[579] “The German nation will at once obtain what it is now in need of, namely, fisheries and naval power, maritime commerce and colonies.” (National System, p. 143.) List has no difficulty in allying his patriotic idealism with the practical side of his nature.
[580] List deliberately distinguishes between exchange values and productive forces; but the distinction is by no means a happy one. For a policy which aims at encouraging productive forces has no other way of demonstrating its superiority than by showing an increase of exchange value. The two notions are not opposed to one another, and in reckoning a nation’s wealth we must take some account of its present state as well as of its future resources. In his Letters to Ingersoll (cf. Letter IV, referred to above) he distinguishes between “natural and intellectual capital” on the one hand and “material productive capital” on the other (Adam Smith’s idea of capital). “The productive powers of the nation depend not only upon the latter, but also and chiefly upon the former.”
[581] National System, p. 117.
[582] Unjustly as we think, for on more than one occasion Smith did take account of moral forces. He dated the prosperity of English agriculture from the time when farmers were freed from their long servitude and became henceforth independent of the proprietors. He remarks that towns attain prosperity quicker than the country, because a regular government is earlier established there. “The best effect which commerce and manufactures have is the gradual introduction and establishment of order and good government, and with them the liberty and security of individuals among the inhabitants of the country. This, though it has been the least observed, is by far the most important of their effects. Mr. Hume is the only writer who so far as I know has hitherto taken notice of it.” (Book III, chap. 4; Cannan, vol i, p. 383.) Speaking of the American colonies, Smith (Cannan, vol. ii, p. 73) makes the remark that although their fertility is inferior to the Spanish, Portuguese, and the French colonies, “the political institutions of the English colonies have been more favourable to the improvement and cultivation of this land than those of any of the other three nations.” How could List have forgotten the celebrated passage in which Smith attributes the prosperity of Great Britain largely to its legal system, which guarantees to each individual the fruits of his toil and which must be reckoned among the definitive achievements of the Revolution of 1688? “That security which the laws in Great Britain give to every man that he shall enjoy the fruits of his own labour is alone sufficient to make any country flourish, notwithstanding these and twenty other absurd regulations of commerce; and this security was perfected much about the same time that the bounty was established.” (Book IV, chap. 5; Cannan, vol. ii, pp. 42-43.)
[583] National System, chap. 17, beginning.
[584] Compare chapters 7 and 15, where he treats of the manufacturing industry in its relation to each of the great economic forces of the country.
[585] Ibid., p. 87.
[586] National System, p. 150.
[587] “It may in general be assumed that where any technical industry cannot be established by means of an original protection of 40 to 60 per cent., and cannot continue to maintain itself under a continued protection of 20 to 30 per cent., the fundamental conditions of manufacturing power are lacking.” (Ibid., p. 251.)
[588] “Solely in nations of the latter kind, namely, those which possess all the necessary mental and material conditions and means for establishing a manufacturing power of their own and of thereby attaining the highest degree of civilisation and development of material prosperity and political power, but which are retarded in their progress by the competition of a foreign manufacturing Power which is already farther advanced than their own—only in such nations are commercial restrictions justified for the purpose of establishing and protecting their own manufacturing power.” (Ibid., p. 144.)