Austria Supreme (if it so Wishes) (1684): 'A Strategy for European Economic Supremacy'

Austria Supreme (if it so Wishes) (1684): 'A Strategy for European Economic Supremacy'

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ISBN-13: 9781783088201
Publisher: Anthem Press
Publication date: 06/25/2018
Series: Economic Ideas that Built Europe
Pages: 236
Product dimensions: 6.00(w) x 9.00(h) x 1.00(d)

About the Author

Philipp Robinson Rössner is a senior lecturer (associate professor) in early modern history at the University of Manchester, UK. Trained as an economic historian at the University of Göttingen, Germany, where he did his MA in 2003, he moved to the University of Edinburgh, UK, where he did his PhD. Between 2007 and 2012 Rössner worked as a lecturer in social and economic history at the University of Leipzig, Germany, where he obtained a senior doctorate in social and economic history.


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CHAPTER 1

PHILIPP WILHELM VON HÖRNIGK – HIS LIFE, TIMES AND PLACE IN HISTORY

A Long-Forgotten Algorithm for Europe's Rise to Greatness: The Hörnigk Strategy

How does a country grow rich? Why do some countries grow rich much faster than others? Why do some nations experience growth and prosperity, while others don't? Why did Europe eventually overtake the rest of the world, becoming the first region to industrialize and experience a progressive economic advantage over the rest of the world? These are the big questions asked in the modern social sciences, not only in more recent times (as witnessed by the post-2000 Great Divergence debate fuelled by two books by scholars working at the University of California), but also since the days of Karl Marx or Max Weber. Philipp Wilhelm von Hörnigk's 'Austria Supreme' provides a concise and powerful answer to them. People had even raised them way before. In the eighteenth-century Enlightenment discourses, these questions were at the core of the 'rich' country versus 'poor' country debates. All major epigones of the Scottish Enlightenment, including David Hume and Adam Smith, would comment on this problem. But this discourse was even older than that. It had been raised in early modern European political economy discourse at least since the sixteenth century and the days of Giovanni Botero, the Italian author who wrote a major treatise on cities and economic development. It is not usually acknowledged that the big rift that developed in economic fortune between Asia and the West around AD 1800 had a prehistory that predates the industrial revolution – one major element and cause of the Great Divergence – by centuries. Nor is it well understood what role ideas played in this process – that is, the intellectual history of industrialization and Europe's eventual economic supremacy. With the present text, written by a seventeenth-century diplomat living in Habsburg, Austria, who no schoolchild and social science student of today would be expected to have heard of, we have an answer at last, however partial or incomplete. It was the 'Hörnigk Strategy' that made European nations rich. Perhaps, there is something to be learned from this. At least, this man should receive the fame he deserves.

During his own lifetime, Philipp Wilhelm von Hörnigk, as he is usually known, must have been formidably famous. At least his work was, as people maintained, even long after his death in 1714. The preface of the 1723 edition of 'Oesterreich über alles' was the first to disclose the author's true identity, years after his death. The original 1684 issue, as well as all other editions up to 1723, had been published anonymously. When Austrian political economy professor Joseph von Sonnenfels (1732/33–1817) was appointed to the chair in Cameralist economics at the University of Vienna in 1763, he was required to draw up a list of textbooks on which his lectures were to be based, as well as indicate the textbook he would actually use in class. While academic bookshops still haunt university lecturers in a similar way by asking them to submit reading lists at the start of every academic year, ironically, the main reason this was required from Sonnenfels by his superiors in the university was that he was a self-confessed ignorant in political economy. He had prepared to lecture on Hebrew and translation. But it was not at all unusual to appoint people who were ignorant in the subject they were supposed to be lecturing on (again, this is not necessarily different today!). But what counts here is that, among a longer list of more modern authors he had (or was going to) read, Sonnenfels included Hörnigk's Österreich über alles (as well as Schröder's Fürstliche Rentkammer and Becher's Politische Discurs) on his reading list as a natural starting point (Seckendorff's Teutscher Fürsten Stat from 1655 seems to be missing from the list). On the one hand, this story seems to testify to the rather dubious qualities and obscure qualifications of some eighteenth-century university professors. On the other hand, it marks and underscores Hörnigk's position and rank as a towering figure in the long and venerable genealogy of modern economics and political economy.

As mentioned above, the initial editions were published anonymously. Well into the 1750s (e.g. 1750) the book's cover page only featured the initials Ph. W. v. H. This was with good reason, as Hörnigk was in the services of high-ranking diplomats on the Imperial level, whose business was often top-secret. But Hörnigk published, in 1684, a bestseller; a book that would become the most widely read economics book on the continent, at least in the German-speaking lands, before Adam Smith wrote his 1776 Inquiry into the Causes and Nature on the Wealth of Nations. We may not call Hörnigk's opus a textbook in the modern sense; this literary genre evolved later on, in the eighteenth-century German lands under the auspices of Cameralism and Cameral Science as taught at universities. But the work was much more than a mere pamphlet, the most common literary genre in early modern European economic thought, especially when it came to framing economic questions and questions of economics scientifically. 'Oesterreich über alles' wann es nur will went through at least eighteen editions between 1684 and 1784. The fact that it was still famous and available in print a hundred years after its first issue (1784) set it apart from most contemporary textbooks in the economic sciences. There were three editions of the work already in 1685, that is, one year after its initial publication. In fact, Hörnigk's treatise went through more editions than his brother-in-law Johann Joachim Becher's (Politischer Discurs, 1673) or Wilhelm von Schröder's Fürstliche Schatz-und Rentkammer (1686), works that represented, alongside Veit Ludwig von Seckendorff's Teutscher Fürsten Stat (1655), 'early' Cameralism and German economics in its prime.The author of the preface to the 1750 edition (Frankfurt and Leipzig) remarked that most of the previous editions had gone out-of-stock rapidly, and that it would be time for a new one, especially as the Cameral sciences had advanced so considerably now. In fact, as the editor of the 1750 edition pointed out, many an active cameralist author or project-maker would have to fear a new edition of Hörnigk's Oesterreich über alles, as such an edition would give away the true origin and basic foundations of Cameralist economic theory, thus, relieving many of the contemporary economics professors of their claim to originality, turning their works into plagiarism. While this assessment is certainly too harsh, especially given the theoretical height and analytical depth found in the works of Johann Gottlob Heinrich Justi (1717–71, the man who developed Cameralist economics into a full-blown and unified economic theory – as far as one could possibly get with then-contemporary economics), it does contain an element of truth. Hörnigk's ideas may not have been so profoundly original as many of his contemporaries and later eighteenth century economists often suggested (there were important precursors, such as Antonio Serra or Giovanni Botero), but they were usually admired for their radicalism and purity of expression (while Hörnigk's language and discursive style were quite complicated, ponderous and laborious in places). The work must have been so prominent that contemporaries in the 1750s were not only ready to admit that Austria had made good economic progress because of the Hörnigk principles, but that the book could also be seen as the scientific foundation of Cameralism as a university discipline. Both assumptions may be doubted on many counts, as will be shown later in this book, but there remained a grain of truth in them. Surely the conditions would have changed between the first appearance of the book and the later eighteenth century, when contemporaries still sung Hörnigk's praises in the highest tunes. But the principles remained in place over time, so that Benedict Franz Hermann, the editor of the much-altered 1784 version, was able to state with pride that over the past century or so, Austrian industry and commerce had flourished, rising to unequalled prominence, and that Hörnigk's book was responsible for this. Hermann acknowledged the rather archaic nature of some of Hörnigk's core principles, including the uncompromising protectionist stance; the condemnation of fashion as a driver of economic change (which was a late seventeenth-century topos), and the rather negative stance on merchants and traders, which comes across clearly from the Hörnigk text. Most importantly, Hermann conceded, on page 15 of the 1784 commented edition of Hörnigk's Austria Supreme, that Austria's backwardness compared to France, England and Holland in terms of manufacturing, which Hörnigk had complained about a hundred years earlier, was still true. The only real change that had occurred in between was that England had now surpassed all the other nations in terms of economic wealth and stealth. With the benefit of hindsight, we know that this was to a significant extent due to England's trajectory as the 'first industrial nation' – which rested on a state economic policy that was formidably close to what Hörnigk laid out in his Austria Supreme. Literally all nations of contemporary Europe adopted Hörnigkian measures to some extent; some with more, others with less success. It was long after the mid-nineteenth century that modern social sciences came to condemn, as something 'unnatural' and contrary to the cosmic order and the natural market optimum effected by the virtuous forces of the 'invisible hand', the very strategies that had made the north-western European nations rich since the Middle Ages (Table 1).

Until the 1930s, some doubts remained about Hörnigk's authorship; including the hypothesis that Oesterreich über alles may have been written by his brother-in-law, eminent German early 'Mercantilist' (or Cameralist) Johann Joachim Becher. Since then however, Hörnigk's authorship has been asserted without doubt. As far as is known, this work was never translated into English and, as yet, we have no secure knowledge of possible contemporary translations into other languages. Parts of the work were translated into English by Arthur E. Monroe in the 1920s. The next edition was the one (in German) in 1948 by August Skalweit; in 1949 there was a New York edition, with part translation into English, by K. W. and L. L. Knapp. After that, all scholarly efforts directed at Hörnigk took place in the German tongue. We have the 1964 commented edition by Otruba. In 1978, there appeared a facsimile reprint of the 1753 edition. This was before google.books. In 1983, a facsimile appeared in the Austrian 'Klassiker der Österreichischen Nationalökonomie' series, again with a brief introduction. In 1997, a similar launch was made in its German equivalent, the Düsseldorf project, accompanied by a Vademecum or companion volume series. The present volume, therefore, presents the first fully annotated and commented translation of this important text into the English language.

Hörnigk's text is odd in more than one way. Contemporaries such as Johann Joachim Becher and his Politische Discurs, or Veit Ludwig von Seckendorff with his Teutscher Fürsten Stat (1656) wrote treatises that often numbered more than a thousand pages. They could easily have condensed them down to the size of Hörnigk's work without losing substance (and Hörnigk may have done the same: a thirty-page volume would have done the trick in terms of bringing home his main points). But only today's epistemology, manifested in the modern paradigm in economics and general calls for parsimony in saving resources for printing would suggest such a strategy. Three hundred years ago, in the age of Baroque, things were much different. People had time to read longer texts. The language and discursive strategy of baroque economics were different. Moreover, Oesterreich über alles was not a 'textbook' in the same way, for instance, as Seckendorff's Fürsten Stat or the Cameralist literature of the eighteenth century à la Johann Heinrich Gottlob Justi's Staatswirthschaft (Principles of Economics, 1755) would have been. It was much more akin to a pamphlet, written in an opaque language, cliché ridden and full of exaggerations, hyperboles, digressions and excursions. Style and syntax were not nearly as economical as students would now expect from an economics textbook. Rather than coming straight to the point, Hörnigk, very much like his brother-in-law J. J. Becher, loved huge sentences that meandered all over the place, often without finding a real ending or coming to the point. They contained a sometimes exhausting level of detail, some of it perhaps obsolete to the modern reader. But the core of his economic programme was very similar to what another 'German' economist would, about 150 years later, formulate as the core strategy of catch-up economic development and a blueprint for many a modern development economic textbook. In his works, Friedrich List (1789–1846) argued, inter alia, that it was vital for an economy to build up a manufacturing sector that was competitive in international markets; that it would be imperative to nourish domestic industry so long as it remained uncompetitive, by protective tariff walls and government intervention so as to raise overall productivity, and that it was good to have free trade – but only when the nation was considered to be fit for it. List was, as were Hörnigk, von Seckendorff and Becher, reiterating a stance other theorists had formulated previously, most prominently Giovanni Botero, in his Della Ragion di Stato (1589) and Antonio Serra, Breve trattato delle cause che possono far abbondare li regni d'oro e argento dove non sono miniere (1613). The Serra text was one of the earliest texts containing a systematic analysis of manufacturing and its role in economic growth and development. In fact it seems as though Botero's Ragion di Stato – a treatise explaining why wages were higher in cities and why manufacturing as an economic activity generated positive scale economies, thus adding value to the economy where agrarian activities wouldn't – would have been the intellectual inspiration of many an economic treatise of the time, including Hörnigk's Austria Supreme. From Veit Ludwig von Seckendorff – the 'Adam Smith of Cameralism' (Albion Small) – it is known that he had read and greatly admired Botero's work. He recommended it as compulsory reading to the Duke Ernest of Saxony-Gotha, and the princely library at Schloss Friedenstein in Gotha contained numerous editions of Botero's Ragion di Stato. Seven translations into German and twelve translations into Latin were published in Germany between 1596 and 1670, which explains not only the huge number of volumes found in the library at Friedenstein Castle but also allows us to draw a direct line between Giovanni Botero and German Cameralism via Veit Ludwig von Seckendorff's Additiones (1665) to his Teutscher Fürsten Stat and his spells as a princely librarian in the service of the Saxon Dukes. It was not unusual in those days to not fully disclose one's sources, and footnotes or annotations were, for the time being, rather rare in scientific treatises. Hörnigk would have known Botero's works as intimately as Seckendorff's and the other cameralists.

Hörnigk got forgotten over time, as did, in a way – looking at the modern economics curriculum taught at university level – Botero, Serra and many Germanic economists yet to come, up to Friedrich List and the earlier and later so-called 'German Historical School'. Their ideas continued to live on into modern economic thought and practice, but sometimes without explicit acknowledgement. Europe grew rich on these ideas. Only specialists are nowadays aware of these economists' contribution to the ideas that built (and in many ways continue to build) Europe, as well as the non-European world.

(Continues…)


Excerpted from "Austria Supreme (if it so wishes) (1684) A Strategy for European Economic Supremacy"
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Copyright © 2018 The Other Canon Foundation; and Philipp Robinson Rössner chapters 1–5.
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Table of Contents

1. Philipp Wilhelm Von Hörnigk – Life and Times ; 2. An Age of Reason? Enlightenment and Economics; 3. Cameralism – Baroque-O-Nomics; 4. Extremis Morbis Extrema Veniant Remedia – Analytical Summary of Hörnigk’s ‘Oesterreich Über Alles’ (1684); 5. How Europe Got Rich – The Austrian Example; Austria Supreme (if it so wishes) (1684); Index.


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