While admittedly the economy of Wilhelmian Germany was marked by protectionism on the international stage and Bismarckian welfare internally both terribly non-lassiez-faire practices how did Germany become such an economic power house? I mean in Hayeks Road to Serfdom he mentions that Germany in the late 19th and early 20th century went in the socialist direction culminating in the Nazis, but how did Wilhelmian germany managed to begin eclipsing the UK which had a much more lassiez-faire economy?
The German Zollverein, established in 1833/34, eliminated tariffs and trade barriers among the German states. This created a huge free trade zone with enormous opportunities for investors.
Additionally, Wilhelminian protectionism and Bismarckian welfarism were preceded by a period of liberal governance in which both international free trade and domestic freedom of trade were promoted. Not all of this was eliminated when Bismarck re-discovered his conservative roots.
Also, Germany - despite its protectionism even in the fairly liberal periods - benefitted from its proximity to the low countries, liberal Scandinavia and England. Think of it, in a way, as being like one of the more heavily regulated American states: American prosperity is still going to seep in through the cracks. Also, German industry became quite efficient during the internal free-trade period, which allowed them to make profitable exports, bringing specie and capital investment into Germany.
Thanks.
What articles or books would you recomend I read to learn more about the Liberal Free Trade era in Germany and the Industrial buildup in Wilhelmian Germany?
That is a very good question. Mises’ book Omnipotent Government covers Germany’s economy very well, but that is mostly in the WW1-WW2 period.
This article by Ralph Raico covers some of it, though it focuses more on the intellectual currents behind the events than on the events themselves.
A little search also brought up this book my Martin Kitchen. Given his quite impressive publishing record on German history, he appears to be an expert on the subject, but I can neither testify to the content of the book nor to the ideology of the author.
German liberalism has always been my favorite branch, Schiller and Goethe are amazing.
Here are some search results from LibertySearch.info: http://www.google.com/cse?cx=004244432897794916980%3Ajtm420j1ej0&ie=UTF-8&q=Wilhelmine+Germany&sa=Search
Could any of your explain how the German Zollverein was founded and what were its effects on the German and European economy?
@Turin, here are some things: http://www.google.com/cse?cx=004244432897794916980%3Ajtm420j1ej0&ie=UTF-8&q=German+Zollverein&sa=Search
I think it has to be noted that germany was politically united quite late, like iItaly and that its culturual renaissance certainly predated this. I believe Hans Hoppe has said some useful things in this regard: