HIST363: Global Perspectives on Industrialization

List took Adam Smith as his starting point in economics, but made intelligent amendments to Smith's views. According to Henderson, in 1827 List declared that he had once been "…not only a very faithful disciple of (Adam) Smith and (JB) Say, but a very zealous teacher of the infallible (free trade) doctrine".

However, the slump in Germany that followed the collapse of Napoleon's "Continental System" led him to revise his views on fiscal policy. When Napoleon's empire fell, the ports of the continent were opened and British manufactured goods flooded the German market. List had seen for himself "the admirable effects of...the Continental System" and what he regarded as disastrous affects of its abolition".

The contemplation of these effects induced me first to doubt infallibility of the old (free market) theory". In some respects, however, he remained faithful to his earlier convictions. He continued to believe in world free trade as an ideal state of affairs, which might be achieved at some time in the future.