HIST363: Global Perspectives on Industrialization

List had many disagreements with Adam Smith. In the third chapter of The Wealth of Nations, Smith mentioned the actual cause of the division of labor, namely the benefits resulting from the formation of a very large economic unit. From the point of view of net production, he argued the larger the better. List, however, was not convinced by this argument, mainly because he asked the question: What if we suppose the large economic unit contains several separate sovereign states? Smith did not ask this question, which may not have occurred to him. He was a man who felt that the union within Great Britain had been a great blessing. Did he also foresee an eventual union of Europe being brought about by trade?

List correctly noted that Smith drew on systems of thought that were "cosmopolitical," hence seeing national differences as a relic of the Dark Ages that enlightened politics would eventually overcome. But List realized that there would be problems. He also had the advantage of seeing the drastic self-destruction of eighteenth-century Enlightenment in the French Revolution. In the European-wide struggle of the Napoleonic Wars, Britain had backed various reactionary forces rather than let a strong empire emerge in continental Europe.

List's answer was: