CHAPTER II.EARLY ECONOMIC POLICY OF PRUSSIA

THUS FAR WE HAVE seen the theoretical side of State Socialism. An important characteristic of this economical system is its recognition of the national idea. As State Socialism is the protest of Collectivism against Individualism, so it is the protest of Nationality against Cosmopolitanism. It proceeds from the axiom that the first duty of the State is to maintain and promote the interests, the well-being of the nation as such. Next in importance, however, to this duty, is the duty of affording help and protection to the subjects of the State according to their necessities. Not only have all citizens to be secured in the possession of their rights, but the weaker classes of the community have a claim to preferential consideration, the State regarding it as its business to help them when they cannot help themselves. Already the theory of State Socialism has received wide application in Germany; but as in legislation theory always keeps far in advance of practice, much remains to be done before the scientific exponents of this system will be satisfied.

It will never be possible to understand and appreciate the State Socialistic measures adopted in Germany since the establishment of the new Empire, unless they are considered in relation to the past social-political policy of Prussia. No mistake could be greater, and yet none is more common amongst the observers of Prince Bismarck’s imperial legislation, than the idea that State Socialism is a new thing in Germany, a purely modern growth owing its origin to accident or the temporary exigencies of a perplexed statesman. To those who regard State Socialism in this light, the series of social, industrial, and commercial measures which the last twenty years have called forth in Germany must indeed seem remarkable, if not inexplicable. But continuity of legislation is as natural to Germany as it is to England, and instead of denoting a completely new departure in economics, these measures are in reality but a continuation of, or a reversion to, traditional policy. Prince Bismarck has done nothing more than develop the social and political system established by the Great Elector, Frederick William I, and Frederick the Great of Prussia. He has taken up the threads of policy which were laid down when, after the Liberation War, the laws of Stein and Hardenberg—passed to meet pressing necessities—gave practical expression to Free Trade and Individualistic ideas, and has endeavored to infuse the spirit of the old Prussian Monarchy into the new German Empire. How this has been done will be seen as we consider the various measures which have united to characterize the last twenty years of German legislation as emphatically an era of State Socialism.

It was the attachment of the reigning house to the idea of nationality, its constant endeavor to promote justice between man and man, and its solicitude for the welfare of the poorer classes which led to the unbounded popularity of the Hohenzol-Ferns amongst their people, whose loyalty to king and crown never varied amid the trying vicissitudes of Prussian history during the seventeenth and eighteenth centuries. The Prussian monarchy differs from other European monarchies in many things, but especially in its traditionally democratic sympathies. It was the proud boast of the Great Frederick that he was “le roi des gueux,” and solicitude first for the prosperity and welfare of the nation as a whole, and then in an especial degree for the happiness of the weaker classes, has always been the key-note of Prussian kingly policy. Thus has been generated a popular attachment to the Crown which in the political convulsions of 1789, not less than in the ferment of forty years ago, proved strong enough to resist every strain.

We see the State Socialistic idea first taking distinct form in the legislation and more still the royal decrees and ordinances of Frederick the Great. Under him the “police state” approached its ideal realization. Adopting as his motto, ‘’ Salus piiblica, suprema lex” he endeavored in home government to hold the scales of justice evenly, to administer with efficiency and economy, and to protect the weak against the strong by checking the ascendency of the aristocracy. During his reign the mercantile theory was supreme. All economic measures had as their end the creation of a national state. In connection with his Government, he established a department for commerce and manufactures, and the royal instructions issued to this office were most numerous and various. Native industries and native trade were protected and stimulated, not only by the imposition of import duties, but by premiums on exports and by the direct subsidizing of struggling manufactures.

The King himself established industrial undertakings, not for purposes of revenue, but for his country’s enrichment. At one time (June, 1783) he devoted 260,000 thalers from his own purse to the reform of the Prussian mining and smelting system. Industries were also encouraged by the granting of commercial privileges, by the import by the State of raw materials, which were re-sold at low prices, and by premiums upon technical improvements. The guilds were, moreover, made powerless to hinder industrial progress, roads and canals were built, a State post was introduced, and in many other ways the commercial instincts of the nation were stimulated. To the enterprise of Frederick the Great are to be attributed the Plauen, Finow, Swine, and Bromberg canals, the harbor and town of Swinemunde, and other great works. Where industries did not exist, Frederick introduced them. Handicraftsmen of various kinds were induced to leave

Holland and France and settle in Prussia, to which country they brought valuable technical knowledge, the results of which were soon seen in new and thriving industries. In 1786, the year of Frederick’s death, no fewer than a third of the inhabitants of Prussia are said to have been immigrants or the descendants of immigrants. Measures were taken to build up a foreign trade. Commercial treaties were concluded with a number of countries, including Turkey, Persia, Holland, and the United States, to this end; and we find towards the end of the eighteenth century an extensive export of textile, iron, steel, brass, bronze, and leather goods from Prussia. Foreign trading adventures were assisted, as the Emdener Handelscompagnie (1751) and the Seehandlungscompagnie (1772), the latter connected since 1848 with the Prussian Ministry of Finance. As to the general economic policy of the early Prussian sovereigns, and especially of Frederick the Great, an authoritative writer says:—

“The Electors of Brandenburg from the earliest times devoted special attention to the economic circumstances of their territories. Many of the decrees issued went, it is true, far beyond the mark, and did not attain the desired result. Here, as elsewhere, where territorial sovereignty had developed strength, the paternal system had reached its highest development, and the Government regulated the smallest and greatest matters alike. Of all Governments of those days (17th century), the Prussian was the first to seek the welfare of the whole community. Every energy was directed to this end. It was the duty of the monarch to ‘keep ever on the watch,’ as the great king (Frederick) expressed it later. The work of national reorganization, in the

narrowest sense of the word, is a great merit of the Great Elector. In order to populate wasted districts, he attracted foreigners to the country. Agriculture revived, and industry developed in particular through the immigration of French Huguenots, to whom houses, land, and freedom from taxation were granted for several years, and who were given financial support.”

“The endeavors of Frederick the Great to improve the economic condition of Prussia cannot be sufficiently estimated, even though one may not agree with the fundamental ideas by which he was led. He gave equal attention to trade, industry, and agriculture. By inducing foreigners to settle down in various provinces he sought to give to agriculture the labor required in the draining of marshy districts and the cultivation of waste lands. Numerous decrees prove the care with which the King promoted agricultural interests; better methods came into application, and the instruction given to the peasants at the command of the King had very successful results. Worthy of all admiration is the energy of the King, who repeatedly enjoined his subjects to plant vacant lands with fruit-trees, to lay out hop-gardens, and to cultivate the vine, flax, madder, wood, caraway-seed, anise-seed, etc. It was, however, a great evil that, owing to the opposition of the nobility, the King was not able to abolish serfage, hereditary servitude,

etc., and that he had to be satisfied with the amelioration of the peasants’ oppressed condition.”

Under Frederick William II, Prussian prestige, both politically and commercially, suffered a great blow. There have been kings of Prussia who have gone to extravagance in the pursuit of their ideals, but this is the only king who has had no ideal. The impetus given in the preceding reign to industry and trade still, however, continued a beneficial influence, until dark days set in for Prussia, and with the Napoleonic era her star of fortune passed into eclipse.

In Prussia the State Socialistic idea has in no department of public policy been more conspicuous than in poor relief and care for the welfare of the working classes. When Frederick the Great was asked to sanction a tax on meat and bread, he returned the official document containing the request with the note:...