Famous for his support for protectionism and inductive reasoning, Friedrich List receives much criticism from economists. In the process of constructing economic science, liberalism and deductive reasoning have been gradually canonized as fundamental principles, whose efficacy few might doubt. As the German Historical School, which respected List as its forerunner, expired in the early twentieth century, the tradition that he represents became much less popular among students and professionals than Anglo-Saxon economics. Nonetheless, List has been remembered by many statesmen and scholars in various countries, many of whom are dissatisfied with the guides of neoclassical economics. Written in Chinese, Mei’s new book aims to comprehensively understand List’s ideas and repel misconceptions.
The book is separated into seven chapters, each of which concentrates on an independent topic related to List. Tracking his life path, Chapter 1 is basically a biography of List. It is well known that List had a turbulent life. He encountered juristic punishment in his hometown for decades, lived in exile in the US, where he suffered from financial failures although he also got to know many prominent figures who influenced his thinking, and was troubled by psychological burdens in his later life. Plagued by instability and bad luck, he never ceased to write down his ideas or to offer suggestions to policy-makers in different countries. However, his turbulent life gave him chances to obtain first-hand experience about economic development and to summarize the inspirations in his works. Chapter 2 introduces List’s works and their main content. Condensed into many policy proposals and four main works, List’s interests cover many topics, such as the importance of protectionism for economically weak countries, analyses of the American economy, and proposals to develop railways.
Chapter 3 further describes List’s interests. First, List’s support for protectionism and patronage to infant industries is not unconditional. Economic measures rely on the judgment of the economic stage and the situation of specific industries. For example, while latecomers need protectionism in the “following” stage, they should gradually give it up when they are “overtaking.” Even though Germany as a whole was in the “following” stage, its agriculture did not need tariff protection. The analysis shows that List is not a unidimensional protectionist. Second, Mei argues, List has a better sort of development economics than the fathers of the discipline, including W. Arthur Lewis and Walt Rostow, who focus on a few isolated conditions such as labor supply and capital accumulation (p. 136). List categorizes the factors supporting economic growth into five aspects: spiritual power, social conditions, political conditions, natural resources, and physical capital. As List analyzed, one country aiming to spur growth needs to possess sufficient conditions in the five domains. Third, List’s paradigm is contrasted with the Smithian paradigm. Arguing that List and Adam Smith are divergent not just in basic methodology but also in main tenets, Mei lists substantial differences of the two (p. 152).
Chapter 4 details the intellectual sources of List’s economics. While there is little explicit evidence about how List got his ideas, Mei investigates the economic doctrines that possibly impacted List, including mercantilist figures in Italy, Spain, and England, Cameralism in Germany, Colbertism in France, and Alexander Hamilton’s designs in the US. Like the mercantilist predecessors, List did not refrain from instructing policy-making in the real world. Chapter 5 records List’s personal contribution to economic practice in Germany, the US, and Hungary, where List provided suggestions to statesmen and helped design policies suitable for individual situations. In Chapter 6, Mei tracks the posthumous spread of List’s theories in the world. There are scholars and statesmen who admire List’s teaching in not just Europe and North America but also East Asia and Australia.
In Mei’s view, List’s theories are suitable and also necessary for developing countries that need tariff protection and industrial policies to strengthen productive forces and achieve industrialization. In Chapter 7, Mei states why List is still important today, and discusses how to evaluate academic drawbacks of List’s theories and how to digest List’s theoretical essence. Emphasizing economic stages, individual conditions in a single country, and the use of historical examples as methodological foundation, List in the book is portrayed as a forerunner of the German Historical School, whose representatives include Wilhelm Roscher (1817–1894) and later Gustav Schmoller (1838–1917). The methodological tradition resulted in the Methodenstreit between the German Historical School and the Austrian School (e.g., Louzek Reference Louzek2011), and later a similar debate in the UK (Schefold Reference Schefold and Schefold1989).
Emphasis on the development stage is the foundation of List’s theories, because it provides the “legitimacy” to List’s support for policies different from those of Smithian and Ricardian figures who argue that liberalist tenets have universal efficacy. Furthermore, because of various developmental stages and different individual conditions involving culture, natural resources, and political structure, etc., authorities should design diverse policies specific to a single country. This tendency contributed to the tide of the so-called Deutscher Sonderweg (German Special Path) in the nineteenth and early twentieth centuries. Another outstanding character of List’s theories is the focus on non-economic factors. List and followers of the Historical School integrated such non-economic factors as cultural tradition, social norms, and political structure into economic analysis, which strongly impacted German social scientists. One prominent example is Max Weber (e.g., The Protestant Ethic and the Spirit of Capitalism), who argued that Calvinist tenets that encourage frugal lifestyle and industriousness contributed to capitalistic entrepreneurship and thereby the rise of modern capitalism.
Like many contemporaries, List was enthusiastically looking forward to political unification and the economic rise of Germany. Mei tries to downplay List’s identity as a nationalist, but apparently List held many nationalist and Eurocentric opinions that were popular in that epoch. For example, List asserted that countries in the tropics do not need industrialization (p. 378) and Germany should take over Eastern Europe and some parts of the Balkan Peninsula as its economic colonies (p. 262). List also supported a political coalition between Germany and Great Britain. Unlike British and American thinkers who held dense liberalist ideas, German thinkers usually had a relatively conservative stance with regards to economic liberty and international order. In other words, they were moderate liberal nationalists. This intellectual tradition prevailed for the entire nineteenth and early twentieth centuries in Germany. To the demarcation belonged Max Weber, who supported constitutional democracy, simultaneously the forcible wield of state apparatus in domestic affairs (Mommsen Reference Mommsen2004), and the emphasis on Germany’s national interests in international relations (Weber [1895] Reference Weber, Mommsen and Aldenhoff1993), and also Werner Sombart, whose antisemitic research helped him to obtain the headship of the German Economic Association (Janssen Reference Janssen2011). The phenomenon that many German geniuses were liberalist and moderately right-wing is itself worth deeper research (e.g., Smith Reference Smith2020).
Despite its general objectivity in evaluating List’s legacies, the book tends to overestimate List’s innovativeness and overly extend his theoretical breadth on a few particular questions. For example, although List does deserve the reputation as one of the earliest objectors against laissez-faire economics, his support for governmental intervention can rarely be described as the forerunner of modern pro-government views that support intervention because of market failures induced by such factors as public goods and transaction costs. It is far-fetched to praise List as their pioneer (p. 371) only because they take a similar pro-government stance while they do so from almost entirely different perspectives.
Having a favorable attitude towards List’s economics, the author aims to justify its merits of theoretical structuring and practical usefulness. Indeed, it brings benefits to understand better List’s ideas and the intellectual tradition that he represents, while Anglo-Saxon economics almost monopolized how people observe economic phenomena and understand economic systems. In particular, List’s support for pragmatic economic policies, comprehensive development economics, and integration of economic history is valuable for people today. Although this book is accessible only to Chinese readers now, it is a new cornerstone for research of Friedrich List and mercantilism to boot with regards to its apparent virtues of comprehensiveness, rich details, and coherent structure.
COMPETING INTEREST
The author declares no competing interests exist.
