The National System of Political Economy
LIST'S allegation as to this effect of the pecuniary subsidies granted by England to her allies on the Continent would appear to have some foundation in fact: any capital transferred by one country to another (other than by a mere transfer of existing securities between wealthy States) must in the long run be effected chiefly in commodities. It is probable that the large loans made by English capitalists to foreign States (notably from 1850 to 1870) resulted in temporary extra demand for British products, which helped to cause the increase of our prosperity 'by leaps and bounds.' So far they may have operated as 'bounties' to British producers, in the manner in which List maintains that the subsidies did. But the subsidies being absolute gifts for services in war, and the subsequent loans to repudiating or bankrupt States being practically (although involuntary) gifts, produced no interest return in future years. The English nation has paid heavily (in the increase to the national debt) for any temporary benefit afforded to English manufacturers by the 'bounties' of which List complains. And English holders of foreign State bonds have paid no less heavily for the temporary 'leaps and bounds' by which British manufacturing industry may have advanced in more recent times, owing to the loans.—TRANSLATOR.
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