Wednesday, March 24, 2010

Tanzania Über Alles, Wann Es Nur Will!

In 1684, Philipp von Hörnigk, an Austrian bureaucrat and a great champion of mercantilism penned a book titled Österreich Über Alles, Wann Es Nur Will meaning "Austria Over All, If She Only Will" where he outlined Nine Principal Rules of National Economy. They are as relevant to Tanzania today as they were to Austria in 1694. Perhaps this is a guide to emulate developed countries.

I have copied them from a translation by Arthur Eli Monroe in his 1930 book Early Economic Thought, Selection from Economic Literature prior to Adam Smith.


Okay, here it begins:

If the might and eminence of a country consist in its surplus of gold, silver, and all other things necessary or convenient for its subsistence, derived, so far as possible, from its own resources, without dependence upon other countries, and in the proper fostering, use, and application of these, then it follows that a general national economy (Landes-Oeconomie) should consider how such a surplus, fostering, and enjoyment can be brought about, without dependence upon others, or where this is not feasible in every respect, with as little dependence as possible upon foreign countries, and sparing use of the country's own cash. For this purpose the following nine rules are especially serviceable:

First, to inspect the country's soil with the greatest care, and not to leave the agricultural possibilities or a single corner or clod of earth unconsidered. Every useful form of plant under the sun should be experimented with, to see whether it is adapted to the country, for the distance or nearness of the sun is not all that counts. Above all, no trouble or expense should be spared to discover gold and silver.

Second, all commodities found in a country, which cannot be used in their natural state, should be worked up within the country; since the payment for manufacturing generally exceeds the value of the raw material by two, three, ten, twenty, and even a hundred fold, and the neglect of this is an abomination to prudent managers. Third, for carrying out the above two rules, there will be need of people, both for producing and cultivating the raw materials and for working them up. Therefore, attention should be given to the population, that it may be as large as the country can support, this being a well-ordered state's most important concern, but, unfortunately, one that is often neglected. And the people should be turned by all possible means from idleness to remunerative professions; instructed and encouraged in all kinds of inventions, arts, and trades; and, if necessary, instructors should be brought in from foreign countries for this.

Fourth, gold and silver once in the country, whether from its own mines or obtained by industry from foreign countries, are under no circumstances to be taken out for any purpose, so far as possible, or allowed to be buried in chests or coffers, but must always remain in circulation; nor should much be permitted in uses where they are at once destroyed and cannot be utilized again. For under these conditions, it will be impossible for a country that has once acquired a considerable supply of cash, especially one that possesses gold and silver mines, ever to sink into poverty; indeed, it is impossible that it should not continually increase in wealth and property. Therefore,

Fifth, the inhabitants of the country should make every effort to get along with their domestic products, to confine their luxury to these alone, and to do without foreign products as far as possible (except where great need leaves no alternative, or if not need, wide-spread, unavoidable abuse, of which Indian spices are an example).

And so on. Sixth, in case the said purchases were indispensable because of necessity or irremediable abuse, they should be obtained from these foreigners at first hand, so far as possible, and not for gold or silver, but in exchange for other domestic wares.

Seventh, such foreign commodities should in this case be imported in unfinished form, and worked up within the country, thus earning the wages of manufacture there.

Eighth, opportunities should be sought night and day for selling the country's superfluous goods to these foreigners in manufactured form, so far as this is necessary, and for gold and silver; and to this end, consumption, so to speak, must be sought in the farthest ends of the earth, and developed in every possible way.

Ninth, except for important considerations, no importation should be allowed under any circumstances of commodities of which there is a sufficient supply of suitable quality at home; and in this matter neither sympathy nor compassion should be shown foreigners, be they friends, kinsfolk, allies, or enemies. For all friendship ceases, when it involves my own weakness and ruin. And this holds good, even if the domestic commodities are of poorer quality, or even higher priced. For it would be better to pay for an article two dollars which remain in the country than only one which goes out, however strange this may seem to the ill-informed.

There is no need of further elucidating these fundamental rules of a general national economy. Their reasonableness is obvious to every man of intelligence. I do not mean to exclude all exceptions. The circumstances of each country may allow them now and then, but only rarely. If countries and their way of looking after things are considered according to these rules, it will be easy to judge their general economy. I do not presume to instruct anyone; but, in all modesty, I venture to say that any manager and administrator of a general national economy, whether of high or low degree, who judges himself according to these rules, will be able to tell easily whether he has properly administered his duties or not. They are not the invention of a speculative mind. They follow from the nature of things, reason confirms them, and in every place where riches flourish all or part of them are applied. Therefore my reader will not resent my delaying him somewhat with this bit of theory; and if he has intelligence, which I do not doubt, he will easily discover its purpose. I believe that he will gradually see the light, if he has not already done so, and realize whether the well-known scarcity of money in Austria is to be ascribed to nature, or to indolence and carelessness, that is, to human will alone.


Anonymous said...

I'm the "old faithful" to your blog and has been checking here often since you disapeared J. Wherever you have been, welcome back - no scolding necessary. I would strongly advise that you send some kind of notice to Michuzi Issa whenever you post something here to notify your followers to check with Taifa Letu just a few keystrokes away (MO does it sometimes and I believe it works).

Now I can go back and read your article!


Anonymous said...

Number nine is a principle that would absolutely NOT work today. Remember when we were manufacturing SWALA bikes in Tanzania and that brand competing against the Chinese Phoenix? Phoenix was a better product and if you had more money you went for that brand. Mwalimu tried to give room for real domestic manufacturing to take hold basing on the principles like these ones in the article I guess, it didnt go very well.

Our economists, policy makers and domestic manufacturers have to be very crafty colaboratively in thwarting foreign products that compete against what we make in the country. At the very least what we make have to be of as high a quality as whats likely to be offered by foreigners - otherwise robust domestic manufacturing will crawl for a long, long time.

As advanced as these developed economies are, they still do subsdize their manufacturers a great deal. I might be wrong but as far as I understand, our manufacturers are pretty much on their own


January Makamba said...

Edgar - thanks for your comments, and your advice. And thanks for keeping the faith with the blog.

Nathan Chiume said...

A very Humanist philosophical approach, I thought. These may be a mercantilist values but I can see its similarities to socialism/planned economy, and our very own Ujamaa as an African context. Interesting read.