"The concentration and reciprocal effect of industry and agriculture conjoin in a growth of productive powers, which increases more in geometrical than in arithmetical proportion"

Friedrich List’s insight emphasizes the dynamic relationship between industrial and agricultural sectors within an economy, suggesting their combined influence goes beyond simple summation. The “concentration and reciprocal effect” refers to both the intensification and mutual reinforcement between these sectors: as industry advances, it creates machinery, fertilizers, transportation, and tools that dramatically enhance agricultural productivity. Conversely, improved agriculture provides food, raw materials, and a labor base to sustain and supply the burgeoning industries. Rather than operating in isolation or offering singular benefits, each sector amplifies the other’s capacities.

List suggests that such synergy drives a much faster pace of economic growth, explaining it “increases more in geometrical than in arithmetical proportion.” Arithmetical growth implies a steady, linear increase, adding equal amounts per unit of time. Geometrical (or exponential) growth, by contrast, means that outputs multiply with each period, resulting in compounding gains. When industry and agriculture act together, their cooperation leads to innovations and efficiencies that cause outputs not just to add up, but to multiply. New techniques and capital investments in one sector ripple through to the other, sparking further improvements in productivity and output.

This interdependent process fosters what modern economists term backward and forward linkages: agricultural advances encourage new manufacturing industries like food processing, while manufacturing growth offers farmers better equipment. The cumulative result is an upward spiral of wealth creation and national prosperity far more powerful than mere incremental gains. List is critiquing economic models that underestimate the potential unleashed by integrated sectoral development, arguing instead for policies fostering both agriculture and industry as partners. He implies that neglecting one handicaps the other and throttles growth. Therefore, it is not just the pace but the nature of economic development that is transformed, the whole economy’s ability to generate and absorb new productive capacities accelerates, setting the stage for dramatic and sustained improvements in living standards and national power.