Georg Friedrich List (August 6, 1789 November 30, 1846) was a leading 19th century German economist who

o developed the "National System" or what some would call today the National System of Innovation. He was a forefather of the German historical school of economics, and considered the original European unity theorist whose ideas were the basis for the European Economic Community.Though List's practical conclusions were different from those of Adam Mller (17791829), he was largely influenced by Alexander Hamilton and the American School rooted in Hamilton's economic principles, including Daniel Raymond,[1] but also by the general mode of thinking of America's first Treasury Secretary, and by his strictures on the doctrine of Adam Smith. He opposed the cosmopolitan principle in the contemporary economical system and the absolute doctrine of free trade which was in harmony with that principle, and instead developed the infant industry argument, to which he had been exposed by Hamilton and Raymond.List's theory of "national economics" differed from the doctrines of "individual economics" and "cosmopolitan economics" by Adam Smith and J.B. Say. List contrasted the economic behaviour of an individual with that of a nation. An individual promotes only his own personal interests but a state fosters the welfare of all its citizens. An individual may prosper from activities which harm the interests of a nation. "Slavery may be a public calamity for a country, nevertheless some people may do very well in carrying on the slave trade and in holding slaves. Disagreements with Adam Smith's ideas.List argued that statesmen had two responsibilities: "one to contemporary society and one to future generations". Normally, most of leaders' attention is occupied by urgent matters, leaving little time to consider future problems. But when a country had reached a turning point in its development, its leaders were morally obliged to deal with issues that would affect the next generation. "On the threshold of a new phase in the development of their country, statesmen should be prepared to take the long view, despite the need to deal also with matters of immediate urgency." [13] List's fundamental doctrine was that a nation's true wealth is the full and many-sided development of its productive power, rather than its current exchange values. For example, its economic education should be more important than immediate production of value, and it might be right that one generation should sacrifice its gain and enjoyment to secure the strength and skill of the future. Under normal conditions, an economically mature nation should also develop agriculture, manufacture and commerce. But the two latter factors were more important because they better influenced the nation's culture and independence. These factors were especially connected to navigation, railways and high technology, while a purely agricultural state tended to stagnate. But, List claims, only countries in temperate regions were adapted to grow higher forms of industry. On the other hand, tropical regions had a natural monopoly in the production of certain raw materials. Thus, there was a spontaneous division of labor and confederation of powers between these two groups of countries.List contended that Smith's economic system is not an industrial system but a mercantile system, and called it "the exchange-value system". Contrary to Smith, he argued that the immediate private interest of individuals would not lead to the highest good of society. The nation stood between the individual and humanity, and was defined by its language, manners, historical development, culture and constitution. This unity must be the first condition of the security, well-being, progress and civilization of the individual. Private economic interests, like all others, must be subordinated to the maintenance, completion and strengthening of the nation. Stages of economic development.List theorised that nations of the temperate zone (which are furnished with all the necessary conditions) naturally pass through stages of economic development in advancing to their normal economic state. These are: 1. 2. 3. 4. pastoral life agriculture agriculture united with manufactures agriculture, manufactures and commerce are combined

The progress of the nation through these stages is the task of the state, which must create the required conditions for the progress by using legislation and administrative action. This view leads to List's scheme of industrial politics. Every nation should begin with free trade, stimulating and improving its agriculture by trade with richer and more cultivated nations, importing foreign manufactures and exporting raw products. When it is economically so far advanced that it can manufacture for itself, then protection should be used to allow the home industries to develop, and save them from being overpowered by the competition of stronger foreign industries in the home market. When the national industries have grown strong enough that this competition is not a threat, then the highest stage of progress has been reached; free trade should again become the rule, and the nation be thus thoroughly incorporated with the universal industrial union. What a nation loses in exchange during the protective period, it more than gains in the long run in productive power. The temporary expenditure is analogous to the cost of the industrial education of the individual. "In a thousand cases the power of the State is compelled to impose restrictions on private industry. It prevents the ship owner from taking on board slaves on the west coast of Africa, and taking them over to America. It imposes regulations as to the building of steamers and the rules of navigation at sea, in order that passengers and sailors may not be sacrificed to the avarice and caprice of the captains. Everywhere does the State consider it to be its duty to guard the public against danger and loss, as in the sale of the necessaries of life, so also in the sale of medicines, Railways.List was the leading promoter of railways in Germany. His proposals on how to start up a system were widely adopted.[17] He summed up the advantages to be derived from the development of the railway system in 1841:[18] 1. It is a means of national defence: it facilitates the concentration, distribution and direction of the army. 2. It is a means to the improvement of the culture of the nation. It brings talent, knowledge and skill of every kind readily to market. 3. It secures the community against dearth and famine, and against excessive fluctuation in the prices of the necessaries of life. 4. It promotes the spirit of the nation, as it has a tendency to destroy the Philistine spirit arising from isolation and provincial prejudice and vanity. It binds nations by ligaments, and promotes an interchange of food and of commodities, thus making it feel to be a unit. The iron rails become a nerve system, which, on the one hand, strengthens public opinion, and, on the other hand, strengthens the power of the state for police and governmental purposes. 5. Legacy List's principal work is entitled Das Nationale System der Politischen konomie (1841) and was translated into English as The National System of Political Economy. Before 1914, List and Marx were the two best-known German economists and theorists of development."This book has been more frequently translated than the works of any other German economist, except Karl Marx."[19]He is credited with influencing National Socialism in Germany, and his ideas are credited as forming the basis of the European Economic Community. His influence among developing nations has been considerable. Japan has followed his model. It has also been argued that Deng Xiaoping's post-Mao policies were inspired by List. As Marx was not interested in the survival of the capitalist system, he was not really concerned with economic policy, except in so far as the labour movement was involved. There, his argument was concentrated on measures to limit the length of the working day, and to strengthen trade union bargaining power. His analysis was also largely confined to the situation in the leading capitalist country of his daythe UKand he did not consider the policy problems of other Western countries in catching up with the lead country (as Friedrich List did). In so far as Marx was concerned with other countries, it was mainly with poor countries which were victims of Western imperialism in the merchant capitalist era.[22]Heterodox economists, such as Ha-Joon Chang and Erik Reinert, refer to List often explicitly when writing about suitable economic policies for developing countries.