peaccenicked
6th April 2002, 21:07
List, in his criticism of Adam Smith, says that Smith tacitly assumes the existence of a universal republic as the political framework of trade. And: "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" (p98).
I suppose it was easy for Smith, at a moment when Britain, with its skill in statesmanship and its national economy which had been made powerful by national political economy, seemed destined to rule the earth, to take the universal state as his framework. But it turned out that the British Empire was not to be the basis of the universal state, and therefore what List calls Smith's "cosmopolitical economy" has proved to be of little practical use in the world, even though The Wealth Of Nations has remained a famous book.
And List, in place of the customary reasoning that trade generated peace, argued that peace generated trade, and that politics generated both:
"The popular school [i.e., English political economy, which then dominated the German universities] has assumed as being actually in existence a state of things which has yet to come into existence. It assumes the existence of a universal union and a state of perpetual peace, and deduces therefrom the great benefits of free trade. In this manner it confounds effects with causes. Among the provinces and states which are already politically united, there exists a state of perpetual peace; from this political union originates their commercial union, and it is in consequence of the perpetual peace thus maintained that commercial union has become so beneficial to them. All examples which history can show are those in which the political union has led the way, and the commercial union has followed. Not a single instance can be adduced in which the latter has taken the lead, and the former has grown up from it. That, however, under the existing conditions of the world, the result of a general free trade would not be a universal republic, but, on the contrary, a universal subjection of the less advanced nations to the predominant manufacturing, commercial and naval power, is a conclusion for which the reasons are very strong.... A universal republic...., i.e. a union of the nations of the earth whereby they recognise the same conditions of right among themselves and renounce self-redress, can only be realised if a large number of nationalities attain to as nearly the same degree as possible of industry and civilisation, political cultivation and power. Only with the gradual formation of this union can free trade be developed, only as a result of this union can it confer on all nations the same great advantages which are now experienced by those provinces and states which are politically united. The system of protection, inasmuch as it forms the only means of placing those nations which are far behind in civilisation on equal terms with the one predominating nation," appears to be the most efficient means of furthering the final union of nations, and hence also of promoting true freedom of trade" (p102-3).
I suppose it was easy for Smith, at a moment when Britain, with its skill in statesmanship and its national economy which had been made powerful by national political economy, seemed destined to rule the earth, to take the universal state as his framework. But it turned out that the British Empire was not to be the basis of the universal state, and therefore what List calls Smith's "cosmopolitical economy" has proved to be of little practical use in the world, even though The Wealth Of Nations has remained a famous book.
And List, in place of the customary reasoning that trade generated peace, argued that peace generated trade, and that politics generated both:
"The popular school [i.e., English political economy, which then dominated the German universities] has assumed as being actually in existence a state of things which has yet to come into existence. It assumes the existence of a universal union and a state of perpetual peace, and deduces therefrom the great benefits of free trade. In this manner it confounds effects with causes. Among the provinces and states which are already politically united, there exists a state of perpetual peace; from this political union originates their commercial union, and it is in consequence of the perpetual peace thus maintained that commercial union has become so beneficial to them. All examples which history can show are those in which the political union has led the way, and the commercial union has followed. Not a single instance can be adduced in which the latter has taken the lead, and the former has grown up from it. That, however, under the existing conditions of the world, the result of a general free trade would not be a universal republic, but, on the contrary, a universal subjection of the less advanced nations to the predominant manufacturing, commercial and naval power, is a conclusion for which the reasons are very strong.... A universal republic...., i.e. a union of the nations of the earth whereby they recognise the same conditions of right among themselves and renounce self-redress, can only be realised if a large number of nationalities attain to as nearly the same degree as possible of industry and civilisation, political cultivation and power. Only with the gradual formation of this union can free trade be developed, only as a result of this union can it confer on all nations the same great advantages which are now experienced by those provinces and states which are politically united. The system of protection, inasmuch as it forms the only means of placing those nations which are far behind in civilisation on equal terms with the one predominating nation," appears to be the most efficient means of furthering the final union of nations, and hence also of promoting true freedom of trade" (p102-3).