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
MANUFACTURES as the basis of a large home and foreign commerce are also the fundamental conditions of the existence of any considerable mercantile marine. Since the most important function of inland transport consists in supplying manufacturers with fuel and building materials, raw materials and means of subsistence, the coast and river navigation cannot well prosper in a merely agricultural State. The coast navigation, however, is the school and the depôt of sailors, ships’ captains, and of shipbuilding, and hence in merely agricultural countries the main foundation for any large maritime navigation is lacking.
International commerce consists principally (as we have shown in the previous chapter) in the interchange of manufactured goods for raw materials and natural products, and especially for the products of tropical countries. But the agricultural countries of the temperate zone have merely to offer to the countries of the torrid zone what they themselves produce, or what they cannot make use of, namely, raw materials and articles of food; hence direct commercial intercourse between them and the countries of the torrid zone, and the ocean transport which arises from it, is not to be expected. Their consumption of colonial produce must be limited to those quantities for which they can pay by the sale of agricultural products and raw materials to the manufacturing and commercial nations; they must consequently procure these articles second-hand. In the commercial intercourse between an agricultural nation and a manufacturing commercial nation, however, the greatest part of the sea transport must fall to the latter, even if it is not in its power by means of navigation laws to secure the lion’s share to itself.
Besides internal and international commerce, sea fisheries occupy a considerable number of ships; but again from this branch of industry, as a rule, nothing or very little falls to the agricultural nation; as there cannot exist in it much demand for the produce of the sea, and the manufacturing commercial nations are, out of
regard to the maintenance of their naval power, accustomed to protect their home market exclusively for their own sea fisheries.
The fleet recruits its sailors and pilots from the private mercantile marine, and experience has as yet always taught that able sailors cannot be quickly drilled like land troops, but must be trained up by serving in the coasting and international navigation and in sea fisheries. The naval power of nations will therefore always be on the same footing with these branches of maritime industry, it will consequently in the case of the mere agricultural nation be almost
The highest means of development of the manufacturing power, of the internal and external commerce proceeding from it, of any considerable coast and sea navigation, of extensive sea fisheries, and consequently of a respectable naval power, are
The mother nation supplies the colonies with manufactured goods, and obtains in return their surplus produce of agricultural products and raw materials; this interchange gives activity to its manufactures, augments thereby its population and the demand for its internal agricultural products, and enlarges its mercantile marine and naval power. The superior power of the mother country in population, capital, and enterprising spirit, obtains through colonisation an advantageous outlet, which is again made good with interest by the fact that a considerable portion of those who have enriched themselves in the colony bring back the capital which they have acquired there, and pour it into the lap of the mother nation, or expend their income in it.
Agricultural nations, which already need the means of forming colonies, also do not possess the power of utilising and maintaining them. What the colonies require, cannot be offered by them, and what they can offer the colony itself possesses.
The exchange of manufactured goods for natural products is the fundamental condition on which the position of the present colonies continues. On that account the United States of North America seceded from England as soon as they felt the necessity and the power of manufacturing for themselves, of carrying on for themselves navigation and commerce with the countries of the torrid zone; on that account Canada will also secede after she has reached the same point, on that account independent agricultural manufacturing commercial States will also arise in the countries of temperate climate in Australia in the course of time.
But this exchange between the countries of the temperate zone and the countries of the torrid zone is based upon natural causes, and will be so for all time. Hence India has given up her manufacturing power with her independence to England; hence all
Asiatic countries of the torrid zone will pass gradually under the dominion of the manufacturing commercial nations of the temperate zone; hence the islands of the torrid zone which are at present dependent colonies can hardly ever liberate themselves from that condition; and the States of South America will always remain dependent to a certain degree on the manufacturing commercial nations.
England owes her immense colonial possessions solely to her surpassing manufacturing power. If the other European nations wish also to partake of the profitable business of cultivating waste territories and civilising barbarous nations, or nations once civilised but which are again sunk in barbarism, they must commence with the development of their own internal manufacturing powers, of their mercantile marine, and of their naval power. And should they be hindered in these endeavours by England’s manufacturing, commercial, and naval supremacy, in the union of their powers lies the only means of reducing such unreasonable pretensions to reasonable ones.