The customs union
that came before Germany
On 1 January 1834, eighteen German states abolished their internal customs barriers and adopted a common tariff. Thirty-seven years before political unity, the German market already existed.
A market before a state
After the Napoleonic Wars, the German Confederation counted thirty-nine states, four of them free cities. Each had its own customs, weights and measures, and currencies. A load crossing Germany passed several borders, each with duties and formalities that raised the price of the goods and slowed their journey.
Prussia led the way. Its 1818 customs law abolished internal duties across its own highly fragmented territory and taxed goods arriving from outside at the frontier. Small enclaved states gradually saw that joining was to their advantage. In 1828 Prussia allied with Hesse-Darmstadt, while Bavaria and Württemberg formed a southern union; a central union followed soon after.
After negotiations in 1833, the Zollverein, literally "customs union," took effect on 1 January 1834. Revenues were pooled and then shared among the members, which prompted a census in 1834 to make the sharing easier.
The economist Friedrich List was its most active advocate. He feared that Germans would become "drawers of water and hewers of wood" for Britain and argued for a large market shielded from English competition. Prussia's motive was also more prosaic: according to the historian Florian Ploeckl, administering one border cost less than running several.
Economic integration as a political lever
The Zollverein shows that a customs union can become an instrument of unification, even if nobody announced it as such. The member states learned to negotiate together, to share revenue, to speak with one voice to outsiders. When the German Empire was proclaimed in 1871, it took over the running of this union rather than inventing it. Historians remain divided on its real effect on growth, and some doubt that it strengthened the Prussian economy by itself; its institutional reach is hardly disputed.
The lesson goes beyond Germany. A customs union is a permanent compromise between internal openness and external protection, and it always leaves one question open: who collects the duties, and by what sharing key? European integration also made a common customs regime one of its first pillars. Does trade come before politics, or does it merely prepare the ground?
Before uniting peoples, one has often begun by uniting their tariffs.