"It is our belief that protection should correspond to, should be the representation of, the difference which exists between the price of an article of home production and a similar article of foreign production. A protective duty calculated upon such a basis does nothing more than secure free competition; free competition can only exist where there is an equality in the facilities of production. In a horse-race the load which each horse carries is weighed and all advantages equalized; otherwise there could be no competition. In commerce, if one producer can undersell all others, he ceases to be a competitor and becomes a monopolist. Suppress the protection which represents the difference of price according to each, and foreign produce must immediately inundate and obtain the monopoly of our market. Every one ought to wish, for his own sake and for that of the community, that the productions of the country should be protected against foreign competition, whenever the latter may be able to undersell the former."
This argument is constantly recurring in all writings of the protectionist school. It is my intention to make a careful investigation of its merits, and I must begin by soliciting the attention and the patience of the reader. I will first examine into the inequalities which depend upon natural causes, and afterwards into those which are caused by diversity of taxes.
Here, as elsewhere, we find the theorists who favor protection taking part with the producer. Let us consider the case of the unfortunate consumer, who seems to have entirely escaped their attention. They compare the field of protection to the turf. But on the turf, the race is at once a means and an end. The public has no interest in the struggle, independent of the struggle itself. When your horses are started in the course with the single object of determining which is the best runner, nothing is more natural than that their burdens should be equalized. But if your object were to send an important and critical piece of intelligence, could you without incongruity place obstacles to the speed of that one whose fleetness would secure you the best means of attaining your end? And yet this is your course in relation to industry. You forget the end aimed at, which is the well-being of the community; you set it aside; more, you sacrifice it by a perfect petitio principii.
But we cannot lead our opponents to look at things from our point of view; let us now take theirs: let us examine the question as producers.
I will seek to prove:
1. That equalizing the facilities of production is to attack the foundations of mutual exchange.
2. That it is not true that the labor of one country can be crushed by the competition of more favored climates.
3. That, even were this the case, protective duties cannot equalize the facilities of production.
4. That freedom of trade equalizes these conditions as much as possible; and