Page:Encyclopædia Britannica, Ninth Edition, v. 9.djvu/789

F 11 E E TRADE gration of such artisans as are employed in the manufacture of munitions of war to a country with which itself was at war. It does more when it does not allow its harbours to ba a refuge or a market for belligerents ships, and prevents private individuals from supplying munitions of war to combatants. A fortiori, it would not allow its subjects to sell such goods to its enemies as might enable those enemies to protract their defence. It is a question whether it is not entitled to prohibit, or at least restrain, the exportation of that over which it is able to exercise a monopoly, though it is very seldom, if indeed it is ever the case, that any country is in so advantageous a position. And, lastly, it is allowed that a Govenimeut may make the commercial intercourse of its subjects a matter of bargain with the Government of other countries, though such expedients, from an economical point of view, have been subjected to very adverse criticism. Free trade, then, must be innocuous and not hostile to the general public good. Between nations, free trade represents the well-known principle of the Division of Employments. The advan tages which result from the natural or spontaneous division of employments, and the loss which ensues from a forced division of employments, are the commonplaces of econo mists. Bat the fact that exactly the same principle rules the distribution of production over such parts of the world as are occupied by industrial agents is not so frequently insisteJ on. That there are several commodities which a country cannot produce at all, or can only produce under circumstances so disadvantageous as to involve dispropor tionate expense or loss, is admitted by every Government, however anxious it may be to develop native industry by protective regulations. No European Government, how ever imperfectly civilized, would attempt to direct its home industries into the production of tea, coffee, and chocolate, or to domesticate elephants for the sake of their ivory, or to breed ostriches for the sake of their plumes, or to main tain a race of wild hogs in order to obtain a due supply of bristles from native sources. But there are in most coun tries a number of industries the continuity of which Govern ments have attempted, and still attempt, to promote, by hindering the free entrance of foreign-made articles of the sauio kind. It will be found that, historically, this practice has had its origin in what is now understood to be a delu sion as to the true functions of the currency. The restraint of production and trade was a policy which ancient civilization never adopted. The great statesman of Athens congratulates his audience on the fact that, thanks to the extended commerce of their country, they are as familiar with the use of foreign products as they are with those of domestic industry, and use them even as freely as the country of their origin does. The public opinion of Greece was profoundly shocked when, as a measure of poli tical animosity, Athens excluded a Greek city, Megara, from its market. The oldest public document preserved in the Roman archives was a commercial treaty with Carthage (Polybius, xii. 22), in which Roman merchants are indeed restrained from traffic in certain districts, more, we may be certain, from fear of the Carthaginian occupation of Italy tlun for other reasons, for the treaty expressly exempts traffic from tolls, and prescribes that Carthage shall build no factories in Latium. Nor is there any record of restraint put upon the distribution of the precious metals, except in one oration of Cicero, where the orator, defending his client from a charge of extorting money from the Asiatic Jews, omments on the public policy of hindering this people from disturbing the money market by sending great remittances of specie to Jerusalem. Perhaps the explanation of the fact that the civilization of antiquity did not interfere with the process of inter national exchange is to be found in the prevalence of slavery. Setting aside fur a moment the historical origin of modern protection, the influence and apparent truth of the mercantile system of which we shall speak im mediately, there is a radical difference between ancient and modern civilization, that in the former slavery was deemed natural, in the latter it has been seen to be mis chievous and felt to be detestable. In modern societies, therefore, the free labourer is a factor in the interpretation of economical forces; in ancient ones, he counted for nothing, or next to nothing. To have prohibited free trade in the products of foreign labour at Athens would have been to give advantage to one class of slave-holders in opposition or in contrast to another class of slave-holders, and was not to be thought of. To prohibit free trade between England and France, or England and the Unitei States, is, in appearance at least, to assist the home labour of the country which adopts protection against the rivalry of free labour in an other country which might undersell its rivals. Protection in ancient times would have been seen to be naked selfish ness ; in modern times, it may seem to be a genuine and dis interested patriotism. And it may be observed that, for this and for other reasons, most slave-holding countries have been indifferent to protective regulations, or even unfriendly to them. This fact is sufficiently illustrated by the contrast of opinion in the northern and southern States of the American Union before the war of secession. The control of production and trade in modern Europe is historically due to the development of what Adam Smith called the mercantile system, i.e., the effort of Government to secure as far as possible the largest possible amount of specie within the country whose affairs it administered. It is easy to discover the origin cf this policy. To a Govern ment which spends, but does not produce, the possession of treasure is of the greatest utility and service. To an indi vidual who produces and trades, still more to one who trades only, treasure is, as a rule, the least valuable instru ment of traffic, as it is an article from which, as it is affected by the least possible variation in value, the least amount of profit can be anticipated by those who deal in it as an article of trade. A trader in the Middle Ages would have readily accepted the doctrine that money was wealth as far as regarded every one but himself ; as far as he was con cerned, he wished to get rid of his money as soon as he could, in exchange for goods, on which he might secure his profits. The doctrine that the machinery of international trade sup plied the process by which the precious metals were dis tributed, and that therefore, if trade were to exist, the attempts of Government to restrain the exportation of money were mischievous or nugatory, was argued as early as the middle of the 14th century by Sanuto the Venetian, and by Oresme the bishop of Lisieux, in language as precise as any used by Turgot or Adam Smith. The reasonings, however, by which protective theories were upheld, the mean and malignant arguments of restraint, as Adam Smith calls them, were always strengthened in England up to thirty years ago, by suggesting the hideous consequences which would come on the nation from a drain of gold. Protection had its origin in the reputed duty of Government towards the currency. Once established, it created artificial inte rests whose existence was a loss to the whole community, but whose maintenance seemed to be the satisfaction of a contract entered into between the Government and the in dustry which the Government had called into being or had stimulated. It will be clear that if any particular industry is of such a character as to be very conveniently carried out by the inhabitants of a particular community or district, if the producer fears no rival in the home market, and still more if he dreads no competition in a foreign market, any pro tection accorded to his industry most be wholly superfluous. IX. - 95