The Forgotten Man, and Other Essays

by William Graham Sumner

I think it must be now nearly twenty years since I have made a free-trade speech or been able to take share in a free-trade dinner.

When I was invited here this evening I thought I would try to come for the pleasure of hearing the gentlemen, especially the members of Congress, who were announced to speak here. I have been so out of health that it has been impossible for me to sit up evenings or to attempt public speaking in the evenings, but things are going a little better and I will make an attempt to say a little—not very much, as the hour is now late.

Thirty-five or forty years ago I became a free trader for two great reasons, as far as I can now remember.

One was because, as a student of political economy, my whole mind revolted against the notion of magic that is involved in the notion of a protective tariff. That is, there are facts that are accounted for by protectionism through assertions that are either plainly untrue or are entirely irrational. The other reason was because it seemed to me that the protective tariff system nourished erroneous ideas of success in business and produced immoral results in the minds and hopes of the people.

I cannot say that I have got any more light on the matter within the last twenty years; it looks to me still as if the great objections to protectionism were these two. No man who enjoys the benefit of a protective tariff, as he believes, can ever tell whether he gets back anything for the taxes which he pays or not. He never has any analysis of the operation and never knows whether or not he really recovers from the action of the tariff what he pays in.

I say now the taxes which he pays, because—let us not make any mistake about this—the matter we are talking about is one entirely of Americans and between Americans. If the protective tariff operates so as to perform what is attributed to it, it prevents things from being imported into this country. That may be a disadvantage to the foreigner, it may disappoint him in his hopes, but we may leave him out of account. Then the increase of the cost of these commodities for the American consumer at home is the source from which the American protected manufacturer must obtain his benefit, if he ever obtains any. Therefore he has to pay also taxes to the other protected industries on account of the operation of the system. Therefore he is both paying and receiving, but whether or not he gets back the part that he hoped to receive is a question which he never can sift and never can know.

I should myself suppose that possibly the Pennsylvanian on his coal and iron might stand a good chance of winning something. The operation is direct and simple in that case, and coal and iron are to-day the very first conditions of industry. They must be obtained as raw material, because they enter into everything, and it is possible that under those circumstances the game might be sufficiently direct so that its effect could be felt and perceived. But the Connecticut manufacturer has to pay taxes on coal and iron and copper and the other metals, and he has to pay also the taxes on wool and the other raw materials, and then comes the question whether he ever gets it back again or not. He never knows; he cannot know; he cannot feel it and he cannot possibly know whether the operation of the system is to bring him back a return for his outlay or not.

We hear a great deal about a rightly adjusted tariff. It is a constant ideal that is presented, whenever the tariff subject comes up again for discussion in Congress, that it ought to be rightly adjusted, and when it is, it is going to perform its beneficial operation.

How can a tariff ever be rightly adjusted unless the industry will stand still? The taxes stand still for years without change. The industries never stand still. There are new inventions in machinery, there are new raw materials brought into use, there are new processes developed, and all that changes the character of the industry. These inventions and improvements and processes are all ignored by the protective system. It contains no allowance for them at all. But our people are full of enterprise, they are fond of improvements, they like novelties, and they adopt changes. The consequence is that the industry changes, and then again the decisions that are made by somebody or other as to the doubtful questions in the interpretation of the law are also constantly changing, and then by and by we find a lot of people who want the tariff changed. They say it needs to be adapted to the time, it is out of date, it has fallen behind, it does not fit the requirements of the moment, and they would like to have a tariff revision; but they are told then that they ought to keep still and not make a disturbance which will bring up a discussion of the entire tariff system, and that they ought to allow it to go on for the sake of the “system.”

What is the system then? The system means that the import duties that we have in this country have raised the prices of all commodities in our market, I may say thirty or forty per cent on a very low calculation. Is not that a very extraordinary thing when you stand off and try to realize it for a minute—that we have raised the prices in the United States thirty or forty per cent—perhaps more nearly fifty per cent—above the level of the prices for the same commodities in the other civilized countries of our grade; and that we believe that we have done a grand and noble thing by raising these prices, putting the whole level of life in this country on an artificial plane that much above the level of the world’s market? In fact, if you should listen to a protectionist he would make you believe that this continent would not be habitable if it was not for the protective tariff that is here working this operation all the time on the American market.