FRIEDRICH LIST, THE ULTIMATE GLOBALIST - regulating entrepreneurship and world power
Draft, Sept. 23rd 1998
For the essay-collection on Free Trade and the Nation State Edited by Jürgen G.Backhaus, as an outcome of The 1997 Heilbronn conferences on the German tradition in economics
Arno Mong Daastøl University of Maastricht, Department of Public Economics SUM - Centre for Development and Environment, University of Oslo
Abstract:
In this article I will first bring forward some quotes that bring forward the fact that List was a "globalist" at heart while still being a protectionist and an economic nationalist, by force of the prevailing situation. I will then try to explain List's somewhat contradictory stance.
The German-American economist, Friedrich List, is known historically among economists as the foremost proponent of railroad construction - and above all as a trade protectionist. In this article I will show that he held beliefs quite contrary to this ordinary appreciation of him. He worked for a more elevated form of global civilisation and therefore was a devoted believer in the promotion of free trade, international law, world trade congresses, a world trade organisation, and a world government. Concerning all these points he came forward with specific suggestions on how to go about to succeed and what resistance to expect. To him, this was most likely to be fulfilled through a development that was gradual and that involved legal, administrative and democratic measures.
The core of List's strategy was the theory of productive powers as opposed to "the theory of exchange values", which English writers termed the rather monetary oriented outlook of Adam Smith and his followers. The means to elevate civilisation was the establishment of an urban industrialised society. The crucial and basic instrument was to be tax and trade policy, besides property regulation. On a more concrete level this would involve arranging for incentives that would spur investment into infrastructure of all kinds, into manufacture, especially machine tool production, and into agriculture, especially science related agriculture.
List's strategy differs from that of the acknowledged free traders in that he paid more respect to factors of production that can be summarised under the label "immaterial". This is connected to List's inclusion of the role of co-operation or "confederation of labour" as an important factor of production - in addition to Smith's "division of labour". This focus on immaterial factors had consequences for the practical application of the legal and administrative measures in that he would advocate transitional remedies related to national learning to overcome the different prevailing circumstances of each individual nation.
List therefore stressed the difference between private and national (public) economic principles. Knowledge being the public good # 1 makes learning and therefore cultivation and protection of skill crucial, therefore the need for governmental intervention. He believed that the following motive / incentive oriented factors were crucial for the development of a more elevated global civilisation: Stability & order for predictability (for investments of all kinds), freedom & participation (for creativity), morality & know-how (for predictability and productivity). These factors were all goals in their own right that needed an accompanying industrialisation. These factors were also instruments of his program for industrialisation.
This is why List in his pursuit of a more elevated and free civilisation, and therefore as an adherent of free trade, of international law, and of a world government, could also be devoted to the promotion of the national principle (applying state intervention) in economics, as the necessary instrument. It is this author's belief that List's version of free trade would represent a more genuine type, if free trade ever would be possible.
-----Original Message----- From: owner-lbo-talk at lists.panix.com [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Rosser Jr, John Barkley Sent: Wednesday, September 23, 1998 8:41 PM To: lbo-talk at lists.panix.com Cc: lbo talk Subject: Re: friedrich list
I agree with Greg that List and his infant industry protectionism (originally derived from Alexander Hamilton) is not "Third Way" in any of the senses that term has been used in this century.
A more serious pre-Bernstein strand that led directly into several of the major twentieth century variants was the Social Christian strand coming out of the Catholic Church that fed corporatism in both its fascist and social democratic variants. The originator of this line of thought in the mid-nineteenth century was the Frenchman, Frederic Ozanam, a member of the revolutionary Paris parliament of 1848, who was beatified by the Pope in Paris a year ago in August. Barkley Rosser On Tue, 22 Sep 1998 19:41:23 -0400 Greg Nowell <GN842 at CNSVAX.Albany.Edu> wrote:
> His ideas are worth reading, and I've been assigning
> them for years. But it would be nonsense to call them
> a "third way." Protectionism in all its ramifications
> is an embedded part of capitalism, the struggle of
> bourgeois vs bourgeois. What is unique about List is
> that his appreciation of the reasons for protectionism
> go far beyond the cartoon infant industry argument with
> which he is summarized and dismissed, when he is
> discussed at all. Any time you have a leading sector
> in capitalist development dilatory political tactics
> will emerge from the representatives of the old way
> (those threatened with replacement) and those who want
> to catch up with the leading edge but, because they are
> farther behind, need some kind of compensation (access
> to subsidized capital, tax reductions, entry controlled
> markets) to put them on a better footing with the
> leading edge firm(s).
>
> --
> Gregory P. Nowell
> Associate Professor
> Department of Political Science, Milne 100
> State University of New York
> 135 Western Ave.
> Albany, New York 12222
>
> Fax 518-442-5298
>
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu