The overriding objective of Frederick’s rule was to increase the power of the state. His desire to foster education and cultural life was sincere, but these humanitarian goals were secondary compared with the task of building a great army and gaining the financial resources needed to maintain it. The army was the pivot around which all else turned, and the administrative system existed essentially to recruit, feed, equip, and pay it. In proportion to the resources available to support it, its size was unequaled anywhere in Europe. In 1740 Frederick inherited a standing army of 83,000 men; when he died, this figure had risen to 190,000 (though of these only about 80,000 were Prussian subjects). Under him it remained a force of peasants and of numerous foreign recruits obtained often by outright kidnapping, officered by landowners. In Prussia the army was recruited almost entirely in the countryside; the function of townsmen was to pay for it through their taxes, not to serve in it. Up to a point Frederick tried to protect the peasants and the soldiers against the demands of the Junker landlord-officers. In 1749 and 1764 he issued decrees limiting the obligations of the peasant to his lord, and in 1748 he ordered officers not to treat their men “like serfs”; but these were essentially efforts to prevent the plight of the peasant from becoming so desperate that he would be driven into flight and thus jeopardize the supply of recruits. Throughout Frederick’s reign, army service was for the majority of his subjects the most onerous of all the burdens imposed by the state. In order to finance the great army, heavy demands were made on territories that for the most part were poor. Nothing, however, seemed more important to the monarch than amassing a large reserve of cash to be used for the recruitment of men in case of war. The financial demands that a serious conflict would make were constantly on his mind, and the desperate struggles of 1756–62 confirmed him in his beliefs.

Much of the tax system, based on the excise (largely a tax on food) paid by the towns and the contribution (a complex property tax) raised in the countryside, supplemented by the profits of the extensive royal domains, remained essentially unchanged. Still, Frederick experimented with a number of new taxes, notably with a new system of taxing tobacco and some less important commodities (introduced in 1766 under the supervision of a French entrepreneur, Le Haye de Launay), but these innovations did not bring about significant changes. Indeed, many of Frederick’s fiscal policies were ill-judged; for example, the maintenance of a great reserve of cash, which removed from circulation much of the liquid capital of a poor society, was economically damaging. Yet strict control of expenditure and relatively efficient tax collection meant that the government, unlike many others of the age, was never hamstrung by lack of money.

Frederick’s economic policies were squarely in the mercantilist tradition. “The foundation of trade and manufactures,” he wrote in his Testament Politique of 1752, “is to prevent money leaving the country and to make it come in.” The direct and simplistic way in which these ideas were sometimes applied can be seen in an order of 1747 forbidding individuals to take more than 300 thalers in specie out of their territories. So far as possible Prussia was to avoid importing foreign manufactured goods, and to this end domestic producers were to be helped by privileges and even outright grants of money. Exports were to be encouraged in the same way. In particular, much money was spent on efforts to develop a substantial silk industry, with generally disappointing results. By the end of the reign textiles of all kinds accounted for two-thirds of Prussia’s industrial production, and the textile industry employed about 90 percent of the industrial labour force, but this situation owed little to Frederick’s economic policies. Efforts to foster the production of porcelain—which, like silk, was one of the industrial status symbols of a number of 18th-century rulers—were also costly and not very effective. A small number of favoured industrialists, notably David Splitgerber and Johann Ernst Gotzkowsky in the 1750s, benefited by these policies, but for Prussia as a whole they were largely a misuse of resources. Other new creations such as the Maritime Trading Company (Seehandlung), a government-backed corporation set up in 1772 to develop overseas trade, and even the Royal Bank of Berlin, established in 1765, were also marginal to the economic life of Frederick’s territories, which, except to some extent in Silesia, in the area around Berlin, and in the little county of Mark in western Germany, continued to be based on agriculture.

Some of the state’s programs, however, achieved real success, though sometimes at high cost. Most important was the sustained effort, in the 1760s and ’70s, to attract immigrants and to settle them on waste or depopulated land; this settlement program formed the central feature of the rétablissement, the making good of the losses of the Seven Years’ War. During Frederick’s reign more than 300,000 settlers were attracted to Prussia from other parts of Europe—a substantial addition to a population that in 1740 had numbered only about 2,200,000. In addition, the army provided a large market for arms and woolen cloth for uniforms and thus did something to stimulate economic growth. Moreover, in peacetime the soldiers served with their regiments only for a few months of the year, spending the remaining part in agriculture or some urban employment. The fact that they were in this way integrated into society helped to offset the burden that so great a military effort placed on the economy.

Frederick’s social policies were as conservative as his economic ones. He considered the nobility the most important class in Prussian society. From it were drawn the majority of the army officers and virtually all the higher-ranking ones. It also produced the majority of his officials and all his ministers and completely dominated local government in the countryside. In Frederick’s eyes, the nobility alone of all the social groups had a sense of personal honour and responsibility. The continued existence of the state depended on it, and the regime could not function without its cooperation. Thus its interests were always to be safeguarded. In particular, it was not to be diluted by the grant of noble status to self-made bourgeois, and land owned by noble families was to be protected against purchase by members of the urban middle class, however wealthy. Frederick stated these ideas repeatedly in his voluminous writings on statecraft, notably in the political testaments of 1752 and 1768 drawn up for his successor. Given this attitude, it is not surprising that his reign saw little practical improvement for the peasantry, much of which, in Pomerania, Brandenburg, and East Prussia, was still personally unfree, owing labour services to noble landowners. In principle, Frederick sincerely disliked serfdom. In practice, however, he realized that any rapid move against it risked the disruption of Prussia’s agricultural life and the erosion of the position of the all-important nobility. His efforts to improve the lot of his peasant subjects were therefore little more than gestures. As part of his commitment to stimulate recovery from the losses of the Seven Years’ War, he tried to abolish serfdom in Prussian Pomerania and also to give the peasantry of Upper Silesia greater security of tenure, but none of this had much practical effect because he never contemplated any significant change in the social order.

Frederick prided himself on being, among rulers, the leading representative of the high culture of his day. He was a prolific writer on contemporary history and politics; his Histoire de mon temps (1746) is still a source of some value for the period it covers. He produced large quantities of mediocre poetry and composed music. He invited to Prussia several of the leading French intellectuals of the age, notably Voltaire (with whom he soon quarreled). But here again his outlook was essentially conservative. Culture to him meant French culture: he wrote and spoke French by preference, using German only when necessary. He had no interest in the profound intellectual stirrings occurring in Germany. Berlin under him never became an important intellectual centre. Gotthold Ephraim Lessing, perhaps the greatest German writer of the mid-18th century, described Prussia as “the most slavish country in Europe,” and Carl Philipp Emanuel Bach, the most distinguished of the musicians serving Frederick, did so rather reluctantly. Frederick’s religious tolerance, however, was genuine: it was one of the things that helped to mark him in the eyes of contemporaries as a truly enlightened ruler. The abolition of judicial torture, one of his first acts as king, also showed his genuine belief in this aspect of enlightened reform. On an even more fundamental level, the General Education Regulations (General-Landschul-Reglement) of 1763 attempted to create a system of universal primary education throughout the Prussian monarchy. Lack of resources limited its practical effect, but it was the most ambitious effort of the kind theretofore seen anywhere in Europe.