Illustrations from everyday life occur on all sides to elucidate the utter absurdity, and, in fact, total impracticapability of the system of free trade, as applied to nations who are, or are becoming, rivals of each other in manufacturing industry. Those who have the advantage, will always advocate free competition; those who are labouring under impediments, will always exclaim against them. In some cases the young have the advantage, in others the old; but in all the free system is applauded by those in the sunshine, and execrated by those in the shade. The fair debutante of eighteen, basking in the bright light of youth, beauty, birth, and connections, has no sort of objection to the freedom of choice in the ball-room. If the mature spinster of forty would divulge her real opinion, what would it be on the same scene of competition? Experience proves that she is glad to retire, in the general case, from the unequal struggle, and finds the system of established precedence and fixed rank at dinner parties, much more rational. The leaders on the North Circuit—Sir James Scarlett or Lord Brongham—have no objections to the free choice, by solicitors and attorneys, for professional talent; but their younger brethren of the gown are fain to take shelter from such formidable rivals in the exclusive employment of the Crown, the East India Company, the Bank of England, or some of the numerous chartered companies in the country. England is the old lawyer on the Cirucuit in manufactures—but Poland is the young beauty of the ball-room in agriculture. We should like to see what sort of reciprocity could be established between them. Possibly the young belle may exchange her beauty for the old lawyer's guineas, but it will prove a bad reciprocity for both.
It is usual for both philosophers and practical men to ascribe the superior cheapness with which subsistence can be raised in the young state to the old one, to the weight of taxes and of debt, public and private, with which the latter is burdened, from which the former is, in general, relieved. But, without disputing that these circumstances enter with considerable weight into the general result, it may safely be affirmed that the main cause of it is to be found in two laws of nature, of universal and permanent application. These are the low value of money in the rich state, in consequence of its plenty, compared with its high value in the poor one, in consequence of its poverty, and the experienced inapplicability of machinery or the division of labour to agricultural operations.
Labour is cheap in the poor state, such as Poland, Prussia, and the Ukraine, becuase guineas are few.—"It is not," as Johnson said of the Highlands, "that eggs are many, but that pence are few." Commercial transactions being scanty, and the want of a circulating medium inconsiderable, it exists to a very limited extent in the country. People do not need a large circulating medium, therefore they do not buy it; they are poor, therefore they cannot. In the opulent and highly advanced community, on the other hand, the reverse of all this takes place. Transactions are so frequent, the necessities of commerce so extensive, that a large circulating medium is soon felt to be indispensable. In addition to a considerable amount of specie, the aid of bank-notes, public and private, of Government securities and exchequer bills, and of private bills to an immense ammount, bcomes necessary. McCulloch calculates the circulating medium of Great Britain, including paper and gold, at L.72,000,000. The bills in circulation are probably in amount nearly as much more. A hundred and forty, or a hundred and fifty millions, between specie, bank-notes, exchequer bills, Government securities, on which advances are made, and private bills, constitute the ordinary circulating medium of twenty-seven millions in the British empire. The total circulation of Russia, with sixty millions of inhabitants, is not forty millions sterling. The effect of this difference is prodigions. It is no wonder, whten it is taken into account, that wages are 5-1/2d. or 6d. a-day in Poland or the Ukraine, and 2s. or 2s. 6d. a-day in England.
The clearest proof that this is the great cause of the superior cost of raising subsistence in the old than the young state, is afforded by the different value which money bears in different parts of the same community. Ask any housekeeper what is the difference between the expense of living in London, Edinburgh, and Aberdeen, and he will answer, that L.1500 a-year in Edingburgh, or L.750 in Aberdeen. Yet these different places are all situated in the same community, and their inhabitants pay the same public taxes, and very nearly the same of local ones. It is the vast results arising from the concentration of wealth and expediture in one place, compared with its abstraction from others, which occasions the difference. But if this effect is conspicuous, and matter of daily observation, in different parts of the same compact and moderately sized country, how much more must it obtain in regard to different countries, situated in different latitudes and politcal circumstances, and in different stages of wealth, civilization, and commercial opulence? Between England for example, and Poland or the Ukraine? The difference is there important and durable. Wheat can be raised with as good a profit to the cultivator for sixteen shillings per quarter in Poland, as for forty-eight shillings in England or Scotland.
This superior weight of wages, rent and all the elements of cost, in the old, when compared with the young community, affects the manufacturer as well as the farmer; and in some branches of manufactures it does so with an overwhelming effect. But, generally speaking, the advantages of capital, machinery, and the division of labour, render the old state altogether predominant over the young one in these particulars. It would seem to be a fixed law of nature, that the progress of society adds almost nothing to the application of machinery to agriculture, but indefinitely to its importance in manufactures. Observe an old man digging his garden with a spade—that is the most productive species of cultivation; it is the last stage of agricultural progress to return to it. No steam engines or steam ploughs will ever rival it. But what is the old weaver toiling with his hands, to the large steam-power mill, turning at once ten thousand spindles? As dust in the balance. Man, by a beneficent law of his Maker, is permanently secured in his first and best pursuit. It is in those which demoralize and degrade, that machinery progressively encroaches on the labour of his hands. England can undersell India in muslins and printed goods, manufactured in Lancashire or Lanarkshire, out of cotton which grew on the banks of the Ganges; for England though younger in years compared to India, is old in civilization, wealth, and power. We should like to see what profit would be made by exporting wheat from England, raised on land paying thirty shillings an acre of rent, by labourers paid at two shillings a-day, to Hindostan, where rice is raised twice a-year, on land paying five shillings an acre rent, by labourers receiving twopence a-day each.
It is the constant operation of this law of nature which ensures the equalization of empires, the happiness of society, and the dispersion of mankind. To be convinced of this, we have only to reflect on the results which would ensue if this were not the case; if no unvarying law gave man in remote situations an advantage in raising subsistence over what they enjoy in the centres of opulence; and agriculture, in the aged and wealthy community, was able to acquire the same decisive superiority over distant and comparatively poor ones, which we see daily examplified in the production of manufactures. Suppose, for example, that in consequence of the application of the steam-engine, capital, and machinery to the raising of subsistence, Great Britian could undersell the cultivatiors of Poland and the Ukraine as effectually as she does their manufacturers in the production of cotton goods; that she could sell in the Polish market wheat at five shillings a quarter, when they require fifteen shillings to remunerate the cost of production. Would not the result be, that commerce between them would be entirely destroyed; that subsistence would be exclusively raised in the old opulent community; that mankind would congregate in fearful multitudes round the great commercial emporium of the world; and that the industry and progress of the more distant nations would be irrevocably blighted? Whereas, by the operation of the present law of nature, that the rich state can always undersell the poor one in maufactures, and the poor one always undersell the rich one in subsistence, those dangers are removed, a check is provided to the undue multiplication of the species in particular situations, and the dispersion of mankind over the globe—a vital object in the system of nature—is secured, from the very necessities and difficulties in which, in the progress of society, the old and wealthy community becomes involved.
These considerations point out an important limitation to which, on principle, the doctrines of free trade must be subjected. Perfectly just in reference to a single community, or a compact empire of reasonable extent, they wholly fail when applied to separate nations in different degrees of civilization, or even to different provinces of the same empire, when it is of such an extent as to bring such different nations, in various degrees of progress, under one common dominion. They were suggested, in the first instance, to philosophers, by the absurd restrictions on the commerce of grain which existed in France under the old monarchy, and which Turgot and the Economists laboured so assiduously to abolish. There can be no doubt that they were perfectly right in doing so; for France is a compact, homogeneous country, in which the cost of producing subsistence is not materially different in one part from another, and the interests of the whole community are closely identified. The same holds with the interchange of grain between the different provinces of Spain, or for the various parts of the British islands. But the case is widely different with an empire so extensive as, like the British in modern or the Roman in ancient times, to embrace separate kingdoms, in wholly different circumstances of climate, progress, and social condition. Free trade, in such circumstances, must lead to a destruction of important interests, and a total subversion of the balance of society in both the kingdoms subjected to it. To be conviced of this, we have only to look at the present condition of the British, or the past fate of the Roman empire.
It is the boast of our manufacturers—and such a marvel may well afford a subject for exultation—that with cotton which grew on the banks of the Ganges, they can, by the aid of British capital, machinery, and enterprise, undersell, in the production of muslin and cotton goods, the native Indian manufacturers, who work up their fabrics in the close vicinity of the original cotton-fields. The constant and increasing export of Britsh goods to India, two-thirds of which are cotton, demonstrates that this superiority really exists; and that the muslin manufacturers in Hindostan, who work for 3d. a-day on their own cotton, cannot stand the competition of the British operatives, who receive 3s. 6d. a-day, aided as they are by the almost miraculous powers of the steam-engine. Free trade, therefore, is ruinous to the manufacturing interests of India; and accordingly the Parliamentary proceedings are filled with evidence of the extreme misery which has been brought on the native manufacturers of Hindostan by that free importation of British goods, in which our political economists so much and so fully exult.
The great distance of India from the British islands, the vast expense of transporting bulky articles eight thousand miles accross the ocean, have prevented the counterpart of this effect taking place; and the British farmers feeling the depressing influence of the Indian plough, in like manner as the Indian manufacturers have the ruinous competition of the British steam-engine. But it is clear that, if India had been nearer, the former effect would have taken place as well as the latter. If the shores of Hindostan were within a few days sail of London and Liverpool, and the Indian cultivators, labouring at 2d. or 3d. a-day, had been brought into direct competition with the British farmers, employing labourers who received two or three shillings, can there be a doubt that the British farmers would have been totally destroyed in the struggle? The English farmers would have been prostrated by the same cause which has ruined the Indian muslin manufacturers. Cheap grain, the fruit of free trade, would have demolished British agriculture as completely as cheap cotton goods, the fruits of unlimited importation, has ruined Indian manufacturing industry.
Is, then, commercial intercourse impossible, on terms of mutual benefit, between states in widely different circumstatnces of commercial or agricultural advancement; and is the only reciprocity which can exist between them and reciprocity of evil? It is by no means necessary to rest in so unsatisfatory a conclusion. A most advantageous commercial intercourse to both parties may be carried on, but it must not be on the footing of free trade. The foundation of such an intercourse should be, that each should take, on the most favourable terms, the articles which it wants and does not produce, and impose restrictions on those which it wants and does produce. On this priciple, trade would be conducted so as to benefit both countries, and injure neither. Thus England may take from India to the utmost extent, and with perfect safety, sugar, indigo, cotton, tea, spices, cinnamon, and the more costly species of shawls; while India might take from England some species of cotton manufacture in which they have no fabrics of their own, cutlery, hardware, and all of the various luxuries of European manufacture. But a paternal and just government, equally alive to the interests of all its provinces, how far removed soever from the seat of power, would impose restrictions to prevent India being deluged with British cottons, to the ruin of its native manufactures, and to prevent Britian—if the distance did not operate, which it certainly would, as a sufficient protection—from being flooded with Indian grain. The varieties of climate, productions, and wants, in different countries, are such, that commerce, regulated on these principles, might be carried to the greatest extent consistent with the paramount duty of providing in each state for the preservation of its staple articles of industry.