Friedrich List and The National System Of Political Economy

Political Economy Reading List

By the middle of the nineteenth century the doctrine of Adam Smith had conquered the whole of Europe. Former theories were forgotten and no rival had appeared to challenge its supremacy. But during the course of its triumphant march it had undergone many changes and had been subjected to much criticism. Even disciples like Say and Malthus, and Ricardo especially, had contributed many important additions and effected much improvement. Through the influence of Sismondi and the socialists new points of view had been gained, in­volving a departure from the narrow outlook of the master in the direction of newer and broader horizons.

Of the principles of the Classical school the Free Trade theory was the only one which still remained intact. This, however, was the most important of all. Here the triumph had been complete. Freedom of in­ternational trade was accepted as a sacred doctrine by the economists of every country. In Germany as in England, in France as in Russia^ there was complete unanimity among scientific authorities. The socialists at first neglected this topic, and when they did mention it it was to express their complete approval of the orthodox view. A few isolated authors might have hinted at reservations or objections, but they never caught the public ear. It is true that Parliaments and Governments in many countries hesitated to put these new ideas into practice. But even here, despite the strength of the opposing forces, one can see the growing influence of Smith's doctrine. The liberal tariff of Prussia in 1818, the reforms of Huskisson in England (1824-27), were expressly conceived by their authors as partial applications of those principles.

However, there arose in Germany a new doctrine for which the peculiar economic and political conditions of that country at the beginning of the nineteenth century afforded a favourable environment. Although the development was slow it was none the less startling. Fredrich List, in his work entitled Das Nationale System der Politischen Okonomie, promulgated the theory of the new Protection. "The history of my book," he remarks in his preface, "is the history of half my life." He might have added that it was also the history of Germany from 1800 to 1840. It was no mere coincidence that led to the creation of an economic system based exclusively upon the conception of nationa­lity in that country, where the dominant political note throughout the nineteenth century was the realization of national unity. List's work was a product of circumstances, and these circumstances we must understand if we are to judge of the author and his work.