The National System of Political Economy

MEMOIR.
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FRIEDRICH LIST was born August 6, 1789, at Reutlingen in Würtemberg, where his father, who, though not rich, was highly respected, carried on business as a currier and held several public appointments. At a very early age Friedrich manifested a strong dislike for his father’s business, and determined to strike out a career for himself.

For a few years he found employment in the Town Clerks’ offices at Blaubeeren, Ulm, and Tübingen; and after passing several Government examinations with distinction entered the Government Civil Service of Würtemberg, in which his promotion was so rapid that in 1816 he had risen to the post of Ministerial Under-Secretary. Von Wangenheim, who was Minister at the time, seems to have recognised his talents from the first, and cordially to have welcomed the assistance of so able a coadjutor in promoting his own projects of reform.

Among these was the establishment of a Chair of Political Economy in the University of Tübingen, an event which elicited from List an able and comprehensive pamphlet, in which he freely criticised the system of administration in Würtemberg, and pointed out that certain branches of knowledge in connection with the new Faculty, which it was of special importance to cultivate, had hitherto been almost entirely neglected. The pamphlet, in fact, was rather a manifesto than an essay, and may be regarded as List’s first open declaration of that war against officialism and red tape in which the rest of his life was to be spent.

Von Wangenheim showed his appreciation of the work by appointing the author Professor of Practical Administration (Staatspraxis) in the University, and encouraged him
to persevere in his advocacy of reform in the State administration, of local representative government, and of freedom of the press.

Unhappily, so far from being of any advantage to List, the Minister’s approval of his efforts was fatal to himself. The time was unpropitious for broaching schemes of reform which the nobility and bureaucracy were incapable of distinguishing from revolution—the King himself was alarmed, and the Minister had to resign.

This publication, however, was by no means List’s only offence against the predominant official conservatism. At the close of the Napoleonic wars in 1815, German diplomatists appear with one consent to have shut their eyes to the industrial interests of the people. The Continental blockade as long as it lasted operated as a strongly protective system in favour of German home trade, particularly in the case of the minor States. But on the removal of the blockade, when the German ports were opened to foreign manufactures at low duties, the trade of the various German States with each other still remained restricted by a chain of internal custom-houses along every frontier. This state of things naturally excited just and general discontent, and an Association was formed for the abolition of these internal customs dues. Of this Association, List accepted the Presidency, a step which immediately brought down upon him the censure of the Government and deprivation of his office. His fellow-townsmen at Reutlingen testified their confidence in him by electing him their representative in the Würtemberg National Legislative Assembly, but so unpardonable was the crime which he had committed against those in authority that his election was cancelled by Ministerial veto.

Nothing daunted, however, List still devoted all his energies to agitating for the abolition of these internal tariffs and for the commercial union of all the German States, from which he foresaw that the political union of Germany must ultimately follow. He not only advocated these objects in the press in the shape of letters, articles, and pamphlets, but travelled, at a time when travelling was both difficult and expensive, to Berlin, Munich, Vienna, and other German capitals, in order to make his views known to all the principal statesmen and leaders of commerce. His pilgrimage, however, produced but little practical result at the time; he
found that the heads of the commercial houses, as usual, were timid, while Ministers, as usual, were jealous of any ‘unauthorised’ agitation for political objects.

A little later, in 1822, he was again elected as deputy from his native town to the Representative Assembly of Würtemberg. But a powerful petition, which he was chiefly instrumental in preparing, in favour of Commercial Union, and of other needful reforms, was resented so strongly by the King and his Ministers, that List was not only expelled from the Assembly, but condemned to ten months’ imprisonment in a fortress, with hard labour, and to pay the costs of the proceedings against him.

To avoid the execution of this harsh sentence, he escaped to Strasburg; but after a brief stay, he was ordered by the authorities to quit that city, at the instance of the Würtemberg Government. From Strasburg he went to Baden, but only again to suffer the same indignity. From Baden he proceeded to Paris, where he was kindly welcomed by General Lafayette, who invited him to visit the United States. Instead, however, of at once accepting the invitation, his intense love of his native country urged him to return to Würtemberg and appeal to the mercy of the King. His appeal was made to deaf ears. He was arrested and imprisoned in the State fortress of the Asberg, from which he was only released after several months’ confinement, on condition of renouncing his nationality as a Würtemberger and quitting the country at once. Once more he proceeded to Strasburg, and once more his steps were dogged by the vindictive animosity of the King of Würtemberg, at whose request he was ordered by the French Government not to remain in French territory. He now determined to leave Europe altogether for a time, and took refuge in the United States, where he was again warmly welcomed by General Lafayette, whose introductions secured him the friendship of President Jackson, Henry Clay, James Madison, Edward Livingstone, and other influential American statesmen.

After an unsuccessful attempt to maintain himself by purchasing and cultivating a small piece of land, he started an American newspaper in the German language—the ‘Adler.’ The tariff disputes between Great Britain and the United States were at that time at their height, and List’s friends urged him to write a series of popular articles on the
subject in his journal. He accordingly published twelve letters addressed to J. Ingersoll, President of the Pennsylvanian ‘Association for the Promotion of Manufacturing Industry.’ In these he attacked the cosmopolitan system of free trade advocated by Adam Smith, and strongly urged the opposite policy, based on protection to native industry, pointing his moral by illustrations drawn from the existing economical condition of the United States.

The Association, which subsequently republished the letters under the title of ‘Outlines of a New System of Political Economy’ (Philadelphia, 1827), passed a series of resolutions affirming that List, by his arguments, had laid the foundation of a new and sound system of political economy, thereby rendering a signal service to the United States, and requesting him to undertake two literary works, one a scientific exposition of his theory, and the other a more popular treatise for use in the public schools, the Association binding itself to subscribe for fifty copies of each, and to recommend the Legislatures of all the other States to do the same.

The success of the ‘Adler,’ coupled with the fortunate discovery by himself of a new and important coalfield in Pennsylvania, had now placed List in a position of comparative pecuniary ease; but in spite of the ingratitude he had experienced at home from the King and the governing classes, his thoughts still turned to his native land. During 1828 and 1829 he warmly advocated, in a number of essays and articles, the formation of a national system of railways throughout Germany, and his desire to revisit Europe was heightened by his anxiety to promote his new scheme.

President Jackson accordingly, to whom List’s views were familiar, sent him on a mission to Paris with a view to facilitating increased commercial intercourse between France and the United States, and subsequently in 1830 appointed him Consul for the United States at Hamburg. But the old spirit, which six years before had met his proposals of political reform with imprisonment and exile, was not yet dead. In the eyes of the servile official German press, List was still the ‘hero of revolution,’ and the American Minister, Van Buren, had to inform him with deep regret that the Senate of Hamburg refused to ratify his appointment. Forbidden to revisit his native Würtemberg, he again retired to Paris, where the American representative, Rives, introduced him to a number
of influential friends. At this time Belgium had just gained her independence, and a more favourable prospect seemed opened for realising his plans both for a German national system of railways, and for increasing, through Belgium, the commercial intercourse between Germany and the United States. After a brief visit to America, he returned to Europe as United States’ Consul at Leipsic, in which capacity he was able to urge his railway schemes on the Government and people of Saxony, with such success that before long he had the satisfaction of witnessing the formation of powerful companies for the formation of several German lines. Whilst at Leipsic he also projected, and in great part wrote, two works which exercised considerable influence on public opinion in Germany—the ‘Staats-Lexicon,’ published in 1834, and the ‘Railway Journal,’ which appeared in 1835.

In the original survey of the railway from Halle to Cassel, the line had been projected so as to avoid the towns of Naumburg, Weimar, Gotha, Erfurt, and Eisenach. List exposed the impolicy of this arrangement both on strategical and commercial grounds, and by articles in the press and personal remonstrances at some of the smaller German courts succeeded in securing for these towns the benefit of railway communication. For his exertions on this occasion he received the personal thanks of the Duke of Gotha, an honorary doctor’s degree from the University of Jena, and highly gratifying assurances on all hands that he had ‘saved’ the three Duchies of Weimar, Gotha, and Meiningen from a ‘fatal danger.’ These assurances were crowned by the munificent gift of one hundred louis d’or, which List received with the remark: ‘So it appears that each of these “saved” principalities estimates the value of its salvation at exactly 33 1/3 louis.’

In 1837, on his way to Paris, he visited Belgium, where he was received with distinction, and renewed his acquaintance with Dr. Kolb, who had shared his imprisonment in the Asberg. Through Kolb’s influence, List was persuaded to accept a permanent literary engagement in connection with the well-known ‘Allgemeine Zeitung,’ which at once began to devote greater space to questions affecting the material interests of Germany, especially in relation to tariffs and commercial law, and the commercial relations of Germany with Austria. List made ample use of this excellent opportunity
of promulgating his opinions by a series of articles, some of which dealt more particularly with the commercial relations of Germany and Belgium with the United States. He also published his views in the columns of the Paris ‘Constitutionnel’ in 1839.

The agitation for the repeal of the Corn Laws in England, which aroused considerable interest throughout Europe, also gave him an opportunity for expounding his views in favour of a national protective policy and recommending its adoption by Germany.

In pointing out the prejudicial influence which he believed that restrictions on the importation of corn must necessarily exercise on the fully established manufacturing power of England, List argued that a national manufacturing power can only be successfully established and maintained by a free importation of raw materials combined with just protection to native industry against the importation of foreign manufactures.

Among many other results expected from the repeal of the English Corn Laws, it was anticipated that that measure would lead to the abolition of the protective duties imposed by Germany on foreign manufactures. But, according to List, it is only when a nation has reached such a stage of development that she can bear the strain of competition with foreign manufactures without injury in any respect, that she can safely dispense with protection to her own manufactures, and enter on a policy of general free trade. This, in fact, is the central idea of List’s theory, which in its economical aspect he opposed to the cosmopolitical theory of Adam Smith and J. B. Say, and in its political and national aspect to their theory of universal freedom of trade. These views he maintained in many of his essays, more particularly in those ‘On Free Trade and Protection,’ and ‘On the Nature and Value of a National Manufacturing Industry.’ It was not until List’s articles appeared that any public discussion of these questions had taken place in Germany, and to him certainly belongs the credit of having first awakened any general public interest in them.

After leaving Leipsic, Augsburg became the permanent residence of List and his family. Here it was that he completed the first part of his ‘National System of Political Economy,’ published in 1841. A second part was intended
to comprise ‘The Policy of the Future,’ and the third, ‘The Effect of Political Institutions on the Wealth and Power of a Nation.’ A commercial treaty had been concluded between England and Prussia on behalf of the German Zollverein, on March 2, 1841, just about the time when List’s work appeared. To this treaty List was bitterly opposed, and his denunciation of it not only aroused the wrath of the official newspapers, which reviled him as the ‘German O’Connell,’ but brought him again into collision with ‘the authorities.’ In his despatch to Lord Aberdeen of July 13, 1842, the English Ambassador, Lord Westmoreland, complains of List’s proceedings, and describes him as ‘a very able writer in the pay of the German manufacturers.’ As the English Anti-Corn-Law League had paid their lecturers and agitators, and as the English Government had paid Dr. Bowring to agitate in Germany, France, and Switzerland, in favour of English commercial interests, Lord Westmoreland’s assumption that List was also a paid agent was not unnatural, but it was wholly without foundation. Whatever may have been the value of List’s services on this occasion, they were at least gratuitous.

As might have been expected, the ‘National System’ was vigorously attacked immediately on its publication; but such was the demand for it that three editions were called for within the space of a few months, and translations of it were published in French, Hungarian, and some other foreign languages. The principal objection raised against it was that the system it propounded was not one for the benefit of the whole world, but simply for the benefit of Germany. This List never sought to conceal. His avowed object was to free Germany from the overwhelming manufacturing supremacy of England, and on this subject some of his ablest opponents admitted that his was the best practical essay. But List never advocated a policy of prohibition. ‘Any nation,’ he declares, ‘which decides to abandon a policy of absolute freedom of imports, must commence by imposing very moderate duties, and reach the protective system which she has decided to adopt by systematic degrees.’ And again: ‘Any tariff system which completely excludes foreign competition is injurious.’ But ‘the productions of foreign manufacturing industry must only be permitted to supply
a part of the yearly national consumption,’ and ‘the maintenance of the foundation of
the national industry at home must ever be the unvarying object of a nation’s policy.’

In 1844 he published the fourth part of his principal work, ‘The Politics’ (of national economy). In this, after a graphic sketch of the negotiations and economical measures promoted by Canning, Huskisson, Labouchere, and Poulett Thompson, and censuring what he terms the ‘crafty and spiteful commercial policy of England,’ he advocates the establishment in Germany of thoroughly efficient transport facilities by river, canal, and railway, under united management—the creation of a German fleet and the adoption of a universal German flag—the founding of German colonies abroad—national supervision of emigration—the establishment of efficient German foreign consulates—of regular lines of German steamships—and the negotiation of favourable commercial treaties with the United States, Holland, and other countries.

The contemptuous bitterness with which this work was criticised by the English press, led many of List’s countrymen to conclude that he had ‘hit the right nail on the head,’ and thus increased the influence of his writings.

In 1843 he had added to his other numerous literary labours the editorship of the ‘Zollvereinsblatt,’ and continued to write in the ‘Allgemeine Zeitung’ and other news-papers, on economical and commercial questions, particularly on the development of the railway system in Germany. He visited Hungary, where he was honourably welcomed, Kossuth alluding to him in public as ‘the man who had best instructed the nations as to their true national economical interests.’ He received testimonials from the Spinners’ Association of Bohemia, the Congress of Manufacturers of Leipsic, the Iron Manufacturers of the Rhine, and various other public bodies. He enjoyed the further satisfaction, amidst the bitter opposition which he had to encounter, of witnessing the conclusion of the treaty between the Zollverein and Belgium on September 1, 1844, for which he had worked long and earnestly, both in the press and by personal visits to Brussels, and by which, as he observed, ‘the Zollverein was enabled to carry on its foreign trade with as much facility as if the ports of Holland and North Germany were included in it.’ Lastly, at an audience with the King of Würtemberg, he received a tardy acknowledgment of the injustice with which he had formerly been treated in the words: ‘My dear
List, I bear you no ill-will. What a pity it is that twenty-four years ago we had not learnt to know each other as well as we do now!’

By this time his almost ceaseless labours had seriously undermined his health. He suffered from severe and frequent headache, and his bodily weakness increased, but he still continued his work. The repeal of the Corn Laws in England was imminent, and List dreaded lest the measure should enable England still further to encroach on German manufacturing industry. In spite of his failing health, he hastened to London in order that he might form a clear idea on the spot of the state of public opinion, and the probable effect of the impending change on the industrial interests of Germany. He was received with courtesy by many who had strongly opposed his policy, among others by Richard Cobden, who jokingly asked him, ‘Have you actually come over here in order to get yourself converted?’ His visit, however, only left List more strongly convinced than ever of the earnest determination of England to secure for herself the manufacturing supremacy of the entire Continent, and the corresponding necessity for Germany to protect herself against it.

On his return from England his unfavourable symptoms both mental and bodily became more alarming, in spite of the affectionate care of his wife and family, to whom he was tenderly attached. A journey to the Tyrol was undertaken in the hope of restoring his shattered health, but it was already too late. After a few days’ confinement to bed at Kufstein, on November 30, 1846, he left his lodging alone. He did not return. A desponding letter addressed to his friend Dr. Kolb was found in his room; search was made, and his remains were found under some newly fallen snow under circumstances which left no doubt that in a moment of mental aberration he had died by his own hand. A monument in the cemetery at Kufstein marks his last resting-place.

The news of his death was received with sincere and general regret throughout Germany and wherever he was known abroad. A subscription was set on foot to present to his bereaved family a substantial testimonial in recognition of his unselfish and devoted efforts to promote the unity, the power, and the welfare of Germany. King Louis of Bavaria was among the first to subscribe, as was also the Regent of Würtemberg, that native land whose rulers formerly so under-valued
and ill-treated her able and patriotic son. Many of his most earnest political opponents joined in this endeavour to do honour to his memory, and even urged that ‘it was the bounden duty of the German people to erect a statue to the noble patriot,’ an appeal which has since been responded to by the erection of such a statue in his native town of Reutlingen.

The commercial policy suggested by List has been in great measure adopted by his native land. The internal tariffs have long since disappeared; under the Zollverein German manufactures and commerce have enormously increased; vigorous steps are being taken to found German colonies; an Imperial German flag floats over German shipping; a German empire has united the German people. And though to give effect to these great objects required the efforts of later and mightier men, a measure of the credit of them is surely due to the man who was long first and foremost in their advocacy, to which he sacrificed health, wealth, and ultimately his life.

List’s talents were those of an original thinker, an able and laborious writer, and an earnest and untiring political agitator. For the latter career undoubtedly he was far more fitted by nature than for the service of the State. His was the thankless task of the political pioneer—the prophet who is not permitted to witness the full realisation of his own predictions, and whose message of a brighter future for his country is disbelieved and resented by those who should have been foremost to help him to hasten its advent.