Underwood 1
The formation of the German empire is one that is unique as it is convoluted through its
coagulation of numerous different German governments into one imperial state. The foundation
for unification in Germany was not initially established through a political or cultural measure;
rather, the foundation of unification was based in economics. The earliest basis from which
economics contributed to the formation of the German empire is the congealing of a multitude of
trade unions in the hundreds of old German states, kingdoms, duchies, and free cities into the
Zollverein (customs union). The Zollverein was in existence from 1834 to the formation of the
German empire in 1871 and became the first unified German economic system before a unified
German political state was formed. At the heart of the economic paradigm of the Zollverein lay
the economic philosophy of Friedrich List. List was one of the earliest advocates of forming the
Zollverein as a way to assist in industrialization and strengthening a German economy that was
disjointed following the Napoleonic wars and the domination of the global and continental
economy by the British Empire, “the lack of effective political unity in Germany and the strength
of particularism in 1815 help to explain the economic backwardness of the country in
comparison with Britain and France.”1 His economic ideas are one of the foundations of the
emergence of the economic policies of neomercantilism in the 19th century. Specifically, his
model, the listian m
odel of neomercantilism championed an idea of a national innovation system
and spurning nationalism. This essentially put the idea of the nation as central to any system of
economics. Listian economic ideas also countered the argument of free trade championed by
Adam Smith through economic protectionism. Friedrich List’s key work The National System of
Political Economy outlines these economic ideas for Germany following the Napoleonic wars
1
W.O. Henderson, The Zollverein, (London: Frank Cass, 1984), p.10.
Underwood 2
and the negotiations at the Congress of Vienna. The coupling of a Listian neo-mercantilistic
economic paradigm and the economic mechanics of the Zollverein contribute to make the
structure of empire in Germany one of a unique nature. Specifically, these economic ideas,
structures, and mechanics contribute to the structure of empire and the German empire in a
significant way in German East Africa (Tanganyika). Thus, the purpose of this paper is to
analyze the relationship between List, the Zollverein, and how they relate to the structure of the
German empire, specifically in the case of Tanganyika.
To understand the economic ideas behind the Zollverein and how this relates to the
structure of the German empire it is important to look at the economist Friedrich List. Friedrich
List was a German-American journalist and economist that taught administration and politics at
the University of Tubingen. Friedrich List also assisted in founding the historical school of
economics and the American school of economics which stressed the idea of protectionism over
free trade in economic policies. “List’s work marked a radical departure from the spatial
assumptions of classical economic paradigms.”2 Moreover, List’s departure from classical
political economy is reflected in his shift of spatial understanding of political economics,
“classical political economy conceived the division of labor and markets as abstract
configurations with no specific spatial extension. In contrast, the central organizing category of
List’s framework was the self inclosed nation, signalling a shift from an abstract special
reference to a place-bound focus.” List’s changes from the paradigms and policies of classical
economics into the parameters of a nation contribute to the economic ideas of the German
imperial policies of realpolitik and weltpolitik. These departures from Smithian Liberalism marks
Manu Goswami, Producing India: From Colonial Economy to National Space, (Chicago: Chicago University
Press, 2004), p.216
2
Underwood 3
List as one the earliest writers of the emergence of the economic philosophy of neomercantilism.
Moreover, the method through which List analyzes the ideas of classical economics is attributed
as “one of unmasking: the regime of free trade was dismissed as a direct expression of British
national economic interest, and classical economic theory’s stress on cosmopolitanism was
regarded as a ploy to retain Britain's economic and imperial hegemony.”3 Neomercantilism is
generally defined as a nationalistic spinoff of traditional mercantilism, but the Listian version
emphasized the addendum of achieving complete autarky in all aspects of an economy.
Furthermore, Listian neomercantilism emphasized a national autarky of science and
technological development in what is referred to as the “National System” or the “National
System of Innovation.” List’s The National System of Political Economy is his most notable
work and uses history as the evidence for constructing and visualizing his economic ideas. “It is
beyond all doubt that riches can only be acquired by the means of the mind and of the body, or of
work; but that is not assigning a case from which useful deductions may be drawn; for history
shows that nations have sunk into poverty and misery despite the labor and economy of their
citizens.”4 List was massively influential in his economic ideas for the new German empire even
though he committed suicide before the empire was formed. List ideas in relation to what he
wanted for German imperialism mimicked his economic ideas,
The new development of industry and industrial thinking gave rise to a new form of colonialism, This new
form, first stated in detail in Germany by List himself, presented colonies, not as settlement areas, but as
means of protecting Germany’s markets and sources of raw materials from possible retaliation by foreign
competitors against the import tariffs that List recommended for Germany.5
Goswami, p. 216.
Friedrich List, The National System of Political Economy, (Delaware: Vernon Press, 2013), p.93.
5
Smith, p. 13.
3
4
Underwood 4
Friedrich List’s contribution to economics and the economic paradigm of the Zollverein
and the German empire is monumental. This contribution can be seen in the imperial idea of
Weltpolitik (world politics) and how the industrialization and the economic policies of Listian
neomercantilism propelled the German empire into one of the strongest empires by the end of the
19th century.
The history of the Zollverein has its beginnings with the formation of the multitude of
minor customs unions in the newly formed German confederation following the dissolvement of
the Holy Roman Empire during the Napoleonic wars, (Fig 1). With the French Empire
diminished in its influence on the German states and as with many matters concerning the
German States, the one that played the largest role during the 19th century was the Kingdom of
Prussia. The consistent fracturing of “unified” German governments contributed to a systemic
disunity in an economic and political sense. “Almost the only form of unity which Germany
possessed in the eighteenth century was that of language and culture, and even this was no strong
bond.”6 With this disunity in the German areas, “the German Zollverein provided an economic
union of most German States without impairing their political independence, and so constituted
the first non-political union among independent states.”7 Before the Zollverein was officially
formed in 1834 the numerous German custom unions were dominated by the massive Prussian
customs union in the 1820s. The struggle between the Prussian Customs union and the Middle
German Commercial Union from 1828-1833 preceded the formation of the Zollverein in 1834
and was on the first obstacles overcome in the creation of the Zollverein. Another obstacle during
this period from 1828-1833 was negotiations between the Prussian Customs Union and the
W.O. Henderson, p.1
Arnold H. Price, The Evolution of the Zollverein, (Ann Arbor: University of Michigan Press, 1949 ), p.1.
6
7
Underwood 5
Bavaria-Wurttemberg Customs Union. Once these negotiations had finished the Zollverein was
created after fifteen years of bitter economic strife that followed the issue of Prussia’s tariff of
May 1818.8 After its creation the Zollverein was put on trial to see if it could actually work. The
Zollverein itself went through two tumultuous periods after its formation in 1834.
The first crisis of the Zollverein occurred in 1848 as “the
German states on the brink of modernity, were subjected to a
complicated mixture of old fashioned agricultural failure and
new fangled industrial crisis which impacted on crucial
sectors of the population to produce a situation of potential
unrest.”9 This crisis is attributed to the political unrest in the
German confederation where there were calls to reform the
German constitution into a unified state and to reform the
economy of the Habsburg empire. After the first crisis period
there was a period of economic growth from 1849-1854. This
period of growth is attributed to the energizing of the commercial middle class, the lowering of
other customs barriers in Europe, and the continuation of construction of railways during the
1850s.10 The second crisis of the Zollverein was spurn from the political ambitions of Otto von
Bismarck and his wars of unification during the 1860s. During this time there was also a rising
push for free trade within the Zollverein as the particularism of Germany still existed in
Zollverein as self interest was still primary and the needs of the customs union came second.11
Henderson, p. 95.
John R Davis, Britain and the German Zollverein, (London: MacMillan Press Ltd, 1997), p. 48.
10
Henderson, p. 229-230.
11
Henderson, p. 272.
8
9
Underwood 6
Even with this particularism still engrained in the German states, political unification by
Bismarck was able to finish the work of the Zollverein:
With the political unification of Germany in 1871 the economic unification of the country was practically
complete. Prussia had taken a leading part in accomplishing both these tasks. It had taken Bismarck less
than ten years to eject Austria from Germany, to defeat France and to annex Schleswig-Holstein and
Alsace-Lorraine. Economic unification had been brought about more slowly. But the laborious work of
Civil Servants such as Motz and Delbruck had at least been brought to a successful conclusion. 12
Beyond its crises and shortfall, this precedent of economic unity that was able to transcend
political unity adds a unique connection between the Zollverein and the structure of empire in
Germany. Because of the relevant success of the Zollverein in creating a somewhat unified
economy the foundational economic ideas of the Zollverein that were championed by Friedrich
List and other economists and became the economic policies copied by the imperial German
government:
The Kaiserreich, as the empire of Wilhelm and Bismarck was known, was a late comer to Europe’s
imperial competition. German leaders worried about lagging behind Great Britain’s industrialization and
about access to raw materials. They were influenced by the writings of Friedrich List (1789-1846), who
advocated a “national” approach to economic policy, meaning that the state should make a vigorous effort
to develop its internal resources and catch up with rivals.13
Ultimately, the Zollverein was not able to fully overcome the self interest particularism that was
prevalent in the German states within the German Confederation, however, the Zollverein laid
the economic foundations utilizing a Listian economic paradigm at the center of its policies and
the economic unity that preceded political union in Germany.
After the formation of the German Empire in 1871 under Chancellor Otto von Bismarck
and the newly crowned Kaiser Wilhelm I, the German imperial government didn’t immediately
attempt to establish a colonial empire. This was because there was no immediate imperial
political drive as Germany was just formed, and there were pressing domestic concerns for
Henderson, p. 329.
Jane Burbank and Frederick Cooper, Empires In World History: Power and the Politics of Difference, (Princeton:
Princeton University Press, 2010), p. 351.
12
13
Underwood 7
Bismarck’s administration. However, the economic incentive to begin colonization was instilled
early on. “Even before 1871 it had been argued that German integration through the Zollverein
would eventually force Germany to seek her own overseas colonies. It was thought that the
Zollverein might come to be considered by Britain and other countries as an economic rival
against whom informal sanctions, and possibly tariffs would have to be levied.”14 Moreover,
there were many events over the course of the 19th century that led to an increased political
interest in expanding German power overseas. It wasn’t until the 1880s when Bismarck was
losing political influence in the Reichstag due to the rise of the Social Democrat Party that
Bismarck shifted the imperial focus to external imperialism. However, the tardiness of Germany
developing an overseas empire meant that Germany had weaker colonies. “In comparison with
the overseas possessions of Britain and France, Germany’s colonies were small. Even more
importantly, they were, with minor exceptions, economically unprofitable.”15 As Woodruff
Smith argues, “the prime importance of the colonial empire to Germany lay neither with its
negligible economic worth nor with its equally negligible strategic value but with its role as a
source of political controversy and a means of building support in German politics.”16 Moreover,
“colonies would perform two major functions: they would protect existing overseas markets and
sources to of raw materials from British retaliation, and they would increase effective German
markets by organizing underdeveloped areas for trade and keeping foreign investments.”17
However, the most important of the German colonial possessions was German East
Africa/Tanganyika/modern day Tanzania.
Woodruff D. Smith, The German Colonial Empire, (Chapel Hill: University of Chapel Hill Press, 1978), p.7.
Smith, p. ix.
16
Smith, p. x.
17
Smith, p. 14.
14
15
Underwood 8
A brief history of German East Africa/Tanganyika/modern day Tanzania begins before
the Germans arrive in the 1880s as Tanganyika’s coastline owed its allegiance to the sultan of
Zanzibar who in turn was supported by the British government, (Fig 2). When the German
explorer Dr. Peters arrived in 1884 he acquired for the Gesellschaft für deutsche Kolonisation
some treaty rights with native chiefs, for which, on February 27, 1885, an Imperial Charter of
Protection (Schutz-breif) was granted.18 After having thus admitted the establishment of German
interests in the Zanzibari region, the Chancellor
took steps to have them adequately protected, and
when the Sultan of Zanzibar protested against the
depletion of his possessions on the mainland, a
German patrol fleet made a demonstrations in the
harbour of Dar-es-Salaam.19 However, the German
and British were able to resolve most of the
political tension during Germany’s push for
acquiring East Africa with the German-Anglo
treaty of 1890. “Although Britain and Germany
avoided armed conflict over East Africa, there
were frequent diplomatic confrontations, which in turn created political problems in Germany.”20
After these tensions were resolved the German government began forming a colonial
government in East Africa to take over the taxation and trade duties of the area. However, one of
the greatest challenges facing the Germans in East Africa tinged on the question of railways,
Heinrich Brode, British and German East Africa, (New York: Arno Press, 1977), p.4.
Albert F. Calvert, German East Africa, (New York: Negro Universities Press, 1970), p. vi.
20
Smith p. 91.
18
19
Underwood 9
which were regarded as the key to economic development but which were also capital
investments that no private company would bear by itself.21 Under the administration of Adolf
Graf von Goetzen (1901-1905) there were economic reforms and ideas that mirrored a Listian
economic ideology with Goetzen's focus on establishing a railroad with the help of the reichstag
in 1901 and Goetzen's push to establish a culture of cash crops, in particular cotton. Yet,
Goetzen’s policies aided in the uprising in the Maji Maji rebellion as his economic reforms
threatened East African culture.The Maji Maji rebellion was eventually put down by the German
colonial government in 1907. However, business in German East Africa didn’t ultimately
succeed, and German enterprise in East Africa did not make a profit.22 Even with the failure of
Germany’s colonial positions to produce a profit, the acquisition of colonies, the economic
policies of German East africa, and the imperial policies of Realpolitik and Weltpolitik reflect the
economic paradigms and policies of the Zollverein and List.
In conclusion, the structure of empire in East Africa, the imperial policies of Germany,
and the influences of the Zollverein and Friedrich List are immense in terms of establishing an
economic paradigm that was ingrained into the foundations of the German empire in both the
background and how it continued as an imperial government. List’s unique interpretation of how
political economy should function in the 19th century influenced the economic policies that the
Zollverein adopted, even though List was not a policy maker in the Zollverein. The Listian
economic policies and paradigms that established the Zollverein ultimately contributed to the
structure of the German empire and of empire in general. Initially, these policies and paradigms
contributed to the imperial policy of Realpolitik in which the imperial German government
Smith, p. 101.
Smith p. 91.
21
22
Underwood 10
adopted Listian economic policies from the Zollverein. Then, as German politics shifted with the
acquisition of overseas colonies, such as German East Africa, there was a continuity of Listian
economic policies and a Listian economic paradigm that contributed to policy of Weltpolitik
through its stressing of colonial possessions for the use of expanding and protecting German
markets. This is not to say that a Listian economic paradigm is the lone driving force of German
imperialism as there were many other factors that contributed to German imperialism. But rather
that the unique circumstances of the background to the formation of the German empire and their
relation to Listian economics and the Zollverein synthesize into the larger structure of empire as
the economic and the political concepts of Realpolitik and Weltpolitik.
Underwood 11
Bibliography:
Henderson, W. O. (William Otto). The Zollverein. Chicago: Quadrangle Books. 1959.
Price, Arnold Hereward. The Evolution of the Zollverein, a Study of the Ideas and Institutions Leading to
German Economic Unification between 1815 and 1833. University of Michigan Publications. History and
Political Science Ann Arbor: Univ. of Michigan Press. 1949.
Davis, John R. Britain and the German Zollverein, 1848-66. London: MacMillan Press LTD. 1997.
Calvert, Albert Frederick. German East Africa. New York: Negro Universities Press. 1970.
Brode, Heinrich. 1977. British and German East Africa, Their Economic & Commercial Relations.
European Business. New York: Arno Press.
Burbank, Jane; Cooper, Frederick. Empires in World History: Power and the Politics of Difference.
Princeton: Princeton University Press. 2010
List, Friedrich. The National System of Political Economy. Delaware: Vernon Press. 2013.
Goswami, Manu. Producing India: From Colonial Economy to National Space. Chicago: University of
Chicago Press. 2004.
Smith, Woodruff. The German Colonial Empire. Chapel Hill: University of Chapel Hill Press. 1978
Images:
“German Unification.”German_unified_1815_1871.jpg. Accessed April 30, 2017.
“German East Africa.”German-East-Africa2.png. Accessed April 30, 2017.