The National System of Political Economy
1.  Cf. 'England and America, 1660 to 1760,' in Economic Surveys, by Professor Ashley, and Dr. Cunningham's Growth of English Industry and Commerce, vol. ii. (edition 1903).
2.  'The principle of retaliation is reasonable and applicable only if it coincides with the principle of the industrial development of the nation, if it serves as it were as an assistance to this object' (p. 255).
Memoir, by J. Shield Nicholson
3.  Abridged from Friedrich List, ein Vorläufer und ein Opfer für das Vaterland. (Stuttgart, 1877.)
4.  De l'Ecluse, Florence et ses Vicissitudes, pp. 23, 26, 32, 103, 213.
5.  Pechio, Histoire de l'Economie Politique en Italie.
6.  Amalfi contained at the period of her prosperity 50,000 inhabitants. Flavio Guio, the inventor of the mariner's compass, was a citizen of Amalfi. It was at the sack of Amalfi by the Pisans (1135 or 1137) that that ancient book was discovered which later on became so injurious to the freedom and energies of Germany—the Pandects.
7.  Hence Charles V. was the destroyer of commerce and industry in Italy, as he was also in the Netherlands and in Spain. He was the introducer of nobility by patent, and of the idea that it was disgraceful for the nobility to carry on commerce or manufactures—an idea which had the most destructive influence on the national industry. Before his time the contrary idea prevailed; the Medici continued to be engaged in commerce long after they had become sovereign rulers.
8.  'Quand les nobles, au lieu de verser leur sang pour la patrie, au lieu d'illustrer l'état par des victoires et de l'agrandir par des conquêtes, n'eurent plus qu' à jouir des honneurs et à se partager des impôts on dut se demander pourquoi il y avait huit ou neuf cents habitants de Venise qui se disaient propriétaires de toute la République.' (Daru, Histoire de Venise, vol. iv. ch. xviii.)
9.  Esprit des Lois, p. 192.
10.  A mere charlatan, Marco Brasadino, who professed to have the art of making gold, was welcomed by the Venetian aristocracy as a saviour. (Daru, Histoire de Venise, vol. iii. ch. xix.)
11.  Venice, as Holland and England subsequently did, made use of every opportunity of attracting to herself manufacturing industry and capital from foreign states. Also a considerable number of silk manufacturers emigrated to Venice from Lucca, where already in the thirteenth century the manufacture of velvets and brocades was very flourishing, in consequence of the oppression of the Lucchese tyrant Castruccio Castracani. (Sandu, Histoire de Venise, vol. i. pp. 247-256.)
12.  Sismondi, Sismondi, Histoire des Républiques Italiennes, Pt. I. p. 285.
13.  Esprit des Lois, livre xx. ch. xii.
14.  Anderson, Origin of Commerce, Pt. I. p. 46.
15.  Wealth of Nations, Book IV. ch. ii.
16.  Hume, History of England, Part IV. ch. xxi.
17.  The revenues of the kings of England were derived at that time more from export duties than from import duties. Freedom of export and duties on imports (viz. of manufactures) betoken at once an advanced state of industry and an enlightened State administration. The governments and countries of the North stood at about the same stage of culture and statesmanship as the Sublime Porte does in our day. The Sultan has, notably, only recently concluded commercial treaties, by which he engages not to tax exports of raw materials and manufactures higher than fourteen per cent. but imports not higher than five per cent. And there accordingly that system of finance which professes to regard revenue as its chief object continues in full operation. Those statesmen and public writers who follow or advocate that system ought to betake themselves to Turkey; there they might really stand at the head of the times.
18.  The Hansards were formerly termed 'Easterlings'or Eastern merchants, in England, in contradistinction to those of the West, or the Belgians and Dutch. From this term is derived 'sterling' or 'pound sterling,' an abbreviation of the word 'Easterling,' because formerly all the coin in circulation in England was that of the Hanseatic League.
19.  Hume, History of England, ch. xxxv.
20.  M. I. Sartorius, Geschichte der Hansa.
21.  II Edward III. cap. 5.
22.  Rymer's Fœdera, p. 496. De Witte, Interest of Holland, p.45.
23.  Hume,History of England, chap. xxv.
24.  Edward IV. cap. iv. The preamble to this Act is so characteristic that we cannot refrain from quoting it verbatim.
'Whereas to the said Parliament, by the artificers men and women inhabitant and resident in the city of London and in other cities, towns, boroughs and villages within this realm and Wales, it has been piteously shewed and complained, how that all they in general and every of them be greatly impoverished and much injured and prejudiced of their worldly increase and living, by the great multitude of divers chaffers and wares pertaining to their mysteries and occupations, being fully wrought and ready made to sale, as well by the hand of strangers being the king's enemies as others, brought into this realm and Wales from beyond the sea, as well by merchant strangers as denizens or other persons, whereof the greatest part is deceitful and nothing worth in regard of any man's occupation or profits, by occasion where of the said artificers cannot live by their mysteries and occupations, as they used to do in times past, but divers of them—as well householders as hirelings and other servants and apprentices—in great number be at this day unoccupied, and do hardly live, in great idleness, poverty, and ruin, whereby many inconveniences have grown before this time, and hereafter more are like to come (which God defend), if due remedy be not in their behalf provided.'
25.  Hume, chap. xxvi.
26.  Hume, chap. xxxv.; also Sir J. Hayward, Life and Reign of Edward VI.
27.  Hume, chap. xxxvii.; Heylyn.
28.  Campbell's Lives of the Admirals, vol. i. p. 386.
29.  Our author would appear to have forgotten, or else unfairly ignored, the exploits of the British fleet under Lord Exmouth.
30.  Smith, Wealth of Nations, Book III. ch. iv.
31.  The construction of good roads, and still more of railways, which has taken place in quite recent times, has materially modified this axiom.
32.  It has been recently stated that the excellence of the Dutch herrings is attributable not only to the superior methods above named, but also to the casks in which they are 'böckelled' and exported being constructed of oak.
33.  Hume, vol. ii. p. 143.
34.  No doubt the decrees prohibiting the export of wool, not to mention the restrictions placed on the trade in wool in markets near the coast, were vexatious and unfair; yet at the same time they operated beneficially in the promotion of English industry, and in the suppression of that of the Flemings.
35.  Hume (in 1603). Macpherson, Histoire du Commerce (in 1651).
36.  See Ustaritz, Théorie du Commerce, ch. xxviii. Thus we see George I. did not want merely to export goods and import nothing but specie in return, which is stated as the fundamental principle of the so-called'mercantile system,' and which in any case would be absurd. What he desired was to export manufactures and import raw material.
37.  Hume, vol. v. p. 39.
38.  Anderson for the year 1721.
39.  Priestley, Lectures on History and General Policy, Pt. II. P. 289.
40.  These and the following figures relating to English statistics are taken from a paper written by McQueen, the celebrated English statistician, and appearing in the July number of Tait's Edinburgh Magazine for the year 1839. Possibly they may be somewhat exaggerated for the moment. But even if so, it is more than probable that the figures as stated will be reached within the present decade.
41.  Before his lamented death, the gifted author of this remark, in his Letters on England, read the nobles of his native country a lesson in this respect which they would do well to lay to heart.
42.  England's national debt would not be so great an evil as it now appears to us, if England's aristocracy would concede that this burden should be borne by the class who were benefited by the cost of wars, namely, by the rich. McQueen estimates the capitalised value of property in the three kingdoms at 4,000 million pounds sterling, and Martin estimates the capital invested in the colonies at about 2,600 millions sterling. Hence we see that one-ninth part of English-men's private property would suffice to cover the entire national debt. Nothing could be more just than such an appropriation, or at least than the payment of the interest on the national debt out of the proceeds of an income tax. The English aristocracy, however, deem it more convenient to provide for this charge by the imposition of taxes upon articles of consumption, by which the existence of the working classes is embittered beyond the point of endurance.
43.  See Appendix A.
44.  Anderson, vol. i. p. 127, vol. ii. p. 350.
45.  M. G. Simon, Recueil d'Observations sur l'Angleterre. Mémoires et Considérations sur le Commerce et les Finances d'Espagne. Ustaritz, Théorie et Pratique du Commerce.
46.  Chaptal, De l'Industrie Française, vol. ii. p. 245.
47.  The chief export trade of the Portuguese from Central and Southern America consisted of the precious metals. From 1748 to 1753, the exports amounted to 18 millions of piastres. See Humboldt's Essai Politique sur le Royaume de la Nouvelle Espagne, vol. ii. p. 652. The goods trade with those regions, as well as with the West Indies, first assumed important proportions, by the introduction of the sugar, coffee, and cotton planting.
48.  British Merchant, vol. iii. p. 69.
49.  Ibid. p. 71.
50.  Ibid p. 76.
51.  Anderson, vol. iii. p. 67.
52.  British Merchant, vol. iii. p. 267.
53.  Ibid. vol. iii. pp. 15, 20, 33, 38, 110, 253, 254.
54.  Anderson for the year 1703.
55.  Macpherson, Annals of Commerce for the years 1771 and 1774. The obstacles thrown in the way of the importation of foreign goods greatly promoted the development of Spanish manufactures. Before that time Spain had been obtaining nineteen-twentieths of her supplies of manufactured goods from England.—Brougham, Inquiry into the Colonial Policy of the European Powers, Part I. p. 421.
56.  Ustaritz, Théorie du Commerce. Ulloa, Rétablissement des Manufactures d'Espagne.
57.  'Eloge de Jean Baptiste Colbert, par Necker' (1773) (Œuvres Completes, vol. xv.).
58.  See Quesnay's paper entitled, 'Physiocratie, ou du Gouvernement le plus avantageux au Genre Humain (1768),' Note 5, 'sur la maxime viii.,' wherein Quesnay contradicts and condemns Colbert in two brief pages, whereas Necker devoted a hundred pages to the exposition of Colbert's system and of what he accomplished. It is hard to say whether we are to wonder most at the ignorance of Quesnay on matters of industry, history, and finance, or at the presumption with which he passes judgment upon such a man as Colbert without adducing grounds for it. Add to that, that this ignorant dreamer was not even candid enough to mention the expulsion of the Huguenots; nay, that he was not ashamed to allege, contrary to all truth, that Colbert had restricted the trade in corn between province and province by vexatious police ordinances.
59.  A highly accomplished American orator, Mr. Baldwin, Chief Justice of the United States, when referring to the Canning-Huskisson system of free trade, shrewdly remarked, that, like most English productions, it had been manufactured not so much for home consumption as for exportation.
Shall we laugh most or weep when we call to mind the rapture of enthusiasm with which the Liberals in France and Germany, more particularly the cosmopolitan theorists of the philanthropic school, and notably Mons. J. B. Say, hailed the announcement of the Canning-Huskisson system? So great was their jubilation, that one might have thought the millennium had come. But let us see what Mr. Canning's own biographer says about this minister's views on the subject of free trade.
'Mr. Canning was perfectly convinced of the truth of the abstract principle, that commerce is sure to flourish most when wholly unfettered; but since such had not been the opinion either of our ancestors or of surrounding nations, and since in consequence restraints had been imposed upon all commercial transactions, a state of things had grown up to which the unguarded application of the abstract principle, however true it was in theory, might have been somewhat mischievous in practice.' (The Political Life of Mr. Canning, by Stapleton, p. 3.)
In the year 1828, these same tactics of the English had again assumed a prominence so marked that Mr. Hume, the Liberal member of Parliament, felt no hesitation in stigmatising them in the House as the strangling of Continental industries.
60.  Forces productives de la France.
61.  The system must necessarily have affected France in a different manner than Germany, because Germany was mostly shut out from the French markets, while the German markets were all open to the French manufacturer.
62.  Report of the Committee of Commerce and Manufactures to the House of Representatives of the Congress of the United States, Feb. 13, 1816.
63.  Organ of the German Commercial and Manufacturing Interests.
64.  Statistical Table of Massachusetts for the Year ending April 1, 1837, by J. P. Bigelow, Secretary of the Commonwealth (Boston, 1838). No American state but Massachusetts possesses similar statistical abstracts. We owe those here referred to, to Governor Everett, distinguished alike as a scholar, an author, and a statesman.
65.  The American papers of July 1839 report that in the manufacturing town of Lowell alone there are over a hundred workwomen who have each over a thousand dollars deposited to their credit in the savings bank.
66.  It is alleged that Adam Smith intended to have dedicated his great work to Quesnay.—TR. (See Life of Smith, published by T. and J. Allman, 1825.)
67.  The Christian religion inculcates perpetual peace. But until the promise, 'There shall be one fold and one shepherd,' has been fulfilled, the principle of the Quakers, however true it be in itself, can scarcely be acted upon. There is no better proof for the Divine origin of the Christian religion than that its doctrines and promises are in perfect agreement with the demands of both the material and spiritual well-being of the human race.
68.  This statement was probably accurate up to the period when List wrote, but a notable exception to it may now be adduced. The commercial union of the various German states under the Zollverein preceded by many years their political union under the Empire, and powerfully promoted it.—TR.
69.  This is true respecting Spain up to the period of her invasion by Napoleon, but not subsequently. Our author's conclusions are, however, scarcely invalidated by that exception.—TR.
70.  Say states in his Economie Politique Pratique, vol. iii. p. 242, 'Les lois ne peuvent pas créer des richesses.' Certainly they cannot do this, but they create productive power, which is more important than riches, i.e. than possession of values of exchange.
71.  Wealth of Nations, Book IV. chap. ii.
72.  From the great number of passages wherein J. B. Say explains this view, we merely quote the newest—from the sixth volume of Economie Politique Pratique, p. 307: 'Le talent d'un avocat, d'un médecin, qui a été acquis au prix de quelque sacrifice et qui produit un revenu, est une valeur capitale, non transmissible à la vérité, mais qui réside néanmoins dans un corps visible, celui de la personne qui le possède.'
73.  See Appendix A.
74.  Wealth of Nations, Book I. chap. i.
75.  Wealth of Nations, Book I. chap. i.
76.  Wealth of Nations, Book IV. chap. ii.
77.  Lectures on Political Economy, by Thomas Cooper, pp. 1, 15, 19, 117.
78.  See Appendix B.
79.  Vide Wealth of Nations, Book IV. chap. ii, (TR.)
80.  See Appendix C.
81.  See Appendix C.
82.  Esprit des Lois, Livre XX. chap. xxiii.
83.  According to Chardin, the Guebres, an unmixed tribe of the old Persians, are an ugly, deformed, and clumsy race, like all nations of Mongol descent, while the Persian nobility, which for centuries has intermarried with Georgian and Circassian women, is distinguished for beauty and strength. Dr. Pritchard remarks that the unmixed Celts of the Scottish Highlands are far behind the Scottish Lowlanders (descendants of Saxons and Celts) in height, bodily power, and fine figure. Pallas makes similar observations respecting the descendants of the Russians and Tartars in comparison with the unmixed tribes to which they are related. Azara affirms that the descendants of the Spaniards and the natives of Paraguay are a much more handsome and powerful race of men than their ancestors on both sides. The advantages of the crossing of race are not only apparent in the mixing of different nations, but also in the mixing of different family stocks in one and the same nation. Thus the Creole negroes far surpass those negroes who have sprung from unmixed tribes, and who have come direct from Africa to America, in mental gifts as well as in bodily power. The Caribbeans, the only Indian race which chooses regularly its women from neighbouring tribes, are in every respect superior to all other American tribes. If this is a law of nature, the rise and progress which the cities of the Middle Ages displayed shortly after their foundation, as well as the energy and fine bodily appearance of the American people, are hence partly explained.
84.  Wealth of Nations, Book IV. chap. ii.
85.  Compare the following paragraph, which appeared in the Times during 1883:
'MANUFACTURES AND AGRICULTURE.—The statistician of the Agricultural Department of the United States has shown in a recent report that the value of farm lands decreases in exact proportion as the ratio of agriculture to other industries increases. That is, where all the labour is devoted to agriculture, the land is worth less than where only half of the people are farm labourers, and where only a quarter of them are so engaged the farms and their products are still more valuable. It is, in fact, proved by statistics that diversified industries are of the greatest value to a State, and that the presence of a manufactory near a farm increases the value of the farm and its crops. It is further established that, dividing the United States into four sections or classes, with reference to the ratio of agricultural workers to the whole population, and putting those States having less than 30 per cent. of agricultural labourers in the first class, all having over 30 and less than 50 in the second, those between 50 and 70 in the third, and those having 70 or more in the fourth, the value of farms is in inverse ratio to the agricultural population; and that, whereas in the purely agricultural section, the fourth class, the value of the farms per acre is only $5 28c., in the next class it is $13 03c., in the third $22 21c., and in the manufacturing districts $40 91c. This shows an enormous advantage for a mixed district. Yet not only is the land more valuable—the production per acre is greater, and the wages paid to farm hands larger. Manufactures and varied industries thus not only benefit the manufacturers, but are of equal benefit and advantage to the farmers as well. The latter would, therefore, do well to abandon their prejudice against factories, which really increase the value of their property instead of depreciating it.'—TR.
86.  General Statistics of the British Empire. London, 1836.
87.  Esprit des Lois, Book XX. chap. xii.
88.  Wealth of Nations, Book IV. chapter iii.
89.  See Appendix D.
90.  During a journey in Germany which the author undertook while this work was in the press, he learned for the first time that Doctors Von Ranke and Gervinus have criticised Macchiavelli's Prince from the same point of view as himself.
91.  Everything that Macchiavelli has written, whether before or after the publication of the Prince, indicates that he was revolving in his mind plans of this kind. How otherwise can it be explained, why he, a civilian, a man of letters, an ambassador and State official, who had never borne arms, should have occupied himself so much in studying the art of war, and that he should have been able to write a work upon it which excited the wonder of the most distinguished soldiers of his time?
92.  Frederick the Great in his Anti-Macchiavel treats of the Prince as simply a scientific treatise on the rights and duties of princes generally. Here it is remarkable that he, while contradicting Macchiavelli chapter by chapter, never mentions the last or twenty-sixth chapter, which bears the heading, 'A Summons to free Italy from the Foreigners,' and instead of it inserts a chapter which is not contained in Macchiavelli's work with the heading, 'On the different kinds of Negotiations, and on the just Reasons for a Declaration of War.'
93.  First published in the work, Pensieri intorno allo scopo di Nicolo Macchiavelli nel libro 'Il Principe.' Milano, 1810.
94.  Stewart says (Book I. chapter xxix.): 'In order to promote industry, a nation must act as well as permit, and protect. Could ever the woollen manufacture have been introduced into France from the consideration of the great advantage which England had drawn from it, if the king had not undertaken the support of it by granting many privileges to the undertakers, and by laying strict prohibitions on all foreign cloths? Is there any other way of establishing a new manufacture anywhere?'
95.  See Appendix C.
96.  Louis Say, Etudes sur la Richesse des Nations, Preface, p. iv.
97.  The following are the actual words of Louis Say (p. 10): 'La richesse ne consiste pas dans les choses qui satisfont nos besoins ou nos goûts, mais dans le pouvoir d'en jouir annuellement.' And further (pp. 14 to 15): 'Le faux système mercantil, fondé sur la richesse en métaux précieux, a été remplacé par un autre fondé sur la richesse en valeurs vénales ou échangeables, qui consiste à n'évaluer ce qui compose la richesse d'une nation que comme le fait un marchand.' And (note, p. 14): 'L'école moderne qui refute le système mercantil a elle-mêmecréé un système qui lui-même doit être appelé le système mercantil.'
98.  Etudes sur la Richesse des Nations, p. 36 (quoting J. B. Say's words): 'Que cette méthode était loin d'être bonne, mais que la difficulté était d'en trouver une meilleure.'
99.  Say, Cours complet d'Economie politique pratique, vii. p. 378.
100.  Even a part of the production of wool in England is due to the observance of this maxim. Edward IV. imported under special privileges 3,000 head of sheep from Spain (where the export of sheep was prohibited), and distributed them among various parishes, with a command that for seven years none were to be slaughtered or castrated. (Essai sur le Commerce d'Angleterre, tome i. p. 379.) As soon as the object of these measures had been attained, England rewarded the Spanish Government for the special privileges granted by the latter, by prohibiting the import of Spanish wool. The efficacy of this prohibition (however unjust it may be deemed) can as little be denied as that of the prohibitions of the import of wool by Charles II. (1672 and 1674).
101.  See Appendix A.
102.  France, said Pitt, has advantages above England in respect of climate and other natural gifts, and therefore excels England in its raw produce; on the other hand, England has the advantage over France in its artificial products. The wines, brandies, oils, and vinegars of France, especially the first two, are articles of such importance and of such value, that the value of our natural products cannot be in the least compared with them. But, on the other hand, it is equally certain that England is the exclusive producer of some kinds of manufactured goods, and that in respect of other kinds she possesses such advantages that she can defy without doubt all the competition of France. This is a reciprocal condition and a basis on which an advantageous commercial treaty between both nations should be founded. As each of them has its peculiar staple commodities, and each possesses that which is lacking to the other, so both should deal with one another like two great merchants who are engaged in different branches of trade, and by a reciprocal exchange of their goods can at once become useful to one another. Let us further only call to mind on this point the wealth of the country with which we stand in the position of neighbours, its great population, its vicinity to us, and the consequent quick and regular exchange. Who could then hesitate a moment to give his approval to the system of freedom, and who would not earnestly and impatiently wish for the utmost possible expedition in establishing it? The possession of such an extensive and certain market must give quite an extraordinary impulse to our trade, and the customs revenue which would then be diverted from the hands of the smuggler into the State revenue would benefit our finances, and thus two main springs of British wealth and of British power would be made more productive.
103.  Since List wrote these lines, the duties which foreign silk manufacturers had to pay on the import of their goods into England have been totally abolished. The results of their abolition may be learned from Mr. Wardle's report on the English silk trade, as follows: London, in 1825, contained 24,000 looms and 60,000 operatives engaged in silk manufacture. At the present time these have dwindled to 1,200 looms and less then 4,000 operatives. In Coventry, in 1861, the ribbon trade is stated to have given subsistence to 40,600 persons; while at the present time probably not more than 10,000 persons are supported by it, and the power-looms at work in Coventry have decreased from 1,800 to 600. In Derby the number of operatives employed in silk manufacture has decreased from 6,650 (in 1850) to 2,400 at present. In the Congleton district they have decreased from 5,186 (in 1860) to 1,530 (in 1884); while of the forty silk-throwsters' works which that district contained (in 1859) only twelve now remain, with 'about three-fourths of their machinery employed.' In Manchester this trade has practically died out, while at Middleton the industry is 'simply ruined.' These results (stated by Mr. Wardle) may account for the decrease in England's imports of raw silk, from 8,000,000 pounds (in 1871) to less than 3,000,000 pounds.
On the other hand, since List wrote, the United States of America have increased and steadily maintained a considerable protective duty on the importation of foreign silk manufactures. The results of that policy were publicly stated by Mr. Robert P. Porter (member of the United States' Tariff Commission), in a speech in 1883, to have been as follows:
Five thousand persons were employed in silk manufacture in the United States before the Morill tariff (1861). In 1880 their number had increased to 30,000. The value of silk manufactures produced in the States increased from 1,200,000l. in 1860 to more than 8,000,000l. in 1880. 'Yet the cost of the manufactured goods to the consumer, estimated on a gold basis, has steadily declined at a much greater rate than the cost of the raw material.' After reference to the earthenware and plate-glass manufactures, Mr. Porter adds: 'The testimony before the Tariff Commission showed unquestionably that the competition in the United States had resulted in a reduction in the cost to the American consumer. In this way, gentlemen, I contend, and am prepared to prove statistically, that protection, so far as the United States are concerned, has in every case ultimately benefited the consumer; and on this ground I defend it and believe in it.'—TRANSLATOR.
104.  Chaptal, De l'Industrie Française vol. ii., p. 147.
105.  Report on the German Zollverein to Lord Viscount Palmerston, by John Bowring, 1840.
106.  See statement of R. B. Porter, note to p. 299.
107.  This fact is confirmed by Mad. Junot, in Mémoires de la Duchess d'Abrantès.—[TRANSLATOR.]