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National System of Political Economy
Friedrich List was one of the most prominent economic philosophers of the 19th century, on a par with-but espousing quite different thinking than-Karl Marx and Adam Smith. In the three-volume National System of Political Economy, he explores a reasoned doctrine of national and pan-national management of trade, a global collaboration between government and business. Presented here in one combined volume, List examines the pronounced influence of freedom prudently balanced with regulation in the economic histories of the nations of Europe and North America, delineates his theory of supportive interconnectedness, and explores the economic and political systems that nurture ascendant nations in their global sovereignty. A close reading of this 1841 classic is an absolute necessity for anyone who hopes to understand world economic history of the last 150 years. German economist and journalist FRIEDRICH LIST (1789-1846) served as professor of administration and politics at the University of Tübingen, but was jailed and later exiled to America for his political views. He is also the author of Outlines of American Political Economy (1827).
194 pages, Paperback
First published January 1, 1841
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About the author
Friedrich List
98 books29 followersGeorg Friedrich List was a leading 19th-century German economist who developed the "National System" or what some would call today the National System of Innovation. He was a forefather of the German historical school of economics, and considered the original European unity theorist whose ideas were the basis for the European Economic Community.
List's principal work is entitled Das Nationale System der Politischen Ökonomie (1841) and was translated into English as The National System of Political Economy. Before 1914, List and Marx were the two best-known German economists and theorists of development.
List's principal work is entitled Das Nationale System der Politischen Ökonomie (1841) and was translated into English as The National System of Political Economy. Before 1914, List and Marx were the two best-known German economists and theorists of development.
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August 24, 2022
ENGLISH
Georg Friedrich List is the anti-Adam Smith. “National System of Political Economy” is dedicated to refute Liberal School — which List calls “popular school” — especially on the argument of free international trade referring to the development of a country’s manufactures.
The book’s main ideas are quite simple:
(1) Countries with nascent manufactures or which compete with stronger industrial countries must protect their manufactures from international competition through tariffs. This must go up to a point where national manufactures are strong enough to compete internationally; then the country can start reducing them.
(2) Free trade is indistinctly desirable for agricultural products and raw material. Thus, Great Britain’s Corn Laws were harmful to the country’s own interests.
(3) Both strong agriculture and manufacturing — activities which should develop together even physically — is the formula to make countries wealthier.
(4) Adam Smith’s fantastic insight that activities implying more division of labor produce more wealth (perfectly illustrated in his example of the pin factory) is contradictory with his further claim that agriculture is the most productive activity. Manufactures mean more division of labor. In the accumulated total, manufactures respond for the superior wealth of a nation.
(5) The exaltation of individual freedom where individuals can do everything while the State can do almost nothing is unrealistic and unreasonable; this is the Political Economy of the green grocer or the small merchant. This in fact has to do with a cosmopolite view that trade is superior to nations, regardless of where merchants are. However, competition in international trade occurs among nations, with each of them fighting for their own interests, which are not necessarily confined to the economic realm (i.e., disputes on territory). Competition in the international arena requires policies at the national level. The correct quest for freedom is in fact primarily the quest for national freedom.
(6) The logic behind dominant nations such as Great Britain in international competition is to import agricultural or colonial products while exporting manufactured ones to other countries. List gives a series of examples, such as the Treaty of Methuen with Portugal and the Treaty of Eden with France, which favored Great Britain in undermining the counterparts’ ability to develop their manufactures, and also GB’s policy favoring its exportation of manufactured goods to the US and the importation of raw materials from them.
The book presents very cohesive and clearly stated ideas. In fact, this was the most pleasant read among old economists’ books I’ve read so far (including Smith, Ricardo, and Mill). The book is filled with sentences that could be taken apart individually without any prejudice to general comprehension and that could by themselves summarize the book’s main point.
The nationalist sentiment is of course very present, as this is the book’s underlying idea. List was clearly jealous of Great Britain as the most powerful nation on Earth at the same time he saw Germany struggling to thrive — if only Europe could organize its tangle of interests better! It’s interesting to note that such factors of disunion in Continental Europe were cited as factors undermining its economic potential — which led the Continent to the First World War a few years later.
List nevertheless recognizes the good England did for humanity when pushing other countries to imitate it, except that it should not have done it at the expense of the others. List constantly recurs to Historical events and presents sharp analytical arguments in favor of his view of the world.
“National System” is the Bible of developmentalists. It is said that List went to the US and studied Alexander Hamilton’s ideas to write his book — my review of the Report on the Subject of Manufactures here: https://www.goodreads.com/review/show... - with all arguments applicable here.
List delivers a very realistic view of international trade and economics. Despite his insistence on the need for protection of the infant industry — for which he became more famous —, he clearly defends a more pondered application of said principle: a gradual reduction of protective tariffs as national industry thrives.
As a curiosity, it’s interesting that he preaches for the Netherlands the same treatment he complains about from Britain. He advocates that the Netherlands should be part of Germany, so Germany should start selling more manufactured products to the Netherlands in exchange for buying colonial products from the Netherlands. In the then current terms, the Netherlands was selling Germany colonial products but buying manufactured products elsewhere. Another curiosity: his “system” is valid only for countries in the tempered climate zone of the planet; tropical countries tend to stay forever dependent of the former. The same for Asian countries: it’d be better if all of them dissolved and Europe took them over(!).
It is impressive how ideologies can make different people see the same phenomena from completely different, and sometimes opposite, perspectives. Even though List’s ideas seem much more realistic, and the fact that liberal economics’ international free trade idea seems more applicable in the “ought to be” plane, the latter has dominated mainstream economics.
Liberal views on the topic are in fact more seductive as exaltation of the individual sounds more modern and glorifying of human capabilities. However, developmentalist/protectionist views seem to describe reality better, and in fact translate the rationality of the economic agents at the international level more accurately. As stated in my review of Hamilton’s “Report on Manufactures”, developed countries preach free trade for others while practicing protectionism for their own products; the same way developing countries complain of protectionism from developed countries, but rationality indicates that if they become developed they will also start protecting their own products. In fact, this is the opposite of what List preaches, as stated above: countries should protect nascent industries and then start reducing protection.
As long as there are countries in the world acting to preserve their own interests, protectitive tariffs — which are practiced by developed and underdeveloped countries almost indistinctly — will be a reality.
PORTUGUÊS
Georg Friedrich List é o anti-Adam Smith. Seu livro “Sistema Nacional de Economia Política” é dedicado a refutar a Escola Liberal – que List chama de “escola popular” – especialmente quanto ao argumento do livre comércio internacional referente ao desenvolvimento das manufaturas de um país.
As ideias principais do livro são bastante simples:
(1) Os países com manufaturas nascentes ou que competem com países industrializados mais fortes devem protege-las da concorrência internacional por meio de tarifas protecionistas. Isso deve ir até o ponto em que as manufaturas nacionais sejam fortes o suficiente para competir internacionalmente; então o país pode começar a reduzi-las.
(2) Para produtos agrícolas e matérias-primas é desejável o livre comércio indistintamente. Por isso, as leis do trigo da Grã Bretanha foram prejudiciais aos interesses do próprio pais.
(3) Agricultura e manufatura fortes – atividades que deveriam se desenvolver juntas mesmo fisicamente – é a fórmula para tornar os países mais ricos.
(4) A fantástica percepção de Adam Smith de que atividades que implicam mais divisão do trabalho produzem mais riqueza (perfeitamente ilustrada em seu exemplo da fábrica de alfinetes) é contraditória com sua alegação posterior de que a agricultura é a atividade mais produtiva. As manufaturas empregam mais divisão de trabalho. No total acumulado, as manufaturas são responsáveis pela riqueza superior de uma nação.
(5) A exaltação da liberdade individual onde os indivíduos podem fazer tudo enquanto o Estado não pode fazer quase nada é irreal e irracional; isto é a Economia Política do quitandeiro ou do pequeno comerciante. Isso, na verdade, tem a ver com uma visão cosmopolita de que o comércio é superior às nações, independentemente de onde os comerciantes estejam localizados. No entanto, a concorrência no comércio internacional ocorre entre as nações, cada uma delas lutando por seus próprios interesses, que não necessariamente se limitam ao domínio econômico (p.e., disputas sobre território). A competição na arena internacional exige políticas em nível nacional. A correta busca por liberdade é, de fato, principalmente a busca da liberdade nacional.
(6) A lógica por trás das nações dominantes na competição internacional, como a Grã-Bretanha em suas relações comerciais com outros países, é importar produtos agrícolas ou coloniais enquanto exporta produtos manufaturados para eles. List dá uma série de exemplos, como o Tratado de Methuen com Portugal e o Tratado do Éden com a França, que favoreceram a Grã-Bretanha em minar a capacidade das contrapartes de desenvolver suas manufaturas, e também a política desta de favorecer sua exportação de manufaturados para os EUA e importação de matéria-prima deste.
O livro apresenta ideias muito coesas e incrivelmente claras. Na verdade, essa foi a leitura mais agradável entre os livros de economistas antigos que li até agora (incluindo Smith, Ricardo e Mill). O livro está repleto de frases que podem ser consideradas individualmente sem prejuízo da compreensão geral, e que por si só podem resumir o ponto principal do livro.
É claro que o sentimento nacionalista está muito presente, já que está é a ideia subjacente em todo o livro. List estava claramente enciumado com o sucesso da Grã-Bretanha como a nação mais poderosa da Terra, ao mesmo tempo em que podia ver o potencial das indústrias alemãs – apenas se a Europa pudesse organizar melhor seu emaranhado de interesses! Interessante notar que tais fatores de desunião na Europa Continental foram citados como fatores que minaram seu potencial econômico – o que alguns anos depois levou o Continente à Primeira Guerra Mundial.
List, no entanto, reconhece o bem que a Inglaterra fez para humanidade ao pressionar outros países a imitá-la, exceto que não deveria fazê-lo às custas dos outros. List constantemente recorre a eventos históricos e apresenta argumentos analíticos afiados em favor de sua visão de mundo.
“Sistema Nacional” é a Bíblia dos desenvolvimentistas. Diz-se que List foi aos EUA e estudou as ideias de Alexander Hamilton para escrever seu livro — minha resenha do Report on the Subject of Manufactures aqui: https://www.goodreads.com/review/show... - com todos os argumentos aplicáveis aqui.
List oferece uma visão muito realista do comércio internacional e da economia. Apesar de sua insistência na necessidade de proteção da indústria nascente — pela qual se tornou mais famoso —, ele defende claramente uma aplicação mais ponderada do princípio: uma redução gradual das tarifas protecionistas à medida que a indústria nacional prospera.
Como curiosidade, também é interessante notar como ele prega para a Holanda o mesmo tratamento que reclama da Grã-Bretanha. Ele defende que a Holanda deveria fazer parte da Alemanha, então a Alemanha deveria começar a vender mais produtos manufaturados para a Holanda em troca da compra de produtos coloniais da Holanda. Nos termos então da época, a Holanda estava vendendo produtos coloniais para a Alemanha, mas comprando produtos manufaturados de outros países. Outra curiosidade: seu “sistema” é válido apenas para países da zona temperada do planeta; os países tropicais tendem a ficar para sempre dependentes dos primeiros. O mesmo para os países asiáticos: seria melhor se todos se dissolvessem e a Europa os assumisse (!).
É impressionante como as ideologias podem fazer com que pessoas diferentes vejam os mesmos fenômenos em perspectivas completamente diferentes, e às vezes opostas. Embora as ideias de List pareçam muito mais realistas, e o fato de que a ideia de livre comércio internacional da economia liberal pareça mais aplicável no plano do “dever ser”, esta última domina a economia convencional.
A visão liberal sobre o assunto é de fato mais sedutora, pois a exaltação do indivíduo soa mais moderna e glorificante das capacidades humanas. No entanto, as visões desenvolvimentistas/protecionistas parecem lidar melhor com a realidade e, de fato, traduzir melhor a racionalidade dos agentes econômicos internacionalmente. Conforme declarado em minha análise do “Report on Manufactures” de Hamilton, os países desenvolvidos pregam o livre comércio para os outros enquanto praticam o protecionismo para seus próprios produtos; da mesma forma que os países em desenvolvimento reclamam do protecionismo dos países desenvolvidos, mas a racionalidade indica que, se atingirem o desenvolvimento, passarão a proteger também seus próprios produtos. Na verdade, isto é o contrário do que List prega, como dito acima: os países deveriam proteger as indústrias nascentes e então começar a reduzir a proteção.
Enquanto houver países no mundo agindo para preservar seus próprios interesses, as tarifas protetivas — que são praticadas quase indistintamente por países desenvolvidos e subdesenvolvidos — serão uma realidade.
Georg Friedrich List is the anti-Adam Smith. “National System of Political Economy” is dedicated to refute Liberal School — which List calls “popular school” — especially on the argument of free international trade referring to the development of a country’s manufactures.
The book’s main ideas are quite simple:
(1) Countries with nascent manufactures or which compete with stronger industrial countries must protect their manufactures from international competition through tariffs. This must go up to a point where national manufactures are strong enough to compete internationally; then the country can start reducing them.
(2) Free trade is indistinctly desirable for agricultural products and raw material. Thus, Great Britain’s Corn Laws were harmful to the country’s own interests.
(3) Both strong agriculture and manufacturing — activities which should develop together even physically — is the formula to make countries wealthier.
(4) Adam Smith’s fantastic insight that activities implying more division of labor produce more wealth (perfectly illustrated in his example of the pin factory) is contradictory with his further claim that agriculture is the most productive activity. Manufactures mean more division of labor. In the accumulated total, manufactures respond for the superior wealth of a nation.
(5) The exaltation of individual freedom where individuals can do everything while the State can do almost nothing is unrealistic and unreasonable; this is the Political Economy of the green grocer or the small merchant. This in fact has to do with a cosmopolite view that trade is superior to nations, regardless of where merchants are. However, competition in international trade occurs among nations, with each of them fighting for their own interests, which are not necessarily confined to the economic realm (i.e., disputes on territory). Competition in the international arena requires policies at the national level. The correct quest for freedom is in fact primarily the quest for national freedom.
(6) The logic behind dominant nations such as Great Britain in international competition is to import agricultural or colonial products while exporting manufactured ones to other countries. List gives a series of examples, such as the Treaty of Methuen with Portugal and the Treaty of Eden with France, which favored Great Britain in undermining the counterparts’ ability to develop their manufactures, and also GB’s policy favoring its exportation of manufactured goods to the US and the importation of raw materials from them.
The book presents very cohesive and clearly stated ideas. In fact, this was the most pleasant read among old economists’ books I’ve read so far (including Smith, Ricardo, and Mill). The book is filled with sentences that could be taken apart individually without any prejudice to general comprehension and that could by themselves summarize the book’s main point.
The nationalist sentiment is of course very present, as this is the book’s underlying idea. List was clearly jealous of Great Britain as the most powerful nation on Earth at the same time he saw Germany struggling to thrive — if only Europe could organize its tangle of interests better! It’s interesting to note that such factors of disunion in Continental Europe were cited as factors undermining its economic potential — which led the Continent to the First World War a few years later.
List nevertheless recognizes the good England did for humanity when pushing other countries to imitate it, except that it should not have done it at the expense of the others. List constantly recurs to Historical events and presents sharp analytical arguments in favor of his view of the world.
“National System” is the Bible of developmentalists. It is said that List went to the US and studied Alexander Hamilton’s ideas to write his book — my review of the Report on the Subject of Manufactures here: https://www.goodreads.com/review/show... - with all arguments applicable here.
List delivers a very realistic view of international trade and economics. Despite his insistence on the need for protection of the infant industry — for which he became more famous —, he clearly defends a more pondered application of said principle: a gradual reduction of protective tariffs as national industry thrives.
As a curiosity, it’s interesting that he preaches for the Netherlands the same treatment he complains about from Britain. He advocates that the Netherlands should be part of Germany, so Germany should start selling more manufactured products to the Netherlands in exchange for buying colonial products from the Netherlands. In the then current terms, the Netherlands was selling Germany colonial products but buying manufactured products elsewhere. Another curiosity: his “system” is valid only for countries in the tempered climate zone of the planet; tropical countries tend to stay forever dependent of the former. The same for Asian countries: it’d be better if all of them dissolved and Europe took them over(!).
It is impressive how ideologies can make different people see the same phenomena from completely different, and sometimes opposite, perspectives. Even though List’s ideas seem much more realistic, and the fact that liberal economics’ international free trade idea seems more applicable in the “ought to be” plane, the latter has dominated mainstream economics.
Liberal views on the topic are in fact more seductive as exaltation of the individual sounds more modern and glorifying of human capabilities. However, developmentalist/protectionist views seem to describe reality better, and in fact translate the rationality of the economic agents at the international level more accurately. As stated in my review of Hamilton’s “Report on Manufactures”, developed countries preach free trade for others while practicing protectionism for their own products; the same way developing countries complain of protectionism from developed countries, but rationality indicates that if they become developed they will also start protecting their own products. In fact, this is the opposite of what List preaches, as stated above: countries should protect nascent industries and then start reducing protection.
As long as there are countries in the world acting to preserve their own interests, protectitive tariffs — which are practiced by developed and underdeveloped countries almost indistinctly — will be a reality.
PORTUGUÊS
Georg Friedrich List é o anti-Adam Smith. Seu livro “Sistema Nacional de Economia Política” é dedicado a refutar a Escola Liberal – que List chama de “escola popular” – especialmente quanto ao argumento do livre comércio internacional referente ao desenvolvimento das manufaturas de um país.
As ideias principais do livro são bastante simples:
(1) Os países com manufaturas nascentes ou que competem com países industrializados mais fortes devem protege-las da concorrência internacional por meio de tarifas protecionistas. Isso deve ir até o ponto em que as manufaturas nacionais sejam fortes o suficiente para competir internacionalmente; então o país pode começar a reduzi-las.
(2) Para produtos agrícolas e matérias-primas é desejável o livre comércio indistintamente. Por isso, as leis do trigo da Grã Bretanha foram prejudiciais aos interesses do próprio pais.
(3) Agricultura e manufatura fortes – atividades que deveriam se desenvolver juntas mesmo fisicamente – é a fórmula para tornar os países mais ricos.
(4) A fantástica percepção de Adam Smith de que atividades que implicam mais divisão do trabalho produzem mais riqueza (perfeitamente ilustrada em seu exemplo da fábrica de alfinetes) é contraditória com sua alegação posterior de que a agricultura é a atividade mais produtiva. As manufaturas empregam mais divisão de trabalho. No total acumulado, as manufaturas são responsáveis pela riqueza superior de uma nação.
(5) A exaltação da liberdade individual onde os indivíduos podem fazer tudo enquanto o Estado não pode fazer quase nada é irreal e irracional; isto é a Economia Política do quitandeiro ou do pequeno comerciante. Isso, na verdade, tem a ver com uma visão cosmopolita de que o comércio é superior às nações, independentemente de onde os comerciantes estejam localizados. No entanto, a concorrência no comércio internacional ocorre entre as nações, cada uma delas lutando por seus próprios interesses, que não necessariamente se limitam ao domínio econômico (p.e., disputas sobre território). A competição na arena internacional exige políticas em nível nacional. A correta busca por liberdade é, de fato, principalmente a busca da liberdade nacional.
(6) A lógica por trás das nações dominantes na competição internacional, como a Grã-Bretanha em suas relações comerciais com outros países, é importar produtos agrícolas ou coloniais enquanto exporta produtos manufaturados para eles. List dá uma série de exemplos, como o Tratado de Methuen com Portugal e o Tratado do Éden com a França, que favoreceram a Grã-Bretanha em minar a capacidade das contrapartes de desenvolver suas manufaturas, e também a política desta de favorecer sua exportação de manufaturados para os EUA e importação de matéria-prima deste.
O livro apresenta ideias muito coesas e incrivelmente claras. Na verdade, essa foi a leitura mais agradável entre os livros de economistas antigos que li até agora (incluindo Smith, Ricardo e Mill). O livro está repleto de frases que podem ser consideradas individualmente sem prejuízo da compreensão geral, e que por si só podem resumir o ponto principal do livro.
É claro que o sentimento nacionalista está muito presente, já que está é a ideia subjacente em todo o livro. List estava claramente enciumado com o sucesso da Grã-Bretanha como a nação mais poderosa da Terra, ao mesmo tempo em que podia ver o potencial das indústrias alemãs – apenas se a Europa pudesse organizar melhor seu emaranhado de interesses! Interessante notar que tais fatores de desunião na Europa Continental foram citados como fatores que minaram seu potencial econômico – o que alguns anos depois levou o Continente à Primeira Guerra Mundial.
List, no entanto, reconhece o bem que a Inglaterra fez para humanidade ao pressionar outros países a imitá-la, exceto que não deveria fazê-lo às custas dos outros. List constantemente recorre a eventos históricos e apresenta argumentos analíticos afiados em favor de sua visão de mundo.
“Sistema Nacional” é a Bíblia dos desenvolvimentistas. Diz-se que List foi aos EUA e estudou as ideias de Alexander Hamilton para escrever seu livro — minha resenha do Report on the Subject of Manufactures aqui: https://www.goodreads.com/review/show... - com todos os argumentos aplicáveis aqui.
List oferece uma visão muito realista do comércio internacional e da economia. Apesar de sua insistência na necessidade de proteção da indústria nascente — pela qual se tornou mais famoso —, ele defende claramente uma aplicação mais ponderada do princípio: uma redução gradual das tarifas protecionistas à medida que a indústria nacional prospera.
Como curiosidade, também é interessante notar como ele prega para a Holanda o mesmo tratamento que reclama da Grã-Bretanha. Ele defende que a Holanda deveria fazer parte da Alemanha, então a Alemanha deveria começar a vender mais produtos manufaturados para a Holanda em troca da compra de produtos coloniais da Holanda. Nos termos então da época, a Holanda estava vendendo produtos coloniais para a Alemanha, mas comprando produtos manufaturados de outros países. Outra curiosidade: seu “sistema” é válido apenas para países da zona temperada do planeta; os países tropicais tendem a ficar para sempre dependentes dos primeiros. O mesmo para os países asiáticos: seria melhor se todos se dissolvessem e a Europa os assumisse (!).
É impressionante como as ideologias podem fazer com que pessoas diferentes vejam os mesmos fenômenos em perspectivas completamente diferentes, e às vezes opostas. Embora as ideias de List pareçam muito mais realistas, e o fato de que a ideia de livre comércio internacional da economia liberal pareça mais aplicável no plano do “dever ser”, esta última domina a economia convencional.
A visão liberal sobre o assunto é de fato mais sedutora, pois a exaltação do indivíduo soa mais moderna e glorificante das capacidades humanas. No entanto, as visões desenvolvimentistas/protecionistas parecem lidar melhor com a realidade e, de fato, traduzir melhor a racionalidade dos agentes econômicos internacionalmente. Conforme declarado em minha análise do “Report on Manufactures” de Hamilton, os países desenvolvidos pregam o livre comércio para os outros enquanto praticam o protecionismo para seus próprios produtos; da mesma forma que os países em desenvolvimento reclamam do protecionismo dos países desenvolvidos, mas a racionalidade indica que, se atingirem o desenvolvimento, passarão a proteger também seus próprios produtos. Na verdade, isto é o contrário do que List prega, como dito acima: os países deveriam proteger as indústrias nascentes e então começar a reduzir a proteção.
Enquanto houver países no mundo agindo para preservar seus próprios interesses, as tarifas protetivas — que são praticadas quase indistintamente por países desenvolvidos e subdesenvolvidos — serão uma realidade.
February 13, 2013
In this book, List essentially argues with the Classical School (he calls it "popular school"), especially Smith and Say. He argues that the classical theory is essentially a theory of exchange, not of production. Also, he argues that the productive power of a nation is important than national income, since if you have the former, the latter won't matter much, and if you don't have the former, the latter won't help you much. Consequently he argues that free trade, while increasing national income in the short run, will arrest the development of infant industries, since they won't be able to compete with foreign industries even in the domestic market.
Now, my point is that no school in economics is without its merits, and that ANY science (not only economics) should have plural schools and opinions, not just one. So, personally I don't like the one sided dominance of neoliberal school in the last 50-60 years. For me, this was a great book, because it showed me a perspective different from what i learned in my graduate school (in economics). And it's quite solid in itself!
On the negative side, List sometimes is too "opinionated" (he would love writing comments on youtube if he was alive today ;)). Time to time, he exaggerates too much, and maybe not so fair. Keep in mind these points when reading the book. Other than that, I think this book is "must read" for any sensible economist.
EDIT: ALso, I do not think that global free trade would be beneficial if everyone implemented it at the same time (this is the position List takes against liberalization of international trade). I believe that a global economic integration would be useful if it went hand to hand with global political integration.
Now, my point is that no school in economics is without its merits, and that ANY science (not only economics) should have plural schools and opinions, not just one. So, personally I don't like the one sided dominance of neoliberal school in the last 50-60 years. For me, this was a great book, because it showed me a perspective different from what i learned in my graduate school (in economics). And it's quite solid in itself!
On the negative side, List sometimes is too "opinionated" (he would love writing comments on youtube if he was alive today ;)). Time to time, he exaggerates too much, and maybe not so fair. Keep in mind these points when reading the book. Other than that, I think this book is "must read" for any sensible economist.
EDIT: ALso, I do not think that global free trade would be beneficial if everyone implemented it at the same time (this is the position List takes against liberalization of international trade). I believe that a global economic integration would be useful if it went hand to hand with global political integration.
May 6, 2022
A comprehensive and thoroughly persuasive revision of political economic theory. Focussing primarily on what is termed elsewhere as the 'theory of infant industry' - List gives a largely holistic demonstration of his nationalist economic viewpoint from the viewpoint of a 1840s liberal. While liberal viewpoints are interjected throughout the thesis (and possibly prevent List from even more profound findings), the book is a testament to independent, non-conformist economic theory.
The book demonstrates (via 4 sub-books - 1. History, 2. Theory, 3. Systems (of economic theory), 4. Politics) that the cosmopolitan, free-trade theories of the likes of Adam Smith, and Jean Baptiste Say (of Say's Law), is not adequate to reflect real world conditions. Instead, List proposes the nationalist theory.
He shows that of primary importance for laying the groundwork for economic theory is not wealth, but power - that power is the true determining driver of the actions of competing/cooperating nation states. While wealth is obviously of importance in the short run, the long run drivers of political independence are those factors that CREATE wealth - and of primary importance is a strong manufacturing industry (which has exponential benefits to the nation). Underlying the creation of a national industry, then, includes a trade protectionism (which does NOT result in monopoly given domestic competition), free trade of agricultural produce, transportation networks, colonialism, a navy, developing/stealing workmen/trading knowledge/capital, the fostering of a national identity/spirit, reinvesting rental incomes into the nation, stability of the balance of payments, and the prevention of over-exposure of money supply from foreign nations (e.g. American bullion crises) etc. He also questions the 'division of labour' theory of Smith, stating that it is both the division, AS WELL AS the skill/unification of workers towards a common goal that increases productivity. He also shows that this (i.e. importance of skill and unification of a goal) can be applied outside of the organisation, and applies also on a national scale. Of course, the circumstances of the nation determine what trade policy is best - a primitive agricultural nation could not compete on any level with a superior manufacturing nation, and should therefore allow more free trade (in order to develop its civility and economic strength).
All of this is in opposition of the theories of the (still dominant) theories of the free trade school, prioritising the individual, thereby distilling economics to the theory of value and wealth (over power/skill/unification/non-material factors). This leads to a theory which promotes seeking trade at 'whatever price is most profitable to the isolated individual', thereby inevitably resulting in the subversion of the national industry (in favour of other, more competitive markets, e.g. see France and Portugal's laissez faire attitude towards English manufacturing supremacy and inevitable political subjugation), and exposes the nations stability and strength to war and foreign economic crises. Smith's focus on value leaves his theory open to egregious mistakes, such as prioritising the largely unproductive farmer (who produces goods of value) over teachers, lawyers, administrators, etc. (who produce no goods, but still help a nation develop its powers of production).
Book 1 covers the history of various nations at the peak of their economic/political strength (by the time of writing ~1840), including the Renaissance Italian states, Hanseatic League, the Netherlands, England, Spain/Portugal, France, Germany, Russia, and the US. England's account is most relevant, detailing the path to England's 1800s superiority through protection of its wool and textile industry. Most interestingly, though, is England's increasingly clear policy of 'kicking away the ladder' for other developing economies - purposefully obfuscating the theories and measures which led to its success, instead promoting theories detrimental to developing nations (e.g. the cosmopolitan school of Smith). As a side note, this intentional subversion has significant implications for modern protective measures - in that the maintenance of political supremacy also includes the need for *ideological* protection.
The second book develops these theories in detail, taking each axiom individually and developing it.
The third book tests List's thesis against other popular schools (e.g. mercantilist school), and particularly demonstrates the weakness of Smith's individualistic theory.
The fourth book looks towards contemporary 1840s European politics, highlighting English economic supremacy and developing a path for the continental nations and the US to forge a path of national independence.
The book, as I say, is comprehensive, restating concepts numerous times, including numerous examples, and numerous explanations, leaving the reader thoroughly inculcated with the major details of his theory.
Given that Listian economics has been largely abandoned in the classroom, one wonders whether a nationalist political economic School would further develop these theories beyond the road set out by List himself. Indeed, there are points where List seems to fail to develop certain axioms (e.g. why key agricultural industries do not need protecting, his support for free-trade policies WITHIN the nation), and how much his liberal outlook has potentially blocked his path towards further discoveries.
The book demonstrates (via 4 sub-books - 1. History, 2. Theory, 3. Systems (of economic theory), 4. Politics) that the cosmopolitan, free-trade theories of the likes of Adam Smith, and Jean Baptiste Say (of Say's Law), is not adequate to reflect real world conditions. Instead, List proposes the nationalist theory.
He shows that of primary importance for laying the groundwork for economic theory is not wealth, but power - that power is the true determining driver of the actions of competing/cooperating nation states. While wealth is obviously of importance in the short run, the long run drivers of political independence are those factors that CREATE wealth - and of primary importance is a strong manufacturing industry (which has exponential benefits to the nation). Underlying the creation of a national industry, then, includes a trade protectionism (which does NOT result in monopoly given domestic competition), free trade of agricultural produce, transportation networks, colonialism, a navy, developing/stealing workmen/trading knowledge/capital, the fostering of a national identity/spirit, reinvesting rental incomes into the nation, stability of the balance of payments, and the prevention of over-exposure of money supply from foreign nations (e.g. American bullion crises) etc. He also questions the 'division of labour' theory of Smith, stating that it is both the division, AS WELL AS the skill/unification of workers towards a common goal that increases productivity. He also shows that this (i.e. importance of skill and unification of a goal) can be applied outside of the organisation, and applies also on a national scale. Of course, the circumstances of the nation determine what trade policy is best - a primitive agricultural nation could not compete on any level with a superior manufacturing nation, and should therefore allow more free trade (in order to develop its civility and economic strength).
All of this is in opposition of the theories of the (still dominant) theories of the free trade school, prioritising the individual, thereby distilling economics to the theory of value and wealth (over power/skill/unification/non-material factors). This leads to a theory which promotes seeking trade at 'whatever price is most profitable to the isolated individual', thereby inevitably resulting in the subversion of the national industry (in favour of other, more competitive markets, e.g. see France and Portugal's laissez faire attitude towards English manufacturing supremacy and inevitable political subjugation), and exposes the nations stability and strength to war and foreign economic crises. Smith's focus on value leaves his theory open to egregious mistakes, such as prioritising the largely unproductive farmer (who produces goods of value) over teachers, lawyers, administrators, etc. (who produce no goods, but still help a nation develop its powers of production).
Book 1 covers the history of various nations at the peak of their economic/political strength (by the time of writing ~1840), including the Renaissance Italian states, Hanseatic League, the Netherlands, England, Spain/Portugal, France, Germany, Russia, and the US. England's account is most relevant, detailing the path to England's 1800s superiority through protection of its wool and textile industry. Most interestingly, though, is England's increasingly clear policy of 'kicking away the ladder' for other developing economies - purposefully obfuscating the theories and measures which led to its success, instead promoting theories detrimental to developing nations (e.g. the cosmopolitan school of Smith). As a side note, this intentional subversion has significant implications for modern protective measures - in that the maintenance of political supremacy also includes the need for *ideological* protection.
The second book develops these theories in detail, taking each axiom individually and developing it.
The third book tests List's thesis against other popular schools (e.g. mercantilist school), and particularly demonstrates the weakness of Smith's individualistic theory.
The fourth book looks towards contemporary 1840s European politics, highlighting English economic supremacy and developing a path for the continental nations and the US to forge a path of national independence.
The book, as I say, is comprehensive, restating concepts numerous times, including numerous examples, and numerous explanations, leaving the reader thoroughly inculcated with the major details of his theory.
Given that Listian economics has been largely abandoned in the classroom, one wonders whether a nationalist political economic School would further develop these theories beyond the road set out by List himself. Indeed, there are points where List seems to fail to develop certain axioms (e.g. why key agricultural industries do not need protecting, his support for free-trade policies WITHIN the nation), and how much his liberal outlook has potentially blocked his path towards further discoveries.
May 15, 2016
This edition seems odd (the cover page photo especially), but List's National System of Political Economy is foundational and fundamental, and still very applicable to development today.
"From the period of the emancipation of the Italian cities by Otho the Great, they gave evidence of what history was testified alike in earlier and later times, namely, that freedom and industry are inseparable companions, even although not unfrequently the one has come into existence before the other."
"From the period of the emancipation of the Italian cities by Otho the Great, they gave evidence of what history was testified alike in earlier and later times, namely, that freedom and industry are inseparable companions, even although not unfrequently the one has come into existence before the other."
December 5, 2024
I actually finished this some time ago, just didn't update this. It was a great read. This is a book by a German statist who saw what England was doing to his country's economy. It was honestly eye-opening, and widely read by many Americans at a prosperous time of our development after eschewing the quartered British soldiers out of our cities and becoming emancipated from an economically oppressive administration. You can hear the tone and notes of prominent criticisms of the English government throughout the work and also the need for unity among the many German states like the Hanse towns, which were unincorporated until later, obviously spurred on by philosophies like List's.
This is a good book for a reason: it shows us a philosophy of economics apart from that of Adam Smith. Almost everyone has a problem with Adam Smith's Wealth of Nations, but it seems like List has a problem with Smith, Ricardo, Mill, and anyone else that was simply exposed to the English mercantilist, and then capitalist system. I will say, actually, that List seems to espouse a philosophy that was clearly present with Ricardo, ironically. Either List did not carefully read Ricardo, or just brushed past it, but he obviously understood Ricardo's theories on rent when referencing him in that book later. Please understand, the theory I am talking about is the idea that a country who has a current manufacturing majority of enterprise in their country can, for an indefinite period, extend a lead in economic trade far above that of purely agricultural nations. Actually, rent depends on manufacturing activity so for this little fact I think that List was either directly influenced by Ricardo's ideas, or just developed the thought at the same time Ricardo did, kind of like how Menger and Walras were kindred spirits as well.
This is a good book, it gets a 4/5 stars and not 5/5 because, like Smith, List was concerned with the economic wellbeing of his home country, so he droned on and on about the corrupting influence of England to the Zollverein's well being. One should read it though, so you learn how Smith was doing the same thing, in a very subversive way for his state as well.
This is a good book for a reason: it shows us a philosophy of economics apart from that of Adam Smith. Almost everyone has a problem with Adam Smith's Wealth of Nations, but it seems like List has a problem with Smith, Ricardo, Mill, and anyone else that was simply exposed to the English mercantilist, and then capitalist system. I will say, actually, that List seems to espouse a philosophy that was clearly present with Ricardo, ironically. Either List did not carefully read Ricardo, or just brushed past it, but he obviously understood Ricardo's theories on rent when referencing him in that book later. Please understand, the theory I am talking about is the idea that a country who has a current manufacturing majority of enterprise in their country can, for an indefinite period, extend a lead in economic trade far above that of purely agricultural nations. Actually, rent depends on manufacturing activity so for this little fact I think that List was either directly influenced by Ricardo's ideas, or just developed the thought at the same time Ricardo did, kind of like how Menger and Walras were kindred spirits as well.
This is a good book, it gets a 4/5 stars and not 5/5 because, like Smith, List was concerned with the economic wellbeing of his home country, so he droned on and on about the corrupting influence of England to the Zollverein's well being. One should read it though, so you learn how Smith was doing the same thing, in a very subversive way for his state as well.
April 3, 2025
Friedrich List’s National System of Political Economy (1841) is a foundational text in the field of economic nationalism, offering a critique of classical liberal economic thought and advocating for a protectionist approach to national economic development. A German economist and political thinker, List developed his ideas as a response to the dominance of British free trade theories, particularly those espoused by Adam Smith and David Ricardo. His work remains relevant today in discussions of economic globalization, trade policy, and industrial strategy.
List’s central thesis is that nations at different stages of economic development require different economic policies. He challenges the universal applicability of free trade, arguing that it primarily benefits already industrialized nations, such as Britain in the 19th century, while hindering the development of emerging economies. Instead, he advocates for a system of temporary protectionism, particularly through tariffs and state intervention, to foster domestic industries until they can compete on a global scale.
He introduces the concept of “productive forces,” emphasizing that economic development should not be measured solely by wealth accumulation but also by a nation’s ability to generate and sustain industrial growth. List contrasts this with the classical school’s emphasis on immediate market efficiency, which he views as short-sighted and detrimental to long-term national prosperity. He also argues for the role of the state in guiding economic development, particularly through infrastructure investment, education, and technological innovation.
List’s arguments offer a compelling critique of classical economics and foreshadow later theories of economic development. His emphasis on the strategic role of industrial policy has influenced numerous historical economic policies, from 19th-century German industrialization to 20th-century East Asian development strategies. His ideas resonate with modern debates on trade protectionism and economic sovereignty, particularly in the context of rising concerns over globalization’s impact on domestic industries.
However, List’s work is not without its limitations. His emphasis on national economic self-sufficiency and protectionism risks being misinterpreted as an argument for autarky, though this was not his intention. Additionally, his framework does not sufficiently address the risks of prolonged protectionism, which can lead to inefficiencies and stagnation if industries become overly reliant on government support.
National System of Political Economy remains a significant work in economic thought, offering a nationalist alternative to classical liberalism and laying the foundation for developmental economics. List’s arguments continue to shape discussions on trade policy, particularly in the context of developing economies seeking to industrialize. While his advocacy for protectionism must be applied cautiously, his insights into the role of state policy in fostering economic growth remain highly relevant in contemporary economic discourse.
GPT
List’s central thesis is that nations at different stages of economic development require different economic policies. He challenges the universal applicability of free trade, arguing that it primarily benefits already industrialized nations, such as Britain in the 19th century, while hindering the development of emerging economies. Instead, he advocates for a system of temporary protectionism, particularly through tariffs and state intervention, to foster domestic industries until they can compete on a global scale.
He introduces the concept of “productive forces,” emphasizing that economic development should not be measured solely by wealth accumulation but also by a nation’s ability to generate and sustain industrial growth. List contrasts this with the classical school’s emphasis on immediate market efficiency, which he views as short-sighted and detrimental to long-term national prosperity. He also argues for the role of the state in guiding economic development, particularly through infrastructure investment, education, and technological innovation.
List’s arguments offer a compelling critique of classical economics and foreshadow later theories of economic development. His emphasis on the strategic role of industrial policy has influenced numerous historical economic policies, from 19th-century German industrialization to 20th-century East Asian development strategies. His ideas resonate with modern debates on trade protectionism and economic sovereignty, particularly in the context of rising concerns over globalization’s impact on domestic industries.
However, List’s work is not without its limitations. His emphasis on national economic self-sufficiency and protectionism risks being misinterpreted as an argument for autarky, though this was not his intention. Additionally, his framework does not sufficiently address the risks of prolonged protectionism, which can lead to inefficiencies and stagnation if industries become overly reliant on government support.
National System of Political Economy remains a significant work in economic thought, offering a nationalist alternative to classical liberalism and laying the foundation for developmental economics. List’s arguments continue to shape discussions on trade policy, particularly in the context of developing economies seeking to industrialize. While his advocacy for protectionism must be applied cautiously, his insights into the role of state policy in fostering economic growth remain highly relevant in contemporary economic discourse.
GPT
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November 24, 2022Comment:
Of course, List is no Fascist. The four parts of this book were all written before the mid 1840's, He is a contemporary of Marx and Ricardo, not Hitler and Mussolini. The reason his book has earned a "Fascist Economics" reputation is because he stresses that the economy exists for the benefit of the people in a given state. And thus he is a protectionist regarding some international trade. In his time and place, he was something of a liberal.
He thought that German industry needed to be protected, but he was for allowing largely free imports of foodstuffs and raw materials. His reasoning is that a strong and growing industrial sector (strong and growing because protected) will be able to support these other sectors of the economy.
He refers to the free trade economy of Adam Smith and his followers as a 'cosmopolitical economy' instead of a genuinely political economy.
Yes, so referring to our author as an 'anti-capitalist is a bit strong; 'anti free-trader' would certainly be closer to the mark.
Of course, List is no Fascist. The four parts of this book were all written before the mid 1840's, He is a contemporary of Marx and Ricardo, not Hitler and Mussolini. The reason his book has earned a "Fascist Economics" reputation is because he stresses that the economy exists for the benefit of the people in a given state. And thus he is a protectionist regarding some international trade. In his time and place, he was something of a liberal.
He thought that German industry needed to be protected, but he was for allowing largely free imports of foodstuffs and raw materials. His reasoning is that a strong and growing industrial sector (strong and growing because protected) will be able to support these other sectors of the economy.
He refers to the free trade economy of Adam Smith and his followers as a 'cosmopolitical economy' instead of a genuinely political economy.
Yes, so referring to our author as an 'anti-capitalist is a bit strong; 'anti free-trader' would certainly be closer to the mark.
May 13, 2020
This is a fantastic (and relatively ignored/forgotten) political economy work. Many have read "The Wealth of Nations" but List provides a great counterpoint, particularly on manufacturing and new industries. I enjoyed Book I where he relates the history of economic development across a number of European nations. Book II details the theory (it is a bit of a slow read). Books III and IV wrap up and detail the politics of free trade as they pertained to the UK and Germany.
It is a great work and I wish I would have read it in college/grad school. Very underrated!
It is a great work and I wish I would have read it in college/grad school. Very underrated!
May 30, 2025
I can't believe I hadn't read this book before now. This book takes direct aim at some of the basic foundations of David Ricardo and Adam Smith and the advantages of Comparative Advantage, at least as far as it crosses borders. I'd highly recommend this book which has not received nearly as much attention as it probably deserves.
March 31, 2022
one of the coolest economic philosophers, even though i don’t agree with a lot of his theory or ideas or philosophy etc. he gave me a lot of things to think about that i hadn’t considered, which is something i’m always happy to have so
January 2, 2026
List is really fun when he is criticizing the economic thought leaders of his time. This book is way too long for me to recommend to most people but if you can deal with the length and the 19th century references it is well worth the effort.
January 13, 2022
Те, що можна описати в 36 сторінках, описано в 360…
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August 11, 2025no lo complete, la version que tenia no esta facil de entender.
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October 3, 2025Read for class
January 18, 2017
I found this book to be a very witty critique of classical economics.
March 13, 2025
Is This An Overview?
What cannot be produced domestically, needs to be obtained through international trade. Sovereign states are limited in what they can produce due to resources, industry, and politics. States prefer and benefit from free and unrestricted trade when they have an agrarian economy, as they can export surplus agriculture products in exchange for manufactured products and metal resources. Trade policies change to become more restricted when the state develops their culture and industry.
States borrow skills and manufacturing ability from others, but then protect them domestically. Competition has the effect of improving the production ability of the competitors, but when domestic producers want more market share, they use their power to appeal to political representatives. Domestic producers ask for restricting foreign competition, and the politicians tend to oblige.
Social and political institutions effect the ability to produce material wealth. States that had more liberty, had more production ability. Liberty brings with it industry, invention, and enterprise. People who are persecuted in a state, take their skills to states that would support them. Infrastructure accompanies the development of manufacturing ability, to enhance access to the market.
Caveats?
This book is difficult to read, with antediluvian references. A diverse history of trade is presented, but more research will be needed to understand any state or situation. Various economic ideas remain valid, but their explanations have been improved.
What cannot be produced domestically, needs to be obtained through international trade. Sovereign states are limited in what they can produce due to resources, industry, and politics. States prefer and benefit from free and unrestricted trade when they have an agrarian economy, as they can export surplus agriculture products in exchange for manufactured products and metal resources. Trade policies change to become more restricted when the state develops their culture and industry.
States borrow skills and manufacturing ability from others, but then protect them domestically. Competition has the effect of improving the production ability of the competitors, but when domestic producers want more market share, they use their power to appeal to political representatives. Domestic producers ask for restricting foreign competition, and the politicians tend to oblige.
Social and political institutions effect the ability to produce material wealth. States that had more liberty, had more production ability. Liberty brings with it industry, invention, and enterprise. People who are persecuted in a state, take their skills to states that would support them. Infrastructure accompanies the development of manufacturing ability, to enhance access to the market.
Caveats?
This book is difficult to read, with antediluvian references. A diverse history of trade is presented, but more research will be needed to understand any state or situation. Various economic ideas remain valid, but their explanations have been improved.
September 18, 2011
This particular edition of the book gets two stars knocked off as it is absolutely the worst example of pagination I have ever experienced. It is a product of "Optical Character Recognition" software used by "General Books". This takes typos to an all new level: they are everywhere. Not only paragraphs, but sentences, and even words, are interrupted by notes. Sometimes sentences are interrupted and the last couple words show up 100 pages later. Everything is ugly. It is so bad I'm tempted to knock off another star...
Too bad, the content itself is extremely good. My main complaint is List's comfort and rationalization regarding colonialism, but in his critique of free market theory, List is incomparably clear, concise and devastating.
I would have loved to have read a better version of the book, unfortunately this is a rare find, and a good version is expensive.
So, with that consideration, it was worth it, for me, to read this mangled version... but I don't think most readers are going to have enough patience to accept it. This version should only be attempted by serious political-economic readers willing to forgive its ugliness and the constant occurrence of thoughts being interrupted or left unfinished (not by the author, again, simply from this computer-automated copying of an original, rare book with no resources for a human editor to clean it up...)
Too bad, the content itself is extremely good. My main complaint is List's comfort and rationalization regarding colonialism, but in his critique of free market theory, List is incomparably clear, concise and devastating.
I would have loved to have read a better version of the book, unfortunately this is a rare find, and a good version is expensive.
So, with that consideration, it was worth it, for me, to read this mangled version... but I don't think most readers are going to have enough patience to accept it. This version should only be attempted by serious political-economic readers willing to forgive its ugliness and the constant occurrence of thoughts being interrupted or left unfinished (not by the author, again, simply from this computer-automated copying of an original, rare book with no resources for a human editor to clean it up...)
June 7, 2023
Friedrich List was a 19th century economist who, through his studies of economic history, and his experience of America, came to the conclusion that economic strength was not built up through free trade, but through protectionism. Protectionism was like a ladder that enabled nations to reach to a certain height, after which time they kicked it away (promoting free trade) to prevent other nations from reaching their level. Read this book to cure yourself of the notion of the universal goodness of free trade.
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