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The Mercantile System And Its Historical Significance
Gustav Schmoller was born at Heilbronn in Würtemberg on June 24, 1838. After studying at the University of Tübingen, he became in 1864 extraordinary, and in 1865 ordinary, Professor of the Political Sciences (Staatswissenschaften) at the University of Halle. In 1872 he was appointed Professor at the reorganised University of Strassburg, and in 1882 was summoned to succeed Adolf Held at the University of Berlin. In 1887 he was elected a Member of the Prussian Academy of Sciences, and also appointed Historiographer for Brandenburg. Professor Schmoller was one of the leading promoters of the Eisenach Congress "for the discussion of the Social Question" (Zur Besprechung der sozialen Frage), and delivered the opening address at its first meeting on Oct. 6, 1872: he took part in the foundation on that occasion of the Association for Social Politics (Verein für Sozialpolitik), and has exercised great influence over its subsequent action. Since 1878 he has edited a substantial series of Investigations in Political and Social Science (Staats- und Sozialwissenschaftliche Forschungen), largely the work of his pupils; and from 1881 onward he has conducted the Jahrbuch für Gesetzgebung, Verwaltung und Volkswirthschaft im deutschen Reiche.
- GenresEconomics
40 pages, Paperback
First published September 1, 1989
29 people want to read
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December 5, 2017
This 1883 essay by a German economist was initially very slow going - in fact, it was a quite frankly a boring slog, which seemed many times him whining about ridiculous, backward, almost feudal commerce/trade policies various German states (prior to unification) put in place to protect, at first, townspeople vs. rural population, then territories vs. other territories, until some of the territories coalesced into States, such as the former nation-state of Prussia. Schmoller, writing in 1883, decries the effects of German backwardness, which has led to Germany losing out on the colonialist bonanza, as well as succumbing to monopolies and all sorts of other barriers to trade put in place by unified states such as France and England. In Appendix I, the author praises a later King of Prussia, Frederick II, for trying to move the country forward, to be competitive, by bringing the silk industry to Berlin. He says that even if the industry dies out, an important step forward anyway would have been achieved, in building up a skilled working class and so forth. This was an interesting book that discusses mercantilism, although, as noted above, the first half of the book is rather dull.
Here are the quotes:
"What I have in mind, is the connection between economic life and the essential, controlling organs of social and political life, -- the dependence of the main economic institutions of any period upon the nature of the political body or bodies most important at the time."
"In Germany, however, it was, as a rule, the territorial princedom, founded on the primitive association of the tribe, and resting on the corporate Estates of communes and knights which created the new political unit, -- a unit which had for its characteristic the association of town and country, the association of a large number of towns on one side, and, frequently, on the other side, of several hundred contiguous square miles of country subject to the same authority."
"It was always the same conception that was involved: the resources of the land were thought of as a whole, which ought, first of all, to serve the needs of the country; they ought not to enrich a few individuals, but serve the home producer and the home consumer at a fair price."
"The transition from a municipal to a territorial currency in Germany likewise belongs to the period from the fifteenth to the seventeenth century, and is one of the most important, and yet one of the most obscure, parts of the constitutional and economic history of the territories."
"The currency system for a whole principality was, then, the institution which, -- together with the financial system for a whole principality to be next described, -- most distinctly drew the circle which bound the territory into one economic body."
"Nevertheless, this much is already clear that the construction of municipal systems of taxation, which belongs to the period from the thirteenth to the fifteenth century, was followed by a period wherein territorial systems were constructed; that the protracted struggles by which a system of direct and indirect territorial taxes was created belong chiefly to the period from the fifteenth to the seventeenth century; that these new systems in part abolished, in part profoundly modified, the old municipal system; and finally, that they created links and bonds of union between town and country, between circle and circle, and between the various districts of the same state, such as fundamentally affected economic life."
"Our purpose was to show by a particular example, that of Brandenburg, that, during the course of the period from the fifteenth to the seventeenth century, the creation of the German territorial state was not merely a political but also an economic necessity."
"To so powerful and self-contained a structure and so independent and individual a policy as the town had reached in an earlier age, and the modern state has reached since, the German territory scarcely anywhere attained."
"Everywhere in southwestern Germany, and to a great extent also in central Germany, the territories of the several Estates, the dominions of the counts, of the imperial cities, of the abbots, of the bishops, and of the knights were so small, that, if for no other cause, they were bound to remain in the state of a natural [barter] economy."
"And things became even worse in the course of the [30 Year] great war, which not only annihilated population and capital, but --what was harder still, -- buried in ruin the beginnings of a rational economic policy for the territory, both in Brandenburg and elsewhere; weakened for many long years the sense of the necessity of such a policy; and everywhere strengthened local privilege and individual self-will."
"The new postal services created an altogether new system of communication."
"The rise of the press gave birth to a new kind of public opinion, and to a crowd of newspapers which cooperated with the postal service in transforming the means of communication."
"Only in our Fatherland dd the old economic institutions become so petrified as to lose all life; only in Germany were the foreign trade, the manufacturing skill, the supply of capital, the good economic usages, connections and traditions, which the country had possessed up to 1620, more and more completely lost."
"And it was not simply the external loss in men and capital which brought about this retrogression of Germany, during a period of more than one century, in comparison with the Powers of the West; it was not even the transference or the world's trading routes from the Mediterranean to the ocean that was of most consequence; it was the lack of politico-economic organization, the lack of consolidation of its forces."
"The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several Estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India."
"Only he who thus conceives of mercantilism will understand it; in its innermost kernel it is nothing but state making -- not state making in a narrow sense, but state making and national-economy making at the same time; sate making in the modern sense, which creates out of the political community an economic community, and so gives it a heightened meaning."
"The struggle against the great nobility, the towns, the corporations, and provinces, the economic as well as political blending of these isolated groups into a larger whole, the struggle for uniform measures and coinage, for a well-ordered system of currency and credit, for uniform laws and uniform administration, for freer and more active traffic within the land, -- this it was which created a new division of labor, a new prosperity, and which liberated a thousand forces towards progress."
"It is a consideration of the economic history of France that most clearly brings out the fact that the mercantilism that was everywhere making its way was at least as much a matter of transformation and union at home as of barriers against the world outside."
"Richelieu's razing of the fortresses of the nobility has often been extolled as one of he most important steps toward internal freedom of intercourse within France; his active measures for the creation of a French marine were among the most important contributions toward the development of an independent commercial policy in relation to other countries."
"The great laws of Colbert... founded the legal as well as the economic unity of France; even economically they are more important than the tariffs of 1664 and 1667, for these did not succeed even in removing the difference between the pays d'etats and the pays d'election." [Translator's note: "The pays d'etats were those provinces of France in which assemblies of Estates survived and retained some authority. The most important of these were Languedoc, Brittany, Burgundy, Provence, Artois, Hainault, the Cambresis, and Bearn. These were all frontier provinces, which had been brought under the direct authority of the French crown at a comparatively late date, and had been allowed to retain a good deal of their old autonomy. Colbert was unable to secure the removal of the customs barriers between these provinces and the rest of France, which was known, as pays d'election, from its division into districts for purposes of financial administration called elections, after the officials, elus (i.e. appointed for this purpose), who presided over them."]
"Our present task has only been to show how close was the connection, in Prussia as elsewhere, between on the one side, reform and centralization at home, the transformation of territorial economies into a national economy ... and the mercantile system on the other; how, here as elsewhere, domestic policy and foreign policy supplemented one another as indispensable elements in one system."
"Difficulties were put in the way of the importation of manufactured goods; and their production and exportation were favored by the prohibition of the export of raw materials, by bounties on export, and by the commercial treaties."
"Commerce with the colonies, and the supplying of them with European wares, was reserved for the mother country."
"The thought pursued everywhere was this: as competition with other countries fluctuated up and down, to cast the weight of the power of the state into the scales of the balance in the way demanded in each case by national interests."
"The whole idea and doctrine of the Balance of Trade, as it then arose, was only the secondary consequence of a conception of economic processes which grouped them according to states."
"All economic and political life rests upon psychical mass-movements, mass-sentiments and mass-conceptions, gravitating around certain centers."
"The old bonds which had held together Catholic states had been broken; all the intellectual movement of the time centered in the new national life; and the stronger and sounder beat the pulse of that life, the more it felt its individuality, the more inevitable was it that it should bar itself against the world outside with a harsh egoism."
"The doctrine of the natural harmony of the economic interests of all states is just as false as the opinion then entertained that an advantage to one state is always a disadvantage to another."
"Even today the great economic Powers seek to utilize their economic superiority in all their international relations, and to retain weaker nations in dependence; even today any half-civilized nation or tribe, among whom the English or French establish themselves, is in danger, first, of a sort of slavery for debt and an unfavorable balance of trade, and following closely in the wake, of political annexation and economic exploitation, -- though this, indeed, may turn into an economic education for it."
"The temptation to the grater states of that time to use their political power for conflict with their economic competitors, and when they could, for their destruction, was too great for them not to succumb time after time, and either to set international law at naught or twist it to their purposes."
"It has been often enough remarked that the period of the wars of religion was followed by one in which economic and commercial interests governed the whole foreign policy of European states."
"As in the East Indies, the ancient source of supply for Oriental wares, for pearls and spices, the Portuguese violently pushed their way in first, annihilated Arabian trade with unheard-of brutality, and imposed upon all the Asiatic tribes and states the rule that they should carry on trade with Portuguese alone; so in later times the Dutch were able to drive the Portuguese out, to get for themselves a like monopoly of the spice trade, to keep other Europeans way by craft and by mercantile talent, -- if need were, by insolent violence and bloodshed, and to held the people of the East in commercial subjection."
"These Dutch, so lauded by the naif free-trader of our day on account of the low customs-duties of their early days, were from the first the sternest and most warlike of monopolists after the mercantilist fashion that the world has ever seen."
"As [the Dutch] suffered no trading ship, whether European or Asiatic, in East Indian waters, without a Dutch pass to be bought only with gold; as by force of arms and by treaty they kept the Belgian port, Antwerp, shut up against commerce [between 1648 until it was reopened by the French in 1794]; as they crushed the Prussian colony in Africa, and countless other settlements of other nations, so at home they forbade all herring-fishers to take their wares to any but the Dutch market, and prohibited their passing into foreign service, or taking to foreign countries the implements of their craft."
"...in the eighteenth century, when [the Dutch] had become too pusillanimous to wage war for their commercial ends, they resorted to the extremest protectionism. In the time of their prosperity they were carrying on war well-nigh all the time, and war for commercial ends; and they showed more skills than any other state, in the seventeenth century, in getting out of their wars fresh commercial advantages."
"The War of the Spanish Succession, ...was, primarily, the struggle of England and Holland, in concert, against the growing industrial and commercial preponderance of France, and against the danger of the union of French trade with the colonial power of Spain."
"The Seven Years' War had its origin, as everyone knows, in the colonial rivalry of England and France in North America."
"English commercial greatness and supremacy date from the successes of the war of 1756-1763. But the climax in its career of colonial conquest by force of arms, and of intentional destruction, dictated by trade jealousy, of the competing mercantile navies of France, Holland, Germany, and Denmark, was reached by Great Britain during the Napoleonic war."
"The long wars, each lasting several years, or even decades, which fill the whole period from 1600 to 1800 and have economic objects as their main aim; the open declaration by the Grand Alliance in 1689 that their object was the destruction of French commerce; the prohibition by the Allies of all trade, even by neutrals, with France, without the slightest regard to international law; all this shews the spirit of the time in its true light."
"All international law rests on the idea that he several states and nations form, from the moral point of view, one community."
"Inasmuch as the states that were the first to obtain colonies on a large scale, Spain and Portugal, had secured from the Pope a partition of the whole oceanic world, and its designation by him as their exclusive property, the law of nature when it made its appearance put forward the doctrine of Mare liberum."
"The great principle of the freedom of the sea did, indeed, slowly gain general currency; but at first each nation only recognized the particular theory that promised it some advantage."
"But, at first, [European "Balance"] ... was a mere phrase taken from international law, and used to justify every caprice on the part of the Great Powers, every intervention in the relations, and every interference with the fate of the smaller states: it was the cloak which hid the silent conspiracy of the western Powers to prevent the rise of a new Power, like the Prussian, and to keep its trade and its whole economic life in the bonds of dependence."
"[Johann Georg] Busch showed, in 1797, that of the last one hundred and forty-four years England had spent sixty-six in the most sanguinary naval wars. They had all been more or less concerned, on the one side, with the conquest of colonies by force of arms, on the other, with the destruction of the neutral trade, i.e. the trade of the smaller states."
"For it was precisely those governments which understood how to put the might of their fleets and admiralties, the apparatus of customs laws and navigation laws, with rapidity, boldness, and clear purpose, at the service of the economic interests of the nation and state, which obtained thereby the lead in the struggle and in riches and industrial prosperity."
"And it was natural that what in these struggles was brutal and unjust should be lost to sight in each nation in the glow of national and economic success."
"And historical justice does not demand more: it gives its approbation to systems of government which help a people to reach the great goal of national greatness and moral unity at a given time and with the means of that time, at home and abroad; systems, moreover, which have redeemed the harshness of national and state egoism as regards neighboring peoples, by a model administration at home."
"As early as the sixteenth century, it became apparent what a disadvantage it was for Germany that it had neither the national and politico-commercial unity of France, nor the mercantilist regulations to which both England and France were beginning to resort."
"While the Dutch destroyed the Hanseatic trade in their own markets by differential duties; while they and the English made the direct trade of Germans with Spain and Portugal impossible, by violence and the confiscation of ships; the Dutch misused, with increasing dexterity, their growing preponderance on the Rhine and in the Baltic to put Germany itself into a position of unworthy dependence in all matters of business."
"As the only or most important purchasers of German raw products and the only suppliers of Indian spices, [the Dutch] ... secured an almost intolerable monopoly, which reached its climax through the unconditional dependence of Germany on the Dutch money market during the period 1600-1750."
"With naive pleasure in their maritime and commercial strength, with the support of a brutal international law, and a diplomacy which forced upon weaker and less experience peoples, by every art of intrigue, unprofitable and perfidious commercial treaties, [England, France, and Denmark] openly adopted the half-true, half-false doctrine that the trade advantage of one state always was and always must be the disadvantage of another."
"There is but one way out of it; we must do what Holland, France and England have done before us; we must exclude the foreign wares; we must once more become masters in our own house."
"--those who would not be hammer would assuredly be anvil."
"The victories of the Prussian army served the same end as the financial and commercial policy of the state; between them they raised Prussia to a place among the Great Powers of Europe."
"Our argument rested on the proposition that, in spite of the fact that it is the individual and the family that labor, produce, trade, and consume, it is the larger social bodies which, by their common attitude and action, intellectual as well as practical, create all those economic arrangements of society, in relation both to those within and those without, upon which depend the economic policy of every age in general and its commercial policy in particular."
"The seventeenth and eighteenth centuries seemed to us the birth hour of modern stats and modern national economies; and therefore, to have been necessarily characterized by a selfish national commercial policy of a harsh and rude kind."
Here are the quotes:
"What I have in mind, is the connection between economic life and the essential, controlling organs of social and political life, -- the dependence of the main economic institutions of any period upon the nature of the political body or bodies most important at the time."
"In Germany, however, it was, as a rule, the territorial princedom, founded on the primitive association of the tribe, and resting on the corporate Estates of communes and knights which created the new political unit, -- a unit which had for its characteristic the association of town and country, the association of a large number of towns on one side, and, frequently, on the other side, of several hundred contiguous square miles of country subject to the same authority."
"It was always the same conception that was involved: the resources of the land were thought of as a whole, which ought, first of all, to serve the needs of the country; they ought not to enrich a few individuals, but serve the home producer and the home consumer at a fair price."
"The transition from a municipal to a territorial currency in Germany likewise belongs to the period from the fifteenth to the seventeenth century, and is one of the most important, and yet one of the most obscure, parts of the constitutional and economic history of the territories."
"The currency system for a whole principality was, then, the institution which, -- together with the financial system for a whole principality to be next described, -- most distinctly drew the circle which bound the territory into one economic body."
"Nevertheless, this much is already clear that the construction of municipal systems of taxation, which belongs to the period from the thirteenth to the fifteenth century, was followed by a period wherein territorial systems were constructed; that the protracted struggles by which a system of direct and indirect territorial taxes was created belong chiefly to the period from the fifteenth to the seventeenth century; that these new systems in part abolished, in part profoundly modified, the old municipal system; and finally, that they created links and bonds of union between town and country, between circle and circle, and between the various districts of the same state, such as fundamentally affected economic life."
"Our purpose was to show by a particular example, that of Brandenburg, that, during the course of the period from the fifteenth to the seventeenth century, the creation of the German territorial state was not merely a political but also an economic necessity."
"To so powerful and self-contained a structure and so independent and individual a policy as the town had reached in an earlier age, and the modern state has reached since, the German territory scarcely anywhere attained."
"Everywhere in southwestern Germany, and to a great extent also in central Germany, the territories of the several Estates, the dominions of the counts, of the imperial cities, of the abbots, of the bishops, and of the knights were so small, that, if for no other cause, they were bound to remain in the state of a natural [barter] economy."
"And things became even worse in the course of the [30 Year] great war, which not only annihilated population and capital, but --what was harder still, -- buried in ruin the beginnings of a rational economic policy for the territory, both in Brandenburg and elsewhere; weakened for many long years the sense of the necessity of such a policy; and everywhere strengthened local privilege and individual self-will."
"The new postal services created an altogether new system of communication."
"The rise of the press gave birth to a new kind of public opinion, and to a crowd of newspapers which cooperated with the postal service in transforming the means of communication."
"Only in our Fatherland dd the old economic institutions become so petrified as to lose all life; only in Germany were the foreign trade, the manufacturing skill, the supply of capital, the good economic usages, connections and traditions, which the country had possessed up to 1620, more and more completely lost."
"And it was not simply the external loss in men and capital which brought about this retrogression of Germany, during a period of more than one century, in comparison with the Powers of the West; it was not even the transference or the world's trading routes from the Mediterranean to the ocean that was of most consequence; it was the lack of politico-economic organization, the lack of consolidation of its forces."
"The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several Estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India."
"Only he who thus conceives of mercantilism will understand it; in its innermost kernel it is nothing but state making -- not state making in a narrow sense, but state making and national-economy making at the same time; sate making in the modern sense, which creates out of the political community an economic community, and so gives it a heightened meaning."
"The struggle against the great nobility, the towns, the corporations, and provinces, the economic as well as political blending of these isolated groups into a larger whole, the struggle for uniform measures and coinage, for a well-ordered system of currency and credit, for uniform laws and uniform administration, for freer and more active traffic within the land, -- this it was which created a new division of labor, a new prosperity, and which liberated a thousand forces towards progress."
"It is a consideration of the economic history of France that most clearly brings out the fact that the mercantilism that was everywhere making its way was at least as much a matter of transformation and union at home as of barriers against the world outside."
"Richelieu's razing of the fortresses of the nobility has often been extolled as one of he most important steps toward internal freedom of intercourse within France; his active measures for the creation of a French marine were among the most important contributions toward the development of an independent commercial policy in relation to other countries."
"The great laws of Colbert... founded the legal as well as the economic unity of France; even economically they are more important than the tariffs of 1664 and 1667, for these did not succeed even in removing the difference between the pays d'etats and the pays d'election." [Translator's note: "The pays d'etats were those provinces of France in which assemblies of Estates survived and retained some authority. The most important of these were Languedoc, Brittany, Burgundy, Provence, Artois, Hainault, the Cambresis, and Bearn. These were all frontier provinces, which had been brought under the direct authority of the French crown at a comparatively late date, and had been allowed to retain a good deal of their old autonomy. Colbert was unable to secure the removal of the customs barriers between these provinces and the rest of France, which was known, as pays d'election, from its division into districts for purposes of financial administration called elections, after the officials, elus (i.e. appointed for this purpose), who presided over them."]
"Our present task has only been to show how close was the connection, in Prussia as elsewhere, between on the one side, reform and centralization at home, the transformation of territorial economies into a national economy ... and the mercantile system on the other; how, here as elsewhere, domestic policy and foreign policy supplemented one another as indispensable elements in one system."
"Difficulties were put in the way of the importation of manufactured goods; and their production and exportation were favored by the prohibition of the export of raw materials, by bounties on export, and by the commercial treaties."
"Commerce with the colonies, and the supplying of them with European wares, was reserved for the mother country."
"The thought pursued everywhere was this: as competition with other countries fluctuated up and down, to cast the weight of the power of the state into the scales of the balance in the way demanded in each case by national interests."
"The whole idea and doctrine of the Balance of Trade, as it then arose, was only the secondary consequence of a conception of economic processes which grouped them according to states."
"All economic and political life rests upon psychical mass-movements, mass-sentiments and mass-conceptions, gravitating around certain centers."
"The old bonds which had held together Catholic states had been broken; all the intellectual movement of the time centered in the new national life; and the stronger and sounder beat the pulse of that life, the more it felt its individuality, the more inevitable was it that it should bar itself against the world outside with a harsh egoism."
"The doctrine of the natural harmony of the economic interests of all states is just as false as the opinion then entertained that an advantage to one state is always a disadvantage to another."
"Even today the great economic Powers seek to utilize their economic superiority in all their international relations, and to retain weaker nations in dependence; even today any half-civilized nation or tribe, among whom the English or French establish themselves, is in danger, first, of a sort of slavery for debt and an unfavorable balance of trade, and following closely in the wake, of political annexation and economic exploitation, -- though this, indeed, may turn into an economic education for it."
"The temptation to the grater states of that time to use their political power for conflict with their economic competitors, and when they could, for their destruction, was too great for them not to succumb time after time, and either to set international law at naught or twist it to their purposes."
"It has been often enough remarked that the period of the wars of religion was followed by one in which economic and commercial interests governed the whole foreign policy of European states."
"As in the East Indies, the ancient source of supply for Oriental wares, for pearls and spices, the Portuguese violently pushed their way in first, annihilated Arabian trade with unheard-of brutality, and imposed upon all the Asiatic tribes and states the rule that they should carry on trade with Portuguese alone; so in later times the Dutch were able to drive the Portuguese out, to get for themselves a like monopoly of the spice trade, to keep other Europeans way by craft and by mercantile talent, -- if need were, by insolent violence and bloodshed, and to held the people of the East in commercial subjection."
"These Dutch, so lauded by the naif free-trader of our day on account of the low customs-duties of their early days, were from the first the sternest and most warlike of monopolists after the mercantilist fashion that the world has ever seen."
"As [the Dutch] suffered no trading ship, whether European or Asiatic, in East Indian waters, without a Dutch pass to be bought only with gold; as by force of arms and by treaty they kept the Belgian port, Antwerp, shut up against commerce [between 1648 until it was reopened by the French in 1794]; as they crushed the Prussian colony in Africa, and countless other settlements of other nations, so at home they forbade all herring-fishers to take their wares to any but the Dutch market, and prohibited their passing into foreign service, or taking to foreign countries the implements of their craft."
"...in the eighteenth century, when [the Dutch] had become too pusillanimous to wage war for their commercial ends, they resorted to the extremest protectionism. In the time of their prosperity they were carrying on war well-nigh all the time, and war for commercial ends; and they showed more skills than any other state, in the seventeenth century, in getting out of their wars fresh commercial advantages."
"The War of the Spanish Succession, ...was, primarily, the struggle of England and Holland, in concert, against the growing industrial and commercial preponderance of France, and against the danger of the union of French trade with the colonial power of Spain."
"The Seven Years' War had its origin, as everyone knows, in the colonial rivalry of England and France in North America."
"English commercial greatness and supremacy date from the successes of the war of 1756-1763. But the climax in its career of colonial conquest by force of arms, and of intentional destruction, dictated by trade jealousy, of the competing mercantile navies of France, Holland, Germany, and Denmark, was reached by Great Britain during the Napoleonic war."
"The long wars, each lasting several years, or even decades, which fill the whole period from 1600 to 1800 and have economic objects as their main aim; the open declaration by the Grand Alliance in 1689 that their object was the destruction of French commerce; the prohibition by the Allies of all trade, even by neutrals, with France, without the slightest regard to international law; all this shews the spirit of the time in its true light."
"All international law rests on the idea that he several states and nations form, from the moral point of view, one community."
"Inasmuch as the states that were the first to obtain colonies on a large scale, Spain and Portugal, had secured from the Pope a partition of the whole oceanic world, and its designation by him as their exclusive property, the law of nature when it made its appearance put forward the doctrine of Mare liberum."
"The great principle of the freedom of the sea did, indeed, slowly gain general currency; but at first each nation only recognized the particular theory that promised it some advantage."
"But, at first, [European "Balance"] ... was a mere phrase taken from international law, and used to justify every caprice on the part of the Great Powers, every intervention in the relations, and every interference with the fate of the smaller states: it was the cloak which hid the silent conspiracy of the western Powers to prevent the rise of a new Power, like the Prussian, and to keep its trade and its whole economic life in the bonds of dependence."
"[Johann Georg] Busch showed, in 1797, that of the last one hundred and forty-four years England had spent sixty-six in the most sanguinary naval wars. They had all been more or less concerned, on the one side, with the conquest of colonies by force of arms, on the other, with the destruction of the neutral trade, i.e. the trade of the smaller states."
"For it was precisely those governments which understood how to put the might of their fleets and admiralties, the apparatus of customs laws and navigation laws, with rapidity, boldness, and clear purpose, at the service of the economic interests of the nation and state, which obtained thereby the lead in the struggle and in riches and industrial prosperity."
"And it was natural that what in these struggles was brutal and unjust should be lost to sight in each nation in the glow of national and economic success."
"And historical justice does not demand more: it gives its approbation to systems of government which help a people to reach the great goal of national greatness and moral unity at a given time and with the means of that time, at home and abroad; systems, moreover, which have redeemed the harshness of national and state egoism as regards neighboring peoples, by a model administration at home."
"As early as the sixteenth century, it became apparent what a disadvantage it was for Germany that it had neither the national and politico-commercial unity of France, nor the mercantilist regulations to which both England and France were beginning to resort."
"While the Dutch destroyed the Hanseatic trade in their own markets by differential duties; while they and the English made the direct trade of Germans with Spain and Portugal impossible, by violence and the confiscation of ships; the Dutch misused, with increasing dexterity, their growing preponderance on the Rhine and in the Baltic to put Germany itself into a position of unworthy dependence in all matters of business."
"As the only or most important purchasers of German raw products and the only suppliers of Indian spices, [the Dutch] ... secured an almost intolerable monopoly, which reached its climax through the unconditional dependence of Germany on the Dutch money market during the period 1600-1750."
"With naive pleasure in their maritime and commercial strength, with the support of a brutal international law, and a diplomacy which forced upon weaker and less experience peoples, by every art of intrigue, unprofitable and perfidious commercial treaties, [England, France, and Denmark] openly adopted the half-true, half-false doctrine that the trade advantage of one state always was and always must be the disadvantage of another."
"There is but one way out of it; we must do what Holland, France and England have done before us; we must exclude the foreign wares; we must once more become masters in our own house."
"--those who would not be hammer would assuredly be anvil."
"The victories of the Prussian army served the same end as the financial and commercial policy of the state; between them they raised Prussia to a place among the Great Powers of Europe."
"Our argument rested on the proposition that, in spite of the fact that it is the individual and the family that labor, produce, trade, and consume, it is the larger social bodies which, by their common attitude and action, intellectual as well as practical, create all those economic arrangements of society, in relation both to those within and those without, upon which depend the economic policy of every age in general and its commercial policy in particular."
"The seventeenth and eighteenth centuries seemed to us the birth hour of modern stats and modern national economies; and therefore, to have been necessarily characterized by a selfish national commercial policy of a harsh and rude kind."
December 12, 2017
Interesting work on the rise of mercantilism and how nationalism is a prerequisite.
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