[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 fashions! 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 für Sächsische 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.)
[A3-1-3] Prince Smith calls protective duties scarcity-duties (Theuerungszölle). 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.
[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.
[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.)
[A3-1-6] Fr. List assumed 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 classes 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 Mühlhausen, Baden and Voralberg, or at least to establish branch houses in these places. Similarly, Neumark cloth makers were induced to emigrate to Russia, and Nürnberg industrial workmen to Austria (Roth, Geschichte des Nürnbergen Handels, II, 170) etc. Compare Burkhardt, c. Basel, I, 74; Böhmert, Arbeiterverhältnisse der Schweiz, I, 16 seq.; II, 17.
[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 competition without the help of protective duties. Something similar is true of most duties on raw material in the United States.
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 competition 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 competition 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]