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The Eighteenth-Century Entrepreneurial State in the Political Economy of Johann Heinrich Gottlob Von Justi (1717-1771)

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The Eighteenth-Century Entrepreneurial State in the Political Economy of Johann Heinrich Gottlob Von Justi (1717-1771) The Eighteenth-Century Entrepreneurial State in the Political Economy of Johann Heinrich Gottlob von Justi (1717-1771) A thesis submitted to The University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities 2020 Xuan Zhao School of Arts, Languages and Cultures Contents Abstract .......................................................................................................................... 4 Declaration and Copyright Statement ............................................................................ 5 Introduction .................................................................................................................... 6 i. Justi and His Cameral Science .................................................................................. 11 ii. Historiography of Justi and German Cameralism ................................................... 19 iii The Argument of This Thesis .................................................................................. 26 iv Methodology and Structure ..................................................................................... 40 Chapter One. The Political Economy of Absolute Monarchy ..................................... 47 1.1 Absolute Monarchy in the Holy Roman Empire ................................................... 48 1.2 The Nature of Absolute Monarchy: Niccolò Machiavelli ..................................... 52 1.3 The Political Economy of Absolute Monarchy: Giovanni Botero ......................... 54 1.4. Manufacturing and the Wealth of Nations: the Preference for Manufacturing .... 61 1.5. Free Trade and Trade Protection in Old Austrian Cameralism ............................. 68 1.6 Conclusion ............................................................................................................. 73 Chapter Two. The Political Economy of the Enlightenment ....................................... 75 2.1 Enlightened Absolutism in Continental Europe, especially in Prussia .................. 76 2.2 The Nature of Enlightened Absolutism: Anti-Machiavel of Frederick II .............. 81 2.3 The Philosophy of Enlightened Absolutism: Christian Wolff ............................... 86 2.4. The Political Economy of Enlightened Absolutism: Policeystaat ........................ 91 2.5 Science, Academy of Sciences, and the Wealth of Nations ................................... 99 2.6 Conclusion ........................................................................................................... 107 Chapter Three. Public Happiness in Justi’s Political Economy ................................. 110 3.1 Justi’s Public Happiness, Natural Law, and the Principle of State Intervention .. 111 3.2 Public Happiness as the Aim of Economic Policy (I): National Internal Strength ................................................................................................................................... 116 3.3 Public Happiness as the Aim of Economic Policy (II): Security ......................... 119 3.4 Strategies towards Happiness: Self-Sufficiency and Commercial Supremacy ... 123 3.5 Conclusion ........................................................................................................... 129 Chapter Four. Justi’s Theory of Manufacturing and National Intellectual Capital .... 132 4.1 The Configuration of Market: Division of Labour and Diversity of Industries .. 132 4.2 Maximising the Diversity of Manufacturing in Mercantilism and Cameralism .. 138 2 4.3 The Expansion of Market: The Force of Increasing Returns and Mechanisation 141 4.4 The Expansion of Market: Product Innovation and Luxuries .............................. 147 4.5 The Economic Significance of Science ............................................................... 155 4.6 Directing the Private Initiative for Economic Development ............................... 159 4.7 Conclusion ........................................................................................................... 162 Chapter Five. Justi’s Proposals for Manufacturing and Innovation Policies ............. 165 5.1 Building manufacturing: Industrial Plan and Enterprise Policy .......................... 168 5.2 Building Manufacturing: Manufacturing Houses and Industrial Regulations ..... 176 5.3 Promoting Innovations: Patenting Inventions and Manufacturing Academy ...... 185 5.4 Promoting Innovations: Industrial Education ...................................................... 192 5.5 Tariff Policy, Configuring National Market, and Other Miscellaneous Policies . 195 5.6 Conclusion ........................................................................................................... 198 Conclusion ................................................................................................................. 200 Bibliography .............................................................................................................. 207 1. Primary Sources ..................................................................................................... 207 2. Secondary Sources: ................................................................................................ 210 Word Count: 78,958 3 Abstract This thesis investigates the German cameralist Johann Heinrich Gottlob von Justi’s economic theories and policy proposals about manufacturing, innovation, technological progress, and people’s industrial spirit and skills. It contextualises Justi’s theories and policy proposals about these topics with the political economy of absolute monarchy represented by the economic thought of Giovanni Botero and the late seventeenth- century Austrian cameralists. It also contextualises Justi’s theories and policy proposals with the political economy of enightened absolutism represented by the natural law theory of Christian Wolff and the thought of the “Industrial Enlightenment” in the early modern period. This thesis challenges and revises two kinds of prevailing interpretations of Justi’s economic thought: one believes that Justi’s economic thought aimed at sheltering the rent-seeking of monarchs and cameralists, and the other thinks that Justi’s economic thought advocated a free market with the minimised and reactive state intervention. This thesis argues that Justi’s economic theories and policy proposals were primarily concerned with not rent-seeking but how to create an economy fitting his definition of public happiness, namely an economy having a large output of goods, strong demand, high productive powers, prevented the polarisation of distribution, and provided citizens with abundant chances to work to earn their comfortable lives. This thesis also finds that Justi theorised the phenomenon of the economic expansion driven by the development of new manufacturing and by the introduction of product and process innovations and the progress of technology and science, and that Justi proposed a set of policies based on his theoretical understandings and expected to create the economy of public happiness through building diversified manufacturing sectors and stimulating innovations and technological progress. This thesis also shows that the economic model proposed by Justi was an economy under the strong leadership of the state especially in the aspects of realising the evolution of industrial structure and promoting the progress of industrial technologies. Justi’s model of “free market” was not a market free from proactive and visionary state intervention but a proper division of labour between state intervention and private initiative. In general, this thesis argues that there was a set of theories and policy proposals deserved to be named “the eighteenth-century entrepreneurial state” in Justi’s economic thought and that Justi represents a long-forgotten but noteworthy forefather of economic modernity. 4 Declaration and Copyright Statement I declare that no portion of the work referred to in the thesis has been submitted in support of an application for another degree or qualification of this or any other university or other institute of learning. i. The author of this thesis (including any appendices and/or schedules to this thesis) owns certain copyright or related rights in it (the “Copyright”) and s/he has given The University of Manchester certain rights to use such Copyright, including for administrative purposes. ii. Copies of this thesis, either in full or in extracts and whether in hard or electronic copy, may be made only in accordance with the Copyright, Designs and Patents Act 1988 (as amended) and regulations issued under it or, where appropriate, in accordance with licensing agreements which the University has from time to time. This page must form part of any such copies made. iii. The ownership of certain Copyright, patents, designs, trademarks and other intellectual property (the “Intellectual Property”) and any reproductions of copyright works in the thesis, for example graphs and tables (“Reproductions”), which may be described in this thesis, may not be owned by the author and may be owned by third parties. Such Intellectual Property and Reproductions cannot and must not be made available for use without the prior written permission of the owner(s) of the relevant Intellectual Property and/or Reproductions. iv. Further information on the conditions under which disclosure, publication and commercialisation of this thesis, the Copyright and any Intellectual Property and/or Reproductions described in it may take place is available in the University IP Policy
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