A P.llIEF EXAMINATION OF FREE-TRADE PRINCIPLES 301 



Commenting on this famous dictum, "The Free-trade 

 Movement " says — 



"No lauguuj^e can state thi^; principle of the efficiency of 

 exchange more simply or i'orcihly than that of Adam Smith." * 



He thon Inllows with this — 



"The increase of utility derived l)y specialising' production is 

 regarded hy economists us tlic greatest advantage gained by trading, 

 bat protective tarilfs prevent tliis gain by checking the importation 

 of goods whicli a country can produce for itself though at a greater 

 cost. Canada has a sparse population, and a soil well suited for the 

 production of corn, fruit, and timber; (Jreat Britain has a dense 

 population, vast capital sunk in machinery, and with her minerals 

 and industrial skill she is specially adapted for manufacturing. 

 If Canada devotes herself by preference to Agriculture, and Great 

 Britain to manufactures, by free interchange both countries will 

 be wealthier than if each endeavoured to supply its entire wants 

 in both departments of industry." f 



The Famous Free-trade Dictum 



These are mere generalisations, and they deal only with the 

 abstract principles of a complicated science ; nevertheless, they 

 are useful in that they fiirnish a plain pronouncement of policy 

 based upon Adam Smith's dictum, from an avowed Free-trader, 

 on one of the most important points connected with economic 

 science. 



Great Britain, owing to her dense population and vast 

 capital sunk in machinery, is to manufacture, while other 

 nations are to grow our corn, fruit, and timber for us. We are 

 to be lords of manufacturing industries, and they — lords of the 

 soil. This is the interpretation of the famous passage in the 

 " Wealth of Nations," and upon it has England been pledged to 

 her present economical system. 



Now, out of such a condition spring so many oljjections, so 

 much loss of wealth, and so much danger, that it would take a 

 far larger volume than this to state one-fiftieth part of the case 

 against so anomalous and perilous a proposal, although, alas ! 

 it must be regretfully admitted that the evil has already fallen 

 upon us, and we are now reaping the fruits of our wrong-doing. 



A policy of this nature carries with it a fundamental eco- 

 nomical error of the first magnitude, and it is, therefore, doomed 

 to destruction. 



* "The Free-trade Movement," p. 198. 

 t Ibid., p. 198. 



