F.—ECONOMIC SCIENCE AND STATISTICS. 165 
An obvious case in point is India, in its new constitutional character. 
In 1922 the Indian Fiscal Commission, after pronouncing for a policy of 
protection ‘with discrimination,’ recommended the appointment of a 
Tariff Board to exercise that discrimination, and laid down the principles 
by which it was to be guided. And the very first is : ‘ The industry must be 
one possessing natural advantages, such as an abundant supply of raw 
material, cheap power, a sufficient supply of labour, or a large home market.’ 
In this present year the Indian Tariff Board has made its first report 
on a specific industry. It recommends protection for the Indian ‘steel 
industry on these grounds: ‘ India possesses great natural advantages 
for the manufacture of steel, owing to the richness and abundance of the 
iron-ore deposits and the comparatively short distance which separates 
them from the coal-fields. The natural advantages are so great that even- 
tually steel manufacture in India should be possible at as low a cost as in 
any other country.’ Perhaps I had better say that I have no opinion on 
the particular proposal myself. I do not know whether the rich and abun- 
dant iron-ore deposits do in fact exist. But if they do, they are what the 
ordinary man means by ‘ natural advantages.’ 
To the Smithian economist, need I say the only proof that a country 
has an ‘advantage ’ is the fact that it can produce more cheaply? ‘Advan- 
tage ’ with him is a comparative not a positive idea. And yet it carries 
with it an implication that does not necessarily belong toit. In this respect 
it is like the biological conception of the ‘ fittest ’ to survive, or, to come 
nearer home, the economist’s employment of‘ utility.’ ‘ Advantage’ 
suggests that its possession is necessarily a good thing for the country 
which has it. But, in the comparative sense, every country which has a 
foreign trade at all must have an ‘ advantage ’ of some kind or other, or it 
would not be able to export. Anything which enables it to produce 
exports more cheaply than it is worth while for the importing country to 
produce them is an ‘advantage.’ Read Professor Taussig’s books: you 
again and again come on the idea that the reason why the United States 
should not enter upon this or the other branch of production is that the 
commodities in question—e.g. beet sugar—are more cheaply produced 
abroad by docile, unintelligent labour: ‘an inferior class which is 
utilised, perhaps exploited, by a superior.’ He comes as near contempt 
for them as is possible for a humane man. But if, in the interchange of 
American machinery for European sugar, America’s advantage is in its 
high-grade labour, by parity of reasoning the economic advantage of Europe 
is in its low-grade labour. And while this may be a reason for satisfaction 
on America’s part, it is not so evidently a reason for satisfaction on Europe’s 
part. P 
And, indeed, as soon as we begin to take a large view of history, it is 
quite certain that the utilisation of comparative advantages has sometimes 
been either a curse or a very mixed blessing. We are all familiar with 
Polish corn as supplying something like a local habitation and a name to 
the argument as to comparative costs. 4 But there is reason to believe 
that the export of corn from the Baltic lands to the countries of Western 
Europe was one of the causes for the depressed position of the peasant of 
54 See e.g. James Mill, Hlements (1821), pp. 84-88, 135-137; followed by J. 8S. Mill, 
Principles, Bk. III., ch. xvii., § 2. 
