TRANSACTIONS OF SECTION F, 653 
and syfdicated industries tends to deprive Germany and other countries in an 
analogous position of the best natural advantage which they possess in competition 
with the other parts of the world, z.e., of superiority in the cheap and skilful 
production of finished articles. 
3. Free Trade and the Labour Market.!. By Professor H. Dinyzet. 
In the controversy as to how the fiscal system influences the stability of the 
labour market two main arguments come to the front. The Protectionists assert 
that from Free Trade arises (1) the danger of dumping by foreigners; (2) the 
danger that crises may break out at home, and that therefore the labour market 
fluctuates more under Free Trade than under Protection. Both ideas are 
fallacious. 
(1) The Dumping Argument.—There are two kinds of dumping: intermittent, 
occasional dumping, consequent upon over-production abroad; and regular, de- 
liberate dumping arising from the ability of Cartells in Protectionist lands to 
sell in other countries at low prices, 
(a) Over-production dumping is an evil: it creates great disturbance in the 
labour market of the country. It is not, however, abolished by Protection—at 
least not by a system of low duties such as now exists in Germany, and is planned 
for England. Under Free Trade the danger is no greater, in spite of the fact that 
there are no duties to be reckoned with; for a Free Trade country has natural 
protection in that the price of wares which it produces, and for which it has to 
fear foreign competition, remains lower there in normal circumstances than 
anywhere else. In Protectionist lands the duties must indeed be reckoned with ; 
but from them the price of home productions is also higher. If in protected 
countries prices are higher than in Free Trade countries, yet they are exposed, to 
exactly the same extent, to the dangers of dumping. 
(6) Trust dumping, since it is chronic, presents no evil from the standpoint of 
continuity. It does not disturb the labour market now and again, but rather 
causes the working power in the home country to be differently invested than if 
it did not exist. If foreign Cartells sell sugar, iron, &c., permanently to England 
at prices that are lower than those at which the English entrepreneur can sell, 
this is economically profitable to England, for she can buy those goods from the 
foreigner with less national work than would be expended on it if it produced 
them athome. Whether the greater cheapness comes artificially or naturally does 
not matter, 
Some industries may be destroyed or handicapped through free competition, 
but others will flourish the more. 
(2) The Crises Argument.—Kngland was formerly the classical land of the 
crisis, According to the ideas of the Protectionists, this fact had its cause in 
the interweaving of England’s industry with the world’s industry. The world- 
market, they thought, must be far more fluctuating than the internal market, The 
Free Traders maintained, on the contrary, that it was the corn-tax réyime that was 
subject to this accusation, After the fall of all barriers the employment of labour 
would become much more steady. This prophecy has been entirely fulfilled ; no 
land has had less to suffer from industrial fluctuations than England. 
The result of the corn-tax réyime was that English industry rose and fell with 
the ups and downs of the national harvests. The result of the removal of that 
régime was that English industries rose and fell with the rising and falling of the 
world’s harvests, which was much more regular than the national; thence the 
condition of English industry became more regular. 
Free Trade works favourably for continuity ; Protection the reverse. 
(a) The higher the protective tariffs the greater the danger that an extraordinary 
demand may lead to inflation, over-production, and crisis. Safe from foreign com- 
! Published in the Heonemic Journal, 
