Sophisms of the Protectionists Part 8

X.

RECIPROCITY.

We have just seen that all which renders transportation difficult, acts in the same manner as protection; or, if the expression be preferred, that protection tends towards the same result as obstacles to transportation.

A tariff may then be truly spoken of, as a swamp, a rut, a steep hill; in a word, an _obstacle_, whose effect is to augment the difference between the price of consumption and that of production. It is equally incontestable that a swamp, a bog, etc., are veritable protective tariffs.

There are people (few in number, it is true, but such there are) who begin to understand that obstacles are not the less obstacles, because they are artificially created, and that our well-being is more advanced by freedom of trade than by protection; precisely as a ca.n.a.l is more desirable than a sandy, hilly, and difficult road.

But they still say, this liberty ought to be reciprocal. If we take off our taxes in favor of Spain, while Spain does not do the same towards us, it is evident that we are duped. Let us then make _treaties of commerce_ upon the basis of a just reciprocity; let us yield where we are yielded to; let us make the _sacrifice_ of buying that we may obtain the advantage of selling.

Persons who reason thus, are (I am sorry to say), whether they know it or not, governed by the protectionist principle. They are only a little more inconsistent than the pure protectionists, as these are more inconsistent than the absolute prohibitionists.

I will ill.u.s.trate this by a fable.

STULTA AND PUERA (FOOL-TOWN AND BOY-TOWN).

There were, it matters not where, two towns, _Stulta_ and _Puera_, which at great expense had a road built which connected them with each other.

Some time after this was done, the inhabitants of _Stulta_ became uneasy, and said: _Puera_ is overwhelming us with its productions; this must be attended to. They established therefore a corps of _Obstructors_, so called because their business was to place obstacles in the way of the wagon trains which arrived from _Puera_. Soon after, _Puera_ also established a corps of Obstructors.

After some centuries, people having become more enlightened, the inhabitants of _Puera_ began to discover that these reciprocal obstacles might possibly be reciprocal injuries. They sent therefore an amba.s.sador to _Stulta_, who (pa.s.sing over the official phraseology) spoke much to this effect: "We have built a road, and now we put obstacles in the way of this road. This is absurd. It would have been far better to have left things in their original position, for then we would not have been put to the expense of building our road, and afterwards of creating difficulties. In the name of _Puera_, I come to propose to you, not to renounce at once our system of mutual obstacles, for this would be acting according to a theory, and we despise theories as much as you do; but to lighten somewhat these obstacles, weighing at the same time carefully our respective _sacrifices_." The amba.s.sador having thus spoken, the town of _Stulta_ asked time to reflect; manufacturers, agriculturists were consulted; and at last, after some years'

deliberation, it was declared that the negotiations were broken off.

At this news, the inhabitants of _Puera_ held a council. An old man (who it has always been supposed had been secretly bribed by _Stulta_) rose and said: "The obstacles raised by _Stulta_ are injurious to our sales; this is a misfortune. Those which we ourselves create, injure our purchases; this is a second misfortune. We have no power over the first, but the second is entirely dependent upon ourselves. Let us then at least get rid of one, since we cannot be delivered from both. Let us suppress our corps of _Obstructors_, without waiting for _Stulta_ to do the same. Some day or other she will learn to understand better her own interests."

A second counselor, a man of practice and of facts, uncontrolled by theories and wise in ancestral experience, replied: "We must not listen to this dreamer, this theorist, this innovator, this utopian, this political economist, this friend to _Stulta_. We would be entirely ruined if the embarra.s.sments of the road were not carefully weighed and exactly equalized, between _Stulta_ and _Peura_. There would be more difficulty in going than in coming; in exportation than in importation.

We would be, with regard to _Stulta_, in the inferior condition in which Havre, Nantes, Bordeaux, Lisbon, London, Hamburg, and New Orleans, are, in relation to cities placed higher up the rivers Seine, Loire, Garonne, Tagus, Thames, the Elbe, and the Mississippi; for the difficulties of ascending must always be greater than those of descending rivers. (A voice exclaims: 'But the cities near the mouths of rivers have always prospered more than those higher up the stream.') This is not possible.

(The same voice: 'But it is a fact.') Well, they have then prospered _contrary to rule_." Such conclusive reasoning staggered the a.s.sembly.

The orator went on to convince them thoroughly and conclusively by speaking of national independence, national honor, national dignity, national labor, overwhelming importation, tributes, ruinous compet.i.tion.

In short, he succeeded in determining the a.s.sembly to continue their system of obstacles, and I can now point out a certain country where you may see road-builders and _Obstructors_ working with the best possible understanding, by the decree of the same legislative a.s.sembly, paid by the same citizens; the first to improve the road, the last to embarra.s.s it.

XI.

ABSOLUTE PRICES.

If we wish to judge between freedom of trade and protection, to calculate the probable effect of any political phenomenon, we should notice how far its influence tends to the production of _abundance or scarcity_, and not simply of _cheapness or dearness_ of price. We must beware of trusting to _absolute prices_, it would lead to inextricable confusion.

Mr. Mathieu de Dombasle, after having established the fact that protection raises prices, adds:

"The augmentation of price increases the expenses of life, and consequently the price of labor, and every one finds in the increase of the price of his produce the same proportion as in the increase of his expenses. Thus, if every body pays as consumer, every body receives also as producer."

It is evident that it would be easy to reverse the argument and say: If every body receives as producer, every body must pay as consumer.

Now, what does this prove? Nothing whatever, unless it be that protection _transfers_ riches, uselessly and unjustly. Robbery does the same.

Again, to prove that the complicated arrangements of this system give even simple compensation, it is necessary to adhere to the "_consequently_" of Mr. de Dombasle, and to convince one's self that the price of labor rises with that of the articles protected. This is a question of fact, which I refer to Mr. Moreau de Jonnes, begging him to examine whether the rate of wages was found to increase with the stock of the mines of Anzin. For my own part I do not believe in it, because I think that the price of labor, like every thing else, is governed by the proportion existing between the supply and the demand. Now I can perfectly well understand that _restriction_ will diminish the supply of coal, and consequently raise its price; but I do not as clearly see that it increases the demand for labor, thereby raising the rate of wages.

This is the less conceivable to me, because the sum of labor required depends upon the quant.i.ty of disposable capital; and protection, while it may change the direction of capital, and transfer it from one business to another, cannot increase it one penny.

This question, which is of the highest interest, we will examine elsewhere. I return to the discussion of _absolute prices_, and declare that there is no absurdity which cannot be rendered specious by such reasoning as that of Mr. de Dombasle.

Imagine an isolated nation possessing a given quant.i.ty of cash, and every year wantonly burning the half of its produce. I will undertake to prove by the theory of Mr. de Dombasle that this nation will not be the less rich in consequence of such a procedure.

For, the result of the conflagration must be, that every thing would double in price. An inventory made before this event would offer exactly the same nominal value, as one made after it. Who then would be the loser? If John buys his cloth dearer, he also sells his corn at a higher price; and if Peter makes a loss on the purchase of his corn, he gains it back by the sale of his cloth. Thus "every one finds in the increase of the price of his produce, the same proportion as in the increase of his expenses; and thus if every body pays as consumer, every body also receives as producer."

All this is nonsense. The simple truth is: that whether men destroy their corn and cloth by fire or by use, the effect is the same _as regards price_, but not _as regards riches_, for it is precisely in the enjoyment of the use, that riches--in other words, comfort, well-being--exist.

Protection may, in the same way, while it lessens the abundance of things, raise their prices, so as to leave each individual as rich, _numerically speaking_, as when unembarra.s.sed by it. But because we put down in an inventory three hectolitres of corn at 20 francs, or four hectolitres at 15 francs, and sum up the nominal value of each at 60 francs, does it thence follow that they are equally capable of contributing to the necessities of the community?

To this view of consumption, it will be my continual endeavor to lead the protectionists; for in this is the end of all my efforts, the solution of every problem. I must continually repeat to them that restriction, by impeding commerce, by limiting the division of labor, by forcing it to combat difficulties of situation and temperature, must in its results diminish the quant.i.ty produced by any fixed quantum of labor. And what can it benefit us that the smaller quant.i.ty produced under the protective system bears the same _nominal value_ as the greater quant.i.ty produced under the free trade system? Man does not live on _nominal values_, but on real articles of produce; and the more abundant these articles are, no matter what price they may bear, the richer is he.

XII.

DOES PROTECTION RAISE THE RATE OF WAGES?

Workmen, your situation is singular! you are robbed, as I will presently prove to you.... But no; I retract the word; we must avoid an expression which is violent; perhaps indeed incorrect; inasmuch as this spoliation, wrapped in the sophisms which disguise it, is practiced, we must believe, without the intention of the spoiler, and with the consent of the spoiled. But it is nevertheless true that you are deprived of the just compensation of your labor, while no one thinks of causing _justice_ to be rendered to you. If you could be consoled by noisy appeals to philanthropy, to powerless charity, to degrading alms-giving, or if high-sounding words would relieve you, these indeed you can have in abundance. But _justice_, simple _justice_--n.o.body thinks of rendering you this. For would it not be _just_ that after a long day's labor, when you have received your little wages, you should be permitted to exchange them for the largest possible sum of comforts that you can obtain voluntarily from any man whatsoever upon the face of the earth?

Let us examine if _injustice_ is not done to you, by the legislative limitation of the persons from whom you are allowed to buy those things which you need; as bread, meat, cotton and woolen cloths, etc.; thus fixing (so to express myself) the artificial price which these articles must bear.

Is it true that protection, which avowedly raises prices, and thus injures you, raises proportionably the rate of wages?

On what does the rate of wages depend?

One of your own cla.s.s has energetically said: "When two workmen run after a master, wages fall; when two masters run after a workman, wages rise."

Allow me, in more laconic phrase, to employ a more scientific, though perhaps a less striking expression: "The rate of wages depends upon the proportion which the supply of labor bears to the demand."

On what depends the _demand_ for labor?

On the quant.i.ty of disposable national capital. And the law which says, "such or such an article shall be limited to home production and no longer imported from foreign countries," can it in any degree increase this capital? Not in the least. This law may withdraw it from one course, and transfer it to another; but cannot increase it one penny.

Then it cannot increase the demand for labor.

While we point with pride to some prosperous manufacture, can we answer, from whence comes the capital with which it is founded and maintained?

Has it fallen from the moon? or rather is it not drawn either from agriculture, or navigation, or other industry? We here see why, since the reign of protective tariffs, if we see more workmen in our mines and our manufacturing towns, we find also fewer sailors in our ports, and fewer laborers and vine-growers in our fields and upon our hillsides.

I could speak at great length upon this subject, but prefer ill.u.s.trating my thought by an example.