Real Prussia: a conservative-liberal model for future economic policy

_ Peter Boehringer, former chairman of the Budget Committee of the German Bundestag, budget spokesman for the AfD parliamentary group in the German Bundestag. Berlin, 6 October 2022.*

For decades Europeans have heard the prejudices about Prussia: “An authority-obidient, unfree barracks country with subject spirits”. However, real Prussia was not like that – in practically no area and especially not in economic life.

An innovative and successful economy requires framework conditions that give the individual freedom and independence. In the standard work on Prussia, the historian Erhardt Bödecker even quotes the original liberal Adam Smith on the cover: “The success of an economy reflects the freedom of the individual”. Such freedom is not the only condition, but it is a mandatory requirement.

In complete contrast to the prejudices and contrary to the statements of the left-wing falsifiers of history, Prussia actually granted many individual freedoms for over 200 years until 1914 – measured by the state and tax quota of 10 to 15 percent, it was a very liberal country in which, admittedly, the monarchs also paid attention to the well-being of the whole, of the collective – but in a way that left the individual much more freedom, at least economically, than today’s Germany of  an increasingly planned economy state with more than 50 percent state quota.

Interestingly, it is not only left-wing historians who make the mistake of describing Prussia as a state that is not free – right-wing historians often repeat this mistake, too, who for other, supposedly pro-Prussian but factually wrong reasons, also describe Prussia as “aliberal”.

The majority of Prussians lived from the freedom of their entrepreneurial self-employment, which the state also promoted. Interestingly, Otto von Bismarck even entrusted his own liberal critic, Rudolf Gneist, with drawing up the important municipal code.

The Prussian pioneers Christian Thomasius and August Hermann Francke were neither social romantics nor opponents of individual freedoms, despite their commitment to welfare and the “common good”.

The Prussian state was lean and of all things, the soldier king Friedrich Wilhelm I even made freedom from debt a state doctrine. His son Frederick the Great even said: “Any prince who squanders the state’s revenues on inappropriate generosity acts like a mugger.” The contrast to today’s debt-ridden modern German governments is obvious.

Prussia was much more stability oriented than today’s monetary socialist state with the ECB money printing press. In the classic gold standard of the 19th century, however, there was almost no alternative to stability policy.

In 1845, Prussia opted for a free-market system with the “Gewerbeordnung”: private property, freedom of contract, freedom of trade and competition between free and equal citizens were codified; and the state guaranteed that with great legal certainty. In 1871 the German Reich adopted this market-based Prussian trade regulation.

Minorities, too, were protected by the strictly defended written law. Eastern European Jews, for example, liked to immigrate to Prussia precisely because of these freedoms (including freedom of religion, of course).

In addition, there was enormous population growth in Prussia itself, which could only be handled with a successful economy: from 40 million inhabitants in 1871 to 67 million in 1914 – that is an increase of 600,000 people per year.

In 1891, Imperial Chancellor Leo von Caprivi said a sentence that socialists and multiculturalists should definitely know today: “We have to export: either we export machines [and thus get wealth] or we have to export people”. Exactly the opposite is happening in Germany today: we are exporting less and less; the decades-long trade surplus has been gone since 2022, probably for a long time. And at the same time, we still import far too many untrained people. It is the road to impoverishment and disaster.

Prussia’s economic success, which had been evident since the 1880s, was envied by the country. It is now well known among independent historians that England in particular wanted to eliminate this up-and-coming rival 20 years before the First World War. Measured by many criteria, Prussia and the German Reich would have or have caught up with England almost everywhere in these 20 years, overtaken them and in many cases reached world-class levels: economic growth, de facto full employment, level of education and science (most Nobel Prize winners worldwide; only 1 percent illiterate). Around 1910, the Reich was the world market leader in many of the most important sectors: electricity, optics, chemicals, special machines.

However, this success was only possible with an educational and cultural tradition that had grown over centuries, as well as with a Calvinist-pietistic work ethos: modesty, diligence, rationality. Wilhelm Röpke wrote the following in 1958 with reference to the second German economic miracle, which also applied exactly to the first, Prussian economic miracle before the First World War: “No economics textbook can replace the conditions on which the ethos of the market economy must rest: self-discipline, courage to be independent, sense of justice, honesty, fairness, community spirit, respect for human dignity. They are the indispensable pillars that protect against degeneration.” That was also the generally instilled Prussian-pietistic attitude – and it was central to Prussia’s economic success.

However, the line between prosperity-promoting “common good” and prosperity-destroying socialism is narrow. You have to be constantly careful not to fall on the dangerous socialist side of a collectivist argument. It is important that in today’s Basic Law, individual liberties have a higher priority than an indefinable “common good”.

In the name of the notorious “volonté générale” – the common good – Maximilien Robespierre was able to exercise his blood rule in France. Prussia did a better job: Although the “common good” was also written into the “General Land Law” there in 1794 almost at the same time, this did not end in Prussia in a bloodbath like in France or in later socialist experiments under the Bolsheviks, Hitler, Stalin, Mao…

Overcoming the dominance of the church via enlightened, reasonable ideas, such as those introduced by Christian Wolff, Kant’s teacher, into European spiritual teaching very early on was certainly also important for Prussia’s success. The Halle enlightener Thomasius effectively put an end to the witch trials of King Friedrich Wilhelm as early as 1714 – long before France, the alleged cradle of the Enlightenment.

Including farmers, there were over 15 million entrepreneurs in the German Reich in 1912. Thus, including their families, the existence of 60 percent of the citizens depended on being self-employed – today in the Federal Republic it is only 12 percent! Friedrich Wilhelm I therefore had a very clear idea of ​​how to support entrepreneurs in a country poor in raw materials: “Economy and factories are the nerve of all affairs of state. They must therefore be supported. Don’t go into debt and don’t spend more than you earn.” Put these sentences in contrast to today’s sayings and actions, for example by German Minister of Economics Robert Habeck.

The social obligation of the economically successful was not only regulated by social laws, but also arose from the ethos of the entrepreneurs. Of course, this is easier if there is scope for distribution, because then a 5 percent welfare state quota is sufficient to avoid poverty. In Prussia, people still knew that you first had to earn something cheaply before you could redistribute part of it to the needy. And that one must not slaughter the cow that one wants to milk moderately.

Habeck no longer knows this “Economics 101”. The left today is only about distribution – no one thinks about free management by free citizens. This is exactly why the economy of the FRG will also fail once the possibilities for debt accumulation have been exhausted.

However, the basic supply in Prussia remained in public hands, insofar as there were natural monopolies such as the Reichsbahn, Reichspost, water or gas supply. Today, even this infrastructure is being bartered abroad – for example the gas supply including purchasing and storage, which currently has to be nationalized again at great expense after it was “privatised” only a few years ago – for example to the Finnish Uniper or the Russian Gazprom .

Money issues are power issues. That is why budget sovereignty is the royal right of parliaments, because it was initially claimed by the kings – later exercised by the citizens via the parliaments. In 1850, the Prussian Constitution codified in its Article 99: “All revenue and expenditure of the state must be estimated and brought into a budget law [and balanced] every year in advance”. That was the first modern German budgetary law – and it is almost exactly the same to this day in Article 110 of the Basic Law.

The writer Stefan Zweig described the monarchical period in Prussia and Austria in these words: “When I try to find a handy formula for the period before the First World War, I hope to be most concise when I say: it was the golden one Age of Security. The state itself is the supreme guarantor of this stability. The rights he granted to his citizens were guaranteed by Parliament, the freely elected body of the people, and each duty was strictly defined. Our currency circulated in pure gold pieces, thereby guaranteeing its immutability.”

In the near future, as in 1918 to 1923, an unbridled debt regime that is detached from any anchor of stability could trigger another inflationary disaster in Germany.

Despite millions of deaths and regular mass impoverishment through real existing socialism, today’s leftists cannot give up the eternal temptations. From the infantile fiction that everyone lives at the expense of everyone else or that one can print oneself rich.

Almost every high culture in history came to a point at some point where it gave up its adult culture and wanted to live out a beautiful present at the expense of the future: This usually went hand in hand with excessive government spending and cultural flattening. The socialist fiction came in red, brown, yellow or, like today, green-money socialist – but always plan-centric, collectivist, totalitarian and in the end robbing people of all their freedoms.

To this day, the Germans still live well from the constitutive principles of Prussian society and the successes of their economy, which after the first and despite the formal dissolution of Prussia in 1947 also the Second World War in the minds, in education, in the discipline of many people and companies have survived.

In fact, it can be said that Bismarck was the creator of the first and Ludwig Erhardt the creator of the second German economic miracle.

Unfortunately, one has to fear that after 50 years of uncovered paper money and cultural Marxist re-education, the green value nihilists and energy irrationalists are currently sweeping away or successfully destroying the last important remnants of the Prussian-German success factors.

In Germany, only the AfD party stands against all this, which cannot and does not want to reconstitute a purely Prussian system – but wants to preserve these important remnants and in some cases even has to revive them!

And even if Germany should initially go down in the coming years of depression: Reconstruction can by no means succeed with the political class in power today. Here more Prussian wood is needed again. And yes, we might have to go through this cycle all over again first:

“Good times are made by weak men. Weak men create tough times. Hard times make strong men. And strong men make good times again.” Or the more concrete version today:

“Robert Habeck creates good times. Robert Habeck creates hard times. Prussian men create hard times. And Prussian men create good times again.”

* Translated with kind permission of the author from the original publication on: PBoehringer.

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