One might experience some difficulty in understanding the sudden volte-face of List in favour of free exchange in agriculture did we forget the particular situation in Germany, to which his thoughts always returned. This is equally true of many other points in his system. Germany was an exporter of corn and suffered from the operation of the English Corn Laws. German agriculture needed no protection, but suffered from want of markets, and List would have been very happy to persuade England to abandon her Corn Laws. Agricultural protection was only revived in Germany towards the end of 1879, when the agriculturists thought they were being threatened by foreign competition.
II: SOURCES OF LIST’S INSPIRATION. HIS INFLUENCE UPON SUBSEQUENT PROTECTIONIST DOCTRINES.
The question of the origin of List’s Protectionist ideas has frequently been raised. The works of the Frenchmen Dupin and Chaptal undoubtedly gave him some material for reflection, but he was really confirmed in his opposition to laissez-faire by the men whom he met in America. While there he came into intimate contact with the members of a society which had been founded at Philadelphia for the encouragement of national industry. The founder of this society was an American statesman named Hamilton, the author of a celebrated report upon manufactures, who as far back as 1791 had advocated the establishment of Protection for the encouragement of struggling American industries.[593] Hamilton’s argument, as List fully recognised, bears a striking similarity to the thesis of the National System.[594] The Philadelphian society, which was then presided over by Matthew Carey (the father of the economist of whom we shall have to speak by and by), immediately after List’s arrival in America inaugurated an active campaign on behalf of a revision of the tariffs. Ingersoll, the vice-president, persuaded List to join in the campaign, which he did by publishing in 1827 a number of letters which caused quite a sensation.[595] They are really just a résumé of the National System. The policy which in the course of a few years he was to advocate in Germany he now recommended to the consideration of the Americans.
But facts were even more eloquent than books, and what chiefly struck the practical mind and the observant eye of List was the material success of American Protection, just as in Germany he had been impressed by the beneficial effects which temporary Protection enforced by the Continental Blockade had produced there.[596]
Far from being injurious to the economic development of the United States, it seemed as if Protection had really helped it. What it actually did was to quicken by the space of a few years an evolution which nature herself was one day bound to accomplish. So vast was the territory, so abundant the natural resources, and so advantageously were they placed for the application of human energy that no system, however defective, could long have delayed the accumulation of wealth. The similar condition of Germany lent colour to the belief that the same experiment carried on under similar circumstances would also succeed there.
Accordingly, List’s work, though not directly connected with any known American system, is the first treatise which gives a clear indication of the influence upon European thought of the economic experiences of the New World.
In a beautiful paragraph in the National System List has himself confessed to this. “When afterwards I visited the United States, I cast all books aside—they would only have tended to mislead me. The best work on political economy which one can read in that modern land is actual life. There one may see wildernesses grow into rich and mighty states; and progress which requires centuries in Europe goes on there before one’s eyes, viz. that from the condition of the mere hunter to the rearing of cattle, from that to agriculture, and from the latter to manufactures and commerce. There one may see how rents increase by degrees from nothing to important revenues. There the simple peasant knows practically far better than the most acute savants of the Old World how agriculture and rents can be improved; he endeavours to attract manufacturers and artificers to his vicinity. Nowhere so well as there can one learn the importance of means of transport, and their effect on the mental and material life of the people. That book of actual life I have earnestly and diligently studied, and compared with the results of my previous studies, experience, and reflections.”[597]
Though from this point of view List’s Protectionism seems closely connected with the most modern of economic units, a still closer tie links him to the Mercantilism of old. Nor did he ever dissemble his love for the Mercantilists, especially for Colbert. He accused Smith and Say of having misunderstood them, and he declared that they themselves more justly deserved the title of Mercantilists because of their attempt to apply to whole nations a very simple conception which they had merely copied from a merchant’s note-book, namely, the advice to buy in the cheapest and sell in the dearest market. He distinguishes between two classes of Mercantilists according as they are influenced by one or other of two dominating ideas. On the one hand we have those who emphasise the importance of industrial education, which is the dominant note in List’s philosophy. This idea has quite taken the place of the older idea of a favourable balance of trade, and has been adopted by such a Liberal thinker as John Stuart Mill, whereas the other has been definitely rejected by the science. Furthermore, the Mercantilism of the seventeenth century was a special instrument employed in the interests of a permanent policy, which was exclusively national; while List’s Protection, according to his own opinion, was merely a means of leading nations towards the possibility of union on a footing of equality. It was a mere transitory system, a policy dictated by circumstances.
List’s system cannot be regarded as the inspirer of modern Protection, any more than he himself can be regarded as a direct descendant of the old Mercantilists. Even in Germany, despite the great literary success of his work, its influence was practically nil, unless we credit it with the slight increase of taxation upon which the Zollverein decided in 1844, and couple with it the Protectionist campaign afterwards carried on by List in the columns of his newspaper.[598] But the Liberal reforms carried out by the English Parliament under the Premiership of Peel were during that very same year crowned by the abolition of the Corn Laws. This measure caused much consternation throughout Europe, and the confirmation which Cobden’s ideas thus received influenced public opinion a good deal and gave a Liberal trend to the commercial policy of Europe during the next few years. The régime of commercial treaties inaugurated by Napoleon III was an outcome of this change of feeling.
Towards the end of 1879 a vague kind of Protectionism made its appearance in Europe. Tariff walls were raised, but they never seemed to be high enough. One would like to know whether these new tariffs, established successfully by Germany and France, were in any way inspired by List’s ideas.