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

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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

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