§ 7. —on the ground that it lowers prices.
The argument—heard less frequently now than formerly—has been advanced, drawn inductively from statistics, that protection does not raise prices; because, after duties are put on, a larger quantity is produced, the advantages of large production are reaped, and then the price of the manufactured commodity falls lower here than it was before the duty was imposed. The position is then held that protection does not raise prices. It is, of course, understood to mean the prices of protected commodities—a necessary precaution, because we find our own agricultural (unprotected) commodities cited to show that prices are lower here than in England.
No one, however, will deny that there has been a fall in the prices of textile fabrics and manufactured goods. That is the result of a general law of value, and of the tendencies of a progressive state of industry.[372] The causes of this acknowledged fall would be at work, no matter whether tariffs existed or not. It is the result of the general forward march of improvements, as evidenced in the application of new inventions and the display of skill and ingenuity in new processes. To say that it comes because of a tariff, is a complete non sequitur. How true this is may be seen by observing that a country like England, without tariffs, shares in the general fall of prices of manufactured goods equally with the country which has heavy customs-duties. The causes must be wider than tariffs, if they are seen working alike in tariff and non-tariff countries.
But the fact itself can not be gainsaid that protection does raise the prices of the protected goods in the home market. The comparison is not to be made between prices as they now are in this country and as they were twenty or forty years ago also in this country, for this would show only the general march of [pg 626] improvements in this country; but a comparison is to be made between prices in this country to-day and present prices in foreign countries. Does, for instance, the tariff increase the price of woolen goods and clothing to every consumer far beyond what the price would be if the duty on imported woolens were removed? The very existence of a protecting duty is the answer to this. If the duty does not raise the price, then why does the woolen industry wish a continuance of the duties? If goods can be sold as cheaply here as the foreign goods, why do protectionists want any duties? The duties are intended to keep foreign goods out of our markets; and they would be unnecessary if our goods could be sold as cheaply as the foreign wares.
The facts, however, are at hand to show that the statement of principle as made above is corroborated by the statistics. In 1883, although average weekly wages in Massachusetts were over 77 per cent higher than in England, the American laborer had to pay more for the articles entering into his real wages; and to that extent lost the advantage of his higher reward in this country. This is to be seen in the following figures,[373] which show, in percentages, whether prices are higher or lower here than in England:
| Classes of Articles. | Higher Percent. | Lower Percent. |
| Groceries | 16 | |
| Provisions, including meat, eggs, butter, and potatoes | 23 | |
| Dry goods (all grades) | 13 | |
| Boots, shoes, and slippers | 62 | |
| Clothing | 45 |
And yet, in spite of the high prices, 31 per cent of the Massachusetts workman's expenditure represents more comfort and better home surroundings than is enjoyed by the English workman. If the American could purchase at English prices, he would have no less than 37 per cent of a surplus for additional enjoyments (after making due allowance for the higher rents paid here than in England). In other words, higher prices cut off the American laborer from reaping all the superiority in comfort which might be expected from knowing that he had an advantage over the English laborer of 77 per cent in the money wages received.
In order that the reader may easily find the arguments of the protectionists, he is referred to the following books:
Carey's “Principles of Social Science” (3 vols.). The form of argument is, briefly, that all industries should be kept going within the bounds of a country so as to avoid foreign trade. The change of form into the finished commodity should, he holds, take place near the spot where the raw materials are produced, so that not so great a share should go to the mere middle-men, or transporters.
Bowen's “Political Economy,” Chap. XX, advocates protection on the ground that it is needed to secure diversity of industries, and that it lowers the prices of imported goods.