Germany: From Economic Integration to Political Unity. Part 1

An Unknown Germany

It turns out to be impossible to think and even more bothersome to enunciate that until the end of the 18th century the German people was a people submitted to brutal slavery, a people submitted to the whim of the ruling elite that sold the best men of their own towns as slaves, to serve as soldiers in the armies of France and Great Britain. It’s hard to imagine, even, that Germany until just one-hundred and thirty-six years ago was a sub-developed region, exporter of raw materials – cereals and wood - and importer of industrial products; a region political, economic and ideologically subordinated to England; divided into thirty-three independent states and rivaled amongst themselves; alas, a region that made up part of the periphery of the international system, submitted – as was Latin America - to the domination of hegemonic structures of world power. It seems even more difficult to think that until mid-19^th century the now happy German people were a nation without conscience. That the common man from Bavaria, Prussia or from Hesse did not feel German. That he did not believe in the existence of a nation called Germany. That the political class showed extremely high levels of corruption that would make any Latin American politician pale. That the German political elite were superstitious, totally against the advancements of science and, fundamentally, selfish, absolutely unconcerned with German national interest and the destiny of the people and the nation. That German cities – as Hegel describes - were dirty and unorganized.

Let us say, simply to give an example and so that our affirmations don’t sound like exaggeration, that while the thirteen English colonies of North America fought for their independence from Great Britain, the German rulers “sold their subjects for thousands” to the English army, that employed them as slave-soldiers to combat the insubordinate North American colonists. In his “recollection of men” to be sold as slaves – the German historian Emil Ludwig affirms- that the German governors made no distinction:

The poet Gottsched, of a stature as tall as Lincoln, due only to having fled managed to escape the claws of the recruiters, longing to boast in Prussia, not with their talents, but rather with how many feet tall they were. Previously, the poet Seume was sold by his Hesse ruler…[the German rulers] resembled all those slave drivers that until yesterday hunted down well-rounded Sudanese and Abyssinians of both sexes, while the King of Prussia resembled a zoo keeper. For those thousands of men that were sold in that era to England for not having enough troops in the fight against America, around seven and eight pounds per head was paid, but in the global market the price turned out to be higher. Like in a cattle sale, they were felt up, being rejected those that were of a weak build. Once the deal was finalized, some duke of Hesse or Brunswick would give the British agent a diamond ring as a gift. The subjects that were not able to keep safe by fleeing, having been, well, sold abroad, did not have permission to return until a peace treaty was reached, so that their stories would not provoke uprisings. On top of this, they were duped in their pay, since the princes withheld half of them for themselves. (Ludwig, 1944: 190-191)

In the very same sense that Ludwig expressed, in his The History of Diplomacy Vladimir Potemkin states:

The little princes of Germany that, in virtue of the Peace of Westphalia (1648), they had received the right to carry out an autonomous policy, and they engaged in lending their armies by grant to the highest bidder. The most shameless sale of soldiers took place and with it, of the motherland. In just half a century, the German princes earned from France something along the lines of no less than 137 million pounds and 46 and a half million sterling pounds from England. This business supplied so many purposes that the German princes tended to carry out true beatings on their subjects, turning them into soldiers and selling them later as whole armies to their rich allies. Thus, Hessen’s landgrave, to pacify the Americans that had revolted against England, sold to the former this last army of seventeen thousand soldiers [while] in Prussia, its governing class, the nobility, lived off the exploitation of the free work of the servants of the glebe, whose products were sold in the markets of Western Europe. (Potemkin, 1943: 293)

To paint a brushstroke of the corrupt, selfish and superstitious German ruling elite it is fit that we remember that, when in 1840, the laying of the railroad began: “In Bavaria Office of Health raised its voice against the railroads, alleging that due to the swift movement there was to fear serious cerebral disorders in the passengers and even in spectators” (Ludwig, 1944: 322). And the Augustus of Hannover sustained that: “I do not want railroads in my country, I do not want the shoemaker and the tailor traveling at the same speed as me” (quoted by Droz, 1973: 130).

When through some economic “stimulus” these old-fashioned resistances were overcome, a rail fever seized hold of Germany and the railway businessmen were able to obtain “through the corruption of high up officials –such as the Minister of Interior von Rochow, or even members of the royal family- the construction licenses, expropriation and numerous concessions” (Droz, 1973: 130) that before, in the name of “public health” or “national interest”, had been denied them.

During the entire first half of the 19^th century, just like Latin America, Germany was a rural region,  [1] fragmented into numerous states, politically powerless and completely subordinated to the hegemonic structure of world power that had as one of its main objectives to maintain her economically as a raw material producing region and politically as a balkanized region in a plurality of rival states. Germany was, without a doubt, just another part of the periphery of the international system.

Nevertheless, after 1812 and in the middle of the disunity of the German states, the rampant corruption of the political elite, the economic under-development and the ideological subordination of the university sectors to the ideas produced in England, an anti-hegemonic political current began a process of ideological insubordination that took the country, first into economic integration, and then on to political unification in order to, through these two transcendental steps, allow it to almost “miraculously” and in a very short span of time, reach the current threshold of power. Germany is, maybe, one of the clearest examples that ideological insubordination turns out to be, in all peripheral countries, the first and foremost condition for reaching the threshold of power paves the way for political autonomy and economic development.

The Awakening of National Conscience & the First Industrialization

After the Peace of Westphalia in 1648, Germany was left divided in micro-states and the disunity became a chronic disease. For years the territory that was inhabited by the people of the German tongue was a battle field for the French, Swedish, Austrian, Spanish, English and Russians. In 1792 the French army invaded the territories of the ancient German Holy Roman Empire and, after a serious of easy victories, towards the end of 1794 the whole of German territory to the west of Rin fell under French rule. This situation carried on until 1814 (Fullbrook, 1995). Thus, while England and France were unified States since the 16^th century, Germany was nothing more than a “geographic idea”.

Germany suffered through, as much physically as morally, the French domination. Nevertheless, and at the same time, the foreign occupancy carried out a progressive policy tending to eliminate the bad aftertaste of feudalism and to introduce greater levels of justice and freedom:

That produces a sort of division of spirits, some oriented towards collaboration with the overcomer, and others headed towards resistance. (Droz, 1973: 42)

The French occupancy contributed to the development of a national sentiment and to the birth of the idea of founding insubordination of modern Germany. [2]

Nevertheless, as Jacques Droz well points out, given that France engrained the essences of progressive ideas, “the national movement could not stop making reference to revolutionary and imperial France, but the fact that it was a role-model and enemy at the same time truly complicated the problem. There were many Germansof progressive tendencies that thought that the ideas of liberty and equality, of which France had made itself unworthy, should be taken by the Germans and aimed against the oppressor. To this group the philosopher Fichte belonged, who had never hid his Jacobian sympathy and that, in his famous speech, Speech to the German nation, spoken during the winter of 1807-1808 in occupied Berlin, invited is compatriots to continue on in a new spirit of political liberation, rejecting at the same time the universal hegemony of Napoleon and the restoration of the Holy Empire” (Droz, 1973: 67).

It is important to point out that the confusion of spirits was also favored by the positive economic effects of the presence of revolutionary France on German soil. If, on one hand, the French policy promoted the particularism of each German state, applying the old policy of dividing in order to rule, and on the other hand, the simplification of domestic customs allowed new and important movements of labor and capital, closing the gaps between east and west Germany and, more importantly, the continental block decreed by Napoleon ---that hindered the entrance of English industrial products into the continent- allowed some industries to be freed from British competition, allowed the cotton industry of Saxony to modernize and grow, and that through the planting of sugar beets –that replaced cane sugar that the English sold to Germany as middlemen- made the region of Magdeburg grow rich.[3]  Without a doubt, as List highlights (1955: 86): “As a consequence of the blockade, all German manufactured goods received for the first time a huge impulse”.

Ideological Subordination and Deindustrialization

With the financing of the Napoleonic wars in 1815, Germany –made up of thirty-eight sovereign states- from an economic point of view was on the informal prizes that Great Britain received for having defeated Napoleonic France. Great Britain thus regained its position of dominion over the German economy. In order to comprehend the real importance of this “economic reconquering” it is necessary to remember that, given its important natural resources and numerous population, “the German market was form the beginning (of British industrialization) very important to British industry, and offered the best way to ship out English items” (Cole, 1985: 86). The Napoleonic customs system having been destroyed, Germany suffered a true “invasion of English manufactured products” (Droz, 1973: 128), that ruined the newborn German industry that had developed under the shelter of the continental blockade. This blockade, upon hindering the entrance of English industrial products, had provoked the industrialization of Germany through the mechanism of substitutions of imports. Until the supply of the Napoleonic customs policy, Germany had been a region that produced raw materials and imported industrial products. Until the continental blockade, she had fundamentally been a sheep herding agricultural region. As we have already affirmed, during the duration of the Napoleonic continental blockade Germany industrialized, however, when this ended and once again an economic policy of low tariffs and free trade was imposed, it lived through a process of de-industrialization and caused it once again to become a rural country. This situation dragged it back to the stadium of raw material production. [4] In regards to this, List notes:

When peace was restored, English manufactured goods entered back into tough competition with German goods, (the British industry) due to the large amounts of available capital, was in a preferred situation for selling goods at much cheaper prices, offering more perfect items and granting credit for much longer terms than German industry, which still had to struggle with inherent difficulties at the beginning of its development. Soon ruin ensued everywhere. (List, 1955: 86).

In Prussia, the most important German state, the economic policy, “after 1815, was inspired by the doctrines of economic liberalism. Baron Stein and Baron Hardenberg, State Chancellors, great agrarian and administrative reformers of Prussia, were convinced advocates of the doctrines of Adam Smith. […] By way of economic policy, particularly topics touching on problems with international business, the most eminent Prussian ministers were imbued with free trade ideas […] and this attitude of the intellectual rulers harmonized with the interests of the powerful agrarian sector, or rather junkers, that dominated the eastern border of the Elba river” (Friedlander and Oser, 1957: 145).

In that mosaic of German States, Great Britain was in charge of preaching – through “generous subventions” to journalists and professors - that economic liberalism and the international division of labor made up the best economic theory that those states could apply. When List comments on the hidden financing that Great Britain undertook in order to propagate the theory of international division of labor and to discredit protectionist ideas as well as the men who dared to back it affirm that:

The English Cabinet, accustomed to not scrimping when it came to the commercial interests of the country, possesses in its Secret Service Money the means to come to the rescue, at any foreign point, in help of public opinion. A multitude of correspondences and flyers appeared, coming out of Hamburg, Brema, Leipzig and Frankfurt, against the senseless idea of German manufacturers in favor of a common customs protection and against its advice (List); they reproached, in harsh and derogatory terms, the lack of knowledge of the beginnings of the economic policy –beginnings recognized by all educated men- or, at least, of not being able to comprehend them. These spokesmen of English interest were in far more favorable positions than the prevailing theory and the conviction of the men of science that were in favor of it. […] The struggle was visible biased: on one side, a theory finished and played-out in all its parts an of an unarguable authority […] with speakers in all the parliaments […] but, above all, with the great leverage of money; on the other side, poverty and need, diversity of opinions, internecine discord and the complete lack of a foundational theory. (List, 1955: XXV)

In 1814, Germany had freed itself of the political dominance of France only to fall under the cultural and economic subordination of Great Britain. It exercised a true “cultural imperialism” – in Morgenthau’s terms - over Germany. Describing the results of the English cultural dominance over Germany, List affirms: “All learned public officials, all newspaper and pamphlet writers, all the writers that dealt with economic material, educated as they were in the cosmopolitan school (in free trade and the international division of labor), saw in any customs protection a theoretical abomination”. And he adds:

The least experienced student, whose cosmopolitan notebooks have barely had time to dry, thought himself authorized to derogatorily smile each time an experience rich advisor, an able and reflexive businessman, talked of customs duties. (List, 1955: XLVI)

In order to appropriately measure the weight of the cultural domination exercised by Great Britain it will do well to remember that List himself –that unclothed the English cultural domination- was, in a certain way, a “product” of it. It was in the exercise of his teaching career in the College of Political Science of the University of Tubinga that List began to walk the road of reflection, a road that would take him to discover the scaffolding of the English cultural domination over Germany:

I had to prepare in that time a course on economic policy; I had also studied, just like anyone else, what had been thought and written on this subject, but I did not wish to limit myself to instructing youth on the state of the science; I also wanted to teach them how wellbeing, culture and power of Germany had to be propelled with the means of economic order. The theory presented the beginning of free trade. This principle seemed reasonable to me, surely and, also proved by experience […] but the prodigious results of the continental system and the pernicious consequences of its suppression […] gave my doctrine a complete disclaimer, and, trying to explain this contradiction to myself, I came to the conclusion that this doctrine was not right. (List, 1955: XXI)

To be continued...

Footnotes:

1. “Germany continued to be, in the first half of the 19th century, an essentially rural country, since in 1849 72% of the population lived off the land” (Droz, 1973: 133).

2. The National German Movement was never, using modern terminology, a movement of the masses. “A retrospective patriotism has created a war of German liberation in 1813-1814, but it can be said with certainty that, by what respects the supposition that it was based on a popular resistance against the French, it is a merciful lie” (Hobsbawm, 2006b: 90).

3. For a British point of view of the Napoleonic customs system, see Eli Heckscher (1992).

4. This situation would carry on in time until the adoption of the Zollverein unleashed once again the dynamic of industrialization. In general it can be stated that Germany in 1815 was a predominantly agricultural and rural country. Berlin was the only city that had more than one-hundred thousand inhabitants; Koenigsberg and Brelau each had around sixty thousand; Dresde, Leipzig and Munich barely reached thirty thousand inhabitants. For more, see Jacques Droz (1973).

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