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Some Thoughts on Protectionism,

And Restraints upon Labour and Industry.

Protectionism, or protection to Native industry, are phrases meaning the prohibition or discouragement by heavy duties of such foreign commodities as may be produced at home. Industries can be protected and encouraged in this way, and it is a very coarse and direct one. There are other ways by which native industry may be encouraged. Drawbacks were given on exportation; that is, the duty leviable on goods was foregone when they were exported. Foreign goods, liable to duty when imported, to be exported had this duty given back upon their exportation. Bounties or bonuses were given for the encouragement of some manufacturers at their commencement, when supposed by the public to deserve them. Advantageous Treaties of Commerce were made with certain countries, and preferences granted which were not page 76 shared in by the rest of the world. Colonies were established, and a monopoly obtained from the colonists for the goods of the country which established them.

These are the principal ways by which it has been tried to make men industrious, and to get for them higher wages than they would have obtained without them. The absurdity of such legislation is so manifest that it is doubtful if anyone ever really thought wealth would result from it. The only cause and reason for it seems to have been a love of hate and of war even in peace, a determination to see who could live the longest on the least wages, to test the country's resources and to needlessly strain the people's strength. One would think that it must have been apparent to everyone that if money is taken specially from a public or private purse to support any labourer, there must be just so much the less left to support others; that his strength must be gained on their weakness, and that unless some other overhanging or unearthly enemy can be named with which this action does battle, it is clearly a blunder.

Yet other means than those above cited, though less direct and powerful, may be used to encourage certain labourers and their industry. Indeed all things are so full of labour no one can name its page 77 extent and fullness; force, labour, the struggle for existence, are common terms and fill all nature, and no one can move without disturbing them. Every law, new or old, be it ever so general, hurts or aids somebody and his interest. The springs of human industry are numerous, and we can hardly say of any that it stands alone. The web of selfish and vicarious suffering is deeply woven among us. The rich should aid the poor and the strong the weak. The presence of and the combat with moral and physical evil so demand. With this we agree; bat when a systematic and legalised drain is made on the resources of one set of men for the benefit of another set of men, who are not poor or weak, such is not only a loss to the community, but seems immoral. When carried to its necessary and proper length it becomes communism.

We may now allude to some of the arguments which have been used, and may have caused these restraints on labour and trade.

1. The notion that they would keep money in the country, and that this would be a benefit. This notion is now seldom heard of. It is at any rate asleep, if not dead. The idea that by compelling a people to keep by them more gold and silver than they could use, to the exclusion of course of other articles, they would be benefited and enriched, was a page 78 peculiar one. Its absurdity was manifest in peace, and in war its extra power if realised would not be great. The amassing of treasure and war material by a government may in some cases be profitable, but to try by legislation to put money into the hands of the people, and to keep it there, also by law, was a most comical undertaking.

2. The opinion that only one or but few kinds of employment in a country are a bar to the people's intelligence, and that this should be provided against, apparently at any cost.

It will not be denied that a country which contains within itself the appropriate natural basis of all industries should, if possible, have that basis occupied by human inhabitants. The trouble is to get the base and the inhabitants. No country contains within itself the elements of such prosperity; and even if one did, a sufficient population does not now exist on the earth to occupy it. Mankind will not increase more rapidly with proctectionism than with free trade, and neither will capital. It would, therefore, be better to wait till they increased sufficiently in the land to be economically usable for the production of the desired commodities. They will then be produced. By violently extracting the capital from some other employment, the particular page 79 article wanted may be got in the country a few years before its natural time; but other articles, which, it may be, are just as necessary, will have to appear on the stage a few years later.

3. It may be said that in an under-populated country the protection of native industry tends to draw men and capital with their industries from other and better-populated countries to it. If 20 men are making linen in London for New Zealand, and if New Zealand suddenly employs 20 of its own people to make the linen, or gives costly inducements, which is much the same, these 20 Londoners may be thrown out of employment, and may come to inhabit New Zealand. Would not New Zealand thus get both the Londoners and the linen? She might. But she might have to pay highly for them. She may have to pay the enhanced price for many years before the Home prices and the Colonial are the same. This difference she will extract from the capital of the Colony, which should have been given to other industries and added to the general wealth. The day of equalisation would be thus retarded, and probably the price of other commodities exported by the Colony would be affected. For if it by its action throw men out of employment in England, and cause them and their capital to leave it, the goods it exports may not find such a good market. page 80 There will be fewer men and less money there to meet them.

4. Protection, it may be said, is a means of keeping population in a country, and dense and numerous populations are desirable for several reasons. For instance, a small population may be conquered or enslaved by a larger one.

There can be no doubt that protectionism tends to keep people on the ground, and the reason above will be backed up by kings, priests, governments and vested interests generally. The opinion is a very doubtful one, however; for a rich and lightly peopled country is probably as hard to conquer as a poor and heavily loaded and probably discontented one, and where an invader stands a good chance of being welcomed. It is not to their numbers but to their courage which a people owe freedom; it is indeed always difficult, and will never pay to conquer a brave nation. Unless under very extraordinary circumstances, it would cost more than their country is worth; and if religion and morality rule in the future, it will never be attempted. Again, it may be urged in plea for a dense population that solitude is not good for man, and that if protection in an under-peopled country attracts population to it, it is well. Man is a social animal, and the colonist might spend page 81 his surplus funds in protectionism accordingly. To be social, many different employments are needed. Society is the better of as many and as high ones as it can afford to pay for. There is, of course, some truth in this. But whether it is the duty of the civil magistrate to compel by legislation the public money to flow in this direction is altogether doubtful. It is the duty of the civil magistrate to keep order in the state, and if he has anything to do with the subject at all, the ruler of the over-populated country should more properly act. It is for his and its benefit that the deed must be chiefly done. Moreover, by burdening the younger community and lowering the income therein, we go so far in making the one country as poor as the other, and thus to weaken the inducements to people to come at all. This social argument is popular in the United States. It seems a very poor one, and shows, what is indeed true, that the freetraders there are pushing their opponents rather hard.

5. It is also urged that men differ greatly in mind and body, and that it is necessary to provide some lighter labour, such as that of the spindle and the loom for the weaker sort. In a large population such people may be considerable in number.

This was a Victorian (Australia) argument, and was used with great earnestness when page 82 protectionism was set up there. Like a good many other arguments in that country, we should think that the less we have to do with it the better. The result has been, at any rate, that there has been always, and is now, just as much light labour seeking employment as before. The cure offered has failed. Light labour and the desire for it, and sometimes for no labour at all, are desires very prone to perpetuate themselves in spite of protectionism. There need be no one in a new country so light as to want employment, if he will take the market price for it.

6. The flourishing state of certain countries, as France and the United States, are urged as reasons for protectionism.

But it may be answered that these countries would flourish still better under freetrade. What they gain by pride they lose by poverty. The United States is flourishing, but not because of protectionism, which impoverishes it just as any other country. The great extent and natural wealth of that country raises the average income of the people, in spite of protectionism, higher than in older ones. Its extent draws also new people and capital to it, which carry it triumphantly through. Were, however, South America as near Europe, and better governed, and under free trade, the competition would perhaps teach a lesson.

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Canada is now, by what it calls a "National Policy," seeking by protectionism, large loans, and public works to bring to and keep within it a large population. It may make a mistake, for if its forests could not, as was true, compete with the prairies of the United States when the incomes of that people are lowered by protection, and their own high by freetrade, they cannot now compete better with the lower income of their protectionism.

Victoria now finds that protectionism and prosperity are not necessarily convertible terms. Her large mass of wealth and compact population and its high income declared for protection. It was thought that this income might be lowered perhaps without injury to her competing power. Since then and in the course of years capital in the freetrade of her neighbours has accumulated faster than in her own borders. She is left behind, and cannot well rise again. Her frantic ravings about breaking up large estates, and building up small ones at the expense of the rest of the community, do not seem to rise to the occasion. Mr. Berry's hysterical martyrdom notwithstanding.

France has flourished under protectionism, but only as compared with other and poorer countries. The soil and climate of the country are far above page 84 the average in excellence. The people are surpassingly laborious and thrifty, and do not increase numerically.

7. From the difficulty of dealing with, what has been called, a one-sided freetrade. Thus, England admits without a protective tariff American corn, but America does not so admit English-manufactured goods. Hence English corn is lowered in price directly by competition, and indirectly by the English manufacturer being thrown idle, and then want of money to purchase. What is to be done in this case? Should England retaliate? We think not, for these reasons:—(1.) Though we can prove to a man or a nation that he and they will gain by buying cheap goods and not dear ones, we cannot compel him or them to buy anything against their will. (2.) Were England to retaliate on American grain she would raise it to her consumers, and this would hurt the English manufacturer. And though the United States market be closed to him, he may have others to which he can turn, and cheap corn will help him so to do. (3.) The evil on England is not so great as it looks. For the non-importation of English goods raises the price of them to the farmer there. Mr. Mongredien thought that in 1879 the seven million farmers there would lose about £120,000,000 on this account. The American cultivates his land at this page 85 disadvantage accordingly, and cannot sell his corn at so low a price as he could without it. His competition is thus weakened. Again, the American manufacturer though bolstered up will not greatly flourish, because the farmer has but little money to buy goods with. The one impoverishes or lives on his neighbour, and both live on a loss. The cotton manufacturers of the States from 1860 to 1878 only increased, it is said, by £100,000. England's in the same time increased by £12,000,000. The United States, with freetrade and the surpassing activity and ability of the people, would be more formidable than now to Britain.

Such are some of the arguments for and causes of the restraints on trade. I will now give in a few words what may, with fair correctness, be called the tendencies and results of such legislation.

1. It tends to collect and keep population on lands when it could not without it find employment up to the general average of wages. This it does by taxing property or anybody it can get hold of, and impoverishing them. It does not now hesitate, and never did, to break the most sacred rights of man. It is therefore a distinct foe to human progress and national development. The problem as far as man can solve it, of national wealth and poverty, of the struggle page 86 for existence, and of physical and much of moral evil, may be stated in one word: Take your labour to the best field; when there, labour industriously; and save the fruits of your labour. As the world grows older the field may grow narrower. But it is not narrow now. There are acres by the million which the civilised eye has never seen. No amount of ancient philosophy or of clumsy modern musing nearer home can tell much farther than that. Economists have inquired into the causes of the wealth of nations; they have inquired also after the stupidity and follies of nations, but they have not perhaps as yet set forth the fact that men have lost more by breaking the first of these rules than they have lost by breaking all the rest they have so keenly enumerated. The light seems now to be dawning on man, that to attempt many kinds of reform without first equalising the population more fairly over the globe, is a too costly, if not fruitless, labour.

Dr. Chalmers and Dr. Guthrie, we have read, stood one day looking down on the Canongate of Edinburgh—"A fine field, sir," said Chalmers to Guthrie. (Opinions might differ about the fineness of the field.) But how did this man of powerful intellect intend his friend of resolute philanthrophy and useful and beautiful oratory to cultivate it? By emigration, weeding, and culling away the page 87 superabundant plants? Not at all; by teaching morals and religion.

2. It leads to ill feeling and possibly wars between countries. Trade is the great material uniting bond of nations. Protection diminishes trade, and hurts good fellowship into the bargain. Protectionism is or produces a modified kind of war. There is no fair competition near it.

3. It benefits kings and rulers generally at the expense of the people. A country where protectionism exists requires clearly more management than a simple and free one.

4. The results of monopoly on the country monopolised upon are sometimes very momentous. One of the most memorable and deadly was that of Denmark on Iceland. Space does not allow me to enter into particulars; but the history of Iceland under the monopoly is instructive. The system gradually gave way and entirely ended in 1854. During its continuance the population sank sometimes as low as 30,000, caused by hunger. The country was also subjected to losses by floods and fire. Against these disasters and without trade or the possibility of trade, the position was hopeless. Under the monopoly their annual exports of wool were sometimes as low as 39,000 lbs. In 1855, and with freetrade, they exported 1,600,000 pounds.

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The cowardly conduct of England towards her colonies in North America, which was of the nature of a most gross restraint on trade, led to that revolution in the New World by which her glory departed thence and was given to another.

Touching the cure for protectionism; we would say, remove the cause. The cause is ignorance; the cure then must be more light, more knowledge, more religion, more morality. We look around, and we hope to see all its fallacies fail. Education prevails; at the fountains of knowledge the millions are drinking. Christianity pursues the human spirit, fights the evil there, and triumphs. Other systems, political and religious, with their sages and their cunning, totter on the steeps of age and doom. The altar and the throne together rent, together fall. And nations old and slow awake to a fruitful life. We look again. And, Lo! under sun, and moon, and starbeams, a huge steamship presses on, she drops her anchor in the silent bay. For the green earth she brings forth a nation. Soon over distant regions stretching sunny and afar the notes of conquering labour are sounding on the ear. On the naked expanse and in the wounded forest, the table is spread. They go forward still forward, and a voice says, Come.