Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
(?-1899)
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First Pub. Date
1881
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New York: Maynard, Merrill, and Co.
Pub. Date
1899
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Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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LIST, AND HIS SYSTEM

II.270.1

LIST, AND HIS SYSTEM. Frederick List was born in Reutlingen, a free city of Suabia (Würtemberg), Aug. 6, 1789, and died at Kufstein, in the Tyrol, Nov. 30, 1846. His father, a leather dresser, intended him for his own business, but not seeing in him any inclination for it, he decided to make him a government clerk. In 1816, at the age of twenty-seven, he filled a place in one of the central government offices in Würtemberg, and had gained the confidence of M. Wangenheim, the head of the liberal cabinet. This minister having established in Tubingen a school of administrative science, gave List the chair of political economy. At the same time List, in a journal ("The Friend of the Suabian People") started in Heilbronn in 1818 by some of his friends, demanded real national representation, control of the administration, independence of the communes, freedom of the press, and trial by jury; but, shortly after, the reform ministry gave place to its opponents, and this paper was suppressed.

II.270.2

—List states in the preface to his principal work that from this time he conceived his theory with its distinction between cosmopolitan political economy and national political economy, while at the same time he was urging the abolition of provincial duties in Germany, and the development of the industries and commerce of that country by the means used by other peoples. "But," he says, "instead of pursuing my idea by study, my practical mind urged me to put it to the test of application. I was young then (1819), and I hit on the plan of forming an association of merchants and manufacturers to obtain the abolition of the interprovincial taxes and the adoption of a common commercial system; * * the influence of this society on the formation of a compact between the enlightened and high-minded sovereigns of Bavaria and Würtemberg is well known, as also its effect on the German customs association."—(List declares himself the founder and chief agent of this association. This claim has been disputed in the Conversations Lexicon and the "Augsburg Gazette" of December, 1840, and elsewhere. List defended himself against those attacks in his preface, and, later, in the Zollvereins-Blatt of Feb. 24 and March 3, 1846. Whoever is in the right, one thing remains certain, and that is, that List was the head and soul of the association.)

II.270.3

—At the same time List, to put an end to the petty annoyances he suffered from the government, and possessing considerable wealth, resigned his chair, and six weeks later was elected to represent the city of Reutlingen in the Würtemberg estates, but not being yet thirty his election was declared void. He was reelected at the end of 1820. List speaks of this period as follows: "Imagination must suppose the year to be 1819 to have the explanation of my conduct. Governing class and governed, baron and burgess, politician and philosopher, the whole German world, in fact, was fabricating new plans of political regeneration. Germany was like a country laid waste by war where the old proprietors, reinstated in their rights and once more masters of their own property, were on the eve of taking possession again. Some demanded the restoration of the former order of things with all its cumbrous antiquities and superannuated customs; others, rational institutions and agents completely in accordance with modern ideas. Those who gave ear to wisdom and experience were in favor of an intermediate course. Everywhere societies were being formed for the furtherance of patriotic aims. One of the articles of the federal constitution (the 19th) expressly enjoined the organization of a rational commercial system. I saw in this article the foundation on which the industrial and commercial prosperity of my German fatherland might be built."

II.270.4

—List declares that he had to fight on one side the partisans of freedom, whom he represents as forming a powerful party (a statement of which we have grave doubts), and on the other, "differences of opinion, internal dissensions and the absolute want of a theoretical base" in his own camp. (List states, also, that there was great lack of the necessary funds to carry on his agitation while the secret service money of the British government was at the disposal of the advocates of the opposition theory. It will be observed that this calumny is a sufficiently common asseveration with the protectionist school. At the end of the last century the opponents of free trade affirmed on one side of the channel that the defenders of the treaty of 1786 had sold the interests of Great Britain to France. Their comrades on the other side were equally persuaded in respect to the same treaty that the interests of France had been sold to perfidious Albion. At a later period Huskisson was accused of selling himself, Cobden also, his purchaser being, according to them, the Czar Nicholas.) But he affirms that this struggle served to advance his ideas and was the cause of his discovering (this word, somewhat an ambitious one to use of a thing already found out, is his own,) the distinction between the theory of values and that of living forces, that is to say, between wealth and its causes, also the abuse that the school (by this word List means the liberal school) makes of the word capital.

II.270.5

—From the first day of his parliamentary life he urged upon the assembly a bill advocating the breaking down of internal barriers and the commercial union of the German states, but, the diet adjourning, his proposition was not discussed. Shortly after the session List drew up a petition which was to serve as a programme for the parliamentary opposition, and which was the cause of prosecution against him. In February, 1821, he was expelled from the diet on the motion of the ministry; suit was entered against him and he was condemned to ten months' hard labor for outraging and calumniating the government, the courts and the administration of the kingdom. How different from the treatment he received from the minister Wangenheim! List took refuge in France. Received with sympathy in Strasburg, he liked the town, and there projected several literary works; among others, a translation, with notes, of J. B. Say's "Treatise," but the political animosity of his country drove him from that retreat, then from Baden, and from canton after canton of Switzerland. Going to Paris in the beginning of 1823, to seek occupation there, Gen. Lafayette offered to take him to America with him. This proposal to emigrate pleased him, but his family and his friends dissuaded him from it. The year after, tired of a life of wandering and confident of the royal clemency, he re-entered Würtemberg, but he was imprisoned in a fortress and only set at liberty (January, 1825) on condition of leaving the country. It was then he formed the resolution of going to the United States. Accompanied by his numerous family he arrived in the summer, and hastened to join Lafayette in Philadelphia. The general received him cordially and invited him to accompany him on a really triumphal tour among the American people. It was thus that be made the acquaintance of Henry Clay and the principal public men of the young republic.

II.270.6

—After trying several spots he resolved to settle in Pennsylvania, near Harrisburg, with the intention, at a future period, of founding a school of arts and manufactures, but a fever and other circumstances deprived him of success in making the most of a property which he had bought for a moderate sum, and he accepted an offer made him to edit a German paper in the small town of Reading. It was at this time that he published, on the question of free trade, a series of letters in English in the "National Gazette" of Philadelphia. The question was at that time being vigorously debated in the United States, and List informs us that he had then relations with a protectionist association calling itself the Pennsylvanian society for the advancement of arts and manufactures. This society entertained him, reprinted his letters, and passed a resolution inviting him formally "to compose two works, one scientific, in which the theory should be completely elucidated; the other popular, to spread it in schools." This was in 1827. But fortune turned him from this project and postponed the publication of his principal work till twelve years later.

II.270.7

—He discovered, almost accidentally, a coal mine of rich promise, and succeeded in due course in forming a company with a capital of $750,000. The mine was successfully opened up under his direction, and in addition a railway was built in connection with it from Tamaqua to Port Clinton, which landed the produce at the Schuylkill canal. The inauguration of this railway took place in the autumn of 1831. But already List, although he had so much to bind him to America, where he had found wealth and consideration, was longing to return to Europe and Germany. It must be said also that the revolution of July, and the changes it seemed destined to make throughout Europe, had something to do with his resolve. Be that as it may, he obtained from President Jackson a mission in connection with the relations between the United States and France, and the federal government at the same time nominated him to the United States consulate at Hamburg. Arriving in Paris toward the end of 1830, he wrote in the Revue Encyclopédique on the economic, commercial and political reforms, applicable to France; and in the Constitutionnel on the necessity of a new law on the exercise of the right of public domain. He did not go to Germany. "Of his own accord," says M. Richelot. "List almost immediately resigned the Hamburg consulate on learning that the emoluments of the position were needed by the then occupant of the post." Besides, his nomination quickly gave rise to a protest, instigated as he thought by Würtemberg, from the city of Hamburg, and it was not confirmed by the American senate. He returned to the United States toward the end of October, 1831, but the following year he again landed in Europe, the possessor of a fortune which rendered him independent, with the title, purely honorary, of consul at Leipzig, which put him out of the reach of fresh annoyance from the police of his native country. After spending a year in Hamburg he took up his residence in Leipzig in 1833.

II.270.8

—Scarcely had he settled in Germany before he contributed both with pen and purse to the publication of an encyclopædia of political and economic science ("Staats-Lexicon"). He continued at the same time to popularize his favorite idea of a network of German railways which he had already developed in letters sent by him to the "Augsburg Gazette" in 1829, and which he urged with success in a pamphlet "On a system of Saxon railway lines as the basis of a German system, and particularly on the establishment of a line between Leipzig and Dresden." This pamphlet, it is said, led to the formation of a company for the construction of the last named line, to which he gave great assistance as a director. He added fuel to the movement in favor of new routes of communication by the railway journal which he published in 1835. His services, nevertheless, were but poorly recompensed; the citizens of Leipzig confined themselves to offering him for all his trouble and expense a present of $1,500.

II.270.9

—Shortly afterward he paid a visit to his own country. His fellow-countrymen received him with open arms, but the government refused him the title of citizen, and would only regard him as a foreigner having permission to reside in the country; and this, too, after the bench of Friburg had declared his former conviction null and void. This treatment chagrined him greatly. In addition to this mortification came the proscription of his railway paper in the Austrian empire and the loss of the greater part of his fortune as the result of the financial crisis in the United States.

II.270.10

—To restore his health, which had suffered from overwork and from his troubles, he took a trip to Paris in the spring of 1837. He had the opportunity, during this trip, of being presented to King Leopold of Belgium and to Louis Philippe; he also met Dr. Kolb with whom he renewed his former connection and who opened to him the columns of the "Augsburg Gazette"; he received, too, information of a prize offered by the academy of moral and political science, relative to the restrictions on articles of commerce. List relates that he became aware of the competition by pure chance only a fortnight before the date fixed for giving in the essays, but that he nevertheless decided to commit to writing the main idea of his system, and his composition was ranked third out of twenty-seven given in.—(The question was put thus: "When a nation resolves upon free trade or on a revision of tariff legislation, what facts must it consider, to reconcile most equitably the interests of national producers and those of the mass of consumers?" List seems to insinuate that if he was only given the third place it was because MM. Rossi, Blanqui, and the other judges of the competition were, with the exception of M. Ch. Dupin, prejudiced against him by the principles they held. "There were,' he says, after mentioning those three names, "other judges in this assembly, but were their treatises to be rummaged there would only be found ideas suited for female politicians, Parisian dandies, and other mere dabblers, and lastly paraphrases of Adam Smith's paraphrases: of original thought not a vestige, which was to be regretted." To this M. Blanqui has made answer that at that time he was not a member of the academy. As to the section of political economy, the judge of the competition, it was composed, in addition to Messrs. Rossi and Ch. Dupin, of Alexander Delaborde, Villermé and Passy, who had recently been elected in place of Prince Talleyrand.)

II.270.11

—It was this essay, a reproduction of the ideas contained in the Philadelphia letters and amplified in the articles published in the "Quarterly Review" and the "Augsburg Gazette," which became the "National System of Political Economy." List worked there in the bosom of his family, who had rejoined him in Paris, when one of his sons, who had chosen to serve in Algeria, died of fever. Deeply affected by this loss, List turned his steps again in the direction of Germany (summer of 1840). On his return to Leipzig he contributed greatly to the adoption of the line taken by the railway from Halle to Cassel, and on that occasion the university of Jena conferred on him the degree of doctor of laws.

II.270.12

—He chose Augsburg as his residence, and produced, in May, 1841, his work which again drew public attention to his name and procured his rehabilitation, after an audience accorded him by the king of Würtemberg. The approaching tariff congress of the zollverein for 1842 brought back the discussion between free trade and protection in Germany. Recovered from a fall in which he broke his leg, List recommenced his propagandism. He proposed to the publisher Cotta to found a special organ for economic questions in general and the system of protection in particular. It was the Zollvereins-Blatt, in which till his death he developed his ideas with talent and energy.

II.270.13

—At the same time that he was directing and in part writing this sheet, he made numerous journeys which neither benefited his own treasury nor that of the paper, the possession of which Cotta had given up to him. This consideration had caused him to reflect on the means of giving a fresh impetus to his publication, but it was in 1846 that the league and free trade triumphed in England, and he could not resist the desire to see London on that occasion. He related the impressions he received in the two houses of parliament the night on which the abolition of the corn laws was voted by the house of lords. "Dr. Bowring was my conductor, and said to me, 'Permit me to introduce to you Mr. McGregor.' A well-bred man with an intelligent look shook my hand. 'Mr. Cobden desires to make your acquaintance,' another said to me; and a man still young, with a pleasant face, stretched out his hand to me. 'You have come here, then, to be converted.' 'Yes,' answered I, 'and to ask absolution for my sins.' I remained thus a quarter of an hour bantering with my three great opponents. What political life there is in this country! Here you can see history grow."

II.270.14

—List remained three months in London. During his stay he wrote a treatise on the advantages and conditions of an alliance between England and Germany. That was his last production. The insignificant effect it had on English statesmen to whom he had addressed it, discouraged him afresh. It must be said that if his reputation had increased, his fortune had far from kept pace with it; that he had failed to obtain an official position in Würtemberg; that the future of his family caused him great uneasiness; and that he had felt deeply the indifference, the disappointments, the hostility and the humiliations his efforts had exposed him to. His nature was vigorous, but restless, passionate, ardent and feverish, and the joys of success and the disappointments of failure had ended by sapping its vitality.

II.270.15

—On his return from England in the autumn of 1846, his family and friends found him changed; his internal complaint had increased. In November his disease got worse. One morning he set out for Munich en route to Italy, and some days afterward he was found dead in the neighborhood of Kufstein where he had stopped. Before leaving the hotel he had written to Dr. Kolb a despairing letter of farewell, which foreshadowed the approach of death, and by means of which he was identified. List seems to have committed suicide in a fit of temporary insanity, but the manner of death he died has not been clearly ascertained.

II.270.16

—In reading the life of List interest is aroused in a life so active and a nature so full of courage and so well intentioned. But it must be regretted that one so bright and intelligent should have gone astray under the double influence of error and vanity, so far as to believe himself the founder of a new and natural economic doctrine, when he only dressed in the language of contemporary prejudice the superannuated theory of a system of commercial protection. List appears in four distinct characters: as a politician, as a promoter of German railways, as a promoter of the zollverein, and as a theorist on protectionist tariffs on the frontiers of the German states. We have nothing to do with him as a politician, and will confine ourselves to mentioning that he strove for constitutional guarantees, for municipal freedom and decentralization at a time now deemed remote. We must admire the efforts which List made to draw the attention of Europe in general, and of his fellow-countrymen in particular, to the importance of opening up new means of communication. It would be difficult to decide in regard to this whether he really rendered such service as his partisans have claimed for him. The superiority of railroads was so marked from the first that they were built in the United States and then in England, and it is probable that the European continent would also have taken this forward step even if List's voice had never been heard; for, no one owning the ordinary roads, there could not be formed against the new means of communication any of those coalitions of interests which keep prejudice alive and are a bar to progress.

II.270.17

—We shall not say the same of the zollverein, to the formation of which his activity, his talent and his pen were more positively necessary. We have nevertheless two remarks to make on this subject, with the view of appraising List's efforts at their proper value. We would remark, first, to those enthusiastic protectionist admirers of this father of the zollverein, as they call him, that List confined himself to asking for Germany the application of an efficacious measure carried out forty years before in France, as the result of the intelligent teaching of physiocrats; in the second place, that he was powerfully helped in his undertaking by the influence of the political ideas of those German states which rightly or wrongly saw in a customs union a preliminary step toward their administrative and national predominance.

II.270.18

—Let us consider for a moment List's claims. List, speaking of his ideas, says in his preface: "This system, defective as it may still seem, does not rest in the least on a vague cosmopolitanism, but on the nature of things, on the lessons of history and on national wants." It will be observed that the founders of political economy also took as their basis the nature of things, historical lessons, and national wants. The starting point then of the innovator is nothing new, and what has now to be considered is, whether he has better observed than they the nature of things, or has better understood the lessons of history and the wants of nations. For our own part, there is no question about it.

II.270.19

—List has said: "The loftiest association of individual beings actually realized is that of the state, of the nation; the highest imaginable is that of the human race. We know that an individual is much happier as one of a nation than in a condition of isolation, similarly all nations would be much more prosperous if united by a sense of right, by perpetual peace, and by free trade. Nature little by little is bringing nations to this supreme unison by inducing them, through its differences of climate, of soil and of productions, to barter with each other; through over-population and over-abundance of capital and talents to emigrate or to found colonies. International commerce, in awakening activity and energy by the new wants which it gives rise to, and by the interchange between nations of ideas, discoveries and appliances, is one of the most powerful aids to a nation's civilization and prosperity. But as yet the union of nations through commerce is very imperfect, for it is broken, or at least imperiled by wars and the egotistical measures of this nation or of that. By war, a nation may be deprived of its independence, its possessions, its liberty, its constitution, its laws, its characteristics, in fine, of the measure of cultivation and well-being which it has already attained; it may even be enslaved. By egotistical acts on the part of foreign nations it may be impeded and retarded in its economic development. It is with communes and provinces as it is with individuals. It would be folly to maintain that commercial union is less advantageous than provincial duties to the United States, or the departments of France, and to the states of the Germanic confederation. The united kingdoms of Great Britain and Ireland afford a brilliant and decisive example of the immense results of free trade between associated peoples. It remains but to picture a similar union between all the peoples of the earth, and the liveliest imagination would fail to grasp the amount of well-being and comfort it would bring to mankind."

II.270.20

—List admits then, and it is this portion which protectionists who study his writings are compelled to pass by in silence, that the system of free trade, which he called that of the school, is based on a correct idea, an idea which science must admit and work out, that it may fulfill its vocation, which is that of clearing the way for its practical application; and an idea which practice can not ignore without going astray. List, however, finds two faults with the partisans of free trade: first, with not taking into account nationalities, their interests and the conditions peculiar to them; and secondly, with wishing to conciliate nations with the chimera of universal union and peace; and it is here that through sophism and confusion he has missed his proper logical conclusion, and poses as the discoverer of a system which rests on but frail foundations. Thus, he accuses "the school" of confounding cause and effect, of presupposing the existence of the association of international peace, and thus of concluding in favor of free trade. "Peace exists," he says, "between provinces and states already associated, and from this association comes their commercial union. If, on the contrary, associated states begin with a commercial union, free trade would give birth to the enslavement of nations." List starts manifestly with a subtlety: facility of exchange necessarily brings with it international peace; and it could not be admitted that the one is exclusively the cause, and the other exclusively the effect. On the other hand, admitting the truth of List's rule, it follows that free trade ought to be established between nations which are at peace.

II.270.21

—The theory of nationality which List is forced to appeal to to cover the flaws in his logic, while proclaiming free trade between the German states, is a perfect snare; for it is a question incapable of solution to decide what is a German state. In the last analysis List wished to limit German nationality by the line of custom houses; but to begin with, where shall this line stop? That, neither he nor any one else can tell. In the second place, this means of "nationalification," to coin a word, is only legitimate when it increases the wealth of the nation. Then comes the question, is free trade or protection the best for increasing a nation's wealth? a question which is the subject of several articles in this work. List in this matter finds himself in a serious dilemma, so completely is the thesis he undertakes to support at variance with that which he made use of to defend the formation of the zollverein and the suppression of internal duties, and which causes him to cite as an example of beneficial federation the union of Ireland with England and Scotland, while the fanatics of the exclusive system attribute to that union the distress of Ireland, which in reality arises from quite different causes, well understood at the present day.

II.270.22

—In addition to the supposed difference between liberal economy, which he calls cosmopolitan, and his system which he calls political economy, List believes himself to have made another great discovery, that of the theory of exchangeable values and productive forces. By exchangeable values he means products, wealth; by productive forces, the causes of wealth, the means of labor, industry. He is pleased to say that economists had confounded all these before his day, and on this account to reproach the economic school; he reproaches it, for instance, with having limited its researches to material wealth, and with having failed to appreciate the importance to a nation of means of improving the physical and intellectual instruments of its labor. It is very evident that if List had been a professor of political economy for more than the one year, and if he had consequently had an opportunity of learning something of it, he would have seen that his invention was no invention at all.

II.270.23

—He also makes pretensions to having had new ideas on the division of labor, ideas which had escaped the notice of Adam Smith, and this is the conclusion to which he comes: "International division of labor, as well as national, depends greatly on climate and nature. All countries are not suited for the production of tea as China is, of spices as Java, of cotton as Louisiana, of wheat, wool, fruits and manufactures as are the countries of the temperate zone. A nation would be devoid of reason to wish to obtain by a national division of labor, or by indigenous production, articles for the production of which it is unsuited by nature, and which international division of labor or foreign commerce can procure for it, of better quality and at a low price; but it would betray a want of culture or of activity if it did not use all the means at its disposal to satisfy its own wants, and to procure by a surplus of production what nature has refused to its own soil." Truly this is new indeed!

II.270.24

—The idea of nationality, the theory of productive forces, and that of division of labor, are the bases of the book. It seems then to us that we have said sufficient to expose the absurdity of Dr. List's pretensions to be the founder of a new and national system of political economy. His so-called theory is only an ill-compounded amalgam of protectionist ideas on the subjects of politics and economy; and he is not absolutely faithful to it himself, for he declares positively that free trade is the polar star which should guide nations, for it counsels the freedom from taxation of the natural products of the soil and of raw materials; while with regard to manufactured articles, it advocates the gradual extension of the zollverein, that is to say, the widening of the circle of liberty. It is then only by adopting numerous precautions and reservations that the prohibitory and protectionist school can make use of the so-called national system of political economy, and, all things considered, Dr. List is rather an adversary than a partisan of protection, as it is understood in our time.

JOSEPH GARNIER.

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