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"... Being, in fact, consistent in nothing excepting in his obstinate determination to follow the opinion he had once formed, in every situation of things and through all variety of risks."—Sir Walter Soott (character of Charles the Bold).

Cobden's Free Trade Reduced To A System Of Free Imports Into Great Britain And Ireland How Unequal Competition Is Practised To Our Disadvantage Depression Under Free Trade Cannot Be Compared With Depression Under ProtecTion—the "peculiar" Features Of Free-trade Depression The Chronic Character Of Its Symptoms Admitted By The Free-traders"free Trade And Plenty""plenty" DePends Upon The Ability To Buy Wages-fund Of United Kingdom Impaired By British Employment Of Foreign Labour Relation Of Excessive Railway Kates To DepressionFree Trade And Reduction Of WagesThe Tendency Towards High Wages When Labour Is Fully Occupied.

§ 3. The results of unequal competition.—Now it is a matter of the first importance to recognise the course which our whole trade has taken, and is taking, under the supposed benign influence of a system of free imports. For it is to this that the full operation of free trade, as now practised, amounts. We are not blessed with that universal free trade which Cobden anticipated for us. Of this the abstract free-traders of the present day are well aware, and therefore, with some degree of propriety, they have changed their front. So far as they regard the problem (in opposition, let it be observed, to Eichard Cobden), it is really of no moment whether we have a universal free trade or not.1 They are quite convinced that free trade reduced to a system of free imports is, under the present circumstances, best for their country; and their grounds, that the country is nourishing under this system of free imports, and that there is every reason to be and remain contented.2 The differences in the conditions between what Cobden predicted and what his followers are compelled to adhere to will readily appear, to any one who cares to ascertain them, fairly pronounced. And we leave the free-traders of to-day to reconcile them.

But this system of free imports may perhaps be best illustrated by the following simple figure. Suppose there are two fields, not very far apart, containing merchants who are bartering their goods. If you may enter either of them without payment, then, as a freetrader, you would infer a condition of equality. But it so happens that in the case of one of them the advantages have been so great that the merchants in it can produce their goods at a less cost than their neighbours. In the hope of crushing their rivals, these merchants proposed that all previous taxes upon merchandise— and food was regarded as the chief of raw productions —should be abrogated, and they succeeded in abolishing

1 All Cobden's arguments for the utility of free trade are founded on the assumption of its being universal.

2 Sir T. H. Farrer in 'Free Trade v. Fair Trade.'


their own. It may also be remarked that the surroundings of their various industries varied greatly, and that out of the disturbance induced by a change in their mutual commercial policy, the predominant manufacturers of the one nation would secure a certain market in the other, while the latter would in exchange supply the former with an equivalent of corn. There would be a displacement of labour; but while the manufacturing country would monopolise the markets of their rivals, the latter, it was intended, should only be permitted to export just enough corn as would ensure "cheapness and abundance" to their foreign brother labourers. This was again and again maintained: that by a free importation of corn, not a single acre of land would be thrown out of cultivation.1 But in spite of the opinion that both parties would be gainers by the change, and in spite of the apparent simplicity of the new policy, the neighbours of the freetraders came to the conclusion that the importance of home manufactures was very great; and therefore, instead of following in the paths of their "generous" rivals, who were quite willing to take in return for their own goods the "natural" productions of a growing community, they not only maintained the existing duties, but in most instances increased them to such a point as to exclude all foreign wares—that is, the balance, after the home markets had supplied the home consumer according to their ability, was only open to the competition of foreign producers. Every facility was thus afforded to the home producer. He has a certain market for his goods, but he cannot supply it completely. His supplies fall short of the home demand. Is there a tendency here in existence which stimulates the home manufacturer in his exertions, so as to equalise the home supply and demand? And yet the economists who presided over the fortunes of the merchants of their rivals, the free-traders, assert that by Act of legislation you cannot create tendencies, and therefore that you cannot promote trade.1

1 "We have no reason to fear foreign competition (in corn) if restrictions are removed."—Cobden, p. 142. "1 have never been one who believed that the repeal of the Corn Law would throw an acre of land out of cultivation."—P. 52. Cobden's attitude towards those who concluded differently to him: "These philosophers, so profoundly ignorant of what is immediately around them, but who meet us at every turn with prophecies of what is going to happen in the future, will tell us, forsooth, that free trade will throw their land out of cultivation, and deprive their labourers of employment."—P. 63.

But while the home supply is gradually approaching the home demand, the foreign imports will gradually decrease, and finally disappear! Then the free-trade economists come forward and say that their merchants must find other markets.

If, then, the merchants in one field have to pay a tax before they can enter their goods for barter in the other, while their rivals are permitted a free entry, it would, we think, appear to most people who are not biassed by the ideal views of free-traders that the conditions are very unequal. Now the idealists assert that "exchange implies equality of value." And thus the free-trade merchants receive the value of their goods, minus the tax which they pay for being allowed the privilege of selling in a foreign market. And thus they contribute indirectly to the exchequer of other nations.

1 Cobden said, "You cannot by legislation add one farthing's worth to the wealth of the nation."—P. 197.

But it will be offered in reply, that no matter the inequality, our free-trade merchants had the balance of advantages, in so far as they could produce at a cheaper rate.

But to understand the gradually changing relations which take place between rival industries, you must closely watch their respective developments. It will then be seen that the protected industries have everything to assist them; their surrounding circumstances are favourable; they have a greater demand than they can at present supply: while the free-trade industries are in the meanwhile becoming trammelled by reason of the fact that "that artificial demand" which was made for them by legislation, and which was expected to become a "constant" demand, is gradually being removed from their grasp.

But this is not the only obstacle which the free-trade merchant has to encounter. How far he has been responsible for the extensive growth of manufactures in other countries in his "eager endeavour" to destroy them, we need not here inquire. But there can scarce be a doubt that by affording his rivals such indirect assistance (and it has rapidly accumulated and assumed a serious magnitude), he has eventually, within a much shorter time, become the source of those trade difficulties with which at present he has to deal. And one of those difficulties is this: that the foreign manufacturer whose goods have improved and are improving now undersells him in his own market, after having in the first place wrested some external markets from him.1

1 (a) Sugar-refining industry; (h) iron and steel industries—rails, knives, razors (imported in the "rough" from the Continent and finished in Sheffield); (c) the carrying trade; (d) the silk trade ; (c) the agricultural industry—wheat, butter, eggs, cheese, hops, &c,

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