From what has been said, we may understand why the so-called free-trade school, with its atomistic over-valuation of the individual and the moment, rejects all those measures of the industrial protective system.[A3-3-1] As such measures really injure the oppressed portions of the people more than they help the favored classes, their introduction, it is said, uniformly depends on this, that single classes of producers understand their private interests better than others, and are better organized than other producers and especially better than consumers, to take care of their interests.[A3-3-2] Adam Smith approves import hindrances for the purpose of artificially promoting an industry only in two cases:
A. When military safety demands it. Hence he calls the English navigation act, that great prohibitive and protective law intended to advance the merchant marine, the wisest perhaps of all English commercial regulations, although he clearly saw that it compelled England to sell her own commodities cheaper and buy foreign commodities dearer.[A3-3-3]
B. When the import duty is no more than sufficient to balance the tax imposed on the corresponding home product. Smith rightly remarks that a universally heavier taxation by the home country, but which affected all branches of its production equally, operated like diminished natural fertility, and hence does not make any equalizing tax for foreign trade necessary.
The person who has only a modest opinion of the power of his own reason, and therefore a just one of the reason of other men and other times, will not believe that a system like the industrial protective system which the greatest theorizers and practitioners favored for centuries, and which governed all highly developed countries in certain periods of their national life, proceeded entirely from error and deception. It really served, in its own time, a great and regularly occurring want; and the error consisted only in this, that, partly through improper generalization by doctrinarians and partly by the avarice of the privileged classes and the inertia of statesmen, the conditioned and transitory was looked upon as something absolute.[A3-3-4]
[A3-3-1] P. de la Court, in his freedom of trade, has in view not the interest of consumers—and least of all of the whole world—but the interest of the commercial class. Compare Tüb. Ztschr., 1862, p. 273. Similarly, Child, Discourse of Trade, 1690; whereas D. North, Discourses upon Trade (1690), may be called a free-trader in the sense in which the expression is used to-day. No nation has yet grown rich by state-measures; but peace, thrift and freedom, and nothing else, procure wealth. (Postscr.) Davenant also zealously opposes the craving of a people to produce everything themselves, to want only to sell, etc. He considered very few laws on commerce a sign of a flourishing condition of trade. (Works, I, 99, 104 ff.; V, 379 ff., 387 seq.) Fénélon's antipathy for import and export duties in Telémaque, a part of his general opposition to the siècle de Louis XIV. The view of the Physiocrates (La police du commerce interiéur et extérieur la plus sure, la plus exacte, la plus profitable à la nation et à l'état consiste dans la pleine liberté de la concurrence: Quesnay, Maximes générales, No. 25) is directly connected with their deepest fundamental notions of produit net and impôt unique. Turgot vindicates the interests of workmen against protective duties, for whom no compensation is possible, where one industry gains by its being favored in the same way that it loses when another is favored. (Sur la Marque de Fer, I, p. 376 ff., Daire.) "Those who cry so loudly for protective duties are partly thoughtless persons who wish to avoid the consequences of bad speculations, and in part shrewd persons who would like to earn during the first years a rate of profit higher than that usual in the country." (Rossi.) Bastiat ridicules the advocates of a protective tariff by the petition of the lamplighters, lamp manufacturers, etc., that to advance their industry, and indirectly almost all others, the mighty foreign competition of the sun might be removed from all houses. (Sophismes écon., ch. 7.) To him, the protective system is precisely the system of want; freedom of trade, the system of superabundance. Political economy would have fulfilled its practical calling, if, by means of universal freedom of trade, it had done away with all that is left of that system which excludes foreign commodities because they are cheap, that is, because they include une grande proportion d'utilité gratuite. (Harmonies, p. 174, 306.) Cobden's pet expression: "Free trade, the international law of the Almighty!" (Polit. Writings, II, 110.) K. S. Zachariä calls the protective system a step introductory to communism (Staatsw. Abh., 100), because it nearly always leads to over-population and List's system, a politico-economical absurdity. (Vierzig Bücher vom Staate, VII, pp. 23, 92.)
[A3-3-2] Among the many frequently wonderful speeches by which persons engaged in industry are wont to support their motion for protective duties, etc., the following are particularly characteristic. The long struggle of English manufactures against the East Indian Company, since the later portion of the seventeenth century. Compare Pollexfen, England and East India inconsistent in their Manufactures (1697), against which Davenant, at the solicitation of the company, wrote his Essay on the E. I. Trade (1697). Prohibition of East Indian commodities, 11 and 12 Will. III., ch. 10. The struggle did not stop until the middle of the eighteenth century, when India was outflanked by English machines. When Pitt, in 1785, labored for the abolition of the tariff-barriers against Ireland, English manufacturers, and among others Robert Peel, declared that they would be forced in consequence to transfer a part of their manufactories to Ireland! (McCulloch, Literature of Political Economy, p. 55.) Say tells of a proposition made by the hat-makers of Marseilles to prohibit foreign straw hats (1. c).
[A3-3-3] W. of N., IV, ch. 2. According to Roger Coke, England's Improvement (1675), ship-building in England became dearer in a few years by about one-third, on account of the navigation act; and the wages of sailors advanced to such an extent that England lost its Russian and Greenland trade almost entirely, and the Dutch obtained the control of it. This J. Child, Discourse of Trade, admits, but still calls the navigation act the magna charta maritima. Similarly, Davenant, Works, I, 397. Here the relation of the cost to the immediate product can as little decide as it can against the exercise of troops or the construction of forts. Adam Smith allows the same reasons to apply to export premiums for sail-cloth and gunpowder (IV, ch. 5). Recently, however, Bülau (Staatswirthschaftlehre, 339; Staat und Industrie, 220 seq.;) has argued against all these exceptions of Adam Smith.
[A3-3-4] Schleiermacher (Christ. Sitte, 476) calls the polemics which can see nothing but error in a refuted theory, immoral.
SECTION IV.
FURTHER EDUCATIONAL EFFECTS OF THE INDUSTRIAL PROTECTIVE SYSTEM.