I’m currently reading List’s The National System, and simply cannot resist sharing this section with the kinist virtual community:

Chapter 11

Political and Cosmopolitical Economy

  Before Quesnay and the French economists there existed only a
practice of political economy which was exercised by the State
officials, administrators, and authors who wrote about matters of
administration, occupied themselves exclusively with the
agriculture, manufactures, commerce, and navigation of those
countries to which they belonged, without analysing the causes of
wealth, or taking at all into consideration the interests of the
whole human race.
  Quesnay (from whom the idea of universal free trade originated)
was the first who extended his investigations to the whole human
race, without taking into consideration the idea of the nation. He
calls his work ‘Physiocratie, ou du Gouvernement le plus avantageux
au Genre Humain,’ his demands being that we must imagine that the
merchants of all nations formed one commercial republic. Quesnay
undoubtedly speaks of cosmopolitical economy, i.e. of that science
which teaches how the entire human race may attain prosperity; in
opposition to political economy, or that science which limits its
teaching to the inquiry how a given nation can obtain (under the
existing conditions of the world) prosperity, civilisation, and
power, by means of agriculture, industry, and commerce.
  Adam Smith(1*) treats his doctrine in a similarly extended
sense, by making it his task to indicate the cosmopolitical idea of
the absolute freedom of the commerce of the whole world in spite of
the gross mistakes made by the physiocrates against the very nature
of things and against logic. Adam Smith concerned himself as little
as Quesnay did with true political economy, i.e. that policy which
each separate nation had to obey in order to make progress in its
economical conditions. He entitles his work, ‘The Nature and Causes
of the Wealth of Nations’ (i.e. of all nations of the whole human
race). He speaks of the various systems of Political economy in a
separate part of his work solely for the purpose of demonstrating
their non-efficiency, and of proving that ‘political’ or national
economy must be replaced by ‘cosmopolitical or world-wide economy.’
Although here and there he speaks of wars, this only occurs
incidentally. The idea of a perpetual state of peace forms the
foundation of all his arguments. Moreover, according to the
explicit remarks of his biographer, Dugald Stewart, his
investigations from the commencement are based upon the principle
that ‘most of the State regulations for the promotion of public
prosperity are unnecessary, and a nation in order to be transformed
from the lowest state of barbarism into a state of the highest
possible prosperity needs nothing but bearable taxation, fair
administration of justice, and peace.’ Adam Smith naturally
understood under the word ‘peace’ the ‘perpetual universal peace’
of the Abbé St. Pierre.
  J. B. Say openly demands that we should imagine the existence
of a universal republic in order to comprehend the idea of general
free trade. This writer, whose efforts were mainly restricted to
the formation of a system out of the materials which Adam Smith had
brought to light, says explicitly in the sixth volume (p. 288) of
his ‘Economie politique pratique’. ‘We may take into our
consideration the economical interests of the family with the
father at its head; the principles and observations referring
thereto will constitute private economy. Those principles, however,
which have reference to the interests of whole nations, whether in
themselves or in relation to other nations, form public economy
(l’économie publique). Political economy, lastly, relates to the
interests of all nations, to human society in general.’
  It must be remarked here, that in the first place Say
recognises the existence of a national economy or political
economy, under the name ‘économie publique,’ but that he nowhere
treats of the latter in his works; secondly, that he attributes the
name political economy to a doctrine which is evidently of
cosmopolitical nature; and that in this doctrine he invariably
merely speaks of an economy which has for its sole object the
interests of the whole human society, without regard to the
separate interests of distinct nations.
This substitution of terms might be passed over if Say, after
having explained what he calls political economy (which, however,
is nothing else but cosmopolitical or world-wide economy, or
economy of the whole human race), had acquainted us with the
principles of the doctrine which he calls ‘économie publique,’
which however is, properly speaking, nothing else but the economy
of given nations, or true political economy.
  In defining and developing this doctrine he could scarcely
forbear to proceed from the idea and the nature of the nation, and
to show what material modifications the ‘economy of the whole human
race’ must undergo by the fact that at present that race is still
separated into distinct nationalities each held together by common
powers and interests, and distinct from other societies of the same
kind which in the exercise of their natural liberty are opposed to
one another. However, by giving his cosmopolitical economy the name
political, he dispenses with this explanation, effects by means of
a transposition of terms also a transposition of meaning, and
thereby masks a series of the gravest theoretical errors.
  All later writers have participated in this error. Sismondi
also calls political economy explicitly ‘La science qui se charge
du bonheur de l’espèce humaine.’ Adam Smith and his followers teach
us from this mainly nothing more than what Quesnay and his
followers had taught us already, for the article of the ‘Revue
Méthodique’ treating of the physiocratic school states, in almost
the same words: ‘The well-being of the individual is dependent
altogether on the well-being of the whole human race.’
  The first of the North American advocates of free trade, as
understood by Adam Smith—Thomas Cooper, President of Columbia
College—denies even the existence of nationality; he calls the
nation ‘a grammatical invention,’ created only to save periphrases,
a nonentity, which has no actual existence save in the heads of
politicians. Cooper is moreover perfectly consistent with respect
to this, in fact much more consistent than his predecessors and
instructors, for it is evident that as soon as the existence of
nations with their distinct nature and interests is recognised, it
becomes necessary to modify the economy of human society in
accordance with these special interests, and that if Cooper
intended to represent these modifications as errors, it was very
wise on his part from the beginning to disown the very existence of
nations.
  For our own part, we are far from rejecting the theory of
cosmopolitical economy, as it has been perfected by the prevailing
school; we are, however, of opinion that political economy, or as
Say calls it ‘économie publique,’ should also be developed
scientifically, and that it is always better to call things by
their proper names than to give them significations which stand
opposed to the true import of words.
  If we wish to remain true to the laws of logic and of the
nature of things, we must set the economy of individuals against
the economy of societies, and discriminate in respect to the latter
between true political or national economy (which, emanating from
the idea and nature of the nation, teaches how a given nation in
the present state of the world and its own special national
relations can maintain and improve its economical conditions) and
cosmopolitical economy, which originates in the assumption that all
nations of the earth form but one society living in a perpetual
state of peace.
  If, as the prevailing school requites, we assume a universal
union or confederation of all nations as the guarantee for an
everlasting peace, the principle of international free trade seems
to be perfectly justified. The less every individual is restrained
in pursuing his own individual prosperity, the greater the number
and wealth of those with whom he has free intercourse, the greater
the area over which his individual activity can exercise itself,
the easier it will be for him to utilise for the increase of his
prosperity the properties given him by nature, the knowledge and
talents which he has acquired, and the forces of nature placed at
his disposal. As with separate individuals, so is it also the case
with individual communities, provinces, and countries. A simpleton
only could maintain that a union for free commercial intercourse
between themselves is not as advantageous to the different states
included in the United States of North America, to the various
departments of France, and to the various German allied states, as
would be their separation by internal provincial customs tariffs.
  In the union of the three kingdoms of Great Britain and Ireland
the world witnesses a great and irrefragable example of the
immeasurable efficacy of free trade between united nations. Let us
only suppose all other nations of the earth to be united in a
similar manner, and the most vivid imagination will not be able to
picture to itself the sum of prosperity and good fortune which the
whole human race would thereby acquire.

So, free trade is at birth globalist and cosmopolitan.

List (a German) is fairly cosmopolitan too, but he’s also a nationalist, albeit one who is open to allowing in foreign skilled workers when a new industry needs developing. And oddly open to the idea of forming a larger state union. So, he serves the German state without being attached to its people/nation? Odd.

Footnotes that were referenced in that section:

NOTES:

1. It is alleged that Adam Smith intended to have dedicated his
great work to Quesnay.—TR. (See Life of Smith, published by T.
and J. Allman. 1825.)

2. The Christian religion inculcates perpetual peace. But until the
promise, ‘There shall be one fold and one shepherd,’ has been
fulfilled, the principle of the Quakers, however true it be in
itself, can scarcely be acted upon. There is no better proof for
the Divine origin of the Christian religion than that its doctrines
and promises are in perfect agreement with the demands of both the
material and spiritual well-being of the human race.

Footnote 2 is no longer referenced above, however I leave it here because it’s interesting that Christianity is linked with this globalist dream.

From Section 1:

The island kingdom borrowed from every country of the Continent
its skill in special branches of industry, and planted them on
English soil, under the protection of her customs system. Venice
had to yield (amongst other trades in articles of luxury) the art
of glass manufacture, while Persia had to give up the art of carpet
weaving and dyeing.
  Once possessed of any one branch of industry, England bestowed
upon it sedulous care and attention, for centuries treating it as
a young tree which requires support and care.

  Under George I English statesmen had long ago clearly perceived
the grounds on which the greatness of the nation depends. At the
opening of Parliament in 1721, the King is made to say by the
Ministry, that ‘it is evident that nothing so much contributes to
promote the public well-being as the exportation of manufactured
goods and the importation of foreign raw material.(4*)
  This for centuries had been the ruling maxim of English
commercial policy, as formerly it had been that of the commercial
policy of the Venetian Republic. It is in force at this day (1841)
just as it was in the days of Elizabeth. The fruits it has borne
lie revealed to the eyes of the whole world. The theorists have
since contended that England has attained to wealth and power not
by means of, but in spite of, her commercial policy. As well might
they argue that trees have grown to vigour and fruitfulness, not by
means of, but in spite of, the props and fences with which they had
been supported when they were first planted.

In the fourteenth century, England was still so poor in
iron that she thought it necessary to prohibit the exportation of
this indispensable metal; she now, in the nineteenth century,
manufactures more iron and steel wares than all the other nations
on earth (namely, thirty-one millions’ worth), while she produces
thirty-four millions in value of coal and other minerals. These two
sums exceed by over sevenfold the value of the entire gold and
silver production of all other nations, which amount to about two
hundred and twenty million francs, or nine millions sterling.
  At this day she produces more silk goods than all the Italian
republics produced in the Middle Ages together, namely, thirteen
and a half million pounds. Industries which at the time of Henry
VIII and Elizabeth scarcely deserved classification, now yield
enormous sums; as, for instance, the glass, china, and stoneware
manufactures, representing eleven millions; the copper and brass
manufactures, four and a half millions; the manufactures of paper,
books, colours, and furniture, fourteen millions.
  England produces, moreover, sixteen millions’ worth of leather
goods, besides ten millions’ worth of unenumerated articles. The
manufacture of beer and spirituous liquors in England alone greatly
exceeds in value the aggregate of national production in the days
of James I, namely, forty-seven millions sterling.
  The entire manufacturing production of the United Kingdom at
the present time, is estimated to amount to two hundred and
fifty-nine and a half millions sterling.
  As a consequence, and mainly as a consequence, of this gigantic
manufacturing production, the productive power of agriculture has
been enabled to yield a total value exceeding twice that sum (five
hundred and thirty-nine millions sterling).
  It is true that for this increase in her power, and in her
productive capacity, England is not indebted solely to her
commercial restrictions, her Navigation Laws, or her commercial
treaties, but in a large measure also to her conquests in science
and in the arts.
  But how comes it, that in these days one million of English
operatives can perform the work of hundreds of millions? It comes
from the great demand for manufactured goods which by her wise and
energetic policy she has known how to create in foreign lands, and
especially in her colonies; from the wise and powerful protection
extended to her home industries; from the great rewards which by
means of her patent laws she has offered to every new discovery;
and from the extraordinary facilities for her inland transport
afforded by public roads, canals, and railways.
  England has shown the world how powerful is the effect of
facilities of transport in increasing the powers of production, and
thereby increasing the wealth, the population, and the political
power of a nation. She has shown us what a free, industrious, and
well-governed community can do in this respect within the brief
space of half a century, even in the midst of foreign wars. That
which the Italian republics had previously accomplished in these
respects was mere child’s play. It is estimated that as much as a
hundred and eighteen millions sterling have been expended in
England upon these mighty instruments of the nation’s productive
power.

It must be admitted, too, that the enormous producing capacity
and the great wealth of England are not the effect solely of
national power and individual love of gain. The people’s innate
love of liberty and of justice, the energy, the religious and moral
character of the people, have a share in it. The constitution of
the country, its institutions, the wisdom and power of the
Government and of the aristocracy, have a share in it. The
geographical position, the fortunes of the country, nay, even good
luck, have a share in it.

In no European kingdom is the institution of an aristocracy
more judiciously designed than in England for securing to the
nobility, in their relation to the Crown and the commonalty,
individual independence, dignity, and stability; to give them a
Parliamentary training and position; to direct their energies to
patriotic and national aims; to induce them to attract to their own
body the élite of the commonalty, to include in their ranks every
commoner who earns distinction, whether by mental gifts,
exceptional wealth, or great achievements; and, on the other hand,
to cast back again amongst the commons the surplus progeny of
aristocratic descent, thus leading to the amalgamation of the
nobility and the commonalty in future generations. By this process
the nobility is ever receiving from the Commons fresh accessions of
civic and patriotic energy, of science, learning, intellectual and
material resources, while it is ever restoring to the people a
portion of the culture and of the spirit of independence peculiarly
its own, leaving its own children to trust to their own resources,
and supplying the commonalty with incentives to renewed exertion.

Somewhere in Section 1 he mentions that power is useful for defense, among other things.

—-

Kinism isn’t fully compatible with such an imperialistic view. However, we can learn much from these policies.

Rather than inviting in alien skilled professionals from industries we’ve not yet mastered, we can attempt to learn these technologies and skills ourselves.

And while colonies are not of interest to kinists, the principle of importing raw materials and exporting finished goods is of interest.

——

This also offers a taste of how a nationalist trade policy looks like, as opposed to a globalist trade policy. And it reveals in the second book (first post) how very globalist Adam Smith and his fellow ideologues were. They were assuming the world was a single polity, and free trade theory today continues to assume this.

Ron Paul and “true free trade” is often presented as the mystic alternative to the corporate, America-last trade we have today. List, however, blows Paul, Smith, and the rest of the globalists out of the water. For they assume the world is made of but one state, and since such a precept is false their entire theory is false.

Kinists must ask: what is best for those I love, within morality? The free traders ask: what is best for a theoretical global state? The answers to these two questions are very different.

—-

I’ll continue editing this thread until it’s more useful.

A core argument of mercantilism which I haven’t yet seen in List’s book is that global resources are limited. And so ideally a state wants to import a large percentage of these increasingly scarce resources, while exporting finished goods. And this must be done with a view to the long term well being of the state, obviously. Recycling as well as competing for scarce resources will become important in the future.

And as a result of such competition, some states will acquire many resources, while others will obtain few, and will be poor as a result.

The ultimate desire for wealth though is for the power to defend the state, I’d say. According to Machiavelli, a well ordered state does not allow the average subject to have excess material wealth, which can be corrupting. Such a concept isn’t popular among most readers here I’m sure, but it’s a reminder that fancy cars and very short work days aren’t necessarily a good thing, up to a point. Man is meant to work at some task (as opposed to being idle and slothful), though of course family should come before work.

Ideally a state continues work in research (which would be kept within the state in most cases) when other work becomes less necessary, but I wonder what will encourage man to work when his state is far above all others? It seems a moral decline would be likely, as citizens give into temptation and grow soft and selfish, lacking a drive to work hard.

A state that follows List’s principles will be apt to grow very powerful and wealthy. I fear that this could create similar problems as what England and later the US experienced as world powers. Successful states seem to lose their will to act in their best interests, and seem to develop a sort of mystic belief in some special quality of their state which grants them their success, as opposed to rational policy, including trade policy.

And similarly, would citizens begin trying to save the world and neglect to look after loved ones?

Economic success [and the power and thus security it brings] then, though necessary for defense, seems a double edged sword.

Until reaching a point of security, which none of us currently possess, we needn’t worry too much about the dangers of security. Survival is to be focused on for now. I imagine though that gardening, hunting, sporting competitions, and other recreations could be pursued as well, each of these encouraging virtue somewhat, when success is finally enjoyed again. And industry could be decentralised and competitions could arise among communities within a larger state.

Some system then could hopefully be developed that could weather security without committing suicide as the US is today, and as Britain did before her (Britain’s free trade is what built Germany btw.) But again, security must be achieved first, or at the least a degree of security…

—-

From the second section:

The causes of wealth are something totally different from
wealth itself. A person may possess wealth, i.e. exchangeable
value; if, however, he does not possess the power of producing
objects of more value than he consumes, he will become poorer. A
person may be poor; if he, however, possesses the power of
producing a larger amount of valuable articles than he consumes, he
becomes rich.

On America, from the first section:

The North American colonies were kept, in respect of trade and
industry, in such complete thraldom by the mother country, that no
sort of manufacture was permitted to them beyond domestic
manufacture and the ordinary handicrafts. So late as the year 1750
a hat manufactory in the State of Massachusetts created so great
sensation and jealousy in Parliament, that it declared all kinds of
manufactories to be ‘common nuisances,’ not excepting iron works,
notwithstanding that the country possessed in the greatest
abundance all the requisite materials for the manufacture of iron.
Even more recently, namely, in 1770, the great Chatham, made uneasy
by the first manufacturing attempts of the New Englanders, declared
that the colonies should not be permitted to manufacture so much as
a horseshoe nail.

The monopoly of all manufacturing industry by the mother
country was one of the chief causes of the American Revolution; the
tea duty merely afforded an opportunity for its outbreak.

Besides, the Americans had long ago learnt from experience that
agriculture cannot rise to a high state of prosperity unless the
exchange of agricultural produce for manufactures is guaranteed for
all future time; but that, when the agriculturist lives in America
and the manufacturer in England, that exchange is not unfrequently
interrupted by wars, commercial crises, or foreign tariffs, and
that consequently, if the national well-being is to rest on a
secure foundation, ‘the manufacturer,’ to use Jefferson’s words,
‘must come and settle down in close proximity to the
agriculturist.’

How can a naval power
arise when fisheries, the coasting trade, ocean navigation, and
foreign trade decay? How are the Atlantic states to protect them
selves against foreign attacks without a naval power? How is
agriculture even to thrive in these states, when by means of
canals, railways, &c;. the produce of the much more fertile and
cheaper tracts of land in the west which require no manure, can be
carried to the east much more cheaply than it could be there
produced upon soil exhausted long ago?

English Dual Standards! from the second section.

With the fall of Napoleon, English competition, which had been
till then restricted to a contraband trade, recovered its footing
on the continents of Europe and America. Now for the first time the
English were heard to condemn protection and to eulogise Adam
Smith’s doctrine of free trade, a doctrine which heretofore those
practical islanders considered as suited only to an ideal state of
Utopian perfection. But an impartial, critical observer might
easily discern the entire absence of mere sentimental motives of
philanthropy in this conversion, for only when increased facilities
for the exportation of English goods to the continents of Europe
and America were in question were cosmopolitan arguments resorted
to; but so soon as the question turned upon the free importation of
corn, or whether foreign goods might be allowed to compete at all
with British manufactures in the English market, in that case quite
different principles were appealed to.(3*)

Footnote

3. A highly accomplished American orator, Mr Baldwin, Chief Justice
of the United States, when referring to the Canning-Huskisson
system of free trade, shrewdly remarked, that, like most English
productions, it had been manufactured not so much for home
consumption as for exportation.
  Shall we laugh most or weep when we call to mind the rapture of
enthusiasm with which the Liberals in France and Germany, more
particularly the cosmopolitan theorists of the philanthropic
school, and notably Mons. J. B. Say, hailed the announcement of the
Canning-Huskisson system? So great was their jubilation, that one
might have thought the millennium had come. But let us see what Mr
Canning’s own biographer says about this minister’s views on the
subject of free trade.
  ‘Mr Canning was perfectly convinced of the truth of the
abstract principle, that commerce is sure to flourish most when
wholly unfettered; but since such had not been the opinion either
of our ancestors or of surrounding nations, and since in
consequence restraints had been imposed upon all commercial
transactions, a state of things had grown up to which the unguarded
application of the abstract principle, however true it was in
theory, might have been somewhat mischievous in practice.’ (The
Political Life of Mr Canning, by Stapleton, p. 3.) In the year
1828, these same tactics of the English had again assumed a
prominence so marked that Mr Hume, the Liberal member of
Parliament, felt no hesitation in stigmatising them in the House as
the strangling of Continental industries.

In other words the English were calling for: free trade for foreigners; protectionist trade for the English!

Sound familiar? (e.g. the rising East Asian states today).

=======

England did eventually fall for free trade though, and English free trade is what built Germany subsequently. I mentioned this previously, but this is worth pointing out twice, especially since List says at the end of section 1:

Finally, history teaches us how nations which have been endowed
by Nature with all resources which are requisite for the attainment
of the highest grade of wealth and power, may and must—without
on that account forfeiting the end in view—modify their systems
according to the measure of their own progress: in the first stage,
adopting free trade with more advanced nations as a means of
raising themselves from a state of barbarism, and of making
advances in agriculture; in the second stage, promoting the growth
of manufactures, fisheries, navigation, and foreign trade by means
of commercial restrictions; and in the last stage, after reaching
the highest degree of wealth and power, by gradually reverting to
the principle of free trade and of unrestricted competition in the
home as well as in foreign markets, that so their agriculturists,
manufacturers, and merchants may be preserved from indolence, and
stimulated to retain the supremacy which they have acquired. In the
first stage, we see Spain, Portugal, and the Kingdom of Naples; in
the second, Germany and the United States of North America; France
apparently stands close upon the boundary line of the last stage;
but Great Britain alone at the present time has actually reached
it.

I wonder if this isn’t propaganda on the part of List, who is German? Free trade for England, protectionist trade for Germany! The dual standard rises again, and the English fell for it.

I’m not qualified to say with any certainty that this was intentional propaganda, but history shows that Germany profited at England’s expense. And this component doesn’t, to my mind, logically fit in with the rest of List’s theory.

Frank,

I recall seeing some 1800’s cartoons in books on the damage done to England by “free trade.”

England did eventually fall for free trade though, and English free trade is what built Germany subsequently. I mentioned this previously, but this is worth pointing out twice, especially since List says at the end of section 1:
...
I wonder if this isn’t propaganda on the part of List, who is German? Free trade for England, protectionist trade for Germany! The dual standard rises again, and the English fell for it. I’m not qualified to say with any certainty that this was intentional propaganda, but history shows that Germany profited at England’s expense. And this component doesn’t, to my mind, logically fit in with the rest of List’s theory.

Before I comment, I think this topic should be moved to the Research board. There is a lot of carefully culled material that is worthy of comment, but I’m not sure it belongs on the general board, as it is highly specialized.

I won’t preemptively move it, though, without comment. So let me know what you think of the idea. We need more participation on that board anyway.

JM,

it doesn’t matter to me where this thread goes. I don’t like how the cultural videos thread appears in both places though.

The cultural videos thread might actually belong in both, because it’s fun, but this thread doesn’t.

—-

If this thread is left here, I could later cut and paste these quotes along with others to make a more general and thus larger trade thread in the research area.

I’ll sticky the thread in this forum for the time being so you can add to it from time to time.

Frank - 07 March 2009 05:19 AM

So, free trade is at birth globalist and cosmopolitan.

Yes, this is a pretty much a chief tenet of Kinism. Free trade is inimical not only to “nationalism” but to any set of non-eocnomic values. It presumes that “price” is the only indicator of value that is admissible in determining the worthiness and appropriateness of a phenomenon in society -that is, can it be priced and will someone buy it. But as careful research has shown, not even the Austrian School was of the pure faith, which really didn’t come into existence until the anarcho-capitalist strain of Austrian economics, popularized by Ayn Rand but essentially codified by Ludwig Von Mises, and Murray Rothbard. Even Rothbard attempts to secret certain aspects of “values” conservatism into his philosophy, due to the dire social consequences of pure anarcho-capitalism.

A brief anecdote is appropriate here: Wilhelm Ropke (an economist from whom Kinism has obtained many useful ideas) was giving the elderly Mises a tour of a worker’s garden in Swiss town that was highly representative of Ropke’s ideas about “localism”, at which sight Von Mises sniffed and coldly remarked that it was an irrational way to grow vegetables (meaning not industrialized). Von Mises misses (sic) the entire point of localism, which is to create a class of freeholders who are able to be economically and therefore politically and socially independent of “powers.” This is the last thing in the world that the plutocrats running things want. They will destroy the world and everything you and I treasure to prevent that outcome.