The National System of Political Economy
By Friedrich List
MORE than thirty-three years have elapsed since I first entertained doubts as to the truth of the prevailing theory of political economy, and endeavoured to investigate (what appeared to me) its errors and their fundamental causes. My avocation (as Professor) gave me the motive to undertake that task–the opposition which it was my fate to meet with forcibly impelled me to pursue it further.My German contemporaries will remember to what a low ebb the well-being of Germany had sunk in 1818. I prepared myself by studying works on political economy. I made myself as fully acquainted as others with what had been thought and written on that subject. But I was not satisfied with teaching young men that science in its present form; I desired also to teach them by what economical policy the welfare, the culture, and the power of Germany might be promoted. The popular theory inculcated the principle of freedom of trade. That principle appeared to me to be accordant with common sense, and also to be proved by experience, when I considered the results of the abolition of the internal provincial tariffs in France, and of the union of the three kingdoms under one Government in Great Britain. But the wonderfully favourable effects of Napoleon’s Continental system, and the destructive results of its abolition, were events too recent for me to overlook; they seemed to me to be directly contradictory of what I previously observed. And in endeavouring to ascertain on what that contradiction was founded, the idea struck me that
the theory was quite true, but only so in case all nations would reciprocally follow the principles of free trade, just as those provinces had done. This led me to consider the nature of
nationality. I perceived that the popular theory took no account of
nations, but simply of the entire human race on the one hand, or of single individuals on the other. I saw clearly that free competition between two nations which are highly civilised can only be mutually beneficial in case both of them are in a nearly equal position of industrial development, and that any nation which owing to misfortunes is behind others in industry, commerce, and navigation, while she nevertheless possesses the mental and material means for developing those acquisitions, must first of all strengthen her own individual powers, in order to fit herself to enter into free competition with more advanced nations. In a word, I perceived the distinction between
political economy. I felt that Germany must abolish her internal tariffs, and by the adoption of a common uniform commercial policy towards foreigners, strive to attain to the same degree of commercial and industrial development to which other nations have attained by means of their commercial policy. [From the Preface to the First Edition]
J. Shield Nicholson, ed. Sampson S. Lloyd, trans.
First Pub. Date
London: Longmans, Green, and Co.
First published in German. First translated 1885.
The text of this edition is in the public domain. Picture of List courtesy of The Warren J. Samuels Portrait Collection at Duke University.
- Translators Preface to the First Edition
- Introductory Essay, by J. Shield Nicholson
- Extracts from the Authors Preface
- Book I, Chapter 1
- Book I, Chapter 2
- Book I, Chapter 3
- Book I, Chapter 4
- Book I, Chapter 5
- Book I, Chapter 6
- Book I, Chapter 7
- Book I, Chapter 8
- Book I, Chapter 9
- Book I, Chapter 10
- Book II, Chapter 11
- Book II, Chapter 12
- Book II, Chapter 13
- Book II, Chapter 14
- Book II, Chapter 15
- Book II, Chapter 16
- Book II, Chapter 17
- Book II, Chapter 18
- Book II, Chapter 19
- Book II, Chapter 20
- Book II, Chapter 21
- Book II, Chapter 22
- Book II, Chapter 23
- Book II, Chapter 24
- Book II, Chapter 25
- Book II, Chapter 26
- Book II, Chapter 27
- Book III, Chapter 28
- Book III, Chapter 29
- Book III, Chapter 30
- Book III, Chapter 31
- Book III, Chapter 32
- Book IV, Chapter 33
- Book IV, Chapter 34
- Book IV, Chapter 35
- Book IV, Chapter 36
- Appendix A
- Appendix B
- Appendix C
- Appendix D
ABOUT five years ago, when the works of Friedrich List were republished and widely circulated in Germany, the Berlin correspondent of the ‘Times’ took occasion to comment on the powerful influence which those works were then exercising in that country in favour of the adoption of a protective commercial policy.
It was this testimony to the practical influence of List’s economical theories which first attracted my attention to his writings, and a perusal of them induced me to undertake the translation of the following work, with a view to affording English readers an opportunity of judging for themselves as to the truth of his statements and the soundness of his arguments.
The work consists of four parts—the History, the Theory, the Systems, and the Politics of National Economy. It is important to bear in mind that all were written before 1844, and the fourth part in particular treats of political circumstances and of commercial policies which have now for the most part ceased to exist. The Corn Laws, the Navigation Laws, and the generally protectionist tariff of Great Britain were then still unrepealed; the manufacturing industry of Germany was still in its infancy, and the comparatively moderate tariff of the German States still permitted England to supply them with the greater part of the manufactured goods which they required.
At first sight, therefore, it would seem an anachronism to place before the reader of to-day a work having special relation to a state of things which existed forty years ago. The principles, however, enunciated by List are in their main features as applicable at one time as at another, and it will be found that they possess two especially powerful claims to consideration at the present moment.
In the first place, there is good reason for believing that they have directly inspired the commercial policy of two of the greatest nations of the world, Germany and the United States of America; and in the next, they supply a definite scientific basis for those protectionist doctrines which, although acted upon by our English-speaking colonies and held by not a few practical men as well as by some commercial economists in this country, have hitherto been only partially and inadequately formulated by English writers.
The fundamental idea of List’s theory will be seen to be the free import of agricultural products and raw materials combined with an effective but not excessive protection (by means of customs duties) of native manufacturing industry against foreign competition. According to his views, the most efficient support of native production of agricultural products and raw materials is the maintenance within the nation of flourishing manufacturing industry thus protected. The system which he advocates differs, therefore, on the one hand from the unconditionally free import system of one-sided free trade adopted by England, and on the other from the system now apparently approved by Prince Bismarck, of imposing protective duties on the import of food and raw materials as well as on that of manufactured goods.
In fact, List draws a sharp line of demarcation between what he deems a truly ‘political’ economy and the ‘cosmopolitical’ economy of Adam Smith and his followers (English and foreign), and he vigorously defends a ‘national’ policy as opposed to the ‘universal trade’ policy which, although nearly forty years have elapsed since its adoption by England, has failed to commend itself in practice to any other civilised country.
In combating what he regarded as the mischievous fallacies of the cosmopolitical theory, List occasionally denounces with considerable asperity the commercial supremacy then exercised by England. But, so far from being an enemy of England, he was a sincere admirer of her political institutions and a warm advocate of an alliance between this country and Germany. ‘England and Germany,’ he wrote, ‘have a common political interest in the Eastern Question, and by intriguing against the Customs Union of Germany and against her commercial and economical progress, England is sacrificing the highest political
objects to the subordinate interests of trade, and will certainly have to rue hereafter her short-sighted shopkeeper policy.’ He further addressed to the English and Prussian Governments a brief but forcible essay ‘On the Value and Necessity of an Alliance between Great Britain and Germany.’
In translating the work, my aim has been to render the original as literally as possible. I have neither attempted to abridge my author’s tautology nor to correct his style, and where passages are emphasised by italics or capital letters they are so in the original. Those, and they are probably many in this country, who are prepared to accept some or all of List’s conclusions, will prefer to have his theories and arguments stated in his own way, ungarbled and unvarnished, while those who reject his doctrines may perhaps still be interested in seeing the exact form in which the intellectual founder of the German Zollverein gave his opinions to the world.
Economic Surveys, by Professor Ashley, and Dr. Cunningham’s
Growth of English Industry and Commerce, vol. ii. (edition 1903).
industrial development of the nation, if it serves as it were as an assistance to this object’ (p. 255).
Memoir, by J. Shield Nicholson
Friedrich List, ein Vorläufer und ein Opfer für das Vaterland. (Stuttgart, 1877.)