The Historical School: From Friedrich List to the Social Market Economy. Zemfira Nazarova

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the main source of wealth – to be the main component.

      Friedrich List’s book «The National System of Political Economy» in Russian translation by V.M.Isergin, edited by K.V.Trubnikov, published in 1891 and republished by the publishing house «Sotsium» in 2017 contains four books: the first is called «History», the second – «Theory», the third – «Systems», the fourth – «Politics».

      In the introduction, compiled by Konstantin Trubnikov it is noted that F. List, during his lifetime, was known in the highest government, scholarly and public spheres throughout Germany, Austria, England, France and the United States of America, where he personally participated in scholarly economic literature. After his death, The National System of Political Economy was reprinted several times in Germany, and was translated into French and English. Trubnikov notes, «unfortunately, the „National System of Political Economy“ by Fr. List, which has a worldwide reputation, not only has not been translated into Russian until now, and therefore unknown to Russian educated society, but even very little known to most of our scientists-economists»45. Konstantin Trubnikov further states that the teachings of Fr. List constituted an epoch not only in the scientific, but also in the practical life of Germany and the United States, and were the guiding star that brought finance, agriculture, industry and commerce in these states to a flourishing state. Scholars of economics recognize that List’s «National System of Political Economy» may be regarded «as the highest scientific expression of the patronage system.»

      Let us turn directly to the primary source. In the preface of the book List notes that he has to tell in it almost half of his life, because «more than twenty-three years have passed since I had my first doubt about the truthfulness of the prevailing theory of political economy, since I devoted myself to the study of its fallacies and their root causes… I have studied as well as others everything that was then thought and written about the subject, but I did not want to limit myself to familiarize young people with the current state of science; I sought to teach them how the national-economic theory of political economy, the national system of political economy, the national system of protection, the national system of protection, and the national system of political economy46. And he also notes there that «for two very advanced nations, free competition can only be beneficial when they are both at the same approximate stage of industrial development». He found a difference between cosmopolitan economics, as he called classical political economy, and political economy.

      Criticizing the classical school for its «cosmopolitanism,» he formulated the doctrine of «national economy,» by which he meant a system of economic policy recommendations for the developing German national bourgeoisie. In his introduction, foregrounding the analysis of national factors and national unity, he argued that there is a «cosmopolitan and political economy, a theory of exchange-valued property and a theory of productive forces – doctrines different in essence, but which must be developed independently» and he further notes «the productive forces of nations depend not only on the labor, savings, morals, and abilities of men, or on the possession of natural treasures and material capitals, but also on social, political, and civilization. No matter how diligent, thrifty, skillful, enterprising, intelligent and moral individuals may be, yet without national unity, without national division of labor and without national cooperation of productive forces, a nation will never be able to attain a high degree of wealth and power or secure a lasting possession of its intellectual, social and material wealth»47.

      The first book, «History» of the «National System of Political Economy» includes an in-depth analysis of the development of the economies of the Italians, Hanseatic, Dutch, English, Spanish and Portuguese, French, Germans, Russians, North Americans and Chapter X – «Lessons of History». He speaks of the rise and loss of power of the Italian cities and the Hanseatic League, how they were supplanted by the Spanish and Portuguese and then the Dutch, in particular he claimed that «when Hanseatic shipping began to decline, the Dutch were building up to 2,000 new ships each year»48. And he goes on to note that until the first half of the seventeenth century, «the Dutch are as far above the English in factories and colonies, in trade and navigation, as the English are at present superior to the French in this respect.» And in the chapter on the English he emphasizes the thought of how, through the wise and energetic policy of Queen Elizabeth and the encouraging measures of the government, industry and commerce have developed in this country. F. List saw the beginning of the industrial and commercial greatness of England mainly in sheep breeding and wool production, emphasizing the great importance of the act of navigation for the growth of economic power of the country. Laying out the policy of protectionism of the English government, he wrote: «It comes out according to our theory, which we call the theory of productive forces and which, without investigating its foundations, recognized English ministers, adhering to the rule: buy raw materials, sell fabricated goods. The English ministers cared not for the acquisition of very cheap but transitory manufactures, but for the creation with endowments of an expensive and permanent manufactory force»49.

      In the history of the development of the French economy F.List notes the role of Colbert’s policy, singling out this time as a brilliant period of French industry and censures Kenet, who «censured» Colbert for the fact that he sought to bring factory industry at the expense of farming. Noting Napoleon’s «advancement» List writes «Once upon a time,» Napoleon said, «there was only one kind of property known – land property; now there is a new kind – industry. Thus Napoleon «saw and expressed clearly what his contemporary economists did not see or could not determine with precision, namely, that a nation combining factory industry and agriculture is more perfect and richer than countries purely agricultural»50.

      Evaluating the economic history of Germany, F.Liszt notes, – «Even at the beginning of the XVIII century in Germany we see: barbarism in literature and language, barbarism in legislation, administration and court; barbarism in agriculture; decline of industry and large-scale trade; lack of national unity and strength; powerlessness and weakness in everything compared to foreign countries. One thing alone has saved the Germans: their original character; their love of labor, order, thrift, and moderation, their perseverance and endurance in research and affairs; their earnest desire for the best; their great store of morality, moderation, and prudence.»51.

      As a champion of German national unity, he favored transforming Germany into a power capable of economic and political expansion on the world stage. War is «a blessing for the nation,» he said. Drawing attention to the historical peculiarities of the development of capitalism in Germany, he opposed both the supporters of feudal-patriarchal orders and the supporters of liberalization of the economy.

      Noting the state of the Russian economy, List shows a thorough knowledge of the economic policies of the Russian government and the country’s economic history in chapter eight, «The Russians.» He refers to the political economy course of A. Storch, which was no less respected in Russia than the works of Say in Germany. Let us turn to the primary source: «Russia owes its first successes in culture and industry to relations with Greece, then to trade with Hanse through Novgorod, and finally, after the conquest of this city by Tsar John Vasilievich, as well as due to the opening of the waterway through the White Sea, to trade with the British and the Dutch. Significant development of Russian industry, as well as mainly the softening of manners, however, began only with the reign of Peter the Great. The history of Russia, from the seventeenth century to the forties of the eighteenth century, provides striking evidence of what a powerful economic prosperity of the people»52. List believes that reasonable trade and economic policy, conducted at different times in Russia, led to the fact that «trade crises have completely

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