LIST, FRIEDRICH (1789–1846)

LIST, FRIEDRICH (1789–1846)

Born in Reutlingen, the son of an artisan, the economist Friedrich List was appointed to a chair in government at Tübingen in 1817 and was elected to the Wurttemberg parliament in 1820. He established his reputation as a liberal opponent of tariffs on behalf of the south German industrialists. As a result he lost his teaching post in 1820 and his seat in the Landtag in 1821. He was imprisoned for his political views, and released only when

he undertook to emigrate to the USA, where her edited a German newspaper in Pennsylvania and became a US citizen. List was an unsuccessful businessman, but quickly became a national figure when he became involved with the Pennsylvania Society for the Promotion of Manufactures and the Mechanic Arts, and took up its protectionist cause.

List was influenced by the US school of ‘national’ economists, who opposed free trade on the grounds that it disproportionately favoured the dominant economic power (then Great Britain) at the expense of emergent manufacturing economies (such as the USA or Germany), which found it difficult to establish themselves under the conditions dictated by classical economic liberalism. His Outlines of American Political Economy (1827) argued that an infant industrial economy needed protection.

List returned to Germany in 1834 as American Consul in Leipzig where he became an active supporter of railway construction, and campaigned for protectionist measures to assist German industry through its early stages. He proposed a semi-protectionist ‘national system’ in Germany, and envisaged its expansion into southeast Central Europe. Austria should be in the German customs union (Zollvereiri), he wrote in 1843; its railway connection to Trieste would bring that port a ‘German national’ significance. He also proposed subsidies to divert German emigrants from North America to southeastern Central Europe, arguing that emigration to North America constituted a loss of valuable

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resources to the national economy. The importance to List’s thinking of the nation, as the principal subdivision ‘between each individual and entire humanity’, is reflected in his National System of Political Economy (1841), the most important statement of his thinking. As a forerunner of the German historical school of economics List was sceptical of the universal applicability of a theoretical system such as that envisaged in classical economics. International free trade would only work if all nations were at an equivalent stage of economic development, and this was patently not so. Economic ‘laws’ therefore would necessarily be affected by the social and institutional framework—or national context-within which economic activity took place. Moreover he argued convincingly that although Britain was now a passionate advocate of free trade because it suited British interests, its present position was based on a history of protectionism and encouragement of native manufacturing: ‘Had the English left everything to itself …England would have still continued to be the sheep-farm of the Hansards, just as Portugal became the vineyard of England’. Once industries were established, he argued, free trade could then be allowed. His attempts to persuade the political authorities in Germany met with little success and, impoverished and disappointed, he committed suicide in 1846.