Page:Encyclopædia Britannica, Ninth Edition, v. 9.djvu/791

F K E E T R A D E 755 employer will rapidly, even more rapidly, supply what may be needed in the way of labour. Generally, indeed, the check to such a decline in wages is supplied by trades unions, which are, as the industrial experience of the United States has proved, the inevitable outcome of a protective system in a country where combinations of labour are not prohibited by law. In England up to 1824 they were pro hibited. In course of time then, and generally at an early period, the advantage which the protective system accorded to a special industry ceases, by being distributed among a larger number of producers. To this rule there is but one ex ception, protection accorded to the produce of land. Here, if the commodity produced be one which cannot be dis pensed with, and for which no substitute is found, the fact that the supply procurable falls short of the demand may greatly increase the value of the article, and through the farmer s profits raise rents. But the advantage is soon found to be only partial. In civilized and fully settled countries, agriculture is a complex process, in which success depends upon a just balance being struck between tillage proper and stock-keeping. An excessive price of corn, or rather of wheat, due to the machinery of a protective system, apart from the extraordinary fluctuations in price which it induces on the price of wheat, discourages the use of meat, and even of the inferior kinds of grain ; for it is a law in prices that any notable exaltation in the value of one of the items which contribute to a joint product invariably de presses the value of the other items ; just as it is an equally invariable law in prices that when there is a notable scarcity of any commodity the greatest rise in price always takes place in that form or quality of the article which was cheapest before. Hence there is always a natural remedy, though it is by no means a compensating one to the con sumer, for any artificial exaltation in the value of agricultural produce. The principles referred to may be proved by the analysis of facts. Since the repeal of the English corn laws the price of agricultural land has steadily risen ; for though the average price of wheat has fallen, that of other kinds of grain, as is found by the tithe averages, has risen, while meat and dairy produce have much more than doubled in ralue since the period referred to. It is chiefly, however, in relation to manufactures that the operation of protective regulations is significant or im portant, for most countries have abandoned all or nearly all restraint on the importation of food. The employer gets no advantage from the regulation, nor the labourer, and the consumer suffers a loss. But the removal of protec tion would, in most cases, however great a benefit to the consumer, inflict considerable loss on employers and labourers, since they would be subjected to a competition in which it is probable they would be worsted ; for it may be concluded that the manufacturer cannot, or believes he cannot, subsist without protection, since he would re pudiate it if he saw that it was superfluous. Hence it is exceedingly difficult and invidious to alter a system to which capital and labour have accommodated themselves ; and it may be stated generally that all the arguments by which an existing protection is defended, however plausible and convenient they may be, are mere sophistry, though very often unconscious sophistry; while the prospect that the sudden suspension of protection to manufactures would seriously disturb the relations of employers and labourers, and would very probably lead to a great destruction of property, points to a real difficulty, which the advocates of free trade will always find confronting them. In practical politics, in so far as they are connected with economical subjects, the difficulty is enormous, for the defence of im perilled interests is always more watchful and energetic than attack on them, and can always count on a co-opera tion and concentration which is far less fully developed in those who criticize or challenge the privilege. There is a well-known passage in Mr Mill s political economy in which this author conceives it expedient that protection should be given to certain industries in new countries, pro vided that the country had good natural resources for the successful prosecution of such an industry, and the protec tion accorded be only temporary. But apart from the fact that new countries never possess a superfluity of capital and labour, and therefore are least of all well advised in direct ing these elements of wealth, into channels where they would be less advantageously employed than they would be in others ; apart from the considerations that all countries have a natural protection in the cost of carriage, and in the comparative ease with which they can interpret demand ; and apart from the fact that good natural advantages for any particular industry are sure to suggest that industry at the very earliest time at which it will be expedient to un dertake it, the circumstances which invariably affect a protected industry render it impossible that Mr Mill s rule of a temporary protection should be applicable. Who is to determine at what time the protection should be removed ! Not the consumer, as represented in the legislature, for he would naturally object to the protection from the beginning, since the regulation inflicted a loss on him, at the very in stant that it came into operation. Not the manufacturer, for until the time comes in which he dreads no rivalry, he believes that the regulation is the guarantee of his ordinary profit, and that its removal will expose him to certain loss, The probability that he may come to such a state as to render the protection manifestly superfluous depends on his making some great, sudden, and lasting stride in the efficiency of the industry which he exercises. But protec tion discourages all kinds of improvement, and indeed it does not appear that the phenomenon of sudden, vast, and permanent progress has ever been witnessed in economical history except during the latter half of the 18th century in England. Not the labourer who is engaged in producing the favoured product, for the wages of labour are adversely affected, in the fall of prices, at an earlier stage than any other object into which gross value is distri buted, and are advantageously affected, on the other hand, at a later period than that in which any other interest, other than that of manual labour, is benefited. Loaned or floating capital is most easily extricated from a declining trade, and most easily attracted to a growing trade ; fixed capital, and such capital as gives efficiency to fixed capital, is attracted less easily, and by parity of reasoning, is less easily accumulated or appropriated ; while the supply of labour is decreased with the greatest loss to the labourer, and increased with the smallest gain. It may be concluded then that, while Mr Mill has given a doubtful defence for the adoption of a temporary protec tion, his limits to the protection so accorded will be found to be practically nugatory, and that in fact the adoption of the system will confer the minimum of good, while the abolition or abandonment of it will inflict the maximum of injury. This result then, the creation of factitious in dustries, which cannot be assisted by the operations of Government without loss to the consumer, but which cannot be abandoned by Government without ruin real or apparent to the consumers, is substantially the apology and defence for the protective systems of Continental Europe. For there is nothing which characterizes modern systems of govern ment more than the tenderness which all parties show towards imperilled interests. There is a growing disposition towards treating them as vested, that is, as equitably en titled to compensation if their continuity is disturbed or even threatened. Of course there must be a limit to this con sideration, for no Governmenthas yet ventured on admitting,