Page:Encyclopædia Britannica, Ninth Edition, v. 9.djvu/790

 754 FREE T K A D E He might even contemplate an export duty with equanimity, though of course an export duty would be destructive of his foreign market if he had real rivals, and he would generally find that such a duty would not only limit the consumption of his produce, but would call a rivalry into existence. It is equally clear that if a protective duty were imposed on the importation of foreign commodities into a country which has already a marked superiority over other countries in these commodities, the regulation would have no effect in increasing either the profits of the producer or the cost of the article to the consumer, that, in short, the enactment would be absolutely nugatory. It will be also plain that, in every country, there are certain commodities which are effectually shielded from foreign rivalry by the cost of carriage, and that such commodities possess the superiority which other products enjoy from the peculiar facilities which a particular country has in manufacturing them, A protective system then is inevitably concerned with such products as are liable to foreign rivalry, and a foreign rivalry can only be defeated at the cost of the consumer. But as the protective regulation can affect prices in that country only which imposes the regulation, it is obvious that the only person who can be made to bear the in creased cost which the protective restraint imposes will be the home consumer. If the produce could find a market at home, there would be no need of the assistance; if it cannot subsist at home without a machinery which guarantees the profit of the producer, the domestic consumer is the only person who can be made to contribute the fund from which the profit is made. The positions stated above receive a significant but com plete illustration from the economical history of England. A century ago the English landowners were free traders, the English merchants protectionists. Adam Smith rested all his hopes of a better system on the former class, but despaired of any co-operation from the latter. Twenty years after the Wealth of Nations was published, the mer cantile and manufacturing classes, with few exceptions, were free traders ; the landowners, with few exceptions, were protectionists. The explanation of the change in sentiment is to be found in the change of interests, Up to the middle of the 18th century England exported considerable quan tities of agricultural produce, sometimes naturally, at other times under the wholly indefensible stimulus of a bounty on exportation. Now it needs very little intelli gence to discover that the profits of an exporter, or at any rate the extension of his trade, depend largely on the variety of imports which he can obtain in exchange for his goods. A country which puts no hindrance on imports always deals to the greatest advantage, and the advantage decreases with restraint. If a country refused to admit any import but one, i.e., money, it would sell its exports in the worst possible market, and for the least possible value, re ceiving in return an article which the machinery of its trade takes the most effectual possible means to depreciate. Hence the landowners of the 18th century, like the agricul turists of the western and southern States of America now, were free-traders, because free trade was their best hope of profit. The manufacturers, on the other hand, were pro foundly afraid of foreign rivalry, even the rivalry of the British colonies, even the rivalry of Ireland. Perhaps the most grotesque illustration of this fear was the law which directed under strict penalties that the dead should be buried in woollen, in order to encourage the woollen manu factures. The change of sentiment was due to the great mechanical industries of the 18th century. The discoveries of Ark wright, of Watt, of Hargreaves, of Crompton, gave England a practical monopoly of textile fabrics, and subsequently of other Products nearly as important. No doubt the Berlin and Milan decrees interfered with the Continental trade of England, though it is well known that Napoleon s soldiers were clothed, in spite of these decrees, in the produce of north-eastern and west country looms. But in other parts of the world England had no rivals, while her supremacy on sea, after the great victory of Trafalgar, guaranteed her traffic. Hence, when the merchant and manufacturer, especially the latter, discovered that protection had ceased to be an advantage to them, and discovered also, for the reasons given above, that the restraint of imports was a disadvan tage to production and exportation, the principles of free trade made rapid progress in the manufacturing districts of England. But on the other hand, the very reverse opinion influenced the minds of the landowners. Owing partly to the succession of late harvests, partly to the rapid growth of population consequent upon manufacturing enter prise, partly to the restriction of Continental supply, the result of war, of the great drain which war made on the agricultural population of Europe, and of hindrances put on the import of food, rents and farmers profits rose with amazing rapidity, and the Corn Law of 1815 was enacted in order to secure, if possible, the permanence of such rents and profits. The partisans of free trade and protection were only by accident allied to the great historical parties of English public life. The struggle for free trade was really one between town and country, as hereafter efforts in the same direction will get their advocates from the same classes, It may be believed that, in England at least, the question of protection to manufactures is finally settled, though there are not wanting persons who advocate reciprocity, co-ordin ate taxation on foreign products, retaliatory duties on re puted bounties, and the like. But the traditions of legis lation are too firmly fixed, and the benefits of free trade ex perienced during the past thirty years are so generally admitted, that the advocacy of the exploded theory of pro tection is looked on as a harmless whim which has no chance of popularity. It is not perhaps equally clear that the English people are quite safe ogainst the revival of protec tion to agriculture under the pretence of sanitary restraint, for that which is the inevitable result of protection to manufacture, tlie limitation of voluntary consumption, is not so markedly developed from the protection which may be accorded to articles of necessary consumption. When trade is restrained in those articles of foreign origin which may be producer!, though under less advan tageous circumstances, at home, and the product is an article in which the use may, to a limited extent only, be economized, the following results ensue : Prices rise, and profits rise, of course, at the expense of the consumer; wages, however, do not rise, for in so far as wages are determined by the competition of employers for services, the tendency is towards a reduction of wages, seeing that the use of the product is not increased but rather stinted. Now, the extra profits which protection accords might be secured to those who are already employed in the particular indus try thus favoured only if the producers have a natural monopoly in the produce of their calling, as was practically the case with the English landowners during the existence of the corn laws, or if the law restrains other persons from competing against them, as was the case in England with Eastern produce during the continuance of the East India Company s chartered trade. If such an advantage be not accorded, capital makes its way to the favoured industry ; or, to be more accurate, an increasing number of employers compete for the exceptional profit. Such an operation may in some degree raise the rate of wages, though here again, unless the labour be protected by some arrangement, sucb as apprenticeship, or by the machinery of a strict trade union, the same cause which attracted the energies of the