The Historical School: From Friedrich List to the Social Market Economy. Zemfira Nazarova
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
Weber, M. Selected: Protestant Ethics and the Spirit of Capitalism. – 3rd ed. supplemented and revised. – M.; St. Petersburg: 2014. -Pg.85
Smith, A. Smith: [Translated from English: foreword by V.S.Afanasiev]. – M.: Eksmo, 2007. – Pg.418.
Espinas, A. History of economic doctrines: Per. from Fr. – St. Petersburg: 1998. – Pg. 56
Samuelson, P. Economics: Translated from English; In 2 vols. – Vol.2. – M.: 1997. – Pg. 342
Frederick the Great Anti-Machiavelli. Instruction on military art to his generals. – M: Izd-vo AST: OGIZ, 2021. – Pg.39.
Ibid. – Pg. 120