice, being shaped by and itself shaping politico-economic realities.⁴⁸ Technological innovation, thus, not only effects industry performance, production processes, working conditions, consumer demands, and consumption levels but is itself constitutive of the networks that sustained the Dutch paper industry throughout different phases of capitalism. Thus, the industry’s networked survival needs to be traced along the lines of technology.

1.3 (Re-)writing History

Capitalist history, and thus the history of the Dutch paper industry, emerges through distinct, yet successive phases of changing capitalist relations of (re-)production.⁴⁹ More often referred to as modes of regulation, meaning the social conditions under which (re-)production is organized, these phases are the manner as well as the object of regulation.⁵⁰ As history succeeds through continuous discontinuity, each mode of regulation struggles to serve as a supportive base to the respective accumulation regime in times of severe crisis. Retrospectively, one can identify meaningful conjunctures for the gradual succession of a particular mode of regulation by another one.

The rise of capitalism in the Netherlands started with the transition from the feudal to the capitalist mode of production, which was closely interlinked with the rise of Dutch colonial power during the sixteenth century and the subsequent development of national, capital markets, as well as secondary financial markets.⁵¹ This co-called second rise of capitalism is rooted in the Dutch cycle of capital accumulation, sketching out the ‘uniqueness’ of Dutch capitalism (1580–1815).⁵² This phase is furthermore paradigmatic of the non-linear transition from feudalism to capitalism, as feudally organized paper production in the Veluwe coexisted alongside more capitalistic organized paper production in the Zaanstreek.⁵³

Dutch monarchic liberalism (1815–1914) describes the second, distinct phase of capitalism in the Netherlands due to the reinstallment of a monarchic rule in 1813.⁵⁴ Consequently, the emergence of the gentlemanly capitalist class fraction in the first half of the nineteenth century and the rise of Dutch liberals in the second half of the nineteenth century have to be understood in direct relation to the Dutch monarchy under William I (reigned 1813–1815) and William II (reigned 1840–1849).⁵⁵ In regards to the Dutch paper industry, this phase was marked by two major technological shifts in paper production, the shift from handmade paper to mechanically produced paper and the change from cloth to cellulose fibers.

With the beginning of the nineteenth century, Fordism (1914–1980) demarcates the third phase of Dutch capitalism, in which mass production technologies and Taylorist practices of organizing working procedures became predominant.⁵⁶ In the context of the Dutch paper industry, this third phase is primarily marked by the transition from virgin wood fiber to waste paper fiber in the 1950s. As the state took efforts to stimulate nationwide household paper recycling, waste paper material became cheaply available in the Netherlands, relieving Dutch paper producers from costly imports of virgin wood pulp. During this time, the visible hand of the state also played a major role in stimulating mergers, takeovers, and the internationalization of Dutch industrial sectors.⁵⁷ Furthermore, the ‘old boys network’, comprised of supervisory directors of big corporations and banks, started controlling the majority of Dutch industries.⁵⁸ These network relations abetted the later dominance of the financial class fraction, which profited from the industrial declines and crises of the 1970s through private and public bank loans.

Consequently, the following phase of Post-Fordism (1980–now) is defined by the rise of finance-led accumulation patterns. In addition, the transnationalization of production and the subsequent emergence of global value chains, deindustrialization, deregulation and neoliberal re-regulation, and labor market flexibilization all mark this fourth phase.⁵⁹ Often romanticized as a time of state retrenchment and free markets, post-Fordism actually involves new forms of state-led market intervention, for example, in the form of direct financial aid.⁶⁰ Concerning the Dutch paper industry, the co-evolution of the industry’s network organization (KCPK) and the Dutch Competition Authority (NMa) is a prime example of the development of post-Fordist cooperation between governmental authorities and companies of the Dutch paper industry in a climate of hyper-competition.

The historicization of the Dutch paper industry—as well as the chapters in this book—are structured according to these four phases of capitalism: The rise of Dutch capitalism (1580–1815), Dutch monarchic liberalism (1815–1914), Fordism (1914–1980), and post-Fordism (1980–2016). Since the four phases are fluid in their timely and spatial boundaries, the periodization sketches out the specific industrial context of Dutch papermaking and, hence, remains non-generalizable.⁶¹ Nevertheless, it can serve as a viable reference point for future research dedicated to offer similar, critical accounts of capitalist industrial history.