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
cosmopolitical and
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]
Translator/Editor
J. Shield Nicholson, ed. Sampson S. Lloyd, trans.
First Pub. Date
1841
Publisher
London: Longmans, Green, and Co.
Pub. Date
1909
Comments
First published in German. First translated 1885.
Copyright
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
- Memoir
- 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
APPENDIX C.
THAT List should reject the idea of protective duties on corn and agricultural produce as being in any degree beneficial to a country like Germany, is easy to understand. Her agriculture at the time when he wrote (1841) not only amply provided for the wants of her population, but yielded then, and had yielded for a long previous period, a large and steady surplus for export to other countries. No other European nation could profitably export such produce to her, while the high rates of freight then prevalent and the non-existence of ocean steam transport rendered such export to her from more distant countries impossible.
Whether, as a mere question of policy, the free importation of agricultural produce be approved or not, his contention, thus laid down by him as a sort of universal axiom, but apparently based on the circumstances of his own country and time, can scarcely be deemed consistent with some other arguments on which his general theory of national economy is based. Nor can it be deemed (of itself) conclusive as a solution of the question which is presented to Great Britain at the present time, viz. whether, under circumstances in which the necessary result of a policy of unrestricted importation of agricultural produce is to throw a large portion of the land of the nation out of cultivation, to deprive those who cultivated it of their accustomed employment, and to render the nation dependent for the major part of its food on foreign supplies, the nation’s best interests are most effectually promoted by such a policy, or by one of such moderate protection of native agriculture as may retain in cultivation the national land, and greatly lessen the nation’s dependence for its food on foreign importation. His contention leads rather to the inference that what may be good for one nation may be undesirable for another which exists under very different conditions, and still more to show that what may be beneficial to a people at one stage of their national history may be injurious at another time—an opinion which the present German Government appears to sanction by its recent reversion to a protectionist policy as respects the import of agricultural produce.
A policy of moderate protection appears to be advocated by those who approve it as a sort of mutual assurance to the industrious producers of the nation against the competition in its own markets of producers who do not belong to the nation. It is further advocated as an impost levied on the foreign producing competitor in the shape of a contribution by him to the revenue of the nation which imposes it, and as the condition on which he is permitted to compete in the markets of the latter nation with the native producers, who are subjected to much taxation to which the foreigner does not otherwise contribute. It is
noteworthy that Adam Smith himself expresses approval of protective duties for the latter purpose in case the foreign imported products are believed to be subjected to less taxation than similar home products. (‘Wealth of Nations,’ Book IV. chapter ii.)
If those views can be deemed sound in their application to manufacturing industry, our author does not appear to have clearly stated the reasons why that industry which, as he admits, is the most important of any, and which employs more capital and population than any other, should not (if its successful prosecution requires it) receive moderate protection as well as manufacturing industry.
Whether, however, the principle of protective duties (either generally or limited in their application to manufacturing industry alone) be admitted or not, two inferences seem to be fairly deducible from the teaching of Adam Smith and not to be disproved by that of List: firstly, that if the home agriculturist is required (in the interest of the nation) to be exposed to free competition by the foreigner in the home market, he is entitled to be relieved from all such taxation, whether local or imperial, as at all specially or disproportionately oppresses him; secondly, that differential duties are justifiable on imports from those nations who impose restrictions on our export to them as compared with imports from those nations who impose no such restrictions.—TRANSLATOR.