September i8, 1890] 



NATURE 



493 



that she manufactured for herself ; and thus her case was con- 

 trasted with England, who could manufacture them more cheaply 

 for her own use the more of her manufactures she sent abroad 

 to buy raw produce ; and for this and other reasons a protective 

 tax did not nearly always raise the cost of goods to the American 

 consumer by its full amount. And, secondly, protection in 

 America did not, as in England, tax the industrial classes for 

 the benefit of the wealthy class of landlords. On the contrary, 

 in so far as it fell upon the exporters of American produce, it 

 pressed on those who had received large free gifts of public 

 land ; and there was no primd facie injustice in awarding to the 

 artisans, by special taxation, a small part of the fruits of that 

 land, the direct ownership of which had not been divided 

 between farmers and artisans, as it equitably might have been, 

 but had been given exclusively to the former. 



I have touched on but a few out of many aspects of the 

 problem. But perhaps I may stop here, and yet venture to 

 express my own opinion on the controversy. It is, that fifty 

 years ago it might possibly have been not beyond the powers 

 of human ingenuity to devise schemes of protection which 

 would, on the whole, be beneficial to America, at all events if 

 one regarded only its economic and neglected its moral effects ; 

 but that the balance has turned strongly against protection long 

 ago. In 1875 I walked up and down some of the streets of 

 nearly all the chief American cities and said to myself as I 

 went— The adoption of free trade, so soon its first disturbances 

 were over, would strengthen this firm, and weaken that ; and I 

 tried to strike a rough balance of the good and evil effects of 

 such a change on the non-agricultural population. On the 

 whole, it seemed to me the two were about equally balanced. 

 Taking account, therefore, of the political corruption which 

 necessarily results from struggles about the tariff in a democratic 

 countiy, and taking account also of the interests of the agri- 

 cultural classes, I settled in my own mind the question as to 

 which I had kept an open mind till I went to America, and 

 decided that, if an American, I should unhesitatingly vote for 

 free trade. Since that time the advantages of protection in 

 America have steadily diminished, and those of free trade have 

 increased ; I can see no force in Prof. Patten's new defence of 

 protection as a permanent policy. I have already implied that 

 I believe that many of those arguments that tell in favour of 

 protection as regards a new country tell against it as regards an 

 old one. Especially for England a protective policy would, I 

 believe, be an unmixed and grievous evil. 



But this expression of my own opinion is a digression. My 

 present purpose in discussing protection is to argue that, if the 

 earlier English economists had from the first studied the con- 

 ditions of other countries more carefully, and abandoned all 

 positions that were at all weak, they could have retained the 

 controversy with their opponents within those regions where 

 they had a solid advantage. They would thus have got a more 

 careful hearing when they claimed that, even though labour 

 migrated more freely between the west and the east of America 

 than between England and America, yet it was unwise to spend 

 so much trouble on protecting the nascent industries of the East 

 against those of England, and none on protecting the nascent 

 industries of the west against those of the east ; or, again, 

 when they urged that, the younger an industry was, and the 

 more deeply it needed help, the more exclusively would its 

 claims have to stand on its own merits ; while its older and 

 sturdier brothers could supplement their arguments by a voting 

 power which even the most honest politicians had to respect, 

 and by a power of conuption which would tend to make politics 

 dishonest. 



Had the English economists been more careful and more 

 many-sided, they would have gradually built up a prestige for 

 honesty and frankness, as well as for scientific thoroughness, 

 which would have inclined the popular ear to their favour, even 

 when their arguments were difficult to follow. Intellectual 

 thoroughness and sincerity is its own reward ; but it is also a 

 prudent policy when the people at large have to be convinced 

 of the advisability of a course of action against which such 

 plausible fallacies can be urged as that "protection increases 

 the employment of domestic industries," or that " it is needed 

 to enable a country in which the rate of wages is generally high 

 to carry on trade with another in which it is generally low." 

 The arguments by which such fallacies can be opposed have an 

 almost mathematical cogency, and will convince, even against 

 his will, any one who is properly trained for such reasonings. 

 J3ut the real nature of foreign trade is so much disguised by the 



monetary transactions in which it is enveloped, that a clever 

 sophist has a hundred opportunities of throwing dust in the 

 eyes of ordinary people, and especially the working classes, 

 when urging the claims of protection as affording a short cut to 

 national prosperity ; and, to crown all, he contrasts America's 

 prosperity with English prophecies of the ruin that protection 

 would bring on her. 



It is true that Ricardo himself, and some of those who worked 

 with him, were incapable of supposing that a doctrine can be 

 made more patriotic by being made less true ; and, so far as 

 their limits went, they examined the good and evil of any pro- 

 posed course, and weighed the good and evil against one another 

 in that calm spirit of submissive interrogation with which the 

 chemist weighs his materials in his laboratory. But they were 

 few in number, and their range of inquiry was somewhat narrow ; 

 while many of those Englishmen who were most eager to spread 

 free trade doctrines abroad had not the pure scientific temper. 



Now at length, however, there seems to be the dawn of a 

 brighter day in the growth of large numbers of many-sided 

 students, in England and other countries, and notably in 

 America itself, where the problems of protection can be studied 

 to most advantage — students who are not, indeed, without 

 opinions as to what course it is most expedient to follow prac- 

 tically, but who are free from party bias, and have the true 

 scientific delight in ascertaining a new fact or developing a new 

 argument, simply because they believe it to be new and true, 

 and who welcome it equally whether it tells for or against the 

 practical conclusion which, on the whole, they are inclined to 

 support. 



But I must leave the subject of competition from outside a 

 nation, and pass to that of competition within. Here the past 

 counts for less ; the present and the future have to work for 

 themselves without very much direct aid from experience. For, 

 rapid as are the changes which the last few years have seen in 

 the conditions of foreign trade, those which are taking place in 

 the relations of different groups of industry within a country are 

 more rapid still, and more fundamental. The whirligig of Time 

 brings its revenges. It was to England's sagacity and good 

 fortune in seizing hold of those industries in which the law of 

 increasing return applies most strongly that she owed in a great 

 measure her leading position in commerce and industry. Time's 

 revenge was that that very law of increasing return furnished 

 the chief motive to other countries, and especially America, to 

 restrict their commerce with her by protective duties to home 

 industries. And Time's counter-revenge is found in this — that 

 England's free trade has prevented the law of increasing 

 return from strengthening combinations of wealthy manu- 

 facturers against the general weal here to the same extent 

 as it has in countries ia which protection has prevailed, and 

 notably America. 



The problem of the relations between competition and com- 

 bination is one in which differences of national character and 

 conditions show themselves strongly. The Americans are the 

 only great people whose industrial temper is at all like that of 

 the English ; and yet even theirs is not very like. Partly 

 because of this difference of temper, but more because of the 

 differences in the distribution of wealth and in the physical 

 character of the two countries, the individual counts for much 

 more in American than in English economic movements. Here, 

 few of those who are very rich take a direct part in business ; 

 they generally seek safe investments for their capital ; and again, 

 among those engaged in business the middle class predominates, 

 and most of them are more careful to keep what they have, than 

 eager to increase it by risky courses. And lastly, tradition and 

 experience are of more service and authority in an old country 

 than in one which, like America, has not yet even taken stock 

 of a great part of her natural resources, and especially those 

 mineral resources, the sudden development of some of which has 

 been the chief cause of many recent dislocations of industry. 



In England, therefore, the dominant force is that of the 

 average opinion of business-men ; and the dominant form of 

 association is that of the joint-stock company. But in America 

 the dominant force is the restless energy and the versatile enter- 

 prise of a comparatively few very rich and able men, who rejoice 

 in that power of doing great things by great means that their 

 wealth gives them ; and who have but partial respect for those 

 who always keep their violins under glass cases. The methods 

 of a joint-stock company are not always much to their mind ; 

 they prefer combinations that are more mobile, more e'astic, 

 more adventurous, and often more aggressive. For some 



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