Other formats

    Adobe Portable Document Format file (facsimile images)   TEI XML file   ePub eBook file  


    mail icontwitter iconBlogspot iconrss icon

The Pamphlet Collection of Sir Robert Stout: Volume 52

"The Indluence of Free Trade on Mages; or, — Why Working Men Should be Free Traders."

page break

"The Indluence of Free Trade on Mages; or,

Why Working Men Should be Free Traders."


In a rightly ordered State, the interests of every class would be identical, and none would have particular requirements. But it can hardly be denied, that, in the present state of society, this happy condition has not yet been reached, and that each class still has its peculiar interests. Take for example the class of Wage-Receivers. This class sets before itself certain objects of desire, which are distinct from the objects of the Trading Class. It demands to be admitted to a share in certain benefits, which are believed to be within the reach of other classes. Whether its peculiar grievances arise from the conditions of society or from the negligence of law-makers need not be considered, since we are, at present, only concerned to know how class interests are affected by Free Trade. For, since every set of men judge of a policy by reference to their own interests, it is desirable, if we would justify Free Trade to Working Men, to show how it affects them.

Now, the class interests of Working Men are (1st) that they should have high and steady wages; (2ndly) that they should have decent dwellings, within a reasonable distance of their work; (3rdly) that they should have opportunities for secure investment, and for provision against sickness and old age. It is necessary therefore to explain the attitude of Free Trade towards each of these requirements, in order that it may be seen both what Free Trade has done already for the Working Class, what more may be expected from the policy, and what are the things which lie outside its influence.

In the first place, let us treat of Wages. Working Men make page 3 two demands in respect of Wages. First, that Wages should be high; secondly, that Wages should be steady. It is hard to say which of these requirements is the most important; but it seems to be admitted that employment at a steady rate tends to more security and independence than would larger, but uncertain gains. We will, however, consider Free Trade from both these points of view, and trace its influence both in raising and in steadying Wages.

A statement of the theory of the Wages Question is beset with many difficulties of technical expression; but these may be avoided, and a principle laid down, which is in accordance with the facts, by saying that Wages are the labourer's share of that which is produced. Whatever, therefore, increases the total products of a country, gives a larger fund from which Wages may be taken. It docs not follow that the labourers will receive in every case a due proportion of this increase; but it is impossible to say, from the simple fact of this enlargement having taking place, that the Wages of a labourer would be lessened. It may be that, simultaneously with an increase in National Wealth, Capitalists become more able to appropriate what ought to be the labourer's share; but this must arise from causes which are independent of the mere increase; because it is obvious (to put the case in its simplest form) that where a certain sum has to be divided between two parties, an increase in the sum to be divided cannot, of itself, lessen the quotient Accordingly, if it can be shown that the policy of Free Trade will cause an increase in the total quantity of National Wealth, that, in itself, is an assurance that Free Trade cannot lower Wages, unless it can be shown that the policy, either by weakening the labouring class, or by strengthening that of the employers, or by some other means, will so depress the Wage-Receivers that they cannot claim their proper share. Later in these pages this hypothesis will be deal with, and it will be shown that, in fact, Free Trade does not depress the labourer. For the present let it be assumed that this point is proved, and follow the singly enquiry how Free Tradeaffects the aggregate of a country's wealth.

This is a matter which has been already over-laboured by writers on Free Trade. Regarded in its influence on production, Free Trade is simply an expedient for carrying the principle of the division of employment into International Commerce. As it is found in a domestic industry that the largest quantity is produced when each man confines himself to a particular department, so it can be shown conclusively that wealth will accumulate most rapidly in a country which produces those articles, in the production of which it has especial natural advantages, and exchanges these for the other things it needs. Just as a baker would waste his time by making his own clothes, so will a nation spend its labour uselessly by producing articles at greater cost than it can buy them page 4 from another country. Nature gives gratuitously to every country advantages peculiar to itself—to one it is coal, to another iron, to another wheat, to another wool—but, thanks to Free Exchange, men in every quarter of the globe can serve themselves of these free gifts. These may seem dogmatic statements, resting on no proof, but the arguments by which they are established have been skipped, because it is believed, after a perusal of the writings of most of the Protectionist economists, that the effect of Free Trade in increasing National Wealth has never been disputed. Protection is justified on other grounds, chiefly moral and political, but not because of its effect upon the aggregate of wealth produced. Under such a policy, production admittedly takes place with greater effort and at greater cost, although this loss is supposed to be made up by counterbalancing advantages.* It will, therefore, be waste of time to quote more than one instance to illustrate these statements.

In 1840 there were nearly 1000 articles upon the English tariff, and in that year the exports of British and Irish produce from Great Britain were valued at £51,400,000. In 1845 Sir Robert Peel carried a Free Trade Budget, by which export duties were abolished, and many taxes upon imports were also abolished or reduced. In the following year, 1846, the value of exports was £57,000,000; in 1850 it was £71,300,000; in 1860 it was £135,800,000; in 1870, £199,586,822; and in 1880 it had increased beyond 200 millions. But it will be said by what title do you claim the credit of this increase for Free Trade alone.

* Here it may be mentioned that Free Traders readily admit that Protection must at first raise Wages in the protected trade. If you put a tax of 10 per cent, on all imported boots, the employer would have a larger margin of profit out of which he could pay his men. But this increase would be only temporary. Men would crowd in from other trades to get the higher Wages, and employers would come in from other businesses in order to obtain the higher profits. The result of this internal competition would be to depress Wages back to the former level: moreover, other trades would, in their turn, demand to be protected, and the bootmakers would have to pay away to the workmen in other trades whatever extra profit they might make themselves; and if it is thought that this will give everybody high Wages, let it be remembered that all-round Protection can never be fully carried out. The immense body of clerks, seamen, retail dealers, carriers, and all those who do not themselves actually take part in the manufacture of an article, cannot have an import duty imposed in their favour. They are, as regards those articles which a tariff could touch, consumers only. They must consequently suffer from a rise in prices, and their suffering will recoil upon the producing classes by lessening the demand for products of consumption. All-round Protection will also cause in a more aggravated form that un-settlement of trade, which will be referred to in the following pages as one of the most hurtful effects of a Protective policy. It will also give rise to the lowest forms of political corruption by the temptations which it offers to manufacturers to obtain modifications of the tariff for their own advantage; and if these arguments should not be thought sufficiently deterrent, and if any Protectionist really thinks that by putting taxes upon all imports he can raise Wages in all industries, let him answer this question—"Where does the money come from so pay the higher Wages?" Either a tariff raises prices, or it does not. If it does not raise prices, then Wages cannot be higher, because the Protectionist assertion is that the lowness of prices under Free Trade is the cause of low Wages; if it does raise prices, how is it that, although everyone has to give more for what he wants, there is a larger sum available for Wages? Where does the money come from? By whose labour is it created? These are questions which Protectionists must answer. The present Pamphlet is not intended to deal with the points raised, being confined entirely to considering the effect of Free Trade upon Wages, but they are none the less questions of importance in the Free Trade controversy.

page 5 Have not railways been discovered in those fifty years, and have not great improvements taken place in every kind of mechanism, to which at least some portion of this growth of trade may be accredited? Undoubtedly! But, none the less, it can be proved that it is to the removal of the checks upon the intercourse of nations that we chiefly owe this increase; nay, more, we can go further, and show that it is only through Free Trade that men can reap the full advantage of mechanical improvements.

These statements can be substantiated in two ways. The first method is a comparison of the condition of trade in the years immediately preceding the remission of a tax on imports, with its condition in the years immediately following. If, then, it is found that in every case a dose of Free Trade has been followed by an otherwise inexplicable increase in the volume of a country's commerce, it may fairly be concluded that there is some connection between this increase and the legislation which preceded it. Or we may adopt a second method of enquiry, and endeavour to ascertain the influence of mechanical or locomotive agencies when they are at work without Free Trade, in order to deduct their influence from the total increase.

This latter method is extremely complicated, and not perhaps altogether satisfactory, owing to the difficulty of making an accurate estimate of the value of the locomotive factor. Fortunately, however, the matter has been thoroughly considered by the greatest living master of finance, Mr. Gladstone, in a paper published in the Nineteenth Century of February, 1880. Without attempting to summarise that paper, it may be useful just to indicate the method of Mr. Gladstone's enquiry. He first estimates the average increase in the volume of Trade caused in England by the use of railways up to 1842, the first year of Free Trade legislation. For twenty years, from 1810 to 1830, English trade was almost stationary. With the invention of railways came a sudden increase, which continued year by year as new railways were opened. The first instalment of Free Trade took place in 1842, so that the growth of trade since 1830, but previously to that date, may, for the purpose of this calculation, fairly be set down to locomotive agencies alone. But how are we to use the figures thus obtained for the purpose of comparison with other years? Mr. Gladstone attempts to gel over this difficulty in the following way:—He takes the number of miles of a railway open during the years 1830 to 1842, together with the mileage receipts during the same years, and on the assumption that the increase we have spoken of was owing to the locomotive agencies alone, he arrives at a rough estimate of the effect of each new mile of railway upon the volume of English trade. Then he calculates from this basis, the deductions to be made from the yearly increase in that volume subsequently to 1842 on account of railways, and making an equal page 6 deduction on account of telegraphs and ocean steamships, he arrives at a conclusion that by far the largest portion of the increase in English trade during the last forty years has to be assigned to other causes. The conclusion is, at best, imperfect; but it is at least as worthy of attention as the unsupported statements of Protectionist orators and letter-writers that the whole of the improved condition of our trade in recent years is owing to mechanical inventions.

The first of the two methods already referred to gives more accurate results, and enables us to make a more precise estimate of the effect upon trade of the removal of Protectionist restrictions. This method is, as has been stated, a comparison between the exports of the years immediately preceding Free Trade legislation and those of the years immediately following it, in order to see whether the removal of restrictive laws produces any effect upon the expansion of trade. But first let us look at the state of trade during the years 1816-1830, when railways were not invented and Protection had the field entirely to itself. It is instructive to find that during those fifteen years of peace, down to 1830 inclusive, although mechanical invention was in constant growth, the value of British exports remained almost stationary at about £36,000,000, or, if we took into account the growth of population during that period, that there was an actual decline in the value per head of the population. Well may Mr. Gladstone say that during those years Protection proved itself to be, in the United Kingdom at least, but another name for paralysis!

The first instalment of Free Trade legislation was granted in 1842, by which time, thanks to the growth of railways, English exports had increased to £51,400,000, but the remissions of duty did not take effect until 1843. That year is consequently the first in which the influence of Free Trade can be perceived. The concession to freedom was very slight, consisting almost entirely of a permission to import certain articles, which had previously been prohibited, at reasonable duties; yet, slight as the concession was, the three years, 1843-45, showed an average export of £57,000,000, an aggregate growth that is of £6,000,000, and an annual growth one year with another of two millions.

The second instalment of Free Trade was given by Sir Robert Peel in the year 1845. By the tariff of that year all export duties were abolished, and 430 out of 813 articles of raw material were admitted free of duty; but the Corn Laws, the Navigation Laws, and the Sugar Duties remained untouched. The three years during which this tariff was in force were marked by three great calamities. The first, scarcity in England and famine in Ireland; the second, commercial panic with the suspension of the Bank Charter Act in 1847; and the third, in 1848, wars and revolutions on the Continent, which in one year drove our exports down £6,000,000. page 7 In the days of more stringent Protection, any one of similar occurrences had caused a disastrous decline; under Free Trade, however, the result of all of them combined was little more than a stoppage of growth. The average of the exports for the three years, 1845-8, was £56,500,000, as compared with £57,000,000, which had been the average of the period from 1842 to 1845.

The third dose of Free Trade was given in 1849 by the repeal of the Corn Laws at the beginning of that year, and the abolition of more than 100 other taxes upon imports, together with the repeal of the Navigation Acts later in the Parliamentary session. For that year the exports rose suddenly from £52,800,000 to £63,500,000. The rise steadily continued, so that the average annual value of exports for the three years, 1849 to 1852, was £72,000,000, representing an increase of £15,000,000 per annum over the preceding triennium.

The fourth instalment of Free Trade legislation begun with the new tariff of 1853. The three years from 1853-55, notwithstanding the Crimean war, show an average export of £97,000,000. From 1853, a very flourishing year, with an export of £78,000,000, we pass to 1894, with the enormous increment of £20,000,000, and a total export value of £98,000,000. The effect of the war is seen during the next two years by the exports remaining about stationary; but, in spite of this, the average for the three years, 1853-5, is £94,000,000 or an increase of £22,000,000 on the previous triennium. This increase continued steadily up to 1859.

The fifth and last Free Trade period is marked by Mr. Cobden's French Treaty, and by the Customs Act of 1860, which finally established the principle that no protective duties should be charged, and by the repeal of the paper duties. This was again followed by an increase in our exports; but it is not possible to estimate the quantity of this increase for any purpose of comparison, since we have no limit provided by any fresh epoch of Free Trade legislation. It is, however, very noteworthy that since the removal of the Free Trade stimulus—if we leave out of account the exceptional years 1870-75, when owing to the consequences of the Franco-German war trade advanced by leaps and bounds—the increase in English exports tends to become more regular and steady, as if it were henceforward to be attributed mainly to the growth of population.

It may be that these figures are not rigidly conclusive, because social problems do not admit of being demonstrated like a rule of mathematics. But let any candid man put this question to himself—" Supposing that in any other case but one in which Protection was at issue with Free Trade, I found that legislation of a certain character was always followed by the same results, for which no other cause can be suggested, must I not therefore conclude that there is a close connection between this legislation and the subsequent page 8 events?" This is a test which we should recognise in every other matter of political experience, and Free Traders only ask that the same openness of mind and the same readiness to look to facts alone should be displayed by everyone who enters on this field of controversy. But, lest it should be imagined that the same results as those which have been quoted with regard to English trade can also be exhibited in a Protected Country, it is desirable to make a very brief reference to the figures of American trade.

America for the past twenty-five years has been a very hotbed of Protection. In no other country are the natural resources so enormous and so easily available. There are millions of acres of alluvial land, with soil thirty feet deep; there are minerals of every kind, coal fields, oil wells, and every sort of natural product in astonishing abundance, and moreover these resources are not locked up in inaccessible regions, but are brought near to the markets of the world by a most extensive system of railway and river communication. Add to all this that on an average 200,000 immigrants are being poured into the country every year, representing each of them a capital expenditure of £200, or a total increase of forty million pounds per annum to the national capital, and that America has neither to bear the expense of a Civil List nor of a costly armament, and we have a combination of every circumstance most favourable to the increase of wealth. And America enjoys as well the blessing of Protection!

Well! In 1840 the exports (and it is the exports and not the imports to which Protectionists attach a value as an indication of the state of trade) from America were £1 11s. 1d. per head of the population. The exports from Great Britain in the same year were £1 18s. 9d. In ten years' time, American trade had decreased 13 per cent., and the exports in 1850 were £1 3s. 2d. The increase in Great Britain during those ten years had been 30 per cent., and the average of her exports was £2 11s. 10d. per head. The same disparity between the rate of increase between the two countries was kept up throughout the next ten years, and in 1860, while England was exporting £4 14s. 7d. per head, the exports from America per head were only £2 10s. 11d.

Between 1860 and 1870 the Civil War arrested the growth of American trade, so that the exports of 1870 were only £2 6s. 11d. per head, or a decrease of 7 per cent. The exports from Great Britain during that period had, on the contrary, increased about 70 per cent., and the exports for the corresponding year were £6 7s. 11d. In 1880 the exports from England were £6 9s. 5d. per head as against £3 8s. 1d. from America. That is to say, an English workman makes for export nearly twice the quantity of goods which he could make in the protected country of America; and as a proof that this is owing to Free Trade, let attention be directed to the figures already quoted. Previously to Free Trade, that is in 1840, page 9 the exports per head from England and America were within a few shillings of each other, but since that time the difference has become much greater, and, with the exception of the period when America was recovering from the war, the distance has been increasing in each decade.

The statistics of imports tell the same story. The imports per head of the population of the United Kingdom in 1880 were nearly four times those of the population of the United States, the figures being £11 18s. 7d. for the United Kingdom, and £3 os. 9d. for the United States. And lest it should be thought that this is owing to Protection having closed the American market against the foreigner, let us remember that the increase in the total imports into America between 1840 and 1880 is 610 per cent., as compared with an increase of only 560 per cent, in the total exports.

The first point in the argument is now established, namely, that Free Trade is more favourable than Protection to an increase in the aggregate of National Wealth.

Attacks upon Free Trade must, therefore, be directed to another quarter. It is absurd to say that because Free Trade increases the amount of wealth to be distributed, it lessens upon that account the share of anyone.

. . . . . . .

We arrive, therefore, at the second head of our enquiry as to the effect of Free Trade in Raising Wages, viz.—Does Free Trade depress the Labourer? Let us recapitulate. The products of industry, we have said, viewed as an aggregate, have to be divided between the two classes of labourers and employers (rent may be left out of account in the present argument, because it is only a deduction from the share of each class, after the division has been made). Wages and profits—these are the two factors which, roughly speaking, make up the sum total of human wealth. Now, there is no reason why, as labour becomes more fruitful, and the aggregate of wealth increases, Wages and Profits should not rise together in the same proportion. But it might be that the causes which have made wealth greater, have also strengthened one class and depressed the other, so that the increase is not properly divided between labourers and employers. Now, Protectionists assert that this is the case with Free Trade. They say that the policy encourages monopolies, and tends to place the labourer at the mercy of a rich employer. The question therefore comes to this—" Does Free Trade increase profits at the expense of Wages?" and to this Free Traders must attempt an answer.

It is a commonplace of certain writers that the interests of employer and employed are identical. So they are—up to a certain point. It is certainly to the interest of both parties to a bargain that each should be in a position to fulfil his part; but, none the less, they would not usually regard their interests as identical page 10 while they were making terms. It is the same in striking the bargain between Capital and Labour. There is a point below which Wages cannot be reduced without impairing the efficiency of Labour, and there is a point below which profits cannot be reduced without discouraging the use of Capital. But between these two points there is a wide field of debateable ground. Every pound of profit beyond the least which will induce the capitalist to employ all available labour is so much to be fought for by the Wage-Receiver; every shilling of Wages beyond that which is enough to make the labourer able to do justice to his power of work is so much taken from potential profits. High Wages and great profits may occur together when labour is efficient, but to say that high Wages mean low Profits, and great Profits mean low Wages is not a contradiction to this statement, if it is understood with reference to that margin of distributable produce which remains when both Capital and Labour have received their minimum.

This is how it comes about that Trade Unions can raise Wages. A Trade Union is to the workman just what Capital is to an employer. It enables him to wait until the market for his labour rises. Alone, a workman must take work or starve; in union, he can wait for better times. Of the many other virtues of Trade Unions, of their social services as benefit societies and sick clubs, of their intellectual services in giving practice in affairs, of their moral services in encouraging honest workmanship and in stimulating self respect, it is not necessary to speak in this connection. It is to their effect in raising Wages that attention ought to be directed, because it is with Wages that we are now dealing, and because it may be shown that Free Trade acts in raising Wages by making Trade Unions more intelligent and more effective.

The power of a Trade Union depends greatly upon two things, the number of its members, and its knowledge of the markets.

Now Protection tends to create a number of small industries, or, to use a simile which was first suggested by Bastiat—instead of collecting water in a deep reservoir, it scatters it among numerous claypans which the summer heat evaporates.

Under Free Trade, on the contrary, natural resources are developed mote slowly, but the industries are on a larger scale.* Follow the effect of this difference in an individual struggle. Sup-

* For an example, the following may be cited from the Victorian Trade Statistics given in Hayter's Year Book for 1883:—Shot manufactories—2 establishments, 9 hands: ships, wheels, blocks, etc., manufactories—3 establishments, 10 hands: macaroni works-2 establishments, 4 hands: curled hair manufactories—2 establishments, 9 hands. There are 29 different protected industries mentioned in Mr. Hayter's list, which severally employ less than 30 hands, and 67 which employ less than 100 each. In almost all these cases, and in many others, it would be cheaper to the country to give pensions to all the hands employed, and remove the Tariff. The manufacture of pianofortes, for example, gives employment to 24 men. For their protection a tax is levied on imported pianos, amounting to £21.175 per annum. If each of these 24 men were to receive from the Government a free pension of £500 a year, as a compensation for removing the tax on pianos, they would get more than they get at present, and the people of Victoria would save nearly £10,000 a year.

page 11 pose that every attempt at settling a dispute in a particular trade has failed, and that a strike has taken place: How much weaker is the Union where the workmen are dispersed in small bodies among numerous industries artificially created? How can it be supposed that the nine men and boys who form the total number of hands employed in the great industry of manufacturing curled hair in an adjoining colony could enforce their demands against an employer? Let them strike! The master can still supply his customers by imported goods. He loses for a time the extra profit which the tariff gives him, and the interest on his plant, and that is all. But when a strike takes place in a large industry of natural growth, employers cannot execute their orders by importing goods, because the very fact of the industry existing in a Free Trade country shows that goods can be produced in that country more cheaply than they can be imported. Consequently anyone who imported goods to supply his customers would do so at a loss. Employers therefore have a stronger material inducement in a Free Trade country to come to terms with their men.

The difference in the size of a protected and of a natural industry tells also in another way. The employer of labour in a protected country can more readily change the direction of his capital, both on account of the smaller amount invested in machinery and plant, and also because of the variety of openings which Protection gives to a manufacturer at the expense of the rest of the community. Our friend, the curled-hair maker, to retun to our former example, would find it much easier to change his occupation and become, say, a macaroni manufacturer (a protected industry in the colony of Victoria, which, in two establishments, employs four men), than if he had employed ten thousand men, and if there had been no tariff to promise him profits from the pockets of consumers in whatever trade he undertook.

Trade Unions have been spoken of, so far, as if they were nothing more than a weapon of industrial warfare. But it must not be forgotten that, in reality, the main purpose of a well-organised Trade Society is the prevention of strikes. Nevertheless, in every case, a strike remains the Wage-Receivers last resource. It is the knowledge that the workman has that weapon lying by which constitutes his strength. Si vis pacem, belium para—He is left at peace because he is prepared for war. Everybody knows, however, that nothing could be more disastrous to the Working Classes than an unsuccessful strike. It not only paralyses industry—that is done by every strike, no matter what its result—but it consumes the savings of years without the least return. A strike, at any time, is a doubtful expedient, to which wise leaders will only be driven in extremities; but to strike upon a falling market is simply suicidal. It follows, therefore, that it is of the highest importance to the Working Classes that the leaders of their Unions should be well- page 12 informed. Now it is just in this respect that Free Trade gives an advantage. Free Trade means closer and more frequent intercourse with foreign countries, through which is gained a knowledge of the markets and a solidarity of the Working Classes in different countries, which is of inestimable value. Men, in a protected country, have but little means of knowing what is the condition of any market save their own. They cannot tell what channels are open for export, nor do they know what stores are ready to furnish the supply, which they themselves have stopped; while, from their policy of isolation, they will find it hard to act in concert with their fellow workmen in another country. But a Free Trade industry, since it is not created only to supply the home demand, will answer to the changes in the markets of many different countries, so that both masters and workmen run less danger of mistaking a local congestion 01 a local failure for a universal phenomenon. It is in fact observed everywhere that the larger and more powerful the Trade Union, the better are the relations between masters and men. Thus the Society of Amalgamated Engineers, whose head-quarters is in England, comprises 50,000 members, has invested capital of nearly £300,000, and an annual income of £130,000. It has 390 branches, and correspondents in almost every civilised country. It has been in existence for thirty-three years, and during all that time there has only been one trade dispute, which has not been peaceably settled. The Society of Boiler Makers furnishes another example of the increased efficiency and intelligence given to Trade Unions by Free Trade. That society has 20,000 members, with an income of £40,000 a year, and an invested capital of £50,000. Many other instances might be given, but anyone who cares to follow up these enquiries can see in Mr. Howell's work upon the Conflicts of Capital and Labour abundant evidence of the assertion that strikes occur more frequently in the small and local societies, and that a larger organisation and amalgamation of local Unions makes peaceable settlements more easy.

But it is not necessary to go so far afield as England to show that in a protected country, where every industry is artificially created and artificially sustained, the Working Classes have less strength than they would have, if their labour were allowed to flow in its natural channels. A sufficient illustration can be taken from the recently-published Report of the proceedings of the Trade Union Congress at Melbourne during the present year. Victoria is a country with a more democratic constitution than that of New South Wales, and one in which the Working Classes might therefore be presumed to have a greater influence. Nevertheless, in two matters of the highest importance the Working Men of Victoria do not yet enjoy the same advantages which we enjoy in Free Trade New South Wales. The Victorians are still demanding the page 13 Employer's Liability Act which we received in 1881; and they are still demanding that Trade Unions shall be recognised to have a legal existence.

It would be difficult to name two measures which more closely touch the welfare of the Working Classes, and yet, in that country, which, according to Protectionists, is the Paradise of the Working Man, neither of these measures has been yet obtained. The greater power of the Working Classes in a Free Trade country could hardly be more strikingly illustrated.

The same phenomenon can be observed in America. There also the power of Trade Unions is less than it is in England. This is doubtless owing to other causes besides Protection, such as the mobility of the population and the exaggerated sense of personal independence, which characterises the inhabitants of a young country; but the phenomenon is none the less very striking. It is hard to believe that, were American industry left quite untrammelled, it could continue in its present state of disorganisation. Workmen in America are, at present, able to protect themselves by the facilities which the Continent offers for migration to new employment; but they are none the less underpaid as compared with English workmen, if the cost of living be taken into account, and in very few States is there any legal restriction upon the number of hours which make a day's work.

But there is little use in proving that Free Trade ought to cause a rise in Wages, unless it can be also shown that, that, which ought to be, has actually happened. With regard to Wages in England this is capable of proof.

The first authority upon the point is Mr. Brassey, the well-known contractor, who, in his book entitled "Work and Wages," has analysed the pay-sheets of his enormous business during the last thirty years, and given a faithful record of the rise and fall of Wages, during that period, in the two great trades of the Builders and the Engineers; secondly, there is a collection of Statistics made in 1866 by Professor Leone Levi and Mr. Dudley Baxter, under the title of "Wages and Earnings of the Working Class." These are collected chiefly from private sources, and most of the information appears to be drawn from the more favoured trades, so that, without questioning the accuracy of the figures themselves, the estimate of the average earnings of the Working Classes, so arrived at by these gentlemen, is somewhat too high. The last, and perhaps the most useful source of authentic information, is the annual return furnished by the Chambers of Commerce in different centres to the English Board of Trade. These are published among the Miscellaneous Statistics of the United Kingdom, and will be the chief figures relied upon in the course of this Essay. From these reports, although they are arranged without reference to any system, and on miscellaneous principles of confusion and page 14 inconvenience, it is possible to obtain a continuous record of the Wages paid, during the last forty years, in the four great English industries—the Cotton, Woollen, Worsted, and Iron Trades—in which considerably more than one-half of the artisan population is employed. These records also contain much information about other deparments of labour, from which it can be shown that, in many other industries there has been an enormous advance in Wages, while, at the same time, there has been a lessening in the hours of labour, so that many workmen now get twice as much pay in a day of nine hours as they did formerly in a day of twelve hours. Mr. Giffen, who is the head of the Statistical Department of the Board of Trade, considers that the average wage of a Working Man has doubled since 1830. It is possible that this is the case, and certainly no one can differ without hesitation from such a great authority as Mr. Giffen; but the average advance in Wages certainly does not appear to be so great in the four great industries already mentioned. The statement is quite accurate with regard to skilled labour, the rewards for which have, in many cases, even more than doubled; but among the body of unskilled labourers in the Iron, Worsted, Woollen, and Cotton Trades, the increase, so far as can be gathered from the Board of Trade Statistics, is not more than from 25 to 50 per cent. In fact, it is a remarkable illustration of the truth which has been mentioned earlier in these pages that the stronger the labourer, and the better he is able to protect himself, the more likely is he to obtain good Wages, that these figures show that, not only is it the class of skilled labourers who have benefited most, but, in almost every case, they have been the first to get the advantage of a rising market. Indeed, the figures of the Cotton, Woollen, Worsted, and Iron Trades lead to these two conclusions: First, that the increase of Wages has been largest among the best paid class of artisans, less among the class of medium ability, and least among the common labourers; and, secondly, that a rise in Wages comes earliest to the best paid class, later to the middle class, and latest to the unskilled workman. These assertions are not put forward as the invariable laws of rising Wages, but they are certainly conclusions from a large number of important observations. [See Appendix.]

But, it may be said, the unskilled labourers form the mass of the community, and since it is the poorest classes that suffer most, it is in their prosperity that the country is most interested. This leads to another branch of our enquiry, viz., whether Wages have increased beyond the greater cost of living. There can be no doubt that even the poorest workman receives more money than he used, but does a sovereign in England go as far now as it did thirty years ago? In the hands of a workman it does! If anyone will make a table of the articles of a labourer's consumption, and, by a reference to any book on Prices in the Public Library, page 15 estimate the cost of living, say thirty years ago, and at the present time, he will find that in respect of most items of a labourer's ex-expenditure there has been a marked decrease of price, and that in respect of only two items has there been any increase. These two are meat and house rent The price of meat has nearly doubled, and rent has increased one and a half times. But none the less it is not true, as has been written, that Rent has swallowed up the whole of the increase in workman's Wages. Theoretically, Mr. George's views are sound enough. Imagine a country with entirely unrestrained competition, with a limited quantity of land in private hands, shut out from all foreign trade, and its people prohibited from emigrating, then, undoubtedly, Rent would increase at the expense of both Wages and Profits. But these theoretical conditions do not prevail in any country in the world, not even in Ireland, and in a Free Trade country least of all.

Take a simple instance. Suppose that where a man paid 5s. a week for rent, he now pays 12s., and that his Wages have increased in that period from 15s. to 25s. a week. In the one case he would have a balance for other purposes of 10s.—5s. from 15s., in the other a balance of 13s.—12s. from 25s. Moreover, house accommodation now is better than it was, and larger rents are paid partly in consequence of the larger capital invested in buildings. Nor has the greater cost of meat reduced the workman's real income. By making a table of the average expenses of a workman with a wife and three children in 1840 and at the present time, it will be found that, while, in 1840, an unskilled workman seldom eat meat more than once a week, now, allowing for meat every day, and allowing for the rise in rent, he has a larger balance than he used to have. That is to say, under a Free Trade policy, even where the rise in Wages has been lowest, namely, among the class of unskilled labourers, it has at least outpaced the increase in the cost of living. Many other facts point to the same conclusion. The consumption of tea and sugar, for example, per head of the population, is now four times what it used to be in the days of Protection. It is the same with the consumption of Rice, Tobacco, Wine and Spirits, and similar luxuries. What better evidence could be given that the prosperity of the last forty years has been diffused among the masses. The articles named are none of them such that the increased consumption of the rich could have made much difference. They are emphatically poor men's luxuries.

. . . . . . .

But there is an even more important consideration with regard to Wages, namely, the steadiness of prices since Free Trade. In the days before Free Trade, the price of a quartern loaf was seldom steady for a month together. When England was dependent for her corn, upon the products of the Home Market, every frost and every fall of rain might be the presage of starva- page 16 tion. The price of a quarter of wheat has often doubled in a single year, while, since Free Trade, it seldom varies more than between ten and fifteen shillings. Or, to give another illustration of the same fact, the price of the quartern loaf, which in one year reached eighteenpence, and in another sold for fourpence, has, since Free Trade, remained almost stationary between fivepence halfpenny and sevenpence. And not only so: While under Protection, high prices were the rule; under Free Trade they are exceptional; so, that, in twenty years, the average price of wheat has been reduced 10s. the quarter. It is perhaps difficult for those, who have never lived in a country, where poverty and want abound, to realise the inestimable boon of such a state of things. But those who have read the literature of Charlist Period, such tales, for instance, as Kingsley's "Yeast," or Disraeli's "Sybil," know well that, in those days, the varying price of corn continually drove the Working Classes to sheer starvation. Periodic starvation was, in fact, the condition of the Working Men in England previously to the introduction of Free Trade; and, if this statement seem exagerated, the cruellest and most rigid proof of it is given by the tables of mortality. The returns of the Registrar-General show an increase in the number of deaths with every rise in the price of bread.

It is sufficient to speak only of the price of corn, because that has given the most striking illustration of the working of Free Trade; but it would be possible to show that, the prices of other articles are, similarly, both lowered and steadied by the removal of a tax on importation.

It is, in fact, impossible that Free Trade should have any other result; since, by opening many sources of supply, it lessens the chance of a general failure, and makes the market independent of local accidents. Suppose, for instance, that we were dependent for our iron supply, only on the furnaces of Lithgow, the price of iron might be doubled in a day by any one of many accidents. A strike, a breakage of machinery, disease among the workmen, might any of them temporarily stop the output. But, when we can buy iron from England, Belgium, and America, and (as we may hope shortly to be able to add) from Lithgow also, the failure of one market would only have a small effect upon prices in the others. The wider the area for production, the greater the security for steadiness.

But, by making prices steadier, Free Trade produces a direct effect in steadying Wages. For, since real Wages consist not so much in money as in money's worth, whatever steadies the prices of articles in common use, makes it easier to estimate incomes and to calculate expenditure. This offers opportunities for saving, and creates a sense of independence and security, which no one can fail to appreciate. Nor is the benefit of steady prices confined to page 17 Working Men. Employers also find it an advantage to know beforehand all the items of their outlay. From being able to make more certain estimates, they are encouraged to undertake more business; and they can undertake this at a lower cost, without reducing Wages, because the risk is lessened. This activity in business soon reacts upon the Wages of the labourer, until it is shown by yet another instance that Free Trade means Great Trade, and Great Trade means Prosperity. Moreover, through this steadying effect on prices, Free Trade proves itself to be a great security against commercial crises. Fluctuating trade, with all its misery of wasted efforts, savings squandered, homes destroyed, is an evil, which lies far outside the range of any fiscal policy. But, although the cause of fluctuating trade is independent either of Protection or Free Trade, Free Trade at least can mitigate its evil. Wars, excessive speculation, dishonesty, gambling in land—these are among the causes of commercial crises which cannot be affected by Free Trade, and with regard to which Protection is most certainly as impotent. But Free Trade does at least remove one source of danger. It gives a larger area for the production of raw materials, so that no industry is now dependent upon the supply of a single country.

Closely connected with this virtue is the effect of Free Trade in giving a more accurate knowledge of the state of distant markets. A Free Trade country, which encourages intercourse with foreigners, is less likely to mistake its markets than one whose policy is isolation. The danger of producing goods, which are not wanted at the time, is plainly lessened by a closer intercourse with those who are your customers. Free Trade, like Telegraphs and Railways, serves to keep producers and consumers both informed as to each other's needs. Thus, although commercial crises will continue to occur in Free Trade countries, there is perhaps no risk of their resembling some of those in earlier times, when, for instance, a cargo of skates was shipped to the Brazils, and grand pianos lay upon the beach at Valparaiso for the want of storage room, and diamond tiaras were consigned for sale among the savages of South America! Moreover, when the crisis comes, the Workman will be more prepared to meet it in a Free Trade country. In the first place, owing to the greater accumulation of capital, employers will be able to keep business going for a longer time. Secondly, the larger foreign trade will afford a quicker outlet for the surplus stock, and bring the market sooner to its normal state; while, whether the spasm be prolonged or momentary, the workman's greater power of saving and the lower price of his domestic necessaries will both relieve the pressure of the harder times.

This is no imaginary picture. Between 1877 and 1880, England suffered from a Trade depression as profound as any in her history. During that period the writer once counted, within the limits of a page 18 two hours walk outside a midland country town, no less than 16 starving men tramping to find work. But there is no need to multiply instances. That time is near in all our recollections. It was the time of reaction from the artificial stimulus which followed the conclusion of the Franco-German War. It was also itself a time of war in Europe, Africa, and Asia. There was such a famine in Ireland as had not been known since 1846, and for seven consecutive years the English harvest had been bad. Events like these in former days produced the Luddite and the Chatst Riots. Yet during those three years in England there was not one single outbreak. There were splutterings of a disorder in France, Germany and Spain, while in America the workers in the iron trade, the most protected industry of that protected country, suffered such extremities that they broke into actual riot and occupied the town of Pittsburg.

But that is not all. Not only was England quiet when other countries were disordered; but, in spite of her difficulties and in spite of the slackness of work during those three years, there was actually no perceptible increase in the number of paupers. The Working Class largely lived upon their savings. It is hardly possible to offer a more pointed illustration of the working of a Free Trade policy.

Yet all the recent facts of English industrial history point to the same conclusion. Crime has diminished; pauperism has diminished; the deposits in the Savings' Banks have increased; the funds of the Friendly Societies have increased; the consumption of domestic articles in common use, per head of the population, is nearly three times what it was in 1840; the rate of mortality has declined, so that on an average a man lives two years and a woman three and a half years longer than they used.

Where, we may ask again, is it possible to get an accumulation of facts like these to support the contrary conclusion of Protectionists that Free Trade has injured the Working Classes?

No doubt Protection in a young country and Protection in England are supported by very different arguments; but English experience is at least of so much value that it justifies us in putting Protectionists to a proof of their assertions. They tell us that Free Trade creates monopolies; they tell us that Free Trade increases profits at the expense of Wages; they tell us that Free Trade produces paupers! The contrary has been the case in England! Let them prove their statements! And surely, too, there is something reasonable in holding to a policy which has already done so much? Terrible, indeed, is the present misery of the poor in England, and little enough has been their improvement, even measured by a low ideal, so that it is hard to see things as they are without desiring something like a revolution for the better. Still, the fact of an enormous progress must be kept in page 19 view; progress which may not be recognised until comparison is made with the former state of things. As Mr. Giffen warns us—"Discontent with the present must not make us forget that things have been so much worse."

It was said earlier that the particular requirements of the Working Class are (1stly) High and Steady Wages, (2ndly) good and convenient dwellings, (3rdly) provision against sickness and old age.

So far an attempt has been made to show the effect of Free Trade upon the first of these requirements only; and the argument, if it has been followed, leads to these results:—That Free Trade has only an indirect influence in making Wages high by increasing the national productiveness, but that with respect to the steadying of Wages it produces a direct effect by widening the area of production. This equalises markets, cheapens the articles of common use, and lessens the danger of commercial crises. Consequently Free Trade benefits the Working Class in two ways, indirectly by increasing the aggregate of a country's wealth, and strengthening the workman in obtaining his share, and, directly, by steadying Wages and reducing prices.

We have now to examine the attitude of Free Trade towards other Working Class grievances. Mention has been made at the conclusion of the last section of the diminution in the number of these grievances, and the growing improvement in the condition of the poorer classes. But much still remains to be done, and much which cannot be affected either by Protection or Free Trade. Crowded homes, an existence without pleasure, an insecure old age, ate causes of complaint which cannot be removed by any changes in a fiscal policy. No mere tariff reform will give the poorer workmen healthy and convenient dwellings, or find them openings for secure investment, or relieve the monotony of their dull existence.

But, if Free Trade provide no remedy for many social grievances, it offers no hostility to any that may be proposed. Its attitude towards social questions is completely neutral. For Free Trade is not a principle of Government, but an expedient of commerce. It is an expedient of commerce, just like credit or bank notes, of which the special function is to cheapen produce and to level markets. Within its proper field, which is that of production, it justifies the utmost competition, and proves the value of allowing the greatest freedom in the choice of occupation and in the manner of exchange. But to carry the doctrines of Free Trade from the field of Production into that of Distribution inevitably leads to anarchy.

This is a doctrine which many writers on Free Trade have been unwilling to accept, with the result, as has been said earlier in these page 20 pages, that their peculiar views have come to be connected with the doctrine of Free Trade, and that Free Trade is in consequence discredited among Working Men. Accordingly, before pointing out in detail the lines of social reform, which in a Free Trade country men have the leisure and the means to follow, it will be desirable to explain the scientific distinction between the application of Free Trade in commerce and the application of similar principles to general Government, and, more particularly, to illustrate and to enforce the radical distinction between the ideas which may be applied in the Production of Wealth and those which may be applied in its Distribution. Working Men have always insisted, by their actions, if not by their words, that the Production and the Distribution of Wealth stand upon different planes, so that the rules, which may apply to one, may be totally inapplicable to the other. Some Free Traders strenuously denounce this doctrine, and, strangely enough, invoke the experience derived from the practice of Free Trade to justify their denunciations. And yet the contention of the Working Classes is no less sound in theory than it is true in fact. The Wages of Labour and the Price of Goods are not in fact now, nor have they ever been, determined by the same forces; nor is that condition of free and equal competition, which political economy assumes in determining the Laws of Production and Exchange generally, if ever, present in determining what portion of the Product the Labourer shall receive in Wages. That effective competition, which is the fundamental assumption of abstract Political Economy, does not exist between the two classes of Employers and Labourers. The Laws of Production and Exchange can be rigidly determined if we start with the assumption of free and universal competition; but when from the very nature of the case there cannot be an effective competition, then we must seek for different Laws by examining the different conditions. This is the theoretic distinction between the field of Production and the field of Distribution. Buyers and sellers may, for the purpose of an abstract argument, be presumed to stand towards each other on a footing of equality; but to assume that the competition between the employers on the one hand, and the Wage-receivers on the other is a competition between equal units, is so fanciful and contrary to fact that any conclusions drawn from such an assumption have little value under present circumstances.

Very slight consideration will show how misleading it may be to apply the principles which determine the Price of Goods to determining the Wages of Labour. The value of human Labour cannot be determined, like that of a commodity, simply by the higgling of the market Labour cannot be stored, moved, or sampled like a bale of goods. As Mr. Frederick Harrison puts it—"For those who have commodities to sell there is a true market Here competition acts rapidly, fully, simply, fairly, it is totally page 21 otherwise with a day labourer, who has no commodity to sell. He must be himself present at every market, which means costly personal locomotion. He cannot correspond with his employer: he cannot send a sample of his strength: nor do employers knock at his cottage door. Moreover, when buyer and seller meet, the bargain is made: his price is paid: the goods change hands: they part: the contract is complete: the transaction ends. But the relation of employer and employed is permanent, or at least continuous. It envolves the entire existence of one at least; it implies sustained co-operation. This is no contract to sell something, it is the contract to do something; it is a contract of partnership or joint activity; it is an association involving every side of life."

These words contain the kernel of the Labour question, which Free Traders are apt to overlook. And yet, if we would persuade the Wage-receivers to support Free Trade, it cannot be too often repeated that such sentiments are not at variance with the teaching of that policy. Free Trade justifies unrestricted competition only within the field of Production, because within that field there is a competition between equal units. But within the field of Distribution, the competition is between unequal units. There is some approach to an equality between those who buy and those who sell commodities. Goods and Capital can both be moved from place to place, and the postponement of a sale or purchase leads only to a loss of money. But between the labourer and the employer equality rarely exists. The labourer is tied down to certain places by the ties of home, association, or necessity. He is seldom capable of any but a single occupation, at which he must find work or starve. Therefore, although Free Trade may be an expedient of great value in furthering the Exchange and the Production of Goods, it does not follow that the same policy should be applied in respect of their Distribution. Unlimited competition may be good in the one case, and evil in the other. Upon that Free Trade gives us no guide for pronouncing a judgment. Free Trade has a particular province, and within that province the practice of Free Trade has proved the benefit of competition being unrestricted by law. But Free Traders need not therefore make a Deity of Competition, and forbid us to regard its ravages. There is nothing in Free Trade which says that competition ought to be the governing influence of social life, "Rather," a Free Trader is inclined to say, "competition is a force of nature like a flood or a gale, which, in Bacon's phrase, 'Man must obey so as to command.'"

To hold otherwise, and to justify the reign of Competition pure and simple in the regulation of the Labour Market, is to reject experience. There is no period in English History in which the labourer has been left entirely unprotected in making terms with page 22 an employer. "Custom," as John Stuart Mill observed, "has always been the great protector of the weak against the strong." Many illustrations of this saying might be given if it were necessary, from the example of the growth of villeins into copyholders down to the example of a benevolent despotism, founded upon custom which may be seen in many English parishes at the present time. The artisan population has also been similarly protected. In the old days of domestic industries, the Trade Guilds, the power of which rested mainly upon custom, helped the labourer to a better footing, and prevented unscrupulous men from taking advantage of his weakness. But the Trade Guilds broke down before the accumulation of capital and the growth of foreign trade, while the introduction of machinery and the adoption of the factory system inaugurated an entirely new industrial era. A new set of employers grew up, with no high traditions of their class, and no public opinion to restrain them in their dealings with workmen. The consequence was that for some sixty years—from 1770 to 1830—the relations between employers and employed were largely determined by an unrestricted competition, with a result so frightful in its cruelty and horror that the experiment will never be repeated.

At last it was perceived that, under these new circumstances, legislation was imperative, in order to protect the workman. Then began the long series of enactments designed to place the workman more on an equality with his employer, such as the Factory Acts, the Mining Acts, the Friendly Societies and Trades Union Acts, the Education Act, the Employes Liability Act, the Pawnbrokers Acts, the Irish Land Act of 1881, and many others. These were all, in the strict sense of the word, Socialistic measures. They invoked the intervention of the State to remedy artificial irregularities. They were all of them, as was said early in these pages, opposed in the name of Free Trade as an interference with Freedom of Contract. In reality they were attempts to establish a real state of Freedom, in which the stronger party to the bargain could not take advantage of the other's weakness. This sort of legislation is not ended yet. So long as there are any who are forced by external circumstances, in whose ordering they have had no voice, to start in the struggle for existence handicapped by want of education: so long as there are others who are weakened in the power of self-improvement by the conditions of society: so long as the State maintains any institutions which directly or indirectly cause to others physical misery or mental darkness: so long it will be the duty of Free Traders and Protectionists alike to agitate for a policy of action, which may bring us nearer to the time when inaction can be justified.

Thus far, we may claim to have shown that the practice of Free page 23 Trade opposes no obstacle of principle against a legislative remedy for the evils of unequal Distribution. It is not the purpose of this Pamphlet to advocate particular measures of social reform. It is enough at one time to point out that those reformers, who are following Protection, are being lured by a false light upon a wrong path. Legislation may, or may not, provide a cure for social evils. That is not a matter upon which Free Trade provides an answer. Towards legislation on such questions as the Eight Hours Movement, the prevention of Chinese Immigration, the settlement of the People on the Land, the attitude of Free Trade is neutral. It clears the ground for other agencies to work, and does not, of itself, build up the edifice.

Nevertheless, it should not be forgotten that, under a policy of Free Trade, there are strong tendencies at work towards social improvement, the efficiency of which would be materially impaired by Protection. These tendencies exist independently of legislation, although the influence of some of them might be extended by legal measures. But, for the present, it is not necessary to consider how far legislation can ameliorate the condition of the poorer classes. For the moment, we need only point out, what Protectionists apparently forget, that, even under the present industrial system, there are some tendencies at work towards social improvement both in the field of Production and in that of Distribution. After enumerating these we shall be able to judge whether their influence is greater under a Protective or a Free Trade policy.

In the first place, as telegraphs, railways, and steamships bring together the markets of the world, uncertainty as to the supply, which is the main element of gambling, tends to be eliminated. The China tea trade furnishes an illustration. In the old days of sailing ships, and before the telegraph, that trade was in the hands of a few merchants, who, from their large capital, could afford to leave a wide margin for their great risk. Now, however, thanks to the policy of Free Trade having allowed the English nation to make use of superior means of intercourse, the price of tea in China can be accurately fixed according to the state of the demand in London. Purchases are consequently made to meet actual orders, and the trade is distributed among men of smaller means. The same thing is taking place every year in other trades, so that in this respect, at any rate, there is a lessening of the danger of producing unsalable articles. Improved means of locomotion are tending everywhere to steady markets by bringing together the producer and consumer, and by making the supply of any article adjustable to the demand for it.

But of what advantage are facilities of intercourse with other countries to a nation which shuts itself within the wall of a protective tariff? No doubt in a protected country producer and consumer are near enough to know each other's wants, because the page 24 tariff shuts the door on foreign trade; but it is not enough to be able to calculate Demand alone, unless one can also calculate Supply. The home Demand of any country can be accurately estimated, whatever may be the fiscal policy; the problem is that the Supply should be adjusted accurately to that Demand. Under a Free Trade policy, every improvement in the means of intercourse gives assistance in the solving of this problem; but under a Protective tariff the Supply is drawn from limited and uncertain sources, and can find no outlet if it is excessive. Gluts and scarcities in consequence alternate, and the manufacturer is driven to relieve himself by periodic slaughterings of his suplus stock in foreign markets. The same thing will no doubt sometimes happen in a Free Trade country: that is not denied, nor is it in question in the present argument. Free Traders do not claim that their policy prevents commercial crises, but only that it removes some of their causes, and that it mitigates their ill effects. And, in particular, it lessens the chance of a commercial crisis arising from an inability to calculate markets, because it enables a nation to make the fullest use of every mechanical invention which brings nearer together those who are far off.

This suggests another expedient for adjusting the Supply to the Demand, which, although at present in its infancy, is already in successful operation, and promises to be the most important agency of moral and material growth, namely, the principle of cooperation.

Co-operation, if we analyse its working, is only another expedient for bringing together the producer and consumer. In Cooperative Distribution, the consumer buys his goods directly from the manufacturer, and thus saves for himself what would have been the profit of the middleman. In Co-operative Production, the workmen gain the total profit of the article produced. By becoming their own employers they reap the full advantage of their work, and at the same time they have themselves alone to blame for any misdirection of their labour. As yet, however, Co-operative Production has very rarely been successful—the Rochdale Cotton Mills are perhaps the only exception—but the reason of this has not been any fault in the system, but in those who worked it. The greatest friend to Working Men is not he who is afraid to blame their failings, and it must be said that workmen up to present time have not succeeded in industrial enterprises. They have shown a want of those qualities which make up business aptitude, decision, patience, confidence in a leader, knowledge of the markets, so that, although Co-operative Production is, we may believe, destined to be the most important civilising influence which has yet appeared in the industrial system, attempts in that direction have at present failed, though a lack of the necessary moral qualities on the part of those who undertook them. The page 25 principles of Co-operation are, however, already at work, and their field is widening every year. Fortunately, also, they can work independently of any fiscal policy, with a beneficent influence which even Protection cannot weaken.

Thirdly, in addition to Co-operation and the improvement in the means of intercourse, there is yet another tendency at work within the field of Production to remove the evils which arise from misdirected labour. This is the continuing elevation in the average standard of comfort.

Everybody knows that one very disastrous cause of fluctuations in trade is the incalculable variety of fashion. For example, many men and women engaged in the Irish poplin trade, or in the manufacture of Bradford goods (to take another instance) have suffered the greatest misery, simply on account of a change in the caprice of a few women in London. Now, without necessarily offering suggestions on a matter of feminine costume, it may yet be pointed out to those, who think that there are no signs of improvement in the industrial world, that every increase in the wealth of the poorer classes tends to make Working Men more independent of the whims of fashion. As the standard of the poorer classes rises, their expenditure is chiefly upon necessaries, or upon those small luxuries, such as music, books, household ornaments, which, to a civilised man, make up three-quarters of his necessaries. The demand for such things will always be steadier than the demand for extravagant fopperies, and will increase with every improvement in general well-being. A clothing manufacturer, for instance, is much more certain of a steady trade with one thousand customers of the poorer class than with one hundred rich ones. The fancies of the rich will alter every season, but a class which has once worn broadcloth is never likely to go back to fustian.

Summing up, then, this branch of our enquiry, we find three tendencies at work to steady trade and to prevent the production, of unsaleable goods, namely, improvement in the means of locomotion, co-operation, and the more general diffusion of wealth. It is not, therefore, necessary to believe that Protection is the only remedy for industrial evils.

Passing now away from the field of Production, we can trace similar tendencies at work within the field of Distribution. It would be impossible and out of place at the conclusion of this Pamphlet to give a full account of all the methods by which Labour can protect itself. But, in view of the frequent assertion of Protectionists that Labourers must sink from bad to worse under a Free Trade régime, it is of use to show that the only means by which labour can obtain its proper portion of reward is something independent either of. Protection or Free Trade.

page 26

Combination is the Workman's only source of strength. But Combination must not be entirely on one side.

Employers often give this answer when Trade Unions ask for higher Wages:—"The competition among ourselves is so severe, and the rate of profit is already cut so low, that it we give you higher Wages we shall have nothing for ourselves." That may be perfectly true, but the employers have the remedy in their own hands. Let them say to each other—Stop this reckless competition, and form a Union among ourselves to keep up rates or prices (as the case may be) to such a point that we can afford to give our Workmen reasonable Wages.

But, it will be said, this is an organisation of Employers and Workmen to benefit each other at the expense of the consumer. Undoubtedly it is; but this need not be the hardship that it looks; because, if the Workmen ask for an unreasonable Wage, so that prices have to be put up to an excessive height, consumers will join with other producers in a system of co-operation. It freights, for instance, should be raised too high, the merchants will become their own carriers; or, if the price of boots and clothes became excessive, a body of tailors and bootmakers would find it to their interest to agree together to supply exclusively the other's wants. Moreover, any scheme of combination must ultimately break down if public opinion is against it. One man may successfully defy public opinion, but a large number of men would find it impossible to sustain demands which were manifestly unfair to the rest of the community.

But who shall decide upon the question of their fairness? Public Opinion! But not a public opinion like that which now prevails, and which justifies adulteration and bad workmanship, until these quite obliterate the limit of dishonesty and overreaching; but a larger and healthier Public Opinion, under which each class will rise to a higher conception of the duties which it owes to others. The Workman then would be ashamed to offer as an excuse for his bad work the silly reason that another man will have to be employed to remedy his wilful error: the employer will realise that he has other duties towards his men besides the paying them good Wages, and that he stands to them in the position of the leader of a band of comrades; while the consumer will not then think only of the price of what he buys, but whether it was made by honest men and honest means—a Public Opinion, in fact, through which the man who enriches himself by grinding wages down—by "sweating," for example—or he who by cornering or any other form of speculation, creates an artificial scarcity, and makes men pay, in consequence, a price which is out of all proportion to the ordinary value of the service that he renders, will be marked with the same infamy as one who follows a disgraceful calling or a convicted felon.

Such a state of things, as yet, is only dimly shadowed in the page 27 future, so that it may be perhaps absurd to talk and argue about that which seems at present both fantastic and impossible. Yet, surely, it is not entirely idle to attempt to picture to ourselves the goal of our improvement, if that should help us to remember that they are wrong, who tell us we are drifting into chaos? Material agencies are everywhere at work to elevate the individual, and with a wider moral growth each class will learn to recognise its duties. Duty, not self-interest, is the strongest influence in social progress. But, although the first result can only be attained through a more active moral development, there are, in the meantime, certain political objects, which we may immediately pursue in preference to Protection. There are certain objects of desire which neither the widest Free Trade nor the strictest Protection could succeed in giving to the poorer classes, but which might become more easy of attainment through the means of legislation.

This is not the place to elaborate a theory of State interference. But, since Free Traders are accused of being fanatical adherents of that theory, which would confine the action of the State to keeping order and administering affairs, it is well, before mentioning particular cases, to state summarily and without reference to other theories the general principles, on which Free Traders might justify a more active interference by the State.

The State exists in order to secure Liberty: that is to say, to bring about conditions under which every citizen can at all times do that which is best. Having provided these conditions, the function of the State is at an end. Other influences must determine what is Good or Bad, and must supply the motive which would make men choose the former. Philosophy and Religion begin their operations upon the ground which the State has cleared; but the action of the State should not interfere with the work of either. It consequently becomes one part of the business of political science to define the limits, within which the State can act without trenching on the province of moral agencies. It is not necessary now to show in detail where those limits reach. It is enough for our present purpose to mark them in rough outline. Laws exist to prevent men unduly interfering with the individual freedom of their fellow-citizens; or looked at in another way, a Law defines a sphere within which each man's will may work with complete freedom. What then determines the exact amount of interference with individual freedom, which is necessary for the advantage of society? To that we answer—"Experience, and a clear sense of what is needed by the individual, in order that he may attain to a full and harmonious development. Whether this clearer sense of what is needed is evolved by inherited instinct, or whether it is due to the inspired direction of sacred writers matters not to the State. All that the State has to do is to see that such social conditions exist that Society may satisfy its wants, so soon page 28 as it becomes aware of them, and so soon as it is certain that their satisfaction is necessary to human development. This is the utmost which the State can do. It must not attempt to decide for Society what moral influence should guide its judgments, still less must it interfere with the free determination by every individual of the guiding principles of his own life. Consequently, every act of the State is bad, which weakens the motives to self-improvement, either by unnecessarily taking away a duty which is owed to others (as, for instance, the care of children), or by preventing the full play of the human instinct towards self-development. A Law which forbids men to think as they like, and to express their thoughts with a due regard to the public order, is bad on the same ground that a Law would be bad, which weakened individual self-reliance, or which removed the motives towards thrift and industry.

It would seem, then, that the principles by which any act of State Interference should be tested maybe summarised as follows:—
1stly.The State ought in no case to weaken the motives for morality.
2ndly.The State should not do that which might be done as well by private persons.
3rdly.The State should never act in such a way as to weaken individual self-reliance.

But where the object to be gained is one of national importance, which the efforts of individuals cannot accomplish, and when it can be gained without discouraging any from making efforts on their own behalf, or from entering into Union for a common purpose, then all the conditions are present whose presence is required to justify State action. Or to express the same thing still more shortly, we can ask, as the ultimate test of the goodness of every Law—Does it help the development of man's moral nature?"

It is not the purpose of this Pamphlet to enquire at length what further applications of these principles may be required; but only to bring before the mind of those who, from disgust at the present state of things, may be attracted towards Protection, that there are other legislative remedies still untried.

In the first place, the resources of legislation are not yet exhausted as regards the question of the Housing of the Poor. Where overcrowding is a desperate evil, with which, owing to the high price of land, private enterprise has shown itself incapable of grappling, legislation need not weaken individual self-reliance. Any Municipality might be empowered to do, as the Board of Works in London has already done, indirectly, in the case of the Peabody Buildings, viz., to buy up land, and let it to Building Companies under certain conditions. These companies should be limited to a certain rate of profit, so that rents could not be raised page 29 indefinitely, and that Workmen could be decently housed, at a moderate price in the centre of a city. But this is a question in itself of immense importance, and one quite worthy of occupying all our minds, without the distraction of a noise about Protection.

Then there is the question of Recreation: whether Government cannot do something to relieve the dreadful dreariness in which so many pass their lives. Free Libraries, subsidised theatres, public concerts: any of these are things more worth considering than a flat unprofitable squabble about tariffs.

Then there is the question of insurance. It has been remarked that "many of those who talk about insurance overlook the fact that thrift may often brutalise a man as much as drink. That is to say that a man may make huge efforts to save and raise himself, and so become narrow and selfish and careless of his fellow men." We ought, therefore, to consider whether the Government can overcome this moral danger by helping men to insure themselves on easy terms. It may be that this cannot be done at present; but it should none the less be borne in mind that various schemes have been proposed, and that some are even actually at work, any one of which at least deserves attention.

Then there is the most important question of Taxation—whether it is not wise to check the dangerous accumulation of wealth in single hands; and whether it is not possible to do this, without unduly checking the stimulus to saving. This is a question of enormous difficulty, and one not to be solved without a patient and laborious study into that most difficult of all economical questions—the manner and the causes of the Distribution of Wealth. Closely connected with this is the question of the Land. By what means is it possible to secure to the body of the community a fair portion of that increase in the value of land which is caused by the natural growth of the State? It is simply astonishing to see so called Working Class politicians clamouring for Protection, while they do not lift a finger to remove that great cause of poverty—speculation in land. A Land Tax assessed on the true value of the Land, as determined by periodic valuations would do far more to encourage native industry than the most ingenious tariff; while, if our Railway Policy and our Land Policy went hand in hand, so that the Railways might be paid for from the increased value of the land through which they passed, it is no rash prophecy that the name Protection would never be heard again in New South Wales.*

Finally there is a question of Administration, which to a Democratic country is more important than any other, and here any

* As an illustration, suppose that the Government, before constructing the Illawarra line, had resumed to a depth of say 1000 feet on either side of the permanent way, as far as George's River. The profits from the sale of this land after the line was made would almost pay for the construction of the whole railway. The same principle might be applied to all suburban lines.

page 30 legislative efforts are directly aided by a Free Trade policy. Free Trade will not give us, of itself, a honest and capable administration; but it does not, like Protection, offer a direct encouragement to political jobbery. The Legislature in a protected country cannot fail to be beset by many sturdy beggars, each eager to obtain a tax upon his special article, and ready to pay money freely to any who will help him to obtain it. Under Free Trade this temptation to corruption is at least removed, and by so much is a country which adopts Free Trade the more likely to obtain the services of Statesmen—the services that is of men who see what the people need, know what they ought to have, and by patient self obliteration become competent to give it.

These, then, and not Protection, are the political questions of the day—Land, Taxation, and Administtation. Even when the utmost has been done in each of these reforms, much will still remain which is beyond the power of Legislation. But in the meantime, and by the side of Legislation, there are growing tendencies at work towards better things, among which the influence of Free Trade is certainly not least important. Free Trade undoubtedly cannot accomplish everything, since many of our desired reforms lie quite beyond the scope of any fiscal policy. But Free Trade does what Protection cannot do, when, by the stimulus it gives to trade, and by the steadiness it gives to prices, it betters the condition of the poorer classes, and helps them in the use of other means of rising. The issue between Protection and Free Trade ought to have been settled long ago. The question of the Land, of Taxation, of Administration—these, and not Protection or Free Trade are the really pressing questions of the day. Let Protection alone. It is a "dead and disgusting doctrine," which ought long ago to have been decently interred. Protectionists are wasting time in asking for a tariff now, and turning men's attention from important matters.

Free Traders are alive like them to the evils of our industrial systems, but they refuse to follow a quack remedy. The grievances of Protectionists are real enough, but they are only aggravated by the proposed cure. Let Protectionists and Free Traders end their empty quarrel, and join in a common effort to establish and sustain democracy. Free Traders are not, of necessity, advocates of the established system, and enemies of the poorer class. Rather they may say to the Protectionists—"We aim with you at common class ideals: we will work with you in everything except that matter of the tariff, and we ask from you in turn a similar support."


page breakpage break