Protection and Communism

by Frédéric Bastiat

What disorder, what confusion in facts; but what can you expect when there is such disorder and confusion in ideas? You may have resisted Communism vigorously in the abstract; but while at the same time you humour, and support, and foster it in that part of our legislation which it has tainted, your labours will be in vain. It is a poison, which, with your consent and approbation, has glided into all our laws and into our morals, and now you are indignant that it is followed by its natural consequences.

Possibly, Sir, you will make me one concession; you will say to me, perhaps, the system of Protection rests on the principle of Communism. It is contrary to right, to property, to liberty; it throws the government out of its proper road, and invests it with arbitrary powers, which have no rational origin. All this is but too true; but the system of Protection is useful; without it the country, yielding to foreign competition, would be ruined.

This would lead us to the examination of Protection in the economical point of view. Putting aside all consideration of justice, of right, of equity, of property, of liberty, we should have to resolve the question into one of pure utility, the money question, so to speak; but this, you will admit, does not properly fall within my subject. Take care that, availing yourself of expediency in order to justify your contempt of the principle of right is as if you said, 'Communism or spoliation, condemned by justice, can, nevertheless, be admitted as an expedient,' and you must admit that such an avowal is replete with danger.

Without seeking to solve in this place the economical problem, allow me to make one assertion. I affirm that I have submitted to arithmetical calculation the advantages and the inconveniences of Protection, from the point of view of mere wealth, and putting aside all higher considerations. I affirm, moreover, that I have arrived at this result: that all restrictive measures produce one advantage and two inconveniences, or, if you will, one profit and two losses, each of these losses equal to the profit, from which results one pure distinct loss, which circumstance brings with it the encouraging conviction, that in this, as in many other things, and I dare say in all, expediency and justice agree.

This is only an assertion, it is true, but it can be supported by proofs of mathematical accuracy.*

* What M. Bastiat here asserts is unquestionably true. For
it has often been shown, and may readily be shown, that the
importation of foreign commodities, in the common course of
traffic, never takes place except when it is, economically
speaking, a national good, by causing the same amount of
commodities to be obtained at a smaller cost of labour and
capital to the country. To prohibit, therefore, this
importation, or impose duties which prevent it, is to render
the labour and capital of the country less efficient in
production than they would otherwise be; and compel a waste
of the difference between the labour and capital necessary
for the home production of the commodity, and that which is
required for producing the things with which it can be
purchased from abroad. The amount of national loss thus
occasioned is measured by the excess of the price at which
the commodity is produced over that at which it could be
imported. In the case of manufactured goods, the whole
difference between the two prices is absorbed in
indemnifying the producers for waste of labour, or of the
capital which supports that labour. Those who are supposed
to be benefited—namely, the makers of the protected
article, (unless they form an exclusive company, and have a
monopoly against their own countrymen, as well as against
foreigners,) do not obtain higher profits than other people.
All is sheer loss to the country as well as to the consumer.
When the protected article is a product of agriculture—the
waste of labour not being incurred on the whole produce, but
only on what may be called the last instalment of it—the
extra price is only in part an indemnity for waste, the
remainder being a tax paid to the landlords.—J. S. Mill

What causes public opinion to be led astray upon this point is this, that the profit produced by Protection is palpable—visible, as it were, to the naked eye, whilst of the two equal losses which it involves, one is distributed over the mass of society, and the existence of the other is only made apparent to the investigating and reflective mind.

Without pretending to bring forward any proof of the matter here, I may be allowed, perhaps, to point out the basis on which it rests.

Two products, A and B, have an original value in France, which I may denominate 50 and 40 respectively. Let us admit that A is not worth more than 40 in Belgium. This being supposed, if France is subjected to the protective system, she will have the enjoyment of A and B in the whole as the result of her efforts, a quantity equal to 90, for she will, on the above supposition, be compelled to produce A directly. If she is free, the result of her efforts, equal to 90, will be equal: 1st, to the production of B, which she will take to Belgium, in order to obtain A; 2ndly, to the production of another B for herself; 3rdly, to the production of C.

It is that portion of disposable labour applied to the production of C in the second case, that is to say, creating new wealth equal to 10, without France being deprived either of A or of B, which makes all the difficulty. In the place of A put iron; in the place of B, wine, silk, and Parisian articles; in the place of C put some new product not now existing. You will always find that restriction is injurious to national prosperity.