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The Pamphlet Collection of Sir Robert Stout: Volume 51

Chapter X. — Impossibility of Encouraging Exports and at the Same Time Checking Imports

Chapter X.

Impossibility of Encouraging Exports and at the Same Time Checking Imports.

Fortunately no government and no legislation can succeed in altogether putting a stop to international trade. The world is preserved from the complete application of protectionism by two important influences. The one is the fact that there are several commodities which a country must either do without or import from abroad, as the native production of them is impossible. No amount of protection could enable England to produce her own wine, or France to raise her own cotton, or America to grow her own tea. To some extent, therefore, Nature compels nations to interchange commodities, and thus she points the way to free trade.

The other influence is almost as forcible and effective. It arises out of the intense desire that exists everywhere, and is perhaps most intense in protected countries, to sell, that is, to export, to the greatest possible amount. Indeed, this eagerness to export did formerly often, and does even now sometimes, prompt governments to grant bounties on the exportation of certain articles, so as to enable the producer to sell his goods cheap abroad, while he gets the full price of them at home. This process simply amounts to taxing the community in order to make a present to the foreigner of a portion of the proceeds. The absurdity, however, proved too flagrant to endure, and has therefore nearly (not quite—see the French Sugar bounties) become obsolete. All govern- page 37 ments and all nations are exceedingly anxious to swell the amount of their exports to the rest of the world, and, strangely enough, this passion for selling co-exists with a vehement aversion to buying, or importing from other countries! As if the achievement of both these purposes at once were not an utter impossibility! It has been clearly shown that if a community desires to export, it must, from the nature of things, import in proportion—and if it determines on curtailing its imports, it must be content, in a similar ratio, to curtail its exports.

As we have elsewhere pointed out, some nations do indeed export more than they import, but that is because they are in debt to the rest of the world, either for interest on loans, &c., or for war indemnities, or for tribute to a suzerain power, and such like. These debts are provided for, not by the transmission of specie, but by the export of goods, and for that portion of their exports those countries, of course, receive no imports in return. So likewise some countries (among which England stands foremost) import more than they export, because the rest of the world is in debt to them, and this excess of imports being sent in payment of that debt, no return is made for it in the shape of exports. But beyond the amount of such debt-payments, it is an incontrovertible fact that for every hundred pounds' worth exported, a country must receive back one hundred pounds' worth of foreign commodities. If you determine on only importing fifty pounds' worth of foreign commodities, you must be content with only exporting fifty pounds' worth of your own productions. Such must of necessity be the final result of your commercial transactions with the world at large. Of course, with one or more individual countries, your separate account may stand differently; you may export largely to these, and get but few imports from them in return; but your imports will be, in the same proportion, larger from, and your exports smaller to, other countries, so as to restore the equilibrium, and in the aggregate, your imports and exports will balance each other.

It is this passion for exporting which practically acts, to a certain extent, as a counterpoise to the aversion of page 38 protectionist countries to the importation of foreign commodities. They cannot indulge their love for selling, and, at the same time, indulge their repugnance to buying. Of this they are unaware, and they delude themselves by a vain expectation that they can compel the foreigner to pay in specie for the goods which they sell to them. But it is not so, it cannot be so, and even if it were so, it would be of no advantage to them, for the reasons which we have given elsewhere. The goods which they export will be paid for in goods. Practically and substantially all commerce is barter.

Some have proposed, as a milder and more allowable form of protection, that protective duties should be levied on foreign manufactured goods only, and not on agricultural produce or raw materials. The reason assigned is that the former represents a larger percentage of capital and labour than the latter class of commodities. This distinction, if admissible, would not meet any of the objections to which we have shown the protective system to be open. But it is not admissible. The only difference (and that a slight one) is that the element of rent of land enters rather more directly into the value of raw material than into that of a manufactured article. But otherwise, fifty pounds sterling's worth of the former represents as much of wages of labour and remuneration to capital as fifty pounds' worth of the latter. The identity of their market price shows the identity of their exchangeable value, and, as nearly as possible, the equivalence of their cost of production. There is undoubtedly more labour and capital absorbed in a £50 pianoforte than in a ton of pig iron at per ton; but not more than in ten tons of the same pig iron, since they also represent the same sum of £50. It is not the question of relative bulk or weight which we have to consider, but that of relative value, and whether it is expensive cutlery or cheap raw cotton that constitute the import, the same value of each represents, as nearly as possible, the same amount of capital and labour.