F.—ECONOMIC SCIENCE AND STATISTICS. 1638 
The form of the long-run idea with which we are most familiar in 
England is the concession which Mill makes, as he says,‘ on mere principles 
of political economy,’ with respect to the possible wisdom of imposing 
protective duties ‘in hopes of naturalising a foreign industry in itself 
perfectly suitable to the circumstances of the country,’ 7.e., as he goes on 
to say, ‘ where there is no inherent disadvantage.’ 5° This, the so-called 
_ ‘Infant Industries’ argument, I need not further elaborate. Mill recog- 
nises that such a policy involves a burden so long as the new industry cannot 
stand without protection ; but ‘a protecting duty will sometimes be the 
least inconvenient mode in which the nation can tax itself for the support 
of such an experiment.’ It may be remarked that Mill’s statement of 
the economic and psychological difficulties under which a new industry, 
in itself perfectly suited to a country, will ordinarily labour, is nothing 
more than what Hamilton had said fifty-eight years before. *! Neither 
of them mentions a consideration which modern business has made of 
vast importance: the greater economy of manufacture which large-scale 
production enjoys owing to the wider distribution of overhead charges. 
The form in which the same idea was presented to the German public 
_ by List was of more philosophical generality. It is summed up in the 
- contrast between a policy based on present ‘ exchange values ’"—which is 
his not unjust way of paraphrasing the language of Adam Smith—and a 
_ policy based on ‘ productive powers.’ By suffering a present loss, a country 
may secure for itself a permanent source of wealth, which may repay, 
many times over, the initial loss. 
is I do not propose to enter into the tangled and highly controversial 
_ question of the extent to which the policy of protecting infant industries 
or developing productive powers has been or can be wisely applied in 
_ particular countries, at different stages of development, and with varying 
physical resources. I do not forget what is said, and said with a good deal 
of obvious justice, about the selfishness of particular interests, and about 
infants not growing up. It is not necessary to substitute for the belief in the 
_ necessary beneficence of human selfishness under free trade any belief 
in the necessary beneficence of human selfishness under protection. But 
it is fair, I think, to say that experience, since the time of List and Mill, 
is not altogether barren of what may reasonably be regarded as successful 
_ applications of the List and Mill principle. As my purpose is merely to 
_ examine the free trade doctrine of Adam Smith and of the century follow- 
_ ing as a piece of abstract argument, I will take only one case. 
The tariff history of the United States has long been the happy hunting- 
_ ground for those who sought evidence of the sordidness of protectionist 
politics. The conjunction of the development of vast physical resources 
_ with the working, for the first time on a big scale, of practical democracy, 
created conditions not always favourable to political virtue. ‘ Lobbying’ 
has become a term of such evil sound that to some minds it makes further 
2 argument unnecessary. 
___ If, in this sea of dubious issues, any writer can be supposed to steer 
a judicious course, I suppose it is Professor Taussig, the colleague by whose 
side I was proud to serve many years ago at Harvard. In successive 
50 Bk. V., ch. x., p. 1. 
51 See the ‘ very cogent reasons’ set forth by Hamilton, p. 29, seq. 
u 2 
