Note 575 — Chapter IV · : FRIEDRICH LIST AND THE NATIONAL SYSTEM OF POLITICAL ECONOMY

It was the example of England that gave List the idea, but the whole conception is based upon a historical error. England possessed a navy, had founded colonies and developed her international trade long before she became a manufacturing nation. Since the time of List various categories of national development have been proposed. Hildebrand speaks of periods of natural economy, of money economy, and of credit economy (Jahrbücher für National Oekonomie, vol. ii, pp. 1-24). Bücher proposed the periods of domestic economy, of town economy, and of national economy as a substitute (Die Entstehung der Volkswirtschaft, 3rd ed., p. 108). Sombart, in his turn, has very justly criticised this classification in his book Der moderne Kapitalismus (vol. i, p. 51; Leipzig, 1902). But would that which he proposes himself be much better?

No one, we believe, has as yet remarked that List borrowed this enumeration of the different economic states, almost word for word, from Adam Smith. In chap. 5 of Book II, speaking of the various employments of capital, Smith clearly distinguished between three stages of evolution—the agricultural state, the agricultural-manufacturing, and the agricultural-manufacturing-commercial. Smith considered that this last stage was the most desirable, but in his opinion its realisation must depend upon the natural course of things.