The Pete Quiñones Show - *Throwback* The Life and Economic Theory of Friedrich List w/ Wendell from CozyTV

Episode Date: February 1, 2025

67 MinutesSafe for WorkWendell is a researcher and livestreamer on the Cozy TV platform. Wendell joins Pete to go over the life and thought of German economist Friedrich List.Wendell's Cozy ChannelPete and Thomas777 'At the Movies'Support Pete on His WebsitePete's PatreonPete's SubstackPete's SubscribestarPete's GUMROADPete's VenmoPete's Buy Me a CoffeePete on FacebookPete on TwitterBecome a supporter of this podcast: https://www.spreaker.com/podcast/the-pete-quinones-show--6071361/support.

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Well, thank you for coming back on. This is the one I'm really looking forward to. I started looking into Friedrich List about a year ago, but I haven't really had a chance to go too deep. And I know that the first time that we ever talked, you seem to have a really good working knowledge of the work and the life of Friedrich Liss. So let me just, let's just jump right in. I'll, we'll start with this. Friedrich Liss was German.

He was an economist. How would you describe his theory of the economy? Well, List is a really interesting early example of, you know, while a German, he was also an American citizen and really his work stemmed from his time here in America and his perhaps founding contributions to the so-called American School of Economics. So I guess just to give the background on List and the biography of List is remarkable and really quite telling, as the founding differences between the Orthodox economists of the time and this emerging generation of protectionists or, you know, nationally oriented economists who had a lot of skin in the game, right? These weren't economists hunched over in the ivory tower with a candle and the quill pen coming up with theoretical figures about the price of corn in Austria or something like that.

List was very energetic and, you know, he had his humble origins as a professor of economics during the end of the continental system. At the time, Germany had been conquered by Napoleon and was being released in the mid-1800s. And this was coterminous with the United States war against England as well. That's who Napoleon was, you know, his chief entity. antagonist was England and List like the American system thinkers or American school thinkers who he would encounter in the next decade Began to Uh, kind of envision envisage a

maintenance of in his case Napoleon's continental system and Bargowing against British trade and and and Had these ideas of maintaining Napoleon system which while had been meant to embargo British trade with the continent of Europe controlled by Napoleon, it had created a system of manufacturers on the European continent itself, being bereft of trade with the world's workshop, England at the time. And so, you know, initially as a professor of economics, he was concerned with, at the time

that, you know, Napoleonic forces withdrew from continental Europe, that he would try and usher in a domestic economic framework, which would later be called the Zolverine. About 25 years later, his dream came true. And what is now Germany and what was then a bunch of mediatized palatinates, Napoleon had drastically reduced a number of principalities within Germany itself. And so they all had different customs in terms of internal trade. They all had different costs of doing trade with one another different essentially internal taxes. And so List was advocating for a system of free trade in a domestic market only, envisaging that this would bind together the German people and their industries and prevent what was beginning to turn up at the time, this wave of

British manufactured goods from wiping out all the progress they had made in creating a productive economy for themselves, of course, under the dual issue of being conquered by Napoleon and the embargo he had in place on continental Europe against British goods as his chief weapon against British trade power. So that's kind of the start of list. And at the same time, across the Atlantic, you have thinkers like Matthew Carey also rediscovering founding ideas of American economy that had been put to rest to the point that it weakened America to be reinvaded by the British during, I guess, that theater of war.

Britain, of course, at war across the entire Atlantic in the mid-1800, I guess the 18-teens, kind of an awkward way of saying it. And the same thing was happening. After the Treaty of Ghent, America hadn't just been under an embargo and reinvated by the Brits during the course of the war of 1812, in the run-up to the involvement in the war. They'd had a series of embargoes

before we were at war with Britain as well. We nearly went to war with both Britain and France during that time. And so the United States was cutting itself off as a country with no industry. They're very small native industry that had not grown yet in the wake of independence,

cutting itself off from the two major global manufacturers and found itself in the similar position, being cut off from trade with Britain and to a lesser extent France meant that the United States enjoyed this unforeseen increase in agricultural production, land price lowered. Obviously, they had to substitute for manufactured goods, substitute for the import of these by domestic manufacture. The Treaty of Ghent kicks in. Again, the wave of British exports roles.

in. And this is a kind of favored method of the British Empire at the time, and still a favored method of major manufacturing countries today. In comes the wave of imported goods, gradually destroying all this new American production. So I guess that's probably the best place to start with List is, as a professor, he becomes interested in governance. And this is the same unifying aspect of many protectionists, unlike academic theorist economists, they are primarily drawn into ideas of econometrics, political economy, establishing facts rather than theory, what you call inductivism versus deductivism, by the need to try and engage in good governance, if no one else will. So List becomes a bit of a rabble rouser. Not only is he advocating,

for a customs union between dozens at that point of essentially, you know, what are analogous to the modern German states, saying dissolve your tariffs, you know, create a common domestic market, an internal free market. He's observing what the source of England's global economic power is, the protection of their home industries, essentially free trade within England proper, but aggressive protection of its ability to import raw goods from the entire world, which it keeps from manufacturing anything by dumping, then the value-added exported goods on them at prices low enough to keep them from ever having to manufacture anything on their own.

So List is advocating for this domestic customs union, and he gets into trouble, you know, as one does when they begin to, I guess with a mind geared toward efficiency and improvement enter the halls of government issues dozens of new rules that he would like to see. The parliament abide by. It ends up getting him, I think, convicted something like a two-year sentence, and he goes on the lamb. And this becomes a theme throughout lists life for the next, something like near 30 years until he dies. He's just in constant motion between Europe and the...

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He's a coal miner. He does all of these things. So, you know, there's a great modern biography of list by Eugen Vendler, that's W-E-N-D-L-E-R and if you if anyone's interested I'm kind of I'm front-running the the wildlife of Friedrich Liss because it in and of itself would would take hours to relate so you know needless to say he was very active he wasn't just someone who laid down a founding theory of protectionist economic economics he was very transatlantic and he's almost like the forest gump of early 19th century political economy.

So I guess I'll start there, you know, and this is eventually how he ends up in the United States, but I'll come up for air here and let you respond. Well, I think when anyone who knows anything about him, even a very vague understanding of his economics, tariffs on imported goods are what anyone who might know who he is will talk about. Can you defend tariffs from a list standpoint? Yeah, I guess at the root of it, the most important concept of list in terms of wealth was that wealth is a matter of national productivity and not the hoarded, material wealth of individuals within the state itself. It's what a nation can produce.

So I think there are obvious ties to someone who wanted to create a unified German customs union to bring the people, the kind of disparate German people together. List is still seen as a founding father of federal Germany. List was held in the greatest esteem by founders of modern Germany in its various phases like Bismarck and was a, I guess, a prominent fixture of the economic theories of 1930s Germany, which himself was extremely nationalist. So, you know, that's something that he would go on to share with his American counterparts and probably pick up in America. He, before coming to America, only had this kind of concept of a domestic free trade union. But in the United States itself, he enters into the tariff debate.

He comes to the United States in, I think, 1826 as a guest of Lafayette, the great French revolutionary. And Lafayette has met List and his bizarre itinerant flight from justice in Europe and invited him to the United States, where List immediately is met with the, I believe it's Richard Rush, was leaving his position as consul to England and was Secretary of the Treasury. So due to Lafayette's stature, this is the 50th anniversary of Lafayette's heroism in the War of Independence. They say at times, List and Lafayette are traveling in carriages surrounded by as many as 2,000 men in parades.

He's meeting with all the heads of state of the United States. He becomes known to all the presidents, but he's dropped then into this emerging tariff debate that within a year will be known as the tariff of abominations. And so the United States is split along sectional lines of basically, you know, in the South, they preferred to continue the status quo trade arrangements with England, where they would provide raw goods to England, and England would provide industry. And in the north, there's a much more anglophobic sentiment and independent segment sentiment of creating your own goods and limiting England's continued engagement and interaction with American commerce and governance.

And so, you know, List understands in this circle in Pennsylvania headed by Matthew Carey, known as the Pennsylvania School of Protectionists, that to ensure national sovereignty and strength, you have to build up so-called infant industries. So in the case that you don't have the ability to produce finished goods out of resources yourself, you have to somehow create that. And while the tariff enforces that, and the tariff has to be set high enough to reduce, you know, the ability of a state with massive subsidies to insert their products, no matter essentially what your tariff is. And tariffs can essentially become bans at some point, right? You're levying increased taxes on the value of imported goods that sometimes can increase over the value of the

finished good itself in the first place. Like right now, President Biden has a 100% tariff on incoming Chinese electric vehicles, which is clearly meant to prevent Chinese electric vehicles from entering the United States and potentially wiping out, you know, a key component of American manufacturing. So this is basic protectionism. You have to protect your infant industries. You have to get to the point that you have national industry so you can join the world of advanced economies.

And in this time, he says, there's just one. It's England. He has the, you know, and this is probably his most important contribution to the corpus of protectionist ideas is he is the first to codify protectionism. So while dealing with the Pennsylvania schoolers, although not caucusing with them politically, he sides with their opponents, the Democrats, you know, to the point that his friendship with Andrew Jackson and Martin Van Buren results in their appointment of him as their consul to Germany, which is an entirely different saga and comedy of errors in lists unfortunate life in Europe, I guess, in his final decade.

But, you know, it's this concept that bringing people together who have not learned to think continentally, the United States is 13 relatively disparate states at that point. There's an early admonition in 1791 through Hamilton, First Secretary of the Treasury's report on manufacturers that you have to engage in a series of behaviors to draw people together. He says you have to learn how to think continentally. We're no longer 13 confederated states. We are now a single union of states. And List is attempting to solve the same problem with these German platinates. But of course, now he's living in the U.S. And he becomes kind of a representative of German Americans and kind of contributes materially to delivering their block vote.

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And after List's life, he only really spreads these ideas to France and back to Germany in his own lifetime. But Bliss becomes the kind of founding father of many nationalist economic movements deep into the 20th century, and you're still seeing its imprint now, particularly in China. So, you know, the necessity of moving out of being

just simply an agrarian state. This is the first phase where you can only engage in farming. Your human capital is essentially manual labor. That's all people can do. You don't have institutions. You don't have means of elevating human capital like university systems. You don't have infrastructure. And you don't have anything to do with that stuff anyway. You don't have a means of exporting anything other than raw materials. That's exported for you by foreigners. And you have to go through that phase

of subjecting yourself to exporting your natural resources to be returned to you, as finished goods is the kind of first stage of ennoblement. And while England's the only country capable of doing that in the time of lists writing, he says, you have to go through this period because you can gradually indigenize the things that they are bringing back to you. He mentions that, you know, the United States used to just send England wool and receive back linens, you know, or receive back like completed textile goods. and then the United States became such a textile power that it threatened England's ability to produce these things.

And, you know, he doesn't really give mention to it, but he was familiar with the work of Hamilton's concept of bounties, which today you would hear called intellectual property theft. So that's kind of the first step. You are examining and kind of reverse engineering in some way and creating internal demand to replicate goods that you are importing. You're trying to substitute those imports. And then you move to the second phase, which is a combination of agrarian society, farming, exporting, raw material still, but beginning to, in ways where it makes the most sense, enable the production of finished goods from resources that you control. And eventually in the final phase, you move into being a commerce-oriented

state. You're doing all the other processes. You're providing your own food. You are creating not only just finished goods out of your own resources for your domestic market, but you're even importing other nations' raw materials who are below you, right? They're still in that first phase in the agrarian phase. And you are producing those for export as finished goods with extremely high added value. And you are now engaging in primarily commerce. And list, believed eventually, with the exception of the tropical states, which leads to claims of racism and imperialism from kind of recent revisionists from a free trade pro liberationist perspective like Mark William Palin, that every nation, once it's achieved this final state, this third phase,

then free trade is possible at an international level and not just within domestic market. or between master producer nations and nations learning how to escape the agrarian muck. So to him a tariff is a kind of step. It's an intermediary step. Obviously, we haven't escaped the national utility of tariffs on a global level at this point. So he didn't put a timer on it. He didn't say, you know, by 2,300, the needs for tariffs and protection will no longer be in place. But I guess one of the detractions from Lists, from an American perspective, is, you know, he's distinctly liberal.

He's not particularly nationalistic. He took pains to kind of delineate between having excessive national pride or, you know, what the appropriate level of national pride was versus exceptionalism. And while a very early thinker and the first to codify, again, the first to codify, the Pennsylvania School of Precertainment. protectionism that he found himself in, you know, he was roundly denigrated by the follow-on scholars who were his contemporaries like Matthew Carey's son, Henry Carey, in particular Erasmus Peashide Smith, the contemporary of Carey's who was a particularly advanced protectionist thinker. And the irony was, you know, in the United States, our academic institutions were always kind of hewing toward the status quo of British free trade, British concepts of economics. And so it's lists ideas that actually take root in the academy. And that's in Germany.

And this is where Americans have to go and learn about political economy from a Listian perspective in the 1870s and bring it back to the United States during a period where the Democratic Party is on the rise again after the Civil War. And there's an entirely new form of progressive free trade led by the Cobdenists that's creeping in a transatlantic sense that is still, Cobdenism is kind of still what we'd associate with liberal internationalist free trade. So yeah, I don't know, that's a pretty convoluted answer about the necessity of terrorists, but essentially to join the world of powerful nations to secure your own national sovereignty, you can't rely

on the import of goods and services that that more powerful nation will hold over you. you, right? Well, hold as a cudgel against you to compel you to engage in behavior that they find convenient. Well, let me ask this. You just basically went through his stages of economic development. Something that he was also a big proponent of, and you talked to, you mentioned it very, briefly is railroads. Can you talk about what how, what his vision for the railroads were when it came to the nation and the economy. Mobility was key in list theory of kind of economic change or in elvenment. And that economies of time and space, as he called them, meant a lot more than just the

transfer of goods, but also the transfer of people. I talked about human capital, the cultural improvements that List saw as a domain of, you know, I guess neglected to mention that the tariff, of course, provides income for government. So through the application of these monies collected essentially from foreign governments or foreign, you know, mercantilists that want access to your domestic market for a high enough price, you're taking that money and you're investing it into the development of human capital. So the training and education of the populace, you're also creating infrastructure. what was known as internal improvements.

So you're building out basically the arteries of a national economy. The primary importance of free trade within protectionism is purely domestic. So you have to find a way of connecting your disparate palatinates in Germany and your American states. You guys are probably familiar with, you know, if you've taken a road trip, all the different industries and resources that are found in the United States. Well, they have to be connected somehow. And early on, those were canals and railroads. So List becomes the first, I believe, one of the earliest, if not the first railroad, you know,

visionaries in the United States. It takes some time, I believe, 1833 until you can get a locomotive going. But it's not just the movement of goods. Protectionists also think of humans as capital. Capital beyond the Adam Smith, Malthus, and Daniel Ricardo concept of something you can exchange for goods and services, whether it's gold or, you know, other resources. People are also a resource. Wealth is also held, you know, if you're familiar with the nightsoilers or the work of Justice Liebig, like within the soil, the earth itself. So you're not just transferring goods.

you can move people around. You know, you can move them quickly across vast distances. And a key component of the Pennsylvania school in which List found himself in Sconson was the kind of abolition of class warfare. What Henry Carey, his contemporary son of Matthew Carey, would call the harmony of interests. You know, that you can have a harmony of interest between labor and capital. You can have a harmony of interest between the rural farm. and the urban industrialist.

But they have to be connected together through a system of internal infrastructure, and they have to have equal access to cultural improvements, again, like land grant universities beginning to supplant the Ivy League, which, as I mentioned, had always remained kind of loyalist in a certain sense. Michael Hudson has some interesting examples of that throughout his book, America's protectionist takeoff, about the difficulties that American nationalists had in clawing back the academy. They always failed.

And that's probably no surprise to the audience when you look at the elite American Academy now. They were always a status quo academy. They never really had anything to do with a national project here in the United States. So, you know, interconnecting people, interconnecting their goods. Hudson gives examples of the reduction of feed costs in the Hudson Valley for milk cows. Once you could build Erie Canal, you can move goods and services that otherwise don't have a comparative advantage because they can't reach each other. Now you can move those and interconnect your domestic free trade economy. but also there were security imperatives in Europe.

The rails, you know, this was part of the kind of European orientation that List had toward a lot of his ideas was you need to be able to move troops around rapidly. And the Napoleonic Wars had certainly taught them the value of that. So, you know, I guess that's kind of the rail thing in a nutshell, but also it represented this massive expansion of technology that was underway. coal and steam power. And, you know, it represented fundamentally the massive leverage of a human worker through technology. So, you know, it's about continuing.

It's been called by Hudson technological optimism. Some of your audience and you, yourself Pete, may have seen that be kind of clumsily wedded to Ricardian economic ideology by the venture capitalist Mark Andreessen in a recent manifest. though, which I find quite curious, given that its origins are in critiques of Ricardian economics. But the fact that technology can radically alter a state's position against other states, but everything is part of this broader whole. It's not just about building infrastructure. It's not just about building cultural institutions. It's not just about protecting the people and the resources.

from foreign predation. It's a broader system of human being and later thinkers within protectionism who followed list quite shortly, like Erasmus Pehine Smith, Henry Carey, Simon Patton, they begin to just associate it with comps concept of sociology, that this is just part of the human experience, this is part of man and nature, and it's not actually economics. So, Airgrid, operator of Ireland's electricity grid, is powering up the northwest. We're planning to upgrade the electricity grid in your area, and your input and local knowledge are vital in shaping these plans. Our consultation closes on the 25th of November.

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Get the facts be drinkaware, visit drinkaware.com.e. You know, I think the quote from list about the real is like, the world is in motion, right? The world's in motion. So he was very much a mover as well, as I mentioned, his travels, kind of constant itinerance across the world. It's said that he inspired Keynes, John Maynard Keynes. How do you think he inspired? fired Keynes when he wasn't a cognizist. Yeah, I think the Keynesian aspect is probably that, you know,

Keynes believed in subsidies. And, you know, you even see this within protectionism itself. It's a massive spectrum of ideas where List represents a kind of more liberal position. List, for example, wouldn't protect agrarian output. figures like Kerry believed you had to protect everything. Figures like Simon Patton had theories of regulatory control and kind of behavior adjustment for literally everything, right? We can change the tastes of people if they want to continue eating imported food, right? We'll figure out how to substitute where to grow a banana in the United States instead of bring bananas in

from a foreign country. You know, it's, so there's this vast spectrum, but, you know, it's, there is obvious overlap with other forms of economic ideas. And what's the infamous line about Keynes, right? Barry, about subsidies, right? Just bury jars of money and the most capable will dig them up. So, I, you know, if that's the alignment, I guess I would reject that and that the protectionist concept of subsidies, you know, usually gets derided.

is cronyism, but at the same time, it's an acknowledgment of inequalities that, say, you had $100 million in tariff revenue to give out. If you gave it to a million people, $100 each, nothing happens. But if you give it to a guy who's champing at the bit, set up the first railway in the United States and he knows how to do it, you may get a railway out of the deal. You know, whether or not that's cronyism is usually a kind of point of political debate. But, yeah, I don't know. I don't see a lot of crossover other than vague, like, you know, that there's a kind of private and public responsibility that both Keynesians and protectionists delineate in the economy.

But yeah, I don't know. I don't really see a ton of crossover with the Keynesians other than, like I said, kind of government-directed finance and industry to a degree. But, you know, when you read about List, there are some thinkers who will bring up like the Juche regime in North Korea. They'll bring up autarkic regimes and say, well, hey, you know, they're marshalling their native resources and engaging in value ad manufacturing in their own country. Maybe they got that from List. And it's a bit of a stretch. Talk a little bit about what you already mentioned that a little bit, him getting in trouble with the law. What was, what exactly was he doing to, to piss off the people in charge?

Well, you know, if you, it's, I believe it was 42 prescriptions for changing kind of the parliamentary rules within Vurtenberg, where he was from. And, and also, like I mentioned, just drawing together all of these disparate states in a common customs union. This is in a time where the aristocracy is trying to reestablish itself with some form of Germanic independence after, you know, at that point, 15 years of Napoleonic rule. So that was unpopular. Ironically, it's an idea before its time. He's forced to flee in the late 18 teens and returns in the 1830s. and even the king of Vurttberg welcomes him back and

feels bad, right? He feels bad that List was treated the way he was. So, I think it's important to note that when you know, in this time that he is away, America becomes an economic superpower. And List is really the first major

codifier of these new ideas at the behest of Ingersoll who runs the Pennsylvania Society. And America goes from in 1827 when he writes that to having a handful of native industries to by the 1840s. It's a serious global competitor in areas like textiles, iron. It has a functioning railway system.

The canal systems have been built out. It is kind of the talk of the world. The doctrine of high wages exists. Americans are attracting massive numbers of Europeans who want to come work. And either work in, you know, there's a kind of bifurcation and it appeals to two types of people. You can either come and work in these new American factories or you can strike out on the frontier and homestead. Of course, these are major political issues as well. And by 1848, when Germany undergoes its own liberal revolutionary attempt by a strange mixture of liberals and Marxists that fails,

it's perhaps a decade of the Zolverine, the German Customs Union, that helps bind it together and as a federal power resist what otherwise could have been salami sliced in piecemeal by this revolutionary movement. So you could say it's an idea before it's time, but, you know, in many cases when you read about the real politics of the 19th century, it's even zanier. than political interactionist now. And I was reading about the bank war the other day between Jackson and Biddle. And it really has nothing to do with Jackson's views on banking

or even that he necessarily had any that were dogmatic, but really just a power struggle with someone who was asserting his influence without being elected president. So there's a lot of rubbing the wrong way and things like that. So, yeah, Liz. would variably return to Germany, serve some portion of his sentence. And, I mean, he was just all over Europe in the United States from basically the time of his conviction until he committed suicide following his failed attempt at reaching some

kind of trade agreement between Germany and England when he met with the Cobb tonight's. So it's pretty hard to qualify, you know, what exactly lists personal issues were when his modern biographer is doing so from a kind of perspective of a fesscript, right? That this is like a celebration of lists prominence as an early German thinker. The forward to that Vendler book is written by the recent president of Germany. And the introduction is written by the mayor of Lists' hometown. So, yeah, I don't know that there's anything more to it than rabble rousing in kind of, I don't know, post-crisis. Do you think that he, one of the reasons you could call him, or one of the reasons he was so popular was because he foresaw exactly what

was happening with the technological, with the industrial revolution and that he was able to basically craft a kind of economic theory or economic approach around it? Yeah, and it gave a lot of inspiration to nationalist thinkers. So, list, and it's not just list, it's the German historical school of economics that follows list and takes their cues from him. You know, anyone that's read the report or the national system of political economy lists magnum opus, you'll know that the whole first third is just, it's history, right? It's a historiography of various nations and their evolution toward whatever trade system

they find themselves in now, and system of economy they find themselves in now. So, you know, a list is very much oriented, not on theory, not in this idea that theory comes first and you're restrained by theory, which is the hallmark of the deductive theorists of Adam Smith, Malthus, and Ricardo, the orthodox of English economic literature and teaching at the time. But instead that you start from observation and you end in theory, which is actually the structure of the book. So you start with observation. And for nationalists, we're seeing this kind of growing sentiment that starts with the receding of Napoleonic power from continental Europe that, as I mentioned, it mediatedized in Germany and in places like Italy, it brought, I think,

for the necessity of an invading conqueror to maintain a political control over these places. It brought these groups closer together. There's a notion of economic competition. There's salon culture throughout Europe that's tracked by, some of the other chroniclers of lists, I guess the penetration of his ideas into countries like Japan, China, Italy, Russia, all during the 19th century. And they're literally reading a codified version of what they are seeing in the United States having accomplished. And so they're thinking like, okay, I need to start to examine. I need to start to have my universities have people who

examine some of these imported goods. I need to maybe bounty the copying of this technology like the United States did to textile mills early on. I need to somehow implant industry, need to have other scholars who are kind of yoked to state incomes that are providing for their education to go and examine whether or not we have resources and what they can be turned into. And so this is all kind of inherent in lists work. And it's celebrated as a means of providing the fulcrum that these early kind of national experiments can use to first bind the populace together in a common domestic market while protecting as they industrialize that common domestic market from being invaded again or reinvated by cheap imports.

And once you have, once you're producing things, you have this very compact what Kerry called the harmony of interest. a very compact domestic market where you are feeding, say, suburban farm is feeding a growing, or ex-urban farm would be feeding a growing industrial kind of conurbation, like as a city grew, around a factory. And if you place that factory near the resource that it's of adding value to, then, you know, you might have an iron mine grow into a small city. The iron mine's being fed by a farm.

The literal waste from the iron mine workers is being sent to the farm to fertilize it, to reconstitute the food that's now going into the mouths of the iron miners. And those iron miners are producing nails. And those nails are used to build, right? The rest of the things, you get the idea. So that you're not supporting any kind of international trade by winnowing off workers from, from your economy to go and, I don't know, work on merchant marine ships. You're not sending your resources overseas. You're not feeding a foreign country.

You're not relying on a foreign country to feed you in cases where you have to import food. So it does create a very compact insular nugget from which, you know, a seed from which this kind of national feeling can grow. I believe in the forward of Imperium Press's publication of national system by list. Francis O'Bierney, I believe his name is. I don't know if I'm pronouncing that correctly. He brings in James Greger's, I believe it's called, like, reactive nationalism, right? Where Greger talks about the utility of List in the mid-19th century

as all these various European nations began to try the country thing, right? So that's kind of lists utility there. As I mentioned, List is not the most complete nationalist thinker or protectionist thinking. from the American school. I think in large part, List's prominence is owed to the fact that he was able to leave America and write his ideas down in France, where they took root in the 1830s.

Again, the Forrest Gump-like quality of List in meeting Adolf Tears as a historian at the time and then becomes Prime Minister of France is quite propitious. And from there, you know, he's got a safe haven to write his book, National System. It's not even translated. into English and available in the United States for another decade or so.

But that takes root in Germany and it's spread as it's translated throughout the continent into Eurasia. And as I mentioned, back to the United States, not just through the means of the book, but by the German Historical School that crops up in German universities, the patronage of Bismarck to lists ideas, and the rising popularity of figures like Henry Carey in the United States, who has some traction within Bismarckian circles. So there's this exchange of ideas that were only possible, even though they come from America, if they set route in foreign countries.

It reminds me of the kind of modern Listerian concepts that help Japan be built into an economic superpower following the war. You know, you hear a lot about Japanese management techniques. but if you dig into the origins of those management techniques, in many cases, they were American management techniques that had no purchase inside the United States. So I suppose you'd call it a kind of like ideological boomerang effect. And, you know, List is important because he was able to, I guess, have these ideas spread in ways that the American Academy had no interest in spreading the ideas of their ideological opponents,

the protectionists in the United States, I guess variously, the federalists, the Republicans, the Whigs, the anti-Masons, and then the modern Republican Party. They had a fairly short run. They were never interested in dominating the academy or making inroads there beyond the Wharton School at the University of Pennsylvania, which becomes mostly shored up as a protectionist institution by, again, the boomerang that comes back from the German historical school. So they're interested in governance.

They have a great deal of success in spreading their versions of protectionism, which again, come from the same. They're rooted on the same tree that lists is. There's very few degrees of separation between them. But they mostly do that as an artifact of state power when they become a dominant unit party following the Civil War throughout the Civil War, when the Democrats are basically abolished from the field until 1877. So, you know, they used an entirely different method. Statecraft in particular, Erasmus Pishine Smith going and kind of undoing a lot of British work in Japan in the 1870s as the number three or number four man in the State Department.

The strong ties that Seward and Hamilton Fish, Secretary of State Fish, have with Alexander the second of Russia that result in the sale of Alaska to the United States. that result in Alexander II being the only national leader to support the Union in the Civil War, sending fleets to San Francisco and New York. So, you know, there were other means of spreading these ideas, but I think the destruction of the Americans of the American school proper by the great reproachment, the transplantation of Cobdenism, in a transatlantic sense from Britain to the United States in that period.

And it really led to this just complete burial of protectionist thinking in the United States until Donald Trump revived it. Also a Wharton man, right? And Trump comes out of nowhere, even as early as 2014, digging up strange quotes about learning to think continentally, getting mocked by the media for calling himself tariff man on stage until someone pulls out that, you know, McKinley, President McKinley, the apostle of protection. used that as a campaign slogan some 120 years before.

So for some reason, the spark was kept lit long enough in the United States to be revived. And you'll find through a survey of the literature that it did kind of transfer through the old right to a degree. There were a handful of American system or American school protectionists in the paleo-conservative camp, which is, of course, quite a jumble if anybody's ever looked. But, yeah, I think Lists' popularity and his durability came from being the kind of, I guess, like the ideological leader of what supports nationalism, the econometrics that bind Apollity together everywhere but the United States. His ideas were formative here, but they were, I guess, done several times better by his followers. like Henry Kerry, Erasmus Peshine Smith, David Hall Rice, Simon Patton. There are quite a few of them that were much more advanced thinkers and much more granular.

And they had their specific critiques of List as well, but they didn't, with the exception in some cases of Kerry, managed to break out of the American paradigm. And what's funny about List as this kind of father of global protectionism is, you know, he was critiqued by his American counterparts as not being universal enough. He was not the kind of the great generalizer of protectionism. You know, as part of his historical analysis and his inductivism was saying that there is no universal principle of economics, unlike what Smith or Ricardo would have their readers believe that nations are highly specific.

The types of people they have within them are radically different from one nation to the next. The resources they contain are radically different. There's a context here. You know, and this is kind of the root of historicism is that it is contextualized. So that's a kind of rich irony, but you can see how that message in a way leads to a universality and that there's something unique about you as an Italian, right? There's something unique about you as a Japanese. and there's something unique about the resources you command as a leader of this country.

And that means, you know, you will be able to develop a very unique set of industries and either trade for the rest or as an emerging kind of revisionism of List that I mentioned from Mark William Palin is implying lately, engage in colonialism. I mentioned that List, you know, he recognized the three stages. and that if you're at the third stage as England was, you were going around with your big Navy and your merchant marine fleet and your prominence as the workshop of the world. And it was in your interest to try and import everybody else's raw materials

and give them back much more expensive value-added manufactured goods, prevent them from ever having an industrial base, keep them captive, control even the amount of food they can eat. Simon Patton, who I mentioned, he brought up that monocropping, you know, really reduced a nation's ability to have hardened itself in a sovereign-tist fashion against this kind of foreign predation. So, you know, where we see countries even in Western Africa now that just produce chocolate, right? I can't remember which one it is, the Ivory Coast or something, where you can watch videos of guys going around with buckets and sticks and they're just

shaking cocoa beans out of trees. There's no industry there. You know, the most advanced form of transportation is a moped. And yet, uh, you're, you're buying chocolate. Chocolate is this global staple at this point, but not a chocolate bar is produced where the beats are grown. So List foresaw that. He said, you know, there's places where it's just not probably going to be possible. And if that's true, uh, then, you know, and you need to garner the foreign resources of other countries to make articles for export, for your export economy. I mentioned Chinese electric vehicles. A lot of those resources don't come from China.

They come from other countries. They're then refined into and value added into a complete product that's exported. But more advanced forms of protectionist theory. And I see economists like Charles Benoit from the Coalition for Prosperous America, which is the leading and perhaps only protectionist. lobby in the United States, say, you know, why would you export any of your energy? Why would you export oil at all, right? Why, you know, these are limited, finite resources within your own national boundaries. Why would you even export food? Why would you allow the Chinese to buy

Smithfield and not only own the largest American pork producer, but also purchase like two-thirds of America's soybeans to feed their own pigs? Why would you take nutrients out of your own soil? Why would you take ore out of your soil to export it? So in a very, I guess, almost autistically granular system of protection, you're seeking the maximum advantage on a global scale by only refining for export things that you're getting from lesser countries. And that way you're not actually reducing or removing natural resources

from your domestic market or economy. And, you know, this leads to, accusations of imperialism. Palin has multiple examples of nations in a kind of circumstantial sense like Japan, who get on board with American school ideas and then immediately roll up on their lesser developed neighbors. So that is, I guess, a kind of emerging theory. And I'll note that Palin is attempting to do this, and you're going to roll your eyes at this

Pete to develop a kind of ultra-liberal third-worldest free trade movement, right? It's kind of a very new thing. Like think about wokeism and free trade together. So that's where these critiques of lists are coming from, these emerging critiques. Somebody put me on to that recently. They said, you've got to check out this group of globalist like woke college students or whatever around Palin, they're all into free trade. Rather than free trade being this kind of bugbear,

I'm sure you remember the WTO riots, kind of traditional left orthodoxy that emerges from Marxist critiques of free trade that used to predominate, and this is the kind of new idea fix A, is Palin boils everything down to Cobdenism versus Listians. And while he acknowledges some of the other contributors to protectionist,

this theory, they are all kind of condensed into list, you know, through the name listing itself. Well, I assume that the fact that so much of our manufacturing, well, American manufacturing is overseas to even institute a proper Listian kind of approach to our economy now, say we had someone come into power who this is what they wanted to do, to see it succeed. the way it should, we'd probably need to build a whole much more manufacturing, factories, and everything. Can you see it being done with the level of manufacturing we're at right now as a nation? Well, it is being done through the kind of extension into the Biden administration of Trump's trade policies and then also the IRA and the Chips Act.

these massive subsidies from the Biden administration toward securing a new high-end manufacturing sector for semiconductors, green technology, electric vehicles. And the irony there is we've turned from the source of these ideas. I mentioned the kind of Chinese predilection for using 19th century American political economy to build its export-based economy to establish its tariffs, establish a strong domestic market infrastructure. They do this through bounting technologies, you know, in almost every case. If it's their high-speed rail network, that was done by having the Chinese come in and build out high-speed rail networks to a limited degree.

Reverse engineer those. Don't need to buy Japanese trains or rail anymore. You're building it yourself, right? And now you can export that, like they're planning on doing to places like Vietnam. So China's using what Hudson, you know, titled his text, the America's protectionist takeoff. China is using these techniques. Hudson at the beginning of that book, he's, I don't know, I don't want to say cluelish, but Hudson, you know, the typical academic, he talks about like, you know, it's funny.

There's no real market for these concepts in the United States, but they sure do love me in China. They bring me over there all the time. So United States is in this hilarious. position where, and maybe protectionists can take advantage of this or will just naturally benefit from it, that China as a competitor to the United States is now creating the rules, much like England did for someone like Friedrich List 200 years ago. And the sad irony, I suppose, depending on how you feel about it, is that reindustrialization in America is being driven

by nations that we industrialized. Because in the mid-20th century, this was our export. As we switched to a global free trade economy, as we gradually abolished tariffs and de-industrialized, that future investment was going to places like Japan to prevent it from falling into communist hands. Japan had a very active Communist Party. The United States needed to not only maintain Japan,

militarily, which created great savings for the nation of Japan. It didn't really have a military until recently. The United States was securing it. The United States was ensuring that communists couldn't take over Japan through its patronage or vassalization of the one-party system, the LDP, the 1955 system, as they call it there. And, you know, Japan built this highly protected economy that used central banking to deflate its currency to drive exports. Now we hear those lines from Robert Lightheiser, who was Trump's United States trade representative, right? We need to deflate our currency to drive exports. We need to engage in punitive tariffs to achieve this middle ground, which is closer to list, I would say, fair trade, as Peter Navarro and Lighthizer call it,

where you only use a tariff to abolish a foreign. foreign tariff, which does nothing, of course, to replace the income tax, which everybody in the GOP believes is theft, right? This post-1913 system that pivoted from the collection of duties from foreign manufacturers who wanted access to our domestic market to instead picking the pocket of American workers. So, you know, these are half measures, and they're really just meant to compete with a country that's using what it learned from America's ship. out of an agrarian society that was disconnected into the kind of envy of the manufacturing world. And so where are these industries coming back to the United States from?

Well, Europe. You know, I watched a documentary the other day from the Financial Times about the country's building plants in the United States as a result of IRA and CHIPS Act subsidies. They're coming from Denmark. We rebuilt Denmark with the Marshall Plan to prevent it from going communist in the post-war era. That's boomeranged back. You may remember 15 years ago when Fiat bought Chrysler. And the irony there is one of the hallmark proposals or projects of the Marshall Plan was sending automotive manufacturing equipment to Yanni Agnelli of Fiat in the 1950s. We built the Italian

auto industry in large part to provide high wages to prevent it from going communist. when the CIA wasn't preventing the Italian communist from winning elections outright. So that's a boomerang that came back. We industrialize Italy. We export protectionism. We show them how to do these things. We build from rubble entirely new economies. And because we have forsaken our own industrial investment to do that.

Because we send the money to build. the transistorization or solid state manufacturing economy in Japan, American financial capital buys low and builds an entire industrial sector. And it doesn't happen here. And it moves on when it has to come back for security reasons or energy reasons. You're seeing German companies now reshor, well, not reshoring, but offshoring their industry, their new build industry to the United States. Biden has refused to export liquid natural gas. This is kind of seen as a campaign, you know, a campaign gift to the, I guess, the Greens in the United States, right? He's trying to maybe buy off environmentalists, but what he's also doing is massively raising energy prices in Germany.

Energy prices in the United States are very low. Germany is being told to, you know, withdraw foreign. direct investment and economic interdependence from the Chinese as a security issue. So that cheap labor from China, Germany's last offshoring target is now offshore to the United States. But of course, we built the West Germany economy. They're a vassalized state. Germany has probably more American military power within its borders than German military

power because we secured them. So we spent all this money. We spent all this money building these protectionist states, and now I guess the bills come through, and they're reshoring to the U.S. Even Trump has floated, you know, while he wants a massive tariff on Chinese electric vehicles to prevent their importation here, he would be okay if they built plants here. So that's the kind of bittersweet aspect of these reshoring policies. Plus, as a lot of you guys know, these are high-tech manufacturing jobs. They are, there's a high degree of automation inherent to them. So these new factories aren't taking in, you know, 100,000 phonetians in Arizona are not going to the Taiwanese

semiconductor manufacturing plant and, you know, looking through loops and, you know, like a jeweler and carving a semiconductor out of a piece of silicon. That's not how it works. with each iterative new build of a factory, they're using fewer and fewer people to do this. But also the United States has visa carveouts just for high-tech or highly educated foreign workers. So in many cases, these jobs are not going to even go to Americans.

So I don't like a black pill here, but there is a boomerang effect where, In a way, it vindicates list and it vindicates the other protectionist thinkers that this is a way of securing a foreign nation against, you know, securing a nation against foreign intrusion. And maybe the best way to prevent Japan from going communist was to use protectionist principles to secure it. Japan then became the industrializer of the so-called Asian Tigers starting in the 1970s. once Japan began to try and escape, right, the economic chokehold and vassalization of the United States. You may remember the last decade and the bursting of the Japanese banks in the 1980s and the inevitable transfer then of Japanese industry or industrial development into China. But, you know, that I think speaks to the shrewdness of a fully financialized or what list.

would call the third tier of the third phase, you know, the third part of the third phase, a commerce nation. So, you know, when List talks about technology, he's not just talking about gadgets and gizmos. He's also talking about advancement. And the most advanced, like I said, the third point and the third most tier or phase of economic advancement is commerce and financial technology now predominates. And he points out, you know, what's good for individuals, you know, this is a major Listian kind of knock against Adam Smith is what's he called cosmopolitanism. You know, you can't just think about individual benefit from econometrics and economic policy. You have to think about national benefit. And he says, yeah, to a degree, we have to understand that technological

subsidies may benefit fewer people inside the nation itself, kind of pointing or presaging the cronious argument. But America's financial elite made a lot of money off global labor arbitrage, finding cheap labor, gaining cheap subsidies from countries like China, or cheap energy subsidies. But China built a competitive hegemon, right? China is looking like the U.S. is pacing competitor now. And it seems like the United States government is coercing, especially the venture capitalists who built China's dual use, meaning military and civilian industrial base. There was a scandal about McKinsey and company basically delivering to the Chinese 15 years ago the roadmap that they've used to develop a competitive economy. There's been a lot of

strange stories about venture capitalists like Sequoia having to destroy their Chinese arm, and now they're fully on board. They're waving the U.S. flag. They're investing heavily in defense technology that's meant to contain China's rise. They're using the same talking points you hear from Chinese economists about the use of so-called government growth funds in China or hear private public partnerships. So, yeah, there's protectionism's back in a weird, distorted way. But it doesn't really have anything to do with national. or America as, you know, again, a common domestic market yet.

So it's very perverse and strange. I don't know. I don't really know how to qualify it beyond those means. I mean, I guess that's like the kind of the tomorrow of these Listian ideas. Well, I really appreciate everything. Thank you. That's a lot of information. And I think this is one of those episodes.

Some people might even want to listen to twice because I know I'm going to go back and listen to it over again. I look forward to editing it so I can listen to it again. Tell people how they can find your work. I'm on Twitter at Cozy TV Wendell, all one word, and I stream Fridays and hopefully a lot more coming this fall than just Fridays on cozy. dot TV slash Wendell. I will, as I did last time, include your links in the show notes, and I really do appreciate it. Thank you. I appreciate the wisdom that you bring, and I think the way you presented, I think you're

one of the best presenters of information that we have. So thank you very much. Hey, thanks for having me on. I'll see you next time. All right. Take care. Bye.