Cameralism in Practice and Prussian Industrialization Policies

Abstract

This article argues that Prussian industrialization policies implemented by Peter Beuth and Christian Rother from 1820 to 1848 worked as a kind of cameralism in practice. This argument is supported by two main points: first, Beuth, the primary Prussian industrialization promoter, was a cameralist who, having been trained in cameral sciences at university, tried to apply what he was taught to his industrial policy; second, Beuth's and Rother's industrialization policies accorded with the cameralist way of thinking in creating and promoting new manufacturing industries. Their ideologies were especially similar to that of J. H. G. Justi, the epitome of eighteenth-century cameralism. This article tries to challenge the “disordered police state” interpretation of cameralism and argues that, in contrast to such critical assessments, the economic strategy of cameralism could be interpreted as “the ride of Pegasus.”

Introduction

Today there is heated discussion as to whether cameralism could provide a viable path toward economic and social development, as its proponents have claimed. Recent debate was triggered by Andre Wakefield's The Disordered Police State (2009). This book argues that economic strategies proposed by cameralist texts were unrealistic because the texts were not intended to promote public welfare but rather meant to shield princes' bloodsucking fiscal policies and facilitate their authors' pursuit of public offices (Wakefield 2009: 5, 138). As Wakefield argues, “The cameral sciences served the treasury and not the interests of the people,” and cameralists were “either incompetent or dishonest” (9). Responding to Wakefield's thesis, a recent volume, published in 2017 and edited by Marten Seppel and Keith Tribe, argues the opposite. It regards cameralists as the first thinkers discussing the right actions to promote the development of society and the economy (Seppel 2017: 5). It believes that the practice of cameralism had “an impressive number of successes, start-ups, expansions and improvements” and that “the impact of cameralism on the development of state and economy should not be underestimated” (10).

This article aims to present an oft-forgotten successful example of cameralism in practice: the Prussian industrialization policies from 1820 to 1848. These policies were implemented by two politicians: Peter Beuth (1781–1853) as the head of the Department of Industry and Commerce and Christian Rother (1778–1849) as the director of the state financial and commercial corporation, Seehandlung (Overseas Trading Corporation). These policies have been known to modern scholars as the Gewerbeförderung (promotion of industry) and are considered to have been an important impetus of Prussian industrialization (Henderson 1958, 1975; Ritter 1961; Mieck 1965; Treue 1984: 283–449; Brose 1993; Magnusson 2009: 104–7; Tilly and Kopsidis 2020: 135). The policies helped Prussia catch up with the ongoing technological revolution, cultivated the human capital necessary for industrialization, and widened investment opportunities in new industries, as well as founded institutions that facilitated long-run industrial development and created some core components of the modern German national innovation system.

Prussian Gewerbeförderung embodied a regional version of the contemporary pan-German, state-pushed industrialization. Outside Prussia, similar Gewerbeförderung could also be found at least in Saxony, Württemberg, Baden, and Bavaria, all being the key industrial hubs of modern Germany (Jacobi 1842; Noeggerath 1865; Weigelsperg 1872; Simon 1903). Friedrich List (1789–1842) proposed his theories about national productive powers, industrialization, and the German Custom Union in the context of Gewerbeförderung (List 1841). List ([1837] 1983: 119–22) regarded the implementation of Gewerbeförderung as the precondition of the implementation of the infant industry protection tariff policy he proposed. This article concentrates only on the Prussian Gewerbeförderung policies.

This article argues that these policies were cameralist for two reasons. First, Peter Beuth, one of the protagonists of the Prussian Gewerbeförderung, was a trained cameralist. Beuth studied cameral sciences under the cameralist professor Johann Christoph Christian Rüdiger at the University of Halle. He responded well to cameralism, as evidenced by his attempt to apply what he was taught to his industrial policies. As for the other protagonist, Christian Rother, who was the Prussian industrialization promoter “second only to Beuth” (Fischer 1974: 94), it is not as straightforward as in the case of Beuth to specify which economic ideology he was converted to or whether he was converted to any. Working for the Prussian government after high school, Rother never received a university education (Radkte 1987: 22–23), nor did he comment on the sources of his economic thought in his writings. Rother had remained pragmatic and designed policies based on his working experience in government (Radkte 1981: 320–21). This article regards Rother's policies as being cameralist, because they accorded with the cameralist way of thinking on promoting new manufacturing industries, and so did Beuth's policies. And this is the second reason why this article argues that Beuth's and Rother's industrialization policies were cameralist. This article finds that these policies especially accorded with the way of thinking of Johann Heinrich Gottlob von Justi (1717–71), the epitome of eighteenth-century cameralism. According to Seppel and Tribe, cameralism is defined as “first and foremost a way of thinking and a common language” (Seppel 2017: 5–6). Therefore, “cameralism in practice cannot be identified simply by looking at the actions associated with it; instead, we can claim that such actions were cameralist by examining how these actions were explained” (5). This perspective is adopted here, and this article will present the cameralist interpretation of the Prussian industrialization policies.

Beuth and J. C. C. Rüdiger's Cameral Sciences

Beuth, whom Werner Siemens (1892: 34) regarded as “the undebatable founder of modern technology in North Germany” (der Gründer der norddeutschen Technik), studied jurisprudence and cameral sciences at the University of Halle from 1798 to 1801 before joining the Prussian government (Reihlen 2014: 15). The scholarly literature tends to regard Beuth as one of the liberal-minded Prussian reformers and highlights the influence of Adam Smith's doctrine on him (see Matschoss 1921: 18; Mieck 1965: 21–25; Brose 1993: 108–9). The most recent monograph on the Prussian promotion of industry states that, at Halle, Beuth studied the antimercantilistic and individualistic economics of Adam Smith through his professor as well as “Halle's premier ‘cameralist,’” Ludwig Heinrich Jakob (Brose 1993: 109). It also argues that the principle of Beuth's industrial policies, “helping businessmen help themselves,” existed in Jakob's economic textbook, which was influenced by Adam Smith's Wealth of Nations (109).

However, a closer look into the history of the cameral sciences at Halle tells a different story. Jakob (1759–1827), who introduced Smith's doctrine to the University of Halle, started teaching political economy only in 1801, the year Beuth graduated (Kähler 1898: 35; Rüdiger 2005: 297; Maliks 2011: 218). And Jakob's textbook of political economy was not published until 1805 (Jakob 1805). Thus, it seems that Jakob played virtually no role in Beuth's college education. Instead, Beuth's true cameralism professor was actually J. C. C. Rüdiger (1751–1822). And instead of Smith's doctrine, Rüdiger taught J. H. G. Justi's economic doctrine, especially with regard to industrial policy. Instead of in Jakob's textbook, Beuth's policy principle could also be found in Justi's doctrine, which will be covered in the second half of this article.

J. C. C. Rüdiger's Cameral Sciences

The chair of cameral sciences, or officially the chair of “oeconomy, police and chamber affairs” (Oeconomie, Policey, und Cammersachen), was established at the University of Halle in 1727, because the Prussian king Friedrich Wilhelm I (1688–1740) thought government servants should be taught more about fiscal and economic affairs (Kähler 1898: 14–16; Tribe 1988: 42–44; Rüdiger 2005: 202–13). The chair was set in the jurisprudence faculty, which educated candidates for future bureaucrats (Kähler 1898: 16). Simon Peter Gasser (1676–1745) was the first person appointed to the chair (Kähler 1898: 15; Tribe 1988: 42). This was also the first university chair in economics in the world, and Gasser therefore was “the first professor of economics anywhere” (Backhaus 2009: 5; Reinert 2019: 103). The official title of the chair suggested a focus on the subject of cameral sciences (Lindenfeld 1997: 14–20). Oekonomie (Oeconomie), or oeconomy, studied the management of private wealth in rural and urban industries and focused on detailed technical knowledge about the rural and urban economic activities required to cultivate future practitioners of those activities, including agronomy, forestry, mining, zootechnics, and the industrial arts (Technologie) (Rüdiger 1783: 47–72). Policey referred to all state interventions in economy and society. Policeywissenschaft (science of policy) studied “the principles regarding the increase and the provision of citizens, regarding the improvement of their qualities through knowledge, religion and good morality, and their exterior conditions through substance, wealth and affluence, and finally regarding the security through justice and other forces, and also the institutions and establishments beneficial to these goals” (Rüdiger 1777: 32).¹Cammersachen was the management of state fiscal revenue, including taxation, royal property, and state monopolies, and the university science covering it was Finanzwissenschaft (science of finance).

After Gasser died, the chair was filled by the professor of oeconomy from the philosophy faculty, Johann Friedrich Stiebritz (1707–72) (Kähler 1898: 22; Rüdiger 2005: 217, 430). However, Stiebritz was not an adequate successor and was criticized for knowing nothing about his subject (Kähler 1898: 23). He brought crisis to the cameral sciences at Halle. After Stiebritz died, King Friedrich II (1712–86) suspended the chair of cameral sciences (Rüdiger 2005: 220–21). Yet the teaching of cameral sciences continued and was taken over by professors from the philosophy faculty at Halle (Kähler 1898: 25). Having taught cameral sciences since his lectureship, J. C. C. Rüdiger was made a professor in the philosophy faculty in 1791 (Rüdiger 2005: 293; Kähler 1898: 29). In 1798, Rüdiger and Johann Christian Föster (1735–98) were the only professors teaching cameral sciences at Halle (Stieda 1907: 107). Föster died in March of 1798, and new faculty did not appear until 1801 (Kähler 1898: 35). So, when Beuth studied cameral sciences at the University of Halle, his professor must have been J. C. C. Rüdiger only.

Since the beginning of his academic career in 1777 (Rüdiger 2005: 279), in order to revive the depressed cameral sciences at Halle, Rüdiger started “to methodologically emancipate the hitherto cameral sciences from the carelessness [Schlendrian]” (Roscher 1874: 557). The methodological “carelessness” was the prevailing perspective that took oeconomy as the foremost subdiscipline of cameral sciences, being above the sciences of policy and finance and also being the core of cameral sciences, around which the system of the sciences was established. This perspective was held by the cameralists who regarded the management of wealth as the central subject of cameral sciences, and they prioritized oeconomy because its subject was the management of wealth (Rüdiger 1777: 26–27). This perspective had a long tradition stretching back to the earliest cameralist professors, Gasser and Justus Christoph Dithmar (1678–1737), and was promoted by J. H. G. Justi's influential work on systemizing cameral sciences (Dithmar 1745; Justi 1755: xliv; 1756: 7; 1760a: 9; Rüdiger 1777: 25–26).

Rüdiger thought this perspective confined cameral sciences to the gathering of technical details about finance and industry management, which required “no educated knowledge” but only “sound intelligence” and “some economic concepts” to master, and, in this way, cameral sciences were made only a minor consideration for jurists (Rüdiger 1777: 6–8). The outcome was the suspension of the Halle cameralist chair at the hand of Stiebritz, whose main focus was on rural oeconomy (Kähler 1898: 23–24), because Friedrich II, who suspended the chair, believed “one learns oeconomy from farmers, not at university” (Rüdiger 2005: 220).

Rüdiger's solution was to incorporate politics (Politik), which studied the state and public welfare (gemeine Beste), to treat politics as the discipline that led the sciences of policy and finance, and to downgrade oeconomy to an indispensable but auxiliary discipline (Rüdiger 1777: 45–46; 1783: 43). Rüdiger's logic was that since cameral sciences received their name (cameral-) by studying the affairs of Cammer (chamber), a department of contemporary German governments, it was necessary to define the function of the Cammer. And Cammer was politically determined by different laws in different countries. As Rüdiger (1777: 44) wrote, “Because it completely depends on the will of the governments to arrange the affairs of Cammern and restrictions and expansions are always found, Cammern are full of the greatest differences.” Some Cammern only managed state finance, some also administrated royal properties, and some supervised all Policey (44). Rüdiger thus believed that “cameral sciences must be determined differently in every state according to its own constitution” (45).

Therefore, thought Rüdiger (1777: 46), cameral sciences were inseparable from politics and should unfold themselves within the framework of politics. The research program of cameral sciences should start by studying the concept and origin of the state, its form of government, its legal system, and its public administration; it should then observe “all individual subjects to which the state administration relates and uses for public welfare”; and it should then finally propose prescriptions and principles for institutions and policies, with which “good orders and effective execution” could be practiced (47–48).

Rüdiger tried to amend the intentional separation of politics and cameral sciences, which had occurred since the birth of the latter due to the Prussian king's intention to make cameral sciences a university science only of administrative technology. Rüdiger wanted to emancipate cameral sciences from their role as the mere servant of German monarchies (Rüdiger 2005: 279–92). Rüdiger's cameral sciences embodied how cameralism was “first and foremost a way of thinking and a common language.” It seems reasonable to summarize that Rüdiger's cameralism was relative and context-based, and different countries in different circumstances could have different kinds of cameralism according to different constitutional frameworks. Cameralism was therefore unbound from specific, concrete policy models applicable only in certain polities. Rüdiger's theory sufficed to support the most up-to-date understanding that cameralism was not German mercantilism serving German princes (Rössner 2020).

This relativism did not dissolve the coherent identity of cameralism. Politics also helped retain the systemization and coherence of cameralism. Although contextually determined, Rüdiger believed it was still necessary “to settle the concept [of cameral sciences] as generally and comprehensively as possible, so that it can be used in all states,” so that the independent and systemized cameral sciences could exist (Rüdiger 1777: 45). And Rüdiger believed the general concept of cameral sciences was “the synthesis [Inbegriff] of all truths about the methods to establish and implement all institutions of the state for the welfare of its public and individual members” (45). Cameral sciences were therefore the political science of happiness.

Like contemporary continental political philosophers (Engelhardt 1981), Rüdiger took “happiness” (Glückseligkeit) to be “the highest law of State,” and he defined “happiness” as “the satisfaction of all demands of bodies, souls, and hearts [of the people], their perfection, and the exterior conditions advantageous to them,” including civil liberty (Bürgerliche Freyheit), security, wealth, and the presence of “numerous, wise, moral, and diligent” people (Rüdiger 1795a, pt. 1: 132–33, 246–47). Although cameralism was not bound to specific policies and polities, happiness was the universal aim of all states, and happiness still required cameral sciences to promote a certain universally applied policy framework as a general approach toward this aim. To Rüdiger, this universal policy framework was that the state should be “interventionist,” in the sense that the state should exert its full capacity to promote happiness. As Rüdiger wrote, “The special circumstances of individual states provide different methods for the realization of these aims [happiness] . . . but nothing usable should be neglected” (247).

Quoting from the historical works of the Scottish Enlightenment thinkers Adam Ferguson, Lord Kames, and Gilbert Stuart, Rüdiger (1795a, pt. 1: 120–21) followed their interpretation of human history as a process of “refinement” (Verfeinerung) or “civilization.” During this process, human society evolved from fishing and hunting society to commercial society, population expanded, the division of labor was extended, wealth increased, the sciences and the arts grew, and people's physical and spiritual demands multiplied (Rüdiger 1795a, pt. 1: 122–27; Berry 1997: 93–99). However, unlike the Scottish thinkers' proposal of the state in commercial society as the provider of a secure legal framework for the liberal functioning of the market (Berry 1997: 122–33), Rüdiger made an observation similar to that of “Wagner's Law,” namely, that as the economy and society develop, the range of interventions and the scale of expenditures of the state expand. As society evolved to higher stages, people's demands and components of happiness also multiplied; so, argued Rüdiger (1795a, pt. 1: 128), “careful consideration of livelihood and industry, life, health, cultivation of spirit, wealth and security of every citizen” was taken, and “these all necessitate a number of new institutions and measures.” Rüdiger did not quote anyone here, but this was a classical cameralist viewpoint. Before Rüdiger, Justi (1766: 48–52) had proposed a very similar theory about the relationship between social evolution and state intervention. In this way, regardless of the country in which it was applied, Rüdiger's cameralism advocated that the state be as “interventionist” as possible in the sense that the state should proactively arrange economic and social policies and institutions as comprehensively as possible to provide for people's material and mental welfare for the realization of happiness. In the eighteenth-century context, this meant that the state should design and implement all kinds of Policey as comprehensively as possible. Therefore, it can be summarized that Rüdiger “remained a lifelong adherent of Policey” and “tried to achieve the political emancipation of cameral sciences in the framework of Policey” (Rüdiger 2005: 281, 282).

Specifically, “happiness” required the state to promote the balanced generation and development of wealth and public services. As Rüdiger (1795a, pt. 1: 247) emphasized, “Evenness and balance must be paid attention to in considering the different parts of happiness.” According to this principle, in the field of economic policy, the state should push the balanced development of all industries to provide as many kinds of and as much material wealth as possible. This was why Rüdiger was against both the physiocrats, who promoted only agricultural sectors, and the Colbertists, who favored only manufacturing sectors (248). The balanced development of primary and manufacturing sectors had been a shared principle of German economic thinkers since Gottfried Wilhelm Leibniz (1646–1716) and became a tenet of the eighteenth-century German cameralists (Reinert 2009: 58).

Comprehensive state intervention required adequate bureaucracy for its implementation (Rüdiger 1795a, pt. 1: 253). And, in Rüdiger's opinion, the cameralist bureaucracy should be technocratic, in the sense that bureaucrats should be trained in industrial techniques or, in Rüdiger's time, oeconomy to help bureaucrats design and implement policies and institutions. Rüdiger (1777: 51) believed that a detailed technical knowledge of rural and urban economic activities was “absolutely necessary for cameralists,” because good institutions and policies relied on the good understanding of detailed technologies. “Often the smallest details can have the greatest influence” (51). Therefore, Rüdiger believed that when cameral sciences were taught, oeconomy should be taught first, stating that “one can treat it [oeconomy] as the precondition of teaching cameral sciences” (53). In Rüdiger's six-semester study program of cameral sciences, oeconomy was the focus of the first four semesters, and politics and the sciences of policy and finance appeared only in the last two semesters (Rüdiger 1783: 113–14). However, since cameralists were not farmers or manufacturers themselves, they did not have to gain expertise in all professional fields (Rüdiger 1777: 52). It was sufficient for them to know general technical principles and the most influential technical factors, so that they could work with experts of rural and urban industries and make their own judgments (52). Rüdiger's endeavor to establish the political cameralism made him one of the contributors promoting the evolution of the eighteenth-century cameral sciences to the nineteenth-century state sciences (Staatswissenschaften) (Brückner 1977: 297–98; Rüdiger 2005: 283–86). His design of cultivating technocracy was a predecessor of the training scheme of the later state sciences, the state sciences being one of the two faculties, besides jurisprudence, educating the Prussian bureaucrats in the nineteenth century (Beck 1995: 131; Lindenfeld 1997: 111–41).

Rüdiger's own cameralist textbooks were not published until 1795 (Rüdiger 1795a, 1795b). Thus, he often used others' textbooks. Despite Rüdiger's disagreement with Justi on methodology, “he seemed to consider Justi and Sonnenfels as the first men in his field” (Roscher 1874: 558). In the field of industrial policy, Rüdiger especially appreciated Justi's works. When teaching the science of policy, which included industrial policy, Rüdiger used the 1782 edition of Justi's Grundsäße der Policey-wissenschaft (Kähler 1898: 31; Tribe 1988: 117). In Rüdiger's own textbooks, in the section about industrial policy, the only reference listed was Justi's 1767 edition of Vollständige Abhandlung von den Manufacturen und Fabriken (abbreviated below as Manufacturen und Fabriken). Rüdiger's section was just a very concise listing of the policies Justi proposed (Rüdiger 1795a, pt. 2: 73–82). Rüdiger kept the system and content of his cameral sciences until his retirement in 1819 (Kähler 1898: 35). This was the cameralism that educated Peter Beuth.

Beuth as a Cameralist

We do not know whether or how Beuth evaluated Rüdiger's teachings. However, it is fair to say that Beuth received them very well and identified himself as a cameralist, because he tried to establish a cameralist technocracy in a form similar to the one taught by Rüdiger.

Beuth was appointed as the leader of the Prussian Department of Industry and Commerce in 1818 (Reihlen 2014: 15). The predecessor of this department was the Department of Manufacturing established in 1740 by Friedrich II (Schmoller and Hintze 1901: 26–32; Johnson 1975: 72–82). Three tasks were given to the predecessor department: improving native manufacturing, building new manufacturing, and settling foreign manufacturers (Schmoller and Hintze 1901: 26–27). And Friedrich II stipulated that mercantilist methods—high tariffs on foreign manufactured goods, soliciting foreign skilled manufacturers, and encouraging entrepreneurs through chartered monopolies and financial subsidies—should be used to fulfill these tasks (Frederick II of Prussia [1752] 1913: 122, 140). During the Prussian Reform Movement, the Department of Manufacturing was dissolved, and the new Department of Industry and Commerce was established (Meier 1881: 177–86; Frauendienst 1960: 127, 130).

The guidelines for industrial policy were also changed. Under the leadership of Karl von Stein and Prince Hardenberg, liberalism was adopted by the Prussian state as the way to create an efficient nation (Hasek 1925; Bruford 1965; Koselleck 1981; Schultz 1999; Levinger 2000). Policey was preserved as the means to promote public welfare (Meier 1881: 228). However, the principle of government action was changed to not restricting anyone's enjoyment of “his property, his civil rights, and freedom” and to allowing anyone “the freest possible development and application of his [moral and physical] quality, capability, and force” (227). The Prussian state now believed that it was best “to always let the industry go on its natural course” (227). Therefore, the freedom of domestic and foreign trade, the specialization on the international market, and the free competition among producers were all welcomed, and government subsidies on specific sectors, the pursuit of autarky, and chartered monopolies were rejected (228–31). In this context, previous nearly prohibitive tariff protection was demolished, and a very mild tariff law was introduced in 1818 (Henderson 1958: 90). The new tariff minimized the protection of native industries (Henderson 1975: 33). It lowered the tariff on foreign manufactured goods to 10 percent of their value (Henderson 1959: 40). This made Prussia the first European country to break with the mercantilist tradition of steep tariff protections and adopt the principle adjacent to the principle of free trade (Radkte 1987: 20).

This was the constitutional situation that Beuth faced. Beuth rejected laissez-faire as the aim of state policy and still believed that the state should promote the balanced development of industries, which was a key factor of cameralists' “happiness.” As Beuth explained, “A country such as Prussia, which did not provide a premium to its industries through import prohibitions or abnormal import duties, so that it was pointless for its industries to worry about the exposure to too much wind and thunder of competition, had also the responsibility to make industries survive the competition victoriously through all known methods” (quoted in Mieck 1965: 24).

In 1817, Beuth made a proposal to improve Prussia's administration of industry. This proposal aimed to reorganize the subordinate units of the Department of Industry and Commerce to strengthen the executive force of the department's industrial policies (Matschoss 1911: 15). The main subjects of the reform were the Technical Deputation (Technische Deputation) in Berlin and provincial factory inspectors (15). The Technical Deputation was formed in 1808 as an advisory committee for consulting the government on industrial and technical matters (3–8, 12–14). The duty of provincial factory inspectors was to offer industries technical advice, but Beuth found that, because these officials' expertise was inadequate, they often did more harm than good to industries (15). Industrialists also complained that provincial and regional officials knew only of legal affairs and neglected industry and technology (Brose 1993: 104).

Beuth's solution was to enhance the cameralist training of the Prussian bureaucracy. In 1770, Prussia introduced the civil service examination (Rüdiger 2005: 272). Applicants for public servant positions needed to first pass a provincial examination (Dorn 1932: 270; Johnson 1975: 220). Then they were admitted to the provincial government as probationary servants (Referendarn) to learn government affairs through practice (Johnson 1975: 220). After two to three years, on the recommendation of their provincial government, they could take the final examination (Dorn 1932: 271). The examination was on cameral affairs and jurisprudence (Meier 1881: 39). After passing the final examination, applicants were recruited as assessors (Assessorn) and sent back to provinces as candidates for provincial and regional officials (Meier 1881: 39; Dorn 1932: 271).

In Beuth's proposal, the incompetent factory inspectors were to be abolished. For probationary servants, admission examinations should be extended to cover subjects such as industrial arts, physics, chemistry, and natural history, all of which were of industrial usefulness and were also auxiliary disciplines of the cameral sciences (Matschoss 1911: 18; Rüdiger 1783: 100–120). After being recruited, they should be specifically trained in finance and Policey (Matschoss 1911: 18). Assessors aspiring to positions in government industrial departments should “supplement their university study of cameralism with one or two years of specialized instruction under the Technical Deputation” (Brose 1993: 102). That training would still relate to the industrial arts (Gewerbekunde) (Matschoss 1911: 18). After they were sent back to provinces, they should act as the cameralist technocrats. These “technically educated officials” should be appointed as the provincial industrial department councillors (Gewerbedepartmentsräte); they administrated provincial industrial policies; they should regularly inspect industrial regions, listen to industrialists' wishes and complaints, and update industrialists on the recent technological progress; they should “be drawn into the work of other departments ‘whenever matters of national welfare, industry, and trade’ were at stake” to represent the state's interest in industrial affairs relevant to these matters; and they should be preferentially promoted to be the heads of governments of the regions where industries concentrated (Matschoss 1911: 17–18; Brose 1993: 102). This design fitted Rüdiger's theory of technocracy, as the essential function of these cameralist bureaucrats was to promote industries through the intervention at the technological level based on their training in cameralism.

Beuth submitted his proposal in 1818 and received a reply in 1819 (Matschoss 1911: 18). The reform of the Technical Deputation was approved, and provincial factory inspectors were dissolved, but the proposal for a technocracy was rejected (18–19). The king worried that the special training and privileged treatment of cameralist technocrats would cause conflicts between departments (19). But the deeper reason for the rejection was that the liberalist chancellor Hardenberg, who was behind the king, was antagonistic to a cameralist technocracy (Brose 1993: 103).

Beuth's proposal should be understood as an episode in the long-term endeavor to create a professional cameralist bureaucracy in Prussia; indeed, “Beuth's campaign to construct a technocratic state was part of a developing cultural struggle within the bureaucracy itself” (Brose 1993: 103). There had been competition between the philosophy faculties and the jurisprudence faculties in German universities over which could be the “seminaries for the new elite of bureaucrats” (Haakonssen 2006: 260). Cameralism, as a discipline in philosophy faculties, was involved in this competition. Although the Prussian civil service examination made cameral affairs the threshold for admitting bureaucrats, the university training of cameral sciences was not made a compulsory prerequisite, so this recruitment system “qualified the acquisition of cameralist knowledge practically as an individual private matter” (Rüdiger 2005: 275). As a result, the civil service examination actually favored aristocratic candidates, who had more private access to government practices than those from common families and who had more interest in studying jurisprudence in universities; and this symbolized a failure of cameral sciences against jurisprudence (275). Prussian bureaucrats were far from being cameralist. Even in the 1820s, 33.4 percent of Prussian university graduates were law students, and only 13.8 percent were philosophy students (cameralist students included) (Brose 1993: 103–4). In this context, Beuth's proposal attempted a further push toward a professional cameralist bureaucracy. And it was doomed to fail; as Brose argues, “[Beuth's] proposals for expanding the cameralist's role in government were destined to founder against the objections of the arrogant and far more numerous lawyers” (104).

In general, Beuth could be regarded as a cameralist. In the context of a monarchy embracing liberalism, he insisted on the aim that fitted the requirement of cameralists' “happiness” as the aim of state policy; in short, the development of manufacturing should not be neglected. He tried to enable the state to make extensive interventions in industries through the creation of a cameralist technocracy that could promote the manufacturing industries with its training in cameral sciences and technical knowledge, just as Rüdiger had taught. He wanted to further increase the authority of cameralists within Prussian public administration. And he failed because he advocated cameralism too much. Beuth could thus clearly be regarded as a disciple of cameral sciences who tried to apply what he had been taught at university.

Prussian Industrialization Policies and Justi's Proposal of Manufacturing Policies

In a context where mercantilist policies had been abolished, Beuth and Rother adopted industrial policies, which held the principle of “the promotion of industries through education and training” (die Förderung der Industrie durch Erziehung und Fortbildung) at their core (Straube 1933). This article argues that this core principle accorded with the main thrust of J. H. G. Justi's proposal on manufacturing policies. In this way, Beuth's and Rother's industrialization policies could be regarded as cameralist. It should be noted that although Beuth received training on Justi's industrial policy theory and proposal at Halle, this article does not argue for any direct influence of Justi on Beuth; instead, it presents an accordance.

Justi was arguably the most important eighteenth-century cameralist (Small 1909: 248; Reinert 2009: 33; Nokkala 2019: 1, 5). His contribution to the development of cameralism was systemizing the hitherto cameralist doctrine, absorbing contemporary Enlightenment thinkers' thoughts into cameralism, supplementing cameralism with detailed research into manufacturing, and introducing liberalism into cameralism (Justi 1755: iii–iv; 1758: preface; Roscher 1874: 444, 451; Small 1909: 285; Sommer 1920: 170–88; Brückner 1977: 229; Adam 2006; Reinert 2009: 55–59; Nokkala 2019; Nokkala and Miller 2020; Rössner 2020).

Manufacturing was one of Justi's central concerns. Justi regarded manufacturing industries as “the genuine” and “the most essential [hauptsächlichste]” basis of the economy (Justi 1760a: 440; 1782: 136). He believed that “the chiefest measure of the Policey of a country [Landespolicey] to establish its economy must be targeted at these subjects [manufacturing industries]” (Justi 1760a: 440). In fact, Justi himself took his focus on manufacturing as one of his major innovations of the contemporary cameral sciences. He thought previous cameralist textbooks were too concerned with agriculture (Justi 1755: iii–iv). He wrote Manufacturen und Fabriken to fill a clear gap—there were no German monographs about manufacturing and its policies (Justi 1758: preface). To Justi, manufacturing was important for several reasons. First, manufacturing featured a complex division of labor, meaning it was central to configuring the national market to organize and mobilize laborers and other national resources (Zhao 2021: 466–68). Second, manufacturing was invention-intensive and science-based, making it an economic activity full of dynamics and progress; therefore, manufacturing could be the engine of economic development (468–73). Third, manufacturing cultivated in people mental qualities that were favorable for economic development (473–74). In this way, Justi regarded it as a principle of state policy that a nation should establish as many kinds of manufacturing sectors as possible (Justi 1782: 136–37).

Liberalism in Justi's Cameral Sciences

Justi's proposal of manufacturing policies was embedded in his advocacy of liberalism. Justi's economic liberalism was not laissez-faire. He believed the state should direct the economy. His concept of freedom was not being free from state intervention but from the abuse of feudal princes and monopolies and privileges (Brückner 1977: 234; Priddat 2008; Rössner 2020: 109–28). Justi believed that enterprises were free only when their freedom was in service of the public welfare and that state intervention for the promotion of public welfare was not against freedom (Justi 1760a: 699, 700–701). Specifically, he stated that “the freedom of commerce and industry does not at all exclude the direction of the economy and of every single sector of industry” (die Direction des Nahrungsstandes und eines jeden Gewerbes insbesondere) (700). This meant that “the government can prescribe every kind of occupation [Arbeit], what and by what way it should work, as well as can order [befehlen] those engaging in industries what they should do” (700). This included rescuing depressed industries and building new industries important to the entire economy (700). To Justi, the state had the duty to create a productive industrial structure within which private enterprises could freely operate. In Schumpeter's (1954: 171–72) words, Justi “saw the practical argument for laissez-faire not less clearly than did A. Smith.” However, Justi's “laissez-faire” was “laissez-faire plus watchfulness” and “laissez-faire with the nonsense left out,” meaning that the state should interfere when the liberal market failed to realize public welfare (Schumpeter 1954: 172; Adam 2006: 188; Nokkala 2019: 100–101).

Under the influence of Bernard Mandeville and directly quoting David Hume and Montesquieu, Justi understood and recognized that self-interestedness was human nature (Justi 1760b: 46; Reinert 2009: 57–58; Adam 2006: 93–185; Nokkala 2019: 50–83). And he believed that without self-interest, “all motivations and encouragement to industriousness, diligence, and skills” ceased (Justi 1760a: 7). However, he also believed that “self-love demands a very rational direction if humans want to realize their happiness” (Justi 1759: 10). Otherwise, humans' self-interestedness would cause conflicts and break society (52–53). Without considering public welfare, individuals' private happiness “could be of no long duration” (Justi 1760b: 473). This necessitated a role for the state, the intervention of which should embody rationality (265). Therefore, to Justi (1760a: 9), the function of the state was “to set the welfare of single families in the closest connection with the public welfare.”

In this way, the state should welcome people's pursuit of self-interest. Justi (1760a: 686) took “the freedom of commerce and industry” as one fundamental factor to promoting the economy. This freedom was defined as “the unrestricted license” of manufacturers and merchants to do all they wanted “as long as it is not against public welfare” (699). They should be free from “being hindered by monopolies, closed societies, granted privileges, and other kinds of constraints,” so “control should not be imposed by unfavorable regulations over the commercial principles of merchants, as long as they are not against the welfare of the country” (Justi 1782: 176). Justi (1760a: 752) regarded monopolies as being “harmful business[es]” and believed that creating chartered monopolies was a bad policy. Manufactories enjoying chartered monopolies over the domestic market would not be motivated to expand into the international market but would instead stay within their privileged area, where they found the highest profit (755). Therefore, Justi (1767: 149) believed that “it should be an unbreakable principle for a wise government to never grant monopoly or exclusive privilege over any kind of manufacturing industry, whatever it may be.” Instead, free competition among manufacturers, wherein “[manufacturers] seek to surpass each other through diligence, powers of invention, and better products,” should be advocated (150–51).

Justi was also against giving trade protections to infant industries. He regarded it as an unconventional policy applicable only in extreme conditions (Justi 1767: 10–11): “The main work [of acquiring a market for national products] relies on the good quality and inexpensive price of the national products . . . rather than the prohibition of foreign products” (157). If national products did not have competitive qualities and prices, then trade protection was useless because people would smuggle in foreign products, and the harder the protection was, the bolder the smugglers would be (49–50). However, Justi indeed proposed a kind of tariff barrier that was imposed on foreign products of the same quality and price as national products (155–58). He justified this because he believed that consumers had an irrational preference for foreign products, which was harmful to national industries (182–84). However, such a tariff was proposed to be no more than 10 percent of the product value; he believed that if a manufacturer wanted a tariff rate of 15 percent, then either that manufacturer wanted to make an “illegal profit harmful to the nation,” or his enterprise was ill-managed (Justi 1760a: 571). Justi (1782: 145) believed that the industrial policy should be primarily concerned with the creation of industries, rather than trade protection.

Justi did not regard government subsidy as a desirable industrial policy. He believed that “freedom contributes to economic prosperity more than the support of government” (Justi 1760a: 698). Here, “support of government” referred to “prepayment, award, premium, and other supportive measures,” that is, subsidies (698). However, as mentioned above, Justi's “freedom” included the state's direction of the industrial structure. Therefore, Justi here essentially meant that economic development could be promoted more effectively by state direction including the creation of a productive industrial structure within which enterprises operated freely than by having industries rely on government subsidies.

In this way, both Justi and Prussian industrialization promoters faced an identical problem: how to build and promote new industries to create a more productive industrial structure under conditions where conventional mercantilist measures were rejected. And Justi and Prussian industrialization promoters devised the solutions sharing the accordant principle, although differences in implemental measures existed among them. And the accordant principle was that the state should act as the promoter of the generation of new industrial technology, the educator of new technology, and the pioneering entrepreneur in new industries. In the Prussian case, these three functions were realized by the combination of Beuth's and Rother's policies. As comrades in promoting Prussian industrialization, Beuth established the institutions to promote the generation and diffusion of new industrial technology, and Rother created the state enterprises fulfilling the role of pioneering entrepreneur in new industries. In some projects, Beuth and Rother cooperated, especially in developing modern industries in Silesia (Brose 1993: 201).

The State as the Technology Promoter

To Justi (1767: 139; 1782: 149), the effective policy to promote manufacturing was to make products of quality at competitive prices. Doing so required the improvement of producers' technical standards, skills, and efficiency. Justi (1760a: 686, 687) believed that the primary factors necessary to promoting the economy were people's “diligence and skills.” Therefore, a primary policy to build new manufacturing industries “should seek to awaken people's mental ability [Genie] in these industries” (Justi 1782: 140).

To build the industries that were entirely new to the nation, Justi (1782: 141) believed that, first, “foreigners should be attracted to the country in order to build those industries and therein to train the people.” The primary function of these foreigners was not operating manufactories but spreading knowledge and skills among native people (Justi 1767: 76–77).

Besides transferring new foreign technology, the state should also promote the generation of new technology. Justi regarded technical invention and science as the key forces that made manufacturing industries flourish, enlarged their domestic and foreign market, and prevented their collapse (Zhao 2021: 468–73). Justi (1767: 135) believed that “the spirit of invention [Erfindungsgeist] is the soul of manufacturing.” “New invention” in manufacturing referred to new colors, new designs, new ways of processing, new machines, and “entirely new kinds of manufacturing industries” (Justi 1767: 222; 1760a: 572). And new inventions originated from science. As Justi (1782: 221) wrote, “Sciences give the artisans and workers the required capabilities and skills to make thousands of new inventions for the necessities and comforts of humans and to conduct the work of their trades with all perfection.” Justi strongly believed that “manufacturing and commerce are commonly originated from the better development in science” (Justi 1761: 54), and that

By “sciences,” Justi meant “mechanics, metrology, chemistry, and natural history [Naturkunde].” He believed that “manufacturing should chiefly expect its perfection from these sciences” (40). In general, Justi's solution to the problem mentioned above was to upgrade the mental capabilities of industrial producers, especially their mastery of the sciences, new inventions, and skills.

This was also the solution proposed by Prussian industrialization promoters. They regarded industrialization as the central economic task for Prussia and believed that industrialization was not possible without elevating the nation's mental capabilities. Beuth (1822b: 15) wrote that “industry, which we aim to promote, is the foundation of the wealth of a nation, and because true industry is not imaginable without virtue [Tugend], it is therefore also the foundation of the national power [Nationalkraft].” Chief among the mental capabilities was science: “Where the science is not introduced in industry, there is no securely built industry, and there is no progress” (Beuth 1824: 169). In this way, to Prussian industrialization promoters, “the answer to the question, how to promote Prussian industry, was this: to cultivate men of profound knowledge and capabilities and energy inspired by the desire to advance with their own power” (Matschoss 1921: 27). It could be summarized that Beuth's and Rother's policies “placed the pedagogical function in the central place of every policy of industrial promotion; all supports which the state granted to industries should ultimately serve the education of industrial enterprises, which cultivated independent and responsibility-aware individuals in the economy” (Mieck 1965: 12). And the state's “pedagogy” should include

In order to promote the generation of new inventions, Justi (1762: 25) emphasized that “one must . . . make continuous experiments for the improvement of manufacturing and its greater perfection.” Accordingly, Justi advocated for the establishment of the Academy of Sciences as a state-led industrial research institute. The Academy of Sciences was to consist of “diligent scholars skillful in new inventions,” and its aim was to make inventions that “should be so characterized that through them the prosperity of the economy and the welfare of the commonwealth are promoted” (Justi 1782: 256). Its scholars especially “should be skillful at researching the nature of raw materials with the help of their knowledge, at investigating all manufacturing processes according to the right principles, and at making new inventions thereupon” (Justi 1762: 27). According to Justi, the academy should be under the direct leadership of the industrial ministry, because the ministry knew what kinds of inventions were commonly demanded by industries; the academy should conduct only “experiments and inventions related to the industries”; research was to mainly involve four sciences: “chemistry, mechanics, botany and husbandry”; the academy's research agenda was not to be determined freely by its members but by the industrial ministry, so that it could efficiently direct its attention and energy to solving the most urgent industrial problems (25–30). Justi believed the presence and function of such an academy was crucial to improving and perfecting manufacturing industries (33). Justi's justification for the academy was that he found contemporary scholars had the common problem of focusing too much on “speculative sciences” (speculativischen Wissenschaften) rather than “practical sciences” (practischen Wissenschaften); these scholars did not sufficiently aim their research at the promotion of industry (Justi 1767: 40–41; Members of Academy of Sciences in Paris 1762: p. 8 of the preface).

The state acting as a facilitator of technology transfer and a generator of new technologies was also central to Beuth's industrialization policies. Establishing an agency to facilitate technology transfer and to research the new technologies commonly demanded by Prussian industries was the center of Beuth's proposal for reforming the Technical Deputation in 1817. Beuth wanted the deputation to have the best experts in industrial technologies and to work as “the embodiment of all prior knowledge [Vorkenntnisse] which industries demand in their practice” (Matschoss 1911: 15). The deputation should collect industrial technologies and “should possess the most accurate practical knowledge about the domestic and foreign industrial enterprises,” mainly through collecting advanced models and machines from foreign countries (15). Moreover, “a greater part of the task” of the deputation should be “solving the problems which were specifically important to industries,” so “above all it was necessary that the Technical Deputation conducted experiments by itself” (16). Beuth prioritized the promotion of machine-building industries serving textile and metalworking industries, which were the key carriers of the ongoing technological revolution (Matschoss 1921: 42). Therefore, the deputation was meant to specifically “build models and large machines and extensively research their applicability” (Matschoss 1911: 16). In order to fulfill its tasks, the deputation should have showrooms to exhibit its collection of models and machines, laboratories to conduct experiments, and workshops to build models and machines (17). The deputation's director should be not only a technician but also a member of the industrial department so that the deputation could be an efficient tool of industrial policies (17). The deputation should have experts in chemistry, mathematics, industrial arts, machine-building, and industrial drafting (17). Beuth's proposal regarding the Technical Deputation was approved and put into practice (18–19).

In 1822, Beuth published a report to present the outline of his industrialization policies (Matschoss 1911: 19). In this report, Beuth (1822a: 134) wrote that the aim of the Technical Deputation was “to concentrate knowledge of scientific and practical technologies and to disseminate it for the benefit of industries.” The deputation collected the newest machines and their blueprints from foreign countries, especially England (137). At that time, exports of machinery and machine blueprints were prohibited in England (Musson 1972). The deputation acquired those machines by dismantling them into as many separate components as possible and transporting them to the deputation via as many different paths as possible (Matschoss 1911: 23). The deputation had its own mechanical workshop, which was an experimental plant “primarily established for making models of the newest and best machines” (Beuth 1822a: 137). At the workshop, foreign machines were reassembled and researched, they were reproduced and their blueprints were drawn, and then their reproduced copies and blueprints were transferred to Prussian industrialists for free, although under the stipulation that more of the new machines should be built and utilized (Matschoss 1911: 23; Beuth 1822a: 137). The deputation's workshop also built scaled-down models of these advanced machines with identical materials, then exhibited them in showrooms and carefully operated them “so that they could serve as examples for enterprises” (Beuth 1822a: 136). The mechanical workshop had the specific tasks to “conduct experiments to build new machines” and make machines and models for “the general industrial purpose” as well as educational purposes (Itzenplitz 1871: 42). “In order to enable the Deputation to conduct experiments, and in order to provide necessary means for industrial education,” physical and chemical laboratories were set up to conduct experiments in chemistry, machine-building, and metalworking (Beuth 1822a: 137).

The State as the Technology Educator

According to Justi, the state should spread the new technologies it accumulated to industries. Justi proposed multiple methods for spreading technologies.

First, manufacturing houses (Manufacturhauser) should be built in cities where new industries were planted (Justi 1767: 107; 1782: 143–44). Manufacturing houses' primary purpose was to provide “education in all and every kind of manufacturing industry” (Justi 1767: 107). The houses should especially concentrate skillful foreigners “who do nothing but give courses to spread skills of manufacturing” (107). The courses should be freely offered to anyone (107–8).

Second, to spread the inventions generated by the academy, industrial regulations (Manufactur-und Fabriken-Reglemente) should be reformed. Industrial regulation was a common policy tool in early modern Europe that aimed to standardize product quality and production processes (Roscher 1874: 408–9). Justi proposed to use industrial regulations to spread new inventions. After the new inventions of the academy were proven efficient, they should “be compiled in the industrial regulations for manufacturers to compulsorily comply with” (Justi 1762: 33–34). If the new inventions were too costly, the state should provide subsidies to manufacturers for adopting them (Justi 1762: 35–36; 1767: 96). In this way, government subsidies were essentially turned into a tuition fee paid by the state for industries to learn and acquire new technologies. These policies were to spread new technologies through coercion, and Justi proposed these policies because he did not trust the rationality of private manufacturers and believed that “a wise government should try to lead the great mass of the injudicious to their true interests” (Justi 1762: 13).

Third, a national polytechnical education system should be built. Justi cherished the cultivation of industrial laborers' skills. He believed a precondition for making new inventions and improving the quality of national products was “that laborers acquire abundant skills and constantly maintain them” (Justi 1767: 225–26). Polytechnical schools (mechanische Real-Schulen), which taught about the nature of industrial materials, manufacturing crafts, and the quality of manufactured products, should therefore be built for youths (Justi 1761: 119–20). These schools should also be affiliated with manufacturing houses (Justi 1782: 261). Justi made such a proposal because he found the contemporary apprenticeship system to be corrupt with masters not properly teaching skills, and public schools excluded the training demanded by industries (Justi 1755: 274; 1761: 119).

The state's being a technology educator also played a significant role in Beuth's industrial policies. Beuth proposed that the new technologies acquired by the deputation should be taught to enterprises through lectures, leaflets and newsletters, publications, practical instructions, and the exhibition of models and blueprints (Matschoss 1911: 16). In particular, the deputation should provide public education to cultivate the minds of the nation's youths (16). The deputation had its printing works to produce publications, given out free of cost, for the purpose of spreading new technologies among enterprises and students in polytechnical schools (Beuth 1822a: 137–38). As had Justi's academy, Beuth's deputation had the task of spreading new technologies to industries. The only difference was that Justi's academy did it through the coercion of industrial regulations, whereas Beuth's deputation used persuasion.

Beuth and Justi were consistent in their desires to build the public polytechnical education system. Beuth built polytechnical schools (Gewerbeschule) under the leadership of the deputation to spread the technologies and inventions acquired and generated by the deputation (Matschoss 1911: 21). Beuth aimed at supplementing the contemporary Prussian public education system, where “the prior knowledge which industrial enterprises demand” was excluded (Beuth 1822a: 134, 139). These schools aimed to train future entrepreneurs and engineers, not ordinary laborers (Beuth 1822a: 139; Itzenplitz 1871: 3). In 1821, the first polytechnical school—christened the “Industrial Institute” (Gewerbeinstitut)—was established in Berlin (Simon 1902: 726). It offered only courses directly useful to industries, especially the machine-building and chemical industries (Beuth 1822a: 140–42; Itzenplitz 1871: 3–6; Simon 1902: 727). The deputation's mechanical workshop and laboratories were the practice field for students of the Gewerbeinstitut (Beuth 1822a: 141; Itzenplitz 1871: 42). Following the example of the Gewerbeinstitut, Beuth built another twenty provincial polytechnical schools across all the Prussian provinces, with seven being concentrated in the Rhine and Westphalia, which were quickly becoming the industrial centers of Prussia (Sichersmann 1979: 57; Reihlen 2014: 58). This was the predecessor of the modern German polytechnical education system.

The State as the Pioneering Entrepreneur

Justi also wanted the state to educate industries through the building and operation of pioneering and model enterprises (Musterbetriebe). Justi's manufacturing houses were model enterprises for foreign manufacturers to spread their skills through practicing their trades. Manufacturing houses should supply these manufacturers with the necessary tools and materials to help them open their businesses, but the houses should not seek profit from them (Justi 1767: 108). Because of his antimonopoly attitude, Justi was in principle against the government's direct operation of manufactories, as they could be easily turned into monopolies (Justi 1767: 85–87; 1782: 144). However, Justi made an exception. He expected state enterprises to act as “entrepreneurs of last resort” to invest and operate enterprises in new industries when no private entrepreneur could be found for them (Justi 1782: 144–45). As he explained,

State enterprises as the pioneering and model enterprises in new industries were also actively encouraged by Beuth and Rother. Beuth emphasized that the instructions and teaching of the deputation should not only be oral and literary but include “the operation of devices at site” and “making models” (Matschoss 1911: 16). The deputation's mechanical workshop was built with the intention to make a model machine-building factory for private enterprises (Matschoss 1921: 52). Beuth also created other model enterprises. However, owing to his limited access to fiscal resources and his trust in private initiative, Beuth did not erect completely new state enterprises but rather invested in already-established exemplary and pioneering private enterprises, with the intention of making them examples for other entrepreneurs. The most significant case was the enterprise of F. A. F. Egells (1788–1854) (Matschoss 1921: 48; Henderson 1958: 113; Redlich 1944: 134–35). Egells was a locksmith journeyman in Westphalia who wanted to become a machine builder, and during his journey in Berlin he met Beuth, who was impressed by this young man's entrepreneurship. Beuth sent Egells to Paris, London, Manchester, and other industrializing cities in Western Europe to observe and learn. In 1821, Egells was summoned back, and with Beuth's investment of money and machinery, he built an iron foundry and a machine-building factory in Berlin. Egells's enterprise later became a model enterprise, “an important nursery of the entire German machine-building industry” (Matschoss 1921: 48) and where “there was educated a whole generation of machine builders” (Redlich 1944: 135).

Creating more significant pioneering and model Prussian state enterprises relied on the work of Christian Rother. Rother reformed Seehandlung from a state trading and banking corporation to a development investment agency supporting new Prussian industries and a concern of state industrial enterprises. Seehandlung was established in 1772 as a chartered state shipping and trading corporation (Henderson 1958: 121–23; 1965: 1–16; Johnson 1975: 82–87, 223–32; Radkte 1981: 5–12). During the Prussian Reform Movement, Seehandlung was preserved for raising funds to pay the national debts caused by the Napoleonic Wars (Rother 1845: 9; Henderson 1958: 124–26; Radkte 1981: 43–45, 57–85). In 1820, a cabinet order confirmed that Seehandlung had the right to conduct all lawful industries but without privilege (Rother 1845: 10–12; Radkte 1981: 50–57). The national debt was nearly balanced by the early 1820s, so Rother turned the attention of Seehandlung to the promotion of Prussian industrialization (Rother 1845: 13; Henderson 1958: 127).

Besides providing low-interest-rate loans to industrialists, transporting Prussia's exports to foreign markets, and constructing highways and canals, Seehandlung promoted Prussian industrialization mainly by directly investing in and operating enterprises in new industries (Rother 1845: 12–19; 1847: 8–9; Henderson 1958: 130–31; Mieck 1965: 171–74; Radtke 1981: 85–94, 111–18). Seehandlung's investments comprised a significant share of overall Prussian industrial investment during the 1830s and 1840s: they made up 5.4 percent of net Prussian industrial investment in the 1830s, 13.2 percent in the 1840s, and 17 percent at their peak (Brose 1993: 201, 207). Seehandlung had eighteen major industrial assets: a papermaking factory, a sulphuric acid- and soda-making factory, an iron and steel foundry, a mechanized woolen weaving factory, a mechanized worsted spinning factory, a zinc rolling mill, a mechanized cotton textile factory, two machinery factories building steam engines and industrial equipment, two flax preparation plants, three mechanized flax spinning factories, and four steam-powered grain mills (Rother 1845: 29–32, 42–44; 1847: 14–27).

Rother classified three kinds of circumstances where he let Seehandlung directly invest in and operate industrial enterprises. First, “where private power does not suffice to support and maintain the existing enterprises” (Rother 1847: 9), Seehandlung took over and rescued such enterprises. The papermaking factory and the chemical factory were of this type (Rother 1845: 29–31; Mieck 1965: 174–75, 182–86; Radtke 1981: 228–34). Second, where private power was too weak and did not suffice “to meet a widely spread but unsatisfied demand” (Rother 1847: 9), Seehandlung intervened and acted as the “entrepreneur of last resort.” One example was the machine-building factory at Breslau, which was the first machine builder in Silesia (Rother 1845: 40; Radtke 1981: 110; Brose 1993: 201). This factory was built on the petition of Silesian industrialists, who advocated that “the greatest obstacle of the industrial activities in Silesia” was the lack of an adequate machine builder to produce newly invented industrial equipment (Rother 1845: 40, 80–81; Radkte 1981: 101–7). Third, where private power did not suffice “to facilitate the spread of the progress acquired abroad, to pave the new ways, and to set up great model works” (Rother 1847: 9), Seehandlung built model factories, from which private industrialists could learn. Examples included the zinc rolling mill, the worsted spinning factory, the iron and steel foundry, and the mechanized grain mills (Rother 1847: 9; 1845: 41, 44–48; Radkte 1981: 135, 215–22, 235–40). Rother did not want the state to be the ordinary entrepreneur. He believed when Seehandlung's enterprises “cultivated the technicians whose knowledge and experience benefit private industries” and opened the opportunity for private investment in new industries, then those enterprises would be ready to be transferred to private entrepreneurs (Rother 1845: 54).

Rother sometimes cooperated with Beuth to build model and pioneering enterprises. For example, the machine-building factory at Breslau was fervently supported by Beuth, who believed that such pioneering investment was necessary in Silesia, where entrepreneurship was greatly lacking (Rother 1845: 81; Radkte 1981: 105; Brose 1993: 199–201). Beuth sent his students to this factory for assistance and practice (Radkte 1981: 178–79). He supplied the factory with steam engines and machine tools that were valued at almost a third of the initial capital (Radkte 1981: 174; Brose 1993: 123). He also sent technicians to Seehandlung's first grain mill, which aimed to serve as the model for Prussian grain mills (Rother 1845: 45; Radkte 1981: 235–36). And Seehandlung created the steam-powered worsted spinning factory at the request of Beuth's department (Rother 1845: 41).

Rother made the above investment clearly according to the principle of educating industries through model factories and the example of the “entrepreneur of last resort.” In his own words,

Seehandlung's industrial investment was geographically concentrated to the east of Elbe, because, there, private entrepreneurship was most lacking (Henderson 1958: 137; Radtke 1981: 129–31).

In conclusion, Justi's proposal for manufacturing policies adhered to a principle identical to the one practiced by Prussian industrialization policies. This principle was that the state should not promote industries through protection, subsidy, and privilege but through “education.” There were indeed disagreements among Justi and Prussian industrialization promoters about how to implement such “education.” These disagreements were caused by the different levels of confidence in private enterprises. Beuth trusted private initiative the most. His “education” was to persuade private enterprises to apply new technology through lecturing, advertising, and modeling. Except in rare cases such as the Breslau machine-building factory, Beuth refrained from engaging the state directly in operating industrial enterprises (Brose 1993: 123, 199). He picked and sponsored exemplary private enterprises to establish pioneering and model enterprises, such as Egells's factory (Henderson 1958: 112–15). Justi had less confidence in private entrepreneurs' innovation initiative, so he proposed to educate them through not only publicizing new technology and modeling but also enforcing coercive industrial regulations. Justi also regarded the pioneering and model state enterprise as a laudable policy rather than an unconventional measure. Rother hesitated even less about involving the state in industrial enterprises. Although intending to set up models and widen opportunities in new industries for private enterprises, Rother did not see much inefficiency of the state in managing industrial enterprises. He believed his deeds had proved that state officials could manage industrial enterprises at least as efficiently as private entrepreneurs (Rother 1845: 55). In this respect, Rother was criticized by Beuth for undermining private initiative (Brose 1993: 203).

Despite these disagreements over implementation measures, Justi and Prussian industrialization promoters agreed upon the basic principle of building a new industrial structure in the context of a liberal economy, namely, that the state should act as a facilitator of technology transfer, as a generator of new technologies, as an educator of new technologies, and as an “entrepreneur of last resort” and a model entrepreneur in new industries. In this way, Beuth's and Rother's industrialization policies accorded with “the way of thinking” of the epitome of cameralism, J. H. G. Justi, in building and developing new manufacturing industries. Beuth's and Rother's policies also embodied Rüdiger's definition of cameralism as the advocacy of the happiness-oriented and context-based interventionist state unbound from a specific polity and adaptable to different contexts. Beuth and Rother practiced the cameralist principle of industrial policy represented by Justi's in a state transitioning from mercantilism to liberalism. With mercantilist policies excluded from their toolbox, Beuth and Rother adequately utilized the measures permitted by the new constitutional framework and enabled the state to extensively intervene in the industrial structure, so that the policies accordant with the cameralist principle could be implemented to promote modern manufacturing, which was an indispensable element of the cameralist aim of “happiness.” For example, with the coercive industrial regulations no longer available, Beuth used multiple methods of persuasion to realize the same aim as industrial regulations. In this way, Beuth's and Rother's policies could be regarded as an adaptation of the late eighteenth-century cameralist way of thinking to a new, more liberal circumstance. Beuth's and Rother's industrialization policies could be regarded as cameralist policies.

We can also conclude that Prussian industrialization policies were not as Smithian as scholars have frequently indicated (Matschoss 1921: 18; Hasek 1925: 96; Mieck 1965: 21–25; Brose 1993: 108–9; Schultz 1999: 74). While the roles of the state performed by Prussian industrialization policies accorded with Justi's cameralist proposal, they could hardly find support in Adam Smith's Wealth of Nations. There was almost no space left for industrialization policies in The Wealth of Nations, as Adam Smith had no preference for manufacturing but regarded agriculture as “the most advantageous to the society” among all economic activities (Smith 1776, 1:443). Smith was explicitly against policies to change the existing industrial structure of an economy, because he believed that, as the work of “an invisible hand,” private people would naturally employ their labor and capital in the channels most advantageous to both themselves and society (2:32–38). Smith was completely against state enterprises. He believed the roles of “trader” and “sovereign” were the most inconsistent character combination (2:415). In the third edition of The Wealth of Nations, Smith (1784: 149–50) specifically expressed the disapproval of the state companies for promoting new manufacturing because of breaking the “natural proportion” among industries. Proposals for a state industrial research agency and a polytechnical education system also had no trace in The Wealth of Nations. Smith (1776, 2:370) favored only the public elementary education in geometry and mechanics indiscriminately useful to all trades rather than any specific industrial training serving modern industries.

Conclusion

We can generally conclude that Prussian industrialization policies put into practice the principles of cameralism. Beuth, the primary Prussian industrialization promoter, was a cameralist who was taught cameral sciences and tried to apply what he was taught to his industrial policies. Additionally, Beuth's and Rother's industrialization policies accorded with the way of thinking of J. H. G. Justi, the epitome of cameralism, in developing new manufacturing industries. In this way, Prussian industrialization policies could serve as a successful case of cameralism in practice, challenging the “disordered police state” interpretation of cameralism and the Smithian interpretation of Prussian industrialization policies.

Pegasus, the winged horse, is a Greek mythological creature. It is the Muses' horse, and the kick of its hooves created the Muses' inspiring spring. In 1837, Carl Friedrich Schinkel (1781–1841), the contemporary leading Prussian architect, gave his friend Peter Beuth a Christmas gift, a painting of “the ride of Pegasus” (Brose 1993: 98–99). At the center of the painting was Beuth riding Pegasus in the sky, and under the hooves of Pegasus, there was an industrializing city with a cluster of steam-powered factories and several steamships on the water. This image was a proper metaphor for Beuth's and Rother's industrialization policies. Under their leadership, the Prussian state acted like Pegasus, which nourished the development of new industries with the “inspiring spring” of the goddesses of knowledge from its “hooves.” Now, this metaphor also seems applicable to the cameralist proposal of manufacturing policies represented by Justi's doctrine, and therefore it could be argued that the economic strategy of cameralism was not the “disordered police state” but, rather, the ride of Pegasus. Interpreted from this perspective, the contemporary relevance of the cameralism represented by Justi is increased in today's context. From today's perspective, the ride-of-Pegasus policies proposed by Justi and practiced by Beuth and Rother were essentially to develop a new industrial structure through constructing a “national system of innovation,” a national network of institutions generating and diffusing new technologies in industries, in the nineteenth-century context (Freeman 1987: 1; 1995: 7–8; Freeman and Soete 1997: 68). As industrial policy is becoming a mainstream topic again nowadays, the awareness that a truly effective industrial policy should essentially be a technology and innovation policy is also growing (Cherif and Hasanov 2019), which will perhaps prompt an approach to the modern version of the role of the state as the ride of Pegasus.

This research is supported by the Program for Innovative Research Team of Shanghai University of Finance and Economics (2020110932).

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