This article attempts to historicise the concept of "folk art" using the example of wooden toys from the Erzgebirge mountains to show that it was invented by cultural elites as a marketing concept at the beginning of the twentieth century in order to support a domestic industy caught in structural crisis.
Today the Erzgebirge mountains are situated on both sides of the German-Czech border. In the German part that belongs to the state of Saxony, wooden toys have been produced since the eighteenth century.  Historians and ethnographers have often explained the emergence of this home industry in terms of the "healthy roots"  of folk art in that area (Bilz 1970, 37). Ethnographer Manfred Bachmann presents its development in the late nineteenth century as a story of decline. He praises the variety of forms in the folk art of the second half of the eighteenth century and the beginning of the nineteenth century, whereas, in his view, the toy production turned away from "real folk art" during the late nineteenth century (Bachmann 1989, 69). Ethnographer Konrad Auerbach recently criticised this view and claimed that the folk art of wood carving in the west of the Erzgebirge mountains remained separate from the commercial toy production further east (Auerbach 1995b, 8). The research presented here suggests a third point of view: the toy production in the Erzgebirge did not simply grow out of folk art nor did they both exist separately, but the concept of folk art from the Erzgebirge was invented at the beginning of the twentieth century as a reaction to a deep crisis in the toy industry. Here, folk art did not give birth to the toy industry; the toy industry (or rather its crisis) gave birth to folk art. This article thus gives an example of what ethnographer Gottfried Korff has termed folk art as ideological construct (Korff 1992). It also aims to show how the concept of folk art could be used for commercial and very different political purposes throughout the twentieth century. To avoid misunderstandings: my point is not that the concept of folk art originated in the Erzgebirge and spread from there. Rather, this is but one example for developments occurring throughout Germany and probably Europe. In Germany, a discussion among intellectuals about folk art began in the 1890s in the context of applied arts reform, but the meaning of the term folk art was different from the one used later, because it included only objects produced for personal consumption and not for wider markets (Deneke 1964).
The toy industry of the Erzgebirge was a typical proto-industrial home industry based on the technologies of wood turning and carving. During the second half of the nineteenth century it sank into a deep crisis. The number of employees fell from an estimated 10,000 in 1869 to 8500 in 1895 and 5200 in 1907 (Meyer 1911, 12-5). The number of lathes in the principal centre of this industry, the town of Seiffen, fell from seventy-three in 1884 to nine in 1904 (HSTA MfW 70, 2-8). Particularly in the 1880s and 1890s, falling prices for their products caused great social distress among the toy makers (Bilz 1975). Chair building replaced toy making in towns like Dittersbach and Neuhausen. The crisis had several reasons: first, the entrepreneurs were able to lower wages through the contracting-out system. Second, the demand for wooden toys fell because they had to compete with more modern metal toys. Third, wood prices increased at the same time and, fourth, in the years preceding World War I a new competitor on the world market of wooden toys emerged: Japan. The Japanese export of wooden toys grew from 1 million yen or 2 million Reichsmark (RM) to 1.9 million yen or RM 3.9 million in 1911. The total production value of Erzgebirge toys was an estimated RM 10 million in 1913, more than one-half of which was exported (HSTA MfW 114, 71 and 97). Japan was an especially serious competitor because her toys resembled those from the Erzgebirge. …