Friedrich list



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CONTENTS

Editor's Introduction 1

List's Introduction 17

1. Cosmopolitan Economics 27

2. National Economics 29

3. Theory of Productive Powers 34

4. Theory of Value 36

5. The Differences between Countries and their

National Economies 41

6. The Dominant Nation 46

7. The Common Interest of all Manufacturing States

in Free Trade 49

8. The Opposition of Countries to the Dominant Nation

in Industry, Commerce, and Sea Power 51

9. The Productive Powers of Agriculture in the

First Stage of Economic Development 52

10. The Productive Powers of-Agriculture in the

Second Stage of Economic Development 54

11. The Productive Powers of Agriculture in the

Third Stage of Economic Development 60

12. The Productive Powers of Industry 66

13. The Productive Powers of Industry (continued) 70

14. Does the Development of Industry withdraw Capital

from Agriculture? 76

15. Does the Protection of Industry by a Tariff
give Manufacturers a Monopoly Prejudicial to

the Consumers of the Goods that they make? 80

16. Are the Interests of Consumers sacrificed if the

Home Market is dominated by native Manufacturers? 82

17. Is it necessary to protect Agriculture and, if so,

in what Circumstances? 85

18. Agriculture and Industry in the Fourth Period

of Economic Development 91

19. The Productive Powers of Commerce 94

20. How do the Interests of Commerce differ from

the Interests of Individual Merchants? 99

21. Protection by Means of a Tariff 105

22. Tariffs: Prohibitions and Duties on Imports

and Exports 109

23. Tariffs: The Policy of Protection 114

24. Transition from the System of Prohibitions to

the Policy of Protection 118

25. Transition from the Policy of Protection to

the Policy of as much Free Trade as possible 122

26. How best to introduce and to foster Free Trade 124

27. History of England's Economic Policy 128

28. History of France's Economic Policy 141

29. History of Germany's Economic Policy 152

30. Economic Policy of Spain, Portugal and Italy 162

History of the Economic Policy of the

United States of America 170

31. History of Russia's Economic Policy 177

32. The Spirit of different Economic Doctrines in

Relation to Tariff Laws 178

33. The Natural System of Political Economy 189

34. The Question posed by the Academy 191 Appendix. List's Note to Chapter 4 193 Index 197

EDITOR'S INTRODUCTION



Friedrich List, a leading German economist and journalist in the first half of the nineteenth century, was one of the earliest and severest critics of the classical school of economists. He denounced Adam Smith and his disciples as the "cosmopolitan school" and advocated what he called first a "natural" and then a "national" doctrine of economics. He held that universal free trade was an ideal that might be achieved in the far distant future but, for the time being, each nation should foster the development of its own manu­factures by prohibitions, import duties, subsidies, and navigation laws so as to restrict the flow of imports from more advanced industrial countries. Only by such means could countries like France, Germany, Russia, and the United States ever hope to reach a standard of industrial efficiency which would enable them to compete on equal terms with Britain which was at that time by far the most advanced manufacturing country in the world.

List was no mere armchair critic of the free traders. He had taken an active part in fiscal controversies in America and in Germany. In the United States, where he lived from 1825 to 1832 (except for an interval of a year),1 List had become involved in the struggle between protectionists and free traders that preceded the passing of a new tariff law in 1828. He had vigorously supported the propa­ganda campaign in favour of higher import duties mounted by the Philadelphia Society for the Promotion of Manufactures and the Mechanic Arts. In a series of letters to Charles Ingersoll, published in the National Gazette (Philadelphia) in 1827, List had argued in favour of greater protection for the American iron and textile industries. In the same year the letters appeared in two pamphlets entitled Outlines of American Political Economy and Appendix to the Outlines of American Political Economy.2

In Germany List had taken a leading part in the agitation in favour of protection. In 1819, as a young man, he had drawn up a

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petition on behalf of a Union of German Merchants for submission to the Federal Diet in which he had urged the German states to set up a customs union with a tariff "based upon the principle of retaliation against foreign countries". For eighteen months he had been an indefatigable supporter of the Union of Merchants and had worked hard to promote its objects.3 Later, in the 1840s, in the early years of the German customs union (Zollverein) List argued that German manufacturers were at the mercy of competition from highly efficient English rivals and urgently needed greater tariff protection in the home market. In his view a great mistake had been made in 1834 when the states joining the Zollverein had agreed to adopt the Prussian tariff in 1818 which at that time was the most liberal in Europe.

List's book on The National System of Political Economy: Inter­national Commerce, Commercial Policy, and the German Customs Union, published in 1841,4 came to be accepted as a standard state­ment of the protectionist case. Long after List's death advocates of protection found in List's writings the arguments they were seeking to justify their demands for higher tariffs. In 1889, three years before his appointment as Russia's Minister of Finance, Count Witte wrote that List's book was studied in every German university and lay on Bismarck's desk.5 In 1909 F.W. Hirst declared that "it is not too much to say that most of the ideas which underlie modern tariffs, both in the old world and the new, were originated and formulated by List".6

List's disciples, however, treated the doctrines of their master in a rather cavalier fashion. They paid tribute to the profundity of List's learning and the cogency of his arguments but instead of following his advice in its entirety they accepted those aspects of his theories that suited their immediate purpose and ignored those that did not. For example List had demanded protection only for manufactured goods and had recommended that no import duties should be levied upon agricultural products or raw materials. In practice, however, whenever a country has adopted the policy of protection the land­owners and farmers have declared that if manufacturers enjoy a privileged position in the home market they too have a right to receive similar privileges. And although taxes on food normally result in higher prices for the housewife, few governments have been able to resist demands for protection from the agricultural interest. Moreover very few protectionists were prepared to face

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the possibility - clearly envisaged by List - that manufacturers should at some time in the future be prepared to dispense with the protection afforded by import duties or subsidies. List advocated protection mainly for new "infant" industries during the first years of their development to give them an opportunity to become as efficient as similar industries already established in more advanced countries. He recognised that, at any rate for a time, this would involve some sacrifice on the part of consumers who would have to pay high prices for goods of comparatively poor quality instead of buying better products from abroad more cheaply. But however long an "infant" industry enjoys protection it is rare indeed for manufacturers to admit that their industry has grown up and no longer requires protection. Those who impose tariffs on "infant" industries may intend that the duties should be levied only for a time and should be lowered or even abolished when the industry has become well established. In practice "infant" industries never seem to grow up and the duties levied to protect them become a per­manent feature of the tariff. This was by no means what List had intended. Again List believed in the possibility of universal free trade in the future. His disciples rarely shared his optimism.

In addition to the Outlines of American Political Economy and The National System of Political Economy List had a third book to his credit but this was not published until ninety years after it had been written.7 This was The Natural System of Political Economy which was written in Paris in the autumn of 1837. When List arrived in France at the end of October he apparently had no intention of resuming his studies on economics. During the previous four years he had tried to foster the progress of railway construction in Germany and he had been particularly active in promoting the line between Leipzig and Dresden. Disappointed at his failure to secure either a directorship in a railway company or a post in the adminis­tration of a state railway, he had left Germany to settle in Paris, where he hoped to arouse interest in his plans for the construction of railways in France.

Soon after his arrival in Paris, where he found lodgings in the Rue des Martyrs, List learned that the Academy of Moral and Political Sciences8 was offering a prize for a treatise answering the question: "If a country proposes to introduce free trade or to modify its tariff, what factors should it take into account so as to reconcile in the fairest manner the interests of producers with those of consumers?"

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Although the closing date for entries was December 31, 1837 List decided to compete for the prize and the manuscript was completed in great haste. On November 22 List wrote to his wife that he was working for fifteen hours a day to finish the treatise in time.9 When he submitted his manuscript he was told that the final date for submitting it had been postponed for a week, so he was able to make some last minute revisions. On the day on which the final correc­tions were made List added a long note to Chapter 4 in which he stated that the manuscript had taken forty days to complete and in a letter to his wife he declared that he had spent six or seven weeks on the treatise.10 Later he pretended that the work had been done more quickly than this. In 1838 he wrote that his manuscript had been finished in three weeks'' and in 1841 he asserted that he "had only a fortnight... to meet the Academy's peremptory deadline". List was also mistaken in 1841 when he wrote that "as I did not have my earlier writings by me, I had to rely entirely on my memory".12 In fact List had consulted over thirty books.'3 An examination of the manuscript shows that these books included standard works of leading writers on trade and industry-King, Anderson, and Adam Smith on England; Chaptal, Dupin, Say, and Ferrier on France; Uztaris and Ulloa on Spain; Alexander Hamilton and Mathew Carey on the United States; and Storch on Russia.

In writing his thesis List was influenced by the advice given to competitors on behalf of the Academy by the well known economist Charles Dupin. The "Programme" drawn up by Dupin raised a number of questions which competitors were expected to answer. Was it right that cheap foreign imports should be allowed to ruin a branch of industry at home in the name of Free Trade? Should industries that had developed during a war (to produce goods in short supply) be allowed to sink into oblivion when hostilities ceased? Would it be in the national interest to protect an industry which could not compete with a foreign rival because that rival had gained an advantage by using a newly invented efficient machine? And should the state foster the growth of a new industry by a protective tariff and by encouraging skilled foreign mechanics to settle in France? In his essay List attempted to answer these -and other - questions posed by Dupin.

The Academy decided that none of the twenty seven manuscripts submitted was worthy of the prize. It criticised the candidates for failing to answer the question that had been set. They had been

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content to advocate either a policy of complete freedom of trade or one of protection. Three manuscripts, however, were commended as "ouvrages remarquables” and one of them bore the motto "Et la patrie et l'humanite". This was List's treatise. List was bitterly disappointed at not receiving the prize. He needed the money and he would have welcomed the prestige attached to an award from the leading learned institute in Europe. And the publication of a prize essay would have established List's reputation as an economist. List was angry that the adjudicators had failed to appreciate the merits of The Natural System of Political Economy. In a letter to Cotta he complained that the Academy had not merely failed to award him the prize but had added insult to injury by announcing a new competition with the German customs union as its subject. List declared that he had already dealt fully with the significance of the Zollverein in his manuscript and he quoted with approval a remark made to him by "an influential personage" in Paris that the Academy was "a nest of robbers".14

Having failed to win the prize, List dismissed The Natural System of Political Economy as a hastily written work of no great impor­tance and turned his attention to The National System of Political Economy which appeared in 1841. Although the manuscript sub­mitted in the competition gathered dust in the archives of the French Academy until its publication in 1927 it is much more than a mere first draft of The National System of Political Economy. It is a book in its own right which marks an important stage in the progress of List's economic thinking. Since List had to meet a deadline he had to be brief and he had to put forward his arguments in a concise form. Although the treatise was only about half the length of The National System of Political Economy it contains virtually all the main points to be found in the later work. As the editors of The Natural System of Political Economy observe:


List's more important and fundamental teachings are fully developed in this book. Above all the theory of the stages of economic growth finds full classic expression as a central theme in List's thinking - as it does again in The National System of Political Economy. In his treatise List frequently gives clear, systematic, and brief explanations in numbered paragraphs of his most important doctrines, which are not so clearly stated in any / of his other works.15

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The importance of The Natural System of Political Economy lies not so much in List's advocacy of the policy of protection as in the new - or relatively new - doctrines that he put forward. While the classical economists had examined problems concerning popula­tion, exchange-value, money, rent, and the allocation of scarce resources, List discussed stages of economic growth, "productive power," and the industrialisation of backward regions. Those who have regarded List simply as a leading protectionist have done him less than justice and have failed to appreciate the real significance of his writings. There was no lack of champions of the policy of protection in the early nineteenth century. Chaptal, Dupin, and Ferrier in France, and Alexander Hamilton and Mathew Carey in the United States had advocated the imposition of prohibitions and of import duties to safeguard native industries, while in England there was ample support for the Corn Laws, the navigation code, and imperial preference. But List offered his readers much more than a repetition of the familiar arguments put forward by these writers. He regarded prohibitions, import duties, and subsidies as simply one method - indeed the most important method - by which a government could foster a nation's economic expansion. But in his view a tariff was only a means to an end. And the object of the policy of protection, from List's point of view, was the establishment of an urban-industrial society. This was the promised land to which List believed that he could lead those who accepted his doctrines and followed the policies that he recommended.

List declared that in a purely agrarian and rural society "the whole range of intellectual and moral powers is virtually non­existent" and sheer physical strength was all that could be expected from those who worked on the land. On the other hand an indus-( • trialised urban society "calls forth and promotes the growth of intellectual and moral forces of every kind". List considered that "industry is the mother and father of science, literature, the arts, enlightenment, freedom, useful institutions, and national power and independence".16 He regarded a manufacturing town as a mecca for enterprising entrepreneurs and skilled workers who could fulfil their ambitions in a way that would be impossible in the countryside. He saw in the growth of factory towns the key to educational and cultural advance. Only an urban and industrial society could afford to provide its citizens with facilities for progress in the arts and sciences. Only such a civilisation could build and

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maintain schools, colleges, theatres, opera houses, concert halls, museums, and art galleries. But what List failed to mention was that the factory workers of the 1830s had to work long hours for low wages. Many of them lived in wretched slums, survived on a very poor diet, and suffered from numerous industrial diseases. They had no security of employment and ran a serious risk of losing their jobs whenever there was a slump in trade. For them there was no hope of the good life in factory towns that List had promised them. The idyllic existence of the urban workers was a figment of List's lively imagination and bore no resemblance to the harsh reality of life in a factory town at that time.

List next explained how a backward country could foster the growth of its economy so that it could eventually enjoy the benefits of an urban industrial society. He believed that this could be done by fostering a country's "productive powers". These were rather different from the "productive forces" discussed by Charles Dupin in a statistical work on the French economy published in 1827." Dupin had explained that "by productive and commercial forces in France I mean the combined forces exercised by men, animals and nature and applied to work in agriculture, workshops, and commercial enterprises". List's doctrine of "productive powers" was much wider than this for it included political, administrative, and social institutions, natural and human resources, industrial establishments, and public works.

List held that before a country could foster the growth of its "productive powers" it should have made some progress towards the establishment of suitable political and social institutions. The abolition of slavery and serfdom, the ending of despotism and autocracy, the establishment of the rule of law with security for persons and property were essential prerequisites for economic growth. A measure of self-government at both local and national level was also highly desirable. The natural resources of a country, particularly its land and minerals, should be used to the best advantage. If coal, peat, timber, or iron ore were available they could become the basis of important industries. The skills of the people - especially the young people - should be fostered by provid­ing a sound elementary education for all children and adequate training facilities at universities and technical colleges for the more gifted. A well educated community, with a sufficient number of competent managers and skilled workers, could exploit a country's

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natural resources far more efficiently than a backward ignorant people. List included professional men, civil servants, and local government officials among those who helped to increase a nation's "productive powers". While this section of the community did not grow foodstuffs or make manufactured goods it did assist indirectly in their production. The lawyers and policemen who maintained law and order, the armed forces which defended the country, the doctors who maintained a nation's health, the teachers who educated the rising generation, and the clergy who maintained the moral standards of their parishioners were all just as useful members of society as miners or factory workers.

The building of new factories and the opening up of new mines would not only stimulate industrial output at once but would be an asset to future generations for years to come. List considered the provision, whether by public authorities or private companies, of improved transport facilities to be a vitally important contribu­tion to a country's "productive powers". The construction of an adequate network of roads, railways, and canals and the building of bridges and harbours were essential to promote the flow of raw materials to factories and of manufactured goods to consumers at home and abroad. List wrote with some authority on transport since he had been closely involved with the construction of the Tamaqua—Port Clinton railway in Pennsylvania and the Leipzig— Dresden railway in Saxony. The growth of the mercantile marine and the shipbuilding and fishing industries would promote the expansion of foreign trade. List also suggested other means of stimulating a nation's "productive powers" such as organising industrial exhibitions, rewarding inventors, encouraging the im­migration of skilled workers from abroad, and assisting manu­facturers to visit foreign factories.

List considered that none of these methods of promoting the development of a nation's "productive powers" was as effective as the imposition of prohibitions and import duties so as to protect manufacturers from competition in the home market from more advanced industrial countries. He advocated protection for new industries that could not otherwise survive competition from more efficient foreign rivals. On the other hand he considered that no protection was necessary for agriculture. The degree of protection for industry that List proposed would vary from country to country and from commodity to commodity. Some manufacturers might

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need to be safeguarded by prohibiting all imports of foreign goods, while others would need only the protection of moderate import duties. List believed that duties should be changed quickly if necessary. For example the sudden arrival of large quantities of a particular product should be countered at once by raising the import duty that they had to pay. List was well aware of the drawbacks of tariffs. Prohibitions and high import duties raised the prices that consumers had to pay, rendered householders liable to have their premises searched for contraband, and encouraged smuggling. But circumstances might arise which would make it imperative for a government to impose a general tariff. For example, large quantities of British manufactured goods had been sent to the Continent immediately after the collapse of the Continental System so that industries which had developed during the Napoleonic wars were threatened with extinction. Only the erection of tariff barriers enabled them to survive.

The various ways in which List suggested that a country's "productive powers" might be fostered involved sacrifices on the part of the public. The imposition of prohibitions or import duties would mean that, at any rate for a time, people would have to buy expensive goods of poor quality instead of cheap foreign goods of high quality. People would have to pay higher taxes to finance the construction of roads and canals, the establishment of technical colleges, and the holding of industrial exhibitions. List considered that it was not unreasonable to expect people to make financial sacrifices of this kind to promote the future economic prosperity of the country. As private citizens they made sacrifices for their children and grandchildren. A landowner who gave his son a good education and let him travel abroad to improve his knowledge of agricultural practices was spending money to ensure that his estate would be well run when he retired. A farmer who planted an orchard might derive little benefit from it himself but his descen­dants would be grateful to him for his foresight. List believed that what prudent private citizens did for later generations should also be done by the state and he urged that immediate gains should be sacrificed to ensure the economic growth of the nation in the future.

List also put forward a theory of stages of economic growth. The criterion which he used to identify different phases of growth was the extent to which the economy of a village, a region, or a nation was linked with other economies. List's first stage of

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economic development was one of isolation and self-sufficiency when peasants and craftsmen produced the food and manufactured goods that they required and when a village had very little con­tact with neighbouring communites. The second stage came when villages had made contact with the nearest town. This association with an urban economy brought new ideas and techniques to peasants and artisans. There was progress in farming and craft work and there was an exchange of commodities between urban and rural areas.

List's third phase was one in which - with improved communica­tions - urban and rural workshops and factories were able to supply a whole country with manufactured goods. Just as an isolated village had been virtually self-sufficient in the first phase of economic development, so now in the third phase an entire country was virtually self-sufficient. In the fourth phase a nation had made contact with neighbouring states and imported some of the raw materials and foodstuffs which it required and it exported some of its manufactured goods in return. All this may appear somewhat elementary in comparison with more sophisticated modern theories of economic expansion but List deserves credit for having suggested the possibility of identifying phases of economic growth.

The merit of List's The Natural System of Political Economy lay in its new approach to economics, the analysis of national "productive powers," and the theory of stages of economic growth. It dealt with problems that continued to be relevant long after List's death. In the second half of the twentieth century those interested in stimulating the economic expansion of states in the Third World could still find inspiration in List's doctrines. List's true claim to fame was as "a prophet of the ambitions of all underdeveloped countries"18 rather than as a champion of the policy of protection.

But The Natural System of Political Economy was not without its faults. List persistently overrated the extent to which the govern­ment of a country is capable of stimulating economic expansion. Time and time again he attributed the prosperity of a nation at a particular time to the wise actions of the government. The growth of industry and trade is a highly complex process involving the inter­action of many factors. Government policy is one of these factors and it is not necessarily the most important. List's interpretation of /t/if historical events was not always accurate. He repeatedly argued that the Continental System had brought prosperity to Napoleon's

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dominions and that the opening of the ports after his defeat was followed by a period of depression because the markets of the Continent were flooded by cheap British manufactured goods. It is a travesty of the truth to suggest that the economies of France and her satellites flourished in Napoleon's day. Some regions – such as Saxony and the Roer Department - and some branches of manu­facture derived benefits from the Emperor's economic policy. Others did not. The Grand Duchy of Berg, which included the Ruhr, "suffered nothing but injury from the Continental System".19 And Heckscher considers that between 1811 and 1813 there was "a serious deterioration of the economic conditions prevailing every­ where on the Napoleonic mainland".20 Again, List stated that interest rates were always high in the early stages of industrialisa­tion. This was true of France at the time when List was writing but it had not been true of England in the second half of the eighteenth century.21

List was prone to make confident assertions without attempting to prove that they were correct. An example of this was his extra­ordinary statement that no suitable work was available for women, children, and old people on the land. Another example was his statements concerning the relationship between a country's internal and external commerce which are of no great value in the absence -at that time - of statistics of internal trade. Another weakness of List's writing was his habit of regarding "industrialists" and "agriculturalists" as compact social groups each pursuing its own economic interests. But manufacturers do not all think alike and those who make a living on the land do not all think alike. Different industrialists (ironmasters, textile manufacturers) and different "agriculturalists" (sheep farmers, dairy farmers, arable farmers, stockbreeders) may have conflicting interests and may support different fiscal policies at various times. And within a particular industry there may be groups which have different interests such as spinners, weavers, bleachers, and dyers in the textile industries.

On a number of matters on which his readers might expect some precise information List is somewhat vague. A protective tariff was the very cornerstone of his doctrine of the growth of "productive powers" which would promote industrialisation. Yet List refers only to "reasonable" and "fair" tariffs without explaining what rates of import duty are "reasonable" and "fair". The same criticism may be made concerning his reference to a "fair" rate of

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interests without any explanation being given as to what a "fair"

rate might be.

A comment should also be made upon List's violent attack upon merchants, which is a little surprising as at one time he played a leading part in organising a Union of Merchants in Germany. List denounced merchants for what he regarded as their anti-social activities. He accused them of selling anything to anybody - so long as they had bought in the cheapest market and were selling in the dearest market - without being concerned about the way in which their transactions might affect the interests of the country. He denounced trafficking in arms and drugs. He seemed to forget that there were individuals engaged in many other occupations who were also from time to time guilty of unsocial or unpatriotic acts. There seems to be no reason to signal out the black sheep among the merchants for special condemnation.

Finally, List's criticism of Adam Smith and his followers deserves to be mentioned. List labelled Adam Smith's doctrines "cosmo­politan economics" and declared that they were based upon the principle of universal peace. List considered that "cosmopolitan economics" taught that "conflicts between nations - whether settled by force of arms or by other means - must be replaced by an alliance of all peoples, governed by laws of universal application. A world republic, as envisaged by J. B. Say, is necessary to secure the fulfilment of the dreams of the free traders" ,22 List was wrong in supposing that Adam Smith chose to ignore the fact that the world was divided into many nations each of which pursued its own economic and political interests. Adam Smith had made it clear that the first duty of a sovereign was to protect a country from invasion by another state and this duty could be performed only by maintain-^ ing a military force. He declared that the art of war was the noblest of the"arts. He approved of bounties on the export of sailcloth and gunpowder to encourage the production of commodities which would be of vital importance to a country in time of war. And in an oft-quoted passage he declared that since defence " is of much more importance than opulence, the act of navigation is, perhaps, the wisest of all the commercial regulations of England".23 It may be added that List "made the mistake so common with popular writers, but inexcusable in the author of a systematic treatise, of attributing to Adam Smith the extravagant dogmas of his exponents".24

Some of the weaknesses of The Natural System of Political

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Economy may be ascribed to List's background and previous experience. Although for a short time he had oncebeen a professor at the University of Tubingen, he was no academic. He was a politician, a journalist, and a businessman. His treatise for the French Academy was his first attempt to give a full account of his economic doctrines. And it did not turn out to be a balanced scholarly monograph. Each chapter might have been an article written for a newspaper. It was List the journalist, rather than List the economist who was responsible for the sweeping generali­sations, the exaggerations, and the personal attacks upon his opponents.
NOTES
1. List lived in the United States from June 1825 to July 1832. He was in Europe between November 1830 and October 1831.

2. Reprinted in Margaret E. Hirst, Life of Friedrich List (1909), pp. 147-272 and F. List, Werke, Vol. II (ed. W. Notz, 1931 and 1971), pp. 97-155. List's letter of November 27,1827 was not included either in the Outlines of American Political Economy (1827) or in Hirst's biography of List. It is printed in F. List, Werke, Vol. II, pp. 155-6.

3. Hans-Peter Olshausen, Friedrich List und der Deutsche Handels- und Gewerbsverein (1935).

4. There are two English translations. The first (by G.A. Matile) appeared in Philadelphia in 1856, the second (by Sampson S. Lloyd) in London in 1885 (reprinted in 1904 and in 1966). A French translation by Henri Richelot was published in 1857 and a Russian translation in 1891.

5. Theodore H. Von Laue, Sergei Witte and the Industrialisation pf Russia (1963). p-62.

6. F.W. Hirst's introduction to Margaret E. Hirst, Life of Friedrich List (1909).

7. On March 15, 1913 Eugene d'Eichthal gave a lecture to the Academy of Moral and Political Sciences on the manuscript of The Natural System of Political Economy entitled "L'Economiste Frederic List. Candidat a un des concours de l'Acadfemie des sciences morales et politiques en 1837". List's manuscript was published in 1927 (reprinted 1971) as the fourth volume of his collected works. A German translation appeared in the same volume.

8. The French Academy of Moral and Political Sciences was established in 1795 as the second section of the Institute of Sciences and Arts. The section was abolished in 1802 but was revived in 1832.

9. F. List to Caroline List, November 22, 1837 in F. List, Werke, Vol. IV, p. 46. In this letter List stated that he was working on two prize essays. The second was an answer to the question: "How do the mechanical power and the means of transport now in use influence the life of the community, the state of society, the political power, and the economic development of the old world and the new?". No copy of this thesis has been found in the archives of the French Institute. Carl

13
Brinkmann doubts if it was ever written: see Carl Brinkmann, Friedrich List (1949), p. 233, note 11.

10. F. List to Caroline List, January 1, 1838 and postscript of January 13, 1838 in F. List, Werke, Vol. IV, pp. 47-8.

11. F. List to J.G. Cotta, September 6, 1838 in F. List, Werke, Vol. IV, p. 48.

12. F. List, Das Nationale System der Politischen Okonomie in F. List, Werke, Vol. VI, p. 19.

13. F. List to Caroline List, January 1, 1838 and postscript of January 13, 1838 in F. List, Werke, Vol. IV, pp. 47-8.

14. F. List to J.G. Cotta, September 6, 1838 in the List Archives (Reutlingen): printed in F. List, Werke, Vol. IV, p.20.

15. Edgar Salin and Artur Sommer in F. List, Werke, Vol. IV, p. 20.

16. See chapter 12 below.

17. Charles Dupin,Situation Progressive des Forces de la Francedepuis 1827 (Paris, 1~827). In a speech in Philadelphia on November 3,1827 List had referred to this book as an "excellent production", written by a "celeb~rated scholar".

18. T.H. Von Laue, Sergei Witte and the Industrialisation of Russia (1963), p. 57.

19. E.F. Heckscher, The Continental System (1922), p. 314.

20. E.F. Heckscher, The Continental System (1922), p. 322. For Germany's foreign trade between 1789 and 1834 see MartinK\xtz,DeutschlandsAussenhandelvon der franzosischen Revolution bis zur Grundung des Zollvereins (1974).

21. T. S. Ashton,/tn Economic History of England. The Eighteenth Century (1955) and L.S. Pressnell, "The Rate of Interest in the Eighteenth Century" in L.S. Pressnell (ed), Studies in the Industrial Revolution (presented to T.S. Ashton) (1960), pp. 178-214.

22. See below, chapter 1.

23. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776 (Everyman edition), Vol. I, p. 408.

24 J. Shield Nicholson's introduction of 1904 to F. List, The National System of Political Economy, 1841 (new edition, 1966), p. 448.

FRIEDRICH LIST
THE NATURAL SYSTEM
OF POLITICAL ECONOMY

1837


Etlapatrie, etl'humanite
Answer to the Question posed by the French Academy of Moral and Economic Sciences.

If a country proposes to introduce free trade or to modify its tariff, what factors should it take into account so as to reconcile in the fairest manner the interests of producers with those of consumers?


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