Why England Fought for Free Trade Only After It Got Rich
- Evan Papp
- Oct 14
- 4 min read
By the Political Economy Project
Friedrich List and the Lost Art of National Strategy
The Heresy Against Free Trade Faith
In the modern global economy, one idea dominates: free trade equals prosperity.
Open your markets. Specialize. Buy from the cheapest source. Follow this path, we are told, and you will grow rich. To question it feels like heresy against modern economics.
Nearly two centuries ago, Friedrich List, a German economist influenced by the American System of Political Economy, wrote in exile and later in a divided homeland, dared to question that orthodoxy. His 1841 masterpiece The National System of Political Economy drew not from theory but from history.
List asked a simple question with revolutionary implications:
If free trade creates wealth, why did England only adopt it after it became the richest nation in the world?
His answer was not ideological. It was historical, strategic and devastatingly logical. List showed that prosperity follows power, not the other way around.
A Nation Must Be United Before It Can Be Rich
List begins with politics, not markets. National unity, he insists, is the foundation of every enduring economy.
He looked to medieval Italy—Venice, Genoa and Florence—the heart of Europe’s commerce and banking. These city-states possessed industry, finance and brilliance. Yet they fell into ruin. Their wealth dissolved because they lacked cohesion. Each city fought the others, inviting foreign manipulation and internal decay.
“One thing alone was wanting to Italy to enable her to become what England has become in our days… she lacked national union and the power which springs from it.”
List’s point is timeless: before a nation can prosper, it must be united in purpose. Without shared political identity, even the most dynamic enterprise builds on sand.
Buying Cheap and Selling Dear Is Not a Strategy for Greatness
List next turns to the Hanseatic League, a network of Northern European merchant cities that once controlled trade from London to Novgorod. Their strategy seemed sound: buy where it’s cheap, sell where it’s dear.
For centuries, they thrived as middlemen between agricultural and manufacturing powers. Yet they never built industries of their own. When their trading partners industrialized, they no longer needed the League. Its wealth drained away and its cities declined.
“They acted for centuries on the maxim commended to all nations today—buy only in the cheapest market. But when the nations from whom they bought and to whom they sold excluded them, neither their agriculture nor their industry could sustain them.”
The Hansa’s downfall mirrors the modern illusion of post-industrial prosperity. No economy built only on commerce, finance or logistics can endure without a base of production. Trade without power becomes dependency.
England Preached Free Trade Only After Protectionism Made It Supreme
England’s own history offers List’s sharpest lesson. The same nation that became the loudest preacher of free trade spent centuries practicing protectionism.
For much of its early history, England was a raw wool supplier to the textile workshops of Belgium. List described it as “the sheepfarm of the Hansards.”
That changed under monarchs such as Edward III, who attracted Flemish artisans, banned imported cloth and strengthened maritime dominance through the Navigation Acts. These policies nurtured England’s infant industries and built the foundations of its empire.
Once England achieved industrial supremacy, it reversed course. It began preaching free trade to others, persuading rivals to abandon the very methods that had made it powerful.
“Had the English left everything to itself—laissez faire et laissez aller—the Belgians would still manufacture cloth for them, and England would still be the sheepfarm of the Hansards.”
Free trade, in List’s view, was not a universal truth but a strategic weapon. It served the powerful by keeping others weak.
True Wealth Is the Power to Create, Not the Possession of Things
At the heart of List’s philosophy is a single insight. Adam Smith defined wealth as value possessed. List defined it as power to produce.
Spain once held immense wealth from its colonies and world-class industries in Seville. But it destroyed its productive powers through religious persecution and political corruption. Its gold bought only foreign goods and dependence.
Germany, in contrast, was repeatedly devastated by war but always recovered because it preserved its productive capacity—the skill, education and creativity of its people.
“The forces of production are the tree on which wealth grows. The tree which bears the fruit is of greater value than the fruit itself.”
A nation that prizes cheap imports over productive strength sacrifices its future for convenience. Power matters more than wealth because power renews wealth.
The Ladder and the Lesson
List saw economic history not as a march toward universal free trade but as a struggle between nations for productive sovereignty.
His heroes were state-builders—Edward III, Colbert, Washington and Hamilton—leaders who fused agriculture, industry and commerce into self-sustaining national systems. They understood that a balanced home market is the cornerstone of independence.
Should a nation’s goal be to consume what is cheapest or to ensure it can create for itself?
This is the moral core of List’s system and the question every modern nation must face.
Why It Matters Today
In the 21st century, “free trade” once again conceals a global contest for power. Beneath the language of openness lie struggles over energy, semiconductors and supply chains.
List’s insights are not relics of the past. They are the logic of survival for nations that wish to endure.
To secure a free and prosperous future, a people must first reclaim its capacity to produce. It must cultivate its orchard before it can enjoy its fruit.
That is the National System of Political Economy. It is not nostalgia. It is strategy.
