While the persistence of feudal-aristocratic social structures and absolutist state regulation of economic life may – as Adam Smith’s followers held – have slowed the advance of industry and commerce, economic growth both in this sphere and in agriculture in the period 1770-1806 was rapid, multiplying the numbers, wealth, and social-political influence of the entrepreneurial middle classes or “propertied bourgeoisie” [Besitzbürgertum]. This important group increasingly took its cultural and political bearings from the Enlightenment intellectuals and artists who gave voice to the educated middle class (that is, the aforementioned Bildungsbürgertum).
In the late eighteenth century, many members of both groups, including civil servants, began demanding changes in the system of “enlightened absolutism.” They objected to the survival of both legally encoded and de facto aristocratic privileges, as in noble monopolies of possession of rural lordships, and in privileged noble access to the highest military, diplomatic, and courtly posts. Enlightenment philosophy, after all, implied the ultimate equality of all rational beings, while the music and literature of this cultural era, known today as German Classicism, questioned aristocratic pretension and exclusivity while pillorying, in allusions to unpopular contemporary rulers, the “tyrants” of old.
After the outbreak of the French Revolution, Prussia followed Austria in drawing back from the path of Enlightenment reforms, fearing that their egalitarian or “leveling” tendency would encourage political radicalization and revolt. In Prussia, the codification of state law begun in Frederick II’s reign sparked controversy in 1791-1794 when the question arose as to whether such a legislative compendium could, in quasi-constitutional manner, bind and limit the monarch’s will. The 1794 version of the General Law Code [Allgemeines Landrecht] conservatively eliminated any such possibilities. Simultaneously, it became evident that the absolutist system was not coping well with a spreading social crisis, the result of rapid population expansion (from – within the Empire – some twenty-three million in 1750 to about thirty-one million in 1800). Rising numbers of uprooted and pauperized people appeared on urban streets and country roads.
The spread of capitalist-organized cottage industry and early forms of factory production multiplied an ill-paid proletariat. Against the background of the French Revolution, fears of lawless vagabonds and mob violence circulated among the propertied classes. The more sophisticated middle-class response was to call, in the spirit of Adam Smith, for economic liberalism, that is, a market economy freed of heavy government regulation and class privileges, allowing entrepreneurially energetic individuals of all stations in life access, as the contemporary phrase put it, to “careers open to talent.” The heavy expenses of militaristic monarchy should be cut, and the antiquated system of guild-bound, monopolistic artisan handicraft production abolished, freeing such trades to all comers. Subject villagers should be released from feudal rents and given their farms in freehold, leaving noble landlords to adjust to an economy based on wage labor and free markets.
In the era of the French Revolution and Napoleon, the system of absolutism in Germany faced increasingly sharp criticism on both philosophical-ideological and practical grounds. This criticism was formulated mainly by middle-class intellectuals and members of the nobility whose university education drew them toward their middle-class counterparts. Yet in Austria and other German states, and above all in the kingdom of Prussia, the absolutist system had created a centralized and militarized bureaucratic monarchy served by a self-confident and privileged elite of officials, many noble-born or ennobled, many of middle-class origins but loyal to the regime employing them. Such a system constituted a formidable obstacle to the advance of Enlightenment-based, opposition-minded constitutional-parliamentary liberalism. As the future would show, this division of power favored, not revolution, but reform from above, through compromises between liberal middle classes and military-aristocratic monarchy. This would become the Prussian path to nineteenth-century political modernity.