[589] Ibid., p. 240.
[590] “Everyone knows,” says he (quoted by Hirst, pp. 231 et seq.), “that the cost of production of a manufactured good depends very largely upon the quantity produced—that is, upon the operation of the law of increasing returns. This law exercises considerable influence upon the rise and fall of manufacturing power.… An English manufacturer producing for the home market has a regular sale of 10,000 yards at 6 dollars a yard.… His expenses being thus guaranteed by his sales in the home market, the cost of producing a further quantity of 10,000 yards for the foreign market will be considerably reduced and would yield him a profit even were he to sell for 3 or 4 dollars a yard. And even though he should not be making any profit just then, he can feel pretty confident about the future when he has ruined the foreign producer and driven him out of the field altogether.” List thinks that this shows how impossible it is for manufacturers in a new country without any measure of protection to compete with other countries whose industry is better established. But this is one of the arguments that has been most frequently used by British manufacturers in recent years in demanding protection against American competition. We would like to know what List would have thought of this.
[591] National System, p. 144, and the whole of chap. 16 of Book II. He considered that “it would be a further error if France, after her manufacturing power has become sufficiently strong and established, were not willing to revert gradually to a more moderate system of Protection and by permitting a limited amount of competition incite her manufacturers to emulation.” (Ibid., p. 249.)
[592] Ibid., p. 253, and especially p. 162, etc., where with a sudden change of front he declares himself in favour of Free Trade in agriculture, and employs the arguments which Free Traders had applied to all products. Compare again p. 230, where he declares that agriculture “by the very nature of things is sufficiently well protected against foreign competition.”
[593] The authors were unable to find a copy of Hamilton’s works in France, but according to Bastable (Commerce of Nations, 6th ed., London, 1912, pp. 120, 121) the principal arguments deduced by the report to prove the advantages of industry are that it permits of greater division of labour, prevents unemployment, supplies a more regular market than the foreign, and encourages immigration.
[594] It is very probable that List had read the work of another American Protectionist, Daniel Raymond, whose Thoughts on Political Economy appeared in 1820 and ran into four editions (cf. Daniel Raymond, by Charles Patrick Neill, Baltimore, 1897). This seems to be the opinion of the majority of writers who during the last few years have especially concerned themselves with the study of List’s opinions (Miss Hirst, in her Life of Friedrich List, and M. Curt Kohler in his book Problematisches zu Friedrich List, Leipzig, 1909). But to regard Raymond as his only inspirer, as is done by Rambaud in his Histoire des Doctrines, seems to us mere exaggeration. Apart from the facts that Raymond’s ideas are not particularly original and that List had lived some years in America in a Protectionist environment, List never quotes him at all. On the other hand, he frequently and enthusiastically refers to both Dupin and Chaptal in his Letters to Ingersoll. The expression “productive forces” was probably borrowed from Baron Dupin’s Situation progressive des Forces de la France (Paris, 1827), which opens with the following words: “This forms an introduction to a work entitled The Productive and Commercial Forces of France. By productive forces I mean the combined forces of men, animals, and nature applied to the work of agriculture, of industry, or of commerce.” Again, the idea of protecting infant industries is very neatly put by Chaptal. On p. xlvi of the introduction to his De l’Industrie français (published in 1819) we meet with the following words: “It does not require much reflection to be convinced of the fact that something more than mere desire is needed to overcome the natural obstacles in the way of the development of industry. Everywhere we feel that ‘infant industries’ cannot struggle against older establishments cemented by time, supported by much capital, freed from worry and carried on by a number of trained, skilled workmen, without having recourse to prohibition in order to overcome the competition of foreign industries.”
It is certain that List, during his first stay in France, had read these two authors, and had there found a confirmation of his own Protectionist ideas. It is not less certain, from a letter written by him in April 1825 (quoted by Miss Hirst, p. 33), that he was converted before going to America, but that he expected to find some new arguments there which would strengthen him in his opposition to Smith. Marx’s assertion made in his Theorien über den Mehrwerth, vol. i, p. 339 (published by Kautsky, Stuttgart, 1905), that List’s principal source of inspiration was Ferrier (Du Gouvernement considéré dans ses Rapports avec le Commerce, Paris, 1805) has not the slightest foundation. Neither has the attempt to credit Adam Müller with being the real author of the conception of a national system of political economy. List, we know, was acquainted with Müller, a Catholic writer who wished for the restoration of the feudal system. But to be a German writer in the Germany of the nineteenth century was quite enough to imbue one with the idea of nationality. Moreover, Protectionists’ arguments are extremely limited in number, so that they do not differ very much from one epoch to another, and it is a comparatively easy task to find some precursors of Friedrich List.
[595] Published in a volume entitled Outlines of a New System of Political Economy, in a Series of Letters addressed by F. List to Charles Ingersoll (Philadelphia, 1827). This publication did not find a place in the collected edition published by Häusser, but the whole of it has been incorporated in the interesting Life of Friedrich List by Margaret E. Hirst (London, 1909).
[596] This was the consideration that influenced him in adopting a Protectionist attitude, although hitherto he had regarded himself as a disciple of Smith and Say. (Letters to Ingersoll, p. 173.)
[597] National System, preface, p. 54.