Friedrich List

Daniel Friedrich List (6 August 1789 – 30 November 1846) was a German entrepreneur, diplomat, economist and political theorist who developed the nationalist theory of political economy in both Europe and the United States. He was a forefather of the German historical school of economics and argued for the Zollverein (a pan-German customs union) from a nationalist standpoint. He advocated raising tariffs on imported goods while supporting free trade of domestic goods and stated the cost of a tariff should be seen as an investment in a nation's future productivity. His theories and writing also influenced the American school of economics.

List was a political liberal who collaborated with Karl von Rotteck and Carl Theodor Welcker on the Rotteck-Welckersches Staatslexikon, an encyclopedia of political science that advocated constitutional liberalism and influenced the Vormärz. At the time in Europe, liberal and nationalist ideas were almost inseparably linked, and political liberalism was not yet attached to what was later considered economic liberalism. Emmanuel Todd considers List a forerunner to John Maynard Keynes as a theorist of "moderate or regulated capitalism."

Daniel Friedrich List was born in the free imperial city of Reutlingen in the Duchy of Württemberg. His date of birth is uncertain, but his baptism is usually given as August 6, 1789. His father, Johannes (1746–1813), was a prosperous master tanner and a city official, and his mother was Maria Magdalena (née Schäfer). Daniel Friedrich was the second son and youngest child in his family. He was educated at the town's Latin School. As an apprentice at his father's tanning business, List showed little interest in manual labor. He was apprenticed as a bureaucratic clerk at Blaubeuren. After passing his examination, he entered the administrative service in 1805 and became Taxes and Warehouses Commissioner in Schelklingen.

At age 23 in 1811, List was promoted to a post at Tübingen. While there, he regularly attended lectures at the University of Tübingen and expanded his reading. He also made the acquaintance of the future minister Johannes von Schlayer. In 1816, List's position in the bureaucracy was improved as the succession of King William I of Württemberg ushered in a period of reform. Under minister Karl August von Wangenheim, later his sponsor, List rose quickly through the bureaucracy. He moved to the Ministry of Finance in Stuttgart and rose to the position of chief auditor and accountant in 1816. In that role, he commissioned surveys among emigrants from Baden and Württemberg for the purpose of studying the increase in emigration and enacting countermeasures.

Von Wangenheim, who had meanwhile been appointed Minister for Church and School Affairs for the Duchy, commissioned List to propose reforms to university civil service training. List proposed establishing a political science faculty alongside the standard legal training, arguing in 1817:

"No one in our University has any conception of a national economy. No one teaches the science of agriculture, forestry, mining, industry, or trade. ... [T]he forms of government are in such a truly barbarous state, that if an official of the seventeenth century rose again from the dead he could at once take up his old work, though he would assuredly be astonished to find the advances that had been made during the interval in the simplest process of manufacture."

This proposal was accepted and the institution opened in Tübingen on October 17, 1817. Despite lacking a university degree, List was appointed professor of public administration science at the insistence of Von Wangenheim. The established professors and the university committees opposed the appointment on the grounds that List had only achieved his position through patronage, and they accused him of incompetence.

List's theory of "national economics" differed from the doctrines of "individual economics" and "cosmopolitan economics" by Adam Smith and Jean-Baptiste Say. List argued that Smithian critiques of mercantilism were "partly correct", but argued for the need for temporary tariff protection targeted to protect specific infant industries that were critical to economic growth.

List contrasted the economic behaviour of an individual with that of a nation. An individual promotes only his own personal interests but a state fosters the welfare of all its citizens. An individual may prosper from activities which harm the interests of a nation. "Slavery may be a public calamity for a country, nevertheless some people may do very well in carrying on the slave trade and in holding slaves." Likewise, activities beneficial to society may injure the interests of certain individuals. "Canals and railroads may do great good to a nation, but all waggoners will complain of this improvement. Every new invention has some inconvenience for a number of individuals, and is nevertheless a public blessing". List argued that although some government action was essential to stimulate the economy, an overzealous government might do more harm than good. "It is bad policy to regulate everything and to promote everything by employing social powers, where things may better regulate themselves and can be better promoted by private exertions; but it is no less bad policy to let those things alone which can only be promoted by interfering social power."

Due to the "universal union" that nations have with their populace, List stated that "from this political union originates their commercial union, and it is in consequence of the perpetual peace thus maintained that commercial union has become so beneficial to them. ... The result of a general free trade would not be a universal republic, but, on the contrary, a universal subjection of the less advanced nations to the predominant manufacturing, commercial and naval power, is a conclusion for which the reasons are very strong. ... A universal republic ..., i.e. a union of the nations of the earth whereby they recognise the same conditions of right among themselves and renounce self-redress, can only be realised if a large number of nationalities attain to as nearly the same degree as possible of industry and civilisation, political cultivation and power. Only with the gradual formation of this union can free trade be developed; only as a result of this union can it confer on all nations the same great advantages which are now experienced by those provinces and states which are politically united. The system of protection, inasmuch as it forms the only means of placing those nations which are far behind in civilisation on equal terms with the one predominating nation, appears to be the most efficient means of furthering the final union of nations, and hence also of promoting true freedom of trade."

In his seventh letter List repeated his assertion that economists should realise that since the human race is divided into independent states, "a nation would act unwisely to endeavour to promote the welfare of the whole human race at the expense of its particular strength, welfare, and independence. It is a dictate of the law of self-preservation to make its particular advancement in power and strength the first principles of its policy". A country should not count the cost of defending the overseas trade of its merchants. And "the manufacturing and agricultural interest must be promoted and protected even by sacrifices of the majority of the individuals, if it can be proved that the nation would never acquire the necessary perfection ... without such protective measures."

List argued that international trade reduced the security of the states who took part in it.

During his time as a professor in Tübingen, List married the widow Karoline Neidhard, daughter of the poet David Christoph Seybold and sister of the writer and editor Ludwig Georg Friedrich Seybold and Major General Johann Karl Christoph von Seybold (1777–1833) in Wertheim on February 19, 1818. List received permission from the ruler and dispensation from the University of Tübingen to marry in Baden.

Emilie (born on December 10, 1818), who served as his secretary from 1833;

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. This book has been more frequently translated than the works of any other German economist, except Karl Marx.

Before 1914, List and Marx were the two best-known German economists and theorists of development, although Marx, unlike List, devised no policies to promote economic development.

In Ireland he influenced Arthur Griffith of Sinn Féin and these theories were used by the Fianna Fáil government in the 1930s to instigate protectionism with a view to developing Irish industry.

Among others he strongly influenced was Sergei Witte, the Imperial Russian Minister of Finance, 1892–1903. Witte's plan for rapid industrialisation was centred around railroad construction (the Trans-Siberian railroad for example) and a policy of protectionism. At the time, it was largely considered that Russia was a backward country with an underdeveloped economy. The boom which was seen during the 1890s was largely credited to Witte's policy.

Angus Maddison noted that: As Marx was not interested in the survival of the capitalist system, he was not really concerned with economic policy, except in so far as the labour movement was involved. There, his argument was concentrated on measures to limit the length of the working day, and to strengthen trade union bargaining power. His analysis was also largely confined to the situation in the leading capitalist country of his day—the UK—and he did not consider the policy problems of other Western countries in catching up with the lead country (as Friedrich List did). In so far as Marx was concerned with other countries, it was mainly with poor countries which were victims of Western imperialism in the merchant capitalist era.

—. The National System of Political Economy. Archived from the original on 2009-08-31. Retrieved 2007-12-14.