Principles of Political Economy Part 48

[Footnote A3-1-2: People would, however, have to calculate on the foolish luxury which despises the home product because "it came from no great distance." World-supremacy of Paris fas.h.i.+ons! A manufacturer of excellent German _Schaumwein_ (foaming wine) complained to me, in 1861, that, after suffering heavy losses, he was compelled by his customers to adopt French labels. Here, a wise prince may have a favorable influence by his example. Louis XIV.

himself insisted, when his mother died, that the court should use only French articles of mourning. _Gee_, Trade and Navigation, p. 46. Augustus I., of Saxony, always wore home cloth. (_Weisse_, Museum fur Sachsische Geschichte, II, 2, 109.) Similar requirements by the prince of Orange (1749) of all officials: Richesse de Hollande, II, 317. Dutch executioners were dressed in calico. (Discourse of Trade, Coyn, etc., 1697.) American popular stipulations not to wear foreign articles of luxury. (_Ebeling_, Geschichte und Erdbeschreibung, II, 481.) Rhode Island tailors placed the working wages for home stuffs much lower than for foreign.

(II, 149.)]

[Footnote A3-1-3: _Prince Smith_ calls protective duties scarcity-duties (_Theuerungszolle_). Because of this increased dearness of the "protected" commodities, consumers can no longer pay for as many other home commodities. If the industry was previously in existence, the protective duty imposed is wont to enhance the price, not only of the foreign commodity, but also of the home commodity.]

[Footnote A3-1-4: If, for instance, the English had never had a protective tariff on silk, nor the French a protective tariff on iron, the former would probably get all the silk commodities they want from France and pay for them in iron ware. In this way, both nations would be well off in what concerns the relation between the cost of production and the satisfaction of wants. _Say_ calls protective duties a fight against nature, in which we take pains to refuse a part of the gifts which nature offers us. He leaves himself open to the charge of exaggeration, however, when he compares a nation that wants to produce everything itself to a shoemaker who wanted to be tailor, carpenter, to build houses and cultivate a farm also. Although no nation is all-sided, yet every nation is a great deal more-sided than an individual.]

[Footnote A3-1-5: Whoever keeps a people from purchasing in the cheapest market, thereby prevents their selling in the dearest. (_McCulloch._) It was no mere desire of revenge that induced Holland, in the 17th century, to threaten the Poles, in case the enhancement of their duties continued in Danzig and Pillau, they would supply their corn-want from Russia, (_Boxhorn_, Varii Tractat. polit., p. 240.) Thus the tariff-measures adopted by France against the German cattle trade and the Swedish iron trade promoted the growth of the Crefeld silk manufacture, and lessened the exportation of French wine to Sweden. When, in 1809, England heavily taxed Norwegian wood, in favor of Canada, the Norwegians began, instead of purchasing English manufactured articles, to supply themselves from Hamburg, Altona and France. (_Blom_, Norwegen, I, 257.)]

[Footnote A3-1-6: _Fr. List_ a.s.sumed altogether too unconditionally such an effect from import duties to be the rule. The more developed the self-confidence of a nation is, the more vigorous the life of its industries, the more many-sided the commerce of its people; the less disposed are its industrial cla.s.ses to give up their home and carry their market with them. But, for instance, Swiss labor and, still more, Swiss capital have been induced by the tariff-systems of the great neighboring countries to settle in Muhlhausen, Baden and Voralberg, or at least to establish branch houses in these places. Similarly, Neumark cloth makers were induced to emigrate to Russia, and Nurnberg industrial workmen to Austria (_Roth_, Geschichte des Nurnbergen Handels, II, 170) etc. Compare _Burkhardt_, c. Basel, I, 74; _Bohmert_, Arbeiterverhaltnisse der Schweiz, I, 16 seq.; II, 17.]

[Footnote A3-1-7: Compare _Alby_ in the Revue des deux Mondes, Oct., 1869, and, _per contra_, Cairnes, Principles, p. 458. The misfortunes of war or internal disquiet have frequently driven away the best labor-forces of an old industrial state, and thus powerfully promoted a young protective system in the neighborhood. Reception of Byzantine silk-weavers in Venice, during the crusade to Constantinople, of Flemish wool-weavers in England, under Edward III. (_Rymer_, Foedera, III, 1, 23) and Elizabeth; of Huguenot industrial workmen under the great elector, etc.

The growth of the Zurich silk industry by the settlement there of expelled Protestants from Locarno.

England, indeed, had, up to 1849, protective duties both for industry and agriculture. But the protective duties were of no real importance, except in the case of the latter, because the greater part of England's industrial products were superior to foreign compet.i.tion without the help of protective duties. Something similar is true of most duties on raw material in the United States.]

SECTION II.

EFFECT OF EXPORT DUTIES, etc., ON RAW MATERIAL.--EXPORT PREMIUMS.

B. Export duties on raw material, and prohibitions of the exportation of raw material, lower the price of such articles, by preventing the compet.i.tion of foreign buyers.[A3-2-1] To this loss of the producers of raw material, there is, in the long run, no corresponding gain to the manufacturers. Rather will there be, when freedom of compet.i.tion prevails at home, an increased flow of the forces of production to the favored branch, because of its rate of profit, which is greater than that usual in the country, and a corresponding flow from the injured branch, until such time as the level of profit usual in the country is restored.[A3-2-2] Hence here, also, the final result is only a change of the direction, not a direct increase of the productive forces.[A3-2-3]

C. In the case of export-premiums, it is necessary to distinguish between the mere refunding back of the taxes which have been paid on the a.s.sumption of a home consumption which has not taken place (drawbacks), and the actual making of donations because of the exportation of goods (bounties). The former produces no result except to maintain the possibility of a production which would otherwise have been prevented by the tax. The latter, on the contrary, compels all those who are subject to taxation to make a donation to one particular cla.s.s of persons engaged in industry.[A3-2-4] Moreover, all consumers are compelled to pay a higher price for the commodity to the extent that the market price, inclusive of the premium to be obtained abroad, is higher than the home market price hitherto usual. But, as the cost of production has not increased, this profit of the producers, which is greater than that usual in the country, must induce other productive forces to enter into the favored branch; so that here, also, the lasting result is not a higher rate of profit of the individuals engaged in the industry, but an extension of the industry itself. Foreign countries chiefly reap the greatest advantage from this course, since they obtain the commodities at gift-prices.[A3-2-5] The premiums paid, not for exportation, but for the production of a commodity, have a meaning akin to this.[A3-2-6]

Either the industry could not maintain itself without premiums, in which case the state encourages a losing production,--and the more there is produced the greater is the loss to the national economy;--or the industry might exist without the payment of premiums, and then the newly increased profit would lead to an extension of the industry. Exportation would follow, and all the effects of export-premiums appear.[A3-2-7]

[Footnote A3-2-1: Rags in Silesia dearer than in Bohemia by the full amount of the Austrian export duties (Gutachten uber die Erneuerung der Handelsvertrage; 1876, p. 9). When the English export-prohibitions were extended to Scotland, the price of Scotch wool fell about 50 per cent. (_A.

Smith_, W. of N., IV, ch. 8.) In the case of foreign raw material, the reexportation of which is prevented, the object of such prohibitions may be largely frustrated. When England, to promote its dyeing industries, left the importation of colors entirely free, but allowed their exportation only under heavy duties (8 George I., c. 15), the importers provided the market always with somewhat less than the amount required, and thus raised the price.]

[Footnote A3-2-2: Export hindrances have been continued longest in favor of manufacturing industries (_Verarbeitungsindustrie_), in the case of such commodities as are not intentionally produced, such as rags, ashes, etc., but which are collected only as the remains of some other kind of production or consumption. "Negative production," according to _Stilling_, Grundsatze der Staatswirthschaft, 803, because it is desirable to produce as little as possible of such raw material. But the dearer rags, for instance, are, the more carefully are they collected.]

[Footnote A3-2-3: When the French prohibition of the exportation of hemp was extended to Alsace, its production decreased from 60,000 to 40,000 cwt. (_Schwerz_, Landwirthschaft des Nieder-Elsa.s.ses, 378 ff.) Frederick the Great soon carried his prohibition of the exportation of raw wool to such an extent as to prohibit the exportation even of unshorn sheep, and to punish the dropping of a sheepfold by a fine of 1,000 ducats. (Preuss. Gesch. Friedrichs III., 42.) Here, also, belong prohibitions relating to the exportation of corn, which force considerable capital, etc.

into industry. The prohibition of the exportation of corn in England, and the permitting of the exportation of cattle, wool, etc., was one of the princ.i.p.al causes why there were so many complaints at the time of the turning of land used for tillage into pasturage-land. When, in 1666, the exportation of Irish cattle to England was prohibited, it produced, at the outset, great need in Ireland, but afterwards a flouris.h.i.+ng condition of Irish industry.

(_Hume_, History of England, ch. 64.)]

[Footnote A3-2-4: The effect must be very much the same when the right of buying up all the raw material of a certain district is granted to one factory exclusively. The elector, Augustus of Saxony, did this frequently. Compare _Falke_, Gesch. des Kurf., A. v. S., 190-212, 345.]

[Footnote A3-2-5: As to how, by means of German drawbacks (_Ruckzolle_) it is possible for beet-sugar to be offered at a cheaper rate in Brazil than home cane-sugar, see _Wappaus_, Brazilien, 1830. The French export-premiums for sugar amounted, in 1856, to over 8,000,000 francs. Frenchmen subject to taxation were obliged to pay this amount, and thus add to the already increasing price which they had to pay for that article. (Journ. des Econom., Juill., 1857.) In England, in 1742, the export-premiums for linen were defrayed by enhanced entry-duties on cambrics. (15 and 16 George II., c. 29.)]

[Footnote A3-2-6: As to how English export-premiums sometimes made English commodities cheaper in Germany than in England, see _Busch_, Werke, XIII, 82. There are, indeed, gifts which may ruin the receiver of them, as, for instance, when one gets his rival intoxicated at his expense before the decisive solicitation. _Timeo Danaos et dona ferentes_ (cited by Fox and Burke against the Eden treaty: _Hansard_, Parl. History, 1787, Jan. p. 402, 488).]

[Footnote A3-2-7: It is said that Maria Theresa paid 1,500,000 florins a year for this purpose. (_Sonnenfels_, Grundsatze, II, p. 179.) England, between 1806 and 1813, altogether, 6,512,170. _Colquhoun_, Wohlstand, Macht, etc., Tieck's translation, I, 251.]

SECTION III.

THE FREE-TRADE SCHOOL.

From what has been said, we may understand why the so-called free-trade school, with its atomistic over-valuation of the individual and the moment, rejects all those measures of the industrial protective system.[A3-3-1] As such measures really injure the oppressed portions of the people more than they help the favored cla.s.ses, their introduction, it is said, uniformly depends on this, that single cla.s.ses of producers understand their private interests better than others, and are better organized than other producers and especially better than consumers, to take care of their interests.[A3-3-2] Adam Smith approves import hindrances for the purpose of artificially promoting an industry only in two cases:

A. When military safety demands it. Hence he calls the English navigation act, that great prohibitive and protective law intended to advance the merchant marine, the wisest perhaps of all English commercial regulations, although he clearly saw that it compelled England to sell her own commodities cheaper and buy foreign commodities dearer.[A3-3-3]

B. When the import duty is no more than sufficient to balance the tax imposed on the corresponding home product. Smith rightly remarks that a universally heavier taxation by the home country, but which affected all branches of its production equally, operated like diminished natural fertility, and hence does not make any equalizing tax for foreign trade necessary.

The person who has only a modest opinion of the power of his own reason, and therefore a just one of the reason of other men and other times, will not believe that a system like the industrial protective system which the greatest theorizers and pract.i.tioners favored for centuries, and which governed all highly developed countries in certain periods of their national life, proceeded entirely from error and deception. It really served, in its own time, a great and regularly occurring want; and the error consisted only in this, that, partly through improper generalization by doctrinarians and partly by the avarice of the privileged cla.s.ses and the inertia of statesmen, the conditioned and transitory was looked upon as something absolute.[A3-3-4]

[Footnote A3-3-1: _P. de la Court_, in his freedom of trade, has in view not the interest of consumers--and least of all of the whole world--but the interest of the commercial cla.s.s. Compare Tub. Ztschr., 1862, p. 273. Similarly, _Child_, Discourse of Trade, 1690; whereas _D. North_, Discourses upon Trade (1690), may be called a free-trader in the sense in which the expression is used to-day. No nation has yet grown rich by state-measures; but peace, thrift and freedom, and nothing else, procure wealth. (Postscr.) _Davenant_ also zealously opposes the craving of a people to produce everything themselves, to want only to sell, etc. He considered very few laws on commerce a sign of a flouris.h.i.+ng condition of trade. (Works, I, 99, 104 ff.; V, 379 ff., 387 seq.) _Fenelon's_ antipathy for import and export duties in Telemaque, a part of his general opposition to the _siecle de Louis XIV_. The view of the Physiocrates (_La police du commerce interieur et exterieur la plus sure, la plus exacte, la plus profitable a la nation et a l'etat consiste dans la pleine liberte de la concurrence_: _Quesnay_, Maximes generales, No. 25) is directly connected with their deepest fundamental notions of _produit net_ and _impot unique_. _Turgot_ vindicates the interests of workmen against protective duties, for whom no compensation is possible, where one industry gains by its being favored in the same way that it loses when another is favored. (Sur la Marque de Fer, I, p. 376 ff., Daire.) "Those who cry so loudly for protective duties are partly thoughtless persons who wish to avoid the consequences of bad speculations, and in part shrewd persons who would like to earn during the first years a rate of profit higher than that usual in the country." (_Rossi._) _Bastiat_ ridicules the advocates of a protective tariff by the pet.i.tion of the lamplighters, lamp manufacturers, etc., that to advance their industry, and indirectly almost all others, the mighty foreign compet.i.tion of the sun might be removed from all houses. (Sophismes econ., ch. 7.) To him, the protective system is precisely the system of want; freedom of trade, the system of superabundance. Political economy would have fulfilled its practical calling, if, by means of universal freedom of trade, it had done away with all that is left of that system which excludes foreign commodities because they are cheap, that is, because they include _une grande proportion d'utilite gratuite_. (Harmonies, p. 174, 306.) _Cobden's_ pet expression: "Free trade, the international law of the Almighty!" (Polit. Writings, II, 110.) _K. S. Zacharia_ calls the protective system a step introductory to communism (Staatsw. Abh., 100), because it nearly always leads to over-population and _List's_ system, a politico-economical absurdity. (Vierzig Bucher vom Staate, VII, pp. 23, 92.)]

[Footnote A3-3-2: Among the many frequently wonderful speeches by which persons engaged in industry are wont to support their motion for protective duties, etc., the following are particularly characteristic. The long struggle of English manufactures against the East Indian Company, since the later portion of the seventeenth century. Compare _Pollexfen_, England and East India inconsistent in their Manufactures (1697), against which _Davenant_, at the solicitation of the company, wrote his Essay on the E. I.

Trade (1697). Prohibition of East Indian commodities, 11 and 12 Will. III., ch. 10. The struggle did not stop until the middle of the eighteenth century, when India was outflanked by English machines. When Pitt, in 1785, labored for the abolition of the tariff-barriers against Ireland, English manufacturers, and among others Robert Peel, declared that they would be forced in consequence to transfer a part of their manufactories to Ireland! (_McCulloch_, Literature of Political Economy, p. 55.) _Say_ tells of a proposition made by the hat-makers of Ma.r.s.eilles to prohibit foreign straw hats (1. c).]

[Footnote A3-3-3: W. of N., IV, ch. 2. According to _Roger c.o.ke_, England's Improvement (1675), s.h.i.+p-building in England became dearer in a few years by about one-third, on account of the navigation act; and the wages of sailors advanced to such an extent that England lost its Russian and Greenland trade almost entirely, and the Dutch obtained the control of it. This _J. Child_, Discourse of Trade, admits, but still calls the navigation act the _magna charta maritima_. Similarly, _Davenant_, Works, I, 397. Here the relation of the cost to the immediate product can as little decide as it can against the exercise of troops or the construction of forts. _Adam Smith_ allows the same reasons to apply to export premiums for sail-cloth and gunpowder (IV, ch. 5). Recently, however, _Bulau_ (Staatswirthschaftlehre, 339; Staat und Industrie, 220 seq.;) has argued against all these exceptions of Adam Smith.]

[Footnote A3-3-4: _Schleiermacher_ (Christ. Sitte, 476) calls the polemics which can see nothing but error in a refuted theory, immoral.]

SECTION IV.

FURTHER EDUCATIONAL EFFECTS OF THE INDUSTRIAL PROTECTIVE SYSTEM.

The sacrifices which the protective system directly imposes on the national wealth consist in products, fewer of which with an equal straining (_Anstrengung_) of the productive forces of the country, are produced and enjoyed, than free trade would procure. But it is possible by its means to build up (_bilden_) new productive forces, to awaken slumbering ones from their sleep, which, in the long run, may be of much greater value than those sacrifices. Who would say that the cheapest education is always the most advantageous?[A3-4-1] Only by the development of industry also, does the nation's economy become mature.[A3-4-2] The merely agricultural state can attain neither to the same population nor the same energy of capital, to say nothing of the same skillfulness of labor, as the mixed agricultural and industrial state; nor can it employ its natural forces so completely to advantage.[A3-4-3] How many beds of coal, waterfalls, hours of leisure,[A3-4-4] and how much apt.i.tude for the arts of industry, can be turned to scarcely any account in a merely agricultural state? If, therefore, the protective system could materially promote a national industry, or if it made such industry possible, for the first time, the sacrifice connected therewith, in the beginning, should be considered like the sacrifice of seed made by the sower;[A3-4-5] but this can be justified only on the three following conditions: that the seed is capable of germination; that the soil be fertile and properly cultivated, and the season favorable.[A3-4-6] [A3-4-7]

[Footnote A3-4-1: _List_, Nationales System der polit.

Oekonomie, kap. 12, contrasts two owners of estates, each of whom has five sons, and can save 1,000 thalers a year. The one brings his sons up as tillers of the ground (_Bauern_ = peasants) and puts his savings out at interest. The other, on the contrary, has two of his sons educated as _rational_ (_rationelle_) agriculturists, and the others as intelligent industrial workers, and at a cost which prevents the possibility of his acc.u.mulating any more capital. Which of the two has cared better for the standing, wealth, etc. of his posterity; the adherent of the "theory of exchangeable values" or the adherent of the doctrine of "the productive forces?"]

[Footnote A3-4-2: The rent of the land of Gr. Botton, in Lancas.h.i.+re, was estimated in 1692 at 169 per annum; in 1841, at 93,916. (_H. Ashworth._)]

[Footnote A3-4-3: The pottery district of Staffords.h.i.+re was formerly considered very unfertile. It was industry that first showed how the rich and varied beds of clay at the surface, and the wealth of coal under them, could be fully utilized.]

[Footnote A3-4-4: Blind free-traders always like to a.s.sume that every man capable of working always busies himself; whereas idleness frequently excuses the wasting of its time, by the plea that a remunerative market of the possible new products is improbable, or at least uncertain. Compare _J.

Moser_, P. Ph., I, 4. _Kroncke_, Steuerwesen (1804), 324, 328 seq., and even the first German reviewers of Adam Smith in _Roscher_, Gesch. der N. Oek. in Deutschland, II, 599.]

[Footnote A3-4-5: _List_ calls attention to the case of the stenographic apprentice who writes more slowly for a time than he was wont to formerly.]

[Footnote A3-4-6: Let us suppose that a country had hitherto produced $10,000,000 worth of corn, and that of this amount it had sent $1,000,000 worth into foreign countries as a counter-value for foreign manufactured articles. It now, by means of a protective tariff, establishes home manufactures, through the instrumentality of which a coal bed or water fall is turned to account. The workmen in the manufactories henceforth consume what was formerly exported. Of course such a change is not effected without loss; but this loss ceases as soon as the home industry becomes the equal of the foreign industry which was crowded out. And then the forces which have been made useful in the meantime appear as clear gain. _List_ not unfrequently called special attention to the fact that a consumption of 70,000 persons engaged in home industries means as much to German agriculture as all that it exported to England from 1833 to 1836.

(Zollvereinsblatt, 1843, No. 5.)]

[Footnote A3-4-7: _Adam Smith's_ free-trade doctrine has always been contradicted in Germany. Even in 1777, his first great reviewer, _Feder_, says that many foreign commodities can be dispensed with without damage; and that industries which indemnify the undertakers of them only after a time but which are then very useful to the community in general, would not be begun always without special favor shown them.

(_Roscher_, Geschichte der National Oekonomie, II, p. 599.) _Kroncke_, Steuerwesen, 324 ff., speaks of attempts towards the education of industries by taxation-favors: "If of ten, only one succeeds, even that is to be considered a great gain." But modern protectionists base themselves chiefly on their interest in the independence of the country, precisely as the free-traders do on that of individual freedom. _Ad.

Muller_, with his organic way of comprehending things, opposes the a.s.sumption of a merely mercantile world-market, in which all the merchants engaged in foreign trade const.i.tute a species of republic. (_Quesnay._) He also rejects on national grounds the universal freedom of trade as well as the universal empire akin to it; although as a means of opposing it, he suggests not so much a protective tariff as the intellectual cultivation of nationality in general. (Elemente der Staatskunst, 1809, II, 290, III, 215, II, 240, 258.) According to _Sorgel_ (Memorial an den Kurfurst v. Sachsen, 1801,) commercial constraint (_Handelszw.a.n.g_), by means of export and import duties, is useful in the childhood of manufactures, afterwards injurious, because the powerful incentive to perfection is wanting where no compet.i.tion is to be feared (67). _P.

Kaufmann_, the opponent of Smith's balance-theory, demands moderate protection against the otherwise irresistible advantages to already developed industrial nations.

(Untersuchungen, 1829, I, 98 ff.) The princ.i.p.al advocate in this direction is _Fr. List_, with a great deal of sense for the historical, but with little historical erudition; and after the manner of an intelligent journalist, he reproaches the free-trade school with baseless cosmopolitanism, deadly materialism, and disorganizing individualism. He distinguishes in the development of nations five different stages: hunter-life, shepherd-life, agriculture, the agricultural-manufacturing period, the agricultural-manufacturing-commercial period; and he demands that the state should lend its a.s.sistance in the transition from the third to the fourth stage, in the nursing or planting of manufacturing forces in connection, throughout, with the enfeebling of feudalism and bureaucracy, the increase of the middle cla.s.s, with the power of public opinion, especially of the press, the strengthening of the national consciousness from within and without. Compare _Roscher's_ review in the Gott. gelehrten A. 1842, No. 118 ff. As to how List resembles, and differs from Ad. Muller, see _Roscher_, Gesch. der N. O., II, 975 ff.; _von Thunen's_ independent defense of a protective tariff; Isolirter Staat, II, 2, 81, 92 ff., 98; Leben, p. 255 seq. The socialist _Marlo_ (Weltokonomie, I, ch. 9, 10) distinguishes common products (_Gemeinprodukte_) which may be obtained equally well in every properly developed country, and peculiar products (_Sonderprodukte_), like coffee, wine, etc. With respect to the former, he agrees with List; in regard to the latter, with Smith. A protective tariff exerts a constraint on consumers, compelling them to abridge their enjoyments somewhat, and to employ these now in the procuring of instruments of production, in the exercise of skill needed in production and the acc.u.mulation of capital. At the same time foreigners should be kept from utilizing home natural forces, and where possible, home manufactures should be helped to utilize foreign natural forces. _Marlo_, indeed, a.s.sumes, as one-sidedly as the followers of Smith do the contrary, that without the tariff the workmen in question would not be employed at all; but he is right in this, that the most fruitful employment of the forces of labor, and the keeping of them most completely busy, mutually replace each other. In France, even _Ferrier_, Du Gouvernement considere dans ses Rapports avec le Commerce (1808), had defended the Napoleonic continental system. See _Ganilh_, the French List, Theorie de l'Economie politique (1822), who grades the branches of a nation's economy in a way the reverse of Adam Smith, and finds the protective system necessary for the less developed nations, to the end that they may not be confined to the most disadvantageous employments of capital (II, p. 192 ff.). Especially is a greater population made possible in this way (248 ff.). Similarly, _Suzanne_, Principes de l'E. polit., 1826. Further, _H. Richelot_, List's translator. _M. Chevalier_, who recommends free trade for France in our day so strongly, approves the system of Cromwell and Colbert for their own time, and for a long time afterwards (Examen du Systeme commercial, 1851, ch. 7): a view which _Perin_ says is now shared by "all serious writers." (Richesse dans les Societes Chretiennes, 1861, I, p. 510.) _Demesnil-Marigny_, Les libres echangistes et les Protectionistes concilies (1860), bases his protective system on this, chiefly, that it may greatly enhance the money-value of a nation's resources to the detriment of other nations, especially by the transformation of agricultural labor, estimated in money, into the much more productive labor of industry. The value in use of all the national resources is doubtless greatest where full freedom of trade obtains. In Russia, _Cancrin_ demands that every nation should be to some extent independent in respect to all the chief wants to the production of which it has at least a middle (_mittlere_) opportunity; especially as all civilization, even the higher development of agriculture, must proceed from the cities. (Weltreichthum, 1821, 109 ff.

Oekonomie der menschlichen Gesellschaften, 1845, 10, 235 ff.) America's most distinguished protectionist is _Hamilton_, Report on the Subject of Manufactures presented to the House of Representatives, December 5, 1791. _Jefferson's_ saying, that the industry should settle by the side of agriculture, leads us to _Carey_, who repeats the same idea with wearying unwearisomeness; at first for the reason that the "machine of exchange" should not be allowed to become too costly; but afterwards rather from the Liebig endeavor to prevent the exhaustion of the soil. He describes, indeed, how the East Indian producer and consumer of cotton are united with one another by a pontoon bridge which leads over England.

(Principles of Social Science, I, 378.) A good soil and good harbors are the greatest misfortune for a country like Carolina if free trade prevails, because it is turned into an agricultural country (I, 373). The people who, after the manner of the Irish, gradually export their soil, will end by exporting themselves. _Carey_ would force colonies to demean themselves like old countries from the first. If corn be worth 25 cents in Iowa, and in Liverpool $1, for which 20 ells of calico are brought back, the Iowa farmer receives of this quant.i.ty about 4 ells. Hence it would be no injury to him were he to supply his want of cotton from a neighbor who produced it at a cost four times as great as the Englishmen.

a.n.a.logies drawn from natural history, as, for instance, that every organism, the lower it is in the scale of existence, the greater is the h.o.m.ogeneity of its several parts; also a deep aversion for centralization, and hatred of England, cooperate in _Carey's_ recommendation of the protective system, often called in the United States the "American system," in opposition to the "British," advocated by Webster against Calhoun and Clay against Jackson. _John Stuart Mill_, Principles, V, ch. 10, 1, allows a protective tariff temporarily, "in hopes of naturalizing a foreign industry in itself perfectly suitable to the circ.u.mstances of the country." Peel's colleague, G. Smythe, said, in 1847, at Canterbury, that as an American (citizen of a young country) or as a Frenchman (citizen of an old country with its industry undeveloped), he would be a protectionist.

(Colton, Public Economy, p. 81.) Even _Huskisson_ admitted, in 1826, that England in the seventeenth century had been very much advanced by its protective system; and that he would continue to vote even now for its maintenance, if there were no reprisals to fear.]

SECTION V.