Friedrich List
Read this biographical article about Friedrich List. It offers some context for his refinements to Smith's ideas, based on List's wealth of experiences.
List's Main Economic Theories
Stages of National Development
List described four stages of economic development through which nations naturally proceed:
In the economical development of nations by means of external trade, four periods must be distinguished. In the first, agriculture is encouraged by the importation of manufactured articles, and by the exportation of its own products; in the second, manufacturers begin to increase at home, whilst the importation of foreign manufactures to some extent continues; in the third, home manufactures mainly supply domestic consumption and the internal markets; finally, in the fourth, we see the exportation upon a large scale of manufactured products, and the importation of raw materials and agricultural products.
In the economical aspect, List's theory opposed the "cosmopolitan" (or more properly "cosmopolitical") theory of Adam Smith and J. B. Say, and in its political and national aspects their theory of universal freedom of trade.
The system of import duties being considered as a mode of assisting the economical development of a nation, by regulating its external trade, must constantly take as a rule the principle of the industrial education of the country. To encourage agriculture by the aid of protective duties is vicious policy; for agriculture can be encouraged only by promoting manufacturing industry; and the exclusion of raw material and agricultural products from abroad, has no other result than to impede the rise of national manufactures.
This, in fact, is the central idea of List's theory, that a nation must first develop its own agricultural and manufacturing processes sufficiently to support international free trade.
It is only when a nation has reached such a stage of development that she can bear the strain of competition with foreign manufactures without injury in any respect, that she can safely dispense with protection to her own manufactures, and enter on a policy of general free trade.
This "economic nationalism" can be observed as permeating all List's economic writing.