Page:The Economic Journal Volume 1.djvu/620

 598 TIlE ECONOMIC JOURNAL regulation of men, the State production of raw materials. consumption, but consumption must be so controlled as to suit (supposed) best form of production. A policy of this kind must its basis not in economics, but in general social philosophy. must regulate nature and artificialize the Production is not to be adjusted to meet the find The promised economic theory of protection renains therefore as much a desideratum as it was before. Besides the general claim for an active policy as necessary for the maintenance of a 'dynamic' social condition, several of the older pro- tectionist arguments are reproduced; in some cases with interesting variations. Thus, we have the ' infant industry' argument extended in the statement that 'infant industries .... a nation will always have as long as it remains in a dynamic condition,' from which it is concluded that at any given time the new' industries need the same encouragement that those developed in the past received.' The doctrine of 'List that productive power is of more importance than production receives a chapter to itself, and a novel' though more than questionable test of productive power is suggested in ' the average result in all industries' (p. 127). The well-known ' pauper labour'argument is transformed into a plea for preserving peculiar natural advantages to the community that possesses them. In following out .this line of thought Professor Patten brings forward perhaps the hardest of the many' hard sayings'that his work contains in the assertion that free-trade fosters natural monopolies. Puzzling as this at first appears to those who regard pro- tection as a form of monopoly, it really means that under certain conditions foreign trade may bring the ' law of diminishing returns' into more active operation, thereby increasing the cost of products sub- ject to that law. For countries that export raw lnaterials and food this is likely to happen, but it is rather strange that Professor Patten should have overlooked the fact that Americaimports certain raw materials , .notably minerals. If free trade in America would raise the rent of land, would it not lower the rent of mines? Moreover on the theory of a ' dynamic' condition of society might not the additional foreign demand call fresh inventions into being and counteract the growing stinginess of nature ? Can we believe, with the author, that a foreign demand is always for unsuitable products, and a home demand always for suitable ones ? We should a priori imagine that the foreign deinand would be more varied as coming from a wider area. In spite of an evident endcavour to treat opponents with scrupulous fairness, Professor Patten sometimes fails to catch the free-trade point of view, e.g. we read,' The argument as usually presented by free- traders assumes that America has a special fitness for the production of wheat. On the contrary, England has its special advantage in the production of iron' (p. 32). Here the author reads his own sentiments into an opposed mode of thought. To regard a country as ' fitted' for certain products which it is the duty of the State to encourage is the