Similarities and differences of approach: List versus law and economics
Some characteristics of List’s approach resemble modern law and economics analysis and some elements distance him from this type of analysis. If analysed with modern economic language, there is a lot to be learned from List’s insights for students of law and economics, as well as for students of history, development, communication and innovation.
Distancing him from the pricing inclination of the law and economics tradition would be his emphasis on the immaterial production factors. Another distancing factor would be his corresponding contempt for the exchange school of Adam Smith working mainly with the monetary aspect of economics, that is to say with the trade aspect, and far less with the productive and creative aspect. List criticized Smith explicitly and repeatedly on this point (for example, List, 1841, ch. 12 - ‘The theory of the powers of production and the theory of value’. List regarded the factors that cannot be priced on a market, in particular the immaterial aspects, as the most important factors for the generation of both prosperity and the elevation of culture (List, 1827a, pp. 59, 63, 67; 1841, ch. 12 - ‘The manufacturing power and the personal, social and political productive powers of the nation’). To him, market prices were only one practical instrument among many, as part of a larger plan concerning the ultimate goal, the elevation of human culture. Therefore, it is likely that List would have been critical of several characteristics of modern law and economics. This would most likely have been that of pricing a legal arrangement, the reason being that he belonged to the code of the Continental law tradition, where you do not bargain over (semi-religiously) given axioms. He would most probably also have been somewhat critical of the assumption of freedom of choice, since he was critically aware of the path dependencies created by historical power structures.Nevertheless, the above characteristics of immaterialism and power also constitute factors which unite List with the law and economics tradition. Reminding us of the law and economics approach is List’s emphasis on a policy which uses governmental regulation and law making concerning, for example, competition, privileges, taxation and subsidies to promote longterm efficiency in the legal system and also within the economic system.
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