The Historical School: From Friedrich List to the Social Market Economy
Zemfira Nazarova

© Zemfira Nazarova, 2024

ISBN 978-5-0062-1567-2

Created with Ridero smart publishing system

With feeling of gratitude and deep appreciation to my father, Nazarov Mugbil Khalil oglu, veteran of the Great Patriotic War, who went through the whole war from Leningrad to Berlin and met the end of the war in Berlin, with infinite respect remembering the German people as highly cultured, hardworking and well-organized, to my mother Ryabova Lidia Dmitrievna and aunt Ida Alfredovna Rezel, whose parents came from Germany to Azerbaijan in the early 20th century to work in the oil industry.

Economic ideas are the product of the environment in which they arise. A thought, an idea, a word-formed consciousness, an ideology, is the result of the everyday life and the social order where it is created and developed.

V.V.Svyatlovsky, Russian historian, economist, writer

– I came to you through the dense forest, through the dense thicket, through the high mountains, through the wide rivers… I thought of you! I came to you! Come out, come out, queen of my soul’s dreams!

And hearing the quiet sound of slow footsteps, the knight Hazir even squeezed his eyes shut: he was afraid that he would be blinded by the sight of the marvelous beauty.

He stood there with his heart beating hard, and when he plucked up courage and opened his eyes, there before him was a naked old woman. Her skin, brown and wrinkled, hung in folds. Her gray hair was piled in tangles. Her eyes were watery. She was hunched over, leaning on a beak. Hazir recoiled in disgust.

– I am the truth! – she said. – Did you think you’d find a beauty? Yes, I was! On the first day the world was created. Allah himself has only seen such beauty once! But, after all, centuries have passed by since then. I’m as old as the world, I’ve suffered a lot, and that doesn’t make me more beautiful, my knight! It doesn’t!

Hazir felt he was going mad… He stood before her, looking mad, clutching his head:

– What shall I say? What shall I say?

Truth fell on her knees before him and, stretching out her hands to him, said in a pleading voice:

– Lie!

Arabic parable «The Truth»

PREDICTION

What is truth? And how can it be attained? Especially when it comes to history, the history of economic development and especially the history of economic doctrines. In ancient times, when religion played an important role in human life, chroniclers who lived under rulers presented events from the standpoint of the interests of the ruler and the church. In the era of the Renaissance, the Reformation, and the first scientific and technological revolution, there were works of a social nature that described the events and achievements of the rulers from the standpoint of the state and society, and the church receded into the background, although it continued to have a fairly active influence on people’s lives. Today the task of a researcher in the field of history of economic science is not only to search for the truth, but also to present it objectively and comprehensively, so that its study by researchers can be further developed, economic recommendations can be developed, and the economic policy of the state can be formed.

As noted Russian historian and historiographer Vasily Osipovich Klyuchevsky, it is necessary to find meaning in nonsense, it is in this unpleasant duty of the historian, and in an intelligent case to find meaning will be able to any philosopher.

Defining the meaning and usefulness of the study of history, a representative of the neo-Austrian school, economist Ludwig von Mises in his work «Theory and History: Interpretation of Socio-Economic Evolution, comparing his understanding of the tasks of history with the views of German historians, noted that the task of history – to record not all past events, but only historically significant. Therefore, it is necessary to find a criterion that would allow to filter what is historically significant from what is not. And, according to the representatives of the historical school, the study of history provides man with road signs that show him the path he should follow. Man can succeed only if his actions are in accordance with the tendencies of evolution. To discover these tendencies is the main task of history. The opinion of the representatives of the historical school seems to be more significant from the point of view of the realities of the 21st century, since there is still no one who has found the criteria that would allow to filter out what is historically significant from what is not. And should this be done? In this regard, the main task of the author of this monograph is to present materials related to the retrospective analysis of the emergence and development of economic thought in Germany, which went from the economic policy of the free cities, the «educational, national protectionism» of Friedrich List, to the ordoliberalism, to the ordo-liberalism of the second half of the twentieth century and the economic policy of modern Germany of the twenty-first century, with its successes and failures, in the context of the crisis of world migration, the coronavirus pandemic and the bacchanalia of sanctions against Russia, in which it is involved. The ideas of the historical school were, in fact, a product of the environment in which they were born, and gave roots to the formation of economic policy in Hitler’s Germany and post-war Germany, and gave quite significant sprouts in tsarist Russia (it is enough to recall the economic policy of S.Y. Witte).

Also in 1956 in West Germany was published the book «Welfare for All» by the German professor and politician Ludwig Erhard, which was a great success among readers. This book, which was published in Russia in 1991 (the first reprint in Russian was published in Germany in 1960), became a bestseller in our country, although it was undeservedly forgotten a few years later. The experiences and ideas contained in it would be very interesting for our reforms. Its author, Ludwig Erhard, this remarkable scientist, was fortunate to successfully realize his scientific thoughts and ideas as Minister of National Economy, Vice-Chancellor and then Chancellor of West Germany (1963—1966).

In the ten years after the war, West Germany not only rebuilt its shattered economy, but also allowed the world to speak of its economy as the «German miracle». And today, unified Germany consistently occupies one of the leading places in the ranking of the world’s wealthiest democracies, overcoming the difficulties of modern conditions of world economic relations. However, few people today remember the «German miracle» and its author.

As mentioned above, Germany is one of the most successful countries in the world today. What makes it successful and stable? – The social market economy, which was created by L. Erhard and his team, who had the rare opportunity to try out their strategy day by day for ten years after the war, to test it in practice, and to be convinced of its correctness. The «spiritual father» of this social market economy is rightly considered another bright German scientist Walter Oiken, the founder of an independent branch of modern neoliberalism – ordoliberalism and the «Freiburg School», a disciple of Werner Sombart, no less bright representative of the social-psychological direction of the historical school of Germany.

It should also be noted that post-war Germany condemned and rethought its past associated with nationalism, «state socialism,» totalitarianism, and fascism, with which it had flirted for almost a century, beginning in the mid-nineteenth century, when the theories of «national protectionism» and «state socialism,» revolutionary Marxism, and Bernsteinite social reformism began to emerge on German soil. The threads of all these theories can be connected with the greatest phenomenon of economic thought in Germany in the nineteenth century – the historical school and the legacy of Friedrich List, the retrospective analysis of which and the formation of models of state regulation of the economy are offered to the attention of readers interested in the problems of economic theory, state regulation of the economy, economic history and economic thought. As is known, the history of any science is personified. Ideas, concepts, theories are the result of thinking activity of the best minds, aimed at understanding the past, understanding the present and looking into the future. When we study the history of economics, we study the theories and recommendations of certain people who lived in the conditions of a certain place and time.

However, we should not forget that the emergence of such or such views and concepts is always closely connected with the processes that take place in society, with objective conditions, needs and interests of living economic practice.

Among the economists associated with the development of the historical school and the formation of the model of state regulation of the economy, it is necessary to emphasize the German economists F. List, B. Hildebrand, G. Schmoller, W. Sombart, M. Weber, L. Erhard, from the Russian – S. Y. Witte, I. M. Kulisher, D. I. Mendeleev, V. V. Svyatlovsky and a number of others, on whose works the author has relied as primary sources in this study. Among the basic textbooks on the history of the world economy used by the author, it is necessary to mention the textbooks edited by A.N. Markova, on the economic history of the world by M.V. Konotopov, on the history of economic doctrines by V.S. Avtonomov, A.G. Khudokormov, E.M. Maiburd, G.D. Glovely, French economists S. Gide and S. Rist, A. Espinas, English economists M. Blaug, L. Robbins, American economist and historian B. Seligman, Austro-English economist and historian J.A. Schumpeter and German historian F. Mehring. In the analysis of the economic situation in Germany at different periods of its history, the author also used the works of the representatives of the historical school and her own work «History of economics and economic doctrines in a summary of key events».

I want to be honest, to find the truth, no matter how «ugly» it is, when studying this period of German economic history. Without the truth we will not be able to evaluate what is happening in our country, in Europe and in the world. It is a pity that people (especially those in power) have a very short or selective memory, as the events of recent years have shown, and this does not allow them to be objective in assessing what is happening. The search for truth in any field of scientific knowledge is possible only thanks to a comprehensive historical understanding of the subject of research. After all, it is thanks to many German scientists that in the last two hundred years most of the discoveries in the field of archaeology and history have been made, the ancient world and especially the East, thanks to the development of the German historical school, economics has received a number of brilliant works on economic history, industry, statistics, branch economics and other areas of economic and historical science. It was the development of the historical school that led to the post-war «economic miracle» in Germany.

In modern conditions all countries are looking for the way of crisis-free development, stability and efficiency of the economy, the way of higher standard of living, and some of them create socially oriented market economy, but most of the states, developing even under market conditions, by many indicators lag behind the successful countries. Knowledge of the history of economics and economic doctrines allows to see the advantages and disadvantages of different models, to choose the way of development, to formulate the economic policy of the state, methods and mechanisms of state regulation of the economy from the experience of market economy mechanism accumulated by civilizations. The experience of work in educational organizations allows us to assert that all established modern economic theories and models of economic development are the result of the development of economic thought and doctrines, the result of the long formation of economic science. The course «History of economics and economic doctrines», which the author read for many years, also allows us to testify that the ideas of List and representatives of the historical school of Germany undeservedly «faded» next to the Anglo-American theories of economic freedom, liberalism and fritrade, presented in modern textbooks of economic theory and history of economic doctrines.

The pace of development of countries is different and depends on the effectiveness of economic policy and economic management, and the effectiveness in turn depends on the culture of people, their national characteristics, natural intelligence, diligence, self-discipline. It took more than a millennium for mankind to come to modern economic conditions and to understand the importance of rational (efficient) use of resources (the wealth of nature) to satisfy the ever-growing needs. What will be the challenges and especially the consequences of digital economy, information warfare and cyber technologies?

Once upon a time, Marxists and Bolsheviks were accused of «exporting revolution». Today, the U.S. can be accused of «exporting democracy,» as it is very active in «helping» countries establish democracy. NATO’s borders in recent decades have come close to Russia’s borders, where missile defense installations are now located. It is high time to remind once again the desire of the author of these lines that if the USA is a truly democratic country, is it not time for it to contribute to the liquidation of NATO, which the author has repeatedly proposed in her articles since 2009, and to create another institution (international organization) with a new content and tasks, in order to preserve peace on the whole earth and for all earthlings.

And in these new conditions it is necessary to become objectively familiar with various alternative doctrines of economic theory, one of which is the historical school of Germany and its followers.

This monograph attempts to outline the relationship from the great Liszt to the social market economy policies of modern Germany, and to connect Germany’s successes with the ability to be properly guided by the legacy of scientific thought in political economy and the economic teachings of German political economists who stood at the origins of West German neoliberalism (ordoliberalism).

The monograph includes a brief chronological guide, an index of names, a glossary of terms and concepts, as well as structural and logical schemes that complement the main text and a bibliographic list of literature and primary sources used by the author.

The role of cities in the development of mercantilism and cameralism, contributing to Frederick the Great’s Anti-Machiavelli, Fichte’s Closed Commercial State and Thünen’s Isolated State

According to historians, the settlement of Germanic tribes in Western Europe began to occur in the I millennium BC, and it was under the blows of Germanic tribes that the fall of Rome began in 476.

Germany is usually attributed to the countries of the «non-synthesis path of the genesis of feudalism». In future France feudalism developed on the basis of decaying slaveholding relations and communal and tribal relations at the stage of military democracy under the influence of Roman institutions. In Germany this influence was relatively weak, and the processes were based on the decomposition of communal relations, the Romans could not fully conquer Germany, and its main part was not part of the Roman Empire. There was no large landownership, villas with dependent colonists and slaves. The process of formation of feudal land ownership here through allods and benefices was slow, beginning in the 7th century, and was completed by the 12th century. Many lands, wealth, and even the armed forces in Germany belonged to the church. Germanic bishops and abbots were the backbone of kings and played a decisive role in the selection of the Roman pope, the eleventh century was the period of the «Germanic popes». The Germanic king Otto I, having captured the main part of Italy in 962, was crowned emperor in Rome, declaring himself the successor of the rulers of the Roman Empire, so the Holy Roman Empire of the Germanic nation was founded. On favorable trade and river routes, cities appeared, in which crafts and active trade developed, a layer of townspeople was formed. In the X – XII centuries in Germany and throughout Western Europe there is a growth of cities – both from the old Roman fortifications, and from new craft and trade settlements. Cities, originally dependent on their liege lords (bishops, secular feudal lords, the king), sought liberation from their authority, self-government, and personal freedom of citizens. In the struggle for their autonomy, cities sought the personal liberation of all townspeople from serfdom. A serf, if he fled to the city and lived in it for a certain period of time, usually one year and one day, became free, and the landlord could not return him. As the German proverb says: «the city air makes one free». Along with imperial cities, subordinated directly to the Holy Roman Empire, free cities appeared. This process was accompanied by a liberation movement of townspeople from feudal dependence. The result of the so-called communal movement (communal revolutions) was the freedom and independence of cities, the growth of commodity production and money circulation. These cities were equalized in rights with imperial cities and became known as free imperial cities. Becoming independent with their own laws, they concluded treaties with other states, minted their own coinage, had their own court, and the laws of the city provided conditions for the development of crafts and trade. For example, the inhabitants of the city of Cologne in 1288 won the final victory over their liege lord and received the status of a free imperial city. The history of such cities have Lübeck, Hamburg, Bremen. By the way, it will be said that very well illustrates these cities in his work «The Prince» («The Sovereign») Niccolo Machiavelli (1469—1527), noting that «German cities enjoy complete freedom, have small areas, obey the emperor when they want it, and are not afraid of him or powerful neighbors, they are so fortified that everyone is sure that the conquest of them is a matter pesky and difficult. They are all surrounded by proper moats and walls, have sufficient artillery, and always keep a supply of food, drink, and fuel for the whole year in the public stores. Besides, in order to be able to feed the common people without detriment to the community, they always stock up for the year with material that can be worked in the manufactures that constitute the vital nerve of the city and are the chief occupation of the common people; military science is also in great honor with them, and they support it with many institutions.»¹.Already in the 10th – 12th centuries, there were cities and other settlements in the Baltic regions, which were connected by lively trade relations with the entire Baltic Sea basin. The most significant of them were large Slavic cities: Wolin – at the mouth of the Oder, Novgorod, Kolobrzeg (Kolberg), Gdansk and others. In 1241 a treaty was concluded between Lübeck and Hamburg on the joint defense of trade routes in the Baltic. In 1256 the union of the seaside towns of Lübeck, Hamburg, Lüneburg, Wismar and Rostock was formed, which became the basis of the future Great Hansa.

In the beginning of XII century as a result of dismemberment of Kievan Rus’ separate principalities were formed, the connection between which was often broken by internecine strife, but never finally interrupted due to the unity of the people, common language, culture, history. The unification of the Russian principalities began only after the liquidation of the 200-year Tatar-Mongol yoke in 1480 under the rule of Moscow. However, all these years the cities grew and developed, trade relations were established. Especially powerful, strong and independent were Pskov and Novgorod, which became members of the Hanseatic League.

As the Russian historian I.M.Kulisher notes, already at the end of XII century the first treaty between Novgorodians and Germans appears, and to the same time belongs the letter of Emperor Frederick I to Lubeck in 1188, allowing duty-free trade in this city to Russians. So it is from this time the goods exchange both in Novgorod and in Lübeck takes place. The most important source confirming the fact of trade of Novgorod and Pskov with Hansa are trade treaties. The Livonian cities of Dorpat, Revel and Riga appear in the treaty of 1392, and in 1436 Dorpat and Revel are the only representatives of all German cities in negotiations with Novgorod. Treaties, charters and agreements (1195, 1260, 1270, 1304, 1373, 1392, etc.) define the measures of responsibility of the parties. As I.M.Kulisher points out, each treaty establishes the general principle that both parties are given the right to trade and no one will put obstacles in their way, they can trade without embarrassment, without forcible seizure of goods from them, which is expressed by the words «free trade», «the way is clear», «without borders», «without harm».² Merchants of German towns «went» to Pskov and the northwestern Russian regions of Smolensk, Vitebsk, and Polotsk.

At the beginning of the XIII century, some groups of North German cities acquired trading privileges in other countries and established their offices there. The whole system of trade relations was based in the West on Bruges, in the East on Novgorod, and in the center on Lübeck, the crossroads of the routes leading to Germany. There were also large Hanseatic offices in London and Bergen (Norway). The Hanseatic cities were trade intermediaries between the east, west and north of Europe. The main items imported from the East were: bread, furs, wax, hides, leather, lard, flax; from the West – cloth, linen; from the Scandinavian peninsula – herring and cod. A unified union of Hanseatic cities – Hamburg, Bremen, Cologne, Gdansk, Riga, Lubeck, Pskov, Novgorod, etc., the total number of which reached 150 cities – was formed in 1356—1372, during the period when the trade activities of German merchants in Flanders, Denmark and Norway were limited. The first general Hanzatag (Sejm) of the cities, whose deputies met in 1356, creating the Hanseatic League (formalized the emergence of the Hanseatic League). In the Hanseatic cities, whose economic life was based mainly on trade, the power was in the hands of the merchant patriciate. The Union had as its goal not only to monopolize trade with foreign countries, but also to protect the domination of the patrician upper class; the Great Hanseatic Statute of 1418 provided for measures to combat social movements within the cities. The Union became an independent political body. Its power was manifested in the war with Denmark in 1367—70 years, which ended with a complete victory of the Hanseatic League. The decline of the Hanse began in the middle of the XV century. Rebellions of shop craftsmen broke out in the cities of the Union, rivalry between individual cities intensified. At the end of the XV century, during the formation of the centralized Russian state, after the capture by Ivan III Novgorod in 1478, Pskov in 1510 (Novgorod and Pskov boyarhood and merchants tried to defend their «liberties»), these cities were annexed to the Russian centralized state. The last congress of the Hanseatic cities took place in 1669. The main purpose of the Hanse was the protection of its merchants in foreign countries and the development of trade, which contributed to its transformation into a significant political force in Northern Europe, capable of waging even wars that pursued economic goals. As researchers note, the Hansa had neither a common seal, nor officials, nor authorities, except for the cathedral (Hansetag), which was rarely convened, and it was never attended by representatives of all cities. According to F. List «Hanseaticians created a powerful military fleet; having realized that the maritime power of the country strengthens or weakens depending on its commercial navigation and the development of fisheries, they issued a law, on the basis of which the Hanseatic wealth was to be transported only on Hanseatic ships, and took care of the wide development of fisheries of the sea. The English Navigation Act was modeled on the Hanseatic Act, which in turn was modeled on the Venetian Act»³. The Hanse existed for almost 500 years.

The changes taking place in the socio-economic life of the countries of Western Europe in these centuries necessitated their theoretical justification and the formation of a holistic concept of economic policy of cities and emerging absolutism, such theoretical justification of economic policy, which was dictated by the ongoing processes became mercantilism and cameralism. In the universities of Naples (founded in 1224), Prague (1348), Krakow (1364), Vienna (1365), Heidelberg (1386), Marburg (1527), and others, training was organized for government officials who studied cameralistic sciences (finance, mining, forestry, agriculture). As J. Schumpeter notes «professorial chairs were created to teach what in Germany was called cameral science or state science and what would more correctly be called ’the foundations of economic administration and economic policy’ (in Germany there was the term Polizeiwissenschaft)»⁴

In the XIV—XVII centuries, bright personalities, professionals (later we will call them the great humanists of the Renaissance) in their pamphlets independently from each other, without coordinating among themselves neither the methods nor the principles of governing the country, began to offer «service books» to kings to improve the country’s structure. These are the real recommendations of Niccolo Machiavelli (1469—1527) on the state structure and state policy, these are the beautiful «Experiments…» of morality by Michel Montaigne (1533—1592), this is the materialism of Francis Bacon (1561—1626), which influenced naturalists and in general on the development of «experimental science» of the XVII century. The era of book printing, when the German master Johann Gutenberg (1395—1468) in Mainz in 1450 improved the printing press imported from China and created a method of book printing with movable letters, on which he printed the Bible – the first full-volume printed edition in Europe, recognized as a masterpiece of early printing. This criticism of reality and the negative side of the new trends of the emerging young class of the bourgeoisie (merchants and usurers, reaching for power and experiencing the gold rush of initial capital accumulation) is vividly given in the utopias of the Englishman Thomas More (1478—1535) and the Italian Tommaso Campanella (1568—1639). The humanist Campanella, being in the custody of the Inquisition, spoke in defense of Galileo and substantiated the principle of freedom of science. It was here at the University of Prague (Charles) at the end of the XIV century began a sharp criticism of the prevailing Catholic church system Jan Hus (1371—1415), in 1517 Martin Luther (1483—1546) on the door of the Wittenberg Cathedral hung 95 theses against indulgences, which rejected the basic tenets of Catholicism, translated the Bible into German, establishing, as historians believe, Jean Calvin (1509—1564), characterized by extreme religious intolerance, from 1541 turned Geneva into one of the centers of the Reformation, which culminated in the mass movement of Protestantism, contributing to the formation of the Protestant ethic and the spirit of capitalism in Europe, according to the German historian, sociologist and economist Max Weber. He notes that «the Christian-elect exists for the purpose, and only for the purpose, of carrying out in his worldly life the commandments for the glory of the Most High. God is pleased with the social activity of the Christian, for he wants the social organization of life to be in accordance with his commandments and his purpose.⁵

Adam Smith called this era of economic relations a mercantilist system. «The different character of the development of wealth at different periods and in different nations has given rise to two dissimilar systems of political economy on the question of the means of enriching the people. One may be called the commercial system and the other the farming system.» His understanding of these two systems of political economy: the «commercial system» or mercantilist system and farming systems A. Smith outlines in the fourth book «On the Systems of Political Economy» of the fundamental work «An Inquiry into the Nature and Causes of the Wealth of Nations» (1776)⁶.

The works of the authors of this time, which we call mercantilists today, are didactic in nature, teaching how to trade to make the nation rich. The authors of these works were merchants, bankers, entrepreneurs, financiers (T. Man, A. Serra, G. Scaruffi, J.-B. Colbert).

Mercantilism (from Italian mercante – merchant, trader), or mercantile system, as it is called by French historian A. Espinas, contributed to the birth of utilitarian political economy⁷. And as Paul Samuelson would later say in the 20th century «these so-called ’mercantilists’, though we may laugh at their ideas and the immaturity of their work, perfected the methods of political economy and paved the way for Adam Smith and the classical school that opposed them, representing an enormous step forward»⁸. This system identified the wealth of the state with money (and the role of money at that time was gold and silver). The accumulation of this wealth could be achieved with the help of state power, and the source of wealth was considered to be non-equivalent exchange only as a result of trade with other countries (inside the country one sells, another buys, and the nation does not get richer).

In Germany, due to political and economic fragmentation, the ideas of mercantilism had a specific character, merging with Kameralistics.

Kameralistik – (German: Kameralistik, from Late Lat. Camera = palace treasury) in the German economic literature of XVII—XVIII centuries – a set of administrative and economic knowledge on the conduct of the chamber (palace and in the broad sense of the state) economy, a method of descriptive presentation of the whole sum of social sciences with emphasis on the theory and practice of state administration. As it was noted, it was a special cycle of administrative and economic disciplines taught in medieval European universities. The chamber sciences received their name from the chamber departments created in the Middle Ages by princes, dukes and kings who had their own considerable households. To train officials and managers of large feudal lords’ economies, the sciences called chamber sciences were taught at special faculties of universities and in special schools (chamber schools). In Germany, for example, this cycle included economic, geographical information, mining, forestry and agriculture, similar disciplines appeared from the second half of the XIX century and in Russian universities. Also, it should be noted that in 1736 in the German Marburg University comes to study the course of general technical training of mining M.V.Lomonosov. There is a plaque on the walls of this university, which testifies that in 1736—1739 the great Russian scientist and writer Mikhail Vasilyevich Lomonosov (1711—1765) was a student of Marburg University. Among the many universities in Western Europe, it is the first Protestant university in the world, founded in 1527. To continue his studies in mining: mineralogy and metallurgy, Lomonosov moved to Freiberg. Education in Saxon Freiberg was bequeathed by Peter the Great (1672—1725), who during the Great Embassy visited this city, observed how silver was mined, and took a group of mining masters to Russia.

The protectionism of the principalities further increased the economic fragmentation of Germany. Princely luxury was praised as a good thing even for the people. This legend was spread by the Prussian King Frederick II the Great (1712—1786) himself, as his work «Anti-Machiavelli» (1740) shows. «King-soldier», «king-philosopher», enlightener, in addition to the famous victories left behind a huge creative legacy concerning almost all aspects of life. Even in his youth he paid attention to Niccolo Machiavelli’s treatise «The Sovereign» – one of the most famous treatises on the issues of state administration and the duties of the ruler, entering into a polemic with Florentine Machiavelli, Frederick II formulated new principles of monarchy. In essence, this work is a polemic with Machiavelli’s «The Prince» («The Sovereign»). Speaking from the position of Enlightenment ideals, Frederick considered Machiavelli a «court charlatan»⁹ and argues with him, stating in the preface that Machiavelli’s book is one of the most dangerous of all works published to date. The full title of the work is «Anti-Machiavelli, or the Experience of an Objection to the Machiavellian Science of the Mode of Government.» In the work, the «king-philosopher», from a mercantilist position, and even thinking much more broadly, states: «the most necessary and essential sciences for people’s lives are agriculture, trade and manufactory…The sovereign, who wishes to undertake for his exaltation of this quiet and pleasant way, must necessarily know in detail his state, so that he understands which of these arts can best develop in it; and, therefore, what he should do to encourage them. The French and Spaniards, seeing the lack of development of their trade, tried to find means to weaken the trade of the English… A state whose abundance lies in bread and the cultivation of grapes, should observe the following rules: first, it should make its land fertile, so that even the smallest part of it is useful. After that, he should think about bringing his goods out of the state in large quantities, transporting them at low cost and selling them cheaper than others. As for the various manufactories, they can be useful and profitable for the state. By means of them the sovereign supplies its inhabitants with all that is necessary for their needs and abundance, and the neighbors will have to buy with money the fruits of this diligence. On the one hand, manufactories are useful in that the money does not go outside the state, and on the other hand, they contribute to the fact that the state constantly has the opportunity to receive new goods»¹⁰.

In domestic affairs and economic reforms, Frederick the Great, as noted, was rather protectionist, which contributed to the strengthening of absolutism in Prussia. He abolished censorship, reduced taxes, codified legislation, and introduced religious freedom. Calling himself a «servant of society,» he also instituted a passport system and effectively banned travel abroad. Caring for the needs of the army, he encouraged the development of the cloth industry and arms production, while at the same time forbidding the use of machines for fear of population decline. To Frederick the Great Liszt wrote: «Frederick II attracted foreign agronomists to the country, cultivated uncultivated fields, encouraged the development of meadows, the cultivation of fodder and food plants, the introduction of potato and tobacco culture, breeding the best breeds of sheep, cattle and horses, the use of mineral fertilizer, etc. and delivered capital and credit to farms. If by these direct measures he raised agriculture, he benefited it still more indirectly, by means of factories, which – in consequence of the introduction of the customs system which he had improved, the improvement of the means of communication which he had undertaken, and the establishment of a bank – had attained the greatest development in Prussia in comparison with the rest of Germany. «In expressing this praise we do not at all intend to defend the errors of his system, such as the prohibition of the exportation of raw materials; but the fact that, in spite of these errors, thanks to his system industry has risen, no enlightened and open-minded historian would dare to deny. It must be clear to every mind, alien to prejudice and not clouded by false doctrinal considerations, that it was not so much by its conquests as by its wise measures for the promotion of agriculture, industry, and commerce, by its successes in literature and science, that Prussia was able to occupy a place among the European states. And all this was the work of one great genius alone!»¹¹. The development of the economy was also hindered by continuous wars that strengthened the power of the military feudal bureaucracy. It should be noted that the future King of Prussia, in the early years of life, and did not dream of the crown, because he was the third son in the family, but his two brothers died, opening the way to the throne. Since childhood, Karl Friedrich was fond of philosophy, literature, music, dance, composition. He played the flute beautifully. There is a well-known historical fact of his music-making in the palace of Sans Souci with the great Johann Sebastian Bach, whose son worked as a harpsichordist at the court of the King of Prussia. The Prussian king was fluent in English, French, Spanish, Italian and Portuguese, and read Greek, Ancient Greek and Latin. Karl Friedrich II can be considered an outstanding representative of the Hohenzollern dynasty, whose nickname combined the sympathy of the Germans for their king and the recognition of his statesmanship. The Russian Empress Elizabeth Petrovna called him «the Prussian Nadir Shah», her nephew Peter III called him «one of the world’s greatest heroes», and Voltaire, with whom Friedrich corresponded, called him «the northern Solomon». And also, criticizing the science of management Machiavelli, the Prussian king notes, «we must always remember that in the world there is nothing perfect and that the error is inherent in all people. The happiest is the state, where mutual care of the sovereign and subjects make public life pleasant and easy, without which human existence becomes an obnoxious burden»¹².

The end of the 18th century and the first half of the 19th century in the history of European philosophy is usually called classical German philosophy. During this period, the center of development of spiritual culture moves from France to Germany: German writers Johann Gottfried Herder, Johann Wolfgang Goethe, Gotthold Ephraim Lessing, Johann Friedrich Schiller; musicians Christoph Willibald Gluck, Ludwig van Beethoven, Wolfgang Amadeus Mozart, continuing the culture of the French Enlightenment, contribute to the development of German classical philosophy and German romanticism. Among the brightest representatives of German classical philosophy should be highlighted philosopher and public figure Johann Gottlieb Fichte (1762—1814) and his work «Closed commercial state» (1800) – one of the interesting concepts of the ideal state, in which he attempted to realize the main provisions of the social ideal of the second half of 90-ies of the XVIII century – by radical reforms carried out «from above» and the peculiarity of which was to implement it within a single country.

Having given up the career of a Lutheran pastor with a relatively secure existence, imbued in his university years with the ideas of anti-clerical freethinking, philosopher and public figure Johann Gottlieb Fichte hoped through the development of the doctrine of human freedom to influence the change in the social life of people in the modern world, which he assessed as completely intolerable. Acquaintance with Kant’s works (in 1780 he visited him in Königsberg) contributed to the formation of his philosophical outlook. He can be considered one of the brightest representatives of subjective idealism, which developed, among other things, on the basis of Kant’s theoretical and ethical works. Fichte believed that the Great French Revolution (1789) was prepared not only by the works of Jean-Jacques Rousseau, but also by Kant. According to Fichte, it was Kant’s philosophy, especially its ethical part, that first proved the reality of freedom.

In 1800, Fichte wrote, as he notes in the subtitle, a philosophical project that would serve as a supplement to the science of law and an attempt to construct a forthcoming policy for the creation of the concept of an ideal state under the title «The Closed Commercial State». In the preliminary explanation of the title, Fichte notes that «the state of law is a closed set of many people, subject to the same laws and the same supreme coercive power», and further notes in the introduction: «Whoever wishes to show to what special laws trade relations should be subjected in the state, must therefore first of all investigate what in the state of reason, in the field of trade relations, is consistent with law, and then indicate what is the custom in this respect in the currently existing state?¹³. Fichte writes: «A state which still has a backward agriculture, which needs a considerable number of hands for its improvement, which lacks the usual mechanical crafts, cannot allow itself luxury. Fichte believes that «man must work, but not like a pack animal, which sinks into sleep under his burden and, after a meager recovery of exhausted strength, again forced to carry the same burden. He must work fearlessly, willingly and joyfully.» A full-fledged citizen of man makes possession of property, «every adult and reasonable person must have property» believes Fichte. He notes that «the purpose of the state is, first of all, to give everyone his own, to bring him into possession of his property, and then to begin to protect it.¹⁴ If the state ensures that every citizen has property, it can demand rights in relations between people. People themselves choose, each for himself, the field of activity, and the state must ensure them the right to labor and to property. At the same time, labor was seen not only as a vital necessity of each person, but also as his indispensable duty. In Fichte’s «closed commercial state» there are three estates: producers («extract natural works of nature»), artists (perform «further processing for final destination») and merchants. Speaking of national welfare, he notes: «Welfare should extend to all in approximately the same degree»¹⁵. Highlighting the need for an active role of the state in the economy and human life, Fichte opposes pure market regulation of the economy, considering it inevitably leading to an imbalance of various types of labor activity, to the unemployment of a significant part of the population and poverty.

Fichte was born in Rahmenau (East Prussia) into a peasant family. Through patronage he received a university education, studying at the University of Jena (1780) and the University of Leipzig (1780—1784).

At the beginning of 1794 Fichte gives private lectures on «science» in Zurich, the rumor of which reached Germany and on the initiative of Goethe he is invited to the University of Jena as a professor, where he worked until 1799. In 1805 Fichte lectured at the University of Erlangen, and in 1806 – Königsberg University.

From 1800 Fichte lived and worked mainly in Berlin; in 1810 he was appointed dean of the Faculty of Philosophy and was soon elected rector of the university. In 1814 he died of typhoid fever, contracted from his wife while caring for sick and wounded soldiers in a hospital.

Fichte’s works influenced many contemporaries, such as the young F. Schelling, Johann W. Goethe, W. von Humboldt, F. and A. Schlegel, F. Schiller, Novalis. The symbol of the epoch became, published in 1808, «Speeches to the German nation» Fichte, in which the idea of a united German fatherland was gaining popularity. Fichte can be considered the philosopher whose ideas served as a bridge between the ideas of the great hermit Kant and the great dialectician Georg Wilhelm Friedrich Hegel.

Completely opposite in content is another work, «The Isolated State» (1826), in which an abstract model of the state is created by Johann Heinrich von Thünen (1783—1850), a Mecklenburg junker (landowner), a mathematician by training, one of the predecessors of the «Marginalist revolution» and the founders of mathematical methods of limit analysis in economic theory, who created the theory of the isolated state («Der isolierte Staat»), which led to the emergence of the abstract theory of the psychological and mathematical school on the Austro-German soil in the 80s of the Х1st century. His mathematical constructions in this respect also foreshadowed the direction that in the twentieth century came to be called «econometrics». The full title of the work is «The Isolated State in its Relation to Agriculture and National Economy» (the first volume was published in 1826, part of the second in 1850, the remainder of the second, and the third volume, were published after his death in 1863). As many scholars have noted, Thünen was barely noticed and little appreciated by his contemporaries.

In his non-existent state, which is essentially a hypothesis, Thünen, considers all economic phenomena in their purest form. The state or city, which is located in the center of the plain, which has a rounded territory and everywhere equally fertile soil for various agricultural activities. The distances from the center of distribution along all the boundaries of the area are the same, and the city is the only outlet for all the goods produced around it. Thünen notes: «Imagine a very large city situated in the middle of a fertile plain, not cut through by any navigable rivers or canals. Let this plain have perfectly uniform soil, everywhere equally convenient for cultivation, and let it pass at a great distance from the city into virgin spaces which separate the whole state from the rest of the world. There are no other towns on the plain except the said single large city, upon which falls the duty of supplying the whole country with the products of industrial production, which in turn receives its foodstuffs exclusively from the surrounding plain. The mines and saltworks, which satisfy all the needs of the state for metals and salt, we imagine,» says Thünen, «lie also in the vicinity of this central city, which we shall hereafter call simply a city, since it is the only one¹⁶. Thünen poses the question: what forms will agriculture take under these conditions, and how will it be affected by a greater or lesser distance from the city, if this agriculture is conducted quite rationally?

Under the conditions of such an «isolated state», Thünen considers the formation of different kinds of income. He points out that for the application of labor in farming, the application of capital is also necessary, and the level of profit is determined by the profitability of the last part of capital and this determines the profit on capital in its «natural» state in the «isolated state». Thünen believes that capital invested in production not only increases wealth and income in the hands of capitalists, but is also beneficial to the workers themselves, as it increases the influence of one of the elements that increase their wages. It should be noted that Thünen lives in the era of the industrial revolution and the emergence of unemployment as a social phenomenon, which exacerbated the contradictions between workers and capitalists. Workers began to see the capitalists as their enemies, believing that the interests of the workers are opposite to those of the capitalists, and that profits grow at the expense of wages. According to Thünen, if workers’ wages were raised and their children received a free education sufficient for the entrepreneurial endeavor, the barrier that existed between the estates would disappear. In the matter of restricting free trade, Thünen argues that «the prohibitionist system has nowhere created such new sources by which the worker’s earnings could be increased and he would be able to pay a more expensive price for bread. On the contrary, by increasing the price of necessities, the welfare of all, and especially of the laborers, is diminished; … by inflicting an inevitably deep wound on the poorest state by restricting free trade, the rich state at the same time wounds itself no less deeply»¹⁷

Mark Blaug, in his essay on Thünen in his book One Hundred Great Economists Before Keynes, calls Thünen’s work The Isolated State a grand masterpiece. He notes «Thünen is two, perhaps even three economists in one: for geographical economists he is the ’father’ of the theory of the location of economic activity, the branch of economic science that studies the role of distance and territory in economic life; for theoretical economists he is one of the independent pioneers of the so-called ’marginal productivity theory of distribution’; and for mathematical economists and econometricians he is a major innovator in the use of computation to find solutions to maximization problems.¹⁸ It should also be noted that contemporaries perceived Thünen’s work as an exemplary guide to agriculture. Until the end of the XVIII century, many branches of natural science, which formed the basis of agriculture, were at the stage of formation. Social and economic life in the countries of Central Europe was gradually being freed from medieval vestiges, commodity-money relations were developing, the reorganization of subsistence economy under the influence of the developing market, and the problems of interaction between agriculture and the market had not been considered by anyone before Thünen. Only many decades later, at the beginning of XX century, Thünen was recognized as one of the predecessors of marginalism.

The three works cited here are all by brilliant Germans who left a mark on the history of German economic thought and are dedicated to the goal of better organizing the state. The ruler, the philosopher and the landowner were trying to create a model of well-being for their state. One preached absolutism, the other freedom of the individual, the third freedom of trade. Who is right? Where is the truth?

Philosophy of Romanticism – Georg Wilhelm Friedrich Hegel

The spiritual environment that developed in most European countries in the second half of the 18th century, labeled by historians as the Age of Enlightenment, in fragmented Germany also had a specificity, which consisted in the fact that among many representatives of the German Enlightenment the idea of national unity was very popular. In the 70s of the XVIII century, the literary movement «Storm and onslaught» emerged, which contributed to the awakening of national feelings. The Stürmer movement had a noticeable influence on the early work of Goethe, Schiller, Hölderlin and other German poets and writers who created in their works a gallery of images of rebels.

The end of XVIII – beginning of XIX century – is the time of the Great French Revolution, the Napoleonic Wars, the time of industrial revolution in England and the development of capitalism, it is a time of political humiliation of many peoples of Europe (Germans, Hungarians, Poles, Italians, Czechs) and the rise of their national consciousness. Europe was on the threshold of the greatest upheavals and changes. The French Revolution shook the foundations of the old order and for a quarter of a century plunged the countries of the Old World into the abyss of social and political instability. It should be recognized that Napoleon, who tried to redraw the map of Europe, which was languishing under the burden of feudalism and outdated territorial division, first drew under French influence almost all the leading personalities of the time, who, however, soon became disillusioned with him (the great Beethoven changed the dedication in his «Heroic» symphony).

Hegel, a prominent representative of the German classical school, did not stand aloof from these changes. Like many young people of the time, as a student, he marveled at the French Revolution, and then abruptly changed his beliefs and began to praise the extremely conservative Prussian state. His philosophy absorbed the contradictions of the epoch, becoming the creator of a system that tried on the absolute idea with the Prussian class monarchy, he surprisingly combined revolutionary ideas and conservative elements in his doctrine

Georg Wilhelm Friedrich Hegel (1770—1831) was born in Stuttgart, the capital of the principality of Württemberg. The philosopher’s father was a secretary of the treasury and was a member of the highest bureaucracy. His parents prepared him for a career as a pastor; 1788—1793 he studied at the Theological University of Tübingen and earned a Ph. D. in theology. Together with fellow student Schelling and mutual friend Hölderlin, who soon became a famous German Romantic poet, Hegel read the works of Plato and Kant; disillusioned with his career as a pastor, he concentrated on philosophy. From 1793 to 1800, Hegel labored as a home teacher and educator. After the death of his father, he receives his share of the inheritance, which gives him the opportunity to engage in philosophical activities. In early 1801 he comes to Jena, where after defending two dissertations, he receives the right to teach at the local university as a private associate professor of philosophy. In 1802—1803, together with Schelling, he published the «Critical Philosophical Journal», in which he printed a number of his works. After leaving Jena, Hegel moved first to Bamberg and then to Nuremberg, where he worked as director of the gymnasium (1808—1816); it was during this period that he wrote The Science of Logic. From 1816—1818 he held a professorship at the University of Heidelberg, and from 1818 until his death at the University of Berlin, where he was rector of the university for several years. It was in these years, in the Berlin period, that Hegel’s works were especially widely recognized and his authority grew considerably.

According to the famous German historian, social democrat Franz Mehring, Hegel «saw in the history of mankind a process of constant movement, change and transformation, rising from the lowest to the highest forms, and a powerful strain of mind tried to trace in the most diverse departments of historical science, the internal connection, the constant development of this process among all the seeming deviations and accidents.¹⁹ His philosophy belonged to the dominant position in German intellectual life. The ideal of the rule of law constructed by Hegel in his «Philosophy of Right» (1822) was just as much a reflection of the Prussian state of 1821 as Fichte’s «Closed Commercial State» was a reflection of the Prussian state of 1801, but Hegel goes further in his «Philosophy of Right» he demands a public trial and jury trials. It is on this work we would like to stop the reader’s attention to understand the philosophy of economic thought and the development of economic doctrines of Germany.

It should be noted that in the second half of the 18th century in the Enlightenment era begins to form a «union» of philosophy and political economy: Hume, Rousseau, Kenet, Thurgot, Smith and others were both philosophers and economists. For the «Encyclopedia» Diderot and D.Alambera wrote their articles on philosophy and political economy Rousseau, Kenet and Thurgot. In 1759 came out «Theory of Moral Sentiments», and in 1776 «Study on the nature and causes of the wealth of nations» A.Smith. They came by their theoretical judgments through natural law philosophy to free trade and the «invisible hand». However, Hegel, also drawing from the laws of natural law, comes to the realization that «man must find his reason» – Spirit – in law.

Hegel notes that «there are two kinds of laws: natural and legal. Natural laws are absolute and have the force of what they are: they do not allow any limitation, although it is possible in some cases to sin against them. To know what the law of nature is, we must know it, for these laws are true; only our conceptions of them may be false. The measure of these laws is outside of us, and our knowledge of them adds nothing to them… when considering legal laws, a spirit of reflection rises, and already the mere difference of the laws makes us pay attention to the fact that they are not absolute…In legal laws, a precept is valid not because it exists, but each person demands that it conform to his own criterion. Here, therefore, there is a possible conflict between what is and what ought to be, between law in and for itself existing, remaining unchanged, and the arbitrary definition of what is right. We find such a division and such a struggle only on the ground of the spirit, and since this advantage of the spirit seems to lead to discord and disaster, one often hears the invitation to return from the arbitrariness of life to the study and contemplation of nature and to make the latter its model. But it is precisely these opposites between the right in and for itself and that to which arbitrariness gives the power of right, that cause the need to know thoroughly what should be recognized as right»²⁰.

Hegel was one of the few scholars of the time who understood the real meaning of the subject of political economy. In his Philosophy of Right, he notes that political economy is a science that «must depict the relation and movement of masses of products in their qualitative and quantitative definiteness and entanglement. It is one of those sciences that have emerged in modern times, because they have the latter as their soil. Its development is an interesting example of how thought in the infinite variety of private facts, which it has in front of it, finds the simple principles of the subject, the reasoning operating in it and controlling it… There are certain universal needs, such as the need for food, drink, clothing, etc., and the way in which these needs are satisfied depends entirely on the circumstances. The soil is more or less fertile here or there; the years differ from one another in their yield; one man is industrious, another lazy. But this teeming arbitrariness gives rise to universal determinations, and the facts, which seem scattered and devoid of any thought, are governed by a necessity which itself appears. Finding this necessity here is the task of political economy, a science that does honor to thought, because it, having before it a mass of accidents, finds their laws»²¹.

In those years German universities, as noted in the first paragraph, were dominated by cameralistics, which studied the social sciences with a focus on the theory and practice of state administration and German economic thought, maintained a stubborn adherence to the collection of factual data and was alien to broad theoretical generalizations. But Hegel went further and saw political economy as a science that does honor to thought, which allows you to penetrate into the inner connection of things. Hegel came to the understanding that the real subject of political economy are not dependent on the will and consciousness, contradicting externally observed phenomena, deep economic processes through which the realization of necessity. Hegel notes, – «It is interesting to see how all dependencies have an opposite effect here, how special spheres are grouped, affect other spheres and experience from them to help or hinder. This mutual connection, in the existence of which at first is not believed, because it seems as if everything here is left to the arbitrariness of a single individual, is remarkable mainly because – and similar in this with the planetary system – that it always shows the eye only wrong movements, and yet it is possible to know its laws.²²

On the political map of Germany at the time of Hegel there were fragmented states, for the centralization of which there were no economic and legal conditions, and that is why he perceived the Greek polis as a democratic alternative to the development of fragmented Germany.

In characterizing the understanding of the essence of the state, Hegel notes: – «The state is the reality of the moral idea, – the moral spirit as a manifest, self-clear substantive will, which thinks and knows itself and performs what it knows and insofar as it knows it. In morals it has its immediate existence, and in the self-consciousness of the individual man, just as the self-consciousness of the individual man through the mindset has in it, as in its essence, purpose and product of its activity, its substantive freedom»²³.

History, according to Hegel, is a «judgment of the world,» and since human history is understood by him as «the self-disclosure of Spirit in time,» world history is interpreted as having its own «reasonable plan,» as the realization of the plan possessed by the World Mind. Therefore, everything that seems evil to us (crimes, wars, revolutions, etc.) in fact turns out to be only a transient, though necessary at some stage of development. Here we should recall Hegel’s famous thesis formulated in his Philosophy of Right: «All that is real is reasonable, all that is reasonable is real».

The movement of world human history is interpreted by him as a process of increasing freedom and growth of reasonableness. According to Hegel, history passes through three stages of development:

– Eastern society (everyone is a slave);

– the Greco-Roman world (individuals gain freedom);

– the Germanic-Christian world (all are free)²⁴.

Having been realized in history as freedom, the Absolute Idea at the stage of Absolute Spirit now returns to itself in the process of self-discovery, revealing itself in another triad: art, religion, and philosophy.

«The Germanic spirit is the spirit of the new world,» Hegel notes in the fourth part of the Philosophy of History, «whose aim is the realization of absolute truth as the infinite self-determination of freedom, that freedom whose content is its very absolute form. The purpose of the Germanic peoples is to be the bearers of the Christian principle… the Germanics began by spilling over like a stream, flooding the world and subduing the decrepit and internally rotted states of civilized peoples. It was only then that their development began, brought about by contact with alien culture, alien religion, polity and legislation. They were formed by assimilating and overcoming the alien, and their history is rather a process of deepening into themselves and relating to themselves»²⁵.

«The Germanic nation was characterized by a sense of natural wholeness in itself, and we may,» Hegel notes, «call this feeling Gemuth (soul)…Germanic peoples have the capacity to be bearers of a higher principle of spirit. «In Germany, freedom has been the banner until modern times, and even the alliance of sovereigns, with Frederick II at its head, arose out of love of freedom,» Hegel believed.²⁶

Let us return to the Philosophy of Law, in which Hegel outlines his understanding of the ideal state. His economic ideal is neither detailed regulation of economic life nor strictly centralized closed natural production. In the Philosophy of Right, strict state control is associated with the primitive state of society. However, he does not exclude that «the different interests of producers and consumers may clash with each other, and although in general the correct relation between them is established by itself, their reconciliation also requires regulation consciously undertaken by an authority above them both»²⁷. And these functions he assigns to police supervision. He notes that «the police should take care of street lighting, the construction and maintenance of bridges, the establishment of firm prices for everyday necessities, as well as the health of individuals. And there are two main prevailing opinions here. Some argue that the police should supervise everything, while others argue that the police should not determine anything here, since everyone will be guided in his activities by the needs of others. The individual, of course, should enjoy the right to earn his bread in one way or another, but, on the other hand, the public also has the right to want what they need to be properly supplied. Both parties must be satisfied, and freedom of trade must not be of such a kind as to jeopardize the common good»²⁸. Hegel believed that without state intervention, a tendency toward self-destruction could prevail. In his Philosophy of Right, Hegel declares constitutional monarchy to be the highest and most perfect form of government. It is quite characteristic that Hegel considered members of the government and public officials as that part of society in which «the developed mind and legal consciousness of the whole mass of the people» were concentrated. He notes «the middle class, to which belong government officials, is the center of state consciousness and the most outstanding education. It is therefore its main pillar of legitimacy and intelligence»²⁹. Hegel thus entrusts bureaucrats with the task of renewing society.

November 14, 1831, an epidemic of cholera cut short Hegel’s life. He left his life at the height of the authority of the philosophy he had created, on the basis of which a whole school of Hegelians emerged.

Many academic sources note that Hegel’s doctrine is the highest achievement of dialectics of German classical idealism of his time, is characterized by the breadth and depth of content, the importance and diversity of the problems put forward – it is a widely developed system of categories, the laws of which he deduces from their interactions. However, the focus of Hegel’s philosophy is the dialectic of human history. This great idealist, who believed that development is a characteristic of the activity of the spirit, contributed to the formation of the historical school of law and the historical school of political economy in Germany. It was his philosophical concept that formed the basis for the formation of the methodology of these schools.

The merit of Hegel is that he was the first to see the connection between philosophy and political economy. The entire subsequent history of economic science confirms that the methodological basis of economic disciplines is the philosophy of economics (the culture of thinking of the economist). It should be noted that in recent years in our country the taste for studying the history of economic doctrines, the works of outstanding economists is lost…

Paradoxically, but for two hundred years Hegel’s philosophy has been the subject of controversy and struggle of the most diverse opposing sides. Hegel’s inheritance was divided especially zealously in Russia, where it was considered «theirs» by both Slavophiles and Westerners, both Reds and Whites. Karl Marx, having absorbed Hegel’s ideas, developed his own doctrine, which is still a subject of discussion among politicians and scientists. However, neither politicians nor postmodernists have managed to appropriate his legacy in its entirety.

Adam Muller and political economy romanticism

On the wave of disillusionment with the consequences of the French Revolution – the Jacobin dictatorship and Bonapartism – Romanticism was formed, preaching the growth of national civic consciousness. Identification of romanticism national identity, in contrast to the Enlightenment cosmopolitanism, contributes to the emergence of the ideology of bourgeois nationalism, with particular force manifested in European countries deprived of statehood – Germany, Italy, Poland, Hungary. Among the great romantics of these countries, suffice it to name: German writer, composer and artist Ernst Theodor Amadeus Hoffmann (1776—1822), composer and conductor Carl Maria von Weber (1786—1826), composer and conductor Richard Wagner (1813—1883), Austrian composer Franz Peter Schubert (1797—1828), Italian composers Vincenzo Bellini (1801—1835) and Giuseppe Verdi (1813—1901), virtuoso violinist and composer Nicolo Paganini, French composer Louis Hector Berlioz (1803—1869), Polish poet Adam Mickiewicz (1798—1855), Hungarian poet and revolutionary Sándor Petőfi (1823—1849), and Hungarian-German composer and virtuoso pianist Franz Liszt (1811—1886). They no longer felt obliged to write only on commission; it was a bold gesture, reflecting the spirit of a new time – the time of «Romanticism’.

In art, Romanticism replaced classicism in the 20-30-ies of the XIX century and, as noted by researchers, had two sources: the first, the liberation movement of the people against feudalism and national oppression and the second, the disappointment of the broad social circles of the results of the revolutions of the XVIII century, which in turn, determined the formation of two currents. In one direction, criticism of capitalism was, as a rule, one-sided in nature, noticed only its shadow sides, ignored the progressive that brought the victory of the new system, created illusory ideals that represent an apologia of the medieval past (Novalis, Zhukovsky). Another direction had a progressive, revolutionary orientation, expressing the protest of broad circles of society, both against the bourgeois and feudal system of social organization, against political reaction (Byron, Shelley, Hugo, Sand, Mickiewicz, Petefi, Ryleev, Delacroix, Brullov, Chopin, Berlioz, Liszt). Aesthetic ideals of this direction of romanticism also often had a utopian character, and the images were characterized by ambivalence, internal tragedy, they still expressed a certain understanding of the contradictions of bourgeois society, interest in the life of the broad masses of people and were directed into the future.

In the same period in political economy also formed a direction called by Lenin «economic romanticism», the founder of which he considered the Swiss petty-bourgeois economist Sismond de Sismondi (1773—1842). However, we would like to dwell on another most prominent representative of romanticism in German economic science, an interesting economist, whose views contributed to the formation of «national protectionism» and the emergence of the historical school in Germany – Adam Muller. However, as F. Engels believed, although «Germans have long since proved that in all fields of science they are equal to the rest of the civilized nations, and in most of these areas even surpass them. Only among the coryphees of one science – political economy – there was not a single German name. The reason for this is clear. Political economy is the theoretical analysis of modern bourgeois society and presupposes, therefore, developed bourgeois relations, relations which in Germany for centuries… could not arise»³⁰.

The American historian of economic science, institutionalist B. Seligman (1912—1970) in his fundamental work «The main currents of modern economic thought» notes that «Muller’s romanticism and List’s nationalism served as models that had a decisive influence on the nature of the subsequent criticism of the classical doctrine by representatives of the historical school, who persistently sought to overthrow the abstract categories of the classical school with the help of countless empirical data»³¹.

Adam Heinrich Müller (1779—1829) was a German publicist and economist. A graduate of the University of Göttingen, he entered the service of the Austrian government in 1813. In 1818 – 1827 he was Consul General of Austria in Leipzig. The most important work of Adam Muller, which in one letter he himself calls the most successful of his works, is the lectures on the elements of state art, which he read in 1808 in Dresden to the Prince of Weimar and a large gathering of statesmen and diplomats, and which in 1809 were printed in Berlin in three volumes under the title «Fundamentals of the Art of State Administration». In this work he was the first to evaluate the Smithian theory as cosmopolitan, not taking into account the national peculiarities of individual countries and peoples. All that he subsequently wrote was a repetition or more detailed exposition of the views contained in this work. In his works he expressed the interests of the feudal aristocracy, praised serfdom, and advocated the defense of large feudal farms and medieval shop associations. Idealizing the medieval way of life, he called for the restructuring of society on «corporate principles». Below the author outlines some of Müller’s conceptual views as presented by Bruno Gildebrand, a representative of the old historical school, and he, in turn, refers only to the above-mentioned lectures. As Bruno Gildebrand notes, in the literature only one Adam Müller «conceived the idea of restoring the science of national economy to its medieval beginnings. This experience deserves special attention, because it was not only the first peculiar manifestation of German nationality in the history of political economy, but also the fair side of its doctrine served as a source for later reactions against the Smithian system»³².

In political economy, Muller was an opponent of A. Smith.

In opposition to Smith’s labor theory of value, Müller put forward the «idea of value,» according to which national wealth should include not only the material but also the spiritual values of the people. Along with material capital there is another, as Bruno Gildebrand notes, «at least as important, or even more important, spiritual capital. The former is expressed and developed in money, and the latter in language. The capital of popular wisdom, experience and thought grows in language; it passes from generation to generation and constitutes at all times the strongest lever of the national economy, which for some reason has been neglected in the last century»³³.

At the foundation of Müller’s economic theory lies, according to Hildebrand, the notion of the state, of national union. «Man loses everything, says Müller, as long as he does not feel the social bond, or the state. The state is the need of all needs, the need of the heart, spirit and body; without the state man cannot hear, see, think, feel, love; in a word, man is not conceivable except in the state»³⁴. To the state Müller ascribes a Germanic origin, derives it from German freedom, and considers it an organic national product, as Hildebrand observes. «Hence every state can only be cognized in its movement and development; it is not a concept, but only a living idea, which itself is mobile and which must not be studied, but experienced. Hence in the state practical life should be guided not by the private benefit of one person and not by the immediate benefit of the whole, but only by the permanent benefit of the whole in its continuance. Every living generation, every statesman must always harmonize the present with the past and always have both before his eyes in the same way»³⁵.

Highlighting Müller’s main economic points, Hildebrand notes that «national production reinforces the civic character of values and creates the product of all products – the social bond which alone ensures the lasting existence of each individual production. Therefore, net income may sometimes remain unchanged, and meanwhile national production and national wealth may increase, or decrease»³⁶.

Muller gives a completely different definition of value «in use and exchange value» from A. Smith, a definition he applies equally to all persons and objects. «The former is individual value, the latter, on the contrary, social or political.» Muller considers «four elements serve as the main condition of all production: land, labor, material capital and spiritual capital»³⁷.

Summarizing the main economic provisions of Muller, Hildebrand notes, «the basic principles of Muller’s doctrine have no scientific validity. They represent the same sharp one-sidedness as the teachings of the Smith school, only in the opposite direction. Müller, like classical antiquity, understands man only as a member of the state, as a vessel of common ideas, and overlooks the fact that each individual man in the state consciously carries within himself his own independent world. Just as Adam Smith detached the individual from the moral idea of the public and recognized the whole only as the sum of individuals, so exactly Müller detaches the whole from its rich content, from its constituent creative individualities, and recognizes the individual man only as much as he is needed for the state»³⁸. Б. Hildebrand notes the sharp contradiction between Müller’s idea of the state and the content he gives to this state. Hildebrand notes, – «on the one hand, he demands, according to the ancient view, that man should be absorbed into the state, and on the other hand, he fills this state with all immobile feudal elements, in which there can be no moral state power, no common state consciousness, which would powerfully unite all members of the state into one; he fills it with such elements, which by their very nature counteract the force supporting all parts of the whole in constant harmony»³⁹. We do not see in the Middle Ages the state that Müller puts forward as his ideal, says B. Hildebrand.

It should also be noted that Müller’s economic views were sharply criticized by K.Marx, who called him a romantic sycophant (see K.Marx, F. Engels. Op. 23, p.135, note).

But it would not be desirable to conclude the presentation of Müller’s views on such a negative note. E.M.Mayburd in his work «Introduction to the History of Economic Thought» in chapter 20 «History with Geography» characterizes A.Muller’s views interestingly enough, he notes that Muller considers it necessary to take into account in social production for the future of the nation also intellectual labor and its products. «Every nation is a special organism with its own vital principles and its own individuality; on this basis its historical existence is formed. A nation is characterized by organic integrity and continuity from the past to the present, from the present to the future. It cannot and should not live only by current consumption, not caring about the welfare of future generations». Further E.M. Mayburd writes, «Muller did not go so far as to deny any truth of Smith’s doctrine. For England, he said, it is suitable… For continental countries, Muller believes, you need something else – a system that would protect and develop the complex of national forces». We can fully agree with Mayburd that «in today’s world, such ideas sound quite relevant». And he is right that «today we see more clearly that in the nature of things there are certain economic laws common to all nations. But even today we do not always realize that in different national-historical conditions they can manifest themselves differently and lead to different results. Superficial analogies and mechanical borrowings should be avoided. Knowledge of the general laws of economic science must necessarily be complemented by an understanding of the specific conditions of each country, its „intellectual and moral capital“. Therefore, a good economist is also a polymath in the field of history and culture, who not only keeps his erudition, but constantly expands it. He who knows nothing but modern economic science does not know it properly»⁴⁰.

Friedrich List – preacher of the ideas of «national economy» and «educational protectionism» – the forerunner of the historical school

The 30s-40s of the 19th century were blessed for Germany in terms of diversity (today we would say pluralism) of opinions – ideas on the problems of political economy. It was in these years that the classical school found some followers in Germany, of whom the most prominent, as noted above, was Johann Heinrich von Thünen (1783—1850), who wrote his only work «The Isolated Economy in its Relation to Agriculture and National Economy», which led to the emergence of the abstract theory of the psychological and mathematical school on the Austro-German soil in the 80s of the 19th century.

On the other hand, the development of capitalism and the emergence of machine labor by the mid-twentieth century not only did not lead to general welfare, but also led to the ruin of small producers and to the distress of the population. The aggravation of the contradictions between labor and capital, accompanied by uprisings and revolutions in these years leads to the emergence of the economic theory of socialism, which evolved on German soil into the revolutionary theory of Marxism, and later Austro-German social reformism.

A peculiarity of Germany in this period of development is the so-called Prussian way of developing capitalism with the gradual adaptation of landlord-junker economies to capitalism. Another peculiarity is the fragmentation of the country, the unification of which became in the first half of the XIX century an urgent issue of bourgeois development of Germany.

The fragmentation of Germany made it urgent to realize national unity, both in political and economic terms, and it was this idea of national unity that formed the basis of the views of the brightest German scientist Friedrich List (1789—1846), whose strength lay in boldly raising acute issues of economic policy in the conditions of a relatively backward country.

The English historian of economic thought Lord Lionel Robbins (1898—1984) considers Friedrich List to be a very authoritative figure in the early 19th century in Germany in matters of protectionist policy, who «exerted an influence on the politics of various countries inferior only to that of Adam Smith in his time and Karl Marx in our time»⁴¹.

Another great Anglo-Austrian historian of economic thought, Joseph A. Schumpeter (1883—1950) in his History of Economic Analysis states, «as a scientist, the economist List possesses one property that characterizes great scientists, namely, a great vision of the situation of his country, which, while not in itself a scientific achievement, serves as a prerequisite for scientific achievement of a certain type, of which the outstanding example in our day is the work of Keynes» further noting, «List was also not lacking in specifically scientific tools in which the vision must be realized in order to bear scientific fruit; in fact, he was not lacking in the specific scientific tools in which the vision must be realized in order to bear scientific fruit. But parts of this analytical apparatus were not particularly new»⁴².

Indeed, Friedrich List can be considered the most prominent ideologue of the German bourgeoisie in the first half of the nineteenth century, leading an intensified propaganda for the economic unification of Germany, whose ideas contributed to the formation of «educational protectionism», national economy and history as a method of knowledge of economics.

Hildebrand, comparing the views of List and Müller, argues that «despite the same protest against the Smithian system, both these writers pursue quite opposite interests, and List advocates precisely what Müller rejects. He censures Germany for still clinging too strongly to the old ways and not so vigorously embarking on the path of industrial development, while Müller, on the contrary, censures her for crushing the old and rushing to assimilate English industry»⁴³.

In turn, the Social Democrat Rudolf Hilferding, in his work «Financial Capital», correctly enough notes that «List’s system is by no means a refutation of the theory of free trade, as it was formulated, for example, by Ricardo. It is merely an economic policy which is only meant to make possible a system of free trade by fostering such national industry for which a system of free trade is most appropriate. List’s educational duties were to serve exclusively this purpose; List therefore demanded low duties which were to equalize the difference between the superiority of England and the backwardness of Germany – temporary duties, since his policy was to cause the duties to become finally superfluous… List’s system was recognized as the system of capitalist backward countries.»⁴⁴

Liszt was born in Reutlingen in the kingdom of Würtenberg (southern Germany), which was until 1814 a vassal of the French Empire. The son of a prosperous artisan, after receiving a school education, he was apprenticed to a scribe. For ten years of service, List held many different positions, a year and a half studied law at the University of Tubingen and finished his career in the rank of counting counselor in the capital of the kingdom of Stuttgart. From 1817, under the patronage of the liberal minister Wangenheim, he was appointed professor of «the practice of public administration» at the University of Tübingen. As noted by historians, List had a great talent as a writer and orator, the clarity of thought which distinguishes all his writings and articles, by nature an enthusiastic, expansive and unusually energetic man. He traveled to Austria, North Germany, Hungary, Switzerland, France, England and, as he writes, everywhere he tried to familiarize himself with the current state of these countries. List can be considered a supporter of radical bourgeois-democratic reforms. He was one of the organizers of the «General Association of German industrialists and merchants» and led an intense propaganda of the ideas of economic unification of Germany. Because of his disagreements with the government, forced to emigrate to the United States in 1825, he returned home only in 1832 as American consul. As he himself notes, in North America, the best book from which to familiarize himself with political economy in this country was life itself. Engaged in business in the United States, where he discovered an anthracite deposit in Pennsylvania and participated in a railroad project, he became quite a wealthy man. With no less energy he tried to realize the idea of creating railroads in Germany. It was thanks to the increased activity of F. List, as historians believe, in 1833 was created the German Customs Union, which can be considered the first step towards the unification of Germany. In 1837, List receives news that the industrial crisis in America ruined him. His strength is no longer sufficient to fight his opponents and the turbulent activity to which he had become accustomed. In the fall of 1846 in the city of Kuvstein, in a hotel he committed suicide.

His main political economy ideas are outlined in the book «National System of Political Economy» (1841). The book was a great success and, according to historians, served a great service in the further national and economic unification of Germany and contributed to the formation of an alternative to the classical school of political economy direction, which would later take shape in the historical school. The reason for the success of the book is probably also the fact that it was timely and pursued the goal of theoretically substantiating the urgent economic needs of Germany. Engels considered Liszt’s work "…the best of what German bourgeois economic literature has produced, although all of his celebrated work was copied from the Frenchman Ferrier». There may be some truth in these words, but it should be noted that any research is the result of analysis, including the literature of its predecessors and, as the author of this study believes, List’s work is a really very deep analysis of the economies of the European countries of his time and the theory of Adam Smith and a number of representatives of the classical school of political economy. It should also be noted that List, being in America, was familiar with the views of the American Minister of Finance (Secretary of the Treasury) Alexander Hamilton (1757—1804), who was the author of the program to encourage the development of national industry, and living in France, with the works and views of statesman and political figure, economist and publicist François Ferrier (1777—1861). Developing the idea of «educational protectionism» put forward by A. Hamilton and F. Ferrier, List advocated active intervention of the state in the economy in order to create a single national market and protect national production until it reached the English level of competitiveness. All this contributed to the expansion of List’s views and, reflecting the historical peculiarities of the development of capitalism in Germany, he, preaching the idea of «educational protectionism» opposes both the adherents of feudal orders and supporters of economic liberalism, and it is deeply substantiated in the work «National System of Political Economy», which he publishes in 1841.

In this work List formulates his position in the consideration of the method, tasks and content of political economy: 1) historicism as a method of political economy; 2) productive forces as a source of wealth of the nation and 3) the national idea as the basis of economic policy of the state.

List creates his own system of historical-economic development of nations, distinguishing five main stages: states of savagery, pastoral, agricultural, agricultural-manufacturing and agricultural-manufacturing-commercial.

In the theory of productive forces, List considers «mental capital» – the main source of wealth – to be the main component.

Friedrich List’s book «The National System of Political Economy» in Russian translation by V.M.Isergin, edited by K.V.Trubnikov, published in 1891 and republished by the publishing house «Sotsium» in 2017 contains four books: the first is called «History», the second – «Theory», the third – «Systems», the fourth – «Politics».

In the introduction, compiled by Konstantin Trubnikov it is noted that F. List, during his lifetime, was known in the highest government, scholarly and public spheres throughout Germany, Austria, England, France and the United States of America, where he personally participated in scholarly economic literature. After his death, The National System of Political Economy was reprinted several times in Germany, and was translated into French and English. Trubnikov notes, «unfortunately, the „National System of Political Economy“ by Fr. List, which has a worldwide reputation, not only has not been translated into Russian until now, and therefore unknown to Russian educated society, but even very little known to most of our scientists-economists»⁴⁵. Konstantin Trubnikov further states that the teachings of Fr. List constituted an epoch not only in the scientific, but also in the practical life of Germany and the United States, and were the guiding star that brought finance, agriculture, industry and commerce in these states to a flourishing state. Scholars of economics recognize that List’s «National System of Political Economy» may be regarded «as the highest scientific expression of the patronage system.»

Let us turn directly to the primary source. In the preface of the book List notes that he has to tell in it almost half of his life, because «more than twenty-three years have passed since I had my first doubt about the truthfulness of the prevailing theory of political economy, since I devoted myself to the study of its fallacies and their root causes… I have studied as well as others everything that was then thought and written about the subject, but I did not want to limit myself to familiarize young people with the current state of science; I sought to teach them how the national-economic theory of political economy, the national system of political economy, the national system of protection, the national system of protection, and the national system of political economy⁴⁶. And he also notes there that «for two very advanced nations, free competition can only be beneficial when they are both at the same approximate stage of industrial development». He found a difference between cosmopolitan economics, as he called classical political economy, and political economy.

Criticizing the classical school for its «cosmopolitanism,» he formulated the doctrine of «national economy,» by which he meant a system of economic policy recommendations for the developing German national bourgeoisie. In his introduction, foregrounding the analysis of national factors and national unity, he argued that there is a «cosmopolitan and political economy, a theory of exchange-valued property and a theory of productive forces – doctrines different in essence, but which must be developed independently» and he further notes «the productive forces of nations depend not only on the labor, savings, morals, and abilities of men, or on the possession of natural treasures and material capitals, but also on social, political, and civilization. No matter how diligent, thrifty, skillful, enterprising, intelligent and moral individuals may be, yet without national unity, without national division of labor and without national cooperation of productive forces, a nation will never be able to attain a high degree of wealth and power or secure a lasting possession of its intellectual, social and material wealth»⁴⁷.

The first book, «History» of the «National System of Political Economy» includes an in-depth analysis of the development of the economies of the Italians, Hanseatic, Dutch, English, Spanish and Portuguese, French, Germans, Russians, North Americans and Chapter X – «Lessons of History». He speaks of the rise and loss of power of the Italian cities and the Hanseatic League, how they were supplanted by the Spanish and Portuguese and then the Dutch, in particular he claimed that «when Hanseatic shipping began to decline, the Dutch were building up to 2,000 new ships each year»⁴⁸. And he goes on to note that until the first half of the seventeenth century, «the Dutch are as far above the English in factories and colonies, in trade and navigation, as the English are at present superior to the French in this respect.» And in the chapter on the English he emphasizes the thought of how, through the wise and energetic policy of Queen Elizabeth and the encouraging measures of the government, industry and commerce have developed in this country. F. List saw the beginning of the industrial and commercial greatness of England mainly in sheep breeding and wool production, emphasizing the great importance of the act of navigation for the growth of economic power of the country. Laying out the policy of protectionism of the English government, he wrote: «It comes out according to our theory, which we call the theory of productive forces and which, without investigating its foundations, recognized English ministers, adhering to the rule: buy raw materials, sell fabricated goods. The English ministers cared not for the acquisition of very cheap but transitory manufactures, but for the creation with endowments of an expensive and permanent manufactory force»⁴⁹.

In the history of the development of the French economy F.List notes the role of Colbert’s policy, singling out this time as a brilliant period of French industry and censures Kenet, who «censured» Colbert for the fact that he sought to bring factory industry at the expense of farming. Noting Napoleon’s «advancement» List writes «Once upon a time,» Napoleon said, «there was only one kind of property known – land property; now there is a new kind – industry. Thus Napoleon «saw and expressed clearly what his contemporary economists did not see or could not determine with precision, namely, that a nation combining factory industry and agriculture is more perfect and richer than countries purely agricultural»⁵⁰.

Evaluating the economic history of Germany, F.Liszt notes, – «Even at the beginning of the XVIII century in Germany we see: barbarism in literature and language, barbarism in legislation, administration and court; barbarism in agriculture; decline of industry and large-scale trade; lack of national unity and strength; powerlessness and weakness in everything compared to foreign countries. One thing alone has saved the Germans: their original character; their love of labor, order, thrift, and moderation, their perseverance and endurance in research and affairs; their earnest desire for the best; their great store of morality, moderation, and prudence.»⁵¹.

As a champion of German national unity, he favored transforming Germany into a power capable of economic and political expansion on the world stage. War is «a blessing for the nation,» he said. Drawing attention to the historical peculiarities of the development of capitalism in Germany, he opposed both the supporters of feudal-patriarchal orders and the supporters of liberalization of the economy.

Noting the state of the Russian economy, List shows a thorough knowledge of the economic policies of the Russian government and the country’s economic history in chapter eight, «The Russians.» He refers to the political economy course of A. Storch, which was no less respected in Russia than the works of Say in Germany. Let us turn to the primary source: «Russia owes its first successes in culture and industry to relations with Greece, then to trade with Hanse through Novgorod, and finally, after the conquest of this city by Tsar John Vasilievich, as well as due to the opening of the waterway through the White Sea, to trade with the British and the Dutch. Significant development of Russian industry, as well as mainly the softening of manners, however, began only with the reign of Peter the Great. The history of Russia, from the seventeenth century to the forties of the eighteenth century, provides striking evidence of what a powerful economic prosperity of the people»⁵². List believes that reasonable trade and economic policy, conducted at different times in Russia, led to the fact that «trade crises have completely ceased, and it is enough just to look at the latest reports of the Russian Ministry of Finance to see that Russia thanks to this system has achieved a high degree of prosperity and that it is moving giant steps along the path of national wealth and power… Any nation, as well as any person, has no more dear interests as their own. Russia has nothing to concern herself with the welfare of Germany. Let Germany concern herself with Germany, Russia with Russia. Instead of complaining, hoping and waiting, for the Messiah of future free trade, it would be far better to throw cosmopolitan systems into the fire and learn from the example of Russia»⁵³.

Paying attention to the economy of the North Americans, F. List states that «the trade and industrial history of North America is more instructive for our purpose than any other, since here development is rapid, periods of freedom and restrictions and constraints quickly follow one after another, their results are seen with clarity and certainty, and the whole system of national industry and public administration is openly unfolded before the eyes of the observer»⁵⁴.

In the tenth chapter of «Lessons of History» F. List notes «history teaches, therefore, that individuals derive most of their productive forces from social institutions and social organization». And then List writes: «history teaches that arts and crafts wander from city to city, from country to country. Persecuted and oppressed in their homelands, they flee to those cities and countries which afford them freedom, patronage and support. Thus they passed from Greece and Asia to Italy, thence to Germany, Flanders, and Brabant, and from these latter to Holland and England. Everywhere recklessness and despotism drove them out, but the spirit of freedom attracted them»⁵⁵.

F.List creates his system of historical-economic development, assuming that all nations in their economic development go through certain stages. In «economic terms, nations must pass through the following stages of development: the state of initial savagery, pastoral, agricultural, agricultural-manufacturing and agricultural-manufacturing-commercial»⁵⁶. List regarded the agricultural-manufacturing-commercial stage as an ideal, the achievement of which for young countries (to which he included Germany and the United States) is impossible without a policy of industrial protectionism. For the countries that were behind Great Britain in terms of the level of development of their economies, according to List, the transition to the «agricultural-manufacturing-commercial state,» the highest stage of economic development of nations, was possible only through a system of protectionism. At the end of the chapter «Lessons of History» he notes that at the first stage of development are Spain, Portugal and Naples, at the second Germany and North America, not far from the border of the latter is France, and at the last stage is still only Great Britain. List believes that a nation that has not reached the height of its economic power, has the right to defend itself and create patronizing tariffs, against the competition of other industrial countries. Germany was in this exact position and therefore, List’s endeavor was merely an effort to theorize the country’s overdue economic problems. Being an advocate of protectionist policy, List limits his protectionism only to the field of manufacturing industry and considers inadmissible the establishment of any duties for agricultural products, as it only delays the transition of the nation to the next manufactory stage. It should also be said that he considers it inadmissible to impose any duties on agricultural products, because this will retard the development of the nation, and here freedom of trade is needed. It is not difficult to see that Germany, while interested in industrial protectionism, was equally interested in free trade in agricultural products and was opposed to the bread protective import duties then existing in England.

Book two, «Theory» of the «National System of Political Economy», is devoted to analyzing the views of the economists of the classical school, F. Kenet, A. Smith, J.-B. Say, whose theories he outlines, subjected to sharp criticism, and develops the theoretical foundations of his system. List notes, «Kené, who first originated the idea of universal freedom of trade, extended the scope of his research to the whole of humanity, having no idea of a separate nation… he would like „merchants of all nations to form one trade republic.“ Clearly, Kenet had in mind cosmopolitan economics, i.e., that science which teaches how the human race can secure its own welfare, as opposed to political economy, or that science which confines itself to the study of how a given nation, under known world relations, by means of agriculture, industry, and commerce, achieves prosperity, civilization, and power…Adam Smith, like Kenet, did not think of writing a treatise on the subject of political economy, i.e., the policy which individual nations should follow in order to make progress in their economic condition.»⁵⁷

Classical political economy only overlooked the essence of nationalities, their interests and their special conditions. Each nation has its own path of development, argued List. The final unification of individual nations on an economic basis is possible only when all nations fully develop their productive forces. Therefore, List noted, not for every nation and not at any time can be applied the same common measures of economic policy for all. What is useful for one nation may be premature for another, as it does not have the appropriate level of development of productive forces. Therefore, the protectionist system is the only means to raise lagging nations to the level of the nations ahead of them. List notes «the protectionist system is, from this point of view, a powerful force drawing nations towards the ultimate goal of the association of nations, and hence towards true free trade. From the same point of view, national (political) economy is a science which, recognizing the existing interests and individual conditions of nations, teaches how each of them can rise to the same degree of economic development at which its association with other nations of equal culture on the basis of free trade becomes possible and profitable»⁵⁸.

Criticizing the labor theory of value (value), List put forward the theory of productive forces. If a man can possess wealth, i.e. exchange value, but if he does not possess the ability to produce more valuable objects than he consumes, he will be poor. On the other hand, a man may be poor, but if he has the power to produce quantities of value greater than he consumes, he will become rich»⁵⁹. The ability to create wealth is infinitely more important than wealth itself, according to List. List considered the main component of productive forces to be «mental capital» – it is the main source of wealth. And the increase of material capital of the nation depends on the increase of its mental capital and vice versa, according to List. In contrast to A. Smith’s doctrine of productive labor, List recognized as productive the activities of those who run the court and administration, in whose hands education and religious upbringing, who moves science, works in the field of art, etc. In List’s view, the well-being of a nation is conditioned not by the quantity of wealth, as the classics claim, but by the degree of development of the productive forces that create it. It is not only important for a nation to have the totality of material goods available to meet current needs, but it is even more important to retain «the ability to create and increase wealth,» for this ability is more important than wealth itself, List noted. Sometimes it may happen that it is necessary to sacrifice cash wealth in order to develop and increase it in the future, according to List. A nation must sacrifice and put up with the lack of material wealth in order to acquire the intellectual and social strength to develop it; it must sacrifice present benefits in order to secure its future, he believed. Let us turn to the primary source: in reference to the classical school he writes: «It is evident now how strangely mistaken the school was in making material wealth or exchange values alone the subject of its investigations and in considering only physical labor as productive force. In its opinion, he who raises pigs is a productive member of society, and he who raises human beings is not productive. He who makes balalaikas and harmonies for sale is a productive member of society, while the greatest virtuosos, just because they cannot bring what they perform to the market, are not productive. The physician who saves the life of his patient does not belong to the class of producers, but the apothecary boy belongs to it, although the exchange-values, or pills, which he manufactures, exist only for a few minutes, and then are utterly destroyed. The productivity of Newton, Watt, Kepler is inferior to that of the donkey, the horse, the pack ox, which have recently been placed by MacCulloch among the productive members of human society… The above errors and contradictions of the school may be easily proved from the standpoint of the theory of productive forces. Those who raise pigs or make balalaikas and pills are, of course, productive, but incomparably more productive are the educators of youth and the teachers of adults, virtuosos, doctors, judges and administrators. The former produce exchange values, the latter create productive forces: one of these latter prepares the next generation for production, another develops the morality and religious feeling of the present generation, a third contributes to the ennobling and elevation of the human spirit, a fourth saves the productive forces of his patients, a fifth secures the state of law, a sixth the social order, a seventh, finally, by his art and the pleasures he gives, excites the productivity of exchange values. If laws and public institutions do not directly produce values, they create productive forces; and Say is mistaken when he asserts that nations enrich themselves under every mode of government and that laws cannot create wealth.»⁶⁰

The highest form of development of productive forces, according to F.List, is manufactory, i.e. the development of manufacturing industry. According to F.List, it is in it that all material and social forces of the nation – the use of natural forces of the country, division of labor, increase in demand, market, increase in wages and welfare of the population, increase in profit, rent, etc. – find the highest development in comparison with previous economic forms. – find their highest development in comparison with previous economic forms. And the protectionist system is «the only means of raising the backward countries to the level of the nations that have preceded them, which by nature have not received any eternal monopoly of manufactory industry, but have only gained in time over other nations.»⁶¹

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Примечания

1

Machiavelli, N. The Prince. – Minsk: LLC «Zavigar», 2000. – Pg.83.

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2

Kulisher, I.M. History of the Russian national economy. 2nd ed. – Chelyabinsk: Sotsium. 2004. – Pg.131

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3

List, F. National system of political economy. – M.: Chelyabinsk: Sotsium, 2017. – Pg. 78

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4

Schumpeter, J.A. History of Economic Analysis: In 3 vol. Ed. V.S. Avtonomov. SPb.: Economic School, 2001. – Pg. 202.

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5

Weber, M. Selected: Protestant Ethics and the Spirit of Capitalism. – 3rd ed. supplemented and revised. – M.; St. Petersburg: 2014. -Pg.85

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6

Smith, A. Smith: [Translated from English: foreword by V.S.Afanasiev]. – M.: Eksmo, 2007. – Pg.418.

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Espinas, A. History of economic doctrines: Per. from Fr. – St. Petersburg: 1998. – Pg. 56

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Samuelson, P. Economics: Translated from English; In 2 vols. – Vol.2. – M.: 1997. – Pg. 342

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9

Frederick the Great Anti-Machiavelli. Instruction on military art to his generals. – M: Izd-vo AST: OGIZ, 2021. – Pg.39.

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10

Ibid. – Pg. 120

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11

List, F. National system of political economy. – M.: Chelyabinsk: 2017. – Pg. 128—129

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12

Ibid. – Pg. 144

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13

Fichte, I.G. The Closed Commercial State: A Philosophical Project, which serves as a supplement to the science of law and an attempt to build a future policy. Per. from German. – M.: KRASAND, 2019 – Pg. 14

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14

Ibid. – Pg. 17

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15

Ibid. – Pg. 45

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16

World economic thought. Through the prism of centuries. In 5 vol. / VOL. II. Rising capitalism / Reply. Ed. M.G.Pokidchesko. – Moscow: Mysl, 2005. – Pg. 64.

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17

Ibid., pp.69—70.

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18

Blaug, M. 100 Great Economists before Keynes. / Translated from English. Edited by A. A. Fofanov. – St. Petersburg: 2005. – p.299

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19

Mehring, F. History of Germany since the end of the Middle Ages. М.: 1923. – Pg.137

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20

Hegel, G.W.F. Philosophy of Law. М.: 2023. – Pg.23—25

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21

Ibid. – Pg.314—315

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22

Hegel, G.W.F. Philosophy of Law. М.: 2023. – Pg.315

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23

Ibid. – Pg.385

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24

Hegel, G.W.F. Lectures on the Philosophy of History. SPb.: Nauka, 2000

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25

Hegel, G.W.F. Phenomenology of Spirit. Philosophy of History. – Moscow: Eksmo, 2007. – Pg.778

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26

Ibid. – Pg.787

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27

Hegel, G.W.F. Philosophy of Law. М.: 2023. – Pg. 365

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28

Hegel, G.W.F. Philosophy of Law. М.: 2023. – Pg. 366

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29

Ibid. – Pg. 472

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30

Marx, K. and Engels, F. Collected Works. Op. 2nd ed. Vol. 13. – Pg.489

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31

Seligman B. The main currents of modern economic thought: Per. from Engl. M.: Progress, 1968. – С. 26

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32

Hildebrand, B. Political Economy of the Present and Future: Per. with German. Ed. 2nd. М.: 2012. – С. 25

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33

Ibid. – С. 29

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34

Hildebrand, B. Political Economy of the Present and Future: Per. with German. Ed. 2nd. М.: 2012. – С. 32

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35

Ibid. – Pg. 33

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36

Ibid. – Pg. 34

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37

Ibid. – Pg. 35

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38

Hildebrand, B. Political Economy of the Present and Future: Per. with German. Ed. 2nd. М.: 2012. – Pg. 38

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39

Ibid. – Pg. 38

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40

Mayburd, E.M. Introduction to the History of Economic Thought. From prophets to professors. – M.: Delo, Vita-Press, 1996. – Pg. 313

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41

Robbins, L. History of Economic Thought: Lectures at the London School of Economics. – М.: 2013. – С. 327

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42

Schumpeter, J.A. History of Economic Analysis: In 3 vol. SPb.: 2001. – С. 660

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43

Hildebrand, B. Political Economy of the Present and Future: Per. with German. Ed. 2nd. М.: 2012. – С. 46

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44

Gilferding, R. Financial Capital: The Newest Phase in the Development of Capitalism. – М.: 1959. – С. 390

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45

List, F. National system of political economy. – M.: Chelyabinsk: 2017. – С. 8

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46

List, F. National system of political economy. – M.: Chelyabinsk: 2017. – С. 21

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47

Ibid. – С. 60

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48

List, F. The national system of political economy. – M.: Chelyabinsk: 2017. – p. 90

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49

Ibid. – p. 99

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50

Ibid. – p. 121

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51

List, F. The National system of political economy. – M.: Chelyabinsk: 2017. – pp. 126—127

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52

Там же. – С. 133

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53

Ibid. – pp. 138—139

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54

List, F. The National system of political economy. – M.: Chelyabinsk: 2017. – p. 140

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55

Ibid. – p. 153

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56

Ibid. – p. 205

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57

List, F. The national system of political economy. – M.: Chelyabinsk: 2017. – p. 114

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58

List, F. The National system of political economy. – M.: Chelyabinsk: 2017. – p. 167

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59

Там же. – С. 171

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60

List, F. The National system of political economy. – M.: Chelyabinsk: 2017. – pp. 178—179

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61

Ibid. – p. 167

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