1144 REPORT —1885. 
to recognise fully and frankly the existence of cases in which the industrial interven- 
tion of Government is desirable, even with a view to the most economical produc- 
tion of wealth. Hence, I conceive, the present business of economic theory in this 
department is to give a systematic and carefully-reasoned exposition of these cases, 
which, until the constitution of human nature and society are fundamentally 
altered, must always be regarded as exceptions to a general rule of non-interference. 
The statesman’s decision on any particular case it does not belong to abstract theory 
to give; this can only be rationally arrived at after a careful examination of the 
special conditions of each practical problem at the particular time and place at 
which it presents itself. But abstract reasoning may supply a systematic view of 
the general occasions for Governmental interference, the different possible modes 
of such interference, and the general reasons for and against each of them, which 
may aid practical men both in finding and in estimating the decisive considerations 
in particular cases. Thus it may show, on the one hand, under what circumstances 
the inevitable drawbacks of Governmental management are likely to be least, and 
by what methods they may be minimised; and where, on the other hand, private 
enterprise is likely to fail in supplying a social need—as where an undertaking 
socially useful is likely for various reasons to be unremunerative to the under- 
takers—or where private interests are liable to be markedly opposed to those 
of the public, as is generally the case with businesses that tend to become 
monopolies. 
It would be tedious now to dwell at length on these generalities; but 
there is one special exception to the triumph of the system of natural liberty 
in the civilised countries of Europe which has too much historical importance 
to be passed over without a word in this connection. As we are all aware, this 
triumph has only been decided as regards the internal conditions of industry and 
trade ; the practice of imposing barriers on international exchange, with a view 
to the protection of native industry, still flourishes in the most advanced communi- 
ties, and shows no immediate tendency to come to an end. It is not, I conceive, 
reasonable to attribute this result entirely, as some Free-traders are disposed to 
do, to the incapacity of mankind to understand elementary economic truths, and 
the interested efforts of a combination of producers to prey in a comfortable and 
legal way on the resources of the confiding consumers. I do not deny that both 
these causes have operated ; but, in view of the evident ability and disinterested- 
ness of many of the writers and statesmen who have supported the cause of 
Protection on the Continent or in the United States, I cannot find in them an 
adequate explanation of the phenomenon. 
A part of the required explanation is, I think, suggested when we examine the 
arguments by which Free-trade was actually recommended to intelligent English- 
men at the time when England’s policy was taking the decisive turn in this 
direction, and imagine their effect on the mind of an intelligent foreigner. 
Suppose, for instance, that the intelligent foreigner is studying the Edinburgh 
Review in 1841, when it came forward as a vigorous and decided advocate of Free- 
trade. In the January number he would find the cosmopolitan and abstract 
argument with which we are so familiar; he would learn how, under Free-trade, 
‘every country will exert itself in the way that is most beneficial in the production 
of wealth ;’ how labour and capital will be employed in each country to produce 
those things which the varieties of climate, situation, and soil enable it to produce 
with greater advantage than other countries, so that ‘ the greatest possible amount 
of industry will be kept constantly in action, and all commodities will exist in the 
greatest abundance.’ But in the July number of the same organ he would find a 
recommendation of Free-trade from a national point of view, which, though more 
restricted in its scope, would appear to contain matter no less important for 
practical consideration. He would find that the immediate introduction of Free- 
trade was held to be essential in order to keep what remained of the manufactur- 
ing and commercial supremacy of England. He would learn that ‘the early 
progress of any nation that attempts to rival us in manufactures must be slow ;’ 
for ‘it has to contend with our great capital, our traditionary skill, our almost 
infinite division of labour, our long-established perseverance, energy, and enterprise, 
