The Pamphlet Collection of Sir Robert Stout: Volume 51
9. Protection promotes diversity of industries in the protected country
9. Protection promotes diversity of industries in the protected country.
So much the worse. It is a matter of regret page 30 not of boast. The greater the diversity of industries in a given locality, the less scope there is for universal division of labour. This fertilising and wealth-creating principle is crippled in proportion to the smallness of its sphere of operations. By whatever it is short of being international and world-pervading, by so much is its efficacy impaired. It is merely sectional and intra-national in those countries where great diversification of industries prevails. Nowhere does the diversity of industries exist in a higher degree than among the Pitcairn islanders, unless it were among the country people of the olden times, when each family raised its own food and spun its own garments.
No doubt Protection does promote sectional diversity of industries, since it discourages commercial interchanges between nation and nation. If it were possible for each country to have within itself such a diversity or universality of industries as that all its wants could be supplied by native capital and labour, there would at once be an end to all foreign commerce; for as all countries would have their needs supplied out of their own resources and exertions, no one of them would take anything from the other, and, of course, no one of them would raise or produce anything beyond its own wants, since there would be no outlet for such surplus. The more perfect the system of self-sufficing diversity of industries, the more complete would be the isolation. It has not been the fault of man's fiscal enactments that this complete isolation is not attained; it is the fault of nature's laws. Not only does each nation want something which other countries can, but which itself cannot, produce, but each nation has through its aptitudes, natural or acquired, certain surplus productions for which it desires to find a vent, and for which it must—positively and inevitably must—take in exchange the products of other nations.
Suppose, for instance, a country, A, blest with a fertile soil, with a genial climate, and with land, abundant and cheap, cultivated by an energetic and industrious race of men; the result will be the production of agricultural commodities far in excess of the requirements of that country itself. If for that surplus produce the producers find a vent in the other countries of the world, they will have to take in pay page 31 ment for it the world's commodities of other kinds; for there is no other mode of payment. If country A, in its determination to be self-sufficing, were totally to prohibit the admission of any foreign goods whatever, its surplus of food productions could not be sent abroad at all, since nothing foreign was admitted in exchange for it. Its vent would be confined to the home demand, and the production would have to be cut down to the limit of that demand. The diversity of industries fostered by the self-sufficing system would exercise a blighting and fatal influence on the great staple industry of that country.
If this diversity of industries is promoted by Protection, it would be still far more completely promoted by total prohibition. Indeed, it would be yet farther promoted by cutting up the country into small districts, each to supply its own wants by its own industries. In this case, each little community would have its occupations diversified to the fullest extent, and the division of labour would be effectively impeded. The antagonism between the diversification of industries and the division of labour may be exemplified thus:—If 3,000 men be set to produce pins, needles, and thread, the former system diversifies the industries by setting each man to produce as many pins, as many needles, and as much thread as he can, by his separate and individual efforts, produce in a given time; whereas the division of labour sets 1,000 of these men conjointly to produce nothing but pins, 1,000 to produce nothing but needles, and the remaining 1,000 to produce nothing but thread. By which of these two processes will the greatest quantity of pins, needles, and thread be produced within that given time? Can anyone doubt the result? Will it not be 100,000 to 1 in favour of the latter? If the greatest possible diversification of industries be right, then the division of labour must be a mistake, and we must go back to the good old times when each family combined within itself a diversity of industries, raised its own food, spun its own clothes, and reared its own hovel.
Under a system of perfect freedom of commercial intercourse between country and country there would be such a distribution of industries as was consonant with the aptitudes, natural or incidental, peculiar to each country, page 32 and on these the productive energies of each country would be concentrated. The total productiveness of each would be far greater, although there would be a smaller diversity in the variety of articles produced. Nature says, "Devote your efforts to producing abundantly those things which you can produce best." Protection says, "Produce a little of everything, whether they be things which you are most fitted, or things that you are least fitted, to produce." Left to themselves, capital and labour easily discover and promptly adopt those industries from which they derive the most productive results, and the diversity of industries thus naturally attained furnishes them with their most remunerative employment. On the other hand, Protection diverts them, to a greater or lesser extent, from that profitable employment to other industries which can only flourish by the imposition of a tax on the community at large; and to that extent, while the diversity of industries is enlarged, the wealth of the country is diminished. All diversification of industries which goes beyond its natural boundary, and which, instead of being the result of the regular course of things, is artificially extended by State ordinances, is an encroachment on the division of labour, and therefore an evil. To sum up, the truth is that Protection Frustrates the Division of Labour by Artificially Localising the Greatest Possible Diversity of Industries within Limited areas, without Regard to their Natural Distribution.