Friedrich List’s Real Originality

Friedrich List’s Real Originality

List's method is essentially that of the pioneer. He was the first to make systematic use of historical comparison as a means of demonstra­tion in political economy. Although he can lay no claim to be the founder of the method, still the brilliant use which he made of it justifies us in classifying him as the equal, if not the superior, of those who at the same moment were attempting the creation of the Historical school and the transformation of history into the essential organon of economic research.

List also introduced new and useful points of view into economics. The principle of free exchange as formulated by Smith, and especially by Ricardo and Say, was evidently too absolute and rested upon a demonstration that was too abstract for the ordinary politician. If, as List justly remarks, the practice of commercial nations has so long remained contrary to a doctrine that all economists regard as ad­mirable, it is not without some just cause. As a matter of fact, can the statesman ever place himself outside of the point of view of national interest of which he is the custodian? It is not enough for him to know that the interchange of products will in some degree increase wealth. He must be certain that this increased wealth will benefit his own nation. He must be equally well assured that Free Trade will not result in too sudden a displacement of population or industry, the social and political results of which might be very harmful. In other words, political economy must be subordinated to politics in general, and to-day there is no single economist who does not recognize the impossibility of separating them in practice. There is none that does not perceive the influence of political power on economic prosperity, and that consequently does not recognize the necessity for the different complexion which the peculiar circumstances of each country imposes upon the practical application of the principle of commercial liberty.

This is not all. List, by abandoning the favourite habit of eighteenth-century writers who contrasted man and society, and by giving us a picture of man as he really is, as a member of a nation, has introduced a fruitful conception into economics of which we have not yet seen the full results. He rightly treats of nations not merely as moral and political associations created by history, but also as economic associa­tions. Just as a nation is politically strengthened by the moral cohesion of its citizens, so its economic cohesion increases the productive energy of each individual and enhances the prosperity of the whole nation.
And Governments, while charged with maintaining the political unity of a country, ought also to retain its economic unity by sub­ordinating all local interests to the general interest, by preserving in­tact the liberty of internal trade, by organizing railways and canals on a national basis, by keeping watch over the central bank, and by aiming at a uniform code of commercial legislation. This was the programme outlined by List in his paper the Zollvereinsblatt.

This belief in the power which a unified economic organization can bring to a nation is by no means too common among individualists, who at bottom are often particularists. But List possessed it in the highest degree. He devoted many years of his life to advocating the establishment of a German railway system, and it was he who traced the principal highways which have since been established in Germany. Protection, in his opinion, was one means of increasing the economic cohesion of Germany, because of the solidarity of interests which would result from the presence of a powerful industry.

With similar enthusiasm he devoted himself to two apparently contradictory tasks—the suppression of inter-State duties and the establishment of protective rights. To him there was no element of contradiction in this, any more than there would be for us in a national system of political economy with no protective rights.

He also extended the political horizon of the Classical school and substituted a dynamic for their purely static conception of national development. His thorough examination of the conditions of economic progress is a contribution to the study of international trade exactly analogous to the contribution made by Sismondi to the study of national welfare. But, unlike Sismondi, who wished to retard this progress, he is anxious to stimulate it, and so he charges the State with the duty of safeguarding the future prosperity of the country and with furthering its production. The actual procedure, involving as it did the establishment of protective rights, may appear to us to be unfor­tunate. But the idea which inspires it—the recognition that in the interests of the future national power has a definitely economic role— is essentially sound. To-day it is a mere commonplace. But when List enunciated it it was quite a novel idea.

In attempting to define List's real significance one feels that he failed in the achievement of his chief aim. He has not succeeded in breaking down the abstract theory of international trade. But if his work has retained any lasting value—apart from the literary talent that characterizes it—it is because he tries, by adopting for the first time since the great eighteenth-century economists a purely national standpoint, to define, for a given country at a given moment, a positive objective for its economic policy. It is not a general theory of foreign trade that List endeavours to formulate, but a precise view, after the

Manner of statesman of what is practically desirable for his country at a definite period. Thereby he also sets the limits within which hisideas can be applied, since the end to be sought will naturally vary from state to state and from period to period. None the less he is the forerunner of all who in other times and in other lands seek to determine and improve the future a task that science alone cannot accomplish but which cannot neglect. Nor must it be forgotten that by drawing up for Germany a programme of economic development that was to make her a great manufacturing and maritime State and that needed for its full development the adhesion of neighbouring countries like Holland and Denmark, List may be considered one of the precursors of that economic imperialism which led William II's Empire into the First World War and, later, transformed into the doctrine of living space,' inspired National Socialism. The part played by List in this respect has been noted in an interesting book by F. A. Hayek.