The Historical School: From Friedrich List to the Social Market Economy. Zemfira Nazarova
wealth and power… Any nation, as well as any person, has no more dear interests as their own. Russia has nothing to concern herself with the welfare of Germany. Let Germany concern herself with Germany, Russia with Russia. Instead of complaining, hoping and waiting, for the Messiah of future free trade, it would be far better to throw cosmopolitan systems into the fire and learn from the example of Russia»53.
Paying attention to the economy of the North Americans, F. List states that «the trade and industrial history of North America is more instructive for our purpose than any other, since here development is rapid, periods of freedom and restrictions and constraints quickly follow one after another, their results are seen with clarity and certainty, and the whole system of national industry and public administration is openly unfolded before the eyes of the observer»54.
In the tenth chapter of «Lessons of History» F. List notes «history teaches, therefore, that individuals derive most of their productive forces from social institutions and social organization». And then List writes: «history teaches that arts and crafts wander from city to city, from country to country. Persecuted and oppressed in their homelands, they flee to those cities and countries which afford them freedom, patronage and support. Thus they passed from Greece and Asia to Italy, thence to Germany, Flanders, and Brabant, and from these latter to Holland and England. Everywhere recklessness and despotism drove them out, but the spirit of freedom attracted them»55.
F.List creates his system of historical-economic development, assuming that all nations in their economic development go through certain stages. In «economic terms, nations must pass through the following stages of development: the state of initial savagery, pastoral, agricultural, agricultural-manufacturing and agricultural-manufacturing-commercial»56. List regarded the agricultural-manufacturing-commercial stage as an ideal, the achievement of which for young countries (to which he included Germany and the United States) is impossible without a policy of industrial protectionism. For the countries that were behind Great Britain in terms of the level of development of their economies, according to List, the transition to the «agricultural-manufacturing-commercial state,» the highest stage of economic development of nations, was possible only through a system of protectionism. At the end of the chapter «Lessons of History» he notes that at the first stage of development are Spain, Portugal and Naples, at the second Germany and North America, not far from the border of the latter is France, and at the last stage is still only Great Britain. List believes that a nation that has not reached the height of its economic power, has the right to defend itself and create patronizing tariffs, against the competition of other industrial countries. Germany was in this exact position and therefore, List’s endeavor was merely an effort to theorize the country’s overdue economic problems. Being an advocate of protectionist policy, List limits his protectionism only to the field of manufacturing industry and considers inadmissible the establishment of any duties for agricultural products, as it only delays the transition of the nation to the next manufactory stage. It should also be said that he considers it inadmissible to impose any duties on agricultural products, because this will retard the development of the nation, and here freedom of trade is needed. It is not difficult to see that Germany, while interested in industrial protectionism, was equally interested in free trade in agricultural products and was opposed to the bread protective import duties then existing in England.
Book two, «Theory» of the «National System of Political Economy», is devoted to analyzing the views of the economists of the classical school, F. Kenet, A. Smith, J.-B. Say, whose theories he outlines, subjected to sharp criticism, and develops the theoretical foundations of his system. List notes, «Kené, who first originated the idea of universal freedom of trade, extended the scope of his research to the whole of humanity, having no idea of a separate nation… he would like „merchants of all nations to form one trade republic.“ Clearly, Kenet had in mind cosmopolitan economics, i.e., that science which teaches how the human race can secure its own welfare, as opposed to political economy, or that science which confines itself to the study of how a given nation, under known world relations, by means of agriculture, industry, and commerce, achieves prosperity, civilization, and power…Adam Smith, like Kenet, did not think of writing a treatise on the subject of political economy, i.e., the policy which individual nations should follow in order to make progress in their economic condition.»57
Classical political economy only overlooked the essence of nationalities, their interests and their special conditions. Each nation has its own path of development, argued List. The final unification of individual nations on an economic basis is possible only when all nations fully develop their productive forces. Therefore, List noted, not for every nation and not at any time can be applied the same common measures of economic policy for all. What is useful for one nation may be premature for another, as it does not have the appropriate level of development of productive forces. Therefore, the protectionist system is the only means to raise lagging nations to the level of the nations ahead of them. List notes «the protectionist system is, from this point of view, a powerful force drawing nations towards the ultimate goal of the association of nations, and hence towards true free trade. From the same point of view, national (political) economy is a science which, recognizing the existing interests and individual conditions of nations, teaches how each of them can rise to the same degree of economic development at which its association with other nations of equal culture on the basis of free trade becomes possible and profitable»58.
Criticizing the labor theory of value (value), List put forward the theory of productive forces. If a man can possess wealth, i.e. exchange value, but if he does not possess the ability to produce more valuable objects than he consumes, he will be poor. On the other hand, a man may be poor, but if he has the power to produce quantities of value greater than he consumes, he will become rich»59. The ability to create wealth is infinitely more important than wealth itself, according to List. List considered the main component of productive forces to be «mental capital» – it is the main source of wealth. And the increase of material capital of the nation depends on the increase of its mental capital and vice versa, according to List. In contrast to A. Smith’s doctrine of productive labor, List recognized as productive the activities of those who run the court and administration, in whose hands education and religious upbringing, who moves science, works in the field of art, etc. In List’s view, the well-being of a nation is conditioned not by the quantity of wealth, as the classics claim, but by the degree of development of the productive forces that create it. It is not only important for a nation to have the totality of material goods available to meet current needs, but it is even more important to retain «the ability to create and increase wealth,» for this ability is more important than wealth itself, List noted. Sometimes it may happen that it is necessary to sacrifice cash wealth in order to develop and increase it in the future, according to List. A nation must sacrifice and put up with the lack of material wealth in order to acquire the intellectual and social strength to develop it; it must sacrifice present benefits in order to secure its future, he believed. Let us turn to the primary source: in reference to the classical school he writes: «It is evident now how strangely mistaken the school was in making material wealth or exchange values alone the subject of its investigations and in considering only physical labor as productive force. In its opinion, he who raises pigs is a productive member of society, and he who raises human beings is not productive. He who makes balalaikas and harmonies for sale is a productive member of society, while the greatest virtuosos, just because they cannot bring what they perform to the market, are not productive. The physician who saves the life of his patient does not belong to the class of producers, but the apothecary boy belongs to it, although the exchange-values, or pills, which he manufactures, exist only for a few minutes, and then are utterly destroyed. The productivity of Newton,
Ibid. – pp. 138—139
List, F. The National system of political economy. – M.: Chelyabinsk: 2017. – p. 140
Ibid. – p. 153
Ibid. – p. 205
List, F. The national system of political economy. – M.: Chelyabinsk: 2017. – p. 114
List, F. The National system of political economy. – M.: Chelyabinsk: 2017. – p. 167
Там же. – С. 171