Chapter 4 Johann Heinrich Gottlob von Justi (1717 - 1771): Health as Part of a State's Capital Endowment Contents 4.1 Introduction - The Impact of the Thirty Years' War - Distinctive Feature of Cameralism: the Concern with the Police Function - Health Related Thought in Cameralism 4.2 People, the Wealth of the State - Major Population-Based Measures 4.3 Justi's Contributions to the Economics of Health - Justi's Notion of Social Welfare - How to Prevent Starvation - How to Abolish Begging - The Human Toll of Winter Campaigns - Health Measures Against the Depopulation of a Country - Public Health Tradition in Cameralism 4.4 Relevance of Justi's Thought 4.5 Summary and Conclusions This chapter has been prepared for presentation at the 14th Heilbronn Symposion in Economics and the Social Sciences devoted to Johann Heinrich Gottlob von Justi (1717 - 1771), June 22-24, 2001. "Johann Heinrich Gottlob von Justi (1717 - 1771): Health as Part of a State's Capital Endowment." Publication forthcoming in: The European Heritage in Economics and the Social Sciences , Volume VI. Backhaus Jürgen and Frank Stephen. Editors. New York: Springer. 77 4.1 Introduction In this chapter, the contributions of the Cameralists are investigated, in particular those of Justi (1717 - 1771), to the understanding of what later was to become health economics. After the disastrous events of the Thirty Years' War (1618 - 1648) human capital mattered. Hence, Cameralism emerged as a science of economic policy which was directed towards economic development. It was not incompatible with intellectual developments elsewhere, notably in France, but yet totally different in its emphasis on economic development and the human factor in production. The most prolific writer of the Cameralists, who fully developed the science, was Johann Heinrich Gottlob von Justi. 1 To him not only the quantity, but also the quality of the population mattered. Since health has an influence on both, he elaborated policy measures that would improve the health of the population in order to make economic development possible and to sustain further growth. Justi proposed incentives that would stimulate agriculture and thus encourage an improvement of the nourishment of the population in order to enhance health; he came forward with ideas how to raise the quality of health care and proposed the introduction of a supervisory board for health care provision; and he was concerned with the health of soldiers. As was common in Cameralism, Justi considered people the wealth of the nation. Health is therefore a matter of investment, not consumption; the healthier the population, the higher the wealth of the population. Cameralism emerged in the middle of the sixteenth century, developed mainly during the time of the Thirty Years' War (1618 - 1648), and ended in the late eighteenth century. Cameralism was a scientific development of its own kind; "nowhere the doctrine of the state, as well as administrative science was connected to the social economy in the same way as in the German territorial states." 2 The Cameralists wanted to increase and improve the population as a basis for economic development. They recognized a higher level of education and better health as factors that advance development of a nation. Cameralists were neither monolithic writers, nor did they form a school of Cameralistic thought, but had a common orientation as writers "... who approached civic problems from a common viewpoint, who proposed the same central question, and who developed a coherent civic theory, corresponding with the German system of 1 Lippert. 1900 (2). "Justi, Johann Heinrich Gottlob von." Handwörterbuch der Staatswissenschaften . (Encyclopedia of the State Sciences). Vol. 4. Jena: Gustav Fischer, pp. 1419-1420. 2 The original quote (with the emphasis in the original) reads as follows: "Der Kameralismus ist eine Eigenart der deutschen Sozialwirtschaftslehre, die kein Seitenstück in einem anderen Lande hat. Dies deshalb, weil nirgendwo die Staats- und Verwaltungslehre mit der Lehre der Sozialwirtschaft derart verbunden war wie in den deutschen Territorialstaaten." Anton Tautscher. 1956. "Kameralismus." (Cameralism). Handwörterbuch der Sozialwissenschaften. (Encyclopedia of the Social Sciences). Vol. V. Fischer: Stuttgart, Mohr: Tübingen, Vandenhoeck & Ruprecht: Göttingen, pp. 463-467, p. 464. 78 administration at the same time in course of evolution." 3 Cameralism received its main impetus from the Thirty Years' War (1618 - 1648) which had been a period of dramatic population decline, destruction of the agricultural base, and devastation of other capital. The Impact of the Thirty Years' War The Thirty Years' War (1618 - 1648) and its aftermath gave Cameralism its particular character. The environment under which the Cameralists, as advisors to the feudal princes, had to function was characterized by competition between the many German states, a weak central power, and a war-torn country with a destroyed economic basis and an overall population that had fallen by roughly one-third, from about 21 million to around 13 million. 4 In this situation, the Cameralists turned their attention to the development of human capital, as they believed that this would foster economic development. More than three hundred small and independent sovereign states were created in the peace negotiations of the Thirty Years' War that started in Hamburg in 1641 and ended in the Westphalian cities of Münster and Osnabrück in 1648. Each state had only limited power, and the states had little unity among themselves. The rulers of the individual states could act independently. The central power, consisting of the Emperor and the Imperial Diet (Reichstag), was weakened. Central taxation was almost impossible due to war-related damages and the destroyed economy. 5 The Emperor could not act by himself in foreign policy. Each individual ruler had the free right to form an alliance with a foreign country, as long as it was not directed against the Emperor or the Empire. The subjects of a territory had to follow the religion of the ruler of a territory, but they had the right to emigrate if they wished to. The many independent and small states competed with each other for skilled labor and capital. 3 This is the definition by Albion W. Small, the founder of American sociology, who investigated social theory in the works of the Cameralists. He traced the Cameralists' social theory back to their concern to furnish the state with ready means. Albion W. Small. 1909. The Cameralists: The Pioneers of German Social Polity. Burt Franklin: Chicago, p. viii. 4 The reduction in population was not evenly distributed. "The population of Württemberg fell from 400,000 to 50,000. The Palatinate lost more than 90 percent of its population. Three million people in Bohemia were reduced to 800,000." Jürgen Backhaus and Richard E. Wagner, 1987, "The Cameralists: A Public Choice Perspective." Public Choice . 53, p. 4. The contributions to the Heilbronn Symposion on the Thirty-Years War have shown that at the time of the Thirty Years' War, the statistical basis was not set up in well-defined units. For instance, one could not distinguish between the causes of death such as natural death or death caused by war and epidemics. 5 Compare Brockhaus Encyclopedia, 1892. Brockhaus' Konversations=Lexikon. "Westfälischer Friede." (Peace of Westphalia). F. A. Brockhaus: Leipzig, Berlin, Vienna, pp. 665-666. 79 Distinctive Feature of Cameralism: the Concern with the Police Function The Cameralists, in serving as economic advisors to the princes and feudal rulers of the territories, grounded their advice on economic arguments. 6 It was in the interest of the individual rulers to create conditions that attracted people to live in their territory. By developing an infrastructure that formed the basis for economic development, Cameralists tried to create a tax base for the state. The Cameralists were not only concerned with the treasury function, but also with the police functions of the state. Police functions in Cameralism are broader than in the English understanding of the word. 7 They encompass such measures as public education, public health policy, environmental policy, and even the regulation of the manufactures through the guild system ( Polizeigewerbe ). (Pribram, op. cit. , p. 96). Cameralists systematically proposed the use of the police function as the most appropriate way to establish a basis for national wealth, which would lead to further economic growth. Justi had a clear view of the importance of human capital as he wrote "...all skills of the people living in the state, and even the people themselves are part of the wealth of the state." 8 Thus, human capital and its development form the major basis of economic development. Cameralists designed and applied the police functions to foster economic development on the basis of human capital. The concern with the police functions distinguishes Cameralists from Mercantilists and Physiocrats. Prominent figures in the history of economic thought literature did not always see this clearly; for instance, the views of Adam Smith and Heinrich Rau contributed to misconceptions around Cameralism. Adam Smith did not distinguish between Mercantilists and Cameralists. 9 Therefore, his criticism of the Mercantilists as pure collectors of money has been applied to the Cameralists as well. Adam Smith disliked the Cameralists' policies, and in particular their projects of entrepreneurial activities leading to non tax-revenues of the states (werbende Staatseinnahmen)." 6 Jürgen Backhaus and Richard E. Wagner. 1987. "The cameralists: A public choice perspective." Public Choice. 53, pp. 3-20, p. 6. 7 Therefore, a better translation might be policing function or simply policy or policy making, but policy and policy making are too arbitrary. Policing would presume a set framework of objectives which had to be developed first. 8 Louise Sommer. 1920-25 (1), 1967 (2), op. cit. , p. 233. The statement by Justi (1758) reads in the original as follows: "... alle Fähigkeiten der Menschen, ja, diese Menschen selbst, gehören zum Vermögen des Staats." Staatswirthschaft oder Systematische Abhandlung aller ökonomischen und Cameralwissenschaften.