Friedrich List
Daniel Friedrich List was a German entrepreneur, diplomat, economist and political theorist who developed the nationalist theory of political economy in both Europe and the United States. He was a forefather of the German historical school of economics and argued for the Zollverein from a nationalist standpoint. He advocated raising tariffs on imported goods while supporting free trade of domestic goods and stated the cost of a tariff should be seen as an investment in a nation's future productivity. His theories and writing also influenced the American school of economics.
List was a political liberal who collaborated with Karl von Rotteck and Carl Theodor Welcker on the , an encyclopedia of political science that advocated constitutional liberalism and which influenced the Vormärz. At the time in Europe, liberal and nationalist ideas were almost inseparably linked, and political liberalism was not yet attached to what was later considered "economic liberalism." Emmanuel Todd considers List a forerunner to John Maynard Keynes as a theorist of "moderate or regulated capitalism."
Biography
Early life
Daniel Friedrich List was born in the free imperial city of Reutlingen in the Duchy of Württemberg. His date of birth is uncertain, but his baptism is usually given as August 6, 1789. His father, Johannes, was a prosperous master tanner and a city official, and his mother was Maria Magdalena. Daniel Friedrich was the second son and youngest child in his family. He was educated at the town's Latin School. As an apprentice at his father's tanning business, List showed little interest in manual labor. He was apprenticed as a bureaucratic clerk at Blaubeuren. After passing his examination, he entered the administrative service in 1805 and became Taxes and Warehouses Commissioner in Schelklingen.University professor and early advocacy for German customs union: 1817–1820
At age 23 in 1811, List was promoted to a post at Tübingen. While there, he regularly attended lectures at the University of Tübingen and expanded his reading. He also made the acquaintance of the future minister. In 1816, List's position in the bureaucracy was improved as the succession of King William I of Württemberg ushered in a period of reform. Under minister, later his sponsor, List rose quickly through the bureaucracy. He moved to the Ministry of Finance in Stuttgart and rose to the position of chief auditor and accountant in 1816. In that role, he commissioned surveys among emigrants from Baden and Württemberg for the purpose of studying the increase in emigration and enacting countermeasures.Von Wangenheim, who had meanwhile been appointed Minister for Church and School Affairs for the Duchy, commissioned List to propose reforms to university civil service training. List proposed establishing a political science faculty alongside the standard legal training, arguing in 1817:
"No one in our University has any conception of a national economy. No one teaches the science of agriculture, forestry, mining, industry, or trade.... he forms of government are in such a truly barbarous state, that if an official of the seventeenth century rose again from the dead he could at once take up his old work, though he would assuredly be astonished to find the advances that had been made during the interval in the simplest process of manufacture."
This proposal was accepted and the institution opened in Tübingen on October 17, 1817. Despite lacking a university degree, List was appointed professor of public administration science at the insistence of Von Wangenheim. The established professors and the university committees opposed the appointment on the grounds that List had only achieved his position through patronage, and they accused him of incompetence.
List published his thoughts on these reform in the short book Die Staatskunde und Staatspraxis Württembergs. He further published arguments for constitutional liberalism in the magazine Volksfreund aus Schwaben, a national newspaper for morality, freedom and law. His journalistic activities drew suspicion from the new Württemberg government, and List was compelled to submit a petition to the king to defend himself against accusations of subversion.
In 1819, List traveled to Frankfurt and organized local merchants to establish the General German Trade and Industry Association. This association, which was later renamed the "Association of German Merchants and Manufacturers", is considered the first German business association of the modern era. List thus stands at the beginning of the economic association system that has been typical of German economic history since the 19th century. List formulated the association's opposition to customs borders between the various German states and first envisioned the creation of a large German common market as a necessary prerequisite for the industrialization of Germany. With regard to the foreign trade policy of this desired new internal market, List advocated a retaliatory tariff that would compensate for the trade barriers that existed for German traders abroad. This tariff was intended to protect German economic interests, but it was not yet the idea of an educational tariff that he later developed. The association initiated a petition drive and lobbied German governments and princes to promote these policies.
"Thirty-eight customs and toll lines in Germany paralyze internal traffic and produce approximately the same effect as if every limb of the human body were ligated so that the blood did not overflow into another. In order to trade from Hamburg to Austria, from Berlin to Switzerland, one has to cross ten states, study ten customs and toll regulations, and pay ten times the transit toll."
– Extract from the petition of the General German Trade and Industry Association of 14 April 1819 to the Federal Assembly, formulated by Friedrich List
The Bundestag did not recognize the trade association and instead referred the signatories to the individual state governments. These, however, strictly rejected outside interference in state affairs, and List's activism lost the trust of King Wilhelm I. In order to forestall his dismissal as professor, List resigned his office. Instead, List turned his focus to activism. He became editor-in-chief of the newspaper Organ for the German Trade and Industry, founded on July 1, 1818 and managing director of the Trade and Industry Association. In the latter role, he traveled to various German capitals and unsuccessfully sought dialogue with the governments. Among other places, he traveled to Vienna in 1820, where a pan-German follow-up conference to the Carlsbad Assembly was held. There, List presented an expanded memorandum advocating for the broad principles of free trade. He also presented suggestions for an industrial exhibition or the establishment of an overseas trading company. Despite these failures, Wangenheim, who had become the Württemberg delegate to the Bundestag, relied on List to develop plans for a, which eventually became a reality in 1828.
Member of Württemberg parliament and imprisonment: 1820–1824
By 1819, List had been elected to the Württemberg state parliament, but his election was invalid, having not reached the minimum age of 30. In 1820, he was elected to the state parliament from Reutlingen.As a member of parliament, he continued his campaign for democracy and free trade. In his "Reutlingen Petition " of January 1821, he criticized the prevailing bureaucracy and economic policy, arguing, "A superficial look at the internal conditions of Württemberg must convince the unbiased observer that the legislation and administration of our fatherland suffer from fundamental defects that are consuming the marrow of the country and destroying civil liberties." List further argued that Württemberg suffered under a “world of bureaucrats separated from the people, spread over the whole country and concentrated in the ministries, ignorant of the needs of the people and the conditions of civil life, … opposing every influence of the citizen as if it were a threat to the state.” To remedy the issue, List proposed strong local self-government, including free elections to local authorities and independent local jurisdiction. However, his petition was confiscated by police before it could be distributed. Under pressure from King Wilhelm I, the conservative parliament withdrew his political immunity in a vote on February 24, 1821.
On April 6, 1822, List was sentenced to ten months imprisonment at Hohenasperg. He fled and evaded capture for two years in Baden, Alsace and Switzerland but returned to serve his sentence in 1824, having been unable to build a secure life in exile.
Exile in United States: 1825–1833
After serving five months of his sentence at Hohenasperg, List was pardoned in exchange for agreeing to emigrate to the United States of America. He initially worked as a farmer, with little success. After one year, he sold his farm and moved to Reading, Pennsylvania, where he became editor-in-chief of the German-language Reading Adler from 1826 to 1830.After discovering a coal deposit in 1827, he and several partners founded a coal mine. In 1831, they also founded the Little Schuylkill Navigation, Railroad and Coal Company, which opened a railroad line to transport the coal, making List an early American railroad pioneer. Through these ventures, he gained a certain amount of wealth and financial independence, which he lost again in the wake of the Panic of 1837.
While in the United States, List further developed arguments for economic nationalism, joining American entrepreneurs in demanding the introduction of protective tariffs in 1827. List also came into contact with the ideas of Alexander Hamilton and contributed, among other works, to the 1827 publication Outlines of American Political Economy, in which he provided economic support for the demand for trade protections. He began to distance himself from Adam Smith's theories of free trade as the basis for his customs union proposals, instead arguing that protective tariffs would empower the United States and Germany, which lagged behind England in industrialization, to develop domestic economic sovereignty. In Outlines of Political Economy, List drew heavily on Jean-Antoine Chaptal's work De l’industrie française and the emerging historical school of economics to argue that economic policy should vary depending on the needs of individual states. Some argue that List's American exile inspired his pronounced "National System", which found realization in Henry Clay's American System. Others deny this, since List argued for a German customs union as early as 1819 and his views in the United States were framed as pragmatic rather than dogmatic and were influenced by liberal protectionists such as Chaptal and Adolphe Thiers.
The protectionist campaign brought List into the presidential election of 1828, in which he supported Andrew Jackson. Jackson granted List American citizenship in 1830 and appointed him consul to Hamburg in 1830, though this appointment was not confirmed by the United States Senate, and the Grand Duchy of Baden at Leipzig in 1833, providing him diplomatic immunity and protection from prosecution in Württemberg. However, the position did not provide a fixed salary, and List soon neglected his duties. While in Leipzig, List traveled frequently to Paris to promote American-French trade relations. He met frequently with Heinrich Heine and, through his daughters, befriended the musicians Robert and Clara Schumann.