and not a single one of which has industries all of which bear perfect and harmonious relations to each other; that some one or more of these countries has one or many industries which we ourselves have, and which are developed to a greater extent than our own. Once more, we must remember that association with his fellow-men is the first, the greatest, the paramount need of man; that the more complete the diversification of employments, the greater this power of association, the greater the motion in society, the less the loss of labor-power, the greater the ability to subject to the human will and use the forces of nature; the less the expenditure of human labor in converting raw materials into finished commodities, the greater the power to command an ample supply of money, the instrument of association, and the lower the rate of interest-the precious metals traveling from those places where employments are not diversified and where the rate of interest is high, to where they are diversified, and where the rate of interest is low.

The artificial and inharmonious development of the industries of other nations calls, in turn, for artificial provisions against any movements of these industries in the direction of the destruction of the more or less happy balance of industries existing or trying to exist among ourselves this balance being a measure of the power which we ourselves have actually developed. These provisions are especially essential the world over against the competing industries of Great Britain; the well-recognized and even avowed selfish and wicked policy of which is industrial warfare, with a view to the centralization of wealth in the would-be work-shop of the world.

These provisions against the destruction of the harmonious balance of industries are known under the name of

PROTECTION,

a policy which not merely rest upon the foundations of justice, but which is vindicated by all history; whether that history

be of England, France, Belgium, Russia, or the German Empire, the power of all of which has been built up by this policy, or of Ireland, Turkey, Egypt, Portugal, India, Japan, or Jamaica, the power of which has been destroyed by the absence of it. It is vindicated at every step in our own history, from the settlement of the colonies to the present hour; each period of free foreign trade having caused an impoverishment of the people, the colonies, the States, or the nation, and each period of protection, after protection became possible by independence, having caused the rescue of both people and governments from wretchedness, bankruptcy, and despair.

CHAPTER XV.

PROTECTION AND FREE TRADE.

BY RIGHT HON. HENRY FAUCETT, M.P., D.C.L., F.R.S. Professor of Political Economy in the University of Cambridge.

A

THE ARGUMENTS OF PROTECTIONISTS.

FTER a careful consideration of the arguments which are adduced in support of protection by those who may be regarded as its leading advocates in America, in the Colonies, and in various Continental countries, I think it will be admitted that a full and complete statement of their case will be given by arranging the arguments which are now advanced in support of protection under the following thirteen heads. It will be observed that some of these arguments are of a contradictory character. This circumstance is however accounted for by the fact that protection is regarded from different points of view, and supported for different reasons, in different countries, and I have been anxious to omit no argument to which importance is attributed by those who defend protection in the various countries in which it is maintained:

Protection is desirable, and especially so in a young country, because it secures diversity of industry. A country such as America or Australia possessing an almost boundless extent of fertile land, has exceptional facilities for the production of raw material. If therefore manufactures are not. fostered by protection, labor and capital will be chiefly

devoted to agriculture, and the growth of towns will be discouraged.

2. Protection, by encouraging various branches of home industry, makes a community much less dependent upon foreign countries.

3. The American protectionists assume that in foreign trade the cost of carriage is paid by the exporting country. Raw produce being more bulky than manufactured goods of the same value, is more costly to export. They therefore argue that America would be placed at a disadvantage compared with England if she imported all the manufactured goods she wanted in exchange for raw produce.

4. It is said that the home manufacturer has to pay various taxes which are not levied from his foreign competitor, and therefore if he does not receive some compensation in the form of protection, he must necessarily be placed at a disadvantage.

5. Protection is advantageous to a country because it encourages various branches of home trade, and discourages to the same extent the trade of foreign countries.

6. A protective import duty, it is asserted, is ultimately almost entirely paid by the foreign producer. Consequently protection secures the double advantage of taxing the foreigner and of encouraging home industry.

7. As profits and wages are not higher in protected industries than in those which are not protected, the objection ordinarily urged against protection-that it benefits a special trade at the expense of the general consumercannot be fairly maintained.

Protection is economically advantageous, because if a country obtains its produce at home instead of importing it, the labor employed in transporting produce from a distance is saved, and this labor is assumed to be unproductive.

9. Protection is represented as conferring great benefit upon the working classes in America, because the wages

which are paid in certain industries which enjoy protection in America are higher than the wages in the same industries in free-trade England.

10. Protection would be unjust if only one industry were protected, because the general public would obtain no compensation for the increased price they would have to pay for the product of this particular industry. They however obtain this compensation, if protection is so extended that the entire industry of the country participates in its advantages.

11. Protection has been defended on the ground that wages being higher in America and in the Colonies than in England, the American and the Colonial traders require protection in order to place them in a position of equality with their English competitors.

12. Protection, having been once established, cannot be abolished without causing great loss to employers and employed in those trades which have been protected.

13. Protection can be advantageously introduced into a young country as a temporary expedient, since various industries which will ultimately prosper without protection require its aid in the early stages of their existence.

I will now proceed to consider these arguments in the order in which they have been stated.

1. It will be observed that in the foregoing enumeration of the reasons which are advanced in support of protection, the first position has been given to what is known as the "diversity of industry" argument, because there is no single point on which so much stress is laid by American and Colonial protectionists.

It is contended that a country which has almost inex haustible supplies of fertile land, considerable portions of which are still unoccupied, possesses such exceptional advantages for agriculture that its labor and capital will be chiefly concentrated on the production of raw produce; it is