Abstract
There is a new debate on shock therapy versus gradualism in economics, this time referring to developing and emerging countries. The French Revolution and its impact on the other European nations has repeatedly been highlighted as a historical example for both the merits and pitfalls of the Big Bang strategy. The present paper argues that a comparison between the post-1806 reforms in Prussia and in the southwestern states of Germany offers a particularly interesting historical case study that in the economics literature has not yet received the attention it deserves. In particular, the case study shows how deeply intertwined the economic and political dimension of social transformations are, and that different economic reforms strategies cannot and should not be evaluated without taking political starting conditions into account. In view of recent reform experiences it is particularly interesting to see that Prussia offers maybe the first historical case of state capture by the East-Elbian Junkers.
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Notes
The paper was first published in April 2009. In the present paper, with one exception I refer to the revised version dating from July 7, 2010.
This paper was followed by a companion paper ‘From Ancién Regime to Capitalism: The Spread of the French Revolution as a Natural Experiment’ (ACJR 2010b), which refers less directly to the new debate on shock therapy vs. gradualism.
The authors here approvingly refer to Thomas Paine and his pamphlet The Rights of Man from 1791.
In their above mentioned companion paper ACJR mention in passing that the implementation of French institutions in the occupied territories ‘triggered reforms in many other parts in Germany’ (ACJR 2010b, p. 238), but they do not deal with these reform processes systematically.
The comparison between reforms in the German territories occupied by the French army and those in Western Germany and Japan after the Second World War (ACJR 2009, p. 5) is also misleading: The Japanese and German governments acted under massive external pressure, but they were nevertheless able to choose between different reform strategies (see e.g. Goldschmidt and Wohlgemuth 2008).
This is a point Rodrik himself underlines repeatedly in his book. As early as on page three the reader learns: “First, this book is strictly grounded in neoclassical economic analysis” (Rodrik 2007, p. 3).
The term Ungleichzeitigkeit was introduced by Ernst Bloch in his book Erbschaft dieser Zeit (1935) in the context of the question of the emergence of National Socialism in Germany. The term is still much more common in German than in the international social science literature.
According to NWW (2009, pp. 219–227), even France did not complete its transition until the 1870s.
Throughout this paper, my comparison between the reforms in southwestern Germany and Prussia basically follows the lines of Nolte’s (1990) study on this topic, which is, interestingly, the only monograph entirely dedicated to this comparison up to the present day.
In order to avoid a misunderstanding here it should be repeated that the judgement that the reforms were more successful in southwestern Germany refers to the three decades under review here. Some authors argue that the economic reforms accomplished in Prussia also imposed a decisive modernisation pressure on the political institutions in the long run (e.g. Harnisch 1996, pp. 181–182).
For an overview of this transition see NWW (2009, pp. 219–227).
On 12th and 16th July 1806 the Rheinbundakte [Rhine Union Treaty] was signed by sixteen delegates of German princes, who this way formally opted out of the Holy Roman Empire. Napoleon acted as protector of the Union, but France did not become a member of the Union. However, from 1807 on the Kingdom of Hanover was under French administration.
Or, to put it the other way round: Only 2% of the political entities existing in 1789 survived the year 1806. Even of the larger entities only 10% survived the concentration process (Wehler 1987, p. 365).
More precisely, the window started to close around 1815, as some of the key reforms were completed in the following years.
I am aware that Nipperdey’s book has been translated into English. Unfortunately, no copy of the translation was available to me, so that I have to refer to the German original.
Some authors argue, in my view convincingly, that as idealist philosophy has its roots in Lutheranism, the differences in the shared mental models of the key political actors in Prussia and southwestern Germany are at least partly due to confessional differences (e.g. Winkler 2001, Vol. 1, pp. 16–17). Although I agree that this is an important argument, for the sake of brevity I shall not go into this complex issue here.
The famous characterisation of the Prussian Allgemeines Landrecht as ‘Janus-headed’ stems from the Prussian historian Heinrich von Treitschke, who borrowed it from Madame de Staël (see Clark 2007, p. 283).
The emergence of the Junkerdom as an oligarchic group can be traced back to the fourteenth to sixteenth centuries and was a result of the decline of the Baltic cities, the secular agrarian crisis of the fifteenth century and the price revolution of the sixteenth century, which furthered the expansion of large-scale agrarian production in North-Eastern Germany (Carsten [1964] 1981; Rosenberg [1958] 1978). The Thirty Years’ War further strengthened the position of the Prussian landlords.
Most importantly, the Kreisstände (estate bodies at district level) retained the right to elect the Landrat (district governor), who was responsible for the negotiation of taxation arrangements with the central authorities and thus was a key figure in centre-periphery relations (Clark 2007, pp. 63, 113).
This is one of the parallels between Prussian and Russian catch-up development. In Russia it is interesting to see how serfdom was decisively enforced under Peter the Great and Catherine II, the two great modernisers and ‘Westernisers’ of eighteenth century Russia.
Stein even explicitly warned against the ‘disastrous imitating of France’ (quoted from Nolte 1990, p. 57). He was particularly critical regarding the Code Napoleon, which in his view ‘destroys all civil conditions’ (ibid., p. 138).
This is the reason why some authors regard enlightened absolutism not as a ‘perfection’ of absolutism but rather as its ‘attenuation, sunset’ (Hartung [1955] 1974, p. 73).
With ‘society’ still meaning the traditional elites.
As a result of the failure of the Gendamerie Edict, in 1837 about one-third of the Prussian population was still subject to patrimonial courts (Nipperdey 1983, p. 163).
As Rosenberg (1958, p. 204) aptly puts it: ‘In social complexion, the Prussian revolution never went beyond 1787–1788, the incipient, the aristocratic phase of the French Revolution. Only in the realm of political ideas, social theories, and institutional experiment did Prussia reflect a more advanced stage of development.’
According to Max Weber, ‘very frequently … “world images” … have, like switchmen, determined the tracks along which action has been pushed by the dynamics of interest’ (Weber 1958, p. 288).
For example, Clark (2007, p. 344) explicitly draws a parallel between Gorbachev and Hardenberg, who had both tried to reform the political system without basically changing it. In the light of the NWW approach these could be specified as ‘last’ attempts to reform the system within the boundaries of an limited access order.
This critical assessment of the reforms under Gorbachev and Yeltsin and the emphasis here on the state’s monopoly of power does not necessarily lead to a positive evaluation of the strengthening of the ‘vertical of power’ begun under President Putin.
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Acknowledgement
I am grateful to Gerhard Wegner, University of Erfurt, and an anonymous referee for helpful comments and suggestions. The usual disclaimer applies.
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Zweynert, J. Shock therapy and the transfer of institutions: the new debate and some lessons from the post-1806 reforms in Prussia and in southwestern Germany. Const Polit Econ 22, 122–140 (2011). https://doi.org/10.1007/s10602-010-9095-3
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DOI: https://doi.org/10.1007/s10602-010-9095-3