Abstract:

From 1750 to 1850 the German economy underwent a fundamental change of its institutions which prepared the ground for advanced capitalism. While the late absolutist order gradually eroded in the 18th century, radical reforms towards capitalism were undertaken in the first two decades of the 19th century. The reforms strengthened both the power of the state and the autonomy of the economic sector. Public administration gained ground at the expense of former elite groups (landed nobility, privileged town citizens) and adopted a public interest orientation. In order to prevent the nobility from vetoing against institutional change, public administration organized a political bargain.