Front Page Titles (by Subject) Chapter XVIII: THE MANUFACTURING POWER AND THE NATURAL PRODUCTIVE POWERS OF THE NATION. - The National System of Political Economy
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Chapter XVIII: THE MANUFACTURING POWER AND THE NATURAL PRODUCTIVE POWERS OF THE NATION. - Friedrich List, The National System of Political Economy 
The National System of Political Economy by Friedrich List, trans. Sampson S. Lloyd, with an Introduction by J. Shield Nicholson (London: Longmans, Green and Co., 1909).
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THE MANUFACTURING POWER AND THE NATURAL PRODUCTIVE POWERS OF THE NATION.
THE more that man and the community perfect themselves, the more are they enabled to make use of the natural powers which are within their reach for the accomplishment of their objects, and the more does the sphere of what is within their reach extend itself.
The hunter does not employ the thousandth part, the shepherd not the hundredth part, of those natural advantages which surround him. The sea, foreign climates and countries, yield him either none, or at least only an inconsiderable amount of enjoyment, assistance, or stimulants to exertion.
In the case of a people in a primitive agricultural condition, a large portion of the existing natural resources lies yet unutilised, and man still continues limited to his nearest surroundings. The greater part of the water power and wind power which exists, or can be obtained, is unemployed; the various mineral products which the manufacturers so well understand how to utilise profitably, lie dead; various sorts of fuel are wasted or regarded (as, for instance, peat turf) as a mere hindrance to cultivation; stone, sand, and lime are used but little as building materials; the rivers, instead of being means of freight and transport for man, or of fertilising the neighbouring fields, are allowed to devastate the country by floods; warmer climates and the sea yield to the agricultural country but few of their products.
In fact, in the agricultural State, that power of nature on which production especially depends, the natural fertility of the soil, can only be utilised to a smaller extent so long as agriculture is not supported by manufacturing industry.
Every district in the agricultural State must itself produce as much of the things necessary to it as it requires to use, for it can neither effect considerable sales of that which it has in excess to other districts, nor procure that which it requires from other districts. A district may be ever so fertile and adapted for the culture of plants yielding oil, dyeing materials, and fodder, yet it must plant forests for fuel, because to procure fuel from distant mountain districts, over wretched country roads, would be too expensive. Land which if utilised for the cultivation of the vine and for garden produce could be made to yield three to four times more returns must be used for cultivating corn and fodder. He who could most profitably devote himself solely to the breeding of cattle must also fatten them: on the other hand, he who could most profitably devote himself merely to fattening stock, must also carry on cattle breeding. How advantageous it would be to make use of mineral manures (gypsum, lime, marl), or to burn peat, coal, &c. instead of wood, and to bring the forest lands under cultivation; but in such a State there exists no means of transport by means of which these articles can be conveyed with advantage for more than very short distances. What rich returns would the meadows in the valleys yield, if irrigation works on a large scale were established—the rivers now merely serve to wash down and carry away the fertile soil.
Through the establishment of manufacturing power in an agricultural State, roads are made, railways constructed, canals excavated, rivers rendered navigable, and lines of steamers established. By these not merely is the surplus produce of the agricultural land converted into machinery for yielding income, not merely are the powers of labour of those who are employed by it brought into activity, not only is the agricultural population enabled to obtain from the natural resources which it possesses an infinitely greater return than before, but all minerals, all metals, which heretofore were lying idle in the earth are now rendered useful and valuable. Articles which could formerly only bear a freight of a few miles, such as salt, coals, stone, marble, slate, gypsum, lime, timber, bark, &c., can now be distributed over the surface of an entire kingdom. Hence such articles, formerly quite valueless, can now assume a degree of importance in the statistical returns of the national produce, which far surpasses the total of the entire agricultural production in previous times. Not a cubic foot of water-fall will then exist which is not made to perform some service; even in the most distant districts of a manufacturing country, timber and fuel will now become valuable, of which previously no one knew how to make any use.
Through the introduction of manufactures, a demand for a quantity of articles of food and raw materials is created, to the production of which certain districts can be far more profitably devoted than to the growth of corn (the usual staple article of rude agricultural countries). The demand which now springs up for milk, butter, and meat adds a higher value to the existing pasture land, and leads to the breaking up of fallows and the erection of works of irrigation. The demand for fruit and garden produce converts the former bare agricultural land into vegetable gardens and orchards.
The loss which the mere agricultural State sustains by not making use of these natural powers, is so much the greater the more it is fitted by nature for carrying on manufactures, and the more its territory is adapted for the production of raw materials and natural powers which manufacturers specially require; that loss will therefore be the greatest in mountainous and hilly countries less suitable for agriculture on the whole, but which offer to manufactures plenty of water power, of minerals, timber, and stone, and to the farmer the opportunity of cultivating the products which are specially required by the manufacturer.
Countries with a temperate climate are (almost without exception) adapted for factories and manufacturing industry. The moderate temperature of the air promotes the development and exertion of power far more than a hot temperature. But the severe season of the year, which appears to the superficial observer as an unfavourable effect of nature, is the most powerful promoter of habits of energetic activity, of forethought, order, and economy. A man who has the prospect before him of six months in which he is not merely unable to obtain any fruits from the earth, but also requires special provisions and clothing materials for the sustenance of himself and his cattle, and for protection against the effects of cold, must necessarily become far more industrious and economical than the one who merely requires protection from the rain, and into whose mouth the fruits are ready to drop during the whole year. Diligence, economy, order, and forethought are at first produced by necessity, afterwards by habit, and by the steady cultivation of those virtues. Morality goes hand in hand with the exertion of one's powers and economy, and immorality with idleness and extravagance: each are reciprocally fertile sources, the one of power, the other of weakness.
An agricultural nation, which inhabits a country of temperate climate, leaves therefore the richest part of its natural resources unutilised.
The school, inasmuch as, in judging the influences of climate on the production of wealth, it has not distinguished between agriculture and manufacturing industry, has fallen into the gravest errors in respect to the advantages and disadvantages of protective regulations, which we cannot here omit thoroughly to expose, although we have already made mention of them in general terms elsewhere.
In order to prove that it is foolish to seek to produce everything in one and the same country, the school asks the question: whether it would be reasonable if we sought to produce wine by growing grapes in Scottish and English greenhouses? It is of course possible to produce wine in this manner, only it would be of much worse quality and more expensive than that which England and Scotland could procure in exchange for their manufactured goods. To anyone who either is unwilling or unable to penetrate more deeply into the nature of things, this argument is a striking one, and the school is indebted to it for a large portion of its popularity; at any rate among the French vine growers and silk manufacturers, and among the North American cotton planters and cotton merchants. Regarded in the light of day, however, it is fundamentally false, since restrictions on commercial intercourse operate quite differently on the productive power of agriculture than they do on the productive power of manufacturing industry.
Let us first see how they operate on agriculture.
If France rejects from her frontiers German fat cattle, or corn, what will she effect thereby? In the first place, Germany will thereby be unable to buy French wines. France will therefore have to use those portions of her soil which are fitted for the cultivation of the vine less profitably in proportion as this destruction of commercial interchange lessens her exportation of wines. So many fewer persons will be exclusively occupied with the cultivation of the vine, and therefore so much less native agricultural products will be required, which these persons would have consumed, who would have otherwise devoted themselves exclusively to vine culture. This will be the case in the production of oil as well as in that of wine. France will therefore always lose in her agricultural power on other points much more than she gains on one single point, because by her exclusion of the German cattle she protects a trade in the rearing and fattening of cattle which had not been spontaneously developed, and for which, therefore, probably the agriculture of those districts where this branch of industry has had to be artificially developed is not adapted. Thus will it be if we consider France merely as an agricultural State opposed to Germany as a merely agricultural State, and if we also assume that Germany will not retaliate on that policy by a similar one. This policy, however, appears still more injurious if we assume that Germany, as she will be compelled to out of regard to her own interests, adopts similarly restrictive measures, and if we consider that France is not merely an agricultural, but also a manufacturing State. Germany will, namely, not merely impose higher duties on French wines, but on all those French products which Germany either produces herself, or can more or less do without, or procure elsewhere; she will further restrict the importation of those manufactured goods which she cannot at present produce with special benefit, but which she can procure from other places than from France. The disadvantage which France has brought upon herself by those restrictions, thus appears twice or three times greater than the advantage. It is evident that in France only so many persons can be employed in the cultivation of the vine, in the cultivation of olives, and in manufacturing industry, as the means of subsistence, and raw materials which France either produces herself or procures from abroad, are able to support and employ. But we have seen that the restriction of importation has not increased the agricultural production, but has merely transferred it from one district to another. If free course had been permitted to the interchange of products, the importation of products and raw materials, and consequently the sale of wine, oil, and manufactured goods, would have continually increased, and consequently the number of persons employed in the cultivation of the vine and olives, and in manufactures; while with the increasing traffic, on the one hand, the means of subsistence and raw materials, and, on the other hand, the demand for her manufactured products, would have augmented. The augmentation of this population would have produced a larger demand for those provisions and raw materials which cannot easily be imported from abroad, and for which the native agriculture possesses a natural monopoly; the native agriculture therefore would thus have obtained a far greater profit. The demand for those agricultural products for which the character of the French soil is specially adapted, would be much more considerable under this free interchange than that produced artificially by restriction. One agriculturist would not have lost what another gained; the whole agriculture of the country would have gained, but still more the manufacturing industry. Through restriction, the agricultural power of the country therefore is not increased, but limited; and besides this, that manufacturing power is annihilated which would have grown up from the augmentation of the internal agriculture, as well as from the foreign importation of provisions and raw materials. All that has been attained through the restriction is an increase of prices in favour of the agriculturists of one district at the expense of the agriculturists of another district, but above all, at the expense of the total productive force of the country.
The disadvantages of such restrictions on the interchange of products are still more clearly brought to light in the case of England than in that of France. Through the corn laws, on doubt, a quantity of unfertile land is brought under cultivation; but it is a question whether these lands would not have been brought under cultivation without them. The more wool, timber, cattle, and corn that England would have imported, the more manufactured goods would she have sold, the greater number of workmen would have been enabled to live in England, the higher would the prosperity of the working classes have risen. England would probably have doubled the number of her workmen. Every single workman would have lived better, would have been better able to cultivate a garden for his pleasure and for the production of useful vegetables, and would have supported himself and his family much better. It is evident that such a large augmentation of the working population, as well as of its prosperity and of the amount of what it consumed, would have produced an enormous demand for those products for which the island possesses a natural monopoly, and it is more than probable that thereby double and three times as much land could have been brought into cultivation than by unnatural restrictions. The proof of this may be seen in the vicinity of every large town. However large the mass of products may be which is brought into this town from distant districts for miles around it, one cannot discover a single tract of land uncultivated, however much that land may have been neglected by nature. If you forbid the importation into such a town of corn from distant districts, you thereby merely effect a diminution of its population, of its manufacturing industry, and its prosperity, and compel the farmer who lives near the town to devote himself to less profitable culture.
It will be perceived that thus far we are quite in accord with the prevailing theory. With regard to the interchange of raw products, the school is perfectly correct in supposing that the most extensive liberty of commerce is, under all circumstances, most advantageous to the individual as well as to the entire State.81 One can, indeed, augment this production by restrictions; but the advantage obtained thereby is merely apparent. We only thereby divert, as the school says, capital and labour into another and less useful channel. But the manufacturing productive power, on the contrary, is governed by other laws, which have, unfortunately, entirely escaped the observation of the school.
If restriction on the importation of raw products hinder (as we have seen) the utilisation of the natural resources and powers of a State, restrictions on the importation of manufactured goods, on the contrary, call into life and activity (in the case of a populous country already far advanced in agriculture and civilisation) a mass of natural powers; indeed, without doubt, the greater half of all natural powers, which in the merely agricultural State lie idle and dead for ever. If, on the one hand, restrictions on the importation of raw products are a hindrance to the development not only of the manufacturing, but also of the agricultural productive, powers of a State, on the other hand, an internal manufacturing productive power produced by restrictions on the importation of foreign manufactures, stimulates the whole agricultural productive powers of a State to a degree which the most flourishing foreign trade is never able to do. If the importation of raw products makes the foreign country dependent on us and takes from it the means of manufacturing for itself, so in like manner, by the importation of foreign manufactures, are we rendered dependent on the foreign country, and the means are taken from us of manufacturing for ourselves. If the importation of products and raw materials withdraws from the foreign country the material for the employment and support of its population and diverts it to our nation, so does the importation of manufactured fabrics take from us the opportunity of increasing our own population and of providing it with employment. If the importation of natural products and raw materials increases the influence of our nation on the affairs of the world and gives us the means of carrying on commerce with all other nations and countries, so by the importation of manufactured fabrics are we chained to the most advanced manufacturing nation, which can rule over us almost as it pleases, as England rules over Portugal. In short, history and statistics alike prove the correctness of the dictum expressed by the ministers of George I.: that nations are richer and more powerful the more they export manufactured goods, and import the means of subsistence and raw materials. In fact, it may be proved that entire nations have been ruined merely because they have exported only means of subsistence and raw materials, and have imported only manufactured goods. Montesquieu,82 who understood better than anyone either before or after him how to learn from History the lessons which she imparts to the legislator and politician, has well perceived this, although it was impossible for him in his times, when political economy was as yet but little studied, clearly to unfold the causes of it. In contradiction to the groundless system of the physiocratic school, he maintained that Poland would be more prosperous if she gave up altogether foreign commerce, i.e. if she established a manufacturing power of her own, and worked up and consumed her own raw materials and means of subsistence. Only by the development of an internal manufacturing power, by free, populous, and industrious cities, could Poland obtain a strong internal organisation, national industry, liberty, and wealth; only thus could she maintain her independence and political superiority over less cultivated neighbours. Instead of foreign manufactured goods she should have introduced (as England did at one time, when she was on the same footing as regards culture with Poland) foreign manufacturers and foreign manufacturing capital. Her aristocracy, however, preferred to export the paltry fruits of serf labour to foreign markets, and to obtain in return the cheap and fine goods made by foreign countries. Their successors now may answer the question: whether it is advisable for a nation to buy the fabrics of a foreign country so long as its own native manufactures are not yet sufficiently strengthened to be able to compete in prices and quality with the foreigner. The aristocracy of other countries may bear her fate in mind whenever they are instigated by feudal inclinations; they may then cast a glance at the English aristocracy in order to inform themselves as to what is the value to the great landed proprietors of a strengthened manufacturing power, of free municipal institutions, and of wealthy towns.
Without here entering on an inquiry whether it would have been possible for the elective kings of Poland, under the circumstances under which they were placed, to introduce such a commercial system as the hereditary kings of England have gradually developed and established, let us imagine that it had been done by them: can we not perceive what rich fruits such a system would have yielded to the Polish nation? By the aid of large and industrious towns, the crown would have been rendered hereditary, the nobility would have been obliged to make it convenient to take part in legislation in a House of Peers, and to emancipate their serfs; agriculture would have developed itself, as it has developed itself in England; the Polish nobility would now be rich and respected; the Polish nation would, even if not so respected and influential in the affairs of the world as the English nation is, would have long ago become so civilised and powerful as to extend its influence over the less cultivated East. Without a manufacturing power she has become ruined and partitioned, and were she not so already she must have become so. Of its own accord and spontaneously no manufacturing power was developed in her; it could not be so, because its efforts would have been always frustrated by further advanced nations. Without a system of protection, and under a system of free trade with further advanced nations, even if Poland had retained her independence up to the present time, she could never have carried on anything more than a crippled agriculture; she could never have become rich, powerful, and outwardly influential.
By the circumstance that so many natural resources and natural powers are converted by the manufacturing power into productive capital is the fact chiefly to be accounted for, that protective regulations act so powerfully on the augmentation of national wealth. This prosperity is not a false appearance, like the effects of restrictions on the trade in mere natural products, it is a reality. They are natural powers which are otherwise quite dead—natural resources which are otherwise quite valueless, which an agricultural nation calls to life and renders valuable by establishing a manufacturing power of its own.
It is an old observation, that the human race, like the various breeds of animals, is improved mentally and bodily by crossings; that man, if a few families always intermarry amongst one another, just as the plant if the seed is always sown in the same soil, gradually degenerates. We seem obliged to attribute to this law of nature the circumstance that among many wild or half-wild tribes in Africa and Asia, whose numbers are limited, the men choose their wives from foreign tribes. The fact which experience shows, that the oligarchies of small municipal republics, who continually intermarry among themselves, gradually die out or visibly degenerate, appears similarly attributable to such a natural law. It is undeniable that the mixing of two quite different races results, almost without exception, in a powerful and fine future progeny; and this observation extends to the mixing of the white race with the black in the third and the fourth generation. This observation seems to confirm more than any other thing the fact, that those nations which have emanated from a crossing of race frequently repeated and comprising the whole nation, have surpassed all other nations in power and energy of the mind and character, in intelligence, bodily strength, and personal beauty.83
We think we may conclude from this that men need not necessarily be such dull, clumsy, and unintellectual beings as we perceive them to be when occupied in crippled agriculture in small villages, where a few families have for thousands of years intermarried only with one another; where for centuries it has occurred to no one to make use of an implement of a new form, or to adopt a new method of culture, to alter the style of a single article of clothing, or to adopt a new idea; where the greatest art consisted, not in exerting one's bodily and mental powers in order to obtain as much enjoyment as possible, but to dispense with as much of it as possible.
This condition of things is entirely changed (and for the best purposes of the improvement of race of a whole nation) by establishing a manufacturing power. While a large portion of the increase of the agricultural population goes over into the manufacturing community, while the agricultural population of various districts becomes mixed by marriages between one another and with the manufacturing population, the mental, moral, and physical stagnation of the population is broken up. The intercourse which manufactures and the commerce between various nations and districts which is based upon them bring about, brings new blood into the whole nation as well as into separate communities and families.
The development of the manufacturing power has no less important an influence on the improvement of the breeds of cattle. Everywhere, where woollen manufactures have been established, the race of sheep has quickly been improved. Owing to a greater demand for good meat, which a numerous manufacturing population creates, the agriculturist will endeavour to introduce better breeds of cattle. The greater demand for 'horses of luxury' is followed by the improvement of the breeds of horses. We shall then no longer see those wretched primitive breeds of cattle, horses, and sheep, which having resulted from the crippled state of agriculture and everywhere from neglect of crossing of breeds, exhibit a side spectacle worthy of their clumsy owners.
How much do the productive powers of the nations already owe to the importation of foreign breeds of animals and to the improvement of the native breeds; and how much has yet to be done in this respect! All the silkworms of Europe are derived from a few eggs, which (under Constantine) were brought to Constantinople in hollow sticks, by Greek monks from China, where their exportation was strictly prohibited. France is indebted to the importation of the Thibet goat for a beautiful product of her industry. It is very much to be regretted, that hitherto the breeding and improving of animals has been chiefly carried on in order to satisfy the requirements of luxury, and not in order to promote the welfare of the large masses. The descriptions of travellers show that in some countries of Asia a race of cattle has been seen which combines considerable draught power with great swiftness of pace, so that they can be used with almost the same advantage as horses for riding and driving. What immense advantages would such a breed of cattle confer on the smaller agriculturists of Europe! What an increase in means of subsistence, productive power, and convenience, would the working classes thereby obtain! But even far more than by improved breeds, and importation from one country into another of various animals, has the productive power of the human race been increased by the improvement and importation of trees and plants. This is at once evident, if we compare the original plants as they have sprung from the bosom of nature, with their improved species. How little do the primitive plants of the various species of corn and of fruit trees, of edible vegetables and of the olive, resemble in form and utility their improved offspring! What masses of means of nourishment, of enjoyment, and comfort, and what opportunities for the useful application of human powers, have been derived from them! The potato, the beet-root, the cultivation of root crops for cattle, together with the improved systems of manuring and improved agricultural machines, have increased ten-fold the returns of agriculture, as it is at present carried on by the Asiatic tribes.
Science has already done much with regard to the discovery of new plants and the improvement of them; but governments have not yet devoted to this important object so much attention as they ought to have done, in the interests of economy. Quite recently, species of grass are said to have been discovered in the savannas of North America, which from the poorest soil yield a higher produce than any fodder plants, which are as yet known to us, do from the richest soil. It is very probable that in the wild regions of America, Asia, Africa, and Australia, a quantity of plants still vegetate uselessly, the transplantation and improvement of which might infinitely augment the prosperity of the inhabitants of temperate climates.
It is clear that most of the improvements and transportations of animals and vegetables, most of the new discoveries which are made with respect to them, as well as all other progress, inventions, and discoveries, are chiefly calculated to benefit the countries of the temperate zone, and of those most of all, the manufacturing countries.
[81.] See Appendix C.
[82.] Esprit des Lois, Livre XX. chap. xxiii.
[83.] According to Chardin, the Guebres, an unmixed tribe of the old Persians, are an ugly, deformed, and clumsy race, like all nations of Mongol descent, while the Persian nobility, which for centuries has intermarried with Georgian and Circassian women, is distinguished for beauty and strength. Dr. Pritchard remarks that the unmixed Celts of the Scottish Highlands are far behind the Scottish Lowlanders (descendants of Saxons and Celts) in height, bodily power, and fine figure. Pallas makes similar observations respecting the descendants of the Russians and Tartars in comparison with the unmixed tribes to which they are related. Azara affirms that the descendants of the Spaniards and the natives of Paraguay are a much more handsome and powerful race of men than their ancestors on both sides. The advantages of the crossing of race are not only apparent in the mixing of different nations, but also in the mixing of different family stocks in one and the same nation. Thus the Creole negroes far surpass those negroes who have sprung from unmixed tribes, and who have come direct from Africa to America, in mental gifts as well as in bodily power. The Caribbeans, the only Indian race which chooses regularly its women from neighbouring tribes, are in every respect superior to all other American tribes. If this is a law of nature, the rise and progress which the cities of the Middle Ages displayed shortly after their foundation, as well as the energy and fine bodily appearance of the American people, are hence partly explained.